1933 Act Registration No. 33-36324
1940 Act Registration No. 811-6153
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT /__ /
OF 1933
Pre-Effective Amendment No. ____ /__ /
Post-Effective Amendment No. 18 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY /__ /
ACT OF 1940
Amendment No. 20 / X /
Ranson Managed Portfolios
(Exact Name of Registrant as Specified in Charter)
120 South Market Street, Suite 450, Wichita, Kansas 67202
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 316/262-4955
John A. Ranson
Ranson Managed Portfolios
120 South Market Street, Suite 450
Wichita, Kansas 67202
(Name and Address of Agent for Service)
Copies to:
Eric Fess
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
312/845-3781
It is proposed that this filing will be effective (check appropriate box):
/ X / immediately upon filing pursuant to paragraph (b)
/__ / on (date) pursuant to paragraph (b)
/__ / 60 days after filing pursuant to paragraph (a)
/__ / on (date) pursuant to paragraph (a), of Rule 485
Declaration Pursuant to Rule 24f-2
Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, Registrant has elected to register an indefinite number of shares and
will file a Rule 24f-2 notice with the Commission within 6 months after July
31, 1995, the close of its current fiscal year.
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(A) UNDER THE SECURITIES ACT OF 1933
Form N-1A, Part A, Item Number Heading in Prospectus
- ------------------------------ ---------------------
1 Cover Page Cover
2 Synopsis Highlights of the Fund and
Prospectus Summary; Fee and
Expense Table
3 Condensed Financial Information Condensed Financial Information;
Calculation of Fund Performance
Data
4 General Description of Registrant The Fund; Investment Objective
and Policies
5 Management of the Fund The Fund; Dividends and Taxes;
Fund Management
6 Capital Stock and Other Securities Description of Shares and Rights
7 Purchase of Securities Being Offered Special Programs; Purchase
of Shares
8 Redemption or Repurchase Redemption of Shares
9 Pending Legal Proceedings *
Heading in Statement of
Form N-1A, Part B, Item Number Additional Information
- ------------------------------ -------------------------
10 Cover Page Cover
11 Table of Contents Table of Contents
12 General Information and History The Fund and its Shares
13 Investment Objectives and Policies Investment Objective,
Policies and Restrictions
14 Management of the Fund Officers and Trustees
15 Control Persons and The Fund and its Shares
Principal Holders of Securities
16 Investment Advisory and Management and Investment
Other Services Advisory Agreement
17 Brokerage Allocation and Portfolio Transactions
Other Practices
18 Capital Stock and Other Securities Additional Information
Regarding Shares and Rights
- -i-
Heading in Statement of
Form N-1A, Part B, Item Number Additional Information
- ------------------------------ -------------------------
19 Purchase, Redemption and Pricing Net Asset Value, in Prospectus;
of Shares Being Offered Purchase of Shares, in Prospectus;
Redemption of Shares,in Prospectus
20 Tax Status Dividends and Taxes, in Prospectus
21 Underwriters Purchase of Shares, in Prospectus;
The Distributor, in Prospectus
22 Calculations of Performance Data Performance Data
23 Financial Statements Financial Statements
Form N-1A, Part C, Item Number Heading in Other Information
- ------------------------------ ----------------------------
24 Financial Statements and Exhibits Financial Statements and
Exhibits
25 Persons Controlled by or Under Persons Controlled by or Under
Common Control with Registrant Common Control with Registrant
26 Number of Holders of Securities Number of Holders of Securities
27 Indemnification Indemnification
28 Business and Other Connections of Business and Other Connections of
Investment Adviser Investment Advisor
29 Principal Underwriters Principal Underwriters
30 Location of Accounts and Records Location of Accounts and Records
31 Management Services Management Services
32 Undertakings Undertakings
_____________________
*Not applicable.
- -ii-
PROSPECTUS
NOVEMBER 30, 1995
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
120 SOUTH MARKET, SUITE 450
WICHITA, KANSAS 67202
(316) 262-4955
(800) 345-2363
The Kansas Municipal Fund is an investment portfolio of Ranson Managed
Portfolios which is an unincorporated business trust organized under the laws
of Massachusetts on August 10, 1990. Ranson Managed Portfolios is an open-end
series non-diversified management company, known as a mutual fund. The term
"the Fund" as used herein shall refer to either Ranson Managed Portfolios or
The Kansas Municipal Fund series of Ranson Managed Portfolios as the context
may require. The investment objective of the Fund is to provide its
shareholders with as high a level of current income exempt from both federal
income tax and Kansas income tax as is consistent with preservation of
capital. In pursuit of this objective, the Fund invests primarily in debt
obligations issued by or on behalf of the State of Kansas, its political
subdivisions and their agencies and instrumentalities. A substantial portion
of the income produced by the Fund may be includable in the calculation of
alternative minimum taxable income. Shares of the Fund therefore would not
ordinarily be a suitable investment for investors who are subject to the
alternative minimum tax.
A maximum sales load of 4.25% will be imposed on purchases (4.44% of the net
amount invested). The minimum initial investment is $1,000. See "Purchase of
Shares."
Ranson Capital Corporation (the "Manager") is the Fund's manager. Investors
Fiduciary Trust Company is the Fund's transfer agent and custodian.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE. THE
PROSPECTUS CONCISELY SETS FORTH INFORMATION INVESTORS SHOULD
KNOW BEFORE INVESTING IN THE FUND.
A Statement of Additional Information, dated the date of this Prospectus,
regarding the Fund (which is incorporated herein by reference) has been filed
with the Securities and Exchange Commission and is available upon request and
without charge by writing the Fund at the above mailing address or by
telephoning the Manager at either of the numbers set forth above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
FEE AND EXPENSE TABLE
The following tables set forth (i) the non-recurring shareholder transaction
expenses, (ii) the recurring annual Fund operating expenses and (iii) the
estimated expenses paid directly and indirectly by a shareholder with a
hypothetical $1,000 investment that is subject to the maximum sales load over
1, 3, 5 and 10 year periods.
THE FOLLOWING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.25%
-----
There is no sales charge on reinvested dividends, deferred sales charge,
redemption fee or exchange fee. The Maximum Sales Load may be reduced or not
deducted as described in "Purchase of Shares" and "Special Programs."
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets) THE KANSAS MUNICIPAL FUND
EXPENSE AFTER
FEE WAIVER
-------------------------
<S> <C>
Management Fees 0.30%
Rule 12b-1 Fees 0.25%
Other Expenses 0.30%
-----
Total Fund Operating Expenses 0.85%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Shareholder would pay the following expenses
after fee waiver on a $1,000 investment,
assuming a 5% annual return:
The Kansas Municipal Fund $51 $69 $89 $145
</TABLE>
The purpose of these tables is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. The calculation presumes expenses for the current year at the
projected rate of .85% for the Fund after a partial fee waiver by the
Manager. Management Fees, Rule 12b-1 Fees, Other Expenses and Total Fund
Operating Expenses for the Fund are estimated to be .50%, 0.25%, .30% and
1.05% before fee waivers. These expense estimates assume a voluntary waiver
by the Manager of a portion of its fee not required by the Management and
Investment Advisory Agreement. These costs and expenses should not be
considered a representation of past or future expenses, and the actual
expenses incurred by the Fund, and the degree of expense reimbursement and
fee waiver, if any, may be greater or less in the future. See "Purchase of
Shares" for information relating to sales load discounts, "Fund Management"
for the level of management fees and "The Distributor" for information
relating to the Fund's Shareholder Services Plan. Long-term shareholders may
pay more than the economic equivalent of the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc.
2
HIGHLIGHTS OF THE FUND AND PROSPECTUS SUMMARY
The highlights and summary information below should be read in conjunction
with the detailed information appearing elsewhere in this Prospectus.
THE INVESTMENT OBJECTIVE of the Fund is to provide its shareholders with as
high a level of current income that is exempt from both federal income tax
and Kansas income tax as is consistent with preservation of capital. There is
no assurance that the Fund's investment objective will be achieved. See
"Investment Objective And Policies - Investment Objective."
THE INVESTMENT POLICY of the Fund is to invest in a portfolio of investment
grade municipal securities which generate interest income that is exempt from
both federal income tax and Kansas income tax. These municipal securities
(hereinafter referred to as "Kansas Municipal Securities") generally include
debt obligations of the State of Kansas, its political subdivisions,
municipalities, agencies and authorities, and certain industrial development
and other revenue bonds, short-term municipal notes, participation interests
in municipal leases and tax-exempt commercial paper issued by such entities.
See "Investment Objective And Policies - Kansas Municipal Securities" for a
more complete description of Kansas Municipal Securities. In certain
circumstances the Fund may enter into when-issued or delayed delivery
transactions and purchase taxable securities. The Fund may, for hedging
purposes, enter into financial futures contracts, options on such futures,
municipal bond index futures contracts and options on securities. These
investments entail certain risks. See "Investment Objective And Policies -
Future Contracts and Options." The interest on certain Kansas Municipal
Securities in the Fund's portfolio may constitute an item of preference for
determining the federal alternative minimum tax for individuals and
corporations. See "Dividends and Taxes."
THE FUND'S SHARES MAY BE PURCHASED through Ranson Capital Corporation and
selected dealers at the public offering price, which is equal to the net
asset value next determined, plus a sales charge of 4.25% of the public
offering price (4.44% of the net amount invested). See "Purchase of Shares."
THE MINIMUM INITIAL INVESTMENT is $1,000 and the minimum additional
investment is $100. See "Purchase of Shares." The initial and minimum
investments will be less under certain conditions described under "Purchase
of Shares" and "Special Programs."
AN OPEN ACCOUNT PROGRAM will be established for each investor unless the
investor elects not to participate in such program as is provided under
"Purchase of Shares - Open Account Program/Certificates."
SPECIAL PROGRAMS of the Fund include: a reinvestment program for those who
have invested in any Series of the Kansas Tax-Exempt Trust; a group program;
a systematic withdrawal program; a preauthorized investment program; a rights
of accumulation program; and, a reinstatement privilege. See "Special
Programs."
THE FUND has a Shareholder Services Plan adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, pursuant to which .25% per annum of
average daily net assets will be used to pay dealers and banks selling Fund
shares for administrative and shareholder services or to pay for certain
distribution expenses. See "The Distributor."
3
DISTRIBUTIONS for the Fund will be declared daily from net investment income
and will be paid monthly; net capital gains, if any, will be distributed at
least annually. See "Dividends and Taxes."
MONTHLY STATEMENTS will be sent to all investors who have had purchase or
redemption activity in their account within the preceding three months.
REDEMPTIONS can be made at net asset value, without charge. The Fund may
require redemption of shares if the value of an account is reduced to $1,000
or less (for any reason other than fluctuations in the market value of the
Fund's portfolio securities). See "Redemption of Shares."
THE FUND'S MANAGER AND INVESTMENT ADVISER is Ranson Capital Corporation which
receives a monthly management and investment advisory fee equivalent on an
annual basis to .50 of 1% of the Fund's average daily net assets. Under the
terms of the Management and Investment Advisory Agreement between the Fund
and the Manager, the Manager pays all expenses of the Fund, including the
Fund's management and investment advisory fee and the Fund's dividend
disbursing, administrative and accounting services fees (but excluding taxes
and brokerage fees and commissions, if any) that exceed 1.25% of the Fund's
average daily net assets on an annual basis up to the amount of the
management and investment advisory fee payable by the Fund to the Manager.
The Manager may assume additional Fund expenses or waive portions of its fees
in its discretion. See "Fund Management." Ranson Capital Corporation will act
as the Fund's Evaluator. The procedures of the Evaluator and its valuations
are reviewed by the officers of the Fund under the general supervision of the
Board of Trustees. See "Net Asset Value."
RISK FACTORS: The Fund is subject to the risks of primarily concentrating its
investments in Kansas Municipal Securities and does not have the benefit of
geographical investment diversification (see "Investment Objective And
Policies"). Also, as a non-diversified investment company, the Fund has the
ability to concentrate investments in particular issuers which may be
advantageous when investing in Kansas Municipal Securities, but which
involves an increased risk of loss to the Fund should an issuer be unable to
make interest or principal payments or should the market value of such
securities decline. The Fund has the ability to purchase new issues of Kansas
Municipal Securities on a "when-issued" basis as well as outstanding issues
on a delayed delivery basis, both of which involve the potential risk of loss
of principal in the event either that the value of such securities to be
purchased declines prior to the settlement date or if such securities should
ultimately not be issued or delivered and the price of comparable securities
has increased, the cost of substitute securities having comparable par
amounts, ratings and yields will be greater than was originally contracted
for. A substantial portion of the Kansas Municipal Securities in the Fund's
portfolio may derive their payment from mortgage loans or from hospitals and
other health care facilities, both of which entail certain risks (see
"Investment Objective and Policies - Kansas Municipal Securities"). The Fund
intends from time to time to invest in participations in municipal leases.
Municipal leases are less liquid than many other municipal securities and
therefore will be subject to the risks of illiquidity referred to in the next
paragraph. Also, municipal leases are subject to the risk of "non-
appropriation" which allows the municipal lessee to terminate the lease and
eliminate its obligation to continue to make lease payments (see "Investment
Objective and Policies - Kansas Municipal Securities").
The Fund will invest a substantial portion of its assets in investment grade
Kansas Municipal Securities. Lower quality securities involve a greater risk
of default, including nonpayment of principal and interest, than
investment grade securities; however, the risk of default is present in
4
investment grade securities. Kansas Municipal Securities rated in the lowest
category of investment grade debt may have speculative characteristics.
Investment in medium-quality debt securities (rated BBB or A by Standard &
Poor's Corporation or Baa or A by Moody's Investors Service, Inc.) involves
greater investment risk, including the possibility of issuer default or
bankruptcy, than investment in higher-quality debt securities. An economic
downturn could severely disrupt this market and adversely affect the value of
outstanding bonds and the ability of the issuers to repay principal and
interest. During a period of adverse economic changes, including a period of
rising interest rates, issuers of such bonds are more likely to experience
difficulty in servicing their principal and interest payment obligations than
is the case with higher grade bonds. In addition, an investment in the Fund
should be made with an understanding that the value of the underlying
portfolio may decline with increases in interest rates. In recent years there
have been wide fluctuations in interest rates and thus in the value of fixed-
rate, long-term debt obligations generally. The Manager cannot predict
whether these fluctuations will continue in the future. The principal trading
market for the Kansas Municipal Securities will generally be in the over-the-
counter market. As a result, the existence of a liquid trading market for the
Kansas Municipal Securities may depend on whether dealers will make a market
in such securities. There can be no assurance that a market will be made for
any of the Kansas Municipal Securities, that any market for the Kansas
Municipal Securities will be maintained or of the liquidity of the Kansas
Municipal Securities in any markets made. In addition, certain of the Kansas
Municipal Securities may be subject to extraordinary optional and/or
mandatory redemptions at par if certain events should occur. To the extent
securities were purchased at a price in excess of the par value thereof and
are subsequently redeemed at par as a result of an extraordinary redemption,
the Fund would suffer a loss of principal.
The Fund may invest in financial futures contracts and related options
thereon for hedging purposes. A risk in employing futures contracts to
protect against the price volatility of portfolio securities is that the
prices of securities subject to futures contracts may not correlate perfectly
with the behavior of the cash prices of the Fund's portfolio securities. The
risk of imperfect correlation may be increased by the fact that the Fund may
trade in futures contracts on taxable securities and there is no guarantee
that the prices of taxable securities will move in a manner similar to the
prices of tax-exempt securities. Another risk is that the Manager could be
incorrect in its expectations as to the direction or extent of various
interest rate movements or the time span within which the movements take
place. For example, if the Fund sold futures contracts in anticipation of an
increase in interest rates, and then interest rates went down, causing bond
prices to rise, the Fund would lose money and incur transaction costs on the
sale.
INVESTORS MAY CALL (316) 262-4955 or (800) 345-2363 for daily yield and daily
net asset value quotations. For information on account balances call (800)
822-8460.
5
<TABLE>
<CAPTION>
CONDENSED FINANCIAL INFORMATION
PER SHARE DATA AND RATIOS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Period From
Year Ended Year Ended Year Ended Year Ended November 15,
July 31, July 31, July 31, July 31, 1990 to
1995 1994 1993 1992 July 31, 1991*
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $12.00 $12.67 $12.22 $11.54 $11.49
Income from investment operations:
Net investment income .65 .66 .69 .72 .54
Net realized and unrealized
loss on investments .07 (.53) .50 .69 .05
Total from investment operations .72 .13 1.19 1.41 .59
Less dividends and distributions:
Dividends from net investment income (.65) (.66) (.69) (.72) (.54)
Distributions from net realized gains
on investments (.14) (.05) (.01)
Total dividends and distributions (.65) (.80) (.74) (.73) (.54)
Net asset value at end of period $12.07 $12.00 $12.67 $12.22 $11.54
TOTAL RETURN** 6.23% .91% 10.08% 13.31% 7.38%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $130,091 $127,337 $100,207 $52,010 $20,850
Ratio of expenses to average net assets .82% (a) .70% (a) .75% (a) .70% (a) .30% (a)
Ratio of net investment income to average
net assets 5.46% (b) 5.26% (b) 5.53% (b) 6.00% (b) 6.28% (b)
Portfolio turnover rate 57% 55% 62% 51% 161%
</TABLE>
[FN]
* Commenced operations on November 15, 1990. Ratios and total return are
annualized.
** Total return does not consider the effect of the sales load.
_______________
(a) Ratio of expenses to average net assets prior to fee waiver and
expense reimbursement by the Adviser was 1.06%, 1.06%, 1.13%, 1.25% and
1.62%, respectively.
(b) Ratio of net investment income to average net assets prior to
fee waiver and expense reimbursement by the Adviser was 5.23%, 4.90%,
5.15%, 5.45% and 4.96%, respectively.
Further information about the performance of the Fund is contained in the
Fund's annual report to shareholders and in the Statement of Additional
Information which may be obtained without charge by writing the Fund at the
mailing address or by telephoning the Fund at the telephone number set forth
on the cover page of this prospectus.
6
THE FUND
Ranson Managed Portfolios is an unincorporated business trust organized under
the laws of Massachusetts on August 10, 1990. It is an open-end non-
diversified series management investment company or "mutual fund." The Kansas
Municipal Fund is one of three portfolios or "series" offered at this time.
Like other mutual funds, the Fund sells its shares to investors and uses the
proceeds to invest in various securities as described in this Prospectus. The
Fund is subject to the overall direction and monitoring function of the Board
of Trustees (the "Trustees").
Information regarding the Fund is available by telephoning or writing the
Fund at the phone number or address shown on the front cover of this
Prospectus.
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide its shareholders with as
high a level of current income exempt from both federal income tax and Kansas
income tax as is consistent with preservation of capital. The Fund seeks to
achieve its investment objective by investing primarily in Kansas Municipal
Securities (as further described below). Kansas law provides that to the
extent dividends paid by the Fund are derived from Kansas Municipal
Securities, they shall be exempt from Kansas income tax.
A Shareholder will receive taxable income in the event of capital gains
distributions by the Fund. In addition, the Fund has not established any
limit on the percentage of its portfolio that may be invested in Kansas
Municipal Securities subject to the alternative minimum tax provisions of
federal tax law, and a substantial portion of the income produced by the Fund
may be includable in the calculation of alternative minimum taxable income.
Shares of the Fund therefore would not ordinarily be a suitable investment
for investors who are subject to the alternative minimum tax. The suitability
of shares of the Fund for these investors will depend upon a comparison of
the yield likely to be provided from the Fund with the yield from comparable
tax-exempt investments not subject to the alternative minimum tax, and with
the yield from comparable fully taxable investments, in light of each such
investor's tax position.
KANSAS MUNICIPAL SECURITIES
As used in this Prospectus, the term "Kansas Municipal Securities" refers to
debt obligations the interest payable on which is, in the opinion of bond
counsel to the issuer, exempt from both federal income taxation and Kansas
income taxation. Kansas Municipal Securities include primarily debt
obligations of Kansas, its political subdivisions, municipalities, agencies
and authorities issued to obtain funds for various public purposes, including
the construction or improvement of a wide range of public facilities such as
airports, bridges, highways, hospitals, housing, jails, mass transportation,
nursing homes, parks, public buildings, recreational facilities, school
facilities, streets and water and sewer works. Other public purposes for
which Kansas Municipal Securities may be issued include the refunding of
outstanding obligations, the anticipation of taxes or state aids, the payment
of judgments, the funding of student loans, community redevelopment, the
purchase of street maintenance and firefighting equipment, or any authorized
corporate purpose of the issuer except for the payment of current expenses.
In addition, certain types of industrial development and other revenue bonds
7
may be issued by or on behalf of public corporations to finance privately
operated housing facilities, air or water pollution control facilities and
certain local facilities for water supply, gas, electricity or sewage or
solid waste disposal. Other types of industrial development bonds, the
proceeds of which are used for the construction, equipping, repair or
improvement of privately operated industrial, commercial or office
facilities, constitute Kansas Municipal Securities, although current federal
income tax laws place substantial limitations on the size of such issues.
Since the Fund will invest substantially all of its assets in Kansas
Municipal Securities, the Fund is susceptible to political and economic
factors affecting issuers of Kansas Municipals Securities. As of 1992,
2,515,320 people lived in Kansas. Based on these numbers, Kansas ranked
thirty-second in the nation in population size. Based on statistics provided
by the Kansas Department of Commerce, Kansas ranked twenty-first in the
nation in terms of per capita income. Historically, agriculture and mining
constituted the principal industries in Kansas. Since the 1950's, however,
manufacturing, governmental services and the services industry have steadily
grown and as of 1994 approximately 24% of Kansas workers were in the trade
(wholesale and retail) sector, 24% in the services sector, 20% in the
government sector, 16% in the manufacturing sector, while financial and real
estate, farming, mining, transportation and public utilities, and
construction accounted for the remaining 16% of the work force. The 1993
unemployment rate was 5%. By constitutional mandate, Kansas must operate
within a balanced budget and public debt may only be incurred for
extraordinary purposes and then only to a maximum of $1 million. As of
November 28, 1995, Kansas had no general obligation bonds outstanding.
Over 25% of the Kansas Municipal Securities in the Fund's portfolio may be
health care revenue bonds. Ratings of bonds issued for health care
facilities are sometimes based on feasibility studies that contain
projections of occupancy levels, revenues and expenses. A facility's gross
receipts and net income available for debt service may be affected by future
events and conditions including among other things, demand for services, the
ability of the facility to provide the services required, physicians'
confidence in the facility, management capabilities, competition with other
hospitals, efforts by insurers and governmental agencies to limit rates,
legislation establishing state rate-setting agencies, expenses, government
regulation, the cost and possible unavailability of malpractice insurance and
the termination of restriction of governmental financial assistance,
including that associated with Medicare, Medicaid and other similar third
party payor programs. Pursuant to recent Federal legislation, Medicare
reimbursements are currently calculated on a prospective basis utilizing a
single nationwide schedule of rates. Prior to such legislation Medicare
reimbursements were based on the actual costs incurred by the health
facility. The current legislation may adversely affect reimbursements to
hospitals and other facilities for services provided under the Medicare
program.
Over 25% of the Kansas Municipal Securities in the Fund's portfolio may
derive their payment from mortgage loans. Certain of the Kansas Municipal
Securities in the Fund's portfolio may be single family mortgage revenue
bonds, which are issued for the purpose of acquiring from originating
financial institutions notes secured by mortgages on residences located
within the issuer's boundaries and owned by persons of low or moderate
income. Mortgage loans are generally partially or completely prepaid prior
to their final maturities as a result of events such as sale of the mortgaged
premises, default, condemnation or casualty loss. Because these bonds are
subject to extraordinary mandatory redemption in whole or in part from such
prepayments of mortgage loans, a substantial portion of such bonds will
probably be redeemed prior to their scheduled maturities or even prior to
their ordinary call dates. The redemption price of such issues may be more
or less than the offering price of such bonds. Extraordinary mandatory
redemption without premium could also result from the failure of the
8
originating financial institutions to make mortgage loans in sufficient
amounts within a specified time period or, in some cases, from the sale by
the Bond issuer of the mortgage loans. Failure of the originating financial
institutions to make mortgage loans would be due principally to the interest
rates on mortgage loans funded from other sources becoming competitive with
the interest rates on the mortgage loans funded with the proceeds of the
single family mortgage revenues available for the payment of the principal of
or interest on such mortgage revenue bonds. Single family mortgage revenue
bonds issued after December 31, 1980 were issued under Section 103A of the
Internal Revenue Code, which Section contains certain ongoing requirements
relating to the use of the proceeds of such bonds in order for the interest
on such bonds to retain its tax-exempt status. In each case, the issuer of
the bonds has covenanted to comply with applicable ongoing requirements and
bond counsel to such issuer has issued an opinion that the interest on the
bonds is exempt from Federal income tax under existing laws and regulations.
There can be no assurances that the ongoing requirements will be met. The
failure to meet these requirements could cause the interest on the bonds to
become taxable, possibly retroactively from the date of issuance.
Certain of the Kansas Municipal Securities in the Fund's portfolio may be
obligations of issuers whose revenues are primarily derived from mortgage
loans to housing projects for low to moderate income families. The ability
of such issuers to make debt service payments will be affected by events and
conditions affecting financed projects, including, among other things, the
achievement and maintenance of sufficient occupancy levels and adequate
rental income, increases in taxes, employment and income conditions
prevailing in local labor markets, utility costs and other operating
expenses, the managerial ability of project managers, changes in laws and
governmental regulations, the appropriation of subsidies and social and
economic trends affecting the localities in which the projects are located.
The occupancy of housing projects may be adversely affected by high rent
levels and income limitations imposed under Federal and state programs. Like
single family mortgage revenue bonds, multi-family mortgage revenue bonds are
subject to redemption and call features, including extraordinary mandatory
redemption features, upon prepayment, sale or non-origination of mortgage
loans as well as upon the occurrence of other events. Certain issuers of
single or multi-family housing bonds have considered various ways to redeem
bonds they have issued prior to the stated first redemption dates for such
bonds. In one situation the New York City Housing Development Corporation,
in reliance on its interpretation of certain language in the indenture under
which one of its bond issues was created, redeemed all of such issue at par
in spite of the fact that such indenture provided that the first optional
redemption was to include a premium over par and could not occur prior to
1992.
The Kansas Municipal Securities in which the Fund invests consist of Kansas
tax-exempt bonds, notes, commercial paper and participation interests in
municipal leases. Kansas tax-exempt notes and commercial paper are generally
used to provide for short-term capital needs and ordinarily have a maturity
of up to one year. These include notes issued in anticipation of tax revenue,
revenue from other government sources or revenue from bond offerings and
short-term, unsecured commercial paper, which is often used to finance
seasonal working capital needs or to provide interim construction financing.
Kansas tax-exempt leases are obligations of state and local government units
incurred to lease or purchase equipment or other property utilized by such
governments. The Fund will not originate leases as a lessor, but will instead
purchase a participation interest in the regular payment stream of the
underlying lease from a bank, equipment lessor or other third party. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax-exempt
industrial development bonds are in most cases revenue bonds and generally
9
do not carry the pledge of the credit of the issuing
municipality. The revenues from which such bonds are paid generally
constitute an obligation of the corporate entity on whose behalf the bonds
are issued.
Although the participations in municipal leases which the Fund may purchase
(hereinafter called "lease obligations") do not constitute general
obligations of the municipality for which the municipality's taxing power is
pledged, a lease obligation lease is ordinarily backed by the municipality's
covenant to budget for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain "non-appropriation"
clauses which provide that the municipality has no obligation to make lease
payments in future years unless money is appropriated for such purpose on a
yearly basis. In addition to the "non-appropriation" risk, these securities
represent a relatively new type of financing that has not yet developed the
depth of marketability associated with more conventional bonds. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of foreclosure might prove
difficult. The Fund will only purchase lease obligations which are rated in
the top rating category by either Standard & Poor's Corporation or Moody's
Investor Service, Inc. The Fund will not invest more than 10% of its net
investment assets in lease obligations (including, but not limited to those
lease obligations which contain "non-appropriation clauses"), or any other
illiquid securities.
The Fund will only purchase lease obligations which are covered by an
existing opinion of legal counsel experienced in municipal lease transactions
that, as of the date of issue or purchase of each participation interest in a
municipal lease, the interest payable on such obligation is exempt from both
federal income tax and Kansas income tax and that the underlying lease was
the valid and binding obligation of the governmental issuer.
INVESTMENT POLICIES
It is a fundamental policy of the Fund, which may not be changed without the
approval of the majority of the Fund's shares, that under normal
circumstances at least 80% of the Fund's assets will be invested in Kansas
Municipal Securities which generate income that is exempt, in the opinion of
bond counsel, from both federal income tax and Kansas income tax. While the
Fund attempts, under normal market conditions, to invest all of its assets in
Kansas Municipal Securities, the Fund may temporarily invest up to 100% of
its assets in taxable fixed-income securities or hold up to 100% of its
assets in cash during periods of abnormal market conditions that dictate
taking a defensive posture by investing in such taxable obligations or cash.
In addition, pending the investment or reinvestment in Kansas Municipal
Securities of proceeds of sales of shares or sales of portfolio securities or
in order to avoid the necessity of liquidating portfolio investments to meet
shareholders' redemption requests, the Fund may invest up to 20% of its
assets in taxable fixed income securities or cash.
The Kansas Municipal Securities in which the Fund invests consist of
securities rated within the following grades assigned by Moody's Investors
Service, Inc. ("Moody's"): Aaa, Aa, A and Baa for bonds: MIG-1 and MIG-2 for
notes: Prime-1 and Prime-2 for commercial paper or Standard & Poor's
Corporation ("S & P"): AAA, AA, A and BBB for bonds: SP-1 and SP-2 for notes:
A-1 or A-2 for commercial paper. The risk of default, including nonpayment of
principal and interest, on securities rated below the three highest grades is
somewhat higher than the risk of default on securities rated within the three
highest grades. The Fund may also invest in Kansas tax-exempt industrial
development bonds, if the securities, at the time of purchase, are rated
investment grade quality by either Moody's or S & P. While ratings at the
time of purchase will determine which Kansas Municipal Securities may be
acquired by the Fund, a subsequent reduction in rating will not require the
10
Fund to dispose of the securities. The Fund will purchase unrated Kansas
Municipal Securities which have been determined to be of investment grade
quality at the time of purchase by the Fund's Manager pursuant to guidelines
established and maintained in good faith by the Board of Trustees of the
Fund. Many issuers of tax-exempt securities which have characteristics of
rated securities choose not to have their obligations rated. Although
securities which are not rated are not necessarily of lower quality, the
market for them may not be as broad as for rated securities, since many
investors rely on rating agencies for credit appraisal. As a fundamental
policy, the Fund may not invest more than 30% of its assets in unrated Kansas
Municipal Securities. Also, the Fund will not invest more than 10% of the
Fund's net assets in lease obligations, or in any other illiquid securities.
Taxable obligations which the Fund may purchase for temporary liquidity
purposes, or for temporary defensive purposes, may include: obligations of
the U.S. Government, its agencies or instrumentalities; other debt securities
of issuers having, at the time of purchase, a rating within the four highest
grades of Moody's or S & P; commercial paper rated P-1 or better by Moody's
or A-1 or better by S & P; certificates of deposit of domestic banks,
including foreign branches of domestic banks, which have capital, surplus and
undivided profits of over $100 million; time deposits; bankers' acceptances,
repurchase agreements and obligations of Kansas with respect to any of the
foregoing investments. Interest earned from taxable obligations will be
taxable to investors, except that interest earned from certain taxable Kansas
obligations will be exempt from Kansas income tax.
The Fund also may purchase floating and variable rate demand notes from
municipal and nongovernmental issuers. These notes normally have a stated
maturity in excess of one year, but permit the holder to demand payment of
principal plus accrued interest upon a specified number of day's notice.
Frequently, such obligations are secured by letters of credit or other credit
support arrangements provided by banks. Use of letters of credit or other
credit support arrangements will generally not adversely affect the tax-
exempt status of
these obligations. The Manager will rely upon the opinion of the issuer's
bond counsel to determine whether such notes are exempt from federal and
Kansas income taxation. The issuer of floating and variable rate demand notes
normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the note plus accrued interest
upon a specified number of day's notice to the noteholders. The interest rate
on a floating rate demand note is based on a known lending rate, such as a
bank's prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand note is adjusted at
specified intervals, based upon a known lending rate. The Manager will
monitor the creditworthiness of the issuers of floating and variable rate
demand notes. The Fund will not invest in derivative financial instruments
other than in connection with its hedging activities.
The yields on Kansas Municipal Securities are dependent on a variety of
factors, including general money market conditions, the financial condition
of the issuer, general conditions of the Kansas tax-exempt obligation market,
the size of a particular offering, the maturity of the obligation and the
rating of the issue or issuer. The ratings of Moody's and S&P represent their
opinions as to the quality of the Kansas Municipal Securities which
they undertake to rate. It should be emphasized, however, that ratings are
general, and not absolute, standards of quality. Consequently, Kansas
Municipal Securities of the same maturity, interest rate and rating may have
different yields, while Kansas Municipal Securities of the same maturity and
interest rate with different ratings may have the same yield. Subsequent to
their purchase by the Fund, particular Kansas Municipal Securities or
other investments may cease to be rated or their ratings may be reduced below
the minimum rating required for purchase by the Fund.
11
Medium-quality Kansas Municipal Securities (rated BBB or A by S&P or Baa or A
by Moody's) are obligations of issuers that are considered to possess
adequate, but not outstanding, capacities to service the obligations. Kansas
Municipal Securities rated in the lowest category of investment grade debt
(rated BBB by S&P or Baa by Moody's) may have speculative characteristics.
Because many issuers of medium-quality Municipal Securities choose not to
have their obligations rated by a rating agency, up to 30% of the Kansas
Municipal Securities in the Fund's portfolio may be unrated. Investment in
medium-quality debt securities involves greater investment risk, including
the possibility of issuer default or bankruptcy, than investment in higher-
quality debt securities. An economic downturn could severely disrupt this
market and adversely affect the value of outstanding bonds and the ability of
the issuers to repay principal and interest. During a period of adverse
economic changes, including a period of rising interest rates, issuers of
such bonds are more likely to experience difficulty in servicing their
principal and interest payment obligations than is the case with higher grade
bonds. Medium quality debt securities tend to be less marketable than higher-
quality debt securities because the market for them is less broad. The market
for unrated debt securities is even narrower. During periods of thin trading
in these markets, the spread between bid and asked prices is likely to
increase significantly, and the Fund may have greater difficulty selling the
medium-quality debt securities in its portfolio.
The Fund is a non-diversified investment company, but intends to comply with
Subchapter M of the Internal Revenue Code. Because of the relatively small
number of issuers of investment grade Kansas Municipal Securities, the Fund
will probably use its ability as a non-diversified fund to concentrate its
assets in the securities of certain issuers which the Fund's Manager deems to
be attractive investments, rather than invest in securities of a large number
of issuers merely to satisfy diversification requirements. Although the
Fund's Manager believes that the ability to concentrate the investments of
the Fund in particular issuers is advantageous when investing in Kansas
Municipal Securities, such concentration involves an increased risk of loss
to the Fund should the issuer be unable to make interest or principal
payments or should the market value
of such securities decline. Investment in a non-diversified investment
company such as the Fund may therefore entail greater risks than investment
in a "diversified" fund.
The Fund may invest up to 10% of its total assets in the securities of other
investment companies. Any investment by the Fund in securities issued by
other investment companies will result in the duplication of certain fees and
expenses.
FUTURES CONTRACTS AND OPTIONS
The Fund may invest in financial futures contracts ("futures contracts") and
related options thereon for hedging purposes. It is not the intent of the
Manager to speculate in futures contracts and related options as an
aggressive investment strategy, but rather as described below. The Fund may
sell a futures contract or a call option thereon or purchase a put option on
such futures contract, if the Manager anticipates that interest rates will
rise, as a hedge against a decrease in the value of the Fund's portfolio
securities. If the Manager anticipates that interest rates will decline, the
Fund may purchase a futures contract or a call option thereon or sell a put
option on such futures contract, to protect against an increase in the price
of the securities the Fund intends to purchase. These futures contracts and
related options thereon will be used only as a hedge against anticipated
interest rate changes. A futures contract sale creates an obligation by the
Fund, as seller, to deliver the specific type of instrument called for in the
contract at a specified future time for a specified price. Purchase of a
futures contract creates an obligation by the Fund, as purchaser, to take
delivery of the specific type of financial instrument at a specified future
time at a specified price. A purchaser or seller of a futures contract is
12
required to make daily payments of cash to reflect the change in the value of
the underlying contract. The specific securities delivered or taken,
respectively, at settlement date would not be determined until or near that
date. The determination would be in accordance with the rules of the exchange
on which the futures contract sale or purchase was effected.
Although the terms of futures contracts specify actual delivery or receipt of
securities, in most instances the contracts are closed out before the
settlement date without the making or taking of delivery of the securities.
Closing out of a futures contract is effected by entering into an offsetting
purchase or sale transaction prior to the expiration of the contract.
Unlike a futures contract, which requires the parties to buy and sell a
security on a set date unless offset, an option on a futures contract
entitles its purchaser to decide on or before a future date whether to enter
into such a contract (a long position in the case of a call option and a
short position in the case of a put option). If the purchaser decides not to
enter into the contract, the premium paid for the option on the contract is
lost if it expires. Since the cost of the option is fixed, there are no daily
payments of cash by the purchaser to reflect the change in the value of the
underlying contract as there are by a purchaser or seller of a futures
contract. The seller of the option, however, may be required to make daily
maintenance margin payments to reflect the change in value of the underlying
contract. The value of the option is reflected in the net asset value of the
Fund.
A risk in employing futures contracts to protect against the price volatility
of portfolio securities is that the prices of securities subject to futures
contracts may not correlate perfectly with the behavior of the cash prices of
the Fund's portfolio securities. The risk of imperfect correlation may be
increased by the fact that the Fund may trade in futures contracts on taxable
securities and there is no guarantee that the prices of taxable securities
will move in a manner similar to the prices of tax-exempt securities. The
correlation may be distorted in part by the fact that the futures market is
influenced by short-term traders seeking to profit from the difference
between a contract or security price objective and their cost of borrowed
funds. Such distortions generally are minor and should diminish as the
contract approaches maturity.
Another risk is that the Manager could be incorrect in its expectations as to
the direction or extent of various interest rate movements or the time span
within which the movements take place. For example, if the Fund sold futures
contracts in anticipation of an increase in interest rates, and then interest
rates went down, causing bond prices to rise, the Fund would lose money,
including transaction costs, on the sale.
The Fund may not enter into futures contracts or purchase related options
thereon if immediately thereafter the amount committed to initial margin plus
the amount paid for premiums for unexpired options on futures contracts
exceed 5% of the value of the Fund's total assets. Similarly, the Fund may
not purchase or sell futures contracts or related options thereon if,
immediately thereafter, more than one-third of its net assets would be
hedged.
FORWARD COMMITMENTS
The Fund may purchase new issues of Kansas Municipal Securities and other
securities on a "when-issued" or delayed delivery basis, with delivery and
payment for the securities normally taking place within 45 days
after the date of the commitment to purchase. The payment obligation and the
interest rate that will be received on such securities are fixed at the time
the buyer enters into the commitment. The Fund may enter into such "forward
13
commitments" if it holds, and maintains until the settlement date in a
segregated account with its custodian, cash or high-grade, short-term
obligations in an amount sufficient to meet the purchase price. There is no
percentage limitation on the Fund's total assets which may be invested in
forward commitments. Forward commitments involve a risk of loss if the value
of the Kansas Municipal Securities or other security to be purchased declines
prior to the settlement date, which risk is in addition to the risk of
decline in the value of the Fund's other assets. Although the Fund will
generally enter into forward commitments with the intention of acquiring
Kansas Municipal Securities or other securities for its portfolio, the Fund
may dispose of a commitment prior to settlement if the Manager deems it
appropriate to do so. The Fund may realize short-term profits or losses upon
the sale of forward commitments, which profits or losses may constitute
capital gains or ordinary income depending upon a number of factors,
including the number of sales of such commitments.
PORTFOLIO TURNOVER
Portfolio transactions will be undertaken principally to accomplish the
Fund's objective in relation to anticipated movements in the general level of
interest rates, but the Fund may also engage in short-term trading consistent
with its objective. Securities may be sold in anticipation of a market
decline (a rise in interest rates) or purchased in anticipation of a market
rise (a decline in interest rates) and later sold. In addition, a security
may be sold and another purchased at approximately the same time to take
advantage of what the Manager believes to be a temporary disparity in the
normal yield relationship between the two securities. Yield disparities may
occur for reasons not directly related to the investment quality of
particular issues or the general movement of interest rates, due to such
factors as changes in the overall demand for or supply of various types of
Kansas Municipal Securities or changes in the investment objectives of
investors.
The Fund's investment policies may lead to frequent changes in investments,
particularly in periods of rapidly fluctuating interest rates. A change in
securities held by the Fund is known as "portfolio turnover" and may involve
the payment by the Fund of dealer mark-ups or underwriting commissions, and
other transaction costs, on the sale of securities, including Kansas
Municipal Securities, as well as on the reinvestment of the proceeds in other
securities. The Fund anticipates that its annual portfolio turnover rate will
not exceed 75%. Portfolio turnover rate for a fiscal year is the ratio of the
lesser of the dollar amount of the purchases or sales of portfolio securities
to the monthly average of the value of portfolio securities-excluding
securities whose maturities at acquisition were one year or less. The Fund's
portfolio turnover rate will not be a limiting factor when the Fund deems it
desirable to sell or purchase securities. Frequent changes in the Fund's
portfolio securities may result in higher transaction costs for the Fund. In
addition, in order to qualify as a regulated investment company under the
Internal Revenue Code, the Fund must limit the portion of its gross income
derived from the sale or other disposition of stock or securities held for
less than three months. If the Fund were unable to satisfy this condition,
among others, the Fund would be subject to tax on its taxable income without
deduction for distributions to shareholders. See "Dividends and Taxes" in
this Prospectus and "Portfolio Transactions" in the Fund's Statement of
Additional Information.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with respect to not more than
10% of its total assets (taken at current value), except when investing for
temporary defensive purposes during times of adverse market conditions. A
repurchase agreement is a contract under which the Fund would acquire a
security for a relatively short period and the seller would agree to
repurchase such security at the Fund's cost plus interest within a
specified time (generally one day). Under the Investment Company Act of 1940,
repurchase agreements are considered loans by the Fund. The Fund will not
enter into any repurchase agreement in an amount which would jeopardize the
14
Fund's status as a regulated investment company or its ability to distribute
tax-exempt dividends. Although the Fund may enter into repurchase agreements
with respect to any securities which it may acquire consistent with its
investment policies and restrictions, it is the Fund's present intention to
enter into repurchase agreements only with respect to obligations of the U.S.
Government or its agencies or instrumentalities and with respect to Kansas
Municipal Securities. The Fund's custodian will hold the securities
underlying any repurchase agreement in a segregated account. In investing in
repurchase agreements, the Fund's risk is limited to the ability of the
seller to pay the agreed-upon price at the maturity of the repurchase
agreement. In the opinion of the Manager, the risk is not material, since in
the event of default, barring extraordinary circumstances, the Fund would be
entitled to sell the underlying securities or otherwise receive adequate
protection under federal bankruptcy laws for its interest in such securities.
To the extent that proceeds from any sale upon a default are less than the
repurchase price, however, the Fund could suffer a loss. In addition, the
Fund may incur certain delays in obtaining direct ownership of the
collateral.
The Fund's Board of Trustees may change any of the foregoing policies that
are not fundamental without an affirmative vote of a "majority of the Fund's
outstanding voting shares," as defined in "Investment Objective, Policies and
Restrictions" in the Fund's Statement of Additional Information.
NET ASSET VALUE
The net asset value per share of the Fund is determined by calculating the
total value of the Funds' assets, deducting total liabilities, and dividing
the result by the number of shares outstanding. Fixed income securities for
which quotations are readily available are valued at the mean between the
quoted bid and asked price. Securities for which quotations are not readily
available (which will constitute a majority of the securities held by the
Fund) are valued at fair value as determined by Ranson Capital Corporation
(the "Evaluator") pursuant to procedures adopted by the Board of Trustees,
using methods which include consideration of the following: yields or prices
of municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications as to value from dealers and general market conditions.
The Evaluator may employ electronic data processing techniques and/or a
matrix system to determine valuations. The procedures utilized by the
Evaluator and its valuations are reviewed by the officers of the Fund under
the general supervision of the Board of Trustees and are periodically
reviewed by the Board of Trustees. Short-term securities with remaining
maturities of less than 60 days are valued at amortized cost. Other assets
are valued at fair value as determined in good faith by the Trustees of the
Fund. The net asset value of the Fund is computed once daily as of 3:15 p.m.
Central time on each day that the New York Stock Exchange is open for
trading. The public offering price based thereon becomes effective as of the
time of such computation. The New York Stock Exchange is closed on weekends
and on the following days: New Year's Day, Washington's Birthday, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The Fund reserves the right to calculate the net asset value
and to adjust the public offering price based thereon more frequently than
once each day if deemed desirable.
PURCHASE OF SHARES
Shares may be purchased at the public offering price through any securities
dealer having a sales agreement with Ranson Capital Corporation (the
"Distributor"). Shares may also be purchased through banks and certain other
15
financial institutions that have agency agreements with the Distributor.
These financial institutions will receive transaction fees that are the same
as commissions to dealers and may charge their customers service fees
relating to investments in the Fund. Purchase requests should be addressed to
the dealer or agent from which this Prospectus was received which has a sales
agreement with the Distributor. Such dealer or agent may place a telephone
order with the Distributor for the purchase of Fund shares. It is a dealer's
or broker's responsibility to promptly forward payment and registration
instructions (or completed applications) to the Transfer Agent for shares
being purchased. Reference should be made to the wire order to ensure proper
settlement of the trade. Payment must be received within seven days of the
order or the trade may be cancelled and the dealer or broker placing the
trade will be liable for any losses. The public offering price is the net
asset value per share next determined plus a sales charge that will be a
percentage of the public offering price and will vary as shown below. Current
sales charge rates are:
<TABLE>
<CAPTION>
SALES CHARGE
AS A AS A DEALER
PERCENTAGE OF PERCENTAGE OF ALLOWANCE
OFFERING NET ASSET VALUE AS PERCENTAGE OF
PRICE INVESTED OFFERING PRICE
------------- --------------- ----------------
AMOUNT OF PURCHASE
- ------------------
<S> <C> <C> <C>
Less than $50,000 4.25% 4.44% 3.60%
$50,000 but less than $100,000 3.75% 3.90% 3.15%
$100,000 but less than $250,000 3.25% 3.36% 2.75%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than $1,000,000 1.50% 1.52% 1.40%
$1,000,000 or more 0.75% 0.76% 0.70%
</TABLE>
The minimum initial investment is $1,000 and there is a $100 minimum on all
additional investments (excluding reinvestment of dividends and capital
gains). The Fund reserves the right to redeem Fund accounts that are reduced
to a value of less than $1,000 (for any reason other than fluctuation in the
market value of the Fund's portfolio securities). Should the Fund elect to
exercise this right the investor will be notified before such redemption is
processed that the value of the investor's account is less than $1,000 and
that the investor will have sixty days to increase the account to at least
the $1,000 minimum amount before the account is redeemed.
Shares of the Fund may be sold at net asset value to the officers and
Trustees of the Fund, to any subsidiary companies of Ranson Capital
Corporation and to any employees of Ranson Capital Corporation or to members
of their immediate families. Immediate family members shall include spouses,
children, fathers, mothers, brothers or sisters. Shares of the Fund may also
be sold at their net asset value to any employee or registered representative
of any dealer which has a sales agreement with Ranson Capital Corporation, to
any such employee or representative either jointly with his or her spouse or
as custodian for the minor child of such employee.
From time to time the Distributor may implement programs under which dealers
and their representatives may be eligible to participate in which such firms
may win nominal awards for certain sales efforts or under which the
Distributor will reallow additional concessions to any dealer that sponsors
sales contests or recognition programs conforming to criteria established by
the Distributor or participates in sales programs sponsored by the
16
Distributor. These programs will not change the price that an investor pays
for shares or the amount that the Fund will receive from such sale. In
addition, the Fund and the Distributor may pay firms that sell the Fund's
shares an annual service fee for administrative and shareholder services, as
described under "The Distributor."
LETTERS OF INTENT
An investor may qualify for a reduced sales charge immediately by stating his
or her intention to invest in one or more series of the Fund, during a 13-
month period, an amount that would qualify for a reduced sales charge and by
signing a nonbinding Letter of Intent, which may be signed at any time within
90 days after the first investment to be included under the Letter of Intent.
After signing the Letter of Intent, each investment made by an investor will
be entitled to the sales charge applicable to the total investment indicated
in the Letter of Intent. If an investor does not complete the purchases under
the Letter of Intent within the 13-month period, the sales charge will be
adjusted upward, corresponding to the amount actually purchased. When an
investor signs a Letter of Intent, shares of a series of the Fund with a
value of up to 5% of the amount specified in the Letter of Intent will be
restricted. If the total purchases made by an investor under the Letter of
Intent, less redemptions, equals or exceeds the amount specified in the
Letter of Intent, the restriction on the shares will be removed. In addition,
if the total purchases, exceed the amount specified and qualify for a further
quantity discount, the Distributors will make a retroactive price adjustment
and will apply the adjustment to purchase additional shares at the then
current applicable offering price. If an investor does not complete purchases
under a Letter of Intent, the sales charge is adjusted upward, and if after
written notice to the investor, he or she does not pay the increased sales
charge, sufficient restricted shares will be redeemed at the current net
asset value to pay such charge. In connection with the determination of sales
charges applicable to the purchase of shares of the Fund, the Letter of
Intent program will take into account investments in shares of any other
mutual fund carrying a sales load of which Ranson Capital Corporation is the
distributor.
CONCURRENT PURCHASES
An investor who concurrently purchases shares of the Fund and units of any
unit investment trust sponsored by Ranson Capital Corporation will be charged
the sales charge on the respective purchase at the level specified in the
respective prospectus based on the aggregate dollar value of the combined
purchases.
An investor or his or her dealer or agent must notify the Transfer Agent
whenever a quantity discount is applicable to purchases. Upon such
notification, an investor will receive the lowest applicable sales charge.
Quantity discounts may be modified or terminated by the Distributors at any
time. For more information about quantity discounts, contact the dealer or
agent from which this Prospectus was obtained or the Distributors.
OPEN ACCOUNT PROGRAM/CERTIFICATES
All investors in the Fund will be enrolled in an Open Account Program when
they make their first investment in the Fund, unless they elect otherwise.
Investors may then make additional purchases whenever they wish, but they are
not obligated to make any additional investments. Whenever investors make an
investment in the Fund, full and fractional shares will be purchased for
their account at the next determined public offering price applicable to
their purchase after the Fund receives their order.
If an investor elects not to be enrolled in the Open Account Program by
notifying the Transfer Agent in written form, he or she will be sent share
certificates representing the full shares of the Fund and will be required to
surrender the certificates to redeem such shares. Fund share certificates
will be mailed within 10
17
days of an investor's request. Certificates will not be sent outside of the
United States. Investors should promptly notify the Fund if certificates are
not received. The Fund will not file a mail loss claim later than one year
after the issuance of Fund share certificates. After one year, investors
requesting replacement certificates may be required to post an insurance bond
in the amount of 2% of the market value of the certificated shares.
SPECIAL PROGRAMS
UNIT INVESTMENT TRUST REINVESTMENT
Investors in any Series of The Kansas Tax-Exempt Trust may reinvest
distributions of principal and interest from such trust in shares of the Fund
with no sales charge and no minimum investment. The Fund reserves the right
to modify or terminate this program at any time.
REDEMPTIONS FROM OTHER FUNDS
Shares of the Fund may be purchased at net asset value where the amount
invested is documented to the Fund to be proceeds from the redemption of
shares of an unrelated investment company which does not impose a contingent
deferred sales charge or redemption fee and where the investor paid an
initial sales charge. Purchases must be made within 60 days of the
redemption date. The Fund reserves the right to modify or terminate this
privilege at any time.
Where the amount invested is documented to the Fund to be proceeds from the
redemption of shares of The Kansas Insured Intermediate Fund, shares of the
Fund may be purchased at net asset value plus a sales charge equal to the
difference between the sales charge set forth above under "Purchase of
Shares" and the sales charge originally paid with respect to the redeemed
shares of The Kansas Insured Intermediate Fund. Purchases must be made
within 60 days of the redemption date. The Fund reserves the right to modify
or terminate this privilege at any time.
GROUP PROGRAM
The Fund has a group investment and reinvestment program (the "Group
Program") which allows investors to purchase shares of a Series of the Fund
with a lower minimum initial investment and with a lower sales charge if the
investor and the Group Program of which he or she is a participant meet the
cost saving criteria set forth below.
Description of Group Program. If the investor's Group Program (such as an
employee investment program) meets the requirements described below, a series
of the Fund will modify the $1,000 initial investment requirement to such
minimum investment as may be determined by the Fund. The sales charge set
forth under "Purchase of Shares" for each purchase by a participant of a
Group Program will be based on (i) the combined current purchases of such
group of shares together with (ii) the combined net asset value of shares of
such group at the time of such investment. The dealer or agent, if any,
through which the Group Program was initiated will be entitled to a dealer
concession or agency commission based on the sales charges paid by
participants of such Group Program.
Criteria for the Group Program. The cost savings criteria to the Fund that
must be met in order for a Group Program to qualify for the benefits set
forth above are:
(a) The administrator of an investor's investment program must have
entered into an agreement with the Distributor.
18
(b) Such agreement must provide that the administrator must submit a
single order and make payment with a single remittance for all investments
during each investment period (e.g., each pay period or distribution period)
by all investors who choose to invest through the Group Program.
(c) Such agreement must provide that the administrator will provide the
Transfer Agent with appropriate backup data for each participating investor
in a computerized format compatible with the Transfer Agent's processing
system.
Additional Criteria for the Group Program. As further requirements for
obtaining these special benefits under the Group Program, the Fund requires
that investments be in the form of an Open Account (with no share
certificates being issued), that all dividends and other distributions be
reinvested in additional shares without any systematic withdrawal program
described herein and that the minimum new investment in shares of the Fund by
each participant in an employee investment program be at least $25 per month.
The Fund reserves the right to modify or terminate this program at any time.
SYSTEMATIC WITHDRAWAL PROGRAM
The owner of $10,000 or more of shares of the Fund (which may not be in
certificated form) may provide for the payment from his or her account of any
requested dollar amount to his or her designated payee monthly, quarterly or
annually. Sufficient shares will be redeemed from the investor's account for
the designated amount so that the payee will receive it approximately the
first of each month. Dividend distributions automatically will be reinvested
under this program. Depending upon the size of the payments requested,
redemptions for the purpose of making such payments may reduce or even
exhaust the account. The program may be terminated at any time by the
investor. If an investor desires to utilize this program, he or she may so
indicate on the Account Application included with this prospectus.
It ordinarily will be disadvantageous to an investor to purchase shares
(except through reinvestment of distributions) while participating in a
systematic withdrawal program because he or she will be paying a sales charge
to purchase shares at the same time that shares are being redeemed upon which
such investor may already have paid a sales charge. Therefore, the Fund will
not knowingly permit an investor to make additional investments of less than
$10,000 if an investor is at the same time making systematic withdrawals at a
rate greater than the dividend distributions being paid on such investor's
shares. The Fund reserves the right to amend or terminate the systematic
withdrawal program on thirty days' notice, and investors may withdraw from
the program at any time. The Fund reserves the right to modify or terminate
this program at any time.
PREAUTHORIZED INVESTMENT PROGRAM
An investor may establish an automatic investment program with his or her
Fund account. With the Preauthorized Investment Program, monthly investments
(minimum $100) are made automatically from an investor's account at a bank,
savings and loan or credit union into such investor's Fund account. By
enrolling in the Preauthorized Investment Program, the investor authorizes
the Fund and its agents to take money out of his or her predesignated bank,
savings and loan or credit union account and invest that money in his or her
Fund account. If an investor also has expedited wire transfer redemption
privileges with his or her Fund account, such investor must designate the
same bank, savings and loan or credit union account for both the
Preauthorized Investment Program and wire redemption programs. Any account
owner may terminate this privilege simply by sending written notice to the
Transfer Agent. Termination will become effective as soon as the Transfer
Agent has had a reasonable time to act upon the request. The Preauthorized
19
Investment Program may not be used with passbook savings accounts. Fund
shares purchased by the Preauthorized Investment Program must be owned for 15
days before they may be redeemed. If an investor desires to utilize this
program, he or she may so indicate on the Account Application included with
this prospectus. The Fund reserves the right to modify or terminate this
program at any time.
RIGHTS OF ACCUMULATION
A purchase of shares may qualify for a cumulative quantity discount. The
applicable sales charge will be based on the total of:
(a) the investor's current purchase; and
(b) the net asset value (at the close of business on the previous
day) of the shares of the Fund held by an investor.
For example, if an investor owned shares worth $40,000 at the current net
asset value and purchased an additional $10,000 of shares, the sales charge
for the $10,000 purchase would be at the rate applicable to a single $50,000
purchase.
To qualify for the cumulative quantity discount on a purchase through a
broker-dealer, when each purchase is made, the investor or broker-dealer must
provide the Fund with sufficient information to verify that the purchase
qualifies for the discount.
REINSTATEMENT PRIVILEGE
An investor who has redeemed shares of the Fund may reinvest up to the full
amount of such redemption at net asset value at the time of reinvestment. An
investor using this privilege a year or more after such investor redeemed
shares of the Fund must file a new account application and provide proof that
such investor was a shareholder of the Fund. See "Dividends and Taxes"
regarding the potential tax implications of exercising this privilege. The
Fund reserves the right to modify or terminate this privilege at any time.
REDEMPTION OF SHARES
Upon receipt of a redemption request in proper form addressed to the Transfer
Agent, shares of the Fund will be redeemed by the Fund. The redemption price
for shares of the Fund is based on the net asset value per share next
determined after receipt of the redemption request. Redemption requests must
be in writing, accompanied by any issued certificates (for investor
protection, certificates should be sent by registered mail). Redemption
requests and any certificates or stock power must be endorsed by all
registered owners with signatures guaranteed by a member firm of a national
securities exchange or by a commercial bank, savings and loan association or
trust company. Further documentation may be requested from corporations,
executors, administrators, trustees or guardians.
Alternatively, an investor may place an order to sell shares (whether in
certificate or book entry form) through his or her dealer or agent which has
a sales agreement with the Distributor and from which this prospectus was
received, which dealer or agent will telephone such request to the
Distributor. The investor will receive the net asset value next determined
after the Distributor receives such sell order from the dealer or agent. The
Fund does not charge for this transaction.
20
Whether shares are redeemed by the Fund or sold through an investor's dealer
or agent, a check for the proceeds ordinarily will be mailed to an investor
or his or her dealer or agent within seven calendar days after a
redemption request or repurchase order and Share certificates (if any) are
received in proper form as set forth above.
If a request to redeem shares is received shortly after the purchase of such
shares, the Fund will not mail the proceeds until checks received for the
purchase of shares have cleared, which may take up to 15 days. The proceeds
of a redemption may be more or less than the cost of the shares.
The right of redemption or resale of the Fund may be suspended or the date of
payment postponed during any period when the New York Share Exchange is
closed.
DIVIDENDS AND TAXES
DIVIDENDS
The Fund will declare distributions on a daily basis to shareholders of
record on the date of each declaration and will pay such distributions on a
monthly basis. The monthly distribution will be composed of the investment
income earned by the Fund less the expenses of the Fund plus all or a portion
of net short-term capital gains (such net short-term capital gains reduced by
net long-term capital losses, if any, and carryover capital losses from
previous years) realized by the Fund on transactions in securities. The Fund
will also declare and make distributions of net long-term capital gains, if
any, at least annually. Net long-term capital gain distributions consist of
the realized long-term capital gains on transactions in securities of the
Fund, net of certain realized capital losses and less certain carryover
capital losses from previous years.
The Fund automatically will credit monthly distributions and any capital gain
distributions to an investor's account in additional shares of the Fund
valued at net asset value on the date such distributions are payable, without
sales charge, unless an investor elects to the Transfer Agent of the Fund to
have distributions received in cash. Distributions that are reinvested are
treated as cash distributions for income tax purposes. If an investor elects
to change the method of distribution, such change will be effective only with
regard to distributions for which the payment date is seven or more business
days after the Transfer Agent has received the written request.
A check will be generated on the date on which distributions are payable for
dividends to be received in cash. An investor can expect to receive this
check within seven days. If the U. S. Postal Service cannot deliver the
check, or if the checks remain uncashed for six months, the checks will be
reinvested in the investor's account at the then-current net asset value and
all future dividends will be reinvested.
Distribution checks may be sent to parties other than the investor. The
Transfer Agent of the Fund can provide investors with a "Dividend Order" form
for such purposes. After the Transfer Agent receives this completed form with
a signature guarantee, distribution checks will be sent to the bank or other
person designated as an investor.
TAXES
The Fund has elected and intends to qualify each year as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986
(the "Code") and, if so qualified, will generally not be liable for federal
21
income taxes to the extent it timely distributes its earnings. If in any year
the Fund should fail to qualify under Subchapter M for tax treatment as a
regulated investment company, the Fund would incur a regular corporate
federal income tax upon its taxable income for that year, and distributions
to shareholders of the Fund would be taxable to such shareholders as ordinary
income to the extent of the earnings and profits of the Fund, including
distributions that would otherwise qualify as exempt- interest dividends. For
shareholders of the Fund that are corporations, such distributions would be
eligible for the dividends-received deduction. In addition, the Fund intends
to invest in sufficient municipal securities so that it will qualify to pay
"exempt-interest dividends" (as defined in the Code) to shareholders; the
Fund's dividends payable from net tax-exempt interest earned from municipal
securities will qualify as exempt-interest dividends if, at the close of each
quarter of the taxable year of the Series, at least 50% of the value of the
Fund's total assets consists of tax-exempt municipal securities.
Exempt-interest dividends distributed to shareholders generally are not
subject to federal income tax except to the extent such interest is subject
to the alternative minimum tax, as discussed hereinafter. The percentage of
income that is tax-exempt is applied uniformly to all distributions made
during each calendar year and thus is an annual average for the Fund rather
than a day-by-day determination for each shareholder whether received in
shares or in cash. The percentage of all distributions of earnings other than
exempt-interest dividends paid by the Fund, such as net investment income
received from investments in debt securities other than municipal securities,
and any net realized short-term capital gains (including certain amounts
deemed distributed) will generally be taxable to the shareholders as ordinary
income. Any distribution of net realized long-term capital gains (including
amounts deemed distributed) will generally be subject to federal taxation as
long-term capital gains ("long-term capital gain distributions"), regardless
of the length of time the investor has held such shares.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects tax-exempt
municipal securities to the market discount rules of the Code effective for
municipal securities purchased after April 30, 1993. In general, market
discount is the amount (if any) by which the stated redemption price at
maturity exceeds an Investor's purchase price (except to the extent that such
difference, if any, is attributable to original issue discount not yet
accrued), subject to a statutory de minimus rule. Market discount can arise
based on the price the Fund pays for municipal securities. Under the Tax
Act, accretion of market discount is taxable as ordinary income; under prior
law the accretion had been treated as capital gain. Market discount that
accretes while the Fund holds a municipal security would be recognized as
ordinary income by the Fund when principal payments are received on the
municipal security, or upon sale or at redemption (including early
redemption), unless the Fund elects to include market discount in taxable
income as it accrues. Distributions to shareholders of the Fund, to the
extent of any market discount that is included in the Fund's taxable income,
would be taxable to shareholders as ordinary income.
For both individuals and corporations, interest paid on certain "private
activity bonds" issued on or after August 8, 1986 will be treated as an item
of tax preference and may, therefore, be subject to the alternative minimum
tax. To the extent provided by regulations to be issued by the Secretary of
the Treasury, exempt-interest dividends paid by the Fund will be treated as
interest on private activity bonds to the extent of the proportionate amount
of interest on such private activity bonds received by the Fund. Such exempt-
interest dividends constitute a tax preference item subject to both the
individual and corporate alternative minimum tax. The Fund will annually
supply shareholders with a report indicating the percentage of Fund income
attributable to bonds subject to the alternative minimum tax.
Exempt-interest dividends received by a shareholder which are not with
respect to certain "private activity bonds" are not treated as a tax
preference item. However, for certain corporate shareholders such dividends
22
will be included in the computation of an adjustment item used in determining
such corporation's alternative minimum tax and environmental tax (the
"Superfund Tax"). The adjustment item is 75% of the excess of such corporate
shareholder's "adjusted current earnings" over its other alternative minimum
taxable income with certain adjustments. Although exempt-interest dividends
received by a shareholder will not be included in the gross income of
corporations for federal income tax purposes, "adjusted current earnings"
include all tax-exempt interest, including exempt-interest dividends received
from the Fund. Corporate shareholders are advised to consult their tax
advisers with respect to the tax consequences of the alternative minimum tax,
the Superfund Tax and the branch profits tax under Section 884 of the Code.
For taxpayers other than corporations, net capital gains are presently
subject to a maximum stated marginal tax rate of 28%. All taxpayers are
required to disclose to the Internal Revenue Service on their tax returns the
amount of tax-exempt interest earned during the year including exempt-
interest dividends from the Fund.
The hedging activities and transactions in options and futures contracts of
the Fund are subject to special tax provisions that may accelerate or defer
recognition of certain taxable gains or losses, alter the holding periods of
certain of the Fund's securities, or convert capital gain into ordinary
income and convert short-term capital losses into long-term capital losses.
These rules could therefore affect the amount, timing and character of
distributions to shareholders. Recognition of unrealized taxable gains by the
Fund under the "mark to market" rules of the Code may increase the difficulty
of compliance with requirements which must be satisfied in order for the Fund
to continue to qualify as a regulated investment company, thus requiring the
Fund to limit its hedging activities. Such activities also may be limited by
the requirement that the Fund derive less than 30% of its annual gross income
from the sale or other disposition of securities held for less than three
months in order to qualify as a regulated investment company under the Code.
Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders
of record on a specified date in one of those months and paid during January
of the following year will be treated as having been distributed by the Fund
(and received by the shareholders) on December 31 of the year such dividends
are declared.
Distributions from the Fund will not generally be eligible for the dividends
received deduction for corporations.
The Fund is required by law to withhold a specified percentage of taxable
dividends and certain other payments, including redemption payments, paid to
non-corporate investors who do not certify to the Fund their correct taxpayer
identification number (in the case of individuals, their social security
number) and in certain other circumstances as may be required by the Code.
Under Section 86 of the Code, up to 85% of a social security recipient's
benefits may be included in gross income for a benefit recipient if the sum
of his adjusted gross income, income from tax-exempt sources such as tax-
exempt bonds and distributions made by the Fund plus 50% of his social
security benefits exceeds certain base amounts. Income from the Fund is
still tax-exempt to the extent described above, it is only included in the
calculation of whether a recipient's income exceeds certain established
amounts.
Redemption of shares of the Fund will be a taxable transaction for federal
income tax purposes and such investors will generally recognize gain or loss
in an amount equal to the difference between the basis of the shares and the
23
amount received. Assuming that investors hold such shares as a capital asset,
the gain or loss will be a capital gain or loss and will generally be long-
term if investors have held such shares for a period of more than one year.
In the case of shareholders holding shares of the Fund for six months or less
and subsequently selling those shares at a loss after receiving an exempt-
interest dividend, the loss will be disallowed to the extent of the exempt-
interest dividends received. If such loss is not entirely disallowed, it will
be treated as a long-term capital loss to the extent any long-term capital
gain distribution is made with respect to such shares during the six-month
period or less that the investor owns the shares. If a loss is realized on
the redemption of Fund shares, the reinvestment in additional Fund shares or
the acquisition of a contract or option to acquire securities that are
substantially identical to Fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Code, resulting in
a postponement of the recognition of such loss for federal income tax
purposes. In addition, an investor cannot take into account any sales or
similar charge incurred in acquiring shares of the Fund (a "load charge,"
such charge does not include amounts paid with respect to the reinvestment of
mutual fund share dividends) in computing gain or loss on the sale of shares
of the Fund if the investor sells such shares within 90 days of the date the
shares are acquired and the investor obtains and subsequently exercises the
right to reinvest in shares of any mutual fund without the payment of a load
charge or with the payment of a reduced charge (however, such charges shall
be treated as incurred in connection with the reinvestment in shares).
The Tax Act raised tax rates on ordinary income while capital gains remain
subject to a 28 percent maximum stated rate. Because some or all capital
gains are taxed at a comparatively lower rate under the Tax Act, the Tax Act
includes a provision that recharacterizes capital gains as ordinary income in
the case of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. It is possible
that this provision could result in the recharacterization of amounts or
distributions otherwise characterized as capital gains by the Fund or a
shareholder as ordinary income. Shareholders of the Fund should consult with
their advisers regarding the potential effect of this provision on their
investment in shares of the Fund.
Interest on indebtedness which is incurred to purchase or carry shares of a
mutual fund which distributes exempt-interest dividends during the year is
not deductible for federal income tax purposes. Further, the Fund may not be
an appropriate investment for persons who are "substantial users" of
facilities financed by industrial development bonds held by the Fund or are
"related persons" to such users; such persons should consult their tax
advisers before investing in the Fund.
State and Local Tax Aspects. To the extent that exempt-interest dividends
are derived from interest on Kansas Municipal Securities, that are exempt
from Kansas income taxes, such dividends will also qualify as exempt from
Kansas income taxes. Otherwise, both the nonqualifying exempt-interest
dividends and dividends taxable for federal income tax purposes as ordinary
income will be subject to income tax in the hands of the shareholders of the
Fund. Distributions treated as long-term capital gains for federal income tax
purposes will generally receive the same characterization under Kansas law.
The foregoing discussion of Kansas law does not apply to shareholders which
are corporations or banks, for which dividends from the Fund are not exempt.
Corporations and banks are urged to consult their own tax advisers before
investing in the Fund.
Except as described above with respect to Kansas income taxation, the
exemption from federal income tax for exempt-interest dividends does not
necessarily result in exemption for such dividends under the income or other
tax laws of any state or local taxing authority. Taxpayers should consult
their own advisers regarding the consequences under such taxes with respect
to the purchase, ownership, and disposition of shares of the Fund.
24
The tax discussion set forth above is for general information only. Annually,
shareholders of the Fund receive information as to the tax status of
distributions made by the Fund in each calendar year. The foregoing relates
to federal income taxation and to Kansas income taxation as in effect as of
the date of this Prospectus. Investors should consult their own tax advisers
regarding the federal, state, local, foreign and other tax consequences of an
investment in the Fund, including the effects of any change, including any
proposed change, in the tax laws.
DESCRIPTION OF SHARES AND RIGHTS
The Fund's Agreement and Declaration of Trust ("Trust Agreement") permits its
Trustees to issue an unlimited number of shares, without par value, from each
Series that is designated by the Board of Trustees. Each share of a Series
represents an equal proportionate interest in the assets and liabilities
belonging to the Series with each other share of such Series and is entitled
to such dividends and distributions out of the income belonging to the Series
as are declared by the Trustees. The shares do not have cumulative voting
rights nor any preemptive rights. In case of a liquidation, subject to the
rights of creditors, the holders of the shares of the Series being liquidated
will be entitled to receive a distribution out of the net assets belonging to
the Series being liquidated. Should additional Series be designated by the
Board of Trustees, the net asset value of the shares of each of such Series
will be computed based only upon the net assets of each such Series.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust could be deemed to have the same type of
personal liability for the obligations of the Fund as does a partner of
a partnership. The Trust Agreement contains an express disclaimer of
liability on the part of Fund shareholders and provides that the Fund shall
assume the defense on behalf of its shareholders. Thus, the risk of Fund
shareholder liability is slight and limited to a circumstance where a Series
itself is unable to meet its obligations.
As a Massachusetts business trust, the Fund is not required to and does not
intend to hold annual shareholders' meetings. However, the Trust Agreement
provides for Fund shareholder voting with respect to certain matters,
including: (a) the election or removal of Trustees if a meeting is called for
that purpose; (b) any contract as to which shareholder approval is required
by the Investment Company Act of 1940, as amended (the "1940 Act"); (c) any
termination or reorganization of the Fund or any Series of the Fund to the
extent provided in the Trust Agreement; and (d) any amendment of the Trust
Agreement (other than amendments designating new Series, changing the name of
the Fund or any Series of the Fund, supplying any omission, curing any
ambiguity, or curing, correcting or supplementing any provisions inconsistent
with the 1940 Act or the Code). Meetings of shareholders may be called upon
written application specifying the purpose of the meeting by shareholders
holding at least 25% (or 10% if the purpose of the meeting is to determine if
a Trustee is to be removed from office) of the shares then outstanding. In
connection with the shareholders' right to remove a Trustee, shareholders
will be assisted with their communications in such manner.
FUND MANAGEMENT
The business and affairs of the Fund will be managed under the direction of
the Board of Trustees. The Trustees are subject to the fiduciary
responsibilities imposed by the laws of the Commonwealth of Massachusetts.
25
Subject to the Trustees' authority, Ranson Capital Corporation, a Kansas
Corporation, 120 S. Market, Suite 450, Wichita, Kansas 67202 (the "Manager")
will supervise and implement the Fund's investment activities and will be
responsible for overall management of the Fund's business affairs. Ranson
Capital Corporation is also the investment adviser of the Fund and will
perform certain evaluations of the securities held by the Fund. The Fund
will pay the Manager a monthly management and investment advisory fee
equivalent on an annual basis to .50 of 1% of its average daily net assets.
For the year ended July 31, 1995, the Fund paid the Manager management and
investment advisory fees equal to .26% of the average net asset value of the
Fund.
Overall portfolio management strategy for the Fund is determined by the
Manager under the general supervision and direction of John A. Ranson, the
President of the Fund and the Manager. Mr. Ranson has been President of the
Manager since its formation in 1990 and has managerial responsibility with
respect to all open-end funds managed by the Manager. The day-to-day
management of the Fund, including credit analysis and the execution of
portfolio transactions, is the responsibility of Alex R. Meitzner, the
Executive Vice President of the Fund and the Manager. Mr. Meitzner has been
the Executive Vice President of the Manager since its formation in 1990. All
portfolio management decisions are subject to weekly review by Mr. Ranson and
to quarterly review by the Fund's Board of Trustees.
The Manager is a broker-dealer registered with the Securities and Exchange
commission and a wholly-owned subsidiary of The Ranson Company, Inc., a
Kansas corporation. John A. Ranson and Alex R. Meitzner own controlling
interests in The Ranson Company, Inc. The Manager was formed in 1990 and is
sponsor, portfolio supervisor and securities evaluator for Series 1 through
78 of The Kansas Tax-Exempt Trust and Series 1 through 5 of The Nebraska Tax-
Exempt Trust. The Kansas and Nebraska Tax-Exempt Trusts are Series of unit
investment trusts with aggregate current par value of $177,311,560. The
Manager is also investment adviser for The Kansas Insured Intermediate Fund
and The Nebraska Municipal Fund, which have current net asset values of
$31,522,370 and $16,257,544 respectively. The Manager has not retained the
right to withdraw from the Fund the use of the name "Ranson," but the Manager
may grant the use of the name "Ranson" to another investment company.
Under the terms of the Management and Investment Advisory Agreement, the
Manager has agreed to pay all expenses of the Fund, including the Fund's
management and investment advisory fee and the Fund's dividend disbursing,
administrative and accounting services fees (but excluding taxes and
brokerage fees and commissions, if any) that exceed 1.25% of the Fund's
average daily net assets on an annual basis up to the amount of the
investment advisory and management fee payable by the Fund to the Manager.
Reimbursements by the Manager for such Fund expenses will be paid monthly
based on annualized year to date expenses. All other expenses shall be paid
by the Fund. From time to time and subject to discontinuance at any time, the
Manager may voluntarily assume certain expenses of the Fund. This will have
the effect of lowering the overall expense ratio of the Fund and of
increasing yield to investors. The Fund's expenses include, among others,
taxes, brokerage fees and commissions, if any, fees of Disinterested
Trustees, expenses of Trustees' and shareholders' meetings, insurance
premiums, expenses of redemption of shares, expenses of issue and sale of
shares (to the extent not borne by the Distributors), expenses of printing
and mailing certificates, association membership dues, charges of the Fund's
custodian, and bookkeeping, auditing and legal expenses, and the fees and
expenses of registering the Fund and its shares with the Securities and
Exchange Commission, registering or qualifying its shares under state
securities laws and the expenses of preparing and mailing prospectuses and
reports to shareholders.
26
The Manager acts as the Fund's administrative and accounting services agent.
For these services, the Manager receives an administrative and accounting
services fee payable monthly from the Fund equal to the sum of (i) $1,500 per
month if the Fund's average daily net assets do not exceed $50 million,
$2,000 per month if the Fund's average daily net assets are greater than $50
million but do not exceed $100 million, and $2,500 per month if the Fund's
average daily net assets exceed $100 million, and (ii) 0.15% of the Fund's
average daily net assets on an annual basis for the Fund's first $20 million
of average daily net assets, 0.10% of the Fund's average daily net assets on
an annual basis for the Fund's next $20 million of average daily net assets,
0.05% of the Fund's average daily net assets on an annual basis for the
Fund's next $60 million of average daily net assets, 0.02% of the Fund's
average daily net assets on an annual basis for the Fund's next $400 million
of average daily net assets, and 0.01% of the Fund's average daily net assets
on an annual basis for the Fund's average daily net assets in excess of $500
million, together with reimbursement of the Manager's out-of-pocket expenses.
This fee and reimbursement are in addition to the investment advisory and
management fee received by the Manager from the Fund.
The Board of Trustees has the authority without shareholder approval, to
determine who will perform the following services for the Fund: securities
evaluator; custodian of the Fund's securities and cash; and, dividend
disbursing, administrative and accounting services agent.
In effecting purchases and sales of the Fund's portfolio securities, the
Manager and the Fund may place orders with and pay brokerage commissions to
brokers which are affiliated with the Fund, the Manager, the Distributor or
selected dealers participating in the offering of the Fund's shares. In
addition, in selecting among firms to handle a particular transaction, the
Manager and the Fund may take into account whether the firm has sold or is
selling shares of the Fund. Subject to rules adopted by the Securities and
Exchange Commission, the Fund may also purchase municipal securities from
other members of underwriting syndicates of which the Distributor or other
affiliates of the Fund are members.
The shareholders of The Ranson Company, Inc., the parent of Ranson Capital
Corporation, have entered into a contract with ND Holdings, Inc., subject to
approval by the Fund's shareholders, pursuant to which ND Holdings, Inc. will
acquire all outstanding shares of The Ranson Company, Inc. and therefore
indirectly, Ranson Capital Corporation. After the consummation of this
transaction, Ranson Capital Corporation, as wholly owned by ND Holdings,
Inc., will continue by that name and will continue to act as investment
advisor and manager for the Fund. ND Holdings, Inc. of Minot, North Dakota
through its subsidiaries currently acts as investment advisor for four mutual
funds. ND Holdings, Inc. has agreed to continue the management and operation
of the Fund as now conducted.
THE DISTRIBUTOR
Shares of the Fund are offered on a continuous basis through Ranson Capital
Corporation, a Kansas Corporation, 120 S. Market, Suite 450, Wichita, Kansas
67202. Pursuant to a Distribution and Services Agreement, the Distributor
will purchase shares of the Fund for resale to the public, either directly or
through securities dealers or agents, and is obligated to purchase only those
shares for which it has received purchase orders. In addition to agreements
with securities dealers, the Distributor may enter into agreements with banks
or bank affiliates with respect to the sale of shares of the Fund. Under the
Glass-Steagall Act, banks and bank affiliates are prohibited from
underwriting Fund shares; however, the Glass-Steagall Act does permit certain
agency transactions and the banking regulators have not indicated that these
27
particular agency transactions are not permitted under such Act. In the event
the Glass-Steagall Act should prevent banks or bank affiliates from acting in
any capacity or providing investor administrative and shareholder services,
The Fund Trustees will consider what action, if any, is appropriate in order
to provide efficient services to the Fund. It is anticipated that a
termination of a relationship with a bank or bank affiliate would not result
in a loss to investors or a change in net asset value.
Under the Distribution and Services Agreement between the Fund and the
Distributor, the Distributor pays the expenses of distribution of the Fund's
shares, including preparation and distribution of literature relating to the
Fund and its investment performance and advertising and public relations
material. The Fund bears the expenses of registration of its shares with the
Securities and Exchange Commission and of sending prospectuses to existing
shareholders. The Distributor will permit its officers and employees to serve
without compensation as Trustees and officers of the Fund if duly elected to
such positions. The Fund will pay the cost of qualifying and maintaining
qualification of the shares for sale under the securities laws of the various
states if necessary. In addition, under the plan adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940 and under which the Fund will
pay some costs of the distribution of its shares, the Fund will pay the
Distributor .25% of the average daily net assets of the Fund and the
Distributor may in turn pay firms that sell the Fund's shares an annual
service fee of up to .25% of average daily net assets of customer accounts in
existence for more than one year for administrative and shareholder services
or use some or all of such payment to pay other distribution expenses which
otherwise would be payable by the Distributor.
The Distribution and Services Agreement continues in effect from year to year
if specifically approved at least annually by the shareholders or Board of
Trustees of the Fund and by the Fund's disinterested Trustees in compliance
with the Investment Company Act of 1940. The agreement may be terminated
without penalty upon sixty days' written notice by the Fund or ninety days'
written notice by the Distributor and will automatically terminate if it is
assigned.
SHAREHOLDER SERVICES AND REPORTS
Investors Fiduciary Trust Company serves as Custodian of the Fund and will
have custody of all securities and cash of the Fund and will attend to the
collection of principal and income and payment for and collection of proceeds
of securities bought and sold by the Fund.
Investors Fiduciary Trust Company is the Transfer Agent for the Fund and will
perform bookkeeping, data processing and administrative services related to
the maintenance of shareholder accounts. When an investor makes an initial
investment in the Fund, an account will be opened on the Fund's books and the
investor will receive a confirmation of the opening of the account. An
investor will receive monthly statements
giving details of all activity in his or her account and will receive a
statement whenever investments in or withdrawals from such account are made.
The statement with tax information for the year will be mailed to investors
by January 31 and will also be filed with the Internal Revenue Service.
As a rule, the Fund will not issue share certificates. However, upon written
request to the Transfer Agent, a share certificate will be issued for any or
all of the full shares credited to an investor's account. Share certificates
which have been issued may be returned at any time.
Investors will receive annual financial statements, together with a report of
independent auditors, and semi-annual unaudited financial statements.
Investors will also receive notices of shareholders' meetings. Shareholder
inquiries regarding their account should be directed to the Transfer Agent.
28
CALCULATION OF FUND PERFORMANCE DATA
From time to time, the Fund may advertise several types of performance
information. These are "current yield," "tax equivalent yield," "distribution
return," "average annual total return" and "total return." Each of these
figures is based upon historical results and is not necessarily
representative of the future performance of the Fund.
Current yield is determined by annualizing net investment income earned per
share for a stated period (normally one month or thirty days) and dividing
the result by the maximum public offering price at the end of the evaluation
period.
Tax equivalent yield is determined by dividing that portion of current yield
which is tax-exempt by one minus a stated combined state and federal income
tax rate and adding that portion of the current yield, if any, that is not
tax-exempt.
The Fund's distribution return is computed by dividing the income per share
by the number of days in the current month and the quotient is multiplied by
365. The result is divided by the offering price per share on the last day
of the month.
Average annual total return and total return figures measure both the net
investment income generated by the Fund and the effect of any realized or
unrealized appreciation or depreciation of the underlying investments in the
portfolio of the Fund for the period in question, assuming the reinvestment
of all dividends and capital gains distributions. Thus, these figures reflect
the change in the value of an investment in the Fund during a specified
period. Average annual total return will be quoted for at least the one, five
and ten year periods ending on a recent calendar quarter (or if such periods
have not yet elapsed, at the end of a shorter period corresponding to the
life of the Fund). Average annual total return figures are annualized and,
therefore, represent the average annual percentage change over the period in
question. Total return figures are not annualized and represent the aggregate
percentage or dollar value change over the period in question.
From time to time, the Fund's performance may be compared to that of the
Consumer Price Index or various unmanaged bond indexes and may also be
compared to the performance of other fixed income or government bond mutual
funds or mutual fund indexes as reported by entities such as Lipper
Analytical Services, Inc. ("Lipper"). Lipper is a widely recognized
independent mutual fund reporting service. Lipper performance calculations
are based upon changes in net asset value with all dividends reinvested and
do not include the effect of any sales charges.
The Fund's shares are sold at net asset value plus a maximum sales charge of
4.25% of the offering price. While the maximum sales charge is normally
reflected in the Fund's performance figures, certain total return
calculations may not include such charge and those results would be reduced
if it were included. The Fund's returns and net asset value will fluctuate.
Shares of the Fund are redeemable by an investor at the then current net
asset value, which may be more or less than original cost.
SUMMARY OF PROCEDURES
The following summary is intended as a reference guide for investors. It is
not intended to be comprehensive. Investors should read the main body of the
prospectus and consult with their dealer, agent or the Fund's customer
service representatives as necessary.
29
PURCHASES
Initial investments of $1,000 or more and an account application (indicating
phone order information as applicable) should be mailed to the dealer or
agent from which this Prospectus was received which has a sales agreement
with the Distributor or directly mailed to the Transfer Agent, Investors
Fiduciary Trust Company, 127 West 10th Street, Kansas City, Missouri 64105.
Investors qualifying for reduced initial minimum investments or reduced sales
charges should indicate their qualification on the application. Additional
investments should be sent to the same address. Investors should include the
purchase form from the bottom of their monthly statement and should include
their account number on the check.
Checks should be made payable to The Kansas Municipal Fund.
Wire Instructions:
Investors Fiduciary Trust Company, ABA # 101 003621
Credit The Kansas Municipal Fund, Account #7525346
For further credit to:
(List investor name and account number;
refer to order confirm number, if applicable)
REDEMPTIONS
REDEMPTION REQUESTS must be signed by all registered owners, accompanied by
signature guarantee(s). Fund shares held in certificate form must be
submitted in proper form to effect redemption. The Transfer Agent may request
such other documentation from corporations, executors, administrators,
trustees or guardians as is deemed necessary to determine the authority of
the individual making the request.
REDEMPTION REQUESTS AND OTHER TRANSFER AGENT INQUIRIES should be sent to the
Fund, c/o Investors Fiduciary Trust Company, 127 West 10th Street, Kansas
City, Missouri 64105.
OTHER
ADDRESS CHANGES: A new address should be indicated on the remittance advice
on the bottom of an investor's monthly statement (or on a copy of the monthly
statement) and mailed to the Transfer Agent at the above address. All other
requests must be signature guaranteed.
REGISTRATION CHANGES: A new account is opened whenever there is a change in
registration. Therefore, the procedures for redemption by mail should be
followed indicating the requested registration changes. Shares will be
transferred to the new account at net asset value on the same date as the
closing of the old account.
SALES INFORMATION, PERFORMANCE DATA, PRIOR DAYS'
OFFERING PRICE AND NET ASSET VALUE
CALL (316) 262-4955 OR (800) 345-2363
FOR INFORMATION ON ACCOUNT BALANCES AND ALL OTHER INQUIRIES
CALL (800) 822-8460
30
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FUND MANAGER AND INVESTMENT ADVISER
RANSON CAPITAL CORPORATION
120 South Market Street Suite 450
Wichita, Kansas 67202
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
INDEPENDENT AUDITORS
Allen Gibbs & Houlik, L.C.
301 North Main, Suite 1700
Wichita, Kansas 67202
LEGAL COUNSEL
CHAPMAN AND CUTLER
111 West Monroe Street
Chicago, Illinois 60603
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
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<S> <C>
Fee and Expense Table 2
Highlights of the Fund and
Prospectus Summary 3
Condensed Financial Information 6
The Fund 7
Investment Objective and Policies 7
Net Asset Value 15
Purchase of Shares 15
Special Programs 18
Redemption of Shares 20
Dividends and Taxes 21
Description of Shares and Rights 25
Fund Management 25
The Distributor 27
Shareholder Services and Reports 28
Calculation of Fund Performance Data 29
Summary of Procedures 29
</TABLE>
- ------------------------------------------------
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RANSON MANAGED
PORTFOLIOS
THE KANSAS
MUNICIPAL FUND
_________________________
PROSPECTUS
DATED: November 30, 1995
_________________________
DISTRIBUTOR
RANSON CAPITAL CORPORATION
120 South Market Street Suite 450
Wichita, Kansas 67202
- ------------------------------------------------
- ------------------------------------------------
- -------------------------------------------------------------------------------
INITIAL APPLICATION RANSON MANAGED PORTFOLIOS-
THE KANSAS MUNICIPAL FUND
120 South Market, Suite 450, Wichita, KS 67202
ACCOUNT APPLICATION
Mail To:The Kansas Municipal Fund, 120 S. Market, Suite 450, Wichita, KS 67202
1. ACCOUNT REGISTRATION (Please Print) - NOTE: The name(s) and address shown
below must read exactly in accordance with the registration of Shareholder
Account (if any) currently on file.
/_/ INDIVIDUAL OR JOINT* ACCOUNT
_____________________________________ _____________________________________
Name Joint Owner's name
*Joint tenants with rights of survivorship, unless you specify otherwise.
/_/ Check here if purchaser is employee of Broker/Dealer.
/_/ GIFT OR TRANSFER TO A MINOR (UGMA/UTMA)
_____________________ as custodian for ______________________under the ________
Custodian's name Minor's name State
Uniform Gifts/Transfers to Minors Act
/_/ TRUST
_____________________ as trustee(s) of _____________________ _______________
Trustee's name(s) Name of trust Date of trust
agreement agreement
Please include copy of first and last page of trust agreement.
/_/ CORPORATION/OTHER ENTITY
_____________________________________ _______________________________________
Name of corporation or other entity Type of organization (i.e. corporation,
non-profit, partnership)
Please attach a certified copy of your corporate resolution showing the
person(s) authorized to act on this account.
ADDRESS: __________________________ CITY, STATE, ZIP: _________________________
Social Security or taxpayer ID number: ____________ Day Telephone #:___________
- -------------------------------------------------------------------------------
2. INITIAL INVESTMENT
______ Check Enclosed for $__________(Minimum Initial Investment is
$1,000, thereafter $100.) Make Check Payable to The Kansas Municipal Fund.
______ The Dealer Firm Named Below Ordered My Initial Purchase of
___________ Shares by Wire on ____________________
Date
______ Reinvestment of /_/ Principal and Interest /_/ Principal Only /_/
Interest Only at Net Asset Value From the Following Unit Investment
Trust(s) ______________________________________________________________________
This authorization will be sent to the Trustee to change Reinvestment
instructions on the indicated UIT Series.
- -------------------------------------------------------------------------------
3. DIVIDEND AND DISTRIBUTION OPTIONS. All Dividends and capital gains
reinvested unless indicated.
Dividend Capital Gains
/_/ Reinvest /_/ Reinvest
/_/ Cash /_/ Cash
All cash distributions to Shareowner of record unless indicated below
Name _____________________________________________________________
Address _____________________________________________________________
City __________________________ State _____________ Zip__________
Account number (if applicable) _____________ Attach voided check if
payable to your bank account.
- -------------------------------------------------------------------------------
4. LETTER OF INTENT
I request establishment of a Letter of Intent to purchase shares of Ranson
Managed Portfolios-The Kansas Municipal Fund as described in this
prospectus. These shares will be purchased over a thirteen-month period;
the aggregate amount of these purchases will be at least equal to the
amount indicated below:
___ $50,000 ___ $100,000 ___ $250,000 ___ $500,000 ___ $1,000,000
___ This is an amended Letter of Intent
- -------------------------------------------------------------------------------
5. RIGHTS OF ACCUMULATION
If this account qualifies for a reduced sales charge under the Rights of
Accumulation as described in this prospectus, please give the following
information:
ACCOUNT NUMBER OF RELATED ACCOUNTS RELATIONSHIP TO INVESTOR
_____________________________________ _______________________________
_____________________________________ _______________________________
_____________________________________ _______________________________
- -------------------------------------------------------------------------------
6. SYSTEMATIC WITHDRAWAL PLAN
______ Systematic Withdrawal (Available only for accounts of $10,000 or
more)-Redeem sufficient shares on or about the 24th of the month and send
check to the owner listed above: ______ Monthly: ______Quarterly (Jan.,
Apr., July & Oct.) for $______________ (Minimum $50). The first redemption
to take place on the 24th of (indicate month)_____________ (Note: All
distributions from the Fund must be reinvested)
______ Payment to a Different Payee or Account (Optional)-If systematic
withdrawal checks are to be payable to person or address other than as
registered above make checks payable to:
Name _________________________________________________________________
Address _________________________________________________________________
City _______________________________ State____________ Zip____________
Account Number _________________ (if applicable)
- -------------------------------------------------------------------------------
7. PREAUTHORIZED INVESTMENT PROGRAM
I hereby authorize the Investors Fiduciary Trust Company to draw from my
account monthly beginning on the /_/ 5th or /_/ 20th of ___________
Amount Name of Bank ABA Number
________________ __________________________ ________________________
Bank Address Bank Account No.
___________________________________ ____________________________________
Name Shown on Bank Records
_______________________________________________________________________________
Attached is one of unsigned checks marked "Void" to ensure the correct encoding
_____________________________________ _____________________________________
Signature Date Signature Co-depositor Date
- -------------------------------------------------------------------------------
8. YOUR SIGNATURE AND TAX CERTIFICATIONS
See enclosed substitute Instructions and Important Notice. The Fund
reserves the right to refuse to open an account without either a certified
taxpayer identification number ("TIN") or a certification of foreign
status. Failure to provide the tax certifications in this section may
result in backup withholding on payments relating to your account and/or
in your inability to qualify for treaty withholding rates.
_______________________________ OR ________________________________
Social Security Number Employer Identification Number
I am a citizen of: /_/ U.S. /_/ _____________
My Country of residence for tax purposes is: /_/ U.S. /_/ _________________
Check one of the following:
/_/ The number shown above is my correct TIN. I am not subject to
backup withholding due to underreporting of interest or dividend income
either because no notification has been received from the IRS or because
the IRS has notified me that I am no longer subject to backup withholding.
(If you are subject to backup withholding, please cross out the second
sentence.)
/_/ Awaiting TIN. A TIN has not been issued to me, but I am in the
process of applying for a TIN from either the appropriate Internal Revenue
Service Center or Social Security Administration Office. I understand that
if I do not provide a TIN to the Fund within 60 days, the Fund is required
to commence backup withholding until I provide a certified TIN. I am not
subject to backup withholding due to underreporting of interest or
dividend income either because no notification has been received from the
IRS or because the IRS has notified me that I am no longer subject to
backup withholding. (If you are subject to backup withholding, please
cross out the third sentence.)
/_/ Exempt Recipient. I am an Exempt Recipient. The instructions
give a list of the most common Exempt Recipients. (You should still
provide a TIN.)
/_/ Exempt Foreign Person. I am an Exempt Foreign Person as
explained in the instructions.
Under the penalties of perjury, I certify that (1) the information
provided on this application is true, correct and complete, (2) I have
read the prospectus for the Fund in which I am investing and agree to the
terms thereof, and (3) I am of legal age or an emancipated minor.
DATE: _____________________________________
___________________________________ __________________________________
Signature Signature
- -------------------------------------------------------------------------------
9. BROKER/DEALER USE ONLY: (PLEASE PRINT) RANSON DEALER #
We hereby submit this application for the purchase of shares of the Kansas
Municipal Fund indicated in accordance with the terms of our selling
agreement with Ranson Managed Portfolios and with the prospectus for the
Kansas Municipal Fund. We agree to notify Distributor of any purchases
made under a letter of intent or right of accumulation.
Wire Order Only: The attached check for $_____________ should be
applied against wire order
Confirmation Number______________ Dated____________ For ________ Shares
Securities Dealer Name _____________________________________ ______________
Main Office Address ________________________________________ Account No.
Branch #____ Rep #_____ Representative Name_________________ ______________
Branch Address___________________ Telephone Number__________ Salesman's
Authorized Signature, Last Name
Securities Dealer___________________________ Title__________ ______________
R.R. No.
ACCEPTED: Ranson Managed Portfolios By___________________
Date_________________
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10. ADDITIONAL INFORMATION
Each time there is a transaction in a Shareholder Account, the shareholder
will receive a confirmation statement showing the current transaction.
Certificates can be issued for full shares only. These certificates will
be sent to the shareholder only upon specific request.
The method of delivery of share certificates is at the option and risk of
the shareholder. If sent by mail, registered and insured mail is suggested.
All correspondence regarding Shareholder Accounts should be addressed to
the Fund, c/o Investors Fiduciary Trust Company, P. O. Box 419352, Kansas
City, Missouri 64141.
This form is not authorized for distribution to prospective purchasers of
shares of the Portfolio in states where such shares are not qualified for
sale.
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STATEMENT OF ADDITIONAL INFORMATION
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
The Kansas Municipal Fund is an investment portfolio of Ranson Managed
Portfolios, a management investment company. The term "the Fund" as used
herein shall refer to either Ranson Managed Portfolios or The Kansas
Municipal Fund series of Ranson Managed Portfolios as the context may
require. The investment objective of The Kansas Municipal Fund is to provide
its shareholders with as high a level of current income exempt from both
federal income tax and Kansas income tax as is consistent with preservation
of capital. The Fund's manager is Ranson Capital Corporation.
This Statement of Additional Information is not a prospectus but shall be
read in conjunction with the Prospectus for the Fund dated November 30, 1995
(the "Prospectus"). A copy of the Prospectus may be obtained without charge
by calling the Fund at 316/262-4955.
The Prospectus and this Statement of Additional Information omit certain
of the information contained in the registration statement filed with the
Securities and Exchange Commission, Washington, D.C. These items may be
obtained from the Commission upon payment of the fee prescribed, or inspected
at the Commission's office at no charge.
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TABLE OF CONTENTS
PAGE
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The Fund and its Shares 2
Investment Objective, Policies and Restrictions 2
Officers and Trustees 6
Custodian 7
Independent Auditors 8
Management and Investment Advisory Agreement 8
Portfolio Transactions 8
Additional Information Regarding Shares and Rights 9
Expenses of the Fund 11
Performance Data 12
Report of Allen, Gibbs & Houlik, Independent Auditors 13
Financial Statements 14
</TABLE>
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED NOVEMBER 30, 1995.
THE FUND AND ITS SHARES
The Fund is an open-end non-diversified management investment company
organized as an unincorporated business trust under the laws of Massachusetts
on August 10, 1990.
To the best of the Fund's knowledge, as of November 25, 1995, no persons
or entities owned more than 5% of the shares of the Fund.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Investment Objective And
Policies."
The investment objective of the Fund is to provide its shareholders with
as high a level of current income that is exempt from both federal income tax
and Kansas income tax as is consistent with preservation of capital.
The investment policy of the Fund is to invest at least 80% of its assets
in a portfolio of Kansas Municipal Securities (as defined in the Prospectus)
which generate interest income that is exempt, in the opinion of bond
counsel, from both federal income tax and Kansas income tax. These municipal
securities (referred to in the Prospectus as "Kansas Municipal Securities")
generally include debt obligations of the State of Kansas, its political
subdivisions, municipalities, agencies and authorities, and certain
industrial development and other revenue bonds, short-term municipal notes,
municipal leases and tax-exempt commercial paper issued by such entities.
Futures Contracts, Options on Futures and Municipal Bond Index Futures.
The Fund may purchase or sell financial futures contracts ("futures
contracts") and related options thereon. These futures contracts and related
options thereon will be used only as a hedge against anticipated interest
rate changes. In general a futures contract sale creates an obligation by the
Fund, as seller, to deliver the specific type of instrument called for in the
contract at a specified future time for a specified price. A futures contract
purchase would generally create an obligation by the Fund, as purchaser, to
take delivery of the specific type of financial instrument at a specified
future time at a specified price. The specific securities delivered or taken,
respectively, at settlement date would not be determined until on or near
that date. The determination would be in accordance with the rules of the
exchange on which the futures contract sale or purchase was effected.
Although the terms of futures contracts specify actual delivery or
receipt of securities, in most instances the contracts are closed out before
the settlement date without the making or taking of delivery of the
securities. Closing out a futures contract is usually effected by entering
into an offsetting transaction. An offsetting transaction for a futures
contract sale is effected by the Fund entering into a futures contract
purchase for the same aggregate amount of the specific type of financial
instrument at the same delivery date. If the price in the sale exceeds the
price in the offsetting purchase, the Fund immediately is paid the difference
and thus realizes a gain. If the offsetting purchase price exceeds the sale
price, the Fund pays the difference and realizes a loss. Similarly, the
closing out of a futures contract purchase is effected by the Fund entering
into a futures contract sale. If the offsetting sale price exceeds the
purchase price, the Fund realizes a gain, and if the offsetting sale price is
less than the purchase price, the Fund realizes a loss.
Unlike a futures contract, which requires the parties to buy and sell an
instrument on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract (a
long position in the case of a call option and a short position in the case
of a put option). If the holder decides not to enter into the contract, the
premium paid for the contract is lost. Since the cost of the option is fixed,
there are no daily payments of cash by the purchaser to reflect the change in
the value of the underlying contract, as discussed below for futures
contracts. The seller of the option, however, may be required to make daily
2
maintenance margin payments to reflect the change in the value of the
underlying contract. The value of the option is reflected in the net asset
value of the Fund.
The Fund is required to maintain margin deposits with brokerage firms
through which it effects futures contracts and options thereon. The initial
margin requirements vary according to the type of the underlying instrument.
In addition, due to current industry practice, daily variations in gains and
losses on open contracts are required to be reflected in cash in the form of
variation margin payments. The Fund may be required to make additional margin
payments during the term of the contract.
Currently, futures contracts can be purchased on debt securities such as
U.S. Treasury Bills and Bonds, U.S. Treasury Notes with maturities between 6-
1/2 and 10 years, Certificates of the Government National Mortgage
Association, Bank Certificates of Deposit and on a municipal bond index (see
below). The Fund may purchase or sell interest rate futures contracts
covering these types of financial instruments as well as new types of
contracts that become available in the future.
Financial futures contracts and related options contracts are traded in
an auction environment on the floors of several futures Exchanges-
principally, the Chicago Board of Trade, the Chicago Mercantile Exchange and
the New York Futures Exchange.
A risk in employing futures contracts to protect against the price
volatility of portfolio securities is that the prices of securities subject
to futures contracts may not correlate perfectly with the behavior of the
cash prices of the Fund's portfolio securities. The correlation may be
distorted in part by the fact that the futures market is influenced by short-
term traders seeking to profit from the difference between a contract or
security price objective and their cost of borrowed funds. This would reduce
the value of futures contracts for hedging purposes over a short time period.
The correlation may be further distorted since the futures contracts that are
being used to hedge are not based on municipal obligations.
Another risk is that the Manager could be incorrect in its expectations
as to the direction or extent of various interest rate movements or the time
span within which the movements take place. For example, if the Fund sold
futures contracts in anticipation of an increase in interest rates, and then
interest rates went down, causing bond prices to rise, the Fund would lose
money, including transaction costs, on the sale.
In addition to the risks associated with investing in options on
securities, there are particular risks associated with trading in options on
futures. In particular, the ability to establish and close out positions on
such options will be subject to the development and maintenance of a liquid
market in such options. It is not certain that this market will develop.
A substantial majority (i.e., approximately 75%) of all anticipatory
hedge transactions (transactions in which the Fund does not own, at the time
of the transaction, but expects to acquire the securities corresponding to
the relevant futures contract) involving the purchase of futures contracts,
call options or written put options thereon will be completed by the purchase
of securities which are the subject of the hedge.
The Fund may not enter into futures contracts or related options thereon
if, immediately thereafter, the amount committed to initial margin plus the
amount paid for option premiums on open contracts exceeds 5% of the value of
the Fund's total assets. In instances involving the purchase of futures
contracts by the Fund, an amount equal to the gross market value of the
futures contract will be deposited in a segregated account of cash and cash
equivalents and thereby ensure that the use of such futures is unleveraged.
The Fund may not purchase or sell futures contracts or related positions if,
immediately thereafter, more than one-third of its net assets would be
hedged.
The Fund may utilize trading in municipal bond index futures contracts
for hedging purposes. The strategy in employing such contracts will be
similar to that discussed above with respect to financial futures and options
3
thereon. A municipal bond index is a method of reflecting in a single number
the market value (based on an average of quotations from certain dealers) of
many different municipal bonds. The index fluctuates in response to changes
in the market values of the bonds included within the index. Unlike futures
contracts on particular financial instruments, futures on a municipal bond
index will be settled in cash if held until the close of trading in the
contract. However, as in any other futures contract, a position in the
contract may be closed out by purchase or sale of an offsetting contract for
the same delivery month prior to expiration of the contract. Because trading
in municipal bond index futures contracts has been taking place only for a
short time, the Fund's ability to utilize such contracts will be dependent
upon the development and maintenance of a market in such contract.
The Securities and Exchange Commission generally requires that when
investment companies, such as the Fund, effect transactions of the foregoing
nature, such funds must either segregate cash or high quality, readily
marketable portfolio securities with its custodian in the amount of its
obligation under such transactions, or cover such obligations by maintaining
positions in portfolio securities, futures contracts or options that would
serve to satisfy or offset the risk of such obligations. When effecting
transactions of the foregoing nature, the Fund will comply with such
segregation or cover requirements.
Investment Restrictions. Fundamental investment restrictions limiting the
investments of the Fund provide that the Fund may not:
1. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes and then in an amount not exceeding 10% of the
value of the Fund's total assets (including the amount borrowed). The
Fund will not borrow for leveraging purposes, and securities will not
be purchased while borrowings are outstanding. Interest paid on any
money borrowed will reduce the Fund's net income.
2. Pledge, hypothecate, mortgage or otherwise encumber its assets, in
excess of 10% of the value of its total assets (taken at the lower of
cost or current value) and then only to secure borrowings for
temporary or emergency purposes.
3. Purchase securities on margin, except such short-term credits as may
be necessary for the clearance of purchases and sales of securities.
The deposit of initial or maintenance margin by the Fund in connection
with financial futures contracts and related options transactions,
including municipal bond index futures contracts or related options
transactions is not considered the purchase of a security on margin.
4. Make short sales of securities or maintain a short position for the
account of the Fund including any short sales "against the box."
5. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of its portfolio investments it may
be deemed to be an underwriter under federal securities laws.
6. Purchase or sell real estate, but this shall not prevent the Fund from
investing in securities which are secured by real estate or interests
therein.
7. Purchase or sell commodities or commodity contracts except to the
extent the options and futures contracts the Fund may trade in are
considered to be commodities or commodities contracts.
8. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to in
the Prospectus.
4
9. Invest more than 25% of its total assets in the securities of issuers
in any single industry; provided that there shall be no such
limitation on the purchase of securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. (The Fund may,
from time to time, invest more than 25% of its assets in a particular
segment of the municipal bond market; however, the Fund will not
invest more than 25% of its assets in industrial development bonds in
a single industry.)
10. Invest in securities of any issuer if, to the knowledge of the Fund,
officers and Trustees of the Fund or officers and directors of the
Manager who beneficially own more than 1/2 of 1% of the securities of
that issuer together own more than 5%.
11. Purchase securities restricted as to resale, if, as a result, such
investment would exceed 5% of the value of such Fund's net assets.
12. Invest in (a) securities which at the time of such investment are not
readily marketable, including participation interests in municipal
leases, (b) securities the disposition of which is restricted under
federal securities laws (as described in fundamental restriction (11)
above) and (c) repurchase agreements maturing in more than seven days,
if, as a result, more than 10% of such Fund's net assets (taken at
current value) would be invested in securities described in (a), (b)
and (c) above.
13. Invest more than 5% of its total assets in securities of any one
issuer, except that this limitation shall not apply to securities of
the U.S. Government, its agencies and instrumentalities and except
that with respect to 50% of the Fund's total assets the Fund may
invest up to 25% of its total assets in securities of any one issuer.
The Fund may not change any of these investment restrictions without the
approval of the lesser of (i) more than 50% of the Fund's outstanding shares
or (ii) 67% of the Fund's shares present or represented by proxy at a meeting
at which the holders of more than 50% of the outstanding shares are present
or represented by proxy. As long as the percentage restrictions described
above are satisfied at the time of the investment or borrowing the Fund will
be considered to have abided by those restrictions even if, at a later time,
a change in values or net assets causes an increase or decrease in percentage
beyond that allowed.
The following investment restrictions of the Fund may be changed by the
Board of Trustees of the Fund.
The Fund will not:
1. Invest more than 5% of its total assets in the securities of any other
single investment company, nor more than 10% of its total assets in
the securities of two or more other investment companies, except as
part of a merger, consolidation or acquisition of assets.
2. Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
An advisory fee will be charged for assets invested in securities of
other investment companies. However, the Fund will not invest more than 10%
of its total assets in such securities.
5
OFFICERS AND TRUSTEES
The officers and Trustees of the Fund, their principal occupations for
the last five years and their affiliations, if any, with Ranson Capital
Corporation (the "Fund Manager" and "Distributor"), and with Ranson &
Company, Inc. are as follows:
<TABLE>
<CAPTION>
(3)
Principal (4)
(1) (2) Occupation(s) Positions Held with Affili-
Name and Address Position(s) Held During Past ated Persons or Principal
(Age) with Registrant 5 Years Underwriter of Registrant
______________________________________________________________________________________________________________________
<S> <C> <C> <C>
John S. Ranson* ** Chairman and Trustee Senior Consultant President, CEO and
(66) Ranson Capital Corporation; Director of Ranson &
Suite 450 (since June, 1994) Company, Inc.
120 S. Market Chairman and Director of
Wichita, KS 67202 Ranson Capital Corporation;
(1989 to June 1994)
President, Director and CEO
of Ranson & Company, Inc.
J. Joseph Hannah Trustee Partner of Radke & Hannah
(38) Orthodontics Practice
10315 Greentree Court Olathe, Kansas
Olathe, Kansas 66061
Kevin F. Mitchelson Trustee Partner of Wheeler &
(38) Mitchelson, Chartered
Fourth and Broadway (Attorneys)
P.O. Box 610 Pittsburg, KS
Pittsburg, KS 66762
H. Dene Heskett Trustee Retired, Financier
(83)
PO Box 193
Grove, OK 74344
Harrison F. Johnson Trustee Retired, previously
(92) President of Union Gas
1020 West Sycamore Systems
Independence, KS 67301 Independence, Kansas
John A. Ranson* ** President and Trustee President, CEO and Director President, CEO and
(38) of Ranson Capital Director of
Suite 450 Corporation (since 1990); Ranson Capital
120 S. Market Corporation
Wichita, KS 67202
_______________
* "Interested Person" of the Fund as that term is defined in the
Investment Company Act of 1940.
** Member of the Fund's Executive Committee which acts on day to day
matters on behalf of the Fund.
6
Alex Meitzner* Executive Executive Vice President/ Executive Vice
(35) Vice President Trader, and Director of President/Trader
Suite 450 Ranson Capital Corporation and Director of
120 S. Market (since 1990); Ranson Capital
Wichita, KS 67202 Corporation
Robin K. Pinkerton* Secretary, Treasurer Vice President, Secretary/ Vice President,
(40) Treasurer, Director, Ranson & Company,
Suite 450 Financial & Operations Inc.; Vice President
120 S. Market Officer and Chief Secretary/Treasurer,
Wichita, KS 67202 Compliance Officer of Director, Financial
Ranson Capital Corporation & Operations Officer
(since 1990); and Chief Compliance
Vice President, Officer of Ranson
Ranson & Company, Inc. Capital Corporation
(since 1989)
_______________
</TABLE>
[FN]
* "Interested Person" of the Fund as that term is defined in the
Investment Company Act of 1940.
** Member of the Fund's Executive Committee which acts on day to day
matters on behalf of the Fund.
John S. Ranson is the father of John A. Ranson.
On October 17, 1994, Robert G. Langenwalter resigned from the Fund's
Board of Trustees. Mr. Langenwalter had been a member of the Fund's Board
of Trustees since the Fund's inception in 1990. On October 17, 1994, the
remaining Trustees elected J. Joseph Hannah to fill the vacancy created by
Mr. Langenwalter's resignation.
The compensation of the officers and Trustees who are interested persons
(as defined in the Investment Company Act of 1940) of the Manager is paid by
the Manager. The Fund pays Trustees who are not interested persons of the
Manager or the Distributor $500 plus expenses per meeting of the Board of
Trustees and committees thereof attended by such Trustee. None of the
trustees or officers so affiliated received compensation from the Fund for
services as trustees of the Fund. Fees and expenses paid to Trustees who are
interested persons of the Manager or the Distributor totaled $6,442 for the
fiscal year ended July 31, 1994.
As of November 30, 1994 the officers and Trustees of the Fund owned, as
a group, less than 1% of the shares of the Fund.
CUSTODIAN
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, is the Custodian of the Fund and has custody of all
securities and cash of the Fund. The Custodian, among other things, attends
to the collection of principal and income, and payment for and collection of
proceeds of securities bought and sold by the Fund.
7
INDEPENDENT AUDITORS
Shareholders will receive annual financial statements, together with a
report of independent auditors, and semi-annual unaudited financial
statements of the Fund. The independent auditors report on the Fund's annual
financial statements, review certain regulatory reports and the Fund's income
tax returns, and perform other professional accounting, auditing, tax and
advisory services when engaged to do so by the Fund. The independent auditors
for the Fund for the period from the commencement of operations of the Fund
on November 15, 1992 to July 31, 1992, were Ernst & Young, 1200 Main Street,
Kansas City, Missouri. In July 1992, the Fund determined to change
accountants to Allen, Gibbs & Houlik, L.C., 301 North Main, Wichita, Kansas
67202. There were no disagreements at any time between the Fund and Ernst &
Young on any matters of accounting principles or practices, financial
statement disclosure or auditing scope or procedure.
MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT
The agreement between the Manager and the Fund provides that the Manager
will supply investment research and portfolio management, including the
selection of securities for the Fund to purchase, hold or sell, and the
selection of brokers through whom the Fund's portfolio transactions are
executed. The Manager also administers the business affairs of the Fund,
furnishes offices, necessary facilities and equipment, provides
administrative services, and permits its officers and employees to serve
without compensation as directors and officers of the Fund if duly elected to
such positions. Fees and expense limitations under the management agreement
are described in the Prospectus.
The Management and Investment Advisory Agreement was submitted to the
shareholders of the Fund for their approval at the first shareholder's
meeting. The agreement will continue in effect from year to year if
specifically approved by the Fund's Trustees or the Fund's shareholders and
by the Fund's Disinterested Trustees in compliance with the requirements of
the Investment Company Act of 1940 (the "1940 Act"). The agreement may be
terminated without penalty upon 60 days' written notice by either party and
will automatically terminate in the event of assignment.
Ranson Capital Corporation serves as the Fund Manager and is a wholly-
owned subsidiary of The Ranson Company, Inc., a Kansas corporation. John A.
Ranson and Alex R. Meitzner own controlling interests in The Ranson Company
Inc.
PORTFOLIO TRANSACTIONS
The Manager will place orders for portfolio transactions for the Fund
with broker-dealer firms giving consideration to the quality, quantity and
nature of each firm's professional services. These services include
execution, clearance procedures, wire service quotations and statistical and
other research information provided to the Fund and the Manager including
quotations necessary to determine the value of the Fund's net assets. Any
research benefits derived are available for all clients of the Manager. Since
statistical and other research information is only supplementary to the
research efforts of the Manager and still must be analyzed and reviewed by
one of its staff, the receipt of research information is not expected to
materially reduce the Manager's expenses. In selecting among the firms
believed to meet the criteria for handling a particular transaction, the
Manager may take into consideration that certain firms have sold or are
selling shares of the Fund and that certain firms provide market, statistical
or other research information to the Fund and the Manager, and may select
firms that are affiliated with the Fund or the Manager.
If it is believed to be in the best interests of the Fund, the Manager
may place portfolio transactions with brokers who provide the types of
service described above, even if it means the Fund will have to pay a higher
8
commission (or, if the broker's profit is part of the cost of the security,
will have to pay a higher price for the security) than would be the case if
no weight were given to the broker's furnishing of these services. This will
be done, however, only if, in the opinion of the Manager, the amount of
additional commission or increased cost is reasonable in relation to the
value of the services.
If purchases or sales of securities of the Fund and of one or more other
portfolios of the Fund, investment companies or clients supervised by the
Manager are considered at or about the same time, transactions in such
securities will be allocated among the several portfolios of the Fund,
investment companies and clients in a manner deemed equitable to all by the
Manager, taking into account the respective sizes of the funds and the amount
of securities to be purchased or sold. Although it is possible that in some
cases this procedure could have a detrimental effect on the price or volume
of the security as far as the Fund is concerned, it is also possible that the
ability to participate in volume transactions and to negotiate lower
brokerage commissions will be beneficial to the Fund. The Fund expects that
its portfolio transactions in Kansas Municipal Securities will generally be
effected on a principal (as opposed to agency) basis and, accordingly, does
not expect to incur significant brokerage commissions.
While the Manager will be primarily responsible for the placement of the
Fund's business, the policies and practices in this regard must be consistent
with the foregoing and will at all times be subject to review by the Trustees
of the Fund.
The Board of Trustees has adopted certain policies incorporating the
standards of Rule 17e-1 issued by the Securities and Exchange Commission
under the 1940 Act which requires that the commissions paid to the
Distributor and other affiliates of the Fund must be reasonable and fair
compared to the commissions, fees or other remuneration received or to be
received by other brokers in connection with comparable transactions
involving similar securities during a comparable period of time. The Rule and
procedures also contain review requirements and require the Manager to
furnish reports to the Board of Trustees and to maintain records in
connection with such reviews. After consideration of all factors deemed
relevant, the Board of Trustees will consider from time to time whether the
advisory fee will be reduced by all or a portion of the brokerage commission
given to affiliated brokers.
ADDITIONAL INFORMATION REGARDING SHARES AND RIGHTS
The Fund is a non-diversified, open-end investment company established
under Massachusetts law by an Agreement and Declaration of Trust ("Trust
Agreement") dated August 10, 1990, and is the type of organization commonly
known as a "Massachusetts business trust." It is a series company as
contemplated under Rule 18f-2 under the 1940 Act, having three series of
shares offered at this time which are known as "The Kansas Municipal Fund",
"The Kansas Insured Intermediate Fund" and "The Nebraska Municipal Fund". The
Trust Agreement provides that each shareholder, by virtue of becoming such,
will be held to have expressly assented and agreed to the terms of the Trust
Agreement and to have become a party thereto.
The Trust Agreement permits the Trustees to issue an unlimited number of
full and fractional shares, without par value, from each portfolio. Each
share of a portfolio represents an equal proportionate interest in the assets
and liabilities belonging to such portfolio with each other share of such
portfolio and is entitled to such dividends and distributions out of the
income belonging to such portfolio as are declared by the Trustees. The
shares do not have cumulative voting rights nor any preemptive rights. In
case of a liquidation, subject to the rights of creditors, the holders of
shares of each portfolio being liquidated will be entitled to receive as a
series a distribution out of the net assets belonging only to that portfolio.
Under the Trust Agreement, expenses attributable to any specific portfolio
(whether start-up for a new portfolio or on-going operating expenses) will be
borne by that portfolio. Any general expenses of the Fund not readily
identifiable as belonging to a particular portfolio are allocated by or under
the direction of the Trustees in such manner as the Trustees determine to be
fair and equitable, usually in proportion to the portfolio's relative net
assets. The net asset value of the shares of any portfolio will be computed
based only upon the net assets of such portfolio.
9
As a general matter, the Fund will not hold annual or other meetings of
the Fund's shareholders. This is because the Trust Agreement provides for
Fund shareholders voting only (a) for the election or removal of one or more
Trustees if a meeting is called for that purpose; (b) with respect to any
contract as to which shareholder approval is required by the 1940 Act (such
as the Fund's Management and Investment Advisory Agreement and the
Distribution and Services Agreement); (c) with respect to any termination or
reorganization of the Fund or any portfolio to the extent and as provided in
the Trust Agreement; (d) with respect to any amendment of the Trust Agreement
(other than amendments establishing and designating new portfolios, changing
the name of the Fund or the name of any portfolio, supplying any omission,
curing any ambiguity, or curing, correcting or supplementing any provision
thereof which is internally inconsistent with the 1940 Act or with the
requirements of the Internal Revenue Code and applicable regulations for the
Fund to obtain the most favorable treatment thereunder available to regulated
investment companies), which amendments require approval by more than 50% of
the shares entitled to vote; (e) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Fund or the shareholders,
and (f) with respect to such additional matters relating to the Fund as may
be required by the 1940 Act (such as changes in the Fund's investment
policies and restrictions), the Trust Agreement, the by-laws of the Fund, or
any registration of the Fund with the Securities and Exchange Commission or
any state, or as the Trustees may consider necessary or desirable.
Each Trustee serves until the next meeting of shareholders, if any,
called for the purpose of considering the election or reelection of such
Trustee or of a successor to such Trustee, and until the election and
qualification of his successor, if any, elected at such meeting, or until
such Trustee sooner dies, resigns, retires or is removed by the shareholders
or two-thirds of the Trustees.
The Trust Agreement provides that on any matter submitted to a vote of
the shareholders, all Fund shares entitled to vote, irrespective of
portfolio, shall be voted in the aggregate and not by portfolio except that
(a) as to any matter with respect to which a separate vote of any portfolio
is required by the 1940 Act, such requirements as to a separate vote by that
portfolio shall apply in lieu of the aggregate voting as described above, and
(b) when the Trustees have determined that the matter affects only the
interests of one or more portfolios, then only shareholders of the affected
portfolios shall be entitled to vote thereon.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of the 1940 Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an
investment company with separate portfolios like this Fund, shall not be
deemed to have been effectively acted upon unless approved by the holders of
a majority of the outstanding shares (as defined below) of each portfolio
"affected by" such matter. Rule 18f-2 further provides that a portfolio shall
be deemed to be affected by a matter unless the interests of each portfolio
in the matter are substantially identical or the matter does not affect any
interests of such portfolio. The Rule specifically exempts the selection of
independent auditors, the approval of principal underwriting contracts and
the election of trustees from such separate voting requirements and
specifically provides that any required approval of the Fund's Management and
Investment Advisory Agreement and the Distribution and Services Agreement is
subject to such separate voting requirements. In addition, changes in the
Fund's investment policies are also subject to separate voting requirements.
The Trust Agreement provides that the presence at a meeting of
shareholders in person or by proxy of shareholders entitled to vote at least
thirty percent (30%) of the votes entitled to be cast on a matter (or if
voting is to be by portfolio, shareholders of each portfolio entitled to vote
at least thirty percent (30%) of the votes entitled to be cast by each
portfolio) shall constitute a quorum. This permits a meeting of shareholders
of the Fund to take place even if less than a majority of the shareholders
are present on its scheduled date. Shareholders would in such a case be
permitted to take action which does not require a larger vote than a majority
of a quorum (the election of Trustees and the ratification of the selection
of independent public accountants are examples). Some matters requiring a
larger vote under the Trust Agreement, such as termination or reorganization
of the Fund and certain amendments of the Trust Agreement, would not be
10
affected by this provision. This is also true with respect to matters which
under the 1940 Act require the vote of a majority of the outstanding voting
shares (as defined below) of the Fund or a particular portfolio.
As used in the Prospectus and this Statement of Additional Information,
the term "majority of the outstanding shares" of either the Fund or a
particular portfolio of the Fund means the vote of the lesser of (i) 67% or
more of the shares of the Fund or such portfolio present or represented by
proxy at a meeting, if the holders of more than 50% of the outstanding shares
of the Fund or of such portfolio are present or represented by proxy, or (ii)
more than 50% of the outstanding shares of the Fund or such portfolio.
Under the terms of the Trust Agreement, a Trustee is liable for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, and for nothing else, and shall
not be liable for errors of judgment or mistakes of fact or of law. The Trust
Agreement provides for indemnification by the Fund of the Trustees and the
officers of the Fund except with respect to any matter as to which such
person did not act in good faith in the reasonable belief that his action was
in or not opposed to the best interests of the Fund (or the predecessor
corporation) but such person may not be indemnified against any liability to
the Fund or the Fund shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. The Trust
Agreement also provides that any agreement or undertaking by the Trustees on
behalf of the Fund is binding upon the Fund only and not on the Trustees
personally.
EXPENSES OF THE FUND
The Fund's expenses include, among others, management and investment
advisory fees, 12b-1 fees, accounting and administrative fees, taxes,
brokerage fees and commissions, if any, fees of Disinterested Trustees,
expenses of Trustees' and shareholders' meetings, insurance premiums,
expenses of redemption of shares, expenses of issue and sale of shares (to
the extent not borne by the Distributors), expenses of printing and mailing
certificates, association membership dues, charges of the Fund's custodian,
and bookkeeping, auditing and legal expenses, and the fees and expenses of
registering the Fund and its shares with the Securities and Exchange
Commission, registering or qualifying its shares under state securities laws
and the expenses of preparing and mailing prospectuses and reports to
shareholders.
For the years ended July 31, 1993, July 31, 1994, and July 31, 1995 the
Manager earned $376,029, $594,175 and $634,115 respectively, in Management
and investment advisory fees, of which $267,614, $412,573 and $295,875
respectively was waived by the Manager.
For the years ended July 31, 1993, July 31, 1994, and July 31, 1995 the
Manager earned $91,480, $113,767 and $115,363 respectively, in administrative
and accounting services fees of which $6,740, $6,556 and $0 respectively was
waived by the Manager.
For the year ended July 31, 1993 the Rule 12b-1 fee totaled $188,694, of
which $195 was waived by the Distributor. For the year ended July 31, 1994,
the Fund paid the Distributor a Rule 12b-1 fee for administrative and
shareholder services in the amount of $297,086 all of which was paid to
broker-dealers and banks. For the year ended July 31, 1995, the Fund paid
the Distributor $317,057, $261,386 of which was paid to broker-dealers and
banks.
In addition, in connection with sales of shares of the Fund, Ranson
Capital Corporation retained underwriting commissions paid by shareholders in
the amount of $308,508 during the year ended July 31, 1993, $223,930 during
the year ended July 31, 1994 and $69,325 during the year ended July 31, 1995.
11
PERFORMANCE DATA
As described in the prospectus, the Fund's historical performance may be
shown in the form of "current yield," "tax equivalent yield," "distribution
return," "average annual total return" and "total return" figures. These
various measures of performance are described below.
Current yield is determined in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission by annualizing
net investment income earned per share for a stated period (normally one
month or thirty days) and dividing the result by the maximum public offering
price at the end of
the evaluation period. The Securities and Exchange Commission's rules for
calculating current yield require the use of certain standardized accounting
practices which are not necessarily consistent with those used by the Fund in
the preparation of its audited financial statements or federal tax return.
The Fund's current yield figure is based upon historical results and is not
necessarily representative of future performance. The current yield for the
one-month period ending July 31, 1995 was 5.06%.
Tax equivalent yield is determined by dividing that portion of current
yield which is tax-exempt by one minus a stated income tax rate and adding
that portion of current yield, if any, that is not tax-exempt. The tax
equivalent yield for the one-month period ending July 31, 1995 was 8.96%.
The Fund's distribution return is computed by dividing the income per
share by the number of days in the current month, and the quotient is
multiplied by 365. The result is divided by the offering price per share on
the last day of the month. The distribution return for the one-month period
ending July 31, 1995 was 5.05%.
The Fund's average annual total return quotation is computed in
accordance with a standardized method prescribed by rules of the Securities
and Exchange Commission. The average annual total return for the Fund for a
specific period is found by first taking a hypothetical $1,000 investment
("initial investment") in the Fund's shares on the first day of the period
reduced by the maximum sales charge in effect on that date and computing the
"redeemable value" of that investment at the end of the period. The
redeemable value is then divided by the initial investment, and the quotient
is taken to the Nth root (N representing the number of years in the period)
and 1 is subtracted from the result, which is then expressed as a percentage.
The calculation assumes that all income and capital gains dividends paid by
the Fund have been reinvested at net asset value on the reinvestment dates
during the period. The average annual total return for the period from
November 15, 1990 to July 31, 1995 was 6.40%.
The Fund's total return quotation is computed by aggregating the
percentage or dollar value change over the period in question, exclusive of
the initial sales charge. The total return for the period from November 15,
1990 to July 31, 1995 was 39.87%.
The Fund's performance figures are based upon historical results and are
not necessarily representative of future performance. The Fund's shares are
sold at net asset value plus a maximum sales charge of 4.25% of the offering
price. Returns and net asset value will fluctuate. Factors affecting the
Fund's performance include general market conditions, operating expenses and
investment management. Any additional fees charged by a dealer or other
financial services firm would reduce the returns described in this section.
Shares of the Fund are redeemable at net asset value, which may be more or
less than original cost.
12
REPORT OF ALLEN, GIBBS & HOULIK, L.C. INDEPENDENT AUDITORS
The Shareholders and Board of Trustees
Ranson Managed Portfolios-
The Kansas Municipal Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The Kansas Municipal Fund
portfolio of Ranson Managed Portfolios as of July 31, 1995, the related
statement of operations for the year then ended, the statements of changes in
net assets for the years ended July 31, 1995 and 1994 and the financial
highlights for the years ended July 31, 1995, 1994 and 1993. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the year ended July 31, 1992 and for the period from November
15, 1990 (Commencement of Public Offering) to July 31, 1991 were audited by
other auditors whose report dated September 4, 1992 expressed an unqualified
opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1995, by correspondence with the Fund's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the 1995 and 1994 financial statements and financial
highlights referred to above present fairly, in all material respects, the
financial position of The Kansas Municipal Fund portfolio of Ranson Managed
Portfolios at July 31, 1995, the results of its operations for the year then
ended, and the statements of changes in its net assets for the years ended
July 31, 1995 and 1994 and the financial highlights for the years ended July
31, 1995, 1994 and 1993, in conformity with generally accepted accounting
principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
September 11, 1995
13
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
General Obligation Bonds - 19.1% Standard & Poor's Amount (Note 1)
_______________________________ ___________________ ______ _______
<S> <C> <C> <C>
Wyandotte County, Kansas General Obligation
Refunding and Improvement Bonds Series
1989 (FGIC Insured) 7.00%, 9/1/05 Aaa/AAA $ 235,000 $ 247,854
City of Shawnee, Kansas General Obligation
Internal Improvement Bonds Series 1992 B,
5.80%, 12/1/05 A1/NR 485,000 510,147
City of Shawnee, Kansas General Obligation
Internal Improvement Bonds Series 1992 B,
5.85%, 12/1/06 A1/NR 235,000 245,909
Unified School District No. 437, Shawnee County,
Kansas (Auburn-Washburn) General Obligation
Refunding Bonds Series 1992 (FGIC Insured)
6.50%, 9/1/07 Aaa/AAA 100,000 106,920
Unified School District No. 102, Gray County,
Kansas (Cimarron-Ensign) General Obligation
Bonds Series 1993, 6.00%, 9/1/09 NR/NR 145,000 147,765
Unified School District No. 437, Shawnee County,
Kansas (Auburn-Washburn) General Obligation
Refunding Bonds Series 1992 (FGIC Insured)
6.60%, 9/1/09 Aaa/AAA 500,000 538,143
Unified School District No. 266, Sedgwick County,
Kansas (Maize) General Obligation School
Building Improvement Bonds Series 1993 (FGIC
Insured) 5.50%, 9/1/10 Aaa/AAA 465,000 463,585
Unified School District No. 253, Lyon County,
Kansas (Emporia) General Obligation Refunding
Bonds Series 1993, 5.60%, 10/1/10 A/NR 800,000 805,699
Unified School District No. 260, Sedgwick County,
Kansas (Derby) General Obligation Bonds Series
1992 (AMBAC Insured) 6.00%, 10/1/10 Aaa/AAA 500,000 513,560
Unified School District No. 437, Shawnee County,
Kansas (Auburn-Washburn) General Obligation
Bonds Series 1993 (AMBAC Insured) 5.25%,
9/1/11 Aaa/AAA 250,000 238,508
See Notes to Financial Statements.
14
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
General Obligation Bonds (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ ______ _______
Unified School District No. 232, Johnson County,
Kansas (DeSoto) General Obligation School
Building Bonds Series 1992 (Capital Guaranty
Insured) 6.00%, 3/1/12 Aaa/AAA 500,000 508,598
Unified School District No. 437, Shawnee County,
Kansas (Auburn-Washburn) General Obligation
Bonds Series 1993 (AMBAC Insured) 5.25%,
9/1/12 Aaa/AAA 350,000 333,312
Johnson County, Kansas, Internal Improvement and
Refunding Bonds Series 1992A, 6.125%,
9/1/12 Aa1/NR 2,410,000 2,475,400
Unified School District No. 402, Butler County,
Kansas (Augusta) General Obligation Refunding
Bonds Series 1994 (Capital Guaranty Insured)
5.25%, 10/1/12 Aaa/AAA 2,500,000 2,380,455
Sedgwick County, Kansas General Obligation Bonds
Series A 1993, 5.20%, 8/1/13 Aa1/AA 500,000 471,013
Seward County, Kansas General Obligation Hospital
Refunding Bonds Series 1992-B (AMBAC Insured)
6.00%, 8/15/13 Aaa/AAA 750,000 773,441
Unified School District No. 437, Shawnee County,
Kansas (Auburn-Washburn) General Obligation
Bonds Series 1993 (AMBAC Insured) 5.25%,
9/1/13 Aaa/AAA 500,000 473,731
Unified School District No. 394, Butler County,
Kansas (Rose Hill) General Obligation Refunding
and Improvement Bonds Series 1993 (AMBAC
Insured) 5.375%, 9/1/13 Aaa/AAA 1,935,000 1,867,089
Unified School District No. 266, Sedgwick County,
Kansas (Maize) General Obligation School
Building Improvement Bonds Series 1993 (FGIC
Insured) 5.25%, 9/1/13 Aaa/AAA 2,805,000 2,688,099
Unified School District No. 357, Sumner County,
Kansas (Belle Plaine) General Obligation
Refunding and Improvement Bonds Series 1993
(AMBAC Insured) 5.55%, 9/1/13 Aaa/AAA 625,000 609,629
Unified School District No. 418, McPherson County,
Kansas (McPherson) General Obligation School
Building Bonds Series 1994 (Capital Guaranty
Insured) 5.75%, 9/1/13 Aaa/AAA 350,000 345,532
Unified School District No. 203, Wyandotte County,
Kansas (Piper) General Obligation Refunding and
Improvement Bonds Series 1992, 6.60%, 9/1/13 NR/NR 1,000,000 1,063,387
See Notes to Financial Statements.
15
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
General Obligation Bonds (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ ______ _______
City of Park City, Kansas General Obligation
Refunding and Sewer Bonds Series 1993 5.50%,
12/1/13 NR/NR 275,000 265,161
City of Sabetha, Kansas General Obligation Water
Bonds Series 1993-B 5.50%, 12/1/13 NR/NR 400,000 385,688
Unified School District No. 233, Johnson County,
Kansas (Olathe) General Obligation School
Improvement and Refunding Bonds Series 1994
(AMBAC Insured) 5.625%, 9/1/14 Aaa/AAA 650,000 635,508
Unified School District No. 469, Leavenworth County,
Kansas (Lansing) General Obligation Bonds Series
1995, (AMBAC Insured) 5.75%, 9/1/14 Aaa/AAA 875,000 867,997
City of Scott City, Kansas General Obligation Water
System Refunding Bonds Series 1993-A, 6.10%,
9/1/14 NR/NR 625,000 637,763
Unified School District No. 512, Johnson County,
Kansas (Shawnee Mission) General Obligation
School Bonds Series 1995, 5.30%, 10/1/14 Aa1/AA 900,000 846,361
Unified School District No. 469, Leavenworth County,
Kansas (Lansing) General Obligation Bonds
Series 1995 (Capital Guaranty Insured) 5.75%,
9/1/15 Aaa/AAA 930,000 916,935
Unified School District No. 497, Douglas County,
Kansas (Lawrence) General Obligation School
Building Bonds Series 1995-A, 6.00%, 9/1/15 Aa/NR 1,000,000 1,015,218
Unified School District No. 102, Gray County,
Kansas (Cimarron-Ensign) General Obligation
Refunding and School Improvement Bonds Series
1995 6.80%, 9/1/15 NR/NR 500,000 530,500
Unified School District No. 512, Johnson County,
Kansas (Shawnee Mission) General Obligation
School Bonds Series 1994, 6.00%, 10/1/19 Aa1/AA 1,000,000 998,733
___________
Total General Obligation Bonds 24,907,640
___________
See Notes to Financial Statements.
16
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - 76.4% Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Utility - 20.7%
_______________
City of Garden City, Kansas, Water and Sewage
System Refunding and Improvement Revenue
Bonds Series 1991, 6.75%, 11/1/04 A/NR 155,000 166,250
City of Garden City, Kansas, Water and Sewage
System Refunding and Improvement Revenue
Bonds Series 1991, 6.75%, 11/1/05 A/NR 150,000 161,637
Rural Water District No. 2 Miami County,
Kansas Water System Refunding Revenue Bonds
Series 1993 (Asset Guaranty Insured) 6.10%,
6/1/06 AAA**/AA 230,000 237,559
Rural Water District No. 2 Miami County, Kansas
Water System Refunding Revenue Bonds Series
1993 (Asset Guaranty Insured) 6.10%, 12/1/06 AAA**/AA 255,000 263,381
Rural Water District No. 2 Miami County, Kansas
Water System Refunding Revenue Bonds Series
1993 (Asset Guaranty Insured) 6.15%, 6/1/07 AAA**/AA 245,000 253,321
City of Pratt, Kansas Electric Utility System
Refunding and Improvement Revenue Bonds
Series 1992 (AMBAC Insured) 6.60%, 11/1/07 Aaa/AAA 1,000,000 1,087,807
City of Gardner, Kansas Electric Utility Revenue
Refunding Bonds Series 1992, 7.00%, 11/1/09 NR/NR 1,000,000 1,073,134
City of Park City, Kansas Sewer System Revenue
Bonds Series 1993, 5.50%, 12/1/09 NR/NR 1,000,000 971,064
Water District No. 1 of Johnson County, Kansas
Water Revenue Bonds Series 1991 A, 6.25%,
12/1/11 Aa/AA+ 700,000 726,209
City of Wellington, Kansas Electric, Waterworks
and Sewage Utility System Revenue Bonds
Series 1992 (AMBAC Insured) 6.25%, 5/1/12 Aaa/AAA 1,250,000 1,297,510
City of Salina, Kansas Combined Water and Sewage
System Revenue Refunding Bonds Series 1994
(MBIA Insured) 5.25%, 9/1/12 Aaa/AAA 1,250,000 1,190,400
See Notes to Financial Statements.
17
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Utility - (continued)
_____________________
City of Atchison, Kansas Sewer System Revenue
Bonds Series 1992 A, 6.70%, 9/1/12 NR/NR 115,000 121,756
City of Wichita, Kansas Water and Sewer Utility
Refunding and Improvement Revenue Bonds
Series B, 1993 (FGIC Insured) 6.00%, 10/1/12 Aaa/AAA 1,000,000 1,022,657
City of Salina, Kansas Combined Water and Sewage
System Improvement Revenue Bonds Series 1992
(MBIA Insured) 6.25%, 10/1/12 Aaa/AAA 500,000 519,280
Water District No. 1 of Johnson County, Kansas
Water Revenue Refunding Bonds Series 1993,
5.30%, 12/1/12 Aa/AA+ 4,465,000 4,252,341
City of Atchison, Kansas Sewer System Revenue
Bonds Series 1992 A, 6.70%, 9/1/13 NR/NR 125,000 132,472
Water District No. 1 of Johnson County, Kansas
Water Revenue Refunding Bonds Series 1991,
6.50%, 12/1/13 Aa/AA+ 500,000 526,430
Water District No. 1 of Johnson County, Kansas
Water Revenue Refunding Bonds Series 1993,
5.25%, 12/1/15 Aa/AA+ 1,000,000 949,687
City of Kansas City, Kansas Utility System
Refunding and Improvement Revenue Bonds
Series 1992 (AMBAC Insured) 6.30%, 9/1/16 Aaa/AAA 2,000,000 2,068,816
City of Garnett, Kansas Combined Utility
Refunding and Improvement Revenue Bonds
Series 1992 (MBIA Insured) 6.00%, 10/1/17 Aaa/AAA 500,000 502,443
Water District No. 1 of Johnson County, Kansas
Water Revenue Bonds Series 1994, 5.75%,
12/1/19 Aa/AA+ 500,000 489,744
City of Kansas City, Kansas Utility System
Refunding and Improvement Revenue Bonds
Series 1994 (FGIC Insured) 6.375%, 9/1/23 Aaa/AAA 8,500,000 8,798,384
See Notes to Financial Statements.
18
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Utility - (continued)
_____________________
City of Wamego, Kansas Pollution Control Revenue
Refunding Bonds (Western Resources, Inc.
Project) Series 1993 (MBIA Insured) 6.00%,
2/1/33 Aaa/AAA 100,000 99,115
__________
26,911,397
__________
Housing - 23.0%
_______________
Sedgwick County, Kansas and Shawnee County, Kansas
GNMA Collateralized Mortgage Revenue Bonds
Subordinated 1991 Series C, 7.00%, 12/1/98 A1/NR 235,000 235,000
City of Lenexa, Kansas Multi-family Housing Revenue
Refunding Bonds (Barrington Park Apartments
Project) Series 1993A (Asset Guaranty Insured)
6.05%, 2/1/06 AAA**/AA 350,000 356,079
City of Wichita, Kansas Single Family Mortgage
Revenue Refunding Bonds 1993 Series B, 7.10%,
9/1/09 A/NR 1,875,000 1,952,344
City of Hutchinson, Kansas Single Family Mortgage
Revenue Refunding Bonds Series 1992, 6.50%,
12/1/09 A/NR 1,400,000 1,447,250
Seward County, Kansas Single Family Mortgage Revenue
Bonds (Multiple Originators and Servicers) 1979
Series A, 7.375%, 12/1/09 NR/AA- 480,000 499,800
Ford County, Kansas Single Family Mortgage Revenue
Bonds 1992 Series A, 7.90%, 8/1/10 A1/NR 1,150,000 1,211,813
City of Kansas City, Kansas, Leavenworth County,
Kansas and City of Lenexa, Kansas GNMA
Collateralized Mortgage Revenue Bonds Series
1988 B, 7.85%, 11/1/10 NR/AAA 705,000 742,894
Sedgwick, Shawnee County, Kansas GNMA
Collateralized Mortgage Loan Revenue Bonds
1988 Series D 7.875%, 4/1/11 NR/AAA 465,000 489,994
Seward County, Kansas Single Family Mortgage
Revenue Refunding Bonds 1991 Series B, 8.00%,
5/1/11 A1/NR 720,000 762,300
See Notes to Financial Statements.
19
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Housing - (continued)
_____________________
Reno County, Kansas Single Family Mortgage Revenue
Refunding Bonds 1991 Series B, 8.70%, 9/1/11 Aa/NR 495,000 524,081
Saline County, Kansas Single Family Mortgage Revenue
Refunding Bonds 1991 Series A, 9.50%, 10/1/11 A1/NR 250,000 263,438
Labette County, Kansas Single Family Mortgage Revenue
Refunding Bonds 1993 Series A, 8.40%, 12/1/11 A1/NR 825,000 873,469
City of Lawrence, Kansas Multi-family Housing
Development Revenue Refunding Bonds (Brandon
Woods, Inc. Project) Series 1993, 6.625%,
4/1/12 NR/A 2,000,000 2,067,500
Johnson County, Kansas Single Family Mortgage
Revenue Refunding Bonds Series 1994, 7.10%,
5/1/12 A/NR 1,450,000 1,509,813
Kansas Development Finance Authority Housing
Development Revenue Refunding Bonds (FHA
Insured Mortgage Loans - Section 8 Assisted
Projects) Series 1993A (MBIA Insured) 6.00%,
7/1/12 Aaa/AAA 200,000 197,079
Kansas Development Finance Authority Housing
Development Revenue Refunding Bonds (FHA
Insured Mortgage Loans - Section 8 Assisted
Projects) Series 1992A (MBIA Insured) 6.30%,
7/1/12 Aaa/AAA 285,000 291,769
City of Hutchinson, Kansas Single Family Mortgage
Revenue Refunding Bonds Series 1992, 8.875%,
12/1/12 A/NR 3,120,000 3,291,600
Leavenworth County, Kansas Floating Rate Single
Family Mortgage Revenue Bonds (Multiple
Originators and Servicers) Series 1981A,
7.00%, 5/1/13 NR/A 960,000 960,000
City of Kansas City, Kansas Multi-family Housing
Revenue Refunding Bonds Series 1994 (FHA
Insured Mortgage Loan - Rainbow Towers Project)
6.60%, 7/1/14 NR/AAA 250,000 258,438
City of Kansas City, Kansas, Leavenworth County,
Kansas and City of Lenexa, Kansas GNMA
Collateralized Mortgage Revenue Bonds Series
1988 A, 8.40%, 5/1/15 NR/AAA 235,000 248,806
See Notes to Financial Statements.
20
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Housing - (continued)
_____________________
City of Lenexa, Kansas Multi-family Housing Revenue
Refunding Bonds (Barrington Park Apartments
Project) Series 1993A (Asset Guaranty Insured)
6.45%, 2/1/18 AAA**/AA 2,500,000 2,559,375
City of Kansas City, Kansas Leavenworth County,
Kansas and City of Lenexa, Kansas GNMA
Collateralized Mortgage Revenue Bonds Series
1988 C, 8.00%, 11/1/20 NR/AAA 190,000 201,162
City of Olathe, Kansas and Labette County, Kansas
GNMA Collateralized Mortgage Revenue Bonds
1989 Series A (MBIA Insured) 8.00%, 11/1/20 Aaa/AAA 245,000 259,394
Sedgwick County, Kansas and Shawnee County, Kansas
GNMA Collateralized Mortgage Revenue Bonds
1988 Series E, 8.25%, 11/1/20 NR/AAA 430,000 455,262
Sedgwick County, Kansas, Shawnee County, Kansas and
Leavenworth County, Kansas GNMA Collateralized
Mortgage Revenue Bonds 1989 Series A (MBIA
Insured) 7.875%, 12/1/21 Aaa/AAA 335,000 348,651
City of Olathe, Kansas and Labette County, Kansas
GNMA Collateralized Mortgage Revenue
Bonds 1990 Series A, 7.75%, 9/1/22 NR/AAA 185,000 194,944
City of Kansas City, Kansas GNMA Collateralized
Mortgage Revenue Bonds Series 1991, 7.35%,
12/1/23 NR/AAA 855,000 890,269
Kansas Development Finance Authority Housing
Development Revenue Refunding Bonds (FHA
Insured Mortgage Loans - Section 8 Assisted
Projects) Series 1992A (MBIA Insured) 6.40%,
1/1/24 Aaa/AAA 770,000 788,288
Sedgwick County, Kansas and Shawnee County, Kansas
Collateralized Single Family Mortgage Refunding
Revenue Bonds Series 1994A-II, 8.05%, 5/1/24 Aaa/NR 375,000 397,031
See Notes to Financial Statements.
21
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Housing - (continued)
_____________________
Kansas Development Finance Authority Housing
Development Revenue Bonds (FHA Insured Mortgage
Loan - Martin Creek Place Project) Series E,
1993, 6.50%, 8/1/24 Aa/NR 750,000 775,313
Sedgwick County, Kansas and Shawnee County, Kansas
Collateralized Single Family Mortgage Refunding
Revenue Bonds Series 1994 C-I, 7.75%, 11/1/24 Aaa/NR 555,000 584,831
Sedgwick County, Kansas and Shawnee County, Kansas
Collateralized Single Family Mortgage
Refunding Revenue Bonds Series 1994C-II, 7.80%,
11/1/24 Aaa/NR 465,000 492,900
City of Wichita, Kansas Multi-family Housing
Revenue Refunding Bonds (GNMA Mortgage-Backed
Security Program-Northpark Apartments Project)
Series II-A, 1993, 6.125%, 8/20/28 Aaa/NR 1,900,000 1,864,016
Kansas Development Finance Authority Housing
Development Revenue Bonds (FHA Insured Mortgage
Loan - Martin Creek Place Project) Series E,
1993, 6.60%, 8/1/34 Aa/NR 1,900,000 1,964,125
__________
29,959,028
__________
Health Care - 15.3%
___________________
City of Kansas City, Kansas Hospital Revenue
Bonds Series AA, 1974 (Bethany Medical
Center) 8.10%, 12/1/04 NR/A+ 664,000 682,592
City of Kansas City, Kansas Hospital Refunding
Revenue Bonds Series 1992 (Sisters of Charity
of Leavenworth Health Services Corporation/
Providence-St. Margaret Health Center Project)
5.90%, 8/1/05 Aa/NR 300,000 312,890
City of Wichita, Kansas Hospital Revenue Bonds
Series A, 1977 (St. Francis Hospital and
School of Nursing, Inc.) 6.75%, 10/1/07 NR/NR 595,000 635,806
See Notes to Financial Statements.
22
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Health Care - (continued)
_____________________
City of Salina, Kansas Hospital Revenue Refunding
Bonds (Asbury-Salina Regional Medical Center,
Inc. Project) Series 1993 (AMBAC Insured)
5.20%, 10/1/08 Aaa/AAA 160,000 153,375
City of Wichita, Kansas CSJ Health System of
Wichita, Inc., Revenue Bonds Series X 1991,
7.00%, 11/15/08 NR/A 640,000 683,524
City of Lawrence, Kansas Hospital Revenue Bonds
Series 1994 (The Lawrence Memorial Hospital)
6.00%, 7/1/09 A/NR 2,000,000 2,018,808
City of Wichita, Kansas Hospital Facilities
Improvement and Refunding Revenue Bonds (St.
Francis Regional Medical Center, Inc.) 1992
Series A-3 (MBIA Insured) 6.25%, 10/1/10 Aaa/AAA 250,000 260,478
City of Wichita, Kansas Hospital Facilities
Improvement and Refunding Revenue Bonds
(St. Francis Regional Medical Center, Inc.)
1992 Series B-3 (MBIA Insured) 6.25%,
10/1/10 Aaa/AAA 1,000,000 1,041,911
City of Olathe, Kansas Health Facilities Revenue
Refunding Bonds (Olathe Medical Center)
Series 1994A (AMBAC Insured) 6.00%, 9/1/11 Aaa/AAA 1,000,000 1,011,788
City of Salina, Kansas Hospital Revenue Refunding
Bonds (Asbury-Salina Regional Medical Center,
Inc. Project) Series 1993 (AMBAC Insured)
5.30%, 10/1/13 Aaa/AAA 1,250,000 1,178,657
City of Lawrence, Kansas Hospital Revenue Bonds
Series 1994 (The Lawrence Memorial Hospital)
6.20%, 7/1/14 A/NR 1,200,000 1,203,986
City of Wichita, Kansas CSJ Health System of
Wichita, Inc., Revenue Bonds Series XXV 1985,
7.20%, 10/1/15 NR/A 2,225,000 2,377,884
Shawnee County, Kansas Health Care Facility Revenue
Bonds (The Menninger Foundation) Series 1987,
6.75%, 8/15/16 A1/AA- 145,000 153,300
City of Olathe, Kansas Health Facilities Revenue
Refunding Bonds (Olathe Medical Center) Series
1994A (AMBAC Insured) 5.875%, 9/1/16 Aaa/AAA 2,000,000 1,984,698
See Notes to Financial Statements.
23
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Health Care - (continued)
_____________________
City of Wichita, Kansas CSJ Health System of
Wichita, Inc., Revenue Bonds Series X 1991,
7.00%, 11/15/18 NR/A 2,350,000 2,492,189
City of Olathe, Kansas Health Facilities Revenue
Bonds (The Evangelical Lutheran Good Samaritan
Society Project) (AMBAC Insured) Series 1994,
6.00%, 5/1/19 Aaa/AAA 900,000 892,269
City of Lawrence, Kansas Hospital Revenue Bonds
Series 1994 (The Lawrence Memorial Hospital)
6.20%, 7/1/19 A/NR 1,725,000 1,722,864
City of Merriam, Kansas Hospital Refunding Revenue
Bonds Series 1991 B (Shawnee Mission Medical
Center, Inc. Project) 7.25%, 9/1/21 NR/A- 1,000,000 1,064,991
__________
19,872,010
__________
Transportation - 5.5%
_____________________
Kansas Turnpike Authority Turnpike Revenue Bonds
Series 1993 (AMBAC Insured) 5.40%, 9/1/09 Aaa/AAA 260,000 257,474
State of Kansas, Department of Transportation
Highway Revenue Bonds Series 1992A, 6.00%,
9/1/09 Aa/AA 150,000 154,318
State of Kansas, Department of Transportation
Highway Revenue Bonds Series 1993, 5.375%,
3/1/12 Aa/AA 1,000,000 966,469
State of Kansas, Department of Transportation
Highway Revenue Bonds Series 1992A, 6.00%,
9/1/12 Aa/AA 2,200,000 2,249,702
State of Kansas, Department of Transportation
Highway Revenue Bonds Series 1993, 5.375%,
3/1/13 Aa/AA 1,740,000 1,673,977
Kansas Turnpike Authority Turnpike Revenue Bonds
Series A, 1993 (AMBAC Insured) 5.25%, 9/1/13 Aaa/AAA 1,020,000 977,490
Kansas Turnpike Authority Turnpike Revenue Bonds
Series 1993 (AMBAC Insured) 5.25%, 9/1/17 Aaa/AAA 950,000 889,883
_________
7,169,313
_________
See Notes to Financial Statements.
24
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Miscellaneous - 11.9%
_____________________
Wichita Airport Authority of the City of Wichita,
Kansas Airport Facilities Refunding Revenue
Bonds (Wichita Airport Hotel Associates, L.P.
Project) Series 1992 (Asset Guaranty Insured)
7.00%, 3/1/05 AAA**/AA 440,000 450,890
Kansas Development Finance Authority Revenue Bonds
Series T, 1992 (Kansas Highway Patrol Central
Training Facility) 6.30%, 12/1/05 NR/NR 450,000 480,356
City of Hiawatha, Kansas, Industrial Refunding
Revenue Bonds (Wal-Mart Stores, Inc. Project)
Series 1991, 6.75%, 1/1/06 NR/AA 700,000 740,865
Blue Valley Recreation Commission Johnson County,
Kansas Certificates of Participation Series
1993,6.60%, 4/1/07 NR/NR 245,000 258,262
Kansas Development Finance Authority Revenue Bonds
Series C, 1993 (Kansas Board of Regents - Fort
Hays State University Lewis Field Stadium
Renovation Project) 6.00%, 4/1/08 NR/NR 500,000 506,645
Johnson County, Kansas Park and Recreation Revenue
Refunding Bonds Series 1991, 7.20%, 1/1/09 NR/NR 500,000 539,613
Kansas Development Finance Authority Energy
Conservation Revenue Bonds Series G, 1992
(The Kansas Board of Regents Institutions
Projects) 6.35%, 3/1/09 A/A+ 300,000 312,496
Kansas Development Finance Authority Refunding
Revenue Bonds Series L 1992 (State of Kansas-
Department of Corrections El Dorado and Larned
Projects) (MBIA Insured) 6.00%, 2/1/12 Aaa/AAA 2,000,000 2,023,020
Cowley County Community College Certificates of
Participation, Series 1992, 7.00%, 3/1/12 A/NR 900,000 960,123
City of Hays, Kansas Sales Tax Revenue Bonds
Series 1992, 6.875%, 9/1/12 NR/NR 500,000 533,358
Kansas City, Kansas Community College Student
Center System Revenue Bonds Series 1994
(MBIA Insured) 6.30%, 5/15/14 Aaa/AAA 255,000 265,899
See Notes to Financial Statements.
25
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
PORTFOLIO OF INVESTMENTS
July 31, 1995
Credit Ratings
Moody's/ Principal Value
Revenue Bonds - (continued) Standard & Poor's Amount (Note 1)
____________________________________ ___________________ _________ ________
Miscellaneous (continued)
_________________________
Wichita Public Building Commission Revenue Bonds
Series H, 1993 (State Office Building Project)
5.50%, 8/1/14 A/A+ 1,215,000 1,184,270
Kansas Development Finance Authority Water
Pollution Control Revolving Fund Revenue
Bonds 1993 SRF Series I (State Match Bonds)
6.00%, 11/1/14 Aa1/AA+ 500,000 504,559
Kansas City, Kansas Community College Student
Center System Revenue Bonds Series 1994
(MBIA Insured) 6.30%, 5/15/15 Aaa/AAA 275,000 285,456
Wichita Public Building Commission Refunding
and Improvement Revenue Bonds Series G-1,
1992 (The Wichita State University Projects)
(AMBAC Insured) 5.75%, 2/1/17 Aaa/AAA 350,000 345,328
City of Wichita, Kansas Airport Facilities
Revenue Bonds (Cessna Citation Service Center
Project) Series II, 1990, 7.25%, 5/15/30 NR/AA+ 100,000 102,475
City of Burlington, Kansas Pollution Control
Refunding Revenue Bonds (Kansas Gas and
Electric Company Project) Series 1991 (MBIA
Insured) 7.00%, 6/1/31 Aaa/AAA 5,555,000 5,931,100
__________
15,424,715
__________
Total Revenue Bonds 99,336,463
__________
TOTAL INVESTMENTS - 95.5% (COST $122,308,858) 124,244,103
OTHER ASSETS, LESS LIABILITIES - 4.5% 5,847,182
___________
NET ASSETS - 100.0% $130,091,285
___________
___________
</TABLE>
[FN]
** Duff and Phelps
NR Not Rated
See Notes to Financial Statements.
26
<TABLE>
<CAPTION>
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995
<S> <C>
ASSETS
______
Investments, at value (cost $122,308,858) (Note 1) $124,244,103
Cash 68,143
Accrued interest receivable 2,472,000
Receivable for securities sold 3,898,919
Receivable for fund shares sold 70,129
Deferred organization costs (Note 1) 5,366
___________
Total assets 130,758,660
___________
LIABILITIES AND NET ASSETS
__________________________
Payable for:
Dividends (Note 1) 580,861
Fund share redemptions 3,142
Accrued expenses 83,372
__________
Total liabilities 667,375
__________
Net assets, applicable to 10,777,009 outstanding shares, equivalent
to $12.07 per share (unlimited number of shares authorized,
no par value) $130,091,285
___________
___________
ANALYSIS OF NET ASSETS
______________________
Capital shares $131,119,513
Accumulated undistributed net realized loss on security transactions (2,963,473)
Net unrealized appreciation of investments 1,935,245
___________
Net assets $130,091,285
___________
___________
THE PRICING OF SHARES
_____________________
Net asset value and redemption price per share (Net assets of
$130,091,285 / 10,777,009 shares outstanding) $12.07
______
______
Maximum public offering price per share (Net asset value, plus 4.44% of
net asset value or 4.25% of offering price) $12.61
______
______
</TABLE>
See Notes to Financial Statements.
27
<TABLE>
<CAPTION>
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 1995
<S> <C>
Investment income-interest $7,974,874
_________
Expenses:
Investment advisory and management fee (Note 2) 634,115
Rule 12b-1 fees (Note 2) 317,057
Transfer agent fees 151,790
Administrative and accounting services fee (Note 2) 115,363
Amortization of organization costs (Note 1) 16,783
Insurance premiums 18,565
Custodian fees 49,967
Trustees' fees and expenses (Note 2) 5,731
Regulatory fees 12,333
Legal and audit fees 19,806
__________
Total expenses 1,341,510
Less fees waived and expenses reimbursed by manager and distributor (295,875)
Net expenses paid by Fund 1,045,635
__________
Net investment income 6,929,239
__________
Realized and unrealized loss on investments:
Net realized loss on security transactions (2,051,318)
Net unrealized appreciation of investments 2,658,906
__________
Net gain on investments 607,588
__________
Net increase in net assets resulting from operations $7,536,827
__________
__________
</TABLE>
See Notes to Financial Statements.
28
<TABLE>
<CAPTION>
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
For the years ended
July 31, 1995 and 1994
1995 1994
___________ ___________
<S> <C> <C>
Increase in Net Assets
Operations:
Net investment income $ 6,929,239 $ 6,204,157
Net realized gain (loss) on security transactions (2,051,318) (488,607)
Net unrealized appreciation (depreciation) of investments 2,658,906 (5,306,884)
__________ __________
Net increase in net assets resulting from operations 7,536,827 408,666
__________ __________
Dividends and Distributions to Shareholders:
Dividends from net investment income (6,929,239) (6,204,157)
Distributions from net realized gains on
security transactions -0- (1,264,045)
__________ __________
Net decrease in net assets from dividends and distributions (6,929,239) (7,468,202)
__________ __________
Capital Share Transactions:
Proceeds from capital shares sold 13,828,413 36,924,920
Proceeds from shares issued in reinvestment of
dividends and distributions 4,800,996 5,287,984
Cost of capital shares redeemed (16,482,540) (8,023,802)
__________ __________
Net increase in net assets from capital share transactions 2,146,869 34,189,102
__________ __________
Total increase in net assets 2,754,457 27,129,566
Net Assets:
Beginning of period 127,336,828 100,207,262
___________ ___________
End of period $130,091,285 $127,336,828
___________ ___________
___________ ___________
</TABLE>
See Notes to Financial Statements.
29
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 1995
1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS OPERATIONS
The Kansas Municipal Fund (the "Fund") is an investment portfolio of Ranson
Managed Portfolios (the "Trust") registered under the Investment Company Act
of 1940, as amended, as a non-diversified, open-end management investment
company. The Trust may offer multiple portfolios; currently three portfolios
are offered. Ranson Managed Portfolios is an unincorporated business trust
organized under Massachusetts law on August 10, 1990. The Fund had no
operations from that date to November 15, 1990, other than matters relating
to organization and registration. On November 15, 1990, the Fund commenced
its Public Offering of capital shares to the public.
SECURITY VALUATION
Investments are stated at value, as that term is defined in the Investment
Company Act of 1940 and the published rules and regulations thereunder. The
net asset value per share is determined at 3:15 p.m. (central standard time)
on each day the New York Stock Exchange is open for business and on any other
day on which there is a sufficient degree of trading in the portfolio
securities that the current net asset value of the Fund's shares might be
materially affected. Fixed income securities are valued at the mean of the
quoted bid and asked price. Securities for which quotations are not readily
available (which constitutes a majority of the securities held by the Fund)
are valued at fair value as determined by Ranson Capital Corporation (the
"Manager") using methods which include consideration of yields or prices of
municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications as to value from dealers, and general market conditions.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date, which is the date
the investments are purchased or sold. Realized gains and losses on the sale
of investments are determined on the identified cost basis for both financial
statement and income tax purposes. Interest income is recorded on the
accrual basis. The Fund amortizes original issue discounts and premiums paid
on purchases of investments on the same basis for both financial reporting
and income tax purposes.
DEFERRED ORGANIZATION COSTS
Costs incurred by the Fund in connection with its organization are being
amortized over a 60-month period on the straight-line basis. Accumulated
amortization at July 31, 1995 totaled $78,534. In the event that any of the
initial shares acquired by the Manager are redeemed during such period, the
Fund will be reimbursed by the Manager for unamortized organization costs in
the same proportion as that between the number of shares redeemed and the
number of initial shares outstanding at the time of redemption. All of the
initial shares remain outstanding as of July 31, 1995.
INCOME TAXES
It is the policy of the Fund to qualify as a regulated investment company
which can distribute tax-exempt dividends by complying with provisions
available to certain investment companies, as defined in applicable sections
of the Internal Revenue Code, and to make distributions of income and
realized capital gains sufficient to relieve the Fund from all income taxes.
Therefore, no income tax provision is required. In addition, the Fund
30
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 1995
intends to invest in sufficient municipal securities so that it will qualify
to pay "exempt-interest dividends" (as defined in the Internal Revenue Code)
to shareholders.
DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend of all of its net investment income on each day
the New York Stock Exchange is open, to shareholders of record as of 3:15
p.m. (central standard time). Distributions from net investment income are
paid or reinvested monthly. Distributions from net realized capital gains,
if any, are declared and paid annually.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund entered into a Management and Investment Advisory Agreement with
Ranson Capital Corporation (the "Manager") under which the Manager manages
the Fund's investment portfolio and provides other specified services. The
Fund incurs a monthly investment advisory and management fee equivalent on an
annual basis to .50 of 1% of the average daily net assets of the Fund. For
the year ended July 31, 1995, the fee totaled $634,115. The Manager elected
to waive $295,875 of this fee.
The Manager is obligated to pay all expenses (excluding taxes, brokerage fees
and commissions) which exceed 1.25% of the Fund's average daily net assets on
an annual basis.
The Fund also entered into an Administrative and Accounting Services
Agreement whereby the Fund incurs a fee to the Manager for acting as the
Fund's administrative and accounting services agent. This monthly fee is
equal to the sum of a fixed fee ranging from $1,500 - $2,500, depending on
the level of average daily net assets (ADNA), and a variable fee equal to
.15% of the annualized ADNA from $20,000,000 to $40,000,000 and at a lower
rate on the annualized ADNA in excess of $40,000,000. For the year ended
July 31, 1995, the fee totaled $115,363.
The Fund has entered into a Distribution and Services Agreement with Ranson
Capital Corporation (the "Distributor"). For the year ended July 31, 1995,
the Distributor retained $63,969 in sales commissions from distribution of
Fund shares under the terms of the dealer agreement after allowances to
unaffiliated broker dealers of $59,445. This agreement provides for the
payment of a sales commission to Ranson Capital Corporation ranging from .65%
to .05% of the offering price of each share sold, depending on the number of
shares sold.
Pursuant to the Fund's Shareholder Services Plan and the Distribution and
Services Agreement between the Fund and Ranson Capital Corporation, the Fund
is obligated to make periodic payments to the Distributor of annual amounts
of up to 0.25% of the average net asset value of the Fund. The Distributor
may use such fees to make payments to certain banks and broker-dealers which
provide administrative and shareholder services to the Fund and its
shareholders and/or for its expenses of distributing the Fund's shares. For
the year ended July 31, 1995, the fund paid the Distributor $317,057,
$261,386 of which was paid to broker-dealers and banks.
Certain trustees and officers of the Fund are also directors, officers and/or
employees of the Manager. None of the trustees or officers so affiliated
received compensation from the Fund for services as trustees of the Fund.
Fees paid to non-affiliated trustees totaled $5,731 for the year ended July
31, 1995.
31
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
July 31, 1995
3. CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
Transactions in the capital shares of the Fund were as follows:
Year Ended July 31,
-------------------
1995 1994
---------- ----------
<S> <C> <C>
Shares sold 1,168,053 2,927,380
Shares issued in reinvestment of dividends and
distributions 405,903 419,831
Shares redeemed (1,407,824) (642,892)
___________ ___________
Net increase 166,132 2,704,319
</TABLE>
4. PURCHASES AND SALES OF INVESTMENTS
During the year ended July 31, 1995, the cost of investments purchased and
the proceeds from investments sold, excluding short-term investments, totaled
$70,038,634 and $72,105,734, respectively.
For Federal income tax purposes, the identified cost of investments owned at
July 31, 1995 was $122,491,995 and unrealized depreciation on investments
consisted of:
Gross unrealized appreciation $2,989,919
Gross unrealized depreciation (1,054,674)
___________
Net unrealized appreciation $1,935,245
32
<TABLE>
<CAPTION>
RANSON MANAGED PORTFOLIOS
THE KANSAS MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIONS
(For a Share outstanding throughout the period)
Period From
Year Ended Year Ended Year Ended Year Ended November 15,
July 31, July 31, July 31, July 31, 1990 to
1995 1994 1993 1992 July 31, 1991*
---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $12.00 $12.67 $12.22 $11.54 $11.49
Income from investment operations:
Net investment income .65 .66 .69 .72 .54
Net realized and unrealized
loss on investments .07 (.53) .50 .69 .05
Total from investment operations .72 .13 1.19 1.41 .59
Less dividends and distributions:
Dividends from net investment income (.65) (.66) (.69) (.72) (.54)
Distributions from net realized gains
on investments (.14) (.05) (.01)
Total dividends and distributions (.65) (.80) (.74) (.73) (.54)
Net asset value at end of period $12.07 $12.00 $12.67 $12.22 $11.54
TOTAL RETURN** 6.23% .91% 10.08% 13.31% 7.38%
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $130,091 $127,337 $100,207 $52,010 $20,850
Ratio of expenses to average net assets .82% (a) .70% (a) .75% (a) .70% (a) .30% (a)
Ratio of net investment income to average
net assets 5.46% (b) 5.26% (b) 5.53% (b) 6.00% (b) 6.28% (b)
Portfolio turnover rate 57% 55% 62% 51% 161%
</TABLE>
[FN]
* Commenced operations on November 15, 1990. Ratios and total return are
annualized.
** Total return does not consider the effect of the sales load.
_______________
(a) Ratio of expenses to average net assets prior to fee waiver and expense
reimbursement by the Adviser was 1.06%, 1.06%, 1.13%, 1.25% and 1.62%,
respectively.
(b) Ratio of net investment income to average net assets prior to fee waiver
and expense reimbursement by the Adviser was 5.23%, 4.90%, 5.15%, 5.45%
and 4.96%, respectively.
33
PART C. OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits.
(a) Financial Statements:
(i) Financial Statements included in Part A of the Registration Statement:
Condensed Financial Information.
(ii) Financial Statements included in Part B of the Registration Statement:
Report of Independent Auditors.
Portfolio of Investments dated July 31, 1995.
Statement of Assets and Liabilities dated July 31, 1995.
Statement of Operations dated July 31, 1995.
Statement of Changes in Net Assets dated July 31, 1995.
Schedules 2, 3, 4, 5, 6 and 7 have been omitted
as the required information is not applicable.
(b) Exhibits:
1. Agreement and Declaration of Trust dated August 10, 1990.*
2. By-Laws.*
3. Inapplicable.
4. Inapplicable.
5. Form of Management and Investment Advisory Agreement between
Registrant and Ranson Capital Corporation.*
6. (a) Distribution and Services Agreement between Registrant and
Ranson Capital Corporation.*
(b) Form of Dealer Agreement.*
7. Inapplicable.
8. Form of Custodian Agreement between Ranson Managed Portfolios and
Investors Fiduciary Trust Company.*
9. Form of Accounting and Administrative Services Agreement between
Registrant and Ranson Capital Corporation.*
10. Opinion of Chapman and Cutler.*
11. Consent of Independent Auditors.
12. Inapplicable.
13. Inapplicable.
14. Inapplicable.
15. Shareholder Services Plan.*
16. Computation of Performance Data.
*Previously filed
ITEM 25. Persons Controlled by or Under Common Control With Registrant.
To the best of Registrant's knowledge, as of November 30, 1995 no person
is either directly or indirectly controlled by or under common control with
Registrant.
C-1
ITEM 26. Number of Holders of Securities.
As of November 24, 1995, the number of record holders of Registrant was
as follows:
The Kansas Municipal Fund: 4,924
The Kansas Insured Intermediate Fund: 925
The Nebraska Municipal Fund: 867
ITEM 27. Indemnification.
The following is a summary of the rights of indemnification set forth in
the Agreement and Declaration of Trust of Registrant (see Exhibit 1). Article
VIII of the Agreement and Declaration of Trust of Registrant provides
generally that any person who is or has been a trustee or officer of
Registrant (including persons who serve at the request of Registrant as
directors, trustees or officers of another organization and including persons
who served as officers and directors of the Registrant) shall be indemnified
by Registrant to the fullest extent permitted by law against liabilities and
expenses reasonably incurred by such person in connection with any claim,
suit or proceeding in which such person becomes involved as a party or
otherwise by virtue of being or having been such a trustee, director or
officer and against amounts incurred in settlement thereof. It is further
provided in such Agreement and Declaration of Trust that no indemnification
shall be provided in the event that it is determined that such person was
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office or that such
person did not act in good faith in the reasonable belief that his action was
in the best interests of Registrant. In the event of a settlement or other
disposition not involving a final determination of the foregoing matters by a
court or other body, no indemnification shall be provided unless such
determination is made by a vote of a majority of the "disinterested" trustees
acting on the matter or a written opinion of independent legal counsel. The
right to indemnification as so provided may be insured against by policies
maintained by the Registrant and shall continue as to any person who has
ceased to be a trustee or officer of Registrant.
Expenses of preparation and presentation of a defense by a person
claiming indemnification may be advanced by Registrant provided generally
that such person undertakes to repay any such advances if it is ultimately
determined that he is not entitled to indemnification and provided that
either such undertaking is secured by appropriate security or a majority of
the "disinterested" trustees acting on the matter or independent legal
counsel in a written opinion determines that there is reason to believe that
such person ultimately will be found entitled to indemnification.
The Agreement and Declaration of Trust provides further that in the event
that any shareholder or former shareholder shall be found to be personally
liable solely by reason of his being a shareholder and not because of acts or
omissions of such person, such shareholder shall be entitled out of assets of
the Registrant to be indemnified against all loss and expense arising from
such liability (provided there is no liability to reimburse any shareholder
for taxes paid by reason of such shareholder's ownership of shares or for
losses suffered by reason of any changes in value of any of Registrant's
assets).
The Agreement and Declaration of Trust (Article IV, Section 2(o))
provides specifically that the trustees have the power to purchase and pay
for insurance out of assets of Registrant as they deem necessary or
appropriate for the conduct of its business including policies insuring
shareholders, trustees, officers, employees, agents, investment managers,
principal underwriters or independent contracts or Registrant against claims
or liabilities arising by reason of such persons holding or having held any
such office or position with Registrant or by reason of any action alleged to
have been taken or omitted by such person in such office or position
including any action taken or omitted that may be determined to constitute
negligence whether or not the Registrant would have the power to indemnify
such person against such liability.
The provisions with respect to indemnification in the Agreement and
Declaration of Trust of Registrant do not affect any rights of
indemnification that persons other than those specifically covered may have
whether under contract or otherwise under law.
C-2
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling persons
of the Registrant pursuant to the provisions of Registrant's Agreement and
Declaration of Trust, 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 Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liability (other than the payment by the 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) as asserted by such
trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
ITEM 28. Business and Other Connections of Investment Adviser.
The names of the directors and officers of the Manager and their
businesses, professions, vocations and employment during the past two fiscal
years, either for their own account or as directors, officers, employees,
partners or trustees are as follows:
<TABLE>
<CAPTION>
(3)
Other Business
(2) Profession
(1) Affiliation Vocation or
Name and Principal with Investment Employment
Business Address* Adviser Connection**
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
John S. Ranson Senior Consultant President & CEO,
Suite 200 Ranson & Company, Inc.
120 S. Market President, Ranson Housing
Wichita, KS 67202 Compliance, L.L.C.
President, Ranson Municipal
Consultants, L.L.C.
President, Public Finance
America, L.L.C.
John A. Ranson President, CEO, Director
Suite 450
120 S. Market
Wichita, KS 67202
Alex Meitzner Executive Vice President
Suite 450 Director, Trader
120 S. Market
Wichita, KS 67202
Robin K. Pinkerton Vice President, Secretary Vice President,
Suite 450 Treasurer, Director, Financial & Ranson & Company, Inc.
120 S. Market Operations Officer, Chief
Wichita, KS 67202 Compliance Officer
</TABLE>
[FN]
* Principal business address of all officers and directors is: 120 South
Market, Suite 450, Wichita, Kansas 67202.
** Ranson Capital Corporation, a Kansas corporation, is a securities
dealer.
C-3
ITEM 29. Principal Underwriters.
(a) Ranson Capital Corporation acts as investment adviser and
manager of The Kansas Municipal Fund, The Kansas Insured Intermediate Fund
and The Nebraska Municipal Fund, having net assets of $133,799,182,
$31,522,370 and $16,257,544 respectively, as of November 24, 1995 and also
acts as investment adviser for The Kansas Tax-Exempt Trust Series 1-78 and
The Nebraska Tax-Exempt Trust Series 1-5.
(b) The information required by the following table is provided
with respect to each director, officer or partner of each principal
underwriter named in the answer to Item 21.
<TABLE>
<CAPTION>
RANSON CAPITAL CORPORATION
(1) (2) (3)
Positions and
Offices with Positions and
Name and Principal Ranson Capital Offices
Business Address Corporation with Registrant
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
120 S. Market, Suite 450,
Wichita, KS 67202
John S. Ranson Senior Consultant Chairman, Trustee
John A. Ranson President, Director, President, Trustee
Alex R. Meitzner Executive Vice President, Executive Vice President
Director, Chairman of the Board
Robin K. Pinkerton Vice President, Director, Secretary, Treasurer
Secretary/Treasurer
Chief Financial Officer
John J. Haas Director
Douglas K. Rogers Vice President, Director
Walter I. Cole, Jr. Senior Vice President
Robert P. Schwermann Senior Vice President
Steven Shogren Senior Vice President
Michael L. May Vice President
Timothy P. Quinn Assistant Vice President
Stacy A. Schmidt Assistant Vice President
Ruthanne N. Whitely Assistant Vice President
</TABLE>
ITEM 30. Location of Accounts and Records.
All accounts, books and documents of Registrant are maintained at the
offices of Ranson Managed Portfolios, 120 South Market, Suite 450, Wichita,
Kansas 67202, and with the Custodian at Investors Fiduciary Trust Company,
127 West 10th Street, Kansas City, Missouri.
C-4
ITEM 31. Management Services.
Inapplicable.
ITEM 32. Undertakings.
Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
C-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it has duly
caused this Post-Effective Amendment to be signed on its behalf by the
undersigned duly authorized in the City of Wichita, and State of Kansas on
the 27th day of November, 1995 and certifies that this post-effective
amendment meets all the requirements for effectiveness pursuant to Rule
485(b) of the Securities Act of 1933.
RANSON MANAGED PORTFOLIOS
John A. Ranson
By: ____________________________
John A. Ranson
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to Registration Statement No. 33-36324 has been signed
below on behalf of the following persons in the capacities indicated on the
27th day of November, 1995:
SIGNATURES TITLE
----------- -----
__________________________________ Chairman of the Board and Trustee
John S. Ranson
__________________________________ Trustee (Principal Executive Officer)
John A. Ranson
__________________________________ Trustee
Harrison F. Johnson
__________________________________ Trustee
H. Dene Heskett
__________________________________ Trustee
J. Joseph Hannah
__________________________________ Trustee
Kevin F. Mitchelson
__________________________________ Treasurer (Principal Financial
Robin K. Pinkerton and Accounting Officer)
* Signed by John A. Ranson pursuant to a Power of Attorney filed herewith.
John A. Ranson
__________________________________
Attorney-in-Fact
C-6
EXHIBIT INDEX
1. Agreement and Declaration of Trust dated August 10, 1990.*
2. By-Laws.*
3. Inapplicable.
4. Inapplicable.
5. Form of Management and Investment Advisory Agreement between
Registrant and Ranson Capital Corporation.*
6. (a) Distribution and Services Agreement between Registrant and
Ranson Capital Corporation.*
(b) Form of Dealer Agreement.*
7. Inapplicable.
8. Form of Custodian Agreement between Ranson Managed Portfolios and
Investors Fiduciary Trust Company.*
9. Form of Accounting and Administrative Services Agreement between
Registrant and Ranson Capital Corporation.*
10. Opinion of Chapman and Cutler.*
11. Consent of Independent Auditors.
12. Inapplicable.
13. Inapplicable.
14. Inapplicable.
15. Shareholder Services Plan.*
16. Computation of Performance Data.
*Previously filed.
AVERAGE ANNUAL TOTAL RETURN CALCULATION
The Kansas Municipal Fund Series' average annual total return for the
period from the commencement of operations on November 15, 1990 to
July 31, 1995 was 6.40% calculated as follows:
P(1+T)^n = ERV
Where:
P = a hypothetical initial investment of $1,000
T = average annual total return = 6.40%
n = number of years = 4.71 years
ERV = ending redeemable value on July 31, 1995 of a hypothetical $1,000
payment made on November 15, 1990 = $1,339.28
TOTAL RETURN CALCULATION
The total return for the period from commencement of operations on
November 15, 1990 to July 31, 1995 for the Kansas Municipal Fund
was 39.87%, calculated as follows:
TR = (ERV - INAV) / INAV
Where:
TR = Total return = 39.87%
ERV = ending redeemable value on July 31, 1995 at 12.07/share of one
share purchased at net asset value on November 15, 1990, plus
reinvested dividends = $1,607.11
INAV = Initial net asset value of one share purchased on November 15,
1990 at 11.49/share = $1,149
CURRENT YIELD
The current yield for the one-month period ending July 31, 1995 was
5.06%, calculated as follows:
CY = 2[(a-b + 1)^6 -1] / cd
Where:
a = Dividends and interest earned during the one-month period ending
July 31, 1995
b = Expenses accrued for the one-month period ending July 31, 1995
c = Average daily number of shares outstanding during the one-month
period July 31, 1995 that were entitled to receive dividends
d = The maximum offering price per share on July 31, 1995
TAX EQUIVALENT YIELD
The tax equivalent yield for the one-month period ending July 31, 1995
was 9.17%, calculated as follows:
TEY = CY / (1-SITR)
Where:
TEY = Tax equivalent yield = 8.96%
CY = Current yield = 5.06%
SITR = Stated Income tax rate = 43.50%
DISTRIBUTION RETURN
The distribution return for the one-month period ending July 31, 1995
was 5.05%.
DR = [(IPS/31) (365)] / POP
Where:
DR = Distribution return = 5.05%
IPS = Income per share = .05407
POP = Public offering price per share = 12.61
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use of our report dated September 11, 1995 on the
financial statement referred to therein and to the reference to our firm
under the caption "Independent Auditors" in this Post-Effective Amendment
to the Registration Statement on Form N-1A of The Kansas Municipal Fund
series of Ranson Managed Portfolios filed with the Securities and Exchange
Commission under the Securities Act of 1933 (File No. 33-36324) and in
this Amendment to the Registration Statement under the Investment Company
Act of 1940 (File No. 811-6153).
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
November 27, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000866841
<NAME> RANSON MANAGED PORTFOLIOS-THE KANSAS MUNICIPAL FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JUL-31-1995
<INVESTMENTS-AT-COST> 122,309
<INVESTMENTS-AT-VALUE> 124,244
<RECEIVABLES> 6,441
<ASSETS-OTHER> 74
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 130,759
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 667
<TOTAL-LIABILITIES> 667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 131,119
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,963)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,935
<NET-ASSETS> 130,091
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,975
<OTHER-INCOME> 0
<EXPENSES-NET> 1,046
<NET-INVESTMENT-INCOME> 6,929
<REALIZED-GAINS-CURRENT> (2,051)
<APPREC-INCREASE-CURRENT> 2,659
<NET-CHANGE-FROM-OPS> 7,537
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</TABLE>
