<PAGE> 1
Registration Nos. 33-35190
and 811-6114
As filed with the Securities and Exchange Commission on December 12, 1996
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Post-Effective Amendment No. 14 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/
Amendment No. 13
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AMERICAN PERFORMANCE FUNDS
--------------------------
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, Ohio 43219
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
800-762-7085
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Stephen G. Mintos, Treasurer
American Performance Funds
3435 Stelzer Road, Columbus, Ohio 43219
---------------------------------------
(Name and Address of Agent for Service)
COPIES OF COMMUNICATIONS TO:
Martin E. Lybecker, Esquire
Ropes & Gray
1301 K Street N.W., Washington, D.C. 20005
It is proposed that this filing become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[X] On December 16, 1996 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] On (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485
If appropriate check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
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*Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933 pursuant to Section(a)(l)) of Rule 24f-2. The
Rule 24f-2 Notice for the Registrant's fiscal year ended August 31, 1996 was
filed on October 29, 1996.
<PAGE> 2
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
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PROSPECTUS FOR AMERICAN PERFORMANCE MONEY MARKET FUNDS
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Form N-1A Part A Item Prospectus Caption
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<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Financial Highlights Financial Highlights;
General Information - Performance
Information
4. General Description Cover Page;
of Registrant Investment Objective; Investment
Policies; Investment Restrictions;
General Information - Description of
the Funds and their Shares
5. Management of the Fund Management of the Money Market
Funds
6. Capital Stock and How to Purchase
Other Securities Shares; How to Redeem Shares;
Sales Charges; Dividends; Federal
Income Taxes; General Information -
Description of the Funds and Their
Shares; General Information-
Miscellaneous
7. Purchase of Securities Valuation of Shares; How
Being Offered to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Inapplicable
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
American For performance, purchase, and
Performance redemption information, call
MONEY MARKET (800) 762-7085
Funds 3435 Stelzer Road
Two Stable Net Asset Value Columbus, Ohio 43219
Investment Portfolios of
American Performance Funds
</TABLE>
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PROSPECTUS
- --------------------------------------------------------------------------------
The American Performance Money Market Funds (the "Money Market Funds") are
two stable net asset value portfolios of the AMERICAN PERFORMANCE FUNDS (the
"Funds"), a diversified open-end management investment company which currently
consists of nine separately managed portfolios. All securities or instruments in
which the Money Market Funds invest have remaining maturities of 397 days or
less, although obligations subject to repurchase agreements and certain variable
and floating rate instruments may bear longer maturities. Each Money Market Fund
seeks current income with liquidity and stability of principal.
AMERICAN PERFORMANCE U.S. TREASURY FUND (the "U.S. Treasury Fund") invests
exclusively in U.S. Treasury bills, notes, and other obligations backed by the
full faith and credit of the U.S. Government, some of which may be subject to
repurchase agreements.
AMERICAN PERFORMANCE CASH MANAGEMENT FUND (the "Cash Management Fund")
invests in U.S. dollar-denominated, high quality, short-term debt and other
short-term obligations of high quality.
(Continued on following page)
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AN INVESTMENT IN THE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
- --------------------------------------------------------------------------------
THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, BANCOKLAHOMA TRUST COMPANY OR ANY OF ITS AFFILIATES. THE FUNDS' SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR BY ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY SUCH STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is December 16, 1996.
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<PAGE> 4
(Continued from previous page)
BancOklahoma Trust Company, Tulsa, Oklahoma ("BOTC") serves as investment
adviser ("Investment Adviser") to the Money Market Funds. AMR Investment
Services, Inc. ("AMR") serves as investment sub-adviser ("Sub-Adviser") to the
Cash Management Fund. BISYS Fund Services, Columbus, Ohio ("BISYS") acts as the
Administrator and Distributor to the Money Market Funds.
This Prospectus relates only to the Money Market Funds. The Funds also
include four bond portfolios to which BOTC serves as Investment Adviser: the
American Performance Bond Fund, the American Performance Intermediate Bond Fund,
and the American Performance Short-Term Income Fund, each of which seeks current
income, and the American Performance Intermediate Tax-Free Bond Fund, which
seeks current income exempt from Federal taxation, through investing in
diversified portfolios of bonds and other fixed income securities (collectively,
the "American Performance Bond Investment Funds"). The Funds also include three
equity portfolios to which BOTC serves as Investment Adviser: the American
Performance Equity Fund and the American Performance Aggressive Growth Fund,
each of which seeks growth of capital and, secondarily, income through investing
primarily in common stocks and securities convertible into common stocks, and
the American Performance Balanced Fund, which seeks current income and,
secondarily, long-term capital growth by investing primarily in a broadly
diversified portfolio of securities, including common stocks, preferred stocks
and bonds (collectively, the "American Performance Equity Investment Funds").
Persons who wish to obtain a copy of the Prospectus for the American Performance
Bond Investment Funds or the American Performance Equity Investment Funds may
contact the Funds at the telephone number shown on the previous page.
ADDITIONAL INFORMATION ABOUT THE FUNDS, CONTAINED IN A STATEMENT OF
ADDITIONAL INFORMATION BEARING THE SAME DATE AS THIS PROSPECTUS, HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS INCORPORATED BY REFERENCE IN
ITS ENTIRETY INTO THIS PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION CAN
BE OBTAINED WITHOUT CHARGE BY WRITING TO THE FUNDS OR BY CALLING THE FUNDS AT
THE ADDRESS AND TELEPHONE NUMBER SHOWN ON THE PREVIOUS PAGE.
Please read this Prospectus before investing. It sets forth the information
about the Money Market Funds that a prospective investor should know before
investing. Investors should retain this Prospectus for future reference.
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Fee Table................................................................... 3
Financial Highlights........................................................ 5
Investment Objective........................................................ 6
Investment Policies and Special Considerations.............................. 7
Other Investment Techniques of the Money Market Funds....................... 9
Investment Restrictions..................................................... 12
Valuation of Shares......................................................... 13
How to Purchase Shares...................................................... 14
Sales Charges............................................................... 16
Exchange Privilege.......................................................... 16
How to Redeem Shares........................................................ 17
Dividends................................................................... 19
Federal Income Taxes........................................................ 19
Distribution................................................................ 20
Management of the Money Market Funds........................................ 21
General Information......................................................... 25
</TABLE>
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2
<PAGE> 5
FEE TABLE
<TABLE>
<CAPTION>
U.S. TREASURY CASH MANAGEMENT
FUND FUND
-------------- ----------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
- ------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price).............................................................. 0% 0%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)..................................................... 0% 0%
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, if applicable)................................. 0% 0%
Redemption Fees(2) (as a percentage of amount redeemed, if
applicable)......................................................... 0% 0%
Exchange Fees......................................................... $ 0 $ 0
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------
Management Fees..................................................... 0.40% 0.40%
12b-1 Fees(3) (after voluntary fee reductions)...................... 0% 0%
Other Expenses...................................................... 0.34% 0.31%
Total Fund Operating Expenses(4) (after voluntary fee reductions)..... 0.74% 0.71%
EXAMPLE:
- ------------------------------------------------------------------------------------------------------
You would pay the following expenses on a $1,000 investment in each
of the Funds, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
<CAPTION>
U.S. TREASURY CASH MANAGEMENT
FUND FUND
-------------- ----------------
<S> <C> <C>
1 Year................................................................ $ 8 $ 7
3 Years............................................................... $ 24 $ 23
5 Years............................................................... $ 41 $ 40
10 Years.............................................................. $ 92 $ 88
</TABLE>
The purpose of the above table is to assist a potential purchaser of Shares
of the U.S. Treasury Fund and the Cash Management Fund in understanding the
various costs and expenses that an investor in the U.S. Treasury Fund and the
Cash Management Fund, respectively, will bear directly or indirectly. The
examples reflect voluntary reductions of distribution fees pursuant to the
agreement described in note 3. Although the Distributor currently has agreed to
these voluntary reductions, it may cease to provide these reductions, which
would have the effect of increasing the expenses set forth above in the
examples. Such expenses do not include any fees charged by BOTC or any of its
affiliates to its customers' account which may have invested in Shares of a
Fund. See "MANAGEMENT OF THE MONEY MARKET FUNDS" and "DISTRIBUTION" for a more
complete discussion of the transaction expenses and annual operating expenses of
a holder of Shares ("Shareholder") of the U.S. Treasury Fund and the Cash
Management Fund.
THE FOREGOING EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
- ------------
(1) Participating Organizations (as defined in "DISTRIBUTION") may charge a
Customer (as defined in "DISTRIBUTION") account fees for automatic
investment and other investment and trust services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE SHARES.")
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3
<PAGE> 6
(2) A wire redemption charge may be deducted from the amount of a wire
redemption payment made at the request of a Shareholder. The current charge,
which is subject to change upon notice to Shareholders, is $15.00. (See "HOW
TO REDEEM SHARES--By Telephone.")
(3) In order to reduce operating expenses, BISYS has currently established its
distribution fees at the above amount pursuant to an agreement with the
Funds. The maximum amount of the distribution fees, if charged, would be
.25% of the average daily net assets for the U.S. Treasury Fund and the Cash
Management Fund, respectively.
(4) Absent voluntary reduction of fees by BISYS, the Total Fund Operating
Expenses for the U.S. Treasury Fund and the Cash Management Fund would be
0.99% and .96%, respectively, of each Fund's average daily net assets.
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4
<PAGE> 7
FINANCIAL HIGHLIGHTS
The American Performance Funds were organized as a Massachusetts business trust
and began active operations in August of 1990. The Funds currently consist of
nine series of units of beneficial interest ("Shares"). Two such series
represent interests in the U.S. Treasury Fund and the Cash Management Fund.
The Tables below set forth certain financial highlights for the U.S. Treasury
Fund and the Cash Management Fund for the periods indicated, which have been
audited by KPMG Peat Marwick LLP, independent public accountants for the Funds,
whose report thereon, insofar as it relates to each of the years or persons in
the five-year period ended August 31, 1996, is included in the Statement of
Additional Information, which a shareholder may obtain by calling the Funds.
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND
------------------------------------------------------------------------------
SEPTEMBER 21,
YEAR ENDED AUGUST 31, 1990 TO
-------------------------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992 1991(a)
-------- -------- -------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment
income............ 0.050 0.052 0.030 0.028 0.042 0.063
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment
income............ (0.050) (0.052) (0.030) (0.028) (0.042) (0.063)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= ========= ========= ===============
Total Return............ 5.14% 5.30% 3.08% 2.87% 4.38% 6.55%(c)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets at end of
period (000)...... $375,797 $194,807 $195,490 $167,269 $152,652 $ 95,962
Ratio of expenses to
average net
assets............ 0.71% 0.74% 0.78% 0.78% 0.79% 0.76%(b)
Ratio of net
investment income
to average net
assets............ 5.01% 5.18% 3.05% 2.80% 4.14% 6.75%(b)
Ratio of expenses to
average net
assets*........... 0.96% 0.99% 0.98% 0.98% 1.03% 1.01%(b)
Ratio of net
investment income
to average net
assets*........... 4.76% 4.94% 2.85% 2.60% 3.91% 6.50%(b)
</TABLE>
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* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
prospectus
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<PAGE> 8
<TABLE>
<CAPTION>
U.S. TREASURY FUND
------------------------------------------------------------------------------
SEPTEMBER 5,
YEAR ENDED AUGUST 31, 1990 TO
-------------------------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992 1991(a)
-------- -------- -------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income......... 0.047 0.048 0.028 0.025 0.038 0.061
-------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income......... (0.047) (0.048) (0.028) (0.025) (0.038) (0.061)
-------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ==============
Total Return...................... 4.85% 4.95% 2.87% 2.57% 3.91% 6.28%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)....................... $217,406 $187,007 $165,353 $169,428 $136,637 $ 95,585
Ratio of expenses to average
net assets.................. 0.74% 0.75% 0.81% 0.81% 0.81% 0.78%(b)
Ratio of net investment income
to average net assets....... 4.74% 4.88% 2.81% 2.51% 3.65% 6.10%(b)
Ratio of expenses to average
net assets*................. 0.99% 1.00% 1.01% 1.01% 1.04% 1.03%(b)
Ratio of net investment income
to average net assets*...... 4.49% 4.63% 2.61% 2.31% 3.41% 5.85%(b)
</TABLE>
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* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
INVESTMENT OBJECTIVE
U.S. TREASURY FUND
The investment objective of the U.S. Treasury Fund is to seek current income
with liquidity and stability of principal by investing exclusively in short-term
obligations backed by the full faith and credit of the U.S. Government, some of
which may be subject to repurchase agreements.
CASH MANAGEMENT FUND
The investment objective of the Cash Management Fund is to seek current income
with liquidity and stability of principal by investing in money market
instruments which are considered by the Board of Trustees to present minimal
credit risks.
BOTH MONEY MARKET FUNDS
All securities or instruments in which either of the Money Market Funds invests
are valued based on the amortized cost valuation technique pursuant to Rule 2a-7
under the Investment Company Act of 1940 (the "1940 Act"). All instruments in
which either of the Money Market Funds invests will have remaining maturities of
397 days or less, although instruments subject to repurchase agreements and
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6
<PAGE> 9
certain variable or floating rate obligations may bear longer maturities. The
average dollar-weighted maturity of the securities in each of the Money Market
Funds will not exceed 90 days. Obligations purchased by the Money Market Funds
are limited to U.S. dollar-denominated obligations which the Board of Trustees
has determined present minimal credit risks. See the Statement of Additional
Information for an explanation of the amortized cost valuation method.
Although the U.S. Treasury Fund and the Cash Management Fund have similar
investment objectives, their particular portfolio securities and yields will
differ due to differences in the types of permitted investments, cash flow, and
the availability of particular portfolio investments. The investment objective
with respect to each of the Money Market Funds is fundamental and may not be
changed without a vote of the holders of a majority of the outstanding Shares
(as defined in "GENERAL INFORMATION-- Miscellaneous") of the respective Fund.
There can be, of course, no assurance that either of the Money Market Funds will
achieve its investment objective.
Additionally, the Money Market Funds may engage in certain investment techniques
which may subject the Funds to certain risks (see "INVESTMENT POLICIES AND
SPECIAL CONSIDERATIONS--Both Money Market Funds").
INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS
U.S. TREASURY FUND
The U.S. Treasury Fund will invest exclusively in obligations backed by the full
faith and credit of the U.S. Government and at least 65% of the Fund's total
assets will be invested in direct U.S. Treasury obligations, some of which may
be subject to repurchase agreements. Such obligations may include "stripped"
U.S. Treasury obligations such as Treasury Receipts issued by the U.S. Treasury
representing either future interest or principal payments. Stripped securities
are issued at a discount to their "face value," and may exhibit greater price
volatility than ordinary debt securities because of the manner in which their
principal and interest are returned to investors. Obligations purchased by the
U.S. Treasury Fund may be subject to repurchase agreements.
CASH MANAGEMENT FUND
The Fund may invest in (1) obligations of the U.S. Government or its agencies or
instrumentalities; (2) commercial paper, loan participation interests,
medium-term notes, asset-backed securities and other promissory notes, including
floating or variable rate obligations; and (3) domestic, Yankeedollar and
Eurodollar certificates of deposit, time deposits, bankers' acceptances,
commercial paper, bearer deposit notes and promissory notes including floating
or variable rate obligations issued by U.S. or foreign bank holding companies
and their bank subsidiaries, branches and agencies. The Fund will invest only in
issuers or instruments that at the time of purchase (1) have received the
highest short-term rating by at least two nationally recognized statistical
ratings organizations ("NRSROs") (e.g., "A-1" by Standard & Poor's Corporation
and "P-1" by Moody's Investors Services, Inc.); or (2) are single rated and have
received the highest short-term rating by a NRSRO; or (3) are unrated, but are
determined to be of comparable quality by the Investment Adviser pursuant to
guidelines approved by the Board of Trustees and subject to the ratification of
the Board of Trustees. See the Statement of Additional Information for
definitions of the foregoing instruments and rating systems.
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<PAGE> 10
The Fund will concentrate its investments in obligations issued by the banking
industry. Concentration in this context means the investment of more than 25% of
the Fund's assets in such investments. However, for temporary defensive purposes
during periods when the Investment Adviser believes that maintaining this
concentration may be inconsistent with the best interest of Shareholders, the
Fund will not maintain this concentration. Concentration in obligations issued
by commercial banks and bank holding companies will involve a greater exposure
to economic, business, political, or regulatory changes that are generally
adverse to banks and bank holding companies. Such changes could include
significant changes in interest rates, general declines in bank asset quality,
including real estate loans, and the imposition of costly or otherwise
burdensome government regulations or restrictions. The Fund will not purchase
securities issued by BOTC or any of its affiliates.
Investments in Eurodollar and Yankeedollar obligations involve additional risks
not present with domestic securities. Most notably, there generally is less
publicly available information about foreign companies; there may be less
governmental regulation and supervision; they may use different accounting and
financial standards; and the adoption of foreign governmental restrictions might
adversely affect the payment of principal and interest on foreign investments.
In addition, not all foreign branches of United States banks are supervised or
examined by regulatory authorities as are United States banks, and such branches
may not be subject to reserve requirements.
Obligations issued or guaranteed by U.S. Government agencies or
instrumentalities in which the Cash Management Fund may invest can vary
significantly in terms of the credit risk involved. Obligations of certain
agencies and instrumentalities of the U.S. Government such as the Government
National Mortgage Association and the Export-Import Bank of the United States,
are supported by the full faith and credit of the U.S. Treasury; others, such as
those of the Federal National Mortgage Association, are supported by the right
of the issuer to borrow from the U.S. Treasury; others, such as those of the
Student Loan Marketing Association, are supported by the discretionary authority
of the U.S. Government to purchase the agency's obligations; still others, such
as those of the Federal Farm Credit Banks or the Federal Home Loan Mortgage
Corporation, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored agencies or instrumentalities if it is not
obligated to do so by law. The Cash Management Fund will invest in the
obligations of such agencies or instrumentalities only when the Investment
Adviser deems the credit risk with respect thereto to be minimal.
Investments in loan participation interests are generally not traded in a
secondary market and are regarded by the Funds as illiquid; the Cash Management
Fund intends to limit investments in loan participation interests to 5% of its
total assets.
Variable amount master demand notes in which the Cash Management Fund may invest
are unsecured demand notes that permit the indebtedness thereunder to vary, and
provide for periodic adjustments in the interest rate according to the terms of
the instrument. Because master demand notes are direct lending arrangements
between the Cash Management Fund and the issuer, they are not normally traded.
Although there is no secondary market for the notes, the Cash Management Fund
may demand payment of principal and accrued interest at any time. The period of
time remaining until the principal amount actually can be recovered under a
variable amount master demand note generally shall not exceed seven days. To the
extent such maximum period were exceeded, the note in question would be
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<PAGE> 11
considered illiquid. While the notes are not typically rated by credit rating
agencies, issuers of variable amount master demand notes (which are normally
manufacturing, retail, financial, and other business concerns) must satisfy the
same criteria as set forth above for commercial paper. The Cash Management Fund
will invest in variable amount master demand notes only where such notes are
determined by its Investment Adviser pursuant to guidelines established by the
Funds' Board of Trustees to be of comparable quality to rated issuers or
instruments eligible for investment by the Cash Management Fund. The Investment
Adviser will consider the earning power, cash flow, and other liquidity ratios
of the issuers of such notes and will continuously monitor their financial
status and ability to meet payment on demand. In determining average weighted
portfolio maturity, a variable amount master demand note will be deemed to have
a maturity equal to the longer of the period of time remaining until the next
readjustment of the interest rate or the period of time remaining until the
principal amount can be recovered from the issuer through demand.
The Cash Management Fund may acquire puts with respect to obligations in its
portfolio and sell those puts in conjunction with a sale of those obligations.
See the Statement of Additional Information for more information regarding puts.
OTHER INVESTMENT TECHNIQUES OF THE MONEY MARKET FUNDS
MORTGAGE-RELATED SECURITIES
The Money Market Funds may purchase mortgage-related securities representing
pools of mortgage loans assembled for sale to investors. The U.S. Treasury Fund
will invest only in mortgage-related securities backed by the full faith and
credit of the U.S. Government. The Cash Management Fund may also invest in such
instruments and, in addition, may invest in mortgage-backed securities issued
and/or guaranteed only by U.S. Government agencies or instrumentalities, or by
private issuers such as commercial banks, savings and loan institutions,
mortgage bankers, and private mortgage insurance companies. Although certain
mortgage-related securities are guaranteed by a third party, or otherwise
similarly secured, the market value of the security, which may fluctuate is not
so secured. If a Money Market Fund purchases a mortgage-related security at a
premium, that premium may be lost if there is a decline in the market value of
the security whether resulting from changes in interest rates or prepayments in
the underlying mortgage collateral. As with other interest-bearing securities,
the prices of such securities are inversely affected by changes in interest
rates. However, though the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates, the mortgages underlying the securities are prone to
prepayment. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to the Fund holding the security. In addition, regular payments received in
respect of mortgage-related securities include both interest and principal. No
assurance can be given as to the return the Money Market Fund holding a
mortgage-related security will receive when these amounts are reinvested. The
Cash Management Fund also may invest in collateralized mortgage obligations
structured on pools of mortgage pass-through certificates or mortgage loans. For
further discussion concerning the investment considerations involved, see
"INVESTMENT OBJECTIVE AND POLICIES--Additional Information on Fund
Instruments--Mortgage-Related Securities" in the Statement of Additional
Information.
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<PAGE> 12
REPURCHASE AGREEMENTS
Securities held by a Money Market Fund may be subject to repurchase agreements.
Under the terms of a repurchase agreement, a Money Market Fund would acquire
securities from financial institutions such as member banks of the Federal
Deposit Insurance Corporation or registered broker-dealers which the Investment
Adviser deems creditworthy under guidelines approved by the Funds' Board of
Trustees, subject to the seller's agreement to repurchase such securities at a
mutually agreed upon date and price. The repurchase price would generally equal
the price paid by the Money Market Fund plus interest negotiated on the basis of
current short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller under a repurchase agreement will be
required to maintain the value of collateral held pursuant to the agreement at
not less than the repurchase price (including accrued interest) and the
Investment Adviser possessing investment authority will monitor the collateral's
value to ensure that it equals or exceeds the repurchase price. In addition,
securities subject to repurchase agreements will be held in a segregated account
by the Custodian or a Sub-Custodian of the Fund. Repurchase agreements are
considered to be loans by an investment company under the 1940 Act. See the
Statement of Additional Information for more information regarding this
investment practice.
WHEN-ISSUED SECURITIES
The Money Market Funds may purchase securities on a when-issued basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield and thereby involve a risk that the
yield obtained in the transaction will be less than those available in the
market when delivery takes place. A Money Market Fund will generally not pay for
such securities or start earning interest on them until they are received. When
a Money Market Fund agrees to purchase such securities, its Custodian will set
aside cash or liquid securities equal to the amount of the commitment in a
separate account. Securities purchased on a when-issued basis are recorded as an
asset and are subject to changes in value based upon changes in the general
level of interest rates. Each Money Market Fund expects that commitments to
purchase when-issued securities will not exceed 25% of the value of its total
assets absent unusual market conditions. In the event that its commitments to
purchase when-issued securities ever exceeded 25% of the value of its assets, a
Money Market Fund's liquidity and the ability of the Investment Adviser to
manage it might be severely affected. No Money Market Fund intends to purchase
when-issued securities for speculative purposes but only in furtherance of its
investment objective.
REVERSE REPURCHASE AGREEMENTS
The Money Market Funds may borrow funds for temporary purposes by entering into
reverse repurchase agreements in accordance with the investment restrictions
described below. Pursuant to such agreements, a Money Market Fund would sell
portfolio securities to financial institutions such as banks and broker-dealers
and agree to repurchase them at a mutually agreed-upon date and price. At the
time a Money Market Fund enters into a reverse repurchase agreement, it will
place in a segregated custodial account assets such as liquid high quality debt
securities, consistent with the Fund's investment objective having a value not
less than 100% of the repurchase price (including accrued interest), and will
subsequently monitor the account to ensure that such required value is
maintained. Reverse repurchase agreements involve the risk that the market value
of the securities sold by a Money Market
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Fund may decline below the price at which such Fund is obligated to repurchase
the securities. Reverse repurchase agreements are considered to be borrowings by
an investment company under the 1940 Act.
SECURITIES LENDING
In order to generate additional income, a Money Market Fund may, from time to
time, lend its portfolio securities to broker-dealers, banks, or institutional
borrowers of securities. The Funds will enter into loan agreements only with
broker-dealers, banks, or institutions that BOTC has determined are creditworthy
under guidelines established by the Funds' Board of Trustees. The Money Market
Funds intend to limit their securities lending to 5% of their respective total
assets. See the Statement of Additional Information for more information on
these investment activities.
PRIVATE PLACEMENT INVESTMENTS
The Money Market Funds may invest in commercial paper issued in reliance on the
so-called "private placement" exemption from registration afforded by Section
4(2) of the Securities Act of 1933 (the "Securities Act"), and resold to
qualified institutional buyers under Securities Act Rule 144A ("Section 4(2)
paper"). Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as the
Funds who agree that they are purchasing the paper for investment and not with a
view to public distribution. Any resale by the purchaser must be in an exempt
transaction and may be accomplished in accordance with Rule 144A. Section 4(2)
paper normally is resold to other institutional investors like the Funds through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. The Money Market Funds will
not invest more than 10% of their respective assets in Section 4(2) paper and
illiquid securities unless the Investment Adviser determines, by continuous
reference to the appropriate trading markets and pursuant to guidelines approved
by the Board of Trustees, that any Section 4(2) paper held by such Money Market
Fund in excess of this level is at all times liquid.
Because it is not possible to predict with assurance exactly how this market for
Section 4(2) paper sold and offered under Rule 144A will develop, the Board of
Trustees and the Investment Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the Money Market Funds' investments in
these securities, focusing on such important factors, among others, as
valuation, liquidity, and availability of information. Investments in Section
4(2) paper could have the effect of reducing the Money Market Funds' liquidity
to the extent that qualified institutional buyers become for a time not
interested in purchasing these restricted securities.
ASSET-BACKED SECURITIES
The Cash Management Fund may invest in securities backed by automobile
receivables and credit-card receivables and other securities backed by other
types of receivables or other assets. Credit support for asset-backed securities
may be based on the underlying assets and/or provided through credit
enhancements by a third party. Credit enhancement techniques include letters of
credit, insurance bonds, limited guarantees (which are generally provided by the
issuer), senior-subordinated structures and over-collateralization. The Cash
Management Fund will only purchase an asset-backed security if it
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is rated within the three highest ratings categories assigned by a NRSRO (e.g.,
at least "A" by S&P or Moody's). Asset-backed securities are generally
considered to be illiquid.
INVESTMENT RESTRICTIONS
The U.S. Treasury Fund and the Cash Management Fund are subject to a number of
fundamental investment restrictions that may be changed with respect to a
particular Money Market Fund only by a vote of a majority of the outstanding
Shares of such Money Market Fund (see "GENERAL INFORMATION--Miscellaneous").
U.S. TREASURY FUND
The U.S. Treasury Fund may not purchase securities other than U.S. Treasury
bills, notes and other obligations backed by the full faith and credit of the
U.S. Government, some of which may be subject to repurchase agreements.
BOTH MONEY MARKET FUNDS
The U.S. Treasury Fund and the Cash Management Fund may not:
1. Purchase securities of any one issuer, other than obligations issued or
guaranteed by the U.S. Government (and, with respect to the Cash Management
Fund, other than obligations issued or guaranteed by the U.S. Government or
its agencies or instrumentalities) if, as a result, with respect to 75% of
its portfolio, more than 5% of the value of each Fund's total assets would be
invested in such issuer.*
2. Purchase any securities which would cause more than 25% of the value of each
Fund's total assets at the time of purchase to be invested in securities of
one or more issuers conducting their principal business activities in the
same industry, provided that (a) there is no limitation with respect to
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, obligations issued by commercial banks and bank holding
companies, repurchase agreements secured by bank instruments or obligations
of the U.S. Government or its agencies or instrumentalities and obligations
issued by commercial banks and bank holding companies primarily engaged in
the banking industry; (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of their parents; and (c) utilities will
be divided according to their services. For example, gas, gas transmission,
electric and gas, electric, and telephone will each be considered a separate
industry.
3. Borrow money or issue senior securities, except that each Fund may borrow
from banks and enter into reverse repurchase agreements for temporary
purposes in amounts up to 10% of the value of its total assets at the time of
such borrowing; or mortgage, pledge, or hypothecate any assets,
- ---------------
* In addition, although not a fundamental investment restriction (and therefore
subject to change without Shareholder vote), to the extent required by rules
of the Securities and Exchange Commission the U.S. Treasury Fund and the Cash
Management Fund each generally apply the above restriction with respect to
100% of their portfolios.
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<PAGE> 15
except in connection with any such borrowing and in amounts not in excess of
the lesser of the dollar amounts borrowed or 10% of the value of such Fund's
total assets at the time of its borrowing. Neither Fund will purchase
securities while its borrowings (including reverse repurchase agreements)
exceed 5% of the total assets of such Fund.
4. Make loans, except that each Fund may purchase or hold debt instruments in
accordance with its investment objective and policies, may lend portfolio
securities in accordance with its investment objective and policies, and may
enter into repurchase agreements.
5. Enter into repurchase agreements with maturities in excess of seven days if
such investment, together with other instruments in such Fund which are not
readily marketable, exceeds 10% of such Fund's net assets.
6. Invest in securities of other investment companies except as they may be
acquired as part of a merger, consolidation, reorganization, or acquisition
of assets.
CASH MANAGEMENT FUND
The Cash Management Fund may not write or sell puts, calls, straddles, spreads
or combinations thereof except that the Cash Management Fund may acquire puts
with respect to obligations in its portfolio and sell those puts in conjunction
with a sale of those obligations. The Cash Management Fund will not:
(1) Acquire a put, if, immediately after such acquisition, over 5% of the total
value of the Cash Management Fund's assets would be subject to puts from
such issuer (except that the 5% limitation is inapplicable to puts that, by
their terms, would be readily exercisable in the event of a default in
payment of principal or interest on the underlying securities). For the
purpose of this investment restriction and the investment restriction
immediately below, a put will be considered to be from the party to whom
the Cash Management Fund will look for payment of the exercise price;
(2) Acquire a put that, by its terms, would be readily exercisable in the event
of a default in payment of principal and interest on the underlying
security or securities if immediately after that acquisition the value of
the security or securities underlying that put, when aggregated with the
value of any other securities issued or guaranteed by the issuer of the
put, would exceed 10% of the total value of the Cash Management Fund's
assets.
VALUATION OF SHARES
The net asset values of the Funds are determined and their Shares are priced as
of 12:00 noon Eastern Time and as of the close of regular trading of the New
York Stock Exchange ("NYSE") (generally 4:00 p.m. Eastern Time) on each Business
Day ("Valuation Time"). As used herein, a "Business Day" constitutes any day on
which the NYSE is open for trading, and the Federal Reserve Bank of Kansas City
is open, except days on which there are not sufficient changes in the value of a
Fund's portfolio securities that the Fund's net asset value might be materially
affected, or days during which no Shares are tendered for redemption and no
orders to purchase Shares are received. Currently, the NYSE or the Federal
Reserve Bank of Kansas City is closed on the following holidays: New Year's Day,
Martin
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<PAGE> 16
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas Day.
Net asset value per Share for purposes of pricing sales and redemptions is
calculated by dividing the value of a Money Market Fund's assets, less its
liabilities, by the number of such Money Market Fund's outstanding Shares.
The assets in each Money Market Fund are valued based upon the amortized cost
method. Pursuant to the rules and regulations of the Securities and Exchange
Commission regarding the use of the amortized cost method, each Money Market
Fund will maintain a dollar-weighted average portfolio maturity of 90 days or
less and no security will have a remaining maturity in excess of 397 days,
although obligations subject to repurchase agreements and certain variable and
floating rate instruments may bear longer maturities.
Although each of the Money Market Funds seeks to maintain the net asset value
per Share at $1.00, there can be no assurance that this net asset value will be
maintained.
HOW TO PURCHASE SHARES
Shares of the Money Market Funds ("Shares") are sold on a continuous basis and
may be purchased directly from the Funds' Distributor, BISYS, either by mail, by
telephone, or by electronic transfer. Shares may also be purchased through a
bank or broker-dealer who has established a dealer agreement with the
Distributor. Except as described in "Auto Invest Plan" below, the minimum
initial purchase is $1,000, and the minimum for subsequent purchases is $100.
These minimums may be waived if purchases are made in connection with Individual
Retirement Accounts ("IRAs"), Keoghs, qualified pension plans or other employer
plans. For information on IRAs, Keoghs or similar plans, contact BOTC at (918)
588-6586.
Shares of each Money Market Fund are purchased at the net asset value per Share
of each such Money Market Fund (see "VALUATION OF SHARES") next determined after
receipt by the Distributor of an order to purchase Shares in good form. An order
accepted after the last Valuation Time on any Business Day will be executed at
the net asset value determined as of the first Valuation Time on the next
Business Day. An order to purchase Shares will be deemed to have been received
and accepted by the Distributor only when federal funds with respect thereto are
available to the Funds' Custodian for investment. Federal funds are monies
credited to a bank's account with a Federal Reserve Bank. Payment for an order
to purchase Shares which is transmitted by federal funds wire will be available
the same day for investment by the Funds' Custodian, if received prior to 12:00
noon Eastern time. Payments transmitted by other means (such as by check drawn
on a member of the Federal Reserve System) will normally be converted into
federal funds within two banking days after receipt. The Funds strongly
recommend that investors of substantial amounts use federal funds to purchase
Shares.
BY MAIL
Investors may make an initial purchase of Shares of the Money Market Funds by
completing and signing an Account Registration form and mailing it, along with a
check (or other negotiable bank instrument or money order) for at least $1,000,
payable to the appropriate Money Market Fund, in care of the Funds' Custodian at
Bank of Oklahoma, N.A., Attention: American Performance Funds, Department 12,
Tulsa,
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<PAGE> 17
Oklahoma 74182. Subsequent purchases of Shares may be made at any time by
mailing a check (or other negotiable bank draft or money order) for at least
$100 to the above address.
Account Registration forms can be obtained by calling the Funds at (800)
762-7085.
BY TELEPHONE OR ELECTRONIC TRANSFER
If an investor's Account Registration form has been previously received by the
Distributor, investors may also purchase Shares of either of the Money Market
Funds by telephone or by electronic transfer to the Funds' Custodian. To place
an order by telephone, call the Funds toll-free at (800) 762-7085. Payment for
Shares ordered by telephone may be made by check and must be received by the
Funds' Custodian within the settlement requirements defined under the Securities
Exchange Act of 1934. Shares of the Funds ordered by telephone will be purchased
for the Shareholder's account when the order has been received and federal funds
with respect thereto are available to the Funds' Custodian for investment. Any
questions regarding current settlement requirements or electronic payment
instructions can be directed to the Funds at (800) 762-7085.
AUTO INVEST PLAN
The Funds offer an Auto Invest Plan which enables Shareholders of the Funds to
make regular monthly or quarterly purchases of Shares through automatic
deductions from their bank accounts. With Shareholder authorization, the
Transfer Agent deducts the amount specified from the Shareholder's bank account
which is then automatically invested in Shares at net asset value. The required
minimum initial investments when opening an account using the Auto Invest Plan
is $100; the minimum amount for subsequent investments in the Fund is $50. To
participate in the Auto Invest Plan, Shareholders should complete the
appropriate section of the Account Registration form which can be acquired by
calling (800) 762-7085. To change the Auto Invest instructions, a Shareholder
must submit a written request to the Distributor. A Shareholder may discontinue
the feature by submitting a written request to or by calling the Funds.
FUND DIRECT INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
A Fund Direct IRA enables individuals, even if they participate in an
employer-sponsored retirement plan, to establish their own retirement program.
IRA contributions may be tax-deductible and earnings are tax-deferred. Under the
Tax Reform Act of 1986, the tax deductibility of IRA contributions is restricted
or eliminated for individuals who participate in certain employer pension plans
and whose annual income exceeds certain limits. Existing IRAs and future
contributions up to the IRA maximums, whether deductible or not, still earn
income on a tax-deferred basis.
All IRA distribution requests must be made in writing to the Funds. Any
additional deposits to an IRA must distinguish the type and year of the
contribution. For more information on an IRA call the Funds at (800) 762-7085.
Shareholders are advised to consult a tax adviser on IRA contributions and
withdrawal requirements and restrictions.
OTHER INFORMATION REGARDING PURCHASES
Shares may also be purchased through procedures established by the Distributor
in connection with the requirements of qualified accounts maintained by or on
behalf of certain persons ("Customers") by
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<PAGE> 18
Participating Organizations under the Funds' Distribution Plan (see
"DISTRIBUTION"). Shares of the Funds sold to a Participating Organization acting
on behalf of Customers will normally be held of record by the Participating
Organization, and it is the responsibility of the Participating Organization to
transmit purchase or redemption orders to the Distributor and to deliver funds
for the purchase thereof to the Custodian on a timely basis. Beneficial
ownership of Shares of the Funds will be reflected in the account statements
provided to customers by Participating Organizations.
Depending upon the terms of a particular Customer account, Participating
Organizations may charge a Customer account fees for services provided in
connection with investment in any Money Market Fund. Information concerning
these services and any charges can be obtained from the Participating
Organization. This Prospectus should be read in conjunction with any such
information so received.
In the case of orders for the purchase of Shares placed through a broker-dealer,
the applicable public offering price will be the net asset value as so
determined, but only if the broker-dealer receives the order prior to the
Valuation Time for that day and transmits it to the Distributor prior to the
Valuation Time for that day. The broker-dealer is responsible for transmitting
such orders promptly. If the broker-dealer fails to do so, the investor's right
to that day's closing price must be settled between the investor and the
broker-dealer. If the broker-dealer receives the order after the Valuation Time
for that day, the price will be based on the net asset value determined as of
the Valuation Time for the next day.
Each Money Market Fund reserves the right to reject any order for the purchase
of its Shares in whole or in part, including purchases made with foreign and
third party checks.
Every Shareholder will receive a confirmation of each new transaction in the
Shareholder's account, which will also show the total number of Shares of such
Fund owned by the Shareholder and the number of Shares being held in safekeeping
by the Transfer Agent for the account of the Shareholder. Shareholders may rely
on these confirmations in lieu of certificates. No certificates representing
Shares of any Fund will be issued.
SALES CHARGES
There is no sales charge imposed by the Funds in connection with the purchase of
Shares of the Money Market Funds. Sales charges apply to purchases of the seven
other Funds of the American Performance Funds.
EXCHANGE PRIVILEGE
Shareholders may exchange Shares of the Money Market Funds for Shares of any
other Funds of the American Performance Funds so long as they maintain the
respective minimum account balance in each such Fund in which they own Shares.
Exchanges made from the Money Market Funds to the American Performance Bond
Investment Funds and the American Performance Equity Investment Funds will be
subject to the applicable sales charge upon the exchange, up to a maximum of 4%.
Exchanges made from either Money Market Fund into the other Money Market Fund
will be accomplished on the basis of current net asset value. An exchange is
considered to be a sale of Shares for federal income tax purposes on which a
Shareholder may realize a capital gain or loss. The exchange privilege may only
be
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<PAGE> 19
exercised in states where the exchange may legally be made. The Funds reserve
the right to eliminate or to alter the terms of this exchange offer upon sixty
days' notice to Shareholders.
A Shareholder wishing to exchange his or her Shares may do so by contacting the
Funds at (800) 762-7085 or by providing written instructions to the Distributor.
Any Shareholder who wishes to make an exchange must have received a current
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
HOW TO REDEEM SHARES
Shares may ordinarily be redeemed by mail or by telephone. Shareholders may
redeem their Shares without charge on any day that net asset value is calculated
(see "VALUATION OF SHARES.") However, all or part of a Customer's Shares may be
redeemed in accordance with instructions and limitations pertaining to his or
her account held at a Participating Organization.
BY MAIL
Shares may be redeemed by mail by sending a written request to the Distributor
in care of the Funds' Custodian at Bank of Oklahoma, N.A., Attention: American
Performance Funds, Department 12, Tulsa, Oklahoma 74182. The Distributor may
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations as those terms are defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. The Distributor reserves the right to
reject any signature guarantee if (i) it has reason to believe that the
signature is not genuine, (ii) it has reason to believe that the transaction
would otherwise be improper, or (iii) the guarantor institution is a broker or
dealer that is neither a member of a clearing corporation nor maintains net
capital of at least $100,000. The signature guarantee requirements will be
waived if all of the following conditions apply: (1) the redemption check is
payable to the Shareholder(s) of record, and (2) the redemption check is mailed
to the Shareholder(s) at the address of record. The Shareholder may also have
the proceeds mailed or sent electronically to a commercial bank account
previously designated on the Account Registration form or by written instruction
to the Distributor. There is no charge for having redemption requests mailed to
a designated bank account.
BY TELEPHONE
Shares may be redeemed by telephone if the Account Registration form reflects
that the Shareholder has that capability. The Shareholder may have the proceeds
mailed to his or her address or mailed or sent electronically to a commercial
bank account previously designated on the Account Registration form. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Electronic payment requests may be
made by the Shareholder by calling the Funds at (800) 762-7085. The Transfer
Agent may reduce the amount of a wire redemption payment by the Custodian's
then-current wire redemption charge (presently $15.00). Neither the Distributor,
the Investment Adviser, the Sub-Adviser nor the Funds will be liable for any
losses, damages, expenses or costs arising out of any telephone transaction
(including exchanges and redemptions) effected in accordance with the Funds'
telephone transaction procedures, upon instructions reasonably believed to be
genuine. The Funds will employ procedures designed to provide
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<PAGE> 20
reasonable assurance that instructions communicated by telephone are genuine; if
these procedures are not followed, the Funds may be liable for any losses due to
unauthorized or fraudulent instructions. These procedures include recording all
phone conversations, sending confirmations to Shareholders within 72 hours of
the telephone transaction, verifying the account number or tax identification
number and sending redemption proceeds only to the address of record or to a
previously authorized account. If, due to temporary adverse conditions,
investors are unable to effect telephone transactions, Shareholders may also
mail the redemption request to the Distributor at the address listed above under
"HOW TO REDEEM SHARES-- By Mail." The telephone redemption option will be
suspended for a period of 10 days following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan enables Shareholders of the Fund to make regular
monthly or quarterly redemptions of Shares if their account has at least
$10,000. With Shareholder authorization, the Transfer Agent will automatically
redeem Shares at the net asset value on the dates of the withdrawal and have a
check in the amount specified mailed to the Shareholder. The required minimum
withdrawal is $100. To participate in the Systematic Withdrawal Plan,
Shareholders should call (800) 762-7085 for more information. Purchases of
additional Shares concurrent with withdrawals may be disadvantageous to certain
Shareholders because of tax liabilities. To change the Systematic Withdrawal
instructions, a Shareholder must submit a written request to the Distributor. A
Shareholder may discontinue the feature by submitting a written request to or by
calling the Funds.
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per Share next
determined after receipt of a valid request for redemption, as described above.
Payment to Shareholders for Shares redeemed will be made within the settlement
requirements defined in the Securities Exchange Act of 1934, after receipt by
the Distributor of the request for redemption. However, to the greatest extent
possible, requests from Shareholders for payments upon redemption of Shares
received by the Distributor before 12:00 noon (Eastern Time), will be honored on
that Business Day or, if received after 12:00 noon (Eastern Time), on the
following Business Day, unless it would be disadvantageous to the Fund or its
Shareholders to sell or liquidate portfolio securities in an amount sufficient
to satisfy requests for payments in that manner.
At various times a Money Market Fund may be requested to redeem Shares for which
it has not yet received good payment. In such circumstances, the forwarding of
proceeds may be delayed for up to 15 days until payment has been collected for
the purchase of such Shares. The Money Market Funds intend to pay cash for all
Shares redeemed, but under abnormal conditions which make payment in cash
unwise, payment may be made wholly or partly in readily marketable portfolio
securities with a market value equal to the redemption price. In such cases, an
investor may incur brokerage costs in converting such securities to cash.
Due to the relatively high cost of handling small investments, each Money Market
Fund reserves the right to redeem, at net asset value, the Shares of any
Shareholder if, because of redemptions of Shares by or on behalf of the
Shareholder, the account of such Shareholder in any Money Market Fund has a
value of less than $500. Before any Money Market Fund exercises its right to
redeem such Shares and
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<PAGE> 21
to send the proceeds to the Shareholder, the Shareholder will be given notice
that the value of the Shares in his or her account is less than the minimum
amount and will be allowed 60 days to make an additional investment in such Fund
in an amount which will increase the value of the account to at least $500.
See the Funds' Statement of Additional Information--"ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION"--for examples of when the right of redemption may be
suspended.
DIVIDENDS
The net investment income of each Money Market Fund is declared daily and paid
monthly as a dividend to the respective Shareholders of each such Fund. Net
capital gain income (if any) is distributed at least once a year. Shares in the
Money Market Funds purchased before 12:00 noon (Eastern Time) begin earning
dividends on the same Business Day. All Shares continue to earn dividends
through the day before their redemption. A Shareholder will automatically
receive all dividends from a Fund in additional full and fractional Shares of
such Fund at the net asset value as of the ex-dividend date, unless the
Shareholder elects to receive dividends in cash. Reinvested dividends receive
the same tax treatment as dividends paid in cash. Dividends are paid in cash not
later than seven Business Days after a Shareholder's complete redemption of his
Shares in a Money Market Fund. Such election, or any revocation thereof, must be
made in writing to the Distributor, BISYS Fund Services, 3435 Stelzer Road,
Columbus, Ohio 43219, and will become effective with respect to dividends paid
after its receipt by the Distributor.
Shareholders may elect to have all income, dividends, and capital gains
distributions paid by check or reinvested in the Fund. If you elect to receive
distributions paid by check and the check (1) is returned and marked as
"undeliverable" or (2) remains uncashed for six months, your payment election
will be changed automatically and your future dividend and capital gains
distribution will be reinvested in the Fund at the per share net asset value
determined as of the date of payment of the distribution. In addition, any
undeliverable check that remains uncashed for six months will be canceled and
reinvested in the Fund at the per share net asset value determined as of the
date of cancellation.
FEDERAL INCOME TAXES
Each of the Money Market Funds is treated as a separate entity for federal
income tax purposes, each intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"), and each
intends to distribute on a current basis all of its net investment income and
net capital gains if any so that it is not required to pay federal income taxes
on amounts so distributed to Shareholders. In general, distributions, whether
paid in cash or additional shares, are taxable to Shareholders as ordinary
income. Shareholders will be advised at least annually as to the federal income
tax consequences of distributions made during the year.
The Money Market Funds do not expect to realize any long-term capital gains and,
therefore, do not foresee paying any "capital gain dividends" as described in
the Code.
Dividends attributable to interest earned on obligations of the U.S. Government
may not be exempt from state taxes even though the interest, if earned directly
by the Shareholders, would be. Shareholders
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<PAGE> 22
should consult their tax advisers for further information concerning state and
local taxes, which may differ from federal income tax rules.
Additional information regarding federal taxes is contained in the Statement of
Additional Information under "INVESTMENT OBJECTIVES AND POLICIES--Additional Tax
Information Concerning All The Funds." However, the foregoing and the material
in the Statement of Additional Information are only brief summaries of some of
the important tax considerations generally affecting the Funds and their
Shareholders. In addition, the foregoing discussion and the federal tax
information in the Statement of Additional Information are based on tax laws and
regulations which are in effect as of the date of this Prospectus; these laws
and regulations may subsequently change. Potential investors in a Money Market
Fund are urged to consult their tax advisers with special reference to their own
tax situation.
DISTRIBUTION
Shares of the Money Market Funds are sold on a continuous basis by the
Distributor for the Funds, BISYS Fund Services (the "Distributor"). Under the
Funds' Distribution and Shareholder Services Plan (the "Distribution Plan"), the
Money Market Funds will pay a monthly distribution fee (also referred to as a
12b-1 fee) to the Distributor as compensation for its services in connection
with the Distribution Plan at an annual rate equal to the lesser of (1) such fee
as may from time to time be agreed upon in writing by the Funds and the
Distributor, or (2) twenty-five one-hundredths of one percent (.25%) of the
average daily net assets of each of the Money Market Funds. The Distributor may
use the distribution fee to provide distribution assistance with respect to the
Money Market Funds' Shares or to provide Shareholder services to the holders of
the Money Market Funds' Shares ("Customers") purchased through financial
institutions and intermediaries, broker-dealers, or similar entities, including
affiliates or subsidiaries of the Distributor ("Participating Organizations")
pursuant to contractual arrangements with the Distributor under the Distribution
Plan.
The distribution fee will be payable without regard to whether the amount of the
fee is more or less than the actual expenses incurred in a particular year by
the Distributor in connection with distribution assistance or Shareholder
services rendered by the Distributor itself or incurred by the Distributor
pursuant to the contractual agreement entered into under the Distribution Plan.
The Glass-Steagall Act and other applicable laws generally prohibit banks from
engaging in the business of underwriting securities, but in general do not
prohibit banks from purchasing securities as agent for and upon the order of
customers. Accordingly, banks acting as Participating Organizations may provide
only those services which, in the banks' opinion, are consistent with the then
current legal requirements. It is possible, however, that future legislative,
judicial or administrative action affecting the securities activities of banks
will cause the Funds to alter or discontinue their arrangements with banks that
act as Participating Organizations, or change their method of operations. It is
not anticipated, however, that any change in the Funds' method of operations
would affect their net asset value per share or result in financial loss to any
customer. See the Statement of Additional Information for further information
regarding the Distribution Plan.
prospectus
20
<PAGE> 23
MANAGEMENT OF THE MONEY MARKET FUNDS
TRUSTEES OF THE FUNDS
Overall responsibility for management of the Money Market Funds rests with the
Board of Trustees of the Funds, who are elected by the Shareholders of the
Funds. The Funds will be managed by the Board of Trustees in accordance with the
laws of The Commonwealth of Massachusetts governing business trusts. There are
currently four Trustees, three of whom are not "interested persons" of the Funds
within the meaning of that term under the 1940 Act. The Board of Trustees, in
turn, elects the officers of the Funds to supervise actively the Funds'
day-to-day operations.
The Trustees of the Funds, their addresses, and principal occupations during the
past five years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------- ---------------------- ---------------------------------------------------------
<S> <C> <C>
Walter B. Grimm* Chairman and Trustee From June, 1992 to present, employee of BISYS Fund
3435 Stelzer Road Services; From 1987 to June, 1992, President of Leigh
Columbus, Ohio 43219 Consulting/Investments (investment firm).
Michael J. Hall Trustee From December, 1995 to present, Vice President and Chief
7130 South Lewis, Suite Financial Officer, Worldwide Sports & Recreation, Inc.;
850 from January, 1994 to present, Vice President and Chief
Tulsa, Oklahoma 74136 Financial Officer, Pexco Holdings, Inc.; from 1991 to
December, 1993, Senior Vice President, Finance and
Administration, Chief Financial Officer, Treasurer, and
Director of Operations, Europe/Africa/Middle East
Region of T.D. Williamson, Inc. (a heavy equipment
manufacturer).
Perry A. Wimpey Trustee From January, 1992 to present, Local Financial and
4843 S. 69th East Avenue Regulatory Consultant; from June, 1985 to January,
Tulsa, Oklahoma 74145 1992, Senior Vice President and Chief Financial
Officer, ONEOK Inc. (an energy company).
I. Edgar Hendrix Trustee From June 1983 to present, Vice President and Treasurer,
8 East 3rd Street Parker Drilling Co.
Tulsa, Oklahoma 74103
<FN>
- ------------
*Indicates an "interested person" of the Funds as defined in the 1940 Act.
</TABLE>
The Trustees of the Funds receive fees and are reimbursed for their expenses in
connection with each meeting of the Board of Trustees they attend. However, no
officer or employee of the Investment Adviser, the Sub-Adviser or the
Administrator of the Funds receives any compensation from the Funds for acting
as a Trustee. The officers of the Funds receive no compensation directly from
the Funds for performing the duties of their offices. BISYS receives fees from
the Funds for acting as Administrator and may receive additional income under
the Distribution Plan of the Funds.
INVESTMENT ADVISER
U.S. TREASURY FUND
BOTC serves as the Investment Adviser to the U.S. Treasury Fund. BOTC, the
largest trust company in the State of Oklahoma, is a subsidiary of Bank of
Oklahoma, N.A. ("BOK"), which in turn is a subsidiary of BOK Financial
Corporation ("BOK Financial"). BOK Financial is controlled by its principal
shareholder, George B. Kaiser. Through its subsidiaries, BOK Financial provides
a full array of trust,
prospectus
21
<PAGE> 24
commercial banking and retail banking services. Its non-bank subsidiaries engage
in various bank-related services, including mortgage banking and providing
credit, life, accident, and health insurance on certain loans originated by its
subsidiaries.
BOTC maintains offices in Tulsa and Oklahoma City and offers a variety of
services for both corporate and individual customers. Individual financial trust
services include personal trust management, administration of estates, and
management of individual investments and custodial accounts. For corporate
clients, the array of services includes management, administration and
recordkeeping of pension plans, thrift plans, 401(k) plans and master trust
plans. BOTC has experience in providing investment advisory service to the Funds
and experience in managing collective investment funds with investment
portfolios and objectives comparable to those of the Funds. BOTC also serves as
transfer agent and registrar for corporate securities, paying agent for
dividends and interest, and indenture trustee of bond issues. At December 31,
1995, BOTC was responsible for approximately $7.2 billion in assets including
approximately $3.2 billion in assets under management and possessed total
capital and surplus and undivided profits of over $7.7 million.
Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the investment objective and restrictions of the U.S. Treasury
Fund, BOTC reviews, supervises, and provides general investment advice regarding
the U.S. Treasury Fund's investment programs. Subject to the general supervision
of the Funds' Board of Trustees and in accordance with the investment objective
and restrictions of the U.S. Treasury Fund, BOTC makes all final decisions with
respect to portfolio securities of the U.S. Treasury Fund, places orders for all
purchases and sales of the portfolio securities of the U.S. Treasury Fund, and
maintains the U.S. Treasury Fund's records directly relating to such purchases
and sales.
For the services provided and expenses assumed pursuant to the Investment
Advisory Agreement with the Funds regarding the U.S. Treasury Fund, BOTC
receives a fee from the U.S. Treasury Fund, computed daily and paid monthly
equaling the lesser of (1) such fee as may from time to time be agreed upon in
writing by the Funds and BOTC, or (2) forty one-hundredths of one percent (.40%)
of the Fund's average daily net assets. BOTC and its parent, BOK, also receive
fee income from the Funds from several other sources. (See "SALES CHARGES,"
"DISTRIBUTION," and "GENERAL INFORMATION--Custodian and Transfer Agent.") BOTC
may periodically waive all or a portion of its fee with respect to the U.S.
Treasury Fund to increase the net income of such Fund available for distribution
as dividends. BOTC has currently established its investment advisory fee
pertaining to the U.S. Treasury Fund at forty one-hundredths of one percent
(.40%) of the U.S. Treasury Fund's average daily net assets pursuant to
agreements with the Funds.
For investment advisory services to the U.S. Treasury Fund for the fiscal year
ended August 31, 1996, the Funds paid BOTC .40% of the U.S. Treasury Fund's
average daily net assets.
CASH MANAGEMENT FUND
BOTC serves as the Investment Adviser to the Cash Management Fund and AMR serves
as the Sub-Adviser, pursuant to a sub-investment advisory agreement between BOTC
and AMR.
prospectus
22
<PAGE> 25
Subject to the general supervision of the Funds' Board of Trustees and BOTC, and
in accordance with the investment objective and restrictions of the Cash
Management Fund, AMR performs the following services: management of the Cash
Management Fund, decisions with respect to portfolio securities, placement of
orders for all purchases and sales of the portfolio securities of the Cash
Management Fund, and maintenance of the Cash Management Fund's records directly
relating to such purchases and sales.
AMR is a wholly-owned subsidiary of AMR Corporation, the parent company of
American Airlines, Inc., and was organized in 1986 to provide business
management, advisory, administrative and asset management consulting services.
As of September 30, 1996, AMR assets under management (including assets under
fiduciary advisory control) totaled approximately $15.3 billion including
approximately $5.9 billion under active management and $9.4 billion as named
fiduciary or fiduciary adviser. Of the total, approximately $10.8 billion of
assets are related to AMR Corporation.
For the services provided and expenses assumed pursuant to its Investment
Advisory Agreement with the Funds regarding the Cash Management Fund, BOTC
receives a fee from the Cash Management Fund, computed daily and paid monthly of
the lesser of (1) such fee as may from time to time be agreed upon in writing by
the Funds and BOTC, or (2) forty one-hundredths of one percent (.40%) of the
Fund's average daily net assets. Of this amount, BOTC pays to AMR a fee,
computed daily and paid monthly, at the annual rate of fifteen one-hundredths of
one percent (.15%) of the Cash Management Fund's average daily net assets,
pursuant to a sub-investment advisory agreement between BOTC and AMR. BOTC may
periodically waive all or a portion of its fee with respect to the Cash
Management Fund to increase the net income of such Fund available for
distribution as dividends.
For investment advisory services to the Cash Management Fund for the fiscal year
ended August 31, 1996, the Funds paid BOTC, .40% of the Cash Management Fund's
average daily net assets. Of this amount, BOTC paid AMR 0.15% of the Cash
Management Fund's average daily net assets.
ADMINISTRATOR AND DISTRIBUTOR
BISYS is the Administrator for each of the Funds and also acts as the Funds'
principal underwriter and Distributor (the "Administrator" or the "Distributor,"
as the context indicates). BISYS is a subsidiary of The BISYS Group, Inc., 150
Clove Road, Little Falls, New Jersey 07424, a publicly owned company engaged in
information processing, loan servicing and 401(k) administration and
recordkeeping services to and through banking and other financial organizations.
The Administrator generally assists in all aspects of the administration and
operation of the Money Market Funds.
For expenses assumed and services provided as Administrator pursuant to its
administration agreement with the Funds, BISYS is entitled to receive a fee from
each Money Market Fund, computed daily and paid periodically, at the lesser of
(1) such fee as may from time to time be agreed upon in writing by the Funds and
the Administrator, and (2) an annual rate of twenty one-hundredths of one
percent
prospectus
23
<PAGE> 26
(.20%) of each Money Market Fund's average daily net assets. The Administrator
may periodically waive all or a portion of its administrative fee with respect
to a Fund to increase the net income of the Fund available for distribution as
dividends.
For administration services to the U.S. Treasury Fund and the Cash Management
Fund for the fiscal year ended August 31, 1996, the Funds paid the Administrator
.20% of the U.S. Treasury Fund's and the Cash Management Fund's average daily
net assets.
SUB-ADMINISTRATOR
BOTC serves as the Sub-Administrator to the Funds pursuant to an agreement
between the Administrator and BOTC. Pursuant to this agreement, BOTC assumed
many of the Administrator's duties, for which BOTC receives a fee, paid by the
Administrator, calculated at an annual rate of five one-hundredths of one
percent (.05%) of each Fund's average net assets.
EXPENSES
The Investment Adviser, Sub-Adviser, and the Administrator each bear all
expenses in connection with the performance of their services, other than the
cost of securities (including brokerage commissions, if any) purchased for the
Funds. Each Money Market Fund bears the following expenses relating to its
respective operations: taxes, interest, any brokerage fees and commissions, fees
and travel expenses of the Trustees of the Funds, Securities and Exchange
Commission fees, state securities qualification fees, costs of preparing and
printing prospectuses for regulatory purposes and for distribution to current
Shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and reasonable out-of-pocket expenses of the custodian and transfer
agent, expenses incurred for pricing securities owned by the particular Fund,
certain insurance premiums, costs of maintenance of the Funds' existence, costs
of Shareholders' and Trustees' reports and meetings, and any extraordinary
expenses incurred in each Fund's operation.
The total of all expenses incurred by the Funds for the fiscal year ended August
31, 1996 was .74% of the average net assets of the U.S. Treasury Fund and .71%
of the average net assets of the Cash Management Fund, after voluntary fee
reductions.
BANKING LAWS
BOTC believes that it may perform the investment advisory services contemplated
by its agreement with the Funds and this Prospectus without violating the
Glass-Steagall Act. Future changes in federal or state statutes and regulations
relating to permissible activities of banks or bank holding companies and their
subsidiaries and affiliates as well as further judicial or administrative
decisions or interpretations of present and future statutes and regulations
could change the manner in which BOTC could continue to perform such services
for the Funds. See "MANAGEMENT OF THE FUNDS--Glass-Steagall Act" in the
Statement of Additional Information for further discussion of applicable banking
laws and regulations.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
prospectus
24
<PAGE> 27
GENERAL INFORMATION
DESCRIPTION OF THE FUNDS AND THEIR SHARES
The Money Market Funds represent two separate series of units of beneficial
interest ("Shares") of American Performance Funds, a Massachusetts business
trust which was organized in October of 1987 and began active operations in
August of 1990. Each Share represents an equal proportionate interest in a Fund
with other Shares of the same series, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to that Fund as
are declared at the discretion of the Trustees.
The Funds believe that as of November 22, 1996, Bank of Oklahoma, N.A. (Bank of
Oklahoma Tower, One Williams Center, Tulsa, Oklahoma 74103) and its bank
affiliates were the shareholders of record of 99.3% of the U.S. Treasury Fund's
Shares and 99.8% of the Cash Management Fund's Shares. The Funds believe that as
of the same date, Bank of Oklahoma, N.A. and its bank affiliates possessed, on
behalf of its underlying accounts, voting or investment power with respect to
81.0% of the U.S. Treasury Fund's Shares and 61.3% of the Cash Management Fund's
Shares, and as a consequence, Bank of Oklahoma, N.A. and its bank affiliates may
be deemed to be a controlling person of the U.S. Treasury Fund and the Cash
Management Fund under the 1940 Act.
Shareholders are entitled to one vote for each Share, and a proportionate
fractional vote for any fraction of a Share, and will vote in the aggregate and
not by series except as otherwise expressly required by law.
Although the Funds are not required to hold annual meetings of Shareholders,
Shareholders have the right (1) to call a meeting to elect or remove one or more
of the Trustees of the Funds and (2) to be assisted by the Trustees in
communicating with other Shareholders of the Funds. Shareholder inquiries should
be directed to the Secretary of the Funds, at 3435 Stelzer Road, Columbus, Ohio
43219.
Overall responsibility for the management of the Funds is vested in the Board of
Trustees. See "MANAGEMENT OF THE MONEY MARKET FUNDS--Trustees of the Funds."
Individual Trustees are elected by the Shareholders and may be removed by the
Board of Trustees or Shareholders in accordance with the provisions of the
Declaration of Trust and By-laws of the Funds and Massachusetts law. See
"ADDITIONAL INFORMATION--Miscellaneous" in the Statement of Additional
Information for further information.
CUSTODIAN AND TRANSFER AGENT
Bank of Oklahoma, N.A. serves as custodian for the Funds. BISYS Fund Services
Ohio, Inc., an affiliate of BISYS, serves as the transfer agent ("Transfer
Agent") for the Funds and performs fund accounting.
PERFORMANCE INFORMATION
From time to time each Money Market Fund may present its "current yield" and
"effective yield." Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of a Money Market Fund
refers to the income generated by an investment in the Money Market Fund over a
seven calendar-day period (which period will be stated in the advertisement).
This income
prospectus
25
<PAGE> 28
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a one-year period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in a Money
Market Fund is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. Performance information for the Money Market Funds showing their
average annual total return and aggregate total return may also be presented in
advertisements, sales literature, and shareholder reports. Such performance
figures are based on historical earnings and are not intended to indicate future
performance. Total return will be calculated for the period since the
establishment of the Money Market Funds. Average annual total return is measured
by comparing the value of an investment in a Money Market Fund at the beginning
of the relevant period and the redemption value of the investment at the end of
the period (assuming immediate reinvestment of any dividends or capital gains
distributions) and annualizing the result. Aggregate total return is measured
similarly to average annual total return, however, the resulting difference is
not annualized.
Investors may also judge the performance of other mutual funds with similar
investment objectives and other relevant indices. For example, the performance
of the Money Market Funds may be compared to the Donoghue's "Money Fund
Average", which is an average compiled by IBC/Donoghue's MONEY FUND REPORT(R) of
Holliston, MA 01746, a widely recognized independent publication that monitors
the performance of money market funds, to the average yields reported by the
Bank Rate Monitor from money market deposit accounts offered by the 50 leading
banks and thrift institutions in the top five standard metropolitan statistical
areas, or to data prepared by Lipper Analytical Services, Inc., as well as to
performance data as reported in publications such as Money Magazine, Forbes,
Barron's, The Wall Street Journal, The New York Times, Business Week, Pensions
and Investments, U.S.A. Today, Ibbotson Associates, Inc., Morningstar, Inc.,
CDA/Wiesenberger, American Banker, Fortune, Institutional Investor and local
newspapers. In addition to yield information, general information about these
Funds that appears in a publication such as those mentioned above may also be
quoted or reproduced in advertisements or in reports to Shareholders. Additional
performance information is contained in the Funds' Annual Report, which is
available free of charge by calling the telephone number on the front page of
the prospectus.
Yields will fluctuate and any quotation of yield should not be considered as
representative of the future performance of any Money Market Fund. Since yields
fluctuate, yield data cannot necessarily be used to compare an investment in
these Money Market Funds' Shares with bank deposits, savings accounts, and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield for a stated period of time. Shareholders should remember that
performance and yield are generally functions of kind and quality of the
investments held in a portfolio, portfolio maturity, operating expenses, and
market conditions. Any fees charged by Participating Organizations to Customer
accounts investing in Shares of these Money Market Funds will not be included in
yield calculations; such fees, if charged, would reduce the actual yield from
that quoted. For further information on performance information, see
"PERFORMANCE COMPARISONS" in the Statement of Additional Information.
prospectus
26
<PAGE> 29
MISCELLANEOUS
Shareholders will receive unaudited mid-year reports describing the investment
operations of the Money Market Funds and annual financial statements audited by
independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to" a Fund means the consideration received by the Fund upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof including any proceeds
from the sale, exchange, or liquidation of such investments, and any funds or
payments derived from any reinvestment of such proceeds, and any general assets
of the Funds not readily identified as belonging to a particular Fund that are
allocated to that Fund by the Funds' Board of Trustees. The Board of Trustees
may allocate such general assets in any manner it deems fair and equitable. It
is anticipated that the factor that will be used by the Board of Trustees in
making allocations of general assets to particular Funds will be the relative
total net assets of the respective Funds at the time of allocation. Assets
belonging to a particular Fund are charged with the direct liabilities and
expenses with respect to that Fund, and with a share of the general liabilities
and expenses of the Fund not readily identified as belonging to a particular
Fund that are allocated to that Fund in proportion to the relative total net
assets of the respective Funds at the time of allocation. The timing of
allocations of general assets and general liabilities and expenses of the Fund
to particular Funds will be determined by the Board of Trustees of the Funds and
will be in accordance with generally accepted accounting principles.
Determinations by the Board of Trustees of the Funds as to the timing of the
allocation of general liabilities and expenses and as to the timing and
allocable portion of any general assets with respect to a particular Fund are
conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Funds or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the outstanding Shares of the Funds or such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Funds or such Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding Shares of the Funds or such
Fund.
Inquiries regarding the Funds may be directed in writing to the Funds at 3435
Stelzer Road, Columbus, Ohio 43219, or by calling toll free (800) 762-7085.
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 MONEY
MARKET FUNDS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING
BY THE MONEY MARKET FUNDS OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
prospectus
27
<PAGE> 30
AMERICAN PERFORMANCE FUNDS
MONEY MARKET FUNDS
U.S. TREASURY FUND
CASH MANAGEMENT FUND
INVESTMENT ADVISER
BancOklahoma Trust Company
Bank of Oklahoma Tower
Tulsa, Oklahoma 74103
INVESTMENT SUB-ADVISER
(Cash Management Fund only)
AMR Investment Services, Inc.
P.O. Box 619003
Dallas/Ft. Worth Airport, Texas 75261-9003
ADMINISTRATOR/DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
------------------------------------------------
U.S. TREASURY FUND
CASH MANAGEMENT FUND
------------------------------------------------
PROSPECTUS DATED DECEMBER 16, 1996
[AMERICAN PERFORMANCE FUNDS LOGO]
AMERICAN PERFORMANCE
FUNDS
<PAGE> 31
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
---------------------
PROSPECTUS FOR THE AMERICAN PERFORMANCE
---------------------------------------
BOND INVESTMENT FUNDS
---------------------
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Financial Highlights Financial Highlights;
General Information - Performance
Information
4. General Description Cover Page;
of Registrant Investment Objective; Investment
Policies; Other Investment Techniques
of the Bond Investment Funds;
Investment Restrictions; General
Information - Description of
the Funds and their Shares
5. Management of the Fund Management of the Bond Investment
Funds
6. Capital Stock and Cover Page; How to Purchase
Other Securities Shares; How to Redeem Shares;
Sales Charges; Dividends; Federal
Income Taxes; General Information -
Description of the Funds and Their
Shares; General Information-
Miscellaneous
7. Purchase of Securities Valuation of Shares; How
Being Offered to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Inapplicable
</TABLE>
<PAGE> 32
<TABLE>
<S> <C>
American For performance, purchase,
Performance and
BOND INVESTMENT redemption information, call
Funds (800) 762-7085
Four Variable Net Asset Value 3435 Stelzer Road
Investment Portfolios of Columbus, Ohio 43219
AMERICAN PERFORMANCE FUNDS
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
The American Performance Bond Investment Funds (the "Bond Investment
Funds") are four variable net asset value portfolios of the AMERICAN PERFORMANCE
FUNDS (the "Funds"), a diversified open-end management investment company which
currently consists of nine separately managed portfolios. Each of the Bond
Investment Funds has a different investment objective, and the net asset value
per unit of beneficial interest ("Share") of each Bond Investment Fund may be
expected to fluctuate in accordance with the value of each Fund's portfolio
investments.
AMERICAN PERFORMANCE BOND FUND (the "Bond Fund") seeks to maximize total
return by investing primarily in an actively managed, diversified portfolio of
short, intermediate, and long-term bonds and other fixed income securities. The
total return on a portfolio of such fixed income securities consists of a
combination of interest income and capital appreciation.
AMERICAN PERFORMANCE INTERMEDIATE BOND FUND (the "Intermediate Bond Fund")
seeks current income consistent with preservation of capital by investing
primarily in a diversified portfolio of intermediate term bonds and other fixed
income securities.
AMERICAN PERFORMANCE INTERMEDIATE TAX-FREE BOND FUND (the "Intermediate
Tax-Free Bond Fund") seeks current income consistent with preservation of
capital that is exempt from federal income taxes by investing primarily in a
diversified portfolio of intermediate term tax-free bonds and other tax-free
fixed income securities.
AMERICAN PERFORMANCE SHORT-TERM INCOME FUND (the "Short-Term Income Fund")
seeks current income consistent with preservation of capital by investing
primarily in a diversified portfolio of short-term bonds and other fixed income
securities.
(Continued on following page)
- --------------------------------------------------------------------------------
THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, BANCOKLAHOMA TRUST COMPANY OR ANY OF ITS AFFILIATES. THE FUNDS' SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR BY ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is December 16, 1996.
prospectus
<PAGE> 33
(Continued from previous page)
BancOklahoma Trust Company, Tulsa, Oklahoma ("BOTC") serves as the
investment adviser ("Investment Adviser") to each Bond Investment Fund. BISYS
Fund Services, Columbus, Ohio, ("BISYS") acts as the Bond Investment Funds'
Administrator and Distributor.
This Prospectus relates only to the Bond Investment Funds. The Funds also
include two money market portfolios to which BOTC serves as Investment Adviser:
the American Performance Cash Management Fund (for which AMR Investment
Services, Inc. ("AMR") serves as Investment Sub-Adviser) and the American
Performance U.S. Treasury Fund, each of which seeks current income with
liquidity and stability of principal (collectively, the "American Performance
Money Market Funds"). The Funds also include three equity portfolios to which
BOTC serves as Investment Adviser: the American Performance Equity Fund, and the
American Performance Aggressive Growth Fund, each of which seeks growth of
capital and, secondarily, income through investing primarily in common stocks
and securities convertible into common stocks, and the American Performance
Balanced Fund, which seeks current income and, secondarily, long-term capital
growth by investing primarily in a broadly diversified portfolio of securities,
including common stocks, preferred stocks and bonds (collectively, the "American
Performance Equity Investment Funds"). Persons who wish to obtain a copy of the
Prospectus for the American Performance Money Market Funds or the American
Performance Equity Investment Funds may contact the Funds at the telephone
number shown on the previous page.
ADDITIONAL INFORMATION ABOUT THE FUNDS, CONTAINED IN A STATEMENT OF ADDITIONAL
INFORMATION BEARING THE SAME DATE AS THIS PROSPECTUS, HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS INCORPORATED BY REFERENCE IN ITS
ENTIRETY INTO THIS PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION CAN BE
OBTAINED WITHOUT CHARGE BY WRITING TO THE FUNDS OR BY CALLING THE FUNDS AT THE
ADDRESS AND TELEPHONE NUMBER SHOWN ON THE PREVIOUS PAGE.
Please read this Prospectus before investing. It sets forth the information
about the Bond Investment Funds that a prospective investor ought to know before
investing. Investors should retain this Prospectus for future reference.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
Fee Table................................................................ 3
Financial Highlights..................................................... 5
Investment Objectives.................................................... 9
Investment Policies and Special Considerations........................... 10
Other Investment Techniques of the Bond Investment Funds................. 15
Investment Restrictions.................................................. 18
Valuation of Shares...................................................... 19
How to Purchase Shares................................................... 20
Sales Charges............................................................ 22
Sales Charge Waivers..................................................... 24
Concurrent Purchases and Right of Accumulation........................... 24
Letter of Intent......................................................... 25
Exchange Privilege....................................................... 25
How to Redeem Shares..................................................... 26
Dividends................................................................ 28
Federal Income Taxes..................................................... 28
Distribution............................................................. 30
Management of the Bond Investment Funds.................................. 31
General Information...................................................... 34
</TABLE>
prospectus
2
<PAGE> 34
FEE TABLE
<TABLE>
<CAPTION>
INTERMEDIATE SHORT-TERM
INTERMEDIATE TAX-FREE INCOME
BOND FUND BOND FUND BOND FUND FUND
--------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
- ------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases(2)
(as a percentage of offering price)................ 4.00% 3.00% 3.00% 2.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................ 0% 0% 0% 0%
Deferred Sales Load (as a percentage of original
purchase price or redemption proceeds, if
applicable)........................................ 0% 0% 0% 0%
Redemption Fees(3) (as a percentage of amount
redeemed, if applicable)........................... 0% 0% 0% 0%
Exchange Fees........................................ $ 0 $ 0 $ 0 $ 0
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------
Management Fees(4) (after voluntary fee
reductions)...................................... 0.35% 0.35% 0.35% 0%
12b-1 Fees(5) (after voluntary fee reductions in
the case of the Intermediate Tax-Free Bond Fund
and the Short-Term Income Fund).................. 0.25% 0.25% 0% 0%
Other Expenses(6) (after voluntary fee reductions
in the case of the Intermediate Tax-Free Bond
Fund and the Short-Term Income Fund)............. 0.36% 0.35% 0.40% 0.41%
--- --- --- ---
Total Fund Operating Expenses(7) (after voluntary
fee reductions).................................. 0.96% 0.95% 0.75% 0.41%
========= ========== ========== ===========
EXAMPLE:
- ------------------------------------------------------------------------------------------------------
You would pay the following expenses on a $1,000
investment in each of the Funds, assuming (1) 5%
annual return and (2) redemption at the end of
each time period:
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE SHORT-TERM
INTERMEDIATE TAX-FREE INCOME
BOND FUND BOND FUND BOND FUND FUND
--------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
1 Year............................................... $ 49 $ 39 $ 37 $ 24
3 Years.............................................. $ 69 $ 59 $ 53 $ 33
5 Years.............................................. $ 91 $ 81 $ 70 $ 43
10 Years............................................. $ 153 $ 143 $ 120 $ 71
</TABLE>
The purpose of the above table is to assist a potential purchaser of Shares
of any of the Bond Investment Funds in understanding the various costs and
expenses that an investor in any of the Bond Investment Funds will bear directly
or indirectly. The examples reflect voluntary reductions of investment advisory
and 12b-1 fees pursuant to the agreements described in notes 4 and 5. Although
the Investment Adviser and the Distributor have currently agreed to these
voluntary reductions, they may cease to provide these reductions, which would
have the effect of increasing the projected expenses set forth above in the
examples. Such expenses do not include any fees charged by BOTC or any of its
affiliates to its customers' accounts which may have invested in shares of a
Fund. See "MANAGEMENT OF THE INVESTMENT BOND FUNDS", "SALES CHARGES", and
"DISTRIBUTION" for a more complete discussion of the transaction expenses and
annual operating expenses of a holder of Shares ("Shareholder") of the Bond
Investment Funds. NASD rules generally limit the amount that a Bond Investment
Fund may pay under a Distribution Plan. A Bond Investment Fund would stop
accruing payments under the Distribution Plan if, to the extent, and for as long
as, such limit would otherwise be
prospectus
3
<PAGE> 35
exceeded. Long-term shareholders may pay more than the equivalent of the maximum
front-end sales charges otherwise permitted by the rules of the National
Association of Securities Dealers, Inc.
THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
- ------------
(1) Participating Organizations (as defined in "DISTRIBUTION") may charge a
Customer's (as defined in "DISTRIBUTION") account fees for automatic
investment and other investment and trust services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE SHARES.")
(2) There may be no sales load imposed upon purchases of shares of the Funds by
(1) investors who purchase through the Investment Adviser and who have an
existing trust relationship with the Investment Adviser; (2) employees of
the Investment Adviser or its affiliates; (3) each Trustee of the Funds and
any employee of a company that constitutes the principal business activity
of a Trustee; (4) employees of the Distributor and its affiliates; (5)
orders placed on behalf of other investment companies distributed by The
BISYS Group, Inc. or its affiliated companies; (6) existing Shareholders
who own Shares in any of the Bond Investment Funds within their trust
accounts and purchase additional Shares outside of their trust
relationships; and (7) investors within wrap accounts.
(3) A wire redemption charge may be deducted from the amount of a wire
redemption payment made at the request of a holder of Shares. The current
charge, which is subject to change upon notice to Shareholders, is $15.00.
(See "HOW TO REDEEM SHARES--By Telephone.")
(4) In order to reduce operating expenses, the Investment Advisor has currently
established the investment advisory fees at the above amount, pursuant to
an agreement with the Funds. The maximum amount of the investment advisory
fees, if charged, would be .55% of each Fund's average daily net assets for
the Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund and
Short-Term Income Fund.
(5) In order to reduce operating expenses, the Distributor has currently
established the 12b-1 fees at the above amount pursuant to an agreement
with the Funds. The maximum amount of the 12b-1 fees, if charged, would be
.25% of the average daily net assets of the Intermediate Tax-Free Bond Fund
and the Short-Term Income Fund.
(6) The total amount of Other Expenses for the Short-Term Income Fund, absent
voluntary fee reductions, would be 0.44% of the Fund's average daily net
assets.
(7) Absent voluntary reduction of fees, the Total Fund Operating Expenses for
the Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund and
Short-Term Income Fund would be 1.16%, 1.15%, 1.20% and 1.24% of each
Fund's average daily net assets respectively.
prospectus
4
<PAGE> 36
FINANCIAL HIGHLIGHTS
The American Performance Funds (the "Funds") were organized as a
Massachusetts business trust and began active operations in August of 1990. The
Funds currently consist of nine series of units of beneficial interests
("Shares"). Four such series represent interests in the Bond Fund, Intermediate
Bond Fund, Intermediate Tax-Free Bond Fund, and Short-Term Income Fund.
The Tables below set forth certain financial highlights for the Bond Fund,
the Intermediate Bond Fund, the Intermediate Tax-Free Bond Fund and the
Short-Term Income Fund for the periods indicated. The information below has been
audited by KPMG Peat Marwick LLP, independent public accountants for the Funds,
whose report thereon, insofar as it relates to each of the years or periods in
the five-year period ended August 31, 1996, is included in the Statement of
Additional Information, which a Shareholder may obtain by calling the Funds.
<TABLE>
<CAPTION>
BOND FUND
---------------------------------------------------
SEPTEMBER 28,
YEAR ENDED AUGUST 31, 1990 TO
--------------------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992 1991(A)
------- ------- ------- ------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $ 9.29 $ 9.36 $ 11.05 $ 10.99 $ 10.57 $ 10.00
------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income........... 0.57 0.56 0.58 0.70 0.76 0.71
Net realized and unrealized
gains (losses) on
investments................... (0.30) 0.15 (0.77) 0.50 0.54 0.57
------- ------- ------- ------- ------- -------
Total from Investment
Activities.............. 0.27 0.71 (0.19) 1.20 1.30 1.28
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income........... (0.57) (0.56) (0.58) (0.70) (0.76) (0.71)
Net realized gains.............. -- -- (0.43) (0.44) (0.12) --
In excess of net realized
gains......................... -- (0.22) (0.49) -- -- --
------- ------- ------- ------- ------- -------
Total Distributions....... (0.57) (0.78) (1.50) (1.14) (0.88) (0.71)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD.... $ 8.99 $ 9.29 $ 9.36 $ 11.05 $ 10.99 $ 10.57
======= ======= ======= ======= ======= ==============
Total Return (excludes sales
charge)......................... 2.84% 8.21% (1.92%) 11.76% 12.71% 13.12%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)......................... $32,807 $37,293 $38,257 $23,554 $42,396 $ 45,911
Ratio of expenses to average net
assets........................ 0.96% 1.03% 1.05% 1.12% 1.06% 1.07%(b)
Ratio of net investment income
to average net assets......... 6.08% 6.18% 5.72% 6.49% 6.96% 7.35%(b)
Ratio of expenses to average net
assets*....................... 1.16% 1.23% 1.25% 1.33% 1.30% 1.32%(b)
Ratio of net investment income
to average net assets*........ 5.88% 5.98% 5.52% 6.28% 6.72% 7.10%(b)
Portfolio turnover.............. 61.02% 185.48% 122.14% 26.27% 60.84% 37.99%
<FN>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
</TABLE>
prospectus
5
<PAGE> 37
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
---------------------------------------------------
SEPTEMBER 28,
YEAR ENDED AUGUST 31, 1990 TO
--------------------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992 1991(A)
------- ------- ------- ------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD..................... $ 10.26 $ 10.23 $ 11.06 $ 10.89 $ 10.45 $ 10.00
------- ------- ------- ------- ------- --------
INVESTMENT ACTIVITIES
Net investment income...... 0.60 0.61 0.61 0.64 0.71 0.66
Net realized and unrealized
gains (losses) on
investments.............. (0.25) 0.06 (0.73) 0.30 0.54 0.45
------- ------- ------- ------- ------- --------
Total from
Investment
Activities........ 0.35 0.67 (0.12) 0.94 1.25 1.11
------- ------- ------- ------- ------- --------
DISTRIBUTIONS
Net investment income...... (0.60) (0.61) (0.61) (0.64) (0.71) (0.66)
Net realized gains......... -- -- (0.06) (0.13) (0.10) --
In excess of net realized
gains.................... -- (0.03) (0.04) -- -- --
------- ------- ------- ------- ------- --------
Total
Distributions..... (0.60) (0.64) (0.71) (0.77) (0.81) (0.66)
------- ------- ------- ------- ------- --------
NET ASSET VALUE, END OF
PERIOD..................... $ 10.01 $ 10.26 $ 10.23 $ 11.06 $ 10.89 $ 10.45
======= ======= ======= ======= ======= ========
Total Return (excludes sales
charge).................... 3.41% 6.81% (1.14%) 9.04% 12.41% 11.42%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000).................... $63,088 $74,395 $84,144 $57,085 $47,523 $ 41,894
Ratio of expenses to
average net assets....... 0.95% 0.98% 0.98% 1.02% 1.07% 1.10%(b)
Ratio of net investment
income to average net
assets................... 5.84% 6.00% 5.72% 5.95% 6.62% 6.98%(b)
Ratio of expenses to
average net assets*...... 1.15% 1.18% 1.18% 1.24% 1.31% 1.33%(b)
Ratio of net investment
income to average net
assets*.................. 5.64% 5.80% 5.52% 5.74% 6.39% 6.75%(b)
Portfolio turnover......... 129.97% 154.43% 76.30% 47.79% 60.53% 22.18%
<FN>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
</TABLE>
prospectus
6
<PAGE> 38
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
------------------------------------------------------------
MAY 29,
YEAR ENDED AUGUST 31, 1992 TO
-------------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992(A)
------- ------- ------- ----------- ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.67 $ 10.42 $ 10.77 $ 10.18 $ 10.00
------- ------- ------- ------- --------
INVESTMENT ACTIVITIES
Net investment income................. 0.49 0.51 0.54 0.55 0.13
Net realized and unrealized gains
(losses) on investments............. (0.10) 0.25 (0.35) 0.59 0.18
------- ------- ------- ------- --------
Total from Investment
Activities................... 0.39 0.76 0.19 1.14 0.31
------- ------- ------- ------- --------
DISTRIBUTIONS
Net investment income................. (0.49) (0.51) (0.54) (0.55) (0.13)
------- ------- ------- ------- --------
Total Distributions............ 0.49 (0.51) (0.54) (0.55) (0.13)
------- ------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD.......... $ 10.57 $ 10.67 $ 10.42 $ 10.77 $ 10.18
======= ======= ======= ======= ========
Total Return (excludes sales charge).... 3.68% 7.62% 1.76% 11.56% 3.14%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000)..... $31,036 $28,114 $30,097 $17,415 $ 7,560
Ratio of expenses to average net
assets.............................. 0.75% 0.51% 0.25% 0.25% 0.35%(b)
Ratio of net investment income to
average net assets.................. 4.58% 4.99% 5.06% 5.34% 5.28%(b)
Ratio of expenses to average net
assets*............................. 1.20% 1.24% 1.44% 1.63% 2.03%(b)
Ratio of net investment income to
average net assets*................. 4.13% 4.25% 3.87% 3.96% 3.60%(b)
Portfolio turnover.................... 19.53% 8.35% 14.33% 13.19% 19.33%
<FN>
- ------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions had not occurred, the ratios would have
been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
</TABLE>
prospectus
7
<PAGE> 39
<TABLE>
<CAPTION>
SHORT-TERM INCOME FUND
-------------------------
OCTOBER 19,
YEAR ENDED 1994 TO
AUGUST 31, AUGUST 31,
1996 1995(A)
---------- -----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......................... $ 9.95 $ 10.00
-------- -------
INVESTMENT ACTIVITIES
Net investment income...................................... 0.59 0.52
Net realized and unrealized gains (losses) on
investments............................................. (0.14) (0.05)
-------- -------
Total from Investment Activities................... 0.45 0.47
-------- -------
DISTRIBUTIONS
Net investment income...................................... (0.59) (0.52)
Net realized gains......................................... (0.01) --
In excess of net realized gains............................ (0.01) --
-------- -------
Total Distributions................................ (0.61) (0.52)
-------- -------
NET ASSET VALUE, END OF PERIOD............................... $ 9.79 $ 9.95
======== =======
Total Return (excludes sales charge)......................... 4.64% 4.81%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000).......................... $ 14,399 $10,228
Ratio of expenses to average net assets.................... 0.41% 0.57%(b)
Ratio of net investment income to average net assets....... 5.95% 5.96%(b)
Ratio of expenses to average net assets*................... 1.24% 1.47%(b)
Ratio of net investment income to average net assets*...... 5.12% 5.06%(b)
Portfolio turnover......................................... 80.98% 212.35%(b)
Average Commission Rate(d)................................. -- --
<FN>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operation.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
</TABLE>
prospectus
8
<PAGE> 40
INVESTMENT OBJECTIVES
BOND FUND
The investment objective of the Bond Fund is to maximize total return by
investing primarily in an actively managed, diversified portfolio of short,
intermediate and long-term bonds and other fixed income securities. (See
"INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS" for discussion of such other
fixed income securities.) Total return on a portfolio of fixed income securities
consists of a combination of interest income and capital appreciation. The Bond
Fund will seek to maximize total return through active adjustment, when
appropriate, of portfolio composition and maturity in response to actual or
anticipated changes or trends in interest rates, the financial markets, or the
economy.
INTERMEDIATE BOND FUND
The investment objective of the Intermediate Bond Fund is to seek current
income, consistent with the preservation of capital, by investing primarily in a
diversified portfolio of intermediate bonds and other fixed income securities.
(See "INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS" for discussion of such
other fixed income securities.)
INTERMEDIATE TAX-FREE BOND FUND
The investment objective of the Intermediate Tax-Free Bond Fund is to seek
current income, consistent with the preservation of capital, that is exempt from
federal income taxes by investing primarily in a diversified portfolio of
intermediate term bonds and other fixed income securities. Investments in the
Intermediate Tax-Free Bond Fund, therefore, would not be appropriate for tax
deferred plans, such as IRA and Keogh Plans.
SHORT-TERM INCOME FUND
The investment objective of the Short-Term Income Fund is to seek current
income, consistent with preservation of capital, by investing primarily in a
diversified portfolio of short-term bonds and other fixed income securities.
(See "INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS" for discussion of such
other fixed income securities.)
ALL BOND INVESTMENT FUNDS
The Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund and
Short-Term Income Fund are collectively referred to herein as Bond Investment
Funds. The investment objectives with respect to each of the Bond Investment
Funds may not be changed without a vote of the holders of a majority of the
outstanding Shares of that Bond Investment Fund (as defined in "GENERAL
INFORMATION--Miscellaneous"). There can be no assurance that the investment
objective of a Bond Investment Fund will be achieved. Depending upon the
performance of a Bond Investment Fund's investment portfolio, the net asset
value per share of the Bond Investment Fund may decrease instead of increase.
Additionally, the Bond Investment Funds may engage in certain investment
techniques which may subject the Bond Investment Funds to certain risks (see
"OTHER INVESTMENT TECHNIQUES OF THE BOND INVESTMENT FUNDS").
prospectus
9
<PAGE> 41
INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS
BOND, INTERMEDIATE BOND, AND SHORT-TERM INCOME FUNDS
The investments of the Bond, Intermediate Bond, and Short-Term Income Funds will
primarily consist of, but will not be limited to, debt obligations such as
bonds, notes and debentures, bills which are issued by United States
corporations or issued or guaranteed by the United States Government or its
agencies or instrumentalities and municipal securities which possess all the
characteristics detailed under "Intermediate Tax-Free Bond Fund" below, other
than exemption from federal income taxes. As described in greater detail below,
the Bond, Intermediate Bond, and Short-Term Income Funds may also invest in
certain foreign securities, asset-backed securities, mortgage-related securities
and zero coupon obligations. The Bond, Intermediate Bond, and Short-Term Income
Funds will invest in debt securities only if they carry a rating within the
three highest ratings categories assigned by a nationally recognized statistical
ratings organization (an "NRSRO") (e.g., at least "A" from Moody's Investors
Services ("Moody's"), or Standard & Poor's Corporation ("S&P") (including all
sub-classifications indicated by modifiers of such "A" ratings)) or, if unrated,
are deemed by the Investment Adviser under guidelines established by the Funds'
Board of Trustees to present attractive opportunities and to be of comparable
quality to the securities so rated. See "Appendix" to the Statement of
Additional Information for an explanation of these ratings.
The Bond, Intermediate Bond, and Short-Term Income Funds, under normal market
conditions, will each invest at least 65% of the value of their total assets in
bonds, except that, when market conditions indicate a temporary defensive
investment strategy as determined by the Funds' Investment Adviser, more than
35% of the Bond, Intermediate Bond, or Short-Term Income Funds' assets may be
held in cash equivalents. At least 65% of the value of the total assets of the
Intermediate Bond Fund will be invested in bonds with stated or remaining
maturities of between three and ten years at the time of purchase. For purposes
of the above-stated policies, "bonds" includes any debt instrument with a
remaining maturity of one year or more.
Certain debt securities such as, but not limited to, mortgage backed securities,
CMOs and asset-backed securities, as well as securities subject to prepayment of
principal prior to the stated maturity date, are expected to be repaid prior to
their stated maturity dates. As a result, the effective maturity of these
securities is expected to be shorter than the stated maturity. For purposes of
calculating a Bond Investment Fund's weighted average portfolio maturity, the
effective maturity of such securities, as determined by the Adviser, will be
used.
"Cash equivalents" are deposits or high quality interest-bearing instruments
with a remaining maturity of one year or less. The purpose of cash equivalents
is to provide liquidity and income at money market rates while minimizing the
risk of decline in value to the maximum extent possible. The instruments may
include, but are not limited to, commercial paper, domestic and Eurodollar
certificates of deposit, repurchase agreements, bankers' acceptances, United
States Treasury Bills, master demand notes, agency discount notes, bank money
market deposit accounts and money market mutual funds. The Bond, Intermediate
Bond, and Short-Term Income Funds will only purchase commercial paper rated at
the time of purchase within the highest ratings categories assigned by an NRSRO
(e.g., A-1 by S&P, P-1 by Moody's or F-1 by Fitch Investors Service) or, if not
rated, found by the Investment Adviser under guidelines established by the
Funds' Board of Trustees to be of comparable quality. See
prospectus
10
<PAGE> 42
"Appendix" to the Statement of Additional Information for an explanation of
these ratings. During temporary defensive periods as determined by the
Investment Adviser, the Bond Fund, the Intermediate Bond Fund, or the Short-Term
Income Fund may hold up to 100% of its total assets in cash equivalents.
The Intermediate Bond Fund intends that, under normal market conditions, its
portfolio will maintain an average dollar-weighted maturity of approximately
three to ten years. The Bond Fund intends that, under normal market conditions,
its portfolio will maintain an average dollar-weighted maturity of seven years
or more. The Short-Term Income Fund intends that, under normal market
conditions, its portfolio will maintain an average dollar-weighted maturity of
three years or less. However, for temporary defensive purposes the Intermediate
Bond Fund, the Bond Fund, and the Short-Term Income Fund may shorten the average
dollar-weighted maturity of its portfolio depending upon anticipated changes in
interest rates or other relevant market factors.
The Bond Fund will attempt to maximize total return by allocating portfolio
assets among various fixed income markets, securities, and maturities.
Securities and maturities selected will be those that offer the greatest
potential for maximizing total return without assuming undue risk. The
Investment Adviser will monitor the Fund's portfolio performance on an ongoing
basis and reallocate assets in response to actual and anticipated market and
economic changes. This approach may result in significant variations in the Bond
Fund's average weighted maturity.
FOREIGN SECURITIES
The Bond, Intermediate Bond, and Short-Term Income Funds may invest in Canadian,
Supra-national, and World Bank Bonds, Eurodollars, and similar instruments.
Investment in foreign securities is subject to special risks, such as future
adverse political and economic developments, possible seizure, nationalization,
or expropriation of foreign investments, less stringent disclosure requirements,
the possible establishment of exchange controls or taxation at the source, or
the adoption of other foreign governmental restrictions.
ASSET-BACKED SECURITIES
The Bond, Intermediate Bond, and Short-Term Income Funds may invest in
securities backed by automobile receivables and credit-card receivables and
other securities backed by other types of receivables or other assets. Credit
support for asset-backed securities may be based on the underlying assets and/or
provided through credit enhancements by a third party. Credit enhancement
techniques include letters of credit, insurance bonds, limited guarantees (which
are generally provided by the issuer), senior-subordinated structures and
over-collateralization. The Bond, Intermediate Bond, and Short-Term Income Funds
will only purchase an asset-backed security if it is rated within the three
highest ratings categories assigned by an NRSRO (e.g., at least "A" by S&P or
Moody's). Asset-backed securities are generally considered to be illiquid.
MORTGAGE-RELATED SECURITIES
The Bond, Intermediate Bond, and Short-Term Income Funds may purchase
mortgage-related securities representing pools of mortgage loans assembled for
sale to investors by various governmental agencies such as the Government
National Mortgage Association and government-related organizations such as the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation,
prospectus
11
<PAGE> 43
as well as by private issuers such as commercial banks, savings and loan
institutions, mortgage bankers and private mortgage insurance companies.
Although certain mortgage-related securities are guaranteed by a third party or
otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If the Bond Fund, the Intermediate Bond Fund, or
the Short-Term Income Fund purchases a mortgage-related security at a premium,
that portion may be lost if there is a decline in the market value of the
security whether resulting from changes in interest rates or prepayments in the
underlying mortgage collateral. As with other interest-bearing securities, the
prices of such securities are inversely affected by changes in interest rates.
However, though the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true since in periods of
declining interest rates, the mortgages underlying the securities are prone to
prepayment. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to the Bond Investment Fund holding the security. In addition, regular payments
received in respect of mortgage-related securities include both interest and
principal. No assurance can be given as to the return the Bond Investment Fund
holding a mortgage related security will receive when these amounts are
reinvested. The Bond, the Intermediate Bond, and the Short-Term Income Funds
also may invest in collateralized mortgage obligations structured on pools of
mortgage pass-through certificates or mortgage loans. Collateralized mortgage
obligations will be purchased only if rated in one of the three highest rating
categories by an NRSRO. For further discussion concerning the investment
considerations involved, see "INVESTMENT OBJECTIVE AND POLICIES--Additional
Information on Fund Instruments--Mortgage-related Securities" in the Statement
of Additional Information.
ZERO COUPON OBLIGATIONS
The Bond, the Intermediate Bond, and the Short-Term Income Funds may hold
zero-coupon obligations issued by the United States Treasury and United States
Agencies. Such zero-coupon obligations pay no current interest and are typically
sold at prices greatly discounted from par value, with par value to be paid to
the holder at maturity. The return on a zero-coupon obligation, when held to
maturity, equals the difference between the par value and the original purchase
price. Zero-coupon obligations have greater price volatility than coupon
obligations and such obligations will be purchased only if, at the time of
purchase, the yield spread, considered in light of the obligation's duration, is
considered advantageous.
INTERMEDIATE TAX-FREE BOND FUND
Under normal market conditions at least 80% of the net assets of the
Intermediate Tax-Free Bond Fund will be invested in a diversified portfolio of
obligations (such as bonds, notes, and debentures) issued by or on behalf of
states, territories and possessions of the United States, the District of
Columbia and other political subdivisions, agencies, instrumentalities and
authorities, the interest on which is both exempt from federal income taxes and
not treated as a preference item for individuals for purposes of the federal
alternative minimum tax ("Municipal Securities"). This is a fundamental policy
and may only be changed by the vote of a majority of the outstanding Shares of
the Intermediate Tax-Free Bond Fund (as defined in "GENERAL
INFORMATION--Miscellaneous"). The Intermediate Tax-Free Bond Fund will maintain
a dollar-weighted average portfolio maturity between three and ten years. Under
normal market conditions, at least 65% of the Intermediate Tax-Free Bond Fund's
total assets will be invested in Municipal Securities which are bonds and
debentures.
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<PAGE> 44
The two principal classifications of Municipal Securities which may be held by
the Intermediate Tax-Free Bond Fund are "general obligation" securities and
"revenue" securities. General obligation securities are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of principal
and interest. Revenue securities are payable only from the revenues derived from
a particular facility or class of facilities or, in some cases, from proceeds of
a special excise tax or other specific revenue source such as the user of the
facility being financed. Private activity bonds held by the Intermediate
Tax-Free Bond Fund are in most cases revenue securities and are not payable from
the unrestricted revenues of the issuer. Consequently, the credit quality of
private activity bonds is usually directly related to the credit standing of the
corporate user of the facility involved.
The Intermediate Tax-Free Bond Fund may also invest in "moral obligation"
securities, which are normally issued by special purpose public authorities. If
the issuer of moral obligation securities is unable to meet its debt service
obligations from current revenues, it may draw on a reserve fund, the
restoration of which is a moral commitment, but not a legal obligation of the
state or municipality which created the issuer.
The Intermediate Tax-Free Bond Fund invests in Municipal Securities which are
rated at the time of purchase within the three highest rating groups assigned by
an NRSRO, in the case of bonds (e.g. at least A by Moody's, or S&P); rated
within the highest ratings category assigned by an NRSRO, in the case of notes
(e.g., "SP-1" by S&P or "MIG-1" by Moody's); rated in the highest ratings
category assigned by an NRSRO, in the case of tax-exempt commercial paper (e.g.,
"A-1" or higher by S&P or "P-1" by Moody's); or rated in the highest ratings
category assigned by an NRSRO, in the case of variable rate demand obligations,
(e.g., "VMIG-1" by Moody's). The Intermediate Tax-Free Bond Fund may also
purchase Municipal Securities which are unrated at the time of purchase but are
determined to be of comparable quality by the Investment Adviser pursuant to
guidelines approved by the Funds' Board of Trustees. The applicable Municipal
Securities ratings are described in the Appendix to the Statement of Additional
Information.
Interest income from certain types of municipal securities may constitute a
preference item for individuals for purposes of the federal alternative minimum
tax. The Intermediate Tax-Free Bond Fund will not treat these securities as
"Municipal Securities" for purposes of measuring compliance with the 80% test
described above. To the extent the Intermediate Tax-Free Bond Fund invests in
these securities, individual shareholders, depending on their own tax status,
may be subject to alternative minimum tax on that part of the Intermediate
Tax-Free Bond Fund's distributions derived from these securities. More
generally, corporate shareholders may be subject to federal alternative minimum
tax on distributions derived by the Intermediate Tax-Free Bond Fund from
Municipal Securities.
Opinions relating to the validity of Municipal Securities and to the exemption
of interest thereon from federal income tax are rendered by bond counsel to the
respective issuers at the time of issuance. Neither the Intermediate Tax-Free
Bond Fund nor its Investment Adviser will review the proceedings relating to the
issuance of Municipal Securities or the basis for such opinions.
Although the Intermediate Tax-Free Bond Fund may invest more than 25% of its net
assets in (i) Municipal Securities whose issuers are in the same state (ii)
Municipal Securities the interest on which is paid solely from revenues of
similar projects, and (iii) private activity bonds, it does not presently intend
to do so on a regular basis. To the extent the Intermediate Tax-Free Bond Fund's
assets are
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13
<PAGE> 45
concentrated in Municipal Securities that are payable from the revenues of
similar projects or are issued by issuers located in the same state, or are
concentrated in private activity bonds, the Intermediate Tax-Free Bond Fund will
be subject to the peculiar risks presented by the laws and economic conditions
relating to such states, projects and bonds to a greater extent than it would be
if its assets were not so concentrated.
The Intermediate Tax-Free Bond Fund may invest in short-term Municipal
Securities up to 100% of its assets during temporary defensive periods.
TAXABLE OBLIGATIONS
Under normal market conditions, at least 80% of the net assets of the
Intermediate Tax-Free Bond Fund will be invested in Municipal Securities.
However, investments of the Intermediate Tax-Free Bond Fund may be made in
taxable obligations if, for example, suitable tax-exempt obligations are
unavailable or if acquisition of U.S. Government or other taxable securities is
deemed appropriate for temporary defensive purposes. Such taxable obligations,
which are further described in the Statement of Additional Information may
include obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities (some of which may be subject to repurchase agreements),
certificates of deposit and bankers' acceptances of selected banks and
commercial paper meeting the Intermediate Tax-Free Bond Fund's quality standards
(as described above) for tax-exempt commercial paper. Under such circumstances
and during the period of such investment, the Intermediate Tax-Free Bond Fund
may not achieve its stated investment objective.
VARIABLE AND FLOATING RATE NOTES
Municipal Securities purchased by the Intermediate Tax-Free Bond Fund may
include rated and unrated variable and floating rate tax-exempt notes. There may
be no active secondary market with respect to a particular variable or floating
rate note. Nevertheless, the periodic readjustments of their interest rates tend
to assure that their value to the Intermediate Tax-Free Bond Fund will
approximate their par value. Variable and floating rate notes for which no
readily available market exists will be purchased in an amount which, together
with other securities described in Investment Restriction Number 5 below (see
"INVESTMENT RESTRICTIONS"), exceeds 10% of the Intermediate Tax-Free Bond Fund's
net assets only if such notes are subject to a demand feature that will permit
the Intermediate Tax-Free Bond Fund to receive payment of the principal within
seven days after demand by the Intermediate Tax-Free Bond Fund.
THE BOND INVESTMENT FUNDS
Bonds, notes, and debentures in which the Bond Investment Funds may invest may
differ in interest rates, maturities and times of issuance. The market value of
the Bond Investment Funds' debt securities will change in response to interest
rate changes and other factors. During periods of falling interest rates, the
value of outstanding debt securities generally rise. Conversely, during periods
of rising interest rates, the value of such securities generally decline.
Moreover, while securities with longer maturities tend to produce higher yields,
the price of longer maturity securities is also subject to greater fluctuations
as a result of changes in interest rates. Conversely, securities with shorter
maturities generally have less price movement than securities of comparable
quality with longer maturities. Changes by recognized agencies in the rating of
any debt security and in the ability of an issuer to make
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<PAGE> 46
payments of interest and principal also affect the value of these investments.
Except under conditions of default, changes in the value of a Bond Investment
Fund's portfolio securities will not affect cash income derived from these
securities but will affect a Bond Investment Fund's net asset value.
OTHER INVESTMENT TECHNIQUES OF THE BOND INVESTMENT FUNDS
INVESTMENT COMPANY SECURITIES
Each Bond Investment Fund may invest in shares of other investment companies,
including other American Performance Funds. However, none of the Bond Investment
Funds may invest more than 5% of its total assets in the securities of any one
investment company, nor may any Bond Investment Fund own more than 3% of the
securities of any investment company or invest more than 10% of its total assets
in the securities of other investment companies. These investment companies
typically pay an investment advisory fee out of their assets. Therefore,
investments may be subject to duplicate management, advisory and distribution
fees. The Investment Adviser will consider this fee in its investment analysis
when determining whether to purchase shares of these companies for a Bond
Investment Fund. This fee is in addition to the fees received by a Bond
Investment Fund's Investment Adviser and Administrator. In order to avoid the
imposition of additional fees as a result of investments by a Bond Investment
Fund in shares of other American Performance Funds, the Investment Adviser and
Administrator have agreed to promptly forward to the Bond Investment Fund any
portion of their usual asset-based service fees from an American Performance
Fund which is attributable to investment by the Bond Investment Fund in Shares
of such other American Performance Fund.
OPTIONS AND FUTURES CONTRACTS
Each Bond Investment Fund may acquire put or call options and futures contracts
and may write covered call options. See the Statement of Additional Information
for more information on these investment activities.
Futures transactions involve brokerage costs and require a Bond Investment Fund
to segregate assets to cover contracts that would require it to purchase
securities. A Bond Investment Fund may lose the expected benefit of futures
transactions if interest rates or securities prices move in an unanticipated
manner. Such unanticipated changes may also result in poorer overall performance
than if the Bond Investment Fund had not entered into any futures transactions.
In addition, the value of a Bond Investment Fund's futures positions may not
prove to be perfectly or even highly correlated with the value of its portfolio
securities, limiting the Bond Investment Fund's ability to hedge effectively
against interest rate and/or market risk and giving rise to additional risks.
There is no assurance of liquidity in the secondary market for purposes of
closing out futures positions.
WHEN-ISSUED SECURITIES
Each Bond Investment Fund may purchase securities on a when-issued basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield and thereby involve a risk that the
yield obtained in the transaction will be less than those available in the
market when delivery takes place. A Bond Investment Fund will generally not pay
for such securities or start earning interest on them until they are received.
When a Bond Investment Fund agrees to purchase such securities, its Custodian
will set aside cash or liquid high grade securities equal to the amount of the
commitment in a separate account with the Custodian or a Sub-Custodian of the
Bond
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<PAGE> 47
Investment Fund. Securities purchased on a when-issued basis are recorded as an
asset and are subject to changes in value based upon changes in the general
level of interest rates. Each Bond Investment Fund expects that commitments to
purchase when-issued securities will not exceed 25% of the value of its total
assets absent unusual market conditions. In the event that its commitments to
purchase when-issued securities ever exceeded 25% of the value of its assets, a
Bond Investment Fund's liquidity and the ability of the Investment Adviser to
manage it might be severely affected. No Bond Investment Fund intends to
purchase when-issued securities for speculative purposes but only in furtherance
of its investment objective.
SECURITIES LENDING
In order to generate additional income, each Bond Investment Fund may, from time
to time, lend its portfolio securities to broker-dealers, banks, or
institutional borrowers of securities. The Funds will enter into loan agreements
with broker-dealers, banks, or other institutions that BOTC has determined are
creditworthy under guidelines established by the Funds' Board of Trustees. See
the Statement of Additional Information for more information regarding these
investment activities.
REPURCHASE AGREEMENTS
Securities held by a Bond Investment Fund may be subject to repurchase
agreements. Under the terms of a repurchase agreement, a Bond Investment Fund
would acquire securities from financial institutions, such as member banks of
the Federal Deposit Insurance Corporation or registered broker-dealers which the
Investment Adviser deems creditworthy under guidelines approved by the Funds'
Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed upon date and price. The repurchase price would
generally equal the price paid by the Bond Investment Fund plus interest
negotiated on the basis of current short-term rates, which may be more or less
than the rate on the underlying portfolio securities. The seller under a
repurchase agreement will be required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest) and the Investment Adviser will monitor the collateral's value
to ensure that it equals or exceeds the repurchase price. In addition,
securities subject to repurchase agreements will be held in a segregated
account. Repurchase agreements are considered to be loans by an investment
company under the Investment Company Act of 1940 (the "1940 Act"). See the
Statement of Additional Information for more information regarding this
investment practice.
REVERSE REPURCHASE AGREEMENTS
Each Bond Investment Fund may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. Pursuant to such agreements, a Bond Investment
Fund would sell portfolio securities to financial institutions such as banks and
broker-dealers and agree to repurchase them at a mutually agreed upon date and
price. At the time a Bond Investment Fund enters into a reverse repurchase
agreement, it will place in a segregated custodial account assets, such as
liquid high quality debt securities, consistent with the Bond Investment Fund's
investment objective having a value not less than 100% of the repurchase price
(including accrued interest), and will subsequently monitor the account to
ensure that such required value is maintained. Reverse repurchase agreements
involve the risk that the market value of the securities sold by a Bond
Investment Fund may decline below the price at which such Fund is obligated
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<PAGE> 48
to repurchase the securities. Reverse repurchase agreements are considered to be
borrowings by an investment company under the 1940 Act.
PRIVATE PLACEMENT INVESTMENTS
Each Bond Investment Fund may invest in commercial paper issued in reliance on
the so-called "private placement" exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, and resold to qualified
institutional buyers under Securities Act Rule 144A ("Section 4(2) paper").
Section 4(2) paper is restricted as to disposition under the federal securities
laws, and generally is sold to institutional investors such as the Funds who
agree that they are purchasing the paper for investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction and may be accomplished in accordance with Rule 144A. Section 4(2)
paper normally is resold to other institutional investors like the Funds through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. None of the Bond Investment
Funds will invest more than 10% of its net assets in Section 4(2) paper and
illiquid securities unless the Investment Adviser determines, by continuous
reference to the appropriate trading markets and pursuant to guidelines approved
by the Board of Trustees, that any Section 4(2) paper held by the Bond
Investment Fund in excess of this level is at all times liquid.
Because it is not possible to predict with assurance exactly how this market for
Section 4(2) paper sold and offered under Rule 144A will develop, the Board of
Trustees and the Investment Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the Bond Investment Funds' investments
in these securities, focusing on such important factors, among others, as
valuation, liquidity, and availability of information. Investments in Section
4(2) paper could have the effect of reducing a Bond Investment Fund's liquidity
to the extent that qualified institutional buyers become for a time not
interested in purchasing these restricted securities.
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. High turnover rates will generally result in higher transaction
costs to a Bond Investment Fund and may result in additional tax consequences to
a Bond Investment Fund's Shareholders.
The investment objective of the Bond Fund typically involves the active trading
of portfolio securities, rather than the holding of securities to maturity, in
order to maximize total return. Such trading will increase the Bond Fund's
annual turnover rate and its transaction costs. Portfolio turnover rate for the
fiscal year ended August 31, 1996 was 61.02%.
Although the investment objective of the Intermediate Bond Fund is the
production of current income, the Intermediate Bond Fund may engage in
short-term trading, which involves selling securities held for a short time, in
order to increase the potential for capital appreciation and/or income of the
Fund, or to take advantage of what the Investment Adviser believes is a
temporary disparity in the normal yield relationship between two securities or
change in market, industry or company conditions or outlook. Any such trading
would increase the Intermediate Bond Fund's annual turnover rate and its
transaction costs. Portfolio turnover rate for the fiscal year ended August 31,
1996 was 129.97%.
The large portfolio turnover ratio for this period was a result of the following
factor: The Fund sold its position in Treasury securities and higher yielding
mortgage-backed securities were purchased in an
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<PAGE> 49
effort to enhance Fund performance during the fiscal year as changes to the
fixed income market occurred.
The portfolio turnover rate for the Intermediate Tax-Free Bond Fund for the
fiscal year ended August 31, 1996 was 19.53%.
The portfolio turnover rate for the Short-Term Income Fund for the fiscal year
ended August 31, 1996 was 80.98%.
INVESTMENT RESTRICTIONS
Each Bond Investment Fund is subject to a number of investment restrictions that
may be changed only by a vote of a majority of the outstanding Shares of the
Bond Investment Fund (as defined in "GENERAL INFORMATION--Miscellaneous").
Pursuant to these investment restrictions:
1. Each of the Bond Investment Funds will not purchase a security if, as a
result, with respect to 75% of its portfolio (i) more than 5% of the value of
its total assets would be invested in any one issuer, or (ii) it would hold
more than 10% of any class of securities of such issuer. There is no limit on
the percentage of assets that may be invested in U.S. Treasury bills, notes,
or other obligations issued or guaranteed by the U.S. Government or its
agencies and instrumentalities. For purposes of this and the immediately
following limitation, a security is considered to be issued by the government
entity (or entities) whose assets and revenues back the security, or, with
respect to a private activity bond that is backed only by the assets and
revenues of a non-governmental user, such non-governmental user.
2. Each of the Bond Investment Funds will not purchase a security if, as a
result, more than 25% of the value of its total assets would be invested in
securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) this limitation shall not
apply to obligations issued or guaranteed by the U.S. Government or its
agencies and instrumentalities; (b) wholly owned finance companies will be
considered to be in the industries of their parents if their activities are
primarily related to financing the activities of their parents; (c) utilities
will be divided according to their services (for example, gas, gas
transmission, electric and gas, electric, and telephone will each be
considered a separate industry); and (d) this limitation shall not apply to
Municipal Securities or governmental guarantees of Municipal Securities; and
further, that for the purpose of this limitation only, private activity bonds
that are backed only by the assets and revenues of a non-governmental user
shall not be deemed to be Municipal Securities.
3. The Bond Investment Funds may not borrow money or issue senior securities,
except that each Bond Investment Fund may borrow from banks or enter into
reverse repurchase agreements for temporary purposes in amounts up to 10% of
the value of its total assets at the time of such borrowing; or mortgage,
pledge, or hypothecate any assets, except in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of each Bond Investment Fund's total assets at
the time of its borrowing. No Bond Investment Fund will purchase securities
while its borrowings (including reverse repurchase agreements) exceed 5% of
its total assets.
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4. No Bond Investment Fund may make loans, except that each Bond Investment Fund
may, in accordance with its investment objectives and policies, purchase or
hold debt instruments, lend portfolio securities, and enter into repurchase
agreements.
5. No Bond Investment Fund will enter into a repurchase agreement with a
maturity in excess of seven days if such investment, together with other
instruments in the Fund which are not readily marketable, exceeds 10% of such
Fund's net assets.
In addition, the Intermediate Tax-Free Bond Fund is subject to the following
additional investment restrictions pursuant to which it will not:
1. Acquire a put, if, immediately after such acquisition, over 5% of the total
value of the Intermediate Tax-Free Bond Fund's assets would be subject to
puts from such issuer (except that the 5% limitation is inapplicable to puts
that, by their terms, would be readily exercisable in the event of a default
in payment of principal or interest on the underlying securities). For the
purpose of this investment restriction and Investment Restriction Number 2
below, a put will be considered to be from the party to whom the Intermediate
Tax-Free Bond Fund will look for payment of the exercise price.
2. Acquire a put that, by its terms, would be readily exercisable in the event
of a default in payment of principal and interest on the underlying security
or securities if immediately after that acquisition the value of the security
or securities underlying that put, when aggregated with the value of any
other securities issued or guaranteed by the issuer of the put, would exceed
10% of the total value of the Intermediate Tax-Free Bond Fund's assets.
VALUATION OF SHARES
The net asset value of the Funds are determined and their Shares are priced as
of the close of regular trading of the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern Time) on each Business Day ("Valuation Time"). As
used herein, a "Business Day" constitutes any day on which the NYSE is open for
trading, and the Federal Reserve Bank of Kansas City is open, except days on
which there are not sufficient changes in the value of a Fund's portfolio
securities that the Fund's net asset value might be materially affected, or days
during which no Shares are tendered for redemption and no orders to purchase
Shares are received. Currently, the NYSE or the Federal Reserve Bank of Kansas
City is closed on the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas Day. Net asset
value per share for purposes of pricing sales and redemptions is calculated by
dividing the value of all securities and other assets belonging to each Bond
Investment Fund, less the liabilities charged to each Bond Investment Fund, by
the number of its outstanding Shares.
The securities in each Bond Investment Fund will be valued at market value. If
market quotations are not readily available, the securities will be valued by a
method which the Funds' Board of Trustees believes accurately reflects fair
value. Debt securities with remaining maturities of 60 days or less will be
valued in accordance with the amortized cost method where the Funds' Trustees
determine that amortized cost
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<PAGE> 51
is fair value. For further information about valuation of investments, see the
Statement of Additional Information.
HOW TO PURCHASE SHARES
Shares of the Bond Investment Funds are sold on a continuous basis and may be
purchased directly from the Funds' Distributor, BISYS, either by mail, by
telephone, or by electronic transfer. Shares may also be purchased through a
bank or broker-dealer who has established a dealer agreement with the
Distributor. Except as described under "Auto Invest Plan" below, the minimum
initial purchase is $1,000, and the minimum for subsequent purchases is only
$100. These minimums may be waived if purchases are made in connection with
Individual Retirement Accounts ("IRAs"), Keoghs, qualified pension plans,
similar plans, or other employer plans. For information on IRAs, Keoghs or
similar plans, contact BOTC at (918) 588-6586.
BY MAIL
Investors may purchase Shares of any Bond Investment Fund by completing and
signing an Account Registration form and mailing it, along with a check (or
other negotiable bank instrument or money order) for at least $1,000, payable to
the appropriate Fund, in care of the Funds' Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds, Department 12, Tulsa, Oklahoma 74182.
Subsequent purchases of Shares may be made at any time by mailing a check (or
other negotiable bank draft or money order) for at least $100, to the above
address.
Account Registration forms can be obtained by calling the Funds at (800)
762-7085.
BY TELEPHONE OR ELECTRONIC TRANSFER
If an investor's Account Registration form has been previously received by the
Distributor, investors may also purchase Shares of any of the Bond Investment
Funds by telephone or by electronic transfer to the Funds' Custodian. To place
an order by telephone, call the Funds toll-free at (800) 762-7085. Payment for
Shares ordered by telephone may be made by check and must be received by the
Funds' Custodian within the settlement requirements defined under the Securities
Exchange Act of 1934. Shares of the Bond Investment Funds ordered by telephone
will be purchased for the Shareholder's account when the order has been
received. Any questions regarding current settlement requirements or electronic
payment instructions should be directed to the Funds at (800) 762-7085.
If payment for the Shares is not received within the prescribed time periods, or
if a check timely received does not clear, the purchase will be cancelled and
the investor could be liable for any losses or fees incurred.
AUTO INVEST PLAN
The Funds offer an Auto Invest Plan which enables Shareholders of the Bond
Investment Funds to make regular monthly or quarterly purchases of Shares
through automatic deductions from their bank accounts. With Shareholder
authorization, the Transfer Agent deducts the amount specified from the
Shareholder's bank account which is then automatically invested in Shares at net
asset value. The required minimum initial investment when opening an account
using the Auto Invest Plan is $100; the minimum amount for subsequent
investments in a Bond Investment Fund is $50. To participate in the
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<PAGE> 52
Auto Invest Plan, Shareholders should complete the appropriate section of the
Account Registration form which can be acquired by calling (800) 762-7085. To
change the Auto Invest instructions, a Shareholder must submit a written request
to the Distributor. A Shareholder may discontinue the feature by submitting a
written request to or by calling the Funds.
FUND DIRECT INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
A Fund Direct IRA enables individuals, even if they participate in an
employer-sponsored retirement plan, to establish their own retirement program.
IRA contributions may be tax-deductible and earnings are tax-deferred. Under the
Tax Reform Act of 1986, the tax deductibility of IRA contributions is restricted
or eliminated for individuals who participate in certain employer pension plans
and whose annual income exceeds certain limits. Existing IRAs and future
contributions up to the IRA maximums, whether deductible or not, still earn
income on a tax-deferred basis.
All IRA distribution requests must be made in writing to the Funds. Any
additional deposits to an IRA must distinguish the type and year of the
contribution. For more information on an IRA call the Funds at (800) 762-7085.
Investment in Shares of the Intermediate Tax-Free Bond Fund would not be
appropriate for any IRA. Shareholders are advised to consult a tax adviser on
IRA contribution and withdrawal requirements and restrictions.
OTHER INFORMATION REGARDING PURCHASES
Shares may also be purchased through procedures established by the Distributor
in connection with the requirements of qualified accounts maintained by or on
behalf of certain persons ("Customers") by Participating Organizations under the
Funds' Distribution Plan (See "DISTRIBUTION"). Shares of any Bond Investment
Fund sold to a Participating Organization on behalf of Customers will normally
be held of record by the Participating Organization and it is the responsibility
of the Participating Organization to transmit purchase or redemption orders to
the Distributor and to deliver funds for the purchase thereof on a timely basis.
Depending upon the terms of a particular Customer account, a Participating
Organization may charge a Customer account fees for services provided in
connection with investment in any Bond Investment Fund. Information concerning
these services and any charges can be obtained from the Participating
Organization or one of its affiliates. This Prospectus should be read in
conjunction with any such information so received.
Shares of each Bond Investment Fund are purchased at the net asset value per
share (see "VALUATION OF SHARES") next determined after receipt by the
Distributor of an order to purchase Shares in good form, plus any applicable
sales charge as described below. Purchases of Shares in a Bond Investment Fund
will be effected only on a Business Day (as defined in "Valuation of Shares") of
that Bond Investment Fund. An order received prior to the Valuation Time on any
Business Day will be executed at the net asset value determined as of the
Valuation Time on the day of receipt. An order received after the Valuation Time
on any Business Day will be executed at the net asset value determined as of the
Valuation Time on the next Business Day.
In the case of orders for the purchase of Shares placed through a broker-dealer,
the applicable public offering price will be the net asset value as so
determined, but only if the broker-dealer receives the order prior to the
Valuation Time for that day and transmits it to the Distributor prior to the
Valuation
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<PAGE> 53
Time for that day. The broker-dealer is responsible for transmitting such orders
promptly. If the broker-dealer fails to do so, the investor's right to that
day's closing price must be settled between the investor and the broker-dealer.
If the broker-dealer receives the order after the Valuation Time for that day,
the price will be based on the net asset value determined as of the Valuation
Time for the next day.
Each Bond Investment Fund reserves the right to reject any order for the
purchase of its Shares in whole or in part, including purchases made with
foreign and third party checks.
Every Shareholder will receive a confirmation of each new transaction in the
Shareholder's account, which will show the total number of Shares of such Fund
owned by the Shareholder and the number of Shares being held in safekeeping by
the Transfer Agent for the account of the Shareholder. Confirmation of purchases
and redemptions of Shares of the Bond Investment Funds by a Participating
Organization on behalf of a Customer will be sent by the Participating
Organization. Shareholders may rely on these statements in lieu of certificates.
No certificates representing Shares of any Bond Investment Fund will be issued.
SALES CHARGES
The public offering price of a Share of each of the Bond Investment Funds equals
its net asset value plus a sales charge. BISYS receives this sales charge as
Distributor and reallows a portion of it as dealer discounts and brokerage
commissions. However, the Distributor, at its sole discretion, may pay certain
dealers all or part of the portion of the sales charge it receives. A broker or
dealer who receives a reallowance in excess of 90% of the sales charge may be
deemed to be an "underwriter" for purposes of the Securities Act of 1933.
The following table sets forth information pertaining to the Sales Charges for
the Bond Fund.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENTAGE OF A PERCENTAGE OF % OF PUBLIC
NET AMOUNT NET OFFERING OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000.................... 4.17% 4.00% 3.50%
$50,000 but less than $250,000....... 3.63% 3.50% 3.00%
$250,000 but less than $500,000...... 3.09% 3.00% 2.50%
$500,000 but less than $1,000,000.... 2.56% 2.50% 2.25%
$1,000,000 or more................... 2.04% 2.00% 2.00%
</TABLE>
The following table sets forth information pertaining to sales charges for the
Intermediate Bond Fund and the Intermediate Tax-Free Bond Fund.
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<PAGE> 54
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENTAGE OF A PERCENTAGE OF % OF PUBLIC
NET AMOUNT NET OFFERING OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000.................... 3.09% 3.00% 2.50%
$50,000 but less than $250,000....... 2.56% 2.50% 2.00%
$250,000 but less than $500,000...... 2.04% 2.00% 1.50%
$500,000 but less than $1,000,000.... 1.52% 1.50% 1.25%
$1,000,000 or more................... 1.01% 1.00% 1.00%
</TABLE>
The following table sets forth information pertaining to sales charges for the
Short-Term Income Fund.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENTAGE OF A PERCENTAGE OF % OF PUBLIC
NET AMOUNT NET OFFERING OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000.................... 2.04% 2.00% 1.80%
$50,000 but less than $250,000....... 1.52% 1.50% 1.35%
$250,000 but less than $500,000...... 1.01% 1.00% .90%
$500,000 but less than $1,000,000.... .50% .50% .45%
$1,000,000 or more................... .00% .00% .00%
</TABLE>
From time to time dealers who receive dealer discounts and brokerage commissions
from the Distributor may reallow all or a portion of such dealer discounts and
brokerage commissions to other dealers or brokers.
The Distributor, at its expense, will also provide additional compensation to
dealers in connection with sales of Shares of any of the Funds. Such
compensation will include financial assistance to dealers in connection with
conferences, sales or training programs for their employees, seminars for the
public, advertising campaigns regarding one or more Funds of the Funds, and/or
other dealer-sponsored special events. In some instances, this compensation will
be made available only to certain dealers whose representatives have sold a
significant amount of such Shares. Compensation will include payment for travel
expenses, including lodging, incurred in connection with trips taken by invited
registered representatives and members of their families to locations within or
outside of the United States for meetings or seminars of a business nature.
Compensation will also include the following types of non-cash compensation
offered through sales contests: (1) vacation trips, including the provision of
travel arrangements and lodging at luxury resorts at exotic locations, (2)
tickets for entertainment events (such as concerts, cruises and sporting events)
and (3) merchandise (such as clothing, trophies, clocks and pens). Dealers may
not use sales of a Fund's Shares to qualify for this compensation to the extent
such may be prohibited by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc. None of the
aforementioned compensation is paid for by any Fund or its Shareholders.
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<PAGE> 55
SALES CHARGE WAIVERS
The Distributor may periodically waive the sales charges for all customers with
respect to any of the Bond Investment Funds. In addition, the Distributor may
waive the sales charge for the purchase of a Fund's shares with the proceeds
from the recent redemption of shares of another non-money market mutual fund
that imposes a sales charge.
The sales charges may also be waived for (1) investors who purchase through
accounts with the Investment Adviser and through their existing trust
relationship with the Investment Adviser; (2) employees of the Investment
Adviser or its affiliates; (3) each Trustee of the Funds and any employee of a
company that constitutes the principal business activity of a Trustee; (4)
employees of the Distributor and its affiliates; (5) orders placed on behalf of
other investment companies distributed by The BISYS Group, Inc. or its
affiliated companies; (6) existing Shareholders who own Shares in any of the
Bond Investment Funds within their trust accounts and purchase additional Shares
outside of these trust relationships; and (7) investors within wrap accounts.
Each investor described in paragraphs (2), (3), (4), and (6) above must identify
himself or herself at the time of purchase. When an investor who has previously
redeemed Shares of any American Performance Fund re-enters the American
Performance Funds, the sales charge on the newly purchased shares will be waived
on a one-time basis in an amount up to the total of any sales charge paid on the
shares previously redeemed. If the Shareholder exercising this re-entry
privilege paid a sales charge on the redeemed shares and held them for less than
91 days, such Shareholder must reduce his or her cost basis of the redeemed
shares for purposes of determining any capital gain or loss on the redemption by
the lesser of (1) the sales charge paid for those shares, or (2) the sales
charge waived in connection with the purchase of the new shares. The Funds
reserve the right to alter the terms of their sales charge waiver practices upon
sixty days' notice to Shareholders.
CONCURRENT PURCHASES AND RIGHT OF ACCUMULATION
For purposes of qualifying for a reduced sales charge, investors have the
privilege of combining concurrent purchases of, and holdings in, shares of any
Funds of the Funds sold with a sales charge ("Eligible Shares"). Investors are
permitted to purchase Eligible Shares at the public offering price applicable to
the total of (a) the dollar amount of the Eligible Shares then being purchased
plus (b) an amount equal to the then-current net asset value of the purchaser's
combined holdings of Eligible Shares.
To receive the applicable public offering price pursuant to concurrent purchases
and the right of accumulation, Shareholders must, at the time of purchase, give
the Distributor sufficient information to permit confirmation of qualification.
Investors may combine purchases of Eligible Shares that are made in their
individual capacity with (1) purchases that are made by members of their
immediate household and (2) purchases made by businesses that they own as sole
proprietorships, for purposes of obtaining reduced sales charges pursuant to
concurrent purchases and the right of accumulation. In order to accomplish this,
however, investors must designate on the Account Registration form the accounts
that are to be combined for this purpose. Investors can only designate accounts
that are open at the time of the concurrent purchases and when the right of
accumulation is exercised.
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<PAGE> 56
LETTER OF INTENT
You may obtain a reduced sales charge by means of a written Letter of Intent
which expresses your intention to invest, within a period of 13 months, a
certain amount in Shares of any of the American Performance Funds which charge a
sales load. Each purchase of Shares under a Letter of Intent will be made at the
public offering price plus the sales charge applicable at the time of such
purchase to a single transaction of the total dollar amount indicated in the
Letter of Intent. A Letter of Intent may include purchases of Shares made not
more than 90 days prior to the date the investor signs a Letter of Intent;
however, the 13-month period during which the Letter of Intent is in effect will
begin on the date of the earliest purchase to be included.
A Letter of Intent is not a binding obligation upon the investor to purchase the
full amount indicated. The minimum initial investment under a Letter of Intent
is 5% of such amount. Shares purchased with the first 5% of such amount will be
held in escrow (while remaining registered in the name of the investor) to
secure payment of the higher sales charge applicable to the Shares actually
purchased if the full amount indicated is not purchased. Such escrowed Shares
will be involuntarily redeemed to pay the additional sales charge, if necessary.
Dividends on escrowed Shares, whether paid in cash or reinvested in additional
Shares are not subject to escrow. The escrowed Shares will not be available for
disposal by the investor until all purchases pursuant to the Letter of Intent
have been made or the higher sales charge has been paid. When the full amount
indicated has been purchased, the escrow will be released.
Additionally, if the total purchases within the 13-month period exceed the
amount specified, an adjustment will be made to reflect further reduced sales
charges applicable to such purchases. Adjustments for these purchases and
purchases made during the 90-day period prior to submission of the Letter of
Intent will be made at the conclusion of the 13-month period and in the form of
additional shares credited to the shareholder's account at the then current
Public Offering Price applicable to a single purchase of the total amount of the
total purchase.
For further information, interested investors should contact the Distributor.
Letter of Intent privileges may be amended or terminated without notice at any
time by the Distributor.
EXCHANGE PRIVILEGE
Shares of any Bond Investment Fund may be exchanged without payment of a sales
charge for Shares of any other American Performance Fund having a sales charge
equal to or less than that of the Bond Investment Fund Shares sought to be
exchanged. If the Shareholder exercising the exchange privilege paid a sales
charge on the exchanged Shares that is less than the sales charge applicable to
the Shares sought to be acquired through the exchange, such Shareholder must pay
a sales charge on the exchange equal to the difference between the sales charge
paid for the exchanged Shares and the sales charge applicable to the Shares
sought to be acquired through the exchange. The exchange will be made on the
basis of the relative net asset values of the Shares exchanged. An exchange is
considered a sale of Shares and may result in a capital gain or loss for federal
income tax purposes. If the Shareholder exercising the exchange privilege paid a
sales charge on the exchanged Shares and held them for less than 91 days, for
purposes of determining the amount of the capital gain or loss, such Shareholder
must reduce his or her cost basis of the exchanged Shares by the lesser of (1)
the sales charge paid for those Shares, or (2) the sales charge waived on the
exchange. The sales charge is treated as incurred
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25
<PAGE> 57
in connection with the acquisition of the newly exchanged-for Shares. The
exchange privilege may only be exercised in states where the exchange may
legally be made. The Funds reserve the right to eliminate or to alter the terms
of this exchange offer upon sixty days' notice to Shareholders.
A Shareholder wishing to exchange his or her Shares may do so by contacting the
Funds at (800) 762-7085 or by providing written instructions to the Distributor.
Any Shareholder who wishes to make an exchange must have received a current
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
HOW TO REDEEM SHARES
Shares may ordinarily be redeemed by mail or by telephone. Shareholders may
redeem their Shares without charge on any day that net asset value is calculated
(see "VALUATION OF SHARES"). However, all or part of a Customer's Shares may be
redeemed in accordance with instructions and limitations pertaining to his or
her account held at a Participating Organization.
BY MAIL
Shares may be redeemed by mail by sending a written request to the Distributor
in care of the Funds' Custodian at Bank of Oklahoma, N.A., Attention: American
Performance Funds, Department 12, Tulsa, Oklahoma 74182. The Distributor may
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations as those terms are defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. The Distributor reserves the right to
reject any signature guarantee if (i) it has reason to believe that the
signature is not genuine, (ii) it has reason to believe that the transaction
would otherwise be improper, or (iii) the guarantor institution is a broker or
dealer that is neither a member of a clearing corporation nor maintains net
capital of at least $100,000. The signature guarantee requirements will be
waived if all of the following conditions apply: (1) the redemption check is
payable to the Shareholder(s) of record, and (2) the redemption check is mailed
to the Shareholder(s) at the address of record. The Shareholder may also have
the proceeds mailed or sent electronically to a commercial bank account
previously designated on the Account Registration form or by written instruction
to the Distributor. There is no charge for having redemption requests mailed to
a designated bank account.
BY TELEPHONE
Shares may be redeemed by telephone if the Account Registration form reflects
that the Shareholder has that capability. The Shareholder may have the proceeds
mailed to his or her address or mailed or sent electronically to a commercial
bank account previously designated on the Account Registration. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Electronic payment requests may be
made by the Shareholder by calling the Funds at (800) 762-7085. The Transfer
Agent may reduce the amount of a wire redemption payment by the Custodian's
then-current wire redemption charge (presently $15.00). Neither the Distributor,
the Transfer Agent, the Investment Adviser, nor the Funds will be liable for any
losses, damages, expenses or costs arising out of any telephone transaction
(including exchanges and redemptions) effected in accordance with the Funds'
telephone transaction procedures, upon instructions reasonably believed to
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<PAGE> 58
be genuine. The Funds will employ procedures designed to provide reasonable
assurance that the instructions communicated by telephone are genuine; if these
procedures are not followed, the Funds may be liable for any losses due to
unauthorized or fraudulent instructions. These procedures include recording all
phone conversations, sending confirmations to shareholders within 72 hours of
the telephone transaction, verifying the account name and a shareholder's
account number or tax identification number and sending redemption proceeds only
to the address of record or to a previously authorized account. If, due to
temporary adverse conditions, investors are unable to effect telephone
transactions, Shareholders may also mail the redemption request to the
Distributor at the address listed above under "HOW TO REDEEM SHARES--By Mail."
The telephone redemption option will be suspended for a period of 10 days
following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan enables Shareholders of the Funds to make regular
monthly or quarterly redemptions of Shares if their account has at least
$10,000. With Shareholder authorization, the Transfer Agent will automatically
redeem Shares at the net asset value on the dates of the withdrawal and have a
check in the amount specified mailed to the Shareholder. The required minimum
withdrawal is $100. To participate in the Systematic Withdrawal Plan,
Shareholders should call (800) 762-7085 for more information. Purchases of
additional Shares concurrent with withdrawals may be disadvantageous to certain
Shareholders because of tax liabilities. To change the Systematic Withdrawal
instructions, a Shareholder must submit a written request to the Distributor. A
Shareholder may discontinue the feature by submitting a written request to or by
calling the Funds.
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per Share next
determined after receipt of a valid request for redemption, as described above.
Payment to Shareholders for Shares redeemed will be made within the settlement
requirements defined in the Securities Exchange Act of 1934, after receipt by
the Distributor of the request for redemption. However, to the greatest extent
possible, the Trust will attempt to honor requests from Shareholders for next
Business Day payments upon redemption of Shares if the request for redemption is
received by the Transfer Agent before the Valuation Time on a Business Day or,
if the request for redemption is received after the Valuation Time, to honor
requests for payment within two Business Days, unless it would be
disadvantageous to the Trust or the Shareholders of the particular Fund to sell
or liquidate portfolio securities in an amount sufficient to satisfy requests
for payments in that manner.
At various times, a Bond Investment Fund may be requested to redeem Shares for
which it has not yet received good payment. In such circumstances, the
forwarding of proceeds may be delayed for up to 15 days until payment has been
collected for the purchase of such Shares. The Bond Investment Funds intend to
pay cash for all Shares redeemed, but under abnormal conditions which make
payment in cash unwise, payment may be made wholly or partly in readily
marketable portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
Due to the relatively high cost of handling small investments, each Bond
Investment Fund reserves the right to redeem, at net asset value, the Shares of
any Shareholder if, because of redemptions of Shares by or on behalf of the
Shareholder, the account of such Shareholder in any Bond Investment Fund has
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<PAGE> 59
a value of less than $500. Accordingly, an investor purchasing Shares of any
Bond Investment Fund in only the minimum investment amount may be subject to
such involuntary redemption if he or she thereafter redeems some of his or her
Shares. Before any Bond Investment Fund exercises its right to redeem such
Shares and to send the proceeds to the Shareholder, the Shareholder will be
given notice that the value of the Shares in his or her account is less than the
minimum amount and will be allowed 60 days to make an additional investment in
such Fund in an amount which will increase the value of the account to at least
$500.
See the Funds' Statement of Additional Information--"ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION"--for examples of when the right of redemption may be
suspended.
DIVIDENDS
Net investment income of each Bond Investment Fund is declared daily as a
dividend and paid monthly to persons who are Shareholders at the close of
business on the day of declaration. Net capital gain income is distributed at
least once a year. A Shareholder will automatically receive all income dividends
and capital gains distributions in additional full and fractional Shares at net
asset value as of the ex-dividend date, unless the Shareholder elects to receive
dividends or distributions in cash. Reinvested dividends receive the same tax
treatment as dividends paid in cash. Such election, or any revocation thereof,
must be made in writing to the Distributor at: BISYS Fund Services, 3435 Stelzer
Road, Columbus, Ohio 43219 and will become effective with respect to dividends
and distributions having record dates after its receipt by the Distributor.
Shareholders may elect to have all income, dividends, and capital gains
distributions paid by check or reinvested in the Fund. If you elect to receive
distributions paid by check and the check (1) is returned and marked as
"undeliverable" or (2) remains uncashed for six months, your payment election
will be changed automatically and your future dividend and capital gains
distribution will be reinvested in the Fund at the per share net asset value
determined as of the date of payment of the distribution. In addition, any
undeliverable check that remains uncashed for six months will be canceled and
reinvested in the Fund at the per share net asset value determined as of the
date of cancellation.
FEDERAL INCOME TAXES
Each of the Funds is treated as a separate entity for federal income tax
purposes, each intends to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended, (the "Code") and each intends to
distribute all of its net investment income and capital gains so that it is not
required to pay federal income taxes on amounts so distributed to Shareholders.
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made during the year.
A Shareholder receiving a distribution of ordinary income and/or an excess of
net short-term capital gain over net long-term capital loss would treat it as a
receipt of ordinary income, whether such distribution is paid in cash or in
additional shares. Distribution by each Bond Investment Fund of the excess of
net long-term capital gain over net short-term capital loss is generally taxable
to Shareholders as long-term capital gain in the year in which it is received,
regardless of how long the Shareholder has held shares in the Bond Investment
Fund. Such distributions are not eligible for the dividends-received
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<PAGE> 60
deduction. If a Shareholder disposes of Shares in the Bond Investment Fund at a
loss before holding such Shares for longer than 6 months, such loss will be
treated as a long-term capital loss to the extent the Shareholder has received a
capital gain dividend on the Shares.
Prior to purchasing Shares, the impact of dividends or capital gains
distributions which are expected to be declared or have been declared, but have
not been paid, should be carefully considered. Dividends or capital gains
distributions paid after a purchase of Shares are subject to federal income
taxes, although in some circumstances the dividends or distributions may be, as
an economic matter, a return of capital.
Dividends designated as exempt interest dividends by the Intermediate Tax-Free
Bond Fund may be treated by such Fund's Shareholders as items of interest
excludable from their gross income for federal income tax purposes. However,
such dividends may be taxable to Shareholders under state or local law as
ordinary income even though all or a portion of the amounts may be derived from
interest on tax-exempt obligations which, if realized directly, would be exempt
from such taxes. In determining net exempt-interest income, expenses of the
Intermediate Tax-Free Bond Fund are allocated to gross tax-exempt interest
income in the proportion that the gross amount of such interest income bears to
the Intermediate Tax-Free Bond Fund's total gross income, excluding net capital
gains. Shareholders are advised to consult a tax adviser with respect to whether
exempt-interest dividends retain the exclusion if such Shareholder would be
treated as a "substantial user" or a "related person" to such user under Section
147(a) of the Code. Interest on indebtedness incurred by a Shareholder to
purchase or carry shares is not deductible for federal income tax purposes to
the extent the Intermediate Tax-Free Bond Fund distributes exempt-interest
dividends during the Shareholder's taxable year.
Interest income from securities in which the Intermediate Tax-Free Bond Fund may
invest may subject investors to liability under federal alternative minimum tax.
Under normal market conditions, not more than 20% of the Intermediate Tax-Free
Bond Fund's total assets will be invested in securities the interest on which is
treated as a preference item for purposes of federal alternative minimum tax for
individuals. To the extent the Intermediate Tax-Free Bond Fund invests in
securities the interest on which is subject to federal alternative minimum tax,
Shareholders, depending on their tax status, may be subject to alternative
minimum tax on that part of the Fund's distributions derived from those
securities. Interest income on all Municipal Securities is included in "adjusted
current earnings" for purposes of computing the alternative minimum tax
applicable to corporate shareholders of the Intermediate Tax-Free Bond Fund.
Under the Code, if a Shareholder receives an exempt-interest dividend with
respect to any Share and such Share is held for six months or less, any loss on
the sale or exchange of such Share will be disallowed to the extent of the
amount of such exempt-interest dividend.
The Intermediate Tax-Free Bond Fund may at times purchase Municipal Securities
at a discount from the price at which they were originally issued. For federal
income tax purposes, some or all of this market discount will be included in the
Intermediate Tax-Free Bond Fund's ordinary income and will be taxable to
shareholders as such when it is distributed to them.
To the extent dividends paid to Shareholders of the Intermediate Tax-Free Bond
Fund are derived from taxable income (for example, from interest on certificates
of deposit, market discount or repurchase agreements), or from long-term or
short-term capital gains, such dividends will be subject to federal income tax,
whether such dividends are paid in the form of cash or additional shares.
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<PAGE> 61
Additional information regarding federal income taxes is contained in the
Statement of Additional Information under "INVESTMENT OBJECTIVE AND
POLICIES--Additional Tax Information Concerning All of the Funds and Additional
Tax Information Concerning the Intermediate Tax-Free Bond Fund." However, the
foregoing and the material in the Statement of Additional Information are only
brief summaries of some of the important tax considerations generally affecting
the Bond Investment Funds and their Shareholders. In addition, the foregoing
discussion and the federal tax information in the Statement of Additional
Information are based on tax laws and regulations which are in effect as of the
date of this Prospectus; these laws and regulations may subsequently change.
Prospective investors in a Bond Investment Fund are advised to consult their tax
adviser with special reference to their own tax situations, including the
potential application of state and local taxes.
DISTRIBUTION
Shares of the Bond Investment Funds are sold on a continuous basis by the
distributor for the Funds, BISYS Fund Services (the "Distributor"). Under the
Funds' Distribution and Shareholder Services Plan (the "Distribution Plan"), the
Bond Investment Funds will pay a monthly distribution fee (also referred to as a
12b-1 fee) to the Distributor as compensation for its services in connection
with the Distribution Plan at an annual rate equal to the lesser of (1) such fee
as may from time to time be agreed upon in writing by the Funds and the
Distributor, or (2) twenty-five one-hundredths of one percent (.25%) of the
average daily net assets of each of the Bond Investment Funds. The Distributor
may use the distribution fee to provide distribution assistance with respect to
the Bond Investment Funds' Shares or to provide Shareholder services to the
holders of the Bond Investment Funds' Shares ("Customers") purchased through
financial institutions and intermediaries, broker-dealers, or similar entities,
including affiliates or subsidiaries of the Distributor ("Participating
Organizations") pursuant to contractual arrangements with the Distributor under
the Distribution Plan.
The distribution fee will be payable without regard to whether the amount of the
fee is more or less than the actual expenses incurred in a particular year by
the Distributor in connection with distribution assistance or Shareholder
services rendered by the Distributor itself or incurred by the Distributor
pursuant to the contractual agreement entered into under the Distribution Plan.
The Glass-Steagall Act and other applicable laws generally prohibit banks from
engaging in the business of underwriting securities, but in general do not
prohibit banks from purchasing securities as agent for and upon the order of
customers. Accordingly, banks acting as Participating Organizations may provide
only those services which, in the banks' opinion, are consistent with the then
current legal requirements. It is possible, however, that future legislative,
judicial or administrative action affecting the securities activities of banks
will cause the Funds to alter or discontinue their arrangements with banks that
act as Participating Organizations, or change their method of operations. It is
not anticipated, however, that any change in the Funds' method of operations
would affect their net asset value per share or result in financial loss to any
customer. See the Statement of Additional Information for further information
regarding the Distribution Plan and "MANAGEMENT OF THE BOND INVESTMENT
FUNDS--Banking Laws" for information concerning the applicability of the
Glass-Steagall Act to the Investment Adviser's investment advisory services to
the Funds.
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<PAGE> 62
MANAGEMENT OF THE BOND INVESTMENT FUNDS
TRUSTEES OF THE FUNDS
Overall responsibility for management of the Bond Investment Funds rests with
the Board of Trustees of the Funds, who are elected by the Shareholders of the
Funds. The Funds will be managed by the Trustees in accordance with the laws of
the Commonwealth of Massachusetts governing business trusts. There are currently
four Trustees, of whom three are not "interested persons" of the Funds within
the meaning of that term under the 1940 Act. The Trustees, in turn, elect the
officers of the Funds to supervise actively the Funds' day-to-day operations.
The Trustees of the Funds, their addresses, and their principal occupations
during the past five years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------- ------------------- ------------------------------------------------------
<S> <C> <C>
Walter B. Grimm* Chairman and From June, 1992 to present, employee of BISYS Fund
3435 Stelzer Road Trustee Services; from 1987 to June, 1992, President of
Columbus, Ohio 43219 Leigh Consulting/Investments (investment firm).
Michael J. Hall Trustee From December, 1995 to present, Vice President and
7130 South Lewis Chief Financial Officer, Worldwide Sports &
Suite 850 Recreation, Inc.; from January, 1994 to present,
Tulsa, Oklahoma 74136 Vice President and Chief Financial Officer, Pexco
Holdings, Inc.; from 1991 to December, 1993, Senior
Vice President, Finance and Administration, Chief
Financial Officer, Treasurer, and Director of
Operations, Europe/Africa/Middle East Region of T.D.
Williamson, Inc. (a heavy equipment manufacturer).
Perry A. Wimpey Trustee From January, 1992 to present, Local Financial and
4843 S. 69th East Avenue Regulatory Consultant; from June, 1985 to January,
Tulsa, Oklahoma 74145 1992, Senior Vice President and Chief Financial
Officer, ONEOK Inc. (an energy company).
I. Edgar Hendrix Trustee From June, 1983 to present, Vice President and
8 East 3rd Street Treasurer, Parker Drilling Co.
Tulsa, Oklahoma 74103
<FN>
- ------------
* Indicates an "interested person" of the Funds as defined in the 1940 Act.
</TABLE>
The Trustees receive fees and are reimbursed for their expenses in connection
with each meeting of the Board of Trustees they attend. However, no officer or
employee of an Investment Adviser, Sub-Adviser, or the Administrator of the
Funds receives any compensation from the Funds for acting as a Trustee. The
officers of the Funds receive no compensation directly from the Funds for
performing the duties of their offices. BISYS receives fees from each Fund of
the Funds for acting as Administrator and may receive additional income under
the Distribution Plan for the Funds.
INVESTMENT ADVISER
BancOklahoma Trust Company serves as investment adviser to the Bond Investment
Funds. BOTC, the largest trust company in the State of Oklahoma, is a subsidiary
of Bank of Oklahoma, N.A. ("BOK") which in turn is a subsidiary of BOK Financial
Corporation ("BOK Financial"). BOK Financial is controlled by its principal
shareholder, George B. Kaiser. Through its subsidiaries, BOK Financial
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provides a full array of trust, commercial banking and retail banking services.
Its non-bank subsidiaries engage in various bank-related services, including
mortgage banking and providing credit life, accident, and health insurance on
certain loans originated by its subsidiaries.
BOTC maintains offices in Tulsa and Oklahoma City and offers a variety of
services for both corporate and individual customers. Individual financial trust
services include personal trust management, administration of estates, and
management of individual investments and custodial accounts. For corporate
clients, the array of services includes management, administration and
recordkeeping of pension plans, thrift plans, 401(k) plans and master trust
plans. BOTC has experience in providing investment advisory services to the
Funds and experience in managing collective investment funds with investment
portfolios and objectives comparable to those of the Funds. BOTC also serves as
transfer agent and registrar for corporate securities, paying agent for
dividends and interest, and indenture trustee of bond issues. At December 31,
1995 BOTC was responsible for approximately $7.2 billion in assets including
approximately $3.2 billion in assets under management and possessed total
capital, surplus and undivided profits of $7.7 million.
Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the investment objective and restrictions of each Bond
Investment Fund, BOTC manages the Bond Investment Funds, makes decisions with
respect to and places orders for all purchases and sales of their portfolio
securities, and maintains each Bond Investment Fund's records relating to such
purchases. The persons primarily responsible for the day-to-day management of
each Bond Investment Fund, as well as their previous business experience, are as
follows:
<TABLE>
<CAPTION>
PORTFOLIO MANAGER BUSINESS EXPERIENCE
--------------------- ------------------------------------------------------
<S> <C>
William Bequette Manager of the Intermediate Tax-Free Bond Fund since
its inception. Since 1963, Mr. Bequette has been a
portfolio manager for BOTC.
J. Brian Henderson Manager of the Bond Fund and the Intermediate Bond
Fund since January, 1993 and the Short-Term Income
Fund since its inception. In 1993, Mr. Henderson
joined BOTC as a Portfolio Manager. In 1991, Mr.
Henderson joined BOK as a Government Securities Trader
and was named Investment Officer of the Capital Market
Division in 1992. Prior to joining BOK, Mr. Henderson
was a Financial Consultant and Equity Analyst with
Southwest Securities in Dallas, Texas.
</TABLE>
For the services provided and expenses assumed pursuant to its investment
advisory agreement with the Funds, BOTC receives a fee from each Bond Investment
Fund, computed daily and paid monthly equaling the lesser of (1) such fee as may
from time to time be agreed upon by the Funds and BOTC, or (2) fifty-five
one-hundredths of one percent (.55%) of each of the Bond, Intermediate Bond,
Intermediate Tax-Free Bond and Short-Term Income Fund's average daily net
assets. BOTC and its parent, BOK, also receive fee income from the Funds from
several other sources. (See "SALES CHARGES," "DISTRIBUTION," and "MANAGEMENT OF
THE BOND INVESTMENT FUNDS--Custodian and Transfer Agent.") BOTC may periodically
waive all or a portion of its advisory fee with respect to any Fund to increase
the net income of such Bond Investment Fund available for distribution as
prospectus
32
<PAGE> 64
dividends. In order to reduce operating expenses, BOTC has currently established
the investment advisory fees at thirty-five one-hundredths of one percent (.35%)
of the Intermediate Bond, Bond and Intermediate Tax-Free Bond Funds' average
daily net assets. BOTC currently waives the investment advisory fees with
respect to the Short-Term Income Fund.
For investment advisory services for the fiscal year ended August 31, 1996, the
Funds paid BOTC 0.35% of the average net assets of each of the Bond Fund,
Intermediate Bond Fund and Intermediate Tax-Free Bond Fund, after voluntary fee
reductions. For the fiscal year ended August 31, 1996, the Funds did not pay any
investment advisory fees for the Short-Term Income Fund, after voluntary fee
reductions.
ADMINISTRATOR AND DISTRIBUTOR
BISYS is the Administrator for the Funds, and also acts as the Funds' principal
underwriter and Distributor (the "Administrator" or the "Distributor," as the
context indicates). BISYS is a subsidiary of The BISYS Group, Inc., 150 Clove
Road, Little Falls, New Jersey 07424, a publicly owned company engaged in
information processing, loan servicing and 401(k) administration and
recordkeeping services to and through banking and other financial organizations.
The Administrator generally assists in all aspects of each Fund's administration
and operation.
For expenses assumed and services provided as Administrator pursuant to its
management and administration agreement with the Funds, BISYS receives a fee
from each Bond Investment Fund, computed daily and paid periodically, at the
lesser of (1) such fee as may from time to time be agreed upon in writing by the
Funds and the Administrator, and (2) an annual rate of twenty one-hundredths of
one percent (.20%) of each Bond Investment Fund's average daily net assets. The
Administrator may periodically waive all or a portion of its administrative fee
with respect to a Fund to increase the net income of the Fund available for
distribution as dividends.
For administration services for the fiscal year ended August 31, 1996, the Funds
paid BISYS .20% of the average net assets of each of the Bond Investment Funds.
SUB-ADMINISTRATOR
BOTC serves as the Sub-Administrator to the Funds pursuant to an agreement
between the Administrator and BOTC. Pursuant to this agreement, BOTC assumed
many of the Administrator's duties, for which BOTC receives a fee, paid by the
Administrator, calculated at an annual rate of five one-hundredths of one
percent (.05%) of each Fund's average net assets.
EXPENSES
The Investment Adviser and the Administrator each bear all expenses in
connection with the performance of their services as investment adviser and
general manager and administrator, respectively, other than the cost of
securities (including brokerage commissions) purchased for the Funds. Each Bond
Investment Fund bears the following expenses relating to its respective
operations: taxes, interest, brokerage fees and commissions, fees and travel
expenses of the Trustees of the Funds, Securities and Exchange Commission fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to current
Shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and reasonable out-of-pocket expenses of the custodian and transfer
agent, expenses incurred for pricing securities owned by the
prospectus
33
<PAGE> 65
particular Fund, certain insurance premiums, costs of maintenance of the Funds'
existence, costs of Shareholders' and Trustees' reports and meetings, and any
extraordinary expenses incurred in each Fund's operation.
The total of all expenses incurred by the Funds for the fiscal year ended August
31, 1996 was 0.96%, 0.95%, 0.75% and 0.41% of the average daily net assets of
the Bond Fund, the Intermediate Bond Fund, the Intermediate Tax-Free Bond Fund,
and the Short Term Income Fund, respectively, after voluntary fee reductions.
BANKING LAWS
The Investment Adviser believes that it may perform the investment advisory
services for the Bond Investment Funds contemplated by its agreements with the
Funds and by this Prospectus without violating the Glass-Steagall Act. Future
changes in federal or state statutes and regulations relating to permissible
activities of banks or bank holding companies and their subsidiaries and
affiliates as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations could change the
manner in which the Investment Adviser could continue to perform such services
for the Funds. See the Statement of Additional Information under the heading
"MANAGEMENT OF THE FUNDS--Glass-Steagall Act" for further discussion of
applicable banking laws and regulations.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
GENERAL INFORMATION
DESCRIPTION OF THE FUNDS AND THEIR SHARES
The Bond Fund, Intermediate Bond Fund, Intermediate Tax-Free Bond Fund, and
Short-Term Income Fund represent four separate series of units of beneficial
interest ("Shares") of The American Performance Funds, a Massachusetts business
trust which was organized in October of 1987 and began active operations in
August of 1990. The organizational expenses of the Short-Term Income Fund will
be capitalized and amortized during the Fund's first two years of operations.
Such amortization will reduce amounts available for distribution as dividends to
Shareholders. Each Share represents an equal proportionate interest in a Fund
with other Shares of the same series, and is entitled to such dividends and
distributions out of the income earned on the assets belonging to that Fund as
are declared at the discretion of the Trustees.
The Funds believe that as of November 22, 1996, Bank of Oklahoma, N.A. (Bank of
Oklahoma Tower, One Williams Center, Tulsa, Oklahoma 74103) and its bank
affiliates were the Shareholder of record of 96.2% of the Bond Fund's Shares,
95.6% of the Intermediate Bond Fund's Shares, 80.9% of the Intermediate Tax-Free
Bond Fund's Shares and 99.3% of the Short-Term Income Fund's Shares. The Funds
believe that as of the same date, Bank of Oklahoma, N.A. and its bank affiliates
possessed on behalf of its underlying accounts, voting and investment power with
respect to 78.9% of the Bond Fund's Shares, 80% of the Intermediate Bond Fund's
Shares, and 70% of the Intermediate Tax-Free Bond Fund's Shares, and 89.2% of
the Short-Term Income Fund Shares and, as a consequence, Bank of
prospectus
34
<PAGE> 66
Oklahoma, N.A. and its bank affiliates may be deemed a controlling person of
each of these Funds under the 1940 Act.
Shareholders are entitled to one vote for each Share, and a proportionate
fractional vote for any fraction of a Share, and will vote in the aggregate and
not by series except as otherwise expressly required by law.
Although the Funds are not required to hold annual meetings of Shareholders,
Shareholders have the right (1) to call a meeting to elect or remove one or more
of the Trustees of the Funds and (2) to be assisted by the Trustees in
communicating with other Shareholders of the Funds. Shareholder inquiries should
be directed to the Secretary of the Funds, at 3435 Stelzer Road, Columbus, Ohio
43219.
Overall responsibility for the management of the Funds is vested in the Board of
Trustees. See "MANAGEMENT OF THE BOND INVESTMENT FUNDS--Trustees of the Funds."
Individual Trustees are elected by the Shareholders and may be removed by the
Board of Trustees or Shareholders in accordance with the provisions of the
Declaration of Trust and By-laws of the Funds and Massachusetts law. See
"ADDITIONAL INFORMATION--Miscellaneous" in the Statement of Additional
Information for further information.
CUSTODIAN AND TRANSFER AGENT
Bank of Oklahoma, N.A. serves as custodian for the Funds ("Custodian"). BISYS
Fund Services Ohio, Inc., an affiliate of BISYS, serves as the transfer agent
for the Funds ("Transfer Agent') and performs fund accounting.
PERFORMANCE INFORMATION
From time to time performance information for the Bond Investment Funds showing
their average annual total return and aggregate total return may be presented in
advertisements, sales literature and shareholder reports. Such performance
figures are based on historical earnings and are not intended to indicate future
performance. Total return will be calculated for the period since the
establishment of the Bond Investment Funds and will, unless otherwise noted,
reflect the imposition of the maximum sales charge. For the information of
Shareholders not subject to a sales charge, the Bond Investment Funds may also
publish total return figures which include no sales charge. Average annual total
return is measured by comparing the value of an investment in a Bond Investment
Fund at the beginning of the relevant period to the redemption value of the
investment at the end of the period (assuming immediate reinvestment of any
dividends or capital gains distributions) and annualizing the result. Aggregate
total return is measured similarly to average annual total return, however the
resulting difference is not annualized. The yield of a Bond Investment Fund is
determined by annualizing the Fund's net investment income per share during a
recent specified thirty-day period ending on the last day of the most recent
calendar quarter, and dividing that amount by the Fund's per share net asset
value on the last day of the period.
In addition, from time to time the Funds may present their respective
distribution rates in supplemental sales literature which is accompanied or
preceded by a prospectus and in Shareholder reports. Distribution rates will be
computed by dividing the distribution per share made by a Fund over a twelve-
month period by the maximum offering price per share. The calculation of income
in the distribution rate includes both income and capital gain dividends and
does not reflect unrealized gains or losses,
prospectus
35
<PAGE> 67
although a Fund may also present a distribution rate excluding the effect of
capital gains. The distribution rate differs from the yield, because it includes
capital items which are often non-recurring in nature, whereas yield does not
include such items. Distribution rates may also be presented excluding the
effect of a sales charge, if any.
The Intermediate Tax-Free Bond Fund may also present its tax equivalent yield
which reflects the amount of income subject to federal income taxation that a
taxpayer would have to earn in order to obtain the same after-tax income as that
derived from the yield of the Intermediate Tax-Free Bond Fund. The tax
equivalent yield will be significantly higher than the yield of the Intermediate
Tax-Free Bond Fund.
Investors may also judge the performance of any Bond Investment Fund by
comparing it to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc., Standard &
Poor's Corporation, The Russell 2000 Index, and Morningstar, Inc. and to data
prepared by Lipper Analytical Services, Inc. Comparisons may also be made to
indices or data published in Money Magazine, Forbes, Barron's, The Wall Street
Journal, The New York Times, Business Week, Pensions and Investments, Fortune,
Ibbotson Associates, Inc., U.S.A. Today, CDA/Wiesenberger, American Banker,
Institutional Investor and local newspapers. In addition to performance
information, general information about these Funds that appears in a publication
such as those mentioned above may be included in advertisements and in reports
to Shareholders.
Total return and yield are functions of the type and quality of instruments held
in the portfolio, operating expenses, and market conditions. Consequently, total
return and yield will fluctuate and are not necessarily representative of future
results. Any fees charged by a Participating Organization with respect to
Customer accounts for investing in shares of Bond Investment Funds will not be
included in performance calculations; such fees, if charged, will reduce the
actual performance from that quoted. Further information regarding Performance
Comparisons may be found in the Statement of Additional Information under
"Performance Comparisons."
Additional information about the performance of each Bond Investment Fund is
contained in the Funds' annual report to Shareholders, which is available free
of charge by calling the telephone number on the front page of this Prospectus.
MISCELLANEOUS
Shareholders will receive unaudited semi-annual reports and annual reports
audited by independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to" a Fund means the consideration received by the Funds upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof including any proceeds
from the sale, exchange, or liquidation of such investments, and any funds or
payments derived from any reinvestment of such proceeds, and any general assets
of the Funds not readily identified as belonging to a particular Fund that are
allocated to that Fund by the Funds' Board of Trustees. The Board of Trustees
may allocate such general assets in any manner it deems fair and equitable. It
is anticipated that the factor that will be used by the Board of Trustees in
making allocations
prospectus
36
<PAGE> 68
of general assets to particular Funds will be the relative net asset values of
the respective Funds at the time of allocation. Assets belonging to a particular
Fund are charged with the direct liabilities and expenses with respect to that
Fund, and with a share of the general liabilities and expenses of the Funds not
readily identified as belonging to a particular Fund that are allocated to that
Fund in proportion to the relative net asset values of the respective Funds at
the time of allocation. The timing of allocations of general assets and general
liabilities and expenses of the Fund to particular Funds will be determined by
the Board of Trustees of the Funds and will be in accordance with generally
accepted accounting principles. Determinations by the Board of Trustees of the
Funds as to the timing of the allocation of general liabilities and expenses and
as to the timing and allocable portion of any general assets with respect to a
particular Fund are conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Funds or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the outstanding Shares of the Funds or such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Funds or such Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding Shares of the Funds or such
Fund.
Inquiries regarding each Bond Investment Fund may be directed in writing to the
Funds at 3435 Stelzer Road, Columbus, Ohio, 43219, or by calling toll free (800)
762-7085.
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 BOND
INVESTMENT FUNDS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING BY THE BOND INVESTMENT FUNDS OR BY THE DISTRIBUTOR IN ANY JURISDICTION
IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
prospectus
37
<PAGE> 69
AMERICAN PERFORMANCE FUNDS
BOND INVESTMENT FUNDS
BOND FUND
INTERMEDIATE BOND FUND
INTERMEDIATE TAX-FREE BOND FUND
SHORT-TERM INCOME FUND
INVESTMENT ADVISER
BancOklahoma Trust Company
Bank of Oklahoma Tower
Tulsa, Oklahoma 74103
ADMINISTRATOR/DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
- ------------------------------------------------
BOND FUND
INTERMEDIATE BOND FUND
INTERMEDIATE TAX-FREE BOND FUND
SHORT-TERM INCOME FUND
- ------------------------------------------------
PROSPECTUS DATED DECEMBER 16, 1996
[LOGO]
<PAGE> 70
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET
---------------------
PROSPECTUS FOR AMERICAN PERFORMANCE EQUITY INVESTMENT FUNDS
-----------------------------------------------------------
Form N-1A Part A Item Prospectus Caption
- --------------------- ------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Financial Highlights Financial Highlights;
General Information - Performance
Information
4. General Description Cover Page;
of Registrant Investment Objective; Investment
Policies; Investment Restrictions;
General Information - Description of
the Funds and their Shares
5. Management of the Fund Management of the Money Market
Funds
6. Capital Stock and How to Purchase
Other Securities Shares; How to Redeem Shares;
Sales Charges; Dividends; Federal
Income Taxes; General Information -
Description of the Funds and their
Shares; General Information-
Miscellaneous
7. Purchase of Securities Valuation of Shares; How
Being Offered to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Inapplicable
</TABLE>
<PAGE> 71
American For performance, purchase, and
Performance redemption information, call
EQUITY INVESTMENT (800) 762-7085
Funds 3435 Stelzer Road
Three Variable Net Asset Value Columbus, Ohio 43219
Investment Portfolios of
American Performance Funds
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
The American Performance Equity Investment Funds (the "Equity Investment
Funds") are three variable net asset value portfolios of the AMERICAN
PERFORMANCE FUNDS (the "Funds"), a diversified, open-end management investment
company which currently consists of nine separately managed portfolios. Each of
the Equity Investment Funds has a different investment objective, and the net
asset value per unit of beneficial interest ("Share") of each Equity Investment
Fund may be expected to fluctuate in accordance with the value of each Fund's
portfolio investments.
AMERICAN PERFORMANCE EQUITY FUND (the "Equity Fund") seeks growth of
capital and, secondarily, income by investing primarily in a diversified
portfolio of common stocks and securities convertible into common stocks.
AMERICAN PERFORMANCE AGGRESSIVE GROWTH FUND (the "Aggressive Growth Fund")
seeks long-term capital appreciation and, secondarily, income by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks of small to medium-size companies.
AMERICAN PERFORMANCE BALANCED FUND (the "Balanced Fund") seeks current
income and, secondarily, long-term capital growth by investing primarily in a
broadly diversified portfolio of securities, including common stocks, preferred
stocks and bonds.
(Continued on following page)
- --------------------------------------------------------------------------------
THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, BANCOKLAHOMA TRUST COMPANY OR ANY OF ITS AFFILIATES. THE FUNDS' SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR BY ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is December 16, 1996.
prospectus
<PAGE> 72
BancOklahoma Trust Company, Tulsa, Oklahoma ("BOTC") serves as the
investment adviser ("Investment Adviser") to each Equity Investment Fund. BISYS
Fund Services, Columbus, Ohio, ("BISYS") acts as the Equity Investment Funds'
Administrator and Distributor.
This Prospectus relates only to the Equity Investment Funds. The Funds also
include two money market portfolios to which BOTC serves as Investment Adviser:
the American Performance Cash Management Fund (for which AMR Investment
Services, Inc. ("AMR") serves as Investment Sub-Adviser) and the American
Performance U.S. Treasury Fund, each of which seeks current income with
liquidity and stability of principal (collectively, the "American Performance
Money Market Funds"). The Funds also include four bond portfolios to which BOTC
serves as Investment Adviser: the American Performance Bond Fund, the American
Performance Intermediate Bond Fund, and the American Performance Short-Term
Income Fund, each of which seeks current income, and the American Performance
Intermediate Tax-Free Bond Fund, which seeks current income exempt from Federal
taxation, through investing in diversified portfolios of bonds and other
fixed-income securities (collectively, the "American Performance Bond Investment
Funds"). Persons who wish to obtain a copy of the Prospectus for the American
Performance Money Market Funds or the American Performance Bond Investment Funds
may contact the Funds at the telephone number shown on the previous page.
ADDITIONAL INFORMATION ABOUT THE FUNDS, CONTAINED IN A STATEMENT OF
ADDITIONAL INFORMATION BEARING THE SAME DATE AS THIS PROSPECTUS, HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS INCORPORATED BY REFERENCE IN
ITS ENTIRETY INTO THIS PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION CAN
BE OBTAINED WITHOUT CHARGE BY WRITING TO THE FUNDS OR BY CALLING THE FUNDS AT
THE ADDRESS AND TELEPHONE NUMBER SHOWN ON THE PREVIOUS PAGE.
Please read this Prospectus before investing. It sets forth the information
about the Equity Investment Funds that a prospective investor ought to know
before investing. Investors should retain this Prospectus for future reference.
TABLE OF CONTENTS
PAGE
----
Fee Table......................................................... 3
Financial Highlights.............................................. 5
Investment Objectives............................................. 8
Investment Policies and Special Considerations.................... 9
Investment Restrictions........................................... 14
Valuation of Shares............................................... 15
How to Purchase Shares............................................ 16
Sales Charges..................................................... 18
Sales Charge Waivers.............................................. 19
Concurrent Purchases and Right of Accumulation.................... 20
Letter of Intent.................................................. 20
Exchange Privilege................................................ 21
How to Redeem Shares.............................................. 21
Dividends......................................................... 23
Federal Income Taxes.............................................. 24
Distribution...................................................... 25
Management of the Equity Investment Funds......................... 25
General Information............................................... 29
prospectus 2
<PAGE> 73
FEE TABLE
<TABLE>
<CAPTION>
AGGRESSIVE
EQUITY GROWTH BALANCED
FUND FUND FUND
------ ---------- --------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)
- ---------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases(2) (as a percentage of offering
price)............................................................... 4.00% 4.00% 4.00%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of
offering price)...................................................... 0% 0% 0%
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, if applicable).................................. 0% 0% 0%
Redemption Fees(3) (as a percentage of amount redeemed, if
applicable).......................................................... 0% 0% 0%
Exchange Fees.......................................................... $ 0 $ 0 $ 0
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------------------------------------------
Management Fees(4) (after voluntary fee reductions).................. 0.50% 0.50% 0%
12b-1 Fees (after voluntary fee reductions with respect to the
Balanced Fund)..................................................... 0.25% 0.25% 0%(5)
Other Expenses (after voluntary fee reductions with respect to the
Balanced Fund)..................................................... 0.33% 0.36% 0.38%(6)
Total Fund Operating Expenses(7) (after voluntary reductions)........ 1.08% 1.11% 0.38%
EXAMPLE:
- ----------------------------------------------------------------------------------------------------------
You would pay the following expenses on a $1,000 investment in each
of the Funds, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE
EQUITY GROWTH BALANCED
FUND FUND FUND
------ ---------- --------
<S> <C> <C> <C>
1 Year................................................................. $ 51 $ 51 $ 44
3 Years................................................................ $ 73 $ 74 $ 52
5 Years................................................................ $ 97 $ 99 $ 60
10 Years............................................................... $166 $170 $ 86
</TABLE>
The purpose of the above table is to assist a potential purchaser of Shares
of any of the Equity Investment Funds in understanding the various costs and
expenses that an investor in any of the Equity Investment Funds will bear
directly or indirectly. The examples reflect voluntary reductions of investment
advisory and/or 12b-1 fees, as applicable, pursuant to the agreements described
in notes 4 and 5. Although the Investment Adviser and the Distributor currently
have agreed to these voluntary reductions, they may cease to provide these
reductions, which would have the effect of increasing the projected expenses set
forth above in the examples. Such expenses do not include any fees charged by
BOTC or any of its affiliates to its customers' accounts which may have invested
in shares of a Fund. See "MANAGEMENT OF THE EQUITY INVESTMENT FUNDS", "SALES
CHARGES", and "DISTRIBUTION" for a more complete discussion of the transaction
expenses and annual operating expenses of a holder of Shares ("Shareholder") of
the Equity Investment Funds. NASD rules generally limit the amount that a Equity
Investment Fund may pay under a Distribution Plan. An Equity Investment Fund
would stop accruing payments under the Distribution Plan if, to the extent, and
for as long as, such limit would otherwise be exceeded. Long-term shareholders
may pay more than the equivalent of the maximum front-end sales charges
otherwise permitted by the Rules of the National Association of Securities
Dealers, Inc.
THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
3 prospectus
<PAGE> 74
- ------------
(1) Participating Organizations (as defined in "DISTRIBUTION") may charge a
Customer's (as defined in "DISTRIBUTION") account fees for automatic
investment and other investment and trust services provided in connection
with investment in the Funds. (See "HOW TO PURCHASE SHARES.")
(2) There may be no sales load imposed upon purchases of shares of the Funds by
(1) investors who purchase through the Investment Adviser and who have an
existing trust relationship with the Investment Adviser; (2) employees of
the Investment Adviser, or its affiliates; (3) each Trustee of the Funds and
any employee of a company that constitutes the principal business activity
of a Trustee; (4) employees of the Distributor and its affiliates; (5)
orders placed on behalf of other investment companies distributed by The
BISYS Group, Inc. or its affiliated companies; (6) existing Shareholders who
own Shares in any of the Equity Investment Funds within their trust accounts
and purchase additional Shares outside of their trust relationship; and (7)
investors within wrap accounts.
(3) A wire redemption charge may be deducted from the amount of a wire
redemption payment made at the request of a holder of Shares. The current
charge, which is subject to change upon notice to Shareholders, is $15.00.
(See "HOW TO REDEEM SHARES -- By Telephone.")
(4) In order to reduce operating expenses, the Investment Adviser has currently
established the investment advisory fees at the above amount, pursuant to an
agreement with the Funds. The maximum amount of the investment advisory
fees, if charged, would be .69% of the average daily net assets of the
Equity Fund and the Aggressive Growth Fund, and .74% of the average daily
net assets of the Balanced Fund.
(5) BISYS has agreed with the Funds to voluntarily reduce the amount of its
distribution fee for the Balanced Fund. Absent the voluntary reduction of
distribution fees, 12b-1 fees as a percentage of the Balanced Fund's average
daily net assets would be .25%.
(6) The total amount of Other Expenses for the Balanced Fund, absent voluntary
fee reductions, would be 0.41% of the Fund's average daily net assets.
(7) Absent voluntary reduction of fees, the Total Fund Operating Expenses for
the Equity Fund, Aggressive Growth Fund and Balanced Fund would be 1.27%,
1.30% and 1.40% respectively of each Fund's average daily net assets.
prospectus 4
<PAGE> 75
FINANCIAL HIGHLIGHTS
The American Performance Funds (the "Funds") were organized as a Massachusetts
business trust and began active operations in August of 1990. The Funds
currently consist of nine series of units of beneficial interests ("Shares").
Three such series represent interests in the Equity Fund, the Aggressive Growth
Fund and the Balanced Fund.
The Tables below set forth certain financial highlights for the Equity Fund, the
Aggressive Growth Fund and the Balanced Fund for the periods indicated. The
information below has been audited by KPMG Peat Marwick LLP, independent public
accountants for the Funds, whose report thereon, insofar as it relates to each
of the years or periods in the five-year period ended August 31, 1996, is
included in the Statement of Additional Information, which a Shareholder may
obtain by calling the Funds.
<TABLE>
<CAPTION>
EQUITY FUND
-------------------------------------------------------------------------
SEPTEMBER 28,
YEAR ENDED AUGUST 31, 1990 TO
--------------------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992 1991(a)
------- ------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 12.33 $ 11.85 $ 12.78 $ 11.31 $ 12.13 $ 10.00
------- ------- ------- ------- ------- --------
INVESTMENT ACTIVITIES
Net investment income................ 0.18 0.20 0.14 0.14 0.17 0.30
Net realized and unrealized gains
(losses) on investments............ 2.04 1.77 0.40 1.56 (0.63) 2.13
------- ------- ------- ------- ------- --------
Total from Investment
Activities................... 2.22 1.97 0.54 1.70 (0.46) 2.43
------- ------- ------- ------- ------- --------
DISTRIBUTIONS
Net investment income................ (0.18) (0.19) (0.14) (0.14) (0.17) (0.30)
Net realized gains................... (0.64) (0.39) (1.33) (0.09) (0.19) --
In excess of net realized gains...... -- (0.91) -- -- -- --
------- ------- ------- ------- ------- --------
Total Distributions............ (0.82) (1.49) (1.47) (0.23) (0.36) (0.30)
------- ------- ------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD......... $ 13.73 $ 12.33 $ 11.85 $ 12.78 $ 11.31 $ 12.13
======= ======= ======= ======= ======= ========
Total Return (excludes sales charge)... 18.53% 19.74% 4.66% 15.12% (3.98%) 24.57%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000).... $86,352 $76,398 $84,618 $58,015 $90,890 $ 73,362
Ratio of expenses to average net
assets............................. 1.08% 1.14% 1.12% 1.16% 1.16% 1.17%(b)
Ratio of net investment income to
average net assets................. 1.35% 1.73% 1.32% 1.09% 1.46% 3.01%(b)
Ratio of expenses to average net
assets*............................ 1.27% 1.33% 1.31% 1.36% 1.39% 1.42%(b)
Ratio of net investment income to
average net assets*................ 1.16% 1.54% 1.13% 0.88% 1.23% 2.76%(b)
Portfolio turnover................... 67.46% 100.44% 159.30% 66.54% 51.26% 69.94%
Average Commission Rate(a)........... $0.0504 -- -- -- -- --
<FN>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
</TABLE>
5 prospectus
<PAGE> 76
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
--------------------------------------------------------------
FEBRUARY 3,
YEAR ENDED AUGUST 31, 1992 TO
---------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992(a)
------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.............................. $ 16.31 $ 11.99 $ 11.96 $ 8.37 $ 10.00
------- ------- ------- ------- --------
INVESTMENT ACTIVITIES
Net investment income (loss)...... (0.04) (0.06) (0.04) (0.03) 0.03
Net realized and unrealized gains
(losses) on investments......... 0.30 4.38 0.07 3.62 (1.63)
------- ------- ------- ------- --------
Total from Investment
Activities................. 0.26 4.32 0.03 3.59 (1.60)
------- ------- ------- ------- --------
DISTRIBUTIONS
Net investment income (loss)...... -- -- -- -- (0.03)
Net realized gains................ (0.28) -- -- -- --
------- ------- ------- ------- --------
Total Distributions.......... (0.28) -- -- -- (0.03)
------- ------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD........ $ 16.29 $ 16.31 $ 11.99 $ 11.96 $ 8.37
======= ======= ======= ======= ========
Total Return (excludes sales
charge)............................. 1.77% 36.03% 0.25% 42.89% (16.02%)(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)........................... $43,278 $38,008 $24,775 $11,012 $ 11,716
Ratio of expenses to average net
assets.......................... 1.11% 1.27% 1.35% 0.62% 0.28%(b)
Ratio of net investment income
(loss) to average net assets.... (0.35%) (0.62%) (0.69%) (0.24%) 0.58%(b)
Ratio of expenses to average net
assets*......................... 1.30% 1.45% 1.55% 1.64% 1.47%(b)
Ratio of net investment income
(loss) to average net assets*... (0.54%) (0.81%) (0.89%) (1.26%) (0.61%)(b)
Portfolio turnover................ 32.89% 27.16% 18.76% 59.47% 14.53%
Average Commission Rate(d)........ $0.0665 -- -- -- --
<FN>
- ------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commission paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
</TABLE>
prospectus 6
<PAGE> 77
<TABLE>
<CAPTION>
BALANCED FUND
----------------------
JUNE 1,
1995 TO
YEAR ENDED AUGUST
AUGUST 31, 31,
1996 1995(a)
---------- ---------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................................... $ 10.62 $ 10.00
--------- --------
INVESTMENT ACTIVITIES
Net investment income.............................................. 0.35 0.08
Net realized and unrealized gains (losses) on investments.......... 0.79 0.62
--------- --------
Total from Investment Activities.............................. 1.14 0.70
--------- --------
DISTRIBUTIONS
Net investment income.............................................. (0.35) (0.08)
Net realized gains................................................. (0.13)
--------- --------
Total Distributions........................................... (0.48) (0.08)
--------- --------
NET ASSET VALUE, END OF PERIOD......................................... $ 11.28% $ 10.62
======== =======
Total Return (excludes sales charge)................................... 10.87% 6.98%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period (000).................................. $ 22,592 $12,842
Ratio of expenses to average net assets............................ 0.38% 0.90%(b)
Ratio of net investment income to average net assets............... 3.27% 3.17%(b)
Ratio of expenses to average net assets*........................... 1.40% 1.92%(b)
Ratio of net investment income to average net assets*.............. 2.25% 2.15%(b)
Portfolio turnover................................................. 71.89% 18.68%
Average Commission Rate(d)......................................... $ 0.0792
<FN>
- ------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions had not occurred, the ratios would have
been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
</TABLE>
7 prospectus
<PAGE> 78
INVESTMENT OBJECTIVES
EQUITY FUND
The investment objective of the Equity Fund is to seek growth of capital and,
secondarily, income by investing primarily in a diversified portfolio of common
stocks and securities convertible into common stocks. The Equity Fund is managed
using a "quantitative" investment approach. Individual stocks in a universe are
ranked according to their return characteristics. The approach seeks to measure
some or all of the following quantitative factors which the Investment Adviser
may supplement or modify from time to time: relative strength, earning revision
and acceleration, forecast earnings to price, and normal earnings to price. An
additional factor in stock selection is an attempt to structure the Equity
Fund's portfolio so as to be relatively neutral to the stocks comprising
Standard and Poor's Corporation's ("S&P") 500 Index regarding both industry
exposure and factor exposure (e.g., company size, yield, trading activity, labor
intensity, foreign-derived income, financial leverage, earnings variability,
book to price, earnings to price, growth, variability in markets and recent
success). The Equity Fund will not, however, seek to match or track the
performance of the S&P 500, nor limit investments to stocks in that index.
Equity securities such as those in which the Equity Fund may invest are more
volatile and carry more risk than some other forms of investment, including
investments in short-term high-grade fixed income funds. The Equity Fund
portfolio of securities will be composed of securities believed by its
Investment Adviser to be generally less volatile and carry less risk than those
generally held by an aggressive growth fund. Depending upon the performance of
the Equity Fund's investments, the net asset value per share of such fund may
decrease instead of increase.
AGGRESSIVE GROWTH FUND
The investment objective of the Aggressive Growth Fund is to seek long-term
capital appreciation and, secondarily, income by investing primarily in a
diversified portfolio of common stocks and securities convertible into common
stocks of small to medium-size companies. The inherent risks of small to
medium-size companies are two-fold: business risk and market risk. Business risk
refers to the possibility that a company may do poorly due to competitive or
financial factors. Market risk refers mainly to the relatively small number of
shares publicly owned as compared to larger companies.
The Aggressive Growth Fund will tend to utilize a "bottom-up" approach to
securities selection. In this analysis, emphasis is placed upon the prospects of
each individual company rather than on its sector prospects. Particular
attention will be focused upon the prospects of above market earnings growth.
Other characteristics will include return on equity, product profile, condition
of the balance sheet and company management. Because the Aggressive Growth Fund
primarily seeks long-term return from capital appreciation, the Fund will be
managed in a manner that seeks to provide roughly the same level of income as an
aggressive growth fund, but less than an income fund. Also, the Aggressive
Growth Fund will attempt to achieve growth over a period of years that is
greater than that of an income fund. Depending upon the performance of the
Aggressive Growth Fund's investments, the net asset value per share of such fund
may decrease instead of increase.
prospectus 8
<PAGE> 79
BALANCED FUND
The investment objective of the Balanced Fund is to seek current income and,
secondarily, long-term capital growth by investing primarily in a broadly
diversified portfolio of securities, including common stocks, preferred stocks
and bonds. The portion of the Balanced Fund's assets invested in equity and debt
securities will vary in accordance with economic conditions, the general level
of common stock prices, interest rates and other relevant considerations,
including the risks associated with each investment medium. Although the
Balanced Fund seeks to reduce the risks associated with any one investment
medium by utilizing a variety of investments, performance will depend upon
additional factors such as timing and mix and the ability of its Investment
Adviser to judge and react to changing market conditions. Because the Balanced
Fund will invest in both debt and equity securities, the Balanced Fund is
expected to produce a higher level of current income than the Equity Fund and
the Aggressive Growth Fund.
ALL EQUITY INVESTMENT FUNDS
The investment objectives with respect to the Equity Fund, the Aggressive Growth
Fund or the Balanced Fund may not be changed without a vote of the holders of a
majority of the outstanding Shares of that Equity Investment Fund (as defined in
the Statement of Additional Information). There can be no assurance that the
investment objectives of the Equity Fund, the Aggressive Growth Fund or the
Balanced Fund will be achieved.
Additionally, the Equity Fund, the Aggressive Growth Fund and the Balanced Fund
may engage in certain investment techniques which may subject the Funds to
certain risks (see "INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS").
INVESTMENT POLICIES AND SPECIAL CONSIDERATIONS
Under normal market conditions, each of the Equity Fund and the Aggressive
Growth Fund will invest at least 70% of the value of its total assets in common
stocks and securities convertible into common stocks of companies believed by
the Investment Adviser to be characterized by sound management and the ability
to finance expected growth. Each of the Equity Fund and the Aggressive Growth
Fund may also invest up to 30% of the value of its total assets in preferred
stocks, corporate bonds, notes, warrants, and cash equivalents. Corporate bonds
will be rated at the time of purchase within the three highest ratings
categories assigned by a nationally recognized statistical ratings organization
(an "NRSRO") (e.g., at least "A" by Moody's Investors Services ("Moody's") or
S&P) or, if not rated, found by the Investment Adviser under guidelines
established by the Funds' Board of Trustees to be of comparable quality.
"Cash equivalents" are deposits or high quality, interest-bearing instruments
with a remaining maturity of one year or less. The purpose of cash equivalents
is to provide liquidity and income at money market rates while minimizing the
risk of decline in value to the maximum extent possible. The instruments may
include, but are not limited to, commercial paper, domestic and Eurodollar
certificates of deposit, repurchase agreements, bankers' acceptances, United
States Treasury Bills, master demand notes, agency discount notes, bank money
market deposit accounts and money market mutual funds. Each Equity Investment
Fund will only purchase commercial paper rated at the time of purchase within
the three highest ratings categories assigned by an NRSRO (e.g., A-1 by S&P, P-1
by Moody's or F-1 by
9 prospectus
<PAGE> 80
Fitch Investors Service) or, if not rated, found by the Investment Adviser under
guidelines established by the Funds' Board of Trustees to be of comparable
quality. See "Appendix" to the Statement of Additional Information for an
explanation of these ratings. During temporary defensive periods as determined
by the Investment Adviser, an Equity Investment Fund may hold up to 100% of its
total assets in cash equivalents.
Under normal market conditions, the Balanced Fund will invest in equity
securities consisting of common stocks but may also invest in other equity-type
securities such as warrants, convertible preferred stocks and convertible debt
instruments. The Balanced Fund's equity investments will be in companies
believed by its Investment Adviser to be undervalued. The Balanced Fund's debt
securities will consist of securities such as bonds, notes, debentures and money
market instruments. The average dollar-weighted portfolio maturity of debt
securities held by the Balanced Fund will vary according to market conditions
and interest rate cycles and will range between 1 year and 30 years under normal
market conditions. While securities with longer maturities tend to produce
higher yields, the price of longer maturity securities is also subject to
greater market fluctuations as a result of changes in interest rates. The
Balanced Fund's debt securities will consist of high grade securities, which are
those securities rated within the three highest ratings categories assigned by
an NRSRO at the time of purchase (e.g., at least "A" from Moody's or S&P
(including all sub-classifications indicated by modifiers of such "A" ratings))
or, if not rated, found by the Investment Adviser under guidelines established
by the Funds' Board of Trustees to be of comparable quality.
It is a fundamental policy of the Balanced Fund that it will invest at least 25%
of its total assets in fixed-income securities. For this purpose, fixed-income
securities include debt securities, mortgage-related securities, non-convertible
preferred stock and that portion of the value of securities convertible into
common stock, including convertible preferred stock and convertible debt, which
is attributable to the fixed-income characteristics of those securities.
Certain debt securities such as, but not limited to, mortgage backed securities
and CMOs, as well as securities subject to prepayment of principal prior to the
stated maturity date, are expected to be repaid prior to their stated maturity
dates. The Adviser determines the "effective maturity" of the securities based
on the expected payment date (which is earlier than the stated maturity dates of
the securities). For purposes of calculating the Balanced Fund's weighted
average portfolio maturity, the effective maturity of such securities, as
determined by the Adviser, will be used.
INVESTMENT COMPANY SECURITIES
Each of the Equity Investment Funds may invest in shares of other investment
companies, including other American Performance Funds. However, none of the
Equity Investment Funds may invest more than 5% of its total assets in the
securities of any one investment company, nor may any Equity Investment Fund own
more than 3% of the outstanding securities of any investment company or invest
more than 10% of its total assets in the securities of other investment
companies. These investment companies typically pay an investment advisory fee
out of their assets. Therefore, investments may be subject to duplicate
management, advisory and distribution fees. The Investment Adviser will consider
this fee in its investment analysis when determining whether to purchase shares
of these companies for an Equity Investment Fund. This fee is in addition to the
fees received by an Equity Investment Fund's Investment Adviser and
Administrator. In order to avoid the imposition of additional fees as a result
of
prospectus 10
<PAGE> 81
investments by an Equity Investment Fund in shares of other American Performance
Funds, the Investment Adviser and Administrator have agreed to promptly forward
to the Equity Investment Fund any portion of their usual asset-based service
fees from an American Performance Fund which is attributable to investment by
the Equity Investment Fund in shares of such other American Performance Fund.
OPTIONS AND FUTURES CONTRACTS
Each Equity Investment Fund may acquire put or call options and futures
contracts and may write covered call options. See the Statement of Additional
Information for more information on these investment activities.
Futures transactions involve brokerage costs and require an Equity Investment
Fund to segregate assets to cover contracts that would require it to purchase
securities. An Equity Investment Fund may lose the expected benefit of futures
transactions if interest rates or securities prices move in an unanticipated
manner. Such unanticipated changes may also result in poorer overall performance
than if the Equity Investment Fund had not entered into any futures
transactions. In addition, the value of an Equity Investment Fund's futures
positions may not prove to be perfectly or even highly correlated with the value
of its portfolio securities, limiting the Equity Investment Fund's ability to
hedge effectively against interest rate and/or market risk and giving rise to
additional risks. There is no assurance of liquidity in the secondary market for
purposes of closing out futures positions.
FOREIGN SECURITIES
Each Equity Investment Fund may invest in foreign securities through the
purchase of sponsored and unsponsored American Depository Receipts and may also
invest in securities issued by foreign branches of U.S. banks and foreign banks,
in Canadian commercial paper, and in Europaper (U.S. dollar denominated
commercial paper of a foreign issuer). Investment in foreign securities is
subject to special risks, such as future adverse political and economic
developments, possible seizure, nationalization, or expropriation of foreign
investments, less stringent disclosure requirements, the possible establishment
of exchange controls or taxation at the source, or the adoption of other foreign
governmental restrictions.
SECURITIES LENDING
In order to generate additional income, an Equity Investment Fund may, from time
to time, lend its portfolio securities to broker-dealers, banks, or
institutional borrowers of securities. The Funds will enter into loan agreements
only with broker-dealers, banks, or other institutions that BOTC has determined
are creditworthy under guidelines established by the Funds' Board of Trustees.
See the Statement of Additional Information for more information on these
investment activities.
REPURCHASE AGREEMENTS
Securities held by an Equity Investment Fund may be subject to repurchase
agreements. Under the terms of a repurchase agreement, an Equity Investment Fund
would acquire securities from financial institutions such as member banks of the
Federal Deposit Insurance Corporation or registered broker-dealers which the
Investment Adviser deems creditworthy under guidelines approved by the Funds'
Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed
11 prospectus
<PAGE> 82
upon date and price. The repurchase price would generally equal the price paid
by the Equity Investment Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
portfolio securities. The seller under a repurchase agreement will be required
to maintain the value of collateral held pursuant to the agreement at not less
than the repurchase price (including accrued interest) and the Investment
Adviser will monitor the collateral's value to ensure that it equals or exceeds
the repurchase price. Repurchase agreements are considered to be loans by an
investment company under the Investment Company Act of 1940 (the "1940 Act").
See the Statement of Additional Information for more information regarding this
investment practice.
REVERSE REPURCHASE AGREEMENTS
Each Equity Investment Fund may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with the investment
restrictions described below. Pursuant to such agreements, an Equity Investment
Fund would sell portfolio securities to financial institutions such as banks and
broker-dealers and agree to repurchase them at a mutually agreed upon date and
price. At the time an Equity Investment Fund enters into a reverse repurchase
agreement, it will place in a segregated custodial account assets, such as
liquid high quality debt securities, consistent with the Equity Investment
Fund's investment objective having a value not less than 100% of the repurchase
price (including accrued interest), and the Investment Adviser will subsequently
monitor the account to ensure that such required value is maintained. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by an Equity Investment Fund may decline below the price at which such Fund
is obligated to repurchase the securities. Reverse repurchase agreements are
considered to be borrowings by an investment company under the 1940 Act.
WHEN-ISSUED SECURITIES
Each Equity Investment Fund may purchase securities on a when-issued basis.
When-issued securities are securities purchased for delivery beyond the normal
settlement date at a stated price and yield and thereby involve a risk that the
yield obtained in the transaction will be less than those available in the
market when delivery takes place. An Equity Investment Fund will generally not
pay for such securities or start earning interest on them until they are
received. When an Equity Investment Fund agrees to purchase such securities, its
Custodian will set aside cash or liquid high grade securities equal to the
amount of the commitment in a separate account with the Custodian or a
Sub-Custodian of the Equity Investment Fund. Securities purchased on a
when-issued basis are recorded as an asset and are subject to changes in value
based upon changes in the general level of interest rates. Each Equity
Investment Fund expects that commitments to purchase when-issued securities will
not exceed 25% of the value of its total assets absent unusual market
conditions. In the event that its commitments to purchase when-issued securities
ever exceeded 25% of the value of its assets, an Equity Investment Fund's
liquidity and the ability of the Investment Adviser to manage it might be
severely affected. No Equity Investment Fund intends to purchase when-issued
securities for speculative purposes but only in furtherance of its investment
objective.
PRIVATE PLACEMENT INVESTMENTS
The Equity Investment Funds may invest in commercial paper issued in reliance on
the so-called "private placement" exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, and resold to qualified
institutional buyers under Securities Act Rule 144A ("Section 4(2) paper").
prospectus 12
<PAGE> 83
Section 4(2) paper is restricted as to disposition under the federal securities
laws, and generally is sold to institutional investors such as the Funds who
agree that they are purchasing the paper for investment and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction and may be accomplished in accordance with Rule 144A. Section 4(2)
paper normally is resold to other institutional investors like the Funds through
or with the assistance of the issuer or investment dealers who make a market in
the Section 4(2) paper, thus providing liquidity. No Equity Investment Fund will
invest more than 10% of its net assets in Section 4(2) paper and illiquid
securities unless the Investment Adviser determines, by continuous reference to
the appropriate trading markets and pursuant to guidelines approved by the Board
of Trustees, that any Section 4(2) paper held by the Equity Investment Fund in
excess of this level is at all times liquid.
Because it is not possible to predict with assurance exactly how this market for
Section 4(2) paper sold and offered under Rule 144A will develop, the Board of
Trustees and the Investment Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the Equity Investment Funds'
investments in these securities, focusing on such important factors, among
others, as valuation, liquidity, and availability of information. Investments in
Section 4(2) paper could have the effect of reducing the Equity Investment
Funds' liquidity to the extent that qualified institutional buyers become for a
time not interested in purchasing these restricted securities.
MORTGAGE RELATED SECURITIES
The Balanced Fund may purchase mortgage-related securities representing pools of
mortgage loans assembled for sale to investors by various governmental agencies
such as the Government National Mortgage Association and government-related
organizations such as the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation, as well as by private issuers such as commercial
banks, savings and loan institutions, mortgage bankers and private mortgage
insurance companies. Although certain mortgage-related securities are guaranteed
by a third party or otherwise similarly secured, the market value of the
security, which may fluctuate, is not so secured. If the Balanced Fund purchases
a mortgage-related security at a premium, that portion may be lost if there is a
decline in the market value of the security whether resulting from changes in
interest rates or prepayments in the underlying mortgage collateral. As with
other interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates, the mortgages
underlying the securities are prone to prepayment. Prepayments occur when the
borrower under an individual mortgage prepays the remaining principal before the
mortgage's scheduled maturity date. As a result of the pass-through of
prepayments of principal on the underlying securities, mortgage-backed
pass-through securities are often subject to more rapid prepayments of principal
than their stated maturity would indicate. Because the prepayment
characteristics of the underlying mortgages vary, it is not possible to predict
accurately the realized yield or average life of a particular issue of
pass-through certificates. Prepayments are important because of their effect on
the yield and price of the securities. During periods of declining interest
rates, such prepayments can be expected to accelerate, and the Funds would be
required to reinvest the proceeds at the lower interest rates then available. In
addition, prepayments of mortgages which underlie securities purchased at a
premium may not have been fully amortized at the time the obligation is repaid.
As a result of these principal prepayment features, mortgage-backed pass-through
13 prospectus
<PAGE> 84
securities are generally more volatile investments than other U.S. Government
Securities. For these and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying mortgages
and, therefore, it is not possible to predict accurately the security's return
to the Balanced Fund. In addition, regular payments received in respect of
mortgage-related securities include both interest and principal. No assurance
can be given as to the return the Balanced Fund will receive when these amounts
are reinvested. The Balanced Fund also may invest in collateralized mortgage
obligations structured on pools of mortgage pass-through certificates or
mortgage loans. Collateralized mortgage obligations will be purchased only if
rated at the time of purchase in one of the three highest rating categories by
an NRSRO or, if not rated, found by the Investment Adviser under guidelines
established by the Funds' Board of Trustees to be of comparable quality. For
further discussion concerning the investment considerations involved, see
"INVESTMENT OBJECTIVE AND POLICIES -- Additional Information on Fund Instruments
- -- Mortgage-related Securities" in the Statement of Additional Information.
PORTFOLIO TURNOVER
Portfolio turnover may vary greatly from year to year as well as within a
particular year. High turnover rates will generally result in higher transaction
costs to an Equity Investment Fund and may result in additional tax consequences
to an Equity Investment Fund's Shareholders. The portfolio turnover rate for the
Equity Fund for the fiscal year ended August 31, 1996 was 67.46% and the
portfolio turnover rate for the Aggressive Growth Fund was 32.89%. The portfolio
turnover rate for the Balanced Fund for the fiscal year ended August 31, 1996
was 71.63% with respect to the common stock portion of its portfolio and 72.29%
with respect to the fixed income portion of its portfolio. For further
information regarding portfolio turnover, see the Statement of Additional
Information.
INVESTMENT RESTRICTIONS
Each Equity Investment Fund is subject to a number of investment restrictions
that may be changed only by a vote of a majority of the outstanding Shares of
the Equity Investment Fund (as defined in "GENERAL INFORMATION --
Miscellaneous").
Pursuant to these investment restrictions:
1. Each of the Equity Investment Funds will not purchase a security if, as a
result, with respect to 75% of its portfolio (i) more than 5% of the value of
its total assets would be invested in any one issuer, or (ii) it would hold
more than 10% of any class of securities of such issuer or more than 10% of
the outstanding voting securities of the issuer. There is no limit on the
percentage of assets that may be invested in U.S. Treasury bills, notes, or
other obligations issued or guaranteed by the U.S. Government or its agencies
and instrumentalities. For purposes of this and the immediately following
limitation, a security is considered to be issued by the government entity
(or entities) whose assets and revenues back the security, or, with respect
to a private activity bond that is backed only by the assets and revenues of
a non-governmental user, such non-governmental user.
2. Each of the Equity Investment Funds will not purchase a security if, as a
result, more than 25% of the value of its total assets would be invested in
securities of one or more issuers conducting their principal business
activities in the same industry, provided that (a) this limitation shall not
apply to
prospectus 14
<PAGE> 85
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities; (b) wholly owned finance companies will be considered to
be in the industries of their parents if their activities are primarily
related to financing the activities of their parents; and (c) utilities will
be divided according to their services. For example, gas, gas transmission,
electric and gas, electric, and telephone will each be considered a separate
industry.
3. The Equity Investment Funds may not borrow money or issue senior securities,
except that each Equity Investment Fund may borrow from banks or enter into
reverse repurchase agreements for temporary purposes in amounts up to 10% of
the value of its total assets at the time of such borrowing; or mortgage,
pledge, or hypothecate any assets, except in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of each Equity Investment Fund's total assets at
the time of its borrowing. No Equity Investment Fund will purchase securities
while its borrowings (including reverse repurchase agreements) exceed 5% of
its total assets.
4. No Equity Investment Fund may make loans, except that each Equity Investment
Fund may, in accordance with its investment objectives and policies, purchase
or hold debt instruments, lend portfolio securities, and enter into
repurchase agreements.
5. No Equity Investment Fund will enter into a repurchase agreement with a
maturity in excess of seven days if such investment, together with other
instruments in the Fund which are not readily marketable, exceeds 10% of such
Fund's net assets.
Additionally, although not a matter controlled by their fundamental investment
policies or restrictions (and therefore subject to change without shareholder
approval), no Equity Investment Fund will, so long as its shares are registered
under the securities laws of the State of Texas and such restrictions are
required as a consequence of such registration, (1) invest more than 5% of any
Equity Investment Fund's net assets in warrants valued at the lower of cost or
market; provided that, of this 5%, no more than 2% will be in warrants that are
not listed on the New York Stock Exchange or the American Stock Exchange or (2)
invest in illiquid investments, including securities which are subject to legal
or contractual restrictions on resale, or for which there is no readily
available market if more than 15% of an Equity Investment Fund's average net
assets would be invested in such securities. For purposes of restriction (1) in
the preceding sentence, warrants acquired by an Equity Investment Fund in units
or attached to other securities may be deemed to be without value.
VALUATION OF SHARES
The net asset value of the Funds are determined and their Shares are priced as
of the close of regular trading of the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern Time) on each Business Day ("Valuation Time"). As
used herein, a "Business Day" constitutes any day on which the NYSE is open for
trading, and the Federal Reserve Bank of Kansas City is open, except days on
which there are not sufficient changes in the value of a Fund's portfolio
securities that the Fund's net asset value might be materially affected, or days
during which no Shares are tendered for redemption and no orders to purchase
Shares are received. Currently, the NYSE or the Federal Reserve Bank of Kansas
City is closed on the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veteran's Day,
15 prospectus
<PAGE> 86
Thanksgiving Day and Christmas Day. Net asset value per Share for purposes of
pricing sales and redemptions is calculated by dividing the value of all
securities and other assets belonging to each Equity Investment Fund, less the
liabilities charged to each Equity Investment Fund, by the number of its
outstanding Shares.
The securities in each Equity Investment Fund will be valued at market value. If
market quotations are not readily available, the securities will be valued by a
method which the Funds' Board of Trustees believes accurately reflects fair
value. Debt securities with remaining maturities of 60 days or less will be
valued in accordance with the amortized cost method where the Funds' Trustees
determine that amortized cost is fair value. For further information about
valuation of investments, see the Statement of Additional Information.
HOW TO PURCHASE SHARES
Shares of the Equity Investment Funds are sold on a continuous basis and may be
purchased directly from the Funds' Distributor, BISYS, either by mail, by
telephone, or by electronic transfer. Shares may also be purchased through a
bank or broker-dealer who has established a dealer agreement with the
Distributor. Except as described in "Auto Invest Plan" below, the minimum
initial purchase is $1,000, and the minimum for subsequent purchases is only
$100. These minimums may be waived if purchases are made in connection with
Individual Retirement Accounts ("IRAs"), Keoghs, qualified pension plans,
similar plans, or other employer plans. For information on IRAs, Keoghs or
similar plans, contact BOTC at (918) 588-6586.
BY MAIL
Investors may purchase Shares of any Equity Investment Fund by completing and
signing an Account Registration form and mailing it, along with a check (or
other negotiable bank instrument or money order) for at least $1,000, payable to
the appropriate Fund, in care of the Funds' Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds, Department 12, Tulsa, Oklahoma 74182.
Subsequent purchases of Shares may be made at any time by mailing a check (or
other negotiable bank draft or money order) for at least $100, payable to the
appropriate Fund, to the above address.
Account Registration forms can be obtained by calling the Funds at (800)
762-7085.
BY TELEPHONE OR ELECTRONIC TRANSFER
If an investor's Account Registration form has been previously received by the
Distributor, investors may also purchase Shares of the Equity Investment Funds
by telephone or by electronic transfer to the Funds' Custodian. To place an
order by telephone, call the Funds toll-free at (800) 762-7085. Payment for
Shares ordered by telephone may be made by check and must be received by the
Funds' Custodian within the settlement requirements defined under the Securities
Exchange Act of 1934. Shares of the Equity Investment Funds ordered by telephone
will be purchased for the Shareholder's account when the order has been
received. Any questions regarding current settlement requirements or electronic
payment instructions should be directed to the Funds at (800) 762-7085.
If payment for the Shares is not received within the prescribed time periods, or
if a check timely received does not clear, the purchase will be cancelled and
the investor could be liable for any losses or fees incurred.
prospectus 16
<PAGE> 87
AUTO INVEST PLAN
The Funds offer an Auto Invest Plan which enables Shareholders of the Equity
Investment Funds to make regular monthly or quarterly purchases of Shares
through automatic deductions from their bank accounts. With Shareholder
authorization, the Transfer Agent deducts the amount specified from the
Shareholder's bank account which is then automatically invested in Shares at net
asset value. The required minimum initial investment when opening an account
using the Auto Invest Plan is $100; the minimum amount for subsequent
investments in an Equity Investment Fund is $50. To participate in the Auto
Invest Plan, Shareholders should complete the appropriate section of the Account
Registration form which can be acquired by calling (800) 762-7085. To change the
Auto Invest instructions, a Shareholder must submit a written request to the
Funds. A Shareholder may discontinue the feature by submitting a written request
to or by calling the Funds.
FUND DIRECT INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS")
A Fund Direct IRA enables individuals, even if they participate in an
employer-sponsored retirement plan, to establish their own retirement program.
IRA contributions may be tax-deductible and earnings are tax-deferred. Under the
Tax Reform Act of 1986, the tax deductibility of IRA contributions is restricted
or eliminated for individuals who participate in certain employer pension plans
and whose annual income exceeds certain limits. Existing IRAs and future
contributions up to the IRA maximums, whether deductible or not, still earn
income on a tax-deferred basis.
All IRA distribution requests must be made in writing to the Funds. Any
additional deposits to an IRA must distinguish the type and year of the
contribution. For more information on an IRA call the Funds at (800) 762-7085.
Shareholders are advised to consult a tax adviser on IRA contribution and
withdrawal requirements and restrictions.
OTHER INFORMATION REGARDING PURCHASES
Shares may also be purchased through procedures established by the Distributor
in connection with the requirements of qualified accounts maintained by or on
behalf of certain persons ("Customers") by Participating Organizations under the
Funds' Distribution Plan (See "DISTRIBUTION"). Shares of any Equity Investment
Fund sold to a Participating Organization on behalf of Customers will normally
be held of record by the Participating Organization and it is the responsibility
of the Participating Organization to transmit purchase or redemption orders to
the Distributor and to deliver funds for the purchase thereof on a timely basis.
Depending upon the terms of a particular Customer account, a Participating
Organization may charge a Customer account fees for services provided in
connection with investment in an Equity Investment Fund. Information concerning
these services and any charges can be obtained from the Participating
Organization or one of its affiliates. This Prospectus should be read in
conjunction with any such information so received.
Shares of each Equity Investment Fund are purchased at the net asset value per
share (see "VALUATION OF SHARES") next determined after receipt by the
Distributor of an order to purchase Shares in good form, plus any applicable
sales charge as described below. Purchases of Shares in an Equity Investment
Fund will be effected only on a Business Day (as defined in "VALUATION OF
SHARES") of that Equity Investment Fund. An order received prior to the
Valuation Time on any
17 prospectus
<PAGE> 88
Business Day will be executed at the net asset value determined as of the
Valuation Time on the day of receipt. An order received after the Valuation Time
on any Business Day will be executed at the net asset value determined as of the
Valuation Time on the next Business Day.
In the case of orders for the purchase of Shares placed through a broker-dealer,
the applicable public offering price will be the net asset value as so
determined, but only if the broker-dealer receives the order prior to the
Valuation Time for that day and transmits it to the Distributor prior to the
Valuation Time for that day. The broker-dealer is responsible for transmitting
such orders promptly. If the brokerdealer fails to do so, the investor's right
to that day's closing price must be settled between the investor and the
broker-dealer. If the broker-dealer receives the order after the Valuation Time
for that day, the price will be based on the net asset value determined as of
the Valuation Time for the next day.
Each Equity Investment Fund reserves the right to reject any order for the
purchase of its Shares in whole or in part, including purchases made with
foreign and third party checks.
Every Shareholder will receive a confirmation of each new transaction in the
Shareholder's account, which will show the total number of Shares of such Fund
owned by the Shareholder and the number of Shares being held in safekeeping by
the Transfer Agent for the account of the Shareholder. Confirmation of purchases
and redemptions of Shares of the Equity Investment Funds by a Participating
Organization on behalf of a Customer will be sent by the Participating
Organization. Shareholders may rely on these statements in lieu of certificates.
No certificates representing Shares of any Equity Investment Fund will be
issued.
SALES CHARGES
The public offering price of a Share of each of the Equity Investment Funds
equals its net asset value plus a sales charge. BISYS receives this sales charge
as Distributor and reallows a portion of it as dealer discounts and brokerage
commissions. However, the Distributor, at its sole discretion, may pay certain
dealers all or part of the portion of the sales charge it receives. A broker or
dealer who receives a reallowance in excess of 90% of the sales charge may be
deemed to be an "underwriter" for purposes of the Securities Act of 1933.
The following table sets forth information pertaining to the Sales Charges for
each of the Equity Investment Funds.
<TABLE>
<CAPTION>
DEALER DISCOUNTS
AND BROKERAGE
SALES CHARGE AS SALES CHARGE AS COMMISSIONS AS
A PERCENTAGE OF A PERCENTAGE OF % OF PUBLIC
NET AMOUNT NET OFFERING OFFERING
AMOUNT OF PURCHASE INVESTED PRICE PRICE
- ------------------------------------- --------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000.................... 4.17% 4.00% 3.50%
$50,000 but less than $250,000....... 3.63% 3.50% 3.00%
$250,000 but less than $500,000...... 3.09% 3.00% 2.50%
$500,000 but less than $1,000,000.... 2.56% 2.50% 2.25%
$1,000,000 or more................... 2.04% 2.00% 2.00%
</TABLE>
prospectus 18
<PAGE> 89
From time to time dealers who receive dealer discounts and brokerage commissions
from the Distributor may reallow all or a portion of such dealer discounts and
brokerage commissions to other dealers or brokers.
The Distributor, at its expense, will also provide additional compensation to
dealers in connection with sales of Shares of any of the Funds. Such
compensation will include financial assistance to dealers in connection with
conferences, sales or training programs for their employees, seminars for the
public, advertising campaigns regarding one or more Funds of the Funds, and/or
other dealer-sponsored special events. In some instances, this compensation will
be made available only to certain dealers whose representatives have sold a
significant amount of such Shares. Compensation will include payment for travel
expenses, including lodging, incurred in connection with trips taken by invited
registered representatives and members of their families to locations within or
outside of the United States for meetings or seminars of a business nature.
Compensation will also include the following types of non-cash compensation
offered through sales contests: (1) vacation trips, including the provision of
travel arrangements and lodging at luxury resorts at exotic locations, (2)
tickets for entertainment events (such as concerts, cruises and sporting events)
and (3) merchandise (such as clothing, trophies, clocks and pens). Dealers may
not use sales of a Fund's Shares to qualify for this compensation to the extent
such may be prohibited by the laws of any state or any self-regulatory agency,
such as the National Association of Securities Dealers, Inc. None of the
aforementioned compensation is paid for by any Fund or its Shareholders.
SALES CHARGE WAIVERS
The Distributor may periodically waive the sales charges for all customers with
respect to any of the Equity Investment Funds. In addition, the Distributor may
waive the sales charge for the purchase of a Fund's shares with the proceeds
from the recent redemption of shares of another non-money market mutual fund
that imposes a sales charge.
The sales charges may also be waived for (1) investors who purchase through
accounts with the Investment Adviser and through their existing trust
relationship with the Investment Adviser; (2) employees of the Investment
Adviser or its affiliates; (3) each Trustee of the Funds and any employee of a
company that constitutes the principal business activity of a Trustee; (4)
employees of the Distributor and its affiliates; (5) orders placed on behalf of
other investment companies distributed by The BISYS Group, Inc. or its
affiliated companies; (6) existing Shareholders who own Shares in any of the
Equity Investment Funds within their trust accounts and purchase additional
Shares outside of these trust relationships; and (7) investors within wrap
accounts.
Each investor described in paragraphs (2), (3), (4), and (6) above must identify
himself or herself at the time of purchase. When an investor who has previously
redeemed Shares of any American Performance Fund re-enters the American
Performance Funds, the sales charge on the newly purchased shares will be waived
on a one-time basis in an amount up to the total of any sales charge paid on the
Shares previously redeemed. If the Shareholder exercising this re-entry
privilege paid a sales charge on the redeemed shares and held them for less than
91 days, such Shareholder must reduce his or her cost basis of the redeemed
shares for purposes of determining any capital gain or loss on the redemption by
the lesser of (1) the sales charge paid for those shares, or (2) the sales
charge waived
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<PAGE> 90
in connection with the purchase of the new shares. The Funds reserve the right
to alter the terms of their sales charge waiver practices upon sixty days'
notice to Shareholders.
CONCURRENT PURCHASES AND RIGHT OF ACCUMULATION
For purposes of qualifying for a reduced sales charge, investors have the
privilege of combining concurrent purchases of, and holdings in, shares of any
Funds of the Funds sold with a sales charge ("Eligible Shares"). Investors are
permitted to purchase Eligible Shares at the public offering price applicable to
the total of (a) the dollar amount of the Eligible Shares then being purchased
plus (b) an amount equal to the then-current net asset value of the purchaser's
combined holdings of Eligible Shares.
To receive the applicable public offering price pursuant to concurrent purchases
and the right of accumulation, Shareholders must, at the time of purchase, give
the Distributor sufficient information to permit confirmation of qualification.
Investors may combine purchases of Eligible Shares that are made in their
individual capacity with (1) purchases that are made by members of their
immediate household and (2) purchases made by businesses that they own as sole
proprietorships, for purposes of obtaining reduced sales charges pursuant to
concurrent purchases and the right of accumulation. In order to accomplish this,
however, investors must designate on the Account Registration form the accounts
that are to be combined for this purpose. Investors can only designate accounts
that are open at the time of the concurrent purchases and when the right of
accumulation is exercised.
LETTER OF INTENT
You may obtain a reduced sales charge by means of a written Letter of Intent
which expresses your intention to invest, within a period of 13 months, a
certain amount in Shares of any of the American Performance Funds which charge a
sales load. Each purchase of Shares under a Letter of Intent will be made at the
public offering price plus the sales charge applicable at the time of such
purchase to a single transaction of the total dollar amount indicated in the
Letter of Intent. A Letter of Intent may include purchases of Shares made not
more than 90 days prior to the date the investor signs a Letter of Intent;
however, the 13-month period during which the Letter of Intent is in effect will
begin on the date of the earliest purchase to be included.
A Letter of Intent is not a binding obligation upon the investor to purchase the
full amount indicated. The minimum initial investment under a Letter of Intent
is 5% of such amount. Shares purchased with the first 5% of such amount will be
held in escrow (while remaining registered in the name of the investor) to
secure payment of the higher sales charge applicable to the Shares actually
purchased if the full amount indicated is not purchased. Such escrowed Shares
will be involuntarily redeemed to pay the additional sales charge, if necessary.
Dividends on escrowed Shares, whether paid in cash or reinvested in additional
Shares are not subject to escrow. The escrowed Shares will not be available for
disposal by the investor until all purchases pursuant to the Letter of Intent
have been made or the higher sales charge has been paid. When the full amount
indicated has been purchased, the escrow will be released.
Additionally, if the total purchases within the 13-month period exceed the
amount specified, an adjustment will be made to reflect further reduced sales
charges applicable to such purchases. Adjustments for these purchases and
purchases made during the 90-day period prior to submission of
prospectus 20
<PAGE> 91
the Letter of Intent will be made at the conclusion of the 13-month period and
in the form of additional shares credited to the shareholder's account at the
then current Public Offering Price applicable to a single purchase of the total
amount of the total purchase.
For further information, interested investors should contact the Distributor.
Letter of Intent privileges may be amended or terminated without notice at any
time by the Distributor.
EXCHANGE PRIVILEGE
Shares of any Equity Investment Fund may be exchanged without payment of a sales
charge for Shares of any American Performance Fund having a sales charge equal
to or less than that of the Equity Investment Fund Shares sought to be
exchanged. If the Shareholder exercising the exchange privilege paid a sales
charge on the exchanged Shares that is less than the sales charge applicable to
the Shares sought to be acquired through the exchange, such Shareholder must pay
a sales charge on the exchange equal to the difference between the sales charge
paid for the exchanged Shares and the sales charge applicable to the Shares
sought to be acquired through the exchange. The exchange will be made on the
basis of the relative net asset values of the Shares exchanged. An exchange is
considered a sale of Shares and may result in a capital gain or loss for federal
income tax purposes. If the Shareholder exercising the exchange privilege paid a
sales charge on the exchanged Shares and held them for less than 91 days, for
purposes of determining the amount of the capital gain or loss, such Shareholder
must reduce his or her cost basis of the exchanged Shares by the lesser of (1)
the sales charge paid for those Shares, or (2) the sales charge waived on the
exchange. The sales charge is treated as incurred in connection with the
acquisition of the newly exchanged-for Shares. The exchange privilege may only
be exercised in states where the exchange may legally be made. The Funds reserve
the right to eliminate or to alter the terms of this exchange offer upon sixty
days' notice to Shareholders.
A Shareholder wishing to exchange his or her Shares may do so by contacting the
Funds at (800) 762-7085 or by providing written instructions to the Distributor.
Any Shareholder who wishes to make an exchange must have received a current
Prospectus of the Fund in which he or she wishes to invest before the exchange
will be effected.
HOW TO REDEEM SHARES
Shares may ordinarily be redeemed by mail or by telephone. Shareholders may
redeem their Shares without charge on any day that the net asset value is
calculated (see "VALUATION OF SHARES"). However, all or part of a Customer's
Shares may be redeemed in accordance with instructions and limitations
pertaining to his or her account held at a Participating Organization.
BY MAIL
Shares may be redeemed by mail by sending a written request to the Distributor
in care of the Funds' Custodian at Bank of Oklahoma, N.A., Attention: American
Performance Funds, Department 12, Tulsa, Oklahoma 74182. The Distributor may
require a signature guarantee by an eligible guarantor institution. For purposes
of this policy, the term "eligible guarantor institution" shall include banks,
brokers, dealers, credit unions, securities exchanges and associations, clearing
agencies and savings associations as those terms are defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. The
21 prospectus
<PAGE> 92
Distributor reserves the right to reject any signature guarantee if (i) it has
reason to believe that the signature is not genuine, (ii) it has reason to
believe that the transaction would otherwise be improper, or (iii) the guarantor
institution is a broker or dealer that is neither a member of a clearing
corporation nor maintains net capital of at least $100,000. The signature
guarantee requirements will be waived if all of the following conditions apply:
(1) the redemption check is payable to the Shareholder(s) of record, and (2) the
redemption check is mailed to the Shareholder(s) at the address of record. The
Shareholder may also have the proceeds mailed or sent electronically to a
commercial bank account previously designated on the Account Registration form
or by written instruction to the Distributor. There is no charge for having
redemption requests mailed to a designated bank account.
BY TELEPHONE
Shares may be redeemed by telephone if the Account Registration form reflects
that the Shareholder has that capability. The Shareholder may have the proceeds
mailed to his or her address or mailed or sent electronically to a commercial
bank account previously designated on the Account Registration form. Under most
circumstances, payments will be transmitted on the next Business Day following
receipt of a valid request for redemption. Electronic payment requests may be
made by the Shareholder by calling the Funds at (800) 762-7085. The Transfer
Agent may reduce the amount of a wire redemption payment by the Custodian's
then-current wire redemption charge (presently $15.00). Neither the Distributor,
the Transfer Agent, the Investment Adviser, nor the Funds will be liable for any
losses, damages, expenses or costs arising out of any telephone transaction
(including exchanges and redemptions) effected in accordance with the Funds'
telephone transaction procedures, upon instructions reasonably believed to be
genuine. The Funds will employ procedures designed to provide reasonable
assurance that the instructions communicated by telephone are genuine; if these
procedures are not followed, the Funds may be liable for any losses due to
unauthorized or fraudulent instructions. These procedures include recording all
phone conversations, sending confirmations to Shareholders within 72 hours of
the telephone transaction, verifying the account name and a Shareholder's
account number or tax identification number and sending redemption proceeds only
to the address of record or to a previously authorized account. If, due to
temporary adverse conditions, investors are unable to effect telephone
transactions, Shareholders may also mail the redemption request to the
Distributor at the address listed above under "HOW TO REDEEM SHARES -- By Mail."
The telephone redemption option will be suspended for a period of 10 days
following a telephonic address change.
SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan enables Shareholders of the Funds to make regular
monthly or quarterly redemptions of Shares if their account has at least
$10,000. With Shareholder authorization, the Transfer Agent will automatically
redeem Shares at the net asset value on the dates of the withdrawal and have a
check in the amount specified mailed to the Shareholder. The required minimum
withdrawal is $100. To participate in the Systematic Withdrawal Plan,
Shareholders should call (800) 762-7085 for more information. Purchases of
additional Shares concurrent with withdrawals may be disadvantageous to certain
Shareholders because of tax liabilities. To change the Systematic Withdrawal
instructions, a Shareholder must submit a written request to the Distributor. A
Shareholder may discontinue the feature by submitting a written request to or by
calling the Funds.
prospectus 22
<PAGE> 93
OTHER INFORMATION REGARDING REDEMPTIONS
All redemption orders are effected at the net asset value per Share next
determined after receipt of a valid request for redemption, as described above.
Payment to Shareholders for Shares redeemed will be made within the settlement
requirements defined in the Securities Exchange Act of 1934, after receipt by
the Distributor of the request for redemption. However, to the greatest extent
possible, the Trust will attempt to honor requests from Shareholders for next
Business Day payments upon redemption of Shares if the request for redemption is
received by the Transfer Agent before the Valuation Time on a Business Day or,
if the request for redemption is received after the Valuation Time, to honor
requests for payment within two Business Days, unless it would be
disadvantageous to the Trust or the Shareholders of the particular Fund to sell
or liquidate portfolio securities in an amount sufficient to satisfy requests
for payments in that manner.
At various times, an Equity Investment Fund may be requested to redeem Shares
for which it has not yet received good payment. In such circumstances, the
forwarding of proceeds may be delayed for up to 15 days until payment has been
collected for the purchase of such Shares. The Equity Investment Funds intend to
pay cash for all Shares redeemed, but under abnormal conditions which make
payment in cash unwise, payment may be made wholly or partly in readily
marketable portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.
Due to the relatively high cost of handling small investments, each Equity
Investment Fund reserves the right to redeem, at net asset value, the Shares of
any Shareholder if, because of redemptions of Shares by or on behalf of the
Shareholder, the account of such Shareholder in any Equity Investment Fund has a
value of less than $500. Accordingly, an investor purchasing Shares of any
Equity Investment Fund in only the minimum investment amount may be subject to
such involuntary redemption if he or she thereafter redeems some of his or her
Shares. Before any Equity Investment Fund exercises its right to redeem such
Shares and to send the proceeds to the Shareholder, the Shareholder will be
given notice that the value of the Shares in his or her account is less than the
minimum amount and will be allowed 60 days to make an additional investment in
such Fund in an amount which will increase the value of the account to at least
$500.
See the Funds' Statement of Additional Information -- "ADDITIONAL PURCHASE AND
REDEMPTION INFORMATION" -- for examples of when the right of redemption may be
suspended.
DIVIDENDS
Net investment income of the Equity Fund, the Aggressive Growth Fund and the
Balanced Fund is declared and paid quarterly as a dividend to persons who are
Shareholders at the close of business on the day of declaration. Net capital
gain income is distributed at least once a year. A Shareholder will
automatically receive all income dividends and capital gains distributions in
additional full and fractional Shares at net asset value as of the ex-dividend
date, unless the Shareholder elects to receive dividends or distributions in
cash. Reinvested dividends receive the same tax treatment as dividends paid in
cash. Such election, or any revocation thereof, must be made in writing to the
Distributor at: BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219 and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Distributor.
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<PAGE> 94
Shareholders may elect to have all income, dividends, and capital gains
distributions paid by check or reinvested in the Fund. If you elect to receive
distributions paid by check and the check (1) is returned and marked as
"undeliverable" or (2) remains uncashed for six months, your payment election
will be changed automatically and your future dividend and capital gains
distribution will be reinvested in the Fund at the per share net asset value
determined as of the date of payment of the distribution. In addition, any
undeliverable check that remains uncashed for six months will be canceled and
reinvested in the Fund at the per share net asset value determined as of the
date of cancellation.
FEDERAL INCOME TAXES
Each Equity Investment Fund is treated as a separate entity for federal income
tax purposes, each intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended, (the "Code") and each intends to
distribute all of its net investment income and capital gains so that it is not
required to pay federal income taxes on amounts so distributed to Shareholders.
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made during the year.
Receipt by a Shareholder of a distribution of ordinary income and/or an excess
of net short-term capital gain over net long-term loss is treated as a receipt
of ordinary income, whether such distribution is paid in cash or additional
shares. The "70 percent dividends-received deduction" for corporations generally
will apply to these distributions to corporate shareholders to the extent the
distribution represents amounts that would qualify for the "dividends-received"
deduction if the Equity Investment Fund making the distribution were a regular
corporation, and to the extent designated by such Equity Investment Fund as so
qualifying.
Distribution by each Equity Investment Fund of the excess of net long-term
capital gain over net short-term capital loss is generally taxable to
Shareholders as long-term capital gain in the year in which it is received,
regardless of how long the Shareholder has held shares in the Equity Investment
Fund. Such distributions are not eligible for the dividends-received deduction.
If a Shareholder disposes of Shares in the Equity Investment Fund at a loss
before holding such Shares for longer than six months, such loss will be treated
as a long-term capital loss to the extent the Shareholder has received a capital
gain dividend on the Shares.
Prior to purchasing Shares, the impact of dividends or capital gains
distributions which are expected to be declared or have been declared, but have
not been paid, should be carefully considered. Dividends or capital gains
distributions paid after a purchase of Shares are subject to federal income
taxes, although in some circumstances the dividends or distributions may be, as
an economic matter, a return of capital.
Additional information regarding federal income taxes is contained in the
Statement of Additional Information under "INVESTMENT OBJECTIVE AND POLICIES --
Additional Tax Information Concerning All The Funds." However, the foregoing and
the material in the Statement of Additional Information are only brief summaries
of some of the important tax considerations generally affecting the Equity
Investment Funds and their Shareholders. In addition, the foregoing discussion
and the federal tax information in the Statement of Additional Information are
based on tax laws and regulations which are in effect as of the date of this
Prospectus; these laws and regulations may subsequently change.
prospectus 24
<PAGE> 95
Prospective investors in an Equity Investment Fund are advised to consult their
tax adviser with special reference to their own tax situations, including the
potential application of state and local taxes.
DISTRIBUTION
Shares of the Equity Investment Funds are sold on a continuous basis by the
Distributor for the Funds, BISYS Fund Services (the "Distributor"). Under the
Funds' Distribution and Shareholder Services Plan (the "Distribution Plan"), the
Equity Investment Funds will pay a monthly distribution fee (also referred to as
a 12b-1 fee) to the Distributor as compensation for its services in connection
with the Distribution Plan at an annual rate equal to the lesser of (1) such fee
as may from time to time be agreed upon in writing by the Funds and the
Distributor, or (2) twenty-five one-hundredths of one percent (.25%) of the
average daily net assets of each of the Equity Investment Funds. The Distributor
may use the distribution fee to provide distribution assistance with respect to
the Equity Investment Funds' Shares or to provide Shareholder services to the
holders of the Equity Investment Funds' Shares ("Customers") purchased through
financial institutions and intermediaries, broker-dealers, or similar entities,
including affiliates or subsidiaries of the Distributor ("Participating
Organizations") pursuant to contractual arrangements with the Distributor under
the Distribution Plan.
The distribution fee will be payable without regard to whether the amount of the
fee is more or less than the actual expenses incurred in a particular year by
the Distributor in connection with distribution assistance or Shareholder
services rendered by the Distributor itself or incurred by the Distributor
pursuant to contractual agreement entered into under the Distribution Plan.
The Glass-Steagall Act and other applicable laws generally prohibit banks from
engaging in the business of underwriting securities, but in general do not
prohibit banks from purchasing securities as agent for and upon the order of
customers. Accordingly, banks acting as Participating Organizations may provide
only those services which, in the banks' opinion, are consistent with the then
current legal requirements. It is possible, however, that future legislative,
judicial or administrative action affecting the securities activities of banks
will cause the Funds to alter or discontinue their arrangements with banks that
act as Participating Organizations, or change their method of operations. It is
not anticipated, however, that any change in the Funds' method of operations
would affect their net asset value per share or result in financial loss to any
customer. See the Statement of Additional Information for further information
regarding the Distribution Plan and "MANAGEMENT OF THE EQUITY INVESTMENT FUNDS
- -- Banking Laws" for information concerning the applicability of the
Glass-Steagall Act to the Investment Adviser's investment advisory services to
the Funds.
MANAGEMENT OF THE EQUITY INVESTMENT FUNDS
TRUSTEES OF THE FUNDS
Overall responsibility for management of the Equity Investment Funds rests with
the Board of Trustees of the Funds, who are elected by the Shareholders of the
Funds. The Funds will be managed by the Trustees in accordance with the laws of
the Commonwealth of Massachusetts governing business trusts. There are currently
four Trustees, of whom three are not "interested persons" of the Funds within
the meaning of that term under the 1940 Act. The Trustees, in turn, elect the
officers of the Funds to supervise actively the Funds' day-to-day operations.
25 prospectus
<PAGE> 96
The Trustees of the Funds, their addresses, and their principal occupations
during the past five years, are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------- ------------------- ------------------------------------------------------
<S> <C> <C>
Walter B. Grimm* Chairman and From June, 1992 to present, employee of BISYS Fund
3435 Stelzer Road Trustee Services; from 1987 to June 1992, President of Leigh
Columbus, Ohio 43219 Consulting/Investments (investment firm).
Michael J. Hall Trustee From December, 1995 to present, Vice President and
7130 South Lewis Chief Financial Officer, Worldwide Sports &
Suite 850 Recreation, Inc.; from January, 1994 to present,
Tulsa, Oklahoma 74136 Vice President and Chief Financial Officer, Pexco
Holdings, Inc.; from 1991 to December, 1993, Senior
Vice President, Finance Administration, Chief
Financial Officer, Treasurer and Director of
Operations, Europe/Africa/ Middle East Region of
T.D. Williamson, Inc. (a heavy equipment
manufacturer).
Perry A. Wimpey Trustee From January, 1992 to present, Local Financial and
4843 S. 69th East Avenue Regulatory Consultant; from June, 1985 to January,
Tulsa, Oklahoma 74145 1992, Senior Vice President and Chief Financial
Officer, ONEOK Inc. (an energy company)
I. Edgar Hendrix Trustee From June, 1983 to present, Vice President and
8 East 3rd Street Treasurer, Parker Drilling Co.
Tulsa, Oklahoma 74103
<FN>
- ------------
* Indicates an "interested person" of the Funds as defined in the 1940 Act.
</TABLE>
The Trustees receive fees and are reimbursed for their expenses in connection
with each meeting of the Board of Trustees they attend. However, no officer or
employee of an Investment Adviser, Sub-Adviser, or the Administrator of the
Funds receives any compensation from the Funds for acting as a Trustee. The
officers of the Funds receive no compensation directly from the Funds for
performing the duties of their offices. BISYS receives fees from each Fund of
the Funds for acting as Administrator and may receive additional income under
the Distribution Plan of the Funds.
INVESTMENT ADVISER
BancOklahoma Trust Company serves as investment adviser to the Equity Investment
Funds. BOTC, the largest trust company in the State of Oklahoma, is a subsidiary
of Bank of Oklahoma, N.A. ("BOK") which in turn is a subsidiary of BOK Financial
Corporation ("BOK Financial"). BOK Financial is controlled by its principal
shareholder, George B. Kaiser. Through its subsidiaries, BOK Financial provides
a full array of trust, commercial banking and retail banking services. Its
non-bank subsidiaries engage in various bank-related services, including
mortgage banking and providing credit life, accident, and health insurance on
certain loans originated by its subsidiaries.
BOTC maintains offices in Tulsa and Oklahoma City and offers a variety of
services for both corporate and individual customers. Individual financial trust
services include personal trust management, administration of estates, and
management of individual investments and custodial accounts. For corporate
clients, the array of services includes management, administration and
recordkeeping of pension plans, thrift plans, 401(k) plans and master trust
plans. BOTC has experience in providing investment advisory services to the
Funds, and experience in managing collective investment funds with
prospectus 26
<PAGE> 97
investment portfolios and objectives comparable to those of the Funds. BOTC also
serves as transfer agent and registrar for corporate securities, paying agent
for dividends and interest, and indenture trustee of bond issues. At December
31, 1995, BOTC was responsible for approximately $7.2 billion in assets
including approximately $3.2 billion in assets under management and possessed
total capital, surplus and undivided profits of $7.7 million.
Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the investment objective and restrictions of each Equity
Investment Fund, BOTC manages the Equity Investment Funds, makes decisions with
respect to and places orders for all purchases and sales of their portfolio
securities, and maintains each Equity Investment Fund's records relating to such
purchases.
The persons primarily responsible for the day-to-day management of each Equity
Investment Fund, as well as their previous business experience, are as follows:
<TABLE>
<CAPTION>
PORTFOLIO MANAGER BUSINESS EXPERIENCE
--------------------- ------------------------------------------------------
<S> <C>
Joe P. Sing, Jr. Manager of the Aggressive Growth Fund since its
inception. Since 1984, Mr. Sing has been a portfolio
manager for BOTC.
Grafton M. Potter Manager of the Equity Fund since its inception. Since
1988, Mr. Potter has served as Director of Equity
Research for BOTC.
Andy H. Hood Manager of the Balanced Fund since its inception.
Since 1993, Mr. Hood has been a portfolio manager for
BOTC. From 1987 to 1993 Mr. Hood was a portfolio
manager for Sun Trust Bank in Florida.
</TABLE>
For the services provided and expenses assumed pursuant to its investment
advisory agreement with the Funds, BOTC receives a fee from the Equity Fund and
the Aggressive Growth Fund, computed daily and paid monthly equaling the lesser
of (1) such fee as may from time to time be agreed upon by the Funds and BOTC,
or (2) sixty-nine one-hundredths of one percent (.69%) of each Fund's average
daily net assets. BOTC receives a fee from the Balanced Fund computed daily and
paid monthly equaling the lesser of (1) such fee as may from time to time be
agreed upon by the Fund and BOTC, or (2) seventy-four-one-hundredths of one
percent (.74%) of the Balanced Fund's average daily net assets. BOTC and its
parent, BOK, also receive fee income from the Funds from several other sources.
(See "SALES CHARGES," "DISTRIBUTION," and "MANAGEMENT OF THE EQUITY INVESTMENT
FUNDS -- Custodian and Transfer Agent.") BOTC may periodically waive all or a
portion of its advisory fee with respect to any Equity Investment Fund to
increase the net income of such Equity Investment Fund available for
distribution as dividends. In order to reduce operating expenses, BOTC has
currently established the investment advisory fees pertaining to the Equity
Fund, the Aggressive Growth Fund and the Balanced Fund at .50%, .50% and 0.00%
of each respective Fund's average daily net assets.
For investment advisory services for the fiscal year ended August 31, 1996, the
Funds paid BOTC 0.50% of the average net assets of each of the Equity Fund and
the Aggressive Growth Fund, after voluntary fee reductions. The Fund did not pay
any investment advisory fees for the Balanced Fund, after voluntary fee
reductions.
27 prospectus
<PAGE> 98
ADMINISTRATOR AND DISTRIBUTOR
BISYS is the Administrator for the Funds, and also acts as the Funds' principal
underwriter and Distributor (the "Administrator" or the "Distributor," as the
context indicates). BISYS is a subsidiary of The BISYS Group, Inc., 150 Clove
Road, Little Falls, New Jersey 07424, a publicly owned company engaged in
information processing, loan servicing and 401(k) administration and
recordkeeping services to and through banking and other financial organizations.
The Administrator generally assists in all aspects of each Fund's administration
and operation.
For expenses assumed and services provided as Administrator pursuant to its
management and administration agreement with the Funds, BISYS receives a fee
from each Equity Investment Fund, computed daily and paid periodically, at the
lesser of (1) such fee as may from time to time be agreed upon in writing by the
Funds and the Administrator, or (2) twenty one-hundredths of one percent (.20%)
of each Equity Investment Fund's average daily net assets. The Administrator may
periodically waive all or a portion of its administrative fee with respect to an
Equity Investment Fund to increase the net income of the Equity Investment Fund
available for distribution as dividends.
For administration services for the Equity Investment Funds for the fiscal year
ended August 31, 1996 the Funds paid the Administrator .20% of the average net
assets of each of the Equity Investment Funds.
SUB-ADMINISTRATOR
BOTC serves as the Sub-Administrator to the Funds pursuant to an agreement
between the Administrator and BOTC. Pursuant to this agreement, BOTC has assumed
many of the Administrator's duties, for which BOTC receives a fee, paid by the
Administrator, calculated at an annual rate of five one-hundredths of one
percent (.05%) of each Fund's average net assets.
EXPENSES
The Investment Adviser and the Administrator each bear all expenses in
connection with the performance of their services as investment adviser and
general manager and administrator, respectively, other than the cost of
securities (including brokerage commissions) purchased for the Funds. Each
Equity Investment Fund bears the following expenses relating to its respective
operations: taxes, interest, brokerage fees and commissions, fees and travel
expenses of the Trustees of the Funds, Securities and Exchange Commission fees,
state securities qualification fees, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to current
Shareholders, outside auditing and legal expenses, advisory and administration
fees, fees and reasonable out-of-pocket expenses of the custodian and transfer
agent, expenses incurred for pricing securities owned by the particular Fund,
certain insurance premiums, costs of maintenance of the Funds' existence, costs
of Shareholders' and Trustees' reports and meetings, and any extraordinary
expenses incurred in each Fund's operation.
The total of all expenses incurred by the Funds for the fiscal year ended August
31, 1996 was 1.08%, 1.11% and 0.38% of the average net assets of the Equity
Fund, the Aggressive Growth Fund, and the Balanced Fund, respectively, after
voluntary fee reductions.
prospectus 28
<PAGE> 99
BANKING LAWS
The Investment Adviser believes that it may perform the investment advisory
services for the Equity Investment Funds contemplated by its agreements with the
Funds and by this Prospectus without violating the Glass-Steagall Act. Future
changes in federal or state statutes and regulations relating to permissible
activities of banks or bank holding companies and their subsidiaries and
affiliates as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations could change the
manner in which the Investment Adviser could continue to perform such services
for the Funds. See the Statement of Additional Information under the heading
"MANAGEMENT OF THE FUNDS -- Glass-Steagall Act" for further discussion of
applicable banking laws and regulations.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
GENERAL INFORMATION
DESCRIPTION OF THE FUNDS AND THEIR SHARES
The Equity Fund, the Aggressive Growth Fund and the Balanced Fund represent
three separate series of units of beneficial interest ("Shares") of American
Performance Funds, a Massachusetts business trust which was organized in October
of 1987 and began active operations in August of 1990. The organizational
expenses of the Balanced Fund were capitalized and will be amortized during the
Fund's first two years of operations. Such amortization will reduce amounts
available for distribution as dividends to Shareholders. Each Share represents
an equal proportionate interest in a Fund with other Shares of the same series,
and is entitled to such dividends and distributions out of the income earned on
the assets belonging to that Fund as are declared at the discretion of the
Trustees.
The Funds believe that as of November 22, 1996, Bank of Oklahoma, N.A. (Bank of
Oklahoma Tower, One Williams Center, Tulsa, Oklahoma 74103) and its bank
affiliates were the Shareholders of record of 97% of the Equity Fund's Shares,
95.5% of the Aggressive Growth Fund's Shares and 99.7% of the Balanced Fund's
Shares, respectively. The Funds believe that as of the same date, Bank of
Oklahoma, N.A. and its bank affiliates possessed, on behalf of its underlying
accounts voting and investment power with respect to 81%, of the Equity Funds'
Shares, 66.7% of the Aggressive Growth Fund's Shares and 62% of the Balanced
Fund's Shares, respectively and, as a consequence, Bank of Oklahoma, N.A. and
its bank affiliates may be deemed to be a controlling person of each of these
Equity Investment Funds under the 1940 Act.
Shareholders are entitled to one vote for each Share, and a proportionate
fractional vote for any fraction of a Share, and will vote in the aggregate and
not by series except as otherwise expressly required by law.
Although the Funds are not required to hold annual meetings of Shareholders,
Shareholders have the right (1) to call a meeting to elect or remove one or more
of the Trustees of the Funds and (2) to be assisted by the Trustees in
communicating with other Shareholders of the Funds. Shareholder inquiries should
be directed to the Secretary of the Funds, at 3435 Stelzer Road, Columbus, Ohio
43219.
Overall responsibility for the management of the Funds is vested in the Board of
Trustees. See "MANAGEMENT OF THE EQUITY INVESTMENT FUNDS -- Trustees of the
Funds." Individual Trustees
29 prospectus
<PAGE> 100
are elected by the Shareholders and may be removed by the Board of Trustees or
Shareholders in accordance with the provisions of the Declaration of Trust and
By-laws of the Funds and Massachusetts law. See "ADDITIONAL INFORMATION --
Miscellaneous" in the Statement of Additional Information for further
information.
CUSTODIAN AND TRANSFER AGENT
Bank of Oklahoma, N.A. serves as custodian for the Funds ("Custodian"). BISYS
Fund Services Ohio, Inc., an affiliate of BISYS, serves as the transfer agent
for the Funds ("Transfer Agent") and performs fund accounting.
PERFORMANCE INFORMATION
From time to time performance information for the Equity Investment Funds
showing their average annual total return and aggregate total return may be
presented in advertisements, sales literature and shareholder reports. Such
performance figures are based on historical earnings and are not intended to
indicate future performance. Total return will be calculated for the period
since the establishment of the Equity Investment Funds and will, unless
otherwise noted, reflect the imposition of the maximum sales charge. For the
information of Shareholders not subject to a sales charge, the Equity Investment
Funds may also publish total return figures which include no sales charge.
Average annual total return is measured by comparing the value of an investment
in an Equity Investment Fund at the beginning of the relevant period to the
redemption value of the investment at the end of the period (assuming immediate
reinvestment of any dividends or capital gains distributions) and annualizing
the result. Aggregate total return is measured similarly to average annual total
return, however the resulting difference is not annualized. The yield of an
Equity Investment Fund is determined by annualizing the Fund's net investment
income per share during a recent specified thirty-day period ending on the last
day of the most recent calendar quarter, and dividing that amount by the Fund's
per share net asset value on the last day of the period.
In addition, from time to time the Funds may present their respective
distribution rates in supplemental sales literature which is accompanied or
preceded by a prospectus and in Shareholder reports. Distribution rates will be
computed by dividing the distribution per share made by a Fund over a twelve-
month period by the maximum offering price per share. The calculation of income
in the distribution rate includes both income and capital gain dividends and
does not reflect unrealized gains or losses, although a Fund may also present a
distribution rate excluding the effect of capital gains. The distribution rate
differs from the yield, because it includes capital items which are often
non-recurring in nature, whereas yield does not include such items. Distribution
rates may also be presented excluding the effect of a sales charge, if any.
Investors may also judge the performance of an Equity Investment Fund by
comparing it to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc., Standard &
Poor's Corporation, The Russell 2000 Index, and Morningstar, Inc. and to data
prepared by Lipper Analytical Services, Inc. Comparisons may also be made to
indices or data published in Money Magazine, Forbes, Barron's, The Wall Street
Journal, The New York Times, Business Week, Pensions and Investments, Fortune,
Ibbotson Associates, Inc., U.S.A. Today, CDA/Wiesenberger, American Banker,
Institutional Investor and local newspapers. In addition to performance
information,
prospectus 30
<PAGE> 101
general information about these Funds that appears in a publication such as
those mentioned above may be included in advertisements and in reports to
Shareholders.
Total return and yield are functions of the type and quality of instruments held
in the portfolio, operating expenses, and market conditions. Consequently, total
return and yield will fluctuate and are not necessarily representative of future
results. Any fees charged by a Participating Organization with respect to
Customer accounts for investing in shares of Equity Investment Funds will not be
included in performance calculations; such fees, if charged, will reduce the
actual performance from that quoted. Further information regarding Performance
Comparisons may be found in the Statement of Additional Information under
"Performance Comparisons."
Additional information about the performance of each Equity Investment Fund is
contained in the Funds' Annual Report to Shareholders, which is available free
of charge by calling the telephone number on the front page of this Prospectus.
MISCELLANEOUS
Shareholders will receive unaudited semi-annual reports and annual reports
audited by independent public accountants.
As used in this Prospectus and in the Statement of Additional Information,
"assets belonging to" a Fund means the consideration received by the Funds upon
the issuance or sale of Shares in that Fund, together with all income, earnings,
profits, and proceeds derived from the investment thereof including any proceeds
from the sale, exchange, or liquidation of such investments, and any funds or
payments derived from any reinvestment of such proceeds, and any general assets
of the Funds not readily identified as belonging to a particular Fund that are
allocated to that Fund by the Funds' Board of Trustees. The Board of Trustees
may allocate such general assets in any manner it deems fair and equitable. It
is anticipated that the factor that will be used by the Board of Trustees in
making allocations of general assets to particular Funds will be the relative
net asset values of the respective Funds at the time of allocation. Assets
belonging to a particular Fund are charged with the direct liabilities and
expenses with respect to that Fund, and with a share of the general liabilities
and expenses of the Funds not readily identified as belonging to a particular
Fund that are allocated to that Fund in proportion to the relative net asset
values of the respective Funds at the time of allocation. The timing of
allocations of general assets and general liabilities and expenses of the Funds
to particular Funds will be determined by the Board of Trustees of the Funds and
will be in accordance with generally accepted accounting principles.
Determinations by the Board of Trustees of the Funds as to the timing of the
allocation of general liabilities and expenses and as to the timing and
allocable portion of any general assets with respect to a particular Fund are
conclusive.
As used in this Prospectus and in the Statement of Additional Information, a
"vote of a majority of the outstanding Shares" of the Funds or a particular Fund
means the affirmative vote, at a meeting of Shareholders duly called, of the
lesser of (a) 67% or more of the outstanding Shares of the Funds or such Fund
present at a meeting at which the holders of more than 50% of the outstanding
Shares of the Funds or such Fund are represented in person or by proxy, or (b)
the holders of more than 50% of the outstanding shares of the Funds or such
Fund.
31 prospectus
<PAGE> 102
Inquiries regarding each Equity Investment Fund may be directed in writing to
the Funds at 3435 Stelzer Road, Columbus, Ohio 43219, or by calling toll free
(800) 762-7085.
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 EQUITY
INVESTMENT FUNDS OR THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING BY THE EQUITY INVESTMENT FUNDS OR BY THE DISTRIBUTOR IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
prospectus 32
<PAGE> 103
AMERICAN PERFORMANCE FUNDS
EQUITY INVESTMENT FUNDS
EQUITY FUND
AGGRESSIVE GROWTH FUND
BALANCED FUND
INVESTMENT ADVISER
BancOklahoma Trust Company
Bank of Oklahoma Tower
Tulsa, Oklahoma 74103
ADMINISTRATOR/DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, D.C. 20005
AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
------------------------------------------------
EQUITY FUND
AGGRESSIVE GROWTH FUND
BALANCED FUND
------------------------------------------------
PROSPECTUS DATED DECEMBER 16, 1996
[AMERICAN PERFORMANCE FUNDS LOGO]
AMERICAN PERFORMANCE
FUNDS
<PAGE> 104
CROSS REFERENCE SHEET
---------------------
AMERICAN PERFORMANCE FUNDS
--------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
<TABLE>
<CAPTION>
Form N-1A Part B Item
- ---------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History The Funds; Additional
Information - Description of Shares
13. Investment Objective
and Policies Investment Objectives and Policies
14. Management of the Group Management of the Funds
15. Control Persons and Principal
Holders of Securities Additional Information - Miscellaneous
16. Investment Advisory and
Other Services Management of the Funds
17. Brokerage Allocation Management of the Funds - Portfolio
Transactions
18. Capital Stock and Other
Securities Valuation; Additional Purchase and
Redemption Information; Additional
Information
19. Purchase, Redemption and
Pricing of Securities
Being Offered Valuation; Additional Purchase and
Redemption Information; Management of
the Funds
20. Tax Status Investment Objectives and Policies -
Additional Tax Information Concerning
All of the Funds; Additional Tax
</TABLE>
<PAGE> 105
<TABLE>
<S> <C>
Information Concerning the Intermediate
Tax-Free Bond Fund
21. Underwriters Management of the Funds - Distributor;
Management of the Funds - Distribution
22. Calculation of Performance
Data Additional Information -
Calculation of Performance Data
23. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of the Registration Statement.
-2-
<PAGE> 106
STATEMENT OF ADDITIONAL INFORMATION
AMERICAN PERFORMANCE FUNDS
AMERICAN PERFORMANCE MONEY MARKET FUNDS
AMERICAN PERFORMANCE BOND INVESTMENT FUNDS
AMERICAN PERFORMANCE EQUITY INVESTMENT FUNDS
DECEMBER 16, 1996
This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectuses for the American Performance Money Market
Funds, the American Performance Bond Investment Funds, and the American
Performance Equity Investment Funds, each of which bears the same date as this
Statement of Additional Information. This Statement of Additional Information is
incorporated in its entirety into those Prospectuses. A copy of each of the
Prospectuses for the American Performance Funds (the "Funds") may be obtained by
writing the Funds at 3435 Stelzer Road, Columbus, Ohio 43219, or by telephoning
toll free (800) 762-7085.
<PAGE> 107
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
THE FUNDS..................................................................................................1
INVESTMENT OBJECTIVE AND POLICIES..........................................................................1
ADDITIONAL INFORMATION ON FUND INSTRUMENTS...........................................................1
Bank Obligations............................................................................1
U.S. Government Obligations.................................................................3
Purchases of Options........................................................................4
Covered Calls...............................................................................4
Puts .......................................................................................6
Futures Contracts...........................................................................7
Mortgage-Related Securities.................................................................8
Loan Participation..........................................................................9
Foreign Investments........................................................................10
When-Issued Securities.....................................................................10
Securities Lending.........................................................................11
Repurchase Agreements......................................................................11
Municipal Securities.......................................................................12
INVESTMENT RESTRICTIONS.............................................................................13
PORTFOLIO TURNOVER..................................................................................14
ADDITIONAL TAX INFORMATION CONCERNING ALL THE FUNDS ................................................15
ADDITIONAL TAX INFORMATION CONCERNING THE INTERMEDIATE
TAX-FREE BOND FUND.........................................................................17
VALUATION.................................................................................................19
THE MONEY MARKET FUNDS..............................................................................19
THE BOND AND EQUITY INVESTMENT FUNDS................................................................20
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................................................20
MANAGEMENT OF THE FUNDS...................................................................................21
TRUSTEES AND OFFICERS...............................................................................21
INVESTMENT ADVISER AND SUB-ADVISER..................................................................22
DISTRIBUTION........................................................................................25
GLASS-STEAGALL ACT..................................................................................28
PORTFOLIO TRANSACTIONS..............................................................................29
ADMINISTRATOR.......................................................................................31
SUB-ADMINISTRATOR...................................................................................33
EXPENSES ...........................................................................................33
</TABLE>
-i-
<PAGE> 108
<TABLE>
<S> <C>
DISTRIBUTOR....................................................................................... 34
CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTANT.................................................... 34
AUDITORS ......................................................................................... 37
LEGAL COUNSEL..................................................................................... 37
ADDITIONAL INFORMATION.................................................................................. 37
DESCRIPTION OF SHARES............................................................................. 37
SHAREHOLDER AND TRUSTEE LIABILITY................................................................. 38
CALCULATION OF PERFORMANCE DATA................................................................... 39
PERFORMANCE COMPARISONS........................................................................... 41
MISCELLANEOUS..................................................................................... 42
FINANCIAL STATEMENTS.................................................................................... 48
Independent Auditors' Report...................................................................... 48
Audited Financial Statements as of August 31, 1996................................................ 48
APPENDIX................................................................................................ 49
</TABLE>
-ii-
<PAGE> 109
THE FUNDS
The American Performance Funds (the "Funds") consist of nine series of
units of beneficial interest ("Shares") each representing interests in one
of nine separate investment portfolios of a diversified open-end management
investment company: the American Performance U.S. Treasury Fund (the "U.S.
Treasury Fund"), the American Performance Cash Management Fund (the "Cash
Management Fund"), the American Performance Equity Fund (the "Equity Fund"),
the American Performance Aggressive Growth Fund (the "Aggressive Growth
Fund"), the American Performance Balanced Fund (the "Balanced Fund"), the
American Performance Bond Fund (the "Bond Fund"), the American Performance
Intermediate Bond Fund (the "Intermediate Bond Fund"), the American
Performance Intermediate Tax-Free Bond Fund (the "Intermediate Tax-Free Bond
Fund"), and the American Performance Short-Term Income Fund (the "Short-Term
Income Fund"). The U.S. Treasury Fund and the Cash Management Fund are
sometimes referred to herein as the "Money Market Funds"; the Equity Fund,
the Aggressive Growth Fund and the Balanced Fund are sometimes referred to
herein as the "Equity Investment Funds"; and the Bond Fund, the Intermediate
Bond Fund, the Intermediate Tax-Free Bond Fund, and the Short-Term Income
Fund are sometimes referred to herein as the "Bond Investment Funds." Much
of the information contained herein expands upon subjects discussed in the
Prospectuses for the respective Funds. No investment in Shares of a Fund
should be made without first reading that Fund's Prospectus.
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement each Fund's investment objective and
policies as set forth in the respective Prospectus for that Fund.
ADDITIONAL INFORMATION ON FUND INSTRUMENTS
------------------------------------------
BANK OBLIGATIONS
----------------
The Cash Management Fund, the Bond Investment Funds, and the Equity
Investment Funds may invest in obligations of the banking industry such as
bankers' acceptances, commercial paper, loan participations, bearer deposit
notes, promissory notes, floating or variable rate obligations, certificates
of deposit, and demand and time deposits. The Cash Management Fund will
normally invest more than 25% of its assets in such investments.
BANKERS' ACCEPTANCES: Bankers' acceptances are negotiable drafts or
bills of exchange typically drawn by an importer or exporter to pay for
specific merchandise, which are "accepted" by a bank, meaning, in effect,
that the bank unconditionally agrees to pay the face value of the instrument
on maturity. The Funds will invest in only those bankers' acceptances
guaranteed by domestic and foreign banks having, at the time of
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investment, total assets in excess of $1 billion (as of the date of their
most recently published financial statements).
CERTIFICATES OF DEPOSIT: Certificates of deposit are negotiable
certificates issued against funds deposited in a commercial bank for a
definite period of time and earning a specified return. Certificates of
deposit will be those of domestic and foreign branches of U.S. commercial
banks which, at the time of purchase, have total assets in excess of $1
billion (as of the date of their most recently published financial
statements). Certificates of deposit may also include those issued by
foreign banks outside the United States with total assets at the time of
purchase, in excess of the equivalent of $1 billion. The Funds may also
invest in Eurodollar certificates of deposit which are U.S. dollar
denominated certificates of deposit issued by branches of foreign and
domestic banks located outside the United States and Yankee certificates of
deposit which are certificates of deposit issued by a U.S. branch of a
foreign bank denominated in U.S. dollars and held in the United States.
In addition, the Funds may invest in bearer deposit notes, which are
negotiable time deposits with a specific maturity date issued by a bank, and
time deposits, which are interest bearing non-negotiable deposits at a bank
that have a specific maturity date.
COMMERCIAL PAPER: Commercial paper consists of unsecured promissory
notes issued by corporations. Except as noted below with respect to variable
amount master demand notes, issues of commercial paper normally have
maturities of nine months or less and fixed rates of return.
The above Funds may also invest in Canadian Commercial Paper which is
commercial paper issued by a Canadian corporation or a Canadian counterpart
of a U.S. corporation and in Europaper which is U.S. dollar denominated
commercial paper of a foreign issuer.
VARIABLE AMOUNT AND FLOATING RATE NOTES: Commercial paper eligible for
investment by the Cash Management Fund, the Equity Investment Funds, and the
Bond Investment Funds may include variable amount and floating rate notes. A
variable rate note is one whose terms provide for the readjustment of its
interest rate on set dates and which, upon such readjustment, can reasonably
be expected to have a fair market value that approximates its par value. A
floating rate note is one whose terms provide for the readjustment of its
interest rate whenever a specified interest rate changes and which, at any
time, can reasonably be expected to have a market value that approximates
its par value. Such notes are frequently not rated by credit rating
agencies; however, unrated variable and floating rate notes purchased by a
Fund will be determined by the Fund's Investment Adviser under guidelines
established by the Funds' Board of Trustees to be of comparable quality, at
the time of purchase, to rated instruments which are eligible for purchase
under the Fund's investment policies. In making such determinations, the
Investment Adviser will consider the earning power, cash flow and other
liquidity ratios of
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the issuers of such notes (such issuers include financial, merchandising,
bank holding and other companies) and will monitor their financial
condition. Although there may be no active secondary market with respect to
a particular variable or floating rate note purchased by a Fund, the Fund
may re-sell the note at any time to a third party. The absence of such an
active secondary market, however, could make it difficult for the Fund to
dispose of the variable or floating rate note involved in the event the
issuer of the note defaulted on its payment obligations, and the Fund could,
for this or other reasons, suffer a loss to the extent of the default.
Variable or floating rate notes may be secured by bank letters of credit or
drafts.
Variable or floating rate notes with stated maturities of more than one
year may, under the Securities and Exchange Commission's amortized cost
rule, 17 C.F.R. Section 270.2a-7, be deemed to have shorter maturities as
follows:
(1) A note that is issued or guaranteed by the United States Government
or any agency thereof which has a variable rate of interest readjusted no
less frequently than every 762 days will be deemed by a Fund to have a
maturity equal to the period remaining until the next readjustment of the
interest rate.
(2) A variable rate note, the principal amount of which is scheduled on
the face of the instrument to be paid in 397 days or less, will be deemed by
a Fund to have a maturity equal to the period remaining until the next
readjustment of the interest rate.
(3) A variable rate note that is subject to a demand feature will be
deemed by a Fund to have a maturity equal to the longer of the period
remaining until the next readjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand.
(4) A floating rate note that is subject to a demand feature will be
deemed by a Fund to have a maturity equal to the period remaining until the
principal amount can be recovered through demand.
As used above, a note is "subject to a demand feature" where the Fund
is entitled to receive the principal amount of the note either at any time
on no more than 30 days' notice or at specified intervals not exceeding one
year and upon no more than 30 days' notice.
U.S. GOVERNMENT OBLIGATIONS
---------------------------
The U.S. Treasury Fund invests exclusively in obligations issued or
guaranteed by the U.S. Government, some of which may be subject to
repurchase agreements. All of the other Funds may invest in obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, some of which may be subject to repurchase agreements.
(Obligations of certain agencies and instrumentalities of the U.S.
Government are
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supported by the full faith and credit of the U.S. Government; others are
supported by the right of the issuer to borrow from the Government; others
are supported by the discretionary authority of the U.S. Government to
purchase the agency's obligations; and still others are supported only by
the credit of the instrumentality.) No assurance can be given that the U.S.
Government would provide financial support to U.S. Government-sponsored
agencies or instrumentalities if it is not obligated to do so by law. A Fund
(excluding however, the U.S. Treasury Fund) will invest in the obligations
of such agencies or instrumentalities only when its Investment Adviser
believes that the credit risk with respect thereto is minimal. For
information on mortgage-related securities issued by certain agencies or
instrumentalities of the U.S. Government, see "Investment Objective and
Policies-Mortgage-related Securities" in this Statement of Additional
Information.
PURCHASES OF OPTIONS
--------------------
The Equity Investment Funds and Bond Investment Funds may purchase call
options. A call option gives the purchaser of the option the right to buy,
and a writer has the obligation to sell, the underlying security at the
stated exercise price at any time prior to the expiration of the option,
regardless of the market price of the security. The premium paid to the
writer is consideration for undertaking the obligations under the option
contract. Call options purchased by the foregoing Funds will be valued at
the last sale price, or in the absence of such a price, at the mean between
bid and asked price.
The Equity Investment Funds and Bond Investment Funds may also purchase
index options. Index options (or options on securities indices) are similar
in many respects to options on securities, except that an index option gives
the holder the right to receive, upon exercise, cash instead of securities,
if the closing level of the securities index upon which the option is based
is greater than the exercise price of the option.
Purchasing options is a specialized investment technique that entails a
substantial risk of a complete loss of the amounts paid as premiums to
writers of options. Each of the Equity Investment and Bond Investment Funds
will purchase call options and index options only when its total investment
in such options immediately after such purchase, will not exceed 5% of its
total assets.
COVERED CALLS
-------------
The Equity Investment Funds and the Bond Investment Funds may write
(sell) "covered" call options and purchase options to close out options
previously written by the Fund. Such options must be listed on a national
securities exchange. The purpose of each Fund in writing covered call
options is to generate additional premium income. This premium income will
serve to enhance the Fund's total return and will reduce the effect of any
price decline of the security involved in the option.
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A call option gives the holder (buyer) the "right to purchase" a
security at a specified price (the exercise price) at any time until a
certain date (the expiration date). So long as the obligation of the writer
of a call option continues, the writer may be assigned an exercise notice by
the broker-dealer through whom such option was sold, requiring the writer to
deliver the underlying security against payment of the exercise price. This
obligation terminates upon the expiration of the call option, or such
earlier time at which the writer effects a closing purchase transaction by
purchasing an option identical to that previously sold. To secure the
writer's obligation to deliver the underlying security in the case of a call
option, subject to the rules of the Options Clearing Corporation, a writer
is required to deposit in escrow the underlying security or other assets in
accordance with such rules. The Equity Investment Funds and the Bond
Investment Funds will write only covered call options. This means that a
Fund will only write a call option on a security which a Fund already owns.
In order to comply with the requirements of the securities laws in several
states, a Fund will not write a covered call option if, as a result, the
aggregate market value of all portfolio securities covering call options or
currencies subject to put options exceeds 25% of the market value of the
Fund's net assets.
Portfolio securities on which call options may be written will be
purchased solely on the basis of investment considerations consistent with
each Fund's investment objectives. The writing of covered call options is a
conservative investment technique believed to involve relatively little risk
(in contrast to the writing of naked or uncovered options, which a Fund will
not do), but capable of enhancing the Fund's total return. When writing a
covered call option, a Fund, in return for the premium, gives up the
opportunity for profit from a price increase in the underlying security
above the exercise price, but conversely retains the risk of loss should the
price of the security decline. Unlike one who owns securities not subject to
an option, a Fund has no control over when it may be required to sell the
underlying securities, since it may be assigned an exercise notice at any
time prior to the expiration of its obligation as a writer. If a call option
which a Fund has written expires, a Fund will realize a gain in the amount
of the premium; however, such gain may be offset by a decline in the market
value of the underlying security during the option period. If the call
option is exercised, a Fund will realize a gain or loss from the sale of the
underlying security. The security covering the call will be maintained in a
segregated account of the Fund's custodian. The Equity Investment Funds and
Bond Investment Funds do not consider a security covered by a call to be
"pledged" as that term is used in each Fund's policy which limits the
pledging or mortgaging of its net assets.
The premium received is the fair market value of an option. The premium
each Fund will receive from writing a call option will reflect, among other
things, the current market price of the underlying security, the
relationship of the exercise price to such market price, the historical
price volatility of the underlying security, and the length of the option
period. Once the decision to write a call option has been made, the Fund's
Investment Adviser in determining whether a particular call option should be
written on a particular security, will consider the reasonableness of the
anticipated premium and the
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likelihood that a liquid secondary market will exist for those options. The
premium received by a Fund for writing covered call options will be recorded
as a liability in the Fund's statement of assets and liabilities. This
liability will be adjusted daily to the option's current market value, which
will be the latest sale price at the time at which the net asset value per
Share of the Fund is computed (close of the New York Stock Exchange), or, in
the absence of such sale, the latest asked price. The liability will be
extinguished upon expiration of the option, the purchase of an identical
option in the closing transaction, or delivery of the underlying security
upon the exercise of the option.
Closing transactions will be effected in order to realize a profit on
an outstanding call option, to prevent an underlying security from being
called, or to permit the sale of the underlying security. Furthermore,
effecting a closing transaction will permit a Fund to write another call
option on the underlying security with either a different exercise price or
expiration date or both. If a Fund desires to sell a particular security
from its portfolio on which it has written a call option, it will seek to
effect a closing transaction prior to, or concurrently with, the sale of the
security. There is, of course, no assurance that a Fund will be able to
effect such closing transactions at a favorable price. If a Fund cannot
enter into such a transaction, it may be required to hold a security that it
might otherwise have sold, in which case it would continue to be at market
risk on the security. This could result in higher transaction costs. A Fund
will pay transaction costs in connection with the writing of options to
close out previously written options. Such transaction costs are normally
higher than those applicable to purchases and sales of portfolio securities.
Call options written by a Fund will normally have expiration dates of
less than nine months from the date written. The exercise price of the
options may be below, equal to, or above the current market values of the
underlying securities at the time the options are written. From time to
time, a Fund may purchase an underlying security for delivery in accordance
with an exercise notice of a call option assigned to it, rather than
delivering such security from its portfolio. In such cases, additional costs
will be incurred.
A Fund will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the premium
received from the writing of the option. Because increases in the market
price of a call option will generally reflect increases in the market price
of the underlying security, any loss resulting from the repurchase of a call
option is likely to be offset in whole or in part by appreciation of the
underlying security owned by the Fund.
PUTS
----
The Equity Investment Funds, Bond Investment Funds, and the Cash
Management Fund may acquire "puts" with respect to securities held in their
portfolios. A put is a right to sell a specified security (or securities)
within a specified period of time at a specified
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exercise price. The Cash Management Fund may sell, transfer, or assign a put
only in conjunction with the sale, transfer, or assignment of the underlying
security or securities.
The amount payable to a Fund upon its exercise of a "put" on debt
securities is normally (i) the Fund's acquisition cost of the securities
(excluding any accrued interest which the portfolio paid on their
acquisition), less any amortized market premium or plus any amortized market
or original issue discount during the period the Fund owned the securities,
plus (ii) all interest accrued on the securities since the last interest
payment date during that period.
Puts may be acquired by a Fund to facilitate the liquidity of its
portfolio assets. Puts may also be used to facilitate the reinvestment of a
Fund's assets at a rate of return more favorable than that of the underlying
security or to limit the potential losses involved in a decline in an equity
security's market value.
Each Fund intends to enter into puts only with dealers, banks, and
broker-dealers which, in the Investment Adviser's opinion, present minimal
credit risks.
FUTURES CONTRACTS
-----------------
The Equity Investment Funds and the Bond Investment Funds may enter
into contracts for the future delivery of securities and futures contracts
based on a specific security, class of securities or an index, purchase or
sell options on any such futures contracts, and engage in related closing
transactions. A futures contract on a securities index is an agreement
obligating either party to pay, and entitling the other party to receive,
while the contract is outstanding, cash payments based on the level of a
specified securities index.
When interest rates are expected to rise or market values of portfolio
securities are expected to fall, a Fund can seek through the sale of futures
contracts to offset a decline in the value of its portfolio securities. When
interest rates are expected to fall or market values are expected to rise, a
Fund, through the purchase of such contracts, can attempt to secure better
rates or prices for the Fund than might later be available in the market
when it effects anticipated purchases.
The acquisition of put and call options on futures contracts will,
respectively, give a Fund the right (but not the obligation), for a
specified price, to sell or to purchase the underlying futures contract,
upon exercise of the option, at any time during the option period.
Futures transactions involve brokerage costs and require a Fund to
segregate assets to cover contracts that would require it to purchase
securities. A Fund may lose the expected benefit of futures transactions if
interest rates or securities prices move in an
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unanticipated manner. Such unanticipated changes may also result in poorer
overall performance than if the Fund had not entered into any futures
transactions. In addition, the value of a Fund's futures positions may not
prove to be perfectly or even highly correlated with the value of its
portfolio securities, limiting the Fund's ability to hedge effectively
against interest rate and/or market risk and giving rise to additional
risks. There is no assurance of liquidity in the secondary market for
purposes of closing out futures positions.
Aggregate initial margin deposits for futures contracts, and premiums
paid for related options, may not exceed 5% of an Equity Investment or Bond
Investment Fund's total assets, and the value of securities that are the
subject of such futures and options (both for receipt and delivery) may not
exceed one-third of the market value of an Equity Investment or Bond
Investment Fund's total assets. Futures transactions will be limited to the
extent necessary to maintain each Equity Investment or Bond Investment
Fund's qualification as a regulated investment company ("RIC").
MORTGAGE-RELATED SECURITIES
----------------------------
Each of the Funds may, consistent with its investment objective,
restrictions and policies, invest in mortgage-related securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. Each
of the Equity Fund, the Aggressive Growth Fund and the Intermediate Tax-Free
Bond Fund will limit its total investment in such securities to 5% or less
of net assets.
Mortgage-related securities, for purposes of the Funds' Prospectuses
and this Statement of Additional Information, represent pools of mortgage
loans assembled for sale to investors by various governmental agencies such
as the Government National Mortgage Association and government-related
organizations such as the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, as well as by nongovernmental
issuers such as commercial banks, savings and loan institutions, mortgage
bankers, and private mortgage insurance companies. Although certain
mortgage-related securities are guaranteed by a third party or otherwise
similarly secured, the market value of the security, which may fluctuate, is
not so secured. If a Fund purchases a mortgage-related security at a
premium, that portion may be lost if there is a decline in the market value
of the security whether resulting from changes in interest rates or
prepayments in the underlying mortgage collateral. As with other
interest-bearing securities, the prices of such securities are inversely
affected by changes in interest rates. However, though the value of a
mortgage-related security may decline when interest rates rise, the converse
is not necessarily true since in periods of declining interest rates the
mortgages underlying the securities are prone to prepayment. For this and
other reasons, a mortgage-related security's stated maturity may be
shortened by unscheduled prepayments on the underlying mortgages and,
therefore, it is not possible to predict accurately the security's return to
a Fund. In addition, regular payments received in respect of
mortgage-
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related securities include both interest and principal. No assurance can be
given as to the return a Fund will receive when these amounts are
reinvested.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related
securities and among the securities that they issue. Mortgage-related
securities issued by the Government National Mortgage Association ("GNMA")
include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") which are guaranteed as to the timely payment of principal and
interest by GNMA and such guarantee is backed by the full faith and credit
of the United States. GNMA is a wholly-owned U.S. Government corporation
within the Department of Housing and Urban Development. GNMA certificates
also are supported by the authority of GNMA to borrow funds from the U.S.
Government to make payments under its guarantee. Mortgage-related securities
issued by the Federal National Mortgage Association ("FNMA") include FNMA
Guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes")
which are solely the obligations of the FNMA and are not backed by or
entitled to the full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private stock-holders.
Fannie Maes are guaranteed as to timely payment of principal and interest by
FNMA. Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates
(also known as "Freddie Macs" or "PCs"). The FHLMC is a corporate
instrumentality of the United States, created pursuant to an Act of
Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Banks
and do not constitute a debt or obligation of the United States or of any
Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of
interest, which is guaranteed by the FHLMC. The FHLMC guarantees either
ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When the FHLMC does not guarantee timely payment
of principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage, but in no event later than one year after it becomes payable.
LOAN PARTICIPATION
------------------
As noted in its Prospectus, the Cash Management Fund may purchase
certain loan participation interests. Loan participation interests represent
interests in bank loans made to corporations. The contractual arrangement
with the bank transfers the cash stream of the underlying bank loan to the
participating investor. Because the issuing bank does not guarantee the
participations, they are subject to the credit risks generally associated
with the underlying corporate borrower. The secondary market, if any, for
these loan participations is extremely limited and any such participations
purchased by the investor are regarded as illiquid. In addition, because it
may be necessary under the terms of the loan participation for the investor
to assert through the issuing bank such rights as may exist against the
underlying corporate borrower, in the event the underlying corporate
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borrower fails to pay principal, and interest when due, the investor may be
subject to delays, expenses and risks that are greater than those that would
have been involved if the investor had purchased a direct obligation (such
as commercial paper) of such borrower. Moreover, under the terms of the loan
participation the investor may be regarded as a creditor of the issuing bank
(rather than of the underlying corporate borrower), so that the issuer may
also be subject to the risk that the issuing bank may become insolvent.
Further, in the event of the bankruptcy or insolvency of the corporate
borrower, the loan participation may be subject to certain defenses that can
be asserted by such borrower as a result of improper conduct by the issuing
bank.
FOREIGN INVESTMENTS
-------------------
The Cash Management Fund, the Equity Investment Funds, the Bond Fund,
the Intermediate Bond Fund, and the Short-Term Income Fund may, subject to
their investment objectives, restrictions and policies, invest in certain
obligations or securities of foreign issuers. Permissible investments may
consist of obligations of foreign branches, agencies or subsidiaries of U.S.
banks and of foreign banks, including European Certificates of Deposit,
European Time Deposits, Canadian Time Deposits and Yankee Certificates of
Deposit, and investments in Canadian Commercial Paper, foreign securities
and Europaper. These instruments may subject a Fund to investment risks that
differ in some respects from those related to investments in obligations of
U.S. domestic issuers. Such risks include future adverse political and
economic developments, the possible imposition of withholding taxes on
interest or other income, possible seizure, nationalization, or
expropriation of foreign deposits, the possible establishment of exchange
controls or taxation at the source, greater fluctuations in value due to
changes in exchange rates, or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and
interest on such obligations. Such investments may also entail higher
custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting
treatment and engage in business practices different from those respecting
domestic issuers of similar securities or obligations. Foreign branches of
U.S. banks and foreign banks may be subject to less stringent reserve
requirements than those applicable to domestic branches of U.S. banks.
WHEN-ISSUED SECURITIES
----------------------
As discussed in the Prospectuses, each of the Funds may purchase
securities on a "when-issued" basis. When a Fund engages in "when-issued"
transactions, it relies on the seller to consummate the trade. Failure of
the seller to do so may result in the Fund's incurring a loss or missing the
opportunity to obtain a price considered to be advantageous.
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SECURITIES LENDING
------------------
Each of the Funds may lend its portfolio securities to broker-dealers,
banks or institutional borrowers of securities. A Fund must receive 100%
collateral in the form of cash or U.S. Government securities. This
collateral must be valued daily by the Fund's Investment Adviser and should
the market value of the loaned securities increase, the borrower must
furnish additional collateral to the Fund. During the time portfolio
securities are on loan, the borrower will pay the Fund any dividends or
interest paid on such securities. Loans will be subject to termination by a
Fund or the borrower at any time. While a Fund will not have the right to
vote securities in loan, it intends to terminate the loan and regain the
right to vote if that is considered important with respect to the
investment. A Fund will only enter into loan arrangements with
broker-dealers, banks or other institutions which the Fund's Investment
Adviser has determined are creditworthy under guidelines established by the
Funds' Board of Trustees. Each Fund will limit securities loans to 5% of its
net assets.
REPURCHASE AGREEMENTS
---------------------
Securities held by each of the Funds may be subject to repurchase
agreements. Under the terms of a repurchase agreement, a Fund would acquire
securities from a financial institution such as a member bank of the Federal
Deposit Insurance Corporation or a registered broker-dealer, which the
Fund's Investment Adviser deems creditworthy under guidelines approved by
the Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase price
would generally equal the price paid by the Fund plus interest negotiated on
the basis of current short-term rates, which may be more or less than the
rate on the underlying portfolio securities. The seller under a repurchase
agreement will be required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including accrued
interest). If the seller were to default on its repurchase obligation or
become insolvent, a Fund would suffer a loss to the extent that the proceeds
from a sale of the underlying portfolio securities were less than the
repurchase price under the agreement, or to the extent that the disposition
of such securities by the Fund were delayed pending court action.
Additionally, there is no controlling legal precedent confirming that a Fund
would be entitled, as against a claim by such seller or its receiver or
trustee in bankruptcy, to retain the underlying securities, although the
Board of Trustees of the Funds believes that, under the regular procedures
normally in effect for custody of each Fund's securities subject to
repurchase agreements and under applicable federal laws, a court of
competent jurisdiction would rule in favor of a Fund if presented with the
question. Securities subject to repurchase agreements will be held by each
Fund's Custodian, Sub-Custodian, or in the Federal Reserve/Treasury
book-entry system. Repurchase agreements are considered to be loans by an
investment company under the Investment Company Act of 1940 (the "1940
Act").
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MUNICIPAL SECURITIES
--------------------
As a matter of fundamental policy, under normal market conditions, at
least 80% of the net assets of the Intermediate Tax-Free Bond Fund will be
invested in Municipal Securities. The Bond, Intermediate Bond and Short-Term
Income Funds, under normal market conditions, may invest in municipal
securities which are not exempt from federal income taxes. Municipal
Securities include debt obligations issued to obtain funds for various
public purposes, such as the construction of a wide range of public
facilities, the refunding of outstanding obligations, the payment of general
operating expenses, and the extension of loans to other public institutions
and facilities. The Intermediate Tax-Free Bond Fund may purchase short-term
tax-exempt General Obligations Notes, Tax Anticipation Notes, Bond
Anticipation Notes, Revenue Anticipation Notes, Project Notes, and other
forms of short-term tax exempt loans. Such notes are issued with a
short-term maturity in anticipation of the receipt of tax funds, the
proceeds of bond placements, or other revenues. In addition, the
Intermediate Tax-Free Bond Fund may invest in other types of tax-exempt
investments, such as municipal bonds, private activity bonds, and pollution
control bonds. The Intermediate Tax-Free Bond Fund may also purchase
tax-exempt commercial paper. While the issuing state or local housing agency
has the primary obligation with respect to its Project Notes, they are also
secured by the full faith and credit of the United States through agreements
with the issuing authority which provide that, if required, the federal
government will lend the issuer an amount equal to the principal of and
interest on the Project Notes.
There are, of course, variations in the quality of Municipal
Securities, both within a particular classification and between
classifications, and the yields on Municipal Securities depend upon a
variety of factors, including general money market conditions, the financial
condition of the issuer, general conditions of the municipal bond market,
the size of a particular offering, the maturity of the obligations, and the
rating of the issue. The ratings of nationally recognized statistical
ratings organizations ("NRSROs") represent their opinions as to the quality
of Municipal Securities. It should be emphasized, however, that ratings are
general and are not absolute standards of quality, and Municipal Securities
with the same maturity, interest rate and rating may have different yields
while Municipal Securities of the same maturity and interest rate with
different ratings may have the same yield. Subsequent to its purchase by the
Intermediate Tax-Free Bond Fund, an issue of Municipal Securities may cease
to be rated or its rating may be reduced below the minimum rating required
for purchase by the Fund. The Fund's Investment Adviser will consider such
an event in determining whether the Fund should continue to hold the
obligations.
Information about the financial condition of issuers of Municipal
Securities may be less available than about corporations a class of whose
securities is registered under the Securities Exchange Act of 1934.
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An issuer's obligations under its Municipal Securities are subject to
the provisions of bankruptcy, insolvency, and other laws affecting the
rights and remedies of creditors, such as the federal bankruptcy code, and
laws, if any, which may be enacted by Congress or state legislatures
extending the time for payment of principal or interest, or both, or
imposing other constraints upon the enforcement of such obligations. The
power or ability of an issuer to meet its obligations for the payment of
interest on and principal of its Municipal Securities may be materially
adversely affected by litigation or other conditions.
INVESTMENT RESTRICTIONS
-----------------------
Unless otherwise specifically noted, the following investment
restrictions may be changed with respect to a particular Fund only by a vote
of a majority of the outstanding Shares of that Fund (as defined under
"GENERAL INFORMATION--Miscellaneous" in the Funds' Prospectuses).
None of the Funds may:
1. Purchase securities on margin, sell securities short, or participate
on a joint or joint and several basis in any securities trading account,
except, in the case of the Intermediate Tax-Free Bond Fund, for use of
short-term credit necessary for clearance of purchases of portfolio
securities.
2. Underwrite the securities of other issuers except to the extent
that a Fund may be deemed to be an underwriter under certain securities
laws in the disposition of "restricted securities."
3. Purchase or sell commodities or commodity contracts, except that
each of the Equity Investment Funds and Bond Investment Funds may invest in
futures contracts if, immediately thereafter, the aggregate initial margin
deposits for futures contracts, and premium paid for related options, does
not exceed 5% of the Fund's total assets and the value of securities that
are the subject of such futures and options (both for receipt and delivery)
does not exceed one-third of the value of the Fund's total assets.
4. Purchase participation or other direct interests in oil, gas or
mineral exploration or development programs or leases (although investments
by the Cash Management Fund, the Equity Investment Funds, and the Bond
Investment Funds in marketable securities of companies engaged in such
activities are not hereby precluded).
5. Invest in any issuer for purposes of exercising control or
management.
6. Purchase or retain securities of any issuer if the officers or
Trustees of the Funds or the officers or directors of its Investment
Adviser owning beneficially more than
B-13
<PAGE> 122
one-half of 1% of the securities of such issuer together own beneficially
more than 5% of such securities.
7. Invest more than 5% of a Fund's total assets in the securities of
issuers which together with any predecessors have a record of less than
three years of continuous operation.
8. Purchase or sell real estate, including limited partnership
interests, (however, each Fund except a Money Market Fund may, to the extent
appropriate to its investment objective, purchase securities secured by real
estate or interests therein or securities issued by companies investing in
real estate or interests therein).
9. For as long as shares of a Fund are registered in Arkansas and for
so long as the State of Arkansas so requires, invest more than 10% of a
Fund's total assets in the securities of issuers which are restricted as to
disposition, other than restricted securities eligible for resale pursuant
to Rule 144A under the Securities Act of 1933.
In addition, the Money Market Funds may not:
1. Buy common stocks or voting securities, or state, municipal, or
private activity bonds.
In addition, the Intermediate Tax-Free Bond Fund may not:
1. Invest in private activity bonds where the payment of principal and
interest are the responsibility of a company (including its predecessors)
with less than three years of continuous operation.
If a percentage restriction is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in
asset value will not constitute a violation of such restriction.
PORTFOLIO TURNOVER
------------------
The portfolio turnover rate for each Fund is calculated by dividing the
lesser of purchases or sales of portfolio securities for the year by the
monthly average value of the portfolio securities. The calculation excludes
all securities whose maturities, at the time of acquisition, were one year
or less. Thus, for regulatory purposes, the portfolio turnovers with respect
to the Money Market Funds will be zero. Fund turnover may vary greatly from
year to year as well as within a particular year, and may also be affected
by cash requirements for redemptions of shares and by requirements which
enable the Funds to receive certain favorable tax treatments. Fund turnover
will not be a limiting factor in making portfolio decisions.
B-14
<PAGE> 123
For the fiscal year ended August 31, 1996, the portfolio turnover rates
for the Funds were as follows: 61.02% for the Bond Fund; 129.97% for the
Intermediate Bond Fund; 67.46% for the Equity Fund; 19.53% for the
Intermediate Tax-Free Bond Fund; 32.89% for the Aggressive Growth Fund; and
80.98% for the Short-Term Income Fund. The portfolio turnover rate for the
balanced fund for the fiscal year ended August 31, 1996, was 71.63% with
respect to the common stock portion of its portfolio and 72.29% with respect
to the fixed income portion of its portfolio.
For the fiscal year ended August 31, 1995, the portfolio turnover
rates for the Funds were as follows: 185.48% for the Bond Fund; 154.43% for
the Intermediate Bond Fund; 100.44% for the Equity Fund; 8.35% for the
Intermediate Tax-Free Bond Fund; and 27.16% for the Aggressive Growth Fund.
The portfolio turnover rate for the Short-Term Income Fund for the period
from commencement of operations, October 19, 1994, to August 31, 1995 was
212.35%. The portfolio turnover rate for the Balanced Fund for the period
from commencement of operations, June 1, 1995, to August 31, 1995 was .09%
with respect to the common stock portion of its portfolio and 47.63% with
respect to the fixed income portion of its portfolio.
ADDITIONAL TAX INFORMATION CONCERNING ALL THE FUNDS
---------------------------------------------------
It is the policy of each of the Funds to meet the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
By following such policy, each Fund expects to eliminate or reduce to a
nominal amount the federal income taxes to which it may be subject.
In order to qualify as a RIC each Fund must, among other things, (1)
derive at least 90% of its gross income from dividends, interest, payments
with respect to securities loans, and gains from the sale or other
disposition of stock or securities, foreign currencies or other income
(including gains from options, futures or forward contracts) derived with
respect to its business of investing in stock, securities or currencies, (2)
derive less than 30% of its gross income from the sale or other disposition
of stock, securities, options, futures, forward contracts, and certain
foreign currencies (or options, futures, or forward contracts on foreign
currencies) held for less than three months, and (3) diversify its holdings
so that at the end of each quarter of its taxable year (i) at least 50% of
the market value of the Fund's assets is represented by cash or cash items,
U.S. Government securities, securities of other RICs and other securities
limited, in respect of any one issuer, to an amount not greater than 5% of
the value of the Fund's assets and 10% of the outstanding voting securities
of such issuer, and (ii) not more than 25% of the value of its assets is
invested in the securities of any one issuer (other than U.S. Government
securities) or of two or more issuers that the Fund controls and that are
engaged in the same, similar or related trades or businesses. These
requirements may restrict the degree to which the Fund may engage in
short-term trading and limit the range of the Fund's investments. If a Fund
qualifies as a RIC, it will not be subject to federal income tax on the part
of its net
B-15
<PAGE> 124
investment income and net realized capital gains, if any, that it
distributes to shareholders, provided the Fund distributes during its
taxable year at least (a) 90% of its "investment company taxable income" (as
that term is defined in the Code), and (b) 90% of the excess of (i) its
tax-exempt interest income over (ii) certain deductions attributable to that
income. Each Fund intends to make sufficient distributions to Shareholders
to meet this requirement.
The Code imposes a non-deductible excise tax on RICs that do not
distribute in each calendar year (regardless of whether they otherwise have
a non-calendar taxable year) an amount equal to 98% of their "ordinary
income" (as defined) for the calendar year plus 98% of their capital gain
net income for the 1-year period ending on October 31 of such calendar year
plus any undistributed amounts from the prior year. For the foregoing
purposes, a Fund is treated as having distributed any amount on which it is
subject to income tax for any taxable year ending in such calendar year. If
distributions during a calendar year were less than the required amount, a
particular Fund would be subject to a non-deductible excise tax equal to 4%
of the deficiency.
A Fund's transactions in futures contracts, options, and foreign
currency denominated securities, and certain other investment and hedging
activities of the Fund, will be subject to special tax rules. In a given
case, these rules may accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's assets, convert
short-term capital losses into long-term capital losses, or otherwise affect
the character of the Fund's income. These rules could therefore affect the
amount, timing, and character of distributions to Shareholders. Income
earned as a result of these transactions would, in general, not be eligible
for the Dividends Received Deduction or for treatment as exempt-interest
dividends when distributed to Shareholders. Each Fund will endeavor to make
any available elections pertaining to these transactions in a manner
believed to be in the best interest of the Fund.
The Funds will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of taxable dividends and other distributions paid to
any Shareholder who has provided either an incorrect tax identification
number or no number at all, or who is subject to withholding by the Internal
Revenue Service for failure properly to include on his tax return payments
of interest or dividends. This withholding, known as back-up withholding, is
not an additional tax, and any amounts withheld may be credited against the
Shareholder's ultimate U.S. tax liability.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of a Fund of the
Funds. Further tax information regarding the Intermediate Tax-Free Bond Fund
is included in the immediately following section of this Statement of
Additional Information. No attempt is made to present a detailed explanation
of the federal income tax treatment of each Fund or its Shareholders, and
this discussion is not intended as a substitute for careful tax planning.
B-16
<PAGE> 125
Accordingly, potential purchasers of shares of a Fund are urged to consult
their tax advisers with specific reference to their own tax situation.
The foregoing discussion and the discussion below regarding the
Intermediate Tax-Free Bond Fund are based on tax laws and regulations which
are in effect on the date of this Statement of Additional Information; such
laws and regulations may be changed by legislative or administrative action,
and such changes may be retroactive.
ADDITIONAL TAX INFORMATION CONCERNING THE INTERMEDIATE
------------------------------------------------------
TAX-FREE BOND FUND
------------------
The Code permits a RIC which invests at least 50% of its assets in
tax-free Municipal Securities and other securities exempt from the regular
federal income tax to pass through to its investors, tax-free, net interest
income from such securities.
The policy of the Intermediate Tax-Free Bond Fund is to pay each year
as dividends substantially all the Fund's interest income net of certain
deductions. An exempt-interest dividend is any dividend or part thereof
(other than a capital gain dividend) paid by the Intermediate Tax-Free Bond
Fund and designated as an exempt-interest dividend in a written notice
mailed to Shareholders after the close of the Fund's taxable year, but not
to exceed in the aggregate the net interest from Municipal Securities and
other securities exempt from the regular federal income tax received by the
Fund during the taxable year. The percentage of the total dividends paid for
any taxable year which qualifies as federal exempt-interest dividends will
be the same for all Shareholders receiving dividends from the Intermediate
Tax-Free Bond Fund during such year, regardless of the period for which the
Shares were held.
Exempt-interest dividends may be treated by the Intermediate Tax-Free
Bond Fund's Shareholders as items of interest excludable from their gross
income under Section 103(a)(1) of the Code. However, each Shareholder of an
Intermediate Tax-Free Bond Fund is advised to consult his tax adviser with
respect to whether exempt-interest dividends would retain the exclusion
under Section 103(a)(1) if such Shareholder were treated as a "substantial
user" or a "related person" to such user under Section 147(a) with respect
to facilities financed through any of the tax-exempt obligations held by the
Fund. "Substantial user" is defined under U.S. Treasury Regulations to
include a non-exempt person who regularly uses a part of such facilities in
his trade or business and (a)(i) whose gross revenues derived with respect
to the facilities financed by the issuance of bonds are more than 5% of the
total revenues derived by all users of such facilities or (ii) who occupies
more than 5% of the usable area of the facility or (b) for whom such
facilities or a part thereof were specifically constructed, reconstructed or
acquired. "Related persons" includes certain related natural persons,
affiliated corporations, partners and partnerships.
B-17
<PAGE> 126
Dividends attributable to interest on certain private activity bonds
issued after August 7, 1986 must be included in alternative minimum taxable
income for purposes of determining liability (if any) for the alternative
minimum tax for individuals and corporations. In the case of corporations
all tax-exempt interest dividends will be taken into account in determining
adjusted current earnings for the purpose of computing the alternative
minimum tax imposed on corporations (as defined for federal income tax
purposes).
The Intermediate Tax-Free Bond Fund may acquire rights regarding
specified portfolio securities under puts. See "Puts." The policy of the
Intermediate Tax-Free Bond Fund is to limit its acquisition of puts to those
under which the Fund will be treated for federal income tax purposes as the
owner of the Municipal Securities acquired subject to the put and the
interest on the Municipal Securities will be tax-exempt to the Fund.
Although the Internal Revenue Service has issued a published ruling that
provides some guidance regarding the tax consequences of the purchase of
puts, there is currently no guidance available from the Internal Revenue
Service that definitively establishes the tax consequences of many of the
types of puts that the Funds could acquire under the 1940 Act. Therefore,
although the Intermediate Tax-Free Bond Fund will only acquire a put after
concluding that it will have the tax consequences described above, the
Internal Revenue Service could reach a different conclusion from that of the
Fund.
The Intermediate Tax-Free Bond Fund will distribute at least 90% of any
investment company taxable income for each taxable year. In general, the
Fund's investment company taxable income will be its taxable income subject
to certain adjustments and excluding the excess of any net long-term capital
gain for the taxable year over the net short-term capital loss, if any, for
such year. The Intermediate Tax-Free Bond Fund will be taxed on any
undistributed investment company taxable income. To the extent such income
is distributed by the Intermediate Tax-Free Bond Fund (whether in cash or
additional Shares), it will be taxable to Shareholders as ordinary income.
The dividends-received deduction for corporations will not apply to such
distributions.
If for any taxable year the Intermediate Tax-Free Bond Fund does not
qualify for the special tax treatment afforded RICs, all of its taxable
income would be subject to tax at regular corporate rates (without any
deduction for distributions to shareholders), and Municipal Securities
interest income, although not taxable to the Fund, would be taxable to
Shareholders when distributed as dividends.
Income exempt from federal income taxation must be considered when
determining whether Social Security payments or railroad retirement benefits
received by a Shareholder are subject to federal income taxation.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of the Intermediate
Tax-Free Bond
B-18
<PAGE> 127
Fund. Additional tax information concerning all Funds of the Funds is
contained in the immediately preceding section of this Statement of
Additional Information. No attempt is made to present a detailed explanation
of the income tax treatment of the Intermediate TaxFree Bond Fund or its
Shareholders, and this discussion is not intended as a substitute for
careful tax planning. Accordingly, potential purchasers of shares of the
Intermediate TaxFree Bond Fund are urged to consult their tax advisers with
specific reference to their own tax situation.
VALUATION
THE MONEY MARKET FUNDS
----------------------
The Money Market Funds have elected to use the amortized cost method of
valuation pursuant to Rule 2a-7 under the 1940 Act. This involves valuing an
instrument at its cost initially and thereafter assuming a constant
amortization to maturity of any discounts or premiums, regardless of the
impact of fluctuating interest rates on the market value of the instrument.
This method may result in periods during which value, as determined by
amortized cost, is higher or lower than the price each Fund would receive if
it sold the instrument. The value of securities in the Funds can be expected
to vary inversely with changes in prevailing interest rates.
Pursuant to Rule 2a-7, the Money Market Funds will maintain a
dollar-weighted average portfolio maturity appropriate to their objective of
maintaining a stable net asset value per Share, provided that no Fund will
purchase any security with a remaining maturity of more than 397 days
(securities subject to repurchase agreements and certain variable or
floating rate instruments may bear longer maturities) nor maintain a
dollar-weighted average portfolio maturity which exceeds 90 days. The Funds'
Board of Trustees has also undertaken to establish procedures reasonably
designed, taking into account current market conditions and a Fund's
investment objective, to stabilize the net asset value per Share of the
Money Market Funds for purposes of sales and redemptions at $1.00. These
procedures include review by the Trustees, at such intervals as they deem
appropriate, to determine the extent, if any, to which the net asset value
per Share of each Fund calculated by using available market quotations
deviates from $1.00 per Share. In the event such deviation exceeds one half
of one percent, the Rule requires that the Board promptly consider what
action, if any, should be initiated. If the Trustees believe that the extent
of any deviation from a Fund's $1.00 amortized cost price per Share may
result in material dilution or other unfair results to new or existing
investors, they will take such steps as they consider appropriate to
eliminate or reduce to the extent reasonably practicable any such dilution
or unfair results. These steps may include selling portfolio instruments
prior to maturity, shortening the dollar-weighted average portfolio
maturity, withholding or reducing dividends, reducing the number of a Fund's
outstanding Shares
B-19
<PAGE> 128
without monetary consideration, or utilizing a net asset value per Share
determined by using available market quotations.
THE BOND AND EQUITY INVESTMENT FUNDS
------------------------------------
Except as noted below, investments of the Bond Investment Funds and the
Equity Investment Funds in securities the principal fair market for which is
a securities exchange are valued at their fair market values based upon the
latest available sales price or, absent such a price, by reference to the
latest available bid prices in the principal market in which such securities
are normally traded. With regard to each of the above-mentioned Funds,
securities, the principal market for which is not a securities exchange, are
valued based on bid quotations in such principal market. Securities and
other assets for which quotations are not readily available are valued at
their fair market value as determined in good faith under consistently
applied procedures established by and under the general supervision of the
Trustees of the Funds. Short-term securities are valued at amortized cost,
which approximates current value.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Shares in each Fund are sold on a continuous basis by BISYS Fund
Services (the "Distributor"), and the Distributor has agreed to use
appropriate efforts to solicit all purchase orders. As described in the
Prospectuses, in addition to purchasing Shares directly from the
Distributor, Shares may be purchased through procedures established by the
Distributor in connection with the requirements of Participating
Organizations under the Funds' Distribution and Shareholder Services Plan.
Customers purchasing Shares of the Funds may include officers, directors, or
employees of the Investment Adviser and its affiliates.
The Funds may suspend the right of redemption or postpone the date of
payment for Shares during any period when (a) trading on the New York Stock
Exchange (the "Exchange") is restricted by applicable rules and regulations
of the Securities and Exchange Commission, (b) the Exchange is closed for
other than customary weekend and holiday closings, (c) the Securities and
Exchange Commission has by order permitted such suspension, or (d) an
emergency exists as determined by the Securities and Exchange Commission.
The Money Market Funds may redeem Shares involuntarily if redemption
appears appropriate in light of the Funds' responsibilities under the 1940
Act. (See "VALUATION - The Money Market Funds" above for further
information.)
B-20
<PAGE> 129
MANAGEMENT OF THE FUNDS
TRUSTEES AND OFFICERS
---------------------
The names of the trustees of the Funds, their addresses, and principal
occupations during the past five years are set forth in each of the Funds'
Prospectuses. The officers of the Funds, their addresses, and principal
occupations during the past five years are as follows:
Position(s) Held Principal Occupation
Name and Address With the Funds During Past 5 Years
---------------- -------------- ---------------------
Walter B. Grimm* Chairman, From June, 1992 to present,
3435 Stelzer Road President, and employee of BISYS Fund Services;
Columbus, OH 43219 Trustee from 1987 to June, 1992, President
of Leigh Consulting/Investments
(investment firm).
D'Ray Moore* Vice President and From February, 1990 to present,
3435 Stelzer Road Secretary employee of BISYS Fund Services.
Columbus, OH 43219
Alaina J. Metz* Assistant From June 1995 to present, employee
3435 Stelzer Road Secretary of BISYS Fund Services; from May
Columbus, OH 43219 1989 to June 1995, Supervisor,
Mutual Fund Legal Department,
Alliance Capital Management.
William J. Tomko* Vice President From April, 1987 to present,
3435 Stelzer Road employee of BISYS Fund Services.
Columbus, OH 43219
Stephen G. Mintos* Treasurer From January, 1987 to present,
3435 Stelzer Road employee of BISYS Fund Services.
Columbus, OH 43219
George O. Martinez* Vice President From April 1995 to present,
3435 Stelzer Road employee of BISYS Fund Services;
Columbus, OH 43219 from June 1989 - March 1995, Vice
President and Associate General
Counsel, Alliance Capital
Management.
B-21
<PAGE> 130
----------------
* Messrs. Grimm, Tomko, Mintos and Martinez and Ms. MOORE and Ms. Metz
are each considered to be an "interested person" of the Funds as
defined in the 1940 Act.
<TABLE>
<CAPTION>
COMPENSATION TABLE(1)
---------------------
Total
Aggregate Pension or Compensation
Compensation Retirement from The
from The Benefits Estimated American
American Accrued As Annual Performance
Name of Person, Performance Part of Fund Benefits Upon Funds Paid to
Position Funds Expenses Retirement Trustee
-------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Walter B. Grimm None None None None
J. David Huber None None None None
Michael J. Hall $5,000 None None $5,000
Perry A. Wimpey $6,000 None None $6,000
I. Edgar Hendrix $6,000 None None $6,000
<FN>
(1)Figures are for the Funds' fiscal year ended August 31, 1996.
</TABLE>
INVESTMENT ADVISER AND SUB-ADVISER
----------------------------------
Investment advisory services are provided to each of the Funds by
BancOklahoma Trust Company ("Investment Adviser" or "BOTC"), pursuant to an
Investment Advisory Agreement dated October 1, 1994 (hereinafter referred to
as the "Advisory Agreement"). Sub-investment advisory services are provided
to the Cash Management Fund by AMR Investment Services, Inc. ("AMR")
pursuant to a Sub-Investment Advisory Agreement between BOTC and AMR dated
October 1, 1994 (hereinafter referred to as the "Sub-Advisory Agreement").
Under the Advisory Agreement, BOTC has agreed to provide to the
respective Funds the respective investment advisory services described in
the Funds' Prospectuses. For the services provided and expenses assumed
pursuant to the Advisory Agreement, BOTC is entitled to receive a fee from
each of the Funds, computed daily and paid monthly, based on the lower of
(1) such fee as may, from time to time, be agreed upon in writing by the
Funds and BOTC or (2) the average daily net assets of each such Fund as
follows: the U.S. Treasury Fund and the Cash Management Fund - forty
one-hundredths of one percent (.40%) annually; the Equity Fund and the
Aggressive Growth Fund - sixty-nine one-hundredths of one percent (.69%)
annually; the Balanced Fund - seventy-four one-hundredths of one percent
(.74%) annually; the Bond Fund,
B-22
<PAGE> 131
the Intermediate Bond Fund, the Intermediate Tax-Free Bond Fund and the
Short-Term Income Fund - fifty-five one-hundredths of one percent (.55%)
annually. For the services provided and the expenses assumed pursuant to the
Sub-Advisory Agreement, AMR is entitled to receive a fee from BOTC, computed
daily and paid monthly, at the annual rate of fifteen one-hundredths of one
percent (.15%) of the average daily net assets of the Cash Management Fund.
For its investment advisory services during the fiscal year ending
August 31, 1996, BOTC received from the Funds $801,240 with respect to the
U.S. Treasury Fund; $1,238,786 with respect to the Cash Management Fund;
$129,467, WHICH IS $73,915 less than the maximum amount of advisory fees, if
charged, with respect to the Bond Fund; $227,937, which is $130,084 less
than the maximum amount of such fees, if charged, with respect to the
Intermediate Bond Fund; $407,341, which is $154,982 less than the maximum
amount of such fees, if charged, with respect to the Equity Fund; $101,273,
which is $57,916 less than the maximum amount of advisory fees, if charged,
with respect to the Intermediate Tax-Free Bond Fund; $202,594, which is
$77,088 less than the maximum amount of advisory fees, if charged, with
respect to the Aggressive Growth Fund; $0, which is $65,313 less than the
maximum amount of advisory fees, if charged with respect to the Short-Term
Income Fund ; and $0 which is $149,330 less than the maximum amount of
advisory fees, if charged with respect to the Balanced Fund.
For its investment advisory services during the fiscal year ended
August 31, 1995, BOTC received from the Funds $732,975, which is $27,001
less than the maximum amount of advisory fees, if charged, with respect to
the U.S. Treasury Fund; $119,282 which is $66,995 less than the maximum
amount of advisory fees, if charged, with respect to the Bond Fund; $271,212
which is $152,206 less than the maximum amount of advisory fees, if charged,
with respect to the Intermediate Bond Fund; $360,139 which is $134,698 less
than the maximum amount of advisory fees, if charged, with respect to the
Equity Fund; $56,984, which is $96,109 less than the maximum amount of
advisory fees, if charged, with respect to the Intermediate Tax-Free Bond
Fund; $130,408 which is $49,067 less than the maximum amount of advisory
fees, if charged, with respect to the Aggressive Growth Fund. For investment
advisory services during the period from October 1, 1994 to August 31, 1995,
BOTC received from the Funds $799,677 which is $30,520 less than the maximum
amount of advisory fees, if charged, with respect to the Cash Management
Fund. For the period from commencement of operations, October 19, 1994, to
August 31, 1995, BOTC received from the Funds $17,642 which is $39,100 less
than the maximum amount of advisory fees, if charged, with respect to the
Short-Term Income Fund; and for the period from commencement of operations,
June 1, 1995, to August 31, 1995, BOTC received from the Funds $0 which is
$21,992 less than the maximum amount of advisory fees, if charged, with
respect to the Balanced Fund.
For its investment advisory services during the fiscal year ending
August 31, 1994, BOTC received from the Funds $153,213, which is $153,213
less than the maximum amount of advisory fees, if charged, with respect to
the U.S. Treasury Fund; $91,725, which is $52,636 less than the maximum
amount of advisory fees, if charged, with respect to the Bond Fund;
$224,116,
B-23
<PAGE> 132
which is $128,475 less than the maximum amount of advisory fees, if charged,
with respect to the Intermediate Bond Fund; $304,010, which is $116,027 less
than the maximum amount of advisory fees, if charged, with respect to the
Equity Fund; $0, which is $120,948 less than the maximum amount of advisory
fees, if charged, with respect to the Intermediate Tax-Free Bond Fund;
$80,387, which is $32,285 less than the maximum amount of advisory fees, if
charged, with respect to the Aggressive Growth Fund. The Short-Term Income
Fund and the Balanced Fund were not in operation during the fiscal year
ended August 31, 1994. BOTC did not serve as investment adviser to the Cash
Management Fund for the fiscal year ended August 31, 1994.
Investment advisory services formerly were provided by AMR, jointly
with BOTC, to the U.S. Treasury Fund and by AMR solely to the Cash
Management Fund pursuant to an Investment Advisory Agreement dated September
5, 1990. AMR ceased providing investment advisory services to the U.S.
Treasury Fund and the Cash Management Fund on September 30, 1994. For
services provided and expenses assumed under the AMR Investment Advisory
Agreement, the U.S. Treasury Fund and the Cash Management Fund paid AMR a
fee, computed daily and paid monthly, based on the lower of (1) such fee as
was, from time to time, agreed upon in writing by the Funds and AMR or (2)
the average daily net assets of the respective Funds, as follows: the Cash
Management Fund - forty one-hundredths of one percent (.40%) annually and
the U.S. Treasury Fund - twenty one-hundredths of one percent (.20%)
annually.
For investment advisory services during the period from September 1,
1994 to September 30, 1994, at which time the Investment Advisory Agreement
terminated, AMR received from the Funds $13,468 with respect to the U.S.
Treasury Fund; and $29,578 with respect to the Cash Management Fund. For
Sub-Advisory services during the period from October 1, 1994 to August 31,
1995, AMR received from BOTC $281,081 with respect to the Cash Management
Fund.
For investment advisory services during the fiscal year ending August
31, 1994, AMR received from the Funds $153,212, which is $153,212 less than
the maximum amount of advisory fees, if charged, with respect to the U.S.
Treasury Fund; and $358,644, which is $358,644 less than the maximum amount
of such fees, if charged, with respect to the Cash Management Fund.
The Investment Adviser may periodically set its fees at less than the
maximum allowable amount with respect to any Fund it serves in order to
increase the net income of that Fund available for distribution as
dividends. For information on such voluntary reductions undertaken for the
period ended August 31, 1996, concerning a particular Fund, see "MANAGEMENT
OF THE FUND - Investment Adviser" in the Prospectus pertaining to such Fund.
Unless sooner terminated, the Advisory Agreement will continue in
effect until August 1, 1997. The Advisory Agreement will continue in effect
as to a particular Fund for successive
B-24
<PAGE> 133
one-year terms after the aforementioned date, if such continuance is
approved at least annually by the Funds' Board of Trustees or by vote of a
majority of the outstanding voting Shares of such Fund (as defined under
"GENERAL INFORMATION--Miscellaneous" in the Funds' Prospectuses), and a
majority of the Trustees who are not parties to the Advisory Agreement, or
interested persons (as defined in 1940 Act) of any party to the Advisory
Agreement by votes cast in person at a meeting called for such purpose.
The Sub-Advisory Agreement between BOTC and AMR provides that unless
sooner terminated, it will continue in effect until August 1, 1997 and for
successive one-year terms thereafter, provided that such continuance is
approved annually in the manner set forth above. The Advisory and
Sub-Advisory Agreements are terminable as to a particular Fund at any time
on 60 days' written notice without penalty by the Trustees, by vote of a
majority of the outstanding voting Shares of that Fund, or by the Investment
Adviser or the Sub-Adviser, as the case may be. The Advisory and
Sub-Advisory Agreements also terminate automatically in the event of any
assignment, as defined in the 1940 Act.
The Advisory and Sub-Advisory Agreements provide that the Investment
Adviser or the Sub-Adviser, as the case may be, shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of the respective Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith, or gross negligence on the part of the respective provider of
services to the Funds in the performance of its duties, or from reckless
disregard by it of its duties and obligations thereunder.
From time to time, advertisements, supplemental sales literature and
information furnished to present or prospective shareholders of the Funds
may include descriptions of the Investment Adviser or Sub-Adviser including,
but not limited to, (i) descriptions of the adviser's operations; (ii)
descriptions of certain personnel and their functions; and (iii) statistics
and rankings related to the adviser's operations.
DISTRIBUTION
------------
Shares of the Funds are sold on a continuous basis by the Distributor
for the Funds. Under the Funds' Amended and Restated Distribution and
Shareholder Services Plan (the "Distribution Plan"), each of the Funds will
pay a monthly distribution fee to the Distributor as compensation for its
services in connection with the Distribution Plan at an annual rate equal to
twenty-five one hundredths of one percent (.25%) of its average daily net
assets. The Distributor may use the distribution fee to provide distribution
assistance with respect to the Funds' Shares or to provide Shareholder
services to the holders of the Funds' Shares. The Distributor may also use
the distribution fee (i) to pay financial institutions and intermediaries
(such as insurance companies, and investment counselors, but not including
banks), broker-dealers, and the Distributor's affiliates and subsidiaries
compensation for services or reimbursement of expenses incurred in
connection with distribution assistance or (ii) to pay banks, other
financial institutions
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<PAGE> 134
and intermediaries, broker-dealers, and the Distributor's affiliates and
subsidiaries compensation for services or reimbursement of expenses incurred
in connection with the provision of Shareholder services. All payments by
the Distributor for distribution assistance or Shareholder services under
the Distribution Plan will be made pursuant to an agreement between the
Distributor and such bank, other financial institution or intermediary,
broker-dealer, or affiliate or subsidiary of the Distributor (a "Servicing
Agreement"; banks, other financial institutions and intermediaries,
broker-dealers, and the Distributor's affiliates and subsidiaries which may
enter into a Servicing Agreement are hereinafter referred to individually as
a "Participating Organization"). A Servicing Agreement will relate to the
provision of distribution assistance in connection with the distribution of
the Funds' Shares to the Participating Organization's customers on whose
behalf the investment in such Shares is made and/or to the provision of
Shareholder services rendered to the Participating Organization's customers
owning the Funds' Shares. Under the Distribution Plan, a Participating
Organization may include the Funds' Investment Advisers or their affiliates.
A Servicing Agreement entered into with a bank (or any of its subsidiaries
or affiliates) will contain a representation that the bank (or subsidiary or
affiliate) believes that it possesses the legal authority to perform the
services contemplated by the Servicing Agreement without violation of
applicable banking laws (including the Glass-Steagall Act).
The distribution fee will be payable without regard to whether the
amount of the fee is more or less than the actual expenses incurred in a
particular year by the Distributor in connection with distribution
assistance or Shareholder services rendered by the Distributor itself or
incurred by the Distributor pursuant to the Servicing Agreements entered
into under the Distribution Plan. If the amount of the distribution fee is
greater than the Distributor's actual expenses incurred in a particular year
(and the Distributor does not waive that portion of the distribution fee),
the Distributor will realize a profit in that year from the distribution
fee. If the amount of the distribution fee is less than the Distributor's
actual expenses incurred in a particular year, the Distributor will realize
a loss in that year under the Distribution Plan and will not recover from
the Funds the excess of expenses for the year over the distribution fee,
unless actual expenses incurred in a later year in which the Distribution
Plan remains in effect were less than the distribution fee paid in that
later year. The Distributor may periodically waive all or a portion of the
distribution fee to increase the net income attributable to a Fund available
for distribution as dividends to the Fund's Shareholders. To reduce
operating expenses, the Distributor has by agreement with the Funds, limited
its fees under the Distribution Plan to twenty-five one hundredths of one
percent (.25%) of each Fund's average daily net assets. For information on
such voluntary reductions concerning a particular fund, see "DISTRIBUTION"
in the Prospectus pertaining to such Fund.
Under the Distribution Plan during the fiscal year ended August 31,
1996, the Distributor received the maximum amount receivable under the Plan
with respect to the following Funds and in the following amounts: $92,476,
with respect to the Bond Fund; $162,813, with respect to the Intermediate
Bond Fund; $203,670 with respect to the Equity Fund and $101,297 with
respect to the Aggressive Growth Fund. Under the Distribution Plan
B-26
<PAGE> 135
during the fiscal year ended August 31, 1996, the Distributor received $0
which is $500,780 less than the maximum amount receivable under the PLAN
with respect to the U.S. Treasury Fund; $0 which is $830,500 less than the
maximum amount receivable under the Plan with respect to the Cash Management
Fund; $0 which is $72,358 less than the maximum amount receivable under the
Plan with respect to the Intermediate Tax-Free Bond Fund; $0 which is
$50,449 less than the maximum amount receivable under the Plan with respect
to the Balanced Fund; and $0 which is $29,688 less than the maximum amount
receivable under the Plan with respect to the Short-Term Income Fund.
Under the Distribution Plan during the fiscal year ended August 31,
1995, the Distributor received the maximum amount receivable under the Plan
with respect to the following Funds and in the following amounts: $84,678
with respect to the Bond Fund; $192,530 with respect to the Intermediate
Bond Fund; $179,345 with respect to the Equity Fund and $64,937 with respect
to the Aggressive Growth Fund. Under the Distribution Plan during the fiscal
year ended August 31, 1995, the Distributor received $0, which is $69,588
less than the maximum amount receivable under the Plan with respect to the
Intermediate Tax-Free Bond Fund; $33,751 which is $441,234 less than the
maximum amount receivable with respect to the U.S. Treasury Fund; and
$38,082 which is $480,791 less than the maximum amount receivable with
respect to the Cash Management Fund. Under the Distribution Plan during the
period from commencement of operations, October 19, 1994, to August 31,
1995, the Distributor received $2,911 which is $22,881 less than the maximum
amount receivable under the Plan with respect to the Short-Term Income Fund;
and during the period from commencement of operations, June 1, 1995 to
August 31, 1995, the Distributor received $0 which is $7,430 less than the
maximum amount receivable under the Plan with respect to the Balanced Fund.
Under the Distribution Plan during the fiscal year ended August 31,
1994, the Distributor received the maximum amount receivable under the Plan
with respect to the following Funds and in the following amounts: $383,031
with respect to the U.S. Treasury Fund; $448,305 with respect to the Cash
Management Fund; $65,518 with respect to the Bond Fund; $160,083 with
respect to the Intermediate Bond Fund; $152,005 with respect to the Equity
Fund and $40,194 with respect to the Aggressive Growth Fund. Under the
Distribution Plan during the fiscal year ended August 31, 1994, the
Distributor received $0, which is $54,977 less than the maximum amount
receivable under the Plan with respect to the Intermediate Tax-Free Bond
Fund. The Short-Term Income Fund and the Balanced Fund were not in operation
during the fiscal year ended August 31, 1994.
Substantially all of the amount received by the Distributor under the
Distribution Plan during the last fiscal year, the period from September 1,
1995 to August 31, 1996, was spent on compensation to dealers. 2.09% was
retained by BISYS and spent on printing and mailing of prospectuses. The
total amount spent on compensation to dealers during the last fiscal year
was $560,018. The total amount retained by BISYS during the last fiscal year
was $11,721.
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<PAGE> 136
The Securities and Exchange Commission has proposed amendments to Rule
12b-1 under the 1940 Act, which regulates the Distribution Plan and similar
arrangements of other investment companies which make payments in connection
with the distribution of their securities. One concern of the Securities and
Exchange Commission is the desirability of so-called "compensation plans"
which pay distributors of investment companies fees that are not tied
directly to distribution expenses actually incurred by them. Because the
Distribution Plan does not limit payments made to the Distributor and to
Participating Organizations to the reimbursement of expenses incurred
pursuant to the Plan, the Distribution Plan is a compensation plan. In the
event the amendments to Rule 12b-1 are adopted, new procedural and
substantive requirements may be imposed on 12b-1 distribution plans, and may
necessitate certain modifications to the Distribution Plan.
GLASS-STEAGALL ACT
------------------
In 1971 the United States Supreme Court held in INVESTMENT COMPANY
INSTITUTE v. CAMP that the federal statute commonly referred to as the
Glass-Steagall Act prohibits a national bank from operating a fund for the
collective investment of managing agency accounts. Subsequently, the Board
of Governors of the Federal Reserve System (the "Board") issued a regulation
and interpretation to the effect that the Glass-Steagall Act and such
decision: (a) forbid a bank holding company registered under the Federal
Bank Holding Company Act of 1956 (the "Holding Company Act") or any non-bank
affiliate thereof from sponsoring, organizing, or exerting control of a
registered, open-end investment company continuously engaged in the issuance
of its shares, but (b) do not prohibit such a holding company or affiliate
from acting as Investment Adviser, transfer agent, and custodian to such an
investment company. In 1981, the United States Supreme Court held in BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM v. INVESTMENT COMPANY INSTITUTE
that the Board did not exceed its authority under the Holding Company Act
when it adopted its regulation and interpretation authorizing bank holding
companies and their non-bank affiliates to act as Investment Advisers to
registered closed-end investment companies. In the BOARD OF GOVERNORS case,
the Supreme Court also stated that if a national bank complied with the
restrictions imposed by the Board in its regulation and interpretation
authorizing bank holding companies and their non-bank affiliates to act as
Investment Advisers to investment companies, a national bank performing
investment advisory services for an investment company would not violate the
Glass-Steagall Act.
BOTC believes that it possesses the legal authority to perform the
investment advisory services that are contemplated by its Investment
Advisory Agreement with the Funds and described in the Prospectuses and this
Statement of Additional Information without violation of the Glass-Steagall
Act. Future changes in either federal or state statutes and regulations
relating to the permissible activities of banks or bank holding companies
and the subsidiaries or affiliates of those entities, as well as further
judicial or administrative decisions or interpretations of present and
future statutes and regulations, could prevent or restrict BOTC, from
continuing to perform such services for the Funds. Depending upon the nature
of any changes in the services
B-28
<PAGE> 137
which could be provided by BOTC, the Board of Trustees of the Funds would
review the Funds' relationship with BOTC, and consider taking all action
necessary in the circumstances.
Should future legislative, judicial, or administrative action prohibit
or restrict the proposed activities of BOTC, or other banks serving as
Participating Organizations under the Funds' Distribution and Shareholder
Services Plan, in connection with Customer purchases of Shares of the Funds,
such banks may be required to alter materially or discontinue the services
offered by them to Customers under the Distribution and Shareholder Services
Plan. It is not anticipated, however, that any change in the Funds'
Distribution and Shareholder Services Plan would affect its net asset value
per Share or result in financial losses to any Customer.
PORTFOLIO TRANSACTIONS
----------------------
Pursuant to the Advisory and Sub-Advisory Agreements, BOTC and AMR
determine, subject to the general supervision of the Board of Trustees of
the Funds and in accordance with each Fund's investment objective, policies
and restrictions, which securities are to be purchased and sold by each such
Fund and which brokers are to be eligible to execute its portfolio
transactions. Purchases and sales of portfolio securities with respect to
the Money Market Funds and the Bond Investment Funds usually are principal
transactions in which portfolio securities are purchased directly from the
issuer or from an underwriter or market maker for the securities. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter and purchases from dealers serving as
market makers may include the spread between the bid and asked price.
Transactions with respect to the Equity Investment Funds on stock exchanges
(other than certain foreign stock exchanges) involve the payment of
negotiated brokerage commissions. Transactions in the over-the-counter
market are generally principal transactions with dealers. With respect to
the over-the-counter market, the Funds, where possible, will deal directly
with the dealers who make a market in the securities involved except in
those circumstances where better price and execution are available
elsewhere. While BOTC and AMR generally seek competitive spreads or
commissions, the Funds may not necessarily pay the lowest spread or
commission available on each transaction, for reasons discussed below.
During the fiscal year ended August 31, 1996, the Equity Fund paid
aggregate brokerage commissions in the amount of $106,593. During the fiscal
year ended August 31, 1996, BOTC directed brokerage transactions for the
Equity Fund to brokers because of research services provided in the
following amounts: aggregate transactions -- $90,918; aggregate commissions
--$48,969. During the fiscal year ended August 31, 1996, the Aggressive
Growth Fund paid aggregate brokerage commissions in the amount of $20,047.
During the fiscal year ended August 31, 1996, BOTC directed brokerage
transactions for the Aggressive Growth Fund to brokers because of research
services provided in the following amounts: aggregate transactions --
$20,047; aggregate commissions -- $0. During the fiscal year ended august
31, 1996 the Balanced Fund paid aggregate brokerage commissions in the
amount of $25,340. BOTC directed brokerage transactions for the
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<PAGE> 138
Balanced Fund to brokers because of research services provided in the
following amounts: aggregate transactions -- $19,722 and aggregate
commissions -- $5,618.
During the fiscal year ended August 31, 1995, the Equity Fund paid
aggregate brokerage commissions in the amount of $159,829. During the fiscal
year ended August 31, 1995, BOTC directed brokerage transactions for the
Equity Fund to brokers because of research services provided in the
following amounts: aggregate transactions -- $158,700,000; aggregate
commissions -- $159,069. During the fiscal year ended August 31, 1995, the
Aggressive Growth Fund paid aggregate brokerage commissions in the amount of
$10,768. During the fiscal year ended August 31, 1995, BOTC directed
brokerage transactions for the Aggressive Growth Fund to brokers because of
research services provided in the following amounts: aggregate transactions
-- $14,600,000; aggregate commissions -- $10,648. For the period June 1,
1995 to August 31, 1995, the Balanced Fund paid aggregate brokerage
commissions in the amount of $9,818.
Allocation of transactions, including their frequency, to various
dealers is determined by BOTC and/or AMR with respect to the Funds it serves
based on its best judgment and in a manner deemed fair and reasonable to
Shareholders. The primary consideration is prompt execution of orders in an
effective manner at the most favorable price. Subject to this consideration,
dealers who provide supplemental investment research to BOTC and AMR may
receive orders for transactions by the Funds. Information so received is in
addition to and not in lieu of services required to be performed by BOTC and
AMR and does not reduce the advisory fees payable to BOTC and AMR. Such
information may be useful to BOTC and AMR in serving both the Funds and
other clients and, conversely, supplemental information obtained by the
placement of business of other clients may be useful to such adviser in
carrying out its obligations to the Funds.
The Funds will not execute portfolio transactions through, acquire
portfolio securities issued by, make savings deposits in, or enter into
repurchase or reverse repurchase agreements with BOTC or AMR, its
Distributor, or their affiliates except as may be permitted under the 1940
Act, and will not give preference to correspondents of an Investment Adviser
with respect to such transactions, securities, savings deposits, repurchase
agreements, and reverse repurchase agreements.
Investment decisions for each Fund are made independently from those
for the other Funds or any other investment company or account managed by
BOTC and AMR. Any such other investment company or account may also invest
in the same securities as the Funds. When a purchase or sale of the same
security is made at substantially the same time on behalf of a given Fund
and another Fund, investment company or account, the transaction will be
averaged as to price, and available investments allocated as to amount, in a
manner which BOTC or AMR believes to be equitable to the Fund(s) and such
other investment company or account. In some instances, this investment
procedure may adversely affect the price paid or received by a Fund or the
size of the position obtained by a Fund. To the extent permitted by law,
BOTC or AMR may
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<PAGE> 139
aggregate the securities to be sold or purchased by it for a Fund with those
to be sold or purchased by it for other Funds or for other investment
companies or accounts in order to obtain best execution. As provided by
Investment Advisory and Sub-Advisory Agreements, in making investment
recommendations for the Funds, BOTC or AMR will not inquire or take into
consideration whether an issuer of securities proposed for purchase or sale
by the Funds is a customer of BOTC or AMR or their respective parents or
subsidiaries or affiliates unless legally required to do so and, in dealing
with its commercial customers, BOTC or AMR and their respective parents,
subsidiaries, and affiliates will not inquire or take into consideration
whether securities of such customers are held by the Funds.
ADMINISTRATOR
-------------
BISYS Fund Services ("BISYS") serves as general manager and
administrator (the "Administrator") to each Fund pursuant to the Management
and Administration Agreement with the Funds dated September 5, 1990, as
amended and restated on August 30, 1994 (hereinafter referred to as the
"Administration Agreement"). The Administrator assists in supervising all
operations of each Fund (other than those performed under the Investment
Advisory, Sub-Advisory, Custodian, Fund Accounting, and Transfer Agency
Agreements for that Fund). The Administrator is a broker-dealer registered
with the Securities and Exchange Commission and is a member of the National
Association of Securities Dealers, Inc.
On October 1, 1993, BISYS and its affiliated companies, including BISYS
Fund Services Ohio, Inc., were acquired by the BISYS Group, Inc., a publicly
held company which is a provider of information processing, loan servicing
and 401(k) administration and record-keeping services to and through banking
and other financial organizations.
Under the Administration Agreement, the Administrator has agreed to
price the portfolio securities of each Fund and to compute the net asset
value and net income of those Funds on a daily basis, to maintain office
facilities for the Funds, to maintain the Funds' financial accounts and
records, and to furnish the Funds statistical and research data, data
processing, clerical, accounting, and bookkeeping services, and certain
other services required by the Funds with respect to the Funds. The
Administrator prepares annual and semi-annual reports to the Securities and
Exchange Commission, prepares federal and state tax returns, prepares
filings with state securities commissions, and generally assists in all
aspects of the Funds' operations other than those performed under the
Investment Advisory, Sub-Advisory, Custodian, Fund Accounting, and Transfer
Agency Agreements. Under the Administration Agreement, the Administrator may
delegate all or any part of its responsibilities thereunder.
The Administrator receives a fee from each Fund for its services
provided and expenses assumed pursuant to the Administration Agreement,
calculated daily and paid monthly, at the annual rate of twenty one
hundredths of one percent (.20%) of each Fund's average daily net assets.
The Administrator may periodically set its fees at less than the maximum
allowable amount with respect to any Fund in order to increase the net
income of one or more of the Funds
B-31
<PAGE> 140
available for distribution as dividends. For information on such voluntary
reductions undertaken concerning a particular fund, see "MANAGEMENT OF THE
FUND - Administrator, and Distributor" in the Prospectus pertaining to such
Fund.
For management and administration services during the fiscal year ended
August 31, 1996, BISYS received from the Funds $400,620 with respect to the
U.S. Treasury Fund; $664,393 with respect to the Cash Management Fund;
$73,981 with respect to the Bond Fund; $130,250 with respect to the
Intermediate Bond Fund; $57,869 with respect to the Intermediate Tax-Free
Bond Fund; $162,936 with respect to the Equity Fund; $81,038 with
respect to the Aggressive Growth Fund; $23,727 with respect to the
Short-Term Income Fund ; and $40,306 with respect to the Balanced Fund.
For management and administration services during the fiscal year ended
August 31, 1995, BISYS received from the Funds $379,988 with respect to the
U.S. Treasury Fund; $415,071 with respect to the Cash Management Fund;
$67,742 with respect to the Bond Fund; $154,024 with respect to the
Intermediate Bond Fund; $17,180 with respect to the Intermediate Tax-Free
Bond Fund, which represents a waiver of $38,490; $143,476 with respect to
the Equity Fund; and $51,949 with respect to the Aggressive Growth Fund. For
the period from commencement of operations, October 19, 1994, to August 31,
1995, BISYS received from the Funds $10,031 which represents a waiver of
$10,603 with respect to the Short-Term Income Fund, and for the period from
commencement of operations, June 1, 1995, to August 31, 1995, BISYS received
from the Funds $5,873 with respect to the Balanced Fund.
For management and administration services during the fiscal year ended
August 31, 1994, BISYS received from the Funds $306,425 with respect to the
U.S. Treasury Fund; $358,644 with respect to the Cash Management Fund;
$52,414 with respect to the Bond Fund; $127,744 with respect to the
Intermediate Bond Fund; $0 with respect to the Intermediate TaxFree Bond
Fund, which represents a waiver of $43,981; $121,604 with respect to the
Equity Fund; and $32,583 with respect to the Aggressive Growth Fund. The
Short-Term Income Fund and the Balanced Fund were not in operation during
the fiscal year ended August 31, 1994.
Unless sooner terminated, the Administration Agreement will continue in
effect until December 31, 1998 and thereafter will automatically continue in
effect for successive three-year periods unless written notice not to renew
is given by the non-renewing party at least sixty days prior to the
expiration of the then-current term. Otherwise, the Administration Agreement
is terminable, with respect to a particular Fund only upon mutual agreement
or for "cause" in either case on not less than sixty days' notice by the
Funds' Board of Trustees or by the Administrator. For purposes of the
Administration Agreement, "cause" means (i) willful misfeasance, bad faith,
gross negligence, abandonment, or reckless disregard on the part of either
party with respect to its obligations and duties set forth herein; (ii)
regulatory, administrative, or judicial action initiated against either
party with regard to the violation of any rule, regulation, order, or law;
(iii) the dissolution or liquidation of either party or other cessation of
business other than a reorganization or recapitalization of such party as an
ongoing business; (iv) financial
B-32
<PAGE> 141
difficulties on the part of either party which is evidenced by the
authorization or commencement of, or involvement by way of pleading, answer,
consent, or acquiescence in, a voluntary or involuntary case under Title 11
of the United States Code, as, from time to time, in effect, or any
applicable law, other than said Title 11, of any jurisdiction relating to
the liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors; or (v) any circumstance which
substantially impairs the performance of either party's obligations and
duties as contemplated herein.
The Administration Agreement provides that the Administrator shall not
be liable for any error of judgment or mistake of law or any loss suffered
by the Funds in connection with the matters to which the Agreement relates,
except a loss resulting from willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or from the reckless disregard
by it of its obligations and duties thereunder.
SUB-ADMINISTRATOR
-----------------
Effective May 12, 1995, BancOklahoma Trust Company became the
Sub-Administrator to the Funds pursuant to an agreement between the
Administrator and BancOklahoma Trust Company. Pursuant to this agreement,
BancOklahoma Trust Company assumed many of the Administrator's duties, for
which BancOklahoma Trust Company receives a fee, paid by the Administrator,
calculated at an annual rate of five one-hundredths of one percent (.05%) of
each Fund's average net assets.
For Sub-Administration services during the fiscal year ended August 31,
1996, BancOklahoma Trust Company received fees in the following amounts from
the Administrator: $100,155 with respect to the U.S. Treasury Fund; $166,098
with respect to the Cash Management Fund; $18,495 with respect to the Bond
Fund; $32,563 with respect to the Intermediate Bond Fund; $14,468 with
respect to the Intermediate Tax-Free Bond Fund; $5,932 with respect to the
Short-Term Income Fund; $9,970 with respect to the Balanced Fund; $40,734
with respect to the Equity Fund; and $20,259 with respect to the Aggressive
Growth Fund.
For Sub-Administration services during the period from May 12, 1995 to
August 31, 1995 BancOklahoma Trust Company received fees in the following
amounts from the Administrator: $33,272 with respect to the U.S. Treasury
Fund; $33,645 with respect to the Cash Management Fund; $4,429 with respect
to the Bond Fund; $9,680 with respect to the Intermediate Bond Fund; $3,594
with respect to the Intermediate Tax-Free Bond Fund; $9,488 with respect to
the Equity Fund; $4,200 with respect to the Aggressive Growth Fund; and
$1,589 with respect to the Short-Term Income Fund. For the period from
commencement of operations, June 1, 1995 to August 31, 1995, BancOklahoma
Trust Company received $1,241 with respect to the Balanced Fund.
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<PAGE> 142
EXPENSES
--------
As discussed in the Prospectuses, if total expenses borne by any one of
the Funds in any fiscal year exceed expense limitations imposed by
applicable state securities regulations, BOTC and the Administrator will
reimburse or agree to reduce its fees charged that Fund by the amount of
such excess in proportion to the respective Investment Advisory and
Management and Administration fees paid by the Fund in question. As of the
date of this Prospectus, under the most restrictive state expense limitation
applicable to the Funds, the annual expenses of the Funds may not exceed the
total of two and one-half percent (2.5%) of the first thirty million dollars
($30,000,000) of the Funds' average net assets, plus two percent (2.0%) of
the next seventy million dollars ($70,000,000) of the Funds' average net
assets, plus one and one-half percent (1.5%) of the remaining amount of the
Funds' average net assets. Any expense reimbursements or fee reductions will
be estimated daily and reconciled and paid, in the case of reimbursements,
on a monthly basis. Fees imposed upon customer accounts by Participating
Organizations under the Funds' Distribution and Shareholder Services Plan
are not included within Funds' expenses for purposes of any such expense
limitation.
For the period ending August 31, 1996, total expenses borne by each of the
Funds did not exceed the limitations imposed by any applicable state
securities regulation.
DISTRIBUTOR
-----------
BISYS serves as distributor to each of the Funds pursuant to its
Distribution Agreement with the Funds dated October 1, 1993 (the
"Distribution Agreement"). Unless otherwise terminated, the Distribution
Agreement will continue in effect until August 1, 1997 and thereafter will
continue for successive one-year periods if approved at least annually (i)
by the Funds' Board of Trustees or by the vote of a majority of the
outstanding voting Shares of the Funds (as defined in "GENERAL
INFORMATION-Miscellaneous" in the Funds' Prospectuses) that are parties to
the Distribution Agreement, and (ii) by the vote of a majority of the
Trustees of the Funds who are not parties to the Distribution Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such approval. The
Agreement may be terminated in the event of its assignment, as defined in
the 1940 Act.
The Distribution Agreement is the successor to the previous
distribution agreement, which terminated automatically by its terms upon
consummation of the acquisition of BISYS by The BISYS Group, Inc. The
Distribution Agreement was unanimously approved by the Board of Trustees of
the Funds and is materially identical to the terminated distribution
agreement.
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<PAGE> 143
CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTANT
----------------------------------------------
Cash and securities owned by each of the Funds are held by Bank of
Oklahoma, N.A. ("BOK") as custodian. Under its September 5, 1990 Custodian
Agreement, with the Funds, BOK (i) maintains a separate account or accounts
in the name of each Fund; (ii) makes receipts and disbursements of money on
behalf of each Fund; (iii) collects and receives all income and other
payments and distributions on account of the Funds' portfolio securities;
(iv) responds to correspondence from security brokers and others relating to
its duties; and (v) makes periodic reports to the Funds' Board of Trustees
concerning the Funds' operations. BOK may, at its own expense, open and
maintain a sub-custody account or accounts on behalf of the Funds, provided
that it shall remain liable for the performance of all of its duties under
the Custodian Agreement.
Under the Custodian Agreement, the Funds have agreed to pay BOK a
custodian fee with respect to each Fund at an annual rate of three one
hundredths of one percent (.03%) of such Fund's average daily net assets.
BOK is also entitled to be reimbursed by the Funds for its reasonable
out-of-pocket expenses incurred in the performance of its duties under the
Custodian Agreement. BOK may periodically set its custodian fees at less
than the maximum allowable amount with respect to a Fund to increase the
Fund's net income available for distribution as dividends. No such voluntary
reductions were undertaken for the period ended August 31, 1996 concerning
any of the Funds except for the Balanced Fund and the Short-Term Income
Fund.
For custodian services during the fiscal year ended August 31, 1996, the Funds
paid BOK $60,093 for the U.S. Treasury Fund; $99,659 for the Cash Management
Fund; $11,097 for the Bond Fund; $19,538 for the Intermediate Bond Fund;
$24,441 for the Equity Fund; $8,681 for the Intermediate Tax-Free Bond Fund ;
$12,156 for the Aggressive Growth Fund ; no fees for the Short-Term Income Fund
which reflects a fee reduction of $3,562; and no fees for the Balanced Fund
which reflects a fee reduction of $6,054.
For custodian services during the fiscal year ended August 31, 1995,
the Funds paid BOK $56,998 for the U.S. Treasury Fund; $62,260 for the Cash
Management Fund; $10,161 for the Bond Fund; $23,103 for the Intermediate
Bond Fund; $21,521 for the Equity Fund; $8,352 for the Intermediate Tax-Free
Bond Fund; and $7,792 for the Aggressive Growth Fund. For the period from
commencement of operations, October 19, 1994, to August 31, 1995, the Funds
paid BOK $349 for the Short-Term Income Fund, and for the period from
commencement of operations, June 1, 1995, to August 31,1995, the Funds paid
BOK no fees for the Balanced Fund.
For custodian services during the fiscal year ended August 31, 1994,
the Funds paid BOK $45,964 for the U.S. Treasury Fund; $53,797 for the Cash
Management Fund; $7,862 for the Bond Fund; $19,210 for the Intermediate Bond
Fund; $18,241 for the Equity Fund; $6,014 for the Intermediate Tax-Free Bond
Fund; and $4,823 for the Aggressive Growth Fund. The Short Term Income Fund
and the Balanced Fund were not in operation during the fiscal year ended
August 31, 1994.
B-35
<PAGE> 144
BISYS Fund Services Ohio, Inc. serves as transfer agent to each of the
Funds pursuant to a Transfer Agency Agreement with the Funds dated September
5, 1990. While BISYS Fund Services Ohio, Inc. is a distinct legal entity
from BISYS Fund Services (each Fund's Administrator and Distributor), BISYS
Fund Services Ohio, Inc. is considered to be an affiliated person of BISYS
Fund Services under the 1940 Act due to, among other things, the fact that
BISYS Fund Services Ohio, Inc. is owned by substantially the same persons
that directly or indirectly own BISYS Fund Services. Under the Transfer
Agency Agreement, BISYS Fund Services Ohio, Inc. has agreed: (i) to issue
and redeem Shares of the Funds; (ii) to address and mail all communications
by the Funds to its Shareholders, including reports to Shareholders,
dividend and distribution notices, and proxy material for its meetings of
Shareholders; (iii) to respond to correspondence or inquiries by
Shareholders and others relating to its duties; (iv) to maintain Shareholder
accounts and certain sub-accounts; and (v) to make periodic reports to the
Funds' Board of Trustees concerning the Funds' operations.
Under the Transfer Agency Agreement, the Funds have agreed to pay BISYS
Fund Services Ohio, Inc. with respect to each Fund an annual minimum fee of
$10,000 for less than 100 Shareholder accounts invested in a Fund, $18,000
for 100 to 499 Shareholder accounts invested in a Fund, $24,000 for 500 or
more Shareholder accounts invested in a Fund, $16 for each additional
Shareholder account invested in a Money Market Fund, and $14 for each
additional Shareholder account invested in a non-daily dividend based fund.
(The number of Shareholder accounts for purposes of determining the base fee
is calculated on a monthly basis.) BISYS Fund Services Ohio, Inc. is also
entitled to be reimbursed by the Funds for postage, handling fees, and
reasonable costs of supplies used by BISYS Fund Services Ohio, Inc. in the
performance of its services under the Transfer Agency Agreement. BISYS Fund
Services Ohio, Inc. may periodically set its transfer agency fees at less
than the maximum allowable amount with respect to a Fund to increase the
Fund's net income available for distribution as dividends.
BISYS Fund Services Ohio, Inc. serves as fund accountant for each Fund
pursuant to a fund accounting agreement with the Funds dated September 5,
1990 (the "Fund Accounting Agreement"). As fund accountant for the Funds,
BISYS Fund Services Ohio, Inc. prices the Funds' Shares, calculates the
Funds' net asset value, and maintains the general ledger accounting records
for each Fund. Under its Fund Accounting Agreement with the Funds, BISYS
Fund Services Ohio, Inc. is entitled to receive a fee (1) from each Fund
(other than the Intermediate Tax-Free Bond Fund) at an annual rate of three
one-hundredths of one percent (.03%) of the Fund's average daily net assets
plus out-of-pocket expenses, with a minimum monthly fee of $2,500 per Fund
and (2) from the Intermediate Tax-Free Bond Fund at an annual rate of four
one-hundredths of one percent (.04%) of the Fund's average daily net assets,
plus out-of-pocket expenses, with a minimum monthly fee of $3,500. BISYS
Fund Services Ohio, Inc. may periodically set its fund accounting fees at
less than the maximum allowable amount with respect to a Fund in order to
increase the Fund's net income available for distribution as dividends.
For transfer agency and Fund accounting services during the fiscal year
ended August 31, 1996, the Funds paid BISYS Fund Services Ohio, Inc. $99,549
for the U.S. Treasury Fund;
B-36
<PAGE> 145
$153,313 for the Cash Management Fund; $27,287 for the Bond Fund; $47,236
for the Intermediate Bond Fund; $50,607 for the Equity Fund; $36,462 for the
Intermediate Tax-Free Bond Fund ; $32,127 for the Aggressive Growth Fund;
$4,798 for the Short-Term Income Fund; and $14,931 for the Balanced Fund.
For transfer agency and Fund accounting services during the fiscal year
ended August 31, 1995, the Funds paid BISYS Fund Services Ohio, Inc. $74,920
for the U.S. Treasury Fund, $81,737 for the Cash Management Fund, $38,030
for the Bond Fund, $49,535 for the Intermediate Bond Fund, $43,976 for the
Equity Fund, $30,706 for the Intermediate Tax-Free Bond Fund, and $46,075
for the Aggressive Growth Fund. For the period from commencement of
operations October 19, 1994, to August 31, 1995, the Funds paid BISYS Fund
Services Ohio, Inc. $17,725 for the Short-Term Income Fund, and for the
period from commencement of operations, June 1, 1995, to August 31, 1995,
the Funds paid BISYS Fund Services Ohio, Inc. $2,756 for the Balanced Fund.
For transfer agency and Fund accounting services during the fiscal year
ended August 31, 1994, the Funds paid BISYS Fund Services Ohio, Inc. $56,358
for the U.S. Treasury Fund, $64,974 for the Cash Management Fund, $44,139
for the Bond Fund, $50,394 for the Intermediate Bond Fund, $44,158 for the
Equity Fund, $29,487 which reflects a waiver of $42,000 for the Intermediate
Tax-Free Bond Fund, and $49,740 for the Aggressive Growth Fund. The
Short-Term Income Fund and the Balanced Fund were not in operation during
the fiscal year ended August 31, 1994.
AUDITORS
--------
The financial statements of the Funds as of August 31, 1996 appearing
in this Statement of Additional Information have been audited by KPMG Peat
Marwick LLP, independent public accountants, as set forth in their report
appearing elsewhere herein, and is included in reliance upon such report and
on the authority of such firm as experts in auditing and accounting.
LEGAL COUNSEL
-------------
Ropes & Gray, Suite 800 East, One Franklin Square, 1301 K Street,
N.W., Washington, D.C. 20005 are counsel to the Funds.
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES
---------------------
The Funds are separate series of a single Massachusetts business trust
which was organized on October 1, 1987 and began active operations in August
of 1990. The Funds' Declaration of Trust was filed with the Secretary of
State of the Commonwealth of
B-37
<PAGE> 146
Massachusetts on October 2, 1987 and authorizes the Board of Trustees to
issue an unlimited number of Shares, which are units of beneficial interest,
with par value of $0.00001. The Funds currently comprise nine series of
Shares which represent interests in the U.S. Treasury Fund, the Cash
Management Fund, the Bond Fund, the Intermediate Bond Fund, the Intermediate
Tax-Free Bond Fund, the Equity Fund, the Aggressive Growth Fund, the
Short-Term Income Fund and the Balanced Fund. The Funds' Declaration of
Trust authorizes the Board of Trustees to divide or redivide any unissued
Shares of the Funds into one or more additional series by setting or
changing in any one or more respects their respective preferences,
conversion or other rights, voting power, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption.
Shares have no subscription or preemptive rights and only such
conversion or exchange rights as the Board may grant in its discretion. When
issued for payment as described in the Prospectuses and this Statement of
Additional Information, the Funds' Shares will be fully paid and
non-assessable. In the event of a liquidation or dissolution of the Funds,
Shares of a Fund are entitled to receive the assets available for
distribution belonging to the Fund, and a proportionate distribution, based
upon the relative asset values of the respective Funds, of any general
assets not belonging to any particular Fund which are available for
distribution.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an
investment company such as the Funds shall not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding Shares of each Fund affected by the matter. For purposes of
determining whether the approval of a majority of the outstanding Shares of
a Fund will be required in connection with a matter, a Fund will be deemed
to be affected by a matter unless it is clear that the interests of each
Fund in the matter are identical (in which case the Shareholders of the
Funds will vote in the aggregate), or that the matter does not affect any
interest of the Fund (in which case no vote by the Shareholders of the Fund
in question will be required). Under Rule 18f-2, the approval of an
investment advisory agreement or any change in investment policy would be
effectively acted upon with respect to a Fund only if approved by a majority
of the outstanding Shares of such Fund. However, Rule 18f-2 also provides
that the ratification of independent public accountants, the approval of
principal underwriting contracts, and the election of Trustees may be
effectively acted upon by Shareholders of the Funds voting without regard to
series.
SHAREHOLDER AND TRUSTEE LIABILITY
---------------------------------
Under Massachusetts law, holders of units of beneficial interest in a
business trust may, under certain circumstances, be held personally liable
as partners for the obligations of the trust. However, the Funds'
Declaration of Trust provides that Shareholders shall not be subject to any
personal liability for the obligations of the Funds, and that every written
agreement, obligation, instrument, or undertaking made by the Funds shall
contain a provision to the effect that the Shareholders are not personally
liable thereunder. The Declaration of Trust provides for indemnification out
of the trust property of any Shareholder held personally liable solely by
B-38
<PAGE> 147
reason of his being or having been a Shareholder. The Declaration of Trust
also provides that the Funds shall, upon request, assume the defense of any
claim made against any Shareholder for any act or obligation of the Funds,
and shall satisfy any judgment thereon. Thus, the risk of a Shareholder
incurring financial loss on account of Shareholder liability is limited to
circumstances in which the Funds themselves would be unable to meet their
obligations.
The Declaration of Trust states further that no Trustee, officer, or
agent of the Funds shall be personally liable in connection with the
administration or preservation of the assets of the trust or the conduct of
the Funds' business; nor shall any Trustee, officer, or agent be personally
liable to any person for any action or failure to act except for his own bad
faith, willful misfeasance, gross negligence, or reckless disregard of his
duties. The Declaration of Trust also provides that all persons having any
claim against the Trustees or the Funds shall look solely to the assets of
the trust for payment.
CALCULATION OF PERFORMANCE DATA
-------------------------------
Based on the seven-day period ended August 31, 1996 (the "base
period"), the yield of the Cash Management Fund was 4.92% and the Fund's
effective yield was 5.04%. Based on the same base period, the yield of the
U.S. Treasury Fund was 4.55% and the Fund's effective yield was 4.66%. Each
Money Market Fund's seven-day yield is computed by determining the
percentage net change, excluding capital changes, in the value of an
investment in one share of the Fund over the base period, and multiplying
the net change by 365/7 (or approximately 52 weeks). Each Money Market
Fund's effective yield represents a compounding of the yield by adding 1 to
the number representing the percentage change in value of the investment
during the base period, raising that sum to a power equal to 365/7, and
subtracting 1 from the result.
Based on the thirty-day period ended August 31, 1996 ("30-day base
period"), the 30- day yields of the Bond Investment Funds were as follows:
the Bond Fund, 6.29% (without load) and 6.04% (with load); the Intermediate
Bond Fund, 5.84% (without load) and 5.66% (with load); and the Intermediate
Tax-Free Bond Fund, 4.36% (without load) and 4.23% (with load) ; the
Short-Term Income Fund, 5.97% (without load) and 5.85% (with load). The
30-day yield of each Bond Investment Fund is calculated by dividing the net
investment income per-share earned during the 30-day base period by the
maximum offering price per share on the last day of the period, according to
the following formula:
30-Day Yield = 2[(a-b/cd+1)to the 6th power-1]
In the above formula, "a" represents dividends and interest earned
during the 30-day base period; "b" represents expenses accrued for the
30-day base period (net of reimbursements); "c" represents the average daily
number of shares outstanding during the 30-day base period that were
entitled to receive dividends; and "d" represents the maximum offering price
per share on the last day of the 30-day base period.
B-39
<PAGE> 148
The tax equivalent yield for the Intermediate Tax-Free Bond Fund is
computed by dividing that portion of the Intermediate Tax Free Bond Fund's
yield which is tax-exempt by one minus a stated income tax rate and adding
the product to that portion, if any, of the yield of the Fund that is not
tax-exempt. The tax-equivalent yield for the Intermediate Tax-Free Bond Fund
will generally be computed based on an assumed effective Federal income tax
rate of 39.6%.
The average annual total returns for the one-year period ended August
31, 1996 for the Bond Investment Funds, assuming the imposition of a sales
load, were as follows: the Bond Fund, (1.30%); the Intermediate Bond Fund,
0.29%; the Intermediate Tax-Free Bond Fund, 0.58%; and the Short-Term Income
Fund, 2.58%. The average annual total returns for the one-year period ended
August 31, 1996 for the Equity Investment Funds, assuming the imposition of
a sales load, were as follows: the Equity Fund, 13.82%; the Aggressive
Growth Fund, (2.30)%; and the Balanced Fund, 6.46%.
The average annual total return of each Bond Investment and Equity
Investment Fund is determined by calculating the change in the value of a
hypothetical $1,000 investment in the Fund for each of the periods shown.
Average annual total return for each Fund was computed by determining the
average annual compounded rate of return over the applicable period that
would equate the initial amount invested to the ending redeemable value of
the investment. The ending redeemable value includes dividends and capital
gain distributions reinvested at net asset value. The resulting percentages
indicated the positive or negative investment results that an investor would
have experienced from changes in Share price and reinvestment of dividends
and capital gains distributions. The total return data above are calculated
assuming the imposition of the maximum sales charge for each respective
Fund.
For Shareholders who are not subject to a sales charge, the average
annual total returns for the one-year period ended August 31, 1996 were as
follows: the Equity Fund 18.53%, the Aggressive Growth 1.77%, the Bond Fund
2.84%, the Intermediate Bond Fund 3.41%, the Intermediate Tax-Free Bond Fund
3.68%, the Short-Term Income Fund 4.64%, and the Balanced Fund 10.87%.
The average annual total returns for the five-year period ended August
31, 1996 were: 6.57% (without sales charge) and 5.71% (as adjusted for
maximum sales charge) for the Bond Fund 6.01% (without sales charge) and
5.37% (as adjusted for maximum sales charge) for the Intermediate Bond Fund;
and 10.43% (without sales charge) and 9.52% (as adjusted for maximum sales
charge) for the Equity Fund.
The average annual total returns for the following Funds are: Bond Fund
from commencement of operations (9/28/90) to August 31, 1996, 7.73% (without
sales charge) and 6.98% (as adjusted for maximum sales charge); Intermediate
Bond Fund from commencement of operations (09/28/90) to August 31, 1996,
6.97% (without sales charge) and 6.42% (as adjusted for maximum sales
charge); and Equity Fund from commencement of operations
B-40
<PAGE> 149
(09/28/90) until August 31, 1996, 12.82% (without sales charge) and 12.04%
(as adjusted for maximum sales charge).
The average annual total returns for the following Funds are:
Aggressive Growth Fund from commencement of operations (02/03/92) until
August 31, 1996, 11.78% (without sales charge) and 10.78% (as adjusted for
maximum sales charge); Short-Term Income Fund from commencement of
operations (October 19, 1994) to August 31, 1996 was 5.06% (without sales
charge) and 3.95% (as adjusted for maximum sales charge); Balanced Fund from
commencement of operations (June 1, 1995) to August 31, 1996 was 14.56%
(without sales charge) and 10.87% (as adjusted for maximum sales charge);
and Intermediate Tax-Free Bond Fund from commencement of operations
(05/29/92) to August 31, 1996, 6.47% (without sales charge) and 5.71% (as
adjusted for maximum sales charge).
Performance will fluctuate from time to time and is not necessarily
representative of future results. Accordingly, a Fund's performance may not
provide for comparison with bank deposits or other investments that pay a
fixed return for a stated period of time. Performance is a function of a
Fund's quality, composition, and maturity, as well as expenses allocated to
the Fund. Fees imposed upon Customer accounts by Participating Organizations
will reduce a Fund's effective yield to customers.
PERFORMANCE COMPARISONS
-----------------------
Investors may judge the performance of the Funds by comparing their
performance to the performance of other mutual funds or mutual fund
portfolios with comparable investment objectives and policies through
various mutual fund or market indices such as the Morgan Stanley Capital
International EAFE Index and those prepared by Dow Jones & Co., Inc.,
Standard & Poor's Corporation, Shearson Lehman Brothers, Inc. and The
Russell 2000 Index and to data prepared by Lipper Analytical Services, Inc.,
a widely recognized independent service which monitors the performance of
mutual funds, Morningstar, Inc. and the Consumer Price Index. Comparisons
may also be made to indices or data published in Donoghue's MONEY FUND
REPORT of Holliston, Massachusetts 01746, a nationally recognized money
market fund reporting service, Money Magazine, Forbes, Fortune, Ibbotson
Associates, Inc., CDA/Wiesenberger, American Banker, Institutional Investor,
Barron's, The Wall Street Journal, The Bond Buyer's Weekly 20-Bond Index,
The Bond Buyer's Index, The Bond Buyer, The New York Times, Business Week,
Pensions and Investments, U.S.A. Today and local newspapers. In addition to
performance information, general information about these Funds that appears
in a publication such as those mentioned above may be included in
advertisements and in reports to Shareholders.
From time to time, the Funds may include the following types of
information in advertisements, supplemental sales literature and reports to
Shareholders: (1) discussions of general economic or financial principles
(such as the effects of inflation, the power of compounding and the benefits
of dollar-cost averaging); (2) discussions of general economic
B-41
<PAGE> 150
trends; (3) presentations of statistical data to supplement such
discussions; (4) descriptions of past or anticipated portfolio holdings for
one or more of the Funds within the Trust; (5) descriptions of investment
strategies for one or more of such Funds; (6) descriptions or comparisons of
various savings and investment products (including but not limited to
insured bank products, annuities, qualified retirement plans and individual
stocks and bonds) which may or may not include the Funds; (7) comparisons of
investment products (including the Funds) with relevant market or industry
indices or other appropriate benchmarks; (8) discussions of fund rankings or
ratings by recognized rating organizations; and (9) testimonials describing
the experience of persons that have invested in one or more of the Funds. In
addition, with respect to the Intermediate Tax-Free Bond Fund, the benefits
of Tax-Free investments may be communicated to shareholders. For example,
the Intermediate Tax-Free Bond Fund may present information on the yield
that a taxable investment must earn at various income brackets to produce
after-tax yields equivalent to those of the tax-exempt investments.
The Funds may also include calculations, such as hypothetical
compounding examples, which describe hypothetical investment results in such
communications. Such performance examples will be based on an express set of
assumptions and are not indicative of the performance of any of the Funds.
Morningstar, Inc., Chicago, Illinois, rates mutual funds on a one- to
five-star rating scale with five stars representing the highest rating. Such
ratings are based upon a fund's historical risk/reward ratio as determined
by Morningstar relative to other funds in that fund's class. Funds are
divided into classes based upon their respective investment objectives. The
one- to five-star ratings represent the following ratings by Morningstar,
respectively: Lowest, Below Average, Neutral, Above Average and Highest.
Current yields or performance will fluctuate from time to time and are
not necessarily representative of future results. Accordingly, a Fund's
yield or performance may not provide for comparison with bank deposits or
other investments that pay a fixed return for a stated period of time. Yield
and performance are functions of a Fund's quality, composition, and
maturity, as well as expenses allocated to the Fund.
Fees imposed on its affiliated or correspondent banks for cash management
services will reduce a Fund's effective yield to Customers.
MISCELLANEOUS
-------------
The Funds are not required to hold a meeting of Shareholders for the
purpose of electing Trustees except that (i) the Funds are required to hold
a Shareholders' meeting for the election of Trustees at such time as less
than a majority of the Trustees holding office have been elected by
Shareholders and (ii) if, as a result of a vacancy on the Board of Trustees,
less than two-thirds of the Trustees holding office have been elected by the
Shareholders, that vacancy may only be filled by a vote of the Shareholders.
In addition, Trustees may be removed from office by a
B-42
<PAGE> 151
written consent signed by the holders of Shares representing two-thirds of
the outstanding Shares of the Funds at a meeting duly called for the
purpose, which meeting shall be held upon the written request of the holders
of Shares representing not less than 10% of the outstanding Shares of the
Funds. Upon written request by the holders of Shares representing 1% of the
outstanding Shares of the Funds stating that such Shareholders wish to
communicate with the other Shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a Trustee,
the Funds will provide a list of Shareholders or disseminate appropriate
materials (at the expense of the requesting Shareholders). Except as set
forth above, the Trustees may continue to hold office and may appoint
successor Trustees.
The Funds are registered with the Securities and Exchange Commission as
a management investment company. Such registration does not involve
supervision by the Commission of the management or policies of the Funds.
The Prospectuses and this Statement of Additional Information omit
certain of the information contained in the Registration Statement filed
with the Securities and Exchange Commission. Copies of such information may
be obtained from the Commission upon payment of the prescribed fee.
The Prospectuses and this Statement of Additional Information are not
an offering of the securities herein described in any state in which such
offering may not lawfully be made. No salesman, dealer, or other person is
authorized to give any information or make any representation other than
those contained in the Prospectus and Statement of Additional Information.
As of November 22, 1996, the trustees and officers of the Funds, as a
group, owned less than one percent of the Shares of each of the Funds.
The following table indicates each additional person known by the Funds
to own beneficially five percent (5%) or more of the Shares of the Funds as
of November 15, 1996:
Intermediate Bond Fund
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
NONE
B-43
<PAGE> 152
<TABLE>
<CAPTION>
Aggressive Growth Fund
----------------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
<S> <C> <C>
Kaiser Francis Oil Co. 146,757.398 5.56%
Profit Sharing
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
BOK Employee 307,383.145 11.66%
Thrift Plan
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Cash Management Fund
--------------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
Williams Master Trust 22,668,130.800 5.81%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Superstar/Netlink 26,023,181.090 6.67%
7140 S. Lewis
Tulsa, Oklahoma 74136-5428
</TABLE>
B-44
<PAGE> 153
<TABLE>
<CAPTION>
Bond Fund
---------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
<S> <C> <C>
OneOK Inc. Employees 189,357.290 5.30%
Thrift Plan
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Short-Term Income Fund
----------------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
Fisher Products Profit 90,972.268 5.93%
Sharing Plan
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Fabricut Profit Sharing Plan 76,950.145 5.01%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Cherokee Nation 78,884.346 5.14%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
</TABLE>
B-45
<PAGE> 154
<TABLE>
<CAPTION>
U.S. Treasury Fund
------------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
<S> <C> <C>
OneOK Inc. Employees Thrift 21,441,101.190 10.42%
Plan
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Tia Hillcrest Project Fund 14,933,695.630 7.26%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Balanced Fund
-------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
<S> <C> <C>
RCD Bank 401K Profit Sharing 225,581.535 10.94%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Acme Savings 121,562.123 5.90%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
Hughes Anderson 209,607.838 10.17%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
BOK Pension Plan - 1987 1,043,112.338 50.59%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
</TABLE>
B-46
<PAGE> 155
<TABLE>
<CAPTION>
Equity Fund
-----------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
<S> <C> <C>
None
Intermediate Tax-Free Bond Fund
-------------------------------
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund(%)
---------------- ------------------ ----------
John T. Oxley Trust 424,128.935 14.70%
Bank of Oklahoma Trustee
One Williams Center
Tulsa, Oklahoma 74192
</TABLE>
B-47
<PAGE> 156
FINANCIAL STATEMENTS
Independent Auditors' Report
Audited Financial Statements as of August 31, 1996
B-48
<PAGE> 157
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of the American Performance Funds:
We have audited the accompanying statements of assets and liabilities of the
American Performance Funds--Cash Management Fund, U.S. Treasury Fund, Bond Fund,
Intermediate Bond Fund, Equity Fund, Aggressive Growth Fund, Intermediate
Tax-Free Bond Fund, Short-Term Income Fund and Balanced Fund, including the
schedules of portfolio investments, as of August 31, 1996, and the related
statements of operations, statements of changes in net assets and the financial
highlights for each of the periods indicated herein. These financial statements
and the financial highlights are the responsibility of the American Performance
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
August 31, 1996 by examination and other appropriate audit procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising the American Performance Funds at August
31, 1996, the results of their operations, the changes in their net assets and
the financial highlights for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
Columbus, Ohio
October 18, 1996
-17-
<PAGE> 158
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1996
<TABLE>
<CAPTION>
CASH U.S. INTERMEDIATE
MANAGEMENT TREASURY BOND BOND
FUND FUND FUND FUND
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments at value,
(Amortized cost
$375,375,424;
$74,810,750; cost
$33,047,018;
$65,882,926
respectively)........ $375,375,424 $ 74,810,750 $32,508,994 $64,850,294
Repurchase agreements,
at cost................ -- 143,547,141 -- --
------------ ------------ ----------- -----------
Total Investments...... 375,375,424 218,357,891 32,508,994 64,850,294
Interest receivable.... 2,294,687 41,532 503,362 647,004
Prepaid and other ex-
penses................. -- 35 89 106
------------ ------------ ----------- -----------
Total Assets........ 377,670,111 218,399,458 33,012,445 65,497,404
------------ ------------ ----------- -----------
LIABILITIES:
Dividends payable...... 1,638,864 857,252 176,827 311,698
Capital gains payable.. 2,631 -- -- --
Payable to brokers for
investments purchased.. -- -- -- 1,991,810
Payable for capital
shares redeemed........ -- -- -- 31,639
Accrued expenses and
other payables:
Investment advisory
fees.................. 133,144 75,092 10,036 18,628
Administration fees... 16,627 9,711 1,445 2,775
12b-1 fees............ -- -- 7,169 13,306
Custodian, accounting
and transfer agent
fees.................. 30,486 17,097 3,231 6,908
Audit and legal fees.. 33,423 22,774 3,833 12,878
Other................. 17,442 11,119 3,215 19,956
------------ ------------ ----------- -----------
Total Liabilities... 1,872,617 993,045 205,756 2,409,598
------------ ------------ ----------- -----------
NET ASSETS:
Capital................ 375,797,212 217,406,283 34,168,406 64,949,581
Undistributed (distri-
butions in excess of)
net investment
income................ -- -- 7,424 6,635
Net unrealized appreci-
ation (depreciation)
on investments........ -- -- (538,024) (1,032,632)
Accumulated undistrib-
uted net realized gains
(losses) on investment
transactions.......... 282 130 (831,117) (835,778)
------------ ------------ ----------- -----------
Net Assets.......... $375,797,494 $217,406,413 $32,806,689 $63,087,806
============ ============ =========== ===========
Outstanding units of
beneficial interest
(shares)............... 375,797,212 217,406,387 3,648,782 6,305,377
============ ============ =========== ===========
Net asset value--re-
demption price per
share.................. $ 1.00 $ 1.00 $ 8.99 $ 10.01
============ ============ =========== ===========
Maximum Sales Charge... -- -- 4.00% 3.00%
============ ============ =========== ===========
Maximum Offering Price
(100%/(100%-Maximum
Sales Charge) of net
asset value adjusted
to nearest cent) per
share................ $ 1.00(a) $ 1.00(a) $ 9.36 $ 10.32
============ ============ =========== ===========
<FN>
(a) Offering price and redemption price are the same for the Cash Management
Fund and the U.S. Treasury Fund.
</TABLE>
See notes to financial statements.
-18-
<PAGE> 159
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE
AGGRESSIVE TAX-FREE SHORT-TERM
EQUITY GROWTH BOND INCOME BALANCED
FUND FUND FUND FUND FUND
----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $70,120,625;
$31,248,219;
$30,209,441;
$14,492,428, and
$21,421,361 respective-
ly)..................... $86,523,244 $43,327,902 $30,732,113 $14,321,364 $22,664,060
Interest and dividends
receivable............. 180,130 21,176 451,578 161,256 122,008
Receivable for capital
shares issued.......... -- 7,200 -- -- --
Unamortized organiza-
tion costs............. -- -- -- 1,279 8,912
Prepaid and other ex-
penses................. 280 237 472 1,430 --
----------- ----------- ----------- ----------- -----------
Total Assets........ 86,703,654 43,356,515 31,184,163 14,485,329 22,794,980
----------- ----------- ----------- ----------- -----------
LIABILITIES:
Dividends payable...... 267,323 -- 123,919 73,725 190,629
Payable to brokers for
investments purchased.. -- 33,000 -- -- 3,000
Accrued expenses and
other payables:
Investment advisory
fees................. 36,717 18,037 9,383 -- --
Administration fees... 3,837 1,897 1,361 633 1,011
12b-1 fees............ 18,359 9,019 -- -- --
Custodian, accounting
and transfer
agent fees........... 7,457 6,074 4,985 2,217 1,089
Audit and legal fees.. 10,008 4,951 3,773 3,743 3,622
Other................. 7,895 5,846 4,299 5,628 3,200
----------- ----------- ----------- ----------- -----------
Total Liabilities... 351,596 78,824 147,720 85,946 202,551
----------- ----------- ----------- ----------- -----------
NET ASSETS:
Capital................ 63,572,169 32,725,757 30,551,182 14,582,467 20,895,740
Undistributed (distri-
butions in excess of)
net
investment income..... (3,935) (311,765) 12,585 2,085 2,362
Net unrealized appreci-
ation (depreciation)
on investments........ 16,402,619 12,079,683 522,672 (171,064) 1,242,699
Accumulated undistrib-
uted net realized gains
(losses) on investment
transactions.......... 6,381,205 (1,215,984) (49,996) (14,105) 451,628
----------- ----------- ----------- ----------- -----------
Net Assets.......... $86,352,058 $43,277,691 $31,036,443 $14,399,383 $22,592,429
=========== =========== =========== =========== ===========
Outstanding units of
beneficial interest
(shares).............. 6,289,664 2,655,987 2,935,146 1,470,128 2,002,657
=========== =========== =========== =========== ===========
Net asset value--re-
demption price per
share................. $ 13.73 $ 16.29 $ 10.57 $ 9.79 $ 11.28
=========== =========== =========== =========== ===========
Maximum Sales Charge... 4.00% 4.00% 3.00% 2.00% 4.00%
=========== =========== =========== =========== ===========
Maximum Offering Price
(100%/(100%-
Maximum Sales Charge)
of net asset value
adjusted to nearest
cent) per share....... $ 14.30 $ 16.97 $ 10.90 $ 9.99 $ 11.75
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-19-
<PAGE> 160
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
<TABLE>
<CAPTION>
CASH U.S. INTERMEDIATE
MANAGEMENT TREASURY BOND BOND
FUND FUND FUND FUND
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $18,978,452 $10,976,579 $ 2,543,533 $ 4,348,400
Dividend income from
affiliates................ -- -- 60,059 71,757
----------- ----------- ----------- -----------
Total Income........... 18,978,452 10,976,579 2,603,592 4,420,157
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fees.. 1,328,786 801,240 203,382 358,021
Administration fees....... 664,393 400,620 73,981 130,250
12b-1 fees................ 830,500 500,780 92,476 162,813
Custodian and accounting
fees...................... 177,309 115,155 26,870 45,603
Legal and audit fees...... 52,349 36,774 9,006 13,556
Trustees' fees and
expenses.................. 10,680 7,356 1,480 2,506
Transfer agent fees....... 75,663 44,487 11,514 21,171
Registration and filing
fees...................... 7,453 10,130 2,793 3,963
Printing costs............ 23,438 55,768 4,903 8,133
Other..................... 8,417 8,262 1,560 3,206
----------- ----------- ----------- -----------
Total Expenses......... 3,178,988 1,980,572 427,965 749,222
----------- ----------- ----------- -----------
Expenses voluntarily
reduced................... (830,500) (500,780) (73,915) (130,084)
----------- ----------- ----------- -----------
Net Expenses........... 2,348,488 1,479,792 354,050 619,138
----------- ----------- ----------- -----------
Net Investment Income..... 16,629,964 9,496,787 2,249,542 3,801,019
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains (loss-
es) on investment transac-
tions..................... 4,936 2,588 (138,651) 2,959
Change in unrealized ap-
preciation (depreciation)
on investments........... -- -- (1,023,947) (1,503,165)
----------- ----------- ----------- -----------
Net realized/unrealized
gains (losses) on invest-
ments..................... 4,936 2,588 (1,162,598) (1,500,206)
----------- ----------- ----------- -----------
Change in net assets re-
sulting from operations... $16,634,900 $ 9,499,375 $ 1,086,944 $ 2,300,813
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-20-
<PAGE> 161
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE SHORT-
AGGRESSIVE TAX-FREE TERM
EQUITY GROWTH BOND INCOME BALANCED
FUND FUND FUND FUND FUND
----------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........ $ -- $ 117,794 $1,515,748 $ 729,053 $ 464,148
Dividend income........ 1,817,716 43,677 -- -- 207,903
Dividend income from
affiliates............. 148,143 146,285 26,680 25,652 65,063
Other income........... 14,158 -- -- -- --
----------- --------- ---------- --------- ----------
Total Income........ 1,980,017 307,756 1,542,428 754,705 737,114
----------- --------- ---------- --------- ----------
EXPENSES:
Investment advisory
fees................... 562,323 279,682 159,189 65,313 149,330
Administration fees.... 162,936 81,038 57,869 23,727 40,306
12b-1 fees............. 203,670 101,297 72,358 29,688 50,449
Custodian and account-
ing fees............... 52,057 25,409 27,328 7,887 16,056
Legal and audit fees... 15,592 8,256 5,542 3,960 4,734
Organization costs..... -- -- -- 9,676 11,872
Trustees' fees and
expenses............... 3,120 1,656 1,114 366 724
Transfer agent fees.... 22,991 18,874 17,815 473 4,929
Registration and filing
fees................... 2,744 3,122 2,113 4,378 2,370
Printing costs......... 7,110 4,094 3,935 932 2,050
Other.................. 3,266 1,560 1,253 550 110
----------- --------- ---------- --------- ----------
Total Expenses...... 1,035,809 524,988 348,516 146,950 282,930
----------- --------- ---------- --------- ----------
Expenses voluntarily
reduced................ (154,982) (77,088) (130,274) (98,563) (205,833)
----------- --------- ---------- --------- ----------
Net Expenses........ 880,827 447,900 218,242 48,387 77,097
----------- --------- ---------- --------- ----------
Net Investment Income
(loss)................. 1,099,190 (140,144) 1,324,186 706,318 660,017
----------- --------- ---------- --------- ----------
REALIZED/UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains on
investment transac-
tions.................. 7,922,697 902,632 126,926 17,326 675,617
Change in unrealized
appreciation (deprecia-
tion) on investments.. 4,300,120 (341,433) (356,637) (219,607) 535,215
----------- --------- ---------- --------- ----------
Net realized/unrealized
gains (losses) on
investments........... 12,222,817 561,199 (229,711) (202,281) 1,210,832
----------- --------- ---------- --------- ----------
Change in net assets
resulting from opera-
tions.................. $13,322,007 $ 421,055 $1,094,475 $ 504,037 $1,870,849
=========== ========= ========== ========= ==========
</TABLE>
See notes to financial statements.
-21-
<PAGE> 162
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND U.S. TREASURY FUND
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income......... $ 16,629,964 $ 10,758,462 $ 9,496,787 $ 9,269,376
Net realized gains on
investment transactions....... 4,936 18,203 2,588 1,878
------------- ------------- ------------- -------------
Change in net assets
resulting from opera-
tions.......................... 16,634,900 10,776,665 9,499,375 9,271,254
------------- ------------- ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income....................... (16,629,964) (10,758,462) (9,496,787) (9,269,376)
From net realized
gains........................ (4,771) (18,093) (2,588) (1,860)
In excess of net real-
ized gains................... -- -- (130) --
------------- ------------- ------------- -------------
Change in net assets
from shareholder
distributions.................. (16,634,735) (10,776,555) (9,499,505) (9,271,236)
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued....................... 943,474,078 480,782,449 439,883,580 553,548,126
Dividends reinvested.......... 47,735 50,703 26,913 60,736
Cost of shares
redeemed..................... (762,531,473) (481,516,467) (409,510,632) (532,055,574)
------------- ------------- ------------- -------------
Change in net assets
from share transac-
tions.......................... 180,990,340 (683,315) 30,399,861 21,653,288
------------- ------------- ------------- -------------
Change in net assets........... 180,990,505 (683,205) 30,399,731 21,653,306
NET ASSETS:
Beginning of period........... 194,806,989 195,490,194 187,006,682 165,353,376
------------- ------------- ------------- -------------
End of period................. $ 375,797,494 $ 194,806,989 $ 217,406,413 $ 187,006,682
============= ============= ============= =============
SHARE TRANSACTIONS:
Issued........................ 943,474,078 480,782,449 439,883,580 553,648,126
Reinvested.................... 47,735 50,703 26,913 60,736
Redeemed...................... (762,531,473) (481,516,467) (409,510,632) (532,055,574)
------------- ------------- ------------- -------------
Change in shares............... 180,990,340 (683,315) 30,399,861 21,653,288
============= ============= ============= =============
</TABLE>
See notes to financial statements.
-22-
<PAGE> 163
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BOND FUND INTERMEDIATE BOND FUND
------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income............ $ 2,249,542 $ 2,092,728 $ 3,801,019 $ 4,619,424
Net realized gains
(losses) on investment
transactions.................... (138,651) (381,851) 2,959 (672,657)
Net change in
unrealized appreciation
(depreciation) on
investments..................... (1,023,947) 784,355 (1,503,165) 887,285
----------- ------------ ------------ ------------
Change in net assets
resulting from opera-
tions............................ 1,086,944 2,495,232 2,300,813 4,834,052
----------- ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income.......................... (2,241,663) (2,092,728) (3,801,091) (4,619,424)
In excess of net real-
ized gains...................... -- (821,392) -- (231,121)
Return of capital................ (7,879) -- -- --
----------- ------------ ------------ ------------
Change in net assets
from shareholder distri-
butions.......................... (2,249,542) (2,914,120) (3,801,019) (4,850,545)
----------- ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.......................... 8,439,328 13,067,370 11,734,840 9,969,929
Dividends reinvested............. 1,656,562 2,644,377 1,824,959 2,613,677
Cost of shares
redeemed........................ (13,419,791) (16,256,403) (23,366,575) (22,316,730)
----------- ------------ ------------ ------------
Change in net assets
from share transactions.......... (3,323,901) (544,656) (9,806,776) (9,733,124)
----------- ------------ ------------ ------------
Change in net assets.............. (4,486,499) (963,544) (11,306,982) (9,749,617)
NET ASSETS:
Beginning of period.............. 37,293,188 38,256,732 74,394,788 84,144,405
----------- ------------ ------------ ------------
End of period.................... $32,806,689 $ 37,293,188 $ 63,087,806 $ 74,394,788
=========== ============ ============ ============
SHARE TRANSACTIONS:
Issued........................... 910,369 1,424,476 1,150,312 990,022
Reinvested....................... 177,989 293,503 178,100 259,350
Redeemed......................... (1,454,954) (1,790,949) (2,275,525) (2,218,605)
----------- ------------ ------------ ------------
Change in shares.................. (366,596) (72,970) (947,113) (969,233)
=========== ============ ============ ============
</TABLE>
See notes to financial statements.
-23-
<PAGE> 164
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY FUND AGGRESSIVE GROWTH FUND
-------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income
(loss)........................ $ 1,099,190 $ 1,237,933 $ (140,144) $ (160,698)
Net realized gains on
investment transactions....... 7,922,697 2,417,383 902,632 232,614
Net change in
unrealized appreciation
(depreciation)
on investments................ 4,300,120 8,433,969 (341,433) 8,906,465
------------ ------------ ----------- ------------
Change in net assets
resulting from opera-
tions.......................... 13,322,007 12,089,285 421,055 8,978,381
------------ ------------ ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income........................ (1,099,190) (1,228,736) -- --
In excess of net
investment income............. (13,132) -- -- --
From net realized
gains......................... (3,660,781) (2,417,383) (660,090) --
In excess of net real-
ized gains.................... -- (5,706,896) -- --
------------ ------------ ----------- ------------
Change in net assets
from shareholder distri-
butions........................ (4,773,103) (9,353,015) (660,090) --
------------ ------------ ----------- ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued........................ 14,184,214 22,157,455 14,359,199 14,327,891
Dividends reinvested........... 4,255,911 8,862,971 656,962
Cost of shares
redeemed...................... (17,034,652) (41,976,682) (9,507,747) (10,072,860)
------------ ------------ ----------- ------------
Change in net assets
from share transactions........ (1,405,473) (10,956,256) 5,508,414 4,255,031
------------ ------------ ----------- ------------
Change in net assets............ 9,954,377 (8,219,986) 5,269,379 13,233,412
NET ASSETS:
Beginning of period............ 76,397,681 84,617,667 38,008,312 24,774,900
------------ ------------ ----------- ------------
End of period.................. $ 86,352,058 $ 76,397,681 $43,277,691 $ 38,008,312
============ ============ =========== ============
SHARE TRANSACTIONS:
Issued......................... 1,049,725 2,041,952 858,255 1,062,740
Reinvested..................... 330,316 883,043 43,278 --
Redeemed....................... (1,288,822) (3,868,445) (575,883) (798,411)
------------ ------------ ----------- ------------
Change in shares................ 91,219 (943,450) 325,650 264,329
============ ============ =========== ============
</TABLE>
See notes to financial statements.
-24-
<PAGE> 165
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE
TAX-FREE SHORT-TERM
BOND FUND INCOME FUND
------------------------ ------------------------
OCTOBER 19,
YEAR ENDED YEAR ENDED YEAR ENDED 1994 TO
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995 (a)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............ $ 1,324,186 $ 1,387,784 $ 706,318 $ 615,202
Net realized gains
(losses) on investment
transactions.................... 126,926 (155,650) 17,326 (5,632)
Net change in unrealized
appreciation (depreciation)
on investments.................. (356,637) 662,119 (219,607) 48,543
----------- ----------- ----------- -----------
Change in net assets
resulting from operations........ 1,094,475 1,894,253 504,037 658,113
----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income.......................... (1,324,186) (1,387,784) (706,318) (615,202)
From net realized gains.......... -- -- (17,326) --
In excess of net realized
gains........................... -- -- (6,388) --
----------- ----------- ----------- -----------
Change in net assets from
shareholder distributions........ (1,324,186) (1,387,784) (730,032) (615,202)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.......................... 10,599,186 5,458,181 6,885,605 18,829,185
Dividends reinvested............. 263,588 277,935 309,680 178,607
Cost of shares redeemed.......... (7,710,967) (8,225,269) (2,798,266) (8,822,344)
----------- ----------- ----------- -----------
Change in net assets from
share transactions............... 3,151,807 (2,489,153) 4,397,019 10,185,448
----------- ----------- ----------- -----------
Change in net assets.............. 2,922,096 (1,982,684) 4,171,024 10,228,359
NET ASSETS:
Beginning of period.............. 28,114,347 30,097,031 10,228,359 --
----------- ----------- ----------- -----------
End of period.................... $31,036,443 $28,114,347 $14,399,383 $10,228,359
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued........................... 993,632 533,365 693,519 1,897,482
Reinvested....................... 24,687 27,117 31,150 17,998
Redeemed......................... (719,169) (812,547) (282,145) (887,876)
----------- ----------- ----------- -----------
Change in shares.................. 299,150 (252,065) 442,524 1,027,604
=========== =========== =========== ===========
<FN>
- ----------
(a) Period from commencement of operations.
</TABLE>
See notes to financial statements.
-25-
<PAGE> 166
AMERICAN PERFORMANCE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED FUND
------------------------
JUNE 1,
YEAR ENDED 1995 TO
AUGUST 31, AUGUST 31,
1996 1995 (a)
----------- -----------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.............................. $ 660,017 $ 94,263
Net realized gains (losses) on investment transac-
tions............................................ 675,617 (7,047)
Net change in unrealized appreciation on invest-
ments............................................ 535,215 707,484
----------- -----------
Change in net assets resulting from operations...... 1,870,849 794,700
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income......................... (658,319) (93,764)
From net realized gains............................ (216,777) --
----------- -----------
Change in net assets from shareholder distributions. (875,096) (93,764)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued........................ 9,567,734 12,216,424
Dividends reinvested............................... 777,333 --
Cost of shares redeemed............................ (1,590,246) (75,505)
----------- -----------
Change in net assets from share transactions........ 8,754,821 12,140,919
----------- -----------
Change in net assets................................ 9,750,574 12,841,855
NET ASSETS:
Beginning of period................................ 12,841,855 --
----------- -----------
End of period...................................... $22,592,429 $12,841,855
=========== ===========
SHARE TRANSACTIONS:
Issued............................................. 863,012 1,216,749
Reinvested......................................... 69,985 --
Redeemed........................................... (139,704) (7,385)
----------- -----------
Change in shares.................................... 793,293 1,209,364
=========== ===========
<FN>
- ----------
(a) Period from commencement of operations.
</TABLE>
See notes to financial statements.
-26-
<PAGE> 167
AMERICAN PERFORMANCE FUNDS
CASH MANAGEMENT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- ----------------------------------------------- ------------
<S> <C>
BANKERS ACCEPTANCES (2.7%):
$10,100,000 Bank of Tokyo, Mitsubishi, 5.38%, 10/8/96...... $ 10,044,464
------------
Total Bankers Acceptances 10,044,464
------------
CERTIFICATES OF DEPOSIT (25.8%):
Yankee Certificates of Deposit (25.8%):
7,000,000 Banca CRT, 5.54%*, 3/10/97..................... 7,000,000
12,000,000 Banca CRT, 5.68%*, 7/18/97..................... 12,000,000
20,000,000 IBJ, 5.54%*, 8/5/97............................ 20,000,000
20,000,000 Norinchukin Bank, 5.51%, 12/6/96............... 20,000,000
8,000,000 Postipankki, Ltd., 5.56%*, 12/30/96............ 8,000,000
10,000,000 Postipankki, Ltd., 5.50%, 6/6/97............... 10,000,000
7,000,000 Sanwa, New York, 5.61%, 11/14/96............... 7,000,000
13,000,000 Sanwa, New York, 5.57%*, 2/6/97................ 13,000,000
------------
Total Certificates of Deposit 97,000,000
------------
COMMERCIAL PAPER (10.3%):
Business Credit (5.0%):
19,000,000 Finova Capital Corp., 5.44%, 11/18/96.......... 18,778,935
------------
Personal Credit (5.3%):
20,000,000 Aristar, Inc., 5.42%, 11/15/96................. 19,777,083
------------
Total Commercial Paper 38,556,018
------------
MEDIUM TERM NOTES (37.8%):
Automotive (9.8%):
6,000,000 American Honda Finance Corp., 5.63%*, 1/27/97.. 5,999,274
5,000,000 American Honda Finance Corp., 5.50%*, 2/7/97... 4,999,245
10,000,000 American Honda Finance Corp., 5.58%*, 2/7/97... 10,000,000
16,000,000 General Motors Acceptance Corp., 5.50%*,
2/23/97....................................... 16,000,000
------------
36,998,519
------------
Banking (11.2%):
16,000,000 Bank of Boston Corp., 5.65%*, 1/24/97.......... 16,000,000
7,000,000 Banponce Corp., 5.68%*, 12/18/96............... 7,000,000
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- --------------------------------------------------- ------------
<S> <C>
MEDIUM TERM NOTES, CONTINUED:
Banking, continued:
$10,000,000 Banponce Corp., 5.25%*, 3/19/97.................... $ 10,000,000
9,000,000 First Boston, Inc., 5.54%*, 2/11/97................ 9,000,000
------------
42,000,000
------------
Business Credit (4.8%):
18,000,000 Sanwa Business Credit Corp., 5.57%*, 3/4/97........ 17,994,290
------------
Financial Services (10.4%):
20,000,000 Bear Stearns Cos., Inc., 5.69%*, 1/17/97........... 20,000,000
19,000,000 Merrill Lynch & Co., Inc., 5.67%*, 1/14/97......... 18,998,560
------------
38,998,560
------------
Security Brokers & Dealers (1.6%):
6,000,000 Paine Webber Group, Inc., 6.01%*, 2/12/97.......... 6,008,507
------------
Total Medium Term Notes 141,999,876
------------
TIME DEPOSITS (3.9%):
Banking (3.9%):
7,775,066 Skandinaviska Enskilda Banken, 5.25%, 9/3/96....... 7,775,066
7,000,000 Sumitomo Bank, 5.31%, 9/3/96....................... 7,000,000
------------
Total Time Deposits 14,775,066
------------
VARIABLE RATE NOTES (19.4%):
Financial Services (5.0%):
9,000,000 Heller Financial, Inc., 5.58%*, 9/30/96............ 9,000,000
6,000,000 Heller Financial, Inc., 5.58%*, 12/30/96........... 6,000,000
4,000,000 Heller Financial, Inc., 5.71%*, 12/30/96........... 4,000,000
------------
19,000,000
------------
Life Insurance (5.3%):
20,000,000 Jackson National Life Insurance Co., 5.52%*,
9/2/97............................................ 20,000,000
------------
</TABLE>
Continued
-27-
<PAGE> 168
AMERICAN PERFORMANCE FUNDS
CASH MANAGEMENT FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- --------------------------- ------------
<S> <C>
VARIABLE RATE NOTES, CONTINUED:
Security Brokers & Dealers (9.1%):
$17,000,000 Goldman Sachs Group LP,
5.54%*, 4/4/97............ $ 17,000,000
8,000,000 Lehman Brothers, 5.65%*,
11/29/96.................. 8,000,000
9,000,000 Lehman Brothers, 5.64%*,
5/30/97................... 9,000,000
------------
34,000,000
------------
Total Variable Rate Notes 73,000,000
------------
Total (Cost--$375,375,424)(a) $375,375,424
============
<FN>
- ----------
Percentages indicated are based on net assets of $375,797,494.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate investments. The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at August 31, 1996.
</TABLE>
See notes to financial statements
-28-
<PAGE> 169
AMERICAN PERFORMANCE FUNDS
U.S. TREASURY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- ------------------------- ------------
<S> <C>
U.S. TREASURY BILLS (34.4%):
$75,000,000 5.06%, 9/19/96........... $ 74,810,750
------------
Total U.S. Treasury Bills 74,810,750
------------
Total Investments, at value 74,810,750
------------
REPURCHASE AGREEMENTS (66.0%):
10,000,000 Bear Stearns, 5.20%,
9/3/96 (Collateralized
by $10,118,867 U.S.
Treasury Notes, 5.13%,
12/1/98, market value
$10,207,005).............. 10,000,000
10,000,000 Dean Witter, 5.18%,
9/3/96 (Collateralized
by $10,113,963 U.S.
Treasury Notes, 5.63%,
6/1/97, market value
$10,228,630).............. 10,000,000
10,000,000 Deutsche Bank, 5.18%,
9/3/96 (Collateralized
by $9,948,291 U.S.
Treasury Notes, 5.50%,
2/1/99, market value
$10,225,625).............. 10,000,000
8,547,141 Merrill Lynch, 5.15%,
9/3/96 (Collateralized
by $8,650,036 U.S.
Treasury Notes, 8.25%,
7/1/98, market value
$8,736,197)............. 8,547,141
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- -------------------------- ------------
<S> <C>
REPURCHASE AGREEMENTS, CONTINUED:
$10,000,000 Morgan Stanley, 5.20%,
9/3/96 (Collateralized by
$9,979,336 U.S. Treasury
Notes, 10.00%, 5/15/10,
market value $10,222,848).. $ 10,000,000
45,000,000 Nomura Securities, 5.21%,
9/3/96 (Collateralized by
$45,033,159 U.S. Treasury
Notes, 5.50%-9.50%,
4/1/00-5/1/18, market
value $45,984,979).......... 45,000,000
50,000,000 Sanwa Bank, 5.23%, 9/3/96
(Collateralized by
$50,893,034 U.S. Treasury
Notes, 8.50%, 2/1/20,
market value
$51,048,304)............. 50,000,000
------------
Total Repurchase Agreements 143,547,141
------------
Total (Cost--$218,357,891)(a) $218,357,891
============
<FN>
- ----------
Percentages indicated are based on net assets of $217,406,387.
(a) Cost for federal income tax and financial reporting purposes are the same.
</TABLE>
See notes to financial statements.
-29-
<PAGE> 170
AMERICAN PERFORMANCE FUNDS
BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- ----------
<S> <C>
ASSET BACKED SECURITIES (4.7%):
$ 333,333 Chase Credit Card, 8.75%, 8/15/99....................... $ 334,633
1,200,000 General Electric Capital Mortgage, 7.30%, 3/25/12....... 1,203,384
----------
Total Asset Backed Securities 1,538,017
----------
COLLATERALIZED MORTGAGE OBLIGATIONS (10.4%):
2,000,000 Federal National Mortgage Assoc., 6.00%, 10/25/16....... 1,949,840
1,433,130 Merrill Lynch Trust, 9.10%, 9/20/14..................... 1,462,710
----------
Total Collateralized Mortgage Obligations 3,412,550
----------
CORPORATE BONDS (46.0%):
Automotive (4.7%):
1,050,000 Ford Motor Co., 7.75%, 3/15/05.......................... 1,056,563
500,000 General Motors Corp., 7.70%, 4/15/16.................... 483,750
----------
1,540,313
----------
Banking (4.4%):
1,500,000 BankAmerica Corp., 7.13%, 5/12/05....................... 1,455,000
----------
Brokerage Services (5.5%):
1,000,000 Merrill Lynch & Co., 8.00%, 2/1/02...................... 1,027,500
800,000 Smith Barney Holdings, 6.88%, 6/15/05................... 763,000
----------
1,790,500
----------
Computers (1.5%):
500,000 IBM Corp., 6.38%, 6/15/00............................... 490,000
----------
Financial Services (10.2%):
1,000,000 Associates Corp., 7.50%, 4/15/02........................ 1,010,000
1,000,000 CNA Financial Corp., 7.25%, 11/15/23.................... 890,000
500,000 General Electric Capital Corp., 7.50%, 6/15/09.......... 502,500
1,000,000 General Motors Acceptance Corp., 6.63%, 10/1/02......... 962,500
----------
3,365,000
----------
Leasing (6.1%):
1,000,000 Hertz Corp., 7.38%, 6/15/01............................. 1,006,250
1,000,000 International Lease Finance, 6.50%, 8/15/99............. 990,000
----------
1,996,250
----------
Office Equipment & Services (3.2%):
1,000,000 Xerox Corp., 8.13%, 4/15/02............................. 1,042,500
----------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- -----------
<S> <C>
CORPORATE BONDS, CONTINUED:
Retail Stores (3.0%):
$1,000,000 May Department Stores, 8.38%, 10/1/22, Callable
10/1/02 @ 104....................................... $ 991,250
-----------
Telecommunications (7.4%):
1,000,000 Alltel Corp., 3/15/16................................ 917,500
1,500,000 MCI Communications Corp., 7.13%, 1/20/00............. 1,500,000
-----------
Total Corporate Bonds 15,088,313
-----------
MEDIUM TERM NOTES (3.1%):
1,000,000 Beneficial Corp., 7.75%, 3/1/99...................... 1,025,000
-----------
Total Medium Term Notes 1,025,000
-----------
U.S. GOVERNMENT AGENCIES (31.3%):
Federal Home Loan Bank:
2,000,000 8.00%, 9/11/01....................................... 2,086,880
60,000 7.36%, 7/1/04........................................ 60,697
Federal Home Loan Mortgage Corp.:
459,914 6.00%, 7/1/99........................................ 452,872
1,345,973 6.50%, 2/1/00........................................ 1,331,746
Federal National Mortgage Assoc.:
34,767 6.50%, 9/1/02........................................ 34,055
465,178 6.50%, 12/1/02....................................... 455,498
192,180 6.50%, 1/1/03........................................ 188,085
762,846 6.50%, 2/1/03........................................ 746,216
500,000 8.95%, 2/12/18....................................... 574,880
Government National Mortgage Assoc.:
62,062 10.50%, 11/15/15, Pool #268347....................... 68,753
145,827 11.00%, 2/15/16, Pool #279067........................ 162,915
90,898 9.00%, 1/15/20, Pool #280664......................... 95,755
114,279 9.00%, 10/15/20, Pool #289412........................ 120,207
287,498 9.00%, 7/15/21, Pool #308511......................... 301,962
655,403 7.00%, 9/15/23, Pool #347688......................... 624,632
1,033,667 7.50%, 11/15/23, Pool #354701........................ 1,011,950
991,090 7.50%, 12/15/25, Pool #401510........................ 967,799
927,491 8.00%, 5/15/26, Pool #428480......................... 927,778
59,882 8.00%, 6/15/26, Pool #426149......................... 59,901
-----------
Total U.S. Government Agencies 10,272,581
-----------
U.S. TREASURY BONDS (3.2%):
1,000,000 7.63%, 2/15/25....................................... 1,046,690
-----------
Total U.S. Treasury Bonds 1,046,690
-----------
</TABLE>
Continued
-30-
<PAGE> 171
AMERICAN PERFORMANCE FUNDS
BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C>
INVESTMENT COMPANIES (0.4%):
118,543 American Performance Cash Management Fund.............. $ 118,543
7,300 American Performance U.S. Treasury Fund................ 7,300
-----------
Total Investment Companies 125,843
-----------
Total (Cost--$33,047,018)(a) $32,508,994
===========
<FN>
- ----------
Percentages indicated are based on net assets of $32,806,689.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
Unrealized appreciation......................................... $ 206,078
Unrealized depreciation......................................... (744,102)
---------
Net unrealized depreciation..................................... $(538,024)
=========
</TABLE>
See notes to financial statements.
-31-
<PAGE> 172
AMERICAN PERFORMANCE FUNDS
INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ -----------
<S> <C>
ASSET BACKED SECURITIES (12.8%):
$2,949,886 AFC Home Equity Loan Trust, 6.80%, 10/26/96........... $ 2,903,849
1,198,675 CoreStates Home Equity Trust, 5.10%, 3/15/09.......... 1,165,016
2,050,000 Ford Motor Credit Corp., 6.50%, 8/15/02............... 2,019,250
2,000,000 GE Capital Mortgage Services, 6.90%, 2/25/10.......... 1,991,800
-----------
Total Asset Backed Securities 8,079,915
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (10.1%):
1,100,000 Federal Home Loan Mortgage Corp., 6.00%, 3/15/05...... 1,081,608
2,000,000 Federal Home Loan Mortgage Corp., 6.50%, 5/15/19...... 1,925,520
1,000,000 Federal Home Loan Mortgage Corp., 8.00%, 9/15/20...... 997,620
500,000 Federal National Mortgage Assoc., 6.00%, 10/25/16..... 487,460
1,000,000 Federal National Mortgage Assoc., 6.25%, 1/25/20...... 961,140
1,000,000 Nomura Asset Securities Corp., 7.12%, 1/25/26......... 946,280
-----------
Total Collateralized Mortgage Obligations 6,399,628
-----------
CORPORATE BONDS (36.0%):
Brokerage Services (6.1%):
500,000 Bear Stearns Co., 6.75%, 8/15/00...................... 491,875
1,000,000 Bear Stearns Co., 6.75%, 4/15/03...................... 962,500
1,500,000 Merrill Lynch & Co., Inc., 6.64%, 9/19/02............. 1,441,875
1,000,000 Smith Barney Holdings, 6.63%, 6/1/00.................. 985,000
-----------
3,881,250
-----------
Financial Consumer (3.1%):
1,000,000 CIT Group Holdings, 6.13%, 9/1/98..................... 991,250
1,000,000 GMAC, 6.30%, 6/11/98.................................. 993,750
-----------
1,985,000
-----------
Financial Services (11.5%):
1,500,000 Associates Corp., 6.88%, 1/15/97...................... 1,505,445
500,000 Associates Corp., 7.50%, 4/15/02...................... 505,000
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ -----------
<S> <C>
CORPORATE BONDS, CONTINUED:
Financial Services, continued:
$2,100,000 CNA Financial Corp., 6.25%, 11/15/03.................. $ 1,950,375
2,000,000 Commercial Credit Co., 6.38%, 9/15/02................. 1,912,500
500,000 Dean Witter Discover, 6.75%, 8/15/00.................. 494,375
1,000,000 General Motors Acceptance Corp., 6.63%, 10/1/02....... 962,500
-----------
7,330,195
-----------
Food Products (3.4%):
1,000,000 Grand Metropolitan, 8.63%, 8/15/01.................... 1,061,250
1,000,000 McCormick & Co., 8.95%, 7/1/01........................ 1,071,250
-----------
2,132,500
-----------
Industrial Goods & Services (0.8%):
500,000 American Home Products Co., 6.50%, 10/15/02........... 484,375
-----------
Leasing (6.2%):
1,000,000 Hertz Corp., 7.38%, 6/15/01........................... 1,006,250
1,500,000 Hertz Corp., 6.00%, 1/15/03........................... 1,395,000
1,500,000 International Lease Finance, 6.50%, 8/15/99........... 1,485,000
-----------
3,886,250
-----------
Office Equipment & Services (1.7%):
1,000,000 Xerox Corp., 8.13%, 4/15/02........................... 1,042,500
-----------
Telecommunications (1.6%):
500,000 Alltel Corp., 7.00%, 3/15/16.......................... 458,750
500,000 Comsat Corp., 8.95%, 5/15/01.......................... 532,500
-----------
991,250
-----------
Utility--Electric (1.6%):
1,000,000 Alabama Power, 6.38%, 8/1/99.......................... 987,500
-----------
Total Corporate Bonds 22,720,820
-----------
MEDIUM TERM NOTES (1.6%):
1,000,000 Beneficial Corp., 7.35%, 2/28/97...................... 1,006,440
-----------
Total Medium Term Notes 1,006,440
-----------
</TABLE>
Continued
-32-
<PAGE> 173
AMERICAN PERFORMANCE FUNDS
INTERMEDIATE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ -----------
<S> <C>
TAXABLE MUNICIPAL BONDS (1.5%):
Louisiana (1.5%):
$1,000,000 Orleans Parish, School Board,
Series A, 6.45%, 2/1/05.............................. $ 944,740
-----------
Total Taxable Municipal Bonds 944,740
-----------
U.S. GOVERNMENT AGENCIES (31.6%):
Federal Home Loan Mortgage Corp.:
4,675,788 6.00%, 7/1/99......................................... 4,604,202
544,372 8.00%, 7/1/99......................................... 552,707
2,135,759 6.50%, 2/1/00......................................... 2,113,184
473,573 7.00%, 10/1/07........................................ 467,388
Federal National Mortgage Assoc.:
856,667 5.00%, 2/1/09, Pool #266453........................... 776,217
502,258 7.31%,* 11/1/22, Pool #188965......................... 518,582
775,479 7.63%,* 11/1/22, Pool #189916......................... 799,713
1,131,135 8.13%,* 7/1/23, Pool #224951.......................... 1,173,552
Government National Mortgage Assoc.:
31,840 9.00%, 12/15/04 Pool #284008.......................... 33,222
141,281 9.00%, 1/15/05 Pool #247502........................... 147,417
81,568 9.00%, 3/15/06 Pool #299211........................... 85,110
572,320 7.50%, 6/15/07 Pool #329595........................... 575,359
984,825 6.00%, 1/15/09 Pool #371901........................... 933,062
216,139 8.00%, 10/20/24, Pool #1884........................... 215,249
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Government National Mortgage Assoc., continued:
$ 835,949 6.00%, 2/20/26, Pool #2166............................. $ 742,022
42,139 8.00%, 2/20/26, Pool #2171............................. 41,944
79,606 8.00%, 3/20/26, Pool #2187............................. 79,239
389,777 8.00%, 4/20/26, Pool #2205............................. 387,972
1,751,932 8.00%, 5/20/26, Pool #2219............................. 1,743,751
988,237 8.00%, 6/15/26, Pool #423563........................... 988,543
2,964,156 8.00%, 6/15/26, Pool #426149........................... 2,965,075
-----------
Total U.S. Government Agencies 19,943,510
-----------
U.S. TREASURY NOTES (4.2%):
500,000 8.63%, 8/15/97......................................... 512,050
1,100,000 8.88%, 11/15/97........................................ 1,134,496
500,000 7.25%, 2/15/98......................................... 506,935
500,000 9.25%, 8/15/98......................................... 526,070
-----------
Total U.S. Treasury Notes 2,679,551
-----------
INVESTMENT COMPANIES (4.9%):
3,075,690 American Performance Cash Management Fund.............. 3,075,690
-----------
Total Investment Companies 3,075,690
-----------
Total (Cost--$65,882,926)(a) $64,850,294
===========
<FN>
- ----------
Percentages indicated are based on net assets of $63,087,806.
* Variable rate investments. The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at August 31, 1996.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
Unrealized appreciation....................................... $ 175,220
Unrealized depreciation....................................... (1,207,852)
-----------
Net unrealized depreciation................................... $(1,032,632)
===========
</TABLE>
See notes to financial statements.
-33-
<PAGE> 174
AMERICAN PERFORMANCE FUNDS
EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS (95.8%):
Aerospace/Defense (1.2%):
5,700 Boeing Co................................................. $ 515,850
4,400 United Technologies Corp.................................. 496,100
-----------
1,011,950
-----------
Airlines (1.3%):
15,600 Delta Air Lines........................................... 1,105,650
-----------
Automobiles (0.1%):
11,300 General Motors Corp....................................... 562,175
-----------
Automotive Parts (1.9%):
17,700 Lear Seating Corp. (b).................................... 679,237
20,700 Magna International, Inc., Class A........................ 998,775
-----------
1,678,012
-----------
Banking (6.1%):
15,200 Bank of New York Co., Inc................................. 423,700
15,400 Chase Manhattan Corp...................................... 1,145,375
8,600 Citicorp.................................................. 715,950
23,500 Corestates Financial Corp................................. 972,312
18,600 First Securities Corp..................................... 506,850
20,900 Great Western Financial Corp.............................. 517,275
6,300 Mellon Bank Corp.......................................... 348,863
7,000 NationsBank Corp.......................................... 595,875
-----------
5,226,200
-----------
Beverages (3.7%):
55,200 Coca-Cola Co.............................................. 2,760,000
16,400 PepsiCo, Inc.............................................. 471,500
-----------
3,231,500
-----------
Brokerage Firms (0.4%):
8,000 Salomon, Inc.............................................. 360,000
-----------
Chemicals (5.2%):
16,000 Dow Chemical Co........................................... 1,276,000
9,400 E.I. du Pont de Nemours Co................................ 771,975
22,300 Engelhard Corp............................................ 454,362
6,200 W.R. Grace & Co........................................... 406,875
38,500 Monsanto Co............................................... 1,236,812
4,500 Olin Corp................................................. 356,625
-----------
4,502,649
-----------
Computers & Peripherals (3.4%):
17,200 Cisco Systems, Inc. (b)................................... 907,300
13,900 IBM Corp.................................................. 1,589,812
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS, CONTINUED:
Computers & Peripherals, continued:
22,400 Komag, Inc. (b)........................................... $ 476,000
-----------
2,973,112
-----------
Cosmetics (2.0%):
10,800 Avon Products, Inc........................................ 517,050
19,100 Gillette Co............................................... 1,217,625
-----------
1,734,675
-----------
Electrical Equipment (2.7%):
28,000 General Electric Co....................................... 2,327,500
-----------
Electronic & Electrical (2.0%):
11,400 Avnet, Inc................................................ 532,950
17,800 Raychem Corp.............................................. 1,221,525
-----------
1,754,475
-----------
Entertainment (1.6%):
7,000 ITT (b)................................................... 372,750
18,100 Walt Disney Co............................................ 1,031,700
-----------
1,404,450
-----------
Financial Services (3.1%):
10,000 Dean Witter Discover & Co................................. 500,000
6,100 Federal Home Loan Mortgage Corp........................... 539,087
7,300 Household International, Inc.............................. 578,525
18,800 MBNA Corp................................................. 571,050
11,300 Travelers, Inc............................................ 490,137
-----------
2,678,799
-----------
Food Processing & Packaging (2.0%):
11,600 CPC International, Inc.................................... 798,950
13,600 Dole Food, Inc............................................ 562,700
15,800 IBP, Inc.................................................. 369,325
-----------
1,730,975
-----------
Forest Products (1.7%):
13,000 Consolidated Papers, Inc.................................. 669,500
10,600 Kimberly Clark Corp....................................... 830,775
-----------
1,500,275
-----------
Health Care (1.5%):
27,000 Johnson & Johnson, Inc.................................... 1,329,750
-----------
Insurance (4.8%):
35,200 Aetna Life & Casualty Co.................................. 2,327,600
</TABLE>
Continued
-34-
<PAGE> 175
AMERICAN PERFORMANCE FUNDS
EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS, CONTINUED:
Insurance, continued:
13,700 Allstate.................................................. $ 611,363
10,100 Cigna Corp................................................ 1,172,862
-----------
4,111,825
-----------
Machinery--Diversified (2.3%):
37,100 Harnischfeger Industries, Inc............................. 1,400,525
14,000 Thermo Electron Corp. (b)................................. 554,750
-----------
1,955,275
-----------
Manufacturing--Capital Goods (0.5%):
10,700 Parker-Hannifin Corp...................................... 417,300
-----------
Medical Services (1.1%):
11,300 Columbia/HCA Healthcare Corp. ............................ 637,038
10,900 HEALTHSOUTH Corp. (b)..................................... 352,888
-----------
989,926
-----------
Medical Supplies (0.6%):
9,600 Medtronic, Inc............................................ 499,200
-----------
Metals & Mining (1.1%):
10,600 Freeport McMoran, Inc..................................... 364,375
26,500 Freeport McMoran Resource Partners, L.P. ................. 566,437
-----------
930,812
-----------
Oil--Integrated Companies (6.8%):
7,800 Amoco Corp................................................ 538,200
2,900 Atlantic Richfield Co..................................... 338,575
4,400 British Petroleum Co. .................................... 518,100
9,000 Chevron Corp ............................................. 529,875
19,800 Exxon Corp. .............................................. 1,611,225
13,000 Mobil Corp. .............................................. 1,465,750
5,700 Royal Dutch Petroleum Co.................................. 851,437
-----------
5,853,162
-----------
Oil & Gas--Equipment & Services (1.2%):
12,900 Sonat Offshore Drilling, Inc.............................. 704,663
9,900 Tidewater, Inc............................................ 379,912
-----------
1,084,575
-----------
Oil & Gas Production (2.5%):
12,500 Consolidated Natural Gas.................................. 679,688
15,200 El Paso Natural Gas....................................... 632,700
15,400 MCN Corp.................................................. 411,950
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS, CONTINUED:
Oil & Gas Production, continued:
14,600 Ultramar Corp............................................. $ 401,500
-----------
2,125,838
-----------
Pharmaceuticals (6.8%):
9,400 American Home Products Corp............................... 556,950
12,300 Bristol-Myers Squibb Co. ................................. 1,079,325
11,900 Eli Lilly & Co. .......................................... 681,275
19,300 Merck & Co., Inc. ........................................ 1,266,563
21,400 Pfizer, Inc. ............................................. 1,519,400
14,200 Schering-Plough........................................... 793,425
-----------
5,896,938
-----------
Publishing (1.2%):
16,200 McGraw Hill, Inc.......................................... 664,200
9,300 Meredith Corp............................................. 399,900
-----------
1,064,100
-----------
Retail (3.9%):
12,300 Barnes & Noble, Inc. (b).................................. 404,363
24,200 Home Depot, Inc........................................... 1,285,625
23,400 Sears & Roebuck Co. ...................................... 1,029,600
29,000 Woolworth Corp. (b)....................................... 616,250
-----------
3,335,838
-----------
Semiconductors (1.5%):
16,300 Intel Corp................................................ 1,300,944
-----------
Shoes--Leather (0.4%):
3,400 Nike, Inc., Class B....................................... 367,200
-----------
Soaps & Cleaning Agents (2.0%):
4,300 Colgate-Palmolive, Inc. .................................. 349,375
15,400 Procter & Gamble Co. ..................................... 1,368,675
-----------
1,718,050
-----------
Software & Computer Services (2.5%):
10,200 Microsoft Corp. (b)....................................... 1,249,500
25,500 Oracle Corp. (b).......................................... 898,875
-----------
2,148,375
-----------
Steel (2.5%):
32,100 Timken Co. ............................................... 1,219,800
34,100 USX--U.S. Steel Group, Inc................................ 937,750
-----------
2,157,550
-----------
</TABLE>
Continued
-35-
<PAGE> 176
AMERICAN PERFORMANCE FUNDS
EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------- -----------
<S> <C>
COMMON STOCKS, CONTINUED:
Telecommunications (0.6%):
21,600 Ericsson L.M. Telephone Co.,
Class B (b)............................ $ 498,150
-----------
Tobacco & Tobacco Products (2.5%):
17,600 Philip Morris Cos., Inc. ............... 1,579,600
21,000 RJR Nabisco Holdings Corp............... 556,513
-----------
2,136,113
-----------
Utilities--Electric (5.0%):
35,900 CalEnergy, Inc. (b)..................... 1,085,975
23,100 CMS Energy Corp. ....................... 690,113
18,000 General Public Utilities Corp........... 567,000
84,600 Unicom Corp. ........................... 1,945,800
-----------
4,288,888
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS, CONTINUED:
Utilities--Telecommunications (5.5%):
33,700 AT&T Corp. ............................................ $ 1,769,250
10,400 Bellsouth Corp. ....................................... 377,000
17,000 Cincinnati Bell........................................ 811,750
19,200 GTE Corp. ............................................. 756,000
23,900 NYNEX Corp. ........................................... 1,030,688
-----------
4,744,688
-----------
Total Common Stocks 82,736,894
-----------
INVESTMENT COMPANIES (4.4%):
3,786,350 American Performance Cash Management Fund.............. 3,786,350
-----------
Total Investment Companies 3,786,350
-----------
Total (Cost--$70,120,625)(a) $86,523,244
===========
<FN>
- ----------
Percentages indicated are based on net assets of $86,352,058.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $19,070.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation........................................ $17,710,629
Unrealized depreciation........................................ (1,327,080)
-----------
Net unrealized appreciation.................................... $16,383,549
===========
(b) Represents non-income producing securities.
</TABLE>
See notes to financial statements.
-36-
<PAGE> 177
AMERICAN PERFORMANCE FUNDS
AGGRESSIVE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS (92.6%):
Audio/Video Products (3.7%):
36,295 Harman International...................................... $ 1,592,443
-----------
Automotive Parts (4.2%):
35,400 Discount Auto Parts, Inc. (b)............................. 831,900
71,300 Keystone Automotive Industries,
Inc. (b)................................................. 980,375
-----------
1,812,275
-----------
Beverages (1.0%):
18,600 Canandaigua Wine, Inc. (b)................................ 427,800
-----------
Commercial Services (3.2%):
60,700 Personnel Group America, Inc. (b)......................... 1,396,100
-----------
Computers & Peripherals (20.6%):
58,900 Cisco Systems, Inc. (b)................................... 3,106,975
53,000 Silicon Graphics, Inc. (b)................................ 1,232,250
44,800 U.S. Robotics Corp. (b)................................... 2,352,000
46,900 Verifone, Inc. (b)........................................ 2,239,475
-----------
8,930,700
-----------
Entertainment (4.0%):
46,575 International Family Entertainment,
Class B (b).............................................. 838,350
78,700 Lodgenet Entertainment Corp. (b).......................... 875,538
-----------
1,713,888
-----------
Financial Services (9.3%):
34,700 The Advanta Corp., Class A................................ 1,695,963
74,700 Money Store, Inc.......................................... 1,792,800
44,084 Resource Bancshare Mortgage Group......................... 540,029
-----------
4,028,792
-----------
Health Care (4.8%):
86,300 Matria Healthcare, Inc. (b)............................... 636,462
41,200 Owen Healthcare, Inc. (b)................................. 494,400
45,800 Sterling Healthcare Group, Inc. (b)....................... 950,350
-----------
2,081,212
-----------
Housing--Manufactured (2.3%):
76,800 Southern Energy Homes, Inc. (b)........................... 998,400
-----------
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------ ---------------------------------------------------------- -----------
<S> <C>
COMMON STOCKS, CONTINUED:
Manufacturing (3.8%):
47,400 Bacou USA, Inc. (b)....................................... $ 817,650
19,900 Wolverine Tube, Inc. (b).................................. 815,900
-----------
1,633,550
-----------
Medical--Wholesale Drugs Distribution (3.1%):
18,100 Cardinal Health, Inc...................................... 1,328,088
-----------
Medical Services (5.4%):
31,100 Fisher Scientific International........................... 1,236,225
40,600 Occusystems, Inc. (b)..................................... 1,126,650
-----------
2,362,875
-----------
Medical Supplies (1.0%):
44,300 Isolyser Co., Inc. (b).................................... 420,850
-----------
Pharmaceuticals (1.8%):
19,100 Forest Labs, Inc. (b)..................................... 785,487
-----------
Restaurants (1.4%):
46,000 Casa Ole Restaurants, Inc. (b)............................ 603,750
-----------
Retail (6.1%):
33,000 The Mens Wearhouse, Inc. (b).............................. 717,750
19,600 The Finish Line, Class A (b).............................. 617,400
54,900 Petco Animal Supplies, Inc. (b)........................... 1,317,600
-----------
2,652,750
-----------
Retail--Department Stores (3.6%):
38,300 Proffitts, Inc. (b)....................................... 1,570,300
-----------
Services (Non-Financial) (7.5%):
32,600 Envoy Corp. (b)........................................... 1,079,875
41,150 Paychex, Inc.............................................. 2,201,525
-----------
3,281,400
-----------
Services (Video Tape Rental) (1.5%):
42,600 Movie Gallery, Inc. (b)................................... 649,650
-----------
Software & Computer Services (2.6%):
65,100 Network General Corp. (b)................................. 1,106,700
-----------
Telecommunication Equipment & Services (1.7%):
29,400 Cidco, Inc. (b)........................................... 683,550
1,100 Mastec, Inc. (b).......................................... 32,450
-----------
716,000
-----------
Total Common Stocks 40,093,010
-----------
</TABLE>
Continued
-37-
<PAGE> 178
AMERICAN PERFORMANCE FUNDS
AGGRESSIVE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C>
INVESTMENT COMPANIES (7.5%):
1,939,824 American Performance Cash Management Fund.............. $ 1,939,824
1,295,068 American Performance U.S. Treasury Fund................ 1,295,068
-----------
Total Investment Companies 3,234,892
-----------
Total (Cost--$31,248,219)(a) $43,327,902
===========
<FN>
- ----------
Percentages indicated are based on net assets of $43,277,691.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation........................................ $14,888,037
Unrealized depreciation........................................ (2,808,354)
-----------
Net unrealized appreciation.................................... $12,079,683
===========
(b) Represents non-income producing securities.
</TABLE>
See notes to financial statements.
-38-
<PAGE> 179
AMERICAN PERFORMANCE FUNDS
INTERMEDIATE TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ----------
<S> <C>
MUNICIPAL BONDS (96.5%):
Alaska (1.6%):
$500,000 Alaska State Housing Financial Corp., Series A, 6.10%,
12/1/06................................................ $ 505,105
----------
Arizona (5.0%):
500,000 Arizona State Transportation Board, Highway Revenue,
Sub-Series A, 6.10%, 7/1/01........................... 532,150
500,000 Arizona State Transportation Board, Maricopa County
Regulatory Area RD-A, Excise Tax Revenue, 5.20%,
7/1/00, Insured by: AMBAC............................. 511,115
500,000 Arizona State University Revenue, Series A, 5.80%,
7/1/07, Callable 7/1/02 @ 101 & 7/1/03 @ 100.......... 512,240
----------
1,555,505
----------
California (6.4%):
200,000 California State Franchise Tax Board Certificate,
Certificate of Participation Refunding Bond, 6.90%,
10/1/06............................................... 212,922
200,000 California State Public Works Board, Department of
Corrections, State Prison, Series A, 7.25%, 9/1/03.... 223,446
200,000 Contra Costa Water District, Series C, 6.90%, 10/1/03.. 220,822
500,000 Folsom School Facilities Project, Series B, 6.00%,
8/1/06, Insured by: FGIC.............................. 536,680
300,000 Los Angeles Public Facilities, 5.40%, 8/1/07........... 304,938
500,000 Southern California Public Power Authority, 5.75%,
7/1/09, Insured by: MBIA.............................. 501,940
----------
2,000,748
----------
Delaware (0.5%):
155,000 Delaware State Housing Authority, Senior Home Mortgage,
Series A, 6.90%, 12/1/99, AMT......................... 159,489
----------
District of Columbia (1.6%):
500,000 District of Columbia Refunding, Series B-1, 5.20%,
6/1/04, Insured by: AMBAC............................. 497,250
----------
Florida (0.7%):
220,000 Hillsborough County Hospital Authority Refunding, Tampa
General Hospital Project, 5.75%, 10/1/99.............. 228,089
----------
Illinois (11.1%):
350,000 Chicago O'Hare International Airport Revenue, 5.60%,
1/1/07, Callable 1/1/03 @ 102......................... 354,620
500,000 Chicago Park District Refunding, 5.45%, 1/1/04, Insured
by: FGIC.............................................. 512,100
500,000 Chicago School Finance Authority, Series A, 5.38%,
6/1/08, Callable 6/1/03 @ 102......................... 489,730
400,000 Cook County, Series B, 5.75%, 11/15/07, Callable
11/15/02 @ 102 and 11/15/04 @ 100..................... 425,452
155,000 Du Page Community Water Revenue, 6.30%, 5/1/99......... 159,796
500,000 Illinois Development Finance Authority, Pollution
Control Revenue, 5.70%, 1/15/09, Insured by: AMBAC.... 502,165
500,000 Illinois Health Facilities Revenue, 5.75%, 11/15/07,
Callable 11/15/05 @ 102............................... 487,745
500,000 Illinois State Sales Tax Revenue, Series C, 6.88%,
6/15/15, Callable 6/15/97 @ 102....................... 521,155
----------
3,452,763
----------
Louisiana (4.3%):
180,000 Bastrop Industrial Development Board, Pollution Control
Refunding, International Paper, 6.90%, 3/1/07......... 193,093
500,000 Louisiana Public Facilities Authority, Hospital
Revenue, Lady of the Lake, 6.05%, 12/1/08,
Callable 12/1/01 @ 102 and 12/1/03 @ 100.............. 513,870
400,000 Louisiana Public Facilities Authority, Student Loan
Series A2, 5.60%, 3/1/97, AMT......................... 403,324
</TABLE>
Continued
-39-
<PAGE> 180
AMERICAN PERFORMANCE FUNDS
INTERMEDIATE TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARE OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<S> <C>
MUNICIPAL BONDS, CONTINUED:
Louisiana, continued:
$220,000 Louisiana State Refunding, GO Revenue, Series A,
7.00%, 8/1/02, Insured by: AMBAC..................... $ 230,261
-----------
1,364,343
-----------
Michigan (2.2%):
500,000 Holly, Michigan Area School District GO, 5.30%,
5/1/09, Callable 5/1/05 @ 101........................ 492,890
165,000 Michigan State Housing Development Authority, Revenue,
Series A, 6.15%, 6/1/01.............................. 169,151
-----------
662,041
-----------
Minnesota (1.7%):
550,000 Southern Minnesota Power Agency, Power Supply Revenue,
5.00%, 1/1/10, Callable 1/1/04 @ 102................. 517,270
-----------
Nevada (5.7%):
250,000 Clark County, 6.00%, 7/1/06........................... 261,070
500,000 Las Vegas, Downtown Redevelopment Agency Tax Increment
Revenue, 5.40%, 6/1/07............................... 494,900
500,000 Reno Hospital, St. Mary's, 5.25%, 5/15/07............. 492,325
500,000 Washoe County Airport Authority, Airport Systems
Improvement Revenue Refunding, Series A, 5.60%,
7/1/03, Insured by: MBIA............................. 515,400
-----------
1,763,695
-----------
New Jersey (3.4%):
500,000 New Jersey State Transportation Fund Authority, Series
A, 5.20%, 12/15/00, Insured by: AMBAC................ 511,335
500,000 Ocean City, GO, Series A, 6.25%, 10/1/06.............. 532,495
-----------
532,495
-----------
New Mexico (0.4%):
120,000 New Mexico Mortgage Finance Authority Refunding,
Single Family Mortgage, Series A-1, 6.30%, 1/1/02.... 124,376
-----------
New York (1.8%):
500,000 Triborough Bridge & Tunnel Authority, 7.00%, 1/1/11,
Callable 1/1/01 @ 102 & 1/1/03 @ 100................. 555,065
-----------
Ohio (2.6%):
250,000 Cleveland, Series A, 6.30%, 7/1/05, Callable 7/1/02
@102, 7/1/03 @ 101 & 7/1/04 @ 100.................... 268,423
500,000 Ohio State Water Development Authority, Revenue
Refunding & Improvement, Pure Water, 5.75%, 12/1/06,
Insured by: MBIA..................................... 517,880
-----------
786,303
-----------
Oklahoma (12.9%):
540,000 Grand River Dam Revenue Authority, 5.90%, 11/1/08..... 527,461
500,000 Oklahoma City, GO, 5.60%, 5/1/10...................... 501,060
500,000 Oklahoma State Housing Finance Agency, 5.50%, 11/1/25,
Mandatory Put 11/1/05 @ 100.......................... 501,670
200,000 Oklahoma State Turnpike Authority, Series A, 6.10%,
1/1/05............................................... 212,770
500,000 Tulsa Industrial Authority Hospital Revenue, 5.70%,
2/15/04.............................................. 509,710
500,000 Tulsa International Airport Revenue, 5.40%, 6/1/03.... 514,185
200,000 Tulsa Public Facilities Authority, 5.80%, 7/1/01...... 207,096
540,000 Tulsa Public Facilities Authority Capital Improvement,
Series 1988-B, 5.70%, 3/1/05......................... 524,092
</TABLE>
Continued
-40-
<PAGE> 181
AMERICAN PERFORMANCE FUNDS
INTERMEDIATE TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Oklahoma, continued:
$500,000 Tulsa Public Facilities Authority Solid Waste, 5.65%,
11/1/06.............................................. $ 489,375
-----------
3,987,419
-----------
Pennsylvania (2.4%):
400,000 Pennsylvania State Health Services Revenue, 5.40%,
11/15/07, Callable 11/15/06 @ 102.................... 398,436
320,000 Philadelphia Water & Sewer Revenue, 6.88%, 10/1/06,
Callable 10/1/01 @ 100............................... 343,107
-----------
741,543
-----------
Rhode Island (4.0%):
400,000 Rhode Island Depositors Economic Protection Corp.,
Special Obligations, Series A, 6.38%, 8/1/01......... 428,380
330,000 Rhode Island Port Authority & Economic Development,
Airport Revenue, 5.00%, 7/1/06,
Callable 7/1/03 @ 102................................ 320,004
500,000 Rhode Island State, 6.25%, 5/15/05.................... 534,820
-----------
1,283,204
-----------
South Carolina (1.9%):
350,000 Georgetown County, Pollution Refunding, International
Paper Co. Project, Revenue, 6.25%, 6/15/05........... 367,143
200,000 South Carolina State Education Assistance Authority,
Student Loan Revenue, 5.90%, 9/1/98, AMT............. 205,036
-----------
572,179
-----------
South Dakota (2.2%):
700,000 South Dakota Housing Development Authority Revenue,
5.70%, 5/1/08, Callable 5/1/06 @ 102................. 697,816
-----------
Texas (13.3%):
130,000 Baytown Marina Improvements, Series 1992, 6.50%,
2/1/04, AMT.......................................... 137,635
245,000 Baytown Marina Improvements, Series 1992, 6.60%,
2/1/05, AMT.......................................... 260,058
250,000 Brownsville Utilities System Revenue, 6.25%, 9/1/07,
Callable 9/1/02, 03, 04, 05 & 06 @ 100............... 262,600
500,000 Coastal Bend Health Facilities Development Revenue,
Series A, 5.60%, 11/15/02, Insured by: AMBAC......... 516,880
500,000 Dallas Waterworks & Sewer System Revenue, Series A,
5.50%, 10/1/05....................................... 500,085
350,000 Fort Worth, 6.25%, 3/1/99............................. 353,220
400,000 Houston Water & Sewer System Revenue, 6.10%, 12/1/05,
Callable 12/1/04 @ 100............................... 423,320
220,000 Montgomery County Hospital District, Series B, 6.30%,
4/1/04, Callable 4/1/02 @ 102........................ 239,389
365,000 North Central Health Facility Development Hospital,
Baylor Health Care System, Project A, 6.00%, 5/15/01. 382,075
525,000 North Harris Montgomery Community College, 5.40%,
8/15/05, Callable 2/15/03 @ 100...................... 534,429
250,000 Texas State Student Loan, 6.50%, 8/1/07, AMT.......... 263,763
250,000 Texas State Student Loan, 5.75%, 8/1/08, Callable
8/1/04 @ 100......................................... 248,497
-----------
4,121,951
-----------
Washington (9.4%):
250,000 Kitsap County School District #400, GO 6.25%, 12/1/02. 266,857
500,000 Port Tacoma Revenue Refunding, Series A, 5.50%,
11/1/04, Insured by: AMBAC........................... 512,295
500,000 Tacoma Electric System Revenue, 5.70%, 1/1/03, Insured
by: FGIC............................................. 520,145
410,000 Washington State, GO, 6.40%, 9/1/03, Callable 9/1/01 @
101.................................................. 440,213
175,000 Washington State Health Care Facilities Authority,
Revenue Refunding, Franciscan Health, St. Clara,
6.20%, 7/1/03........................................ 186,186
</TABLE>
Continued
-41-
<PAGE> 182
AMERICAN PERFORMANCE FUNDS
INTERMEDIATE TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<S> <C> <C>
MUNICIPAL BONDS, CONTINUED:
Washington, continued
$500,000 Washington State Public Power Supply System, Nuclear
Project #1 Revenue Refunding, Series A, 5.10%,
7/1/00............................................... $ 502,385
500,000 Washington State Public Power Supply System, Nuclear
Project #2, 6.00%, 7/1/07, Callable 7/1/00 @ 100..... 501,610
-----------
2,929,691
-----------
Wisconsin (1.4%):
200,000 Green Bay Series A, 5.70%, 4/1/05, Callable 4/1/03 @
100.................................................. 206,632
225,000 Wisconsin State Housing & Economic Development
Authority, Housing Revenue, Series D, 6.50%, 5/1/01,
AMT.................................................. 232,731
-----------
439,363
-----------
Total Municipal Bonds........................................... 29,965,243
-----------
INVESTMENT COMPANIES (2.5%):
766,870 SEI Institutional Tax Free Fund....................... 766,870
-----------
Total Investment Companies...................................... 766,870
-----------
Total (Cost--$30,209,441)(a).................................... $30,732,113
===========
- --------
<FN>
Percentages indicated are based on net assets of $31,036,443.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation......................................... $ 635,515
Unrealized depreciation......................................... (112,843)
---------
Net unrealized appreciation..................................... $ 522,672
=========
</TABLE>
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
GO General Obligation
MBIA Municipal Bond Insurance Association
See notes to financial statements.
-42-
<PAGE> 183
AMERICAN PERFORMANCE FUNDS
SHORT-TERM INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C> <C>
ASSET BACKED SECURITIES (11.6%):
Financial Services:
$199,991 AFC Home Equity Loan Trust, 6.80%, 10/26/26............ $ 196,871
500,000 General Electric Capital Mortgage, 7.30%, 3/25/12...... 501,410
500,000 IMC Home Equity Loan, 7.27%, 4/25/11................... 500,400
470,785 Money Store Trust 96-B, Class A-1...................... 472,268
-----------
Total Asset Backed Securities 1,670,949
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (12.6%):
175,000 Contimortgage Home Equity Loan Trust, 6.95%, 7/15/11... 173,797
495,606 Corestates Home Equity Trust, 5.10%, 3/15/09........... 481,689
1,000,000 Federal National Mortgage Assoc., 6.00%, 10/25/16...... 974,920
200,000 Nomura Asset Securities Corp., 7.12%, 1/25/26.......... 189,256
-----------
Total Collateralized Mortgage Obligations 1,819,662
-----------
CORPORATE BONDS (9.9%):
Brokerage Services (1.6%):
250,000 Smith Barney Holdings, 5.88%,
2/1/01................................................ 237,500
-----------
Financial Services (8.3%):
215,000 American General Finance, 7.70%, 11/15/97.............. 218,328
135,000 Associates Corp. of North America, 7.50%, 5/15/99...... 137,363
250,000 Commercial Credit, 6.70%, 8/1/99....................... 248,750
260,000 Ford Motor Credit Corp., 7.25%, 5/15/99................ 262,275
335,000 Merrill Lynch & Co., 6.38%, 3/30/99.................... 331,650
-----------
Total Corporate Bonds 1,198,366
-----------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ -----------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES (26.8%):
Federal Home Loan Bank:
$ 45,000 6.36%, 9/19/96........................................ $ 45,016
2,300,000 7.02%, 7/6/99......................................... 2,319,021
Federal Home Loan Mortgage Corp.:
459,914 6.00%, 7/1/99......................................... 452,872
450,512 6.50%, 2/1/00......................................... 445,750
Federal National Mortgage Assoc.:
300,000 6.05%, 1/12/98........................................ 298,623
Government National Mortgage Assoc.:
297,469 8.00%, 6/15/26........................................ 297,562
-----------
Total U.S. Government Agencies 3,858,844
-----------
U.S. TREASURY NOTES (37.0%):
2,250,000 6.50%, 11/30/96....................................... 2,255,715
500,000 5.63%, 6/30/97........................................ 499,095
1,900,000 5.50%, 11/15/98....................................... 1,864,432
700,000 6.88%, 7/31/99........................................ 705,873
-----------
Total U.S. Treasury Notes 5,325,115
-----------
INVESTMENT COMPANIES (1.5%):
210,928 American Performance Cash Management Fund............. 210,928
-----------
Total Investment Companies 210,928
-----------
Total (Cost--$14,492,428)(a) $14,321,364
===========
- ----------
<FN>
Percentages indicated are based on net assets of $14,399,383.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
Unrealized appreciation......................................... $ 5,671
Unrealized depreciation......................................... (176,735)
---------
Net unrealized depreciation..................................... $(171,064)
=========
</TABLE>
See notes to financial statements.
-43-
<PAGE> 184
AMERICAN PERFORMANCE FUNDS
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<S> <C> <C>
ASSET BACKED SECURITIES (2.6%):
Banking & Financial Services (2.6%):
$300,000 General Electric Capital Mortgage, Series 1996-HE2,
Class A-3 7.30%, 3/25/12............................. $ 300,846
300,000 IMC Home Equity Loan, 7.27%, 4/25/11.................. 300,240
-----------
Total Asset Backed Securities 601,086
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (2.1%):
297,364 CoreStates Home Equity Trust, 5.10%, 3/15/09.......... 289,014
200,000 Nomura Asset Securities Corp., 7.12%, 1/25/26......... 189,256
-----------
Total Collateralized Mortgage Obligations 478,270
-----------
COMMON STOCKS (54.8%):
Airlines (0.9%):
2,800 Delta Air Lines....................................... 198,450
-----------
Automotive Parts (1.2%):
2,075 Discount Auto Parts, Inc. (b)......................... 48,763
2,850 Keystone Automotive Industries,
Inc. (b)............................................. 39,188
3,700 Magna International, Inc., Class A.................... 178,524
-----------
266,475
-----------
Banking (2.7%):
6,000 CoreStates Financial Corp............................. 248,249
5,600 First Securities Corp................................. 152,600
2,500 NationsBank Corp...................................... 212,813
-----------
613,662
-----------
Beverages (1.7%):
1,125 Canandaigua Wine, Inc. (b)............................ 25,875
7,200 Coca-Cola Co.......................................... 360,000
-----------
385,875
-----------
Chemicals (2.9%):
3,400 Dow Chemical Co....................................... 271,149
2,000 E.I. du Pont de Nemours Co............................ 164,250
7,200 Monsanto Co........................................... 231,300
-----------
666,669
-----------
Commercial Services (0.3%):
3,500 Personnel Group of America, Inc. (b).................. 80,500
-----------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Computers & Peripherals (3.3%):
3,450 Cisco Systems, Inc. (b)................................ $ 181,987
1,900 IBM Corp............................................... 217,312
3,050 Silicon Graphics, Inc. (b)............................. 70,913
2,600 US Robotics Corp. (b).................................. 136,500
2,725 Verifone, Inc. (b)..................................... 130,119
-----------
736,831
-----------
Computer Software & Services (0.5%):
1,925 Envoy Corp. (b)........................................ 63,766
3,800 Network General Corp. (b).............................. 64,600
-----------
128,366
-----------
Electrical Equipment (1.5%):
4,100 General Electric Co.................................... 340,812
-----------
Electronic & Electrical (1.3%):
2,100 Harman International................................... 92,138
3,000 Raychem Corp........................................... 205,875
-----------
298,013
-----------
Entertainment (1.3%):
2,768 International Family Entertainment, Class B (b)........ 49,824
4,600 Lodgenet Entertainment Corp. (b)....................... 51,175
3,300 Walt Disney Co......................................... 188,100
-----------
289,099
-----------
Financial Services (1.7%):
2,025 Advanta Corp., Class A................................. 98,972
4,350 The Money Store, Inc................................... 104,400
2,648 Resource Bancshare Mortgage Group...................... 32,441
3,500 Travelers, Inc......................................... 151,812
-----------
387,625
-----------
Food Processing & Packaging (0.6%):
2,100 CPC International, Inc................................. 144,638
-----------
Forest Products (0.8%):
2,200 Kimberly Clark Corp.................................... 172,425
-----------
Health Care (1.7%):
5,400 Johnson & Johnson, Inc................................. 265,949
5,000 Matria Healthcare, Inc. (b)............................ 36,875
2,500 Owen Healthcare, Inc. (b).............................. 30,000
2,675 Sterling Healthcare Group, Inc. (b).................... 55,507
-----------
388,331
-----------
</TABLE>
Continued
-44-
<PAGE> 185
AMERICAN PERFORMANCE FUNDS
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Heavy Machinery--Industrial, Farm, Construction (1.1%):
6,400 Harnischfeger Industries, Inc.......................... $ 241,600
-----------
Insurance (3.1%):
5,800 Aetna Life & Casualty Co............................... 383,524
2,700 Allstate Corp.......................................... 120,488
1,700 Cigna Corp............................................. 197,413
-----------
701,425
-----------
Loan Companies (0.5%):
1,400 Federal Home Loan Mortgage Corp........................ 123,725
-----------
Manufacturing (1.0%):
2,775 Bacou USA, Inc. (b).................................... 47,869
3,600 Parker-Hannifin Corp. (b).............................. 140,400
1,150 Wolverine Tube, Inc. (b)............................... 47,150
-----------
235,419
-----------
Medical--Wholesale Drug Distribution (0.4%):
1,100 Cardinal Health, Inc................................... 80,713
-----------
Medical Services (0.3%):
2,400 Occusystems, Inc. (b).................................. 66,600
-----------
Medical Supplies (0.1%):
2,625 Isolyser Co., Inc. (b)................................. 24,938
-----------
Mobile Homes & Manufactured Housing (0.3%):
4,475 Southern Energy Homes, Inc. (b)........................ 58,175
-----------
Oil--Integrated Companies (3.2%):
2,400 Chevron Corp. ......................................... 141,300
2,100 Exxon Corp. ........................................... 170,888
2,000 Mobil Corp............................................. 225,499
1,300 Royal Dutch Petroleum Co. ............................. 194,187
-----------
731,874
-----------
Oil & Gas Exploration, Production & Services (0.7%):
2,800 Sonat Offshore Drilling, Inc........................... 152,950
-----------
Pharmaceuticals (3.7%):
2,300 Bristol-Myers Squibb Co. .............................. 201,825
1,125 Forest Labs, Inc. (b).................................. 46,266
3,600 Merck & Co., Inc. ..................................... 236,249
3,100 Pfizer, Inc. .......................................... 220,100
2,300 Schering-Plough Corp................................... 128,512
-----------
832,952
-----------
Publishing (0.8%):
4,400 McGraw Hill Cos., Inc.................................. 180,400
-----------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Restaurants (0.1%):
2,000 Casa Ole' Restaurants, Inc. (b)........................ $ 26,250
-----------
Retail (0.7%):
3,500 Sears & Roebuck Co. ................................... 154,000
-----------
Retail--Department Stores (0.4%):
2,225 Proffitts, Inc. (b).................................... 91,225
-----------
Retail--Specialty Stores (1.9%):
4,900 Home Depot, Inc........................................ 260,312
2,850 The Mens Wearhouse, Inc. (b)........................... 61,988
3,187 Petco Animal Supplies, Inc. (b)........................ 76,488
1,100 The Finish Line, Class A (b)........................... 34,650
-----------
433,438
-----------
Scientific Instruments (1.1%):
1,850 Fisher Scientific International........................ 73,538
4,400 Thermo Electron Corp. (b).............................. 174,350
-----------
247,888
-----------
Semiconductors (1.1%):
3,000 Intel Corp............................................. 239,438
-----------
Services (Non-Financial) (0.6%):
2,400 Paychex, Inc........................................... 128,400
-----------
Services--Video Tape Rental (0.2%):
2,475 Movie Gallery, Inc. (b)................................ 37,744
-----------
Soaps & Cleaning Agents (1.0%):
2,600 Procter & Gamble Co. .................................. 231,075
-----------
Software & Computer Services (1.0%):
1,800 Microsoft Corp. (b).................................... 220,500
-----------
Steel (1.8%):
5,900 Timken Co.............................................. 224,200
6,400 USX-US Steel Group, Inc................................ 176,000
-----------
400,200
-----------
Telecommunications (0.2%):
1,750 Cidco, Inc. (b)........................................ 40,688
100 Mastec, Inc. (b)....................................... 2,950
-----------
43,638
-----------
Tobacco & Tobacco Products (1.4%):
2,200 Philip Morris Cos., Inc. .............................. 197,450
4,100 RJR Nabisco Holdings Corp.............................. 108,138
-----------
305,588
-----------
</TABLE>
Continued
-45-
<PAGE> 186
AMERICAN PERFORMANCE FUNDS
BALANCED FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities--Electric (2.8%):
6,400 CalEnergy, Inc. (b)................................... $ 193,600
4,300 CMS Energy Corp. ..................................... 128,463
13,900 Unicom Corp........................................... 319,700
------------
641,763
------------
Utilities--Telecommunications (2.9%):
4,300 AT&T Corp. ........................................... 225,750
3,100 Cincinnati Bell....................................... 148,025
6,600 NYNEX Corp. .......................................... 284,625
------------
658,400
------------
Total Common Stocks 12,388,119
------------
CORPORATE BONDS (8.2%):
Banking (2.1%):
$250,000 BankAmerica Corp., 7.13%, 5/12/05..................... 242,500
250,000 J.P. Morgan, 6.25%, 12/15/05.......................... 230,000
------------
472,500
------------
Brokerage Services (2.1%):
250,000 Bear Stearns, 6.25%, 8/15/00.......................... 245,938
250,000 Smith Barney Holdings, 6.88%, 6/15/05................. 238,438
------------
484,376
------------
Financial Services (2.9%):
250,000 Associates Corp., 6.00%, 12/1/02...................... 233,750
250,000 Ford Motor Credit Co., 6.38%, 9/15/99................. 245,938
200,000 General Motors Acceptance Corp., 6.63%, 10/15/05...... 186,750
------------
666,438
------------
Retail Stores (1.1%):
250,000 Wal-Mart Stores, Inc., 7.25%, 6/1/13.................. 238,750
------------
Total Corporate Bonds 1,862,064
------------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- -----------
<S> <C> <C>
TAXABLE MUNICIPAL BONDS (0.7%):
Louisiana (0.7%):
$ 170,000 Orleans Parish, Louisiana School Board, 6.45%,
2/1/05.............................................. $ 160,863
-----------
Total Taxable Municipal Bonds 160,863
-----------
U.S. GOVERNMENT AGENCIES (9.8%):
Federal Home Loan Mortgage Corp.:
459,914 6.00%, 7/1/99........................................ 452,872
211,351 6.50%, 2/1/00........................................ 209,117
Government National Mortgage Assoc.:
624,432 7.00%, 1/15/26, Pool #421420......................... 592,648
178,909 6.00%, 2/20/26, Pool #2166........................... 158,807
790,589 8.00%, 6/15/26, Pool #423563......................... 790,834
-----------
Total U.S. Government Agencies 2,204,278
-----------
U.S. TREASURY BONDS (2.4%):
625,000 6.25%, 8/15/23....................................... 551,006
-----------
Total U.S. Treasury Bonds 551,006
-----------
U.S. TREASURY NOTES (10.6%):
300,000 6.38%, 6/30/97....................................... 301,191
500,000 5.38%, 11/30/97...................................... 496,085
300,000 6.13%, 5/15/98....................................... 299,178
400,000 6.25%, 6/30/98....................................... 399,612
700,000 6.50%, 4/30/99....................................... 700,084
200,000 7.75%, 2/15/01....................................... 207,904
-----------
Total U.S. Treasury Notes 2,404,054
-----------
INVESTMENT COMPANIES (8.9%):
1,121,767 American Performance Cash Management Fund............ 1,121,767
892,553 American Performance U.S. Treasury Fund.............. 892,553
-----------
Total Investment Companies 2,014,320
-----------
Total (Cost--$21,421,361)(a) $22,664,060
===========
- ----------
<FN>
Percentages indicated are based on net assets of $22,592,429.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
Unrealized appreciation......................................... $1,866,532
Unrealized depreciation......................................... (623,833)
----------
Net unrealized appreciation..................................... $1,242,699
==========
(b) Represents non-income producing securities.
</TABLE>
See notes to financial statements.
-46-
<PAGE> 187
AMERICAN PERFORMANCE FUNDS
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
1.ORGANIZATION:
The American Performance Funds (the "Funds") were organized on October 1,
1987, and are registered under the Investment Company Act of 1940 (the "1940
Act"), as amended, as a diversified, open-end investment company established
as a Massachusetts business trust. The Funds had no operations other than
incurring organizational expenses and the sale of initial units of
beneficial interest ("shares") between the date of organization and the date
of commencement of operations.
The Funds are authorized to issue an unlimited number of shares with a par
value of $.00001 per share. The Funds presently offer shares of the Cash
Management Fund, the U.S. Treasury Fund, the Bond Fund, the Intermediate
Bond Fund, the Equity Fund, the Aggressive Growth Fund, the Intermediate
Tax-Free Bond Fund, the Short-Term Income Fund, and the Balanced Fund
(individually referred to as a "Fund"). BancOklahoma Trust Company ("BOTC"),
a subsidiary of BancOklahoma Corp., serves as investment adviser to the Cash
Management Fund, U.S. Treasury Fund, Bond Fund, Intermediate Bond Fund,
Equity Fund, Aggressive Growth Fund, Intermediate Tax-Free Bond Fund, Short-
Term Income Fund, and Balanced Fund. AMR Investment Services, Inc. ("AMR") a
subsidiary of AMR Corporation, the parent company of American Airlines,
Inc., serves as sub-investment adviser to the Cash Management Fund. Bank of
Oklahoma, N.A., a subsidiary of BancOklahoma Corp., acts as custodian to the
Funds.
The investment objective of the Cash Management Fund and U.S. Treasury Fund
(the "money market funds") is to seek current income with liquidity and
stability of principal. The Equity Fund has as its objective to seek growth
of capital. The Aggressive Growth Fund seeks long-term capital appreciation.
The Balanced Fund seeks current income and, secondarily, long-term capital
growth. The Bond Fund's objective is to maximize total return. The
Intermediate Bond Fund, Intermediate Tax-Free Bond Fund, and the Short-Term
Income Fund seek current income, consistent with the preservation of
capital.
2.SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are
in conformity with generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses for the period. Actual results could differ from those estimates.
SECURITIES VALUATION:
Investments of the money market funds are valued at either amortized
cost, which approximates market value, or at original cost, which
combined with accrued interest approximates market value. Discount or
premium is amortized on a constant basis to the maturity of the security
under the amortized cost method. In addition, the money market funds may
not a) purchase any instrument with a remaining maturity greater than
thirteen months unless such investment is subject to a demand feature, or
b) maintain a dollar weighted average portfolio maturity which exceeds 90
days.
Investments in common stocks, corporate bonds, commercial paper,
municipal government bonds, and U.S. Government securities of the Bond
Fund, Intermediate Bond Fund, Equity Fund, Aggressive Growth Fund,
Intermediate Tax-Free Bond Fund, Short-Term Income Fund, and Balanced
Fund (collectively, "the variable net asset value funds"), are valued at
their market value determined on the basis of the latest available bid
prices in the principal market (closing sales prices if the principal
market is an exchange) in which such securities are normally traded.
Investments in investment companies are valued at their net asset values
as reported by such companies. The
Continued
-47-
<PAGE> 188
AMERICAN PERFORMANCE FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
AUGUST 31, 1996
differences between the cost and market values of investments held by the
variable net asset value funds are reflected as either unrealized
appreciation or depreciation.
SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date. Gains or losses realized on sales of securities are
determined by comparing the identified cost of the security lot sold with
the net sales proceeds.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND DELAYED DELIVERY BASIS:
Each Fund may purchase securities on a "when-issued" basis. When-issued
securities are securities purchased for delivery beyond the normal
settlement date at a stated price and/or yield, thereby involving the
risk that the price and/or yield obtained may be more or less than those
available in the market when delivery takes place. The Fund records the
transaction and reflects the value of the security in determining net
asset value at the time the Fund makes the commitment to purchase a
security on a when-issued basis. Normally, the settlement date occurs
within one month of the purchase. No payment is made by the Fund and no
interest accrues to the Fund during the period between purchase and
settlement. The Fund establishes a segregated account in which it
maintains cash and marketable securities equal in value to commitments
for when-issued securities. Securities purchased on a when-issued basis
or delayed delivery basis do not earn income until the settlement date.
REPURCHASE AGREEMENTS:
Each Fund may acquire securities from financial institutions such as
member banks of the Federal Deposit Insurance Corporation or from
registered broker/dealers which the respective investment adviser deems
creditworthy under guidelines approved by the Board of Trustees, subject
to the seller's agreement to repurchase such securities at a mutually
agreed-upon date and price. The repurchase price generally equals the
price paid by the Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller, under a repurchase
agreement, is required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including accrued
interest). Securities subject to repurchase agreements are held by the
Fund's custodian, another qualified sub-custodian or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered
to be loans by a Fund under the 1940 Act.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly
for the money market funds. Dividends from net investment income are
declared daily and paid monthly for the Bond Fund, Intermediate Bond
Fund, Intermediate Tax-Free Bond Fund and Short-Term Income Fund.
Dividends from net investment income are declared and paid quarterly for
the Equity Fund, Aggressive Growth Fund, and Balanced Fund. Net realized
capital gains, if any, are declared and distributed at least annually.
The Funds follow Statement of Position 93-2, Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return
of Capital Distributions by Investment Companies. Accordingly, timing
differences relating to shareholder distributions are reflected in the
components of net assets and permanent book and tax basis differences
relating to shareholder distributions have been reclassified to
additional paid-in capital.
Continued
-48-
<PAGE> 189
AMERICAN PERFORMANCE FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
AUGUST 31, 1996
Dividends from net investment income and from net realized capital gains
are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments for mortgage-backed securities,
expiring capital loss carryforwards and deferrals of certain losses.
FEDERAL INCOME TAXES:
It is the policy of each Fund to qualify, or continue to qualify, as a
regulated investment company by complying with the provisions available
to certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income
and net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
ORGANIZATION COSTS:
All expenses incurred in connection with the Funds' organization and
registration under the 1940 Act and the Securities Act of 1933 were paid
by each of the Funds. Such expenses are being amortized over a period of
two years commencing with the initial public offering.
OTHER:
Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Funds are prorated
to each Fund on the basis of relative net assets.
3.PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
year ended August 31, 1996 are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Bond Fund............................................ $21,641,726 $23,913,474
Intermediate Bond Fund............................... $81,551,328 $91,586,735
Equity Fund.......................................... $53,046,127 $56,274,431
Aggressive Growth Fund............................... $18,202,788 $11,895,323
Intermediate Tax-Free Bond Fund...................... $ 8,859,236 $ 5,454,582
Short-Term Income Fund............................... $12,585,037 $ 9,085,085
Balanced Fund........................................ $20,560,408 $13,341,543
</TABLE>
4.RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Funds by BOTC. AMR serves
as sub-investment adviser to the Cash Management Fund. Under the terms of
the investment advisory agreements, BOTC and AMR are entitled to receive
fees based on a percentage of the average net assets of each of the Funds.
Bank of Oklahoma, N.A., serves the Funds as custodian.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc. ("BISYS
Ohio") are subsidiaries of the BISYS Group, Inc. BISYS, whom certain
officers of the Funds are affiliated, serves the Funds as administrator.
Such officers and trustees are paid no fees directly
Continued
-49-
<PAGE> 190
AMERICAN PERFORMANCE FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
AUGUST 31, 1996
by the Funds for serving as officers of the Funds. Fees for administration
services are established under terms of the administration contract as a
percentage of the average net assets of each of the Funds. BISYS Ohio,
serves the Funds as transfer agent and mutual fund accountant.
The Funds have adopted a Distribution and Shareholder Services Plan in
accordance with Rule 12b-1 under the 1940 Act, pursuant to which the Funds
are authorized to pay or reimburse BISYS, as distributor, a periodic amount,
calculated at an annual rate not to exceed .25% of the average daily net
asset value of the Funds, and may be used by BISYS to pay banks, including
adviser, broker dealers and other institutions. As distributor, BISYS is
entitled to receive commissions on sales of shares of the variable net asset
value funds. For the year ended August 31, 1996, BISYS received $166,639
from commissions earned on sales of shares of the Funds' variable net asset
value funds, all of which was allowed to affiliated broker/dealers of the
Funds.
From time to time, fees may be voluntarily reduced or reimbursed in order to
assist each of the Funds in maintaining competitive expense ratios.
Information regarding these transactions for the year ended August 31, 1996
is as follows:
<TABLE>
<CAPTION>
CASH U.S.
MANAGEMENT TREASURY
FUND FUND
---------- --------
<S> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee (percentage of average net assets)........... .40% .40%
ADMINISTRATION FEES:
Annual fee (percentage of average net assets)........... .20% .20%
12B-1 FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets).................... .25% .25%
Voluntary fee reductions................................ $830,500 $500,780
CUSTODIAN FEES:
Annual fee before voluntary fee reductions
(percentage of net assets)............................ .03% .03%
TRANSFER AGENT AND MUTUAL FUND ACCOUNTANT FEES........... $153,313 $ 99,549
<CAPTION>
INTERMEDIATE
BOND BOND EQUITY
FUND FUND FUND
------- ------------ --------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ .55% .55% .74%
Voluntary fee reductions.................... $73,915 $130,084 $154,982
ADMINISTRATION FEES:
Annual fee (percentage of average net .20% .20% .20%
assets)...................................
12B-1 FEES:
Annual fee (percentage of average net .25% .25% .25%
assets)...................................
CUSTODIAN FEES:
Annual fee before voluntary fee reductions
(percentage of net assets)................ .03% .03% .03%
TRANSFER AGENT AND MUTUAL FUND ACCOUNTANT
FEES........................................ $27,287 $ 47,236 $ 50,607
</TABLE>
Continued
-50-
<PAGE> 191
AMERICAN PERFORMANCE FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
AUGUST 31, 1996
<TABLE>
<CAPTION>
SHORT-
AGGRESSIVE INTERMEDIATE TERM
GROWTH TAX-FREE INCOME BALANCED
FUND BOND FUND FUND FUND
---------- ------------ ------- --------
<S> <C> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee
reductions
(percentage of average net
assets)......................... .69% .55% .55% .74%
Voluntary fee reductions......... $77,088 $57,916 $65,313 $149,330
ADMINISTRATION FEES:
Annual fee before voluntary fee
reductions
(percentage of average net
assets)......................... .20% .20% .20% .20%
12B-1 FEES:
Annual fee before voluntary fee
reductions or credits
(percentage of average net
assets)......................... .25% .25% .25% .25%
Voluntary fee reductions......... $72,358 $29,688 $ 50,449
CUSTODIAN FEES:
Annual fee before voluntary fee
reductions or credits
(percentage of net assets)...... .03% .03% .03% .03%
Voluntary fee reductions......... -- -- $ 3,562 $ 6,054
TRANSFER AGENT AND MUTUAL FUND
ACCOUNTANT FEES.................. $32,127 $36,462 $ 4,798 $ 14,931
</TABLE>
5.ELIGIBLE DISTRIBUTIONS (UNAUDITED):
The American Performance Funds designate the following eligible
distributions for the dividends received deduction for corporations:
<TABLE>
<CAPTION>
AGGRESSIVE
EQUITY BALANCED GROWTH
FUND FUND FUND
---------- -------- ----------
<S> <C> <C> <C>
Dividend Income................................ $1,965,859 $272,966 $189,962
Dividend Income Per Share...................... $ .1787 $ .1363 $ --
</TABLE>
6.EXEMPT-INTEREST INCOME DESIGNATION (UNAUDITED):
The American Performance Funds designate the following exempt-interest
dividends from the Intermediate Tax-Free Bond Fund's taxable year ended
August 31, 1996:
<TABLE>
<CAPTION>
INTERMEDIATE
TAX-FREE
BOND FUND
------------
<S> <C>
Exempt-interest.................................................. $1,515,748
Exempt-interest dividends per share.............................. $ .4815
</TABLE>
Continued
-51-
<PAGE> 192
AMERICAN PERFORMANCE FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
AUGUST 31, 1996
The percentage break-down of the exempt-interest by state for the
Intermediate Tax-Free Bond Fund's taxable year ended August 31, 1996 was as
follows:
<TABLE>
<S> <C>
Alaska................................................................. 2.0%
Arizona................................................................ 5.3%
California............................................................. 5.7%
Delaware............................................................... 0.7%
District of Columbia................................................... 1.7%
Florida................................................................ 0.8%
Illinois............................................................... 10.0%
Louisiana.............................................................. 5.3%
Michigan............................................................... 1.9%
Minnesota.............................................................. 0.8%
Nevada................................................................. 6.3%
New Jersey............................................................. 3.7%
New Mexico............................................................. 0.5%
New York............................................................... 2.1%
Ohio................................................................... 2.9%
Oklahoma............................................................... 12.8%
Pennsylvania........................................................... 1.7%
Rhode Island........................................................... 4.4%
South Carolina......................................................... 2.2%
South Dakota........................................................... 0.9%
Texas.................................................................. 16.9%
Washington............................................................. 10.1%
Wisconsin.............................................................. 1.3%
-----
Total................................................................ 100.0%
</TABLE>
7.FEDERAL INCOME TAXES (UNAUDITED):
For federal income tax purposes, the following Funds have capital loss
carryforwards as of August 31, 1996, which are available to offset future
capital gains, if any:
<TABLE>
<CAPTION>
AMOUNT EXPIRES
-------- -------
<S> <C> <C>
Bond Fund.................................................... $184,630 2003
151,972 2004
Intermediate Bond Fund....................................... 159,446 2003
666,485 2004
Intermediate Tax-Free Bond Fund.............................. 200 2001
2,887 2002
13,731 2003
30,079 2004
</TABLE>
-52-
<PAGE> 193
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CASH MANAGEMENT FUND
------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income....... 0.050 0.052 0.030 0.028 0.042
-------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income....... (0.050) (0.052) (0.030) (0.028) (0.042)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return................. 5.14% 5.30% 3.08% 2.87% 4.38%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)...................... $375,797 $194,807 $195,490 $167,269 $152,652
Ratio of expenses to average
net assets................. 0.71% 0.74% 0.78% 0.78% 0.79%
Ratio of net investment
income to average net
assets..................... 5.01% 5.18% 3.05% 2.80% 4.14%
Ratio of expenses to average
net assets*................ 0.96% 0.99% 0.98% 0.98% 1.03%
Ratio of net investment
income to average net
assets*.................... 4.76% 4.94% 2.85% 2.60% 3.91%
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
</TABLE>
See notes to financial statements.
-53-
<PAGE> 194
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. TREASURY FUND
------------------------------------------------
YEAR ENDED AUGUST 31,
------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income....... 0.047 0.048 0.028 0.025 0.038
-------- -------- -------- -------- --------
DISTRIBUTIONS
Net investment income....... (0.047) (0.048) (0.028) (0.025) (0.038)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return................. 4.85% 4.95% 2.87% 2.57% 3.91%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)...................... $217,406 $187,007 $165,353 $169,428 $136,637
Ratio of expenses to average
net assets................. 0.74% 0.75% 0.81% 0.81% 0.81%
Ratio of net investment
income to average net
assets..................... 4.74% 4.88% 2.81% 2.51% 3.65%
Ratio of expenses to average
net assets*................ 0.99% 1.00% 1.01% 1.01% 1.04%
Ratio of net investment
income to average net
assets*.................... 4.49% 4.63% 2.61% 2.31% 3.41%
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
</TABLE>
See notes to financial statements.
-54-
<PAGE> 195
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
BOND FUND
--------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $ 9.29 $ 9.36 $ 11.05 $ 10.99 $ 10.57
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income........... 0.57 0.56 0.58 0.70 0.76
Net realized and unrealized
gains (losses) on investments.. (0.30) 0.15 (0.77) 0.50 0.54
------- ------- ------- ------- -------
Total from Investment
Activities................... 0.27 0.71 (0.19) 1.20 1.30
------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income........... (0.57) (0.56) (0.58) (0.70) (0.76)
Net realized gains.............. -- -- (0.43) (0.44) (0.12)
In excess of net realized gains. -- (0.22) (0.49) -- --
------- ------- ------- ------- -------
Total Distributions........... (0.57) (0.78) (1.50) (1.14) (0.88)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD... $ 8.99 $ 9.29 $ 9.36 $ 11.05 $ 10.99
======= ======= ======= ======= =======
Total Return (excludes sales
charge)......................... 2.84% 8.21% (1.92)% 11.76% 12.71%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000).......................... $32,807 $37,293 $38,257 $23,554 $42,396
Ratio of expenses to average net
assets......................... 0.96% 1.03% 1.05% 1.12% 1.06%
Ratio of net investment income
to average net assets.......... 6.08% 6.18% 5.72% 6.49% 6.96%
Ratio of expenses to average net
assets*........................ 1.16% 1.23% 1.25% 1.33% 1.30%
Ratio of net investment income
to average net assets*......... 5.88% 5.98% 5.52% 6.28% 6.72%
Portfolio turnover.............. 61.02% 185.48% 122.14% 26.27% 60.84%
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
</TABLE>
See notes to financial statements.
-55-
<PAGE> 196
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE BOND FUND
--------------------------------------------
YEAR ENDED AUGUST 31,
--------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $ 10.26 $ 10.23 $ 11.06 $ 10.89 $ 10.45
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income........... 0.60 0.61 0.61 0.64 0.71
Net realized and unrealized
gains (losses) on investments.. (0.25) 0.06 (0.73) 0.30 0.54
------- ------- ------- ------- -------
Total from Investment
Activities................... 0.35 0.67 (0.12) 0.94 1.25
------- ------- ------- ------- -------
DISTRIBUTIONS:
Net investment income........... (0.60) (0.61) (0.61) (0.64) (0.71)
Net realized gains.............. -- -- (0.06) (0.13) (0.10)
In excess of net realized gains. -- (0.03) (0.04) -- --
------- ------- ------- ------- -------
Total Distributions........... (0.60) (0.64) (0.71) (0.77) (0.81)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD... $ 10.01 $ 10.26 $ 10.23 $ 11.06 $ 10.89
======= ======= ======= ======= =======
Total Return (excludes sales
charge)......................... 3.41% 6.81% (1.14)% 9.04% 12.41%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000).......................... $63,088 $74,395 $84,144 $57,085 $47,523
Ratio of expenses to average net
assets......................... 0.95% 0.98% 0.98% 1.02% 1.07%
Ratio of net investment income
to average net assets.......... 5.84% 6.00% 5.72% 5.95% 6.62%
Ratio of expenses to average net
assets*........................ 1.15% 1.18% 1.18% 1.24% 1.31%
Ratio of net investment income
to average net assets*......... 5.64% 5.80% 5.52% 5.74% 6.39%
Portfolio turnover.............. 129.97% 154.43% 76.30% 47.79% 60.53%
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
</TABLE>
See notes to financial statements.
-56-
<PAGE> 197
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EQUITY FUND
-------------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $ 12.33 $ 11.85 $ 12.78 $ 11.31 $ 12.13
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income........... 0.18 0.20 0.14 0.14 0.17
Net realized and unrealized
gains (losses)
on investments................. 2.04 1.77 0.40 1.56 (0.63)
------- ------- ------- ------- -------
Total from Investment
Activities................... 2.22 1.97 0.54 1.70 (0.46)
------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income........... (0.18) (0.19) (0.14) (0.14) (0.17)
Net realized gains.............. (0.64) (0.39) (1.33) (0.09) (0.19)
In excess of net realized gains. -- (0.91) -- -- --
------- ------- ------- ------- -------
Total Distributions........... (0.82) (1.49) (1.47) (0.23) (0.36)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD... $ 13.73 $ 12.33 $ 11.85 $ 12.78 $ 11.31
======= ======= ======= ======= =======
Total Return (excludes sales
charge)......................... 18.53% 19.74% 4.66% 15.12% (3.98)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000).......................... $86,352 $76,398 $84,618 $58,015 $90,890
Ratio of expenses to average net
assets......................... 1.08% 1.14% 1.12% 1.16% 1.16%
Ratio of net investment income
to average net assets.......... 1.35% 1.73% 1.32% 1.09% 1.46%
Ratio of expenses to average net
assets*........................ 1.27% 1.33% 1.31% 1.36% 1.39%
Ratio of net investment income
to
average net assets*............ 1.16% 1.54% 1.13% 0.88% 1.23%
Portfolio turnover.............. 67.46% 100.44% 159.30% 66.54% 51.26%
Average Commission Rate (a)..... $0.0504 -- -- -- --
- --------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
</TABLE>
See notes to financial statements.
-57-
<PAGE> 198
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
---------------------------------------------------
FEBRUARY 3,
YEAR ENDED AUGUST 31, 1992 TO
------------------------------------- AUGUST 31,
1996 1995 1994 1993 1992 (a)
------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD......... $ 16.31 $ 11.99 $ 11.96 $ 8.37 $ 10.00
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income
(loss)................ (0.04) (0.06) (0.04) (0.03) 0.03
Net realized and
unrealized gains
(losses) on invest-
ments................. 0.30 4.38 0.07 3.62 (1.63)
------- ------- ------- ------- -------
Total from Investment
Activities.......... 0.26 4.32 0.03 3.59 (1.60)
------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income.. -- -- -- -- (0.03)
Net realized gains..... (0.28) -- -- -- --
------- ------- ------- ------- -------
Total Distributions.. (0.28) -- -- -- (0.03)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 16.29 $ 16.31 $ 11.99 $ 11.96 $ 8.37
======= ======= ======= ======= =======
Total Return (excludes
sales charge).......... 1.77% 36.03% 0.25% 42.89% (16.02)%(c)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets at end of
period (000).......... $43,278 $38,008 $24,775 $11,012 $11,716
Ratio of expenses to
average net assets.... 1.11% 1.27% 1.35% 0.62% 0.28%(b)
Ratio of net investment
income (loss) to
average net assets.... (0.35)% (0.62)% (0.69)% (0.24)% 0.58%(b)
Ratio of expenses to
average net assets*... 1.30% 1.45% 1.55% 1.64% 1.47%(b)
Ratio of net investment
income (loss) to
average net assets*... (0.54)% (0.81)% (0.89)% (1.26)% (0.61)%(b)
Portfolio turnover..... 32.89% 27.16% 18.76% 59.47% 14.53%
Average Commission Rate
(d)................... $0.0665 -- -- -- --
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
</TABLE>
See notes to financial statements.
-58-
<PAGE> 199
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE TAX-FREE BOND FUND
----------------------------------------------
YEAR ENDED AUGUST 31,
----------------------------------
MAY 29,
1992 TO
AUGUST 31,
1996 1995 1994 1993 1992 (a)
------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD....................... $ 10.67 $ 10.42 $ 10.77 $ 10.18 $ 10.00
------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income........ 0.49 0.51 0.54 0.55 0.13
Net realized and unrealized
gains (losses) on invest-
ments....................... (0.10) 0.25 (0.35) 0.59 0.18
------- ------- ------- ------- -------
Total from Investment
Activities................ 0.39 0.76 0.19 1.14 0.31
------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income........ (0.49) (0.51) (0.54) (0.55) (0.13)
------- ------- ------- ------- -------
Total Distributions........ (0.49) (0.51) (0.54) (0.55) (0.13)
------- ------- ------- ------- -------
Net Asset Value, End of
Period....................... $ 10.57 $ 10.67 $ 10.42 $ 10.77 $ 10.18
======= ======= ======= ======= =======
Total Return (excludes sales
charge)...................... 3.68% 7.62% 1.76% 11.56% 3.14%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)....................... $31,036 $28,114 $30,097 $17,415 $ 7,560
Ratio of expenses to average
net assets.................. 0.75% 0.51% 0.25% 0.25% 0.35%(b)
Ratio of net investment in-
come to average net assets.. 4.58% 4.99% 5.06% 5.34% 5.28%(b)
Ratio of expenses to average
net assets*................. 1.20% 1.24% 1.44% 1.63% 2.03%(b)
Ratio of net investment in-
come to average net assets*. 4.13% 4.25% 3.87% 3.96% 3.60%(b)
Portfolio turnover........... 19.53% 8.35% 14.33% 13.19% 19.33%
- ----------
<FN>
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
</TABLE>
See notes to financial statements.
-59-
<PAGE> 200
AMERICAN PERFORMANCE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SHORT-TERM INCOME FUND BALANCED FUND
------------------------ ---------------------
OCTOBER 19, JUNE 1,
YEAR ENDED 1994 YEAR ENDED 1995 TO
AUGUST 31, TO AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 (a) 1996 1995 (a)
---------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 9.95 $ 10.00 $ 10.62 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income....... 0.59 0.52 0.35 0.08
Net realized and unrealized
gains (losses) on invest-
ments...................... (0.14) (0.05) 0.79 0.62
------- ------- ------- -------
Total from Investment
Activities............... 0.45 0.47 1.14 0.70
------- ------- ------- -------
DISTRIBUTIONS
Net investment income....... (0.59) (0.52) (0.35) (0.08)
Net realized gains.......... (0.01) -- (0.13) --
In excess of net realized
gains...................... (0.01) -- -- --
------- ------- ------- -------
Total Distributions....... (0.61) (0.52) (0.48) (0.08)
------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD...................... $ 9.79 $ 9.95 $ 11.28 $ 10.62
======= ======= ======= =======
Total Return (excludes sales
charge)..................... 4.64% 4.81%(c) 10.87% 6.98%(c)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period
(000)...................... $14,399 $10,228 $22,592 $12,842
Ratio of expenses to average
net assets................. 0.41% 0.57%(b) 0.38% 0.90%(b)
Ratio of net investment in-
come to average net assets. 5.95% 5.96%(b) 3.27% 3.17%(b)
Ratio of expenses to average
net assets*................ 1.24% 1.47%(b) 1.40% 1.92%(b)
Ratio of net investment in-
come to average net
assets*.................... 5.12% 5.06%(b) 2.25% 2.15%(b)
Portfolio turnover.......... 80.98% 212.35%(b) 71.89% 18.68%
Average Commission Rate (d). -- -- $0.0792 --
- ----------
<FN>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Unannualized.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
</TABLE>
See notes to financial statements.
-60-
<PAGE> 201
APPENDIX
The nationally recognized statistical rating organizations
(individually, an "NRSRO") that may be utilized by the Funds with regard to
portfolio investments for the Funds include Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P"), Duff & Phelps, Inc.
("Duff"), Fitch Investors Service, Inc. ("Fitch"), IBCA Limited and its
affiliate, IBCA Inc. (collectively, "IBCA"), and Thomson BankWatch, Inc.
("Thomson"). Set forth below is a description of the relevant ratings of
each such NRSRO. The NRSROs that may be utilized by the Funds and the
description of each NRSRO's ratings is as of the date of this Statement of
Additional Information, and may subsequently change.
LONG-TERM DEBT RATINGS (may be assigned, for example, to corporate and
municipal bonds)
Description of the five highest long-term debt ratings by Moody's (Moody's
applies numerical modifiers (1, 2, and 3) in each rating category to
indicate the security's ranking within the category):
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be
as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risk appear somewhat
larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment some time in the
future.
Baa Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
B-49
<PAGE> 202
Ba Bonds which are rated Ba are judged to have speculative
elements - their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both
good and bad times in the future. Uncertainty of position
characterizes bonds in this class.
Description of the five highest long-term debt ratings by S&P (S&P may apply
a plus (+) or minus (-) to a particular rating classification to show
relative standing within that classification):
AAA Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only
in small degree.
A Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
BB Debt is regarded as having predominately speculative
characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of
speculation. While such debt will likely have same quality
and protective characteristics, these are outweighed by large
uncertainties or major exposure to adverse conditions.
Description of the three highest long-term debt ratings by Duff:
AAA Highest credit quality. The risk factors are negligible being
only slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality Protection factors are strong.
AA Risk is modest but may vary slightly from time to
AA- time because of economic conditions.
A+ Protection factors are average but adequate. However,
A risk factors are more variable and greater in periods
A- of economic stress.
B-50
<PAGE> 203
Description of the three highest long-term debt ratings by Fitch (plus or
minus signs are used with a rating symbol to indicate the relative position
of the credit within the rating category):
AAA Bonds considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely
to be affected by reasonably foreseeable events.
AA Bonds considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and
repay principal is very strong, although not quite as strong
as bonds rated "AAA." Because bonds rated in the "AAA" and
"AA" categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issues is generally rated "F-1+."
A Bonds considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
IBCA's description of its three highest long-term debt ratings:
AAA Obligations for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial such that adverse changes in
business, economic or financial conditions are unlikely to
increase investment risk significantly.
AA Obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial. Adverse changes in business,
economic, or financial conditions may increase investment risk
albeit not very significantly.
A Obligations for which there is a low expectation of investment
risk. Capacity for timely repayment of principal and interest
is strong, although adverse changes in business, economic or
financial conditions may lead to increased investment risk.
SHORT-TERM DEBT RATINGS (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit)
Moody's description of its three highest short-term debt ratings:
Prime-1 Issuers rated Prime-1 (or supporting institutions)
have a superior capacity for repayment of senior
short-term promissory obligations. Prime-1
B-51
<PAGE> 204
repayment capacity will normally be evidenced by many
of the following characteristics:
-Leading market positions in well-established
industries.
-High rates of return on funds employed.
-Conservative capitalization structures with
moderate reliance on debt and ample asset
protection.
-Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
-Well-established access to a range of
financial markets and assured sources of
alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have
a strong capacity for repayment of senior short-term
debt obligations. This will normally be evidenced by
many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while
sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate
liquidity is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have
an acceptable ability for repayment of senior
short-term obligations. The effect of industry
characteristics and market compositions may be more
pronounced. Variability in earnings and profitability
may result in changes in the level of debt protection
measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
S&P's description of its three highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have
extremely strong safety characteristics are denoted with a
plus sign (+).
A-2 Capacity for timely payment on issues with this designation
is satisfactory. However, the relative degree of safety is
not as high as for issues designated "A-1."
B-52
<PAGE> 205
A-3 Issues carrying this designation have adequate capacity for
timely payment. They are, however, more vulnerable to the
adverse effects of changes in circumstances than obligations
carrying the higher designations.
Duff's description of its three highest short-term debt ratings (Duff
incorporates gradations of "1+" (one plus) and "1-" (one minus) to assist
investors in recognizing quality differences within the highest rating
category):
D-1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
D-1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
D-1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
D-2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding needs
may enlarge total financing requirements, access to capital
markets is good. Risk factors are small.
D-3 Satisfactory liquidity and other protection factors qualify
issue as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
Fitch's description of its three highest short-term debt ratings:
F-1+ Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as having the strongest degree of
assurance for timely payment.
F-1 Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2 Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as for issues assigned F-1+
or F-1 ratings.
F-3 Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for
timely payment is adequate, however, near-term adverse changes
could cause these securities to be rated below investment
grade.
B-53
<PAGE> 206
IBCA's description of its three highest short-term debt ratings:
A1 Obligations supported by the highest capacity for timely repayment.
Where issues possess a particularly strong credit feature, a
rating of A1+ is assigned.
A2 Obligations supported by a good capacity for timely repayment.
A3 Obligations supported by a satisfactory capacity for timely
payment.
Short-Term Loan/Municipal Note Ratings
--------------------------------------
Moody's description of its two highest short-term loan/municipal note
ratings:
MIG-1/VMIG-1 This designation denotes best quality. There is present
strong protection by established cash flows, superior
liquidity support or demonstrated broad-based access to
the market for refinancing.
MIG-2/VMIG-2 This designation denotes high quality. Margins of
protection are ample although not so large as in the
preceding group.
S&P's description of its two highest municipal note ratings:
SP-1 Strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest,
with some vulnerability to adverse financial and economic
charges over the term of the notes.
Short-Term Debt Ratings
-----------------------
Thomson BankWatch, Inc. ("TBW") ratings are based upon a qualitative and
quantitative analysis of all segments of the organization including, where
applicable, holding company and operating subsidiaries.
BankWatch(TM) Ratings do not constitute a recommendation to buy or sell
securities of any of these companies. Further, BankWatch does not suggest
specific investment criteria for individual clients.
The TBW Short-Term Ratings apply to commercial paper, other senior
short-term obligations and deposit obligations of the entities to which the
rating has been assigned.
B-54
<PAGE> 207
The TBW Short-Term Ratings apply only to unsecured instruments that have a
maturity of one year or less.
The TBW Short-Term Ratings specifically assess the likelihood of an untimely
payment of principal or interest.
TBW-1 The highest category; indicates a very high degree of
likelihood that principal and interest will be paid on a
timely basis.
TBW-2 The second highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as
for issues rated "TBW-1".
TBW-3 The lowest investment grade category; indicates that while
more susceptible to adverse developments (both internal
and external) than obligations with higher ratings,
capacity to service principal and interest in a timely
fashion is considered adequate.
TBW-4 The lowest rating category; this rating is regarded as
non-investment grade and therefore speculative.
B-55
<PAGE> 208
REGISTRATION STATEMENT
OF
AMERICAN PERFORMANCE FUNDS
ON
FORM N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Included in Part A:
-- Financial Highlights.
Included in Part B:
-- Independent Auditors' Report dated October 18, 1996.
-- Statements of Assets and Liabilities as of August 31, 1996
(audited).
-- Statements of Operations for the fiscal year ended August 31,
1996 (audited).
-- Statements of Changes in Net Assets for the periods or years
ended August 31, 1995 and 1996 (audited).
-- Schedules of Portfolio Investments dated August 31, 1996
(audited).
-- Notes to Financial Statements dated August 31, 1996 (audited).
-- Financial Highlights for each of the periods or years ended
August 31, 1992, August 31, 1993, August 31, 1994, August 31,
1995 and August 1996 (audited).
(b) Exhibits:
(1) Agreement and Declaration of Trust dated October 1, 1987, as
amended and restated on August 20, 1990 is incorporated by
reference to
<PAGE> 209
Exhibit 1 to Post-Effective Amendment No. 1 to the Funds'
Registration Statement (filed October 31, 1990).
(2)(a) Bylaws as approved and adopted by Registrant's Board of
Trustees is incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 1 to the Funds' Registration
Statement (filed October 31, 1990).
(2)(b) Certified Resolution of the Registrant's Board of Trustees
amending the Registrant's Bylaws as adopted by a unanimous
vote at a meeting of the Board of Trustees on October 25, 1991
is incorporated by reference to Exhibit 2(b) to Post-Effective
Amendment No. 3 to the Funds' Registration Statement (filed
November 26, 1991).
(3) None.
(4)(a) Article III, Section 4 and 5, Article V, Article VIII, Section
4, and Article IX, Sections 1, 4, 5 and 7 of the Agreement and
Declaration of Trust dated October 1, 1987, as amended and
restated on August 20, 1990 is incorporated by reference to
Exhibit 1 to Post-Effective Amendment No. 1 to the Funds'
Registration Statement (filed October 31, 1990).
(4)(b) Article 9, Article 10, Section 6 and Article 11 of the Bylaws
as approved and adopted by Registrant's Board of Trustees is
incorporated by reference to Exhibit 2 to Post-Effective
Amendment No. 1 to the Funds' Registration Statement (filed
October 31, 1990).
(4)(c) Certified Resolution of the Registrant's Board of Trustees
amending the Registrant's Bylaws as adopted by a unanimous
vote at a meeting of the Board of Trustees on October 25, 1991
is incorporated by reference to Exhibit 2(b) to Post-Effective
Amendment No. 3 to the Funds' Registration Statement (filed
November 26, 1991).
(5)(a) Investment Advisory Agreement between Registrant and
BancOklahoma Trust Company dated October 1, 1994 is
incorporated by reference to Exhibit (5)(a) to Post-Effective
Amendment No. 11 to the Funds' Registration Statement (filed
February 13, 1995).
(5)(b) Sub-Investment Advisory Agreement between Registrant and AMR
Investment Services, Inc. dated October 1, 1994 is
incorporated by
C-2
<PAGE> 210
reference to Exhibit (5)(b) to Post-Effective Amendment No. 10
to the Funds' Registration Statement (filed December 28,
1994).
(5)(c) Amended Schedule A to the Investment Advisory Agreement
between Registrant and BancOklahoma Trust Company dated
October 1, 1994 is incorporated by reference to Exhibit 5(c)
to Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
(6)(a) Distribution Agreement between Registrant and The Winsbury
Company Limited Partnership is incorporated by reference to
Exhibit 6(a) to Post-Effective Amendment No. 6 to the Funds'
Registration Statement (filed December 7, 1993).
(6)(b) Amended Schedules A and B to Distribution Agreement between
Registrant and The Winsbury Company Limited Partnership dated
October 1, 1993 are incorporated by reference to Exhibit 6(b)
to Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
(7) None.
(8)(a) Custodian Agreement between Registrant and Bank of Oklahoma,
N.A. is incorporated by reference to Exhibit 8(a) to
Post-Effective Amendment No. 1 to the Funds' Registration
Statement (filed October 31, 1990).
(8)(b) Amended Schedule A to Custodian Agreement between Registrant
and Bank of Oklahoma, N.A. dated September 5, 1990 is
incorporated by reference to Exhibit 8(b) to Post-Effective
Amendment No. 13 to the Funds' Registration Statement (filed
October 31, 1995).
(9)(a) Management and Administration Agreement between Registrant and
The Winsbury Company Limited Partnership dated September 5,
1990, as amended and restated on May 12, 1995 is incorporated
by reference to Exhibit 9(a) to Post-Effective Amendment No.
13 to the Funds' Registration Statement (filed October 31,
1995).
(9)(b) Transfer Agency and Shareholder Service Agreement between
Registrant and The Winsbury Service Corporation is
incorporated by
C-3
<PAGE> 211
reference to Exhibit 9(b) to Post-Effective Amendment No. 1 to
the Funds' Registration Statement (filed October 31, 1990).
(9)(c) Fund Accounting Agreement between Registrant and The Winsbury
Service Corporation is incorporated by reference to Exhibit
9(c) to Post-Effective Amendment No. 1 to the Funds'
Registration Statement (filed October 31, 1990).
(9)(d) Amended Schedule A to Transfer Agency and Shareholder Service
Agreement between Registrant and The Winsbury Service
Corporation dated September 5, 1990 is incorporated by
reference to Exhibit 9(d) to Post-Effective Amendment No. 13
to the Funds' Registration Statement (filed October 31, 1995).
(9)(e) Amended Schedule A to Fund Accounting Agreement between
Registrant and The Winsbury Service Corporation dated
September 5, 1990 is incorporated by reference to Exhibit 9(e)
to Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
(9)(g) Sub-Administration Agreement between The Winsbury Company
Limited Partnership and BancOklahoma Trust Company dated May
12, 1995 is incorporated by reference to Exhibit 9(g) to
Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
(10) Opinion and consent of counsel is incorporated by reference to
the 24f-2 opinion and consent of counsel filed on October 29,
1996.
(11)(a) Consent of KPMG Peat Marwick LLP is filed herewith.
(11)(b) Consent of Ropes & Gray is filed herewith.
(12) None.
(13) Purchase Agreement dated August 3, 1990 between Registrant and
Winsbury Associates is incorporated by reference to Exhibit 13
to Post-Effective Amendment No. 1 to the Funds' Registration
Statement (filed October 31, 1990).
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<PAGE> 212
(14) None.
(15)(a) Amended and Restated Shareholder Services Plan dated
October 1, 1993 is incorporated by reference to Exhibit
15(a) to Post-Effective Amendment No. 7 to the Funds'
Registration Statement (filed December 16, 1993).
(15)(b) Form of Servicing Agreement with Respect to Shareholder
Services to be utilized in connection with Distribution
and Shareholder Services Plan is incorporated by reference
to Exhibit 15(b) to Pre-Effective Amendment No. 1 to the
Funds' Registration Statement (filed August 29, 1990).
(15)(c) Form of Servicing Agreement with Respect to Distribution
Assistance and Shareholder Services to be utilized in
connection with Distribution and Shareholder Services Plan
is incorporated by reference to Exhibit 15(c) to
Pre-Effective Amendment No. 1 to the Funds' Registration
Statement (filed August 29, 1990).
(15)(d) Amended Schedule A to Amended and Restated Distribution
and Shareholder Services Plan dated October 1, 1993 is
incorporated by reference to Exhibit 15(d) to
Post-Effective Amendment No. 13 to the Funds' Registration
Statement (filed October 31, 1995).
(16)(a) Performance Calculations Schedules for every Fund except
the ShortTerm Income Fund and the Balanced Fund are
incorporated by reference to Exhibit 16 to Post-Effective
Amendment No. 6 to the Funds' Registration Statement
(filed December 7, 1993).
(16)(b) Performance Calculations Schedules for the Short-Term
Income Fund and the Balanced Fund are incorporated by
reference to Exhibit 16(b) to Post-Effective Amendment No.
13 to the Funds' Registration Statement (filed October 31,
1995).
(17) Financial Data Schedules
(a) U.S. Treasury Fund
(b) Cash Management Fund
(c) Equity Fund
(d) Aggressive Growth Fund
(e) Balanced Fund
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<PAGE> 213
(f) Bond Fund
(g) Intermediate Bond Fund
(h) Intermediate Tax-Free Bond Fund
(i) Short-Term Income Fund
Item 25. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
There are no persons controlled or under common control with the
Registrant.
Item 26. Number of Holders of Securities
-------------------------------
As of November 1, 1996 the number of record holders of each series of
the Funds were as follows:
<TABLE>
<CAPTION>
Title of Series Number of Record Holders
--------------- ------------------------
<S> <C>
U.S. Treasury Fund 10
Cash Management Fund 41
Equity Fund 41
Aggressive Growth Fund 130
Bond Fund 26
Intermediate Bond Fund 70
Intermediate Tax-Free
Bond Fund 123
Short-Term Income Fund 4
Balanced Fund 4
</TABLE>
Item 27. Indemnification
---------------
Article VIII of Registrant's Agreement and Declaration of
Trust, filed or incorporated by reference as Exhibit (1)
hereto, provides for the
C-6
<PAGE> 214
indemnification of Registrant's trustees and officers.
Indemnification of Registrant's principal underwriter is
provided for in the Agreement between Registrant and that
service provider as filed or incorporated by reference as
Exhibits hereto. As of the effective date of this Registration
Statement, Registrant has obtained from a major insurance
carrier a trustees and officers' liability policy covering
certain types of errors and omissions. In no event will
Registrant indemnify any of its trustees, officers, employees,
or agents against any liability to which such person would
otherwise be subject by reason of his willful misfeasance, bad
faith, or gross negligence in the performance of his duties,
or by reason of his reckless disregard of the duties involved
in the conduct of his office or under his agreement with
Registrant. Registrant will comply with Rule 484 under the
Securities Act of 1933 and Release 11330 under the Investment
Company Act of 1940 in connection with any indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers,
and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses
incurred or paid by a trustee, officer or controlling person
of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer, or
controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser and
--------------------------------------------------------
Investment Sub-Adviser
----------------------
BancOklahoma Trust Company serves as Registrant's investment
adviser. AMR Investment Services, Inc. serves as the
sub-investment adviser to the American Performance Cash
Management Fund.
To the knowledge of Registrant, none of the directors or
officers of BancOklahoma Trust Company and AMR Investment
Services, Inc. except
C-7
<PAGE> 215
those set forth below is or has been, at any time during the
past two calendar years, engaged in any other business,
profession, vocation or employment of a substantial nature.
Set forth below are the names and principal businesses of the
directors of BancOklahoma Trust Company and AMR Investment
Services, Inc. who are engaged in any other business,
profession, vocation or employment of a substantial nature.
<TABLE>
<CAPTION>
BANCOKLAHOMA TRUST COMPANY
Name and Position With Other
With BancOklahoma Substantial Type of
Trust Company Occupation Business
<S> <C> <C>
Sharon J. Bell, Esq. Attorney and Managing Legal; Medicine;
Director Partner, Rogers & Education; Petroleum;
Bell, Suite 801, 320 Charitable Organization
South Boston Building,
Tulsa Oklahoma, 74101.
Trustee and General
Counsel, Chapman-
McFarlin Interests;
formerly a Director
and President, Red
River Oil Company and
Tulsa Area United Way.
Philip C. Lauinger, Jr. Chairman and Chief Investments; Publishing;
Director Executive Officer of International Affairs
Lauinger Publishing
Company; previously,
Chairman of the Board
and Chief Executive
Officer of PennWell
Publishing Co.;
Director, MAPCO, Inc.
Edgar R. Sanditen Personal Investments Investments
Director
</TABLE>
C-8
<PAGE> 216
<TABLE>
<CAPTION>
<S> <C> <C>
Stanley A. Lybarger President and Chief Banking
Director Operating Officer,
Bank of Oklahoma, N.A.
and BOK Financial;
previously President
of Bank of Oklahoma,
Oklahoma City Regional
Office and Executive
Vice President of Bank
of Oklahoma, N.A. with
responsibility for
corporate banking.
George B. Kaiser Chairman and Chief Banking; Oil
Director Executive Officer,
Bank of Oklahoma, N.A.
and BOK Financial
Corp.; President and
Owner, Kaiser-Francis
Oil Co.
H. James Holloman None
President and Director
Larry W. Brummett Chairman of the Board, Natural Gas
Director President and Chief
Executive Officer of
ONEOK, Inc.; formerly
Executive Vice
President of ONEOK,
Inc. and President of
Oklahoma Natural Gas
Company
Glenn A. Cox Retired in December Oil and Gas
Director 1991 as President and
Chief Operating
Officer of Phillips
Petroleum Company;
Director of Helmerich
& Payne, Inc., The
Williams Companies,
Inc. and Union Texas
Petroleum Company.
</TABLE>
C-9
<PAGE> 217
<TABLE>
<CAPTION>
<S> <C> <C>
Thomas J. Hughes, III President and Chief Lumber
Director Executive Officer of
Hughes Lumber Company.
Robert J. LaFortune Self-employed in Investments
Director investment and
management of personal
financial holdings;
Director of The
Williams Companies,
Inc.
</TABLE>
- ------------------
The address of the BancOklahoma Trust Company is One Williams Center, Bank
of Oklahoma Tower, Tulsa, Oklahoma 74103.
The address of Bank of Oklahoma, N.A. is P.O. Box 2300, Tulsa, Oklahoma
74103.
The address of the BancOklahoma Corporation is One Williams Center, Bank of
Oklahoma Tower, Tulsa, Oklahoma 74103.
C-10
<PAGE> 218
AMR Investment Services, Inc.
-----------------------------
<TABLE>
<CAPTION>
Name and Position Other
With AMR Investment Substantial Type of
Services, Inc. Occupation Business
-------------- ---------- --------
<S> <C> <C>
Robert L. Crandall Chairman, President Airline; Oil Service
Director and Chairman and Chief Executive
Officer, AMR
Corporation; Director,
Chairman, and Chief
Executive Officer,
American Airlines,
Inc. Mr. Crandall also
serves as an officer
and/or director of
various subsidiaries
of AMR Corporation.
Director, Halliburton
Company.
Gerard J. Arpey Senior Vice President Airline
Director and Vice Chairman and Chief Financial
Officer, AMR
Corporation; Mr. Arpey
also serves as an
officer and/or
director of various
subsidiaries of AMR
Corporation.
Jeffrey M. Jackson Vice President of Airline
Vice President and Corporate Development
Treasurer and Treasurer, AMR
Corporation, (March
1995-present), Vice
President of Corporate
Development, AMR
Corporation. Mr.
Jackson also serves as
an officer and/or
director of various
subsidiaries of AMR
Corporation.
</TABLE>
C-11
<PAGE> 219
<TABLE>
<CAPTION>
<S> <C> <C>
Charles D. MarLett Corporate Secretary, Airline; The Arts
Secretary AMR Corporation;
Corporate Secretary,
American Airlines,
Inc. Mr. MarLett also
serves as an officer
and/or director of
various subsidiaries
of AMR Corporation.
Director, Dallas
Summer Musicals.
Anne H. McNamara Senior Vice President Airline; Energy
Director and General Counsel,
AMR Corporation;
Senior Vice President
Administration and
General Counsel,
American Airlines,
Inc. Ms. McNamara also
serves as an officer
and/or director of
various subsidiaries
of AMR Corporation;
Director, LGE Energy
Corp.
William F. Quinn President, AMR Investment Adviser;
President Investment Services, Credit Union; REIT;
Inc.; Chairman and Airline
Director, American
Airlines Employees
Federal Credit Union;
Director, Crescent
Real Estate Equities,
Inc. Mr. Quinn also
serves as an officer
and/or director of
various subsidiaries
of AMR Corporation.
Trustee and President,
AMR Investment
Services Trust,
American AAdvantage
Funds, American
AAdvantage Mileage
Funds.
</TABLE>
C-12
<PAGE> 220
<TABLE>
<CAPTION>
<S> <C> <C>
Nancy A. Eckl Vice President - Trust Investment Adviser
Vice President Investments (April
1995 Present), Vice
President Finance and
Compliance (February
1989-March 1995), AMR
Investment Services,
Inc.; Vice President,
AMR Investment
Services Trust,
American AAdvantage
Funds, American
AAdvantage Mileage
Funds.
Michael W. Fields Vice President - Fixed Investment Adviser
Vice President Income Investments,
AMR Investment
Services, Inc.; Vice
President, AMR
Investment Services
Trust, American
AAdvantage Funds,
American AAdvantage
Mileage Funds.
John B. Roberson Vice President - Investment Advisor
Vice President Marketing, AMR
Investment Services,
Inc.; Vice President,
AMR Investment
Services Trust,
American AAdvantage
Funds, American
AAdvantage Mileage
Funds.
</TABLE>
The address of each director or officer of AMR Investment Services, Inc.
is 4333 Amon Carter Boulevard, Ft. Worth, Texas 76155.
Item 29. Principal Underwriter
---------------------
(a) BISYS Fund Services acts as distributor and administrator for
Registrant. BISYS Fund Services also distributes the securities
of the following investment companies: The Riverfront Funds,
Inc., The Victory Portfolios, The HighMark Group, AmSouth Mutual
Funds, The Parkstone Group of Funds, The Sessions Group, the
MarketWatch Funds, the
C-13
<PAGE> 221
BB&T Mutual Funds Group, The Coventry Group, Pacific Capital
Funds, The ARCH Fund, Inc., M.S.D. & T. Funds, Inc., MMA Praxis
Mutual Funds, Summit Investment Trust, Qualivest Funds, the
Fountain Square Funds, HSBC Family of Funds, The Infinity Mutual
Funds Inc., The Kent Funds, the Parkstone Advantage Funds,
Pegasus Funds, the Republic Funds, SBSF Funds Inc., The Time
Horizon Funds, and First Choice Funds Trust.
(b) Partners of BISYS Fund Services as of the date of this Part C
are as follows:
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address BISYS Fund Services Registrant
---------------- ------------------- -------------
<S> <C> <C>
BISYS Fund Services, Inc. Sole General Partner None
150 Clove Road
Little Falls, NJ 07424
WC Subsidiary Corporation Sole Limited Partner None
150 Clove Road
Little Falls, NJ 07424
</TABLE>
Each of these corporations is a subsidiary of The BISYS Group, Inc., 150
Clove Road, Little Falls, NJ 07424.
Item 30. Location of Accounts and Records
--------------------------------
(1) BancOklahoma Trust Company, Bank of Oklahoma Tower, Tulsa,
Oklahoma 74103 (records relating to its functions as
Investment Adviser).
(2) AMR Investment Services, Inc., P.O. Box 619003, Dallas/Ft.
Worth Airport, Texas 75261- 9003 (records relating to its
function as Sub-Investment Adviser).
(3) BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219
(records relating to its functions as Administrator and
Distributor).
(4) BISYS Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus,
OH 43219 (records relating to its functions as Transfer Agent
and Fund Accountant).
(5) Bank of Oklahoma, N.A., Bank of Oklahoma Tower, Tulsa,
Oklahoma 74103 (records relating to its functions as
Custodian).
C-14
<PAGE> 222
(6) Ropes & Gray, One Franklin Square, 1301 K Street, N.W., Suite
800 East, Washington, D.C. 20005 (Agreement and Declaration of
Trust, Bylaws, and Minute Books).
Item 31. Management Services
-------------------
N/A.
Item 32. Undertakings
------------
(a) Registrant undertakes to call a meeting of shareholders, at
the request of holders of 10% of the Registrant's outstanding
shares, for the purpose of voting upon the question of removal
of a trustee or trustees and undertakes to assist in
communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
(b) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest
annual report to shareholders upon request and without charge.
C-15
<PAGE> 223
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the 1933 Act and has duly caused this Post-Effective
Amendment No. 14 to the Registration Statement of American Performance Funds
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Washington, District of Columbia, as of December 12, 1996.
American Performance Funds
Registrant
* /s/Walter B. Grimm
--------------------------
Walter B. Grimm
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 14 to the Registration Statement has been
signed below by the following persons in the capacity and on the date
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman, President
*/s/Walter B. Grimm and Trustee December 12, 1996
-------------------
Walter B. Grimm
*/s/Stephen G. Mintos Treasurer December 12, 1996
---------------------
Stephen G. Mintos
*/s/Michael J. Hall Trustee December 12, 1996
-------------------
Michael J. Hall
*/s/Perry A. Wimpey Trustee December 12, 1996
-------------------
Perry A. Wimpey
*/s/I. Edgar Hendrix Trustee December 12, 1996
--------------------
I. Edgar Hendrix
* By: /s/Alan G. Priest
--------------------
Alan G. Priest, As
Attorney-in-Fact Pursuant
to Powers of Attorney Filed Herewith.
</TABLE>
C-16
<PAGE> 224
POWER OF ATTORNEY
-----------------
Walter B. Grimm, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Maryellen M. Lundquist,
each individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable the American Performance Funds (the "Trust"), to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with
the filing and effectiveness of any and all amendments (including post-
effective amendments) to the Trust's Registration Statement on Form N-1A
pursuant to said Acts, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name
and on behalf of the undersigned as a trustee and/or officer of the Trust
any and all such amendments filed with the Securities and Exchange
Commission under said Acts, and any other instruments or documents related
thereto, and the undersigned does hereby ratify and confirm all that said
attorneys and agents, or either of them, shall do or cause to be done by
virtue thereof.
Dated: November 12, 1993 /s/ Walter B. Grimm
----------------- -------------------
Walter B. Grimm
<PAGE> 225
POWER OF ATTORNEY
-----------------
Stephen G. Mintos, whose signature appears below, does hereby
constitute and appoint Martin E. Lybecker, Alan G. Priest, and Maryellen M.
Lundquist, each individually, his true and lawful attorneys and agents, with
power of substitution or resubstitution, to do any and all acts and things
and to execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable the American Performance Funds (the "Trust"), to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with
the filing and effectiveness of any and all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form
N-1A pursuant to said Acts, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a trustee and/or officer of the Trust any
and all such amendments filed with the Securities and Exchange Commission
under said Acts, and any other instruments or documents related thereto, and
the undersigned does hereby ratify and confirm all that said attorneys and
agents, or either of them, shall do or cause to be done by virtue thereof.
Dated: November 12, 1993 /s/ Stephen G. Mintos
----------------- ---------------------
Stephen G. Mintos
<PAGE> 226
POWER OF ATTORNEY
-----------------
Michael J. Hall, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Charles B. Mathias, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable the American Performance Funds (the "Trust"), to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with
the filing and effectiveness of any and all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form
N-1A pursuant to said Acts, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a trustee and/or officer of the Trust any
and all such amendments filed with the Securities and Exchange Commission
under said Acts, and any other instruments or documents related thereto, and
the undersigned does hereby ratify and confirm all that said attorneys and
agents, or either of them, shall do or cause to be done by virtue thereof.
Dated: August 7, 1990 /s/ Michael J. Hall
-------------- -------------------
Michael J. Hall
<PAGE> 227
POWER OF ATTORNEY
-----------------
Perry A. Wimpey, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Charles B. Mathias, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable the American Performance Funds (the "Trust"), to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with
the filing and effectiveness of any and all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form
N-1A pursuant to said Acts, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a trustee and/or officer of the Trust any
and all such amendments filed with the Securities and Exchange Commission
under said Acts, and any other instruments or documents related thereto, and
the undersigned does hereby ratify and confirm all that said attorneys and
agents, or either of them, shall do or cause to be done by virtue thereof.
Dated: July 25, 1990 /s/ Perry A. Wimpey
------------- -------------------
Perry A. Wimpey
<PAGE> 228
POWER OF ATTORNEY
-----------------
I. Edgar Hendrix, whose signature appears below, does hereby constitute
and appoint Martin E. Lybecker, Alan G. Priest, and Maryellen M. Lundquist,
each individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable the American Performance Funds (the "Trust"), to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with
the filing and effectiveness of any and all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form
N-1A pursuant to said Acts, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and
on behalf of the undersigned as a trustee and/or officer of the Trust any
and all such amendments filed with the Securities and Exchange Commission
under said Acts, and any other instruments or documents related thereto, and
the undersigned does hereby ratify and confirm all that said attorneys and
agents, or either of them, shall do or cause to be done by virtue thereof.
Dated: July 25, 1990 /s/ I. Edgar Hendrix
------------- --------------------
I. Edgar Hendrix
<PAGE> 229
EXHIBIT INDEX
-------------
Exhibit
-------
No. Description Page No.
--- ----------- --------
(11)(a) Consent of KPMG Peat Marwick LLP.
(11)(b) Consent of Ropes & Gray.
(27) Financial Data Schedules
(a) U.S. Treasury Fund
(b) Cash Management Fund
(c) Equity Fund
(d) Aggressive Growth Fund
(e) Balanced Fund
(f) Bond Fund
(g) Intermediate Bond Fund
(h) Intermediate Tax-Free Bond Fund
(i) Short Term Income Fund
<PAGE> 1
EXHIBIT (11)(a)
Consent of KPMG Peat Marwick LLP
<PAGE> 2
Auditors' Consent
The Board of Trustees of
the American Performance Funds:
We consent to the use of our report included herein dated October 18, 1996
for the American Performance Funds -- Cash Management Fund, U.S. Treasury
Fund, Bond Fund, Intermediate Bond Fund, Equity Fund, Aggressive Growth
Fund, Intermediate Tax-Free Bond Fund, Short-Term Income Fund, and Balanced
Fund -- as of August 31, 1996 and for the periods indicated therein, and to
the references to our firm under the headings "Financial Highlights" in the
Prospectuses and "Auditors" in the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Columbus, Ohio
December 12, 1996
<PAGE> 1
EXHIBIT(11)(b)
Consent of Ropes & Gray
<PAGE> 2
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the references to our
firm under the caption "Legal Counsel" included in or made a part of the
Post-Effective Amendment No. 14 to the Registration Statement of American
Performance Funds on Form N-1A under the Securities Act of 1933, as amended.
/s/ ROPES & GRAY
ROPES & GRAY
Washington, D.C.
December 12, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> THE AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 1
<NAME> THE AMERICAN PERFORMANCE CASH MANAGEMENT FUND
<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 375375424
<INVESTMENTS-AT-VALUE> 375375424
<RECEIVABLES> 2294687
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 377670111
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1872617
<TOTAL-LIABILITIES> 1872617
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 375797212
<SHARES-COMMON-STOCK> 375797212
<SHARES-COMMON-PRIOR> 194806872
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 282
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 375797494
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 18978452
<OTHER-INCOME> 0
<EXPENSES-NET> 2348488
<NET-INVESTMENT-INCOME> 16629964
<REALIZED-GAINS-CURRENT> 4936
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 16634900
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 16629964
<DISTRIBUTIONS-OF-GAINS> 4771
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 943474078
<NUMBER-OF-SHARES-REDEEMED> 762531473
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<GROSS-EXPENSE> 3178988
<AVERAGE-NET-ASSETS> 332196411
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<PER-SHARE-NII> .050
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> THE AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 2
<NAME> THE AMERICAN PERFORMANCE U.S.TREASURY FUND
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<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
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<RECEIVABLES> 41532
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<TOTAL-ASSETS> 218399458
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<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 130
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 217406413
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10976579
<OTHER-INCOME> 0
<EXPENSES-NET> 1479792
<NET-INVESTMENT-INCOME> 9496787
<REALIZED-GAINS-CURRENT> 2588
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9499375
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 9496787
<DISTRIBUTIONS-OF-GAINS> 2718
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<NUMBER-OF-SHARES-SOLD> 439883580
<NUMBER-OF-SHARES-REDEEMED> 409510632
<SHARES-REINVESTED> 26913
<NET-CHANGE-IN-ASSETS> 30999731
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 1.00
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<PER-SHARE-NAV-END> 1.00
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> THE AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 3
<NAME> THE AMERICAN PERFORMANCE BOND FUND
<S> <C>
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<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
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<INVESTMENTS-AT-VALUE> 32508994
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<TOTAL-ASSETS> 33012445
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 205756
<TOTAL-LIABILITIES> 205756
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<PAID-IN-CAPITAL-COMMON> 34168406
<SHARES-COMMON-STOCK> 3648782
<SHARES-COMMON-PRIOR> 4015378
<ACCUMULATED-NII-CURRENT> 7424
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 831117
<ACCUM-APPREC-OR-DEPREC> (538024)
<NET-ASSETS> 32806689
<DIVIDEND-INCOME> 60059
<INTEREST-INCOME> 2543533
<OTHER-INCOME> 0
<EXPENSES-NET> 354050
<NET-INVESTMENT-INCOME> 2249542
<REALIZED-GAINS-CURRENT> (138651)
<APPREC-INCREASE-CURRENT> (1023947)
<NET-CHANGE-FROM-OPS> 1086944
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2241663
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 7879
<NUMBER-OF-SHARES-SOLD> 910369
<NUMBER-OF-SHARES-REDEEMED> 1454954
<SHARES-REINVESTED> 177989
<NET-CHANGE-IN-ASSETS> (4486499)
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<OVERDISTRIB-NII-PRIOR> 4194
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<GROSS-EXPENSE> 427965
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> THE AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 4
<NAME> THE AMERICAN PERFORMANCE INTERMEDIATE BOND FUND
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<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
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<INVESTMENTS-AT-VALUE> 64850294
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<TOTAL-ASSETS> 65497404
<PAYABLE-FOR-SECURITIES> 1991810
<SENIOR-LONG-TERM-DEBT> 0
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<OVERDISTRIBUTION-GAINS> 1032632
<ACCUM-APPREC-OR-DEPREC> (835778)
<NET-ASSETS> 63087806
<DIVIDEND-INCOME> 71757
<INTEREST-INCOME> 4348400
<OTHER-INCOME> 0
<EXPENSES-NET> 619138
<NET-INVESTMENT-INCOME> 3801019
<REALIZED-GAINS-CURRENT> 2959
<APPREC-INCREASE-CURRENT> (1503165)
<NET-CHANGE-FROM-OPS> 2300813
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3801091
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1150312
<NUMBER-OF-SHARES-REDEEMED> 2275525
<SHARES-REINVESTED> 178100
<NET-CHANGE-IN-ASSETS> (11306982)
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<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11311
<OVERDIST-NET-GAINS-PRIOR> 820791
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<GROSS-EXPENSE> 749222
<AVERAGE-NET-ASSETS> 65094101
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<PER-SHARE-NII> .60
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<PER-SHARE-NAV-END> 10.01
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> THE AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 5
<NAME> THE AMERICAN PERFORMANCE EQUITY FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
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<INVESTMENTS-AT-VALUE> 86523244
<RECEIVABLES> 180130
<ASSETS-OTHER> 280
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 86703654
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63572169
<SHARES-COMMON-STOCK> 6289664
<SHARES-COMMON-PRIOR> 6198445
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 3935
<ACCUMULATED-NET-GAINS> 6381205
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16402619
<NET-ASSETS> 86352058
<DIVIDEND-INCOME> 1965859
<INTEREST-INCOME> 0
<OTHER-INCOME> 14158
<EXPENSES-NET> 880827
<NET-INVESTMENT-INCOME> 1099190
<REALIZED-GAINS-CURRENT> 7922697
<APPREC-INCREASE-CURRENT> 4300120
<NET-CHANGE-FROM-OPS> 13322007
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1112322
<DISTRIBUTIONS-OF-GAINS> 3660781
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1049725
<NUMBER-OF-SHARES-REDEEMED> 1288822
<SHARES-REINVESTED> 330316
<NET-CHANGE-IN-ASSETS> 9954377
<ACCUMULATED-NII-PRIOR> 9197
<ACCUMULATED-GAINS-PRIOR> 2119289
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 562323
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1035809
<AVERAGE-NET-ASSETS> 81495212
<PER-SHARE-NAV-BEGIN> 12.33
<PER-SHARE-NII> .18
<PER-SHARE-GAIN-APPREC> 2.04
<PER-SHARE-DIVIDEND> .18
<PER-SHARE-DISTRIBUTIONS> .64
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.73
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000864508
<NAME> THE AMERICAN PERFORMANCE FUNDS
<SERIES>
<NUMBER> 6
<NAME> THE AMERICAN PERFORMANCE AGGRESSIVE GROWTH FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
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