THE TORRAY FUND
The Torray Fund (the "Fund") is a no load, open-end, diversified management
investment company. The Torray Corporation (the "Manager") serves as the Fund's
investment advisor.
This Prospectus concisely describes the information which investors should
know before investing. Please read this Prospectus carefully and keep it for
future reference. A Statement of Additional Information dated April 30, 1997
(the "Statement") is available free of charge by writing to The Torray
Corporation, 6610 Rockledge Drive, Bethesda, Maryland 20817, or by telephoning
toll free at 1-(800)-443-3036. The Statement, which contains more detailed
information about the Fund, has been filed with the Securities and Exchange
Commission and is incorporated by reference in this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
The Date of this Prospectus is April 30, 1997
<PAGE>
SCHEDULE OF FEES
The expenses of the Fund are set forth in the following table, the form of
which is prescribed by federal securities laws and regulations.
SHAREHOLDER TRANSACTION EXPENSES
There are no shareholder transaction expenses such as sales loads, 12b-1,
or exchange fees.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 1.00%
Other Expenses (1)(2) .10%
----
Total Operating Expenses (3) 1.10%
----
----
- ---------------
(1) These amounts have been restated to reflect anticipated expense levels as of
March 31, 1997.
(2) Redemption proceeds wired to a designated account at a shareholder's request
for amounts less than $10,000 will be reduced by a wire redemption fee
(currently $10.00). Certain institutional clients will not be charged this
wire redemption fee.
(3) If you purchase Fund shares through a discount brokerage firm or other
financial institution, there may be fees or commissions charged by them for
shareholder transactions.
The purpose of this table is to assist prospective shareholders in
understanding the various costs and expenses of the Fund that reduce the amount
of income available for distribution to shareholders.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
EXAMPLE:
You would pay the following expenses on a
$1,000 investment assuming (1) 5% annual
return, and (2) redemption at the end of
each time period: $12 $36 $62 $138
NOTE: THE FIGURES SHOWN IN THE EXAMPLES ARE ENTIRELY HYPOTHETICAL. THEY ARE NOT
REPRESENTATIONS OF PAST OR FUTURE PERFORMANCE OR EXPENSES; ACTUAL PERFORMANCE
AND/OR EXPENSES MAY BE MORE OR LESS THAN SHOWN.
2
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FINANCIAL HIGHLIGHTS
The table below sets forth certain financial information with respect to
the per-share data and ratios for The Torray Fund for the periods indicated,
which have been derived from financial statements audited by Johnson Lambert &
Co., independent public accountants for the Fund, whose report thereon is
included in the Statement of Additional Information.
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
PER SHARE DATA ($) 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90(1)
-------- -------- -------- -------- -------- -------- ---------
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NET ASSET VALUE,
BEGINNING OF PERIOD.................. $ 20.110 $13.755 $14.273 $13.743 $11.514 $ 9.999 $ 10.000
Income From Investment Operations
Net Investment Income.................. 0.186 0.215 0.213 0.122 0.180 0.232 0.005
Net Gains on Securities
(both realized and unrealized)....... 5.642 6.674 0.130 0.745 2.229 1.728 0.000
-------- ------- ------- ------- ------- ------- ---------
Total from
Investment Operations........... 5.828 6.889 0.343 0.867 2.409 1.960 0.005
Less Distributions
Dividends
(from Net Investment Income)......... (0.187) (0.214) (0.213) (0.122) (0.180) (0.233) (0.006)
Distributions (from Capital Gains)..... (0.531) (0.320) (0.648) (0.215) 0.0000 (0.212) 0.0000
-------- ------- ------- ------- ------- ------- ---------
Total Distributions............. (0.718) (0.534) (0.861) (0.337) (0.180) (0.445) (0.006)
-------- ------- ------- ------- ------- ------- ---------
NET ASSET VALUE, END OF PERIOD......... $ 25.220 $20.110 $13.755 $14.273 $13.743 $11.514 $ 9.999
TOTAL RETURN3.......................... 29.09% 50.41% 2.41% 6.37% 21.04% 19.98% (0.03%)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(000's omitted)...................... $116,593 $50,744 $23,362 $19,666 $10,298 $ 4,423 $ 200
Ratio of Expenses to Average Net
Assets............................... 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 0.82%(1)
Ratio of Net Income to Average Net
Assets............................... 0.87% 1.31% 1.51% 0.94% 1.54% 2.43% 2.15%(1)
Portfolio Turnover Rate................ 20.95% 22.56% 36.63% 29.09% 37.09% 21.17% n/a(2)
Average Actual Commissions
Paid Per share(4).................... $ 0.0871 $0.0813 n/a n/a n/a n/a n/a
</TABLE>
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(1) Annualized. The Fund commenced operations on December 18, 1990.
(2) Not applicable.
(3) Past performance is not predictive of future performance.
(4) Does not include spreads on shares traded on a principal basis.
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INVESTMENT OBJECTIVE, POLICIES AND RISK FACTORS
The Fund's objective is to earn 15% per year compounded, measured over long
periods (10 years or more). The Fund also seeks to defer shareholder tax
liability on the Fund's appreciated assets, so that earnings can be generated on
money which otherwise would be paid in taxes. In order to accomplish these
goals, the Fund intends to hold stocks for the long term, as opposed to actively
buying and selling. An added benefit of the buy-and-hold strategy is that
brokerage commissions will be contained. There can be no assurance that the
Fund's objective will be achieved.
THE MANAGER'S INVESTMENT PHILOSOPHY AND APPROACH TO SELECTING COMMON STOCKS
The Fund's investment philosophy is simple. Ordinarily, 90% or more of the
Fund's assets will be committed to common stocks. Any balance will be held in
U.S. treasury bills or Treasury notes. No effort is made to forecast the stock
market. Businesses in which the Fund invests must have favorable economic
characteristics, generally including rising sales and earnings, a strong
competitive position, capable management, and a balance sheet appropriate to the
nature of the enterprise. Central to the philosophy is the fact that value
derives from the business, not from the stock. Accordingly, the Fund's
management focuses on business fundamentals, as opposed to stock market
dynamics, the idea being that if a business performs, the stock will take care
of itself.
The Manager's stock selection process is simple: management will buy, at a
fair price, stock in the best companies it can identify, and keep them
indefinitely. Portfolio investments may include small, medium or large
capitalization companies. The latter have predominated in recent years because
management believes they have represented the best available values. However,
that could change if the prices of high quality, small or medium-size company
stocks drop significantly.
Generally speaking, there is widespread agreement among investors about
which companies enjoy the brightest economic outlook. Unfortunately for
prospective buyers, the shares of these businesses usually trade at a premium.
Sometimes they become so over-priced that an investor's potential return will be
almost certainly diminished, or a major loss will occur in the event corporate
performance deteriorates. It is important, therefore, when buying stocks to
carefully assess the prices at which they are offered so that the advantage
gained from owning a top-flight company is not lost to a miscalculation of its
value. Management's policy in this regard is to focus its research on those
quality businesses which, for any number of reasons, have fallen from favor with
investors. Typically, stocks of the companies selected for evaluation will have
already dropped in price -- often as much as 25%-50% -- in response to a
perceived reversal in corporate fortunes. The research effort's objective is to
determine whether prevailing negative investor sentiment is based on a sound
assessment of long term prospects, or is related more to temporary factors which
have little or no bearing on the enterprises's fundamental economic value.
Although the picture is seldom black and white, management finds that in many
instances popular "expert" opinion is misguided and overly pessimistic. It is in
this circumstance, when both the fundamentals and price are right, that the Fund
will invest.
There are also conditions under which stocks may be sold. If management
identifies a compelling investment opportunity, but the Fund has no cash
reserves, stocks with the least promising prospects relative to all other
portfolio holdings will be sold to raise the purchase price. Shares also will be
sold in any business which is materially deteriorating. Finally, in order to
maintain reasonable diversification, a stock or industry grouping of stocks may
be partially sold if, as a result of appreciation, either has become too large a
percentage of the Fund's assets. Generally speaking, and consistent with its
status as a diversified investment company, the Fund may hold up to 7 or 8% of
its assets in a single stock and may invest up to 25% in one industry group.
4
<PAGE>
RISK FACTORS ASSOCIATED WITH INVESTING IN COMMON STOCKS
Three types of risk attach to investments in common stocks -- "business
risk," "systemic risk," and "market risk." The Fund's management, the Torray
Corporation, believes that for long-term investors only business risk matters.
Business risk is the chance that something permanent goes wrong with a company.
When this happens, shareholders lose money. The causes vary, but often include
competitive pressures, declining market share, contracting profit margins,
rising financial leverage, product obsolescence and poor management. In such
circumstances, the degree of risk is usually related directly to the magnitude
of business deterioration. While temporary reversals are of little concern,
serious problems sometimes lead to bankruptcy. Most cases fall in-between.
Mutual funds are subject to the same principle. Their relative riskiness is
a function of the economic profile of the companies they own. Funds holding the
stocks of important high-quality businesses for long-term investment should
prove relatively less risky except for those shareholders who choose, or are
forced by circumstance, to sell in a weak market. Those funds comprised of
lesser companies will involve varying degrees of risk. As noted, the Torray
Fund's policy is to invest at a fair price in the best businesses it can
identify and to hold them indefinitely. In so doing, management believes that it
can largely eliminate the Fund's overall exposure to business risks. The other
forms of risk -- "systemic" and "market" should not worry investors unduly.
"Systemic risk" denotes potential threats to the country's financial structure
- -- political upheaval, runaway inflation or economic collapse, for instance.
Such events seem unlikely, and Torray Fund policies make no provision for
defending against them. "Market risk," in plain English, is the chance that when
you want to sell, you won't like the price. This experience is not unique to the
stock market, as many homeowners, art collectors and others have discovered. In
order to be successful, investors must accept the fact that although stocks of
good companies rise over long periods, they can trade at virtually any price in
the short run. Those who cannot tolerate fluctuations in the value of their
investments should seriously consider avoiding common stocks and mutual funds
that invest in them.
The investment objective and policies described in this Prospectus may be
changed without shareholder approval.
PORTFOLIO TURNOVER
While the Fund does not intend to engage in short term trading, portfolio
turnover is not a limiting factor with respect to investment decisions. For the
fiscal years ended December 31, 1996, 1995, and 1994, the Fund's portfolio
turnover rates were 20.95%, 22.56%, and 36.63%, respectively.
PERFORMANCE INFORMATION
From time to time, the Fund may make available certain information about
its performance. This information is based on the Fund's historical record and
is not intended to indicate future performance. When the Fund makes available
its total return, it will be calculated on an annualized basis for specified
periods of time, and may be calculated for the period since the start of the
Fund's operations. Total Return is measured by comparing the value of an
investment in the Fund at the beginning of the relevant period to the redemption
value of the investment at the end of the time period (assuming reinvestment of
any dividends or capital gains distributions).
HOW TO BUY SHARES
Shares of the Fund are continuously offered at net asset value, and there
are no sales charges on purchases of Fund shares. The minimum initial investment
is $10,000, and the minimum additional investment is $2,000.
5
<PAGE>
Orders for the purchase of shares of the Fund are executed at the net asset
value determined as of the next Valuation Time after receipt by the Fund's
transfer agent and the shares will be eligible to receive dividends beginning
the following day. The Fund reserves the right to reject any order for the
purchase of its shares in whole or in part. (See "How Net Asset Value is
Determined").
In the case of an initial investment, shares of the Fund may be purchased
by sending a check payable to "The Torray Fund," together with a completed
Application to:
The Torray Fund
c/o FPS Services Inc.
3200 Horizon Drive
King of Prussia, PA 19406-0903
Shareholders should be aware that purchases and redemptions mailed to the
Fund at its address in Bethesda, Md. will not be effected until received by the
Fund's agent at the address(es) listed above.
Subsequent purchases may be made by mailing a check payable to "The Torray
Fund" to:
The Torray Fund
P.O. Box 412797
Kansas City, MO 64141-2797
(Please put your account number on your check.)
The Fund is also available through other brokerage firms and institutions.
If you place your order through a broker-dealer, you may be charged a fee for
its services. No such charge will be paid by an investor who purchases Fund
shares directly from the Fund as described above.
If you are interested in investing your IRA account in the Fund, you will
have to establish an IRA or an IRA Rollover account. Please call the Fund at
1-800-443-3036 to request an IRA package. You may also call a bank or
broker-dealer for more information and an account application.
Shareholder inquiries may be directed to FPS Services Inc., 3200 Horizon
Drive, King of Prussia, PA 19406 or by calling 1-800-626-9769.
HOW TO REDEEM
Shares may be redeemed in writing or, for shareholders who elect this
privilege, by telephone. To redeem shares in writing, submit a written
redemption request directly to: The Torray Fund, c/o FPS Services Inc., 3200
Horizon Drive, King of Prussia, PA 19406-0903. If the shareholder is a
corporation, partnership, agent, fiduciary or surviving joint owner, additional
documentation of a customary nature may be required. Where a shareholder has
chosen the telephone redemption option, shares may be redeemed by telephone by
calling toll-free 1-800-626-9769.
The Fund, through its transfer agent, has established procedures designed
to confirm the authenticity of telephonic instructions, which procedures include
requiring callers to establish their personal identity and limiting the mailing
of telephone redemption proceeds to the address or bank account set forth on the
Account Application. Investors should understand that neither Fund nor its
transfer agent will be liable for acting upon instructions communicated by
telephone that it reasonably believes to be genuine. Redemption proceeds wired
to a designated account at a shareholder's request for amounts less than $10,000
will be reduced by a wire transfer fee
6
<PAGE>
(currently $10.00). Certain institutional clients will not be charged this wire
redemption fee. Changes to the designated address or bank account must be made
in writing and may be required to be accompanied by a signature guarantee from
an eligible guarantor.
Shares are redeemed at their net asset value next determined after a
redemption request in good order has been received by the Fund's transfer agent.
A request is deemed to be in good order if it has been signed by the account
holder and is accompanied, where necessary, by a signature guarantee. Redemption
proceeds will be mailed or wired to the redeeming shareholder within seven days,
except where those shares have recently been purchased by personal check. In
those cases, redemption proceeds may be withheld until the check has been
collected, which may take up to fifteen days. To avoid such withholding,
investors should purchase shares by certified or bank check.
The Fund reserves the right to redeem, at net asset value, the shares of
any shareholder if, because of redemptions by the shareholder, the account of
such shareholder has a value of less than $10,000. Before the Fund exercises its
right to redeem such shares, the shareholder will be given written notice of the
proposed redemption and will be allowed 30 days to make an additional investment
in an amount which will increase the value of the account to at least $10,000.
HOW NET ASSET VALUE IS DETERMINED
The net asset value per share of the Fund is determined once each day that
the New York Stock Exchange is open (a "Business Day"), as of the close of the
Exchange ("Valuation Time"). Portfolio securities for which market quotations
are readily available are valued at market value. Short-term obligations having
remaining maturities of 60 days or less are valued at amortized cost, which
approximates market value. All other securities and assets are valued at their
fair value as determined in good faith by the Trustees or by persons acting at
their direction pursuant to guidelines established by the Trustees. Liabilities
are deducted from the total, and the resulting amount is divided by the number
of shares outstanding to produce the "net asset value" per share.
DISTRIBUTIONS
The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"), for as long as such
qualification is in the best interests of its shareholders. In keeping with Code
requirements regarding regulated investment companies, the Fund pays out as
dividends substantially all of its net investment income (which comes from
dividends and interest it receives from its investments) and net realized
capital gains.
All dividends and/or distributions will be reinvested in shares of the
Fund, at net asset value, unless the shareholder elects to receive cash. The
Fund declares and pays dividends out of investment income quarterly, and
distributes net realized capital gains annually. Dividends and capital gains
distributions may be declared more or less frequently at the discretion of the
Trustees.
FEDERAL INCOME TAXES
Dividends and short-term capital gains distributions of the Fund are
taxable to shareholders as ordinary income. Distributions of any long-term
capital gains are taxable to shareholders as such, regardless of how long a
shareholder may have owned shares in the Fund. Shareholders should consult their
tax advisors as to the application of state and local income tax laws to Fund
dividends and capital gain distributions.
7
<PAGE>
In order to avoid a 4% excise tax on undistributed income, the Code
requires the Fund to distribute prior to calendar year end virtually all the
ordinary income of the Fund on a calendar year basis, and to distribute
virtually all of the capital gain net income realized in the one-year period
ending each December 31 and not previously distributed.
Distributions will be taxable whether received in cash or in shares through
the reinvestment of distributions. A dividend paid to a shareholder by the Fund
in January of a year generally is deemed to have paid by the Fund and received
by shareholders on December 31 of the preceding year, if the dividend was
declared and payable to shareholders of record on a date in October, November or
December of that preceding year. The Fund will provide federal tax information
annually, including information about dividends and distributions paid during
the preceding year.
MANAGEMENT OF THE FUND
The Fund is managed by The Torray Corporation, 6610 Rockledge Drive, Suite
450, Bethesda, Maryland 20817 (the "Manager"), which provides investment
advisory and portfolio management services pursuant to a Management Agreement
dated November 16, 1990. The Manager also provides executive and other personnel
for management of the Fund. Pursuant to the Fund's Agreement and Declaration of
Trust, the Trustees supervise the affairs of the Fund as conducted by the
Manager. The Manager was formed in 1990 to serve as the investment advisor to
the Fund. Robert E. Torray, President of the Manager and Portfolio Manager of
the Fund, owns approximately 60% of the outstanding voting securities of the
Manager, and has over 35 years of investment experience. Mr. Torray also owns 80
percent of the outstanding voting securities of Robert E. Torray & Co., Inc., a
registered investment advisor which has been in the investment advisory business
for 25 years.
For investment advisory and management services provided to the Fund, the
Manager receives a fee, computed daily and payable quarterly, at the annual rate
of one percent of the Fund's daily net assets. The Manager received 1.00% of the
Fund's average daily net assets for the fiscal year ended December 31, 1996.
As a result of the Manager's guarantee of Fund expenses, which guarantee
was in effect from the Fund's inception through December 31, 1996, the Fund's
total operating expenses for each fiscal year amounted to 1.25% of average net
assets.
ORGANIZATION AND CAPITALIZATION OF THE FUND
The Fund was established in 1990 as a business trust under Massachusetts
law. The Fund has an unlimited authorized number of shares of beneficial
interest which may, without shareholder approval, be divided into an unlimited
number of series of such shares. These shares are entitled to vote at any
meetings of shareholders. Shares are freely transferable, are entitled to
dividends as declared by the Trustees, and, in liquidation of the Fund, are
entitled to receive the net assets of the Fund. The Fund does not generally hold
annual meetings of shareholders and will do so only when required by law. The
management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees have approved certain contracts under which certain companies provide
essential management services to the Trust. Shareholders may remove Trustees
from office by votes cast in person or by proxy at a meeting of shareholders or
by written consent. The Manager controls the word "Torray" in the Fund's name
and, if it should cease to be the Fund's investment advisor, the Fund may be
required to change its name.
8
<PAGE>
NEW ACCOUNT INSTRUCTIONS: FOR THE TORRAY FUND ("FUND")
- --------------------------------------------------------------------------------
PLEASE CALL THE FUND TOLL FREE AT 1-(800)-626-9769 IF YOU HAVE ANY QUESTIONS
WHILE FILLING OUT THIS APPLICATION.
1 TYPE OF ACCOUNT. An account can be registered as only one of the following:
[ ] individual |
[ ] joint tenants | Supply the Social
[ ] a custodial account |-------- Security number of
under the Uniform Gifts | the registered
or Uniform Transfers to | account owner.
Minors Act |
[ ] a trust (i.e., |
retirement plans) |
[ ] a corporation | Supply the Taxpayer
partnership, |-------- Identification number
organization, fiduciary, | of the legal entity.
etc. |
[ ] Individual Retirement |
Account (IRA) |-------- See the IRA package.
Please check the box in Section 1 that corresponds with the type of account you
are opening and fill in the required information EXACTLY as you wish it to
appear on the account.
TRADING AUTHORIZATION. If you desire to have a party(s) other than the
registered account owner have access to your account(s) or transact business on
your account(s), you must file a TRADING AUTHORIZATION with The Torray
Corporation ("Torray"). Other parties may include spouses, relatives, business
officers, trust officers, financial planners, tax advisors, etc. Call Torray to
ask for a "Trading Authorization."
CORPORATE/TRUST RESOLUTION. Corporations are required to furnish a CORPORATE
RESOLUTION. Trusts are required to furnish a Trust Resolution.
Trusts, fiduciaries, partnerships, and other business entities may be required
to furnish other documentation (e.g., a "Trust Authorization") to authorize
redemptions. Call Torray to ask for the appropriate documentation.
2 YOUR MAILING ADDRESS. Please complete all information in Section 2 requested
as it is required to open your account.
3 YOUR INITIAL INVESTMENT. The amount of your check(s) must meet the minimum
$10,000 initial investment.
4 RECEIVING YOUR DIVIDENDS AND CAPITAL GAINS. Dividends and capital gains
distributions will be automatically paid in Fund shares UNLESS the Shareholder
elects to receive distributions by check by marking the box in Section 4.
5 TELEPHONE REDEMPTIONS. If you elect telephone redemptions, Torray will be
authorized to act upon telephone instructions from you, or from any person
authorized to act on your behalf, without a signature guarantee, to redeem
shares of the Fund in accordance with the terms of the Fund's Prospectus and
Statement of Additional Information as in effect from time to time. In electing
this feature, you also agree that the Fund and Torray shall not have any
liability for acting upon instructions which they reasonably believe to be
genuine.
6 YOUR SIGNATURE(S). Please be sure to sign this application. If the account is
registered in the name of:
[ ] an individual, the individual should sign
[ ] joint tenants, both should sign
[ ] a trustee or other fiduciary, the fiduciary(s) must indicate capacity (If
you are establishing a trust account and want to authorize redemptions, you
must file a "Trust Resolution" with Torray as stipulated in Section 1 under
"Trust Resolution.")
[ ] a corporation or other organization, an officer must sign and indicate
capacity. (If you are establishing a corporate account and want to
authorize redemptions, you must file a "Corporate Resolution" with Torray
as stipulated in Section 1 under "Corporate Resolution.")
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[THIS PAGE INTENTIONALLY LEFT BLANK]
PAGE 10
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NEW ACCOUNT APPLICATION FOR THE TORRAY FUND
DO NOT USE THIS APPLICATION FOR AN IRA ACCOUNT
PLEASE SEE THE ENCLOSED IRA INFORMATION
<TABLE>
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- -----------------------------------------------------------------------------------------------------------------------------
[ ] GIFT/TRANSFER [ ] TRUST (I.E., [ ] CORPORATION, PARTNERSHIP
1 TYPE OF ACCOUNT [ ] INDIVIDUAL [ ] JOINT TENANTS TO A MINOR RETIREMENT PLANS) or Other Entity
(CHECK ONE) Complete A Complete A & B Complete C Complete D Complete E
only only only only
- -----------------------------------------------------------------------------------------------------------------------------
A -- -- -- --
------------------------------------------------ --------------------------------- -------------------------------------
First Name, Middle Initial, Last Name Social Security Number Birthdate
Required to open your account (mm-dd-yy)
---------------------------------
B -- -- -- --
------------------------------------------------ --------------------------------- ----------------------------------
First Name, Middle Initial, Last Name Social Security Number Birthdate
Required to open your account (mm-dd-yy)
-----------------------------
JOINT TENANTS WILL HAVE RIGHTS OF SURVIVORSHIP UNLESS OTHERWISE SPECIFIED.
- -----------------------------------------------------------------------------------------------------------------------------
C ________________________________________________ as custodian for _______________________________________________________
Custodian's Name (only one permitted) Minor's Name (only one permitted)
------------------
under the [ ] [ ] Uniform Gifts/Transfers to Minors Act -- -- -- --
----- ---------
State (Circle One) ------------------------------ ----------------------------
Minor's Social Security Number Minor's Birthday
Required to open the account Required to open the account
---------------------------- ----------------------------
- -----------------------------------------------------------------------------------------------------------------------------
D
________________________________________________ ______________________________________________________________________
Name of Trustee Name of Trust
--
________________________________________________ ________________________________ ___________________________________
Name of Second Trustee (if any) Date of Trust (mm-dd-yy) Taxpayer Identification Number
Required to open your account Required to open your account
-------------------------------- -----------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
E --
----------------------------------------------- -------------------------------
Name of Corporation or other entity. If other Taxpayer Identification
entity, please specify type in the space below, Required to open your account
e.g., partnership, club, etc. -------------------------------
BUSINESS TYPE: ------------------------------- Additional forms, such as a Corporate Resolution, are required to
authorize redemptions and add account features.
See Application Instructions.
- -----------------------------------------------------------------------------------------------------------------------------
2 YOUR MAILING ADDRESS
----------------------------------------------------- ----------------------------------------------------------------
Street address and Apartment number or Box number Area Code Business Telephone Number
----------------------------------------------------- ----------------------------------------------------------------
Area Code Home Telephone Number
-----------------------------------------------------
City State Zip Code I AM A CITIZEN OF [ ] U.S. [ ] OTHER
---------------------
----------------- State of residence if different from mailing address
State
- -----------------------------------------------------------------------------------------------------------------------------
(PLEASE COMPLETE THE REVERSE SIDE)
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3 YOUR INITIAL INVESTMENT ($10,000 minimum).
[ ] I have enclosed a check (do not send cash) made payable to THE TORRAY FUND for $
-------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
4 RECEIVING YOUR DIVIDENDS AND CAPITAL GAINS. If not completed, Option A will be assigned.
A [ ] I would like all dividends and capital gains reinvested in the Fund.
B [ ] I would like all dividends and capital gains paid to me in cash.
C [ ] Dividend Income Paid by check and capital gains reinvested.
- -----------------------------------------------------------------------------------------------------------------------------
5 TELEPHONE REDEMPTIONS. See Instructions. If not completed, Option A will be assigned.
A [ ] I do not authorize telephone redemptions. B [ ] I do authorize telephone redemptions.
Proceeds of redemption requests are paid by check and mailed to the address of
record or wired to your bank account. I (we) authorize FPS Services, Inc. to act
upon instructions received from me (us) to redeem shares. Neither the Fund nor
FPS Services, Inc. will be liable for properly acting upon instructions believed
to be genuine.
If you want to authorize to wire redemptions directly to your bank account
please attach a voided check and complete below. (See "HOW TO REDEEM" on Page 6
for wire charges)
Bank Name Branch Office (if applicable)
---------------------------------------------------------------
Bank Address City State Zip Code
---------------------------------------------------------------
Bank Wire Routing Number Bank Account Number
---------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
6 YOUR SIGNATURE(S). All registered owners or legal representative(s) must sign
this section before we can open your account.
I (we) am (are) of legal age, have received and read the Prospectus, agree to
its terms and understand that by signing below (a) neither the Fund nor Torray
is a bank and Fund shares are not backed or guaranteed by any bank or insured by
the FDIC; (b) I (we) hereby ratify any instructions given on this account and
any account into which I (we) exchange relating to Items 1-5 and agree that
neither the Fund nor Torray will be liable for any loss, cost or expense for
acting upon such instructions (by telephone or writing) believed by it to be
genuine and in accordance with the procedures described in the Prospectus; and
(c) it is my (our) responsibility to read the Prospectus.
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION: AS REQUIRED BY FEDERAL LAW, I
(WE) CERTIFY UNDER PENALTY OF PERJURY (1) THAT THE SOCIAL SECURITY NUMBER
("SSN") OR TAXPAYER IDENTIFICATION NUMBER ("TIN") PROVIDED ABOVE IS CORRECT
AND (2) THAT THE IRS HAS NEVER NOTIFIED ME (US) THAT I (WE) AM (ARE) SUBJECT
TO BACKUP WITHHOLDING DUE TO NOTIFIED PAYEE UNDERREPORTING, OR HAS NOTIFIED ME
(US) THAT I (WE) AM (ARE) NO LONGER SUBJECT TO SUCH BACKUP WITHHOLDING. (NOTE:
IF ANY OR ALL OF PART (2) OF THIS SENTENCE IS NOT TRUE IN YOUR CASE, PLEASE
STRIKE OUT THAT PART BEFORE SIGNING.) IF I (WE) FAIL TO FURNISH MY (OUR)
CORRECT SSN OR TIN, I (WE) MAY BE SUBJECT TO A PENALTY OF $50 FOR EACH FAILURE
AND MY (OUR) ACCOUNT(S) MAY BE SUBJECT TO BACKUP WITHHOLDING ON DISTRIBUTION
AND REDEMPTION PROCEEDS.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
Signature: Date
------------------------------------------------ ------------------ -----------------------------------------
Citizenship (if not U.S.)
Signature: Date
------------------------------------------------ ------------------ -----------------------------------------
Citizenship (if not U.S.)
- -----------------------------------------------------------------------------------------------------------------------------
For further information, contact the Fund toll free at 1-(800)-626-9769. Mail
your completed application to FPS Services Inc., 3200 Horizon Drive, King of
Prussia, PA 19406-0903.
</TABLE>
PAGE 12
<PAGE>
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE FUND IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
------------------------
TABLE OF CONTENTS
PAGE
------
Schedule of Fees............................. 2
Financial Highlights......................... 3
Investment Objective, Policies
and Risk Factors........................... 4
Portfolio Turnover........................... 5
Performance Information...................... 5
How to Buy Shares............................ 5
How to Redeem................................ 6
How Net Asset Value is Determined............ 7
Distributions................................ 7
Federal Income Taxes......................... 7
Management of the Fund....................... 8
Organization and Capitalization
of the Fund................................ 8
New Account Instructions..................... 9
New Account Application...................... 11-12
THE TORRAY FUND
------------------------
PROSPECTUS
------------------------
April 30, 1997
As Supplemented
October 16, 1997
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
<PAGE>
INVESTMENT ADVISOR
The Torray Corporation
6610 Rockledge Drive, Suite 450
Bethesda, Maryland 20817
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
INDEPENDENT AUDITORS
Briggs, Bunting, & Dougherty, LLP
2121 Two Logan Square
18th & Arch Streets
Philadelphia, PA 19103-4901
CUSTODIAN
United Missouri Bank
928 Grand Blvd.
Kansas City, Missouri 64141-6226
TRANSFER AGENT
FPS Services Inc.
P.O. Box 61503
3200 Horizon Drive
King of Prussia, PA 19406-0903
