PROSPECTUS
[LOGO]
LIMITED TERM
NEW YORK
MUNICIPAL FUND
ROCHESTER PORTFOLIO SERIES
350 Linden Oaks
Rochester, New York 14625-2807
(716) 383-1300
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Rochester Portfolio Series, a Massachusetts business trust (the "Trust"),
is a non-diversified, open-end management investment company, consisting of one
portfolio, the Limited Term New York Municipal Fund (the "Fund"), which has two
classes of shares, Class A Shares and Class B Shares. The investment objective
of the Fund is to provide shareholders with as high a level of income exempt
from federal income tax and New York State and New York City personal income
taxes as is consistent with its investment policies and prudent investment
management. The Fund intends to invest primarily in a portfolio of investment
grade obligations with a dollar weighted average effective maturity of five
years or less. There can be no assurance that the investment objective of the
Fund will be realized.
The Prospectus sets forth concisely information about Class A Shares and
Class B Shares of the Fund that prospective investors ought to know before
investing. Investors should read this Prospectus carefully before investing and
should retain it for future reference.
A Statement of Additional Information (the "SAI") for the Fund dated May 1,
1995, which is incorporated by reference in its entirety in this Prospectus, has
been filed with the Securities and Exchange Commission and is available without
charge upon request to Rochester Fund Distributors, Inc., 350 Linden Oaks,
Rochester, NY, 14625-2807, (716) 383-1300. The SAI contains information about
Class A Shares and Class B Shares of the Fund and its management not included in
this Prospectus.
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.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY FINANCIAL INSTITUTION, NOR ARE SHARES OF THE FUND FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
The date of this Prospectus is May 1, 1995, as supplemented on July 5, 1995
Table of Contents
Page
----
Shareholder Expense Information ................................. 2
Financial Highlights ............................................ 3
About the Fund .................................................. 4
Risk Factors .................................................... 8
Dividends and Other Distributions ............................... 10
Alternative Sales Arrangements .................................. 10
How to Purchase Shares .......................................... 11
Distribution Plans .............................................. 14
Shareholder Services ............................................ 15
How to Redeem Shares ............................................ 16
Performance ..................................................... 17
Tax Matters ..................................................... 18
Management, Services and Distribution ........................... 19
Account Application ............................................. 21
<PAGE>
SHAREHOLDER EXPENSE INFORMATION
The information contained in the following tables is intended to assist an
investor in understanding the various costs and expenses that a shareholder in
the Fund will bear directly or indirectly. Existing shares of the Fund were
redesignated as Class A Shares on May 1, 1995. The information for Class B
Shares has been estimated based on expenses expected to be incurred through
December 31, 1995. For a further description of the various costs and expenses
listed below, see How to Purchase Shares, How to Redeem Shares, Exchange
Privilege, and Management, Services and Distribution.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
Class A Shares Class B Shares
-------------- --------------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)(1) ................................ 2.00% NONE
Maximum Contingent Deferred Sales Charge(2) ............................ NONE 2.5% (declining to 0%
after four years)
<CAPTION>
Annual Fund Operating Expenses
As a Percentage of Average Net Assets
Class A Shares Class B Shares
-------------- --------------
<S> <C> <C>
Management Fees ........................................................ 0.44% 0.44%
12b-1 Fees(3) .......................................................... 0.25% 0.75%
Other Expenses ......................................................... 0.20% 0.21%
---- ----
Total Fund Operating Expenses(4) ....................................... 0.89% 1.40%
==== ====
</TABLE>
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(1) The Fund's maximum sales load on Class A Shares of 2.0% declines to 1.0% on
investments of $1,000,000 and over. In addition, the Fund offers several
methods by which investors may aggregate purchases to reduce the applicable
sales load. These methods, which include rights of accumulation, letters of
intent, and group purchases, are explained more fully in the section
entitled Purchasing Class A Shares -- Reduced Sales Loads.
(2) A contingent deferred sales charge of up to 3.50% may be imposed on certain
redemptions of Class B Shares acquired by an exchange of another Rochester
Fund on which no contingent deferred sales charge was paid upon redemption.
See Exchange Privilege.
(3) The 12b-1 fees for Class A Shares consist of a service fee (the "Service
Fee") of 0.25%. The 12b-1 fees for Class B Shares consist of an asset-based
sales charge of 0.50% and a Service Fee of 0.25%. Although the Fund's
Distribution Plan for Class B Shares permits the payment of an asset-based
sales charge of up to 0.75% per annum of relative net assets, the Board of
Trustees has authorized payment of an asset-based sales charge of only 0.50%
per annum of relative net assets. See Distribution Plans.
(4) Total Fund operating expenses for Class A Shares would have been 0.84%
excluding interest. For the fiscal year ended December 31, 1994, the Fund's
interest expense was substantially offset by the incremental interest income
generated on bonds purchased with borrowed funds. See Management, Services,
and Distribution.
Examples
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return, redemption at the end of each period, and conversion from Class B
Shares to Class A Shares at the beginning of the seventh year:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A .......................... $29 $48 $68 $127
Class B .......................... $39 $59 $77 $141
Your same investment would incur the following expenses, assuming no
redemption, and conversion from Class B Shares to Class A Shares at the
beginning of the seventh year:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A .......................... $29 $48 $68 $127
Class B .......................... $14 $44 $77 $141
The above examples should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown. For
Class B Shares, the examples are based on estimated data for the Fund's fiscal
year ending December 31, 1995.
Long-term shareholders of Class B Shares may pay more than the economic
equivalent of the maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc.
For additional information regarding fees and expenses associated with
investing in Class A Shares and Class B Shares of the Fund, see Alternative
Sales Arrangements. Sales representatives may receive different compensation for
sales of Class A Shares than for sales of Class B Shares.
2
<PAGE>
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios
(For a Share Outstanding Throughout the Period)
The following table contains financial information for Class A Shares of
Limited Term New York Municipal Fund for the period from September 18, 1991 to
December 31, 1991 and for the three one year periods ended December 31, 1994.
The information set forth in this table has been derived from financial
statements which have been examined by Price Waterhouse LLP, independent
accountants, whose report thereon was unqualified. This information should be
read in conjunction with the financial statements and notes thereto which appear
in the SAI and may be obtained from Rochester Fund Distributors, Inc., without
charge, upon request. Financial highlights are not presented for Class B Shares
since no shares of that class were outstanding for the periods indicated.
<TABLE>
<CAPTION>
Periods Ended December 31
----------------------------------------------
1994 1993 1992 1991*
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................................. $ 3.33 $ 3.18 $ 3.07 $ 3.00
------ ------ ------ ------
Income from investment operations:
Net investment income ............................................... 0.16 0.17 0.18 0.05
Net realized and unrealized gain (loss) on investments .............. (0.18) 0.15 0.11 0.07
------ ------ ------ ------
Total from investment operations ...................................... (0.02) 0.32 0.29 0.12
------ ------ ------ ------
Less distributions:
Dividends from net investment income ................................ (0.16) (0.17) (0.18) (0.05)
------ ------ ------ ------
Total distributions ................................................... (0.16) (0.17) (0.18) (0.05)
------ ------ ------ ------
Net asset value, end of period ........................................ $ 3.15 $ 3.33 $ 3.18 $ 3.07
====== ====== ====== ======
Total return (excludes sales load) .................................... (0.60%) 10.06% 9.45% 17.47%**
Ratios/Supplemental data:
Net assets, end of period (000 omitted) ............................. $496,452 $457,860 $150,096 $18,659
Ratio of total expenses to average net assets ....................... 0.89% 0.89% 0.83%<F1> 0.83%**
Ratio of total expenses (excluding interest) to average net assets*** 0.84% 0.86% 0.78%<F1> 0.74%**
Ratio of net investment income to average net assets ................ 5.12% 4.94% 5.33%<F1> 5.22%**
Portfolio turnover rate ............................................. 34.58% 17.08% 59.87% 1.42%
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<FN>
* The Fund commenced operations on September 18, 1991.
** Annualized.
*** During the periods shown above, the Fund's interest expense was
substantially offset by the incremental interest income generated on bonds
purchased with borrowed funds.
<F1> Net of fees waived or reimbursed by Fielding Management Company, Inc., the
Fund's previous investment adviser, and Rochester Fund Services, Inc., which
amounted to $0.01 per share. Without reimbursement, the ratios would have
been 1.14%, 1.09% and 5.02%, respectively. Fielding Management Company,
Inc., served as investment adviser to the Fund from September 18, 1991 to
December 19, 1993.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Information on Bank Loans
Periods Ended December 31
----------------------------------------------
1994 1993 1992 1991*
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Bank loans outstanding at end of period (000) .................................. $ 7,797 $ 934 $ 0 $ 0
Monthly average amount of bank loans outstanding during the period (000) ....... $ 3,070 $ 1,383 $ 661 $ 94
Monthly average number of shares of the Fund outstanding during the period (000) 151,481 93,580 23,330 2,461
Average amount of bank loans per share outstanding during the period ........... $ .02 $ 0.01 $ .03 $ .04
</TABLE>
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* The Fund commenced operations on September 18, 1991.
ABOUT THE FUND
The Fund is an open-end, non-diversified management investment company,
organized as a Massachusetts business trust on June 14, 1991. The Fund has
established two classes of shares, known as Class A Shares and Class B Shares
(individually and collectively referred to as "Shares," as the context may
require). Except as otherwise noted in this Prospectus, Class A Shares are sold
subject to a sales charge of up to 2.0% and are redeemed at net asset value.
Class B Shares are sold at net asset value but may be subject to a contingent
deferred sales charge ("CDSC") of up to 2.5% upon redemption. Class A Shares are
subject to a Service Fee of 0.25%. Class B Shares are subject to an asset-based
sales charge of 0.50% and a Service Fee of 0.25%. See How to Purchase Shares and
Distribution Plans.
Investment Objective
The investment objective of the Fund is to seek as high a level of income
exempt from federal income tax and New York State and New York City personal
income taxes as is consistent with its investment policies and prudent
investment management. The Fund intends to invest primarily in a portfolio of
investment grade obligations with a dollar weighted average effective maturity
of five years or less. See Credit Quality and Description of Permitted
Securities and Investment Policies. No assurances can be made, however, that the
Fund will achieve its investment objective.
The Fund seeks to achieve its objective by investing primarily in
obligations issued by or on behalf of New York State, its political
subdivisions, agencies and instrumentalities and obligations of other
qualifying issuers, such as issuers located in Puerto Rico, the Virgin Islands,
and Guam, which pay interest that is, in the opinion of the bond counsel to the
issuer, exempt from federal income tax and New York State and New York City
personal income taxes ("Municipal Obligations"). As a fundamental policy, at
least 95% of the Fund's net assets will be invested in Municipal Obligations
except when the investment adviser, Rochester Capital Advisors, L.P. (the
"Adviser"), believes that market conditions would cause serious erosion of
portfolio value, in which case assets may be invested temporarily in short-term
taxable investments as a defensive measure to preserve net asset value.
Credit Quality
The Fund will invest at least 95% of its net assets, which are invested in
Municipal Obligations, in investment grade Municipal Obligations defined as
follows: (1) obligations which are backed by the full faith and credit of the
U.S. government; (2) short-term tax exempt notes which are rated investment
grade by a nationally recognized statistical rating organization ("NRSRO"); (3)
municipal bonds which are rated investment grade by an NRSRO; (4) tax-exempt
commercial paper which is rated investment grade by an NRSRO; (5) Municipal
Obligations which are issued by an entity which has obligations outstanding that
meet one of the foregoing rating requirements; (6) Municipal Obligations which
are backed by a letter of credit or guarantee of a bank or other institution
which has outstanding securities that meet one of the foregoing rating
requirements; or (7) Municipal Obligations which, although unrated, are
determined by the Adviser to be of comparable investment quality to rated
securities meeting the foregoing rating criteria. The remaining 5% of the Fund's
net assets, which are invested in Municipal Obligations, may be
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<PAGE>
invested in tax-exempt obligations which are lower-rated or unrated and of
comparable quality to lower-rated securities. In no case will the Fund purchase
a security with a rating of below Ba by Moody's Investors Service, Inc.
("Moody's"), BB by Standard & Poor's Ratings Group ("Standard & Poor's") or BB
by Fitch Investors Service, Inc. ("Fitch") at the time of purchase or an unrated
security which, in the opinion of the Adviser, is of comparable quality to rated
securities below such ratings. For a description of such ratings, see Appendix A
to the SAI.
Municipal Obligations
The Fund may invest in a variety of Municipal Obligations including
municipal notes, municipal bonds and municipal leases. The prices of such fixed
income securities fluctuate inversely to the direction of interest rates.
Municipal notes are generally used to provide for short-term capital needs and
generally have a maturity of one year or less. The municipal notes in which the
Fund may invest include tax anticipation notes, revenue anticipation notes, bond
anticipation notes, construction loan notes and tax-exempt commercial paper
(also known as municipal paper). Municipal bonds, which meet longer term capital
needs, generally have maturities of more than one year. The two principal
classifications of municipal bonds in which the Fund may invest are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of the
principal and interest. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facility or, in some cases, from the
proceeds of a special excise or specific revenue source. Industrial development
bonds ("IDBs") are a specific type of revenue bond backed by the credit and
security of a private user. The Fund will purchase IDBs only to the extent that
they pay interest which continues to be tax-exempt under the Internal Revenue
Code of 1986, as amended (the "Code") (although the interest may constitute a
tax preference item for purposes of the federal alternative minimum tax). See
Tax Matters. Investments in tax-exempt lease obligations, which are commonly
referred to as "municipal leases," involve additional risk factors which are not
associated with investments in other tax-exempt obligations such as general
obligation bonds or revenue bonds. See Investments in Illiquid Securities. The
SAI describes the Municipal Obligations in which the Fund may invest in greater
detail.
Description of Permitted Securities and Investment Policies
Variable Rate Obligations
The Fund may invest in variable rate obligations. Variable rate obligations
have a yield which is adjusted periodically based upon changes in the level of
prevailing interest rates. Variable rate obligations have an interest rate fixed
to a known lending rate, such as the prime rate, and are automatically adjusted
when such known rate changes. Variable rate obligations lessen the capital
fluctuations usually inherent in fixed income investments, which diminishes the
risk of capital depreciation of portfolio investments and the Fund's shares; but
this also means that should interest rates decline, the yield of the Fund will
decline and the Fund and its shareholders will forego the opportunity for
capital appreciation of its portfolio investments and of their shares. Variable
rate obligations with demand periods greater than seven days may be determined
to be liquid by the Fund's Board of Trustees. Variable rate instruments in which
the Fund may invest include participation interests purchased from banks in
variable rate tax-exempt Municipal Obligations (expected to be concentrated in
IDBs owned by banks). A participation interest gives the Fund an undivided
interest in the Municipal Obligation in the proportion that the Fund's
participation interest bears to the total principal amount of the Municipal
Obligation. The Fund will only invest in such participation interests to the
extent that an opinion of issuer's counsel supports the characterization of
interest on such securities as tax-exempt.
When Issued Purchases
The Fund may also purchase and sell municipal securities on a "when issued"
and "delayed delivery" basis. These transactions are subject to market
fluctuation and the value of a security at delivery may be more or less than the
purchase price. When the Fund is the buyer in such a transaction, however, it
will maintain, in a segregated account with its custodian, cash or high grade
marketable debt securities having an aggregate value equal to the
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<PAGE>
amount of such purchase commitments until payment is made. In addition, the Fund
will mark the "when issued" security to market each day for purposes of
portfolio valuation. To the extent the Fund engages in "when issued" and
"delayed delivery" transactions, it will do so for the purpose of acquiring
securities for the Fund's portfolio consistent with its investment objective and
policies and not for the purpose of investment leverage. Securities purchased on
a "when issued" and "delayed delivery" basis may not constitute more than 10% of
the Fund's net assets.
Maturity Guidelines
The Fund intends to invest primarily in a portfolio of investment grade
Municipal Obligations with a dollar weighted average effective maturity of five
years or less. In maintaining this average, the Fund may purchase individual
bonds with effective maturities of more or less than five years.
The effective maturity of bonds in the portfolio may lengthen if market
interest rates increase or shorten if market interest rates decrease. Increasing
market interest rates can cause the average effective maturity of the portfolio
to lengthen beyond five years, absent any portfolio transactions. At any time
that the average effective maturity of the portfolio exceeds five years, the
Fund will not purchase bonds with effective maturities exceeding five years. The
Fund may also take prudent steps to reduce the average effective maturity of the
portfolio to five years or less, including selling bonds with effective
maturities exceeding five years and purchasing bonds with effective maturities
of less than five years.
A bond's effective maturity may be shorter than its stated maturity as a
result of differences between its coupon or accretion rate and current market
interest rates, callability and call price, scheduled sinking fund payments and
anticipated prepayments, as well as other factors. In computing the Fund's
average maturity, the Fund intends to use effective maturity dates to the extent
that a particular bond is evaluated for pricing and trading purposes in the
marketplace to a date which is shorter than the bond's stated maturity. This
date may represent a mandatory put, prerefunded call date, optional call date,
or the average life to which the bond is priced. Bonds with a variable coupon
rate or anticipated principal prepayments may be assigned an effective maturity
which is shorter than a stated call date, put date, or average life to properly
reflect the reduced price volatility of such bonds.
Bonds which are evaluated for pricing and trading purposes to a maturity
date which is shorter than the stated maturity date possess price volatility
characteristics which make them substantially similar to bonds with stated
maturity dates identical to the effective maturity date.
Temporary Investments
From time to time when, due to adverse factors, market conditions could
cause serious erosion of portfolio value, the Fund may invest up to 20% of its
assets in taxable short-term investments as a defensive measure to preserve net
asset value. Distributions by the Fund of interest earned from such taxable
investments will be taxable to investors as ordinary income unless such
investors are otherwise exempt from taxation. The Fund may invest on a temporary
basis up to 5% of its assets in other investment companies which have a similar
objective of obtaining income exempt from federal income tax and New York State
and New York City personal income taxes. Such investing involves duplication of
expenses similar to the Fund's by the other investment companies involved.
Industrial Revenue Bonds
The Fund may also invest more than 25% of its assets in industrial revenue
bonds, and may invest more than 25% of its assets in Municipal Obligations
backed by letters of credit or guarantees issued by banks or other financial
institutions. See Risk Factors--Concentration in New York Issuers.
Zero Coupon Securities
The Fund may invest without limitation as to amount in zero coupon
securities. Zero coupon securities are debt obligations that do not entitle the
holder to any periodic payment of interest prior to maturity or a specified date
when the securities begin paying current interest. They are issued and traded at
a discount from their face amount of par value, which discount varies depending
on the time remaining until cash payments begin, prevailing interest
6
<PAGE>
rates, liquidity of the security and the perceived credit quality of the issuer.
Original issue discount earned on zero coupon securities is included in the
Fund's tax-free income. The market prices of zero coupon securities generally
are more volatile than the prices of securities that pay interest periodically
and in cash and are likely to respond to changes in interest rates to a greater
degree than do other types of debt securities having similar maturities and
credit quality.
Investments in Illiquid Securities
The Fund may purchase securities in private placements or in other
transactions, the disposition of which would be subject to legal restrictions,
or securities for which there is no regular trading market (collectively,
"Illiquid Securities"). No more than an aggregate of 15% of the value of the
Fund's net assets at the time of acquisition may be invested in Illiquid
Securities.
Such investments may include municipal lease obligations or installment
purchase contract obligations (which are sometimes called "municipal leases") of
municipal authorities or entities. Municipal leases generally involve a
lease-purchase agreement which is, technically, not a lease, but rather an
installment purchase. Subject to the percentage limitation on investments in
Illiquid Securities, the Fund may invest only up to 15% of the value of its net
assets in such municipal leases. Investments in tax-exempt municipal leases
which have received an investment grade rating from an NRSRO and which have been
determined to be liquid by the Adviser are excluded from the 15% limitation on
investments in municipal leases. The Fund, however, will continue to limit
investments in unrated or illiquid municipal leases to 15% of the value of the
Fund's net assets, subject to the overall 15% limitation on investments in
Illiquid Securities which may be made by the Fund.
Investment in tax-exempt lease obligations presents certain special risks
which are not associated with investments in other tax-exempt obligations such
as general obligation bonds or revenue bonds. Although municipal leases do not
constitute general obligations of the municipality for which the municipality's
taxing power is pledged, a municipal lease may be backed by the municipality's
covenant to budget for, appropriate and make the payments due under the
municipal lease. Most municipal leases, however, contain "non-appropriation"
clauses which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated for
such purpose on a yearly basis. Although "non-appropriation" municipal leases
are generally secured by the leased property, the Fund's ability to recover
under the lease in the event of non-appropriation or default will be limited
solely to the repossession of the leased property without recourse to the
general credit of the lessee, and disposition of the property in the event of
foreclosure might prove difficult. In addition to the risk of
"non-appropriation," municipal lease obligations may be subject to an
"abatement" risk. The leases underlying certain municipal lease obligations may
provide that lease payments are subject to partial or full abatement if, because
of material damage or destruction of the leased property, there is substantial
interference with the lessee's use or occupancy of such property. This
"abatement" risk may be reduced by the existence of insurance covering the
leased property, the maintenance by the lessee of reserve funds or the provision
of credit enhancements such as letters of credit.
Investments in municipal leases will be subject to the 15% limitation
unless the lease has received an investment grade rating from an NRSRO, and the
particular municipal lease is determined to be liquid by the Adviser. The Board
of Trustees has adopted guidelines to be utilized by the Adviser in making
determinations concerning the liquidity and valuation of a municipal lease
obligation. See the SAI for a description of the guidelines which will be
utilized by the Adviser in making such determinations. Under circumstances where
the Fund proposes to purchase unrated municipal lease obligations, the Fund's
Board of Trustees will be responsible for determining the credit quality of such
obligations and will be responsible for assessing on an ongoing basis the
likelihood as to whether the lease will be cancelled.
Borrowing for Investment Purposes
As a fundamental policy, the Fund may borrow money, but only from banks, in
amounts up to 10% of its assets to purchase additional securities. Borrowing for
investment purposes increases both investment opportunity and investment risk.
The Investment Company Act of 1940 (the "Act") requires the Fund to maintain
asset coverage of at
7
<PAGE>
least 300% for all such borrowings, and should such asset coverage at any time
fall below 300%, the Fund would be required to reduce its borrowings within
three days to the extent necessary to meet the requirements of the Act. The Fund
might be required to sell securities at a time when it would be disadvantageous
to do so in order to reduce borrowings. In addition, because interest on money
borrowed is an expense that the Fund would not otherwise incur, the Fund may
have less net investment income during periods when its borrowings are
substantial. The interest paid by the Fund on borrowings may be more or less
than the yield on the securities purchased with borrowed funds, depending on
prevailing market conditions.
Except as otherwise noted, the Fund's investment objective and policies
described herein are not designated fundamental policies within the meaning of
the Act and may, therefore, be changed without the vote of a majority of the
outstanding voting securities of the Fund (as defined in the Act). As a matter
of policy, however, the Fund will not change its objective without the approval
of the majority of the Board of Trustees. See the SAI for a more detailed
discussion of the Fund's fundamental policies.
Portfolio Transactions
The Fund has no obligation to deal with any dealer or group of dealers in
the execution of transactions in securities of the Fund. Municipal Obligations
and other securities in which the Fund invests are traded primarily in the
over-the-counter market. Where possible, the Fund deals directly with the
dealers who make a market in the securities involved except in those
circumstances where better prices and execution are available elsewhere. It is
the policy of the Fund to obtain the best net results in conducting portfolio
transactions for the Fund, taking into account such factors as price (including
the applicable dealer spread), and the firm's general execution capabilities.
Where more than one dealer is able to provide the most competitive price and the
execution capabilities of the dealers are comparable, the sale of shares of the
Fund may be taken into consideration as a factor in the selection of dealers to
execute portfolio transactions for the Fund. The portfolio securities of the
Fund generally are traded on a net basis and normally do not involve the payment
of brokerage commissions. The cost of securities transactions of the Fund
primarily consists of paying dealer or underwriter spreads.
RISK FACTORS
Concentration in New York Issuers
Because the Fund, as a fundamental policy, will invest at least 95% of its
assets in Municipal Obligations of New York issuers, it is more susceptible to
factors affecting the State of New York than is a comparable bond fund whose
investments are not concentrated in the obligations of issuers located in a
single state.
During the last fifteen years, New York State, New York City and other New
York public bodies have encountered financial difficulties. Continued financial
difficulties could have an adverse effect on the performance of the Fund. In
recent years, Moody's and Standard & Poor's (both NRSROs) lowered their ratings
on a substantial portion of the State's appropriation-backed bonds from A to
Baa1 and from BBB+ to BBB, respectively, and adjusted their ratings on all of
the State's outstanding general obligation bonds. The Adviser does not believe
that these developments will have a significant adverse effect on the Fund's
ability to invest in New York Municipal Obligations. These credit standings
could be further reduced and the State's ability to provide assistance to its
public authority and political subdivisions could be further impaired. See
Appendix A to the SAI for additional information relating to the risks
associated with concentration of investments in New York Municipal Obligations.
Credit Quality
In general, the assets of the Fund will be invested so that at least 95% of
the Fund's assets will consist of tax-exempt securities. Shareholders will not
be subject to regular federal income tax on distributions of tax-exempt income
on such securities. The interest on certain private activity bonds, (including
those for housing and student loans) issued after August 15, 1986, while still
tax-exempt for regular tax purposes, constitute a preference item for taxpayers
in determining their alternative minimum tax liability under the Code, and, as
such, may be subject to the alternative minimum tax. The Code also imposes
certain limitations and restrictions on the use of tax-exempt bond
8
<PAGE>
financing for non-essential private activity bonds. The Fund intends to purchase
private activity bonds only to the extent that the interest paid by such bonds
is tax-exempt for regular tax purposes pursuant to the Code.
The Fund will invest at least 95% of its assets in Municipal Obligations
which are investment grade quality as defined herein. Such Municipal Obligations
may include those rated in the lowest categories of investment grade ratings
(e.g. those rated "BBB" by Standard & Poor's or "Baa" by Moody's). Municipal
Obligations in such categories have speculative characteristics and changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case for Municipal
Obligations in the higher rated categories. Because 5% of the Fund's assets
which are invested in tax-exempt securities may be invested in securities which
are rated below the lowest investment grade categories or in securities which
are unrated, the Fund is dependent on the Adviser's judgment, analysis and
experience in evaluating the quality of such obligations. In evaluating the
credit quality of a particular issue, whether rated or unrated, the Adviser will
normally take into consideration, among other things, the financial resources of
the issuer (or, as appropriate, of the underlying source of the funds for debt
service), its sensitivity to economic conditions and trends, any operating
history of and the community support for the facility financed by the issue, the
ability of the issuer's management and regulatory matters. The Adviser will
attempt to reduce the risks inherent in investments in such obligations through
active portfolio management, diversification, credit analysis and attention to
current developments and trends in the economy and the financial markets.
Borrowing for Investment Purposes
Borrowing for investment purposes increases both investment opportunity and
investment risk. The Fund might be required to sell securities at a time when it
would be disadvantageous to do so in order to reduce its borrowings. In
addition, because interest on money borrowed is an expense that the Fund would
not otherwise incur, the Fund may have less net investment income during periods
when its borrowings are substantial. The interest paid by the Fund on borrowings
may be more or less than the yield on the securities purchased with borrowed
funds, depending on prevailing market conditions.
Liquidity and Valuation
Unrated securities (including those that the Adviser believes are of
equivalent quality to rated investment grade securities), lower rated securities
(restricted to 5% of the Fund's net assets) and securities in which the Fund has
a substantial ownership interest are subject to greater liquidity and valuation
risks. In general, such securities are not as liquid as securities for which
there are active secondary trading markets. Reduced liquidity may have an
adverse impact on the market price and the Fund's ability to dispose of
particular issues, when necessary, to meet the Fund's liquidity needs or in
response to a particular economic event, such as the deterioration in the credit
worthiness of the issuer. Reduced liquidity for certain securities may also make
it more difficult for the Fund to obtain market quotations based on actual
trades for purposes of valuing the Fund's portfolio. Current values for these
securities are obtained from pricing services and pricing grids which factor in
coupons, maturities, credit quality, liquidity and other factors. When there are
no readily available market quotations, such values are determined in good faith
by the Board of Trustees and may be based upon factors other than actual sales.
Non-Diversification
The Fund expects that it normally will invest in a substantial number of
issuers; however, as a non-diversified investment company, the Fund may invest a
greater portion of its assets in the securities of a limited number of issuers
than a diversified fund. The Fund's ability to invest a greater proportion of
its assets in the securities of a smaller number of issuers may enhance the
Fund's ability to achieve capital appreciation, but may also make the Fund more
susceptible to any single economic, political or regulatory occurrence. However,
as of the last day of each fiscal quarter, the Fund generally will be required
to meet certain tax-related diversification requirements, which would restrict
the amount of the securities of any one issuer that the Fund could hold.
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DIVIDENDS AND OTHER DISTRIBUTIONS
There are two types of distributions which the Fund may make to its
shareholders, income dividends and capital gain distributions. Distributions
paid by the Fund with respect to Class A Shares likely will be greater than
those paid with respect to Class B Shares because expenses attributable to Class
B Shares generally will be higher.
Income Dividends. The Fund receives income in the form of interest paid by
its investments. This income, less the expenses incurred in the Fund's
operations, is referred to as net investment income. Income dividends are
declared and recorded each day based on estimated net investment income. Such
dividends are paid monthly. Investors earn such dividends beginning on the day
payment for Shares is received to the day prior to the settlement date of
redemption. For federal tax purposes, all distributions declared in the fourth
quarter of any calendar year are deemed paid in that calendar year even if they
are distributed in January of the following year. Any net gain the Fund may
realize from transactions in securities held less than the period required for
long term capital gain recognition (taking into account any carryover of capital
losses from previous years), while technically a distribution from capital gain,
is taxed as an income dividend under the Code. See Tax Matters.
Capital Gain Distributions. If, during any fiscal year, the Fund realizes a
net gain on transactions in securities held for more than one year, it has a net
long term capital gain. After deduction of the amount of any net short term
loss, the balance may be used to offset any carryover of capital losses from
previous years, or, if there is no loss carryover, will be paid out to
shareholders as a capital gain distribution. Capital gain distributions, if any,
will be paid to shareholders of record prior to the end of each calendar year.
Because the value of Fund Shares is based directly on the amount of its net
assets, rather than on the principle of supply and demand, any distribution of
income or capital gain will result in a decrease in the value of Fund Shares
equal to the amount of the distribution.
All dividends and capital gain distributions are paid in additional full
and fractional Shares at net asset value for each shareholder's account unless
otherwise requested on the Account Application or by notifying the Fund in
writing or by telephone. Notice will be effective for the current dividend or
distribution only if it is received by the Fund at least five business days
before the record date. Notice received thereafter will be effective commencing
with the next dividend or distribution. Income dividends and capital gain
distributions will be credited to a shareholder's account in additional shares
valued at the closing net asset value (without a sales load).
If the U.S. Postal Service cannot deliver a shareholder's check, or if a
shareholder check remains uncashed for six months, the Fund reserves the right
to credit the shareholder's account with additional shares of the Fund at the
then current net asset value in lieu of the cash payment and to thereafter issue
such shareholder's dividends in additional Shares of the Fund.
Stock certificates will not be issued in connection with distributions
which are paid in additional Shares unless a written request is received and
certain other procedures are followed. Call Shareholder Services at (716)
383-1966 for more information. Shareholders will be advised of the nature of a
distribution, the number of Shares purchased and the price following each such
distribution.
In certain circumstances, dividends received from the Fund may cause a
portion of Social Security benefits to be subject to federal income tax. See Tax
Matters in the SAI.
ALTERNATIVE SALES ARRANGEMENTS
The two classes of Shares which the Fund offers incur sales charges in
different forms and amounts and incur different levels of expenses.
Class A Shares
Shareholders who purchase Class A Shares pay a sales charge at the time of
purchase. As a result, Class A Shares are not subject to any charges when they
are redeemed. Certain purchases of Class A Shares qualify for reduced sales
charges. Class A Shares currently incur a Service Fee at the annual rate of
0.25% of the Fund's average net assets attributable to Class A Shares. See
Purchasing Class A Shares.
10
<PAGE>
Class B Shares
Class B Shares of the Fund are sold without an initial sales charge, but
are subject to a CDSC of 2.5% if redeemed within the first year, declining to 0%
after the fourth year. Class B Shares also incur an asset-based sales charge,
currently at the annual rate of 0.50% of the Fund's average daily net assets
attributable to Class B Shares, as well as a Service Fee of 0.25%. Class B
Shares will convert to Class A Shares automatically, based on relative net asset
value, approximately six years after purchase. Class B Shares provide
shareholders the benefit of putting all of the investor's dollars to work from
the time the investment is made, but likely will have a higher expense ratio and
pay lower dividends than Class A Shares due to the asset-based sales charge.
Class B Shares will convert into Class A Shares after approximately six years
and thereafter will pay the lower ongoing expenses associated with Class A
Shares. See Purchasing Class B Shares.
Factors to Consider in Choosing a Class of Shares
The decision as to which class of Shares provides a more suitable
investment for an investor depends on a number of factors, including the amount
invested and the intended length of investment. Investors making large
investments, thus qualifying for a reduced sales charge, might consider Class A
Shares. Investors who prefer that 100% of their purchase be invested
immediately, or who want to spread the sales charge payment over time, might
consider Class B Shares. Orders for Class B Shares for $500,000 or more will be
declined because the investor would not realize the economies of scale available
to them through a similar investment in Class A Shares. For more information
about these sales arrangements, contact your investment dealer or Shareholder
Services at The Rochester Funds. Shares may only be exchanged for Shares of the
same class of one of the other Rochester Funds. See Exchange Privilege.
HOW TO PURCHASE SHARES
Shares of the Fund are being continuously offered through securities
dealers who execute a sales agreement with Rochester Fund Distributors, Inc.
(the "Distributor"), 350 Linden Oaks, Rochester, NY 14625-2807, the principal
underwriter of the Fund. The minimum initial investment in Class A Shares or
Class B Shares is $5,000 and subsequent investments must be $100 or more. Such
minimum investment requirements may be modified at the discretion of the
Distributor.
There Are Several Ways You Can Invest
Through the Distributor. Complete an Account Application and return it with
a check payable to the Distributor, who will act as your agent in purchasing
Shares.
Through Your Investment Dealer. Many investment dealers and financial
institutions have a sales agreement with the Distributor and will be glad to
accept your order. If you do not have an account with a dealer, the Distributor
can refer you to one.
Through the Automatic Bank Draft Plan. The Automatic Bank Draft Plan is
available as a convenience to all shareholders of the Fund. Under this plan, you
may elect to make investments ($100 minimum) automatically by arranging to have
pre-authorized checks drawn on your bank account by Rochester Fund Services,
Inc. (the "Agent"). This plan is only available if your bank agrees to
participate. There is no charge for this service and it may be terminated at any
time upon written notice to the Agent. See Shareholder Services.
Automatic Investment Plan. Investments of $100 or more may be made through
a shareholder's checking account by Automated Clearing House ("ACH") funds. For
information on how to establish a plan, contact Shareholder Services at (716)
383-1966.
Certificates
To facilitate redemptions and transfers, most shareholders elect not to
receive stock certificates; however, the Fund will issue them if requested to do
so in writing or by telephone if you have owned the Shares for at least30 days.
If you lose a stock certificate, you may incur an expense to replace it. Call
Shareholder Services for more information.
Purchase Price of Shares
Shares of the Fund are offered at the public offering price (which is the
net asset value plus a sales charge for Class A
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Shares and net asset value for Class B Shares) next computed after receipt by
the Distributor of an order from a qualified securities dealer, by mail, or from
the investor directly, in good order. The net asset value of Shares is
determined once daily as of the close of the New York Stock Exchange (the
"Exchange") on each day that the Exchange is open.
For the purpose of the computation of the applicable public offering price,
orders for Shares placed by the mailing of an Account Application with a check
payable to the Fund are considered processed upon receipt by the Distributor.
Purchase of Shares through authorized dealers must be received by such dealers
prior to 4:00 p.m. New York time (the "Closing") in order to receive such
trading day's public offering price. Orders received by the Distributor
subsequent to the Closing are confirmed at the public offering price determined
as of the Closing on the next trading day. If a dealer who has a sales agreement
with the Distributor receives an order prior to the Closing and fails to
transmit such order to the Distributor prior to its close of business on that
day (5:00 p.m. New York time), any resulting loss will be borne by the dealer.
The net asset value per Share of each class of the Fund, the price at which
Shares of each class are redeemed, is computed by dividing the value of the
Fund's total assets, less its liabilities attributable to a class, by the total
number of Shares of that class outstanding. The net asset value of the Shares of
each class of the Fund fluctuate based on the market value of the Fund's
investments. Procedures describing the method of valuation of individual
securities are discussed in the SAI. The net asset value for Class A Shares, and
Class B Shares may differ primarily due to the variance in daily net income
realized by each class.
The Distributor may provide promotional incentives or compensation to
dealers that sell Shares of the Fund in addition to sales loads. In some
instances, these incentives may be made available only to certain dealers who
have sold specified amounts of Shares. Dealers may not use sales of the Fund's
Shares to qualify for such incentives to the extent that such sales may be
prohibited by the laws of any state or self-regulatory agency such as the
National Association of Securities Dealers, Inc.
PURCHASING CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a
sales load. The following table shows the sales load at various investment
levels for the purchase of Class A Shares of the Fund:
<TABLE>
<CAPTION>
Sales Load Sales Load Reallowance
as % of as % of to Dealers
Public Net as % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ------------------ ----------- ----------- -----------
<S> <C> <C> <C>
Less than $100,000 ...................... 2.00% 2.04% 1.75%
$100,000 to less than $500,000 .......... 1.60% 1.63% 1.40%
$500,000 to less than $1,000,000 ........ 1.30% 1.32% 1.10%
$1,000,000 and over ..................... 1.00% 1.01% 0.80%
</TABLE>
The Distributor also may make a payment, out of its own resources, to
dealers in an amount not to exceed .25% of purchases of $1,000,000 or more.
Information with regard to any of the following special purchase plans or
methods may be obtained from the Distributor.
Reduced Sales Loads
Class A Shares of the Fund may be purchased under a variety of plans which
provide for reduced sales loads. To obtain the reduction of a sales load you or
your dealer must notify the Distributor at the time of the sale which qualifies
for the reduction.
Right of Accumulation. The total value (at the public offering price) of
Class A Shares of the Fund and shares of Eligible Funds (as described in
Exchange Privilege) registered to you, your spouse or your children under 21,
may be combined with the amount of your current purchase in determining the
sales load to be paid.
Letter of Intent. Reduced sales loads will apply to purchases of Class A
Shares made within a period of thirteen months by any person pursuant to a
non-binding Letter of Intent. A shareholder may include the combined value (at
the applicable public offering price) of Class A Shares of the Fund, and of
Shares of Eligible Funds (as described in Exchange Privilege) held by the
shareholder of record as of the date of the Letter of Intent as an "accumulation
credit" toward the completion of the intention expressed in the Letter of
Intent. A shareholder's holdings in the Class A
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Shares of the Fund and Shares of any Eligible Funds acquired more than 90 days
before the Letter of Intent is filed, will be counted towards completion of the
Letter of Intent, but will not be entitled to a retroactive downward adjustment
of sales load.
Group Purchases. An individual who is a member of a qualified group may
also purchase Class A Shares of the Fund at the reduced sales load applicable to
the group taken as a whole. The sales load is based upon the aggregate amount of
Class A Shares previously purchased and still owned by the group, plus the
securities currently being purchased. A "qualified group" is one with more than
10 members and which (1) has been in existence for more than six months, (2) has
a purpose other than acquiring Class A Shares of the Fund at a discount and (3)
satisfies uniform criteria which enables the Distributor to realize economies of
scale in its costs of distributing Class A Shares.
Other Discounts
Class A Shares of the Fund may be purchased at net asset value, without
sales load, by investment managers such as trust companies or bank trust
departments for funds over which they exercise exclusive discretionary
investment authority and which are held in a fiduciary, agency, custodial or
similar capacity. Such purchases are subject to minimum requirements with
respect to amount of investment, which may be established by the Distributor.
Currently, those criteria require that the amount invested or to be invested
during the subsequent 13 month period in the Fund or any other fund in The
Rochester Funds group must total at least $100,000. If an investment by an
investment manager at net asset value is made through a dealer who has executed
a dealer agreement with respect to The Rochester Funds, the Distributor may make
payment out of its own resources to such dealer in an amount not to exceed .25%
of the amount invested.
The Fund may also sell Class A Shares at net asset value to clients of
registered investment advisers purchasing Class A Shares in connection with
special investment products (such as wrap accounts or similar fee-based
programs), the Fund's Trustees (and their families), employees and clients of
the Adviser and affiliates (and their families), registered representatives and
other employees (and their families) of broker-dealers having dealer agreements
with the Distributor and in connection with the acquisition by the Fund of the
assets of another investment company.
PURCHASING CLASS B SHARES
Class B Shares of the Fund are sold without an initial sales charge,
although a CDSC will be imposed if you redeem Class B Shares of the Fund within
four years of purchase. The following types of Class B Shares may be redeemed
without charge at any time: (1) Class B Shares acquired by reinvestment of
distributions and (2) Class B Shares held for more than four full years from the
date of purchase. Subject to the foregoing exclusions, the amount of the charge
is determined as a percentage of the lesser of the current market value or the
cost of the Class B Shares at the time of purchase. Therefore, when a Class B
Share is redeemed, any increase in value above the initial purchase price is not
subject to any CDSC. The amount of the CDSC, which depends on the number of
years since you invested and the dollar amount redeemed, will be calculated
according to the following tables:
Years Since Purchase CDSC As a Percentage of Dollar
Payment Made Amount Subject to Charge
- -------------------- ------------------------------
0-1 ............................................. 2.50%
1-2 ............................................. 2.00%
2-3 ............................................. 1.50%
3-4 ............................................. 1.00%
4 and thereafter ................................ NONE
In determining whether a CDSC is applicable to a redemption, the
calculation will be determined in a manner that results in the lowest possible
charge to the shareholder. In computing the CDSC it will be assumed that
redemptions occur in the following order: (1) any Class A Shares in the
shareholder account; (2) Class B Shares acquired pursuant to the reinvestment of
dividends or distributions; (3) Class B Shares held for more than four years
from the date of purchase; and (4) Class B Shares held longest, if redeemed
before four years from the purchase date. The charge will not be applied to
amounts representing increases in net asset value above the original purchase
price. For information on how sales charges are calculated on exchanges of Class
B Shares, see Exchange Privilege.The Distributor receives the entire amount of
any CDSC you pay.
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<PAGE>
The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of Class B Shares until the time of
redemption of such Shares. For example, assume you purchased 100 Class B Shares
at a price of $10 per Class B Share for a total cost of $1,000. You then
received an additional five Class B Shares through dividend reinvestment and net
asset value has increased to $12 per share. During the second year after your
original purchase you elect to redeem 50 Class B Shares ($600 in proceeds). In
calculating your proceeds, the five Class B Shares received through dividend
reinvestment ($60) would not be subject to any charge. With respect to the
remaining 45 Class B Shares, the charge would be applied to the original price
per Class B Share ($10) of these Class B Shares or $450. The charge would not
apply to the increase in net asset value of $2. Therefore, you would expect to
pay a charge of 2.00% of $450 or $9.00.
Waiver of the CDSC
The CDSC will be waived with respect to the following redemptions: (1)
redemptions following the death or disability, as defined in Section 72(m)(7) of
the Code, of a shareholder; and (2) involuntary redemptions by the Fund of
Shares in shareholder accounts that do not comply with the minimum balance
requirements. Shareholders must notify the Distributor in writing that they are
entitled to the waiver. The Trustees may discontinue the waiver of the CDSC at
any time, although shareholders will be notified of such termination. Any Shares
purchased prior to the discontinuation of the waiver would continue to have the
CDSC waived as provided in the prospectus at the time those Shares were
purchased.
Conversion of Class B Shares
Class B Shares of the Fund will convert automatically into Class A Shares
approximately six years after the purchase date, except as noted below. Class B
Shares acquired by exchange from Class B Shares of another of The Rochester
Funds will convert into Class A Shares based on the time of the initial
purchase. Each time any Class B Shares in the Shareholder's account convert to
Class A Shares, the same percentage of Class B Shares acquired through payment
of dividends and distributions will also convert to Class A Shares. The
conversion of Class B Shares to Class A Shares is subject to the continuing
availability of a ruling from the Internal Revenue Service or an opinion of
counsel that such conversions will not constitute taxable events for Federal tax
purposes. There can be no assurance that such ruling or opinion will be
available, and no conversions of Class B Shares to Class A Shares will occur if
such ruling or opinion is not available. In such event, Class B Shares would
continue to be subject to higher expenses than Class A Shares for an indefinite
period. Shareholders holding Class B Shares may be affected by changes to the
Class A Shares Distribution Plan. The Board will monitor for conflicts of
interest among classes and will take any action necessary to eliminate
conflicts.
DISTRIBUTION PLANS
Pursuant to Rule 12b-1 under the Act, the Fund has adopted a Distribution
Plan with respect to each class of Shares (collectively, the "Plans") which
permits the Fund to pay to the Distributor a Service Fee in connection with the
distribution of Shares an amount of up to 0.25% per annum of the Fund's relative
net assets attributable to each class of Shares. In the case of the Plan for the
Class A Shares, the Service Fee is paid to the Distributor primarily as
reimbursement for payments by the Distributor to compensate brokers, dealers and
banks who have a service agreement with the Distributor for personal service
and/or maintenance of shareholder accounts pursuant to the provisions of the
Service Agreement. In the case of the Plan for the Class B Shares, the Service
Fee is paid to the Distributor as compensation. The Distributor also makes
payments to brokers, dealers and banks to compensate them for providing services
to Class B Shareholders and for maintaining accounts of the Class B
Shareholders. Pursuant to the Plan for Class B Shares, the Fund may also pay the
Distributor an asset-based sales charge of 0.50% per annum, which is computed
based on the relative net assets attributable to Class B Shares. This
asset-based sales charge payment is designed to permit an investor to purchase
Class B Shares of the Fund without the assessment of a front-end sales load and
at the same time permit the Distributor to compensate brokers and dealers in
connection with the sales of Class B Shares. Although the Fund's Distribution
Plan for Class B Shares permits the payment of an asset based sales charge of up
to 0.75% per annum of relative net assets, the Board of Trustees has authorized
payment of an asset based sales
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<PAGE>
charge of only 0.50% per annum of relative net assets. See the SAI for further
information about the Plans.
Although Class B Shares are sold without an initial sales charge, the
Distributor pays a sales commission equal to 2.00% (including a prepaid service
fee of 0.25%) to dealers who sell Class B Shares. These commissions are not paid
on exchanges from other Rochester Funds or on sales to investors exempt from the
CDSC.
Banks and other financial institutions may be subject to various state laws
regarding the services described above and may be required to register as
dealers pursuant to state law.
SHAREHOLDER SERVICES
Account Information
Shareholders with inquiries on accounts not held by their dealer may call
the Fund or the Agent at (716) 383-1966 (9:00 a.m.-5:00 p.m. New York time) or
write to the address provided on the back of this Prospectus.
Exchange Privilege
The Rochester Funds group currently consists of two investment companies in
addition to the Fund, Rochester Fund Municipals and The Bond Fund For Growth,
each of which has distinct investment objectives and policies. As described
below, a shareholder may exchange Shares of the Fund for shares of the same
class of another of The Rochester Funds which are eligible for sale in the
Shareholder's state of residence (collectively the "Eligible Funds"). Not all of
The Rochester Funds offer more than one class of shares. If the other Rochester
Fund offers only one class of shares, only Class A Shares may be exchanged for
such class. Shareholders wishing to make an exchange into an Eligible Fund
should obtain and review a prospectus of the appropriate Eligible Fund before
making the exchange.
If you exchange Shares subject to a CDSC, the transaction will not be
subject to the CDSC. However, when you redeem the Shares acquired through the
exchange, the redemption may be subject to the CDSC, depending upon when you
originally purchased the Shares. You will pay the CDSC of the Rochester Fund
which you originally purchased, without regard to any exchanges. For purposes of
computing the CDSC, the length of time you have owned your Shares will be
measured from the date of original purchase, as determined by the Fund (see
Purchasing Class B Shares) and will not be affected by any exchange.
Shares of an Eligible Fund which have been held for at least 15 days may be
exchanged for shares of the same class of another Eligible Fund on the basis of
the relative net asset values of each Fund's shares, at the time of the exchange
(without sales charge), except that exchanges of Class A Shares held in the Fund
for less than six months for shares of Rochester Fund Municipals will be charged
an incremental sales load.
Shareholders may effect exchanges of noncertificated shares by telephone.
The privilege is available to all shareholders unless requested otherwise by the
shareholder on the account application. Telephone Exchange Authorization Forms
are available from the Distributor upon request. In order to effect an exchange
by telephone shareholders may call the Agent weekdays (except holidays) between
9:00 a.m. and 5:00 p.m. (New York time). All exchanges will be made on the basis
of the relative net asset value of the two funds next determined after the
request is received in good order. Exchange requests received after the close of
regular trading on the Exchange, generally 4:00 p.m. (New York time) will be
processed at the net asset value determined as of the close of business on the
following business day. Telephone exchanges are available only in nonretirement
accounts registered in the same name. Shareholders are limited to one telephone
exchange within any 30-day period for each account authorized to make such
exchanges.
The Fund, the Agent and their affiliates will not be liable for any loss,
damage, cost or expense arising out of any instruction (or any interpretation of
such instruction) received by telephone which they reasonably believe to be
authentic. In acting upon telephone instructions, the Agent utilizes procedures
which are reasonably designed to ensure that such instructions are genuine. For
a description of such procedures, see the SAI. Your telephone call will be
recorded and a written confirmation of the exchange will be mailed to you. If
reasonable procedures are not followed by the Fund, it may be liable for losses
due to unauthorized or fraudulent telephone exchanges. The Fund reserves the
15
<PAGE>
right, in its sole discretion, upon 60 days' notice, to materially modify or
discontinue the telephone exchange privilege. During times of drastic economic
or market conditions, telephone exchanges may be difficult to implement. If you
experience difficulty in making a telephone exchange, you may transmit your
request to the address listed on the back of this Prospectus and it will be
implemented at the next determined net asset value (subject to any applicable
sales charge) following receipt in good order by the Agent.
See Tax Matters for an explanation of the tax consequences of exercising
the exchange privilege.
Reinvestment Privilege
If you redeem Class A Shares or Class B Shares of the Fund and you decide
to reinvest in the Shares of the Fund, you may, within 90 calendar days of the
date of redemption, use all or any part of the proceeds of the redemption to
reinvest, free of sales load, in Class A Shares of the Fund. The Fund will not,
however, refund any CDSC paid as a result of a redemption of Class B Shares.
Your investment will be reinvested at the net asset value per Class A Share next
determined after your request is accepted. You must inform the Agent that this
purchase represents a reinvestment. If you redeem Class A Shares or Class B
Shares of the Fund and immediately invest the proceeds of the redemption in a
money market fund, you may, upon notification to the Fund within one year of
such transaction, reinvest, free of sales load, the exact amount of the proceeds
of the redemption in Class A Shares of the Fund. Your investment will be
reinvested at the net asset value per Class A Share established at the close of
business of the Exchange on the day your request is accepted. There may be
certain limits on facilitating such a transaction with respect to wire orders.
Shareholders should consult with their dealers with respect to facilitating such
transactions. The Fund reserves the right to require proof of the validity of
any request for reinvestment pursuant to this service. You may use these
respective reinvestment privileges only once a calendar year.
See Tax Matters for an explanation of the tax consequences of exercising
the reinvestment privilege.
HOW TO REDEEM SHARES
By Mail. A shareholder may redeem Shares at any time and receive the value
of such Fund's Shares by forwarding a written request signed by all registered
owners to the Agent. The shareholder will then receive from the Fund the value
of the Shares based upon the net asset value per Share, less any applicable CDSC
on Class B Shares, next computed after a written request in good order is
received by the Agent. Redemption requests received after the time at which the
net asset value is calculated each day (at the close of the Exchange) will
receive the price calculated on the following business day. Any certificates
representing Fund Shares being redeemed must be submitted with the written
redemption request.
For the shareholder's protection, and to be considered in good order,
signature(s) must be guaranteed if the redemption request involves any of the
following:
(1) the proceeds of the redemption are over $100,000;
(2) the proceeds (in any amount) are to be paid to someone other than the
registered owner(s) of the account; or
(3) the proceeds (in any amount) are to be sent to any address other than
the shareholder's address of record, pre-authorized bank account or
brokerage firm account.
Eligible signature guarantors are determined in accordance with standards
and procedures adopted by the Agent from time to time. A notarized signature is
not acceptable.
Payment for the redeemed Shares will be sent to the shareholder within
seven days after receipt of the request in good order, except that the Fund may
delay the mailing of the redemption check or a portion thereof until the Fund's
depository bank has made fully available for withdrawal the check used to
purchase Fund Shares, which may take up to 15 days.
Through your Investment Dealer. For the convenience of its shareholders,
the Fund has authorized the Distributor to act as its agent to accept orders
from dealers' authorized order rooms for the redemption of Fund Shares. The Fund
may revoke or suspend this authorization at any
16
<PAGE>
time. The redemption price is the net asset value, less any applicable CDSC on
Class B Shares, next determined following the time at which the Shares are
offered for redemption to the dealer. Payment of the redemption proceeds is made
to the dealer who placed the order within seven days after receipt of the order
provided that within this time, delivery of certificates for Shares in good
order is received, or for open accounts, upon the receipt of a written request
for redemption as described above, and, if required, any supporting documents.
Neither the Fund nor the Distributor may make a charge upon such a redemption,
other than any applicable CDSC on Class B Shares. However, a dealer may make a
charge as agent for the shareholder in the redemption of Fund Shares. If a
shareholder is unable to execute a transaction by telephone to his dealer, or a
dealer is unable to execute a transaction by telephone to the Distributor (for
example, during times of unusual market activity), the shareholder or dealer
should consider placing the order by mail.
Systematic Withdrawal Plan. A Systematic Withdrawal Plan ("SWP") is
available to shareholders which provides for monthly payments by ACH funds or
check. Withdrawals of Class B Shares through the SWP may be subject to a CDSC.
For information on how to establish an SWP, contact Shareholder Services at
(716) 383-1966.
Required Redemption. The Fund may, in order to reduce its expenses, require
any shareholder with Shares having a net asset value in the aggregate of less
than $3,500 to redeem such Shares. Such required redemption would relate only to
a shareholder whose holdings had fallen to below $3,500 by reason of redemption.
Notice of any required redemption (which would be made only in cash at net asset
value without payment of any CDSC) would be given to any such shareholder at
least 30 days prior to any such required redemption, during which time the
shareholder would have the opportunity to bring the account up to a value of
$3,500. The provisions relating to the reinvestment privilege would not be
applicable to any such redeemed shares. Required redemptions are not applicable
where a shareholder is making continuous regular investments in the Fund through
an Automatic Bank Draft Plan.
PERFORMANCE
Advertisements and other sales literature for each class of Shares of the
Fund may refer to the "yield," "tax equivalent yield" and "average annual total
return." When the Fund advertises the yield or tax equivalent yield of a class
of Shares it will also advertise the average annual total return for the most
recent one-year period, the most recent five-year period and for the life of
that class of Shares. Such calculations are determined in accordance with the
rules and regulations established by the Securities and Exchange Commission and
are applicable to all investment companies and are not indicative of the
dividends or other distributions which were or will be paid to the Fund's
shareholders. Dividends or other distributions paid to shareholders are
reflected in the current distribution rate or tax equivalent distribution rate
which may be quoted to shareholders.
The advertised yield of a class of Shares of the Fund will be based upon a
30-day period stated in the advertisement. Yield is calculated by dividing the
net investment income per Share of a class earned during the period by the
maximum offering price per Share of that class on the last day of the period.
The result is then "annualized" using a formula that provides for semiannual
compounding of income. The Fund's yield for a class reflects the deduction of
the maximum initial sales charge, but does not reflect the deduction of any
CDSC.
Tax-equivalent yield for a class of Shares is calculated by applying the
stated federal and state income tax rate only to that portion of the yield which
is exempt from taxation. The tax-exempt portion of the yield is divided by the
number one minus the stated income tax rate (e.g., 100%-38% = 62%). The result
is then added to that portion of the yield, if any, that is not tax-exempt.
The average annual total return of Shares of the Fund is computed by
finding the average annual compounded rate of return of a class over a period
that would equate the initial amount invested in that class to the ending
redeemable value. The calculation assumes that the maximum sales load charge is
deducted from an initial $1,000 investment in Class A Shares, and that the CDSC
is deducted in the case of Class B Shares. The calculation also assumes that
dividends and capital gains distributions are reinvested at net asset
17
<PAGE>
value. The calculation includes all recurring fees that are charged to all
shareholder accounts.
For additional information regarding the calculation of yield and total
return, see Calculation of Performance Data in the SAI. Further information
about the Fund's performance is set forth in the Fund's Annual Report to
shareholders, which may be obtained upon request without charge.
TAX MATTERS
Taxation of the Fund
During the taxable year ended December 31, 1994, the Fund qualified for
treatment as a regulated investment company under Subchapter M of the Code. The
Fund intends to continue to so qualify for future taxable years. The Fund
intends to avoid incurring liability for federal income tax on its investment
company taxable income (consisting generally of taxable net investment income
and net short-term capital gains) and net capital gain (the excess of net
long-term capital gain over net short-term capital loss), and a 4% federal
excise tax on certain undistributed income and gains, by distributing all of
that income and gains and by meeting other applicable requirements of the Code.
Taxation of Shareholders
By meeting certain requirements of the Code, including the requirement that
at the close of each quarter of its taxable year at least 50% of the value of
its total assets consists of obligations the interest on which is excludable
from gross income under section 103(a) of the Code, the Fund intends to continue
to qualify to pay "exempt-interest" dividends to its shareholders.
Exempt-interest dividends designated as such by the Fund may be excluded from a
shareholder's gross income for federal income tax purposes. To the extent
dividends are derived from earnings on interest attributable to obligations of
New York State and its political subdivisions, Puerto Rico, or other U.S.
possessions, they also will be excluded from a New York shareholder's gross
income for New York State and New York City personal income tax purposes.
Although exempt-interest dividends will not be subject to federal income
tax for Fund shareholders, a portion of such dividends which is derived from
interest on certain "private activity" bonds will give rise to a tax preference
item which could subject a shareholder to, or increase a shareholder's liability
under, the federal alternative minimum tax, depending on the shareholder's
individual tax situation.
To the extent dividends are derived from options trading, temporary taxable
investments, an excess of net short-term capital gain over net long-term capital
loss or accretion of market discount, those dividends are taxable as ordinary
income for federal income tax purposes whether a shareholder has elected to
receive dividends in cash or additional Fund Shares. Such dividends will not
qualify for the dividends-received deduction for corporations. Interest on
indebtedness incurred or continued to purchase or carry Shares of the Fund is
not deductible to the extent the Fund's distributions consist of exempt-interest
dividends. Distributions, if any, of net capital gain, when designated as such,
will be treated as long-term capital gains by each shareholder regardless of the
length of time the shareholder has owned Fund Shares and whether the shareholder
received them in cash or additional Fund Shares.
Information as to the tax status of Fund distributions will be provided
annually including information as to which portions are taxable or tax-exempt.
In addition, information will be provided annually identifying the portion of
exempt-interest dividends that constitutes a preference item for shareholders in
determining their liability for the alternative minimum tax. Shareholders who
have not been in the Fund for a full taxable year may get distributions of
income and/or capital gains which are not equivalent to the actual amount
applicable to the period for which they have held shares.
The Fund is required to withhold 31% of all taxable dividends, capital gain
distributions and redemption proceeds (including any applicable CDSC) payable to
individuals and certain other noncorporate shareholders who do not furnish the
Fund with a correct taxpayer identification number. Withholding at that rate
from taxable dividends and capital gain distributions also is required for such
shareholders who otherwise are subject to backup withholding.
18
<PAGE>
Up to 85% of a Social Security recipient's benefits may be included in
federal gross income for recipients whose adjusted gross income (including
income from tax-exempt sources such as the Fund) plus 50% of their 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 Social Security benefits are to be included in gross income.
A redemption of Fund Shares may result in taxable gain or loss to the
redeeming shareholder, depending on whether the redemption proceeds are more or
less than the shareholder's adjusted basis for the redeemed Shares (which
normally includes any sales load paid). An exchange of Fund Shares for shares of
any Eligible Fund generally will have similar tax consequences. However, special
rules apply when a shareholder (1) disposes of Fund Shares through an exchange
or redemption within 90 days after purchase thereof and (2) subsequently
acquires shares of an Eligible Fund or reacquires Fund Shares without paying a
sales load due to the exchange privilege or 90-day reinvestment privilege. (See
Shareholder Services, Exchange Privilege, and Reinvestment Privilege.) In these
cases, any gain on the disposition of the original Fund Shares will be
increased, or loss decreased, by the amount of the sales load paid when those
Shares were acquired, and that amount will increase the basis of the
subsequently acquired Shares. In addition, if a shareholder purchases Fund
Shares (whether pursuant to the reinvestment privilege or otherwise) within 30
days before or after redeeming other Fund Shares at a loss, all or a portion of
that loss will not be deductible and will increase the basis of the newly
purchased Shares.
The foregoing is only a summary of some of the important tax considerations
generally affecting the Fund and its shareholders--see the SAI for a further
discussion--and is not intended to be a substitute for careful tax planning.
There may be tax considerations involved with the automatic conversion of Class
B Shares to Class A Shares--see Conversion of Class B Shares for further
information. There may also be other federal, state or local tax considerations
applicable to a particular investor; for example, the Fund's distributions may
be wholly or partly taxable under state and/or local laws other than New York
State and New York City. Prospective investors therefore are urged to consult
their own tax advisers.
MANAGEMENT, SERVICES AND DISTRIBUTION
Limited Term New York Municipal Fund. The Fund offers an unlimited number
of Shares of beneficial interest, divided into two classes, each Share of which
is entitled to one vote. Fractional Shares have the same rights as full Shares
to the extent of their proportionate interest. All Shares of each portfolio or
class in the Fund have equal voting rights, except that, in matters affecting
only a particular portfolio or class, only Shares of that portfolio or class are
entitled to vote. The Fund acts as its own transfer agent and dividend paying
agent.
The Fund has a Board of Trustees which has the primary responsibility for
the overall management of the Fund. The Trustees elect the officers of the Fund
who are responsible for administering its day-to-day operations. Under the
Fund's Declaration of Trust, no annual or regular meeting of shareholders is
required, but special meetings will be called for certain purposes such as
electing trustees, changing fundamental policies or approving a management
contract. The Declaration of Trust of the Fund provides that the Trustees shall
call and give notice of a meeting of shareholders for the purpose of voting upon
removal of any trustee when requested in writing by shareholders holding not
less than 10% of the shares of the Fund.
Rochester Capital Advisors, L.P. The Adviser, located at 350 Linden Oaks,
Rochester, NY 14625-2807, serves as Adviser to the Fund pursuant to an
Investment Advisory Agreement dated December 20, 1993 (the "Investment Advisory
Agreement"). The Adviser provides the Fund with investment supervision and
management, administrative services and office space. The Adviser is entitled to
receive, pursuant to the Investment Advisory Agreement, an annual fee, payable
monthly, of 0.50% of its average daily net assets up to $100 million, 0.45% of
its average daily net assets on the next $150 million, 0.40% of its average
daily net assets in excess of $250 million but less than $2 billion and 0.39% of
its average daily net assets in excess of $2 billion.
The Adviser, an investment adviser registered under the Investment Advisers
Act of 1940, was organized as a
19
<PAGE>
limited partnership under the laws of the state of New York in 1993. The Adviser
is managed by Rochester Capital Advisors, Inc., a New York corporation, which
serves as the general partner of the Adviser (the "General Partner") and owns a
1% limited partnership interest in the Adviser. Ronald H. Fielding, a Trustee
and President of the Fund is the President of the General Partner. Michael S.
Rosen, a Trustee and Vice President of the Fund is the Vice President of the
General Partner. Messrs. Fielding and Rosen own in the aggregate all of the
outstanding voting securities of the General Partner.
Mr. Fielding, the Portfolio Manager of the Fund, has been primarily
responsible for management of the Fund's portfolio since its inception. In
addition to his employment by the Adviser since 1993, Mr. Fielding has been
employed by Fielding Management Company, Inc. as President since 1982. Messrs.
Rosen and Anthony Tanner, Vice President--Research of the General Partner, also
have responsibility for the day-to-day management of the Fund's portfolio. In
addition to their employment by the Adviser since 1993, Messrs. Rosen and Tanner
have been employed by Fielding Management Company, Inc. since 1983 and 1991,
respectively. Prior to joining Fielding Management Company, Inc., Mr. Tanner was
a student and Research Assistant at the William E. Simon Graduate School of
Business Administration (1989-1991) and a municipal trader for an investment
banking firm.
Rochester Fund Services, Inc. The Agent, an affiliate of the Adviser, has
been retained by the Fund to provide certain administrative services necessary
to the conduct of its affairs, including the daily determination of its net
asset value per Share of each class of the Fund and dividends, and the
maintenance of its Fund and general accounting records. For providing such
services, the Agent receives a monthly maintenance fee from the Fund.
Rochester Fund Distributors, Inc. The Distributor, also an affiliate of the
Adviser, is the Fund's principal underwriter and distributor. Under the terms of
its underwriting agreement with the Fund, the Distributor markets and
distributes the Fund's Shares and is responsible for preparing advertising and
sales literature, and printing and mailing prospectuses to prospective
investors.
20
<PAGE>
Account Application
The Rochester Funds
- -------------------------------------------------------------------------------
Mail completed The person or persons (the "Investor") who are executing
application to: this Account Application authorize Rochester Fund Services,
Rochester Fund Inc. to open or revise an account to purchase common shares
Services Inc. of the Fund indicated below (collectively "The Rochester
350 Linden Oaks Funds") in accordance with these instructions and all other
Rochester, NY applicable provisions in this Account Application, and all
14625 provisions in the current Prospectus of the indicated Fund,
(716) 383-1966 which Prospectus the investor acknowledges having received
from its Dealer prior to, or simultaneously with, the
execution of this Account Application.
- -------------------------------------------------------------------------------
Account Type/ [ ] Individual_____________________________________________
Name First Name Middle Initial Last Name
(Please Print
or Type) Joint [ ] JTTEN:
[ ] Owner [ ] Ten Com:_____________________________________
First Name Middle Initial Last Name
Uniform Gift/
[ ] Transfer to Minor______________________________________
Custodian
[ ]UTMA [ ]UGMA First Name Middle Initial Last Name
as Custodian for________________________________________
Name of Minor(s) State in which
gift is made
[ ] Trust, ________________________________________________
Corporation, Name of Trust or Name of Trustee(s)
Partnership Organization or Officer
Other Entity as it Appears on
Trust Agreement
______________________________________________
For the Benefit of Date of Trust
YOU MUST _____________________ ______________ __________ __________
COMPLETE Address City State Zip
THIS SECTION
FOR ALL __________________________________________Telephone numbers
ACCOUNT TYPES Day Phone Evening Phone will be used for
(include area code) (include area code) non-soliciting
purposes only
- -------------------------------------------------------------------------------
Fund and Fund Name Share Class Amount
Privilege [ ] Rochester Fund
Selections Municipals
(minimum $2,000)
Please indicate RMUNX Class A
your Mutual Fund only available $__________
Investment Choice(s)
and circle the
appropriate Share [ ] Limited Term NY
Class (if Municipal Fund
applicable). (minimum $5,000)
(Please notice the LTNYX Class A $__________
minimum required
investment for the LTNBX Class B $__________
fund you choose.
Subsequent [ ] The Bond Fund
purchases must For Growth
be in amount of (minimum $2,000)
$100 or more for RCVGX Class A $__________
each fund.)
RCVEX Class B $__________
RCVYX (Institutional
Investors only) Class Y
(minimum $50,000) $__________
TOTAL: $
==========
Please enclose a check for this amount payable
to Rochester Fund Distributors, Inc.
21
<PAGE>
Dividend and [ ] Reinvest dividends Please complete the following
Capital Gain in shares and pay if dividend distributions are
capital gains in cash to be mailed to another
(Distributions will address or will be payable to
be reinvested in [ ] Pay dividends in another payee:
additional shares, cash and reinvest
unless specified capital gains in _____________________________
otherwise.) shares Name
[ ] Pay all dividends _____________________________
and capital gains Address
in cash
_____________________________
City/State/Zip
[ ] I do not want Telephone ----------------------------
Exchange Privileges. Signature Guarantee required
Telephone Exchange is for above transaction
automatic (where
applicable) unless A signature guarantee may be
otherwise specified obtained at any commercial
here. bank or from your broker
dealer.
- --------------------------------------------------------------------------------
Signature and I (we) am of legal age to make this purchase. Under the
Taxpayer penalties of perjury, I certify that the tax identifying or
Certification social security number contained herein is true, correct and
complete and I am not subject to backup withholding under
section 3406(a)(1)(C) of the Internal Revenue Code. I (we)
hereby agree that, upon acceptance by Rochester Fund
Distributors, Inc. ("RFD"), this Account Application will be
a contract governed by the laws of the State of New York. In
addition, I (we) hereby agree that any controversy arising
out of or in relation to my (our) account or this contact
shall be settled by arbitration before the National
Association of Securities Dealers, Inc. or any other
self-regulatory organization of which RFD is a member.
___________________________ _______________________________
Owner's Signature Date Owner's Social State in which
Security/Tax ID signed
(Minor's SS# if
UGMA/UTMA)
___________________________ For Tax Purposes: (check
Joint Owner's Date appropriate box:)
Signature (if any) [ ] I am a citizen [ ] Other__
of US
{ } I am a resident [ ] Other__
of US
(Non-resident Aliens must
provide the W-8 form)
- -------------------------------------------------------------------------------
Registered
Representative ____________________________________________________________
Identification First Name Middle Initial Last Name Representative Number
(Broker/Dealer
Use Only) ____________________________________________________________
Registered Representative Signature Office Phone Number
(required)
____________________________________________________________
Firm Name Branch Number
______________________________________
Dealer Authorized Signature (required)
____________________________________________________________
Address City State Zip
Please make your check payable to Rochester Fund
Distributors, Inc. and mail to: 350 Linden Oaks, Rochester,
NY 14625. A shareholder package containing fund privileges
will be forwarded upon processing of your application.
The broker-dealer ("Dealer") signing the Application hereby agrees to all
applicable provisions of this Application. The Dealer will act as principal in
all purchases by the investor of Fund shares indicated herein and authorizes and
appoints RFD to execute such purchases and to confirm such purchases to the
Investor. RFD will remit monthly to the Dealer the amount of any commissions
due, except that no commissions will be paid to the Dealer on any transactions
for which the Dealer's net sales commissions are less than $5.00. The Dealer
also represents that it may lawfully sell shares of the indicated Fund in the
state designated as the Investor's record address, and that it has a currently
effective Dealer Agreement with Rochester Fund Distributors, Inc. authorizing
the Dealer to sell common shares of The Rochester Funds.
The Dealer signature guarantees the signature and legal capacity of the
Investor. If the Investor does not sign this Application, the Dealer warrants
that this application is completed in accordance with the Investor's
instructions and information and agrees to indemnify The Rochester Funds and
Rochester Fund Distributors, Inc. from any loss or liability from acting or
relying upon such instructions and information.
22
<PAGE>
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<PAGE>
----------------------
Investment Adviser
Rochester Capital Advisors, L.P.
Distributor
Rochester Fund Distributors, Inc.
Shareholder Services Agent
Rochester Fund Services, Inc.
350 Linden Oaks
Rochester, NY 14625-2807
(716) 383-1300
----------------------
Custodian
Investors Bank & Trust Company
Boston, MA
Independent Accountants
Price Waterhouse LLP
Rochester, NY
Legal Counsel
Kirkpatrick & Lockhart
Washington, D.C.
----------------------
For further information with respect to the Fund and the shares offered hereby,
reference is made to the Registration Statement filed with the Securities and
Exchange Commission.
----------------------
Your Investment Dealer is:
Item # ROC 504140
LIMITED TERM
[LOGO] NEW YORK
MUNICIPAL FUND
Rochester Portfolio Series
350 Linden Oaks
Rochester, NY 14625-2807
(716) 383-1300
PROSPECTUS May 1, 1995,
as supplemented on
July 5, 1995
