PROSPECTUS
JULY 31, 2000
(AS SUPPLEMENTED NOVEMBER 21, 2000)
CHACONIA
INCOME & GROWTH FUND
[LOGO]
AND
CHACONIA
ACS FUND
[LOGO]
SPONSORED BY:
TRINIDAD & TOBAGO UNIT TRUST CORPORATION
JULY 31, 2000
(AS SUPPLEMENTED NOVEMBER 21, 2000)
P R O S P E C T U S
CHACONIA MUTUAL FUNDS
The Chaconia Income & Growth Fund, Inc., otherwise known as
the Chaconia Mutual Funds, offers two distinct mutual funds offering different
investment strategies.
The Funds are:
THE CHACONIA INCOME & GROWTH FUND
(invests mainly in U.S. Government securities and
equity securities of the U.S., Canada and
Trinidad and Tobago)
THE CHACONIA ACS FUND
(invests mainly in equity and debt securities
of non-U.S. companies located in territories
of the Association of Caribbean States members)
Please read this Prospectus and keep it for future reference. It contains
important information, including information on how The Funds invest and the
services they offer to shareholders.
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The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
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Chaconia Mutual Funds
c/o Firstar Mutual Services, LLC
615 Easr Michigan Street
Milwaukee, WI 53202
1-800-368-3322(U.S)
1-800-624-8648 (non U.S. residents)
www.trinidad.net/home/tandt/utc/utchome.htm
TABLE OF CONTENTS
QUESTIONS EVERY INVESTOR SHOULD ASK BEFORE INVESTING IN THE FUNDS 2
WHO MANAGES THE FUNDS? 10
HOW ARE THE FUNDS' SHARE PRICES DETERMINED? 11
HOW TO PURCHASE SHARES 12
HOW TO SELL SHARES 14
WHAT ABOUT INTERNET TRANSACTIONS? 19
MAY SHAREHOLDERS MAKE EXCHANGES BETWEEN FUNDS? 19
WHAT ABOUT DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES? 19
FINANCIAL HIGHLIGHTS 20
QUESTIONS EVERY INVESTOR SHOULD ASK BEFORE
INVESTING IN THE FUNDS
1. WHAT ARE THE GOALS OF THE FUNDS?
THE CHACONIA I&G FUND
The Chaconia I&G Fund seeks to produce high current income and
capital appreciation.
THE CHACONIA ACS FUND
The Chaconia ACS Fund seeks to produce long-term capital
appreciation.
2. WHAT ARE THE PRINCIPAL INVESTMENT STRATEGIES OF THE FUNDS?
THE CHACONIA I&G FUND
The Chaconia I&G Fund seeks to meet its objective by investing
its assets in:
o U.S. Government securities including U.S. Treasury obligations
and obligations issued or guaranteed by U.S. Government agencies or
instrumentalities;
o investment grade corporate bonds;
o investment grade foreign government bonds;
o equity securities of U.S., Canadian, British and Trinidad and
Tobago companies;
o American Depository Receipts;
o the Schemes of the Trinidad and Tobago Unit Trust Corporation;
o certificates of deposit; and
o money market funds.
Under normal market conditions, the Chaconia I&G Fund will maintain
a level of at least 15% of its total assets invested in debt securities and at
least 25% of its total assets invested in equity securities.
The Schemes of the Trinidad and Tobago Unit Trust Corporation are
separate investment companies created by the Unit Trust Corporation of Trinidad
and Tobago Act of 1981. The assets of the Schemes of the Trinidad and Tobago
Unit Trust Corporation are predominantly invested in equity securities and fixed
income securities of Trinidad and Tobago corporations and in Trinidad and Tobago
government securities.
American Depository Receipts (ADR) are U.S. securities that
generally represent a non-U.S. company's publicly traded equity or debt. ADRs
are created when a broker purchases a foreign company's shares on a foreign
stock market and delivers those shares to a local U.S. custodian bank. The
broker then instructs the bank to issue depository receipts. ADRs may trade
freely, just like any other security, either on an exchange or any
over-the-counter market.
In purchasing debt securities, the Chaconia I&G Fund manager
considers the maturity of the security as well as the credit quality of the
issuer. In determining what equity securities the Chaconia I&G Fund will invest
in, the Chaconia I&G Fund manager will focus on the actual and prospective
earnings and return on equity of the company and other factors. The Chaconia I&G
Fund manager will seek to invest in equity securities of companies whose shares
are undervalued based on the current price relative to the long-term prospects
of the company.
The Chaconia I&G Fund, in response to adverse market, economic,
political or other conditions, may take temporary defensive positions. This
means the Chaconia I&G Fund will invest some or all of its assets in cash or
money market instruments (like U.S. Treasury Bills, commercial paper or
commercial paper master notes). The Chaconia I&G Fund will not be able to
achieve its investment objective to the extent that it invests in cash or money
market instruments. When the Chacona I&G Fund is not taking a temporary
defensive position, it still may hold some cash and money market instruments in
order to take advantage of investment opportunities, or so it can pay expenses
and satisfy redemption requests.
THE CHACONIA ACS FUND
The Chaconia ACS Fund seeks to meet its objective by investing
primarily in a diversified portfolio of equity and debt securities of non-U.S.
issuers domiciled and/or operating in the member, associate member and observer
status countries of the Association of Caribbean States ("ACS"), except Cuba.
Under normal circumstances, the Chaconia ACS Fund intends to invest at least 65%
of its total assets in foreign debt securities, stocks and equity-related
securities, including preferred stocks, warrants, convertible securities and
other similar rights. The Chaconia ACS Fund may purchase securities of foreign
issuers directly or in the form of ADRs, European Depository Receipts, Global
Depository Receipts or other securities representing shares of non-U.S. issuers
domiciled or operating in the ACS.
The countries which are members, associate members and observers of
the ACS whose issuers are eligible for the portfolio are as follows:
ACS MEMBERS
Antigua and Barbuda Haiti
The Bahamas Honduras
Barbados Jamaica
Belize Mexico
Colombia Nicaragua
Costa Rica Panama
Dominica St. Kitts and Nevis
The Dominican Republic St. Lucia
El Salvador St. Vincent and the Grenadines
Grenada Suriname
Guatemala Trinidad and Tobago
Guyana Venezuela
ACS ASSOCIATE MEMBER
France
ACS OBSERVERS
Argentina India
Brazil Italy
Canada Kingdom of the Netherlands
Chile Morocco
Ecuador Peru
Egypt Russian Federation
Spain
The Chaconia ACS Fund intends to diversify its holdings among
several countries. Under normal market conditions, the Chaconia ACS Fund plans
to have investments in the securities of ACS domiciled issuers in not less than
five ACS countries. The Chaconia ACS Fund does not have any limitations on the
percentage of its assets that may be invested in securities primarily traded in
any one country. The Chaconia ACS Fund may invest in securities traded in mature
markets, such as Japan, Canada and the United Kingdom, in less developed markets
and in emerging markets.
The Chaconia ACS Fund may adopt a temporary defensive position
policy that allows it to invest up to 100% of its total assets in cash and money
market obligations, when significant adverse market, economic, political or
other circumstances require immediate action to avoid losses. During adverse
market conditions, the Chaconia ACS Fund may also invest up to 100% of its
assets in U.S. securities or in securities primarily traded in one or more
foreign countries, or in debt securities. If the Chaconia ACS Fund is invested
in defensive instruments, it will not be able to achieve its stated investment
objective. When the Chaconia ACS Fund is not taking a temporary defensive
position, it still may hold some cash and money market instruments in order to
take advantage of investment opportunities, or so it can pay expenses and
satisfy redemption requests.
ALL FUNDS.
Neither of the Funds attempts to achieve its investment objectives
by frequent trading of securities. However, each of the Funds' turnover may
increase due to economic, market or other factors that are not within the
control of each of the Fund's management. It is expected that under normal
market conditions, the annual portfolio turnover rate for each of the Funds will
not exceed 100%.
Other than securities issued or guaranteed by the U.S. government,
neither of the Fund's may invest more than 25% of its total assets in any single
industry, nor invest more than 15% of its net assets in illiquid securities.
Illiquid securities are securities that cannot be sold within seven days in the
normal course of business at approximately the amount at which one of the Funds
has valued or priced the securities. Securities acquired by one of the Funds in
private placements that have restrictions on their resale are generally
considered illiquid.
3. WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
Investors in the Funds may lose money. There are risks associated with
investments in the types of securities in which the Funds invest. These
risks include:
o MARKET RISK: The prices of the securities in which the Funds invest
may decline for a number of reasons. The price declines of common
stocks and bonds may be steep, sudden and/or prolonged.
o CURRENCY RISK: Foreign currency risk is the risk that the U.S.
dollar value of foreign securities held by one of the Funds may be
affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. The value of the
Funds may go up and down as the value of the dollar rises and falls
compared to a foreign currency.
o LIQUIDITY RISK: Foreign markets or exchanges tend to have less
trading volume than the New York Stock Exchange or other domestic
stock exchanges or markets, meaning the foreign market may have
less liquidity. Lower liquidity in a foreign market can affect the
Chaconia ACS Fund's, and to a lesser extent the Chaconia I&G
Fund's, ability to purchase or sell blocks of securities and obtain
the best price in the foreign market. This may cause the Funds
to lose opportunities for favorable purchases or sales of
investments. Because foreign markets trade at times and on days
different than U.S. markets, each Fund's value may change when an
investor's account cannot be accessed.
o FOREIGN INVESTMENT EXPENSE RISK: Investing in foreign securities
generally costs more than investing in U.S. securities because of
higher transaction costs, such as the commissions paid per share.
As a result, mutual funds that invest in foreign securities tend to
have higher expenses due to higher commissions and higher advisory
and custodial fees.
o FOREIGN POLITICAL AND ECONOMIC RISKS: The degree of political
and economic stability varies from country to country. If a country
confiscates money from foreigners or takes over an industry, one of
the Funds may lose some or all of any particular investment in that
country. Parts of individual foreign economies may vary favorably
or unfavorably from the U.S. economy (e.g., inflation rate) which
may affect the value of each Fund's investment in any foreign
country.
o GOVERNMENTAL REGULATION RISK: Many foreign countries do not subject
their markets to the same degree and type of laws and regulations
that cover the U.S. markets. Also, many foreign governments impose
restrictions on investments as well as taxes or other restrictions
on repatriation of investment income. The regulatory differences in
some foreign countries make investing or trading in their markets
more difficult and risky.
o CORPORATE DISCLOSURE STANDARD RISK: Many countries have laws
making information on publicly traded companies, banks and
governments more difficult to obtain, incomplete or unavailable.
The lack of uniform accounting standards and practices among
countries impairs the ability of investors to compare common
valuation measures, such as price/earnings ratios, for securities
of different countries.
o INTEREST RATE RISK: The Funds may invest in debt securities.
In general, the value of bonds and other debt securities rises
when interest rates fall and falls when interest rates rise.
Longer term obligations are usually more sensitive to interest
rate changes than shorter term obligations. While bonds and
other debt securities normally fluctuate less in price than
common stocks, there have been extended periods of increases
in interest rates that have caused significant declines in
bond prices.
o CREDIT RISK: Each Fund may invest in debt securities not backed by
the full faith and credit of the United States. The issuers of such
bonds and other debt securities may not be able to make interest or
principal payments. Even if these issuers are able to make interest
or principal payments, they may suffer adverse changes in financial
condition that would lower the credit quality of the issuer,
leading to greater volatility in the price of the security.
o PREPAYMENT RISK: The issuers of bonds and other debt securities
held by the Funds may prepay principal due on securities,
particularly during periods of declining interest rates. Securities
subject to prepayment risk generally offer less potential for gain
when interest rates decline, and may offer a greater potential for
loss when interest rates rise. Rising interest rates may cause
prepayments to occur at a slower than expected rate. This will
increase the average life of the security and make the security
more sensitive to interest rate changes.
BECAUSE OF THESE RISKS THE FUNDS ARE A SUITABLE INVESTMENT ONLY FOR THOSE
INVESTORS WHO HAVE LONG-TERM INVESTMENT GOALS. PROSPECTIVE INVESTORS WHO ARE
UNCOMFORTABLE WITH AN INVESTMENT THAT WILL INCREASE AND DECREASE IN VALUE SHOULD
NOT INVEST IN THE FUNDS.
4. HOW HAS THE CHACONIA I&G FUND PERFORMED?
The bar chart and tables that follow provide some indication of the
risks of investing in the Funds. The page illustrating the Chaconia I&G
Fund shows changes in its performance from year to year and how its
average annual returns over various periods compares to the performance
of the S&P 500 (50%) and the Lehman Brothers Government and Corporate
Bond Index (50%). The Chaconia ACS Fund has recently commenced
operations and so has no performance information to report at this
time. Please remember that each Fund's past performance is not
necessarily an indication of its future performance. It may perform
better or worse in the future.
THE CHACONIA I&G FUND
(Total return per calendar year)
[GRAPH]
1993 1994 1995 1996 1997 1998 1999
2.40% 0% 27.16% 5.61% 19.98% 15.87% 2.73%
Note: During the seven-year period shown on the bar chart, the Chaconia I&G
Fund's highest total return for a quarter was 11.44% (quarter ended
June 30, 1997) and the lowest total return for a quarter was -6.66%
(quarter ended September 30, 1999).
The Fund's 2000 year to date total return is -1.13% (January 1, through
June 30, 2000).
<TABLE>
<CAPTION>
SINCE THE
INCEPTION OF THE
AVERAGE ANNUAL TOTAL RETURNS PAST FIVE FUND (MAY 11,
(FOR THE PERIODS ENDING DECEMBER 31, 1999) PAST YEAR YEARS 1993)
-------------------------------------------- ------------ -- ------------- ------------------
<S> <C> <C> <C>
The Chaconia I&G Fund* 2.73% 13.89% 10.68%
The Benchmark** 9.45% 18.09% 14.14%
</TABLE>
* The Chaconia I&G Fund commenced operations on May 11, 1993.
**The Chaconia I&G Fund's performance is compared to a balance of the S&P 500
(50%) and the Lehman Brothers Government and Corporate Bond Index (50%).
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you
buy and hold shares of the Funds.
SHAREHOLDER FEES (fees paid directly from your investment)
<TABLE>
<CAPTION>
THE CHACONIA I&G FUND THE CHACONIA ACS FUND
<S> <C> <C>
Maximum Sales Load imposed on Purchases
(as a percentage of offering price)......... None 4.00%
Maximum Deferred Sales Load (as a
percentage of original, purchase price or
redemption proceeds, as applicable)......... None None
Maximum Sales Load imposed on
Reinvested Dividends (as a percentage
of offering price).......................... None None
Redemption Fee (as a percentage of
amount redeemed)............................ None* None*
Exchange Fee................................... None* None*
</TABLE>
*An investor's broker may charge a fee for wire redemptions and/or exchanges
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) (expenses
that are deducted from Fund assets)
Management Fees........................ 0.38%(1) 0.75%(1)
Distribution (12b-1) Fees.............. 0.50% 0.50%
Service Fees .......................... 0.25%(2) 0.25%(2)
Other Expenses......................... 0.60% 0.65%
Total Annual Fund Operating Expenses... 1.73% 2.15%(3)
--------------------
(1)The management fee will vary depending upon the Chaconia I&G Fund's average
daily net assets and will be the greater of $50,000 or 0.75 of 1% on the first
$10 million, 0.50 of 1% on the next $10 million and 0.25 of 1% over $20 million
of the Chaconia I&G Fund's average daily net assets. Total Chaconia I&G Fund
operating expenses will vary depending upon the management fee.
(2)The service fees are payments made by the Chaconia I&G Fund to registered
broker-dealers for personal service and/or the maintenance of shareholder
accounts. Service fees could be paid by the Funds up to 0.25 of 1% of the Fund's
net assts. For the period ended December 31, 1999, $9,694 of service fees were
accrued and paid.
(3)The total operating expenses for the Chaconia ACS Fund are estimates because
the Fund has recently commenced operations.
EXAMPLE
This Example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in a Fund for the time
periods indicated and then redeem all of your shares at the end of these
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
The Chaconia I&G Fund $176 $545 $939 $2,041
Chaconia ACS Fund $609 $1,046 N/A N/A
WHO MANAGES THE FUNDS?
On June 20, 2000, the shareholders voted to approve a new investment
management agreement with Earnest Partners, LLC. Consequently, Earnest Partners,
LLC (the "I&G Manager") is the investment adviser to the Chaconia I&G Fund. The
I&G Manager began managing the Fund's assets on July 5, 2000. The I&G Manager's
address is:
Earnest Partners, LLC
75 Fourteenth Street, Suite 2300
Atlanta, Georgia 30309
The I&G Manager was organized as a Georgia limited liability company on
December 22, 1997 and registered as an investment advisor on January 12, 1999.
As the investment adviser to the Chaconia I&G Fund, the I&G Manager manages the
investment portfolio of the Chaconia I&G Fund. As compensation for its services,
the I&G Manager receives a monthly fee at an annual rate of the greater of
$50,000 or 0.75 of 1% on first $10 million, 0.50 of 1% on next $10 million and
0.25 of 1% over $20 million of the Chaconia I&G Fund's average daily net assets.
This compensation is identical to the compensation paid to the prior investment
advisor for the I&G Fund. During the last fiscal year, the Chaconia I&G Fund
would have paid the I&G Manager an annual investment advisory fee equal to 0.38%
of average net assets.
Chaconia Fund Services, Inc. (the "ACS Manager") is the investment
advisor for the Chaconia ACS Fund. The ACS Manger's address is:
Chaconia Fund Services, Inc.
1000 Brickell Avenue, Suite 600
Miami, Florida 33131
The ACS Manager was incorporated as a Delaware corporation on
December 8, 1997 and registered as an investment advisor on July 8, 1999. As the
investment advisor to the Chaconia ACS Fund, the ACS Manager will manage the
investment portfolio of the Chaconia ACS Fund when it commences operations. The
ACS Manager is a wholly owned subsidiary of the Trinidad and Tobago Unit Trust
Corporation.
PORTFOLIO MANAGERS
PAUL VIERA, portfolio manager for the Chaconia I&G Fund, was the
portfolio manager for the Fund between 1995 and 1998. Prior to working for the
I&G Manager, Mr. Viera managed equity and fixed income portfolios with INVESCO
Capital Management, Inc. from 1991 to 1998 (Chaconia I&G Fund's previous
investment adviser). In December 1998, Mr. Viera founded the I&G Manager. Mr.
Vierra holds a B.A. in Economics from the University of Michigan and a MBA in
Finance from Harvard University.
RUBEN MCSWEEN is the lead portfolio manager for the Chaconia ACS Fund.
He has been managing the Fund since it commenced operations in November 2000.
Mr. McSween also manages investments of the Trinidad and Tobago Unit Trust
Corporation since 1994. Mr. McSween holds a BSC in Financial Management from
South Eastern University and an MBA in General Management from Howard
University.
EUTRICE CARRINGTON is a co-portfolio manager of the Chaconia ACS Fund.
Ms. Carrington has been a co-manager of the Fund since it commenced operations
in November 2000. Ms. Carrington has also served as an investment analyst of the
Schemes of the Trinidad and Tobago Unit Trust Corporation (unit investment
companies) since 1996. Ms. Carrington holds a BSC and an MSC in Economics from
the University of the West Indies.
DAVID THOMPSON is a co-portfolio manager of the Chaconia ACS Fund. Mr.
Thompson has been a co-manager of the Fund since it commenced operations in
November 2000. Mr. Thompson has also served as a manager for investments of the
Trinidad and Tobago Unit Trust Corporation since 1998. Mr. Thompson holds a B.A.
in Economics from the University of the West Indies.
FUND ADMINISTRATION, FUND ACCOUNTING, TRANSFER AGENT, CUSTODY
Firstar Mutual Fund Services, LLC serves as the Funds' administrator,
transfer agent and fund accountant. As such, Firstar Mutual Fund Services, LLC
provides all necessary recordkeeping services and share transfer services for
the Funds. Firstar Bank, N.A. serves as the Funds' custodian.
HOW ARE THE FUNDS' SHARE PRICES DETERMINED?
The price at which investors purchase shares of each Fund and at which
shareholders redeem shares of each Fund is called its net asset value. The Funds
calculate their net asset values as of the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange is open for trading. The New York Stock Exchange is closed on
holidays and weekends. The net asset value purchase is the value of each Fund's
assets, less its liabilities, divided by the number of shares outstanding of
each Fund. Each Fund will process purchase orders that it receives and accepts
and redemption orders that it receives prior to the close of regular trading on
a day that the New York Stock Exchange is open at the net asset value determined
LATER THAT DAY. It will process purchase orders that it receives and accepts and
redemption orders that it receives AFTER the close of regular trading at the net
asset value determined at the close of regular trading on the NEXT DAY the New
York Stock Exchange is open.
HOW TO PURCHASE SHARES
To open an account, you must invest at least the minimum amount.
MINIMUM INVESTMENTS TO OPEN TO ADD TO
YOUR ACCOUNT YOUR ACCOUNT
Regular accounts and $250 $100
IRAs
GOOD ORDER PURCHASE REQUESTS
When making a purchase request, make sure your request is in good
order. "Good order" means your purchase request includes:
|X| the NAME of the Fund
|X| the DOLLAR amount of shares to be purchased
|X| account application form or investment stub
|X| check payable to the "Chaconia Mutual Funds"
METHODS OF BUYING
THROUGH A You can purchase shares of the Funds through any
BROKER/DEALER broker-dealer organization that has an agreement with
ORGANIZATION Chaconia Financial Services, Inc., the Funds' distributor.
The broker-dealer organization is responsible for sending
your purchase order to the Funds' transfer agent. Please
keep in mind that your broker-dealer may charge additional
fees for its services.
BY MAIL You can purchase shares of the Funds through the Funds'
transfer agent, Firstar Mutual Fund Services, LLC. To
open an account, complete an account application form and
send it together with your check to the address below. To
make additional investments once you have opened your
account, send your check together with the detachable form
that is included with your Fund account statement or
confirmation. You may also send a letter stating the
amount of your investment with your name, the name of the
Fund and your account number together with a check to the
address below. Checks should be made payable to "Chaconia
Mutual Funds." No third party checks will be accepted.
If your check is returned for any reason, a $25 fee will
be assessed against your account.
REGULAR MAIL
------------
CHACONIA MUTUAL FUNDS
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WISCONSIN 53201-0701
OVERNIGHT DELIVERY
------------------
CHACONIA MUTUAL FUNDS
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
615 E. MICHIGAN STREET, THIRD FLOOR
MILWAUKEE, WISCONSIN 53202
NOTE: The Funds do not consider the U.S. Postal Service
or other independent delivery services to be their agents.
BY TELEPHONE To make additional investments by telephone, you must
check the appropriate box on your account application form
authorizing telephone purchases. If you have given
authorization for telephone transactions and your account
has been open for at least 15 days, call the Funds toll
free at 1-800-368-3322 (or 1-868-624-8648 for non-U.S.
residents) and you will be allowed to move money from your
bank account to your Fund account upon request. Only
bank accounts held at domestic institutions that are
Automated Clearing House (ACH) members may be used for
telephone transactions. For security reasons, requests by
telephone will be recorded.
BY WIRE To open an account or to make additional investments
by wire, call 1-800-368-3322 to notify the Funds of the
incoming wire using the wiring instructions below:
Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 042000013
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit: Chaconia Mutual Funds, FUND NAME
(your name or the title on the account)
(your account #)
THROUGH AN Once your account has been opened, you may purchase shares
AUTOMATIC of the Funds through an Automatic Investment Plan ("AIP").
INVESTMENT You can have money automatically transferred from your
PLAN checking or savings account on a weekly, bi-weekly,
monthly, bi-monthly or quarterly basis. To be eligible
for this plan, your bank must be a domestic institution
that is an ACH member. The Funds may modify or terminate
the AIP at any time. The first AIP purchase will take
place no earlier than 15 days after the transfer agent has
received your request.
HOW TO SELL SHARES
METHODS OF SELLING
BY MAIL If you purchased your shares through the Funds' transfer
agent, you should send your written redemption request to
the address below. Your request should contain the Fund's
name, your account number and the number of shares or the
dollar amount of shares to be redeemed. Be sure to have
all account holders sign the letter. Additional documents
are required for shareholders that are corporations,
partnerships, executors, trustees, administrators, or
guardians (I.E., corporate resolutions or trust documents
indicating proper authorization).
REGULAR MAIL
------------
CHACONIA MUTUAL FUNDS
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WISCONSIN 53201-0701
OVERNIGHT DELIVERY
------------------
CHACONIA MUTUAL FUNDS
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
615 E. MICHIGAN STREET, THIRD FLOOR
MILWAUKEE, WISCONSIN 53202
The Funds' transfer agent may require a SIGNATURE 3
GUARANTEE for certain redemption requests such as
redemption requests from IRA accounts, or redemption
requests made payable to a person or an address not on
record with the Funds. A signature guarantee assures that
your signature is genuine and protects you from
unauthorized account transfers. You may obtain signature
guarantees from most trust companies, commercial banks or
other eligible guarantor INSTITUTIONS. A NOTARY PUBLIC
CANNOT GUARANTEE SIGNATURES.
BY TELEPHONE If you are authorized to perform telephone transactions
(either through your account application form or by
subsequent arrangement in writing to the Funds' transfer
agent) you may redeem shares in any amount, but not less
than $100, by calling 1-800-368-3322 (or 1-868-624-8648
for non-U.S. residents). A signature guarantee is required
of all shareholders to change or add telephone redemption
privileges. For security reasons, requests by telephone
will be recorded.
BY WIRE To redeem shares by wire, call the Fund at 1-800-368-3322
and specify the amount of money you wish to be wired. Your
bank may charge a fee to receive wired funds. The transfer
agent charges a $12 outgoing wire fee.
WHEN REDEMPTION PROCEEDS ARE SENT TO YOU
Your shares will be redeemed at the NAV next determined after the
transfer agent receives your redemption request in good order. Your redemption
request cannot be processed on days the NYSE is closed.
All requests received in good order by the transfer agent before the
close of the regular trading session of the NYSE (normally 4:00 p.m. Eastern
time) will normally be wired to the bank you indicate or mailed on the following
day to the address of record. In no event will proceeds be wired or a check
mailed more than 7 calendar days after the Fund receives your redemption
request.
If you purchase shares using a check and soon after request a
redemption, the Funds' transfer agent will honor the redemption request, but
will not mail the proceeds until your purchase check has cleared (usually within
12 days).
REDEMPTION REQUESTS IN GOOD ORDER
When making a redemption request, make sure your request is in good
order. "Good order" means your letter of instruction includes:
|X| the NAME of the Fund
|X| the DOLLAR AMOUNT or the NUMBER of shares to be redeemed
|X| SIGNATURES of all registered shareholders exactly as the shares are
registered
|X| the ACCOUNT number
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the
Funds may mail you a notice if your account falls below $250 requesting that you
bring the account back up to $250 or close it out. If you do not respond to the
request within 30 days, the Funds may close the account on your behalf and send
you the proceeds.
SHARE CERTIFICATES
If there are certificates representing your shares, endorse the
certificates or execute a stock power exactly as your shares are registered.
Send the endorsed certificate (or executed stock power) together with your
redemption request made in good order to the above address.
WHAT ABOUT INTERNET TRANSACTIONS?
It is anticipated that the Funds will make available a service on the
Internet which will permit shareholders to request purchases, exchanges and
redemptions of shares after an account is opened on-line. For further
information on availability of this service and to authorize this service after
it is available, call the Transfer Agent at 1-800-368-3322 and follow the
instructions you receive.
MAY SHAREHOLDERS MAKE EXCHANGES BETWEEN FUNDS?
At this time shareholders may not make exchanges between Funds. It is
expected that the Funds will permit shareholders to make exchanges between the
Funds in the near future. For further information on availability of this
service, call the Transfer Agent at 1-800-368-3322.
WHAT ABOUT DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES?
The Funds intend to pay dividends and capital gains distribution, if
any, on an annual basis. Unless the shareholder elects otherwise, dividend and
capital gains distributions will be paid in additional shares of the Funds.
Shareholders may elect to receive dividends and distributions by notifying the
Funds in writing.
You may make this election on the Account Application. You may change
your election by writing to the Transfer Agent or by calling 1-800-368-3322.
Each Fund's distributions, whether received in cash or additional
shares of each Fund, may be subject to federal and state income tax. These
distributions may be taxed as ordinary income and capital gains (which may be
taxed at different rates depending on the length of time the Fund holds the
assets generating the capital gains). The Funds expect that their distributions
will consist of both ordinary income and long-term capital gains.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Chaconia I&G Fund's financial performance for the past five fiscal years of
operations. Certain information reflects financial results for a single share.
The total returns in the table represent the rate that an investor would have
earned on an investment in the Chaconia I&G Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Chaconia I&G Fund's
financial statements, is included in the Annual Report which is available upon
request. The Chaconia ACS Fund recently commenced operations and therefore
has no financial highlights to report at this time.
<TABLE>
<CAPTION>
THE CHACONIA I&G FUND
Six Months Ended
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
-------- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
2000(1) 1999 1998 1997 1996 1995
------- ---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year........... $12.34 $12.47 $11.47 $10.44 $12.13 $9.94
------ ------ ------ ------ ------ -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income....................... .06 0.14 0.11 0.08 0.13 0.24
Net realized and unrealized gain (loss)
on investments .......................... (.20) 0.20 1.71 2.00 0.55 2.47
----- ---- ---- ---- ---- ----
Total from investment operations............ (.14) 0.34 1.82 2.08 0.68 2.71
----- ---- ---- ---- ---- ----
LESS DISTRIBUTIONS:
Dividend from net investment income......... 0.0 (0.14) (0.11) (0.09) (0.17) (0.23)
Distribution in excess of net investment
Income................................... 0.0 0.00(2) 0.00 0.00 (0.01) 0.00(2)
Distribution from net realized gains ....... 0.0 (0.33) (0.71) (0.96) (2.15) (0.28)
Distribution in excess of net realized gains
on investments........................... 0.0 0.00 0.00 0.00 (0.04) 0.00
--- ---- ---- ---- ------ ----
Total distributions......................... 0.0 (0.47) (0.82) (1.05) (2.37) (0.51)
--- ------ ------ ------ ------ ------
Net asset value, end of year ............... 12.20 $12.34 $12.47 $11.47 $10.44 $12.13
===== ======= ====== ====== ======= ======
Total investment return .................... (1.13%) 2.73% 15.87% 19.98% 5.61% 27.16%
-------
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s)............ $53,422 $62,900 $43,762 $18,500 $10,132 $17,809
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................... 1.84%(3) 1.73% 1.99% 2.55% 2.84% 2.37%
Net investment income....................... (.89%)(3) 1.19% 1.21% 0.98% 1.03% 2.09%
Portfolio turnover.......................... 14.69% 65.75% 41.23% 35.04% 72.91% 26.23%
(1) Unaudited.
(2) Less than $0.01 per share.
(3) Annualized
</TABLE>
To learn more about the Funds you may want to read the Statement of
Additional Information (or "SAI") which contains additional information about
the Funds. The Funds have incorporated the SAI into the Prospectus by reference.
This means that you should consider the contents of the SAI to be part of the
Prospectus.
You also may learn more about each Fund's investments by reading the
annual and semi-annual reports to shareholders. The annual report includes a
discussion of the market conditions and investment strategies that significantly
affected the performance of the Funds during their last fiscal year.
The SAI and the annual and semi-annual reports are all available to
shareholders and prospective investors without charge, simply by calling
1-800-368-3322.
Prospective investors and shareholders who have questions about the
Funds may CALL the above number, WRITE to the address below, or visit our WEB
SITE also shown below:
Chaconia Mutual Funds
c/o Firstar Mutual Funds Services, LLC
615 East Michigan Street, Third Floor
Milwaukee, WI 53202
www.trinidad.net/home/tondt/utc/utchome.htm
The general public can review and copy information about the Funds
(including the SAI) at the Securities and Exchange Commission's Public Reference
Room in Washington, D.C. (Please call 1-202-942-8090 for information on the
operations of the Public Reference Room.) Reports and other information about
the Chaconia Mutual Funds are also available on the EDGAR Database at the
Securities and Exchange Commission's Internet site at http://www.sec.gov and
copies of this information may be obtained, upon payment of a duplicating fee,
by electronic request at the following E-mail address: [email protected]. or by
writing to:
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-0102
Please refer to the Securities Act and Investment Company Act
File Nos. 33-37426 and 811-6194 when seeking information about the Chaconia
Mutual Funds from the Securities and Exchange Commission.
STATEMENT OF ADDITIONAL INFORMATION JULY 31, 2000
THE CHACONIA INCOME & GROWTH FUND, INC.
THE CHACONIA INCOME & GROWTH FUND THE CHACONIA ACS FUND
Effective November 13, 2000, Firstar Mutual Fund Services, Inc. provides
various services for the Funds, including fund administration, fund accounting
and transfer agency services.
Requests for copies of the prospectus should be made in writing to the:
Chaconia Mutual Funds
c/o Firstar Mutual Funds Services, LLC
615 East Michigan Street, Third Floor
Milwaukee, Wisconsin 53202,
or by calling 1-800-368-3322 (1-868-624-8648 non U.S. residents).
