As filed with the Securities and Exchange Commission on October 26, 2000.
File No. 811-6647
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 12
TO
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
GROWTH STOCK PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
P.O. Box 7177, 6000 Memorial Drive
Dublin, Ohio 43017
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 614-766-7000
Donald F. Meeder, P.O. Box 7177, 6000 Memorial Drive, Dublin, OH 43017
(Name and Address of Agent for Service)
Copy to:
James B. Craver
P. O. Box 811
Dover, MA 02030-0811
<PAGE>
EXPLANATORY NOTE
This Amendment No. 12 (the "Amendment") to the Registrant's Registration
Statement on Form N-1A is being filed pursuant to Section 8(b) of the Investment
Company Act of 1940, as amended, in order to include new disclosure in Part A
which reflects that the Registrant reserves the right to pay shareholders
redemption proceeds by a distribution in kind of portfolio securities, rather
than cash. The Amendment does not otherwise affect Part A, Part B, Part C, or
the accompanying exhibits of the Registrant's Registration Statement filed on
April 28, 2000, which are incorporated herein by reference.
<PAGE>
PART A
Responses to Items 1, 2, 3, 5, and 9 have been omitted pursuant to
paragraph 2 of Instruction B of the General Instructions to Form N-1A.
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND
RELATED RISKS.
Growth Stock Portfolio (the "Portfolio") is a diversified, open-end
management investment company which was organized as a trust under the laws of
the State of New York on November 1, 1991.
Beneficial interests in the Portfolio are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or similar
organizations or entities which are "accredited investors" as defined in
Regulation D under the 1933 Act. This Registration Statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
The Portfolio's investment adviser and investment subadviser are Meeder
Asset Management, Inc. (the "Manager" or "Adviser"), formerly known as R. Meeder
& Associates, Inc., and Sector Capital Management, L.L.C. (the "Subadviser"),
respectively. The Portfolio seeks growth of capital. To pursue this goal, the
Portfolio invests in a diversified portfolio of domestic common stocks with
greater than average growth characteristics selected primarily from the Standard
& Poor's 500 Composite Stock Price Index (the "S&P 500"). Current income is not
a primary objective. Normally, at least 80% of the Portfolio's total assets will
be invested in domestic common stocks and at least 65% of the Portfolio's total
assets will be invested in growth stocks. At least 70% of the assets of the
Portfolio's assets invested in common stocks will be invested in S&P 500 stocks.
The Portfolio consists of investment portfolios representing each of the
industry sectors (identified by the Subadviser) comprising the S&P 500:
utilities, transportation, capital goods, consumer durables, consumer
non-durables, energy, materials and services, finance, technology and health.
The assets of the Portfolio will be allocated to each of these industry sectors
in approximately the same proportion as these industry sectors are represented
in the S&P 500 on a market capitalization-weighted basis.
The assets of the Portfolio representing each of these industry sectors are
managed by one or more separate investment advisers.
<PAGE>
The Portfolio may invest in "traditional" derivatives, such as financial
futures contracts and related options as a hedge against changes, resulting from
market conditions, in the value of securities held or intended to be held by the
Portfolio.
Under normal conditions, at least 80% of the Portfolio's total assets will
be invested in domestic common stocks and at least 65% of the Portfolio's total
assets will be invested in growth stocks.
The manager selects for the Portfolio common stocks from all domestic
publicly traded common stocks; however, at least 70% of the assets of the
Portfolio invested in common stocks will be invested in common stocks which are
included in the S&P 500.
The Portfolio consists of investment portfolios representing each of the
industry sectors (identified by the Portfolio's subadviser) comprising the S&P
500. The assets of the Portfolio will be allocated to each of these industry
sectors in approximately the same proportion as these industry sectors are
represented in the S&P 500 on a market capitalization-weighted basis. The
subadviser continuously reviews the representation of the industry sectors in
the S&P 500 and continuously groups domestic publicly traded common stocks into
a specific industry sector.
The Portfolio Subadviser compares the total market value of the common
stocks in each industry sector of the S&P 500 to the total market value of all
common stocks in the S&P 500 to determine each industry sector's weighting in
the S&P 500. If the weighting of any industry sector in the Portfolio varies
from the weighting on a market-capitalization basis of that industry sector in
the S&P 500 at the end of any month, the Portfolio Subadviser will reallocated
the amount of assets in the Portfolio allocated to that industry sector. The
Subadviser may reallocate more frequently than monthly if it chooses to do so in
its sole discretion. These reallocations may cause additional transaction costs
to the extent that securities may be sold as part of such reallocations.
The assets of the Portfolio representing each of these industry sectors are
managed on a discretionary basis by one or more separate investment advisers
(the "Sector Advisers") selected by the Portfolio Subadviser. The Portfolio
Subadviser's selection of Sector Advisers is reviewed and approved by the
trustees of the Portfolio.
Assets of the Portfolio representing each of the industry sectors are
managed by one or more Sector Advisers. However, if an advisory agreement
between the Sector Advisor and the Portfolio is terminated leaving no Sector
Adviser to manage the assets of the Portfolio representing an industry sector,
the Subadviser will, upon termination and until a new Sector Adviser were
selected, manage and "index" the assets of the Portfolio representing its
industry sector by selling any stocks representing the industry sector that are
not included in the S&P 500 and investing the assets comprising the industry
sector in S&P 500 stocks identified by the Portfolio's Subadviser as belonging
2
<PAGE>
to that industry sector in the same proportion as those stocks are represented
in the S&P 500 on a market capitalization-weighted basis.
Each Sector Adviser is limited to the list of companies identified by the
Subadviser which represents the Sector Adviser's specific industry sector. Each
Sector Adviser then selects those common stocks which, in its opinion, best
represent those companies that the Sector Adviser believes will perform the best
within the industry sector. In selecting securities for the Portfolio, the
Sector Advisers evaluate factors believed to be favorable to long-term growth of
capital including specific financial characteristics of the issuer such as
historical earnings growth, sales growth, profitability and return on equity.
The Sector Advisers also analyze the issuer's position within its industry
sector as well as the quality and experience of the issuer's management.
Up to 20% of the Portfolio's assets may be invested in temporary defensive
investments such as money market instruments and investment grade bonds. See
"Additional Investment Policies - Money Market Instruments and Bonds." The
Portfolio may purchase stock index futures contracts and related options. See
"Additional Investment Policies - Hedging Strategies and Option Strategies". Up
to 5% of the total assets of the Portfolio may be invested in American
Depositary Receipts.
ADDITIONAL INVESTMENT POLICIES
MONEY MARKET INSTRUMENTS AND BONDS
When investing in money market instruments or bonds, the Portfolio will
limit its purchases to the following securities:
o U.S. Government Securities and Securities of its Agencies and
Instrumentalities.
o Bank Obligations and Instruments Secured Thereby.
o High Quality Commercial Paper -- The Portfolio may invest in
commercial paper rated no lower than "A-2" by Standard & Poor's
Corporation or "Prime-2" by Moody's Investors Services, Inc., or, if
not rated, issued by a company having an outstanding debt issue rated
at least A by Standard & Poor's or Moody's.
o Private Placement Commercial Paper -- unregistered securities which
are traded in public markets to qualified institutional investors,
such as the Portfolio.
o High Grade Corporate Obligations -- obligations rated at least A by
Standard & Poor's or Moody's.
o Repurchase Agreements Pertaining to the Above -- The Portfolio may
invest in any of the above securities subject to repurchase agreements
with any Federal Reserve reporting dealer or member bank of the
Federal Reserve System. Repurchase agreements usually are for short
3
<PAGE>
periods, such as one week or less, but could be longer. The Portfolio
will not invest more than 10% of its assets, at time of purchase, in
repurchase agreements which mature in excess of seven days or in other
illiquid or not readily marketable securities.
HEDGING STRATEGIES
The Portfolio may engage in hedging transactions in carrying out its
investment policies. A hedging program may be implemented for the following
reasons: (1) To gain equity market exposure for unallocated and uninvested cash
balances of the Portfolio; (2) To protect the value of specific securities owned
or intended to be purchased while the Investment Adviser, Subadviser or a Sector
Adviser is implementing a change in the Portfolio's investment position; (3) To
protect portfolio values during periods of extraordinary risk without incurring
transaction costs associated with buying or selling actual securities; and (4)
To utilize the "designated hedge" provisions of Subchapter M of the Internal
Revenue Code as a permitted means of avoiding taxes that would otherwise have to
be paid on gains from the sale of portfolio securities.
A hedging program involves entering into an "option" or "futures"
transaction in lieu of the actual purchase or sale of securities. At present,
many groups of common stocks (stock market indices) may be made the subject of
futures contracts.
Derivatives are financial instruments whose performance is derived, at
least in part, from the performance of an underlying asset, security or index.
Accordingly, these financial futures contracts or related options used by the
Portfolio to implement its hedging strategies are considered derivatives. The
value of derivatives can be affected significantly by even small market
movements, sometimes in unpredictable ways. They do not necessarily increase
risk, and may in fact reduce risk.
The Portfolio will not engage in transactions in financial futures
contracts or related options for speculation but only as a hedge against changes
in the market value of securities held in the Portfolio, securities which it
intends to purchase or to gain market exposure for unallocated and uninvested
cash balances. The Portfolio will only enter in such transactions when they are
economically appropriate to meeting portfolio investment objectives and to the
reduction of risks inherent in the ongoing management of the Portfolio.
For certain regulatory purposes, the Commodity Futures Trading Commission
("CFTC") limits the types of futures positions that can be taken in conjunction
with the management of a securities portfolio for a mutual fund, such as the
Fund. All futures transactions for the Portfolio will consequently be subject to
the restrictions on the use of futures contracts established in CFTC rules, such
as observation of the CFTC's definition of "hedging". In addition, whenever the
Portfolio establishes a long futures position, it will set aside cash or cash
4
<PAGE>
equivalents equal to the underlying commodity value of the long futures
contracts held by the Portfolio. Although all futures contracts involve leverage
by virtue of the margin system applicable to trading on futures exchanges, the
Portfolio will not, on a net basis, have leverage exposure on any long futures
contracts that it establishes because of the cash set aside requirement. All
futures transactions can produce a gain or a loss when they are closed,
regardless of the purpose for which they have been established. Unlike short
futures contracts positions established to protect against the risk of a decline
in value of existing securities holdings, the long futures positions established
by the Portfolio to protect against reinvestment risk are intended to protect
the Portfolio against the risks of reinvesting portfolio assets that arise
during periods when the assets are not fully invested in securities.
The Portfolio may not purchase or sell financial futures or purchase
related options if immediately thereafter the sum of the amount of margin
deposits on the Portfolio's existing futures positions and premiums paid for
related options would exceed 5% of the market value of the Portfolio's total
assets.
The Portfolio expects that any gain or loss on hedging transactions will be
substantially offset by any gain or loss on the securities underlying the
contracts or being considered for purchase. There can be no guaranty that the
Portfolio will be able to realize this objective and, as noted below under "Risk
Factors," there are some risks in utilizing a hedging strategy.
OPTION STRATEGIES
The Portfolio may write (sell) covered call options. The purpose of such
transactions is to: (1) hedge against changes in the market value of specific
securities held by the Portfolio; and/or (2) to generate incremental income by
capturing the proceeds of options sold.
The Portfolio may write (sell) call options, but only if such options are
covered and remain covered as long as the Portfolio is obligated as a writer of
the option (seller). A call option is "covered" if the Portfolio owns the
underlying security covered by the call. If a "covered" call option expires
un-exercised, the writer realizes a gain in the amount of the premium received.
If the covered call option is exercised, the writer realizes either a gain or a
loss from the sale of the underlying security with the proceeds to the writer
being increased by the amount of the premium. Prior to its expiration, a call
option may be closed out by means of a purchase of an identical option. Any gain
or loss from such transaction will depend on whether the amount paid is more or
less than the premium received for the option plus related transaction costs.
MAIN RISK FACTORS.
The value of an investment in the Portfolio will fluctuate in response to
stock market movements. To the extent that the Portfolio invests in higher risk
securities, it encounters additional risks that could adversely affect its
5
<PAGE>
performance. The use of several sector advisers or the replacement of a sector
adviser may increase the Portfolio's turnover, gains or losses, and brokerage
commissions. As with any mutual fund, loss of money is a risk of investing in
this Portfolio.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
The Portfolio's Board of Trustees provides broad supervision over the
affairs of the Portfolio. The address of the Adviser is P.O. Box 7177, 6000
Memorial Drive, Dublin, Ohio 43017. A majority of the Portfolio's Trustees are
not affiliated with the Adviser. Firstar, N.A., Cincinnati ("Firstar") is the
Portfolio's custodian and Mutual Funds Service Co. is the Portfolio's transfer
agent and dividend paying agent. The address of the custodian is 425 Walnut
Street, Cincinnati, Ohio 45202 and the address of Mutual Funds Service Co. is
6000 Memorial Drive, Dublin, Ohio 43017.
The Portfolio has not retained the services of a principal underwriter or
distributor, as interests in the Portfolio are offered solely in private
placement transactions.
The Manager and the Subadviser have the ultimate responsibility for the
investment performance of the Portfolio due to the Manager's responsibility to
oversee the Subadviser and the Subadviser's responsibility to oversee the Sector
Advisers and recommend their hiring, termination and replacement.
Meeder Asset Management, Inc., has been an adviser to individuals and
retirement plans since 1974 and has served as investment adviser to registered
investment companies since 1982. The Manager serves the Portfolio pursuant to an
Investment Advisory Agreement under the terms of which it has agreed to provide
an investment program within the limitations of the Portfolio's investment
policies and restrictions, and to furnish all executive, administrative, and
clerical services required for the transaction of Portfolio business, other than
accounting services and services which are provided by the Portfolio's
custodian, transfer agent, independent accountants and legal counsel. The
Manager invests the Portfolio's liquidity reserves and may invest the
Portfolio's financial futures contracts and related options.
The Manager was incorporated in Ohio in 1974 and maintains its principal
offices at 6000 Memorial Drive, Dublin, Ohio 43017. The Adviser is a
wholly-owned subsidiary of Meeder Financial. Meeder Financial is controlled by
Robert S. Meeder, Sr. through ownership of voting common stock. Meeder Financial
conducts business only through its six subsidiaries which are the Manager;
Mutual Funds Service Co., the Portfolio's transfer agent; Adviser Dealer
Services, Inc., a registered broker-dealer; Opportunities Management Co., a
venture capital investor; Meeder Advisory Services, Inc., a registered
investment adviser and OMCO, Inc., a registered commodity trading adviser and
commodity pool operator.
6
<PAGE>
The Manager's officers and directors are as follows: Robert S. Meeder, Sr.,
Chairman and Sole Director; Robert S. Meeder, Jr., President; Philip A. Voelker,
Senior Vice President and Chief Investment Officer; Donald F. Meeder, Vice
President and Secretary; Thomas E. Line, Chief Operating Officer; Michael J.
Sullivan, Vice President, Sales and Marketing; and Wesley F. Hoag, Vice
President and General Counsel.
Philip A. Voelker is primarily responsible for managing the liquidity
reserve of the Portfolio and managing the futures contracts and related options
of the Portfolio on behalf of the Manager. Mr. Voelker is a Vice President and
Trustee of the Portfolio, Vice President and Trustee of The Flex-funds and
Meeder Advisor Funds and Senior Vice President and Chief Investment Officer of
the Manager. Mr. Voelker has been associated with the Manager since 1975.
The Manager earns an annual fee, payable in monthly installments, at the
rate of 1% of the first $50 million, 0.75% of the next $50 million and 0.60% in
excess of $100 million of the Portfolio's average net assets.
All compensation to the Manager will be shared by the Subadviser and the
Manager out of the Manager's fee from the Portfolio in accordance with a formula
such that the Manager will receive 70% and the Subadviser 30% of the fee payable
with respect to the net assets of the Portfolio upon effectiveness of the
subadvisory arrangement; then the Subadviser will receive 70% and the Manager
30% of the fee attributable to any additional net assets of the Portfolio up to
an amount of net assets equal to the net assets at effectiveness of the
subadvisory arrangement, then the Manager and the Subadviser will share equally
the fee attributable to any additional net assets of the Portfolio up to $50
million of the net assets. With respect to net assets of more than $50 million
and less than $100 million, the applicable fee of 0.75% will be shared such that
the Manager will receive 0.35% and the Subadviser 0.40%. For net assets of $100
million and more, the applicable 0.60% fee will be shared such that the Manager
will receive 0.25% and Subadviser 0.35%.
For the year ended December 31, 1999, total payments to Mutual Funds
Service Co. amounted to $40,870 for the Portfolio.
SUBADVISER
Sector Capital Management, L.L.C. (the "Subadviser"), 5350 Poplar Avenue,
Suite 490, Memphis, Tennessee 38119, serves as the Growth Stock Portfolio's
subadviser under an Investment Subadvisory Agreement among the Portfolio, the
Manager and the Subadviser. The Subadviser furnishes investment advisory
services in connection with the management of the Growth Stock Portfolio.
The Subadviser is a Georgia limited liability company that has been a
registered investment adviser to individuals, pension and profit sharing plans,
trusts, charitable organizations, corporations and other institutions since
7
<PAGE>
January, 1995. As of December 31, 1999, the Subadviser held discretionary
investment authority over approximately $877 million of assets. The Subadviser
is controlled by William L. Gurner and John K. Donaldson. Mr. Gurner is
primarily responsible for the day-to-day management of the Portfolio through
interaction with each of the Sector Advisers. Mr. Gurner is also primarily
responsible for managing the futures contracts and related options of the
Portfolio on behalf of the Subadviser. Mr. Gurner has been President,
Administrator, Manager, and a Member of the Subadviser since its inception in
January 1995.
The Subadviser and the Portfolio have entered into a Sub-subadvisory
Agreement with each Sector Adviser selected for the Portfolio. It is the
Subadviser's responsibility to select, subject to the review and approval of the
Board of Trustees, the Sector Advisers who have distinguished themselves by able
performance in respective areas of expertise in sector management and to review
their continued performance. In addition, it is the Subadviser's responsibility
to categorize publicly traded domestic common stocks into a specific industry
sector. The Subadviser may also invest the Portfolio's financial futures
contracts and related options.
Subject to the supervision and direction of the Portfolio's Board of
Trustees, the Subadviser provides to the Portfolio investment management
evaluation services principally by performing initial due diligence on
prospective Sector Advisers for the Portfolio and thereafter monitoring Sector
Adviser performance through quantitative and qualitative analysis as well as
periodic in-person, telephonic and written consultations with Sector Advisers.
In evaluating prospective Sector Advisers, the Subadviser considers among other
factors, each Sector Advisers level of expertise; relative performance and
consistency of performance, level of adherence to investment discipline or
philosophy; personnel, facilities and financial strength; and quality of service
and client communications. The Subadviser has responsibility for communicating
performance expectations and evaluations to Sector Advisers and ultimately
recommending to the Board of Trustees of the Portfolio whether Sector Advisers'
contracts should be renewed, modified, or terminated. The Subadviser provides
reports to the Portfolio's Board of Trustees regarding the results of its
evaluation and monitoring functions.
The Subadviser pays each Sector Adviser a fee for its investment advisory
services that is computed daily and paid monthly based on the value of the
average net assets of the Portfolio assigned by the Subadviser to the Sector
Adviser at an annual rate equal to 0.25%.
Investors should be aware that the Subadviser may be subject to a conflict
of interest when making decisions regarding the retention and compensation of
particular Sector Advisers. However, the Subadviser's decisions regarding the
8
<PAGE>
selection of Sector Advisers and specific amount of the compensation to be paid
to Sector Advisers, are subject to review and approval by a majority of the
Board of Trustees of the Portfolio.
Although the Subadviser and the Sector Advisers' activities are subject to
general oversight by the Board of Trustees and the officers of the Portfolio,
neither the Board nor the officers evaluate the investment merits of any Sector
Adviser's individual security selections. The Board of Trustees will review
regularly the Portfolio's performance compared to the applicable indices and
also will review the Portfolio's compliance with its investment objectives and
policies.
While the investment professionals of the Subadviser have experience in
asset management and the selection of investment advisers, prior to the
Subadviser becoming the subadviser to the Portfolio, on December 31, 1996, it
did not have previous experience in providing investment advisory services to an
investment company.
The Growth Stock Portfolio has received an exemptive order from the
Securities and Exchange Commission (the "SEC") which permits the Growth Stock
Portfolio and the Subadviser to enter into and materially amend Investment
Sub-subadvisory Agreements with Sector Advisers without such agreements being
approved by the Growth Stock Portfolio's investors or the Funds' shareholders
except for Investment Sub-subadvisory Agreements with an affiliated person of
the Growth Stock Portfolio, the Manager or the Subadviser other than by reason
of such affiliated person serving as an existing Sector Adviser to the Growth
Stock Portfolio. The exemptive order also permits the Growth Stock Portfolio and
the Funds to disclose, on an aggregate basis, the fees paid to Sector Advisers
who are not such affiliated persons. In addition, the exemptive order includes
the condition that within 90 days of the hiring of any new Sector Advisers, the
Manager and the Subadviser will furnish shareholders of the Funds with an
information statement about the new Sector Adviser and Investment
Sub-subadvisory Agreement. Any changes to the Investment Advisory Contract
between the Growth Stock Portfolio and the Manager or the Investment Subadvisory
Agreement among the Growth Stock Portfolio, Manager and the Subadviser will
still require shareholder approval. In accordance with the terms of the
exemptive order, a majority of the shareholders of each of the Funds has
approved the operation of the Funds in accordance with the exemption.
SECTOR ADVISERS: The Sector Advisers have agreed to an investment advisory
fee based on the average net assets of the Portfolio assigned to them by the
Subadviser at an annual rate equal to .25%, which is generally lower than the
fees they charge to institutional accounts for which they serve as investment
adviser, and for which they perform all administrative responsibilities.
9
<PAGE>
Subject to the supervision and direction of the Subadviser and, ultimately,
the Board of Trustees of the Portfolio, each Sector Adviser's responsibilities
are limited to managing its portion of the securities held by the Portfolio in
accordance with the Portfolio's stated investment objective and policies, making
investment decisions for the Portfolio and placing orders to purchase and sell
securities on behalf of the Portfolio.
The following sets forth certain information about each of the Sector
Advisers:
MILLER/HOWARD INVESTMENTS, INC. serves as sector adviser to the utilities
and transportation sectors of the Growth Stock Portfolio. Miller/Howard is a
registered investment adviser that has been providing investment services to
broker-dealers, investment advisers, employee benefit plans, endowment
portfolios, foundations and other institutions and individuals since 1984. As of
December 31, 1999, Miller/Howard managed approximately $272 million in assets.
Lowell G. Miller, President and Chief Investment Officer of Miller/Howard, is
the portfolio manager primarily responsible for the day-to-day management of
those assets of the Growth Stock Portfolio allocated to Miller/Howard. Mr.
Miller has served as President and portfolio manager of Miller/Howard since
1984. Miller/Howard is also the subadviser to the Utilities Stock Portfolio, a
corresponding portfolio to The Flex-funds' Total Return Utilities Fund and the
Meeder Advisor Funds' Utility Growth Fund. Miller/Howard's principal executive
offices are located at 141 Upper Byrdcliffe Road, Post Office Box 549,
Woodstock, New York 12498.
HALLMARK CAPITAL MANAGEMENT, INC. serves as sector adviser to the capital
goods sector of the Growth Stock Portfolio. Hallmark is a registered investment
adviser that has been providing investment services to individuals; banks;
pension, profit sharing, and other retirement plans; trusts; endowments;
foundations; and other charitable organizations since 1986. As of December 31,
1999, Hallmark managed approximately $190 million in assets. Peter S. Hagerman
is the portfolio manager primarily responsible for the day-to-day management of
those assets of the Growth Stock Portfolio allocated to Hallmark. Mr. Hagerman
has been Chairman of the Board, President, and Chief Executive Officer of
Hallmark since 1994 and has been associated with Hallmark since 1986. Hallmark's
principal executive offices are located at One Greenbrook Corporate Center, 100
Passaic Avenue, Fairfield, New Jersey 07004.
BARROW, HANLEY, MEWHINNEY & STRAUSS, INC. serves as sector adviser to the
consumer durable and non-durable sectors of the Growth Stock Portfolio. Barrow
is a registered investment adviser that has been providing investment services
to banks; investment companies; pension and profit sharing plans; charitable
organizations and corporations since 1979. As of December 31, 1999, Barrow
managed approximately $29.1 billion in assets. Jane Gilday, CFA, is the
portfolio manager primarily responsible for the day-to-day management of those
10
<PAGE>
assets of the Growth Stock Portfolio allocated to Barrow. Ms. Gilday has served
as a portfolio manager and Principal for Barrow since January 1998. From 1993 to
January 1998, Ms. Gilday served as a securities analyst at Hancock Institutional
Equity Services and Advest Inc. Barrow's principal executive offices are located
at 3232 McKinney Avenue, 15th Floor, Dallas, Texas 75204-2429.
THE MITCHELL GROUP, INC. serves as sector adviser to the energy sector of
the Growth Stock Portfolio. The Mitchell Group is a registered investment
adviser that has been providing investment services to individuals, banks,
investment companies, pension and profit sharing plans, charitable
organizations, corporations and other institutions since 1989. As of December
31, 1999, The Mitchell Group held discretionary authority over approximately
$311 million in assets. Rodney Mitchell, who has served as President, Chief
Executive Officer, and Chief Financial Officer of The Mitchell Group since 1989,
is the portfolio manager primarily responsible for the day-to-day management of
those assets of the Growth Stock Portfolio allocated to The Mitchell Group. The
Mitchell Group's principal executive offices are located at 1100 Louisiana,
#4810, Houston, Texas 77002.
ASHLAND MANAGEMENT INCORPORATED serves as sector adviser to the materials
and services sector of the Growth Stock Portfolio. Ashland is a registered
investment adviser that has been providing investment services to individuals,
pension and profit sharing plans, charitable organizations, corporations and
other institutions since 1975. As of December 31, 1999, Ashland managed
approximately $2.1 billion in assets. Terence J. McLaughlin, Managing Director
of Ashland, and Deborah C. Ohl, a Vice President and Portfolio Manager, are the
portfolio managers primarily responsible for the day-to-day management of those
assets of the Growth Stock Portfolio allocated to Ashland. Mr. McLaughlin has
been a Portfolio Manager for Ashland since 1986. Ms. Ohl has been employed by
Ashland since August 1992 and has served as a Portfolio Manager for Ashland
since 1993. Ashland's principal executive offices are located at 26 Broadway,
New York, New York 10004.
DELTA CAPITAL MANAGEMENT INC. serves as sector adviser to the finance
sector of the Portfolio. Delta Capital is a registered investment adviser that
has been providing investment services to individuals, endowments, corporations
and other institutions since 1992. As of December 31, 1999, Delta Capital
managed approximately $900 million in assets. Jonathan Kay is the portfolio
manager primarily responsible for the day-to-day management of those assets of
the Portfolio allocated to Delta Capital. Mr. Kay has been a portfolio manager
for Delta Capital since April 1998. From 1993 to March 1998, Mr. Kay was a
portfolio manager for Scudder Kemper Investments, Inc., a registered investment
adviser. Delta Capital's principal executive offices are located at 745 Fifth
Avenue, Suite 816, New York, New York 10151.
11
<PAGE>
DRESDNER RCM GLOBAL INVESTORS, L.L.C. (formerly RCM Capital Management,
L.L.C.) serves as sector adviser to the technology sector of the Growth Stock
Portfolio. Dresdner RCM is a registered investment adviser that provides
investment services to institutional and individual clients and registered
investment companies. Dresdner RCM was established in April 1996 as the
successor to the business and operations of RCM Capital Management, a California
Limited Partnership that, with its predecessors, has been in operation since
1970. As of December 31, 1999, Dresdner RCM had approximately $82.7 billion
under management and advice, including approximately $47.0 billion under
management and advice in San Francisco and an additional $35.7 billion by
affiliates in London, Hong Kong, and San Diego. Walter C. Price and Huachen
Chen, each Principals of Dresdner RCM, are the portfolio managers primarily
responsible for the day-to-day management of those assets of the Growth Stock
Portfolio allocated to Dresdner RCM. Messrs. Price and Chen have managed equity
portfolios on behalf of Dresdner RCM since 1985. Dresdner RCM's principal
executive offices are located at Four Embarcadero Center, San Francisco, CA
94111.
ALLIANCE CAPITAL MANAGEMENT L.P. serves as sector adviser to the health
sector of the Growth Stock Portfolio. Alliance, a registered investment adviser,
is an international investment manager supervising client accounts with assets
as of December 31, 1999 totaling approximately $368 billion. Alliance provides
investment services primarily to corporate employee benefit funds, public
employee retirement systems, investment companies, foundations, and endowment
funds. Raphael L. Edelman, Vice President of Alliance, is the portfolio manager
primarily responsible for the day-to-day management of those assets of the
Growth Stock Portfolio allocated to Alliance. Mr. Edelman, who has seventeen
years of investment experience, joined Alliance's research department in 1986 as
an analyst after working two years as a manager in Alliance's mutual fund
division. Mr. Edelman, Senior Vice President and Portfolio Manager of Alliance
since February 1998, served as Vice President and Portfolio Manager of Alliance
from January 1993 to February 1998. Alliance's principal executive offices are
located at 1345 Avenue of the Americas, New York, NY 10105.
TRANSFER AGENT AND CUSTODIAN
The Portfolio has entered into an Administration and Accounting Services
Agreement with Mutual Funds Service Co., 6000 Memorial Drive, Dublin, Ohio
40317, a wholly-owned subsidiary of Meeder Financial, pursuant to which Mutual
Funds Service Co. provides accounting, stock transfer, dividend disbursing, and
shareholder services to the Portfolio. The minimum annual fee, payable monthly,
for accounting services in the Portfolio is $7,500. Subject to the applicable
minimum fee, the fee is computed at the rate of 0.15% of the first $10 million,
0.10% of the next $20 million, 0.02% of the next $50 million and 0.01% in excess
of $80 million of the Portfolio's average net assets.
Pursuant to a Custody Agreement, Firstar acts as the custodian of the
Portfolio's assets. See Part B for more detailed information concerning
custodial arrangements.
12
<PAGE>
EXPENSES
The expenses of the Portfolio include the compensation of its Trustees who
are not affiliated with the Adviser; governmental fees; interest charges; taxes;
fees and expenses of independent auditors, of legal counsel and of any transfer
agent, custodian, registrar or dividend disbursing agent of the Portfolio;
insurance premiums; expenses of calculating the net asset value of, and the net
income on, the Portfolio; all fees under its Administration and Accounting
Services and Subadministrative Services Agreements; the expenses connected with
the execution, recording and settlement of security transactions; fees and
expenses of the Portfolio's custodian for all services to the Portfolio,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of preparing and mailing reports to investors and to
governmental officers and commissions; expenses of meetings of investors and
Trustees; and the advisory fees payable to the Adviser under the Investment
Advisory Agreement.
ITEM 7. SHAREHOLDER INFORMATION.
CAPITAL STOCK AND OTHER SECURITIES
The Portfolio is organized as a trust under the laws of the State of New
York. Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Each investor is entitled to a vote in
proportion to the amount of its investment in the Portfolio. Investments in the
Portfolio may not be transferred, but an investor may withdraw all or any
portion of its investment at any time at net asset value. Investors in the
Portfolio (E.G., investment companies, insurance company separate accounts and
common and commingled trust funds) will each be liable for all obligations of
the Portfolio. However, the risk of an investor in the Portfolio incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and the Portfolio itself was unable to meet
its obligations.
The net income of the Portfolio is determined each day on which the
N.Y.S.E. is open for trading (and on such other days as are deemed necessary in
order to comply with Rule 22c-1 under the 1940 Act) ("Fund Business Day"). This
determination is made once during each such day. All the net income of the
Portfolio, as defined below, so determined is allocated PRO RATA among the
investors in the Portfolio at the time of such determination.
For this purpose the net income of the Portfolio (from the time of the
immediately preceding determination thereof) shall consist of (i) all income
accrued, less the amortization of any premium, on the assets of the Portfolio,
less (ii) all actual and accrued expenses of the Portfolio determined in
accordance with generally accepted accounting principles. Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio.
13
<PAGE>
Investments in the Portfolio have no preemptive or conversion rights and
are fully paid and nonassessable, except as set forth below. The Portfolio is
not required to hold annual meetings of investors but the Portfolio will hold
special meetings of investors when in the judgment of the Trustees it is
necessary or desirable to submit matters for an investor vote. Investors have
the right to communicate with other investors to the extent provided in Section
16(c) of the 1940 Act in connection with requesting a meeting of investors for
the purpose of removing one or more Trustees, which removal requires a
two-thirds vote of the Portfolio's beneficial interests. Investors also have
under certain circumstances the right to remove one or more Trustees without a
meeting. Upon liquidation or dissolution of the Portfolio, investors would be
entitled to share PRO RATA in the net assets of the Portfolio available for
distribution to investors.
Under the anticipated method of operation of the Portfolio, the Portfolio
will not be subject to any income tax. However, each investor in the Portfolio
will be taxable on its share (as determined in accordance with the governing
instruments of the Portfolio) of the Portfolio's taxable income, gain, loss,
deductions and credits in determining its income tax liability. The
determination of such share will be made in accordance with the Internal Revenue
Code of 1986, as amended, and regulations promulgated thereunder.
The Portfolio's assets, income and distributions are managed in such a way
that an investor in the Portfolio will be able to satisfy the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended, assuming that the
investor invested all of its investable assets in the Portfolio.
Investor inquiries may be directed the Portfolio at 6000 Memorial Drive,
Dublin, Ohio 43017.
PURCHASE OF SECURITIES
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
An investment in the Portfolio may be made without a sales load at the net
asset value next determined after an order is received in "good order" by the
Portfolio.
14
<PAGE>
There is no minimum initial or subsequent investment in the Portfolio.
However, since the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the return on its assets, investments
must be made in federal funds (I.E., monies credited to the account of the
Portfolio's custodian bank by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any time
or to reject any investment order.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Fund Business Day. As of 4:00 p.m., New York time, on each
such day, the value of each investor's beneficial interest in the Portfolio will
be determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, which represents that investor's share of
the aggregate beneficial interests in the Portfolio. Any additions or
reductions, which are to be effected as of 4:00 p.m., New York time, on such
day, will then be effected. The investor's percentage of the aggregate
beneficial interests in the Portfolio will then be recomputed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of 4:00 p.m., New York time, on such day plus or
minus, as the case may be, the amount of net additions to or reductions in the
investor's investment in the Portfolio effected as of 4:00 p.m., New York time,
on such day, and (ii) the denominator of which is the aggregate net asset value
of the Portfolio as of 4:00 p.m., New York time, on such day, plus or minus, as
the case may be, the amount of net additions to or reductions in the aggregate
investments in the Portfolio by all investors in the Portfolio. The percentage
so determined will then be applied to determine the value of the investor's
interest in the Portfolio as of 4:00 p.m., New York time, on the following Fund
Business Day.
REDEMPTION OR REPURCHASE
An investor in the Portfolio may reduce any portion or all of its
investment at any time at the net asset value next determined after a request in
"good order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any reduction
may be suspended or the payment of the proceeds therefrom postponed during any
period in which the N.Y.S.E. is closed (other than weekends or holidays) or
trading on such Exchange is restricted, or, to the extent otherwise permitted by
the 1940 Act, if an emergency exists.
15
<PAGE>
The Portfolio has reserved the right to pay redemption proceeds by a
distribution in kind of portfolio securities (rather than cash) in the event of
an emergency or when, in the opinion of the Portfolio or the Adviser, payment in
cash would be harmful to existing investors. In these circumstances, the
securities distributed would be valued at the price used to compute the
Portfolio's net assets and the redeeming investor may incur brokerage and
transaction charges in converting the securities to cash. The Portfolio does not
intend to redeem illiquid securities in kind. If this happens, however, the
redeeming investor may not be able to recover its investment in a timely manner.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
Beneficial interests in the Portfolio are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or similar
organizations or entities which are "accredited investors" as defined in
Regulation D under the 1933 Act. This Registration Statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Dublin and State of Ohio on the 26th day of October, 2000.
GROWTH STOCK PORTFOLIO
By /s/ Wesley F. Hoag
---------------------------
Wesley F. Hoag
Vice President
