File No. 33-48489
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 7
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 Depositors 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 : July 30, 1999
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
1,992,375 UNITS
PROSPECTUS
Part One
Dated July 27, 1999
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, 1999, each
Unit represented a 1/1,992,375 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, 1999, the Public
Offering Price per 1,000 Units was $1,742.71 (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 NOR HAS THE 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, 1999
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Aggregate Maturity Value of Treasury Obligations in the Trust $1,993,000
Aggregate Number of Shares of Advantage Growth in the Trust 54,572.261
Number of Units 1,992,375
Fractional Undivided Interest in the Trust per Unit 1/1,992,375
Public Offering Price:
Aggregate Value of Securities in the Portfolio $3,315,880
Aggregate Value of Securities per 1,000 Units $1,664.29
Sales Charge 4.712% (4.5% of Public Offering Price) $78.42
Public Offering Price per 1,000 Units $1,742.71
Redemption Price and Sponsor's Repurchase Price per 1,000
Units ($78.42 less than the Public Offering Price per
1,000 Units) $1,664.29
</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, 1999, and the related statements of operations
and changes in net assets for each of the three years in the period then
ended. 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, 1999, 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, 1999, and the results of its
operations and changes in its net assets for each of the three years in the
period then ended, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
July 2, 1999
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, including
accretion on the treasury obligations,
$2,452,305) (Note 1) $3,369,428
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Accrued liabilities 632
Cash overdraft 70,985
__________
71,617
__________
Net assets, applicable to 2,024,804
outstanding units of fractional
undivided interest:
Cost of Trust assets, including
accretion on the treasury obligations
(Note 1) $2,452,305
Net unrealized appreciation (Note 2) 917,123
Distributable funds (deficit) (71,617)
__________
$3,297,811
==========
Net asset value per 1,000 units $1,628.71
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
PORTFOLIO
March 31, 1999
<TABLE>
<CAPTION>
Maturity Market
value Name of Issuer and Title of Security value
<C> <S> <C>
"Zero Coupon" U.S. Treasury bonds
$2,067,000 (1) maturing February 15, 2003 $1,694,072
==========
</TABLE>
<TABLE>
<CAPTION>
Shares
<C> <S> <C>
56,811.261 The Advantage Growth Fund 1,675,356
__________
Total investments $3,369,428
==========
</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.
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended March 31,
1999 1998 1997
<S> <C> <C> <C>
Interest income $116,123 133,524 152,259
Dividends:
Ordinary income 13,341 16,972 11,208
Capital gain 12,426 61,429 68,495
___________________________________________
Total investment income 141,890 211,925 231,962
Expenses:
Trustee's fees and related
expenses (5,795) (4,469) (5,409)
Evaluator's fees (444) (552) (734)
Supervisory fees (333) (414) (566)
___________________________________________
Total expenses (6,572) (5,435) (6,709)
___________________________________________
Investment income - net 135,318 206,490 225,253
Net gain (loss) on investments:
Net realized gain (loss) 98,799 97,933 84,397
Change in net unrealized
appreciation or
depreciation 245,913 444,886 35,604
___________________________________________
344,712 542,819 120,001
___________________________________________
Net increase in net assets
resulting from operations $480,030 749,309 345,254
===========================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE ADVANTAGE GROWTH AND
TREASURY SECURITIES TRUST, SERIES 1
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended March 31,
1999 1998 1997
<S> <C> <C> <C>
Net increase in net assets
resulting from operations:
Investment income - net $135,318 206,490 225,253
Net realized gain (loss) on
investments 98,799 97,933 84,397
Change in net unrealized
appreciation or depreciation
on investments 245,913 444,886 35,604
__________________________________________
480,030 749,309 345,254
Units redeemed (425,025, 479,578
and 952,547 in 1999, 1998 and
1997, respectively) (609,627) (633,311) (1,064,442)
Distributions to unit holders:
Investment income - net (8,571) (13,040) (2,256)
Principal from investment
transactions (12,420) (59,320) (68,474)
__________________________________________
(20,991) (72,360) (70,730)
__________________________________________
Total increase (decrease) in net
assets (150,588) 43,638 (789,918)
Net assets:
At the beginning of the year 3,448,399 3,404,761 4,194,679
__________________________________________
At the end of the year,
including distributable
funds (deficit) applicable
to Trust units of $(71,617),
$3,195 and $7,441 at
March 31, 1999, 1998 and
1997, respectively) $3,297,811 3,448,399 3,404,761
==========================================
Trust units outstanding at
the end of the year 2,024,804 2,449,829 2,929,407
</TABLE>
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 First Trust
Advisors L.P. (the Evaluator), an affiliate 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
Growth's 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 The Chase Manhattan Bank 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 appreciation at March 31, 1999 follows:
<TABLE>
<CAPTION>
Advantage
Treasury Growth
obligations shares Total
<S> <C> <C> <C>
Unrealized appreciation $125,440 791,683 917,123
Unrealized depreciation - - -
____________________________________
$125,440 791,683 917,123
====================================
</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 year -
<TABLE>
<CAPTION>
Year ended March 31,
1999 1998 1997
<S> <C> <C> <C>
Investment income -
interest and dividends $63.89 76.76 68.82
Expenses (2.96) (1.97) (1.99)
_________________________________________
Investment income - net 60.93 74.79 66.83
Distributions to unit holders:
Investment income - net (4.03) (4.77) (.73)
Principal from investment
transactions (5.84) (21.70) (22.16)
Net gain (loss) on investments 170.04 197.02 37.77
_________________________________________
Total increase (decrease)
in net assets 221.10 245.34 81.71
Net assets:
Beginning of the year 1,407.61 1,162.27 1,080.56
_________________________________________
End of the year $1,628.71 1,407.61 1,162.27
=========================================
</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 each year (2,220,814, 2,760,793 and 3,370,593
units during the years ended March 31, 1999, 1998 and 1997, respectively).
Distributions to unit holders of investment income - net per 1,000 units
reflects the Trust's cash distributions of approximately $4.03 per 1,000 units
to 2,126,688 units on January 19, 1999, approximately $4.77 per 1,000 units to
2,733,662 units on January 14, 1998 and approximately $.73 per 1,000 units to
3,089,998 units on January 15, 1997. Distributions of principal from
investment transactions reflect the Trust's cash distributions of
approximately $5.84 per 1,000 units to 2,126,688 units on January 19, 1999,
approximately $21.70 per 1,000 units to 2,733,662 units on January 14, 1998
and approximately $22.16 per 1,000 units to 3,089,998 units on January 15,
1997.
<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: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
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
Part Two NOTE: THIS PART TWO PROSPECTUS MAY
Dated July 30, 1999 ONLY BE USED WITH PART ONE
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 Growth Fund
("Northstar Growth" or the "Fund"). The Northstar Growth Fund was
formerly known as the Northstar Advantage Growth Fund. Northstar 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 Northstar Growth. Collectively the Treasury Obligations and
the Northstar Growth shares are referred to herein as the "Securities."
See "Portfolio" in Part One of the Prospectus. Northstar Growth's
investment objective is to obtain long-term growth of capital by
investing primarily in domestic common stocks. The Fund invests
primarily in U.S. companies that the portfolio manager feels have above-
average prospects for growth. The Trust has a termination date as set forth
in "Summary of Essential Information" in Part One of the Prospectus. 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 Northstar 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 forgo 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.
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 Northstar 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 of the Prospectus.
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 NOR HAS THE 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 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 Northstar 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 of the Prospectus. The minimum purchase is that
amount set forth in Part One of the Prospectus. The sales charge is
reduced on a graduated scale for sales involving at least that amount
set forth in Part One of the Prospectus. See "Public Offering-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 Northstar 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. 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 or her 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 or she 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 Northstar
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 Northstar 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, The Chase Manhattan Bank as Trustee, First Trust
Advisors L.P. as Evaluator and 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 Growth Fund ("Northstar Growth"). The Northstar
Growth Fund was formerly known as the Northstar Advantage Growth Fund.
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. Northstar Growth is an open end mutual fund whose
investment objective is to obtain long-term growth of capital by
investing primarily in domestic common stocks. Collectively, the
Treasury Obligations and Northstar 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 Northstar Growth shares never
paid a dividend and the value of Northstar 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 "Rights of Unit
Holders-How May Units be Redeemed?" The Trust has a Mandatory
Termination Date as set forth under "Summary of Essential Information"
appearing in Part One of the Prospectus.
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.
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 of the
Prospectus, 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 in
such year.
The Evaluator will receive a fee as indicated in "Summary of Essential
Information" appearing in Part One of the Prospectus. No fee is paid to
the Evaluator with respect to the Northstar 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
Page 3
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 Northstar
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 the above described 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.
Each of the above mentioned 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 advisors in determining
the Federal, state, local and any other tax consequences of the
purchase, ownership and disposition of Units in the Trust. For purposes
of the following discussion and opinions, it is assumed that the shares
of Northstar Growth represent shares in an entity treated as a regulated
investment company for Federal income tax purposes.
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 to have
received his or her pro rata share of income derived from each Trust
asset when such income is considered to be received by the Trust.
2. Each Unit holder will have a taxable event when the Trust disposes
of a Security (whether by sale, exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unit holder.
The price a Unit holder pays for his or her Units, including sales
charges, is allocated among his or her pro rata portion of each Security
held by the Trust (in proportion to the fair market values thereof on
Page 4
the valuation date nearest the date the Unit holder purchases his or her
Units) in order to determine his or her initial tax basis (before
adjustment for accrual of original issue discount) for his or her pro
rata portion of each Security held by the Trust. Unit holders should
consult their own tax advisors with regard to calculation of basis. The
Treasury Obligations held by the Trust are treated as stripped bonds and
are treated as bonds issued at an original issue discount as of the date
a Unit holder purchases his or her Units. Because the Treasury
Obligations represent interests in "stripped" U.S. Treasury bonds, a
Unit holder's initial cost for his or her pro rata portion of each
Treasury Obligation held by the Trust (determined at the time he or she
acquires his or her Units in the manner described above) is generally
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 or her
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 Treasury Regulations relating to stripped bonds. To the
extent the amount of such discount is less than the respective "de
minimis" amount, such discount is generally 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. For Federal income tax purposes, a Unit holder's pro rata
portion of dividends (other than designated capital gain dividends as
discussed below) as defined by Section 316 of the Code, paid with
respect to a Northstar Growth share held by the Trust is taxable as
ordinary income to the extent of Northstar Growth's current and
accumulated "earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Northstar Growth share which exceed such current
and accumulated earnings and profits will first reduce a Unit holder's
tax basis in such Northstar Growth share, and to the extent that such
dividends exceed a Unit holder's tax basis in such Northstar Growth
share shall generally be treated as capital gain. In general, the
holding period for such capital gain will be determined by the period of
time the Unit holder has held his or her Units for more than one year.
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). 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, in
general, 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.
Dividends Received Deduction. Distributions on the Northstar Growth
shares which are taxable as ordinary income to the Unit holders will
constitute dividends for Federal income tax purposes. To the extent
dividends received by Northstar Growth are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to such pro rata portion of
such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations.
However, to the extent dividends received by Northstar Growth are from
United States corporations (other than real estate investment trusts)
and are designated by Northstar Growth as being eligible for the
dividends received deduction, distributions received by corporate Unit
holders (other than corporate Unit holders, such as "S" corporations,
which are not eligible for the deduction because of their special
characteristics and other than for purposes of special taxes such as
accumulated earnings tax and personal holding corporation tax) with
respect to Northstar Growth shares attributable to such dividends may
qualify for the 70% dividends received deduction, subject to limitations
Page 5
otherwise applicable to the availability of the deduction. It should be
noted that various legislative proposals that would affect the dividends
received deduction have been introduced. Unit holders should consult
with their tax advisors with respect to the limitations on and possible
modifications to the dividends received deductions.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. Because Unit holders are deemed to
directly own a pro rata portion of the Northstar Growth shares as
discussed above, Unit holders are advised to read the discussion of tax
consequences set forth in the current prospectus for Northstar Growth.
Distributions declared by Northstar Growth on the Northstar 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. Distributions of the Northstar Growth's net capital gain
which Northstar Growth properly designates as capital gain dividends
will be 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
Northstar Growth for six months or less, any loss incurred by a Unit
holder related to the disposition of Northstar Growth shares will be
treated as a long-term capital loss to the extent of any long-term
capital gains distributions received (or deemed to have been received)
with respect to such shares. The Internal Revenue Service Restructuring
and Reform Act of 1998 (the "1998 Tax Act") provides that for taxpayers
other than corporations, net capital gain (which is defined as net long-
term capital gain over net short-term capital loss for the taxable year)
realized from property (with certain exclusions) is generally subject to
a maximum marginal stated tax rate of 20% (10% in the case of certain
taxpayers in the lowest tax bracket). Capital gain or loss is long-term
if the holding period for the asset is more than one year and is short-
term if the holding period for the asset is one year or less. The date
on which a Unit is acquired (i.e., the "trade date") is excluded for
purposes for determining the holding period of the Unit. The legislation
is generally effective retroactively for amounts properly taken into
account on or after January 1, 1998. Capital gains realized from assets
held for one year or less are taxed at the same rates as ordinary income.
Note, however, that the 1998 Tax Act (and the Taxpayer Relief Act of
1997) provide that the application of the rules described above in the
case of pass-through entities such as Northstar Growth will be
prescribed in future Treasury Regulations. The Internal Revenue Service
has released preliminary guidance which provides that, in general, pass-
through entities such as Northstar Growth may designate their capital
gains dividends as either a 20% rate gain distribution, an unrecaptured
section 1250 gain distribution, or a 28% rate gain distribution,
depending on the nature of the gain received by the pass-through entity.
Unit holders should consult their own tax advisors as to the tax rate
applicable to capital gain dividends.
In addition, it should be noted that capital gains may be
recharacterized 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 advisors regarding
the potential effect of this provision on their investment in Units. If
the Unit holder disposes of a Unit, he or she is deemed thereby to have
disposed of his entire pro rata interest in all assets of the Trust
including his pro rata portion of all the Securities represented by that
Unit.
The Taxpayer Relief Act of 1997 (the "1997 Act") includes provisions
that treat certain transactions designed to reduce or eliminate risk of
loss and opportunities for gain (e.g., short sales, offsetting notional
principal contracts, futures or forward contracts or similar
transactions) as constructive sales for purposes of recognition of gain
(but not loss) and for purposes of determining the holding period. Unit
holders should consult their own tax advisors with regard to any such
constructive sales rules.
Limitations on Deductibility of Trust Expenses by Unit Holders. Each
Unit holder's pro rata share of each expense paid by the Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by him or her. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
General. If more than 50% of the value of the total assets of Northstar
Growth consists of stock or securities in foreign corporations,
Northstar Growth may elect to pass through to its shareholders the
Page 6
foreign income and similar taxes paid by Northstar Growth in order to
enable such shareholders to take a credit (or deduction) for foreign
income taxes paid by Northstar Growth. If such an election is made, Unit
holders of the Trust, because they are deemed to own a pro rata portion
of the Northstar 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 Northstar
Growth, and also their portion of the amount which Northstar 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
Northstar Growth from its foreign investments. Unit holders may then
subtract from their Federal income tax the amount of the foreign tax
credit with respect to 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. The
1997 Act imposes a required holding period (with respect to the Unit
holder's holding of Units in the Trust, the Trust's holding of shares in
Northstar Growth and Northstar Growth's holding of foreign securities)
for such credit. Unit holders should consult their tax advisors
regarding this election and its consequences to them.
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
advisors.
Unit holders will be notified annually of the amounts of original issue
discount, dividend income 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. Foreign investors
may be subject to different Federal income tax consequences than those
described above. 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 "Are Investments in the Trust Eligible 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.
Are Investments in the Trust Eligible for Retirement Plans?
Units of the Trust are eligible 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 specific tax laws related
thereto and should consult their attorneys or tax advisors 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
Page 7
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
Northstar Growth.
What is The Northstar Growth Fund?
The portfolio of the Trust also contains shares of Northstar Growth.
Northstar Growth was formerly referred to as Advantage Growth. Northstar
Growth is an open-end diversified management investment company,
commonly known as a mutual fund. Northstar Growth is registered under
the Investment Company Act of 1940 as an open-end, diversified
management investment company. Northstar Growth's investment objective
is long-term growth of capital. The shares of Northstar Growth deposited
in the Trust are maintained on the books of Northstar Growth's transfer
agent.
Northstar 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 Northstar
Growth shares in this Prospectus shall refer to Class T shares.
Northstar 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 Northstar
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 Northstar Growth's Statement of Additional Information dated March 1,
1999. NORTHSTAR GROWTH'S STATEMENT OF ADDITIONAL INFORMATION DATED MARCH
1, 1999 AND ITS PROSPECTUS DATED MARCH 1, 1999, CONTAINS MORE DETAILED
INFORMATION ABOUT THE FUND AND MAY BE OBTAINED WITHOUT CHARGE BY WRITING
TO THE NORTHSTAR FUNDS, 300 FIRST STAMFORD PLACE, STAMFORD, CONNECTICUT
06902 OR CALLING 1-800-595-7827.
Page 8
Selected per Share Data and Ratios for a
Northstar Growth Share Outstanding throughout the Period
Northstar Growth Fund
<TABLE>
<CAPTION>
Year Year Year Year Year
Ended Ended Ended Ended Ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Operating performance:
Net asset value at beginning of period $21.01 $17.82 $15.53 $15.75 $17.33
_______ _______ _______ _______ _______
Income from investment operations:
Net investment income (loss) (.036) (0.17) (0.06) 0.07 0.08
Net realized and unrealized gain (loss) 5.14 4.22 3.16 3.77 (1.41)
_______ _______ _______ _______ _______
Total from investment operations 4.78 4.05 3.10 3.84 (1.33)
======== ======== ======== ======== =======
Less distributions:
Dividends from net investment income - - - (0.07) (0.08)
Dividends from net realized gain (0.21) (0.85) (0.81) (3.99) (0.15)
Dividends from capital - - - - (0.02)
_______ _______ _______ _______ _______
Total distributions (0.21) (0.85) (0.81) (4.06) (0.25)
======== ======== ======== ======== =======
Net asset value at end of period $25.59 $21.02 $17.82 $15.53 $15.75
_______ _______ _______ _______ _______
Total investment return+ 22.79% 22.94% 19.90% 24.40% (7.66)%
Ratios and supplemental data:
Net assets at end of period (thousands) $52,023 $73,674 $70,406 $76,343 $76,391
Ratio of operating expenses
to average net assets 2.05% 2.03% 2.00% 2.00% 2.00%
Ratio of expense reimbursement
to average net assets - - 0.04% - -
Ratio of net investment income (loss)
to average net assets (1.19)% (0.81)% (3.05)% 0.37% 0.49%
Portfolio turnover rate 98.00% 32.00% 62.00% 134.00% 53.76%
______________
<FN>
+ Assumes dividends have been reinvested and does not reflect the effect
of sales charges. Unaudited prior to 1992.
</FN>
</TABLE>
There are two types of fees and expenses when you invest in the Fund: fees,
including sales charges, you pay directly when you buy or sell shares; and
operating expenses paid each year by the Fund.
<TABLE>
<CAPTION>
<S> <C>
Fees you pay directly
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 Northstar Growth Operating Expenses
(as a percentage of average net assets)
Management Fee .75%
Distribution and Service (12b-1) Fee .95%
Other Expenses .35%
Total Fund Operating Expenses 2.05%
______________
<FN>
* Contingent deferred sales load on redemptions declines 1% annually
from a maximum of 4% to 0% after four years.
</FN>
</TABLE>
Page 9
Example
Here's an example of what you would pay in expenses if you invested $10,000,
reinvested all your dividends, the Fund earned an average annual return of
5%, and annual operating expenses remained at the current level. Keep in
mind that this is only an example-actual and performance may vary.
1 year 3 years 5 years 10 years
______ _______ _______ ________
If you sell your shares $608 $843 $1,103 $2,203**
If you don't sell your shares:
Northstar Growth* $208 $643 $1,103 $2,203**
_______________
* There is no contingent deferred sales load payable upon the redemption
of the Northstar Growth shares deposited in the Trust. However, the
maximum sales charge on the Units, and therefore indirectly on the
Northstar Growth shares is 5.0% in the secondary market.
**Class T shares convert to Class A Shares after year 8 or on June 2,
1998, whichever is later. This figure uses Class A expenses for years 9
and 10.
Northstar Growth was established as an unincorporated business trust
under the laws of The Commonwealth of Massachusetts in 1986. The
Trustees of Northstar 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 Northstar 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 Northstar Growth is
entitled to one vote. Shares of Northstar Growth do not have cumulative
voting rights. Fractional shares have proportional voting rights and
participate in any distributions and dividends.
Certificates for shares of Northstar Growth will be issued only upon
specific written request to Northstar Growth. Northstar Growth's
transfer agent maintains records of each shareholder's account and
confirmations showing purchase and sale transactions are issued.
Northstar 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 Northstar Growth will be held if, at any
time, less than a majority of the Trustees then in office have been
elected by shareholders of Northstar Growth. Shareholders of Northstar
Growth have the right to communicate with other shareholders of
Northstar Growth in accordance with the provisions of Section 16(c) of
the Investment Company Act of 1940.
From time to time Northstar 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 Northstar Growth refers to the average annual
compounded rate of return over the stated period that would equate an
initial investment in Northstar 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. Northstar Growth's "yield" is computed by
dividing the net investment income per share earned during the most
recent calendar 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 Northstar Growth will vary from time to time in
response to fluctuations in market conditions, interest rates, the
composition of Northstar Growth's portfolio and expenses. Consequently,
Northstar Growth's performance figures should not be considered
representative of the performance of Northstar Growth for any future
period. Current performance information for Northstar Growth may be
obtained by contacting your investment broker.
What are Northstar Growth's Investment Objectives and Policies?
Northstar Growth's investment objective is long-term growth of capital.
The investment objective of Northstar Growth may be changed by Northstar
Growth's Trustees without shareholder approval. There can, of course, be
no guarantee that the investment objectives of Northstar Growth will be
achieved, due to the uncertainty inherent in all investments. The Fund
Page 10
invests primarily in U.S. companies that the portfolio manager feels
have above-average prospects for growth. Under normal market conditions,
the Fund invests at least 65% of its total assets in securities
purchased on the basis of the potential for capital appreciation. The
portfolio manager uses a disciplined investment process, which includes
extensive database screening, frequent fundamental research,
identification and implementation of a thematic approach in structuring
the portfolio and a sell discipline. Themes attempt to articulate the
major social, economic and technological trends that are likely to shape
the future of business and commerce over the next three to five years,
and provide a framework for identifying the industries and companies
expected to benefit most. This top down approach is combined with
rigorous fundamental research (a bottoms up approach) to guide stock
selection and portfolio structure. In periods of unusual market
conditions, the Fund may temporarily invest part or all of its assets in
cash or high-quality money market securities. In these circumstances,
the Fund may not achieve its objective.
Risks. All mutual funds involve risk-some more than others-and there is
always the chance that the investor could lose money or not earn as much
as he or she hopes. Every fund is affected by the economy and by the
investment decisions portfolio managers make. Because it invests in
equities of small and mid-sized companies, this Fund's performance may
go up or down rapidly depending on market conditions. The Fund's
investments in smaller companies may be subject to more abrupt or
erratic movements in price because:
- - the securities of smaller companies are traded in lower volume;
- - smaller companies are more likely to experience changes in earnings
and growth prospects than the securities of larger, more established
companies; or
- - the value of the securities depends on the success of products or
technologies that are in a relatively early stage of development and
that may not have been tested.
The Fund trades securities actively. This may generate taxable capital
gains and generally increases trading costs, which can lower performance.
Who is the Investment Adviser of Northstar Growth?
Northstar Investment Management Corporation (the "Adviser"), 300 First
Stamford Place, Stamford, Connecticut 06902, provides advice and
recommendations about investments made by Northstar Growth. The Adviser
is a registered investment adviser that currently manages over $4 billion
in mutual funds and institutional accounts.
The Adviser receives a monthly fee for its services based on the average
daily net assets of each of the funds it manages. The fee paid by Northstar
Growth is .75% of its average daily net assets.
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 Northstar 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 Northstar Growth shares is equitable to all parties and
particularly that the interests of the Unit holders are protected.
Northstar Growth has agreed to waive any sales charge, including any
contingent deferred sales load, on shares sold to the Trust.
Furthermore, First Trust Advisors 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 Northstar Growth shares, since
information with respect to the price of Northstar Growth's shares is
readily available to it. In addition, the Indenture requires the Trustee
to vote all shares of Northstar Growth held in the Trust in the same
manner and ratio on all proposals as the vote of owners of Northstar
Growth shares not held by the Trust.
The value of Northstar Growth's shares, like the value of the Treasury
Page 11
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.
Northstar 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
Northstar 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 Northstar 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 a 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 Northstar Growth included in the Trust will be changing as the
Investment Adviser attempts to achieve Northstar Growth's objectives.
Like other investment companies, financial and business organizations
and individuals around the world, the Trust could be adversely affected
if the computer systems used by the Sponsor, Evaluator, Portfolio
Supervisor or Trustee or other service providers to the Trust do not
properly process and calculate information and data involving dates of
January 1, 2000 and thereafter. This is commonly known as the "Year 2000
Problem." The Sponsor, Evaluator, Portfolio Supervisor and Trustee are
taking steps that they believe are reasonably designed to address the
Year 2000 Problem with respect to computer systems that they use and to
obtain reasonable assurances that comparable steps are being taken by the
Trust's other service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact
to the Trust.
The Year 2000 Problem is expected to impact corporations, which may
include issuers of the Securities contained in the Trust, to varying
degrees based upon various factors, including, but not limited to, their
industry sector and degree of technological sophistication. The Sponsor
is unable to predict what impact, if any, the Year 2000 Problem will
have on issuers of the Securities contained in the Trust.
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 Northstar 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:
Page 12
<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>
Any such reduced sales charge shall be the responsibility of the selling
broker/dealer, bank or other selling agent. 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 broker/dealer, bank or other selling
agent. 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 Sponsor and
broker/dealers, banks or other selling agents and their subsidiaries,
the sales charge is reduced by 2% of the Public Offering Price.
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 of the Prospectus 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 Northstar 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 Public Offering Price will be equal to the bid price per Unit of the
Treasury Obligations and the net asset value of the Northstar 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 public offering price determined in the manner
described above.
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.
Page 13
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 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 of the Prospectus. 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 Northstar
Growth. Northstar Growth normally pays quarterly dividends of its net
Page 14
investment income. Net realized capital gains, if any, will be
distributed at least annually.
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 Northstar 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 Northstar 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 Northstar Growth. Unless a Unit
holder indicates that he or she 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 or her account,
instruct Northstar Growth to redeem all or a portion of the shares in
his or her account. Shares of Northstar 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 Northstar 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
Northstar 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 Northstar 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 or she indicates at the
time of purchase, or subsequently notifies the Trustee in writing, that
he or she wishes to receive cash payments. Shares of Northstar 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 Northstar
Growth. Reinvestment by the Trust in Northstar 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 Northstar 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.
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.
Page 15
A Unit holder can exchange shares of the Fund for the same class of
shares of any other fund, or for shares of the Cash Management Fund,
without a sales charge. A Unit holder will, however, pay a sales charge
if he or she buys shares of the Cash Management Fund and then exchanges
them for Class A shares of any of the other funds. 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) except for exchanges into the Money
Market Portfolio, 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.
When a Unit holder exchanges shares, he or she will realize a capital
gain or loss, depending on the difference between what his or her shares
cost him or her and what he or she receives for them. A capital gain or
loss will be long-term or short-term, depending on the length of time
the Unit holder held the shares. In a Unit holder's Federal income tax
return, he or she reports a capital gain as income and a capital loss as
a deduction.
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 Northstar 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.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his or her 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,
Page 16
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 (if
such day is a day on which the New York Stock Exchange is open for
trading), except that as regards Units received after 4:00 p.m. Eastern
time (or as of any earlier time on a day on which the New York Stock
Exchange is scheduled in advance to close at such earlier time), 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. For further information regarding this withholding, see
"Rights of Unit Holders-How are Income and Principal Distributed?" 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 Northstar 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 Northstar 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
Northstar Growth shares next computed; and (3) dividends receivable on
Northstar 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.
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.
Page 17
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 or she 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 $25 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 (630) 241-4141. As of
December 31, 1998, the total partners' capital of Nike Securities L.P.
was $18,506,548 (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 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 The Chase Manhattan Bank with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trusts
may call the Customer Service Help Line at 1-800-682-7520. The Trustee
is subject to supervision by the Superintendent of Banks of the State of
New York, 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."
Page 18
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 First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 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 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
Page 19
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 of the
Prospectus. 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 "Rights of Unit Holders-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 the
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 20
CONTENTS:
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
Are Investments in the Trust Eligible
for Retirement Plans? 7
Portfolio:
What are Zero Coupon Treasuries? 7
What is The Northstar Growth Fund? 8
Selected per Share Data and Ratios for a
Northstar Growth Share Outstanding
throughout the Period 9
What are Northstar Growth's Investment
Objectives and Policies? 10
Who is the Investment Adviser of Northstar Growth? 11
What are Some Additional Considerations
for Investors? 11
Public Offering:
How is the Public Offering Price Determined? 12
How are Units Distributed? 13
What are the Sponsor's Profits? 14
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 14
How are Income and Principal Distributed? 14
How Can Distributions to Unit Holders
be Reinvested? 15
What Reports Will Unit Holders Receive? 16
How May Units be Redeemed? 16
How May Units be Purchased by the Sponsor? 18
How May Securities be Removed from the Trust? 18
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 18
Who is the Trustee? 18
Limitations on Liabilities of Sponsor and Trustee 19
Who is the Evaluator? 19
Other Information:
How May the Indenture be Amended or Terminated? 19
Legal Opinions 20
Experts 20
___________
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.
FIRST TRUST (registered trademark)
The Advantage Growth and Treasury Securities Trust
Prospectus
Part Two
July 30, 1999
First Trust(registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE.
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 21
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
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 July 28, 1999.
ADVANTAGE GROWTH AND TREASURY
SECURITIES TRUST, SERIES 1
(Registrant)
ByNIKE SECURITIES L.P.
(Depositor)
ByRobert M. Porcellino
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 Director of )
Nike Securities )
Corporation, the )
General Partner ) July 28, 1999
of Nike Securities L.P. )
)Robert M. Porcellino
David J. Allen Director of ) Attorney-in-Fact**
Nike Securities
Corporation, the
General Partner
of Nike Securities L.P.
* 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
Combined Series 258 (File No. 33-63483) 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 July 2, 1999 in this
Post-Effective Amendment to the Registration Statement and
related Prospectus of Advantage Growth and Treasury Securities
Trust dated July 27, 1999.
ERNST & YOUNG
Chicago, Illinois
July 26, 1999
