<PAGE> 1
Registration Nos. 33-35190 and 811-6114
As filed with the Securities and Exchange Commission on December 30, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 21 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. 19
--------------
AMERICAN PERFORMANCE FUNDS
--------------------------
(Exact Name of Registrant as Specified in Charter)
3435 Stelzer Road, Columbus, Ohio 43219
---------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
800-762-7085
------------
Jeffrey Shiverdecker, 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
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: CONTINUOUS
- ---------------------------------------------------------
It is proposed that this filing become effective (check appropriate box)
[ ] Immediately upon filing pursuant to paragraph (b)
[ X ] On January 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On _____ pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment
- -----------------------------------------------------------------------------
TITLE OF SECURITIES BEING REGISTERED: SHARES OF BENEFICIAL INTEREST
- ---------------------------------------------------------------------
<PAGE> 2
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Prospectus
January 1, 2000
MONEY MARKET FUNDS
U.S. Treasury Fund
Cash Management Fund
BOND FUNDS
Bond Fund
Intermediate Bond Fund
Intermediate Tax-Free Bond Fund
Short-Term Income Fund
EQUITY FUNDS
Equity Fund
Balanced Fund
Growth Equity Fund
Small Cap Equity Fund
APPLE BUSHEL ARTWORK
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
APPLE LOGO
<PAGE> 3
HOW TO READ THIS PROSPECTUS
This prospectus is arranged into different sections so that you can easily
review this important information. The next page contains general information
you should know about investing in the Funds.
If you would like more detailed information about each Fund, please see: Fund
Summaries
<TABLE>
<S> <C>
TABLE OF CONTENTS
Introduction 1
FUND SUMMARIES
Money Market Funds
U.S. Treasury Fund 2
Cash Management Fund 5
Bond Funds
Bond Fund 9
Intermediate Bond Fund 14
Intermediate Tax-Free Bond Fund 19
Short-Term Income Fund 25
Equity Funds
Equity Fund 30
Balanced Fund 34
Growth Equity Fund 38
Small Cap Equity Fund 43
</TABLE>
If you would like more information about
the following topics, please see:
<TABLE>
<S> <C>
YOUR ACCOUNT 46
How Sales Charges are Calculated 46
Sales Charge Waivers 47
Sales Charge Reductions 48
Distribution/Service (12b-1)
Fees 50
Opening An Account 50
Buying Shares 51
Selling Shares 53
Exchanging Shares 56
Transaction Policies 56
Additional Investor Services 57
Dividends and Capital Gains 57
Taxes 58
INVESTMENT MANAGEMENT 61
FINANCIAL HIGHLIGHTS 63
INVESTMENT PRACTICES AND RISKS 74
GLOSSARY OF INVESTMENT TERMS 85
</TABLE>
To obtain more information about the
American Performance Funds please refer
to the back cover of the prospectus.
January 1, 2000
APPLE LOGO
<PAGE> 4
PROSPECTUS
1
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Introduction
Each Fund is a mutual fund. A mutual fund pools
shareholders' money and, using professional
investment managers, invests it in securities
like stocks and bonds. Before you invest, you
should know a few things about investing in
mutual funds.
The value of your investment in a Fund is based
on the market prices of the securities the Fund
holds. These prices change daily due to economic
and other events that affect securities markets
generally, as well as those that affect
particular companies or governments. These price
movements, sometimes called volatility, will
vary depending on the types of securities a Fund
owns and the markets where these securities
trade.
LIKE OTHER INVESTMENTS, YOU COULD LOSE MONEY ON
YOUR INVESTMENT IN A FUND. YOUR INVESTMENT IN A
FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK
OF OKLAHOMA, N.A., ITS AFFILIATES, OR ANY BANK.
IT IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT
AGENCY.
Each Fund has its own investment goal and
strategies for reaching that goal. However, it
cannot be guaranteed that a Fund will achieve
its goal. Before investing, make sure that the
Fund's goal matches your own.
The portfolio manager invests each Fund's assets
in a way that the manager believes will help the
Fund achieve its goal. A manager's judgments
about the bond and stock markets, economy and
companies, and his method of investment
selection, may cause a Fund to underperform
other funds with similar objectives.
<PAGE> 5
PROSPECTUS
2
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Fund Summaries
MONEY MARKET FUNDS
APPLE LOGO
U.S. Treasury Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal by investing in U.S. Treasury
obligations and repurchase agreements.
PRINCIPAL INVESTMENT STRATEGY
The U.S. Treasury Fund seeks 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, all of which may be subject to
repurchase agreements. The Fund normally invests
at least 65% of its assets in U.S. Treasury
obligations, some of which may be subject to
repurchase agreements. The Fund currently
maintains an average weighted portfolio maturity
of 60 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Your investment in the Fund may be subject to
the following principal risks:
- INTEREST RATE RISK -- Interest rate risk
involves the possibility that the Fund's yield
will decrease due to a decline in interest
rates.
- NET ASSET VALUE RISK -- The risk that the Fund
will be unable to meet its goal of a constant
$1 per share.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF
YOUR INVESTMENT AT $1 PER SHARE, IT IS POSSIBLE
TO LOSE MONEY BY INVESTING IN THE FUND.
MATURITY:
A PORTFOLIO'S
LEVEL OF INTEREST RATE
EXPOSURE IS COMMONLY
INDICATED BY THE TERM
MATURITY. GENERALLY
SPEAKING, THE LONGER A
PORTFOLIO'S MATURITY,
THE GREATER ITS LEVEL
OF INTEREST RATE
EXPOSURE.
<PAGE> 6
PROSPECTUS
3
U.S. Treasury Fund (continued)
APPLE LOGO
PERFORMANCE INFORMATION
The bar chart and the performance table below
illustrate the risks and volatility of an
investment in the Fund. Of course, the Fund's
past performance does not necessarily indicate
how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1991 5.49%
1992 3.20%
1993 2.49%
1994 3.51%
1995 5.22%
1996 4.68%
1997 4.86%
1998 4.75%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 3.15%.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q1 1991 1.53%
Worst Quarter: Q4 1993 0.61%
</TABLE>
This table shows the Fund's average annual total
returns for periods ending December 31, 1998.
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED
12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/5/90)
--------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Fund 4.75% 4.60% 4.39%
--------------------------------------------------------
</TABLE>
YIELD
The 7-day yield for the period ended 12/31/98
was 4.07%.
You may obtain the most current yield
information for the Fund by calling (800)
762-7085.
YIELD:
ALL MUTUAL FUNDS
MUST USE THE SAME
FORMULAS TO CALCULATE
YIELD AND EFFECTIVE
YIELD. THE FUND
TYPICALLY ADVERTISES
PERFORMANCE IN TERMS OF
A 7-DAY YIELD AND 7-DAY
EFFECTIVE YIELD AND MAY
ADVERTISE TOTAL
RETURN. THE 7-DAY YIELD
QUOTATION MORE CLOSELY
REFLECTS CURRENT
EARNINGS OF THE FUND
THAN THE TOTAL RETURN
QUOTATION. THE 7-DAY
EFFECTIVE YIELD WILL BE
SLIGHTLY HIGHER THAN
THE YIELD BECAUSE OF
THE COMPOUNDING EFFECT
OF THE ASSUMED
REINVESTMENT. CURRENT
YIELDS AND EFFECTIVE
YIELDS FLUCTUATE DAILY
AND WILL VARY DUE TO
FACTORS SUCH AS
INTEREST RATES AND THE
QUALITY, LENGTH OF
MATURITIES, AND TYPE OF
INVESTMENTS IN THE
PORTFOLIO.
<PAGE> 7
U.S. Treasury Fund (continued)
PROSPECTUS
FUND SUMMARIES 4
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
September 5, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$452 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
AMERICAN PERFORMANCE
FUND NUMBER
002
CUSIP NUMBER
028846103
TICKER SYMBOL
APGXX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 0%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.96%*
- ------------------------------------------------
* During the last fiscal year, the Distributor
agreed to waive Distribution/Service (12b-1)
Fees by 0.25%. This fee waiver is expected to
continue through December 31, 2000.
Accordingly, actual annual fund operating
expenses were as follows:
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.71%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$98 $306 $531 $1,178
</TABLE>
<PAGE> 8
PROSPECTUS
5
Cash Management Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal by investing in high-quality,
short-term debt instruments.
APPLE LOGO
PRINCIPAL INVESTMENT STRATEGY
The Cash Management Fund seeks current income
with liquidity and stability of principal by
investing in money market instruments which
present minimal credit risks. The Fund invests
primarily in high-quality instruments including
obligations issued by the U.S. government or its
agencies or
instrumentalities, commercial paper, medium-term
notes, certificates of deposit, time deposits,
bankers' acceptances and repurchase agreements.
These obligations may be variable or floating
rate instruments or variable amount master
demand notes. To be considered high-quality, a
security must be rated in one of the two highest
credit quality categories for short-term
securities or determined by the Fund's Adviser
to be of comparable quality. The Fund currently
maintains an average weighted portfolio maturity
of 35 to 75 days.
The Fund may, from time to time, concentrate its
investments in certain securities issued by U.S.
banks, U.S. branches of foreign banks and
foreign branches of U.S. banks.
MATURITY:
A PORTFOLIO'S
LEVEL OF INTEREST RATE
EXPOSURE IS COMMONLY
INDICATED BY THE TERM
MATURITY. GENERALLY
SPEAKING, THE LONGER A
PORTFOLIO'S MATURITY,
THE GREATER ITS LEVEL
OF INTEREST RATE EXPOSURE.
<PAGE> 9
PROSPECTUS
6
Cash Management Fund (continued)
FUND SUMMARIES
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Your investment in the Fund may be subject to
the following principal risks:
- CREDIT RISK -- Credit risk is the possibility
that an issuer cannot make timely interest and
principal payments on its securities. Because
the Fund will only invest in securities
believed to pose minimal credit risk, it is
unlikely that losses due to credit risk will
cause a decline in the value of your
investment. However, even if not severe enough
to cause such a decline in principal value,
credit losses could reduce the Fund's yield.
In general, lower-rated securities have higher
credit risks.
- INTEREST RATE RISK -- Interest rate risk
involves the possibility that the Fund's yield
will decrease due to a decline in interest
rates.
- NET ASSET VALUE RISK -- The risk that the Fund
will be unable to meet its goal of a constant
$1 per share.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF
YOUR INVESTMENT AT $1 PER SHARE, IT IS POSSIBLE
TO LOSE MONEY BY INVESTING IN THE FUND.
<PAGE> 10
Cash Management Fund (continued)
PROSPECTUS
7
PERFORMANCE INFORMATION
The bar chart and the performance table below
illustrate the risks and volatility of an
investment in the Fund. Of course, the Fund's
past performance does not necessarily indicate
how the Fund will perform in the future.
APPLE LOGO
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1991 6.19%
1992 3.57%
1993 2.78%
1994 3.76%
1995 5.52%
1996 5.02%
1997 5.11%
1998 5.01%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 3.41%.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q1 1991 1.77%
Worst Quarter: Q4 1993 0.67%
</TABLE>
This table shows the Fund's average annual total
returns for periods ending December 31, 1998.
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/21/90)
------------------------------------------------------
<S> <C> <C> <C>
Cash Management Fund 5.01% 4.88% 4.72%
------------------------------------------------------
</TABLE>
YIELD
For the period ended 12/31/98 the 7-day yield
was 4.55%.
You may obtain the most current yield
information for the Fund by calling (800)
762-7085.
YIELD: ALL
MUTUAL FUNDS
MUST USE THE SAME
FORMULAS TO CALCULATE
YIELD AND EFFECTIVE
YIELD. THE FUND
TYPICALLY ADVERTISES
PERFORMANCE IN TERMS OF
A 7-DAY YIELD AND 7-DAY
EFFECTIVE YIELD AND MAY
ADVERTISE TOTAL RETURN.
THE 7-DAY YIELD
QUOTATION MORE CLOSELY
REFLECTS CURRENT
EARNINGS OF THE FUND
THAN THE TOTAL RETURN
QUOTATION. THE 7-DAY
EFFECTIVE YIELD WILL BE
SLIGHTLY HIGHER THAN
THE YIELD BECAUSE OF
THE COMPOUNDING EFFECT
OF THE ASSUMED
REINVESTMENT. CURRENT
YIELDS AND EFFECTIVE
YIELDS FLUCTUATE DAILY
AND WILL VARY DUE TO
FACTORS SUCH AS
INTEREST RATES AND THE
QUALITY, LENGTH OF
MATURITIES, AND TYPE OF
INVESTMENTS IN THE
PORTFOLIO.
<PAGE> 11
Cash Management Fund (continued)
PROSPECTUS
8
FUND SUMMARIES
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 0%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.30%*
TOTAL ANNUAL FUND OPERATING EXPENSES 0.95%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.04% of its Investment Advisory Fees,
the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees, and the
Administrator waived 0.01% of Other Expenses.
The Adviser expects to waive 0.11% of its
Investment Advisory Fees, the Distributor
expects to waive 0.25% of its
Distribution/Service (12b-1) Fees, and the
Administrator expects to waive 0.04% of Other
Expenses through December 31, 2000.
Accordingly, estimated annual fund operating
expenses are as follows:
Investment Advisory Fees 0.29%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.26%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.55%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$97 $303 $525 $1,166
</TABLE>
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
September 21, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$561 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
AMERICAN PERFORMANCE
FUND NUMBER
001
CUSIP NUMBER
028846202
TICKER SYMBOL
APCXX
<PAGE> 12
PROSPECTUS
9
BOND FUNDS
Bond Fund
------------------------------------------------
INVESTMENT GOAL
Total return by investing in U.S. government and
APPLE LOGO investment grade corporate debt securities and
mortgage related securities.
PRINCIPAL INVESTMENT STRATEGY
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. To pursue this goal, the Fund
normally invests at least 65% of its assets in
bonds. The Fund invests primarily in investment
grade or comparable quality debt obligations
such as bonds, notes and debentures, and bills
issued by U.S. corporations or by the U.S.
government, its agencies, or instrumentalities,
municipal securities, and derivatives including
mortgage-related securities and asset-based
securities. The Fund invests in debt obligations
only if they carry a rating within the three
highest rating categories assigned by a
nationally recognized statistical ratings
organization (e.g., at least "A" from Moody's or
Standard & Poor's). The Fund also invests in
money market instruments. If the rating of a
security is downgraded after purchase, the
Adviser will determine whether it is in the best
interest of the Fund's shareholders to continue
to hold the security. The Fund will seek to
increase the value of your investment through a
combination of income and capital gains.
CREDIT QUALITY:
A BOND'S CREDIT
QUALITY DEPENDS ON THE
ISSUER'S ABILITY TO PAY
INTEREST ON THE BOND
AND TO REPAY THE DEBT.
BONDS ISSUED OR BACKED
BY THE U.S. GOVERNMENT
OFFER MAXIMUM CREDIT
PROTECTION; BONDS
ISSUED OR BACKED BY
FOREIGN GOVERNMENTS CAN
CARRY CONSIDERABLY MORE
RISK. THE LOWER THE
BOND'S CREDIT RATING BY
A RATING AGENCY (FOR
EXAMPLE, MOODY'S OR
STANDARD & POOR'S), THE
GREATER THE CHANCE THAT
THE BOND ISSUER WILL
DEFAULT, OR FAIL TO
MEET ITS PAYMENT
OBLIGATIONS. BONDS
RATED IN ONE OF THE
FOUR HIGHEST RATING
CATEGORIES ARE
CONSIDERED "INVESTMENT
GRADE."
<PAGE> 13
PROSPECTUS
10
FUND SUMMARIES
APPLE LOGO
Bond Fund (continued)
The Fund will maintain a dollar-weighted average
portfolio maturity of seven years or more and,
generally, of no longer than ten years. The
average portfolio maturity will fluctuate
depending on the outlook for interest rate
changes. The ability to change the average
portfolio maturity allows the Fund to meet its
objective of maximizing total return. In
managing the portfolio, the manager uses a "top
down" investment management approach focusing on
actual or anticipated changes or trends in
interest rates, the financial markets, or the
economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may, from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
APPLE LOGO
BOND
MATURITIES:
A BOND IS
ISSUED WITH A SPECIFIC
MATURITY DATE -- THE
DATE WHEN THE BOND'S
ISSUER, OR SELLER, MUST
PAY BACK THE BOND'S
INITIAL VALUE. BOND
MATURITIES GENERALLY
RANGE FROM LESS THAN
ONE YEAR (SHORT-TERM)
TO 30 YEARS
(LONG-TERM). THE LONGER
A BOND'S MATURITY, THE
MORE RISK YOU, AS A
BOND INVESTOR, FACE AS
INTEREST RATES RISE.
LONG-TERM BONDS ARE
MORE SUITABLE FOR
INVESTORS WILLING TO
TAKE GREATER RISKS;
SHORT-TERM BOND
INVESTORS SHOULD BE
WILLING TO ACCEPT LOWER
YIELDS IN RETURN FOR
LESS FLUCTUATION IN THE
VALUE OF THEIR
INVESTMENT.
INTEREST RATES:
ONE OF THE MOST
SIGNIFICANT
FACTORS AFFECTING THE
PERFORMANCE OF A BOND
FUND IS THE RISE AND
FALL OF INTEREST RATES.
WHEN INTEREST RATES
RISE, A BOND'S VALUE
GENERALLY DECLINES.
<PAGE> 14
Bond Fund (continued)
PROSPECTUS
11
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Loss of money is a risk of investing in the
Fund. In addition, your investment in the Fund
may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility
that an issuer cannot make timely interest and
principal payments on its debt obligations,
such as bonds. In general, lower-rated bonds
have higher credit risks. However, because the
Fund invests in investment grade debt
obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk
involves the possibility that the value of the
Fund's investments will decline due to an
increase in interest rates. In general, the
longer a security's maturity, the greater the
interest rate risk.
- - PREPAYMENT/CALL RISK -- Prepayment risk is the
chance that the repayment of mortgages backing
a security will occur sooner than expected.
Call risk is the possibility that during
periods of falling interest rates, a bond
issuer will "call" -- or repay -- its
high-yielding bond before the bond's maturity
date. In each case, the Fund may be forced to
reinvest in securities with a lower yield. It
may also lose any premium paid for the bond.
Changes in prepayment/call rates can result in
greater price and yield volatility.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 15
Bond Fund (continued)
PROSPECTUS
12
FUND SUMMARIES
PERFORMANCE INFORMATION
The bar chart and the performance table below
illustrate the risks and volatility of an
investment in the Fund. Of course, the Fund's
past performance does not necessarily indicate
how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
<S> <C>
1991 15.34%
1992 6.07%
1993 10.4%
1994 -3.67%
1995 16.12%
1996 1.69%
1997 10.04%
1998 8.22%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was -0.47%.
Sales charges are not reflected in the bar
chart and, if they were reflected, returns
would be less than those shown.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q3 1991 5.94%
Worst Quarter: Q1 1994 -2.92%
</TABLE>
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the Salomon Brothers Broad
(Investment Grade) Bond Index.
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED
12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/28/90)
--------------------------------------------------------
<S> <C> <C> <C>
Bond Fund (reflects
maximum sales charge
of 4.00%) 3.85% 5.40% 7.77%
--------------------------------------------------------
Salomon Brothers
Broad (Investment
Grade) Bond
Index(1) 8.71% 7.30% 9.10%
--------------------------------------------------------
</TABLE>
(1) The Salomon Brothers Broad (Investment
Grade) Bond Index is an unmanaged index
comprised of investment grade corporate and
U.S. government bonds.
<PAGE> 16
PROSPECTUS
13
Bond Fund (continued)
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 4.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 1.00%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%+
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.17%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.20% of its Investment Advisory Fee.
This fee waiver is expected to continue
through December 31, 2000. Accordingly,
actual annual fund operating expenses were as
follows:
Investment Advisory Fees 0.35%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.97%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$514 $757 $1,018 $1,764
</TABLE>
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
September 28, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$61 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform Bond
AMERICAN PERFORMANCE
FUND NUMBER
005
CUSIP NUMBER
028846301
TICKER SYMBOL
APBDX
<PAGE> 17
PROSPECTUS
14
FUND SUMMARIES
APPLE LOGO
Intermediate Bond Fund
------------------------------------------------
INVESTMENT GOAL
Total return by investing in U.S. government and
investment grade corporate debt securities and
mortgage related securities.
PRINCIPAL INVESTMENT STRATEGY
The Intermediate Bond Fund seeks to maximize
total return by investing primarily in an
actively managed, diversified portfolio of
intermediate bond and other fixed income
securities. To pursue this goal, the Fund
normally invests at least 65% of its total
assets in bonds. The Fund invests primarily in
investment grade or comparable quality debt
obligations such as bonds, notes and debentures,
and bills issued by U.S. corporations or the
U.S. government, its agencies, or
instrumentalities, municipal securities, and
derivatives including mortgage-related
securities and asset-backed securities. The Fund
invests in debt obligations only if they carry a
rating within the three highest rating
categories assigned by a nationally recognized
statistical ratings organization (e.g., at least
"A" from Moody's or Standard & Poor's). The Fund
also invests in money market instruments. If the
rating of a security is downgraded after
purchase, the Adviser will determine whether it
is in the best interest of the Fund's
shareholders to continue to hold the security.
The Fund will seek to increase the value of your
investment through a combination of income and
capital gains.
CREDIT QUALITY:
A BOND'S CREDIT
QUALITY DEPENDS ON THE
ISSUER'S ABILITY TO PAY
INTEREST ON THE BOND
AND TO REPAY THE DEBT.
BONDS ISSUED OR BACKED
BY THE U.S. GOVERNMENT
OFFER MAXIMUM CREDIT
PROTECTION; BONDS
ISSUED OR BACKED BY
FOREIGN GOVERNMENTS CAN
CARRY CONSIDERABLY MORE
RISK. THE LOWER THE
BOND'S CREDIT RATING BY
A RATING AGENCY (FOR
EXAMPLE, MOODY'S OR
STANDARD & POOR'S), THE
GREATER THE CHANCE THAT
THE BOND ISSUER WILL
DEFAULT, OR FAIL TO
MEET ITS PAYMENT
OBLIGATIONS. BONDS
RATED IN ONE OF THE
FOUR HIGHEST RATING
CATEGORIES ARE
CONSIDERED "INVESTMENT
GRADE."
<PAGE> 18
PROSPECTUS
15
Intermediate Bond Fund (continued)
APPLE LOGO
The Fund will maintain a dollar-weighted average
portfolio maturity from three to ten years, and
generally of no longer than five years. The
average portfolio maturity will fluctuate
depending on the outlook for interest rate
changes. The ability to change the average
portfolio maturity allows the Fund to meet its
objective of maximizing total return. In
managing the portfolio, the manager uses a "top
down" investment management approach focusing on
actual or anticipated changes or trends in
interest rates, the financial markets, or the
economy. In addition to the securities described
above, the Fund may invest in other debt
securities. The Fund may from time to time, take
temporary defensive positions that are
inconsistent with the Fund's principal
investment strategies in attempting to respond
to adverse market, economic, political, or other
conditions. In these and in other cases, the
Fund may not achieve its investment goal.
APPLE LOGO
BOND
MATURITIES:
A BOND IS
ISSUED WITH A SPECIFIC
MATURITY DATE -- THE
DATE WHEN THE BOND'S
ISSUER, OR SELLER, MUST
PAY BACK THE BOND'S
INITIAL VALUE. BOND
MATURITIES GENERALLY
RANGE FROM LESS THAN
ONE YEAR (SHORT-TERM)
TO 30 YEARS
(LONG-TERM). THE LONGER
A BOND'S MATURITY, THE
MORE RISK YOU, AS A
BOND INVESTOR, FACE AS
INTEREST RATES RISE.
LONG-TERM BONDS ARE
MORE SUITABLE FOR
INVESTORS WILLING TO
TAKE GREATER RISKS;
SHORT-TERM BOND
INVESTORS SHOULD BE
WILLING TO ACCEPT LOWER
YIELDS IN RETURN FOR
LESS FLUCTUATION IN THE
VALUE OF THEIR
INVESTMENT.
INTEREST RATES:
ONE OF THE MOST
SIGNIFICANT
FACTORS AFFECTING THE
PERFORMANCE OF A BOND
FUND IS THE RISE AND
FALL OF INTEREST RATES.
WHEN INTEREST RATES
RISE, A BOND'S VALUE
GENERALLY DECLINES.
<PAGE> 19
PROSPECTUS
16
FUND SUMMARIES
Intermediate Bond Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Loss of money is a risk of investing in the
Fund. In addition, your investment in the Fund
may be subject to the following principal risks:
- CREDIT RISK -- Credit risk is the possibility
that an issuer cannot make timely interest and
principal payments on its debt obligations,
such as bonds. In general, lower-rated bonds
have higher credit risks. However, because the
Fund invests in investment grade debt
obligations, credit risk is minimized.
- INTEREST RATE RISK -- Interest rate risk
involves the possibility that the value of the
Fund's investments will decline due to an
increase in interest rates. In general, the
longer a security's maturity, the greater the
interest rate risk.
- PREPAYMENT/CALL RISK -- Prepayment risk is the
chance that the repayment of mortgages backing
a security will occur sooner than expected.
Call risk is the possibility that during
periods of falling interest rates, a bond
issuer will "call" -- or repay -- its
high-yielding bond before the bond's maturity
date. In each case, the Fund may be forced to
reinvest in securities with a lower yield. It
may also lose any premium paid for the bond.
Changes in prepayment/call rates can result in
greater price and yield volatility.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 20
Intermediate Bond Fund (continued)
PROSPECTUS
17
PERFORMANCE INFORMATION
The bar chart and the performance table below
illustrate the risks and volatility of an
investment in the Fund. Of course, the Fund's
past performance does not necessarily indicate
how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
<S> <C>
1991 14.00%
1992 5.79%
1993 8.74%
1994 -2.5%
1995 12.24%
1996 2.93%
1997 8.05%
1999 6.79%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 1.37%. Sales
charges are not reflected in the bar chart
and, if they were reflected, returns would be
less than those shown.
<TABLE>
<S> <C> <C>
Best Quarter: Q4 1991 5.07%
Worst Quarter: Q1 1994 -2.10%
</TABLE>
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the Lehman Brothers
Intermediate Government/Corporate Bond Index.
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/28/90)
- --------------------------------------------------------
<S> <C> <C> <C>
Intermediate Bond 3.59% 4.74% 6.84%
Fund (reflects
maximum sales
charge of 3.00%)
- --------------------------------------------------------
Lehman Brothers 8.42% 6.59% 8.19%
Intermediate
Government/Corporate
Bond Index(1)
- --------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Intermediate
Government/Corporate Bond Index is an
unmanaged index comprised of investment
grade government and corporate debt
securities with maturities between 1 and 10
years.
<PAGE> 21
Intermediate Bond Fund (continued)
PROSPECTUS
18
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
September 28, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$86 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform IntBd
AMERICAN PERFORMANCE
FUND NUMBER
006
CUSIP NUMBER
028846400
TICKER SYMBOL
APFBX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 3.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 0.75%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%+
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.17%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.20% of its Investment Advisory Fees.
This waiver is expected to continue through
December 21, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.35%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.37%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.97%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$416 $660 $924 $1,678
</TABLE>
<PAGE> 22
PROSPECTUS
19
Intermediate Tax-Free Bond Fund
------------------------------------------------
INVESTMENT GOAL
High current income exempt from federal income
APPLE LOGO tax by investing in investment grade municipal
securities.
PRINCIPAL INVESTMENT STRATEGY
The Intermediate Tax-Free Bond Fund seeks
current income, consistent with the preservation
of capital, that is exempt from federal income
taxes, by investing in a diversified portfolio
of intermediate term bonds and other fixed
income securities.
In pursuing this goal, the Fund invests at least
65% of its assets in investment grade or
comparable quality municipal bonds and
debentures. Additionally, the Fund will normally
invest at least 80% of its assets in municipal
securities which pay interest that is not
subject to federal income tax or federal
alternative minimum tax for shareholders who are
individuals. The Fund invests in municipal
securities which are within the three highest
rating groups assigned by a nationally
recognized statistical ratings organization
(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 "Prime-1" by Moody's); or rated in the
highest
APPLE LOGO
ratings category assigned by an NRSRO, in the
case of variable rate demand obligations, (e.g.,
"VMIG-1" by Moody's).
CREDIT QUALITY:
A BOND'S CREDIT
QUALITY DEPENDS
ON THE ISSUER'S
ABILITY TO PAY INTEREST
ON THE BOND AND TO
REPAY THE DEBT. BONDS
ISSUED OR BACKED BY THE
U.S. GOVERNMENT OFFER
MAXIMUM CREDIT
PROTECTION; BONDS
ISSUED OR BACKED BY
FOREIGN GOVERNMENTS CAN
CARRY CONSIDERABLY MORE
RISK. THE LOWER THE
BOND'S CREDIT RATING BY
A RATING AGENCY (FOR
EXAMPLE, MOODY'S OR
STANDARD & POOR'S), THE
GREATER THE CHANCE THAT
THE BOND ISSUER WILL
DEFAULT, OR FAIL TO
MEET ITS PAYMENT
OBLIGATIONS. BONDS
RATED IN ONE OF THE
FOUR HIGHEST RATING
CATEGORIES ARE
CONSIDERED "INVESTMENT
GRADE."
MUNICIPAL BONDS:
ARE SECURITIES
ISSUED BY STATE
AND LOCAL GOVERNMENTS
AND REGIONAL GOVERN-
MENTAL AUTHORITIES AS A
WAY OF RAISING MONEY FOR
PUBLIC CONSTRUCTION
PROJECTS (FOR EXAMPLE,
HIGHWAYS, AIRPORTS, OR
HOUSING); FOR OPERATING
EXPENSES; OR FOR LOANS
TO PUBLIC INSTITUTIONS
AND FACILITIES.
<PAGE> 23
Intermediate Tax-Free Bond Fund (continued)
PROSPECTUS
20
FUND SUMMARIES
Corporate shareholders will be required to
include all tax-exempt interest dividends in
determining their federal alternative minimum
APPLE LOGO tax. The Fund
will generally invest in two principal
classifications of municipal securities: general
obligation securities and revenue securities.
The Fund will also utilize credit enhancers. The
Fund also invests in money market instruments.
If the rating of a security is downgraded after
purchase, the adviser will determine whether it
is in the best interest of the Fund's
shareholders to continue to hold the security.
CREDIT ENHANCER:
DEBT ISSUERS UTILIZE CREDIT ENHANCERS
TO
APPLE LOGO
RAISE THE CREDIT RATING OF THEIR
OFFERING,
THEREBY LOWER THEIR INTEREST COSTS. A
MUNICIPALITY MAY HAVE THEIR BOND INSURED BY A
LARGE INSURANCE COMPANY, THEREBY RAISING THE
BOND'S CREDIT RATING TO AAA. A CORPORATE BOND
ISSUER MAY ARRANGE FOR A BANK LETTER OF CREDIT
TO BACK ITS ISSUE, RAISING ITS RATING TO AAA.
GENERAL
OBLIGATION
SECURITIES AND
REVENUE SECURITIES:
GENERAL OBLIGATION
SECURITIES ARE
MUNICIPAL SECURITIES
BACKED BY THE FULL
FAITH AND CREDIT AND
TAXING POWER OF A
MUNICIPALITY FOR THE
PAYMENT OF THEIR
PRINCIPAL AND INTEREST.
IN CONTRAST, REVENUE
SECURITIES ARE
MUNICIPAL SECURITIES
ISSUED TO FINANCE
PUBLIC WORKS AND
PAYABLE ONLY FROM THE
REVENUES DERIVED FROM
THE PROJECT BEING
FINANCED.
<PAGE> 24
Intermediate Tax-Free Bond Fund (continued)
PROSPECTUS
21
The Fund will maintain a dollar-weighted average
portfolio maturity between three to ten years.
The average portfolio maturity will fluctuate
depending
APPLE LOGO
on the outlook for interest rate changes. The
ability to change the average portfolio maturity
allows the Fund to meet its objective of
providing high current income with preservation
of capital.
In managing the portfolio, the manager uses a
"top down" investment management approach
focusing on actual or anticipated changes or
trends in interest rates, the financial markets,
or the economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may, from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
INTEREST RATES:
ONE OF THE MOST SIGNIFICANT FACTORS
APPLE LOGO
AFFECTING THE PERFORMANCE OF A BOND FUND IS
THE RISE AND FALL OF INTEREST RATES. WHEN
INTEREST RATES RISE, A BOND'S VALUE GENERALLY
DECLINES.
BOND
MATURITIES:
A BOND IS
ISSUED WITH A SPECIFIC
MATURITY DATE -- THE
DATE WHEN THE BOND'S
ISSUER, OR SELLER, MUST
PAY BACK THE BOND'S
INITIAL VALUE. BOND
MATURITIES GENERALLY
RANGE FROM LESS THAN
ONE YEAR (SHORT-TERM)
TO 30 YEARS
(LONG-TERM). THE LONGER
A BOND'S MATURITY, THE
MORE RISK YOU, AS A
BOND INVESTOR, FACE AS
INTEREST RATES RISE.
LONG-TERM BONDS ARE
MORE SUITABLE FOR
INVESTORS WILLING TO
TAKE GREATER RISKS;
SHORT-TERM BOND
INVESTORS SHOULD BE
WILLING TO ACCEPT LOWER
YIELDS IN RETURN FOR
LESS FLUCTUATION IN THE
VALUE OF THEIR
INVESTMENT.
<PAGE> 25
Intermediate Tax-Free Bond Fund (continued)
PROSPECTUS
22
FUND SUMMARIES
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Loss of money is a risk of investing in the
Fund. In addition, your investment in the Fund
may be subject to the following principal risks:
- CREDIT ENHANCEMENT RISK -- Credit enhancement
risk involves the possibility that a "credit
enhancer," such as a letter of credit,
declines in quality and therefore leads to a
decrease in the value of the Fund's
investments.
- CREDIT RISK -- Credit risk is the possibility
that an issuer cannot make timely interest and
principal payments on its debt obligations,
such as bonds. In general, lower-rated bonds
have higher credit risks. However, because the
Fund invests in investment grade debt
obligations, credit risk is minimized.
- INTEREST RATE RISK -- Interest rate risk
involves the possibility that the value of the
Fund's investments will decline due to an
increase in interest rates. In general, the
longer a security's maturity, the greater the
interest rate risk.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 26
Intermediate Tax-Free Bond Fund (continued)
PROSPECTUS
23
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1993 11.79%
1994 -3.51%
1995 13.71%
1996 3.72%
1997 7.27%
1998 5.46%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was -1.48%.
Sales charges are not reflected in the bar
chart and, if they were reflected, returns
would be less than those shown.
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1995 5.90%
Worst Quarter: Q1 1994 -3.81%
</TABLE>
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the Lehman Brothers Municipal
Bond Index.
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (5/29/92)
- --------------------------------------------------------
<S> <C> <C> <C>
Intermediate Tax- 2.28% 4.53% 6.06%
Free Bond Fund
(reflects maximum
sales charge of
3.00%)
- --------------------------------------------------------
Lehman Brothers 6.48% 6.23% 7.64%
Municipal Bond
Index(1)
- --------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Municipal Bond Index is
an unmanaged index considered to be
representative of the municipal bond market
as a whole.
<PAGE> 27
Intermediate Tax-Free Bond Fund (continued)
PROSPECTUS
24
FUND SUMMARIES
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
May 29, 1992
NET ASSETS AS OF
NOVEMBER 30, 1999
$30 million
SUITABLE FOR IRAS
No
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform IntmTxF
AMERICAN PERFORMANCE
FUND NUMBER
003
CUSIP NUMBER
028846509
TICKER SYMBOL
APTFX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 3.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 0.75%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%+
Distribution/Service (12b-1) Fees 0.25%+
Other Expenses 0.40%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.20%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.20% of its Investment Advisory Fees
and the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees. These fee
waivers are expected to continue through
December 31, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.35%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.40%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.75%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$419 $670 $940 $1,711
</TABLE>
<PAGE> 28
PROSPECTUS
25
Short-Term Income Fund
------------------------------------------------
INVESTMENT GOAL
APPLE LOGO
Total return by investing in U.S. government and
investment grade corporate debt securities and
mortgage related securities.
PRINCIPAL INVESTMENT STRATEGY
The Short-Term Income Fund seeks to maximize
total return by investing primarily in an
actively managed, diversified portfolio of
short-term bonds and other fixed income
securities. To pursue this goal, the Fund
normally invests at least 65% of its assets in
bonds. The Fund invests primarily in investment
grade or comparable quality debt obligations
such as bonds, notes and debentures, and bills
issued by U.S. corporations or by the U.S.
government, its agencies, or instrumentalities,
municipal securities, and derivatives including
mortgage-related securities and asset-backed
securities. The Fund invests in debt obligations
only if they carry a rating within the three
highest rating categories assigned by a
nationally recognized statistical ratings
organization (e.g., at least "A" from Moody's or
Standard & Poor's). The Fund also invests in
money market instruments. If the rating of a
security is downgraded after purchase, the
Adviser will determine whether it is in the best
interest of the Fund's shareholders to continue
to hold the security. The Fund will seek to
increase the value of your investment through a
combination of income and capital gains.
CREDIT QUALITY:
A BOND'S CREDIT
QUALITY DEPENDS ON THE
ISSUER'S ABILITY TO PAY
INTEREST ON THE BOND
AND TO REPAY THE DEBT.
BONDS ISSUED OR BACKED
BY THE U.S. GOVERNMENT
OFFER MAXIMUM CREDIT
PROTECTION; BONDS
ISSUED OR BACKED BY
FOREIGN GOVERNMENTS CAN
CARRY CONSIDERABLY MORE
RISK. THE LOWER THE
BOND'S CREDIT RATING BY
A RATING AGENCY (FOR
EXAMPLE, MOODY'S OR
STANDARD & POOR'S), THE
GREATER THE CHANCE THAT
THE BOND ISSUER WILL
DEFAULT, OR FAIL TO
MEET ITS PAYMENT
OBLIGATIONS. BONDS
RATED IN ONE OF THE
FOUR HIGHEST RATING
CATEGORIES ARE
CONSIDERED "INVESTMENT
GRADE."
<PAGE> 29
PROSPECTUS
26
FUND SUMMARIES
Short-Term Income Fund (continued)
The Fund will maintain a dollar-weighted average
portfolio maturity of three years or less. The
average portfolio maturity will fluctuate
depending
APPLE LOGO
on the outlook for interest rate changes. The
ability to change the average portfolio maturity
allows the Fund to meet its objective of
maximizing total return.
In managing the portfolio, the manager uses a
"top down" investment management approach
focusing on actual or anticipated changes or
trends in interest rates, the financial markets,
or the economy.
In addition to the securities described above,
the Fund may invest in other debt securities.
The Fund may from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
INTEREST RATES: ONE OF THE MOST
SIGNIFICANT FACTORS AFFECTING THE
PERFORMANCE OF A
APPLE LOGO
BOND FUND
IS THE RISE AND FALL OF INTEREST RATES. WHEN
INTEREST RATES RISE, A BOND'S VALUE GENERALLY
DECLINES.
BOND
MATURITIES: A
BOND IS ISSUED
WITH A SPECIFIC
MATURITY DATE -- THE
DATE WHEN THE BOND'S
ISSUER, OR SELLER, MUST
PAY BACK THE BOND'S
INITIAL VALUE. BOND
MATURITIES GENERALLY
RANGE FROM LESS THAN
ONE YEAR (SHORT-TERM)
TO 30 YEARS
(LONG-TERM). THE LONGER
A BOND'S MATURITY, THE
MORE RISK YOU, AS A
BOND INVESTOR, FACE AS
INTEREST RATES RISE.
LONG-TERM BONDS ARE
MORE SUITABLE FOR
INVESTORS WILLING TO
TAKE GREATER RISKS;
SHORT-TERM BOND
INVESTORS SHOULD BE
WILLING TO ACCEPT LOWER
YIELDS IN RETURN FOR
LESS FLUCTUATION IN THE
VALUE OF THEIR
INVESTMENT.
<PAGE> 30
PROSPECTUS
27
Short-Term Income Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Loss of money is a risk of investing in the
Fund. In addition, your investment in the Fund
may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility
that an issuer cannot make timely interest and
principal payments on its debt obligations,
such as bonds. In general, lower-rated bonds
have higher credit risks. However, because the
Fund invests in investment grade debt
obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk
involves the possibility that the value of the
Fund's investments will decline due to an
increase in interest rates. In general, the
longer a security's maturity, the greater the
interest rate risk.
- - PREPAYMENT/CALL RISK -- Prepayment risk is the
chance that the repayment of a mortgage will
occur sooner than expected. Call risk is the
possibility that during periods of falling
interest rates, a bond issuer will
"call" -- or repay -- its high-yielding bond
before the bond's maturity date. In each case,
the Fund may be forced to reinvest in
securities with a lower yield. Changes in
prepayment/call rates can result in greater
price and yield volatility.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 31
Short-Term Income Fund (continued)
PROSPECTUS
28
FUND SUMMARIES
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1995 8.49%
1996 4.35%
1997 7.82%
1998 7.36%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/99 to 9/30/99 was 2.80%. Sales
charges are not reflected in the bar chart
and, if they were reflected, returns would be
less than those shown.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q4 1995 2.72%
Worst Quarter: Q1 1996 -0.04%
</TABLE>
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the Merrill Lynch U.S.
Government/Corporate Bond Index.
AVERAGE ANNUAL TOTAL RETURN
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year (10/19/94)
------------------------------------------------------
<S> <C> <C>
Short-Term Income Fund
(reflects a maximum sales
charge of 2.00%) 5.26% 6.10%
------------------------------------------------------
Merrill Lynch U.S. Government/
Corporate 1-5 Year Bond
Index(1) 7.69% 7.53%
------------------------------------------------------
</TABLE>
(1) The Merrill Lynch U.S. Government/Corporate
1-5 Year Bond Index is an unmanaged index
comprised of investment grade government and
corporate debt securities with maturities
between 1 and 5 years.
<PAGE> 32
Short-Term Income Fund (continued)
PROSPECTUS
29
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
October 19, 1994
NET ASSETS AS OF
NOVEMBER 30, 1999
$64 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform ShTrInc
AMERICAN PERFORMANCE
FUND NUMBER
008
CUSIP NUMBER
028846806
TICKER SYMBOL
APSTX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 2.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 0.50%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.55%+
Distribution/Service (12b-1) Fees 0.25%+
Other Expenses 0.44%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.24%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.55% of its Investment Advisory Fee
and the Distributor waived 0.13% of its
Distribution/Service (12b-1) Fees. The
Adviser expects to waive 0.55% of its
Investment Advisory Fees and the Distributor
expects to waive 0.08% of its
Distribution/Service (12b-1) Fees through
December 31, 2000. Accordingly, estimated
annual fund operating expenses are as
follows:
Investment Advisory Fees 0.00%
Distribution/Service (12b-1) Fees 0.17%
Other Expenses 0.44%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.61%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$324 $586 $867 $1,670
</TABLE>
<PAGE> 33
PROSPECTUS
30
FUND SUMMARIES
EQUITY FUNDS
Equity Fund
------------------------------------------------
INVESTMENT GOAL
Growth of capital and, secondarily, income by
investing in U.S. common stocks.
PRINCIPAL INVESTMENT STRATEGY
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.
To pursue this goal, the Fund invests primarily
in equity securities of U.S. companies with a
weighted average market value similar to that of
The Standard & Poor's 500 Composite Stock Price
Index (S&P 500 Index) focusing on large
capitalization value and growth stocks.
The Fund attempts to identify stocks of both
undervalued companies and growth companies by
employing a quantitative investment approach
whereby individual stocks are ranked according
to their relative price strength, relative
value, earnings momentum, and earnings estimate
revisions. Additional criteria the manager uses
to select particular stocks include volatility,
momentum, size, trading activity, growth,
earnings yield, value, earnings variability,
leverage, currency sensitivity, and dividend
yield. Economic conditions may warrant the
consideration of other factors when ranking
APPLE LOGO individual stocks.
THE S&P 500
INDEX:
CONSISTS OF 500
DOMESTIC STOCKS CHOSEN
FOR MARKET SIZE,
LIQUIDITY AND INDUSTRY
GROUP REPRESENTATIONS.
AS OF THE DATE OF THIS
PROSPECTUS, THE S&P 500
INDEX STATISTICS WERE
AS FOLLOWS: THE
SMALLEST COMPANY HAD A
MARKET VALUE OF $395
MILLION, THE LARGEST
COMPANY A MARKET VALUE
OF $465 BILLION, THE
MEAN MARKET VALUE WAS
$23 BILLION, AND THE
WEIGHTED AVERAGE MARKET
VALUE WAS $119 BILLION.
<PAGE> 34
PROSPECTUS
31
Equity Fund (continued)
In managing the Fund's portfolio, the manager attempts to match the risk
characteristics of the stocks comprising the S&P 500 Index. The Fund does not
seek to match the performance of the S&P 500 Index, nor does it limit its
investments to stocks in that index.
In addition to the securities described above, the Fund may invest in money
market instruments, U.S. Treasury obligations, and other types of equity and
debt securities.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with the Fund's principal investment strategies in attempting to
respond to adverse market, economic, political, or other conditions. In these
and in other cases, the Fund may not achieve its investment goal.
THE FUND INTENDS TO REFOCUS ITS INVESTMENT STRATEGY TO AN EXCLUSIVELY VALUE
INVESTMENT STYLE IN THE UPCOMING YEAR. SHAREHOLDERS WILL BE INFORMED UPON THE
IMPLEMENTATION OF THIS INVESTMENT STRATEGY REFINEMENT.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - INVESTMENT STYLE RISK -- Investment style risk is the possibility that returns
from large capitalization stocks will trail returns from other asset classes
or the overall stock market.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
The Fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and may increase the amount of taxes that you
pay.
For more information about these risks please refer to the section titled
"Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 35
Equity Fund (continued)
PROSPECTUS
32
FUND SUMMARIES
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1991 26.13%
1992 -3.47%
1993 10.46%
1994 -1.21%
1995 35.26%
1996 25.91%
1997 28.77%
1998 18.83%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was -1.79%.
Sales charges are not reflected in the bar
chart and, if they were reflected, returns
would be less than those shown.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q4 1998 18.88%
Worst Quarter: Q3 1998 -12.79%
</TABLE>
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the S&P 500 Index.
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/28/90)
--------------------------------------------------------
<S> <C> <C> <C>
Equity Fund
(reflects maximum
sales charge of
5.00%) 12.90% 19.58% 16.20%
--------------------------------------------------------
S&P 500 Index (1) 28.58% 24.06% 20.43%
--------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index
generally representative of the performance
of large companies in the U.S. stock market.
<PAGE> 36
Equity Fund (continued)
PROSPECTUS
33
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
September 28, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$176 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform Equity
AMERICAN PERFORMANCE
FUND NUMBER
004
CUSIP NUMBER
028846608
TICKER SYMBOL
APEQX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 1.00%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.69%+
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.33%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.27%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.19% of its Investment Advisory Fees.
This fee waiver is expected to continue
through December 31, 2000. Accordingly, actual
annual fund operating expenses were as
follows:
Investment Advisory Fees 0.50%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.33%
TOTAL ANNUAL FUND OPERATING
EXPENSES 1.08%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$623 $883 $1,162 $1,957
</TABLE>
<PAGE> 37
PROSPECTUS
34
FUND SUMMARIES
Balanced Fund
------------------------------------------------
INVESTMENT GOAL
Capital appreciation and income by investing in
U.S. common stocks and investment grade bonds.
PRINCIPAL INVESTMENT STRATEGY
The Balanced Fund seeks capital appreciation and
income by investing primarily in a broadly
diversified portfolio of securities, including
common stocks, preferred stocks and bonds. To
pursue this goal, the Fund normally invests
between 50% and 75% of its total assets in
equity securities and at least 25% of its assets
in investment grade (rated in one of the four
highest rating categories) or comparable quality
debt obligations.
The equity portion of the Fund primarily
consists of large and small capitalization
stocks of both undervalued companies and
companies with above average growth potential.
In selecting equity securities, the Adviser
employs a quantitative investment approach
whereby individual stocks are ranked according
to their relative price strength, relative
value, earnings momentum, and earnings estimate
revisions. Economic conditions may warrant the
consideration of other factors when ranking
individual stocks.
APPLE LOGO
BALANCED FUNDS:
ARE GENERALLY
"MIDDLE-OF-THE-ROAD"
INVESTMENTS THAT SEEK
TO PROVIDE SOME
COMBINATION OF GROWTH,
INCOME, AND
CONSERVATION OF CAPITAL
BY INVESTING IN A MIX
OF STOCKS, BONDS,
AND/OR MONEY MARKET
INSTRUMENTS. BECAUSE
THE PRICES OF STOCKS
AND BONDS OFTEN MOVE IN
DIFFERENT DIRECTIONS,
BALANCED FUNDS ARE ABLE
TO USE REWARDS FROM ONE
TYPE OF INVESTMENT TO
HELP OFFSET THE RISKS
FROM ANOTHER.
<PAGE> 38
PROSPECTUS
35
Balanced Fund (continued)
The debt portion of the Fund primarily consists of bonds, notes and debentures,
and bills issued by U.S. corporations or the U.S. government, its agencies, or
instrumentalities, mortgage-related securities, and asset-backed securities. The
Fund seeks to maintain a dollar-weighted average portfolio maturity of seven to
twelve years for the debt portion of its portfolio. The Fund also invests in
money market instruments. If the rating of a security is downgraded after
purchase, the Adviser will determine whether it is in the best interest of the
Fund's shareholders to continue to hold the security.
The portion of the Fund's assets invested in equity and debt securities will
vary in accordance with economic conditions, the level of stock prices, interest
rates, and the risk associated with each investment medium.
In addition to the securities described above, the Fund may invest in other
equity and debt securities. The Fund may from time to time, take temporary
defensive positions that are inconsistent with the Fund's principal investment
strategies in attempting to respond to adverse market, economic, political, or
other conditions. In these and in other cases, the Fund may not achieve its
investment goal.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - CREDIT RISK -- Credit risk is the possibility that an issuer cannot make
timely interest and principal payments on its debt obligations, such as bonds.
In general, lower-rated bonds have higher credit risks. However, because the
Fund invests in investment grade debt obligations, credit risk is minimized.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
value of the Fund's investments will decline due to an increase in interest
rates. Generally, an increase in the average maturity of the fixed income
portion of the Fund will make it more sensitive to interest rate risk.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
- - PORTFOLIO BALANCING RISK -- Portfolio balancing risk is the possibility that
the portfolio manager will not accurately assess the optimal mix of stocks and
debt securities and therefore will underperform other balanced funds.
To the extent that the Fund makes investments with additional risks, those risks
could increase volatility or reduce performance. The Fund may trade securities
actively, which could increase its transaction costs (thus lowering performance)
and may increase the amount of taxes that you pay.
For more information about these risks please refer to the section titled
"Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 39
Balanced Fund (continued)
PROSPECTUS
36
FUND SUMMARIES
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1996 16.38%
1997 19.46%
1998 17.36%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was -0.51%.
Sales charges are not reflected in the bar
chart and, if they were reflected, returns
would be less than those shown.
<TABLE>
<S> <C> <C> <C>
Best Quarter Q2 1997 13.01%
Worst Quarter Q3 1998 -5.40%
</TABLE>
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the S&P 500 Index and the
Salomon Brothers Broad (Investment Grade) Bond
Index.
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year (6/1/95)
--------------------------------------------------
<S> <C> <C>
Balanced Fund (reflects
maximum sales charge of 5.00%) 11.48% 16.74%
--------------------------------------------------
S&P 500 Index(1) 28.58% 29.34%
--------------------------------------------------
Salomon Brothers Broad
(Investment Grade) Bond
Index(2) 8.71% 9.07%
--------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index
generally representative of the performance
of large companies in the U.S. stock market.
(2) The Salomon Brothers Broad (Investment
Grade) Bond Index is an unmanaged index
comprised of investment-grade corporate and
U.S. government bonds.
<PAGE> 40
Balanced Fund (continued)
PROSPECTUS
37
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
June 1, 1995
NET ASSETS AS OF
NOVEMBER 30, 1999
$59 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform Balan
AMERICAN PERFORMANCE
FUND NUMBER
009
CUSIP NUMBER
028846889
TICKER SYMBOL
APBAX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 1.00%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.74%+
Distribution/Service (12b-1) Fees 0.25%+
Other Expenses 0.36%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.35%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.43% of its Investment Advisory Fees
and the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees. The Adviser
expects to waive 0.32% of its Investment
Advisory Fees and the Distributor expects to
waive 0.25% of its Distribution/Service
(12b-1) Fees through December 31, 2000.
Accordingly, estimated annual fund operating
expenses are as follows:
Investment Advisory Fees 0.42%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.36%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.78%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$631 $906 $1,202 $2,043
</TABLE>
<PAGE> 41
PROSPECTUS
38
FUND SUMMARIES
Growth Equity Fund
------------------------------------------------
INVESTMENT GOAL
APPLE LOGO
Long-term capital appreciation by investing in
U.S. common stocks.
PRINCIPAL INVESTMENT STRATEGY
The Growth Equity Fund seeks long-term capital
appreciation by investing primarily in a
diversified portfolio of common stocks and
securities convertible into common stocks.
To pursue this goal, the Fund invests primarily
in a universe of equity securities of large U.S.
companies above a given market capitalization,
currently $1 billion, with a weighted average
market value similar to that of the S&P
500/BARRA Growth Index, which exhibit growth
characteristics.
The Fund attempts to identify large
capitalization stocks with above-average growth
potential by employing a quantitative investment
approach whereby individual stocks are ranked
according to their relative price strength,
relative value, earnings momentum, earnings
estimate revisions, return on equity, past
growth, earnings per share and sales per share,
and future estimated earnings per share growth.
Economic conditions may warrant the
consideration of other factors when ranking
individual stocks. The Fund will exhibit
volatility similar to the S&P 500/BARRA Growth
Index and slightly higher than the S&P 500
Index.
THE S&P 500/BARRA GROWTH INDEX:
CONSISTS OF THOSE DOMESTIC STOCKS
INCLUDED
APPLE LOGO
IN THE S&P 500 INDEX WHICH ADHERE
TO A GROWTH INVESTMENT STYLE. AS OF THE DATE OF
THIS PROSPECTUS, THE S&P 500/BARRA GROWTH INDEX
STATISTICS WERE AS FOLLOWS: THE SMALLEST COMPANY
HAD A MARKET VALUE OF $624 MILLION, THE LARGEST
COMPANY A MARKET VALUE OF $465 BILLION, THE MEAN
MARKET VALUE WAS $49 BILLION, AND THE WEIGHTED
AVERAGE MARKET VALUE WAS $171 BILLION.
GROWTH FUNDS:
GROWTH
INVESTING
FOCUSES ON
COMPANIES BELIEVED TO
HAVE ABOVE-AVERAGE
POTENTIAL FOR GROWTH IN
REVENUE AND EARNINGS.
REFLECTING THE MARKET'S
HIGH EXPECTATIONS FOR
SUPERIOR GROWTH, THE
PRICES OF SUCH STOCKS
ARE TYPICALLY
ABOVE-AVERAGE IN
RELATION TO SUCH
MEASURES AS REVENUE,
EARNINGS, BOOK VALUE,
AND DIVIDENDS. IN
GENERAL, GROWTH FUNDS
APPEAL TO INVESTORS WHO
WILL ACCEPT MORE
VOLATILITY IN HOPES OF
A GREATER INCREASE IN
SHARE PRICE. GROWTH
FUNDS MAY ALSO APPEAL
TO INVESTORS WITH
TAXABLE ACCOUNTS WHO
WANT A HIGHER
PROPORTION OF RETURNS
TO COME AS CAPITAL
GAINS (WHICH MAY BE
TAXED AT LOWER RATES
THAN DIVIDEND INCOME).
<PAGE> 42
PROSPECTUS
39
Growth Equity Fund (continued)
In addition to the securities described above,
the fund may invest in money market instruments,
U.S. Treasury obligations and other types of
equity and debt securities.
The Fund may, from time to time, take temporary
defensive positions that are inconsistent with
the Fund's principal investment strategies, in
attempting to respond to adverse market,
economic, political, or other conditions. In
these and in other cases, the Fund may not
achieve its investment goal.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Loss of money is a risk of investing in the
Fund. In addition, your investment in the Fund
may be subject to the following principal risks:
- - INVESTMENT STYLE RISK -- Investment style risk
is the possibility that returns from large
capitalization growth stocks will trail
returns from other asset classes or the
overall stock market.
- - MARKET RISK -- Market risk is the possibility
that the Fund's investments in equity
securities will decline because of drops in
the stock market. Stock markets tend to move
in cycles, with periods of either rising or
falling prices. The value of your investment
will go up or down in response to these
movements.
The Fund may trade securities actively, which
could increase its transaction costs (thus
lowering performance) and may increase the
amount of taxes that you pay.
For more information about these risks please
refer to the section titled "Investment
Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN
OBLIGATION OF BANK OF OKLAHOMA, N.A., ITS
AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE> 43
Growth Equity Fund (continued)
PROSPECTUS
40
FUND SUMMARIES
PERFORMANCE INFORMATION
The bar chart and the performance table below
give some indication of the risks and volatility
of an investment in the Fund. Of course, the
Fund's past performance does not necessarily
indicate how the Fund will perform in the
future.
This bar chart shows changes in the Fund's
performance from year to year.*+
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<S> <C>
1998 42.25%
1997 32.88%
1996 24.41%
1995 35.99%
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 4.70%. Sales
charges are not reflected in the bar chart
and, if they were reflected, returns would be
less than those shown.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q4 1998 23.55%
Worst Quarter: Q3 1998 -7.56%
</TABLE>
<PAGE> 44
Growth Equity Fund (continued)
PROSPECTUS
41
This table compares the Fund's average annual
total returns for periods ending December 31,
1998 to those of the S&P 500 Index and the S&P
500/BARRA Growth Index.+
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED 12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year (6/30/94)
- ---------------------------------------------------
<S> <C> <C>
Growth Equity Fund (reflects a
maximum sales charge of 5.00%) 35.11% 28.33%
- ---------------------------------------------------
S&P 500 Index(1) 28.58% 28.03%
- ---------------------------------------------------
S&P 500/BARRA Growth Index(2) 42.16% 32.78%
- ---------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index
generally representative of the performance
of large companies in the U.S. stock market.
(2) The S&P 500/BARRA Growth Index is an
unmanaged index generally representative of
the performance of large growth companies in
the U.S. stock market.
+ The above-quoted performance information
includes the performance of a predecessor fund
for the period from June 30, 1994 until the
Growth Equity Fund commenced operations on
November 3, 1997 adjusted to reflect the
deduction of fees and expenses applicable to
the Growth Equity Fund as stated in this
prospectus in the Fees and Expenses section
(i.e., adjusted to reflect anticipated fees
and expenses, absent any fee waivers). The
predecessor fund was not registered under the
1940 Act and therefore was not subject to
certain investment restrictions, limitations
and diversification requirements imposed by
the Act and the Code. If the predecessor fund
had been registered under the 1940 Act, its
performance may have been adversely affected.
The investment objective, restrictions and
guidelines of the Growth Equity Fund are
substantially similar to its predecessor fund
and both are managed by the same personnel.
<PAGE> 45
PROSPECTUS
42
FUND SUMMARIES
Growth Equity Fund (continued)
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
November 3, 1997
NET ASSETS AS OF
NOVEMBER 30, 1999
$158 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
Am Perform GroEq
AMERICAN PERFORMANCE
FUND NUMBER
010
CUSIP NUMBER
028846871
TICKER SYMBOL
APGEX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 1.00%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.69%+
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.34%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.28%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.19% of its Investment Advisory Fees.
This fee waiver is expected to continue
through December 31, 2000. Accordingly, actual
annual fund operating expenses were as
follows:
Investment Advisory Fees 0.50%
Distribution/Service (12b-1) Fees 0.25%
Other Expenses 0.34%
TOTAL ANNUAL FUND OPERATING
EXPENSES 1.09%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$624 $886 $1,167 $1,968
</TABLE>
<PAGE> 46
PROSPECTUS
43
Small Cap Equity Fund
------------------------------------------------
INVESTMENT GOAL
APPLE LOGO
Long-term capital appreciation and, secondarily,
income by investing in U.S. small cap common
stocks.
PRINCIPAL INVESTMENT STRATEGY
The Small Cap Equity 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-size
companies. To pursue this goal, the Fund
primarily invests in equity securities of small
capitalization U.S. companies believed to be
undervalued, or present above average growth
potential. The Fund attempts to identify stocks
of both undervalued small capitalization
companies and small capitalization companies
with above average growth potential by
employing a quantitative investment approach
whereby individual stocks are ranked according
to their relative price strength, earnings
estimate revisions, book-to-price,
sales-to-price, and cash flow to price.
Additional criteria the manager uses to select
particular stocks include volatility, momentum,
size, trading activity, growth, earnings yield,
value, earnings variability, leverage, currency
sensitivity, and dividend yield. Economic
conditions may warrant the consideration of
other factors when ranking individual stocks.
In managing the Fund's portfolio, the portfolio
will be constructed to exhibit investment
characteristics of the stocks comprising the S&P
Small Cap 600 Index, and investments in stocks
will be limited to the stocks within the Index.
APPLE LOGO
SMALL-CAP
STOCKS:
STOCKS OF
PUBLICLY TRADED
COMPANIES -- AND MUTUAL
FUNDS THAT HOLD THESE
STOCKS -- CAN BE
CLASSIFIED BY THE
COMPANIES' MARKET
VALUE, OR
CAPITALIZATION.
SMALL-CAP FUNDS
TYPICALLY HOLD STOCKS
OF COMPANIES WITH A
MARKET VALUE OF LESS
THAN $1 BILLION.
THE S&P SMALL
CAP 600 INDEX:
CONSISTS OF 600
DOMESTIC STOCKS CHOSEN
FOR MARKET SIZE,
LIQUIDITY AND INDUSTRY
GROUP REPRESENTATIONS.
AS OF THE DATE OF THIS
PROSPECTUS, THE S&P
SMALL CAP 600 INDEX
STATISTICS WERE AS
FOLLOWS: THE SMALLEST
COMPANY HAD A MARKET
VALUE OF $27 MILLION,
THE LARGEST COMPANY A
MARKET VALUE OF $3.3
BILLION, THE MEAN
MARKET VALUE WAS $571
MILLION, AND THE
WEIGHTED AVERAGE MARKET
VALUE WAS $950 MILLION.
<PAGE> 47
PROSPECTUS
44
FUND SUMMARIES
Small Cap Equity Fund (continued)
In addition to the securities described above, the Fund may invest in money
market instruments, U.S. Treasury obligations, and other types of equity and
debt securities.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with the Fund's principal investment strategies in attempting to
respond to adverse market, economic, political, or other conditions. In these
and in other cases, the Fund may not achieve its investment goal.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Loss of money is a risk of investing in the Fund. In addition, your investment
in the Fund may be subject to the following principal risks:
- - INVESTMENT STYLE RISK -- Investment style risk is the possibility that returns
from small capitalization value and growth stocks will trail returns from
other asset classes or the overall stock market.
- - MARKET RISK -- Market risk is the possibility that the Fund's investments in
equity securities will decline because of drops in the stock market. Stock
markets tend to move in cycles, with periods of either rising or falling
prices. The value of your investment will go up or down in response to these
movements.
- - SMALL CAP SECURITIES RISK -- Small cap securities risk involves the greater
risk of investing in smaller, less well-known companies, especially those that
have a narrow product line or are traded infrequently, than investing in
established companies with proven track records.
The Fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and may increase the amount of taxes that you
pay.
For more information about these risks please refer to the section titled
"Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
PERFORMANCE INFORMATION
A bar chart and the performance are not included for the Small Cap Equity Fund
because the Fund did not commence operations until 2/17/99.
<PAGE> 48
Small Cap Equity Fund (continued)
PROSPECTUS
45
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
quarterly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE:
February 17, 1999
NET ASSETS AS OF
NOVEMBER 30, 1999
$8 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
NEWSPAPER
ABBREVIATION
n/a
AMERICAN PERFORMANCE
FUND NUMBER
011
CUSIP NUMBER
028846863
TICKER SYMBOL
n/a
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load)
Imposed on Purchases 5.00%*
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) 0%**
(as a percentage of net asset value)
- ------------------------------------------------
* The sales charges imposed on purchases of
shares decreases as the purchase amount
increases. In addition, a sales charge is not
imposed on purchases of shares by certain
investors. Please refer to the section titled
"Your Account -- How Sales Charges are
Calculated."
** A contingent deferred sales charge of 1.00%
will be assessed against the proceeds of any
redemption request relating to shares
purchased without a sales charge in reliance
upon the waiver accorded to purchases in the
amount of $1 million or more, if the
redemption request is made within one year of
the purchase date. Please refer to the
section titled "Your Account -- How Sales
Charges are Calculated."
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.69%+
Distribution/Service (12b-1) Fees 0.25%+
Other Expenses 0.69%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.63%+
- ------------------------------------------------
+ During the last fiscal year, the Adviser
waived 0.69% of its Investment Advisory Fees
and the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees. These fee
waivers are expected to continue through
December 31, 2000. Accordingly, actual annual
fund operating expenses were as follows:
Investment Advisory Fees 0.00%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.69%
TOTAL ANNUAL FUND OPERATING
EXPENSES 0.69%
- ------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$657 $988 $1,342 $2,336
</TABLE>
<PAGE> 49
PROSPECTUS
46
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Your Account
HOW SALES CHARGES ARE CALCULATED
Shares of each Fund are sold at their public offering price, which includes the
initial sales charge. Therefore, part of the money you invest will be used to
pay the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions or on purchases of the Money Market Funds.
The current sales charge rates are as follows:
FOR THE EQUITY FUND, THE BALANCED FUND, THE GROWTH EQUITY FUND, AND THE SMALL
CAP EQUITY FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 5.00% 5.26%
$50,000 up to $99,999 3.75% 3.90%
$100,000 up to $249,999 2.75% 2.83%
$250,000 up to $499,999 2.00% 2.04%
$500,000 up to $999,999 1.75% 1.78%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
FOR THE BOND FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 4.00% 4.17%
$50,000 up to $99,999 3.25% 3.36%
$100,000 up to $249,999 2.50% 2.56%
$250,000 up to $499,999 2.00% 2.04%
$500,000 up to $999,999 1.50% 1.52%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
(1) There is no initial sales charge on purchases of $1 million or more.
However, a contingent deferred sales charge (CDSC) of up to 1.00% of the
purchase price will be charged to the shareholder if shares are redeemed in
the first year after purchase. This charge will be based on the lower of
your cost for the shares or their net asset value (NAV) at the time of
redemption. There will be no CDSC on reinvested distributions.
<PAGE> 50
PROSPECTUS
47
FOR THE INTERMEDIATE BOND FUND AND THE INTERMEDIATE TAX-FREE BOND FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 3.00% 3.09%
$50,000 up to $99,999 2.50% 2.56%
$100,000 up to $249,999 2.00% 2.04%
$250,000 up to $499,999 1.50% 1.52%
$500,000 up to $999,999 1.25% 1.27%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
FOR THE SHORT-TERM INCOME FUND
<TABLE>
<CAPTION>
Sales Charge Sales Charge
as a % of as a % of
Your Investment Offering Price Your Net Investment
- ---------------------------------------------------------------------------
<S> <C> <C>
Up to $49,999 2.00% 2.04%
$50,000 up to $99,999 1.50% 1.52%
$100,000 up to $249,999 1.25% 1.27%
$250,000 up to $499,999 1.00% 1.01%
$500,000 up to $999,999 0.75% 0.76%
$1,000,000 and above(1) 0.00% 0.00%
- ---------------------------------------------------------------------------
</TABLE>
(1) There is no initial sales charge on purchases of $1 million or more.
However, a contingent deferred sales charge (CDSC) of up to 1.00% of the
purchase price will be charged to the shareholder if shares are redeemed in
the first year after purchase. This charge will be based on the lower of
your cost for the shares or their net asset value (NAV) at the time of
redemption. There will be no CDSC on reinvested distributions.
SALES CHARGE WAIVERS
The Distributor may periodically waive the sales charges for all customers with
respect to any of the Equity Funds or Bond 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;
<PAGE> 51
PROSPECTUS
48
YOUR ACCOUNT
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 Funds within their trust
accounts and purchase additional shares outside of these trust
relationships;
7. investors within wrap accounts;
8. investors who purchase in connection with 401(k) plans, 403(b) plans, and
other employer-sponsored, qualified retirement plans; and
9. investors who purchase in connection with non-transactional fee fund
programs and programs offered by fee-based financial planners and other
types of financial institutions.
Each investor described in paragraphs (2), (3), (4), (6), (8), and (9) 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.
SALES CHARGE REDUCTIONS
Reduced sales charges are available to shareholders with investments of $50,000
or more (please see the previous section titled "How Sales Charges are
Calculated.") In addition, you may qualify for reduced sales charges under the
following circumstances.
- - Letter of Intent. You inform the Funds in writing that you intend to purchase
enough shares over a 13-month period to qualify for a reduced sales charge.
You must include a minimum of 5% of the total amount you intend to purchase
with your letter of intent.
- - Right of Accumulation. When the value of shares you already own plus the
amount you intend to invest reaches the amount needed to qualify for reduced
sales charges, your added investment will qualify for the reduced sales
charge.
<PAGE> 52
PROSPECTUS
49
- - Combination Privilege. Combine accounts of multiple Funds (excluding the Money
Market Funds) or accounts of immediate family household members (spouse and
children under 21) and businesses owned by you as sole proprietorship to
achieve reduced sales charges.
- - Concurrent Purchases. For purposes of qualifying for a reduced sales charge,
investors have the privilege of:
(a) combining concurrent purchases of, and holdings in, shares of any of
the American Performance Funds purchased from a broker or dealer
selling the American Performance Funds, sold with a sales charge
("Eligible Shares"); or
(b) combining concurrent purchases of shares of any funds purchased from a
broker or dealer selling the American Performance Funds, sold with a
sales charge ("Other Shares") with concurrent purchases of 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 and Other 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.
- - Reinstatement Privilege. If you have sold shares and decide to reinvest in the
Fund within a 90 day period, you will not be charged the applicable sales load
on amounts up to the value of the shares you sold. You must provide a written
reinstatement request and payment within 90 days of the date your instructions
to sell were processed.
<PAGE> 53
PROSPECTUS
50
YOUR ACCOUNT
DISTRIBUTION/SERVICE (12B-1) FEES
The Funds have adopted a plan under Rule 12b-1 that allows each Fund to pay
distribution and service fees for the sale and distribution of its shares and
for services provided to shareholders. Because these fees are paid out of a
Fund's assets continuously, over time, these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. The
maximum distribution fee is 0.25% of the average daily net assets of a Fund.
OPENING AN ACCOUNT
1.Read this prospectus carefully.
2.Determine how much you want to invest. The
minimum investment for the American
Performance Funds is as follows:
- INITIAL PURCHASE: $1,000 for each Fund
- ADDITIONAL PURCHASES: $100 for each Fund.
These minimums may be waived if purchases are
made in connection with Individual Retirement
Accounts, Keoghs, qualified pension plans,
similar plans, or other employer plans. For
more information on IRAs, Keoghs, or similar
plans, contact the Funds at (918) 588-6586.
The minimum investment in the Auto Invest Plan
is $100. Please refer to the section titled
"Additional Investor Services."
3.Complete the appropriate parts of the Account
Registration Form, carefully following the
instructions. You must submit additional
documentation when opening trust, corporate or
power of attorney accounts. For more
information, please contact your financial
representative or call the Funds at (800)
762-7085.
<PAGE> 54
PROSPECTUS
51
BUYING SHARES
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
<S> <C> <C> <C>
By Mail
- - Make out a check, bank draft, - Make out a check, bank draft,
or money order for the or money order for the
investment amount (at least investment amount payable (at
$1,000), payable to the least $100) to the American
American Performance Funds. Performance Funds.
- - Deliver the check, bank - Deliver the check, bank
draft, or money order and draft, or money order and
your completed Account investment slip attached to
Registration Form to the your account statement (or,
Funds' Custodian at Bank of if unavailable, provide the
Oklahoma, N.A., Attention: Fund name, amount invested,
American Performance Funds, account name, and account
Department 12, Tulsa, number) to the Funds'
Oklahoma 74182. Custodian at Bank of
Oklahoma, N.A., Attention:
American Performance Funds,
Department 12, Tulsa,
Oklahoma 74182.
- ----------------------------------------------------------------------
By Overnight Mail
- - Make out a check, bank draft, - Make out a check, bank draft,
or money order for the or money order for the
investment amount (at least investment amount payable (at
$1,000), payable to the least $100) to the American
American Performance Funds. Performance Funds.
- - Deliver the check, bank - Deliver the check, bank
draft, or money order and draft, or money order and
your completed Account investment slip attached to
Registration Form to c/o your account statement (or,
BISYS Fund Services, Attn: if unavailable, provide the
T.A. Operations, American Fund name, amount invested,
Performance Funds, 3435 account name, and account
Stelzer Road, Columbus, Ohio number) to c/o BISYS Fund
43219-3035. Services, Attn: T.A.
Operations, American
Performance Funds, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- ----------------------------------------------------------------------
All purchases made by check should be in U.S. dollars.
Third party checks, credit card checks or cash will not be accepted.
</TABLE>
<PAGE> 55
PROSPECTUS
52
YOUR ACCOUNT
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
<S> <C>
By Telephone or Wire Transfer
- - Call (800) 762-7085 for - Deliver your completed Account
instructions on opening an Registration Form to the Funds
account by wire transfer. at: c/o BISYS Fund Services
Attn: T.A. Operations
3435 Stelzer Rd.
Columbus, OH 43219
- To place an order by telephone
call the Funds at (800) 762-7085
for instructions on purchasing
additional shares by wire
transfer.
- Your bank may charge a fee to
wire funds.
- ------------------------------------------------------------------
By Electronic Funds Transfer
- - Your bank must participate in - Establish the electronic
the Automated Clearing House purchase option on your Account
and must be a U.S. bank. Registration Form or call
(800) 762-7085.
- Call (800) 762-7085 to arrange
an electronic purchase.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------
</TABLE>
<PAGE> 56
PROSPECTUS
53
SELLING SHARES
<TABLE>
<CAPTION>
TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
By Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to the Funds'
Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds,
Department 12, Tulsa, Oklahoma, 74182.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
By Overnight Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to American
Performance Funds, c/o BISYS Fund
Services, Attn: T.A. Operations, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
</TABLE>
<PAGE> 57
PROSPECTUS
54
YOUR ACCOUNT
<TABLE>
<CAPTION>
TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
- ------------------------------------------------------------------------------------
By Phone
- - Accounts of any type. - Call (800) 762-7085 with instructions
as to how you wish to receive your
- - Sales of any amount. funds (mail, wire, electronic
transfer).
- ------------------------------------------------------------------------------------
By Wire
- - Accounts of any type which have elected - Call (800) 762-7085 to request a wire
the wire option on the Account transfer.
Registration Form.
- If you call by 4 p.m. Eastern time,
- - Sales of any amount. your payment will normally be wired to
your bank on the next business day.
- The Fund may charge a wire fee.
- Your bank may charge a fee to wire
funds.
- ------------------------------------------------------------------------------------
By Electronic Funds Transfer
- - Accounts of any type. - Call (800) 762-7085 to request an
electronic funds transfer.
- - Sales of any amount.
- If you call by 4 p.m. Eastern time,
- - Shareholders with accounts at a U.S. the NAV of your shares will normally
bank which participates in the Automated be determined on the same day and the
Clearing House. proceeds will be created within 8
days.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------------------------
</TABLE>
Selling Shares in Writing. In certain circumstances, you may need to include a
signature guarantee, which protects you against fraudulent orders. You will need
a signature guarantee unless:
- - the redemption check is payable to the shareholder(s) of record, and the check
is mailed to the shareholder(s) of record and mailed to the address of record,
or
- - the redemption proceeds are being wired according to bank instructions
currently on your account.
You should be able to obtain your signature guarantee from a bank, broker,
dealer, credit union, securities exchange or association, clearing agency, or
savings association. A notary public CANNOT provide a signature guarantee.
<PAGE> 58
PROSPECTUS
55
Receiving Your Money. Normally, payment of your redemption proceeds will be made
as promptly as possible and, in any event, within seven calendar days after the
redemption order is received. At various times, however, a Fund may be requested
to redeem shares for which it has not yet received good payment; collection of
payment may take ten or more days. In these circumstances, the redemption
request will be rejected by the Fund. Once a Fund has received good payment for
the shares a shareholder may submit another request for redemption. If you have
made your initial investment by check, you cannot receive the proceeds of that
check until it has cleared (which may require up to 10 business days). You can
avoid this delay by purchasing shares with a certified check.
Involuntary Sales of Your Shares. Due to the relatively high costs of handling
small investments, each Fund reserves the right to redeem your shares at net
asset value if your account balance in any Fund drops below $500. Before any
Fund exercises its right to redeem your shares you will be given at least 60
days written notice to give you time to add to your account and avoid selling
your shares.
Refusal of Redemption Request. The Funds may postpone payment for shares at
times when the New York Stock Exchange is closed or under any emergency
circumstances as determined by the Securities and Exchange Commission. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send the Funds your request by regular or
overnight mail. Follow the instructions above under "Selling Your Shares" in
this section.
Redemption In Kind. The Funds reserve the right to make payment in securities
rather than cash, known as "redemption in kind." This could occur under
extraordinary circumstances, such as a very large redemption that could affect
Fund operations (for example, more than 1% of a Fund's net assets). If a Fund
deems it advisable for the benefit of all shareholders, redemption in kind will
consist of securities equal in market value to your shares. When you convert
these securities to cash, you will pay brokerage charges.
Undeliverable Redemption Checks. For any shareholder who chooses to receive
distributions in cash: If distribution checks (1) are returned and marked as
"undeliverable" or (2) remain uncashed for six months, your account will be
changed automatically so that all future distributions are reinvested in your
account. Checks that remain uncashed for six months will be canceled and the
money reinvested in the appropriate Fund as of the cancellation date. No
interest is paid during the time the check is outstanding.
<PAGE> 59
PROSPECTUS
56
YOUR ACCOUNT
EXCHANGING SHARES
How to Exchange Your Shares. Shares of any 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 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. 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 Funds at
BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219. 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.
TRANSACTION POLICIES
Valuation of Shares. The net asset value per share of a Fund is determined by
dividing the total market value of the Fund's investments and other assets, less
any liabilities, by the total number of outstanding shares of the Fund.
MONEY MARKET FUNDS
- - The net asset value of each of the Money Market Funds is determined on each
business day 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 day in which the NYSE is open for trading, and the Federal
Reserve Bank of Kansas City is open.
- - The assets in each Money Market Fund are valued based upon the amortized cost
method. For further information about valuation of investments, see the
Statement of Additional Information.
- - The net asset value of each of the Money Market Funds is expected to remain at
a constant $1.00 per share, although there is no assurance that this will be
maintained.
BOND AND EQUITY FUNDS
- - The net asset value of each of the Bond and Equity Funds is determined on each
business day as of the close of regular trading of the NYSE (generally
<PAGE> 60
PROSPECTUS
57
4:00 p.m. Eastern time) on each day in which the NYSE is open for trading, and
the Federal Reserve Bank of Kansas City is open.
- - The assets in each of the Bond and Equity Funds are valued at market value. If
market quotations are not readily available, the securities will be valued at
fair value by the Funds' Pricing Committee. For further information about
valuation of investments, see the Statement of Additional Information.
Buy and Sell Prices. When you buy shares, you pay the net asset value next
determined after your order is received. When you sell shares, you receive the
net asset value next determined after your order is received.
ADDITIONAL INVESTOR SERVICES
Auto Invest Plan (AIP). AIP lets you set up periodic additional investments in
the Funds of your choice through automatic deductions from your bank account.
The minimum investment amount is $100 per month or quarter per Fund. To
establish, complete the appropriate section in the Account Registration Form.
The minimum initial investment in the AIP is $100 and the minimum for subsequent
investments is $50. To participate in AIP from your bank account, please attach
a voided check to your Account Registration Form.
Directed Dividend Option. By selecting the appropriate box in the Account
Registration Form, you can elect to receive your distributions in cash (check)
or have distributions (capital gains and dividends) reinvested in another
American Performance Fund without a sales charge. You must maintain the minimum
balance in each Fund into which you plan to reinvest distributions or the
reinvestment will be suspended and your distributions paid to you. The Fund may
modify or terminate this directed dividend option without notice. You can change
or terminate your participation in the directed dividend option at any time.
Systematic Withdrawal Plan (SWP). If you have at least $10,000 in your account,
you may use SWP, which allows you to receive regular distributions from your
account. Under the plan you may elect to receive automatic payments via check of
at least $100 per Fund or more on a monthly or quarterly basis. You may arrange
to receive regular distributions from your account via check by completing the
appropriate section in the Account Registration Form and attaching a voided
check or by calling (800) 762-7085. The maximum withdrawal per year is 12% of
the account value at the time of election.
DIVIDENDS AND CAPITAL GAINS
As a mutual fund shareholder, you may receive capital gains and/or income from
your investment. The Money Market Funds declare dividends daily and pay income
dividends monthly. The Funds distribute capital gains they have realized, if
any, at least once a year.
<PAGE> 61
PROSPECTUS
58
YOUR ACCOUNT
We will automatically reinvest any income and capital gains distributions you
are entitled to in additional shares of your Fund(s) unless you notify our
Distributor that you want to receive your distributions in cash. To do so, send
a letter with your request, including your name and account number to:
American Performance Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Your request will become effective for distributions having record dates after
our Distributor receives your request. Note that the Internal Revenue Service
treats dividends paid in additional Fund shares the same as it treats dividends
paid in cash.
TAXES
Your mutual fund investments may have a considerable impact on your tax
situation. We've summarized some of the main points you should know below. Note,
however, that the following is general information and will not apply to you if
you are investing through a tax-deferred account such as an IRA or a qualified
employee benefit plan. In addition, if you are not a resident of the United
States, you may have to pay taxes besides those described here, such as U.S.
withholding and estate taxes.
- - Important Note: If you have not done so already, be sure to provide us with
your correct taxpayer identification number OR certify that it is correct.
Unless we have that information, the Funds may be required by law to withhold
31% of the taxable distributions you would otherwise be entitled to receive
from your Fund investments as well as any proceeds you would normally receive
from selling Fund shares.
We will send you a statement each year showing the tax status of all your
distributions. The laws governing taxes change frequently, however, so please
consult your tax adviser for the most up-to-date information and specific
guidance regarding your particular tax situation. You can find more information
about the potential tax consequences of mutual fund investing in our Statement
of Additional Information.
- - Taxes on Fund Distributions. You may owe taxes on Fund distributions even if
they represent income or capital gains the Fund earned before you invested in
it (for example, if such income or capital gains were included in the price
you initially paid for your shares). Note that you will generally have to pay
taxes on Fund distributions whether you received them in the form of cash or
additional Fund shares. The Internal Revenue Service treats most mutual fund
distributions as ordinary income. One exception is gains from the sale of
assets held by a Fund for more than one year, which, for an individual
shareholder are typically taxed at a lower rate than ordinary income
regardless of how long such shareholder has held Fund shares.
<PAGE> 62
PROSPECTUS
59
- - State and Local Taxes. In addition to federal taxes, you may have to pay state
and local taxes on the dividends or capital gains you receive from a Fund, as
well as on any capital gains you realized from selling or exchanging Fund
shares.
- - Dividends and Short-Term Capital Gains. The IRS treats any dividends and
short-term capital gains you receive from the Funds as ordinary income.
- - Special Considerations for Shareholders of the Intermediate Tax-Free Bond
Fund. Shareholders of the Intermediate Tax-Free Bond Fund should note the
following:
- The Fund's portfolio managers expect that virtually all of the income it
generates will be exempt from federal income taxes. If, however, you
receive Social Security or railroad retirement benefits, you should
consult your tax adviser to determine whether an investment in the Fund
may affect the federal taxation of your benefits.
- It is expected that the dividends you receive from the Fund will be exempt
from federal income tax, however, any short-term capital gains you receive
from the Fund will be taxed as ordinary income.
- Some of the Fund's income may be subject to the alternative minimum tax
for individual shareholders.
- Corporate shareholders must include all tax-exempt interest income
dividends in determining their federal alternative minimum tax.
- - Funds Investing in Foreign Securities: If your Fund invests in foreign
securities, the income those securities generate may be subject to foreign
withholding taxes, which may decrease their yield. Foreign governments may
also impose taxes on other payments or gains your Fund earns on these
securities. In general, shareholders in these Funds will not be entitled to
claim a credit or deduction for these foreign taxes on their U.S. tax return.
(There are some exceptions, however; please consult your tax adviser for more
information.) In addition, foreign investments may prompt a fund to distribute
ordinary income more frequently and/or in greater amounts than purely domestic
funds, which could increase your tax liability.
- - Tax Consequences of Selling or Exchanging Shares. If you sell or exchange Fund
shares (including shares of the Intermediate Tax-Free Bond Fund), you will
generally have to report any capital gain you realize as income and any
capital loss as a deduction on your federal income tax return. For more
specific information about your own tax situation, consult your tax adviser.
<PAGE> 63
PROSPECTUS
60
YOUR ACCOUNT
The portfolio managers of the Funds do not actively consider tax consequences
when making investment decisions. From time to time, the Funds may realize
capital gains as by-products of ordinary investment activities. As a result, the
amount and timing of Fund distributions may vary considerably from year to year.
THESE TAX CONSIDERATIONS MAY OR MAY NOT APPLY TO YOU. PLEASE CONSULT YOUR TAX
ADVISER TO DETERMINE WHETHER THESE CONSIDERATIONS ARE RELEVANT TO YOUR
PARTICULAR INVESTMENTS AND TAX SITUATION. MORE INFORMATION ABOUT TAXES IS IN OUR
STATEMENT OF ADDITIONAL INFORMATION.
<PAGE> 64
PROSPECTUS
61
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Investment Management
INVESTMENT ADVISER
Bank of Oklahoma, N.A. serves as the investment
adviser to each of the Funds and, subject to the
supervision of Board of Trustees of the American
Performance Funds, is responsible for the
day-to-day management of their investment
portfolios.
As of September 30, 1999, Bank of Oklahoma, N.A.
had $7.42 billion in assets under management.
Bank of Oklahoma, N.A. is a subsidiary of BOK
Financial Corporation ("BOK Financial"). BOK
Financial is controlled by its principal
shareholder, George B. Kaiser. Through Bank of
Oklahoma, N.A. and its other subsidiaries, BOK
Financial provides a full array of trust,
commercial banking and retail banking. 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.
The investment advisory fees paid to Bank of
Oklahoma, N.A., after voluntary fee reductions,
by the Funds for the fiscal year ended August
31, 1999, were as follows:
<TABLE>
<CAPTION>
FUND % OF AVERAGE NET ASSETS
<S> <C>
- U.S. Treasury Fund 0.40%
- Cash Management Fund 0.36%+
- Bond Fund 0.35%
- Intermediate Bond Fund 0.35%
- Intermediate Tax-Free Bond Fund 0.35%
- Short-Term Income Fund 0.00%
- Equity Fund 0.50%
- Balanced Fund 0.31%
- Growth Equity Fund 0.50%
- Small Cap Equity Fund 0.00%
</TABLE>
+ AMR Investment Services, Inc., P.O. Box
619003, Dallas/Ft. Worth Airport, Texas
75261-9003, served as sub-adviser to the Cash
Management Fund through April 30, 1999.
<PAGE> 65
PROSPECTUS
62
The persons primarily responsible for the
day-to-day management of each Fund, as well as
their previous business experience, are as
follows:
<TABLE>
<CAPTION>
PORTFOLIO
MANAGER FUND(S) BUSINESS EXPERIENCE
- --------- ------- -------------------
<S> <C> <C>
William Intermediate Tax-Free Since 1963, Mr. Bequette has been a
Bequette Bond Fund portfolio manager for Bank of Oklahoma,
N.A.
J. Brian Bond Fund, the Since 1993, Mr. Henderson has been a
Henderson Intermediate Bond portfolio manager for Bank of Oklahoma,
Fund, and the Short- N.A. In 1991, Mr. Henderson joined Bank of
Term Income Fund Oklahoma, N.A. as a Government Securities
Trader and was named Investment Officer of
the Capital Market Division in 1992. Prior
to joining Bank of Oklahoma, N.A., Mr.
Henderson was a Financial Consultant and
Equity Analyst with Southwest Securities in
Dallas, Texas.
Andrew W. Balanced Fund Since 1993, Mr. Hood has been a portfolio
Hood manager for Bank of Oklahoma, N.A. From
1987 to 1993 Mr. Hood was a portfolio
manager for Sun Trust Bank in Florida.
K.C. Intermediate Tax-Free Since 1994, Mr. Matthews has been a
Matthews Bond Fund portfolio manager for Bank of Oklahoma,
N.A. Mr. Matthews joined Bank of Oklahoma,
N.A. in 1993 in the Capital Markets
Division.
Grafton M. Equity Fund, the Since 1988, Mr. Potter has served as
Potter Growth Equity Fund, Director of Equity Research for Bank of
and the Small Cap Oklahoma, N.A.
Equity Fund
</TABLE>
<PAGE> 66
PROSPECTUS
63
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or, if shorter, the period of each
Fund's operations. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned or lost on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by KPMG LLP,
whose report, along with the Funds' financial statements, are included in the
annual report, which is available upon request.
HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE
THIS EXPLANATION USES THE U.S. TREASURY FUND AS AN EXAMPLE. THE FUND
BEGAN FISCAL 1999 WITH A NET ASSET VALUE (PRICE) OF $1 PER SHARE. DURING THE
YEAR, THE FUND EARNED $0.042 PER SHARE FROM INVESTMENT INCOME (INTEREST AND
DIVIDENDS).
SHAREHOLDERS RECEIVED $0.042 PER SHARE IN THE FORM OF DIVIDEND DISTRIBUTIONS. A
PORTION OF EACH YEAR'S DISTRIBUTIONS MAY COME FROM THE PRIOR YEAR'S INCOME.
THE EARNINGS ($0.042 PER SHARE) MINUS THE DISTRIBUTIONS ($0.042 PER SHARE)
RESULTED IN A SHARE PRICE OF $1 AT THE END OF THE YEAR. FOR A SHAREHOLDER WHO
REINVESTED THE DISTRIBUTIONS IN THE PURCHASE OF MORE SHARES, THE TOTAL RETURN
FROM THE FUND WAS 4.26% FOR THE YEAR.
AS OF AUGUST 31, 1999, THE FUND HAD $394 MILLION IN NET ASSETS. FOR THE YEAR,
ITS EXPENSE RATIO AFTER FEE WAIVERS WAS 0.71% ($7.10 PER $1,000 OF NET ASSETS);
AND ITS NET INVESTMENT INCOME AMOUNTED TO 4.17% OF ITS AVERAGE NET ASSETS.
APPLE LOGO
<PAGE> 67
PROSPECTUS
64
FINANCIAL HIGHLIGHTS
U.S. TREASURY FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------------------------------------
1999 1998 1997 1996 1995
<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 0.042 0.048 0.046 0.047 0.048
----------------------------------------------------
Total from Investment Activities 0.042 0.048 0.046 0.047 0.048
----------------------------------------------------
Distributions
Net investment income (0.042) (0.048) (0.046) (0.047) (0.048)
----------------------------------------------------
Total Distributions (0.042) (0.048) (0.046) (0.047) (0.048)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return 4.26% 4.94% 4.74% 4.85% 4.95%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $394,415 $388,319 $298,424 $217,406 $187,007
Ratio of expenses to average net assets 0.71% 0.72% 0.72% 0.74% 0.75%
Ratio of net investment income to
average net assets 4.17% 4.83% 4.65% 4.74% 4.88%
Ratio of expenses to average net assets* 0.96% 0.97% 0.97% 0.99% 1.00%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 68
PROSPECTUS
65
CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------
1999 1998 1997 1996 1995
<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 0.045 0.050 0.049 0.050 0.052
Net realized and unrealized losses on
investments -- -- (0.010) -- --
-----------------------------------------------------
Total from Investment Activities 0.045 0.050 0.039 0.050 0.052
-----------------------------------------------------
Distributions
Net investment income (0.045) (0.050) (0.049) (0.050) (0.052)
-----------------------------------------------------
Total Distributions (0.045) (0.050) (0.049) (0.050) (0.052)
-----------------------------------------------------
Capital contribution -- -- 0.010 -- --
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return 4.63% 5.14% 5.05%(a) 5.14% 5.30%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $551,880 $466,571 $331,095 $375,797 $194,807
Ratio of expenses to average net
assets 0.65% 0.71% 0.72% 0.71% 0.74%
Ratio of net investment income to
average net assets 4.53% 5.02% 4.93% 5.01% 5.18%
Ratio of expenses to average net
assets* 0.95% 0.96% 0.97% 0.96% 0.99%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The total return includes the effect of a capital contribution of $0.010 per
share. The return without the capital contribution would have been 4.05%.
<PAGE> 69
PROSPECTUS
66
FINANCIAL HIGHLIGHTS
BOND FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 9.76 $ 9.29 $ 8.99 $ 9.29 $ 9.36
- -----------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.57 0.57 0.58 0.57 0.56
Net realized and unrealized gains (losses) on
investments (0.58) 0.47 0.30 (0.30) 0.15
-----------------------------------------------
Total from Investment Activities (0.01) 1.04 0.88 0.27 0.71
-----------------------------------------------
Distributions
Net investment income (0.57) (0.57) (0.58) (0.57) (0.56)
In excess of net realized gains -- -- -- -- (0.22)
-----------------------------------------------
Total Distributions (0.57) (0.57) (0.58) (0.57) (0.78)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.18 $ 9.76 $ 9.29 $ 8.99 $ 9.29
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return (excludes sales charge) (0.19)% 11.54% 10.03% 2.84% 8.21%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $62,721 $52,706 $35,454 $32,807 $37,293
Ratio of expenses to average net assets 0.97% 0.96% 0.94% 0.96% 1.03%
Ratio of net investment income to average net
assets 5.95% 6.02% 6.29% 6.08% 6.18%
Ratio of expenses to average net assets* 1.17% 1.16% 1.14% 1.16% 1.23%
Portfolio turnover 41.02% 47.80% 83.65% 61.02% 185.48%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 70
PROSPECTUS
67
INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 10.50 $ 10.23 $ 10.01 $ 10.26 $ 10.23
- -----------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.60 0.61 0.60 0.60 0.61
Net realized and unrealized gains (losses) on
investments (0.42) 0.27 0.22 (0.25) 0.06
-----------------------------------------------
Total from Investment Activities 0.18 0.88 0.82 0.35 0.67
-----------------------------------------------
Distributions
Net investment income (0.60) (0.61) (0.60) (0.60) (0.61)
In excess of net realized gains -- -- -- -- (0.03)
-----------------------------------------------
Total Distributions (0.60) (0.61) (0.60) (0.60) (0.64)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.08 $ 10.50 $ 10.23 $ 10.01 $ 10.26
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 1.73% 8.80% 8.38% 3.41% 6.81%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $87,132 $85,382 $77,319 $63,088 $74,395
Ratio of expenses to average net assets 0.97% 0.95% 0.93% 0.95% 0.98%
Ratio of net investment income to average net
assets 5.80% 5.86% 5.89% 5.84% 6.00%
Ratio of expenses to average net assets* 1.17% 1.15% 1.13% 1.15% 1.18%
Portfolio turnover 34.47% 31.98% 40.77% 129.97% 154.43%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<PAGE> 71
PROSPECTUS
68
FINANCIAL HIGHLIGHTS
INTERMEDIATE TAX-FREE BOND FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 10.99 $ 10.78 $ 10.57 $ 10.67 $ 10.42
- -----------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.47 0.48 0.49 0.49 0.51
Net realized and unrealized gains (losses) on
investments (0.44) 0.28 0.21 (0.10) 0.25
-----------------------------------------------
Total from Investment Activities 0.03 0.76 0.70 0.39 0.76
-----------------------------------------------
Distributions
Net investment income (0.47) (0.48) (0.49) (0.49) (0.51)
Net realized gains (0.04) (0.07) -- -- --
-----------------------------------------------
Total Distributions (0.51) (0.55) (0.49) (0.49) (0.51)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 10.51 $ 10.99 $ 10.78 $ 10.57 $ 10.67
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 0.19% 7.28% 6.79% 3.68% 7.62%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $30,353 $30,454 $26,544 $31,036 $28,114
Ratio of expenses to average net assets 0.75% 0.74% 0.74% 0.75% 0.51%
Ratio of net investment income to average net
assets 4.33% 4.44% 4.61% 4.58% 4.99%
Ratio of expenses to average net assets* 1.20% 1.19% 1.19% 1.20% 1.24%
Portfolio turnover 11.96% 19.10% 11.38% 19.53% 8.35%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<PAGE> 72
PROSPECTUS
69
SHORT-TERM INCOME FUND
<TABLE>
<CAPTION>
OCTOBER 19,
YEAR ENDED AUGUST 31, 1994
------------------------------------- TO AUGUST 31,
1999 1998 1997 1996 1995(a)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.12 $ 9.92 $ 9.79 $ 9.95 $ 10.00
- ------------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.59 0.62 0.61 0.59 0.52
Net realized and unrealized gains
(losses) on investments (0.23) 0.20 0.14 (0.14) (0.05)
-----------------------------------------------------
Total from Investment Activities 0.36 0.82 0.75 0.45 0.47
-----------------------------------------------------
Distributions
Net investment income (0.59) (0.62) (0.61) (0.59) (0.52)
In excess of net investment income -- -- (0.01) -- --
Net realized gains -- -- -- (0.01) --
In excess of net realized gains --(d) -- -- (0.01) --
-----------------------------------------------------
Total Distributions (0.59) (0.62) (0.62) (0.61) (0.52)
- ------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 9.89 $ 10.12 $ 9.92 $ 9.79 $ 9.95
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 3.66% 8.47% 7.85% 4.64% 4.81%(c)
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $62,523 $32,390 $15,658 $14,399 $10,228
Ratio of expenses to average net assets 0.56% 0.41% 0.33% 0.41% 0.57%(b)
Ratio of net investment income to
average net assets 5.85% 6.15% 6.14% 5.95% 5.96%(b)
Ratio of expenses to average net assets* 1.24% 1.22% 1.16% 1.24% 1.47%(b)
Portfolio turnover 109.69% 60.02% 37.55% 80.98% 212.35%
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
* 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) Not annualized.
(d) Distribution per share was less than $0.005.
<PAGE> 73
PROSPECTUS
70
FINANCIAL HIGHLIGHTS
EQUITY FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
--------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 15.06 $ 17.33 $ 13.73 $ 12.33 $ 11.85
- -----------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.06 0.08 0.13 0.18 0.20
Net realized and unrealized gains on
investments 4.06 0.19 5.03 2.04 1.77
--------------------------------------------------
Total from Investment Activities 4.12 0.27 5.16 2.22 1.97
--------------------------------------------------
Distributions
Net investment income (0.06) (0.07) (0.13) (0.18) (0.19)
In excess of net investment income -- -- (0.01) -- --
Net realized gains (0.96) (2.47) (1.42) (0.64) (0.39)
In excess of net realized gains -- -- -- -- (0.91)
--------------------------------------------------
Total Distributions (1.02) (2.54) (1.56) (0.82) (1.49)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 18.16 $ 15.06 $ 17.33 $ 13.73 $ 12.33
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 27.92% 0.79% 40.23% 18.53% 19.74%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $183,777 $166,965 $170,887 $86,352 $76,398
Ratio of expenses to average net assets 1.08% 1.07% 1.06% 1.08% 1.14%
Ratio of net investment income to average
net assets 0.33% 0.44% 0.88% 1.35% 1.73%
Ratio of expenses to average net assets* 1.27% 1.26% 1.25% 1.27% 1.33%
Portfolio turnover 120.70% 72.10% 93.82% 67.46% 100.44%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
<PAGE> 74
PROSPECTUS
71
BALANCED FUND
<TABLE>
<CAPTION>
JUNE 1,
YEAR ENDED AUGUST 31, 1995 TO
------------------------------------- AUGUST 31,
1999 1998 1997 1996 1995(a)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.37 $ 13.38 $ 11.28 $ 10.62 $ 10.00
- -----------------------------------------------------------------------------------------------
Investment Activities
Net investment income 0.34 0.40 0.41 0.35 0.08
Net realized and unrealized gains on
investments 1.90 0.21 2.46 0.79 0.62
-----------------------------------------------------
Total from Investment Activities 2.24 0.61 2.87 1.14 0.70
-----------------------------------------------------
Distributions
Net investment income (0.34) (0.34) (0.41) (0.35) (0.08)
Net realized gains (0.65) (1.28) (0.36) (0.13) --
-----------------------------------------------------
Total Distributions (0.99) (1.62) (0.77) (0.48) (0.08)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 13.62 $ 12.37 $ 13.38 $ 11.28 $ 10.62
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Return (excludes sales charge) 18.51% 4.55% 26.33% 10.87% 6.98%(c)
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $56,571 $40,656 $30,249 $22,592 $12,842
Ratio of expenses to average net assets 0.67% 0.47% 0.36% 0.38% 0.90%(b)
Ratio of net investment income to
average net assets 2.52% 3.02% 3.34% 3.27% 3.17%(b)
Ratio of expenses to average net
assets* 1.35% 1.34% 1.38% 1.40% 1.92%(b)
Portfolio turnover 99.94% 78.07% 66.12% 71.89% 18.68%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* 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.
(b) Not annualized.
<PAGE> 75
PROSPECTUS
72
FINANCIAL HIGHLIGHTS
GROWTH EQUITY FUND
<TABLE>
<CAPTION>
YEAR NOVEMBER 3,
ENDED 1997 TO
AUGUST 31, AUGUST 31,
1999 1998(a)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 11.25 $ 10.00
- ---------------------------------------------------------------------------------------
Investment Activities
Net investment income -- 0.02
Net realized and unrealized gains on investments 4.67 1.25
------------------------
Total from Investment Activities 4.67 1.27
------------------------
Distributions
Net investment income (0.01) (0.02)
In excess of net investment income (0.01) --
Net realized gains (0.44) --
------------------------
Total Distributions (0.46) (0.02)
- ---------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 15.46 $ 11.25
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Total Return (excludes sales charge) 42.19% 12.69%(c)
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $135,376 $78,677
Ratio of expenses to average net assets 1.09% 1.12%(b)
Ratio of net investment income to average net assets 0.01% 0.24%(b)
Ratio of expenses to average net assets* 1.28% 1.31%(b)
Portfolio turnover 124.80% 36.08%
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Period from commencement of operations.
(b) Annualized.
(c) Not annualized.
<PAGE> 76
PROSPECTUS
73
SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
FEBRUARY 17,
1999 TO
AUGUST 31,
1999(a)
- ----------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period $10.00
- ----------------------------------------------------------------------------
Investment Activities
Net investment income 0.02
Net realized and unrealized gains on investments 0.46
-------
Total from Investment Activities 0.48
-------
Distributions
Net investment income (0.01)
-------
Total Distributions (0.01)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net Asset Value, End of Period $10.47
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total Return (excludes sales charge) 4.77%(c)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at end of period (000) $7,390
Ratio of expenses to average net assets 0.70%(b)
Ratio of net investment income to average net assets 0.37%(b)
Ratio of expenses to average net assets* 1.63%(b)
Portfolio turnover 74.58%
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
* 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) Not annualized.
<PAGE> 77
PROSPECTUS
74
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Investment Practices
and Risks
INVESTMENT PRACTICES
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. What follows is
a more comprehensive list of the securities and techniques used by the Funds, as
well as the risks inherent in their use. For a more complete discussion, see the
Statement of Additional Information. Following the table is a more complete
discussion of risk. Refer to the "Fund Summaries" section for a description of
each Fund's principal investment strategy and risks.
<TABLE>
<CAPTION>
FUND NAME FUND CODE
<S> <C>
- U.S. Treasury Fund 1
- Cash Management Fund 2
- Bond Fund 3
- Intermediate Bond Fund 4
- Intermediate Tax-Free Bond Fund 5
- Short-Term Income Fund 6
- Equity Fund 7
- Balanced Fund 8
- Growth Equity Fund 9
- Small Cap Equity Fund 10
</TABLE>
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
AMERICAN DEPOSITORY RECEIPTS 2-4, 6-10 - Market
(ADRS): - Political
ADRs are foreign shares of a - Foreign
company held by a U.S. bank that Investment
issues a receipt evidencing
ownership. Dividends are paid in
U.S. dollars.
- -------------------------------------------------------------------------
ASSET-BACKED SECURITIES: 2-4, 6, 8 - Pre-payment
Securities secured by company - Credit
receivables, home equity loans, - Interest Rate
truck and auto loans, leases, - Regulatory
credit card receivables and other
securities backed by other types of
receivables or other assets.
</TABLE>
<PAGE> 78
PROSPECTUS
75
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
BANKERS' ACCEPTANCES: 2-10 - Credit
Bills of exchange or time drafts - Liquidity
drawn on and accepted by a - Interest Rate
commercial bank. Maturities are
generally six months or less.
- -------------------------------------------------------------------------
CALL AND PUT OPTIONS: 2-4, 6-10 - Credit
A call option gives the buyer the - Market
right to buy, and obligates the - Leverage
seller of the option to sell, a
security at a specified price. A
put option gives the buyer the
right to sell, and obligates the
seller of the option to buy a
security at a specified price. The
Funds will sell only covered call
and secured put options.
- -------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT: 2-10 - Credit
Negotiable instruments with a - Liquidity
stated maturity. - Interest Rate
- -------------------------------------------------------------------------
COMMERCIAL PAPER: 2-10 - Credit
Secured and unsecured short-term - Liquidity
promissory notes issued by - Interest Rate
corporations and other entities - Foreign
including foreign entities. Investment
Maturities generally vary from a
few days to nine months.
- -------------------------------------------------------------------------
COMMON STOCK: 7-10 - Market
Shares of ownership of a company.
- -------------------------------------------------------------------------
CONVERTIBLE SECURITIES: 7-10 - Market
Bonds or preferred stock that - Credit
convert to common stock.
- -------------------------------------------------------------------------
DERIVATIVES: 3-10 - Management
Instruments whose value is derived - Market
from an underlying contract, index - Credit
or security, or any combination - Liquidity
thereof, including futures, options - Leverage
(e.g., put and calls), options on
futures, swap agreements, and some
mortgage-backed securities.
</TABLE>
<PAGE> 79
PROSPECTUS
76
INVESTMENT PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
FOREIGN SECURITIES: 3,4, 6, 7-10 - Market
Stocks issued by foreign companies, - Political
as well as commercial paper of - Liquidity
foreign issuers and obligations of - Foreign
foreign banks, overseas branches of Investment
U.S. banks and supranational
entities.
- -------------------------------------------------------------------------
FUTURES AND RELATED OPTIONS: 3-10 - Management
A contract providing for the future - Market
sale and purchase of a specified - Credit
amount of a specified security, - Liquidity
class of securities, or an index at - Leverage
a specified time in the future and
at a specified price.
- -------------------------------------------------------------------------
ILLIQUID SECURITIES: 1-10 - Liquidity
Each Fund may invest up to 10% of - Market
its net assets in securities that
are illiquid. Illiquid securities
are those securities which cannot
be disposed of in the ordinary
course of business, seven days or
less, at approximately the value at
which the Fund has valued the
securities.
- -------------------------------------------------------------------------
INVESTMENT COMPANY SECURITIES: 3-10 - Market
Shares of other registered
investment companies with similar
investment objectives. A Fund may
invest up to 5% of its assets in
the shares of any one registered
investment company, but may not own
more than 3% of the securities of
any one registered investment
company or invest more than 10% of
its assets in the securities of
other registered investment
companies. These registered
investment companies may include
money market funds of the American
Performance Funds and shares of
other registered investment
companies for which the Adviser or
any of its affiliates serves as
investment adviser, administrator
or distributor.
</TABLE>
<PAGE> 80
PROSPECTUS
77
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
INVESTMENT GRADE BONDS: 3-10 - Interest Rate
Interest-bearing or discounted - Credit
government or corporate securities
that obligate the issuer to pay the
bondholder a specified sum of
money, usually at specific
intervals, and to repay the
principal amount of the loan at
maturity. Investment grade bonds
are those rated BBB or better by
S&P or Baa or better by Moody's or
similarly rated by other nationally
recognized statistical rating
organizations, or, if not rated,
determined to be of comparable
quality by the Adviser.
- -------------------------------------------------------------------------
LOAN PARTICIPATION INTERESTS: 2 - Interest Rate
Loan participation interests are - Liquidity
interests in bank loans made to - Credit
corporations. In these arrangements
the bank transfers the cash stream
of the underlying bank loan to the
participating investor.
- -------------------------------------------------------------------------
MONEY MARKET INSTRUMENTS: 2-10 - Interest Rate
Investment-grade, U.S. - Credit
dollar-denominated debt securities
that have remaining maturities of
one year or less. These securities
may include U.S. government
obligations, commercial paper and
other short-term corporate
obligations, repurchase agreements
collateralized with U.S. government
securities, certificates of
deposit, bankers' acceptances, and
other financial institution
obligations. These securities may
carry fixed or variable interest
rates.
- -------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES: 1-10 - Pre-payment
Debt obligations secured by real - Credit
estate loans and pools of loans. - Interest Rate
These include collateralized - Regulatory
mortgage obligations and real
estate mortgage investment
conduits.
</TABLE>
<PAGE> 81
PROSPECTUS
78
INVESTMENT PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
MUNICIPAL SECURITIES: 2-6 - Credit
Securities issued by a state or - Political
political subdivision to obtain - Tax
funds for various public purposes. - Interest Rate
- Regulatory
- -------------------------------------------------------------------------
PREFERRED STOCK: 7-10 - Market
Preferred stocks are equity
securities that generally pay
dividends at a specified rate and
have preference over common stock
in the payment of dividends and
liquidation. Preferred stock
generally does not carry voting
rights.
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS: 1-10 - Credit
The purchase of a security and the
simultaneous commitment to return
the security to the seller at an
agreed upon price on an agreed upon
date. This is treated as a loan by
a Fund.
- -------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENT: 1-10 - Credit
The sale of a security and the - Leverage
simultaneous commitment to buy the
security back at an agreed upon
price on an agreed upon date. This
is treated as a borrowing by a
Fund.
- -------------------------------------------------------------------------
RESTRICTED SECURITIES: 2-10 - Liquidity
Securities not registered under the - Market
Securities Act of 1933, such as
privately placed commercial paper
and Rule 144A securities.
- -------------------------------------------------------------------------
SECURITIES LENDING: 1-10 - Leverage
The lending of up to 33 1/3% of a - Liquidity
Fund's total assets. In return the - Credit
Fund will receive cash, other
securities, and/or letters of
credit.
- -------------------------------------------------------------------------
TIME DEPOSITS: 2-10 - Liquidity
Non-negotiable receipts issued by a - Credit
bank in exchange for the deposit of - Interest Rate
funds.
</TABLE>
<PAGE> 82
PROSPECTUS
79
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
TREASURY RECEIPTS: 1, 2 - Interest Rate
Treasury receipts, Treasury
investment growth receipts, and
certificates of accrual of Treasury
securities.
- -------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES: 1-10 - Interest Rate
Securities issued by agencies and - Credit
instrumentalities of the U.S.
government. These include Ginnie
Mae, Fannie Mae, and Freddie Mac.
- -------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS: 1-10 - Interest Rate
Bills, notes, bonds, separately
traded registered interest and
principal securities, and coupons
under bank entry safekeeping.
- -------------------------------------------------------------------------
VARIABLE AND FLOATING RATE 2-10 - Credit
INSTRUMENTS: - Liquidity
Obligations with interest rates - Interest Rate
which are reset daily, weekly,
quarterly or some other period and
which may be payable to the Fund on
demand.
- -------------------------------------------------------------------------
WARRANTS: 7-10 - Interest Rate
Securities, typically issued with - Credit
preferred stock or bonds, that give
the holder the right to buy a
proportionate amount of common
stock at a specified price.
- -------------------------------------------------------------------------
WHEN-ISSUED SECURITIES: 1-10 - Interest Rate
Contract to purchase securities at - Leverage
a fixed price for delivery at a - Liquidity
future date. - Credit
- -------------------------------------------------------------------------
ZERO-COUPON DEBT OBLIGATIONS: 3, 4, 6 - Credit
Bonds and other debt that pay no - Interest Rate
interest, but are issued at a - Zero Coupon
discount from their value at
maturity. When held to maturity,
their entire return equals the
difference between their issue
price and their maturity value.
</TABLE>
<PAGE> 83
PROSPECTUS
80
INVESTMENT PRACTICES AND RISKS
INVESTMENT RISKS
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "What are the main risks of investing in this Fund?" Because of
these risks, the value of the securities held by each Fund may fluctuate, as
will the value of your investment in the Fund. Certain investments and Funds are
more susceptible to these risks than others.
- - Credit Risk
The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation.
Credit risk is generally higher for non-investment grade securities. The price
of a security can be adversely affected prior to actual default as its credit
status deteriorates and the probability of default rises.
- - Foreign Investment Risk
The risk associated with higher transaction costs, delayed settlements,
currency controls and adverse economic developments. This also includes the
risk that fluctuations in the exchange rates between the U.S. dollar and
foreign currencies may negatively affect an investment. Adverse changes in
exchange rates may erode or reverse any gains produced by foreign currency
denominated investments and may widen any losses. Exchange rate volatility
also may affect the ability of an issuer to repay U.S. dollar denominated
debt, thereby increasing credit risk. Foreign securities may also be affected
by incomplete or inaccurate financial information on companies, social
upheavals or political actions ranging from tax code changes to governmental
collapse. These risks are more significant in emerging markets.
- - Interest Rate Risk
The risk that debt prices overall will decline over short or even long periods
due to rising interest rates. A rise in rates typically cause a fall in
values, while a fall in rates typically causes a rise in values. Interest rate
risk should be modest for shorter term securities, moderate for
intermediate-term securities, and high for longer-term securities.
<PAGE> 84
PROSPECTUS
81
- - Investment Style Risk
The risk that returns from a particular class or group of stocks (e.g., value,
growth, small cap, large cap) will trail returns from other asset classes or
the overall stock market. Groups or asset classes of stocks tend to go through
cycles of doing better -- or worse -- than common stocks in general. These
periods can last for periods as long as several years. Additionally, a
particular asset class or group of stocks could fall out of favor with the
market, causing the Fund to underperform funds that focus on other types of
stocks.
- - Leverage Risk
The risk associated with securities or practices that multiply small index or
market movements into large changes in value. Leverage is often associated
with investments in derivatives, but also may be embedded directly in the
characteristics of other securities. Leveraged risk is hedged when a
derivative (a security whose value is based on another security or index) is
used as a hedge against an opposite position that a Fund also holds, any loss
generated by the derivative should be substantially offset by gains on the
hedged investment, and vice versa. Hedges are sometimes subject to imperfect
matching between the derivative and underlying security, and there can be no
assurance that a Fund's hedging transactions will be effective.
- - Liquidity Risk
The risk that certain securities may be difficult or impossible to sell at the
time and the price that would normally prevail in the market. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance. This includes the risk of missing out on an investment
opportunity because the assets necessary to take advantage of it are tied up
in less advantageous investments.
<PAGE> 85
PROSPECTUS
82
INVESTMENT PRACTICES AND RISKS
- - Management Risk
The risk that a strategy used by a Fund's portfolio manager may fail to
produce the intended result. This includes the risk that changes in the value
of a hedging instrument will not match those of the asset being hedged.
Incomplete matching can result in unanticipated risks.
- - Market Risk
The risk that the market value of a security may move up and down, sometimes
rapidly and unpredictably. These fluctuations may cause a security to be worth
less than the price originally paid for it, or less than it was worth at an
earlier time. Market risk may affect a single issuer, industrial sector of the
economy or the market as a whole. Finally, key information about a security or
market may be inaccurate or unavailable. This is particularly relevant to
investments in foreign securities.
- - Political Risk
The risk of losses attributable to unfavorable governmental or political
actions, seizure of foreign deposits, changes in tax or trade statutes, and
governmental collapse and war.
- - Pre-Payment/Call Risk
The risk that the principal repayment of a security will occur at an
unexpected time. Prepayment risk is the chance that the repayment of a
mortgage will occur sooner than expected. Call risk is the possibility that
during periods of falling interest rates, a bond issuer will "call" -- or
repay -- its high-yielding bond before the bond's maturity date. Changes in
pre-payment/call rates can result in greater price and yield volatility.
Pre-payments/calls generally accelerate when interest rates decline. When
mortgage and other obligations are pre-paid, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income -- and the potential for taxable capital gains. Further,
with early prepayment, a Fund
<PAGE> 86
PROSPECTUS
83
may fail to recover any premium paid, resulting in an unexpected capital loss.
Prepayment/call risk is generally low for securities with a short-term
maturity, moderate for securities with an intermediate-term maturity, and high
for securities with a long-term maturity.
- - Regulatory Risk
The risk associated with Federal and state laws which may restrict the
remedies that a lender has when a borrower defaults on loans. These laws
include restrictions on foreclosures, redemption rights after foreclosure,
Federal and state bankruptcy and debtor relief laws, restrictions on "due on
sale" clauses, and state usury laws.
- - Small Cap Securities Risk
Stocks of small-capitalization companies are more risky than stocks of larger
companies and may be more vulnerable than larger companies to adverse business
or economic developments. Many of these companies are young and have a limited
track record. Small cap companies may also have limited product lines,
markets, or financial resources. Securities of such companies may be less
liquid and more volatile than securities of larger companies or the market
averages in general and, therefore, may involve greater risk than investing in
larger companies. In addition, small cap companies may not be well-known to
the investing public, may not have institutional ownership, and may have only
cyclical, static, or moderate growth prospects. If a Fund concentrates on
small-capitalization companies, its performance may be more volatile than that
of a fund that invests primarily in larger companies.
- - Tax Risk
The risk that the issuer of the securities will fail to comply with certain
requirements of the Internal Revenue Code, which would cause adverse tax
consequences.
<PAGE> 87
PROSPECTUS
84
INVESTMENT PRACTICES AND RISKS
- - Zero Coupon Risk
The market prices of securities structured as zero coupon or pay-in-kind
securities are generally affected to a greater extent by interest rate
changes. These securities tend to be more volatile than securities which pay
interest periodically.
- - Year 2000 Risk
The American Performance Funds depends on the smooth functioning of computer
systems in almost every aspect of its business. Like other mutual funds,
businesses and individuals around the world, the American Performance Funds
could be adversely affected if the computer systems used by its service
providers do not properly process dates on and after January 1, 2000 and
distinguish between the year 2000 and the year 1900. The American Performance
Funds has made inquiry of its service providers to determine whether they
expect to have their computer systems adjusted for the year 2000 transition,
and has received an assurance from each service provider that it expects its
system to accommodate the year 2000 transition without material adverse
consequences to the American Performance Funds. While such assurances have
been obtained, the American Performance Funds and its shareholders may
experience losses if these assurances prove to be incorrect or as a result of
year 2000 computer difficulties experienced by issuers of portfolio securities
or custodians, banks, broker-dealers or others with which the American
Performance Funds does business.
<PAGE> 88
PROSPECTUS
85
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Glossary of Investment Terms
ALTERNATIVE MINIMUM TAX
A measure designed to assure that individuals pay at least a minimum amount of
federal income taxes. Certain securities used to fund private, for-profit
activities are subject to AMT.
BALANCED FUND
A mutual fund that seeks to provide some combination of income, capital growth,
and conservation of principal by investing in stocks, bonds, and/or money market
instruments.
BOND
A debt security issued by a corporation, government, or government agency in
exchange for the money you lend it. In most instances, the issuer agrees to pay
back the loan by a specific date and make regular interest payments until that
date.
CAPITAL GAINS DISTRIBUTION
Payment to mutual fund shareholders of gains realized on securities that the
fund has sold at a profit, minus any realized losses.
COMMON STOCK
A security representing ownership rights in a corporation. A stockholder is
entitled to share in the company's profits, some of which may be paid out as
dividends.
CREDIT QUALITY
A measure of a bond issuer's ability to repay interest and principal in a timely
manner.
DIVERSIFIED
Holding a variety of securities so that a fund's return is not badly hurt by the
poor performance of a single security or industry.
DIVIDENDS
Payment to shareholders of income from interest or dividends generated by a
fund's investments.
FIXED INCOME SECURITIES
Investments, such as bonds, that have a fixed payment schedule. While the level
of income offered by these securities is predetermined, their prices may
fluctuate.
GROWTH STOCKS
Stocks of companies believed to have above-average prospects for growth.
Reflecting market expectations for superior growth, the prices of growth stocks
often are relatively high in comparison to revenue, earnings, book value, and
dividends.
<PAGE> 89
PROSPECTUS
86
INDEX
An unmanaged group of securities whose overall performance is used as a standard
to measure investment performance.
INVESTMENT ADVISER
An organization that makes the day-to-day decisions regarding a fund's
investments.
INVESTMENT GRADE
A bond whose credit quality is considered by independent bond-rating agencies to
be sufficient to ensure timely payment of principal and interest under current
economic circumstances.
LIQUIDITY
The degree of a security's marketability (that is, how quickly the security can
be sold at a fair price and converted to cash).
MATURITY
The date when a bond issuer agrees to repay the bond's principal, or face value,
to the bond's buyer.
MONEY MARKET FUND
A mutual fund that seeks to provide income, liquidity, and a stable share price
by investing in very short-term, liquid investments.
MONEY MARKET INSTRUMENTS
Short-term, liquid investments (usually with a maturity of 13 months or less)
which include U.S. Treasury bills, bank certificates of deposit (CDs),
repurchase agreements, commercial paper, and bankers' acceptances.
MUNICIPAL SECURITY
Debt obligations issued by a state or local government. Interest income from
municipal securities, and therefore dividend income from municipal bond funds,
is generally free from federal income taxes, as well as taxes in the state in
which the securities were issued.
MUTUAL FUND
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over time.
NET ASSET VALUE (NAV)
The market value of a mutual fund's total assets, minus liabilities, divided by
the number of shares outstanding. The value of a single share is called its
share value or share price.
OPERATING EXPENSES
The percentage of a fund's average net assets used to pay its expenses.
Operating expenses include investment advisory fees, distribution/service
(12b-1) fees, and administration fees.
<PAGE> 90
PROSPECTUS
87
SECURITIES
Stocks, bonds, money market instruments, and other investment vehicles.
TOTAL RETURN
A percentage change, over a specified time period, in a mutual fund's net asset
value, with the ending net asset value adjusted to account for the reinvestment
of all distributions of dividends and capital gains.
VALUE STOCKS
Stocks of companies whose growth prospects are generally regarded as subpar by
the market. Reflecting these market expectations, the prices of value stocks
typically are below-average in comparison to such factors as revenue, earnings,
book value, and dividends.
VOLATILITY
The fluctuations in value of a mutual fund or other security. The greater a
fund's volatility, the wider the fluctuations between its high and low prices.
YIELD
Income (interest and dividends) earned by an investment, expressed as a
percentage of the investment's price.
<PAGE> 91
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<PAGE> 92
[This page intentionally left blank.]
<PAGE> 93
More Information
More information about the Funds is available
without charge through the following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
More detailed information about the American
Performance Funds is included in our SAI. The
SAI has been filed with the SEC and is
incorporated by reference into this prospectus.
This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Funds' holdings and
contain information on the market conditions and
investment strategies that significantly
affected the American Performance Funds'
performance during the last year.
TO OBTAIN THE SAI, ANNUAL OR SEMI-ANNUAL
REPORTS, OR MORE INFORMATION:
BY TELEPHONE:
Call 1-800-762-7085
BY MAIL:
American Performance Funds
3435 Stelzer Road
Columbus, Ohio 43219-3035
BY INTERNET:
http://www.apfunds.com
FROM THE SEC:
You can also obtain the SAI, the Annual and
Semi-Annual Reports, and other information about
the American Performance Funds, from the SEC's
web site (http://www.sec.gov). You may review
and copy documents at the SEC Public Reference
Room in Washington, DC (for information call
1-202-942-8090). You may request documents by
mail from the SEC, upon payment of a duplicating
fee, by writing to: Securities and Exchange
Commission, Public Reference Section, 450 5th
Street, N.W., Washington, DC 20549-6009 or by
sending an e-mail to: [email protected].
American Performance Funds' Investment Company
Act registration number is 811-6114.
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
DISTRIBUTOR &
ADMINISTRATOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio
43219-3035
LEGAL COUNSEL
Ropes & Gray
1301 K Street, N.W.
Suite 800 East
Washington, DC 20005
<PAGE> 94
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Prospectus
January 1, 2000
U.S. Treasury Fund
Cash Management Fund
APPLE BUSHEL ARTWORK
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
APPLE LOGO
<PAGE> 95
HOW TO READ THIS PROSPECTUS
This prospectus is arranged into
different sections so that you can easily
review this important information. The
next page contains general information
you should know about investing in the
Funds.
If you would like more detailed
information about each Fund, please see
the Fund Summaries.
<TABLE>
<S> <C>
TABLE OF CONTENTS
INTRODUCTION 1
FUND SUMMARIES 2
U.S. Treasury Fund 2
Cash Management Fund 6
</TABLE>
If you would like more information about
the following topics, please see:
<TABLE>
<S> <C>
YOUR ACCOUNT 10
Distribution/Service (12b-1) Fees 10
Opening an Account 10
Buying Shares 11
Selling Shares 13
Exchanging Shares 16
Transaction Policies 16
Additional Investor Services 17
Dividends and Capital Gains 17
Taxes 18
INVESTMENT MANAGEMENT 20
FINANCIAL HIGHLIGHTS 21
INVESTMENT PRACTICES AND RISKS 23
GLOSSARY OF INVESTMENT TERMS 31
</TABLE>
To obtain more information about the
American Performance Funds please refer
to the back cover of the prospectus.
January 1, 2000
APPLE LOGO
<PAGE> 96
PROSPECTUS
1
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Introduction
Each Fund is a mutual fund. A mutual fund pools
shareholders' money and, using professional
investment managers, invests it in securities
like stocks and bonds. Before you invest, you
should know a few things about investing in
mutual funds.
The value of your investment in a Fund is based
on the market prices of the securities the Fund
holds. These prices change daily due to economic
and other events that affect securities markets
generally, as well as those that affect
particular companies or governments. These price
movements, sometimes called volatility, will
vary depending on the types of securities a Fund
owns and the markets where these securities
trade.
LIKE OTHER INVESTMENTS, YOU COULD LOSE MONEY ON
YOUR INVESTMENT IN A FUND. YOUR INVESTMENT IN A
FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK
OF OKLAHOMA, N.A., ITS AFFILIATES, OR ANY BANK.
IT IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT
AGENCY.
Each Fund has its own investment goal and
strategies for reaching that goal. However, it
cannot be guaranteed that a Fund will achieve
its goal. Before investing, make sure that the
Fund's goal matches your own.
The portfolio manager invests each Fund's assets
in a way that the manager believes will help the
Fund achieve its goal. A manager's judgments
about the bond and stock markets, economy and
companies, and his method of investment
selection, may cause a Fund to underperform
other funds with similar objectives.
<PAGE> 97
PROSPECTUS
2
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Fund Summaries
MONEY MARKET FUNDS
U.S. Treasury Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
APPLE LOGO
principal by investing in U.S. Treasury
obligations and repurchase agreements.
PRINCIPAL INVESTMENT STRATEGY
The U.S. Treasury Fund seeks 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, all of which may be subject to
repurchase agreements. The Fund normally invests
at least 65% of its assets in U.S. Treasury
obligations, some of which may be subject to
repurchase agreements. The Fund currently
maintains an average weighted portfolio maturity
of 60 days or less.
MATURITY:
A PORTFOLIO'S
LEVEL OF INTEREST RATE
EXPOSURE IS COMMONLY
INDICATED BY THE TERM
MATURITY. GENERALLY
SPEAKING, THE LONGER A
PORTFOLIO'S MATURITY,
THE GREATER ITS LEVEL
OF
INTER
EST RATE EXPOSURE.
<PAGE> 98
PROSPECTUS
3
U.S. Treasury Fund (continued)
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS FUND?
Your investment in the Fund may be subject to the following principal risks:
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
Fund's yield will decrease due to a decline in interest rates.
- - NET ASSET VALUE RISK -- The risk that the Fund will be unable to meet its goal
of a constant $1 per share.
For more information about these risks please refer to the section titled
"Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE INFORMATION
The bar chart and the performance table below
illustrate the risks and volatility of an
investment in the Fund. Of course, the Fund's
past performance does not necessarily indicate
how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
LOGO
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 3.15%.
<TABLE>
<S> <C> <C>
Best Quarter: Q1 1991 1.53%
Worst Quarter: Q4 1993 0.61%
</TABLE>
<PAGE> 99
U.S. Treasury Fund (continued)
PROSPECTUS
4
FUND SUMMARIES
This table shows the Fund's average annual total
returns for periods ending December 31, 1998.
AVERAGE ANNUAL TOTAL RETURNS(PERIODS ENDED
12/31/98)
APPLE LOGO
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/5/90)
--------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Fund 4.75% 4.60% 4.39%
--------------------------------------------------------
</TABLE>
YIELD
The 7-day yield for the period ended 12/31/98
was 4.07%.
You may obtain the most current yield
information for the Fund by calling (800)
762-7085.
YIELD:
ALL MUTUAL
FUNDS MUST USE THE SAME
FORMULAS TO CALCULATE
YIELD AND EFFECTIVE
YIELD. THE FUND
TYPICALLY ADVERTISES
PERFORMANCE IN TERMS OF
A 7-DAY YIELD AND 7-DAY
EFFECTIVE YIELD AND MAY
ADVERTISE TOTAL RETURN.
THE 7-DAY YIELD
QUOTATION MORE CLOSELY
REFLECTS CURRENT
EARNINGS OF THE FUND
THAN THE TOTAL RETURN
QUOTATION. THE 7-DAY
EFFECTIVE YIELD WILL BE
SLIGHTLY HIGHER THAN THE
YIELD BECAUSE OF THE
COMPOUNDING EFFECT OF
THE ASSUMED
REINVESTMENT. CURRENT
YIELDS AND EFFECTIVE
YIELDS FLUCTUATE DAILY
AND WILL VARY DUE TO
FACTORS SUCH AS INTEREST
RATES AND THE QUALITY,
LENGTH OF MATURITIES,
AND TYPE OF INVESTMENTS
IN THE PORTFOLIO.
<PAGE> 100
PROSPECTUS
5
U.S. Treasury Fund (continued)
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE
September 5, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$452 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
AMERICAN PERFORMANCE
FUND NUMBER
002
CUSIP NUMBER
028846103
TICKER SYMBOL
APGXX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 0%
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.96%*
- ------------------------------------------------
* During the last fiscal year, the Distributor
agreed to waive Distribution/Service (12b-1)
Fees by 0.25%. This fee waiver is expected to
continue through December 31, 2000.
Accordingly, actual annual fund operating
expenses were as follows:
Investment Advisory Fees 0.40%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.31%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.71%
- ---------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$98 $306 $531 $1,178
</TABLE>
<PAGE> 101
PROSPECTUS
6
FUND SUMMARIES
Cash Management Fund
------------------------------------------------
INVESTMENT GOAL
Current income with liquidity and stability of
principal by investing in high-quality,
short-term debt instruments.
PRINCIPAL INVESTMENT STRATEGY
The Cash Management Fund seeks current income
with liquidity and stability of principal by
investing in money market instruments which
present minimal credit risks. The Fund invests
primarily in high-quality instruments including
obligations issued by the U.S. government or its
agencies or instrumentalities, commercial paper,
medium-term notes, certificates of deposit, time
deposits, bankers' acceptances and repurchase
agreements. These obligations may be variable or
floating rate instruments or variable amount
master demand notes. To be considered
high-quality, a security must be rated in one of
the two highest credit quality categories for
short-term securities or determined by the
Fund's Adviser to be of comparable quality. The
Fund currently maintains an average weighted
portfolio maturity of 35 to 75 days.
APPLE LOGO The Fund may, from time to time, concentrate its
investments in certain securities issued by U.S.
banks, U.S. branches of foreign banks and
foreign branches of U.S. banks.
WHAT ARE THE MAIN RISKS OF INVESTING IN THIS
FUND?
Your investment in the Fund may be subject to
the following principal risks:
- CREDIT RISK -- Credit risk is the possibility
that an issuer cannot make timely interest and
principal payments on its securities. Because
the Fund will only invest in securities
believed to pose minimal credit risk, it is
unlikely that
MATURITY:
A PORTFOLIO'S
LEVEL OF INTEREST RATE
EXPOSURE IS COMMONLY
INDICATED BY THE TERM
MATURITY. GENERALLY
SPEAKING, THE LONGER A
PORTFOLIO'S MATURITY,
THE GREATER ITS LEVEL
OF INTEREST RATE EXPOSURE.
<PAGE> 102
PROSPECTUS
7
Cash Management Fund (continued)
losses due to credit risk will cause a decline in the value of your
investment. However, even if not severe enough to cause such a decline in
principal value, credit losses could reduce the Fund's yield. In general,
lower-rated securities have higher credit risks.
- - INTEREST RATE RISK -- Interest rate risk involves the possibility that the
Fund's yield will decrease due to a decline in interest rates.
- - NET ASSET VALUE RISK -- The risk that the Fund will be unable to meet its goal
of a constant $1 per share.
For more information about these risks please refer to the section titled
"Investment Practices and Risks."
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OR AN OBLIGATION OF BANK OF OKLAHOMA,
N.A., ITS AFFILIATES, OR ANY BANK, AND IT IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE INFORMATION
The bar chart and the performance table below
illustrate the risks and volatility of an
investment in the Fund. Of course, the Fund's
past performance does not necessarily indicate
how the Fund will perform in the future.
This bar chart shows changes in the Fund's
performance from year to year.*
ANNUAL TOTAL RETURNS (PERIODS ENDED 12/31)
<TABLE>
<CAPTION>
1991 6.91
- ------ ----
<S> <C>
1992 3.57
1993 2.78
1994 3.76
1995 5.52
1996 5.02
1997 5.11
1998 5.01
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 3.41%.
<TABLE>
<S> <C> <C> <C>
Best Quarter: Q1 1991 1.77%
Worst Quarter: Q4 1993 0.67%
</TABLE>
<PAGE> 103
Cash Management Fund (continued)
PROSPECTUS
8
This table shows the Fund's average annual
total returns for periods ending December 31,
1998.
APPLE LOGO
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED
12/31/98)
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (9/21/90)
--------------------------------------------------------
<S> <C> <C> <C>
Cash Management
Fund 5.01% 4.88% 4.72%
--------------------------------------------------------
</TABLE>
* The performance information shown above is
based on a calendar year. The Fund's total
return from 1/1/99 to 9/30/99 was 3.41%.
-----------------------------------------------
YIELD
For the period ended 12/31/98 the 7-day yield
was 4.55%.
You may obtain the most current yield
information for the Fund by calling (800)
762-7085.
YIELD:
ALL MUTUAL
FUNDS MUST USE THE SAME
FORMULAS TO CALCULATE
YIELD AND EFFECTIVE
YIELD. THE FUND
TYPICALLY ADVERTISES
PERFORMANCE IN TERMS OF
A 7-DAY YIELD AND 7-DAY
EFFECTIVE YIELD AND MAY
ADVERTISE TOTAL RETURN.
THE 7-DAY YIELD
QUOTATION MORE CLOSELY
REFLECTS CURRENT
EARNINGS OF THE FUND
THAN THE TOTAL RETURN
QUOTATION. THE 7-DAY
EFFECTIVE YIELD WILL BE
SLIGHTLY HIGHER THAN
THE YIELD BECAUSE OF
THE COMPOUNDING EFFECT
OF THE ASSUMED
REINVESTMENT. CURRENT
YIELDS AND EFFECTIVE
YIELDS FLUCTUATE DAILY
AND WILL VARY DUE TO
FACTORS SUCH AS
INTEREST RATES AND THE
QUALITY, LENGTH OF
MATURITIES, AND TYPE OF
INVESTMENTS IN THE
PORTFOLIO.
<PAGE> 104
PROSPECTUS
9
Cash Management Fund (continued)
ADDITIONAL
INFORMATION
DIVIDENDS
AND CAPITAL GAINS
Dividends are paid
monthly; capital
gains, if any, are
paid annually.
INVESTMENT ADVISER
Bank of Oklahoma,
N.A.
Tulsa, OK
INCEPTION DATE
September 21, 1990
NET ASSETS AS OF
NOVEMBER 30, 1999
$561 million
SUITABLE FOR IRAS
Yes
MINIMUM INITIAL
INVESTMENT
$1,000
AMERICAN PERFORMANCE
FUND NUMBER
001
CUSIP NUMBER
028846202
TICKER SYMBOL
APCXX
FEES AND EXPENSES
- ------------------------------------------------
Shareholder Fees
This table describes the shareholder fees that
you pay if you purchase or sell Fund shares. You
would pay these fees directly from your
investment in the Fund.
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 0%
Maximum Deferred Sales Charge (Load) 0%
(as a percentage of net asset value)
- ------------------------------------------------
Annual Fund Operating Expenses
This table describes the Fund's expenses that
you pay indirectly if you hold Fund shares.
Investment Advisory Fees 0.40%*
Distribution/Service (12b-1) Fees 0.25%*
Other Expenses 0.30%*
TOTAL ANNUAL FUND OPERATING EXPENSES 0.95%*
- ------------------------------------------------
* During the last fiscal year, the Adviser
waived 0.04% of its Investment Advisory Fees,
the Distributor waived 0.25% of its
Distribution/Service (12b-1) Fees, and the
Administrator waived 0.01% of Other Expenses.
The Adviser expects to waive 0.11% of its
Investment Advisory Fees, the Distributor
expects to waive 0.25% of its
Distribution/Service (12b-1) Fees, and the
Administrator expects to waive 0.04% of Other
Expenses through December 31, 2000.
Accordingly, estimated annual fund operating
expenses are as follows:
Investment Advisory Fees 0.29%
Distribution/Service (12b-1) Fees 0.00%
Other Expenses 0.26%
TOTAL ANNUAL FUND OPERATING EXPENSES 0.55%
- ---------------------------------------------------
Example
This Example is intended to help you compare the
cost of investing in the Fund with the cost of
investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for
the time periods indicated. The Example also
assumes that each year your investment has a 5%
return and Fund expenses remain the same.
Although your actual costs and returns may be
different, your approximate costs of investing
$10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C>
$97 $303 $525 $1,166
</TABLE>
<PAGE> 105
PROSPECTUS
10
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Your Account
DISTRIBUTION/SERVICE (12b-1) FEES
The Funds have adopted a plan under Rule 12b-1 that allows each Fund to pay
distribution and service fees for the sale and distribution of its shares and
for services provided to shareholders. Because these fees are paid out of a
Fund's assets continuously, over time, these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. The
maximum distribution fee is 0.25% of the average daily net assets of a Fund.
OPENING AN ACCOUNT
1.Read this prospectus carefully.
2.Determine how much you want to invest. The
minimum investment for the American
Performance Funds is as follows:
- INITIAL PURCHASE: $1,000 for each Fund
- ADDITIONAL PURCHASES: $100 for each Fund
These minimums may be waived if purchases are
made in connection with Individual Retirement
Accounts, Keoghs, qualified pension plans,
similar plans, or other employer plans. For
more information on IRAs, Keoghs, or similar
plans, contact the Funds at (918) 588-6586.
The minimum investment in the Auto Invest
Plan is $100. Please refer to the section
titled "Auto Invest Plan."
3.Complete the appropriate parts of the Account
Registration Form, carefully following the
instructions. You must submit additional
documentation when opening trust, corporate or
power of attorney accounts. For more
information, please contact your financial
representative or call the Funds at (800)
762-7085.
<PAGE> 106
PROSPECTUS
11
BUYING SHARES
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
<S> <C> <C> <C>
By Mail
- - Make out a check, bank draft, - Make out a check, bank draft,
or money order for the or money order for the
investment amount (at least investment amount payable (at
$1,000), payable to the least $100) to the American
American Performance Funds. Performance Funds.
- - Deliver the check, bank - Deliver the check, bank
draft, or money order and draft, or money order and
your completed Account investment slip attached to
Registration Form to the your account statement (or,
Funds' Custodian at Bank of if unavailable, provide the
Oklahoma, N.A., Attention: Fund name, amount invested,
American Performance Funds, account name, and account
Department 12, Tulsa, number) to the Funds'
Oklahoma 74182. Custodian at Bank of
Oklahoma, N.A., Attention:
American Performance Funds,
Department 12, Tulsa,
Oklahoma 74182.
- ----------------------------------------------------------------------
By Overnight Mail
- - Make out a check, bank draft, - Make out a check, bank draft,
or money order for the or money order for the
investment amount (at least investment amount payable (at
$1,000), payable to the least $100) to the American
American Performance Funds. Performance Funds.
- - Deliver the check, bank - Deliver the check, bank
draft, or money order and draft, or money order and
your completed Account investment slip attached to
Registration Form to c/o your account statement (or,
BISYS Fund Services, Attn: if unavailable, provide the
T.A. Operations, American Fund name, amount invested,
Performance Funds, 3435 account name, and account
Stelzer Road, Columbus, Ohio number) to c/o BISYS Fund
43219-3035. Services, Attn: T.A.
Operations, American
Performance Funds, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- ----------------------------------------------------------------------
All purchases made by check should be in U.S. dollars.
Third party checks, credit card checks or cash will not be accepted.
</TABLE>
<PAGE> 107
PROSPECTUS
12
YOUR ACCOUNT
<TABLE>
<CAPTION>
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
<S> <C>
By Telephone or Wire Transfer
- - Call (800) 762-7085 for - Deliver your completed Account
instructions on opening an Registration Form to the Funds
account by wire transfer. at: c/o BISYS Fund Services
Attn: T.A. Operations
3435 Stelzer Rd.
Columbus, OH 43219
- To place an order by telephone
- call the Funds at (800) 762-7085
for instructions on purchasing
additional shares by wire
transfer.
- Your bank may charge a fee to
wire funds.
- ------------------------------------------------------------------
By Electronic Funds Transfer
- - Your bank must participate in - Establish the electronic
the Automated Clearing House purchase option on your Account
and must be a U.S. bank. Registration Form or call
(800) 762-7085.
- Call (800) 762-7085 to arrange
an electronic purchase.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------
</TABLE>
<PAGE> 108
PROSPECTUS
13
SELLING SHARES
<TABLE>
<CAPTION>
TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
By Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to the Funds'
Custodian at Bank of Oklahoma, N.A.,
Attention: American Performance Funds,
Department 12, Tulsa, Oklahoma, 74182.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
By Overnight Mail
- - Accounts of any type. - Write a letter of instruction
indicating the fund name, your account
- - Sales of any amount. number, the name(s) in which the
account is registered and the dollar
value or number of shares you wish to
sell.
- Include the account owner
signature(s).
- Mail the materials to American
Performance Funds, c/o BISYS Fund
Services, Attn: T.A. Operations, 3435
Stelzer Road, Columbus, Ohio
43219-3035.
- A check will be mailed to the name(s)
and address in which the account is
registered, or otherwise according to
your letter of instruction.
- ------------------------------------------------------------------------------------
</TABLE>
<PAGE> 109
PROSPECTUS
14
YOUR ACCOUNT
<TABLE>
<CAPTION>
TO SELL SOME OR ALL OF YOUR SHARES
<S> <C>
- ------------------------------------------------------------------------------------
By Phone
- - Accounts of any type. - Call (800) 762-7085 with instructions
as to how you wish to receive your
- - Sales of any amount. funds (mail, wire, electronic
transfer).
- ------------------------------------------------------------------------------------
By Wire
- - Accounts of any type which have elected - Call (800) 762-7085 to request a wire
the wire option on the Account transfer.
Registration Form.
- If you call by 4 p.m. Eastern time,
- - Sales of any amount. your payment will normally be wired to
your bank on the next business day.
- The Fund may charge a wire fee.
- Your bank may charge a fee to wire
funds.
- ------------------------------------------------------------------------------------
By Electronic Funds Transfer
- - Accounts of any type. - Call (800) 762-7085 to request an
electronic funds transfer.
- - Sales of any amount.
- If you call by 4 p.m. Eastern time,
- - Shareholders with accounts at a U.S. the NAV of your shares will normally
bank which participates in the Automated be determined on the same day and the
Clearing House. proceeds will be created within 8
days.
- Your bank may charge a fee to
electronically transfer funds.
- ------------------------------------------------------------------------------------
</TABLE>
Selling Shares in Writing. In certain circumstances, you may need to include a
signature guarantee, which protects you against fraudulent orders. You will need
a signature guarantee unless:
- - the redemption check is payable to the shareholder(s) of record, and the check
is mailed to the shareholder(s) of record and mailed to the address of record,
or
- - the redemption proceeds are being wired according to bank instructions
currently on your account.
You should be able to obtain your signature guarantee from a bank, broker,
dealer, credit union, securities exchange or association, clearing agency, or
savings association. A notary public CANNOT provide a signature guarantee.
<PAGE> 110
PROSPECTUS
15
Receiving Your Money. Normally, payment of your redemption proceeds will be made
as promptly as possible and, in any event, within seven calendar days after the
redemption order is received. At various times, however, a Fund may be requested
to redeem shares for which it has not yet received good payment; collection of
payment may take ten or more days. In these circumstances, the redemption
request will be rejected by the Fund. Once a Fund has received good payment for
the shares a shareholder may submit another request for redemption. If you have
made your initial investment by check, you cannot receive the proceeds of that
check until it has cleared (which may require up to 10 business days). You can
avoid this delay by purchasing shares with a certified check.
Involuntary Sales of Your Shares. Due to the relatively high costs of handling
small investments, each Fund reserves the right to redeem your shares at net
asset value if your account balance in any Fund drops below $500. Before any
Fund exercises its right to redeem your shares you will be given at least 60
days written notice to give you time to add to your account and avoid selling
your shares.
Refusal of Redemption Request. The Funds may postpone payment for shares at
times when the New York Stock Exchange is closed or under any emergency
circumstances as determined by the Securities and Exchange Commission. If you
experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send the Funds your request by regular or
overnight mail. Follow the instructions above under "Selling Your Shares" in
this section.
Redemption In Kind. The Funds reserve the right to make payment in securities
rather than cash, known as "redemption in kind." This could occur under
extraordinary circumstances, such as a very large redemption that could affect
Fund operations (for example, more than 1% of a Fund's net assets). If a Fund
deems it advisable for the benefit of all shareholders, redemption in kind will
consist of securities equal in market value to your shares. When you convert
these securities to cash, you will pay brokerage charges.
Undeliverable Redemption Checks. For any shareholder who chooses to receive
distributions in cash: If distribution checks (1) are returned and marked as
"undeliverable" or (2) remain uncashed for six months, your account will be
changed automatically so that all future distributions are reinvested in your
account. Checks that remain uncashed for six months will be canceled and the
money reinvested in the appropriate Fund as of the cancellation date. No
interest is paid during the time the check is outstanding.
<PAGE> 111
PROSPECTUS
16
YOUR ACCOUNT
EXCHANGING SHARES
How to Exchange Your Shares. Shares of any 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 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. 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 Funds at
BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219. 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.
TRANSACTION POLICIES
Valuation of Shares. The net asset value per share of a Fund is determined by
dividing the total market value of the Fund's investments and other assets, less
any liabilities, by the total number of outstanding shares of the Fund.
- - The net asset value of each of the Money Market Funds is determined on each
business day 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 day in which the NYSE is open for trading, and the Federal
Reserve Bank of Kansas City is open.
- - The assets in each Money Market Fund are valued based upon the amortized cost
method. For further information about valuation of investments, see the
Statement of Additional Information.
- - The net asset value of each of the Money Market Funds is expected to remain at
a constant $1.00 per share, although there is no assurance that this will be
maintained.
Buy and Sell Prices. When you buy shares, you pay the net asset value next
determined after your order is received. When you sell shares, you receive the
net asset value next determined after your order is received.
<PAGE> 112
PROSPECTUS
17
ADDITIONAL INVESTOR SERVICES
Auto Invest Plan (AIP). AIP lets you set up periodic additional investments in
the Funds of your choice through automatic deductions from your bank account.
The minimum investment amount is $50 per month or quarter per Fund. To
establish, complete the appropriate section in the Account Registration Form.
The minimum initial investment in the AIP is $100 and the minimum for subsequent
investments is $50. To participate in AIP from your bank account, please attach
a voided check to your Account Registration Form.
Directed Dividend Option. By selecting the appropriate box in the Account
Registration Form, you can elect to receive your distributions in cash (check)
or have distributions (capital gains and dividends) reinvested in another
American Performance Fund without a sales charge. You must maintain the minimum
balance in each Fund into which you plan to reinvest distributions or the
reinvestment will be suspended and your distributions paid to you. The Fund may
modify or terminate this directed dividend option without notice. You can change
or terminate your participation in the directed dividend option at any time.
Systematic Withdrawal Plan (SWP). If you have at least $10,000 in your account,
you may use SWP, which allows you to receive regular distributions from your
account. Under the plan you may elect to receive automatic payments via check of
at least $100 per Fund or more on a monthly or quarterly basis. You may arrange
to receive regular distributions from your account via check by completing the
appropriate section in the Account Registration Form and attaching a voided
check or by calling (800) 762-7085. The maximum withdrawal per year is 12% of
the account value at the time of election.
DIVIDENDS AND CAPITAL GAINS
As a mutual fund shareholder, you may receive capital gains and/or income from
your investment. The Money Market Funds declare dividends daily and pay income
dividends monthly. The Funds distribute capital gains they have realized, if
any, at least once a year.
We will automatically reinvest any income and capital gains distributions you
are entitled to in additional shares of your Fund(s) unless you notify our
Distributor that you want to receive your distributions in cash. To do so, send
a letter with your request, including your name and account number to:
American Performance Funds
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Your request will become effective for distributions having record dates after
our Distributor receives your request. Note that the Internal Revenue Service
treats dividends paid in additional Fund shares the same as it treats dividends
paid in cash.
<PAGE> 113
PROSPECTUS
18
YOUR ACCOUNT
TAXES
Your mutual fund investments may have a considerable impact on your tax
situation. We've summarized some of the main points you should know below. Note,
however, that the following is general information and will not apply to you if
you are investing through a tax-deferred account such as an IRA or a qualified
employee benefit plan. In addition, if you are not a resident of the United
States, you may have to pay taxes besides those described here, such as U.S.
withholding and estate taxes.
- - Important Note: If you have not done so already, be sure to provide us with
your correct taxpayer identification number OR certify that it is correct.
Unless we have that information, the Funds may be required by law to withhold
31% of the taxable distributions you would otherwise be entitled to receive
from your Fund investments as well as any proceeds you would normally receive
from selling Fund shares.
We will send you a statement each year showing the tax status of all your
distributions. The laws governing taxes change frequently, however, so please
consult your tax adviser for the most up-to-date information and specific
guidance regarding your particular tax situation. You can find more information
about the potential tax consequences of mutual fund investing in our Statement
of Additional Information.
- - Taxes on Fund Distributions. You may owe taxes on Fund distributions even if
they represent income or capital gains the Fund earned before you invested in
it (for example, if such income or capital gains were included in the price
you initially paid for your shares). Note that you will generally have to pay
taxes on Fund distributions whether you received them in the form of cash or
additional Fund shares. The Internal Revenue Service treats most mutual fund
distributions as ordinary income. One exception is gains from the sale of
assets held by a Fund for more than one year, which, for an individual
shareholder are typically taxed at a lower rate than ordinary income
regardless of how long such shareholder has held Fund shares.
- - State and Local Taxes. In addition to federal taxes, you may have to pay state
and local taxes on the dividends or capital gains, if any, you receive from a
Fund, as well as on capital gains, if any, you realized from selling or
exchanging Fund shares.
- - Dividends and Short-Term Capital Gains. The IRS treats any dividends and
short-term capital gains you receive from the Funds as ordinary income.
- - Funds Investing in Foreign Securities: If your Fund invests in foreign
securities, the income those securities generate may be subject to foreign
withholding taxes, which may decrease their yield. Foreign governments may
also impose taxes on other payments or gains your Fund earns on these
securities. In general, shareholders in these Funds will not be entitled to
claim a credit or deduction for these foreign taxes on their U.S. tax return.
(There are some
<PAGE> 114
PROSPECTUS
19
exceptions, however; please consult your tax adviser for more information.) In
addition, foreign investments may prompt a fund to distribute ordinary income
more frequently and/or in greater amounts than purely domestic funds, which
could increase your tax liability.
The portfolio managers of the Funds do not actively consider tax consequences
when making investment decisions. From time to time, the Funds may realize
capital gains as by-products of ordinary investment activities. As a result, the
amount and timing of Fund distributions may vary considerably from year to year.
THESE TAX CONSIDERATIONS MAY OR MAY NOT APPLY TO YOU. PLEASE CONSULT YOUR TAX
ADVISER TO DETERMINE WHETHER THESE CONSIDERATIONS ARE RELEVANT TO YOUR
PARTICULAR INVESTMENTS AND TAX SITUATION. MORE INFORMATION ABOUT TAXES IS IN OUR
STATEMENT OF ADDITIONAL INFORMATION.
<PAGE> 115
PROSPECTUS
20
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Investment Management
INVESTMENT ADVISER
Bank of Oklahoma, N.A. serves as the investment
adviser to each of the Funds and, subject to the
supervision of Board of Trustees of the American
Performance Funds, is responsible for the
day-to-day management of their investment
portfolios.
As of September 30, 1999, Bank of Oklahoma, N.A.
had $7.42 billion in assets under management.
Bank of Oklahoma, N.A. is a subsidiary of BOK
Financial Corporation ("BOK Financial"). BOK
Financial is controlled by its principal
shareholder, George B. Kaiser. Through Bank of
Oklahoma, N.A. and its other subsidiaries, BOK
Financial provides a full array of trust,
commercial banking and retail banking. 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.
The investment advisory fees paid to Bank of
Oklahoma, N.A., after voluntary fee reductions,
by the Funds for the fiscal year ended August
31, 1999, were as follows:
<TABLE>
<CAPTION>
FUND % OF AVERAGE NET ASSETS
<S> <C>
- U.S. Treasury Fund 0.40%
- Cash Management Fund 0.36%+
</TABLE>
+ AMR Investment Services, Inc., P.O. Box
619003, Dallas/Ft. Worth Airport, Texas
75261-9003, served as sub-adviser to the Cash
Management Fund through April 30, 1999.
<PAGE> 116
PROSPECTUS
21
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, whose report, along with the Funds'
financial statements, are included in the annual report, which is available upon
request.
HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE:
THIS EXPLANATION USES THE U.S. TREASURY FUND AS AN EXAMPLE. THE FUND BEGAN
FISCAL 1999 WITH A NET ASSET VALUE (PRICE) OF $1 PER SHARE. DURING THE YEAR, THE
FUND EARNED $0.042 PER SHARE FROM INVESTMENTS INCOME (INTEREST AND DIVIDENDS).
SHAREHOLDERS RECEIVED $0.042 PER SHARE IN THE FORM OF DIVIDEND DISTRIBUTIONS. A
PORTION OF EACH YEAR'S DISTRIBUTIONS MAY COME FROM THE PRIOR YEAR'S INCOME.
THE EARNINGS ($0.042 PER SHARE) MINUS THE DISTRIBUTIONS ($0.042 PER SHARE)
RESULTED IN A SHARE PRICE OF $1 AT THE END OF THE YEAR. FOR A SHAREHOLDER WHO
REINVESTED THE DISTRIBUTIONS IN THE PURCHASE OF MORE SHARES, THE TOTAL RETURN
FROM THE FUND WAS 4.26% FOR THE YEAR.
AS OF AUGUST 31, 1999, THE FUND HAD $394 MILLION IN NET ASSETS. FOR THE YEAR,
ITS EXPENSE RATIO AFTER FEE WAIVERS WAS 0.71% ($7.10 PER $1,000 OF NET ASSETS);
AND ITS NET INVESTMENT INCOME AMOUNTED TO 4.17% OF ITS AVERAGE NET ASSETS.
APPLE LOGO
<PAGE> 117
PROSPECTUS
22
U.S. TREASURY FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------
<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 0.042 0.048 0.046 0.047 0.048
----------------------------------------------
Total from Investment Activities 0.042 0.048 0.046 0.047 0.048
----------------------------------------------
Distributions
Net Investment Income (0.042) (0.048) (0.046) (0.047) (0.048)
----------------------------------------------
Total Distributions (0.042) (0.048) (0.046) (0.047) (0.048)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 4.26% 4.94% 4.74% 4.85% 4.95%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at End of Period (000) $394,415 $388,319 $298,424 $217,406 $187,007
Ratio of Expenses to Average Net
Assets 0.71% 0.72% 0.72% 0.74% 0.75%
Ratio of Net Investment Income to
Average Net Assets 4.17% 4.83% 4.65% 4.74% 4.88%
Ratio of Expenses to Average Net
Assets* 0.96% 0.97% 0.97% 0.99% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------
<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 0.045 0.050 0.049 0.050 0.052
Net Realized and Unrealized Losses on
Investments -- -- (0.010) -- --
----------------------------------------------
Total from Investment Activities 0.045 0.050 0.039 0.050 0.052
----------------------------------------------
Distributions
Net Investment Income (0.045) (0.050) (0.049) (0.050) (0.052)
----------------------------------------------
Total Distributions (0.045) (0.050) (0.049) (0.050) (0.052)
----------------------------------------------
Capital Contribution -- -- 0.010 -- --
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return 4.63% 5.14% 5.05%(a) 5.14% 5.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplementary Data:
Net Assets at End of Period (000) $551,880 $466,571 $331,095 $375,797 $194,807
Ratio of Expenses to Average Net
Assets 0.65% 0.71% 0.72% 0.71% 0.74%
Ratio of Net Investment Income to
Average Net Assets 4.53% 5.02% 4.93% 5.01% 5.18%
Ratio of Expenses to Average Net
Assets* 0.95% 0.96% 0.97% 0.96% 0.99%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) The total return includes the effect of a capital contribution of $0.010 per
share. The return without the capital contribution would have been 4.05%.
<PAGE> 118
PROSPECTUS
23
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Investment
Practices and Risks
INVESTMENT PRACTICES
The Funds invest in a variety of securities and employ a number of investment
techniques. Each security and technique involves certain risks. What follows is
a more comprehensive list of the securities and techniques used by the Funds, as
well as the risks inherent in their use. For a more complete discussion, see the
Statement of Additional Information. Following the table is a more complete
discussion of risk. Refer to the "Fund Summaries" section for a description of
each Fund's principal investment strategy and risks.
<TABLE>
<CAPTION>
FUND NAME FUND CODE
<S> <C>
- U.S. Treasury Fund 1
- Cash Management Fund 2
</TABLE>
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
AMERICAN DEPOSITORY RECEIPTS 2 - Market
(ADRS): - Political
ADRs are foreign shares of a - Foreign
company held by a U.S. bank that Investment
issues a receipt evidencing
ownership. Dividends are paid in
U.S. dollars.
- -------------------------------------------------------------------------
ASSET-BACKED SECURITIES: 2 - Pre-payment
Securities secured by company - Credit
receivables, home equity loans, - Interest Rate
truck and auto loans, leases, - Regulatory
credit card receivables and other
securities backed by other types of
receivables or other assets.
- -------------------------------------------------------------------------
BANKERS' ACCEPTANCES: 2 - Credit
Bills of exchange or time drafts - Liquidity
drawn on and accepted by a - Interest Rate
commercial bank. Maturities are
generally six months or less.
</TABLE>
<PAGE> 119
PROSPECTUS
24
INVESTMENT
PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
CALL AND PUT OPTIONS: 2 - Credit
A call option gives the buyer the - Market
right to buy, and obligates the - Leverage
seller of the option to sell, a
security at a specified price. A
put option gives the buyer the
right to sell, and obligates the
seller of the option to buy a
security at a specified price. The
Funds will sell only covered call
and secured put options.
- -------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT: 2 - Credit
Negotiable instruments with a - Liquidity
stated maturity. - Interest Rate
- -------------------------------------------------------------------------
COMMERCIAL PAPER: 2 - Credit
Secured and unsecured short-term - Liquidity
promissory notes issued by - Interest Rate
corporations and other entities - Foreign
including foreign entities. Investment
Maturities generally vary from a
few days to nine months.
- -------------------------------------------------------------------------
ILLIQUID SECURITIES: 1, 2 - Liquidity
Each Fund may invest up to 10% of - Market
its net assets in securities that
are illiquid. Illiquid securities
are those securities which cannot
be disposed of in the ordinary
course of business, seven days or
less, at approximately the value at
which the Fund has valued the
securities.
- -------------------------------------------------------------------------
LOAN PARTICIPATION INTERESTS: 2 - Interest Rate
Loan participation interests are - Liquidity
interests in bank loans made to - Credit
corporations. In these arrangements
the bank transfers the cash stream
of the underlying bank loan to the
participating investor.
</TABLE>
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PROSPECTUS
25
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
MONEY MARKET INSTRUMENTS: 2 - Interest Rate
Investment-grade, U.S. - Credit
dollar-denominated debt securities
that have remaining maturities of
one year or less. These securities
may include U.S. government
obligations, commercial paper and
other short-term corporate
obligations, repurchase agreements
collateralized with U.S. government
securities, certificates of
deposit, bankers' acceptances, and
other financial institution
obligations. These securities may
carry fixed or variable interest
rates.
- -------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES: 1, 2 - Pre-payment
Debt obligations secured by real - Credit
estate loans and pools of loans. - Interest Rate
These include collateralized - Regulatory
mortgage obligations and real
estate mortgage investment
conduits.
- -------------------------------------------------------------------------
MUNICIPAL SECURITIES: 2 - Credit
Securities issued by a state or - Political
political subdivision to obtain - Interest Rate
funds for various public purposes. - Regulatory
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS: 1, 2 - Credit
The purchase of a security and the
simultaneous commitment to return
the security to the seller at an
agreed upon price on an agreed upon
date. This is treated as a loan by
a Fund.
- -------------------------------------------------------------------------
REVERSE REPURCHASE AGREEMENTS: 1, 2 - Credit
The sale of a security and the - Leverage
simultaneous commitment to buy the
security back at an agreed upon
price on an agreed upon date. This
is treated as a borrowing by a
Fund.
- -------------------------------------------------------------------------
RESTRICTED SECURITIES: 2 - Liquidity
Securities not registered under the - Market
Securities Act of 1933, such as
privately placed commercial paper
and Rule 144A securities.
</TABLE>
<PAGE> 121
PROSPECTUS
26
INVESTMENT
PRACTICES AND RISKS
<TABLE>
<CAPTION>
INSTRUMENT FUND CODE RISK TYPE
<S> <C> <C>
SECURITIES LENDING: 1, 2 - Leverage
The lending of up to 33 1/3% of a - Liquidity
Fund's total assets. In return the - Credit
Fund will receive cash, other
securities, and/or letters of
credit.
- -------------------------------------------------------------------------
TIME DEPOSITS: 2 - Liquidity
Non-negotiable receipts issued by a - Credit
bank in exchange for the deposit of - Interest Rate
funds.
- -------------------------------------------------------------------------
TREASURY RECEIPTS: 1, 2 - Interest Rate
Treasury receipts, Treasury
investment growth receipts, and
certificates of accrual of Treasury
securities.
- -------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES: 1, 2 - Interest Rate
Securities issued by agencies and - Credit
instrumentalities of the U.S.
government. These include Ginnie
Mae, Fannie Mae, and Freddie Mac.
- -------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS: 1, 2 - Interest Rate
Bills, notes, bonds, separately
traded registered interest and
principal securities, and coupons
under bank entry safekeeping.
- -------------------------------------------------------------------------
VARIABLE AND FLOATING RATE - Credit
INSTRUMENTS: 2 - Liquidity
Obligations with interest rates - Interest Rate
which are reset daily, weekly,
quarterly or some other period and
which may be payable to the Fund on
demand.
- -------------------------------------------------------------------------
WHEN-ISSUED SECURITIES: 1, 2 - Interest Rate
Contract to purchase securities at - Leverage
a fixed price for delivery at a - Liquidity
future date. - Credit
</TABLE>
<PAGE> 122
PROSPECTUS
27
INVESTMENT RISKS
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "What are the main risks of investing in this Fund?" Because of
these risks, the value of the securities held by each Fund may fluctuate, as
will the value of your investment in the Fund. Certain investments and Funds are
more susceptible to these risks than others.
- - Credit Risk
The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation.
Credit risk is generally higher for non-investment grade securities. The price
of a security can be adversely affected prior to actual default as its credit
status deteriorates and the probability of default rises.
- - Foreign Investment Risk
The risk associated with higher transaction costs, delayed settlements,
currency controls and adverse economic developments. This also includes the
risk that fluctuations in the exchange rates between the U.S. dollar and
foreign currencies may negatively affect an investment. Adverse changes in
exchange rates may erode or reverse any gains produced by foreign currency
denominated investments and may widen any losses. Exchange rate volatility
also may affect the ability of an issuer to repay U.S. dollar denominated
debt, thereby increasing credit risk. Foreign securities may also be affected
by incomplete or inaccurate financial information on companies, social
upheavals or political actions ranging from tax code changes to governmental
collapse. These risks are more significant in emerging markets.
- - Interest Rate Risk
The risk that debt prices overall will decline over short or even long periods
due to rising interest rates. A rise in rates typically causes a fall in
values while a fall in rates typically causes a rise in values. Interest rate
risk should be modest for shorter-term securities, moderate for
intermediate-term securities, and high for longer-term securities.
<PAGE> 123
PROSPECTUS
28
INVESTMENT
PRACTICES AND RISKS
- - Leverage Risk
The risk associated with securities or practices that multiply small index or
market movements into large changes in value. Leverage is often associated
with investments in derivatives, but also may be embedded directly in the
characteristics of other securities. Leverage risk is hedged when a derivative
(a security whose value is based on another security or index) is used as a
hedge against an opposite position that a Fund also holds, any loss generated
by the derivative should be substantially offset by gains on the hedged
investment, and vice versa. Hedges are sometimes subject to imperfect matching
between the derivative and underlying security, and there can be no assurance
that a Fund's hedging transactions will be effective.
- - Liquidity Risk
The risk that certain securities may be difficult or impossible to sell at the
time and the price that would normally prevail in the market. The seller may
have to lower the price, sell other securities instead or forego an investment
opportunity, any of which could have a negative effect on Fund management or
performance. This includes the risk of missing out on an investment
opportunity because the assets necessary to take advantage of it are tied up
in less advantageous investments.
- - Management Risk
The risk that a strategy used by a Fund's portfolio manager may fail to
produce the intended result. This includes the risk that changes in the value
of a hedging instrument will not match those of the asset being hedged.
Incomplete matching can result in unanticipated risks.
- - Market Risk
The risk that the market value of a security may move up and down, sometimes
rapidly and unpredictably. These fluctuations may cause a security to be worth
less than the price originally paid for it, or less than it was worth at an
earlier time. Market risk may affect a single issuer,
<PAGE> 124
PROSPECTUS
29
industrial sector of the economy or the market as a whole. Finally, key
information about a security or market may be inaccurate or unavailable. This
is particularly relevant to investments in foreign securities.
- - Political Risk
The risk of losses attributable to unfavorable governmental or political
actions, seizure of foreign deposits, changes in tax or trade statutes, and
governmental collapse and war.
- - Pre-Payment/Call Risk
The risk that the principal repayment of a security will occur at an
unexpected time. Prepayment risk is the chance that the repayment of a
mortgage will occur sooner than expected. Call risk is the possibility that
during periods of falling interest rates, a bond issuer will "call" -- or
repay -- its high-yielding bond before the bond's maturity date. Changes in
pre-payment/call rates can result in greater price and yield volatility.
Pre-payments/calls generally accelerate when interest rates decline. When
mortgage and other obligations are pre-paid, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income -- and the potential for taxable capital gains. Further,
with early prepayment, a Fund may fail to recover any premium paid, resulting
in an unexpected capital loss. Prepayment/call risk is generally low for
securities with a short-term maturity, moderate for securities with an
intermediate-term maturity, and high for securities with a long-term maturity.
- - Regulatory Risk
The risk associated with Federal and state laws which may restrict the
remedies that a lender has when a borrower defaults on loans. These laws
include restrictions on foreclosures, redemption rights after foreclosure,
Federal and state bankruptcy and debtor relief laws, restrictions on "due on
sale" clauses, and state usury laws.
<PAGE> 125
PROSPECTUS
30
INVESTMENT
PRACTICES AND RISKS
- - Year 2000 Risk
The American Performance Funds depends on the smooth functioning of computer
systems in almost every aspect of its business. Like other mutual funds,
businesses and individuals around the world, the American Performance Funds
could be adversely affected if the computer systems used by its service
providers do not properly process dates on and after January 1, 2000 and
distinguish between the year 2000 and the year 1900. The American Performance
Funds has made inquiry of its service providers to determine whether they
expect to have their computer systems adjusted for the year 2000 transition,
and has received an assurance from each service provider that it expects its
system to accommodate the year 2000 transition without material adverse
consequences to the American Performance Funds. While such assurances have
been obtained, the American Performance Funds and its shareholders may
experience losses if these assurances prove to be incorrect or as a result of
year 2000 computer difficulties experienced by issuers of portfolio securities
or custodians, banks, broker-dealers or others with which the American
Performance Funds does business.
<PAGE> 126
PROSPECTUS
31
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
Glossary of Investment Terms
DIVIDENDS
Payment to shareholders of income from interest or dividends generated by a
fund's investments.
INVESTMENT ADVISER
An organization that makes the day-to-day decisions regarding a fund's
investments.
LIQUIDITY
The degree of a security's marketability (that is, how quickly the security can
be sold at a fair price and converted to cash).
MONEY MARKET FUND
A mutual fund that seeks to provide income, liquidity, and a stable share price
by investing in very short-term, liquid investments.
MONEY MARKET INSTRUMENTS
Short-term, liquid investments (usually with a maturity of 13 months or less)
which include U.S. Treasury bills, bank certificates of deposit (CDs),
repurchase agreements, commercial paper, and bankers' acceptances.
MUTUAL FUND
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over time.
NET ASSET VALUE (NAV)
The market value of a mutual fund's total assets, minus liabilities, divided by
the number of shares outstanding. The value of a single share is called its
share value or share price.
OPERATING EXPENSES
The percentage of a fund's average net assets used to pay its expenses.
Operating expenses include investment advisory fees, distribution/service
(12b-1) fees, and administration fees.
SECURITIES
Stocks, bonds, money market instruments, and other investment vehicles.
TOTAL RETURN
A percentage change, over a specified time period, in a mutual fund's net asset
value, with the ending net asset value adjusted to account for the reinvestment
of all distributions of dividends and capital gains.
VOLATILITY
The fluctuations in value of a mutual fund or other security. The greater fund's
volatility, the wider the fluctuations between its high and low prices.
YIELD
Income (interest or dividends) earned by an investment, expressed as a
percentage of the investment's price.
<PAGE> 127
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<PAGE> 128
[This page intentionally left blank.]
<PAGE> 129
FLAG LOGO
AMERICAN PERFORMANCE FUNDS
More Information
More information about the Funds is available
without charge through the following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
More detailed information about the American
Performance Funds is included in our SAI. The
SAI has been filed with the SEC and is
incorporated by reference into this prospectus.
This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list the Funds' holdings and
contain information on the market conditions and
investment strategies that significantly
affected the American Performance Funds'
performance during the last year.
TO OBTAIN THE SAI, ANNUAL OR SEMI-ANNUAL
REPORTS, OR MORE INFORMATION:
BY TELEPHONE:
Call 1-800-762-7085
BY MAIL:
American Performance Funds
3435 Stelzer Road
Columbus, Ohio 43219-3035
BY INTERNET:
http://www.apfunds.com
FROM THE SEC:
You can also obtain the SAI, the Annual and
Semi-Annual Reports, and other information about
the American Performance Funds, from the SEC's
web site (http://www.sec.gov). You may review
and copy documents at the SEC Public Reference
Room in Washington, DC (for information call
1-202-942-8090). You may request documents by
mail from the SEC, upon payment of a duplicating
fee, by writing to: Securities and Exchange
Commission, Public Reference Section, 450 5th
Street, N.W., Washington, DC 20549-6009 or by
sending an e-mail to: [email protected].
American Performance Funds' Investment Company
Act registration number is 811-6114.
INVESTMENT ADVISER
Bank of Oklahoma, N.A.
Bank Oklahoma Tower
Tulsa, Oklahoma 74103
DISTRIBUTOR &
ADMINISTRATOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio
43219-3035
LEGAL COUNSEL
Ropes & Gray
1301 K Street, N.W.
Suite 800 East
Washington, DC 20005
<PAGE> 130
CROSS REFERENCE SHEET
---------------------
AMERICAN PERFORMANCE FUNDS
--------------------------
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
Form N-1A Part B Item
- ---------------------
10. Cover Page and Table of Contents Cover Page; Table of Contents
11. Fund History The Funds; Additional Information
12. Description of the Funds and Its The Funds; Investment Objective and
Investments and Risks Policies; Additional Information -
Description of Shares
13. Management of the Fund Management and Service Providers
of the Funds
14. Control Persons and Principal Additional Information - Miscellaneous
Holders of Securities
15. Investment Advisory and Management and Service Providers
Other Services of the Funds
16. Brokerage Allocation Management of the Funds - Portfolio
and Other Practices Transactions
17. Capital Stock and Other Valuation; Additional Purchase and
Securities Redemption Information; Additional
Information
18. Purchase, Redemption and Valuation; Additional Purchase and
Pricing of Shares Redemption Information; Management
and Service Providers of the Funds
<PAGE> 131
19. Taxation of the Fund Investment Objective and Policies -
Additional Tax Information Concerning
All of the Funds; Investment Objective
and Policies - Additional Tax
Information Concerning the Intermediate
Tax-Free Bond Fund
20. Underwriters Management and Service Providers
of the Funds - Distributor;
Management and Service Providers
of the Funds - Distribution
21. Calculation of Performance Additional Information -
Data Calculation of Performance Data
22. Financial Statements Financial Statements
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> 132
STATEMENT OF ADDITIONAL INFORMATION
AMERICAN PERFORMANCE FUNDS
AMERICAN PERFORMANCE MONEY MARKET FUNDS
AMERICAN PERFORMANCE BOND FUNDS
AMERICAN PERFORMANCE EQUITY FUNDS
January 1, 2000
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 Funds, and the American Performance Equity
Funds, each dated January 1, 2000. This Statement of Additional Information is
incorporated in its entirety into those Prospectuses. A copy of each Prospectus
for the American Performance Funds (the "Funds") may be obtained by writing to
the Funds at 3435 Stelzer Road, Columbus, Ohio 43219, or by telephoning (800)
762-7085.
<PAGE> 133
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
Page
<S> <C>
THE FUNDS..................................................................................................1
INVESTMENT OBJECTIVE AND POLICIES..........................................................................1
ADDITIONAL INFORMATION ON FUND INSTRUMENTS...........................................................5
Asset-Backed Securities.....................................................................5
Bank Obligations............................................................................5
Calls ....................................................................................6
Foreign Investments.........................................................................8
Futures Contracts...........................................................................9
Investment Company Securities..............................................................10
Loan Participation.........................................................................10
Mortgage-Related Securities................................................................11
Municipal Securities.......................................................................12
Options ...................................................................................14
Private Placement Investments..............................................................15
Puts ...................................................................................15
Repurchase Agreements......................................................................16
Reverse Repurchase Agreements..............................................................16
Securities Lending.........................................................................17
U.S. Government Obligations................................................................17
Variable Amount and Floating Rate Notes....................................................18
When-Issued Securities.....................................................................19
Zero Coupon Obligations....................................................................19
INVESTMENT RESTRICTIONS.............................................................................20
PORTFOLIO TURNOVER..................................................................................25
ADDITIONAL TAX INFORMATION CONCERNING ALL THE FUNDS ................................................25
ADDITIONAL TAX INFORMATION CONCERNING THE INTERMEDIATE
TAX-FREE BOND FUND.........................................................................27
VALUATION.................................................................................................29
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................................................30
MANAGEMENT AND SERVICE PROVIDERS OF THE FUNDS.............................................................32
TRUSTEES AND OFFICERS...............................................................................32
INVESTMENT ADVISER..................................................................................34
DISTRIBUTION........................................................................................36
GLASS-STEAGALL ACT..................................................................................38
</TABLE>
-i-
<PAGE> 134
<TABLE>
<S> <C>
PORTFOLIO TRANSACTIONS..............................................................................39
ADMINISTRATOR.......................................................................................41
SUB-ADMINISTRATOR...................................................................................42
DISTRIBUTOR.........................................................................................43
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT.......................................................43
LEGAL COUNSEL.......................................................................................44
ADDITIONAL INFORMATION....................................................................................44
DESCRIPTION OF SHARES...............................................................................44
SHAREHOLDER AND TRUSTEE LIABILITY...................................................................45
CALCULATION OF PERFORMANCE DATA ..................................................................46
PERFORMANCE COMPARISONS.............................................................................49
MISCELLANEOUS.......................................................................................50
FINANCIAL STATEMENTS......................................................................................54
APPENDIX..................................................................................................55
</TABLE>
-ii-
<PAGE> 135
THE FUNDS
The American Performance Funds (the "Funds") is a diversified open-end
management investment company. The Funds presently consist of ten series of
units of beneficial interest ("Shares"), representing interests in of the
following portfolios:
American Performance U.S. Treasury Fund (the "U.S. Treasury Fund")
American Performance Cash Management Fund (the "Cash Management Fund")
American Performance Bond Fund (the "Bond Fund")
American Performance Intermediate Bond Fund (the "Intermediate Bond
Fund")
American Performance Intermediate Tax-Free Bond Fund (the "Intermediate
Tax-Free Bond Fund")
American Performance Short-Term Income Fund (the "Short-Term Income
Fund")
American Performance Equity Fund (the "Equity Fund")
American Performance Balanced Fund (the "Balanced Fund")
American Performance Growth Equity Fund (the "Growth Equity Fund")
American Performance Small Cap Equity Fund ("Small Cap Equity Fund")
The U.S. Treasury Fund and the Cash Management Fund are sometimes
referred to as the "Money Market Funds," the Bond Fund, the Intermediate Bond
Fund, the Intermediate Tax-Free Bond Fund, and the Short-Term Income Fund are
sometimes referred to as the "Bond Funds," and the Equity Fund, the Balanced
Fund, the Growth Equity Fund, and the Small Cap Equity Fund are sometimes
referred to as the "Equity Funds." The information contained in this document
expands upon subjects discussed in the Prospectuses for the Funds. An investment
in a Fund should not 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 THE FUNDS
- -----------------------------------
The 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, as amended (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 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
B-1
<PAGE> 136
Money Market Funds are limited to U.S. dollar-denominated obligations which the
Board of Trustees has determined present minimal credit risks.
The Cash Management 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 ("S&P") and "Prime-1" by Moody's
Investors Services, Inc. ("Moody's")); 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 Appendix for definitions of the foregoing instruments and
rating systems.
The Fund may, from time to time, concentrate its investments in certain
securities issued by U.S. banks, U.S. branches of foreign banks and foreign
branches of U.S. banks. 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
Bank of Oklahoma, N.A. ("BOK" or "Adviser") or any of its affiliates.
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 Adviser deems
the credit risk with respect thereto to be minimal.
The Bond Funds
- --------------
The Bond Fund, the Intermediate Bond Fund, and the Short-Term Income
Fund will invest in debt securities only if they carry a rating within the three
highest ratings categories assigned by an NRSRO (e.g., at least "A" from
Moody's), or S&P (including all sub-classifications indicated by modifiers of
such "A" ratings)) or, if unrated, are deemed by the
B-2
<PAGE> 137
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" for an explanation of these ratings.
The Bond Fund, the Intermediate Bond Fund, and the Short-Term Income
Fund, 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' Adviser,
more than 35% of the Bond Fund's, the Intermediate Bond Fund's, or the
Short-Term Income Fund's assets may be held in cash equivalents. For purposes of
the above-stated policies, "bonds" includes any debt instrument with a remaining
maturity of one year or more.
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"). The 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 "Prime-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). 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.
Bonds, notes, and debentures in which the Bond Funds may invest may
differ in interest rates, maturities and times of issuance. The market value of
the Bond 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 NRSROs in the rating of any debt security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Except under conditions of default, changes in
the value of a Bond Fund's portfolio securities will not affect cash income
derived from these securities but will affect a Bond Fund's net asset value.
B-3
<PAGE> 138
The Equity Funds
- ----------------
Under normal market conditions, the Equity Fund and the Growth Equity
Fund will invest at least 70% and the Small Cap Equity Fund will invest at least
65% of the value of their respective total assets in common stocks and
securities convertible into common stocks of companies believed by the Adviser
to be characterized by sound management and the ability to finance expected
growth. The Equity Fund, the Growth Equity Fund, and the Small Cap Equity Fund
may also invest up to 30% of their respective 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 an NRSRO (e.g., at least "A" by Moody's or S&P) or, if not rated,
found by the Adviser under guidelines established by the Funds' Board of
Trustees to be of comparable quality.
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 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 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,
nonconvertible 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.
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ADDITIONAL INFORMATION ON FUND INSTRUMENTS
ASSET-BACKED SECURITIES
-----------------------
The Cash Management Fund, Bond Fund, the Intermediate Bond Fund, and
the Short-Term Income 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. These 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.
BANK OBLIGATIONS
----------------
The Cash Management Fund, the Bond Funds, and the Equity 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.
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 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.
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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 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.
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, Prime-1 by Moody's or
F-1 by Fitch Investors Service) or, if not rated, found by the Adviser under
guidelines established by the Funds' Board of Trustees to be of comparable
quality.
CALLS
-----
The Bond Funds and the Equity 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.
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 Bond
Funds and the Equity 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.
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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 Bond
Funds and the Equity 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 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 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 ("NYSE")), 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
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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.
FOREIGN INVESTMENTS
-------------------
The Cash Management Fund, the Bond Fund, the Intermediate Bond Fund,
the Short-Term Income Fund, and the Equity Funds 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. Special U.S. tax considerations
may apply to a Fund's foreign investments.
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Each Equity Fund may also 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).
The Bond, Intermediate Bond, and Short-Term Income Funds may also
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.
FUTURES CONTRACTS
-----------------
The Bond Funds and the Equity 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 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.
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Aggregate initial margin deposits for futures contracts, and premiums
paid for related options, may not exceed 5% of an Bond Fund's or an Equity
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 a Bond Fund's or an Equity Fund's total assets. Futures
transactions will be limited to the extent necessary to maintain each Bond
Funds' or Equity Funds' qualification as a regulated investment company ("RIC").
INVESTMENT COMPANY SECURITIES
-----------------------------
Each Bond Fund and Equity Fund may invest in shares of other investment
companies, including the American Performance Money Market Funds. However, none
of the Bond Funds or the Equity Funds may invest more than 5% of its total
assets in the securities of any one investment company, nor may any Bond Fund or
any Equity 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 Adviser will consider this fee
in its investment analysis when determining whether to purchase shares of these
companies for a Bond Fund or an Equity Fund. This fee is in addition to the fees
received by a Bond Fund's or an Equity Fund's Adviser and Administrator. In
order to avoid the imposition of additional fees as a result of investments by a
Bond Fund or an Equity Fund in shares of the American Performance Money Market
Funds, the Adviser and Administrator have agreed to promptly forward to the
appropriate Bond Fund or the appropriate Equity Fund any portion of their usual
asset-based service fees from an American Performance Money Market Fund which is
attributable to investment by the appropriate Bond Fund or the appropriate
Equity Fund in shares of the American Performance Money Market Fund.
LOAN PARTICIPATION
------------------
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
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
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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. The Cash Management Fund intends to limit investments in loan
participation interests to 5% of its total assets.
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. The Equity
Fund, the Growth Equity Fund, the Small Cap Equity Fund, and the Intermediate
Tax-Free Bond Fund will each limit its total investment in such securities to 5%
or less of net assets.
Mortgage-related securities, for purposes of the Funds' Prospectus 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-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
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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.
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 and the Balanced Fund also may invest in
collateralized mortgage obligations structured on pools of mortgage pass-through
certificates or mortgage loans. The Cash Management Fund will only invest in
collateralized mortgage obligations which meet the quality requirements of Rule
2a-7 under the 1940 Act. 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 Adviser under guidelines
established by the Funds' Board of Trustees to be of comparable quality.
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 income from which is exempt from federal
income taxes (subject to the possible incidence of any Federal alternative
minimum tax). The Bond Fund, the Intermediate Bond Fund and the Short-Term
Income Fund, under normal market conditions, may invest in Municipal Securities
the income from which is 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
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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.
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 "Prime-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 Adviser pursuant to guidelines
approved by the Funds' Board of Trustees. The applicable Municipal Securities
ratings are described in the Appendix.
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
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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 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 Adviser will consider such an event in
determining whether the Fund should continue to hold the obligations.
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 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.
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.
OPTIONS
-------
The Bond Funds and the Equity 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.
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The Bond Funds and the Equity 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 Bond Funds and Equity 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.
PRIVATE PLACEMENT INVESTMENTS
-----------------------------
The Cash Management Fund, the Bond Funds, and the Equity 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"). 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 Fund will invest more than 10% of its net assets in
Section 4(2) paper and illiquid securities unless the Adviser determines, by
continuous reference to the appropriate trading markets and pursuant to
guidelines approve by the Board of Trustees, that any Section 4(2) paper held by
a 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 Adviser, pursuant to the guidelines approved by the
Board of Trustees, will carefully monitor the 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 Fund's liquidity to the extent that
qualified institutional buyers become for a time not interested in purchasing
these restricted securities.
PUTS
----
The Cash Management Fund, the Bond Funds, and the Equity Funds 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 exercise price. The Cash
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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 Adviser's opinion, present minimal credit risks.
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 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 1940 Act.
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REVERSE REPURCHASE AGREEMENTS
-----------------------------
Each 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 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 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 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
------------------
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 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 Adviser has determined are creditworthy
under guidelines established by the Funds' Board of Trustees. Each Bond Fund and
the Equity Fund will limit securities loans to 331/3% of the value of its total
net assets.
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 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
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invest in the obligations of such agencies or instrumentalities only when the
Adviser believes that the credit risk with respect thereto is minimal.
VARIABLE AMOUNT AND FLOATING RATE NOTES
---------------------------------------
Variable amount and floating rate notes: Commercial paper eligible for
investment by the Cash Management Fund, the Bond Funds, and the Equity 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 Adviser or 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 Adviser will
consider the earning power, cash flow and other liquidity ratios of 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.
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 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 considered illiquid. While the notes are not typically rated
by credit rating agencies, issuers of variable amount
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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 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 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 dollar-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.
Variable or floating rate notes with stated maturities of more than one
year may, based on the amortized cost valuation technique pursuant to Rule 2a-7
under the 1940 Act, be deemed to have shorter maturities in accordance with such
Rule.
WHEN-ISSUED SECURITIES
----------------------
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 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 Fund relies on the seller to consummate the trade and
will generally not pay for such securities or start earning interest on them
until they are received. When a 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 Fund. Failure of the seller to consummate the trade may
result in the Fund incurring a loss or missing an opportunity to obtain a price
considered to be advantageous. 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 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 exceed 25% of the value of its assets, a
Fund's liquidity and the ability of the Adviser to manage it might be severely
affected. No Fund intends to purchase when-issued securities for speculative
purposes but only in furtherance of its investment objective.
ZERO COUPON OBLIGATIONS
-----------------------
The Bond, the Intermediate Bond, and the Short-Term Income Funds may
hold zero-coupon obligations issued by the U.S. Treasury and U.S. government
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-
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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.
Even though such bonds do not pay current interest in cash, a Fund
nonetheless is required to accrue interest income on these investments and to
distribute the interest income on a current basis. Thus, a Fund could be
required at times to liquidate other investments in order to satisfy its
distribution requirements.
TEMPORARY DEFENSIVE POSITIONS
- -----------------------------
During temporary defensive periods as determined by the Adviser, the
Bond Fund, the Intermediate Bond Fund, the Short-Term Income Fund, and the
Equity Funds may hold up to 100% of its total assets in cash equivalents. The
Intermediate Tax-Free Bond Fund may invest in short-term Municipal Securities up
to 100% of its assets during temporary defensive periods.
During temporary defensive purposes as determined by the Adviser the
Cash Management Fund will not maintain its concentration in the banking industry
if it may be inconsistent with the best interest of Shareholders.
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.
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 Bond Funds and the Equity 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
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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 Bond Funds, and the Equity 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 Adviser owning
beneficially more than 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. Except with respect to the Growth Equity Fund, and the Small Cap
Equity Fund, 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. As of the date of this SAI, the
State of Arkansas did not require this restriction.
In addition, the Money Market Funds may not:
1. Buy common stocks or voting securities, or state, municipal, or
private activity bonds.
2. 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.*
- --------------------
* In addition, although not a fundamental investment restriction (and
therefore subject to change without a 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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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, 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.
The U.S. Treasury Fund may not:
1. 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.
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.
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The Cash Management Fund may not:
1. 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.
2. 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.
3. 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.
4. Purchase any securities which would cause more than 25% of the value
of the 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, repurchase agreements secured by obligations of the U.S.
government or its agencies or instrumentalities, bank certificates of deposits,
bankers' acceptances, and repurchase agreements secured by bank instruments
(such bank certificates of deposits, bankers' acceptances, and repurchase
agreements secured by bank instruments may be issued or guaranteed by U.S. banks
and U.S. branches of foreign banks); (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.*
* On December 16, 1999, the shareholders of the Cash Management Fund
approved the adoption of this investment restriction. Prior to its
adoption the Fund concentrated its investments in obligations issued by
the banking industry. The implementation of this new investment
restriction will occur gradually as the Fund's obligations issued by
the banking industry mature.
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.
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<PAGE> 158
2. 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 3 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.
3. 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.
The Bond Funds and the Equity Funds may not:
1. 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. 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) with respect to the Bond Funds, 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. Borrow money or issue senior securities, except that each 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 Fund's total
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<PAGE> 159
assets at the time of its borrowing. No Fund will purchase securities while its
borrowings (including reverse repurchase agreements) exceed 5% of its total
assets.
4. Make loans, except that each Fund may, in accordance with its
investment objectives and policies, purchase or hold debt instruments, lend
portfolio securities, and enter into repurchase agreements.
5. 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.
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. High turnover rates will generally result in higher
transaction costs to a Fund and may result in additional tax consequences
(including an increase in short-term capital gains which are generally taxed to
individual shareholders at ordinary income tax rates) to a Fund's Shareholders.
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 regulated investment company (a "RIC") under
Subchapter M 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, and (2) 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
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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 securities of other RICs) 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 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 investment income and net realized
capital gains, if any, that it distributes to shareholders, provided the Fund
distributes during its taxable year at least 90% of the sum of its taxable net
investment income, its net tax-exempt income and the excess, if any, of net
short-term capital gains over net long-term capital losses for such year. Each
Fund intends to make sufficient distributions to Shareholders to meet this
requirement.
Distributions from a Fund (other than exempt-interest dividends, as
discussed below) generally will be taxable to shareholders as ordinary income to
the extent derived from the Fund's investment income and short-term capital
gains. Distributions of long-term capital gains will be taxable to shareholders
as such, regardless of how long a shareholder has held shares of the Fund.
Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized losses.
The Code imposes a non-deductible 4% 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 at least equal to the sum of 98% of their
"ordinary income" (as defined) for the calendar year plus 98% of their capital
gain net income for the one-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. A
dividend paid to Shareholders by a Fund in January of a year generally is deemed
to have been paid by the Fund on December 31 of the preceding year, if the
dividend was declared and payable to Shareholders of record on a date in
October, November or December of that preceding year. If distributions during a
calendar year by a Fund did not meet the 98% threshold, that particular Fund
would be subject to this 4% excise tax on the undistributed amounts. Each Fund
generally intends to make distributions sufficient to avoid the imposition of
this 4% excise tax.
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. 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, convert long-term capital gains into short-term
capital gains, or
B-26
<PAGE> 161
otherwise affect the character of the Fund's income. Consequently, the amount,
timing, and character of distributions to Shareholders could be affected. 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 foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of Shares of each Fund. Further
tax information regarding the Intermediate Tax-Free Bond Fund is included in the
next 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. Accordingly, potential purchasers of shares of a Fund are
urged to consult their tax advisers with specific reference to their own tax
situation, including the potential application of foreign, state and local
taxes.
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. Such dividends will not
exceed, in the aggregate, the net interest the Fund receives during the taxable
year from Municipal Securities and other securities exempt from the regular
federal income tax. 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) 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) if
such Shareholder were treated as a "substantial user" or a
B-27
<PAGE> 162
"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 any
non-exempt person who regularly uses a part of such facilities in his or her
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" include certain related natural persons, affiliated corporations,
partners and partnerships.
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.
The Intermediate Tax-Free Bond Fund may acquire rights regarding
specified portfolio securities under puts. (See "INVESTMENT OBJECTIVE AND
POLICIES - Additional Information on Fund Instruments - Puts" above for further
information.) 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 definitive rule that 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 net capital gains (i.e., 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
Fund intends to/will distribute net capital gains, if any, at least once a year
and such distributions will generally be taxable to Shareholders. 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 accorded RICs and their shareholders, all
of its taxable income would be subject to tax at regular corporate rates
(without any deduction for distributions to
B-28
<PAGE> 163
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.
Interest income from certain types of municipal securities may
constitute a preference item for individuals for purposes of the federal
alternative minimum tax. 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 the 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 Adviser will review the proceedings
relating to the issuance of Municipal Securities or the basis for such opinions.
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 Fund. Additional tax information concerning all 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 Tax-Free 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 Tax-Free Bond
Fund are urged to consult their tax advisers with specific reference to their
own tax situation.
VALUATION
---------
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.
B-29
<PAGE> 164
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
without monetary consideration, or utilizing a net asset value per Share
determined by using available market quotations.
The value of portfolio securities of (i) the U.S. Treasury Fund and the
Cash Management Fund determined for the shadow pricing of such assets under Rule
2a-7(c)(7) and (ii) each Bond Fund and Equity Fund for purposes of establishing
the net asset value per share of such Fund will be determined according to the
following Security Valuation Procedures:
A. If available, based on price obtained from one of the
following independent pricing services: Muller Data
Corporation, J.J. Kenney Co., Inc., Merrill Lynch & Co., Inc.,
Interactive Data Corporation, Bloomberg L.P., and Reuters
Limited;
B. If a security cannot be valued pursuant to paragraph (A)
hereof, based on quotes from at least two broker/dealers or
market makers identified by the Funds' Adviser, such quotes to
be obtained by the Funds' Fund Accountant, if such quotes are
available; or
C. If a security cannot be valued pursuant to paragraphs (A) and
(B) hereof, based on a price determined by the Funds' Pricing
Committee.
The Bond Funds and the Equity Funds will value securities for which the
principal market is a securities exchange, 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. Securities, the principal market for which is not a
securities exchange, will be valued based on bid quotations in such principal
market. Short-term securities are valued at amortized cost, which approximates
current value.
B-30
<PAGE> 165
The Pricing Committee conducts its pricing activities in the manner
established by the Security Valuation Procedures. The Security Valuation
Procedures are reviewed and approved by the Funds' Board of Trustees at least
annually.
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. In addition to purchasing Shares
directly from the Distributor, Shares may be 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 Funds'
Distribution and Shareholder Services Plan. Customers purchasing Shares of the
Funds may include officers, directors, or employees of the Adviser and its
affiliates.
<TABLE>
FEE TABLE
---------
<CAPTION>
Intermediate Intermediate Short-Term Growth Small Cap
Bond Bond Tax-free Income Equity Balanced Equity Equity
Fund Fund Bond Fund Fund Fund Fund Fund Fund
---- ---- --------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses(1)
- -----------------------------------
Maximum Sales Load
Imposed on Purchases(2) 4.00% 3.00% 3.00% 2.00% 5.00% 5.00% 5.00% 5.00%
(as a percentage of offering price)
Maximum Sales Load Imposed
on Reinvested Dividends 0% 0% 0% 0% 0% 0% 0% 0%
(as a percentage of offering price)
Deferred Sales Load(3) 0% 0% 0% 0% 0% 0% 0% 0%
(as a percentage of original purchase
price or redemption proceeds,
if applicable)
Redemption Fees(4) 0% 0% 0% 0% 0% 0% 0% 0%
(as a percentage of amount redeemed,
if applicable)
Exchange Fees $0 $0 $0 $0 $0 $0 $0 $0
</TABLE>
B-31
<PAGE> 166
- ------------
(1) Participating organizations may charge a Customer's account fees
for automatic investment and other investment and trust services provided in
connection with investment in the Funds.
(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; (7) investors within wrap accounts; (8)
investors who purchase in connection with 401(k) plans, 403(b) plans, and other
employer-sponsored, qualified retirement plans; and (9) investors who purchase
in connection with non-transactional fee fund programs and programs offered by
fee-based financial planners and other types of financial institutions.
(3) A Contingent Deferred Sales Load of 1.00% for the Bond Fund, THE
EQUITY FUND, THE BALANCED FUND, THE GROWTH EQUITY FUND, AND THE SMALL CAP EQUITY
FUND, 0.75% for the Intermediate Bond Fund and Intermediate Tax-Free Bond Fund,
and 0.50% for the Short-Term Income Fund will be assessed against the proceeds
of any redemption request relating to Shares of that Fund which were purchased
without a sales charge in reliance upon the waiver accorded to purchases in the
amount of $1 million or more, but only where such redemption request is made
within one year of the date the Shares were purchased.
(4) 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.
The Funds may suspend the right of redemption or postpone the date of
payment for Shares during any period when (a) trading on the NYSE is restricted
by applicable rules and regulations of the SEC, (b) the NYSE is closed for other
than customary weekend and holiday closings, (c) the SEC has by order permitted
such suspension, or (d) an emergency exists as determined by the SEC.
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-32
<PAGE> 167
MANAGEMENT AND SERVICE PROVIDERS OF THE FUNDS
TRUSTEES AND OFFICERS
- ---------------------
The names of the trustees and the officers of the Funds, their
addresses, and principal occupations during the past five years are as follows:
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation
Name, Address, and Age With the Funds During Past 5 Years
- ---------------------- ---------------- --------------------
<S> <C> <C>
Walter B. Grimm*, 54 Chairman, From June, 1992 to present,
3435 Stelzer Road President, and employee of BISYS Fund
Columbus, OH 43219 Trustee Services.
Michael J. Hall, 55 Trustee From September, 1998 to
10701 E. Ute Street present, Vice President
Tulsa, Oklahoma 74116 Finance and Chief Financial
Officer and Director, Matrix
Service Company; from December
1995 to November, 1997, Vice
President and Chief Financial
Officer, Worldwide Sports &
Recreation, Inc.; from
January, 1994 to November,
1997, Vice President and Chief
Financial Officer, Pexco
Holdings, Inc.
I. Edgar Hendrix, 54 Trustee From June, 1983 to May, 1999,
8 East 3rd Street Vice President and Treasurer,
Tulsa, Oklahoma 74103 Parker Drilling Co.; May 1999
to present, Financial
Consultant.
Perry A. Wimpey, 67 Trustee From January, 1992 to present,
4843 S. 69th East Ave. Local Financial and Regulatory
Tulsa, Oklahoma 74145 Consultant.
Alaina V. Metz, 32 Assistant From June, 1995 to present,
3435 Stelzer Road Secretary employee of BISYS Fund
Columbus, OH 43219 Services; from May 1989 to
June 1995, Supervisor, Mutual
Fund Legal Department,
Alliance Capital Management.
Jeffrey Shiverdecker, 37 Treasurer From July, 1996 to present,
3435 Stelzer Road employee of BISYS Fund
Columbus, OH 43219 Services; from December 1990
to July 1996, Manager,
Investor Fiduciary Trust
Company; from October 1980 to
1990, Production Engineer, The
Coca-Cola Company.
</TABLE>
B-33
<PAGE> 168
<TABLE>
<S> <C> <C>
Jeffrey Cusick, 40 Vice President From July, 1995 to present,
3435 Stelzer Road and Secretary employee of BISYS Fund
Columbus, OH 43219 Services; from September 1993
to July 1995, Assistant Vice
President, Federated
Administration Services; from
1989 to September 1993, Client
Services Manager, Federated
Administration Services.
</TABLE>
- ----------------
* Mr. Grimm is considered to be an "interested person" of the Funds as
defined in the 1940 Act.
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 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 for acting as Administrator
and may receive additional income under the Distribution Plan of the Funds.
<TABLE>
COMPENSATION TABLE (1)
----------------------
<CAPTION>
Pension or
Aggregate Retirement Total Compensation
Compensation Benefits Accrued Estimated Annual from the American
Name of Person, from the American As Part of Benefits Upon Performance Funds
Position Performance Funds Fund Expenses Retirement Paid to Trustee
- --------------- ----------------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Walter B. Grimm $ 0 None None $ 0
Michael J. Hall $9,250 None None $9,250
Perry A. Wimpey $9,250 None None $9,250
I. Edgar Hendrix $9,250 None None $9,250
</TABLE>
(1) Figures are for the Funds' fiscal year ended August 31, 1999.
B-34
<PAGE> 169
INVESTMENT ADVISER
- ------------------
Investment advisory services are provided to each of the Funds by BOK,
pursuant to an Investment Advisory Agreement.
BOK, the largest trust company headquartered in the State of Oklahoma,
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.
BOK maintains offices in Oklahoma, Arkansas, Texas and New Mexico 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. BOK 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. BOK also serves as transfer agent and registrar for corporate securities,
paying agent for dividends and interest, and indenture trustee of bond issues.
At September 30, 1999, BOK had approximately $7.42 billion in assets under
management .
Subject to the general supervision of the Funds' Board of Trustees and
in accordance with the investment objective and restrictions of each of the
Funds, BOK reviews, supervises, and provides general investment advice regarding
each of the Funds' investment programs. Subject to the general supervision of
the Funds' Board of Trustees and in accordance with the investment objective and
restrictions of each of the Funds, BOK makes all final decisions with respect to
portfolio securities of each of the Funds, places orders for all purchases and
sales of the portfolio securities of each of the Funds, and maintains each
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, the Adviser 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 the Adviser 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 (0.40%) annually; the Equity Fund and the Small
Cap Equity Fund and the Growth Equity Fund - sixty-nine one-hundredths of one
percent (0.69%) annually; the Balanced Fund -seventy-four one-hundredths of one
percent (0.74%) annually;
B-35
<PAGE> 170
the Bond Fund, the Intermediate Bond Fund, the Intermediate Tax-Free Bond Fund
and the Short-Term Income Fund - fifty-five one-hundredths of one percent
(0.55%) annually. (See "SALES CHARGES," "DISTRIBUTION," and "GENERAL INFORMATION
- --Custodian and Transfer Agent.") BOK may periodically waive all or a portion of
its fee with respect to any Fund to increase the net income of such Fund
available for distribution as dividends.
The Funds paid BOK the following fees for investment advisory services:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
August 31, 1999 August 31, 1998 August 31, 1997
--------------- --------------- ---------------
Additional Additional Additional
Amount Amount Amount
Paid Waived Paid Waived Paid Waived
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Fund $1,664,869 $ 0 $1,495,245 $ 0 $ 984,884 $ 0
Cash Management Fund 1,862,255* 200,753 1,630,192* 0 1,476,099* 0
Bond Fund 198,756 113,576 162,521 92,870 114,994 65,711
Intermediate Bond Fund 307,478 175,703 284,465 162,552 224,198 128,113
Intermediate Tax-Free Bond Fund 106,891 61,081 100,362 57,350 95,309 54,462
Short-Term Income Fund 0 298,363 0 117,712 0 80,882
Equity Fund 952,423 361,923 974,200 370,196 604,087 229,553
Balanced Fund 161,661 226,590 46,817 236,504 0 196,422
Growth Equity Fund 580,464 220,577 287,102 109,099 -- --
Small Cap Equity Fund 0 21,596 -- -- -- --
Aggressive Growth Fund 43,409 16,495 188,145 81,755 225,838 85,818
</TABLE>
* Of this amount, AMR Investment Services, Inc. received $497,875 for the fiscal
year ended August 31, 1999, $954,195 for the fiscal year ended August 31, 1998,
and $553,537 for the fiscal year ended August 31, 1997.
Until April 30, 1999, sub-investment advisory services were provided to
the Cash Management Fund by AMR Investment Services, Inc. ("AMR") pursuant to a
Sub-Investment Advisory Agreement between BOK and AMR. For the services provided
and the expenses assumed pursuant to the Sub-Advisory Agreement, AMR received a
fee from BOK, computed daily and paid monthly, at the annual rate of not less
than fifteen one-hundredths of one percent (0.15%) nor more than forty
one-hundredths of one percent (0.40%) of the average daily net assets of the
Cash Management Fund.
The Investment Advisory Agreement will continue in effect as to a
particular Fund for successive 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 and a
majority of the Trustees who are not parties to the Investment Advisory
Agreement, or interested persons (as defined in 1940 Act) of any party to
B-36
<PAGE> 171
the Investment Advisory Agreement by votes cast in person at a meeting called
for such purpose.
The Investment Advisory Agreement is 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. The Investment Advisory Agreement also terminates
automatically in the event of any assignment, as defined in the 1940 Act.
The Investment Advisory Agreement provides that the Adviser 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 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 Adviser including, but not limited to, (i) a
description 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 (0.25%) 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 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
B-37
<PAGE> 172
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' 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
lower operating expenses, the Distributor may voluntarily reduce its fees under
the Distribution Plan.
The Distributor received the following amounts under the Distribution
Plan:
B-38
<PAGE> 173
<TABLE>
FISCAL YEAR ENDED
August 31, 1999 August 31, 1998 August 31, 1997
--------------- --------------- ---------------
Additional Additional Additional
Amount Amount Amount
Paid Waived Paid Waived Paid Waived
---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Fund $ 0 $1,040,542 $ 0 $ 934,531 $ 0 $615,553
Cash Management Fund 0 1,289,379 0 1,018,870 0 922,562
Bond Fund 141,969 0 116,086 0 82,138 0
Intermediate Bond Fund 219,627 0 203,189 0 160,141 0
Intermediate Tax-Free Bond Fund 0 76,352 0 71,687 0 68,078
Short-Term Income Fund 69,143 66,742 0 53,506 0 36,765
Equity Fund 476,212 0 487,100 0 302,044 0
Balanced Fund 0 131,166 0 95,717 0 66,359
Growth Equity Fund 290,232 0 -- -- -- --
Small Cap Equity Fund 0 7,824 -- -- -- --
Aggressive Growth Fund 21,704 -- 112,919 0
</TABLE>
Substantially all of the amount received by the Distributor under the
Distribution Plan during the last fiscal year, the periods from September 1,
1998 to August 31, 1999, was spent on compensation to dealers. BISYS retained
0.49% and spent this amount on printing and mailing of prospectuses. The total
amount spent on compensation to dealers during the last fiscal year was
$1,213,049. The total amount retained by BISYS during the last fiscal year was
$5,838.
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
B-39
<PAGE> 174
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.
BOK 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 BOK, from continuing to perform such services for the
Funds. Depending upon the nature of any changes in the services which could be
provided by BOK, the Board of Trustees of the Funds would review the Funds'
relationship with BOK, and consider taking all action necessary in the
circumstances.
Should future legislative, judicial, or administrative action prohibit
or restrict the proposed activities of BOK, 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 Investment Advisory Agreement, 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 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 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 the Adviser generally seeks competitive spreads or commissions,
the Funds may not necessarily pay the lowest spread or commission available on
each transaction, for reasons discussed below.
B-40
<PAGE> 175
During the fiscal year ended August 31, 1999, the Funds paid aggregate
brokerage commissions as follows:
Equity Fund $558,258
Aggressive Growth Fund $104,769
Balanced Fund $104,663
Growth Equity Fund $236,072
Small Cap Equity Fund $ 25,692
During the fiscal year ended August 31, 1998, the Funds paid aggregate
brokerage commissions as follows:
Equity Fund $279,771
Aggressive Growth Fund $118,045
Balanced Fund $ 56,206
Growth Equity Fund $ 61,297
During the fiscal year ended August 31, 1997, the Funds paid aggregate
brokerage commissions as follows:
Equity Fund $212,467
Aggressive Growth Fund $ 37,432
Balanced Fund $ 26,379
Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser 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 the Adviser 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 the Adviser and does not reduce the
advisory fees payable to the Adviser. Such information may be useful to the
Adviser 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 the Adviser, the Distributor,
or their affiliates except as may be permitted under the 1940 Act, and will not
give preference to correspondents of an 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 the
Adviser. Any such other
B-41
<PAGE> 176
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 the Adviser 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, the Adviser may 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 the Investment Advisory Agreement, in making investment recommendations for
the Funds, the Adviser will not inquire or take into consideration whether an
issuer of securities proposed for purchase or sale by the Funds is a customer of
the Adviser or their respective parents or subsidiaries or affiliates unless
legally required to do so and, in dealing with its commercial customers, the
Adviser 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 (the "Administration Agreement"). The Administrator
assists in supervising all operations of each Fund (other than those performed
under the Investment Advisory, Custodian, Fund Accounting, and Transfer Agency
Agreements for that Fund). The Administrator is a broker-dealer registered with
the SEC and is a member of the National Association of Securities Dealers, Inc.
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 SEC, 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, 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 (0.20%) 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 available for distribution as dividends.
B-42
<PAGE> 177
BISYS received the following fees for management and administrative
services:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
August 31, 1999 August 31, 1998 August 31, 1997
--------------- --------------- ---------------
Paid Paid Paid
---- ---- ----
<S> <C> <C> <C>
U.S. Treasury Fund $832,442 $747,624 $492,442
Cash Management Fund 958,511 815,098 738,049
Bond Fund 113,576 92,870 65,711
Intermediate Bond Fund 175,704 162,552 128,113
Intermediate Tax-Free Bond Fund 61,081 57,350 54,462
Short-Term Income Fund 108,497 42,805 29,412
Equity Fund 380,973 389,681 241,635
Balanced Fund 104,934 76,574 53,087
Growth Equity Fund 232,188 114,841 --
Small Cap Equity Fund 6,259 -- --
Aggressive Growth Fund 14,453 86,058 90,335
</TABLE>
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, BOK became the Sub-Administrator to the Funds
pursuant to an agreement between the Administrator and BOK. Pursuant to this
agreement, BOK assumed many of the Administrator's duties, for which BOK
receives a fee, paid by the Administrator, calculated at an annual rate of five
one-hundredths of one percent (0.05%) of each Fund's average net assets.
BOK received the following fees for Sub-Administration services:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
August 31, 1999 August 31, 1998 August 31, 1997
--------------- --------------- ---------------
Paid Paid Paid
---- ---- ----
<S> <C> <C> <C>
U.S. Treasury Fund $20,611 $373,811 $123,111
Cash Management Fund 239,628 407,548 184,512
Bond Fund 15,270 63,848 16,428
Intermediate Bond Fund 27,124 111,754 32,028
</TABLE>
B-43
<PAGE> 178
<TABLE>
<S> <C> <C> <C>
Intermediate Tax-Free Bond Fund 43,926 39,428 13,616
Short-Term Income Fund 28,394 29,428 7,353
Equity Fund 26,234 336,099 60,409
Balanced Fund 95,243 70,830 13,272
Growth Equity Fund 58,047 99,050 --
Small Cap Equity Fund 1,565 -- --
Aggressive Growth Fund 2,891 74,225 22,584
</TABLE>
DISTRIBUTOR
- -----------
BISYS serves as distributor to each of the Funds pursuant to its
Distribution Agreement with the Funds.
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT
- ---------------------------------------------
Cash and securities owned by each of the Funds are held by BOK as
custodian. Under the Custodian Agreement 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 (0.03%) 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.
BISYS Fund Services Ohio, Inc. serves as transfer agent to each of the
Funds pursuant to a Transfer Agency Agreement with the Funds. 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
B-44
<PAGE> 179
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. 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 (0.03%) 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 (0.04%) 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.
AUDITORS
- --------
KPMG LLP, Two Nationwide Plaza, Columbus, Ohio, 43215, serves as
independent public accountants for the Funds.
LEGAL COUNSEL
- -------------
Ropes & Gray, Suite 800 East, One Franklin Square, 1301 K Street, N.W.,
Washington, D.C. 20005 are counsel to the Funds.
B-45
<PAGE> 180
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES
- ---------------------
Each Fund is a separate series of a Massachusetts business trust which
was organized on October 1, 1987 and began active operations in August of 1990.
The Declaration of Trust was filed with the Secretary of State of the
Commonwealth of 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 ten 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 Short-Term Income Fund, the Equity Fund, the Balanced Fund, the Growth
Equity Fund and the Small Cap Equity Fund. The Aggressive Growth Fund was
liquidated on February 19, 1999. The 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.
B-46
<PAGE> 181
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 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 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
- -------------------------------
Yields based on the seven-day period ended August 31, 1999 (the "base
period") were as follows:
U.S. Treasury Fund 4.54%
Cash Management Fund 4.75%
Effective yields based on the base period were as follows:
U.S. Treasury Fund 4.64%
Cash Management Fund 4.87%
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.
Yields based on the thirty-day period ended August 31, 1999 ("30-day
base period") were as follows:
B-47
<PAGE> 182
<TABLE>
<CAPTION>
Fund With Sales Load Without Sales Load
- ---- --------------- ------------------
<S> <C> <C>
Bond Fund 6.09% 6.34%
Intermediate Bond Fund 5.77% 5.95%
Intermediate Tax-Free Bond Fund 3.95% 4.07%
Short-Term Income Fund 6.05% 6.17%
</TABLE>
The 30-day yield of each Bond 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+1)(6)-1]
---
cd
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.
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 return of each Bond Fund and Equity 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.
The average annual total returns for the one-year period ended August
31, 1999 were as follows:
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<PAGE> 183
<TABLE>
<CAPTION>
Fund With Sales Load Without Sales Load
- ---- --------------- ------------------
<S> <C> <C>
Bond Fund -4.21% -0.19%
Intermediate Bond Fund -1.28% 1.73%
Intermediate Tax-Free Bond Fund -2.82% 0.19%
Short-Term Income Fund 1.55% 3.66%
Equity Fund 21.54% 27.92%
Balanced Fund 12.60% 18.51%
Growth Equity Fund 35.10% 42.19%
Small Cap Equity Fund -0.51% 4.77%
</TABLE>
The average annual total returns for the five-year period ended August
31, 1999 were as follows:
<TABLE>
<CAPTION>
Fund With Sales Load Without Sales Load
- ---- --------------- ------------------
<S> <C> <C>
Bond Fund 5.52% 6.39%
Intermediate Bond Fund 5.13% 5.78%
Intermediate Tax-Free Bond Fund 4.43% 5.06%
Equity Fund 19.52% 20.74%
Growth Equity Fund 26.38% 27.69%
</TABLE>
The average annual total returns for the period from commencement of
operations through August 31, 1999 were as follows:
<TABLE>
<CAPTION>
Commencement of
Fund Operations With Sales Load Without Sales Load
- ---- ---------- --------------- ------------------
<S> <C> <C> <C>
Bond Fund September 28, 1990 5.29% 5.73%
Intermediate Bond Fund September 28, 1990 6.99% 7.48%
Intermediate Tax-Free Bond Fund May 29, 1992 5.29% 5.73%
Short-Term Income Fund October 19, 1994 5.61% 6.04%
</TABLE>
B-49
<PAGE> 184
<TABLE>
<S> <C> <C> <C>
Equity Fund September 28, 1990 15.12% 15.79%
Balanced Fund June 1, 1995 14.28% 15.67%
Growth Equity Fund(1) June 30, 1994 26.15% 27.41%
Small Cap Equity Fund February 17, 1999 -0.51%* 4.77%*
</TABLE>
* Aggregate total return for the period.
(1) The performance data for the Growth Equity Fund includes the
performance history of its predecessor fund, a common trust fund, for the period
from June 30, 1994 until the Growth Equity Fund commenced operations on November
3, 1997. The predecessor fund was not registered under the 1940 Act and
therefore was not subject to certain investment restrictions, limitations and
diversification requirements imposed by the 1940 Act and the Code. If the
predecessor fund had been subject to such requirements under the 1940 Act and
the Code its performance may have been adversely affected.
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, 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.
B-50
<PAGE> 185
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 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
B-51
<PAGE> 186
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 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 SEC 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 SEC. Copies of such information may be obtained from the Commission's
website at http://www.sec.gov or 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 December 28, 1999, 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 66.58% of the U.S. Treasury Fund's Shares, 51.17%
of the Cash Management Fund's Shares, 97.99% of the Bond Fund's Shares, 96.92%
of the Intermediate Bond Fund's Shares, 82.33% of the Intermediate Tax-Free Bond
Fund's Shares, 98.16% of the Short-Term Income Fund's Shares, 97.46% and of the
Equity Fund's Shares, 99.86% of the Balanced Fund's Shares, 97.17% of the Growth
Equity Fund's Shares, and 99.27% of the Small Cap Equity Fund's Shares. As of
December 28, 1999 Bank of Oklahoma, N.A. and its bank affiliates possessed, on
behalf of its underlying accounts, voting or investment power with respect to
46.02% of the U.S. Treasury Fund's Shares, 32.06% of the Cash Management Fund's
Shares, 85.60% of the Bond Fund's Shares, 87.34% of the Intermediate Bond Fund's
Shares, 66.01% of the Intermediate Tax-Free Bond Fund's Shares, 82.12% of the
Short-Term Income Fund's Shares, 88.29% of the Equity Fund's Shares, 91.82% of
the Balanced Fund's Shares, 91.18% of the Growth Equity Fund's Shares, and
95.83% of the Small Cap Equity 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 each Fund under the 1940 Act.
B-52
<PAGE> 187
As of December 1, 1999, 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
December 1, 1999:
<TABLE>
<CAPTION>
Amount of Beneficial Percent
Name and Address Ownership (Shares) of Fund
- ---------------- ------------------ -------
<S> <C> <C>
U.S. Treasury Fund
------------------
NABANK and Co. 441,912,162 98.85%
P.O. Box 2180
Tulsa, OK 74192
Cash Management Fund
--------------------
NABANK and Co. 570,725,746 99.94%
P.O. Box 2180
Tulsa, OK 74192
Bond Fund
---------
NABANK and Co. 6,427,610 96.94%
P.O. Box 2180
Tulsa, OK 74192
Intermediate Bond Fund
----------------------
NABANK and Co. 6,078,463 94.93%
P.O. Box 2180
Tulsa, OK 74192
Intermediate Tax-free Bond Fund
-------------------------------
NABANK and Co. 2,173,051 76.99%
P.O. Box 2180
Tulsa, OK 74192
</TABLE>
B-53
<PAGE> 188
<TABLE>
<S> <C> <C>
Short Term Income Fund
----------------------
NABANK and Co. 1,569,242 24.11%
All Reinvest Account
P.O. Box 2180
Tulsa, OK 74192
NABANK and Co. 4,539,493 69.75%
Income
Cash/CG/Reinvest
P.O. Box 2180
Tulsa, OK 74192
Equity Fund
-----------
NABANK and Co. 8,974,959 97.76%
P.O. Box 2180
Tulsa, OK 74192
Balanced Fund
-------------
NABANK and Co. 4,183,652 99.45%
P.O. Box 2180
Tulsa, OK 74192
Growth Equity Fund
------------------
NABANK and Co. 8,692,047 93.34%
P.O. Box 2180
Tulsa, OK 74192
Small Cap Equity Fund
---------------------
NABANK and Co. 701,849 98.61%
P.O. Box 2180
Tulsa, OK 74192
</TABLE>
FINANCIAL STATEMENTS
The Independent Auditors' Report, Financial Highlights, and Financial
Statements included in the American Performance Funds' Annual Report for the
fiscal year ended August 31, 1999, are incorporated by
B-54
<PAGE> 189
reference into this Statement of Additional Information. A copy of the Annual
Report dated as of August 31, 1999 and the Semi-Annual Report dated as of
February 28, 1999 may be obtained without charge by contacting the Distributor,
BISYS Fund Services at 3435 Stelzer Road, Columbus, Ohio 43219 or by telephoning
toll-free at 1-800-762-7085.
B-55
<PAGE> 190
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 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.
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<PAGE> 191
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 An obligation rated AAA has the highest rating assigned by
S&P. The obligor's capacity to meet its financial commitment
on the obligation is extremely strong.
AA An obligation rated AA differs from the highest-rated
obligations only in small degree. The obligor's capacity to
meet its financial commitment on the obligation is very
strong.
A An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher-rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB An obligation rated BBB exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the
obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having
significant speculative characteristics. BB indicates the
least degree of speculation and C the highest. While such
obligations will likely have some quality and protective
characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
BB An obligation rated BB is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial, or
economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the
obligation.
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
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<PAGE> 192
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.
Description of the three highest long-term debt ratings by Fitch IBCA (plus or
minus signs are used with a rating symbol to indicate the relative position of
the credit within the rating category):
AAA Obligations which have the highest rating assigned by Fitch
IBCA. Capacity for timely repayment principal and interest is
extremely strong relative to other obligors in the same
country.
AA Obligations for which capacity for timely repayment of
principal and interest is very strong relative to other
obligors in the same country. The risk attached to these
obligations differs only slightly from the country's highest
rated debt.
A Obligations for which capacity for timely repayment of
principal and interest is strong relative to other obligors in
the same country. However, adverse changes in business,
economic or financial conditions are more likely to affect the
capacity for timely repayment than for obligations in higher
rated categories.
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 ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often 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.
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<PAGE> 193
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a
strong ability 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 A short-term obligation rated A-1 is rated in the highest
category by S&P. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category,
certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
A-2 A short-term obligation rated A-2 is somewhat more susceptible
to the adverse effects of changes in circumstances and
economic conditions than obligations in higher rating
categories. However, the obligor's capacity to meet its
financial commitment on the obligation is satisfactory.
A-3 A short-term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the
obligation.
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.
B-59
<PAGE> 194
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
issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
Fitch IBCA's description of its three highest short-term debt ratings:
Fl Obligations assigned this rating have the highest capacity for
timely repayment under Fitch IBCA's national rating scale for
that country, relative to other obligations in the same
country. Where issues possess a particularly strong credit
feature, a "+" is added to the assigned rating.
F2 Obligations supported by a strong capacity for timely
repayment relative to other obligors in the same country.
However, the relative degree of risk is slightly higher than
for issues classified as 'Al' and capacity for timely
repayment may be susceptible to adverse changes in business,
economic, or financial conditions.
F3 Obligations supported by an adequate capacity for timely
repayment relative to other obligors in the same country. Such
capacity is more susceptible to adverse changes in business,
economic, or financial conditions than for obligations in
higher categories.
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.
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.
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<PAGE> 195
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.
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 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 the
obligation is more susceptible to adverse developments (both
internal and external) than those 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.
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<PAGE> 196
REGISTRATION STATEMENT
OF
AMERICAN PERFORMANCE FUNDS
ON
FORM N-LA
PART C. OTHER INFORMATION
Item 23. Exhibits
--------
(a) 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).
(b)(1) 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).
(b)(2) 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).
(b)(3) 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).
(c) 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).
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).
<PAGE> 197
(d)(1) Investment Advisory Agreement between Registrant and Bank of
Oklahoma, N.A. (formerly 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).
(d)(2) Investment Advisory Agreement between Registrant and Bank of
Oklahoma, N.A. dated July 25, 1997 is incorporated by
reference to Exhibit (d)(2) to Post-Effective Amendment No. 20
to the Funds' Registration Statement (filed October 29, 1999).
(d)(3) Sub-Investment Advisory Agreement between Bank of Oklahoma,
N.A. and AMR Investment Services, Inc. dated June 16, 1997 is
incorporated by reference to Exhibit 5(b) to Post-Effective
Amendment No. 16 to the Funds' Registration Statement (filed
December 17, 1997).
(d)(4) Amended Schedule A dated January 21, 1999 to the Investment
Advisory Agreement between Registrant and Bank of Oklahoma,
N.A. dated July 25, 1997 is incorporated by reference to
Exhibit (d)(4) to Post-Effective Amendment No. 20 to the
Funds' Registration Statement (filed October 29, 1999).
(e)(1) Distribution Agreement between Registrant and BISYS Fund
Services, LP (formerly, 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).
(e)(2) Amended Schedules A and B dated January 21, 1999 to
Distribution Agreement between Registrant and BISYS Fund
Services, LP (formerly, The Winsbury Company Limited
Partnership) dated October 1, 1993 are incorporated by
reference to Exhibit (e)(2) to Post-Effective Amendment No. 20
to the Funds' Registration Statement (filed October 29, 1999).
(f) None.
(g)(1) 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).
C-2
<PAGE> 198
(g)(2) Amended Schedule A dated January 21, 1999 to Custodian
Agreement dated September 5, 1990 between Registrant and Bank
of Oklahoma, N.A. is incorporated by reference to Exhibit
(g)(2) to Post-Effective Amendment No. 20 to the Funds'
Registration Statement (filed October 29, 1999).
(h)(1) Management and Administration Agreement between Registrant and
BISYS Fund Services, LP (formerly 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).
(h)(2) Administration Agreement between Registrant and BISYS Fund
Services, Ohio, Inc. dated September 15, 1999 is incorporated
by reference to Exhibit (h)(2) to Post-Effective Amendment No.
20 to the Funds' Registration Statement (filed October 29,
1999).
(h)(3) Transfer Agency and Shareholder Service Agreement between
Registrant and BISYS Fund Services Ohio, Inc. (formerly, The
Winsbury Service Corporation) is incorporated by reference to
Exhibit 9(b) to Post-Effective Amendment No. 1 to the Funds'
Registration Statement (filed October 31, 1990).
(h)(4) Transfer Agency Agreement between Registrant and BISYS Fund
Services Ohio, Inc. dated September 15, 1999 is incorporated
by reference to Exhibit (h)(4) to Post-Effective Amendment No.
20 to the Funds' Registration Statement (filed October 29,
1999).
(h)(5) Fund Accounting Agreement between Registrant and BISYS Fund
Services Ohio, Inc. (formerly, The Winsbury Service
Corporation) dated September 5, 1990, as amended and restated
May 12, 1995, is incorporated by reference to Exhibit 9(d) to
Post-Effective Amendment No. 15 to the Funds' Registration
Statement (filed June 24, 1997).
(h)(6) Fund Accounting Agreement between Registrant and BISYS Fund
Services Ohio, Inc. dated September 15, 1999, is incorporated
by reference to Exhibit (h)(6) to Post-Effective Amendment No.
20 to the Funds' Registration Statement (filed October 29,
1999).
C-3
<PAGE> 199
(h)(7) Sub-Administration Agreement between BISYS Fund Services,
Limited Partnership and Bank of Oklahoma, N.A. dated July 25,
1997 is incorporated by reference to Exhibit 9(f) to
Post-Effective Amendment No. 16 to the Funds' Registration
Statement (filed December 17, 1997).
(h)(8) Sub-Administration Agreement between BISYS Fund Services,
Ohio, Inc. and Bank of Oklahoma, N.A. dated September 15, 1999
is incorporated by reference to Exhibit (h)(8) to
Post-Effective Amendment No. 20 to the Funds' Registration
Statement (filed October 29, 1999).
(i) Opinion of Ropes & Gray is filed herewith.
(j)(1) Consent of KPMG LLP is filed herewith.
(j)(2) Consent of Ropes & Gray is filed herewith.
(k) Omitted Financial Statements: None.
(l) 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).
(m)(1) Amended and Restated Distribution and 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).
(m)(2) 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).
(m)(3) 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).
C-4
<PAGE> 200
(m)(4) Amended Schedule A to Amended and Restated Distribution and
Shareholder Services Plan dated October 1, 1993 is
incorporated by reference to Exhibit (m)(4) to Post-Effective
Amendment No. 20 to the Funds' Registration Statement (filed
October 29, 1999).
(o) None.
Item 24. Persons Controlled by or under Common Control with Registrant
-------------------------------------------------------------
There are no persons controlled or under common control with the
Registrant.
Item 25. Indemnification
---------------
Article VIII of Registrant's Agreement and Declaration of Trust, filed
or incorporated by reference as Exhibit (1) hereto, provides for the
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
C-5
<PAGE> 201
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
----------------------------------------------------
Bank of Oklahoma, N.A. ("BOK") serves as Registrant's investment
adviser.
To the knowledge of Registrant, none of the directors or officers of
BOK except 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 BOK who are engaged
in any other business, profession, vocation or employment of a
substantial nature.
<TABLE>
BANK OF OKLAHOMA, N.A.
----------------------
<CAPTION>
Name and Position With Other
Bank of Oklahoma Substantial Type of
N.A. Occupation Business
---------------------- ----------- --------
<S> <C> <C>
W. Wayne Allen Chairman and Chief Executive Officer, Oil
Director Phillips Petroleum Company, 18 Phillips
Building, Bartlesville, OK 74004
Keith E. Bailey Chairman, President and Chief Executive Oil, Gas and
Director Officer, The Williams Companies, Inc., Telecommunications
P.O. Box 2400, Tulsa, OK 74102
</TABLE>
C-6
<PAGE> 202
<TABLE>
<S> <C> <C>
Glenn A. Cox (Retired President and Chief Operating Oil
Director Officer, Phillips Petroleum Company),
401 SE Dewey, Suite 318, Bartlesville,
OK 74003
Dr. Robert H. Donaldson (Former President, University of Tulsa), Education
Director 6449 S. Richmond, Tulsa, OK 74136
James O. Goodwin Chief Executive Officer, The Oklahoma Publishing
Director Eagle Publ. Co., 624 East Archer, Tulsa,
OK 74120
D. Joseph Graham Vice President and Chief Financial Oil
Director Officer, Kaiser-Francis Oil Company,
P.O. Box 21468, Tulsa, OK 74121-1468
V. Burns Hargis None
Director and Vice
Chairman
Eugene A. Harris None
Director and Executive
Vice President
E. Carey Joullian IV President, Mustang Fuel Corporation, Energy
Director 2000 Classen Blvd., 800E, Oklahoma
City, OK 73106-6036
George B. Kaiser President and Owner, Kaiser-Francis Oil Oil
Director and Co., P.O. Box 21468, Tulsa, OK
Chairman of the Board 74121-1468
David R. Lopez President, Oklahoma Southwestern Bell Telecommunications
Director Telephone, 800 North Harvey,
Oklahoma City, OK 73102
Stanley A. Lybarger None
Director, President and
Chief Executive Officer
</TABLE>
C-7
<PAGE> 203
<TABLE>
<S> <C> <C>
Frank A. McPherson (Retired Chairman and Chief Executive Oil
Director Officer Kerr-McGee Corporation), The
Oil Center, 2601 Northwest
Expressway, Suite 805E, Oklahoma
City, OK 73112
J. Larry Nichols Chief Executive Officer and President, Energy
Director Devon Energy Corporation, 20 North
Broadway, Suite 1500, Oklahoma City,
OK 73102-8260
James W. Pielsticker President, Arrow Trucking Company, Trucking
Director 4230 South Elwood, P.O. Box 3750,
Tulsa, OK 74101
E.C. "Kip" Richards Senior Vice President of Operations, Oil
Director Sooner Pipe and Supply Corporation,
MidContinent Tower, 10th Floor, 401 S.
Boston, Tulsa, OK 74103
L. Francis Rooney, III Chairman and Chief Executive Officer, Construction
Director Manhattan Construction Company, 111
W. 5th Street, Suite 1000, Tulsa, OK
74103-4253
James A. White None
Director, Executive
Vice President and
Chief Financial Officer
</TABLE>
The address of Bank of Oklahoma, N.A. is P.O. Box 2300, Tulsa, Oklahoma 74192.
The address of the BOK Financial Corporation is One Williams Center, Bank of
Oklahoma Tower, Tulsa, Oklahoma 74192.
C-8
<PAGE> 204
Item 27. Principal Underwriter
---------------------
(a) BISYS Fund Services, Limited Partnership acts as distributor
and administrator for Registrant. BISYS Fund Services also
distributes the securities of the following investment
companies: Alpine Equity Trust, AmSouth Mutual Funds, The BB&T
Funds, The Coventry Group, ESC Strategic Funds, Inc., The
Eureka Funds, Fifth Third Funds, Governor Funds, Hirtle
Callaghan Trust, HSBC Funds Trust, HSBC Mutual Funds Trust,
The Infinity Mutual Funds, Inc., INTRUST Funds Trust, Magna
Funds, Mercantile Mutual Funds, Inc., Metamarkets.comm, Meyers
Investment Trust, MMA Praxis Mutual Funds, M.S.D.&T. Funds,
Pacific Capital Funds, The Republic Funds Trust, The Republic
Advisor Funds Trust, Sefton Funds, SSgA International
Liquidity Fund, Summit Investment Trust, USAllianz Funds,
USAllianz Funds Variable Trust, Valenzuela Capital Trust,
Variable Insurance Funds, The Victory Portfolios, The Victory
Variable Insurance Funds, and Vintage Mutual Funds, Inc.
(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
3435 Stelzer Road
Columbus, Ohio 43219
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 28. Location of Accounts and Records
--------------------------------
(1) Bank of Oklahoma, N.A. , 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 former Sub-Investment Adviser).
C-9
<PAGE> 205
(3) BISYS Fund Services, LP, 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).
(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 29. Management Services
-------------------
N/A.
Item 30. 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-10
<PAGE> 206
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement
under Rule 485(b) under the Securities Act of 1933 and has duly caused this
Amendment No. 21 to the Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Washington, District of Columbia on
the 30th day of December 1999.
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. 21 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 30, 1999
- --------------------------------
Walter B. Grimm
*/s/Jeffrey Shiverdecker Treasurer December 30, 1999
- --------------------------------
Jeffrey Shiverdecker
*/s/Michael J. Hall Trustee December 30, 1999
- --------------------------------
Michael J. Hall
*/s/Perry A. Wimpey Trustee December 30, 1999
- --------------------------------
Perry A. Wimpey
*/s/I. Edgar Hendrix Trustee December 30, 1999
- --------------------------------
I. Edgar Hendrix
</TABLE>
* By: /s/Alan G. Priest
- -------------------------------------
Alan G. Priest, As
Attorney-in-Fact Pursuant
to Powers of Attorney Filed Herewith.
C-11
<PAGE> 207
POWER OF ATTORNEY
-----------------
Michael J. Hall, 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 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, 1997 /s/ Michael J. Hall
-------------------
Michael J. Hall
<PAGE> 208
POWER OF ATTORNEY
-----------------
Perry A. Wimpey, 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 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, 1997 /s/ Perry A. Wimpey
-------------------
Perry A. Wimpey
<PAGE> 209
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 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, 1997 /s/ I. Edgar Hendrix
--------------------
I. Edgar Hendrix
<PAGE> 210
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 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, 1997 /s/ Walter B. Grimm
-------------------
Walter B. Grimm
<PAGE> 211
POWER OF ATTORNEY
-----------------
Jeffrey Shiverdecker, whose signature appears below, does hereby
constitute and appoint Martin E. Lybecker, Alan G. Priest, and Alyssa
Albertelli, 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 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: October 29, 1999 /s/ Jeffrey Shiverdecker
------------------------
Jeffrey Shiverdecker
<PAGE> 212
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE NO.
--- ----------- --------
<S> <C> <C>
(i) Opinion of Ropes & Gray.
(j)(1) Consent Of KPMG LLP.
(j)(2) Consent of Ropes & Gray.
</TABLE>
<PAGE> 1
EXHIBIT (i)
Opinion of Ropes & Gray
<PAGE> 2
Ropes & Gray
One Franklin Square
1301 K Street, NW
Suite 800 East
Washington, DC 20005
December 30, 1999
American Performance Funds
3435 Stelzer Road
Columbus, Ohio 43219
Gentlemen:
You have registered under the Securities Act of 1933, as amended (the
"1933 Act") an indefinite number of shares of beneficial interest ("Shares")
of the American Performance Funds ("Trust"), as permitted by Rule 24f-2 under
the Investment Company Act of 1940, as amended (the "1940 Act"). You propose
to file a post-effective amendment on Form N-1A (the "Post-Effective
Amendment") to your Registration Statement as required by Section 10(a)(3) of
the 1933 Act and the Rules thereunder and Section 8(b) of the 1940 Act and the
rules thereunder. The purpose of this filing is to provide unaudited financial
statements for the American Performance Growth Equity Fund and to modify an
investment policy with respect to the American Performance Intermediate Bond
Fund.
We have examined your Agreement and Declaration of Trust on file in the
office of the Secretary of The Commonwealth of Massachusetts and the Clerk of
the City of Boston. We have also examined a copy of your Bylaws and such other
documents, receipts and records as we have deemed necessary for the purpose of
this opinion.
Based upon the foregoing, we are of the opinion that the issue and sale
of the authorized but unissued Shares of each Fund of the Trust described in
said Registration Statement (each a "Series") have been duly authorized under
Massachusetts law. Upon the original issue and sale of your authorized but
unissued Shares and upon receipt of the authorized consideration therefor in
an amount not less than the net asset value of the Shares established and in
force at the time of their sale, the Shares issued will be validly issued,
fully paid and non-assessable.
<PAGE> 3
American Performance Funds
December 30, 1999
Page 2
The American Performance Funds is an entity of the type commonly known
as a "Massachusetts business trust." Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Agreement and Declaration of Trust
provides for indemnification out of the property of a particular series of
Shares for all loss and expenses of any shareholder of that series held
personally liable solely by reason of his being or having been a shareholder.
Thus, the risk of shareholder liability is limited to circumstances in which
that series of Shares itself would be unable to meet its obligations.
We understand that this opinion is to be used in connection with the
filing of the Post-Effective Amendment. We consent to the filing of this
opinion with and as part of your Post-Effective Amendment.
Sincerely,
/s/Ropes & Gray
<PAGE> 1
Exhibit (j)(i)
The Board of Trustees
American Performance Funds:
We consent to the use of our report dated October 15, 1999 on the financial
statements of American Performance Funds as incorporated herein by reference and
to the reference to our firm under the heading "Financial Highlights" in the
prospectuses and "Auditors" in the statement of additional information.
/s/ KPMG LLP
Columbus, Ohio
December 29, 1999
<PAGE> 1
EXHIBIT (j)(2)
Consent of Ropes & Gray
<PAGE> 2
CONSENT OF COUNSEL
We hereby consent to the use of our name and the references to our firm
under the caption "Legal Counsel" included in or made a part of Post-Effective
Amendment No. 20 to the Registration Statement of the American Performance Funds
on Form N-1A under the Securities Act of 1933, as amended.
/s/ROPES & GRAY
Washington, D.C.
December 30, 1999
