As filed with the Securities and Exchange Commission on November 2, 1998
Securities Act File No. 33-50390
Investment Company Act File No. 811-7076
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
Post-Effective Amendment No. 13 X
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 13 X
WILSHIRE TARGET FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
c/o First Data Investor Services Group, Inc.
53 State Street
One Exchange Place
Boston, MA 02109
Registrant's Telephone Number, including Area Code: (617) 573-1556
Name and Address of Agent for Service:
Julie A. Tedesco, Esq.
Wilshire Target Funds, Inc.
c/o First Data Investor Services Group, Inc.
53 State Street
One Exchange Place
Boston, MA. 02109
It is proposed that the filing will become effective:
immediately upon filing pursuant to paragraph (b)
on December 29, 1997 pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on pursuant to paragraph (a)(2) of Rule 485
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WILSHIRE TARGET FUNDS, INC.
Cross-Reference Sheet Pursuant to Rule 485(a)
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Part A
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Fee Table
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Description of the Fund; Investment
Considerations and Risks; Performance
Information; General Information
5. Management of the Fund Management of the Fund
5A. Management's Discussion of Not Applicable
Fund Performance
6. Capital Stock and Other Securities How to Buy Fund Shares;
Shareholder Services;
How to Redeem Fund Shares;
Service and Distribution Plan;
Dividends, Distributions and
Taxes; General Information
7. Purchase of Securities How to Buy Fund Shares
8. Redemption or Repurchase How to Redeem Fund Shares
9. Pending Legal Proceedings Not Applicable
Part B.
Item No. Statement of Additional Information Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information and History
13. Investment Objectives and Policies Investment Objective and
Management Policies
14. Management of the Registrant Management of the Fund
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15. Control Persons and Principal Management of the Fund;
Holders of Securities Investment Advisory and
Administration Agreements
16. Investment Advisory and Other Investment Advisory and
Services Administration Agreements;
Service and Distribution Plan;
Custodian, Transfer and Dividend
Disbursing Agent, Counsel and
Independent Accountants
17. Brokerage Allocation Portfolio Transactions
18. Capital Stock and Other Securities Information about the Fund
19. Purchase, Redemption and Pricing Purchase of Fund Shares;
of Purchase, Redemption and Redemption of Fund Shares;
Securities Being Offered Shareholder Services;
Determination of Net Asset Value;
20. Tax Status Dividends, Distributions and Taxes
21. Underwriters Management of the Fund
22. Calculation of Performance Data Performance Information
23. Financial Statements Not Applicable
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WILSHIRE TARGET FUNDS, INC.
The purpose of this Post-Effective Amendment No. 13 is to add a new series
to the Company, namely, Wilshire 5000 Index Portfolio.
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PROSPECTUS WILSHIRE 5000 INDEX PORTFOLIO
(Investment Class Shares)
(http://www.wilfunds.com)
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Wilshire 5000 Index Portfolio (the "Portfolio") is a series of Wilshire Target
Funds, Inc. (the "Company"), a diversified open-end investment company, known as
a mutual-fund. This prospectus offers Investment Class shares of the Portfolio.
The goal of the Wilshire 5000 Index Portfolio is to replicate as closely as
possible the performance of the Wilshire 5000 Index (the "Index") before the
deduction of fund expenses. See "Description of the Portfolio." Wilshire
Associates Incorporated ("Wilshire") serves as the Portfolio's investment
adviser. First Data Investor Services Group, Inc. ("Investor Services Group")
serves as the Portfolio's administrator and transfer agent. First Data
Distributors, Inc. ("FDDI") serves as the Portfolio distributor.
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This prospectus sets forth concisely information about the Portfolio that you
should know before investing. It should be read and retained for future
reference. The Statement of Additional Information, dated January ___, 1999,
which may be revised from time to time, provides a further discussion of certain
topics in this prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission ("SEC")
and is incorporated herein by reference. For a free copy, write to the Company
at P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488, or call
1-888-200-6796. In addition, the SEC maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information, information incorporated
by reference to this prospectus and the Statement of Additional Information and
other information regarding registrants that file electronically with the SEC.
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Shares of the Portfolio are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution, are not insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency, and
involve risk, including the possible loss of principal amount invested.
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TABLE OF CONTENTS Page
Fee Table.................................................... 2
Description of the Portfolio................................. 3
Investment Considerations and Risks.......................... 4
Management of the Portfolio.................................. 6
How to Buy Portfolio Shares.................................. 7
Shareholder Services......................................... 9
How to Redeem Portfolio Shares............................... 10
Service and Distribution Plan................................ 12
Dividends, Distributions and Taxes........................... 13
Performance Information...................................... 14
General Information.......................................... 15
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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FEE TABLE
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The following table illustrates the expenses and fees expected to be
incurred by a shareholder and the Portfolio for the current fiscal year.
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WILSHIRE 5000
INDEX PORTFOLIO
SHAREHOLDER TRANSACTION EXPENSES:
Maximum sales load imposed on purchases or reinvestment of dividends None
Contingent deferred sales load upon redemption of investments..... None
Redemption Fees................................................... None
Exchange Fees..................................................... None
ANNUAL PORTFOLIO OPERATING EXPENSES:
(as a percentage of average daily net assets)
Management Fees (after waiver)*................................... .00%
12b-1 Fee**....................................................... .05%
Other Expenses+................................................... .35%
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Total Portfolio Operating Expenses (after waiver)++............... .40%
* Reflects voluntary waiver of advisory fees which will continue in
effect until at least December 31, 1999. Absent such voluntary waiver,
the ratio of management fees to average daily net assets would be .10%.
** The Portfolio may pay annually up to 0.25% of its average daily net
assets as reimbursement for expenses incurred under its
Rule 12b-1 plan.
+ The Adviser will reimburse expenses with respect to the Portfolio to
the extent necessary to maintain the Portfolio's expense ratio (other
than Rule 12b-1 fees) at 0.35% of the Portfolio's average daily net
assets until at least December 31, 1999.
++ Absent the voluntary fee waivers and expense reimbursements referred to
above, the ratio of total Portfolio operating expenses to average daily
net assets would be 0.77%.
The purpose of the foregoing table is to assist you in understanding
the various estimated costs and expenses that the Portfolio and investors will
bear, the payment of which will reduce investors' annual return. Actual expenses
may be greater or less than such estimates.
The following example illustrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Portfolio. These amounts are based on payments
by the Portfolio of operating expenses at the levels set forth in the above
table and also based on the following assumptions:
.........
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EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of each
time period:
1 Year .........$ 4
3 Years $13
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESENTATIVE
OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN,
THE PORTFOLIO'S PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN
GREATER OR LESS THAN 5%.
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You can purchase shares without charge directly from FDDI; you may be
charged a nominal fee if you effect transactions in shares through a securities
dealer, bank or other financial institution. See "Management of the Fund" and
"Service and Distribution Plan."
DESCRIPTION OF THE PORTFOLIO
Investment Objective
The goal of the Wilshire 5000 Index Portfolio is to replicate as closely as
possible (before fund expenses) the total return of the Index.
Investment Approach
The Portfolio is appropriate for investors who seek a return comparable
to that of the U.S. stock market as a whole as represented by the Index. The
Index, an unmanaged capitalization-weighted index of over 7,000 U.S. equity
securities, consists of all the U.S. stocks regularly traded on the New York and
American Stock Exchanges and the Nasdaq over-the-counter market. The Index has
been computed continuously since 1974 and is published daily in many major
newspapers.
The Portfolio will invest primarily in the common stocks of companies
included in the Index, that Wilshire deems representative of the entire Index,
selected on the basis of computer generated statistical data. Although the
Portfolio will not hold securities of all the issuers whose securities are
included in the Index, it will normally hold securities representing at least
90% of the total market value of the Index.
The Portfolio is managed through the use of a "quantitative" or
"indexing" investment approach, which attempts to duplicate the investment
composition and performance of the Index (before the deduction of fund expenses)
through statistical procedures. As a result, the Adviser does not employ
traditional methods of fund investment management, such as selecting securities
on the basis of economic, financial and market analysis. Securities are selected
based primarily on market capitalization and industry weightings.
Wilshire will keep the Portfolio invested in common stocks as fully as
practicable. During ordinary market conditions, it anticipates that more than
95% of the Portfolio's assets will be so invested. In connection with these
investments, the Portfolio may from time to time receive dividends or
distributions of other securities with equity characteristics, such as preferred
stocks, warrants, rights and securities convertible into common stock; Wilshire
will determine whether it is in the best interest of the Portfolio to hold these
securities or dispose of them. It is not Wilshire's intent to use other
securities, whether issues of individual companies or derivative securities, to
enhance or modify the return of the Portfolio. Nor is it Wilshire's intent to
actively manage the Portfolio's cash position for defensive reasons. From time
to time as the result of unforeseen market conditions or to facilitate the
handling of contributions or withdrawals, Wilshire may purchase such securities
if in its judgement this is in the best interest of the shareholders. Such
positions will be limited to an amount necessary to deal with the specific
condition at hand and will be liquidated as soon as Wilshire deems it
appropriate. In order to meet anticipated redemption requests, the Portfolio may
invest part or all of its assets in U.S. government securities and high quality
(within the two highest rating categories assigned by a nationally recognized
securities rating organization) U.S. dollar-denominated money market securities,
including certificates of deposit, bankers' acceptances, commercial paper,
short-term debt securities and repurchase agreements.
INVESTMENT CONSIDERATIONS AND RISKS
General -- The Portfolio's net asset value is not fixed and should be
expected to fluctuate. You should consider the Portfolio as a supplement to an
overall investment program and should invest only if you are willing to
undertake the risks involved.
The Portfolio may be appropriate for investors who are willing to
endure stock market fluctuations in pursuit of potentially higher long-term
returns. The Portfolio invests for growth and does not pursue income as a
primary objective. Over time, stocks, although more volatile, have shown greater
growth potential than other types of securities. In the shorter term, however,
stock prices can fluctuate dramatically in response to market factors. The
Portfolio is intended to be a long-term investment vehicle and is not designed
to provide investors with a means of speculating on short-term market movements.
Equity securities fluctuate in value, often based on factors unrelated
to the value of the issuer of the securities, and such fluctuations can be
pronounced. Changes in the value of the Portfolio's investment securities will
result in changes in the value of the Portfolio's shares and thus the
Portfolio's total return to investors. See "Investment Objective and Management
Policies" in the Statement of Additional Information.
Over time, Wilshire expects the correlation between the performance of
the Portfolio and the Index to be 0.95 or higher before deduction of fund
expenses. A correlation of 1.00 would indicate perfect correlation, which would
be achieved when the net asset value of the Portfolio, including the value of
its dividend and any capital gain distributions, increases or decreases in exact
proportion to changes in the Index. The Portfolio's ability to track the Index
may be affected by, among other things, transaction costs, administration and
other expenses incurred by the Portfolio, changes in either the composition of
the Index or the assets of the Portfolio, and the timing and amount of Portfolio
contributions and withdrawals. If for any reason the Portfolio does not achieve
a high correlation, the Company's Board of Directors will consider alternatives.
Except as otherwise indicated, the Portfolio's investment objectives
and policies are not fundamental and may be changed without a vote of
shareholders. There can be no assurance that the Portfolio's objective will be
met. See "Investment Objective and Management Policies -- Policies" in the
Statement of Additional Information for a further discussion of certain risks.
Borrowing Money -- The Portfolio is permitted to borrow money only for
temporary or emergency (not leveraging) purposes, in an amount up to 15% of the
value of its total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the Portfolio's total
assets, the Portfolio will not purchase any additional securities.
Simultaneous Investments -- Investment decisions for the Portfolio are
made independently from those of other series of the Company, other investment
companies and other accounts advised by Wilshire. However, if such other
investment companies or accounts are prepared to invest in, or desire to dispose
of, securities of the type in which the Portfolio invests at approximately the
same time as the Portfolio, available investments or opportunities for sales
will be allocated equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by the Portfolio or
the price paid or received by the Portfolio.
Lending Portfolio Securities -- The Portfolio may lend securities from
its portfolio to brokers, dealers and other financial institutions. In
connection with such loans, the Portfolio continues to be entitled to payments
in amounts equal to the interest, dividends or other distributions payable on
the loaned securities. Loans of portfolio securities afford the Portfolio an
opportunity to earn interest on the amount of the loan and at the same time to
earn income on the loan collateral. Loans of portfolio securities may not exceed
33 1/3% of the value of the Portfolio's total assets. In connection with such
loans, the Portfolio will receive collateral consisting of cash, U.S. government
securities or irrevocable letters of credit which will be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned securities. Such loans are terminable by the Portfolio at any time upon
specified notice. The Portfolio might experience risk of loss if the institution
with which it has engaged in a portfolio loan transaction breaches its agreement
with the Portfolio and the Portfolio is delayed or prevented from recovering the
collateral or completing the transaction.
Year 2000 -- The date-related computer issues known as the "Year 2000
problem" could have an adverse impact on the quality of services provided to the
Company and its shareholders. However, the Company understands that its key
service providers, including Wilshire, are taking steps to address the issue. In
addition, the Year 2000 problem may adversely affect the issuers in which the
Portfolio invests. However, because the objective of the Portfolio is to
replicate as closely as possible the total return of the Wilshire 5000 Index,
Wilshire does not perform fundamental analyses of the companies in which the
Portfolio invests, and does not attempt to monitor the impact of the problem on
individual issuers.
MANAGEMENT OF THE PORTFOLIO
Investment Adviser -- Wilshire, located at 1299 Ocean Avenue, Santa
Monica, California 90401, was formed in 1972 and serves as the Portfolio's
investment adviser. As of October 1, 1998, Wilshire managed approximately $7.4
billion in assets. Under the terms of the Investment Advisory Agreement
described below, Wilshire, subject to the overall authority of the Company's
Board of Directors in accordance with Maryland law, manages the investment of
the assets of the Portfolio. The Portfolio's primary portfolio manager is Thomas
D. Stevens, the President and Chairman of the Board of Directors of the Company
and a Senior Vice President of Wilshire. He has been employed by Wilshire since
1980. The Portfolio's other portfolio manager is identified in the Statement of
Additional Information. Wilshire also provides research services for the
Portfolio through a professional staff of portfolio managers and securities
analysts. Wilshire is controlled by its President, Dennis Tito, who owns a
majority of its outstanding voting stock.
Pursuant to the terms of an Investment Advisory Agreement with Wilshire
(the "Advisory Agreement"), the Company has agreed to pay Wilshire a fee
computed daily and paid monthly at the annual rate of .10% of the value of the
Portfolio's average daily net assets. Wilshire will waive advisory fees and
reimburse other expenses with respect to the Portfolio to the extent necessary
to maintain the Portfolio's expense ratio (other than Rule 12b-1 fees) at 0.35%
of the Portfolio's average daily net assets until at least December 31, 1999.
Administrator -- Investor Services Group, a subsidiary of First Data
Corporation, 4400 Computer Drive, Westborough, Massachusetts 01581, serves as
the Company's administrator pursuant to an Administration Agreement with the
Company. Under the terms of the Administration Agreement, Investor Services
Group generally assists in all aspects of the Company's operations, other than
providing investment advice, subject to the overall authority of the Company's
Board of Directors in accordance with Maryland law. Pursuant to the terms of the
Administration Agreement, the Company has agreed to pay Investor Services Group
a fee, computed daily and paid monthly, at the annual rate of .15 of 1% of the
value of the Company's monthly average net assets up to aggregate assets of $1
billion, .10 of 1% of the Company's monthly average net assets on the next $4
billion, and .08 of 1% the Company's monthly average net assets on the excess
net assets. In addition, the Company has agreed to pay Investor Services Group
an annual fee of $25,000 per series and $2,000 for each additional class.
Custodian and Transfer and Dividend Disbursing Agent -- The Northern
Trust Company, 50 South LaSalle Street, Chicago, Illinois 60675, is the
custodian of the Company's investments. Investor Services Group is also the
Company's Transfer and Dividend Disbursing Agent (the "Transfer Agent").
Distributor -- FDDI, 4400 Computer Drive, Westborough, Massachusetts
01581, serves as the distributor of the Company's shares. FDDI is an indirect
wholly-owned subsidiary of First Data Corporation. FDDI is not compensated for
its services as distributor.
Expenses -- From time to time, Wilshire or Investor Services Group may waive
receipt of its fees and/or voluntarily assume certain expenses of the Portfolio
or the Company, which would have the effect of lowering the overall expense
ratio of the Portfolio and increasing the return to investors at the time such
amounts are waived or assumed, as the case may be. The Company will not pay
Wilshire or Investor Services Group for any amounts which may be waived or
assumed. Each of FDDI, Wilshire or Investor Services Group may bear other
expenses of distribution of the shares of the Portfolio or of the provision of
shareholder services to the Portfolio's shareholders, including payments to
securities dealers or other financial intermediaries or service providers, out
of its profits and available resources other than the advisory and
administration fees paid by the Company.
All expenses incurred in the operation of the Company are borne by the
Company, except to the extent specifically assumed by FDDI, Wilshire or Investor
Services Group. The expenses borne by the Company include: organizational costs;
taxes; interest; brokerage fees and commissions, if any; fees of Directors who
are not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of FDDI, Wilshire or Investor Services Group or
any of their affiliates; SEC fees; state Blue Sky qualification fees; advisory
and administration fees; charges of custodians, transfer and dividend disbursing
agents' fees; certain insurance premiums; industry association fees; outside
auditing and legal expenses; costs of maintaining the Company's existence; costs
of independent pricing services; costs attributable to investor services
(including, without limitation, telephone and personnel expenses); costs of
shareholders' reports and meetings; costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders; and any extraordinary expenses. Expenses
attributable to a particular series or class of shares are charged against the
assets of that series or class. Other expenses of the Company are allocated
among the Portfolio and other series of the Company on the basis determined by
the Board of Directors, including, but not limited to, proportionately in
relation to the net assets of the Portfolio and other series of the Company.
HOW TO BUY PORTFOLIO SHARES
Shares are sold without a sales charge. You may be charged a fee if you
effect transactions in shares through a securities dealer, bank or other
financial institution. Share certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Company reserves
the right to reject any purchase order.
The minimum initial investment in the Portfolio is $1,000. Subsequent
investments must be at least $100. The initial investment must be accompanied by
the Account Application. The Company reserves the right to offer shares of the
Portfolio without regard to minimum purchase requirements to employees
participating in certain qualified or non-qualified employee benefit plans or
other programs where contributions or account information can be transmitted in
a manner and form acceptable to the Company. The Company reserves the right to
vary further the initial and subsequent investment minimum requirements at any
time. For investors who purchase through a financial intermediary and hold their
shares through an omnibus account with that financial intermediary, the minimum
initial investment applies to the omnibus account, and not to the investors
individually.
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You may purchase shares by check or wire. Checks should be made payable
to "Wilshire Target Funds, Inc." For subsequent investments, your Portfolio
account number should appear on the check. Payments which are mailed should be
sent to Wilshire Target Funds, Inc., P.O. Box 60488, King of Prussia,
Pennsylvania 19406-0488, together with your investment slip or, when opening a
new account, your Account Application, indicating the name of the Portfolio.
Neither initial nor subsequent investments may be made by third party check.
Wire payments may be made if your bank account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit and Trust Company (ABA #011001234),
together with the name of the Portfolio and the Portfolio's DDA number, 065-587,
for purchase of shares in your name. The wire must include your Portfolio
account number (for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer number, if
applicable. If your initial purchase of Portfolio shares is by wire, please call
1-888-200-6796 after completing your wire payment to obtain your Portfolio
account number. Please include your Portfolio account number on the Account
Application and promptly mail the Account Application to the Portfolio, as no
redemptions will be permitted until the Account Application is received. You may
obtain further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check used
for investment in your account does not clear. The Portfolio makes available to
certain large institutions the ability to issue purchase instructions through
compatible computer facilities.
Shares also may be purchased through the Wilshire Target Funds
Accumulation Plan, described under "Shareholder Services." This service enables
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will not
protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial institution
that is an Automated Clearing House member. You must direct the institution to
transmit immediately available funds through the Automated Clearing House to:
Boston Safe Deposit and Trust Company
Wilshire 5000 Index Portfolio
(Shareholder Account Number)
Account of (Registered Shareholder)
Shares of the Portfolio are sold on a continuous basis at the net asset
value per share next determined after an order in proper form is received by the
Transfer Agent. Net asset value per share of each class of shares is determined
as of the close of trading on the floor of the New York Stock Exchange (normally
4:00 p.m., New York time), on each day the New York Stock Exchange is open for
business. For purposes of determining net asset value of the Portfolio, futures
contracts will be valued 15 minutes after the close of trading on the floor of
the New York Stock Exchange. Net asset value per share of a class of shares of
the Portfolio is computed by dividing the value of the net assets attributable
to that class of shares (i.e., the value of the assets attributable to that
class less liabilities attributable to that class) by the total number of shares
of that class outstanding. The Portfolio's investments are valued based on
market value or, where market quotations are not readily available, based on
fair value as determined in good faith by the Board of Directors. For further
information regarding the methods employed in valuing Portfolio investments, see
"Determination of Net Asset Value" in the Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN could subject you to a $50 penalty imposed by
the Internal Revenue Service (the "IRS").
SHAREHOLDER SERVICES
Exchanges -- You may purchase, in exchange for shares of the Portfolio,
shares of the same class of one of the other series offered by the Company
(each, a "Fund") or shares of another class of the Portfolio or a Fund, to the
extent such shares are offered for sale in your state of residence and you meet
the eligibility requirements (including minimum investment amounts) for the
purchase of such shares.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing. The shares being exchanged must have a value of at
least the applicable minimum initial investment, if any, required for the series
and class into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this privilege. You may establish the Telephone Exchange
Privilege for an existing account by written request, signed by all shareholders
on the account, or by a separate signed Shareholder Services Form, also
available by calling 1-888-200-6796. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions by calling
1-888-200-6796. See "How to Redeem Portfolio Shares-Procedures." Upon an
exchange into a new account, the following shareholder services and privileges,
as applicable and where available, will be automatically carried over to the
Fund into which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, and the dividend and
capital gain distribution option you have selected.
Shares will be exchanged at their next determined net asset value. No
fees currently are charged to shareholders directly in connection with
exchanges, although the Company reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the SEC. The Company reserves the right to reject any exchange
request in whole or in part. The availability of exchanges may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of the Portfolio for shares of a Fund is treated
for Federal income tax purposes as a sale of the Portfolio shares exchanged by
the shareholder and, therefore, you may realize a taxable gain or loss.
Money Market Fund -- You may also exchange shares of the Portfolio for
shares of a money market fund. Please call 1-888-200-6796 to obtain a prospectus
and more information on how to exchange into the money market fund.
Wilshire Target Funds Accumulation Plan -- Wilshire Target Funds
Accumulation Plan permits you to purchase Portfolio shares (minimum of $100 and
maximum of $150,000 per transaction) at regular intervals you select. Shares are
purchased by transferring funds from the bank account you designate. At your
option, the bank account will be debited in the specified amount, and shares
will be purchased, once a month, on either the first or fifteenth day, or twice
a month, on both days. You may only designate an account maintained at a
domestic financial institution which is an Automated Clearing House member. To
establish a Wilshire Target Funds Accumulation Plan account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form by calling 1-888-200-6796. You may cancel your participation
in this privilege or change the amount of purchase at any time by mailing
written notification to Wilshire Target Funds, Inc., P.O. Box 60488, King of
Prussia, Pennsylvania 19406-0488, and the notification will be effective three
business days following receipt. The Company may modify or terminate this
privilege at any time or charge a service fee. No such fee currently is
contemplated.
Retirement Plans -- The Company offers a variety of pension and
profit-sharing plans, including Keogh Plans, IRAs, SEP-IRAs, Roth IRAs and IRA
"Rollover Accounts" and 403(b)(7) Plans. Plan support services also are
available. To obtain details on such Plans, please call the following toll-free
number: 1-888-200-6796.
HOW TO REDEEM PORTFOLIO SHARES
General -- You may request redemption of your shares at any time.
Redemption requests should be transmitted in accordance with the procedures
described below. When a request is received in proper form, the Portfolio will
redeem the shares at the next determined net asset value.
Securities dealers, banks and other financial institutions may charge a
nominal fee for effecting redemptions of the Portfolio's shares. Any
certificates representing the Portfolio's shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed may be
more or less than their original cost, depending upon the Portfolio's
then-current net asset value.
The Portfolio ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC.
However, if you have purchased the Portfolio's shares by check or
through the Wilshire Target Funds Accumulation Plan and subsequently submit a
written redemption request to the Transfer Agent, the redemption proceeds will
be transmitted to you promptly upon bank clearance of your purchase check or
Wilshire Target Funds Accumulation Plan order, which may take eight business
days or more. In addition, the Portfolio will reject requests to redeem shares
by wire or telephone for a period of eight business days after receipt by the
Transfer Agent of the purchase check or the Wilshire Target Funds Accumulation
Plan order against which such redemption is requested. These procedures will not
apply if your shares were purchased by wire payment, or if you otherwise have a
sufficient collected balance in your account to cover the redemption request.
Prior to the time any redemption is effective, dividends on such shares will
accrue and be payable, and you will be entitled to exercise all other rights of
beneficial ownership.
The Transfer Agent will not redeem your shares until it has received
your Account Application.
The Portfolio reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value is
$500 or less as a result of redemptions and remains so during the notice period.
Procedures -- You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent, through the Wire
Redemption Privilege or the Telephone Redemption Privilege. The Company reserves
the right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or the
number of such requests. The Company may modify or terminate any redemption
privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.
You may redeem shares by telephone if you have checked the appropriate
box on the Account Application or have filed a Shareholder Services Form with
the Transfer Agent. If you select a Telephone Redemption Privilege or Telephone
Exchange Privilege (which is granted automatically unless you refuse it), you
authorize the Transfer Agent to act on telephone instructions from any person
representing himself or herself to be you and reasonably believed by the
Transfer Agent to be genuine. The Company will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Company or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Company nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption or exchange of the Portfolio's shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Portfolio's net asset value may fluctuate.
<PAGE>
Regular Redemption -- Under the regular redemption procedure, you may
redeem your shares by written request mailed to Wilshire Target Funds, Inc.,
P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488. Redemption requests
must be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally will
be accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP"), and the Stock Exchanges Medallion Program. If you have any
questions with respect to signature-guarantees, please call one of the telephone
numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member bank of
the Federal Reserve System in accordance with a written signature-guaranteed
request.
Wire Redemption Privilege -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which is
a member of the Federal Reserve System, or a correspondent bank if your bank is
not a member. You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered accounts may have redemption proceeds of up
to $250,000 wired within any 30-day period. You may make redemption requests by
calling 1-888-200-6796. The Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which certificates
have been issued, are not eligible for this privilege.
Telephone Redemption Privilege -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-888-200-6796. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for this
privilege.
SERVICE AND DISTRIBUTION PLAN
The Directors of the Company have adopted a service and distribution
plan (the "Service and Distribution Plan") with respect to the Investment Class
shares of the Portfolio pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder. Under the Service and Distribution Plan, the Company reimburses
FDDI, distributor of the Company, at an annual rate of up to .25 of 1% of the
value of the average daily net assets attributable to the Investment Class
shares of the Portfolio for certain service and distribution expenses borne, or
paid to others, by FDDI. Generally, the service fees covered under the Service
and Distribution Plan are fees paid to securities dealers and other financial
intermediaries for personal services to holders of the Investment Class shares
of the Portfolio and/or for the maintenance of the accounts of the holders of
the Investment Class shares. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Company and providing reports and other information, and services
related to the maintenance of shareholder accounts. To the extent that such
service fees do not aggregate .25 of 1% of the value of the average daily net
assets attributable to the Investment class shares of the Portfolio, the Service
and Distribution Plan also permits reimbursement for distribution expenses
borne, or paid to others, by FDDI for the purpose of financing or assisting in
the financing of any activity which is primarily intended to result in the sale
of the Investment Class shares of the Portfolio. The types of distribution
expenses covered include, but are not limited to, the costs and expenses of
direct marketing activities (including related travel, meals and lodging); the
design, preparation, printing and distribution of promotional materials,
advertising and offering materials, and shareholder materials; the compensation
of securities dealers and other financial intermediaries for sales activities;
and related capital, overhead and interest expenses. Amounts payable under the
Service and Distribution Plan relating to the Portfolio are charged to, and
therefore reduce, income allocated to the Investment Class shares of the
Portfolio.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Portfolio ordinarily declares and distributes net realized gains,
if any, once a year, but may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), in all events in a manner consistent with the
provisions of the 1940 Act. The Company will not make distributions from net
realized gains unless capital loss carryovers, if any, have been utilized or
have expired. You may choose whether to receive dividends and distributions in
cash or to reinvest in additional shares at net asset value. All expenses are
accrued daily and deducted before declaration of dividends to investors.
The Portfolio intends to distribute substantially all of its net
investment income and net realized securities gains on a current basis.
Dividends paid by the Portfolio derived from net investment income and
distributions from net realized short-term securities gains of the Portfolio
will be taxable to U.S. shareholders as ordinary income for federal income tax
purposes whether received in cash or reinvested in additional shares. Depending
upon the composition of the Portfolio's income, all or a portion of the
dividends derived from net investment income may qualify for the dividends
received deduction allowable to certain U.S. corporations. Distributions from
net realized long-term securities gains of the Portfolio will be taxable to U.S.
shareholders as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their shares and whether such
distributions are received in cash or reinvested in shares. The maximum federal
capital gains rate for individuals is 28% with respect to capital assets held
for more than 12 months, but not more than 18 months, and 20% with respect to
capital assets held more than 18 months. The maximum capital gains rate for
corporate shareholders is the same as the maximum tax rate for ordinary income.
Dividends and distributions will generally be subject to state and local taxes.
Dividends from net investment income and distributions from net
realized short-term securities gains paid by the Portfolio to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate of 30%,
unless the foreign investor is entitled to claim the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term securities
gains paid by the Portfolio to a foreign investor as well as the proceeds of any
<PAGE>
redemptions from a foreign investor's account, regardless of the extent to which
gain or loss may be realized, generally will not be subject to any U.S.
withholding tax. However, such distributions and redemption proceeds may be
subject to backup withholding, as described below, unless the foreign investor
certifies his or her non-U.S. residency status. The tax consequences to foreign
investors engaged in a trade or business that is effectively connected with the
United States may differ from the foregoing.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your account
which will include information as to dividends and distributions from securities
gains, if any, paid during the year.
Federal regulations generally require the Company to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to you if
you fail to certify either that the TIN furnished in connection with opening an
account is correct or that you have not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return. Furthermore,
the IRS may notify the Portfolio to institute backup withholding if the IRS
determines your TIN is incorrect or if you failed to properly report taxable
dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.
The Portfolio intends to qualify as a "regulated investment company"
under the Code. Such qualification relieves the Portfolio of any liability for
Federal income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, a 4% non-deductible excise tax
is imposed on regulated investment companies that fail to currently distribute
specified percentages of their ordinary income and capital gain net income
(excess of capital gains over capital losses). The Portfolio intends to make
sufficient distributions or deemed distributions of its ordinary income and any
capital gain net income with respect to each year to avoid liability for this
excise tax.
The foregoing is a general summary of the U.S. Federal income tax
consequences of investing in the Portfolio. You should consult your tax adviser
regarding specific questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on the basis
of average annual total returns and/or total returns of the Portfolio. "Total
return" is the change in value of an investment in the Portfolio for a specified
period. The "average annual total return" of the Portfolio is the average annual
compound rate of return on an investment in the Portfolio assuming the
investment has been held for one-, five- and ten year periods (or the life of
the Portfolio if shorter).
<PAGE>
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management and is also affected by
operating expenses, market conditions and the risks associated with the
Portfolio's objective and investment policies. Performance information, such as
that described above, may not provide a basis for comparison with other
investments or other investment companies using a different method of
calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the shares of the Portfolio, including data from the
Wilshire 5000 Index, Lipper Analytical Services, Inc., the Standard & Poor's 500
Composite Stock Price Index, the Dow Jones Industrial Average, Morningstar, Inc.
and other industry publications.
GENERAL INFORMATION
The Company was incorporated under Maryland law on July 30, 1992, and
commenced operations on September 30, 1992. The Company is authorized to issue
600 million shares of Common Stock (with 100 million allocated to the Portfolio
and 50 million allocated to each class of the Portfolio), par value $.001 per
share.
The Company is a "series fund," which is a mutual fund divided into
separate series. Each series of the Company is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of one
series is not deemed to be a shareholder of any other series. As described
below, for certain matters shareholders of all series vote together as a group;
as to others they vote separately by series or by class.
To date the Board of Directors has authorized the creation of five
series of shares and an "Investment Class" and "Institutional Class" of shares
for each series. All consideration received by the Company for shares of one of
the series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of that series) and will be
subject to the liabilities related thereto. Each share of a class of a series
represents an equal proportionate interest in the series with each other class
share, subject to the liabilities of the particular class. Each class of shares
of a series participates equally in the earnings, dividends and assets
attributable to that class. The income attributable to, and the expenses of, one
class are treated separately from those of the other classes. Shares are fully
paid and non-assessable. Should a series be liquidated, the holders of each
class are entitled to share pro rata in the net assets attributable to that
class available for distribution to shareholders. The Board of Directors has the
ability to create, from time to time, new series and additional classes without
shareholder approval. Shares have no pre-emptive or conversion rights.
Institutional Class shares, which are generally available only to
institutions investing at least $5 million in the Portfolio, bear no Rule 12b-1
fee and, consequently, the Company expects the investment returns of
Institutional Class shares to exceed those of Investment Class shares. For more
information regarding eligibility to purchase Institutional Class shares, call
1-888-200-6796 or contact your investment representative.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Company to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Company's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require the
Company to hold a special meeting of shareholders for the purpose of considering
the removal of a Director from office or for any other purpose. Shareholders may
remove a Director by the affirmative vote of a majority of the Company's
outstanding voting shares. In addition, the Board of Directors will call a
meeting of shareholders for the purpose of electing Directors if, at any time,
less than a majority of the Directors then holding office have been elected by
shareholders. Each share has one vote and shares of each series are entitled to
vote separately to approve investment advisory agreements or changes in
investment restrictions, but shares of all series vote together in the election
of Directors or selection of accountants. Each class of a series is also
entitled to vote separately on any material increases in the fees under its
Service and Distribution Plan or on any other matter that affects solely that
class of shares, but will otherwise vote together with all other classes of
shares of the series on all other matters on which shareholders are entitled to
vote.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account. Certificates for Shares will not be
issued unless specifically requested.
Shareholder inquiries may be made by writing to the Fund at P.O. Box
60488, King of Prussia, Pennsylvania 19406-0488, or by calling toll free
1-888-200-6796.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus and in the
Company's official sales literature in connection with the offer of the
Portfolio's shares, and, if given or made, such other information or
representations must not be relied upon as having been authorized by the
Company. This prospectus does not constitute an offer in any state in which, or
to any person to whom, such offering may not lawfully be made.
<PAGE>
[GRAPHIC OMITTED]
<PAGE>
PROSPECTUS WILSHIRE 5000 INDEX PORTFOLIO
(Institutional Class Shares)
(http://www.wilfunds.com)
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Wilshire 5000 Index Portfolio (the "Portfolio") is a series of Wilshire
Target Funds, Inc. (the "Company"), a diversified open-end investment
company, known as a mutual fund. This prospectus offers Institutional Class
shares of the Portfolio. The goal of the Wilshire 5000 Index Portfolio is to
replicate as closely as possible the performance of the Wilshire 5000 Index
(the "Index") before the deduction of fund expenses. See "Description of
the Portfolio." Wilshire Associates Incorporated ("Wilshire") serves as the
Portfolio's investment adviser. First Data Investor Services Group, Inc.
("Investor Services Group") serves as the Portfolio's administrator and
transfer agent. First Data Distributors, Inc. ("FDDI") serves as the
Portfolio distributor.
- -------------------------------------------------------------------------------
This prospectus sets forth concisely information about the Portfolio that
you should know before investing. It should be read and retained for future
reference. The Statement of Additional Information, dated January ___, 1999,
which may be revised from time to time, provides a further discussion of certain
topics in this prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. For a free copy, write to
the Company at P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488, or call
1-888-200-6796. In addition, the SEC maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information, information incorporated
by reference to this prospectus and the Statement of Additional Information and
other information regarding registrants that file electronically with the SEC.
- --------------------------------------------------------------------------------
Shares of the Portfolio are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution, are not insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency, and
involve risk, including the possible loss of principal amount invested.
- -------------------------------------------------------------------------------
TABLE OF CONTENTS Page
Fee Table.................................................... 2
Description of the Portfolio................................. 3
Investment Considerations and Risks.......................... 4
Management of the Portfolio.................................. 6
How to Buy Portfolio Shares.................................. 7
Shareholder Services......................................... 9
How to Redeem Portfolio Shares............................... 10
Dividends, Distributions and Taxes........................... 12
Performance Information...................................... 14
General Information.......................................... 14
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
FEE TABLE
- -------------------------------------------------------------------------------
The following table illustrates the expenses and fees expected to be
incurred by a shareholder and the Portfolio for the current fiscal year.
- --------------------------------------------------------------------------------
WILSHIRE 5000
INDEX PORTFOLIO
SHAREHOLDER TRANSACTION EXPENSES:
Maximum sales load imposed on purchases or reinvestment of dividends None
Contingent deferred sales load upon redemption of investments..... None
Redemption Fees................................................... None
Exchange Fees..................................................... None
ANNUAL PORTFOLIO OPERATING EXPENSES:
(as a percentage of average daily net assets)
Management Fees (after waiver)*................................... .00%
Other Expenses+................................................... .35%
----
Total Portfolio Operating Expenses (after waiver)++............... .35%
* Reflects voluntary waiver of advisory fees which will continue in
effect until at least December 31, 1999. Absent such voluntary waiver,
the ratio of management fees to average daily net assets would be .10%.
+ The Adviser will reimburse expenses with respect to the Portfolio to
the extent necessary to maintain the Portfolio's expense ratio at 0.35%
of the Portfolio's average daily net assets until at least December 31,
1999.
++ Absent the voluntary fee waivers and expense reimbursements referred to
above, the ratio of total Portfolio operating expenses to average daily
net assets would be 0.72%.
The purpose of the foregoing table is to assist you in understanding
the various estimated costs and expenses that the Portfolio and investors will
bear, the payment of which will reduce investors' annual return.
Actual expenses may be greater or less than such estimates.
The following example illustrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect to
a hypothetical investment in the Portfolio. These amounts are based on payments
by the Portfolio of operating expenses at the levels set forth in the above
table and also based on the following assumptions:
.........
EXAMPLE:
An investor would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time period:
1 Year .........$ 4
3 Years $11
<PAGE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, EACH PORTFOLIO'S PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
- --------------------------------------------------------------------------------
You can purchase shares without charge directly from FDDI; you may be charged
a nominal fee if you effect transactions in shares through a securities dealer,
bank or other financial institution. See "Management of the Fund."
DESCRIPTION OF THE PORTFOLIO
Investment Objective
The goal of the Wilshire 5000 Index Portfolio is to replicate as
closely as possible (before fund expenses) the total return of the Index.
Investment Approach
The Portfolio is appropriate for investors who seek a return comparable
to that of the U.S. stock market as a whole as represented by the Index. The
Index, an unmanaged capitalization-weighted index of over 7,000 U.S. equity
securities, which consists of all the U.S. stocks regularly traded on the New
York and American Stock Exchanges and the Nasdaq over-the-counter market. The
Index has been computed continuously since 1974 and is published daily in many
newspapers.
The Portfolio will invest primarily in the common stocks of companies
included in the Index, that Wilshire deems representative of the entire Index,
selected on the basis of computer generated statistical data. Although the
Portfolio will not hold securities of all the issuers whose securities are
included in the Index, it will normally hold securities representing at least
90% of the total market value of the Index.
The Portfolio is managed through the use of a "quantitative" or
"indexing" investment approach, which attempts to duplicate the investment
composition and performance of the Index (before the deduction of fund expenses)
through statistical procedures. As a result, the Adviser does not employ
traditional methods of fund investment management, such as selecting securities
on the basis of economic, financial and market analysis. Securities are selected
based primarily on market capitalization and industry weightings.
Wilshire will keep the Portfolio invested in common stocks as fully as
practicable. During ordinary market conditions, it anticipates that more than
95% of the Portfolio's assets will be so invested. In connection with these
investments, the Portfolio may from time to time receive dividends or
distributions of other securities with equity characteristics, such as preferred
stocks, warrants, rights and securities convertible into common stock; Wilshire
will determine whether it is in the best interest of the Portfolio to hold these
securities or dispose of them. It is not Wilshire's intent to use other
securities, whether issues of individual companies or derivative securities, to
enhance or modify the return of the Portfolio. Nor is it Wilshire's intent to
actively manage the Portfolio's cash position for defensive reasons. From time
to time as the result of unforeseen market conditions or to facilitate the
handling of contributions or withdrawals, Wilshire may purchase such securities
if in its judgment this is in the best interest of the shareholders. Such
positions will be limited to an amount necessary to deal with the specific
condition at hand and will be liquidated as soon as Wilshire deems it
appropriate. In order to meet anticipated redemption, the Portfolio may invest
part or all of its assets in U.S. government securities and high quality (within
the two highest rating categories assigned by a nationally recognized securities
rating organization) U.S. dollar-denominated money market securities, including
certificates of deposit, bankers' acceptances, commercial paper, short-term debt
securities and repurchase agreements.
INVESTMENT CONSIDERATIONS AND RISKS
General -- The Portfolio's net asset value is not fixed and should be
expected to fluctuate. You should consider the Portfolio as a supplement to an
overall investment program and should invest only if you are willing to
undertake the risks involved.
The Portfolio may be appropriate for investors who are willing to
endure stock market fluctuations in pursuit of potentially higher long-term
returns. The Portfolio invests for growth and does not pursue income as a
primary objective. Over time, stocks, although more volatile, have shown greater
growth potential than other types of securities. In the shorter term, however,
stock prices can fluctuate dramatically in response to market factors. The
Portfolio is intended to be a long-term investment vehicle and is not designed
to provide investors with a means of speculating on short-term market movements.
Equity securities fluctuate in value, often based on factors unrelated
to the value of the issuer of the securities, and such fluctuations can be
pronounced. Changes in the value of the Portfolio's investment securities will
result in changes in the value of the Portfolio's shares and thus the
Portfolio's total return to investors. See "Investment Objective and Management
Policies" in the Statement of Additional Information.
Over time, Wilshire expects the correlation between the performance of
the Portfolio and the Index to be 0.95 or higher before deduction of fund
expenses. A correlation of 1.00 would indicate perfect correlation, which would
be achieved when the net asset value of the Portfolio, including the value of
its dividend and any capital gain distributions, increases or decreases in exact
proportion to changes in the Index. The Portfolio's ability to track the Index
may be affected by, among other things, transaction costs, administration and
other expenses incurred by the Portfolio, changes in either the composition of
the Index or the assets of the Portfolio, and the timing and amount of Portfolio
contributions and withdrawals. If for any reason the Portfolio does not achieve
a high correlation, the Company's Board of Directors will consider alternatives.
<PAGE>
Except as otherwise indicated, the Portfolio's investment objectives
and policies are not fundamental and may be changed without a vote of
shareholders. There can be no assurance that the Portfolio's objective will be
met. See "Investment Objective and Management Policies -- Policies" in the
Statement of Additional Information for a further discussion of certain risks.
Borrowing Money -- The Portfolio is permitted to borrow money only for
temporary or emergency (not leveraging) purposes, in an amount up to 15% of the
value of its total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the Portfolio's total
assets, the Portfolio will not purchase any additional securities.
Simultaneous Investments -- Investment decisions for the Portfolio are
made independently from those of other series of the Company, other investment
companies and other accounts advised by Wilshire. However, if such other
investment companies or accounts are prepared to invest in, or desire to dispose
of, securities of the type in which the Portfolio invests at approximately the
same time as the Portfolio, available investments or opportunities for sales
will be allocated equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by the Portfolio or
the price paid or received by the Portfolio.
Lending Portfolio Securities -- The Portfolio may lend securities from
its portfolio to brokers, dealers and other financial institutions. In
connection with such loans, the Portfolio continues to be entitled to payments
in amounts equal to the interest, dividends or other distributions payable on
the loaned securities. Loans of portfolio securities afford the Portfolio an
opportunity to earn interest on the amount of the loan and at the same time to
earn income on the loan collateral. Loans of portfolio securities may not exceed
33 1/3% of the value of the Portfolio's total assets. In connection with such
loans, the Portfolio will receive collateral consisting of cash, U.S. government
securities or irrevocable letters of credit which will be maintained at all
times in an amount equal to at least 100% of the current market value of the
loaned collateral securities. Such loans are terminable by the Portfolio at any
time upon specified notice. The Portfolio might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction breaches
its agreement with the Portfolio and the Portfolio is delayed or prevented from
recovering the collateral or completing the transaction.
Year 2000 - The date-related computer issues known as the "Year 2000
problem" could have an adverse impact on the quality of services provided to the
Company and its shareholders. However, the Company understands that its key
service providers, including Wilshire, are taking steps to address the issue. In
addition, the Year 2000 problem may adversely affect the issuers in which the
Portfolio invests. However, because the objective of the Portfolio is to
replicate as closely as possible the total return of the Wilshire 5000 Index,
Wilshire does not perform fundamental analyses of the companies in which the
Portfolio invests, and does not attempt to monitor the impact of the problem on
individual issuers.
<PAGE>
MANAGEMENT OF THE PORTFOLIO
Investment Adviser -- Wilshire, located at 1299 Ocean Avenue, Santa
Monica, California 90401, was formed in 1972 and serves as the Portfolio's
investment adviser. As of October 1, 1998, Wilshire managed approximately $7.4
billion in assets. Under the terms of the Investment Advisory Agreement
described below, Wilshire, subject to the overall authority of the Company's
Board of Directors in accordance with Maryland law, manages the investment of
the assets of the Portfolio. The Portfolio's primary portfolio manager is Thomas
D. Stevens, the President and Chairman of the Board of Directors of the Company
and a Senior Vice President of Wilshire. He has been employed by Wilshire since
1980. The Portfolio's other portfolio manager is identified in the Statement of
Additional Information. Wilshire also provides research services for the
Portfolio through a professional staff of portfolio managers and securities
analysts. Wilshire is controlled by its President, Dennis Tito, who owns a
majority of its outstanding voting stock.
Pursuant to the terms of an Investment Advisory Agreement with Wilshire
(the "Advisory Agreement"), the Company has agreed to pay Wilshire a fee
computed daily and paid monthly at the annual rate of .10% of the value of the
Portfolio's average daily net assets. Wilshire will waive advisory fees and
reimburse other expenses with respect to the Portfolio to the extent necessary
to maintain the Portfolio's expense ratio at 0.35% of the Portfolio's average
daily net assets until at least December 31, 1999.
Administrator -- Investor Services Group, a subsidiary of First Data
Corporation, 4400 Computer Drive, Westborough, Massachusetts 01581, serves as
the Company's administrator pursuant to an Administration Agreement with the
Company. Under the terms of the Administration Agreement, Investor Services
Group generally assists in all aspects of the Company's operations, other than
providing investment advice, subject to the overall authority of the Company's
Board of Directors in accordance with Maryland law. Pursuant to the terms of the
Administration Agreement, the Company has agreed to pay Investor Services Group
a fee, computed daily and paid monthly, at the annual rate of .15 of 1% of the
value of the Company's monthly average net assets up to aggregate assets of $1
billion, .10 of 1% of the Company's monthly average net assets on the next $4
billion, and .08 of 1% the Company's monthly average net assets on the excess
net assets. In addition, the Company has agreed to pay Investor Services Group
an annual fee of $25,000 per series and $2,000 for each additional class.
Custodian and Transfer and Dividend Disbursing Agent -- The Northern
Trust Company, 50 South LaSalle Street, Chicago, Illinois 60675, is the
custodian of the Company's investments. Investor Services Group is also the
Company's Transfer and Dividend Disbursing Agent (the "Transfer Agent").
Distributor -- FDDI, 4400 Computer Drive, Westborough, Massachusetts
01581, serves as the distributor of the Company's shares. FDDI is an indirect
wholly-owned subsidiary of First Data Corporation. FDDI is not compensated for
its services as distributor.
<PAGE>
Expenses -- From time to time, Wilshire or Investor Services Group may
waive receipt of its fees and/or voluntarily assume certain expenses of the
Portfolio or the Company, which would have the effect of lowering the overall
expense ratio of the Portfolio and increasing the return to investors at the
time such amounts are waived or assumed, as the case may be. The Company will
not pay Wilshire or Investor Services Group for any amounts which may be waived
or assumed. Each of FDDI, Wilshire or Investor Services Group may bear other
expenses of distribution of the shares of the Portfolio or of the provision of
shareholder services to the Portfolio's shareholders, including payments to
securities dealers or other financial intermediaries or service providers, out
of its profits and available resources other than the advisory and
administration fees paid by the Company.
All expenses incurred in the operation of the Company are borne by the
Company, except to the extent specifically assumed by FDDI, Wilshire or Investor
Services Group. The expenses borne by the Company include: organizational costs;
taxes; interest; brokerage fees and commissions; if any, fees of Directors who
are not officers, directors, employees or holders of 5% or more of the
outstanding voting securities of FDDI, Wilshire or Investor Services Group or
any of their affiliates; SEC fees; state Blue Sky qualification fees; advisory
and administration fees; charges of custodians, transfer and dividend disbursing
agents' fees; certain insurance premiums; industry association fees; outside
auditing and legal expenses; costs of maintaining the Company's existence; costs
of independent pricing services; costs attributable to investor services
(including, without limitation, telephone and personnel expenses); costs of
shareholders' reports and meetings; costs of preparing and printing prospectuses
and statements of additional information for regulatory purposes and for
distribution to existing shareholders; and any extraordinary expenses. Expenses
attributable to a particular series or class of shares are charged against the
assets of that series or class. Other expenses of the Company are allocated
among the Portfolio and other series of the Company on the basis determined by
the Board of Directors, including, but not limited to, proportionately in
relation to the net assets of the Portfolio and other series of the Company.
HOW TO BUY PORTFOLIO SHARES
Shares are sold without a sales charge. You may be charged a fee if you
effect transactions in shares through a securities dealer, bank or other
financial institution. Share certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Company reserves
the right to reject any purchase order.
The minimum initial investment in the Portfolio is $5,000,000.
Subsequent investments must be at least $100,000. The initial investment must be
accompanied by the Account Application. The Company reserves the right to vary
further the initial and subsequent investment minimum requirements at any time.
For investors who purchase through a financial intermediary and hold their
shares through an omnibus account with that financial intermediary, the minimum
initial investment applies to the omnibus account, and not to the investors
individually.
<PAGE>
You may purchase shares by check or wire. Checks should be made payable
to "Wilshire Target Funds, Inc." For subsequent investments, your Portfolio
account number should appear on the check. Payments which are mailed should be
sent to Wilshire Target Funds, Inc., P.O. Box 60488, King of Prussia,
Pennsylvania 19406-0488, together with your investment slip or, when opening a
new account, your Account Application, indicating the name of the Portfolio.
Neither initial nor subsequent investments may be made by third party check.
Wire payments may be made if your bank account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit and Trust Company (ABA #011001234),
together with the name of the Portfolio and the Portfolio's DDA number, 065-587,
for purchase of shares in your name. The wire must include your Portfolio
account number (for new accounts, your Taxpayer Identification Number ("TIN")
should be included instead), account registration and dealer number, if
applicable. If your initial purchase of Portfolio shares is by wire, please call
1-888-200-6796 after completing your wire payment to obtain your Portfolio
account number. Please include your Portfolio account number on the Account
Application and promptly mail the Account Application to the Portfolio, as no
redemptions will be permitted until the Account Application is received. You may
obtain further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check used
for investment in your account does not clear. The Portfolio makes available to
certain large institutions the ability to issue purchase instructions through
compatible computer facilities.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial institution
that is an Automated Clearing House member. You must direct the institution to
transmit immediately available funds through the Automated Clearing House to:
Boston Safe Deposit and Trust Company
Wilshire 5000 Index Portfolio
(Shareholder Account Number)
Account of (Registered Shareholder)
Shares of the Portfolio are sold on a continuous basis at the net asset
value per share next determined after an order in proper form is received by the
Transfer Agent. Net asset value per share of each class of shares is determined
as of the close of trading on the floor of the New York Stock Exchange (normally
4:00 p.m., New York time), on each day the New York Stock Exchange is open for
business. For purposes of determining net asset value of the Portfolio, futures
contracts will be valued 15 minutes after the close of trading on the floor of
the New York Stock Exchange. Net asset value per share of a class of shares of
the Portfolio is computed by dividing the value of the net assets attributable
to that class of shares (i.e., the value of the assets attributable to that
class less liabilities attributable to that class) by the total number of shares
of that class outstanding. The Portfolio's investments are valued based on
market value or, where market quotations are not readily available, based on
fair value as determined in good faith by the Board of Directors. For further
information regarding the methods employed in valuing Portfolio investments, see
"Determination of Net Asset Value" in the Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN could subject you to a $50 penalty imposed by
the Internal Revenue Service (the "IRS").
SHAREHOLDER SERVICES
Exchanges -- You may purchase, in exchange for shares of the Portfolio,
shares of the same class of one of the other series offered by the Company
(each, a "Fund") or shares of another class of the Portfolio or a Fund, to the
extent such shares are offered for sale in your state of residence and you meet
the eligibility requirements (including minimum investment amounts) for the
purchase of such shares.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing. The shares being exchanged must have a value of at
least the applicable minimum initial investment, if any, required for the series
and class into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this privilege. You may establish the Telephone Exchange
Privilege for an existing account by written request, signed by all shareholders
on the account, or by a separate signed Shareholder Services Form, also
available by calling 1-888-200-6796. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions by calling
1-888-200-6796. See "How to Redeem Portfolio Shares-Procedures." Upon an
exchange into a new account, the following shareholder services and privileges,
as applicable and where available, will be automatically carried over to the
Fund into which the exchange is made: Telephone Exchange Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, and the dividend and
capital gain distribution option you have selected.
Shares will be exchanged at their next determined net asset value. No
fees currently are charged to shareholders directly in connection with
exchanges, although the Company reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the SEC. The Company reserves the right to reject any exchange
request in whole or in part. The availability of exchanges may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of the Portfolio for shares of a Fund is treated
for Federal income tax purposes as a sale of the Portfolio shares exchanged by
the shareholder and, therefore, you may realize a taxable gain or loss.
Money Market Fund -- You may also exchange shares of the Fund for
shares of a money market fund. Please call 1-888-200-6796 to obtain a prospectus
and more information on how to exchange into the money market fund.
<PAGE>
Retirement Plans -- The Company offers a variety of pension and
profit-sharing plans, including Keogh Plans, IRAs, SEP-IRAs, Roth IRAs and IRA
"Rollover Accounts" and 403(b)(7) Plans. Plan support services also are
available. To obtain details on such Plans, please call the following toll-free
number: 1-888-200-6796.
HOW TO REDEEM PORTFOLIO SHARES
General -- You may request redemption of your shares at any time.
Redemption requests should be transmitted in accordance with the procedures
described below. When a request is received in proper form, the Portfolio will
redeem the shares at the next determined net asset value.
Securities dealers, banks and other financial institutions may charge a
nominal fee for effecting redemptions of the Portfolio's shares. Any
certificates representing the Portfolio's shares being redeemed must be
submitted with the redemption request. The value of the shares redeemed may be
more or less than their original cost, depending upon the Portfolio's
then-current net asset value.
The Portfolio ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC.
However, if you have purchased the Portfolio's shares by check or
through the Wilshire Target Funds Accumulation Plan and subsequently submit a
written redemption request to the Transfer Agent, the redemption proceeds will
be transmitted to you promptly upon bank clearance of your purchase check or
Wilshire Target Funds Accumulation Plan order, which may take eight business
days or more. In addition, the Portfolio will reject requests to redeem shares
by wire or telephone for a period of eight business days after receipt by the
Transfer Agent of the purchase check or the Wilshire Target Funds Accumulation
Plan order against which such redemption is requested. These procedures will not
apply if your shares were purchased by wire payment, or if you otherwise have a
sufficient collected balance in your account to cover the redemption request.
Prior to the time any redemption is effective, dividends on such shares will
accrue and be payable, and you will be entitled to exercise all other rights of
beneficial ownership.
The Transfer Agent will not redeem your shares until it has received
your Account Application.
The Portfolio reserves the right to redeem your account at its option
upon not less than 45 days' written notice if your account's net asset value is
$500 or less as a result of redemptions and remains so during the notice period.
<PAGE>
Procedures -- You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent, through the Wire
Redemption Privilege or the Telephone Redemption Privilege. The Company reserves
the right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or the
number of such requests. The Company may modify or terminate any redemption
privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.
You may redeem shares by telephone if you have checked the appropriate
box on the Account Application or have filed a Shareholder Services Form with
the Transfer Agent. If you select a Telephone Redemption Privilege or Telephone
Exchange Privilege (which is granted automatically unless you refuse it), you
authorize the Transfer Agent to act on telephone instructions from any person
representing himself or herself to be you and reasonably believed by the
Transfer Agent to be genuine. The Company will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Company or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Company nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption or exchange of the Portfolio's shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Portfolio's net asset value may fluctuate.
Regular Redemption -- Under the regular redemption procedure, you may
redeem your shares by written request mailed to Wilshire Target Funds, Inc.,
P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488. Redemption requests
must be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally will
be accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP"), and the Stock Exchanges Medallion Program. If you have any
questions with respect to signature-guarantees, please call one of the telephone
numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member bank
of the Federal Reserve System in accordance with a written signature-guaranteed
request.
<PAGE>
Wire Redemption Privilege -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which is
a member of the Federal Reserve System, or a correspondent bank if your bank is
not a member. You also may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and mailed to your
address. Redemption proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered accounts may have redemption proceeds of up
to $250,000 wired within any 30-day period. You may make redemption requests by
calling 1-888-200-6796. The Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire. Shares held under
Keogh Plans, IRAs or other retirement plans, and shares for which certificates
have been issued, are not eligible for this privilege.
Telephone Redemption Privilege -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-888-200-6796. Shares held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for this
privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Portfolio ordinarily declares and distributes net realized gains,
if any, once a year, but may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), in all events in a manner consistent with the
provisions of the 1940 Act. The Company will not make distributions from net
realized gains unless capital loss carryovers, if any, have been utilized or
have expired. You may choose whether to receive dividends and distributions in
cash or to reinvest in additional shares at net asset value. All expenses are
accrued daily and deducted before declaration of dividends to investors.
The Portfolio intends to distribute substantially all of its net
investment income and net realized securities gains on a current basis.
Dividends paid by the Portfolio derived from net investment income and
distributions from net realized short-term securities gains of the Portfolio
will be taxable to U.S. shareholders as ordinary income for federal income tax
purposes whether received in cash or reinvested in additional shares. Depending
upon the composition of the Portfolio's income, all or a portion of the
dividends derived from net investment income may qualify for the dividends
received deduction allowable to certain U.S. corporations. Distributions from
net realized long-term securities gains of the Portfolio will be taxable to U.S.
shareholders as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their shares and whether such
distributions are received in cash or reinvested in shares. The maximum federal
capital gains rate for individuals is 28% with respect to capital assets held
for more than 12 months, but not more than 18 months, and 20% with respect to
capital assets held more than 18 months. The maximum capital gains rate for
corporate shareholders is the same as the maximum tax rate for ordinary income.
Dividends and distributions will generally be subject to state and local taxes.
<PAGE>
Dividends from net investment income and distributions from net
realized short-term securities gains paid by the Portfolio to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate of 30%,
unless the foreign investor is entitled to claim the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term securities
gains paid by the Portfolio to a foreign investor as well as the proceeds of any
redemptions from a foreign investor's account, regardless of the extent to which
gain or loss may be realized, generally will not be subject to any U.S.
withholding tax. However, such distributions and redemption proceeds may be
subject to backup withholding, as described below, unless the foreign investor
certifies his or her non-U.S. residency status. The tax consequences to foreign
investors engaged in a trade or business that is effectively connected with the
United States may differ from the foregoing.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your account
which will include information as to dividends and distributions from securities
gains, if any, paid during the year.
Federal regulations generally require the Company to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to you if
you fail to certify either that the TIN furnished in connection with opening an
account is correct or that you have not received notice from the IRS of being
subject to backup withholding as a result of a failure to properly report
taxable dividend or interest income on a Federal income tax return. Furthermore,
the IRS may notify the Portfolio to institute backup withholding if the IRS
determines your TIN is incorrect or if you have failed to properly report
taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.
The Portfolio intends to qualify as a "regulated investment company"
under the Code. Such qualification relieves the Portfolio of any liability for
Federal income tax to the extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, a 4% non-deductible excise tax
is imposed on regulated investment companies that fail to currently distribute
specified percentages of their ordinary income and capital gain net income
(excess of capital gains over capital losses). The Portfolio intends to make
sufficient distributions or deemed distributions of its ordinary income and any
capital gain net income with respect to each year to avoid liability for this
excise tax.
The foregoing is a general summary of the U.S. Federal income tax
consequences of investing in the Portfolio. You should consult your tax adviser
regarding specific questions as to Federal, state or local taxes.
<PAGE>
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on the basis
of average annual total returns and/or total returns of the Portfolio. "Total
return" is the change in value of an investment in the Portfolio for a specified
period. The "average annual total return" of the Portfolio is the average annual
compound rate of return on an investment in the Portfolio assuming the
investment has been held for one-, five- and ten year periods (or the life of
the Portfolio if shorter).
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management and is also affected by
operating expenses, market conditions and the risks associated with the
Portfolio's objective and investment policies. Performance information, such as
that described above, may not provide a basis for comparison with other
investments or other investment companies using a different method of
calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the shares of the Portfolio, including data from the
Wilshire 5000 Index, Lipper Analytical Services, Inc., the Standard & Poor's 500
Composite Stock Price Index, the Dow Jones Industrial Average, Morningstar, Inc.
and other industry publications.
GENERAL INFORMATION
The Company was incorporated under Maryland law on July 30, 1992, and
commenced operations on September 30, 1992. The Company is authorized to issue
600 million shares of Common Stock (with 100 million allocated to the Portfolio
and 50 million allocated to each class of the Portfolio), par value $.001 per
share.
The Company is a "series fund," which is a mutual fund divided into
separate series. Each series of the Company is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of one
series is not deemed to be a shareholder of any other series. As described
below, for certain matters shareholders of all series vote together as a group;
as to others they vote separately by series or by class.
To date, the Board of Directors has authorized the creation of five
series of shares and an "Investment Class" and "Institutional Class" of shares
for each series. All consideration received by the Company for shares of one of
the series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of that series) and will be
subject to the liabilities related thereto. Each share of a class of a series
represents an equal proportionate interest in the series with each other class
share, subject to the liabilities of the particular class. Each class of shares
of a series participates equally in the earnings, dividends and assets
attributable to that class. The income attributable to, and the expenses of, one
class are treated separately from those of the other classes. Shares are fully
paid and non-assessable. Should a series be liquidated, the holders of each
class are entitled to share pro rata in the net assets attributable to that
class available for distribution to shareholders. The Board of Directors has the
ability to create, from time to time, new series and additional classes without
shareholder approval. Shares have no pre-emptive or conversion rights.
Investment Class shares, which are generally available to the public,
bear a Rule 12b-1 fee of up to .25% of the average daily net assets of the
Portfolio's Investment Class shares. For information regarding the Investment
Class shares call 1-888-200-6796 or contact your investment representative.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Company to hold annual meetings of shareholders. As a result,
shareholders may not consider each year the election of Directors or the
appointment of auditors. However, pursuant to the Company's By-Laws, the holders
of at least 10% of the shares outstanding and entitled to vote may require the
Company to hold a special meeting of shareholders for the purpose of considering
the removal of a Director from office or for any other purpose. Shareholders may
remove a Director by the affirmative vote of a majority of the Company's
outstanding voting shares. In addition, the Board of Directors will call a
meeting of shareholders for the purpose of electing Directors if, at any time,
less than a majority of the Directors then holding office have been elected by
shareholders. Each share has one vote and shares of each series are entitled to
vote separately to approve investment advisory agreements or changes in
investment restrictions, but shares of all series vote together in the election
of Directors or selection of accountants. Each class of a series is also
entitled to vote separately on any material increases in the fees under its
Services and Distribution Plan or on any other matter that affects solely that
class of shares, but will otherwise vote together with all other classes of
shares of the series on all other matters on which shareholders are entitled to
vote.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account. Certificates for Shares will not be
issued unless specifically requested.
Shareholder inquiries may be made by writing to the Fund at P.O. Box
60488, King of Prussia, Pennsylvania 19406-0488, or by calling toll free
1-888-200-6796.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus and in the
Company's official sales literature in connection with the offer of the Fund's
shares, and, if given or made, such other information or representations must
not be relied upon as having been authorized by the Company. This prospectus
does not constitute an offer in any state in which, or to any person to whom,
such offering may not lawfully be made.
<PAGE>
[GRAPHIC OMITTED]
Prospectus
<PAGE>
WILSHIRE 5000 INDEX PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
January ___, 1999
This Statement of Additional Information, which is not a prospectus, supplements
and should be read in conjunction with the current prospectuses of Wilshire 5000
Index Portfolio (the "Portfolio") (Investment Class shares and Institutional
Class shares) dated January ____, 1999 (each a "Prospectus"). The Portfolio is a
series of Wilshire Target Funds, Inc. (the "Company"). To obtain a copy of a
Prospectus, please write to the Portfolio at P.O. Box 60488, King of Prussia,
Pennsylvania 19406-0488. Capitalized terms not otherwise defined herein have the
same meaning as in the Prospectuses.
Wilshire Associates Incorporated ("Wilshire") serves as the Portfolio's
investment adviser.
First Data Investor Services Group, Inc. ("Investor Services Group") serves as
the Portfolio's administrator and transfer agent.
First Data Distributors, Inc. ("FDDI") serves as the Portfolio's distributor.
TABLE OF CONTENTS
GENERAL INFORMATION AND HISTORY.............................................. 2
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES................................. 2
MANAGEMENT OF THE COMPANY.................................................... 8
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS............................11
SERVICE AND DISTRIBUTION PLAN................................................13
PURCHASE OF PORTFOLIO SHARES.................................................13
REDEMPTION OF PORTFOLIO SHARES...............................................15
SHAREHOLDER SERVICES.........................................................16
DETERMINATION OF NET ASSET VALUE.............................................17
DIVIDENDS, DISTRIBUTION AND TAXES............................................17
PERFORMANCE INFORMATION......................................................19
PORTFOLIO TRANSACTIONS.......................................................20
INFORMATION ABOUT THE PORTFOLIO..............................................20
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT ACCOUNTANTS........................................21
<PAGE>
GENERAL INFORMATION AND HISTORY
On September 17, 1992, Dreyfus-Wilshire Series Fund, Inc. changed its name to
Dreyfus-Wilshire Target Funds, Inc.
On May 29, 1996, Dreyfus-Wilshire Target Funds, Inc. changed its name to
Wilshire Target Funds, Inc.
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction with the
section in the Prospectuses entitled "Description of the Portfolio."
OTHER PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES. The Portfolio may purchase securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, which
include U.S. Treasury securities that differ in their interest rates, maturities
and times of issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the Treasury; others, such as
those issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the agency
or instrumentality; and others, such as those issued by the Student Loan
Marketing Association, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of interest. While the
U.S. Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will always do
so, since it is not so obligated by law.
BANK OBLIGATIONS. The Portfolio may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. With respect to
such securities issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, and domestic and foreign branches of foreign
banks, the Portfolio may be subject to additional investment risks that are
different in some respects from those incurred by a portfolio which invests only
in debt obligations of U.S. domestic issuers. Such risks include possible future
political and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities, the possible
establishment of exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on these securities and the possible seizure or nationalization of foreign
deposits.
Certificates of deposit are negotiable certificates evidencing the obligation of
a bank to repay funds deposited with it for a specified period of time.
<PAGE>
Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time at a stated interest rate. The Portfolio only
will only invest in time deposits of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the Portfolio
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term bank obligations in which the
Portfolio may invest may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and price
(usually within seven days). The repurchase agreement thereby determines the
yield during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon the
Portfolio's ability to dispose of the underlying securities. The Company's
custodian or sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Portfolio under a repurchase agreement.
Repurchase agreements are considered by the staff of the SEC to be loans by the
Portfolio. In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Portfolio will enter into repurchase agreements only with
domestic banks with total assets in excess of one billion dollars with respect
to securities of the type in which the Portfolio may invest, and will require
that additional securities be deposited with it if the value of the securities
purchased should decrease below resale price.
LENDING PORTFOLIO SECURITIES. In connection with its securities lending
transactions, the Portfolio may return to the borrower or a third party which is
unaffiliated with the Company, and which is acting as a "placing broker," a part
of the interest earned from the investment of collateral received for securities
loaned.
The SEC currently requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Portfolio must receive at least 100%
cash collateral from the borrower; (2) the borrower must increase such
collateral whenever the market value of the securities rises above the level of
such collateral; (3) the Portfolio must be able to terminate the loan at any
time; (4) the Portfolio must receive reasonable interest on the loan, as well as
any dividends, interest or other distributions payable on the loaned securities,
and any increase in market value; (5) the Portfolio may pay only reasonable
custodian fees in connection with the loan; and (6) while voting rights on the
loaned securities may pass to the borrower, the Company's Board of Directors
must terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. These conditions may
be subject to future modification.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. Commercial paper
consists of short-term, unsecured promissory notes issued to finance short-term
credit needs. The commercial paper purchased by the Portfolio will consist only
of direct obligations which, at the time of their purchase, are (a) rated not
lower than Prime-1 by Moody's Investors Service, Inc., A-1 by Standard & Poor's
Ratings Group, F-1 by Fitch Investors Service, L.P. or D-1 by Duff & Phelps
Credit Rating Co.; (b) issued by companies having an outstanding unsecured debt
issue currently rated not lower than Aa3 by Moody's Investors Service, Inc. or
AA- by Standard & Poor's Ratings Group, Fitch Investors Service, L.P. or Duff &
Phelps Credit Rating Co.; or (c) if unrated, determined by Wilshire to be of
comparable quality to those rated obligations which may be purchased by the
Portfolio. These instruments include variable amount master demand notes, which
are obligations that permit the Portfolio to invest fluctuating amounts at
varying rates of interest pursuant to direct arrangements between the Portfolio,
as lender, and the borrower. These notes permit daily changes in the amounts
borrowed. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued interest,
at any time. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Portfolio's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. In connection with floating and variable rate demand obligations,
Wilshire will consider, on an ongoing basis, earning power, cash flow and other
liquidity ratios of the borrower, and the borrower's ability to pay principal
and interest on demand. Such obligations frequently are not rated by credit
rating agencies, and the Portfolio may invest in them only if at the time of an
investment the borrower meets the criteria set forth above for other commercial
paper issuers.
PREFERRED STOCK. The Portfolio may invest up to 5% of its assets in preferred
stock. Preferred Stock, unlike common stock, offers a stated dividend rate
payable from a corporation's earnings. Such preferred stock dividends may be
cumulative or non-cumulative, participating or auction rate. If interest rates
rise, the fixed dividend on preferred stocks may be less attractive, causing the
price of preferred stocks to decline. Preferred stock may have mandatory sinking
fund provisions, as well as call/redemption provisions prior to maturity, a
negative feature when interest rates decline. Dividends on some preferred stock
may be "cumulative," requiring all or a portion of prior unpaid dividends to be
paid before dividends are paid on the issuer's common stock. Preferred stock
also generally has a preference over common stock on the distribution of a
corporation's assets in the event of liquidation of the corporation, and may be
"participating," which means that it may be entitled to a dividend exceeding the
stated dividend in certain cases. The rights of preferred stocks on the
distribution of a corporation's assets in the event of a liquidation are
generally subordinate to the rights associated with a corporation's debt
securities.
CONVERTIBLE SECURITIES. The Portfolio may invest up to 5% of its assets in
convertible securities when its appears to Wilshire that it may not be prudent
to be fully invested in common stocks. In evaluating a convertible security,
Wilshire places primary emphasis on the attractiveness of the underlying common
stock and the potential for capital appreciation through conversion. Convertible
securities may include corporate notes or preferred stock but are ordinarily a
long-term debt obligation of the issuer convertible at a stated exchange rate
into common stock of the issuer. As with all debt securities, the market value
of convertible securities tends to decline as interest rates increase and,
conversely, to increase as interest rates decline. Convertible securities
generally offer lower interest or dividend yields than non-convertible
securities of similar quality. However, when the market price of the common
stock underlying a convertible security exceeds the conversion price, the price
of the convertible security tends to reflect the value of the underlying common
stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus may
not depreciate to the same extent as the underlying common stock. Convertible
securities rank senior to common stocks in an issuer's capital structure and are
consequently of higher quality and entail less risk than the issuer's common
stock, although the extent to which such risk is reduced depends in large
measure upon the degree to which the convertible security sells above its value
as a fixed income security.
WARRANTS AND RIGHTS. The Portfolio may invest up to 5% of its assets in warrants
and similar rights to purchase stock. Warrants basically are options to purchase
equity securities at a specified price valid for a specific period of time.
Their prices do not necessarily move parallel to the prices of the underlying
securities. Rights are similar to warrants, but normally have a short duration
and are distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
DERIVATIVES. Although Wilshire has no current intention to invest Portfolio
assets in financial instruments which derive their performance, at least in
part, from the performance of an underlying assets or index ("Derivatives"), it
reserves the right to do so in the future. Under normal market conditions, less
than 5% of the net assets of the Portfolio would be invested in Derivatives.
Derivatives may provide a cheaper, quicker or more specifically focused way for
the Portfolio to invest than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
Portfolio as a whole. Derivatives permit the Portfolio to increase, decrease or
change the level of risk to which it is exposed in much the same way as the
Portfolio can increase, decrease or change its risk by making investments in
specific securities.
In addition, Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives could
have a large potential impact on the Portfolio's performance. If the Portfolio
invests in Derivatives at inappropriate times or judges market conditions
incorrectly, such investments may lower the Portfolio's return or result in a
loss. The Portfolio also could experience losses if its Derivatives were poorly
correlated with its other investments, or if the Portfolio were unable to
liquidate its position because of an illiquid secondary market. The market for
many Derivatives is, or suddenly can become, illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the prices for
Derivatives.
When required by the SEC, the Portfolio will set aside permissible liquid assets
in a segregated account to cover its obligations relating to its purchase of
Derivatives. To maintain this required cover, the Portfolio may have to sell
portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price. Derivatives
may be purchased on established exchanges or through privately negotiated
transactions referred to as over-the-counter Derivatives. Exchange-traded
Derivatives generally are guaranteed by the clearing agency which is the issuer
or counterparty to such Derivatives. This guarantee usually is supported by a
daily payment system operated by the clearing agency in order to reduce overall
credit risk. As a result, unless the clearing agency defaults, there is
relatively little counterparty credit risk associated with Derivatives purchased
on an exchange. By contrast, no clearing agency guarantees over-the-counter
Derivatives. Therefore, each party to an over-the-counter Derivative bears the
risk that the counterparty will default. Accordingly, Wilshire will consider the
creditworthiness of counterparties to over-the-counter Derivatives in the same
manner as it would review the credit quality of a security to be purchased by
the Portfolio. Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the Derivative to be interested in bidding for
it.
OPTIONS. The Portfolio may write covered call options, buy put options, buy call
options and write secured put options on particular securities or the Wilshire
5000 Index. Options trading is a highly specialized activity which entails
greater than ordinary investment risks. A call option for a particular security
gives the purchaser of the option the right to buy, and a writer the obligation
to sell, the underlying security at the stated exercise price at any time prior
to the expiration of the option, regardless of the market price of the security.
The premium paid to the writer is in consideration for undertaking the
obligations under the option contract. A put option for a particular security
gives the purchaser the right to sell the underlying security at the stated
exercise price at any time prior to the expiration date of the option,
regardless of the market price of the security.
Options on stock indices are similar to options on specific securities,
described above, except that, rather than the right to take or make delivery of
the specific security at a specific price, an option on a stock index gives the
holder the right to receive, upon exercise of the option, an amount of cash if
the closing level of that stock index is greater than, in the case of a call
option, or less than, in the case of a put option, the exercise price of the
option. This amount of cash is equal to such difference between the closing
price of the index and the exercise price of the option expressed in dollar
times a specified multiple. The writer of the option is obligated, in return for
the premium received, to make delivery of this amount. Unlike options on
specific securities, all settlements of options on stock indices are in cash,
and gain or loss depends on general movements in the stocks included in the
index rather than price movements in particular stock.
FUTURES TRANSACTIONS. The Portfolio may enter into futures contracts or
particular securities [or stock indices] in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of the Chicago
Mercantile Exchange. A futures contract is an agreement in which one party
agrees to deliver to the other an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock or stock index
at the close of the last trading day of the contract and the price at which the
agreement is made.
No physical delivery of securities is made.
Engaging in these transactions involves risk of loss to the Portfolio which
could affect the value of the Portfolio's net assets adversely. Although the
Portfolio intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified periods during the
trading day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of futures positions and potentially subjecting the Portfolio to
substantial losses.
Successful use of futures by the Portfolio also is subject to the ability of
Wilshire to predict correctly movements in the direction of the relevant market
and, to the extent the transaction is entered into for hedging purposes, to
ascertain the appropriate correlation between the transaction being hedged and
the price movements of the futures contract. For example, if the Portfolio uses
futures to hedge against the possibility of a decline in the market value of
securities held in its portfolio and the prices of such securities instead
increase, the Portfolio will lose part or all of the benefit of the increased
value of securities which it has hedged because it will have offsetting losses
in its futures positions. Furthermore, if in such circumstances the Portfolio
has insufficient cash, it may have to sell securities to meet daily variation
margin requirements. The Portfolio may have to sell such securities at a time
when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the SEC, the Portfolio may
be required to segregate cash or liquid assets in connection with its
commodities transactions in an amount generally equal to the value of the
underlying commodity. The segregation of such assets will have the effect of
limiting the Portfolio's ability otherwise to invest those assets.
FUTURE DEVELOPMENTS. The Portfolio may take advantage of opportunities in the
area of futures contracts and any other Derivatives which presently are not
contemplated for use by the Portfolio or which currently are not available but
which may be developed, to the extent such opportunities are both consistent
with the Portfolio's investment objective and legally permissible for the
Portfolio. Before entering into such transactions or making any such investment,
the Portfolio will provide appropriate disclosure in its Prospectus or SAI.
MANAGEMENT POLICIES
FUND INVESTMENT RESTRICTIONS. The Portfolio has adopted investment restrictions
numbered 1 through 9 as fundamental policies, which cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of the
Portfolio's outstanding voting shares. Investment restrictions numbered 10
through 12 are not fundamental policies and may be changed by vote of a majority
of the Directors at any time. The Portfolio may not:
1. Invest in commodities, except that the Portfolio may purchase and sell
options and futures contracts, including those relating to indices and options
on futures contracts or indices.
2. Purchase, hold or deal in real estate or oil, gas or other mineral leases or
exploration or development programs, but the Portfolio may purchase and sell
securities that are secured by real estate or issued by companies that invest or
deal in real estate.
3. Borrow money, except for temporary or emergency (not leveraging) purposes in
an amount up to 33 1/3% of the value of the Portfolio's total assets (including
the amount borrowed) based on the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Portfolio's total assets, the Portfolio
will not make any additional investments. For purposes of this investment
restriction, the entry into options, forward contracts, or futures contracts,
including those relating to indices, and options on futures contracts or indices
shall not constitute borrowing.
4. Make loans to others, except through the purchase of debt obligations and the
entry into repurchase agreements. However, the Portfolio may lend its portfolio
securities in an amount not to exceed 33 1/3% of the value of its total assets.
Any loans of portfolio securities will be made according to guidelines
established by the SEC and the Company's Board of Directors.
5. Act as an underwriter of securities of other issuers, except to the extent
the Portfolio may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.
6. Invest more than 25% of its assets in the securities of issuers in any single
industry, provided there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
7. Invest more than 5% of its assets in the obligations of any single issuer,
except that up to 25% of the value of the Portfolio's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.
8. Hold more than 10% of the outstanding voting securities of any single issuer.
This investment restriction applies only with respect to 75% of the Portfolio's
total assets.
9. Issue any senior security (as such term is defined in Section 18(f) of the
1940 Act), except to the extent that the activities permitted in investment
restrictions No. 1 and 3 may be deemed to give rise to a senior security.
10. Invest in the securities of a company for the purpose of exercising
management or control, but the Portfolio will vote the securities it owns in its
portfolio as a shareholder in accordance with its views.
11. Enter into repurchase agreements providing for settlement in more than seven
days after notice or purchase securities which are illiquid, if, in the
aggregate, more than 15% of the value of the Portfolio's net assets would be so
invested.
12. Purchase securities of other investment companies, except to the extent
permitted under the 1940 Act or those received as part of a merger or
consolidation.
If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.
MANAGEMENT OF THE COMPANY
Directors and officers of the Company, together with information as to their
principal business occupations during at least the last five years, are shown
below. Each Director who is deemed to be an "interested person" of the Company,
as defined in the 1940 Act, is indicated by an asterisk.
DIRECTORS OF THE COMPANY
*THOMAS D. STEVENS, Chairman of the Board, President and Director. Senior Vice
President and Principal of Wilshire for more than the past five years. He is the
Chief Investment Officer of the Wilshire Asset Management division of Wilshire.
Wilshire Asset Management is a provider of index and structured equity and fixed
income applications. He is 49 years old and his address is c/o Wilshire
Associates Incorporated, 1299 Ocean Avenue, Santa Monica, California 90401.
<PAGE>
DEWITT F. BOWMAN, Director. Since January 1994, Pension Investment Consultant
providing advice on large pension fund investment strategy, new product
evaluation and integration, and large plan investment analysis and management.
For more than four years prior thereto, he was Chief Investment Officer of the
California Public Employees Retirement System. He currently serves as a director
of the RREE America REIT, RCM Capital and Equity Funds, Inc., trustee of the
Pacific Gas & Electric Nuclear Decommissioning Trust, Brandes Investment Trust
and PCG Private Equity Fund. He is 68 years old and his address is 79 Eucalyptus
Knoll, Mill Valley, California 94941.
*ROBERT J. RAAB, JR., Director. Senior Vice President and Principal of Wilshire
for more than the past five years. He is head of Wilshire's Institutional
Services Division and is responsible for Wilshire Equity, Fixed Income, Index
Fund and Portfolio Accounting products. He is 49 years old and his address is
c/o Wilshire Associates Incorporated, 1299 Ocean Avenue, Santa Monica,
California 90401.
ANNE WEXLER, Director. Chairman of the Wexler Group, consultants specializing in
government relations and public affairs for more than fifteen years. She is also
a director of Alumax, The Dreyfus Corporation, Comcast Corporation, The New
England Electric System, Nova Corporation, and sixteen mutual funds in the
Dreyfus mutual fund family as well as a member of the Board of the Carter Center
of Emory University, the Council of Foreign Relations, the National Park
Foundation, the Visiting Committee of the John F. Kennedy School of Government
at Harvard University and the Board of Visitors of the University of Maryland
School of Public Affairs. She is 68 years old and her address is c/o The Wexler
Group, 1317 F Street, N.W., Suite 600, Washington, D.C. 20004.
CYNTHIA A. HARGADON, Director. Since July 1998, Director of Investments for the
National Automobile Dealers Association. From November 1996 to July 1998,
President of Stable Value Investment Association, Inc. educating the public
about stable value as a fixed income alternative and how to use it in the asset
allocation process for defined contribution plan participants. She is also a
project consultant of Johnson Custom Strategies, Inc. an independent investment
services firm founded in 1992 to provide specialized asset management strategies
to institutional clients. For more than nine years prior thereto, she was Senior
Vice President and Chief Investment Officer of ICMA Retirement Corporation/ICMA
Retirement Trust. She is 43 years old and her address is c/o Stable Value
Investment Association, Inc., 1701 K Street, NW, Suite 300, Washington, D.C.
20006.
For so long as the Company's plan described in the section captioned "Service
and Distribution Plan" remains in effect, the Directors of the Company who are
not "interested persons" of the Company, as defined in the 1940 Act, will be
selected and nominated by the Directors who are not "interested persons" of the
Company.
The Company typically pays its Directors an annual retainer and a per meeting
fee and reimburses them for their expenses. The aggregate amount of compensation
paid to each current Director by the Company for the fiscal year ended August
31, 1998, was as follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PENSION OR
RETIREMENT TOTAL COMPENSATION
BENEFITS ACCRUED FROM REGISTRANT AND
AGGREGATE AS PART OF ESTIMATED ANNUAL COMPANY COMPLEX
COMPENSATION COMPANY'S EXPENSES BENEFITS UPON
NAME OF FROM RETIREMENT
BOARD MEMBER COMPANY*
Thomas D. Stevens $0 N/A N/A $0
DeWitt F. Bowman $13,000 N/A N/A $13,000
Robert J. Raab, Jr. $0 N/A N/A $0
Anne L. Wexler $13,000 N/A N/A $13,000
Cynthia A. Hargadon** $ 6,500 N/A N/A $ 6,500
Peter J. Carre*** $ 3,250 N/A N/A $ 3,250
</TABLE>
* Amount does not include reimbursed expenses for attending Board meetings,
which amounted to $18,422 for all Directors as a group.
** Appointed as Director on June 8, 1998.
*** Resigned as Director on February 19, 1998.
OFFICERS OF THE COMPANY
THOMAS D. STEVENS (see "Directors of the Company" above).
DAVID R. BORGER, Vice President and Treasurer. Vice President and Principal of
Wilshire and Director of Research for its Wilshire Asset Management division for
more than five years. He is 49 years old and his address is c/o Wilshire
Associates Incorporated, 1299 Ocean Avenue, Santa Monica, California 90401.
ALAN L. MANNING, Secretary. Since 1990, Vice President, Secretary and General
Counsel of Wilshire. He is 49 years old and his address is c/o Wilshire
Associates Incorporated, 1299 Ocean Avenue, Santa Monica, California 90401.
MICHAEL J. NAPOLI, JR., Vice President. Vice President and Principal of
Wilshire for more than five years. He is Director of Marketing for its Wilshire
Asset Management division. He is 47 years old and his address is c/o Wilshire
Associates Incorporated, 1299 Ocean Avenue, Santa Monica, California 90401.
JULIE A. TEDESCO, Vice President and Assistant Secretary. Since May 1994,
Counsel to Investor Services Group. From July 1992 to May 1994, Assistant Vice
President and Counsel of The Boston Company Advisors, Inc. She is 41 years old
and her address is c/o First Data Investor Services Group, Inc., 53 State
Street, Boston, Massachusetts 02109.
THERESE M. HOGAN, Vice President and Assistant Secretary. Since June 1994,
Manager (State Regulation) of Investor Services Group. From October 1993 to June
1994, Senior Legal Assistant at Palmer & Dodge, Boston, Massachusetts. For more
than eight years prior thereto, a paralegal at Robinson & Cole in Hartford,
Connecticut. She is 36 years old and her address is c/o First Data Investor
Services Group, Inc., 53 State Street, Boston, Massachusetts 02109.
<PAGE>
TERESA M.R. HAMLIN, Assistant Secretary. Since 1995, Counsel to Investor
Services Group. Prior to that time, she was a paralegal manager with The Boston
Company Advisors, Inc. She is 34 years old and her address is c/o First Data
Investor Services Group, Inc., 53 State Street, Boston, Massachusetts 02109.
KENNETH J. KEMPF, Treasurer. Since 1998 Senior Vice-President of Investor
Services Group. From November 1993 to February 1998, President and Chief
Executive Officer of FPS Services, Inc., King of Prussia, Pennsylvania. He is
48 years old and his address is c/o First Data Investor Services Group, Inc.,
3200 Horizon Drive, King of Prussia, Pennsylvania 19406.
GERALD J. HOLLAND, Assistant Treasurer. Since 1994, Vice President of Investor
Services Group's Fund Administration Department. Prior to that time, he was
Senior Vice President of Finance and Administration for Delaware Management Co.
and its affiliates. He is 47 years old and his address is c/o First Data
Investor Services Group, Inc., 3200 Horizon Drive, King of Prussia,
Pennsylvania 19406.
BRIAN O'NEILL, Assistant Treasurer. Since 1994, Manager of Investor Services
Group's Financial Reporting Department. From 1992 to 1994, Mr. O'Neill was a
Supervisor in the Accounting Services Unit of Investor Services Group. He is 30
years old and his address is c/o First Data Investor Services Group, Inc., 3200
Horizon Drive, King of Prussia, Pennsylvania 19406.
SUSAN T. NAUGHTON, Assistant Treasurer. Since 1995, Supervisor of Investor
Services Group's Financial Reporting Department. From 1993 to 1995, Ms.
Naughton was a Supervisor of International Funds in the Mutual Funds
Accounting Department at PFPC, Inc. She is 38 years old and her address is c/o
First Data Investor Services Group, Inc., 3200 Horizon Drive, King of Prussia,
Pennsylvania 19406.
ROBERT C. HERFORTH, Assistant Treasurer. Since 1997, Senior Financial
Administrator of Investor Services Group's Financial Reporting Department. From
1995 to 1997, Mr. Herforth served as a Financial Administrator. Prior to 1995,
he was a Supervisor in the Transfer Agent Control Department. He is 29 years
old and his address is c/o First Data Investor Services Group, Inc., 3200
Horizon Drive, King of Prussia, Pennsylvania 19406.
Directors and officers of the Company, as a group, owned less than 1% of the
Company's shares of Common Stock outstanding on October 1, 1998.
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
The following information supplements and should be read in conjunction with the
section in the Portfolio's Prospectus (Investment Class shares) entitled
"Management of the Portfolio."
INVESTMENT ADVISORY AGREEMENT. Wilshire provides investment advisory services to
the Portfolio pursuant to Investment Advisory Agreement (the "Advisory
Agreement") dated July 11, 1996 with the Company as amended to include the
Portfolio on June 8, 1998. As to the Portfolio, the Advisory Agreement has an
initial term of two years and thereafter is subject to annual approval by (i)
the Company's Board of Directors or (ii) vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of such Portfolio, provided that
in either event the continuance also is approved by a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of the Company or
Wilshire, by vote cast in person at a meeting called for the purpose of voting
on such approval. As to the Portfolio, the Advisory Agreement is terminable
without penalty, on 60 days' notice, by the Company's Board of Directors or by
vote of the holders of a majority of the Portfolio's shares, or, on not less
than 90 days' notice, by Wilshire. The Advisory Agreement will terminate
automatically, as to the Portfolio, in the event of its assignment (as defined
in the 1940 Act).
The following persons are executive officers and directors of
Wilshire: Dennis A. Tito, Chairman of the Board of Directors, President and
Chief Executive Officer; Robert J. Raab, Jr., Director and Senior Vice
President; Thomas D. Stevens, Director and Senior Vice President; Stephen L.
Nesbitt, Director and Senior Vice President; Rosalind M. Hewsenian, Director and
Vice President; Robert C. Kuberek, Director and Vice President; Howard M. Yata,
Director and Vice President; Cecilia I. Loo, Director and Vice President;
Thomas J. Ryan, Director and Vice President; Alan L. Manning, Vice President,
General Counsel and Secretary; and San Slawson, Vice President and Treasurer.
Wilshire provides day-to-day management of the Portfolio's investments in
accordance with the stated policies of the Portfolio, subject to the oversight
of the Company's Board of Directors. Wilshire provides the Portfolio with
portfolio managers who are authorized by the Board of Directors to execute
purchases and sales of securities. The Portfolio's primary Portfolio Manager is
Thomas D. Stevens and he is assisted by David R. Borger.
ADMINISTRATION AGREEMENT. Pursuant to the Administration Agreement (the
"Administration Agreement") with the Company, Investor Services Group, a
subsidiary of First Data Corporation, 4400 Computer Drive, Westborough,
Massachusetts 01581, furnishes the Company clerical help and accounting, data
processing, internal auditing and legal services and certain other services
required by the Company, prepares reports to the Portfolio's shareholders, tax
returns, reports to and filings with the SEC and state Blue Sky authorities, and
generally assists in all aspects of the Company's operations, other than
providing investment advice.
The Agreement continues in effect from year to year subject to annual approval
by (i) the Company's Board of Directors or (ii) vote of a majority (as defined
in the 1940 Act) of the Portfolio's outstanding voting securities, provided that
in either event the continuance also is approved by a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of the Company or
Investor Services Group, by vote cast in person at a meeting called for the
purpose of voting on such approval. The Administration Agreement is terminable
without penalty on 60 days' notice, by the Company's Board of Directors or by
vote of the holders of a majority of the Portfolio's shares, or, on not less
than 90 days' notice by Investor Services Group. The Administration Agreement
will terminate automatically in the event of its assignment (as defined in the
1940 Act).
As compensation for Investor Services Group's services under the Administration
Agreement, Investor Services Group is entitled to receive from the Company a
monthly administration fee at the annual rate of .15 of 1% of the Company's
monthly average net assets up to aggregate assets of $1 billion, .10 of 1% such
value on the next $4 billion, and .08 of 1% on the excess net assets. In
addition, the Company has agreed to pay Investor Services Group an annual fee of
$25,000 for each series (including the Portfolio) and $2,000 for each additional
class.
<PAGE>
The Advisory Agreement provides that Wilshire shall exercise its best judgment
in rendering the services to be provided to the Portfolio under the Agreement.
Wilshire is not liable under the Advisory Agreement for any error of judgment or
mistake of law or for any loss suffered by the Portfolio. Wilshire is not
protected, however, against any liability to the Portfolio or its shareholders
to which Wilshire would otherwise be subject by reasons of willful misfeasance,
bad faith or gross negligence in the performance of its duties under the
Advisory Agreement or by reason of Wilshire's reckless disregard of its
obligations and duties under the Advisory Agreement.
SERVICE AND DISTRIBUTION PLAN
The Service and Distribution Plan of the Company adopted pursuant to Section
12(b) of the 1940 Act and Rule 12b-1 thereunder was approved as to the
Investment Class shares of the Portfolio by vote of the majority of both (a) the
Directors of the Company, and (b) those Directors of the Company who are not
interested persons of the Company, and have no direct or indirect financial
interest in the operation of the Services Plan or any agreements related to it
(the "Independent Directors"), in each case cast in person at a meeting called
for the purpose of voting on the Service and Distribution Plan.
Under the Service and Distribution Plan, FDDI is required to provide to the
Directors of the Company for their review, at least quarterly, a written report
of the amounts expended by the Portfolio and the purposes for which such
expenditures were made.
The Service and Distribution Plan will continue in effect with respect to the
Portfolio only so long as such continuance is specifically approved at least
annually by votes of the majority (or whatever other percentage may, from time
to time, be required by Section 12(b) of the Investment Company Act of 1940 or
the rules and regulations thereunder) of both (a) the Directors of the Company,
and (b) the Independent Directors of the Company, cast in person at a meeting
called for the purpose of voting on the Service and Distribution Plan. The
Service and Distribution Plan may not be amended in any material respect with
respect to the Portfolio unless such amendment is approved by votes of the
majority (or whatever other percentage may, from time to time, be required by
Section 12(b) of the Investment Company Act of 1940 or the rules and regulations
thereunder) of both (a) the Directors of the Company, and (b) the Independent
Directors of the Company, cast in person at a meeting called for the purpose of
voting on the Service and Distribution Plan, and may not be amended to increase
materially the amount to be spent thereunder without such approvals and approval
by vote of at least a majority of the outstanding shares of the Investment Class
of the Portfolio. The Service and Distribution Plan may be terminated at any
time with respect to the Portfolio by vote of a majority of the Independent
Directors or, as to the Portfolio, by vote of a majority of the outstanding
shares of the Investment Class of the Portfolio.
PURCHASE OF PORTFOLIO SHARES
The following information supplements and should be read in conjunction with the
section in the Prospectuses entitled "How to Buy Portfolio Shares."
THE DISTRIBUTOR. FDDI, a subsidiary of Investor Services Group, 4400 Computer
Drive, Westborough, Massachusetts 01581, serves as the Company's distributor
pursuant to an agreement which is renewable annually by the Board of Directors.
The Portfolio's shares are sold on a continuous basis by FDDI as agent, although
FDDI is not obligated to sell any particular amount of shares. The Distribution
Agreement between the Distributor and the Company provides that the Company
shall indemnify the Distributor against any liability arising out of any untrue
statement of a material fact or any omission of a material fact in the Company's
registration statement necessary to make the statements therein misleading,
unless such liability results from the Distributor's willful misfeasance, bad
faith or negligence in the performance of its duties under the Agreement.
TRANSACTIONS THROUGH SECURITIES DEALERS. Portfolio shares may be purchased and
redeemed through securities dealers which may charge a transaction fee for such
services. Some dealers will place the Portfolio's shares in an account with
their firm. Dealers also may require that the customer invest more than the
$1,000 minimum investment, the customer not take physical delivery of share
certificates, the customer not request redemption checks to be issued in the
customer's name, fractional shares not be purchased, or other conditions.
There is no sales or service charge to individual investors by the Company or by
FDDI, although investment dealers, banks and other institutions may make
reasonable charges to investors for their services. The services provided and
the applicable fees are established by each dealer or other institution acting
independently of the Company. The Company understands that these fees may be
charged for customer services including, but not limited to, same-day investment
of client portfolios; same-day access to client portfolios; advice to customers
about the status of their accounts, yield currently being paid or income earned
to date; provision of periodic account statements showing security and money
market positions; and assistance with inquiries related to their investment. Any
such fees may be deducted from the investor's account monthly and on smaller
accounts could constitute a substantial portion of any distribution by the
Portfolio. Small, inactive, long-term accounts involving monthly service charges
may not be in the best interest of investors. Investors should be aware that
they may purchase shares of the Portfolio directly from the Company through FDDI
without imposition of any maintenance or service charges, other than those
already described herein. In some states, banks or other financial institutions
effecting transactions in Portfolio shares may be required to register as
dealers pursuant to state law.
IN-KIND PURCHASES. Payments for the Portfolio's shares may, at the discretion of
Wilshire, be made in the form of securities which are permissible investments
for the Portfolio. For further information about this form of payment, please
contact the Transfer Agent. Generally, securities which are accepted by the
Portfolio as payment for the Portfolio's shares will be valued using the
Portfolio's procedures for valuing its own shares at the time the Portfolio's
net asset value is next determined after receipt of a properly completed order.
All dividends, interest, subscription or other rights pertaining to such
securities will become the property of the Portfolio and must be delivered to
the Portfolio upon receipt from the issuer. The Portfolio will require that (1)
it will have good and marketable title to the securities received by it; (2) the
securities are in proper form for transfer to the Portfolio and are not subject
to any restriction on sale by the Portfolio under the Securities Act of 1933, as
amended, or otherwise; and (3) the Portfolio receives such other documentation
as Wilshire may, in its discretion, deem necessary or appropriate. Investors who
are subject to Federal taxation may realize a gain or loss for Federal income
tax purpose upon such a payment.
<PAGE>
REDEMPTION OF PORTFOLIO SHARES
The following information supplements and should be read in conjunction with the
section in the Prospectuses entitled "How to Redeem Portfolio Shares."
WIRE REDEMPTION PRIVILEGE. By using this Privilege, the investor authorizes
Investor Services Group (the "Transfer Agent") to act on wire or telephone
redemption instructions from any person representing himself or herself to be
the investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Company will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt if the Transfer Agent
receives the redemption request in proper form. Redemption proceeds ($1,000
minimum) will be transferred by Federal Reserve wire only to the commercial bank
account specified by the investor on the Account Application or Shareholder
Services Form, or to a correspondent bank if the investor's bank is not a member
of the Federal Reserve System. Fees ordinarily are imposed by such bank and
usually are borne by the investor. Immediate notification by the correspondent
bank to the investor's bank is necessary to avoid a delay in crediting the funds
to the investor's bank account.
To change the commercial bank or account designated to receive wire redemption
proceeds, a written request must be sent to the Transfer Agent. This request
must be signed by each shareholder, with each signature guaranteed as described
below under "Stock Certificates; Signatures."
STOCK CERTIFICATES; SIGNATURES. Any certificates representing shares to be
redeemed must be submitted with the redemption request. Written redemption
requests must be signed by each shareholder, including each holder of a joint
account, and each signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed. The Transfer
Agent has adopted standards and procedures pursuant to which signature
guarantees in proper form generally will be accepted from domestic banks,
brokers, dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations, as well as
from participants in the New York Stock Exchange Medallion Signature Program,
the Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. Guarantees must be signed by an authorized
signatory of the guarantor and "Signature Guaranteed" must appear with the
signature. The Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians, and may accept
other suitable verification arrangements from foreign investors, such as
consular verification. For more information with respect to signature
guarantees, please call the telephone number listed on the cover.
REDEMPTION COMMITMENT. The Company has committed itself to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of the Portfolio's
net assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the SEC. In the case of requests for redemption in
excess of such amount, the Board of Directors reserves the right to make
payments in whole or in part in securities or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Portfolio to the detriment of the existing shareholders. In such event, the
securities would be readily marketable, to the extent available, and would be
valued in the same manner as the Portfolio's investment securities are valued.
If the recipient sold such securities, brokerage charges would be incurred.
SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or the date
of payment postponed (a) during any period when the New York Stock Exchange is
closed (other than customary weekend and holiday closings), (b) when trading in
the markets the Portfolio ordinarily utilizes is restricted, or when an
emergency exists as determined by the SEC so that disposal of the Portfolio's
investments or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the SEC by order may permit to
protect the Portfolio's shareholders.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on which the New
York Stock Exchange is closed currently are: New Year's Day, Presidents' Day,
Rev. Martin Luther King, Jr. Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "Shareholder Services."
EXCHANGES. By using the Telephone Exchange Privilege, the investor authorizes
the Transfer Agent to act on telephonic instructions from any person
representing himself or herself to be the investor and reasonably believed by
the Transfer Agent to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible for telephone
exchange.
To establish a personal retirement plan by exchange, shares of the series being
exchanged must have a value of at least the minimum initial investment required
for the series into which the exchange is being made. For Keogh Plans, IRAs,
Rollover IRA, Roth IRAs and IRAs set up under a Simplified Employee Pension Plan
("SEP-IRAs") with only one participant, the minimum initial investment is $750.
To exchange shares held in corporate plans, 403(b)(7) Plans and SEP-IRAs with
more than one participant, the minimum initial investment is $100 if the plan
has at least $1,000 invested among the series of the Company. To exchange shares
held in personal retirement plans, the shares exchanged must have a current
value of at least $100.
The exchange service is available to shareholders residence in any state in
which shares of the series being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other identifying
designations.
The Company reserves the right to reject any exchange request in whole or in
part. The exchange service may be modified or terminated at any time upon notice
to shareholders.
CORPORATE PENSION/PROFIT-SHARING AND PERSONAL RETIREMENT PLANS. The Company
makes available to corporations a variety of prototype pension and
profit-sharing plans. In addition, the Company makes available Keogh Plans,
IRAs, including SEP-IRAs, Roth IRAs and IRA "Rollover Accounts," and 403(b)(7)
Plans. Plan support services also are available. Investors can obtain details on
the various plans by calling the following toll-free number:
1-888-200-6796.
<PAGE>
Investors who wish to purchase the Portfolio's shares in conjunction with a
Keogh Plan, a 403(b)(7) Plan or an IRA, including an SEP-IRA or Roth IRA, may
request from the Transfer Agent forms for adoption of such plans. The entity
acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs may charge a fee,
payment of which could require the liquidation of shares. All fees charged are
described in the appropriate form. Shares may be purchased in connection with
these plans only by direct remittance to the entity acting as custodian.
Purchases for these plans will not be made in advance of receipt of Portfolios.
The minimum initial investment for corporate plans, 403(b)(7) Plans and SEP-IRAs
with more than one participant is $1,000 with no minimum on subsequent
purchases. The minimum initial investment for Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA may also open a non-working
spousal IRA with a minimum investment of $250.
The investor should read the prototype retirement plan and the appropriate form
of custodial agreement for further details on eligibility, service fees and tax
implications, and should consult a tax adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "How to Buy Portfolio Shares."
VALUATION OF PORTFOLIO SECURITIES. The Portfolio's investment securities are
valued at the last sale price on the securities exchange or national securities
market on which such securities primarily are traded. Securities not listed on
an exchange or national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked prices.
Bid price is used when no asked price is available. Short-term investments are
carried at amortized cost, which approximates value. Any securities or other
assets for which recent market quotations are not readily available are valued
at fair value as determined in good faith by the Board of Directors. Expenses
and fees, including the advisory and administration fees, are accrued daily and
taken into account for the purpose of determining the net asset value of the
Portfolio's shares.
DIVIDENDS, DISTRIBUTION AND TAXES
The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "Dividends, Distributions and Taxes."
The Portfolio intends to qualify as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). Qualification as a
regulated investment company relieves the Portfolio from any liability for
Federal income taxes to the extent its earnings are distributed in accordance
with the applicable provisions of the Code. The term "regulated investment
company" does not imply the supervision of management or investment practices or
policies by any government agency.
Depending on the composition of the Portfolio's income, all or a portion of the
dividends paid by the Portfolio from net investment income may qualify for the
dividends received deduction allowable to certain U.S. corporate shareholders
("dividends received deduction"). In general, dividend income of the Portfolio
distributed to qualifying corporate shareholders will be eligible for the
dividends received deduction only to the extent that (i) the Portfolio's income
consists of dividends paid by U.S. corporations and (ii) the Portfolio would
have been entitled to the dividends received deduction with respect to such
dividend income if the Portfolio were not a regulated investment company. The
dividends received deduction for qualifying corporate shareholders may be
reduced if the shares of the Portfolio held by them with respect to which
dividends are received are treated as debt-financed. Pursuant to the Taxpayer
Relief Act of 1997, the dividends received deduction is also not available to a
corporate shareholder if it held the shares of the Portfolio less than 46 days
during the 90-day period that begins 45 days before the stock becomes
ex-dividend with respect to the dividend. This holding period requirement is
applicable to each dividend paid by the Portfolio. In addition to these
requirements, the Code provides other limitations with respect to the ability of
a qualifying corporate shareholder to claim the dividends received deduction in
connection with holding the Portfolio's shares.
Any dividend or distribution paid shortly after an investor's purchase may have
the effect of reducing the aggregate net asset value of shares below the cost of
investment. Such a dividend or distribution would be a return on investment in
an economic sense. In addition, the Code provides that if a shareholder holds
shares of the Portfolio for six months or less and has received a long-term
capital gain distribution with respect to such shares, any loss incurred on the
sale of such shares will be treated as a long-term capital loss to the extent of
the long-term capital gain distribution received.
If a shareholder holds shares of the Portfolio while holding a short position in
a regulated futures contract or an option in such regulated futures contract
that substantially diminishes the shareholder's risk of loss in its Portfolio
shares (an "offsetting position"), recently proposed Internal Revenue Service
regulations clarify that (i) any losses on the disposition of Portfolio shares
will be required to be deferred to the extent of any unrealized appreciation in
the short position and (ii) such holding will limit the shareholder's ability to
claim the corporate dividends received deduction in respect of Portfolio
dividends.
Ordinarily, gains and losses realized from portfolio transactions will be
treated as a capital gain or loss. All or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income under
Section 1258. "Conversion transactions" are defined to include certain forward,
futures, option and "straddle" transactions, transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to be
issued in the future.
Under Section 1256 of the Code, a gain or loss realized by the Portfolio from
certain financial futures transactions will be treated as 60% long-term capital
gain or loss and 40% short-term capital gain or loss. Gain or loss will arise
upon the exercise or lapse of such futures as well as from closing transactions.
In addition, any such futures remaining unexercised at the end of the
Portfolio's taxable year will be treated as sold for their then fair market
value, resulting in additional gain or loss to the Portfolio characterized in
the manner described above.
Offsetting positions held by the Portfolio involving financial futures may
constitute "straddles." Straddles are defined to include "offsetting positions"
in actively traded personal property. The tax treatment of straddles is governed
by Sections 1092 and 1258 of the Code, which, in certain circumstances,
overrides or modifies the provisions of Section 1256. As such, all or a portion
of any short- or long-term capital gain from certain "straddle" and/or
conversion transactions may be recharacterized to ordinary income.
If the Portfolio were treated as entering into straddles by reason of its
futures transactions, such straddles could be characterized as "mixed straddles"
if the futures transactions comprising such straddles were governed by Section
1256 of the Code. The Portfolio may make one or more elections with respect to
"mixed straddles." Depending upon which election is made, if any, the results to
the Portfolio may differ. If no election is made, to the extent the straddle
rules apply to positions established by the Portfolio, losses realized by the
Portfolio will be deferred to the extent of unrealized gain in any offsetting
positions. Moreover, as a result of the straddle rules, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gain on straddle positions may be recharacterized as
short-term capital gain, and as a result of the conversion transaction rules,
long-term capital gain may be recharacterized as ordinary income.
Under Section 1259 of the Code, enacted as part of the Taxpayer Relief Act of
1997, the Portfolio will recognize gain if it enters into a future or forward
contract relating to an appreciated direct position in any stock or debt
instrument, or if it acquires stock or a debt instrument at a time when the
Portfolio has an offsetting appreciated position in the stock or debt
instrument. Such transactions are considered to be constructive sales for income
tax purposes.
Investment by the Portfolio in securities issued or acquired at a discount, or
providing for deferred interest or for payment of interest in the form of
additional obligations could under special tax rules affect the amount, timing
and character of distributions to shareholders by causing the Portfolio to
recognize income prior to the receipt of cash payments. For example, the
Portfolio could be required to accrue a portion of the discount (or deemed
discount) at which the securities were issued each year and to distribute such
income in order to maintain its qualification as a regulated investment company.
In such case, the Portfolio may have to dispose of securities which it might
otherwise have continued to hold in order to generate cash to satisfy these
distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "Performance Information."
From time to time, quotations of the Portfolio's performance may be presented in
advertisements, sales literature or reports to shareholders or prospective
investors. All performance information is calculated separately for each class.
The data is calculated as follows:
Average annual total return is calculated by determining the ending redeemable
value of an investment purchased at net asset value per share with a
hypothetical $1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of the
initial investment, taking the "nth" root of the quotient (where "n" is the
number of years in the period) and subtracting 1 from the result.
Total return is calculated by subtracting the amount of the net asset value per
share at the beginning of a stated period from the net asset value per share at
the end of the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset value
per share at the beginning of the period.
From time to time, advertising materials for the Portfolio may refer to
Morningstar ratings and related analysis supporting such ratings.
PORTFOLIO TRANSACTIONS
Wilshire supervises the placement of orders on behalf of the Portfolio for the
purchase or sale of portfolio securities. Allocation of brokerage transactions,
including their frequency, is made in the best judgment of Wilshire and in a
manner deemed fair and reasonable to shareholders. The primary consideration is
prompt execution of orders at the most favorable net price. Subject to this
consideration, the brokers selected may include those that supplement Wilshire's
research facilities with statistical data, investment information, economic
facts and opinions. Information so received is in addition to and not in lieu of
services required to be performed by Wilshire and its fees are not reduced as a
consequence of the receipt of such supplemental information. Such information
may be useful to Wilshire in serving both the Portfolio and other clients which
it advises and, conversely, supplemental information obtained by the placement
of business of other clients may be useful to Wilshire in carrying out its
obligations to the Portfolio. Brokers also are selected because of their ability
to handle special executions such as are involved in large block trades or broad
distributions, provided the primary consideration is met. Large block trades, in
certain cases, may result from two or more clients Wilshire might advise being
engaged simultaneously in the purchase or sale of the same security. When
transactions are executed in the over-the-counter market, the Portfolio will
deal with the primary market makers unless a more favorable price or execution
otherwise is obtainable.
Portfolio turnover may vary from year to year, as well as within a year. Under
normal market conditions, the Portfolio's turnover rate generally will not
exceed 10%. High turnover rates are likely to result in comparatively greater
brokerage expenses. The overall reasonableness of brokerage commissions paid is
evaluated by Wilshire based upon its knowledge of available information as to
the general level of commissions paid by other institutional investors for
comparable services.
INFORMATION ABOUT THE PORTFOLIO
The following information supplements and should be read in conjunction with the
section in the Prospectus entitled "General Information."
Each share of the Portfolio has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-assessable.
Shares of each class of the Portfolio have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights and
are freely transferable.
Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
under the provisions of the 1940 Act or applicable state law or otherwise to the
holders of the outstanding voting securities of an investment company, such as
the Company, will not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares of the series
affected by such matter. Rule 18f-2 further provides that a series shall be
deemed to be affected by a matter unless it is clear that the interests of all
series in the matter are identical or that the matter does not affect any
interest of all series. However, the Rule exempts the selection of independent
accountants and the election of Directors from the separate voting requirements
of the Rule. Rule 18f-3 under the 1940 Act makes further provision for the
voting rights of each class of shares, such as the Investment Class shares, of
an investment company which issues more than one class of voting shares. In
particular, Rule 18f-3 provides that each class shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to the class'
arrangement for services and expenses, and shall have separate voting rights on
any matter submitted to shareholders in which the interests of one class differ
from the interests of any other class.
The Company will send annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT ACCOUNTANTS
The Northern Trust Company, an Illinois trust company located at 50 South
LaSalle Street, Chicago, Illinois 60675, acts as custodian of the Company's
investments. Investor Services Group, a subsidiary of First Data Corporation,
P.O. Box 60488, King of Prussia, Pennsylvania 19406-0488, is the Company's
transfer and dividend disbursing agent. Neither The Northern Trust Company nor
Investor Services Group has any part in determining the investment policies of
the Portfolio or which securities are to be purchased or sold by the Portfolio.
Paul, Hastings, Janofsky & Walker LLP, 555 South Flower Street, Los Angeles,
California 90071-2371, is counsel for the Company.
PricewaterhouseCoopers L.L.P., One Post Office Square, Boston, Massachusetts
02109, independent accountants, have been selected as auditors of the Company.
<PAGE>
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Financial Highlights -- Not Applicable
Included in Part B:
The Registrant's Annual Report for the fiscal year
ended August 31, 1998 and the Report of Independent
Accountants dated October 9, 1998 are incorporated by
reference to the Definitive 30b-2 filed (EDGAR Form
N-30D) on October 30, 1998 as Accession
#0000950156-98-000672.
(b) Exhibits:
(1)(a) Articles of Incorporation dated July 30, 1992 is
incorporated by reference to Exhibit (1)(a) of
Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A which was filed on November
12, 1993 ("Post-Effective Amendment No. 3").
(1)(b) Articles of Amendment dated August 20, 1992 to the
Articles of Incorporation is incorporated by
reference to Exhibit (1)(b) of Post-Effective
Amendment No.
3.
(1)(c) Articles Supplementary to the Articles of
Incorporation classifying shares of each Series of
the Fund is incorporated by reference to Exhibit
(1)(d) of Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A which was filed
on April 2, 1996 ("Post-Effective Amendment No. 8").
(1)(d) Articles of Amendment to the Articles of
Incorporation amending the name of the Fund and the
name of a class of shares of each Series of the Fund
is incorporated by reference to Post-Effective
Amendment No. 8.
(1)(e) Articles Supplementary dated June 24, 1997 to
the Articles of Incorporation establishing and
classifying shares of the Intermediate Portfolio
Corporate Bond and Long-Term Corporate Bond Portfolio
of the Fund is incorporated by reference to
Post-Effective Amendment No. 11 to the Registration
Statement on Form N-1A which was filed on July 10,
1997 ("Post-Effective Amendment No. 11").
(1)(f) Articles Supplementary dated June 8, 1998 to the
Articles of Incorporation establishing and
classifying shares of the Wilshire 5000 Index
Portfolio is filed herein.
(2)(a) By-Laws dated July 30, 1992, as revised September 17,
1992, are incorporated by reference to Exhibit (2) of
Post-Effective Amendment No. 3.
(2)(b) Amended By-Laws dated September 9, 1996, as
subsequently amended October 1, 1996, are
incorporated by reference to Exhibit (2)(b) of
Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A which was filed on October 30,
1996 ("Post-Effective Amendment No. 10").
(3) Not Applicable.
(4) Not Applicable.
(5)(a) Investment Advisory Agreement between the Fund and
Wilshire Associates Incorporated relating to the
Large Company Growth, Large Company Value, Small
Company Growth and Small Company Value Portfolios
dated July 11, 1996 is incorporated by reference to
Exhibit (5)(a) of Post-Effective Amendment No. 10.
(5)(b) Letter Amendment to the Investment Advisory Agreement
between the Fund and Wilshire Associates Incorporated
relating to the Wilshire 5000 Index Portfolio is
filed herein.
(6) Distribution Agreement between the Fund and First
Data Distributors, Inc. relating to the Large Company
Growth, Large Company Value, Small Company Growth and
Small Company Value Portfolios dated March 3, 1997 is
incorporated herein by reference to Post-Effective
Amendment No. 11.
(7) Not Applicable.
(8)(a) Custody Agreement between the Fund and The Northern
Trust Company dated June 3, 1996 is incorporated
herein by reference to Post-Effective Amendment No.
11.
(8)(b) Letter Agreement between the Fund and The Northern
Trust Company dated November 5, 1996 is incorporated
herein by reference to Post-Effective Amendment No.
11.
(9)(a) Transfer Agency and Services Agreement between
the Fund and First Data Investor Services Group,
Inc. dated May 31, 1996 is incorporated herein by
reference to Post-Effective Amendment No. 11.
(9)(b) Administration Agreement between the Fund and First
Data Investor Services Group, Inc. dated May 31, 1996
is incorporated by reference to Post-Effective
Amendment No. 11.
(10) Not Applicable.
(11)(a) Powers of Attorney of the Directors and officers are
incorporated by reference to Exhibit (11)(b) of
Post-Effective Amendment No. 8.
(11)(b) Powers of Attorney of Directors and officers are
incorporated by reference to Exhibit (11)(c) of
Post-Effective Amendment No. 9 to the Registration
Statement on Form N-1A which was filed on May 31,
1996 ("Post-Effective
Amendment No. 9").
(11)(c) Power of Attorney of Cynthia A. Hargardon is filed
herein.
(11)(d) Opinion of Counsel relating to the establishment of
the Wilshire 5000 Index Portfolio to be filed by
amendment.
(12) Not Applicable.
(13) Purchase Agreement between the Company and
Wilshire Associates Incorporated dated November __,
1998 relating to the Wilshire 5000 Index Portfolio to
be filed by amendment.
(14) Not Applicable.
(15)(a) Shareholder Services Plan under Rule 12b-1 for
Investment Class shares is incorporated herein by
reference to Post-Effective Amendment No. 11.
(15)(b) Amended and Restated Service and Distribution Plan
under Rule 12b-1, adopted as of June 3, 1997 is
incorporated herein by reference to Post-Effective
Amendment No. 11.
(16) Not Applicable.
(17) Not Applicable.
(18)(a) Rule 18f-3 Plan, effective May 31, 1996 is
incorporated herein by reference to Post-Effective
Amendment No. 11.
(18)(b) Amended Rule 18f-3d Plan, adopted as of June 3, 1997
is incorporated herein by reference to Post
Effective Amendment No. 11.
<PAGE>
Item 25. Persons Controlled by or under Common Control with Registrant
Not Applicable.
Item 26. Number of Holders of Securities
Number of Record Holders
Fund as of October 26, 1998
Institutional Class Investment Class
Shares Shares
Large Company Growth Portfolio 2,053 1,950
Large Company Value Portfolio 2,275 250
Small Company Growth Portfolio 1 407
Small Company Value Portfolio 4 361
Item 27. Indemnification
The statement as to the general effect of any contract, arrangements, or statute
under which a Director, officer, underwriter, or affiliated person of the
Registrant is insured or indemnified in any manner against any liability which
may be incurred in such capacity, other than insurance provided by any director,
officer, affiliated person, or underwriter for his/her own protection, is
incorporated by reference to Item 27 of Part C of Pre-Effective Amendment No. 1
to the Registration Statement on Form N-1A which was filed on September 23,
1992.
Reference is also made to the Distribution Agreements filed as Exhibit
(6)(a)(b).
Item 28. Business and Other Connections of Investment Adviser
The list required by this Item 28 of officers and directors of Wilshire
Associates Incorporated, together with the information as to any other business,
profession, vocation, or employment of substantial nature engaged in by such
officers and directors during the past two years, is incorporated by reference
to Schedules A and D of Form ADV filed by Wilshire Associates Incorporated
pursuant to the Investment Advisers Act of 1940 (SEC File No.
801-36233).
Item 29. Principal Underwriters
(a) First Data Distributors, Inc. ("FDDI"), formerly
known as 440 Financial Distributors, Inc., currently acts as
distributor for ABN AMRO Funds, BT Insurance Funds Trust,
CT&T Funds, First Choice Funds Trust, LKCM Funds, The Galaxy
Fund, The Galaxy VIP Fund, Galaxy Fund II, IBJ Funds Trust,
the ICM Series Trust, Panorama Trust, Potomac Funds,
Undiscovered Managers Fund, Forward Funds, Inc., Light Index
Funds, Inc. and Worldwide Index Funds. FDDI is registered
with the Securities and Exchange Commission (the "SEC") as a
broker-dealer and is a member of the National Association of
Securities Dealers. FDDI, a wholly-owned subsidiary of First
Data Investor Services Group, Inc., is located at 4400
Computer Drive, Westborough, Massachusetts 01581.
<PAGE>
(b) The information required by this Item 29(b) with
respect to each director, officer or partner of FDDI
is incorporated by reference to Schedule A of Form BD
filed by FDDI with the SEC pursuant to the Securities
Act of 1934 (File No. 8-45467). No director, officer,
or partner of FDDI holds a position or office with
the Registrant.
Item 30. Location of Accounts and Records
1. First Data Investor Services Group, Inc.
3200 Horizon Drive
King of Prussia, PA 19406-0903
(records relating to its function as fund accounting and
transfer agent)
2. First Data Investor Services Group, Inc. 53 State Street
Boston, Massachusetts 02109 (records relating to it functions
as administrator)
3. First Data Investor Services Group, Inc. and
First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
(records relating to its functions as administrator and
distributor)
4. The Northern Trust Company
50 LaSalle Street
Chicago, Illinois 60675
(records relating to its function as custodian)
5. Wilshire Associates Incorporated
1299 Ocean Avenue
Suite 700
Santa Monica, CA 90401
(records relating to its function as investment adviser)
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
<PAGE>
(b) The Registrant hereby undertakes to call a meeting of
shareholders for the purpose of voting upon the
question of removal of a director or directors when
requested in writing to do so by the holders of at
least 10% of the Registrant's outstanding shares of
common stock and in connection with such meeting to
comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to
shareholder communications.
(c) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy
of the Fund's latest Annual Report to Shareholders
upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, and the Registrant has duly caused this
Post-Effective Amendment No. 13 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts on the 2nd day of November, 1998.
WILSHIRE TARGET FUNDS, INC.
BY: THOMAS D. STEVENS*
Thomas D. Stevens
PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signatures Title Date
THOMAS D. STEVENS* President, November 2, 1998
Thomas D. Stevens Chairman of the Board,
and Director
(Principal Executive Officer)
DAVID R. BORGER* Treasurer November 2, 1998
David R. Borger (Principal Financial Officer)
DEWITT F. BOWMAN* Director November 2, 1998
DeWitt F. Bowman
CYNTHIA A. HARGARDON* Director November 2, 1998
Cynthia A. Hargardon
ROBERT J. RAAB, JR.* Director November 2, 1998
Robert J. Raab, Jr.
ANNE WEXLER* Director November 2, 1998
Anne Wexler
*BY: JULIE A. TEDESCO November 2, 1998
Julie A. Tedesco
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
Item Exhibit
1(f) Articles Supplementary
5(b) Letter Amendment to Investment
Advisory Agreement
11(c) Power of Attorney
EXHIBIT 1(F)
WILSHIRE TARGET FUNDS, INC.
ARTICLES SUPPLEMENTARY
WILSHIRE TARGET FUNDS, INC., a Maryland corporation registered as an
open-end investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), and having its principal office in the State of Maryland in
Baltimore City, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with procedures established in the Corporation's
Charter and pursuant to Section 2-208 of Maryland General Corporate Law, the
Board of Directors of the Corporation, by resolution dated June 8, 1998, duly
reclassifies one hundred million (100,000,000) shares of the authorized common
stock of the Corporation into the following portfolio and classes, designated as
follows, and hereby duly reclassifies one hundred million (100,000,000) shares
of the authorized common stock of the Corporation as unclassified:
<TABLE>
<CAPTION>
<S> <C> <C>
Authorized
Shares
Former Classification New Classification Allocated
Intermediate Corporate Wilshire 5000 Plus Fund - 50,000,000
Bond Portfolio - Investment Class
Investment Class
Intermediate Corporate Wilshire 5000 Plus Fund - 50,000,000
Bond Portfolio - Institutional Class
Institutional Class
Long-Term Corporate Unclassified 50,000,000
Bond Portfolio -
Investment Class
Long-Term Corporate Unclassified 50,000,000
Bond Portfolio -
Institutional Class
</TABLE>
<PAGE>
SECOND: The shares of the corporation reclassified pursuant to Article
First of these Articles Supplementary have been so classified by the Board of
Directors under the authority contained in the Charter of the Corporation. The
number of shares of common stock of the various series that the Corporation has
authority to issue has been established by the Board of Directors in accordance
with Section 2-105(c) of the Maryland General Corporation Law.
THIRD: Immediately prior to the effectiveness of the Articles
Supplementary of the Corporation as herein above set forth, the Corporation had
the authority to issue six hundred million (600,000,000) shares of common stock
of the par value of $0.001 per share and of the aggregate par value of six
hundred thousand dollars ($600,000), of which the Board of Directors had
designated six hundred million shares into portfolios and classes and classified
the shares of each portfolio and class as follows:
<TABLE>
<CAPTION>
Previous Classification of Shares
<S> <C> <C>
Number of Authorized
Name of Portfolio Class Designation Shares Allocated
Large Company Growth Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Large Company Value Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Small Company Growth Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Small Company Value Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Intermediate Corporate Bond Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Long Term Corporate Bond Fund Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
</TABLE>
As amended hereby, the Corporation's Articles of Incorporation
authorize the issuance of six hundred million (600,000,000) shares of common
stock of the par value of $0.001 per share and of the aggregate par value of six
hundred thousand dollars ($600,000), of which the Board of Directors has
designated five hundred million (500,000,000) common shares into portfolios and
classes and classified the shares of each portfolio and class as follows:
<TABLE>
<CAPTION>
Current Classification of Shares
<S> <C> <C>
Number of
Name of Portfolio Class Designation Shares Allocated
Large Company Growth Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Large Company Value Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Small Company Growth Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Small Company Value Portfolio Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
Wilshire 5000 Plus Fund Investment Class Shares 50,000,000
Institutional Class Shares 50,000,000
</TABLE>
FOURTH: The preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of each share of the Wilshire 5000 Plus Fund shall be as set forth in
the Corporation's Articles of Incorporation, as supplemented, and shall be
subject to all provisions of the Articles of Incorporation, as supplemented,
relating to shares of the Corporation generally.
<PAGE>
IN WITNESS WHEREOF, Wilshire Target Funds, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf by its
authorized officers who acknowledge that these Articles Supplementary are the
act of the Corporation; that to the best of their knowledge, information, and
belief, all matters and facts set forth herein relating to the authorization and
approval of these Articles Supplementary are true in all material respects; and
that this statement is made under the penalties of perjury.
Date: June 8, 1998
WILSHIRE TARGET FUNDS, INC.
[CORPORATE SEAL]
By:/s/Thomas D. Stevens
Name: Thomas D. Stevens
Title: President
Attest:
By:/s/ Alan L. Manning
Name: Alan L. Manning
Title: Vice-President
EXHIBIT 5(B)
WILSHIRE TARGET FUNDS
Providence, Rhode Island
June 8, 1998
Wilshire Associates Incorporated
1299 Ocean Avenue
Santa Monica, CA 90401-1085
Ladies and Gentlemen:
This will confirm our agreement that the Investment Advisory Agreement
between us dated July 11, 1996 is amended by adding the Wilshire 5000 Index
Portfolio as a Series thereunder. The annual fee for this Series will be .50% of
average daily net assets. The Reapproval Date and Reapproval Day for this Series
will be May 31, 2000 and May 31, respectively.
In all other respects, the Investment Advisory Agreement will remain in
full force and effect. Please sign this letter below to confirm your agreement
with this amendment.
Very truly yours,
/s/ Michael J. Napoli, Jr.
Michael J. Napoli, Jr.
Vice-President
AGREED:
WILSHIRE ASSOCIATES INCORPORATED
By: /s/ Thomas D. Stevens
Thomas D. Stevens
President
EXHIBIT 11(C)
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Michael Glazer, Thomas D.
Stevens and Julie A. Tedesco and each of them, with full power to act without
the other, her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for her and in her name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all amendments
to the Registration Statement for Wilshire Target Funds, Inc. (including
post-effective amendments and amendments thereto), and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue of this power of attorney.
WITNESS my hand as of the 8th day of June, 1998
/s/ Cynthia A. Hargadon
Cynthia A. Hargadon
Director
