<PAGE>
PROSPECTUS
April 5, 2000
as revised July 1, 2000
The Torray Fund
The Torray Fund is a no-load mutual fund managed by The Torray Corporation.
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary
is a criminal offense.
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TABLE OF CONTENTS
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Page
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About the Fund............................................................. 3
Performance................................................................ 4
Fund Expenses.............................................................. 5
Fund Management............................................................ 6
Purchasing and Redeeming Shares............................................ 6
Taxes and Distributions.................................................... 9
Financial Highlights....................................................... 10
</TABLE>
2
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ABOUT THE FUND
Investment Goals
The Torray Fund's goals are to build shareholder wealth over long periods (10
years or more) and to minimize shareholder capital gains tax liability by
limiting the realization of long and short-term gains.
There is no guarantee that the Fund will meet these objectives.
Investment Strategies and Policies
The manager's strategy is to buy and hold stocks of quality companies for
long-term investment. In this context, "quality" refers to demonstrated
earning power, sound finances, solid competitive position, and capable
executive leadership. Management never trades for quick profits and no effort
is made to forecast the market or time the Fund's investments to take
advantage of the perceived outlook. Ordinarily 90% or more of assets will be
invested in common stocks with the balance held in U.S. Treasury securities or
other cash instruments. Investments are not limited to any particular
capitalization size. Positions in individual stocks will generally not exceed
8% of assets and in industry groupings, 25%.
The manager believes that value exists in businesses, not stocks.
Consequently, a thorough analysis of corporate economic fundamentals is the
essential element of The Torray Corporation's approach. History shows that the
stocks of companies generating higher earnings rise over time. The manager's
research, therefore, concentrates on studying growing businesses, the
objective being to capitalize on the values that accumulate in such
enterprises over long periods. Companies that have performed poorly for
extended periods or appear headed downhill with little chance of recovery are
not bought, regardless of how undervalued their shares may appear. However,
quality companies that have fallen from investor favor are often of interest
because the price of their shares may fail to reflect the business's intrinsic
value. In such cases the manager seeks to determine whether the seemingly low
price reflects temporary problems or a serious impairment of economic values.
Investments are made only when it is believed that a company's long-term
outlook is sound and the shares are fairly priced.
3
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Investors in search of unrealistically high returns or quick profits, or to
whom quarterly performance is important, should not invest in The Torray Fund.
The Fund's goals and investment strategy can be changed without shareholder
approval.
MAIN RISKS
Torray Fund investors face the risk that the manager's business analyses prove
faulty. The Fund usually holds between 25 and 40 stocks compared to a mutual
fund industry average of well over 100. If the fundamental prospects of a
number of large holdings are misjudged, shareholders may suffer losses even
during a time when the general market and many other funds are rising. Beyond
that possibility there is always a risk that money may be lost on investments
in equity mutual funds.
PERFORMANCE
Below are a chart and table showing the Fund's performance. The bar chart
illustrates how the Fund's returns have varied from year to year. The table
compares the Fund's performance against the performance of an unmanaged market
index. These figures assume that all distributions were reinvested. It is
important to remember that the Fund's past performance does not indicate how
the Fund will perform in the future.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996 1997 1998 1999
------ ------ ----- ----- ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Torray Fund.... 19.98% 21.04% 6.37% 2.41% 50.41% 29.09% 37.12% 8.20% 24.01%
</TABLE>
Annual Total Return (%) as of 12/31
[GRAPH]
4
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The Fund's best return for a calendar quarter was 21.30% in the fourth quarter
of 1998, and the lowest return for a calendar quarter was (21.30%) in the
third quarter of 1998.
Average Annual Total Returns as of 12/31/99
<TABLE>
<CAPTION>
9 Years
1 beginning
Year 5 Years 12/31/90*
----- ------- ---------
<S> <C> <C> <C>
Torray Fund............................................ 24.01% 29.00% 21.22%
S&P 500 Index.......................................... 21.04% 28.55% 20.85%
</TABLE>
* Commencement of Operations
FUND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Fund.
<TABLE>
<S> <C>
Shareholder Transaction Fees
(fees paid directly from your investment)
None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
Management Fees.......................................................... 1.00%
Other Expenses........................................................... .07
----
Total Annual Fund Operating Expenses..................................... 1.07%
====
</TABLE>
Example
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. This example uses the same
assumptions that are in all mutual fund prospectuses: a $10,000 investment, a
5% return and fund expenses that remain the same each year. The figures shown
in this example are entirely hypothetical. They are not representations of
past or future performance or expenses. Your actual costs and returns may be
higher or lower.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C>
$ 110 $ 342 $ 593 $ 1,310
</TABLE>
5
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FUND MANAGEMENT
The Fund's manager is The Torray Corporation, 6610 Rockledge Drive, Suite 450,
Bethesda, Maryland 20817. Robert E. Torray has served as President of the
manager since 1990. Mr. Torray is also the Chairman of Robert E. Torray & Co.
Inc., a manager of large institutional portfolios, that he founded May 1,
1972. Douglas C. Eby, the Fund's co-manager, joined The Torray Corporation in
1992. He serves as its Executive Vice President and is also President of
Robert E. Torray & Co. Inc. Mr. Torray is 62 and Mr. Eby is 40.
The manager provides investment advice and portfolio management services and
oversees the administration of the Fund. The manager received 1.0% of the
Fund's average daily net assets as compensation for these services for the
fiscal year ended December 31, 1999.
PURCHASING AND REDEEMING SHARES
Pricing Fund Shares
Orders to buy or redeem shares that are received in good order prior to the
close of the Fund (generally 4:00 P.M. eastern time) will be processed at the
net asset value calculated that day. Net asset value per share is calculated
by dividing the Fund's net assets by the number of shares outstanding after
the New York Stock Exchange ("NYSE") closes for the day.
The Fund uses market quotes that are readily available to value its
securities. In cases where quotes are not readily available, the securities
will be valued using fair value guidelines approved by the Fund's board of
trustees.
6
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How To Buy Shares
You may buy shares of the Fund on a no-load basis on any day that the NYSE is
open.
The minimum initial purchase is $10,000. You should send your check payable to
"The Torray Fund" with a completed account application to the Fund's transfer
agent:
The Torray Fund
c/o PFPC Inc.
211 South Gulph Road
P.O. Box 61503
King of Prussia, PA 19406-0903
Additional purchases can be made for $500 or more and should be mailed to:
The Torray Fund
c/o PFPC Inc.
211 South Gulph Rd.
P.O. Box 61767
King of Prussia, PA 19406-8767
Please remember to include your account number on your check.
You, your spouse, or your children may open a related account for an initial
investment of $2,000 if your current account meets the minimum initial
investment amount of $10,000. A related account can be a joint account with
your spouse or children or a retirement account such as an IRA.
To open a related account you may be asked to present additional documents as
proof of the relationship in addition to an account application. You will also
be asked to provide your existing account number and taxpayer identification
number. You should use caution when giving these numbers to another person
because that person may be able to gain access to your account or other
confidential financial information.
You may also buy shares through a broker or other financial institution and
may be charged a fee for their services.
7
<PAGE>
How to Redeem Shares
You may redeem your shares either in writing or by telephone if you elected
the telephone redemption privilege on your application. You should submit your
written redemption request directly to:
The Torray Fund
c/o PFPC Inc.
211 South Gulph Road
P.O. Box 61503
King of Prussia, PA 19406-0903
If your account is held in the name of a corporation, as a fiduciary or agent,
or as a surviving joint owner, you may be required to provide additional
documents with your redemption request.
To redeem by telephone you can call 1-800-626-9769.
Please remember that all redemption requests must include your name and
account number. The Fund may take up to seven days to pay redemption proceeds.
If you are redeeming shares that were recently purchased by check, the
proceeds may be delayed until the check for purchase clears; this may take up
to 15 days from the date of purchase.
Redemptions (including all IRA transfers) sent to an address other than the
address of record
For your protection, we will require an acceptable medallion signature
guarantee (see below) for all fund redemptions that are sent to a different
address than the address of record. This includes all IRA transfers. After
December 31, 2000, a redemption request bearing a non-medallion signature
guarantee will be returned to you in accordance with the transfer agent's
rejection procedures. This could significantly delay your redemption request
as it will be returned to you via first class mail. The Fund will not be
responsible for delays of this nature.
An acceptable medallion signature guarantee can be obtained from a domestic
bank or trust company, broker/dealer, clearing agency, savings association, or
other financial institution which is participating in any of the following
three medallion programs: Securities Transfer Agents Medallion Program (STAMP)
Stock Exchanges Medallion Program (SEMP), and New York Stock Exchange, Inc.
Medallion Signature Program (NYSE MSP). Signature guarantees from financial
institutions which are not participating in one of these required programs
will not be accepted.
8
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Additional Purchase and Redemption Information
The Fund reserves the following rights as they relate to purchases and
redemptions:
. To redeem your shares if your account balance falls below $10,000 as a
result of redemptions. You will receive 30 days notice to increase the
value of your account to $10,000 before the account is closed.
. To refuse any purchase order.
. To refuse third-party checks for purchases of shares.
. To change or waive the Fund's investment minimums.
. To suspend the right to redeem and delay redemption proceeds during
times when trading on the NYSE is restricted or halted, or otherwise as
permitted by the SEC.
Shareholders should be aware that purchase and redemption requests mailed to
the Fund's Maryland address will not be processed until they are received by
the Fund's transfer agent (generally the next business day) at the address on
page 8. You can avoid delays by mailing requests for purchases and redemptions
directly to the Fund's transfer agent.
TAXES AND DISTRIBUTIONS
The Fund declares and pays dividends quarterly and net capital gains at least
annually. All distributions will be invested in shares of the Fund unless you
elect on your account application to receive distributions in cash. You can
elect to cancel cash payments by notifying the Fund, in writing, prior to the
date of distribution. Your choice will be effective for distributions paid
after the Fund receives your written notice.
The Fund will distribute substantially all of its investment income and
capital gains, if any. The dividends and distributions you receive may be
subject to federal, state and local taxation, depending upon your tax
situation. Capital gains distributions may be taxable at different rates
depending on the length of time the Fund holds its securities. The manager's
buy and hold strategy may act to limit the realization of short- term gains,
and defer the realization of long-term gains. Each redemption of Fund shares
is a taxable event. You should consult a tax advisor regarding your investment
in the Fund.
9
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund (assuming reinvestment of all dividends and distributions). The
information for 12/31/99, 12/31/98 and 12/31/97 has been audited by Briggs,
Bunting & Dougherty, LLP, whose report, along with the Fund's financial
statements are incorporated by reference into the Statement of Additional
Information, which is available upon request. The information for 12/31/96 and
12/31/95 has been audited by other auditors.
<TABLE>
<CAPTION>
Year Year Year Year Year
ended ended ended ended ended
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value,
Beginning of Period.... $ 36.480 $ 33.850 $ 25.220 $ 20.110 $13.755
Income From Investment
Operations:
Net Investment Income.... 0.073 0.139 0.130 0.186 0.215
Net Gains on Securities
(both realized and
unrealized)............ 8.616 2.630 9.206 5.642 6.674
---------- ---------- -------- -------- -------
Total from Investment
Operations............ 8.689 2.769 9.336 5.828 6.889
Less Distributions:
Dividends (from Net
Investment Income)..... (0.073) (0.139) (0.130) (0.187) (0.214)
Distributions (from
Capital Gains)......... (0.786) 0.000 (0.576) (0.531) (0.320)
---------- ---------- -------- -------- -------
Total Distributions..... (0.859) (0.139) (0.706) (0.718) (0.534)
---------- ---------- -------- -------- -------
Net Asset Value, End of
Period................. $ 44.310 $ 36.480 $ 33.850 $ 25.220 $20.110
========== ========== ======== ======== =======
TOTAL RETURN /1/ ........ 24.01% 8.20% 37.12% 29.09% 50.41%
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End of Period
(000's omitted)........ $1,895,538 $1,458,854 $608,537 $116,593 $50,744
Ratio of Expenses to
Average Net Assets..... 1.07% 1.09% 1.13% 1.25% 1.25%
Ratio of Net Income to
Average Net Assets..... 0.18% 0.42% 0.47% 0.87% 1.31%
Portfolio Turnover Rate.. 32.55% 25.96% 11.72% 20.95% 22.56%
</TABLE>
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/1/Past performance is not predictive of future performance.
10
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INVESTMENT MANAGER
The Torray Corporation
6610 Rockledge Drive, Suite 450
Bethesda, MD 20817
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Briggs, Bunting, & Dougherty, LLP
Two Logan Square, Suite 2121
18th & Arch Streets
Philadelphia, PA 19103-4901
TRANSFER AGENT
PFPC Inc.
211 South Gulph Road
P.O. Box 61503
King of Prussia, PA 19406-0903
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HOW TO OBTAIN MORE INFORMATION
The Statement of Additional Information (SAI) contains additional information
about the Fund including a more detailed discussion of its investment policies
and the risks associated with various investments. The SAI is incorporated by
reference into this prospectus. This means that the SAI is legally a part of
the prospectus.
Additional information about the Fund's investments is available in the Fund's
Annual and Semi-annual Report to Shareholders. In the Fund's annual report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during its last fiscal
year.
You may obtain a copy of the SAI or Reports to Shareholders by request and
without charge by contacting the Fund at 1-800-443-3036, in writing to The
Torray Corporation, 6610 Rockledge Drive, Suite 450, Bethesda, Maryland 20817
or on the Fund's web site at www.torray.com.
Information about the Fund (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C., or from the EDGAR Database on the SEC's website (http://www.sec.gov).
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-942-8090. Copies of this information may be
obtained upon payment of a duplicating fee by writing to: Securities and
Exchange Commission, Public Reference Section, Washington, D.C. 20549-0102.
You also may obtain this information upon payment of a duplicating fee, by e-
mailing the SEC at the following address: publicinfo@ sec.gov.
The Torray Fund - 811-06096
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The
TORRAY
FUND
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PROSPECTUS
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April 5, 2000
as revised July 1, 2000
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