File No. 33-48489
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 3
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
ADVANTAGE GROWTH AND TREASURY SECURITIES TRUST, SERIES 1
(Exact Name of Trust)
NIKE SECURITIES L.P.
(Exact Name of Depositor)
1001 Warrenville Road
Lisle, Illinois 60532
(Complete address of Depositor's principal executive offices)
NIKE SECURITIES L.P. CHAPMAN AND CUTLER
Attn: James A. Bowen Attn: Eric F. Fess
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and complete address of agents for service)
It is proposed that this filing will become effective (check
appropriate box)
: : immediately upon filing pursuant to paragraph (b)
: x : August 1, 1995
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
the issuer has registered an indefinite amount of securities. A
24f-2 Notice for the offering was last filed on May 10, 1995.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
4,423,906 UNITS
PROSPECTUS
Part One
Dated July 19, 1995
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.
The Trust
The Advantage Growth and Treasury Securities Trust (the "Trust") is a unit
investment trust consisting of a portfolio of "zero coupon" U.S. Treasury
bonds (treasury obligations) and shares of The Advantage Growth Fund
("Advantage Growth"). Advantage Growth is an open-end diversified management
investment company, commonly known as a mutual fund. At June 16, 1995, each
Unit represented a 1/4,423,906 undivided interest in the principal and net
income of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust.
Public Offering Price
The Public Offering Price per 1,000 Units is equal to the aggregate value of
the Securities in the Portfolio of the Trust divided by the number of Units
outstanding, multiplied by 1,000, plus a sales charge of 4.5% of the Public
Offering Price (4.712% of the amount invested). At June 16, 1995, the Public
Offering Price per 1,000 Units was $1,165.02 (see "Public Offering" in Part
Two). The minimum purchase is $1,000.
Please retain both parts of this Prospectus for future reference.
____________________________________________________________________________
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.
____________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 16, 1995
Sponsor: Nike Securities L.P.
Evaluator: FT Evaluators L.P.
Trustee: United States Trust Company of New York
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Aggregate Maturity Value of Treasury Obligations in the Trust $4,428,000
Aggregate Number of Shares of Advantage Growth in the Trust 119,411.261
Number of Units 4,423,906
Fractional Undivided Interest in the Trust per Unit 1/4,423,906
Public Offering Price:
Aggregate Value of Securities in the Portfolio $4,921,978
Aggregate Value of Securities per 1,000 Units $1,112.59
Sales Charge 4.712% (4.5% of Public Offering Price) $52.43
Public Offering Price per 1,000 Units $1,165.02
Redemption Price and Sponsor's Repurchase Price per 1,000
Units ($52.43 less than the Public Offering Price per
1,000 Units) $1,112.59
</TABLE>
Date Trust Established July 22, 1992
Mandatory Termination Date February 15, 2003
Evaluator's Annual Fee: $.20 per $1,000 principal amount of Treasury
Obligations outstanding. Evaluations for purposes of sale, purchase or
redemption of Units are made as of the close of trading (4:00 p.m. Eastern
time) on the New York Stock Exchange on each day on which it is open.
Supervisory fee payable to Maximum of $.15 per 1,000
an affiliate of the Sponsor Units outstanding annually
Trustee's Annual Fee: $.85 per 1,000 Units outstanding.
Record Date: Five business days after Advantage Growth's ex-dividend date.
Distribution Date: Ten business days after Advantage Growth's distribution
date.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of The Advantage Growth and
Treasury Securities Trust, Series 1
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of The Advantage Growth and Treasury Securities
Trust, Series 1 as of March 31, 1995, and the related statements of operations
and changes in net assets for each of the two years in the period then ended
and for the period from the Initial Date of Deposit, July 22, 1992, to
March 31, 1993. These financial statements are the responsibility of the
Trust's Sponsor. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of March 31, 1995, by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Advantage Growth and
Treasury Securities Trust, Series 1 at March 31, 1995, and the results of its
operations and changes in its net assets for each of the two years in the
period then ended and for the period from the Initial Date of Deposit,
July 22, 1992, to March 31, 1993, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 23, 1995
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, including
accretion on the treasury obligations,
$4,880,258) (Note 1) $4,676,343
Dividends receivable 5,008
__________
4,681,351
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Accrued liabilities 4,575
Cash overdraft 2,932
__________
7,507
__________
Net assets, applicable to 4,613,478
outstanding units of fractional
undivided interest:
Cost of Trust assets, including
accretion on the treasury obligations
(Note 1) $4,880,258
Net unrealized depreciation (Note 2) (203,915)
Distributable funds (deficit) (2,499)
__________
$4,673,844
==========
Net asset value per 1,000 units $1,013.08
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
PORTFOLIO
March 31, 1995
<TABLE>
<CAPTION>
Maturity Market
value Name of Issuer and Title of Security value
<C> <S> <C>
"Zero Coupon" U.S. Treasury bonds
$4,615,000 (1) maturing February 15, 2003 $2,622,865
==========
</TABLE>
<TABLE>
<CAPTION>
Shares
<C> <S> <C>
140,246.261 The Advantage Growth Fund 2,053,478
__________
Total investments $4,676,343
==========
</TABLE>
(1) The Treasury Obligations have been purchased at a discount from their
par value because there is no stated interest income thereon (such
securities are often referred to as U.S. Treasury zero coupon bonds).
Over the life of the treasury obligations the value increases, so that
upon maturity the holders will receive 100% of the principal amount
thereof.
[FN]
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
the Date
of Deposit,
Year ended Year ended July 22, 1992, to
Mar. 31, 1995 Mar. 31, 1994 Mar. 31, 1993
<S> <C> <C> <C>
Interest income $200,348 220,581 133,129
Dividends:
Ordinary income 24,345 7,456 15,066
Capital gain 25,624 104,523 202,165
___________________________________________
Total investment income 250,317 332,560 350,360
Expenses:
Trustee's fees and related
expenses (8,012) (13,037) (5,347)
Evaluator's fees (1,046) (1,209) (782)
Supervisory fees (768) (908) (626)
___________________________________________
Total expenses (9,826) (15,154) (6,755)
___________________________________________
Investment income - net 240,491 317,406 343,605
Net gain (loss) on investments:
Net realized gain (loss) 227,561 83,290 -
Change in unrealized
appreciation or
depreciation (324,825) (224,774) 345,684
___________________________________________
(97,264) (141,484) 345,684
___________________________________________
Net increase in net assets
resulting from operations $143,227 175,922 689,289
===========================================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
the Date
of Deposit,
Year ended Year ended July 22, 1992,
Mar. 31, Mar. 31, to Mar. 31,
1995 1994 1993
<S> <C> <C> <C>
Net increase in net assets
resulting from operations:
Investment income - net $240,491 317,406 343,605
Net realized gain (loss) on
investments 227,561 83,290 -
Change in unrealized
appreciation or depreciation
on investments (324,825) (224,774) 345,684
__________________________________________
143,227 175,922 689,289
Units issued (250,000 and
5,750,000 in 1994 and 1993,
respectively) - 246,490 5,197,940
Units redeemed (906,522 and
980,000 in 1995 and 1994,
respectively) (879,581) (1,009,110) -
Distributions to unit holders:
Investment income - net (10,227) (2,058) (209,580)
Principal from investment
transactions (19,409) (94,609) -
__________________________________________
(29,636) (96,667) (209,580)
__________________________________________
Total increase (decrease) in net
assets (765,990) (683,365) 5,677,649
Net assets:
At the beginning of the period 5,439,834 6,123,199 445,550
__________________________________________
At the end of the period
(including distributable
funds (deficit) applicable
to Trust units of $(2,499),
$(1,505) and $896 at
March 31, 1995, 1994 and
1993, respectively) $4,673,844 5,439,834 6,123,199
==========================================
Trust units outstanding at
the end of the period 4,613,478 5,520,000 6,250,000
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The treasury obligations are stated at values as determined by the Evaluator.
Currently, the evaluator is FT Evaluators L.P., an affiliate of the Sponsor.
Prior to October 1, 1994, the evaluator was Securities Evaluation Service,
Inc., certain shareholders of which are officers of the Sponsor. The values
are based on (1) current bid prices for the securities obtained from dealers
or brokers who customarily deal in securities comparable to those held by the
Trust, (2) current bid prices for comparable securities, (3) appraisal or (4)
any combination of the above.
Shares of The Advantage Growth Fund (Advantage Growth) are stated at
Advantage's Growth published net asset value as reported by the Evaluator.
Net asset value is determined by dividing the value of Advantage Growth's
securities plus any cash and other assets (including accrued interest and
dividends receivable) less all liabilities (including accrued expenses) by the
number of shares outstanding, adjusted to the nearest whole cent.
Investment income -
Dividends from the Advantage Growth shares are recorded on Advantage Growth's
ex-dividend date. Interest income consists of amortization of original issue
discount and market discount or premium on the treasury obligations. Such
amortization is included in the cost of treasury obligations rather than in
distributable funds because it is not currently available for distribution to
unit holders.
Security cost -
Cost of the Trust's treasury obligations is based on the offering price of the
treasury obligations on the dates the treasury obligations were deposited in
the Trust, plus amortization of original issue discount and amortization of
market discount or premium. Cost of the Advantage Growth shares is based on
the net asset value of such shares on the dates the shares were deposited in
the Trust. The cost of securities sold is determined on the average cost
method. Sales of securities and fund shares are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to United States Trust Company of
New York, which is based on $.85 per annum per 1,000 units outstanding based
on the largest aggregate number of units outstanding during the calendar year.
The Evaluator will receive an annual fee based on $.20 per $1,000 principal
amount of treasury obligations outstanding. Additionally, the Trust pays
recurring financial reporting costs and an annual supervisory fee payable to
an affiliate of the Sponsor.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized depreciation at March 31, 1995 follows:
<TABLE>
<CAPTION>
Advantage
Treasury Growth
obligations shares Total
<S> <C> <C> <C>
Unrealized depreciation $(11,191) (192,724) (203,915)
Unrealized appreciation - - -
___________________________________
$(11,191) (192,724) (203,915)
===================================
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
offering price of the treasury obligations and the net asset value of the
Advantage Growth shares on the date of an investor's purchase, plus a sales
charge of 5.0% of the public offering price which is equivalent to
approximately 5.263% of the net amount invested.
Distributions to unit holders -
Distributions to unit holders are made ten business days after Advantage
Growth's distribution date.
<PAGE>
Selected data per 1,000 units of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from
the Date
of Deposit,
Year ended Year ended July 22, 1992 to
Mar. 31, 1995 Mar. 31, 1994 Mar. 31, 1993
<S> <C> <C> <C>
Investment income -
interest and dividends $48.88 55.08 62.40
Expenses (1.92) (2.51) (1.20)
_________________________________________
Investment income - net 46.96 52.57 61.20
Distributions to unit holders:
Investment income - net (1.99) (.35) (34.93)
Principal from investment
transactions (3.97) (16.09) -
Net gain (loss) on investments (13.40) (30.36) 62.34
_________________________________________
Total increase (decrease)
in net assets 27.60 5.77 88.61
Net assets:
Beginning of the period 985.48 979.71 891.10
_________________________________________
End of the period $1,013.08 985.48 979.71
=========================================
</TABLE>
Investment income - interest and dividends, Expenses and Investment income -
net per 1,000 units have been calculated based on the weighted average number
of units outstanding during the period (5,121,452, 6,037,830 and 5,614,620
units during the years ended March 31, 1995, 1994 and the period from July 22,
1992 to March 31, 1993, respectively). Distributions to unit holders of
investment income - net per 1,000 units reflects the Trust's cash
distributions of approximately $.60 per 1,000 units to 5,366,000 units on
July 14, 1994, approximately $.69 per 1,000 units to 5,195,000 units on
October 13, 1994, approximately $.70 per 1,000 units to 4,889,000 units on
January 13, 1995, approximately $.35 per 1,000 units to 5,880,000 units on
December 31, 1993 and approximately $34.93 per 1,000 units to 6,000,000 units
on December 31, 1992. Distributions of principal from investment transactions
reflects the Trust's cash distributions of approximately $3.97 per 1,000 units
to 4,889,000 units on January 13, 1995 and approximately $16.09 per 1,000
units to 5,880,000 units on December 31, 1993. The Net gain (loss) on
investments per 1,000 units during the year ended March 31, 1994 and the
period ended March 31, 1993 includes the effects of changes arising from
issuance of additional units during each period at net asset values which
differed from the net asset value per 1,000 units of the units outstanding at
the beginning of the period.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
PART ONE
Must be Accompanied by Part Two
____________________
P R O S P E C T U S
____________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: United States Trust Company of New York
770 Broadway
New York, New York 10003
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
The Advantage Growth and Treasury Securities Trust
PROSPECTUS NOTE: THIS PART TWO PROSPECTUS MAY
Part Two ONLY BE USED WITH PART ONE
Dated July 24, 1995
The Trust. The Advantage Growth and Treasury Securities Trust
(the "Trust") is a unit investment trust consisting of a portfolio
of zero coupon U.S. Treasury bonds and shares of The Northstar
Advantage Growth Fund ("Advantage Growth"). Advantage Growth is
an open-end diversified management investment company, commonly
known as a mutual fund.
The objective of the Trust is to protect Unit holders' capital
by investing a portion of the Trust's portfolio in zero coupon
U.S. Treasury bonds ("Treasury Obligations") and to provide for
potential capital appreciation by investing a portion of the Trust's
portfolio in shares of Advantage Growth. Collectively the Treasury
Obligations and the Advantage Growth shares are referred to herein
as the "Securities." See "Portfolio" in Part One. Advantage Growth's
primary investment objective is to obtain long-term growth of
capital. As a secondary objective, Advantage Growth also seeks
income. Advantage Growth invests principally in common stocks
of companies which are listed on the domestic securities exchanges
or are traded in the over-the-counter market but may, to a limited
extent, invest in securities traded in markets outside the United
States. Advantage Growth may also invest in preferred stocks and
convertible securities issued by such companies. The Trust has
a termination date as set forth in "Summary of Essential Information"
in Part One. The Treasury Obligations evidence the right to receive
a fixed payment at a future date from the U.S. Government and
are backed by the full faith and credit of the U.S. Government.
The guarantee of the U.S. Government does not apply to the market
value of the Treasury Obligations or the Units of the Trust, whose
net asset value will fluctuate and, prior to maturity, may be
worth more or less than a purchaser's acquisition cost. There
is, of course, no guarantee that the objective of the Trust will
be achieved.
Each Unit of the Trust represents an undivided fractional interest
in all the Securities deposited in the Trust. The Trust has been
organized so that purchasers of Units should receive, at the termination
of the Trust, an amount per Unit at least equal to $1.00 (which
is equal to the per Unit value upon maturity of the Treasury Obligations),
even if the Trust never paid a dividend and the value of the Advantage
Growth shares were to decrease to zero, which the Sponsor considers
highly unlikely. This feature of the Trust provides Unit holders
who purchase Units at a price of $1.00 or less per Unit with total
principal protection, including any sales charges paid, although
they might forego any earnings on the amount invested. To the
extent that Units are purchased at a price less than $1.00 per
Unit, this feature may also provide a potential for capital appreciation.
Unit holders disposing of their Units prior to the maturity of
the Trust may receive more or less than $1.00 per Unit, depending
on market conditions on the date Units are sold or redeemed. UNIT
HOLDERS DISPOSING OF THEIR UNITS PRIOR TO THE MATURITY OF THE
TRUST MAY RECEIVE MORE OR LESS THAN $1.00 PER UNIT, DEPENDING
ON MARKET CONDITIONS ON THE DATE UNITS ARE SOLD OR REDEEMED.
The Treasury Obligations deposited in the Trust will mature on
the date listed in "Portfolio" appearing in Part One. The Treasury
Obligations in the Trust had a maturity value equal to or greater
than the aggregate Public Offering Price (which includes the sales
charge) of the Units of the Trust on the Initial Date of Deposit.
The Advantage Growth shares deposited in the Trust's portfolio
have no fixed maturity date and the net asset value of the shares
will fluctuate. See "Portfolio" appearing in Part One.
BOTH PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
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.
Page 1
Public Offering Price. The secondary market Public Offering Price
per Unit will be based upon a pro rata share of the bid prices
of the Treasury Obligations and the net asset value of the Advantage
Growth shares in the Trust plus or minus a pro rata share of cash,
if any, in the Principal Account of the Trust plus a maximum sales
charge as set forth in "Summary of Essential Information" in Part
One. The minimum purchase is that amount set forth in Part One.
The sales charge is reduced on a graduated scale for sales involving
at least that amount set forth in Part One. See "How is the Public
Offering Price Determined?"
Dividend and Capital Distributions. Distributions, if any, of
net income, other than amortized discount, will be made at least
annually. Distributions of realized capital gains, if any, received
by the Trust, will be made whenever Advantage Growth makes such
a distribution. Any distribution of income and/or capital will
be net of the expenses of the Trust. Income with respect to the
accrual of original issue discount on the Treasury Obligations
will not be distributed currently, although Unit holders will
be subject to income tax at ordinary income rates as if a distribution
had occurred. INCOME WITH RESPECT TO THE ACCRUAL OF ORIGINAL ISSUE
DISCOUNT ON THE TREASURY OBLIGATIONS WILL NOT BE DISTRIBUTED CURRENTLY,
ALTHOUGH UNIT HOLDERS WILL BE SUBJECT TO INCOME TAX AT ORDINARY
INCOME RATES AS IF A DISTRIBUTION HAD OCCURRED. See "What is the
Federal Tax Status of Unit Holders?" Additionally, upon termination
of the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unit holder his pro rata share of the
Trust's assets, less expenses, in the manner set forth under "Rights
of Unit Holders-How are Income and Principal Distributed?"
Reinvestment. Each Unit holder will, unless he elects to receive
cash payments, have distributions of principal (including, if
elected by Unit holders, the proceeds received upon the maturity
of the Treasury Obligations in the Trust at termination), capital,
if any, and income earned by the Trust, automatically invested
in shares of Advantage Growth (if Units are properly registered)
in the name of the Unit holder. Such distributions (including,
if elected by Unit holders, the proceeds received upon the maturity
of the Treasury Obligations in the Trust at termination) will
be reinvested without a sales charge or the imposition of a contingent
deferred sales load to the participant on each applicable distribution
date. See "Rights of Unit Holders-How Can Distributions to Unit
Holders be Reinvested?"
Secondary Market for Units. The Sponsor may maintain a market
for Units of the Trust and offer to repurchase such Units at prices
which are based on the aggregate bid side evaluation of the Treasury
Obligations and the aggregate net asset value of Advantage Growth
shares in the Trust plus or minus a pro rata share of cash, if
any, in the Principal Account of the Trust.
Page 2
The Advantage Growth and Treasury Securities Trust
What is The Advantage Growth and Treasury Securities Trust?
The Advantage Growth and Treasury Securities Trust is a series
of investment companies created by the Sponsor under the name
of The Advantage Growth and Treasury Securities Trust, all of
which are generally similar but each of which is separate and
is designated by a different series number (the "Trust"). This
series was created under the laws of the State of New York pursuant
to a Trust Agreement (the "Indenture"), dated the Initial Date
of Deposit, with Nike Securities L.P. as Sponsor, United States
Trust Company of New York as Trustee, FT Evaluators L.P. as Evaluator
and First Trust Advisors, L.P., as Portfolio Supervisor.
The objective of the Trust is to protect Unit holders' capital
by investing a portion of the Trust's portfolio in zero coupon
U.S. Treasury bonds ("Treasury Obligations") and to provide for
potential capital appreciation by investing a portion of the Trust's
portfolio in shares of The Northstar Advantage Growth Fund ("Advantage
Growth"). The Treasury Obligations evidence the right to receive
a fixed payment at a future date from the U.S. Government and
are backed by the full faith and credit of the U.S. Government.
The guarantee of the U.S. Government does not apply to the market
value of the Treasury Obligations or the Units of the Trust, whose
net asset value will fluctuate and, prior to maturity, may be
more or less than a purchaser's acquisition cost. Advantage Growth
is an open end mutual fund whose primary investment objective
is to obtain long-term growth of capital. As a secondary objective,
Advantage Growth also seeks income. Collectively, the Treasury
Obligations and Advantage Growth shares in the Trust are referred
to herein as the "Securities." There is, of course, no guarantee
that the objective of the Trust will be achieved.
The Trust has been organized so that purchasers of Units should
receive, at the termination of the Trust, an amount per Unit at
least equal to $1.00 per Unit (which is equal to the per Unit
value upon maturity of the Treasury Obligations), even if the
Advantage Growth shares never paid a dividend and the value of
Advantage Growth shares in the Trust were to decrease to zero,
which the Sponsor considers highly unlikely. The receipt of only
$1.00 per Unit upon the termination of the Trust (an event which
the Sponsor believes is unlikely) represents a substantial loss
on a present value basis. Furthermore, the $1.00 per Unit in no
respect protects investors against diminution in the purchasing
power of their investment due to inflation (although expectations
concerning inflation are a component in determining prevailing
interest rates, which in turn determine present values). To the
extent that Units of the Trust are redeemed, the aggregate value
of the Securities in the Trust will be reduced and the undivided
fractional interest represented by each outstanding Unit of the
Trust will increase. See "How May Units be Redeemed?" The Trust
has a Mandatory Termination Date as set forth under "Summary of
Essential Information" appearing in Part One.
What are the Expenses and Charges?
At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses,
expenses of the Trustee and other out-of-pocket expenses. The
Sponsor will not receive any fees in connection with its activities
relating to the Trust. However, First Trust Advisors, L.P., an
affiliate of the Sponsor, will receive an annual supervisory fee,
which is not to exceed the amount set forth under "Summary of
Essential Information" appearing in Part One, for providing portfolio
supervisory services for the Trust. Such fee is based on the number
of Units outstanding in the Trust on January 1 of each year except
during the year or years in which an initial offering period occurs
in which case the fee for a month is based on the number of Units
outstanding at the end of such month. The fee may exceed the actual
costs of providing such supervisory services for this Trust, but
at no time will the total amount received for portfolio supervisory
services rendered to unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the aggregate
cost of First Trust Advisors, L.P. of supplying such services
in such year.
Page 3
The Evaluator will receive a fee as indicated in "Summary of Essential
Information" appearing in Part One. No fee is paid to the Evaluator
with respect to the Advantage Growth shares in the Trust. The
Trustee pays certain expenses of the Trust for which it is reimbursed
by the Trust. The Trustee will receive for its ordinary recurring
services to a Trust and for all normal expenses of the Trustee
incurred by or in connection with its responsibilities under the
Indenture, an annual fee computed at $.85 per annum per 1,000
Units in the Trust outstanding based upon the largest aggregate
number of Units of the Trust outstanding at any time during the
year. For a discussion of the services performed by the Trustee
pursuant to its obligations under the Indenture, reference is
made to the material set forth under "Rights of Unit Holders."
Rule 12b-1 fees imposed on shares of Advantage Growth held in
the Trust, are rebated to the Trust, deposited in the Income Account
and are used to pay expenses of the Trust.
The Trustee's and Evaluator's fees are payable from the Income
Account of the Trust to the extent funds are available and then
from the Principal Account of the Trust. Since the Trustee has
the use of the funds being held in the Principal and Income Accounts
for payment of expenses and redemptions and since such Accounts
are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to
the Trust is expected to result from the use of these funds. Both
fees may be increased without approval of the Unit holders by
amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor.
The following additional charges are or may be incurred by the
Trust: all legal and annual auditing expenses of the Trustee incurred
by or in connection with its responsibilities under the Indenture;
the expenses and costs of any action undertaken by the Trustee
to protect the Trust and the rights and interests of the Unit
holders; fees of the Trustee for any extraordinary services performed
under the Indenture; indemnification of the Trustee for any loss,
liability or expense incurred by it without negligence, bad faith
or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification
of the Sponsor for any loss, liability or expense incurred without
gross negligence, bad faith or willful misconduct in acting as
Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such
taxes or charges are being levied or made or, to the knowledge
of the Sponsor, contemplated). The above expenses and the Trustee's
annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to
sell Securities in the Trust in order to make funds available
to pay all these amounts if funds are not otherwise available
in the Income and Principal Accounts of the Trust except that
the Trustee shall not sell Treasury Obligations to pay Trust expenses.
The Indenture requires the Trust to be audited on an annual basis
at the expense of the Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market
for the Units, the Sponsor is required to bear the cost of such
annual audits to the extent such cost exceeds $.50 per 1,000 Units.
Unit holders of the Trust covered by an audit may obtain a copy
of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal
income tax consequences of the purchase, ownership and disposition
of the Units. The summary is limited to investors who hold the
Units as "capital assets" (generally, property held for investment)
within the meaning of Section 1221 of the Internal Revenue Code
of 1986 (the "Code"). Unit holders should consult their tax advisers
in determining the Federal, state, local and any other tax consequences
of the purchase, ownership and disposition of Units in the Trust.
In the opinion of Chapman and Cutler, counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of the Trust
under the Code; the income of the Trust will be treated as income
of the Unit holders thereof under the Code; and each Unit holder
will be considered
Page 4
to have received his pro rata share of income derived from each
Trust asset when such income is received by the Trust.
2. Each Unit holder will have a taxable event when the Trust disposes
of a Security (whether by sale, exchange, redemption, or payment
at maturity) or upon the sale or redemption of Units by such Unit
holder. The price a Unit holder pays for his Units, including
sales charges, is allocated among his pro rata portion of each
Security held by the Trust (in proportion to the fair market values
thereof on the date the Unit holder purchases his Units) in order
to determine his initial cost for his pro rata portion of each
Security held by the Trust. The Treasury Obligations held by the
Trust are treated as stripped bonds and will in all likelihood
be treated as bonds issued at an original issue discount as of
the date a Unit holder purchases his Units. Because the Treasury
Obligations represent interests in "stripped" U.S. Treasury bonds,
a Unit holder's initial cost for his pro rata portion of each
Treasury Obligation held by the Trust shall be treated as its
"purchase price" by the Unit holder. Original issue discount is
effectively treated as interest for federal income tax purposes
and the amount of original issue discount in this case is generally
the difference between the bond's purchase price and its stated
redemption price at maturity. A Unit holder will be required to
include in gross income for each taxable year the sum of his daily
portions of original issue discount attributable to the Treasury
Obligations held by the Trust as such original issue discount
accrues and will in general be subject to federal income tax with
respect to the total amount of such original issue discount that
accrues for such year even though the income is not distributed
to the Unit holders during such year to the extent it is not less
than a "de minimis" amount as determined under a Treasury Regulation
issued on December 28, 1992 relating to stripped bonds. To the
extent the amount of such discount is less than the respective
"de minimis" amount, such discount shall be treated as zero. In
general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual
compounding of accrued interest. In the case of the Treasury Obligations,
this method will generally result in an increasing amount of income
to the Unit holders each year. Unit holders should consult their
tax advisors regarding the federal income tax consequences and
accretion of original issue discount under the stripped bond rules.
3. A Unit holder's portion of gain, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Trust will
generally be considered a capital gain except in the case of a
dealer or a financial institution and, in general, will be long-term
if the Unit holder has held his Units for more than one year.
A Unit holder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss except in the case of a
dealer or a financial institution and will be long-term if the
Unit holder has held his Units for more than one year. Unit holders
should consult their tax advisors regarding the recognition of
such capital gains and losses for Federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by the
Trust, including fees of the Trustee and the Evaluator but not
including expenses incurred by Advantage Growth, the shares of
which are held by the Trust.
Because Unit holders are deemed to directly own a pro rata portion
of the Advantage Growth shares as discussed above, Unit holders
are advised to read the discussion of tax consequences set forth
in the current prospectus for Advantage Growth. Distributions
declared by Advantage Growth on the Advantage Growth shares in
October, November or December that are held by the Trust and paid
during the following January will be treated as having been received
by Unit holders on December 31 in the year such distributions
were declared. Long-term capital gains distributions on the Advantage
Growth shares are taxable to the Unit holders as long-term capital
gains regardless of how long a person has been a Unit holder.
If a Unit holder holds his Units for six months or less or if
the Trust holds shares of Advantage Growth for six months or less,
any loss incurred by a Unit holder related to the disposition
of Advantage Growth shares will be treated as a long-term capital
loss to the extent of any long-term capital gains distributions
received
Page 5
(or deemed to have been received) with respect to such shares.
For taxpayers other than corporations, net capital gains are subject
to a maximum marginal tax rate of 28%. However, it should be noted
that legislative proposals are introduced from time to time that
affect tax rates and could affect relative differences at which
ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate. Because some or all capital gains
are taxed at a comparatively lower rate under the Tax Act, the
Tax Act includes a provision that recharacterizes capital gains
as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions
entered into after April 30, 1993. Unit holders and prospective
investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
Advantage Growth may elect to pass through to its shareholders
the foreign income and similar taxes paid by Advantage Growth
in order to enable such shareholders to take a credit (or deduction)
for foreign income taxes paid by Advantage Growth. If such an
election is made, Unit holders of the Trust, because they are
deemed to own a pro rata portion of the Advantage Growth shares
held by the Trust, as described above, must include in their gross
income, for federal income tax purposes, both their portion of
dividends received by the Trust from Advantage Growth, and also
their portion of the amount which Advantage Growth deems to be
the Trust's portion of foreign income taxes paid with respect
to, or withheld from, dividends, interest or other income of Advantage
Growth from its foreign investments. Unit holders may then subtract
from their federal income tax the amount of such taxes withheld,
or else treat such foreign taxes as deductions from gross income;
however, as in the case of investors receiving income directly
from foreign sources, the above described tax credit or deduction
is subject to certain limitations. Unit holders should consult
their tax advisors regarding this election and its consequences
to them.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by the Trust to
such Unit holder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions
by a Trust will generally be subject to United States income taxation
and withholding in the case of Units held by non-resident alien
individuals, foreign corporations or other non-United States persons
(accrual of original issue discount on the Treasury Obligations
may not be subject to taxation or withholding provided certain
requirements are met). Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of original
issue discount, income dividends and long-term capital gains distributions
includable in the Unit holder's gross income and amounts of Trust
expenses which may be claimed as itemized deductions.
Dividend income, long-term capital gains and accrual of original
issue discount may also be subject to state and local taxes. Investors
should consult their tax advisors for specific information on
the tax consequences of particular types of distributions.
Unit holders desiring to purchase Units for tax-deferred plans
and IRAs should consult their broker for details on establishing
such accounts. Units may also be purchased by persons who already
have self-directed plans established. See "Why are Investments
in the Trust Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trust for New York tax matters, under the existing income
tax laws of the State of New York the Trust is not an association
taxable as a corporation and the income of the Trust will be treated
as the income of the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital and income received in each of the foregoing plans is
deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review
Page 6
specific tax laws related thereto and should consult their attorneys
or tax advisers with respect to the establishment and maintenance
of any such plan. Such plans are offered by brokerage firms and
other financial institutions. Fees and charges with respect to
such plans may vary.
PORTFOLIO
What are Zero Coupon Treasuries?
The Treasury Obligations deposited in the Trust consist of U.S.
Treasury bonds which have been stripped of their unmatured interest
coupons. The Treasury Obligations evidence the right to receive
a fixed payment at a future date from the U.S. Government, and
are backed by the full faith and credit of the U.S. Government.
Treasury Obligations are purchased at a deep discount because
the buyer obtains only the right to a fixed payment at a fixed
date in the future and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not
make current interest payments (such as the Treasury Obligations)
is that a fixed yield is earned not only on the original investment
but also, in effect, on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same
rate eliminates the risk of being unable to reinvest the income
on such obligations at a rate as high as the implicit yield on
the discount obligation, but at the same time eliminates the holder's
ability to reinvest at higher rates in the future. For this reason,
the Treasury Obligations are subject to substantially greater
price fluctuations during periods of changing interest rates than
are securities of comparable quality which make regular interest
payments. The effect of being able to acquire the Treasury Obligations
at a lower price is to permit more of the Trust's portfolio to
be invested in shares of Advantage Growth.
What is The Advantage Growth Fund?
The portfolio of the Trust also contains shares of Advantage Growth.
Advantage Growth is an open-end diversified management investment
company, commonly known as a mutual fund. Advantage Growth is
registered under the Investment Company Act of 1940 as an open-end,
diversified management investment company. Advantage Growth's
primary investment objective is long-term growth of capital. As
a secondary objective, Advantage Growth also seeks income. The
shares of Advantage Growth deposited in the Trust are maintained
on the books of Advantage Growth's transfer agent.
Advantage Growth currently offers three classes of shares ("Class
A," "Class B" and "Class C") which may be purchased at a price
equal to their respective net asset value per share, plus a sales
charge. The Trust has purchased Class T shares, which as of June
5, 1995 are no longer offered for sale by any Northstar Fund,
except in connection with reinvestment of dividends and other
distributions, upon exchange of Class T shares of another Northstar
Fund or upon exchange from the Class T Account of the Money Market
Portfolio. Any reference to Advantage Growth shares in this Prospectus
shall refer to Class T shares.
Advantage Growth has followed the practice of paying a distribution
at least once annually representing substantially all of its net
investment income and distributing any net realized capital gains.
The table below shows important financial information for Advantage
Growth, such as net investment income, expenses, and dividends,
expressed in terms of one share outstanding throughout the period.
This table is covered by the independent public accountant's report
appearing in Advantage Growth's Statement of Additional Information
dated December 31, 1994. Advantage Growth's Statement of Additional
Information dated December 31, 1994 and its prospectus dated December
31, 1994 may be obtained without charge by writing to The Northstar
Funds, Two Pickwick Plaza, Greenwich, Connecticut 06830 or calling
(203) 863-6200 or 1-800-595-7827.
Page 7
Selected Per Share Data and Ratios for an
Advantage Growth Share Outstanding throughout the Period
Advantage Growth Fund
<TABLE>
<CAPTION>
Year Year Year Year
Ended Ended Ended Ended
12/31/94 12/31/93 12/31/92 12/31/91
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net asset value at beginning
of period $ 17.33 $ 16.36 $ 16.37 $ 12.49
======== ======== ======== ========
Income from investment
operations:
Net investment income (loss) 0.08 0.02 0.02 0.09
Net realized and unrealized
gain (loss) (1.41) 1.67 1.30 4.62
________ ________ ________ ________
Total from investment
operations (1.33) 1.69 1.32 4.71
======== ======== ======== ========
Less distributions:
Dividends from net
investment income (0.08) (0.04) (0.02) (0.08)
Dividends from net realized gain (0.15) (0.67) (1.31) (0.75)
Dividends from capital (0.02) (0.01)* 0.00 0.00
________ ________ ________ ________
Total distributions (0.25) (0.72) (1.33) (0.83)
======== ======== ======== ========
Net asset value at end of period $ 15.75 $ 17.33 $ 16.36 $ 16.37
======== ======== ======== ========
Total return (7.66)% 10.36% 8.05% 38.10%
Ratios/supplemental data:
Net assets at end of period
(thousands) $76,391 $80,759 $56,759 $40,884
Ratio of operating expenses
to average net assets 2.00% 2.04% 2.15% 2.25%
Ratio of net investment income
to average net assets 0.49% 0.13% 0.09% 0.66%
Portfolio turnover rate 53.76% 42.27% 46.77% 63.56%
</TABLE>
<TABLE>
<CAPTION>
Year Year Year Year
Ended Ended Ended Ended
12/31/90 12/31/89 12/31/88 12/31/87
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net asset value at beginning
of period $ 13.85 $ 11.96 $ 10.47 $ 10.54
======== ======== ======== ========
Income from investment
operations:
Net investment income (loss) 0.10 0.20 0.16 0.09
Net realized and unrealized
gain (loss) (0.83) 2.66 1.58 (0.07)
________ ________ ________ ________
Total from investment
operations (0.73) 2.86 1.74 0.02
======== ======== ======== ========
Less distributions:
Dividends from net
investment income (0.10) (0.20) (0.17) (0.08)
Dividends from net realized gain (0.51) (0.76) (0.08) 0.00
Dividends from capital (0.02) (0.01) 0.00 (0.01)
________ ________ ________ ________
Total distributions (0.63) (0.97) (0.25) (0.09)
======== ======== ======== ========
Net asset value at end of period $ 12.49 $ 13.85 $ 11.96 $ 10.47
======== ======== ======== ========
Total return (5.24)% 24.25% 16.70% 0.11%
Ratios/supplemental data:
Net assets at end of period
(thousands) $24,927 $29,842 $25,359 $27,493
Ratio of operating expenses
to average net assets 2.33% 2.33% 2.46% 2.29%
Ratio of net investment income
to average net assets 0.80% 1.39% 1.40% 0.83%
Portfolio turnover rate 54.22% 74.56% 58.73% 54.72%
</TABLE>
[FN]
* Represents distribution in excess of investment income due to
differences in book and tax income.
Page 8
The following expense table lists the costs and expenses that
an investor will incur either directly or indirectly as a shareholder
of Advantage Growth, based upon Advantage Growth's operating expenses
for its most recent fiscal year.
Shareholder Transaction Expenses
Maximum Front-End Sales Load Imposed on Purchases of Shares
(as a percentage of Offering Price) 0%
Maximum Front-End or Deferred Sales Load on
Reinvested Dividends/Distributions 0%
Maximum Contingent Deferred Sales Load on Sale
of Shares (as a percentage of the lesser of
original price or redemption proceeds) 4%*
Exchange Fee $0
Annual Advantage Growth Operating Expenses
(as a percentage of average net assets)
Management Fee .75%
12b-1 Fee (includes a 0.25% service fee) .95%
Other Expenses .30%
Total Fund Operating Expenses 2.00%
[FN]
* Contingent deferred sales load on redemptions declines 1%
annually from a maximum of 4% to 0% after four years.
<TABLE>
<CAPTION>
Example
1 year 3 years 5 years 10 years
________ ________ ________ ________
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming 5% annual return and
redemption at the end of each time period
Advantage Growth* ** $60 $83 $108 $220
You would pay the following expenses on the same
investment, assuming no redemption
Advantage Growth* ** $20 $63 $108 $220
</TABLE>
[FN]
* There is no contingent deferred sales load payable upon the
redemption of the Advantage Growth shares deposited in the Trust.
However, the maximum sales charge on the Units, and therefore
indirectly on the Advantage Growth shares is 5.0% in the secondary
market.
** Effectively, there are no 12b-1 fees on Advantage Growth shares
held in the Trust. However, Unit holders who acquire shares of
Advantage Growth through reinvestment of dividends or distributions
or through reinvestment at the Trust's termination will begin
to incur 12b-1 fees at such time as shares are acquired.
The foregoing table is intended to assist investors in understanding
the various costs and expenses that they will bear directly or
indirectly when investing in Advantage Growth. The example is
included to provide a means for comparison of expense levels of
mutual funds with different fee structures over varying investment
periods. To facilitate this comparison, all mutual funds are required
for this purpose to assume a 5% annual return. This assumption
is unrelated to Advantage Growth's past performance and is not
a projection of future performance. In addition, the example should
not be considered a representation of past or future expenses
of Advantage Growth. The Advantage Growth's actual expenses may
be greater or less than those shown. The first part of the example
reflects deduction of the contingent deferred sales load imposed
by Advantage Growth at rates declining 1% annually from a maximum
of 4% of the lesser of the new asset value or total cost of shares
redeemed within one year of purchase to 1% of such amount for shares
Page 9
redeemed after three years. No contingent deferred sales load
is deducted with respect to shares redeemed after four years or
acquired through reinvestment of distributions.
Advantage Growth was established as an unincorporated business
trust under the laws of The Commonwealth of Massachusetts in October
1985. The Trustees of Advantage Growth have authority to issue
an unlimited number of shares of beneficial interest without par
value. When issued, each share will be fully paid and nonassessable
by Advantage Growth. Shareholders do not have preemptive or conversion
rights. All shares have equal rights with regard to voting, redemption,
dividends, distributions and liquidation. Each share of Advantage
Growth is entitled to one vote. Shares of Advantage Growth do
not have cumulative voting rights. Fractional shares have proportional
voting rights and participate in any distributions and dividends.
Certificates for shares of Advantage Growth will be issued only
upon specific written request to Advantage Growth. Advantage Growth's
transfer agent maintains records of each shareholder's account
and confirmations showing purchase and sale transactions are issued.
Advantage Growth is not required to hold annual meetings of shareholders.
However, special meetings of shareholders may be called for purposes
such as electing or removing Trustees, changing a fundamental
investment policy, and approving an investment advisory agreement
or a Rule 12b-1 distribution plan. In addition, a special meeting
of shareholders of Advantage Growth will be held if, at any time,
less than a majority of the Trustees then in office have been
elected by shareholders of Advantage Growth. Shareholders of Advantage
Growth have the right to communicate with other shareholders of
Advantage Growth in accordance with the provisions of Section
16(c) of the Investment Company Act of 1940.
From time to time Advantage Growth may advertise the "total return"
or "yield" of its portfolio and may compare its performance with
that of other mutual funds as listed in the rankings prepared
by Lipper Analytical Services, Inc., or similar independent services
monitoring mutual fund performance, and with appropriate securities
indices. The "total return" of Advantage Growth refers to the
average annual compounded rate of return over the stated period
that would equate an initial investment in Advantage Growth at
the beginning of the period to its ending redeemable value, assuming
reinvestment of all dividends and distributions and deduction
of all recurring charges and any contingent deferred sales charge.
Advantage Growth's "yield" is computed by dividing the net investment
income per share earned during the most recent calender month
by the maximum offering price per share on the last day of such
month. In computing net investment income, all recurring charges
are recognized. The methods used to calculate "total return" and
"yield" are described further in the Statement of Additional Information.
The performance of Advantage Growth will vary from time to time
in response to fluctuations in market conditions, interest rates,
the composition of Advantage Growth's portfolio and expenses.
Consequently, Advantage Growth's performance figures should not
be considered representative of the performance of Advantage Growth
for any future period. Current performance information for Advantage
Growth may be obtained by contacting your investment broker.
What is Advantage Growth's Investment Objectives and Policies?
Advantage Growth's primary investment objective is long-term growth
of capital. As a secondary objective, Advantage Growth also seeks
income. The investment objective of Advantage Growth may be changed
by Advantage Growth's Trustees without shareholder approval. There
can, of course, be no guarantee that the investment objectives
of Advantage Growth will be achieved, due to the uncertainty inherent
in all investments. Advantage Growth invests principally in common
stocks of companies which are listed on the domestic securities
exchanges or are traded in the over-the-counter markets, but may,
to a limited extent, invest in securities traded in markets outside
the United States. Advantage Growth may also invest in preferred
stocks and convertible securities issued by such companies which
will be rated B or better by Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's")
or Moody's Investors Service, Inc. ("Moody's"). Advantage Growth
invests in industries and companies which, in the opinion of Advantage
Growth's investment adviser, have potential primarily for capital
growth and secondarily for income. The investment adviser generally
selects securities of companies
Page 10
with records of above-average earnings growth or companies which,
in its view, are substantially undervalued in relation to assets.
Although income is not a primary consideration, most of the securities
in Advantage Growth's portfolio are income producing. In seeking
income for Advantage Growth, Advantage Growth's investment adviser
attempts to select securities which have potential for long-term
growth of dividend income.
Some of the equity securities in which Advantage Growth invests
may be speculative and involve substantial risk since they may
experience significant price fluctuations in both rising and declining
markets. Advantage Growth may invest up to 10% of its total assets
in debt securities which are rated Ba by Moody's or below, BB
by Standard & Poor's or below, or are not rated. These debt securities
(which will generally be convertible) are considered speculative
investments and generally involve greater risk, including the
risk of loss of income and principal, than higher rated securities.
Other Investment Policies and Techniques. In addition to investing
in securities directly, Advantage Growth may employ other investment
techniques which, together with their related risks, are summarized
below. These investment techniques and the related risks are described
in more detail in the Statement of Additional Information for
Advantage Growth.
Options and Futures Transactions and their Risks. Advantage Growth's
investment adviser may at times seek to hedge against either a
decline in the value of securities included in its portfolio or
an increase in the price of securities which it plans to purchase
for Advantage Growth through the writing and purchase of options
and the purchase and sale of financial futures contracts and related
options, including options and futures on stock indices. In addition,
Advantage Growth may seek to increase the current return of its
portfolio by writing covered call or secured put options.
Advantage Growth generally expects that its options and futures
transactions will be conducted on securities exchanges. In certain
instances, however, Advantage Growth may purchase and sell options
in the over-the-counter market. The staff of the Securities and
Exchange Commission (the "Commission") considers over-the-counter
options and their underlying securities to be illiquid and accordingly
no more than 15% of Advantage Growth's net assets may be subject
to such options or will be invested in other illiquid securities
at any time. Advantage Growth's ability to terminate option positions
established in the over-the-counter market may be more limited
than in the case of exchange-traded options and may also involve
the risk that securities dealers participating in such transactions
would fail to meet their obligations to Advantage Growth.
In the case of certain options and futures transactions, Advantage
Growth may be required to maintain in a segregated account at
its custodian bank, cash or short-term U.S. Government Securities
with a value equal to or greater than Advantage Growth's obligation
under the option or futures contract.
The use of options and futures strategies by Advantage Growth
involves certain risks, including the risk that no liquid market
will exist and that Advantage Growth will be unable to effect
closing transactions at any particular time or at an acceptable
price and the risk of imperfect correlation between movements
in options and futures prices and movements in the price of the
securities which are the subject of the hedge. The successful
use of options and futures strategies depends on the ability of
Advantage Growth's investment adviser to correctly forecast rate
movements and general stock market price movements. Expenses and
losses incurred as a result of these hedging strategies will reduce
the current return.
Repurchase Agreements. Advantage Growth may invest in repurchase
agreements either for temporary defensive purposes due to adverse
market conditions or to generate income from its cash balances.
Repurchase agreements maturing more than seven days in the future
are considered illiquid, and Advantage Growth will invest no more
than 5% of its net assets in such repurchase agreements at any
time. Repurchase agreements acquired by Advantage Growth will
always be fully collateralized by money market instruments (generally
securities issued by the U.S. Government, bankers' acceptances,
or certificates of deposit) as to principal and interest and will
be entered into only with commercial banks, brokers and dealers
considered by Advantage Growth's investment adviser to be creditworthy
under guidelines adopted by the Trustees of Advantage Growth.
The use of repurchase agreements involves certain risks such
Page 11
as default by, or insolvency of, the other party to the repurchase
agreement. Advantage Growth's right to liquidate its collateral
in the event of a default could involve certain costs, losses
or delays and, to the extent that proceeds from any sale upon
default of the obligation to repurchase are less than the repurchase
price, Advantage Growth could suffer a loss.
Lending Portfolio Securities. In order to obtain a return on its
investments, Advantage Growth may lend portfolio securities to
brokers, dealers and other financial institutions in amounts up
to one-third of the value of its total assets. Loans of portfolio
securities will always be fully collateralized and will be made
only to borrowers considered by Advantage Growth's investment
adviser to be creditworthy under guidelines adopted by the Trustees
of Advantage Growth. Advantage Growth may invest cash collateral
in high-yielding, short-term investments, including any combination
of U.S. Government Securities, bank letters of credit, repurchase
agreements or investment grade commercial paper, rated in the
top two ranking categories by a nationally recognized statistical
rating organization. Lending portfolio securities involves risk
of delay in the recovery of the loaned securities and in some
cases the loss of rights in the collateral should the borrower
fail financially.
Forward Commitments. Advantage Growth may make contracts to purchase
securities for a fixed price at a future date beyond customary
settlement time ("forward commitments") if it holds, and maintains
until the settlement date in a segregated account at its custodian
bank, cash or high-grade debt obligations in an amount sufficient
to meet the purchase price, or if it enters into offsetting contracts
for the forward sale of other securities it owns. Forward commitments
may be considered securities in themselves, and involve risk of
loss if the value of the security to be purchased declines prior
to the settlement date, which risk is in addition to the risk
of decline in value of Advantage Growth's other assets. Where
such purchases are made through dealers, Advantage Growth relies
on the dealer to consummate the sale. The dealer's failure to
do so may result in the loss to Advantage Growth of an advantageous
yield or price.
Floating or Variable Rate Instruments. Advantage Growth may invest
in floating or variable rate instruments, which provide for interest
rate adjustment at specified intervals. Rate adjustments on such
securities are usually set at the issuer's discretion, in which
case the Fund would normally have the right to resell the security
to the issuer or its agent. Alternatively, rate revisions may
be determined in accordance with a prescribed formula or other
contractual procedure. A Fund may also acquire put options in
combination with the purchase of underlying securities or may
separately acquire put options that relate to securities held
in the portfolio. Such put options would give Advantage Growth
the right to require the issuer or some other person to purchase
the underlying security at an agreed upon price.
Discount Obligations. A portion of Advantage Growth's investments
in debt securities may be in (i) securities which were originally
issued at a discount from their face value (collectively, "Discount
Obligations") and (ii) securities purchased by Advantage Growth
at a price less than their stated face value amount. Under current
federal tax law, Advantage Growth will accrue as current income
each year a portion of the discount even though Advantage Growth
does not receive during the year cash interest payments on the
obligation corresponding to the accrued discount. As an investment
company, Advantage Growth must pay out substantially all of its
net investment income each year. Accordingly, Advantage Growth
may be required to pay out as income distribution each year an
amount which is greater than the total amount of cash interest
Advantage Growth actually received. Such distributions will be
made from the cash assets of Advantage Growth or by liquidation
of its portfolio securities, if necessary.
Defensive Strategies. When adverse market conditions warrant a
temporary defensive strategy, Advantage Growth may invest in U.S.
Government Securities and money market instruments. Money market
instruments include high-grade commercial paper (promissory notes
issued by corporations to finance their short-term credit needs),
negotiable certificates of deposit, non-negotiable fixed time
deposits with maturities of less than seven days, bankers' acceptances
and repurchase agreements. Investment in commercial paper will
be rated Prime-1 or Prime-2 by Moody's, A-1 or A-2 by Standard
& Poor's, or F-1 or F-2 by Fitch Investors Service, Inc. Investment
in bank instruments will be in instruments which
Page 12
are issued by U.S. banks having assets at the time of investment
of $1 billion or more and which generally mature in one year or
less from the date of the acquisition.
Foreign Investments. Advantage Growth may invest up to 20% of
its net assets in securities of foreign issuers. Up to 10% of
the Fund's net assets may be invested in securities of foreign
issuers that are not listed on a U.S. securities exchange. Such
securities include securities that are traded on a stock exchange
or on an established over-the-counter market outside the United
States and privately placed securities that are resold to U.S.
institutional buyers.
Advantage Growth may invest in the securities of foreign issuers
through the purchase of American Depositary Receipts ("ADRs"),
European Depositary Receipts ("EDRs") and International Depositary
Receipts ("IDRs"). ADRs are U.S. dollar-denominated certificates
issued by U.S. banks or trust companies and represent the right
to receive securities of a foreign issuer deposited in a domestic
bank or foreign branch of a U.S. bank. EDRs and IDRs are receipts
issued in Europe, generally by non-U.S. banks or trust companies,
that evidence ownership of non-U.S. securities. ADRs are traded
on domestic exchanges or in the U.S. over-the-counter market and
generally are in bearer form. Investment in ADRs has certain advantages
over direct investment in the underlying non-U.S. securities because
(i) ADRs are U.S. dollar-denominated investments which are registered
domestically, easily transferable, and for which market quotations
are readily available, and (ii) issuers whose securities are represented
by ADRs are generally subject to the same auditing, accounting
and financial reporting standards as domestic issuers. There may
be less information concerning foreign issuers whose securities
are represented by ADRs that are sponsored by U.S. banks or trust
companies rather than by the issuers themselves.
Investments in foreign securities involve certain risks, such
as possible imposition of additional dividend or interest withholding
or confiscatory taxes, possible currency blockages or transfer
restrictions, expropriation, nationalization or other adverse
political or economic developments and the difficulty of enforcing
obligations in other countries. Investments in foreign securities
that are not traded on a U.S. securities exchange or in the U.S.
over-the-counter market involve additional considerations due
to more limited information, higher brokerage costs, different
accounting standards and thinner trading markets. Where the purchase
is made in a foreign currency, Advantage Growth may incur currency
conversion costs and may be adversely affected by fluctuations
in the value of that currency.
Zero-Coupon Treasury Securities. Advantage Growth may invest up
to 5% of its total assets in zero coupon Treasury securities,
which consist of stripped interest or principal components of
U.S. Treasury bonds or notes ("STRIPs"). STRIPs involve the separation
of the corpus (face amount) of the bond or note from the coupon
(interest portion). The U.S. Treasury redeems the bond or note
corpus (zero coupon bond or note) for the face value thereof at
maturity and redeems the stripped coupon (interest portion) beginning
at the date specified thereon. Such securities pay no interest
to holders during their life and usually trade at a deep discount
from their face or par value. They are subject to greater fluctuations
of market value in response to changing interest rates than debt
obligations of comparable maturities which make periodic distributions
of interest. On the other hand, zero coupon securities eliminate
reinvestment risk and lock in a rate of return to maturity. Stripped
interests in U.S. Treasury Securities that are not issued through
the U.S. Treasury's STRIPS program are not considered to be U.S.
Government Securities.
Under current federal tax law, Advantage Growth will receive net
investment income in the form of interest by virtue of holding
Treasury bills, notes and bonds, and will recognize interest attributable
to it from holding zero coupon Treasury securities. Current federal
tax law requires that a holder of a zero coupon security accrue
a portion of the discount at which the security was purchased
as income each year even though Advantage Growth receives no interest
payment in cash on the security during the year. As an investment
company, Advantage Growth must pay out substantially all of its
net investment income each year. Accordingly, Advantage Growth
may be required to pay out as an income distribution each year
an amount which is greater than the total amount of cash interest
Advantage Growth actually received. Such distributions will be
made from the cash assets of Advantage Growth or by liquidation
of portfolio securities, if necessary.
Page 13
Private Placements. Advantage Growth may acquire privately placed
securities that are not registered under the Securities Act of
1933, but that can be offered and sold to qualified institutional
buyers under Rule 144A under the Act ("144A securities"). The
Board of Trustees has adopted guidelines that delegate to Advantage
Growth's investment adviser the daily function of determining
and monitoring the liquidity of 144A securities. Since it is not
possible to predict with assurance exactly how the institutional
market for 144A securities will develop, the Trustees will carefully
monitor Advantage Growth investments in these securities, focusing
upon various factors, including valuation, liquidity and availability
of information. Because institutional trading in restricted securities
is relatively new, it is not possible to predict how institutional
markets will develop. If institutional trading in restricted securities
were to decline to limited levels, the liquidity of the investments
in Rule 144A securities could be adversely effected.
Investment Restrictions. Advantage Growth has adopted certain
fundamental investment policies which may not be changed without
approval of Advantage Growth shareholders. These policies provide,
among other things, that Advantage Growth may not: (i) borrow
money, except from a bank and as a temporary measure for extraordinary
or emergency purposes, provided Advantage Growth maintains asset
coverage of 300% for all borrowings; (ii) purchase securities
of any one issuer (except Government securities) if, as a result,
more than 5% of the total assets would be invested in that issuer
or Advantage Growth would own or hold more than 10% of the outstanding
voting securities of the issuer, provided, however, that up to
25% of total assets may be invested without regard to these limitations;
(iii) underwrite the securities of other issuers, except to the
extent that in connection with the disposition of portfolio securities,
Advantage Growth may be deemed to be an underwriter; (iv) concentrate
its assets in the securities of issuers all of which conduct their
principal business activities in the same industry (this restriction
does not apply to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities); (v) make any investment
in real estate, commodities or commodities contracts, except that
Advantage Growth may: (a)purchase or sell readily marketable securities
which are secured by interests in real estate or issued by companies
which deal in real estate, including real estate investment and
mortgage investment trusts; and (b) engage in financial futures
contracts and related options as described herein and in Advantage
Growth's Statement of Additional Information; (vi) make loans,
except that Advantage Growth may (a) invest in repurchase agreements,
and (b) loan its portfolio securities in amounts up to one-third
of the market or other fair value of its total assets; and (vii)
issue senior securities, except as appropriate to evidence indebtedness
which it is permitted to incur, provided that the deposit or payment
by Advantage Growth of initial or maintenance margin in connection
with futures contracts and related options is not considered the
issuance of senior securities. For information on certain nonfundamental
policies which may be changed at any time without a shareholder
vote, see "Investment Restrictions" in Advantage Growth's Statement
of Additional Information.
The net asset value per share of Advantage Growth is computed
each day on which the New York Stock Exchange is open as of the
close of trading on the exchange (currently 4:00 p.m. eastern
standard time). The net asset value per share is arrived at by
determining the value of all of the assets of Advantage Growth,
subtracting all liabilities and dividing the result by the total
number of shares outstanding. Short-term obligations with maturities
of 60 days or less may be valued at amortized cost, provided that
it approximates market value. All other investments are valued
at market value or, where market quotations are not readily available,
at fair value as determined by or under the direction of the Trustees
of Advantage Growth. Since market quotations for many high yield
debt instruments may be determined by pricing services approved
under the direction of the Trustees of Advantage Growth, as the
case may be. Additional information concerning Advantage Growths'
valuation policies is contained in the Statement of Additional
Information.
Who is the Investment Adviser of Advantage Growth?
Northstar Investment Management Corporation (the "Adviser"), Two
Pickwick Plaza, Greenwich, Connecticut 06830, serves as investment
adviser to Advantage Growth. The Adviser is an indirect, majority-owned
subsidiary of ReliaStar Financial Corp. ("ReliaStar"). Combined
minority interests held by members of senior management currently
equal 20%. ReliaStar is a publicly traded holding company whose
Page 14
subsidiaries specialize in the life and health insurance businesses.
Through Northwestern National Life Insurance Company and other
subsidiaries, ReliaStar issues and distributes individual life
insurance, annuities and mutual funds, group life and health insurance
and life and health reinsurance, and provides related investment
management services. Prior to June 2, 1995, the Fund was managed
by Boston Security Counsellors, Inc. ("BSC"). BSC is a wholly-owned
subsidiary of The Advest Group, Inc., which is also the parent company
of Advest, Inc.
Subject to the supervision and direction of the Trustees of Advantage
Growth, the Adviser manages Advantage Growth's portfolio in accordance
with its stated investment objective and policies, makes investment
decisions for Advantage Growth, places orders to purchase and
sell securities on behalf of Advantage Growth, and administers
the affairs of Advantage Growth. For its services, Advantage Growth
pays the Adviser a fee monthly at the annual rate of .75% of
Advantage Growth's average daily net assets. This fee is higher
than investment advisory fees paid by many other mutual funds.
Expenses. Advantage Growth bears all expenses of its operations
other than those incurred by the Adviser under its investment
advisory agreement. Advantage Growth pays the following expenses,
among others: investment advisory fees; amounts pursuant to their
distribution plans; bookkeeping, share pricing and shareholder
servicing fees and expenses; custodian fees and expenses; legal
and auditing fees; expenses of prospectuses, statements of additional
information and shareholder reports for distribution to current
shareholders; registration and reporting fees and expenses; and
Trustees' fees and expenses. Under the investment advisory agreement,
the Adviser will reduce its fee to the extent that expenses payable
by Advantage Growth would exceed the limit on expenses applicable
to the Fund in any state in which the Fund's shares are then qualified
for sale. For the fiscal year ended December 31, 1994, total operating
expenses borne by Advantage Growth (as a percentage of the Fund's
average net assets) were 2.00%.
Portfolio Brokerage Transactions. Subject to the supervision of
the Trustees, the Adviser selects the brokers and dealers which
execute orders to purchase and sell portfolio securities for Advantage
Growth. The Adviser seeks to obtain the best available price and
most favorable execution with respect to all transactions for
Advantage Growth.
In selecting broker-dealers and negotiating commissions, the Adviser
considers the firm's reliability, the quality of its execution
services on a continuing basis and its financial condition. When
more than one firm are believed to meet these criteria, preference
may be given to brokers who provide research or statistical materials
or other services to Advantage Growth. The Adviser is authorized
to pay higher commissions to brokerage firms that provide the
Adviser with such materials than to firms which do not provide
such services if the Adviser determines that such commissions
are reasonable in relation to the overall services provided. The
information received may be used by the Adviser in managing the
assets of other advisory accounts managed by the Adviser as well
as in the management of Advantage Growth.
Subject to the consideration of best price and execution and to
applicable regulations, sales of shares of other members of The
Northstar Funds may be considered as a factor in the selection
of brokers and dealers which execute orders to purchase and sell
portfolio securities for Advantage Growth.
Distribution Plans. Advantage Growth has adopted a distribution
plan pursuant to Rule 12b-1 under the Investment Company Act of
1940. The distribution plans authorize the periodic expenditure
by Advantage Growth of .95% annually of its average daily net
asset value for each year elapsed subsequent to adoption of the
plan to finance activities which are primarily intended to result
in the sale of shares of Advantage Growth Fund, including but
not limited to, the following: (i) commissions to sales personnel
for selling shares of Advantage Growth; (ii) compensation, sales
incentives and payments to sales, marketing and service personnel;
(iii) payments to broker-dealers and other financial institutions
which have entered into agreements with NWNL Northstar Distributors,
Inc. (the "Underwriter") in the form of the Dealer Agreement for
Advantage Growth for services rendered in connection with the
sale and distribution of shares of Advantage Growth and provision
of shareholder services; (iv) payment of expenses incurred in
sales and promotional activities, including advertising expenditures
related to Advantage Growth, (v) the costs of preparing and distributing
promotional materials; (vi) the cost of printing Advantage Growth's
Prospectus
Page 15
and Statement of Additional Information for distribution to potential
investors; and (vii) such other similar services that the Trustees
of Advantage Growth determine are reasonably calculated to result
in the sale of shares of Advantage Growth; provided, however,
that a portion of such amount paid to the Underwriter may be paid
for reimbursing the costs of providing services to shareholders,
including assistance in connection with inquiries related to shareholder
accounts (the "Service Fee"). From the Service Fee, the Underwriter
expects to pay a quarterly fee to qualifying broker/dealers firms,
as compensation for providing personal services to shareholders
and/or for the maintenance of shareholder accounts with respect
to shares sold by such firms. In order to receive Service Fees
under the Plans, participants must meet such qualifications to
be established in the sole discretion of the Underwriter. This
fee will not exceed on an annual basis 0.25% of the average annual
net asset value of such shares, and will be in addition to sales
charges on Advantage Growth shares which are paid or reallowed
to such firms. To the extent that the entire amount of such Service
Fee is not paid to such firms, the balance will serve as compensation
for personal and account maintenance services furnished to shareholders
by the Underwriter. With respect to the Class T Plan, it is anticipated
that all of the payments received by the Underwriter under the
Plan will be paid to Advest, Inc. as compensation for servicing
Class T shareholder accounts and reimbursement for its prior distribution
and shareholder servicing activities in connection with Class
T shares.
The amount paid to the Underwriter in any year pursuant to the
distribution plan may exceed the amount of expenses incurred by it
in performing distribution services on behalf of Advantage Growth,
thereby resulting in a profit to the Undwriter or Advest, Inc. for
that year. It is more likely, however, that during periods in which
significant new sales of Advantage Growth shares are occurring, the
amount of expenses incurred by the Underwriter or Advest, Inc. in any
year will exceed the annual rate permitted under the plan. Pursuant to
the distribution plan, total payments made by Advantage Growth in any
year may not exceed .95% of such Fund's average daily net assets. Under
NASD rules, fees of this type will be limited to .75% annually for sales
charges and .25% annually for service fees, with an aggregate limit upon
sales charges of 6.25% of new gross sales after inception of a 12b-1
plan plus interest on outstanding balances at the prime rate plus 1% per
annum. Payments by Advantage Growth have been set at .95% annually.
Payments received by the Underwriter under the distribution plans during
1994 were utilized by the Underwriter or Advest, Inc. to defray commissions
paid to sales personnel and to pay other expenses incurred by the
Underwriter or Advest, Inc. in its marketing and distribution activities,
or were retained by the Underwriter or Advest, Inc. to offset in part
distribution expenses in excess of amounts received under the plans in
prior periods.
The distribution plan requires that at least quarterly the Trustees of
the Fund review a written report with respect to the amounts expended
under the distribution plan and the purposes therefor. The Trustees of
the Fund have approved the distribution plan and determined that there
is a reasonable likelihood that the distribution plan will benefit
Advantage Growth and its respective shareholders. Rule 12b-1 requires
that while the distribution plan is in effect the selection of
Trustees of the Fund who are not interested persons of Advantage Growth
be made by the disinterested Trustees of the Fund.
THE RULE 12B-1 FEES IMPOSED ON SHARES HELD IN THE TRUST ARE REBATED
TO THE TRUST AND ARE USED TO REDUCE EXPENSES OF THE TRUST RESULTING
IN INCREASED DISTRIBUTIONS TO UNIT HOLDERS. UNIT HOLDERS WHO ACQUIRE
SHARES OF ADVANTAGE GROWTH THROUGH REINVESTMENT OF DIVIDENDS OR
DISTRIBUTIONS OR THROUGH REINVESTMENT AT THE TRUST'S TERMINATION
WILL BEGIN TO INCUR RULE 12B-1 FEES AT SUCH TIME AS SHARES ARE
ACQUIRED.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trust described herein.
The Sponsor has obtained an exemptive order of the Securities
and Exchange Commission to enable it to deposit Advantage Growth
shares purchased for deposit in the Trust. Under the terms of
the exemptive order, the Sponsor has agreed to take certain steps
to ensure that investment in Advantage Growth shares is equitable
to all parties and particularly that the interests of the Unit
holders are protected. Advantage Growth has agreed to waive any
sales charge, including any contingent deferred sales load, on
shares sold to
Page 16
the Trust. Furthermore, FT Evaluators L.P. has agreed to waive
its usual fee for acting as Evaluator of the Trust's portfolio
with respect to that portion of the portfolio comprised of Advantage
Growth shares, since information with respect to the price of
Advantage Growth's shares is readily available to it. In addition,
the Indenture requires the Trustee to vote all shares of Advantage
Growth held in the Trust in the same manner and ratio on all proposals
as the vote of owners of Advantage Growth shares not held by the
Trust.
The value of Advantage Growth's shares, like the value of the
Treasury Obligations, will fluctuate over the life of the Trust
and may be more or less than the price at which they were deposited
in the Trust. Advantage Growth's shares may appreciate or depreciate
in value (or pay dividends) depending on the full range of economic
and market influences affecting the securities in which it is
invested and the success of Advantage Growth's management in anticipating
or taking advantage of such opportunities as they may occur. However,
the Sponsor believes that, upon termination of the Trust, even
if the Advantage Growth shares deposited in the Trust are worthless,
an event which the Sponsor considers highly unlikely, the Treasury
Obligations will provide sufficient principal to at least equal
$1.00 per Unit (which is equal to the per Unit value upon maturity
of the Treasury Obligations) for those individuals purchasing
on the Initial Date of Deposit (or any other Date when the value
of the Units is $1.00 or less). This feature of the Trust provides
Unit holders with principal protection, although they might forego
any earnings on the amount invested. To the extent that Units
are purchased at a price less than $1.00 per Unit, this feature
may also provide a potential for capital appreciation.
Unless a Unit holder purchases Units of the Trust on the Initial
Date of Deposit (or another date when the value of the Units is
$1.00 or less), total distributions, including distributions made
upon termination of the Trust, may be less than the amount paid
for a Unit.
The Trustee will have no power to vary the investments of the
Trust, i.e., the Trustee will have no managerial power to take
advantage of market variations to improve a Unit holder's investment
but may dispose of Securities only under limited circumstances.
Of course, the portfolio of Advantage Growth included in the Trust
will be changing as the Investment Adviser attempts to achieve
Advantage Growth's objectives.
To the best of the Sponsor's knowledge, there is no litigation
pending as of the date of this Part Two Prospectus in respect
of any Security which might reasonably be expected to have a material
adverse effect on the Trust. Litigation may be instituted on a
variety of grounds with respect to the Securities. The Sponsor
is unable to predict whether any such litigation will be instituted,
or if instituted, whether such litigation might have a material
adverse effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. The Public Offering
Price is based on the aggregate bid side evaluation of the Treasury
Obligations and the net asset value of the Advantage Growth shares
in the Trust, plus or minus cash, if any, in the Principal Account
held or owned by the Trust, plus a maximum sales charge of 5.0%
of the Public Offering Price (equivalent to 5.263% of the net
amount invested) divided by the number of outstanding Units of
the Trust.
The minimum purchase of the Trust is $1,000. The applicable sales
charge is reduced by a discount as indicated below for volume
purchases:
<TABLE>
<CAPTION>
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
_______________ __________ __________
<S> <C> <C>
100,000 but less than 250,000 .25% .2506%
250,000 but less than 500,000 .50% .5025%
500,000 but less than 750,000 1.00% 1.0101%
750,000 but less than 1,000,000 1.25% 1.2658%
1,000,000 or more 1.50% 1.5228%
</TABLE>
Page 17
Any such reduced sales charge shall be the responsibility of the
selling Underwriter. The reduced sales charge structure will apply
on all purchases of Units in the Trust by the same person on any
one day from the Underwriter. Additionally, Units purchased in
the name of the spouse of a purchaser or in the name of a child
of such purchaser under 21 years of age will be deemed, for the
purposes of calculating the applicable sales charge, to be additional
purchases by the purchaser. The reduced sales charges will also
be applicable to a trustee or other fiduciary purchasing securities
for a single trust estate or single fiduciary account. With respect
to the employees, officers and directors (including their immediate
families and trustees, custodians or a fiduciary for the benefit
of such person) of the Underwriter and its subsidiaries, the sales
charge is reduced by 2% of the Public Offering Price for purchases
of Units during the secondary offering period.
The Public Offering Price of Units on the date of this Part Two
Prospectus may vary from the amount stated under "Summary of Essential
Information" in Part One in accordance with fluctuations in the
prices of the underlying Securities. The aggregate value of the
Units of the Trust shall be determined (a) on the basis of the
bid prices of the Treasury Obligations and the net asset value
of the Advantage Growth shares therein plus or minus a pro rata
share of cash, if any, in the Principal Account of the Trust,
(b) if net bid prices are not available for the Treasury Obligations,
on the basis of bid prices for comparable securities, (c) by determining
the value of the Treasury Obligations on the bid side of the market
by appraisal, or (d) by any combination of the above.
The secondary market Public Offering Price will be equal to the
bid price per Unit of the Treasury Obligations and the net asset
value of the Advantage Growth shares therein plus or minus a pro
rata share of cash, if any, in the Principal Account of the Trust
plus the applicable sales charge.
Although payment is normally made three business days following
the order for purchase (the "date of settlement"), payment may
be made prior thereto. A person will become owner of Units on
the date of settlement provided payment has been received. Cash,
if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934. Delivery of
Certificates representing Units so ordered will be made on the
date of settlement relating to such order or shortly thereafter.
See "Rights of Unit Holders-How May Units be Redeemed?" for information
regarding the ability to redeem Units ordered for purchase.
How are Units Distributed?
Units repurchased in the secondary market may be offered by this
Part Two Prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust
for sale in a number of states. Secondary market sales will be
made to dealers and others at prices which represent a concession
or agency commission of 3.1% of the Public Offering Price. However,
resales of Units of the Trust by such dealers and others to the
public will be made at the Public Offering Price described in
the prospectus. The Sponsor reserves the right to change the amount
of the concession or agency commission from time to time. Certain
commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge paid
by these customers is retained by or remitted to the banks in
the amounts indicated in the third preceding sentence. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have not indicated that
these particular agency transactions are not permitted under such
Act. In Texas and in certain other states, any banks making Units
available must be registered as broker/dealers under state law.
What are the Sponsor's Profits?
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which
Page 18
price includes a sales charge of 5.0%) or redeemed. The secondary
market public offering price of Units may be greater or less than
the cost of such Units to the Sponsor.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the
Trustee. Ownership of Units may be evidenced by registered certificates
executed by the Trustee and the Sponsor. Delivery of certificates
representing Units ordered for purchase is normally made shortly
thereafter. Certificates are transferable by presentation and
surrender to the Trustee properly endorsed or accompanied by a
written instrument or instruments of transfer. Certificates to
be redeemed must be properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unit holder must sign
exactly as his name appears on the face of the certificate with
the signature guaranteed by a participant in the Securities Transfer
Agents Medallion Program ("STAMP") or such other signature guaranty
program in addition to, or in substitution for, STAMP, as may
be accepted by the Trustee. In certain instances the Trustee may
require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit or
any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder and
will credit each such account with the number of Units purchased by
that Unit holder. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send to the
registered owner of Units a written initial transaction statement
containing a description of the Trust; the number of Units issued or
transferred; the name, address and taxpayer identification number,
if any, of the new registered owner; a notation of any liens and
restrictions of the issuer and any adverse claims to which such Units
are or may be subject or a statement that there are no such liens,
restrictions or adverse claims; and the date the transfer was
registered. Uncertificated Units are transferable through the same
procedures applicable to Units evidenced by certificates (described
above), except that no certificate need be presented to the Trustee
and no certificate will be issued upon the transfer unless requested
by the Unit holder. A Unit holder may at any time request the Trustee
to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For new
certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Income and Principal Distributed?
The Trustee will distribute any net income (other than accreted
interest) received with respect to any of the Securities in the
Trust on or about the Distribution Dates to Unit holders of record
on the preceding Record Date. See "Summary of Essential Information"
in Part One. Proceeds received from rebated Rule 12b-1 fees or on
the sale of any Securities in the Trust, to the extent not used to
meet redemptions of Units or pay expenses, will be distributed
at least annually on each Distribution Date to Unit holders of
record on the preceding Record Date. Income with respect to the
original issue discount on the Treasury Obligations in the Trust,
will not be distributed currently, although Unit holders will
be subject to federal income tax as if a distribution had occurred.
See "What is the Federal Tax Status of Unit Holders?"
The Record Dates and Distribution Dates were established so as
to occur shortly after the record dates and the payment dates
of Advantage Growth. Advantage Growth normally pays quarterly
dividends of its net investment income. Net realized capital gains,
if any, will be distributed at least annually.
Page 19
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by the Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder under certain circumstances by contacting the Trustee,
otherwise the amount may be recoverable only when filing a tax
return. Under normal circumstances the Trustee obtains the Unit
holder's tax identification number from the selling broker. However,
a Unit holder should examine his or her statements from the Trustee
to make sure that the Trustee has been provided a certified tax
identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously
provided such number, one should be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit
holder will, upon surrender of his Units for redemption, receive:
(i) the number of shares of Advantage Growth attributable to his
Units, which will be distributed "in-kind" directly to his account,
rather than redeemed, (ii) a pro rata share of the amounts realized
upon the disposition of the Treasury Obligations and (iii) a pro
rata share of any other assets of the Trust, less expenses of
the Trust, subject to the limitation that Treasury Obligations
may not be sold to pay for Trust expenses. Not less than 60 days
prior to the termination of the Trust, Unit holders will be offered
the option of having the proceeds from the disposition of the
Treasury Obligations in the Trust invested, at the net asset value
on the date such proceeds become available to the Trust, in additional
shares of Advantage Growth at net asset value. Such shares will
not be subject to a sales charge or a contingent deferred sales
load but such shares will incur Rule 12b-1 fees as do all other
shares held directly by investors in Advantage Growth. Unless
a Unit holder indicates that he wishes to reinvest such amounts,
they will be paid in cash, as indicated above. A Unit holder may,
of course, at any time after the shares are distributed to his
account, instruct Advantage Growth to redeem all or a portion
of the shares in his account. Shares of Advantage Growth, as more
fully described in its prospectus, will be redeemed at the then
current net asset value. If within 180 days of the termination
of the Trust a registered owner of Units has not surrendered the
Units, the Trustee shall liquidate the shares of Advantage Growth
held for such owner and hold the funds to which such owner is
entitled until such Units are surrendered.
The Trustee will credit to the Income Account of the Trust any
dividends, distributions or rebated Rule 12b-1 fees received on
the Advantage Growth shares therein. All other receipts (e.g.
return of principal, etc.) are credited to the Principal Account
of the Trust.
The Trustee may establish reserves (the "Reserve Account") within
the Trust for state and local taxes, if any, and any governmental
charges payable out of the Trust.
How Can Distributions to Unit Holders be Reinvested?
Each Unit holder of the Trust will have distributions of principal
or income automatically invested in Advantage Growth shares (if
Units are properly registered in the name of the Unit holder)
deposited at such share's net asset value next computed, unless he
indicates at the time of purchase, or subsequently notifies the
Trustee in writing, that he wishes to receive cash payments.
Shares of Advantage Growth obtained through reinvestment will not
be subject to a sales charge or a contingent deferred sales load,
although such shares will incur Rule 12b-1 fees as do all other
shares held directly by investors in Advantage Growth. Reinvestment
by the Trust in Advantage Growth shares will normally be made as
of the payable date of the Trust after the Trustee deducts
therefrom the expenses of the Trust.
Additional information with respect to the investment objectives
and the management of Advantage Growth is contained in its prospectus,
which can be obtained from the Sponsor or any broker/dealer with
a currently effective sales agreement with Advest, Inc.
Unit holders who are receiving distributions in cash may elect
to participate in the automatic reinvestment feature by filing
with the Trustee an election to have such distributions reinvested
without a sales charge. Such election must be received by the
Trustee at least ten days prior to the Record Date applicable
to any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent notice
is received by the Trustee.
Page 20
Exchange Privilege. THE EXCHANGE PRIVILEGE DOES NOT APPLY TO ADVANTAGE
GROWTH SHARES IN THE TRUST'S PORTFOLIO, ONLY TO A UNIT HOLDER'S
REINVESTMENT ACCOUNT.
Unit holders may exchange shares of a Northstar Fund for the same
class of shares of another Northstar Fund. Exchange requests in
proper form will be honored prior to 4:00 p.m. eastern standard
time. The following conditions must be met for all exchanges among
the Northstar Funds: (1) the shares that will be acquired in the
exchange (the "Acquired Shares") are available for sales in the
Unit holder's state of residence; (2) the Acquired Shares will
be registered to the same Unit holder account as the shares to
be surrendered (the "Exchanged Shares"); (3) the Exchanged Shares
must have been held in the Unit holder's account for at least
30 days prior to the exchange; (4) the account value of the Northstar
Fund whose shares are to be acquired must equal or exceed the
minimum initial investment amount required by that Fund after
the exchange is implemented; and (5) a properly executed exchange
request has been received by the Transfer Agent.
Exchanges will be based upon each Fund's net asset value per share
next computed following receipt of a properly executed exchange
request, without a sales charge. Each Northstar Fund reserves
the right to terminate or modify its exchange privileges at any
time upon prominent notice to shareholders. Such notice will be
given at least 60 days in advance. In order to maintain a stable
asset base in each Northstar Fund and to reduce administrative
expenses borne by each Fund, the Adviser generally restricts
shareholders to a maximum of six exchanges out of a Northstar Fund
each calendar year. If a shareholder exceeds this limit, future
exchange requests may be denied.
Each Northstar Fund reserves the right to delay the actual purchase
of the Acquired Shares for up to five business days if it determines
that it would be disadvantaged by an immediate transfer of proceeds
from the redemption of Exchanged Shares. Normally, however, the
redemption of Exchanged Shares and the purchase of Acquired Shares
will take place on the day that the exchange request is received
in proper form. Each Northstar Fund has different investment
objectives and policies. Shareholders should, therefore, obtain and
review the prospectus of the fund into which the exchange is to be
made before any exchange requests are made.
The exchange of shares from one Northstar Fund to another is treated
as a sale of the Exchanged Shares and a purchase of the Acquired
Shares for Federal income tax purposes. The shareholder may, therefore,
realize a taxable gain or loss.
A Unit holder who wishes to make an exchange should first obtain
and review a current prospectus of the fund into which he or she
wishes to exchange. All exchanges shall be governed by the then
current prospectus of The Northstar Funds. Broker-dealers who
process exchange orders on behalf of their customers may charge
a fee for their services. Such fee may be avoided by making requests
for exchange directly to the Transfer Agent of Advantage Growth.
What Reports Will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 1,000 Units. Within
a reasonable time after the end of each calendar year, the Trustee
will furnish to each person who at any time during the calendar
year was a Unit holder of the Trust the following information
in reasonable detail: (1) a summary of transactions in the Trust
for such year; (2) any Securities sold during the year and the
Securities held at the end of such year by the Trust; (3) the
redemption price per 1,000 Units based upon a computation thereof
on the 31st day of December of such year (or the last business
day prior thereto); and (4) amounts of income and capital distributed
during such year.
Page 21
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to
the Trustee at its corporate trust office in the City of New York
of the certificates representing the Units to be redeemed, or in
the case of uncertificated Units, delivery of a request for
redemption, duly endorsed or accompanied by proper instruments of
transfer with signature guaranteed as explained above (or by
providing satisfactory indemnity, as in connection with lost, stolen
or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the third
business day following such tender the Unit holder will be entitled
to receive in cash an amount for each Unit equal to the Redemption
Price per 1,000 Units next computed after receipt by the Trustee
of such tender of Units. The "date of tender" is deemed to be
the date on which Units are received by the Trustee, except that
as regards Units received after 4:00 p.m. in the City of New York,
the date of tender is the next day on which the New York Stock
Exchange is open for trading and such Units will be deemed to
have been tendered to the Trustee on such day for redemption at
the redemption price computed on that day. Units so redeemed shall
be cancelled.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unit holder's tax identification number in
the manner required by such regulations. Any amount so withheld is
transmitted to the Internal Revenue Service and may be recovered by
the Unit holder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unit holder's tax identification
number from the selling broker. However, any time a Unit holder
elects to tender Units for redemption, such Unit holder should make
sure that the Trustee has been provided a certified tax identification
number in order to avoid this possible "back-up withholding." In the
event the Trustee has not been previously provided such number, one
must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds
are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Principal Account of the Trust.
The Trustee is empowered to sell Securities of the Trust in order
to make funds available for redemption. To the extent that Securities
are sold, the size and diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might
otherwise be realized. Shares of Advantage Growth will be sold
to meet redemptions of Units before Treasury Obligations, although
Treasury Obligations may be sold if the Trust is assured of retaining
a sufficient principal amount of Treasury Obligations to provide
funds upon maturity of the Trust at least equal to $1.00 per Unit.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Treasury Obligations and the net asset value
of the Advantage Growth shares in the Trust plus or minus cash,
if any, in the Principal Account of the Trust. The Redemption
Price per 1,000 Units is the pro rata share of each Unit determined
by the Trustee by adding: (1) the cash on hand in the Trust other
than cash deposited in the Trust to purchase Securities not applied
to the purchase of such Securities; (2) the aggregate value of
the Securities (including "when issued" contracts, if any) held
in the Trust, as determined by the Evaluator on the basis of bid
prices of the Treasury Obligations and the net asset value of
the Advantage Growth shares next computed; and (3) dividends receivable
on Advantage Growth shares trading ex-dividend as of the date
of computation and amounts accrued, if any, for rebated Rule 12b-1
fees; and deducting therefrom: (1) amounts representing any applicable
taxes or governmental charges payable out of the Trust; (2) an
amount representing estimated accrued expenses of the Trust, including
but not limited to fees and expenses of the Trustee (including
legal and auditing fees), the Evaluator, the Supervisor and counsel
fees, if any; (3) cash held for distribution to Unit holders of
record of the Trust as of the business day prior to the evaluation
being made; and (4) other liabilities incurred by the Trust; and
finally dividing the results of such computation by the number
of Units of the Trust outstanding as of the date thereof.
Page 22
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed
(other than for customary weekend and holiday closings) or during
which the Securities and Exchange Commission determines that trading
on that Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances,
the Sponsor may apply to the Securities and Exchange Commission
for an order permitting a full or partial suspension of the right
of Unit holders to redeem their Units. The Trustee is not liable
to any person in any way for any loss or damage which may result
from any such suspension or postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase
such Units by notifying the Trustee before 1:00 p.m. in the City
of New York on the same business day and by making payment therefor
to the Unit holder not later than the day on which the Units would
otherwise have been redeemed by the Trustee. Units held by the
Sponsor may be tendered to the Trustee for redemption as any other
Units. In the event the Sponsor does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
effective prospectus describing such Units. Any profit or loss
resulting from the resale or redemption of such Units will belong
to the Sponsor.
How May Securities be Removed from the Trust?
The portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but need not) direct the Trustee to dispose of
a Security in the unlikely event that an issuer of a Security
defaults in the payment of dividends or interest or there exist
certain other materially adverse conditions described in the Indenture.
The Trustee may also sell Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose
of redeeming Units of the Trust tendered for redemption and the
payment of expenses; provided, however, that in the case of Securities
sold to meet redemption requests, Treasury Obligations may only
be sold if the Trust is assured of retaining a sufficient principal
amount of Treasury Obligations to provide funds upon maturity
of the Trust at least equal to $1.00 per Unit. Treasury Obligations
may not be sold to meet Trust expenses.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds and The First Trust GNMA. First Trust introduced
the first insured unit investment trust in 1974 and to date more
than $9 billion in First Trust unit investment trusts have been
deposited. The Sponsor's employees include a team of professionals
with many years of experience in the unit investment trust industry.
The Sponsor is a member of the National Association of Securities
Dealers, Inc. and Securities Investor Protection Corporation and
has its principal offices at 1001 Warrenville Road, Lisle, Illinois
60532; telephone number (708) 241-4141. As of December 31, 1994,
the total partners' capital of Nike Securities L.P. was $10,863,058
(audited). (This paragraph relates only to the Sponsor and not
to the Trust or to any series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and
Page 23
its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon
request.)
Who is the Trustee?
The Trustee is United States Trust Company of New York with its
principal place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Fund may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Securities. For information relating to the
responsibilities of the Trustee under the Indenture, reference is
made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of the Trust which the Trustee may be required
to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction.
In addition, the Indenture contains other customary provisions
limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or become incapable of acting or become bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is FT Evaluators L.P., an Illinois limited partnership
formed in 1994 and an affiliate of the Sponsor. The Evaluator's
address is 1001 Warrenville Road, Lisle, Illinois 60532. The Evaluator
may resign or may be removed by the Sponsor and the Trustee, in
which event the Sponsor and the Trustee are to use their
Page 24
best efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall not protect the Evaluator
in any case of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties.
OTHER INFORMATION
How May the Indenture Be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the Indenture which may be defective or inconsistent with any
other provision contained therein, or (2) to make such other provisions
as shall not adversely affect the interest of the Unit holders
(as determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the
maturity, redemption or other disposition of the last of the Treasury
Obligations held in the Trust but in no event beyond the Mandatory
Termination Date indicated under "Summary of Essential Information"
in Part One. The Trust may be liquidated at any time by consent
of 100% of the Unit holders of the Trust or by the Trustee in
the event that Units of the Trust not yet sold aggregating more
than 60% of the Units of the Trust are tendered for redemption
by the Underwriters, including the Sponsor. If the Trust is liquidated
because of the redemption of unsold Units of the Trust by the
Underwriters, the Sponsor will refund to each purchaser of Units
of the Trust the entire sales charge paid by such purchaser. In
the event of termination, written notice thereof will be sent
by the Trustee to all Unit holders of the Trust. Within a reasonable
period after termination, the Trustee will follow the procedures
set forth under "How are Income and Principal Distributed?"
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn will act as counsel for
the Trustee and as special New York tax counsel for the Trust.
Experts
The financial statements of the Trust appearing in Part One of
this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein and in the Registration
Statement, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
Page 25
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Page 26
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Page 27
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
The Advantage Growth and Treasury Securities Trust:
What is The Advantage Growth and Treasury
Securities Trust? 3
What are the Expenses and Charges? 3
What is the Federal Tax Status of Unit Holders? 4
Why are Investments in the Trust Suitable
for Retirement Plans? 6
Portfolio:
What are Zero Coupon Treasuries? 7
What is The Advantage Growth Fund? 7
Selected Per Share Data and Ratios for an
Advantage Growth Share Outstanding
throughout the Period 8
What is Advantage Growth's Investment
Objectives and Policies? 10
Who is the Investment Adviser of
Advantage Growth? 14
What are Some Additional Considerations
for Investors? 16
Public Offering:
How is the Public Offering Price Determined? 17
How are Units Distributed? 18
What are the Sponsor's Profits? 18
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 19
How are Income and Principal Distributed? 19
How Can Distributions to Unit Holders
be Reinvested? 20
What Reports Will Unit Holders Receive? 21
How May Units be Redeemed? 21
How May Units be Purchased by the Sponsor? 23
How May Securities be Removed from the Trust? 23
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 23
Who is the Trustee? 23
Limitations on Liabilities of Sponsor and Trustee 24
Who is the Evaluator? 24
Other Information:
How May the Indenture be Amended
or Terminated? 25
Legal Opinions 25
Experts 25
</TABLE>
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE FUND HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
ADVEST, INC.
The Advantage
Growth and Treasury
Securities Trust
Prospectus
Part Two
July 24, 1995
First Trust (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE.
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 28
CONTENTS OF POST-EFFECTIVE AMENDMENT
OF REGISTRATION STATEMENT
This Post-Effective Amendment of Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Auditors
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, Advantage Growth and Treasury Securities Trust,
Series 1, certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment of its Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized
in the Village of Lisle and State of Illinois on August 1, 1995.
ADVANTAGE GROWTH AND TREASURY
SECURITIES TRUST, SERIES 1
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment of Registration Statement has been
signed below by the following person in the capacity and on the
date indicated:
Signature Title* Date
Robert D. Van Kampen Sole Director of )
Nike Securities )
Corporation, the )
General Partner ) August 1, 1995
of Nike Securities L.P. )
) Carlos E. Nardo
) Attorney-in-Fact**
*The title of the person named herein represents his capacity in
and relationship to Nike Securities L.P., Depositor.
**An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Special Situations Trust, Series 18 (File No. 33-42683) and
the same is hereby incorporated herein by this reference.
S-2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated June 23, 1995 in
this Post-Effective Amendment to the Registration Statement and
related Prospectus of Advantage Growth and Treasury Securities
Trust dated July 19, 1995.
ERNST & YOUNG
Chicago, Illinois
July 18, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Post
Effective Amendment to Form S-6 and is qualified in its entirety by
reference to such Post Effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 001
<NAME> ADVANTAGE G&T TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 4,880,258
<INVESTMENTS-AT-VALUE> 4,676,343
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,676,343
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7,507
<TOTAL-LIABILITIES> 7,507
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,880,258
<SHARES-COMMON-STOCK> 4,613,478
<SHARES-COMMON-PRIOR> 5,520,000
<ACCUMULATED-NII-CURRENT> (7,507)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (203,915)
<NET-ASSETS> 4,668,836
<DIVIDEND-INCOME> 44,961
<INTEREST-INCOME> 200,348
<OTHER-INCOME> 0
<EXPENSES-NET> 9,826
<NET-INVESTMENT-INCOME> 235,483
<REALIZED-GAINS-CURRENT> 227,561
<APPREC-INCREASE-CURRENT> (324,825)
<NET-CHANGE-FROM-OPS> 138,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,227
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 19,409
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 906,522
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (770,998)
<ACCUMULATED-NII-PRIOR> (1,505)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
