January 16, 1999
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's
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 16, 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.......................... 3
Management of the Portfolio.................................. 5
How to Buy Portfolio Shares.................................. 6
Shareholder Services......................................... 7
How to Redeem Portfolio Shares............................... 8
Service and Distribution Plan................................ 9
Dividends, Distributions and Taxes........................... 10
Performance Information...................................... 11
General Information.......................................... 12
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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**....................................................... .20%
Other Expenses+................................................... .35%
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Total Portfolio Operating Expenses (after waiver)++............... .55%
* 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 0.92%.
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 $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of each
time period:
1 Year .........$ 6
3 Years $18
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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
Portfolio" 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, 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.
<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.
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
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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).
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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) 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.
