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[ASM LOGO]
MARCH 1, 1996
PROSPECTUS REVISED
---------- APRIL 1, 1996
ASM Fund, Inc. (the "Fund") is a no-load diversified, open-end management
investment company commonly referred to as a mutual fund. The Fund has an
investment objective of providing total return through a combination of
capital appreciation and current income. There can be no assurance that
Fund will achieve its investment objective.
The Fund will pursue its objective by investing primarily in equity
securities of well established companies with large market capitalizations
and earnings and dividend histories.
Shares of the Fund are sold at their net asset value without a sales
charge.
There is no distribution or "Rule 12b-1" charge.
This prospectus concisely sets forth the information about the Fund that a
prospective investor ought to know before investing. Investors are
advised to read this prospectus and retain it for future reference. A
Statement of Additional Information, dated February 23, 1996 has been
filed with the Securities and Exchange Commission and is available without
charge by writing or calling the Fund at the address or phone number
listed on back cover. The Statement of Additional Information is
incorporated into this prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY 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.
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TABLE OF CONTENTS PAGE
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Table of Fees and Expenses 3 Net Asset Value 9
Financial Highlights 4 How to Redeem Shares 9,10
The Fund 5 Exchange Privilege 11
Principal Investment Restrictions 5 Dividends and Tax Status 12
Management of the Fund 6 Performance Information 13
How to Purchase Shares 7,8 General Information 14
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THE CURRENT PORTFOLIO INSIDE FRONT COVER, PAGE 2
As of the date of this prospectus the portfolio is comprised of the
following::
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<S> <C>
AMERICAN TELEPHONE & TELEGRAPH CO. GOODYEAR TIRE & RUBBER CO.
ALLIED SIGNAL, INC. INTERNATIONAL BUSINESS MACHINES, CORP.
ALUMINUM COMPANY OF AMERICA INTERNATIONAL PAPER CO.
AMERICAN EXPRESS CO. McDONALD'S CORP.
BETHLEHEM STEEL CORP. MERCK & CO.
BOEING CO. MINNESOTA MINING & MANUFACTURING CO.
CATERPILLAR J. P. MORGAN
CHEVRON CORP. PHILIP MORRIS COMPANIES, INC.
COCA-COLA CO. PROCTER & GAMBLE CO.
WALT DISNEY SEARS ROEBUCK & CO.
E. I. DUPONT DE NEMOURS & CO. TEXACO, INC.
EASTMAN KODAK CO. UNION CARBIDE CORP.
EXXON CORP. UNITED TECHNOLOGIES CORP.
GENERAL ELECTRIC CO. WESTINGHOUSE ELECTRIC CORP.
GENERAL MOTORS CORP. WOOLWORTH CORP.
</TABLE>
<TABLE>
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TABLE OF FEES AND EXPENSES (BEGINS ON PAGE 3)
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Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases none
Maximum Sales Load Imposed on Reinvested Dividends and Capital Gains none
Deferred Sales Load none
Redemption Fees up to 0.75%*
Annual Fund Operating Expenses (as a percentage of average net assets) **
Management Fees after Expense Reimbursement 0.60%
12b-1 Fees none
Other Expenses 1.90%
Total Fund Operating Expenses 2.50%
<FN>
* The Fund will deduct a redemption fee of up to 0.75% of the value of
shares redeemed only if they are redeemed more than six (6) times per
year. However, the redemption fee will not be applicable to shares held
in omnibus accounts. See page 9. This fee, which is applicable only to
such short-term redemptions on certain accounts, is not reflected in the
example below.
** The percentages expressing annual operating expenses reflect the
Advisor's obligation effective November 1, 1995 to reimburse the Fund for
expenses in excess of 2.5% of its net asset value ("NAV") for the current
fiscal year. Prior thereto the Advisor reimbursed the Fund for expenses
in excess of .75% of its NAV and consequently the expenses for these prior
periods would have been less than for those projected for the current
year. Without the reimbursement of $227,797 the ratio of expenses to
average net assets for the fiscal year ended October 31, 1995 would have
been 5.94%.
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During the fiscal year ended October 31, 1995, the Fund reimbursed the
Advisor for interest expenses paid by the Advisor on behalf of the Fund in
the amount of $50,460. This amount was not subject to the
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expense reimbursement agreement. The ratio of expense to average net assets
for the fiscal year ended October 31, 1995, including the $50,460
interest expense was 3.01%.
The Annual Fund Operating Expenses shown above are based in part on the
agreement of the Fund's advisor, Vector Index Advisors, Inc. (the
"Advisor") to reimburse the Fund for expenses incurred. See also,
Management of the Fund.
EXAMPLE:
You would pay the following expenses of a $1,000 investment assuming (1) a
5% annual return and (2) redemption at the end of each time period:
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1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C>
$26 $79 $135 $286
</TABLE>
The amounts listed in this example should not be considered as
representative of past or future expenses and actual expenses may be
greater or less than those indicated. Moreover, while the example assumes
a 5% annual return, the Fund's actual performance will vary and may result
in an actual return greater or less than 5%. The foregoing table is to
assist you in understanding the various direct and indirect costs and
expenses that an investor in the Fund would bear.
The example takes into account the fact that the Advisor has agreed to
limit the Fund's annual operating expenses to 2.50% of the Fund's average
net assets. Prior to November 1, 1994, the Advisor reimbursed the Fund
for expenses incurred in excess of 0.75% of the Fund's average net assets
and consequently, the expenses you would have paid for these prior periods
would have been less than those reflected in the above table.
FINANCIAL HIGHLIGHTS (BEGINS ON PAGE 4) ?
--------------------
The following financial information for the periods indicated has been
audited by Hacker, Johnson, Cohen & Grieb, independent auditors, whose
unqualified report thereon appears in the Statement of Additional
Information. This information should be read in conjunction with the
financial statements and related footnotes included in the Statement of
Additional Information .
ASM Fund, Inc.
Selected Per Share Data and Ratios
For a share outstanding throughout the periods:
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1995 (2) 1994(2) 1993 (2) 1992 (2) 1991 (2)
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $9.78 $10.07 $9.23 $8.93 10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income - $ 0.56 $0.43 $0.26 0.09
Net Gains or (Losses) on Securities
(both realized and unrealized) $1.77 $(0.16) $0.88 $0.20 (1.16)
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Total From Investment Operations $11.55 $10.47 $10.54 $9.39 8.93
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LESS DISTRIBUTIONS
Dividends (from net investment income) (0.5) (0.52) (0.47) (0.16) ---
Distributions (from capital gains) (0.13) --- --- --- ---
Return of Captial (0.17) --- --- ---
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Total Distributions (0.18) (0.69) (0.47) (0.16) ---
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NET ASSET VALUE, END OF PERIOD $11.37 $9.78 $10.07 $9.23 $8.93
TOTAL RETURN 18.10% 3.97% 14.65% 5.10% (17.74%)(3)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $9,704 7,277 17,085 6,584 1,326
Ratio of Expenses to
Average Net Assets 3.01%(5) 0.75%(5) 0.75% 0.75% 0.75%
Ratio of Net Income to
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Average Net Assets 0..4% 2.17% (4) 3.35% 2.41% 0.97%
Portfolio Turnover Rate 340%(4) 1193% (4) 642%(4) 405%(4) 01%(4)
Average Commission Per Share 0.07 -- -- -- --
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<FN>
(1) For the Period ended October 31, 1991.
(2) For fiscal years ending October 31.
(3) This percentage is annualized. The investment period is equal
to 66% of a full year.
(4) The ASM Fund continues to be nearly 100% invested in equities.
The high portfolio turnover rate in 1995 resulted
primarily from portfolio securities sales made by the fund
to make payment on redemptions. High portfolio turnover may
involve additional brokerage or tax consequences to the Fund
and shareholders. See "Dividends and Tax Status" herein and
"Portfolio Turnover" in the Statement of Additional
Information.
(5) Includes $50,460 of interest expense not subject to the
voluntary expense reimbursement. For the fiscal year
beginning on November 1, 1995, the ratio of Expenses to
Average Net Assets will be no greater than 2.50%. (See
Management of the Fund.) Net of expense reimbursement. If the
voluntary expense reimbursement had not been in effect, the
ratio of expenses to average net assets would have been
5.94%, 2.55%, 2.86%, 3.91% and 26.09% for 1995, 1994, 1993,
1992 and 1991, respectively and the ratio of net investment
income to average net assets would have been 1.11% in 1993 and
would have been (2.90%. in 1995, 0.376% in 1994, 1.11%
in 1993, (0.75%) in 1992 and (24.37%) in 1991.
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THE FUND (BEGINS PAGE 5) ?
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ASM Fund, Inc. (the "Fund") is a no-load, diversified open-end investment
company or "mutual fund." The Fund has an objective of providing total
return through a combination of capital appreciation and current income.
The Fund seeks to achieve its objective by investing in equity securities
of large, well-established companies. The companies in which the Fund
will invest have a large market capitalization (in excess of $1.0
billion), an established history of earnings and dividend payments, a
large number of publicly held shares and high trading volume and a high
degree of liquidity. The Fund's portfolio will consist substantially of
the companies listed in the Dow Jones Industrial Average ("DJIA")*, but
the Fund is not limited in its investments to securities in the DJIA and
will purchase securities of other issuers that meet its capitalization,
earnings and other criteria for investment.
In determining which securities to purchase for the Fund, the Advisor
reviews potential companies that meet its market capitalization, earnings
history and liquidity criteria and then analyzes this grouping from an
industry perspective. It is expected that all of the equity securities
held by the Fund will trade on the New York Stock Exchange and will
represent dominant, key firms in their respective industries. The equity
securities in which the Fund will invest consist of common stocks. It is
expected that short-term money market securities would normally represent
less than 5% of the Fund's total assets. However, in the event future
economic or financial conditions adversely affect equity securities of the
type described above, the Fund may take a temporary, defensive investment
position and invest all or part of its assets insuch short-term money
market securities. These short-term instruments include securities issued
or guaranteed by the U.S. Government and agencies thereof, bankers'
acceptances and certificates of deposit and repurchase agreements
involving such obligations.
PRINCIPAL INVESTMENT RESTRICTIONS
---------------------------------
The Fund is subject to certain investment restrictions which are
fundamental policies that cannot be changed without the approval of a
majority of the Fund's outstanding voting securities (as defined in the
Investment Company Act of 1940, referred to as the "1940 Act").
The Fund's investment objective is such a fundamental policy. In
addition, as a matter of fundamental policy, (i) the Fund may not invest
25% or more of its total assets (calculated at the time of purchase) taken
at market value in any one industry; (ii) purchase more than 10% of the
outstanding voting securities or of any class of securities of any one
issuer; or (iii) borrow money except from banks for
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temporary or emergency purposes in amounts not exceeding 10% of the Fund's
net assets. Additional information about the Fund's fundamental policies
and other investment restrictions is contained in the Statement of
Additional Information.
* Dow Jones Industrial Average and DJIA are trademarks of Dow Jones &
Company, Inc. ASM Fund is neither sponsored by, nor affiliated with Dow
Jones and Company, Inc.
In addition, the Fund's operating policies preclude it from making certain
investments if thereafter more than 10% of the value of its net assets
would be so invested. The investments included in this 10% are (i) those
which are restricted, i.e., those which cannot freely be sold for legal
reasons (which the Fund does not expect to own); (ii) fixed time deposits
subject to withdrawal penalties (other than overnight deposits); (iii)
repurchase agreements having a maturity of more than seven days; and (iv)
investments for which market quotations are not readily available (which
the Fund does not expect to own). The 10 % limit does not include
obligations which are payable at principal amount plus accrued interest
within seven days after purchase.
MANAGEMENT OF THE FUND (BEGINS ON PAGE 6) ?
----------------------
The Fund's Board of Directors decides on matters of general policy and
reviews the activities of the Fund's Advisor, and the Fund's officers
conduct and supervise its daily business operations. Vector Index
Advisors, Inc. (the "Advisor"), 15438 N. Florida Ave., Suite 107, Tampa,
FL 33613, acts as the investment advisor to the Fund, subject to the
control of the Fund's Board of Directors. The Advisor is a Florida
corporation that was organized to act as the Fund's investment advisor.
The Advisor is controlled by Mr. Steven H. Adler, who has had over twenty
years experience in the investment business including employment with the
management company of a major mutual fund and as a consultant to eight
mutual funds.
The Advisor is responsible for the investment and reinvestment of the
Fund's assets, provides the Fund with executive and other personnel,
office space and other facilities and administrative services, and
supervises the Fund's daily business affairs. It formulates and
implements a continuous investment program for the Fund, consistent with
its investment objective, policies and restrictions.
In placing orders for the Fund's portfolio transactions, the Advisor's
policy is to seek "best execution", i.e. prompt and efficient execution at
the most favorable price. In seeking to achieve this combination, the
Advisor evaluates factors such as the overall quality and reliability of
dealers and services they provide, including general execution capability,
reliability, operational capacity and financial condition. Subject to
this policy, the Advisor also is authorized to consider sales of shares of
the Fund as a factor in the selection of brokers to execute brokerage and
principal transactions.
Under the Investment Advisory Agreement applicable to the Fund, the Fund
pays the Advisor a fee, computed daily and payable monthly, at the annual
rate of 0.60 of 1% of the Fund's average daily net assets. The management
of the Fund is the only activity of the Advisor. Therefore, the viability
of the Advisor is totally dependent on the ability of the Fund to grow to a
size where it is able to pay it's expenses including fees to the Advisor.
The Fund's Board of Directors monitors on a continuing basis the ability of
the Advisor to perform its obligations under its agreement with the Fund.
In addition to the fees payable to the Advisor, the Fund is responsible for
its operating expenses, which include such items as interest, taxes,
legal and audit expenses, and custodian and shareholder service agent
fees. See the Statement of Additional Information for more information as
to the Fund's Board of Directors, officers, the Advisor and the
Fund's operating expenses.
In order to assist the Fund in meeting it's expenses, the Advisor had
voluntarily agreed to reimburse the Fund for the expenses in excess of an
agreed upon percentage of it's average NAV. Initially, this amount was
2.5% of average net assets. On October 31, 1991 the Advisor revised this
voluntary agreement retroactively, to limit expenses of the Fund to 0.75%
of average net assets and continued this limitation
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until October 31, 1994. As a result of this agreement, the Advisor
reimbursed the Fund for $106,778, $85,558, $420,775, $321,043 and $227,797
of expenses for the fiscal years 1991, 1992, 1993 1994 and 1995
respectively. These expenses included management fees earned by the
Advisor of, $2,492, $29,858, $69,436, $105,908 and $46,858 for these
respective fiscal years, which fees were either set off against the
Advisor's reimbursement obligation for such years or returned to the Fund
by the Advisor in accordance with its reimbursement obligation.
During fiscal years prior to October 31, 1995, certain expense
reimbursement obligations of the Advisor were accrued by the Fund as a
receivable from the Advisor. All such obligations have been pain in full
to the Fund and its shareholders. In the future, any such amount will be
applied to reduce advisory fees payable to the Advisor. The staff of the
SEC has advised the Advisor that accrual procedures used in earlier years
and the Advisor's failure to pay its expense reimbursement obligations to
the Fund in a timely manner, were not proper, and the Advisor is
discussing the resolution of the staff's concerns at this time. The
Advisor has informed the Fund that it proposes to settle such concerns
with the SEC shortly. (See note 2 to financial statements.) In connection
therewith, the Advisor expects to institute additional compliance and
audit procedures for the protection of the Fund during the next several
years, and the Advisor has agreed to expend up to $20,000 for a compliance
audit of the Advisor and its procedures for the ultimate benefit of the
Fund and its shareholders. This audit will be conducted by counsel to be
selected by the Fund's Board of Directors, subject to approval by the SEC.
PORTFOLIO MANAGER
-----------------
Steven H. Adler is primarily responsible for the day-to-day management of
the ASM Fund. Mr. Adler, a Director and President of the ASM Fund, has
been associated with the Fund since its inception in 1991. Mr. Adler is a
Certified Investment Management Analyst (CIMA, Investment Consultants
Association) and a Certified Pension Consultant (CPC, American Society of
Pension Actuaries).
HOW TO PURCHASE SHARES (BEGINS ON PAGE 7)
----------------------
Shares of the Fund are offered at their net asset value without a sales
charge as an investment vehicle for individuals, institutions, fiduciaries
and retirement plans. The Advisor may make payments of up to 0.20% of the
average daily net assets attributable to registered representatives,
including retirement plan consultants, that provide assistance to them in
their efforts to distribute shares of the Fund. Such payments will be
made by the Advisor out of its own resources. The Advisor, at its expense
and under its objective criteria, may from time to time provide additional
promotional incentives to such representatives. In some instances these
payments or incentives may be offered only to persons who have initiated
the purchase of significant amounts of Fund shares. The minimum initial
investment in the Fund is $1,000. except for retirement and other employee
benefit plans, for which the minimum initial investment is $500. The
minimum subsequent investment is $100. The Fund reserves the right to
reject any order. Investors may be charged a fee if they effect
transactions in Fund shares through a securities dealer, bank or other
financial institution.
PURCHASE BY CHECK
Investors may purchase shares by sending a check payable to ASM Fund, Inc.
together with the application form to:
ASM Fund, Inc.
c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive
Dublin, Ohio 43017
SUBSEQUENT INVESTMENTS in an existing account may be made by mailing a
deposit slip and check made payable to ASM Fund, Inc. to:
ASM Fund, Inc.
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P. O. Box 640276
Cincinnati, OH 45264-0276
Shareholders wishing to open an account or send subsequent investment to
the Fund using an OVERNIGHT COURIER service may use the following address:
ASM Fund, Inc. c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive, Dublin, Ohio 43017
Shares of the Fund will be purchased for the account of the investor at
the net asset value next determined after receipt of the investor's check.
PURCHASE BY WIRE
----------------
Investors may invest in the Fund by first contacting the Fund's transfer
agent at 800-333-4276 to obtain a shareholder account number and then wire
the amount to be invested to ASM Fund, Inc. care of the Fund's custodian
bank, at the following address:
Star Bank, N. A., Cinti/Trust, ABA # 0420-0001-3
Attn: ASM Fund. Credit Account # 480389436
Account Name (your name)
Personal Account Number (your ASM account number)
Shares of the Fund will be purchased for the account of the Investor at
the net asset value next determined after receipt of the Investor's order.
To secure this price, the Transfer Agent must be notified no later than 60
minutes prior to the close of trading on the New York Stock Exchange.
At the same time the Investor should mail an application form to the
Transfer Agent at the following address:
ASM Fund, Inc. c/o Mutual Funds Service Co., Inc.
P O. Box 7177, 6000 Memorial Drive Dublin, OH 43017
AUTOMATIC INVESTMENT PLAN
The Fund offers an Automatic Investment Plan whereby an Investor may
automatically make purchases of shares of the Fund on a regular, convenient
basis ($100 minimum per transaction). Under the Automatic Investment Plan,
an Investor's designated bank or other financial institution debits a pre
authorized amount on the Investor's account each month and applies the
amount to the purchase of Fund shares. The Automatic Investment
Plan must be implemented with a financial institution that is a member of
the Automated Clearing House ("ACH"). In addition, the Fund must have a
currently effective registration in those states in which it is required.
No service fee is currently charge by the Fund for participating in the
Automatic Investment Plan. A fee will be imposed by the Transfer Agent if
sufficient funds are not available in the Investor's account at the time of
the automatic transaction. Applications to establish the Automatic
Investment Plan are available from the Fund. The $1,000 minimum initial
investment must be met before the Automatic Investment Plan may be
established.
NET ASSET VALUE (BEGINS ON PAGE 9) ?
---------------
The Fund's net asset value per share is determined on each day that the
New York Stock Exchange is open for trading, as of the close of the
Exchange (currently 4:00 p.m. Eastern time). Purchase orders received in
good order or shares tendered for redemption on a day the Exchange is open
for trading prior to 3:00p.m.EST on that day will be valued at the close
of trading on that day. The fund does not deem to be "in good order" and
does not accept any orders to purchase or redeem shares after 3:00p.m. on
each
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business day. Therefore, any order received after that time is priced at
the net asset value next computed after acceptance of the order on
the following business day.
The net asset value per share is the value of the Fund's assets, less its
liabilities, divided by the number of shares of the Fund outstanding. The
value of the Fund's portfolio securities is determined on the basis of the
market value of such securities. Short-term investments maturing in less
than 60 days are valued at amortized cost unless the Board of Directors
determines that it does not represent a fair value. See the Statement of
Additional Information for further details.
HOW TO REDEEM SHARES
--------------------
A shareholder wishing to redeem shares by telephone may do so if
appropriate information is supplied on the Account Registration Form. You
can redeem shares by calling the Fund's Transfer Agent at 1-800 333-4276
no later than 60 minutes prior to the close of trading on the New York
Stock Exchange to receive that day's price. The proceeds may be sent by
check to your address of record only or by wire transfer to your bank
account on the next business day following your telephone request. Wire
transfers will be restricted to amounts of $1,000 or more.
A shareholder wishing to redeem shares may do so at any time by writing or
delivering instructions to:
ASM Fund, Inc. c/o Mutual Funds Service Co., Inc.
P. O. Box 7177, 6000 Memorial Drive, Dublin, Ohio 43017
Shareholders desiring to use overnight courier services should address
correspondence to:
ASM Fund, Inc. c/o Mutual Funds Service Co., Inc.
6000 Memorial Drive, Dublin, Ohio 43017
The redemption request should specify the number of shares to be redeemed
and be signed by all registered owners exactly as the account is
registered, and it will not be accepted unless it contains all required
documents in proper form, as described below. If the request is in proper
form, the shares specified will be redeemed at the net asset value next
determined after receipt of the request.
CHARGE APPLICABLE FOR SHORT-TERM REDEMPTIONS
If you redeem shares more than six (6) times per year, the Fund will
deduct a redemption fee. The fee will be retained by the Fund and used
to offset the transaction costs that short-term trading imposes on the
Fund and its shareholders. The fee does not apply to tax qualified
pension or retirement plan accounts. In addition, the redemption fee will
not be charged upon redemption of shares purchased through omnibus
accounts. Also, shares acquired through reinvestment of dividends and
capital gain distributions are exempt from the redemption fee. The fee is
based on the following amounts of assets redeemed:
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<S> <C> <C> <C>
over $10 million 0.06% over $100,000 to $1.5 million 0.20%
over $1.5 million to $10 million 0.10% 0 to $100,000 0.75%
</TABLE>
PROPER FORM
In addition to written instructions, if any shares being redeemed or
repurchased by stock certificates, the certificates must be surrendered.
The certificates must either be endorsed or accompanied by a stock power
signed by the registered owners, exactly as the certificates are
registered. Additional documents may be required from corporations or
other organizations, fiduciaries or anyone other than the shareholder of
record. Any questions concerning documents needed should be directed to
1-800-333-4276.
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PAYMENTS
Payment for shares tendered normally will be made within seven days after
receipt by the Fund of instructions, certificates, if any, and other
documents, all in proper form. However, payment may be delayed under
unusual circumstances, as specified in the 1940 Act or as determined by
the Securities and Exchange Commission. Payment may also be delayed for
any shares purchased by check for a reasonable time (not to exceed 15 days
from the purchase date) necessary to determine that the purchase check
will be honored. Payment will be sent only to shareholders at the address
of record.
REDEMPTION OF SMALL ACCOUNTS
In order to reduce the Fund's expenses, the Board of Directors is
authorized to cause the redemption of all of the shares of any shareholder
whose account has declined to a net asset value of less than $500, as a
result of a transfer or redemption, at the net asset value determined as
of the close of business on the business day preceding the sending of
proceeds of such redemption. The Fund would give shareholders whose
shares were being redeemed 60 days prior written notice in which to
purchase sufficient shares to avoid such redemption.
EXCHANGE PRIVILEGE (BEGINS ON PAGE 11) ?
------------------
A shareholder may redeem all or any portion of his Fund shares and use the
proceeds to purchase shares of The Flex-Funds Money Market Fund, a money
market mutual fund not affiliated with the Fund or the Advisor, if shares
are offered in his/her state of residence. The redemption of shares of
the Fund and the purchase of shares of The Flex-Funds Money Market Fund
will be effected at the respective net asset values of such Funds. An
exchange transaction is a sale and purchase of shares for federal income
tax purposes and may result in a capital gain or loss. Also, if such
exchange transaction is made more than six times per year, the "Charge
Applicable for Short-term Redemptions" as described on page 10 will be
imposed. Prior to exercising the exchange privilege, a shareholder should
obtain and carefully read the prospectus for The Money Market Fund, which
is available from the Fund and may be obtained by telephone at 1-800
445-2763, or by writing to the Fund, ASM Fund, Inc., 15438 North Florida
Avenue, Suite 107, Tampa Florida 33613. The exchange privilege does not in
any way constitute an offering or recommendation on the part of the Fund
or the Advisor of an investment in Flex Funds, Money Market Fund. The
registration of both the account from which the exchange is being made and
the account to which the exchange is made must be identical.
In order to elect this exchange option, you must complete both the
Exchange Authorization Form and New Account Application for The Money
Market Fund and mail it to Mutual Funds Service Co., Box 7177, 6000
Memorial Drive, Dublin, OH 43017. Once you have elected the exchange
option you may initiate an exchange by calling stating your name, account
numbers for both the ASM Fund and The Money Market Fund, and the number of
shares or dollar value of shares to be exchanged or by sending a letter
stating the same information to the Fund c/o Mutual Funds Service Co.,
Inc. An exchange must meet the applicable minimum investment of the Money
Market Fund (currently $2500 for an initial investment and $100 for a
subsequent investment).
The Fund reserves the right, at any time and without prior notice, to
suspend, limit, modify or terminate the exchange privilege or its use in
any manner by any person or class. In particular, since an excessive
number of exchanges may be disadvantageous to the Fund, the Fund reserves
the right to terminate the exchange privilege of any shareholder who makes
more than six exchanges of shares in a year or three in a calendar
quarter.
DIVIDENDS AND TAX STATUS (BEGINS ON PAGE 12) ?
------------------------
The Fund expects to pay annual capital gain distributions and to pay
income dividends quarterly. For the convenience of investors, all
dividends and distributions are paid in full and fractional shares of the
Fund
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based on the net asset value per share at the close of business on the
record date, unless the shareholder has previously notified the transfer
agent that dividends are to be paid in cash by so electing on the
application form or by subsequent written notice to Mutual Fund Service
Co., Inc. the Fund's transfer agent and the dividend paying agent.
The Fund expects to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies for the current and all
subsequent fiscal years, under which all taxable income is expected to be
distributed to shareholders. If so qualified, the Fund will not be
subject to federal income taxes on its net investment income and capital
gains, if any, realized during any fiscal year in which it is
distributed. All dividends from net investment income together with
distributions of net short-term capital gains (collectively "income
dividends") will be taxable as ordinary income to shareholders even though
paid in additional shares. Capital gains dividends will be taxable to
shareholders as net long-term capital gains, regardless of the length of
time a shareholder has owned his shares. Dividends and distributions are
generally taxable to shareholders in the year in which received. However,
dividends and distributions received in January of any calendar year will
be treated for tax purposes as if received in the prior calendar year on
the recorded date for the dividend or distribution, if the record date
was in October, November or December. The Fund will notify each
shareholder after the close of its fiscal year both of the dollar amount
and the tax status of that year's dividends and distributions. Gains
realized from the sale of securities will be long or short term, depending
on the length of time owned by the Fund.
The Fund may be required to impose backup withholding at a rate of 31%
from income dividends and capital gain distributions and upon payment of
redemption proceeds if a shareholder does not comply with federal
requirements relating to the furnishing and certification of taxpayer
identification numbers and reporting of dividends.
PERFORMANCE INFORMATION (BEGINS ON PAGE 13) ?
-----------------------
From time to time the Fund may quote its average annual total return
("standardized return") in advertisements or promotional materials.
Advertisements and promotional materials reflecting standardized return
("performance advertisements") will show percentage rates reflecting the
average annual change in the value of an assumed initial investment in the
Fund of $1,000 at the end of one, five and ten year periods. If such
periods have not yet elapsed, data will be given as of the end of a
shorter period corresponding to the duration of the Fund. Standardized
return assumes the reinvestment of all dividends and capital gain
distributions.
The Fund also may refer in advertising and promotional materials to its
yield. The Fund's yield shows the rate of income that it earns on its
investments, expressed as a percentage of the net asset value of Fund
shares. The Fund calculates yield by determining the interest income it
earned from its portfolio investments for a specified thirty day period
(net of expenses), dividing such income by the average number of Fund
shares outstanding, and expressing the result as an annualized percentage
based on the net assets value at the end of that thirty day period. Yield
accounting methods differ from the methods used for other accounting
purposes; accordingly, the Fund's yield may not equal the dividend income
actually paid to investors or the income reported in the Fund's financial
statements.
In addition to standardized return, performance advertisements may also
include other total return performance data ("non-standardized return").
Non-standardized return may be quoted for the same or different periods as
those for which standardized return is quoted and may consist of aggregate
or average annual percentage rate of return, actual year by year rates or
any combination thereof.
All data included in performance advertisements will reflect past
performance and will not necessarily be indicative of future results. The
investment return and principal value of an investment in the Fund will
fluctuate, and an investor's proceeds upon redeeming Fund shares may be
more or less than the original cost of the shares.
10
<PAGE> 11
(BEGINS ON PAGE 14) ?
ASM FUND VS. S&P 500 INDEX AND LIPPER GENERAL EQUITY MUTUAL FUND AVERAGE
<TABLE>
<CAPTION>
LIPPER GENERAL
EQUITY MUTUAL
ASM FUND $1,000.00 S&P 500 INDEX $1,000.00 FUND AVERAGE $1,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3/31/91-10/31/91 -1.12% $ 988.75 6.26% $1,062.63 6.50% $1,065.00
10/31/92 7.47% $1,062.61 6.68% $1,133.62 8.19% $1,152.22
10/31/93 14.14% $1,212.86 11.74% $1,266.70 18.87% $1,369.65
10/31/94 3.21% $1,251.80 0.97% $1,278.94 0.72% $1,379.51
10/31/95 19.10% $1,490.89 23.11% $1,574.47 21.85% $1,680.93
- ------------------------------------------------------------------------------------------------------------------------------------
Five Year 11.77% 14.64% 14.04%
One Year 30.50% 32.07% 28.76%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The above information outlines the growth of $1,000 and the average annual total
returns for the ASM fund vs The S&P 500 Index and Lipper General Equity Mutual
Fund Average. This is representative of past performance and is not intended to
indicate future performance. The returns of the various indexes are from the end
of the month nearest the Fund's inception to the end of the calendar year.
* Five, Three and One Year returns have been updated to include data through
3/31/96.
1995 IN REVIEW
The ASM Fund mirrored the Dow Jones Industrial Average, plus dividends, less
expenses.
GENERAL INFORMATION
- -------------------
The Fund was incorporated in Maryland on April 25, 1990. Star Bank, NA.
acts as custodian of the Fund's assets, Mutual Funds Service Co. acts as
accounting and shareholder servicing agent and Hacker, Johnson, Cohen and Grieb
serve as the independent auditors for the Fund. It is not contemplated that
regular annual meetings of shareholders will be held. No amendment may be
made to the Articles of Incorporation without the affirmative vote of the
holders of more than 50% of the Fund's outstanding shares. The holders of
shares have no pre-emptive or conversion rights. Shares when issued are fully
paid and non-assessable.
Shareholder inquiries should be directed to the Fund at the address and
telephone number indicated on the cover of the Fund application.
NOTE TO PRINTER..... THE COVER HAS NOT CHANGED AND APPEARS WITH THE CORPORATE
LOGO STREAM.
ACCOUNT APPLICATION INCLUDED
FOR ADDITIONAL INFORMATION:
813 963-3150
800 445-2763
FAX (813) 968-4074
11
<PAGE> 12
NOTE TO PRINTER.....
FRONT COVER, NO CHANGE EXCEPT FOR THE DATE OF THE PROSPECTUS:
MARCH 1, 1996
REVISED
APRIL 1, 1996
12
