<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
PROSPECTUS
MAY 31, 2000
TREASURY SECURITIES MONEY MARKET FUND
TAX EXEMPT MONEY MARKET FUND
THE ARBOR FUND
TRUST CLASS SHARES
ADVISED BY
HANCOCK BANK TRUST & FINANCIAL SERVICES GROUP
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Page 1 of 16
<PAGE>
ABOUT THIS PROSPECTUS
The Hancock Horizon Family of Funds is a mutual fund family that offers
different classes of shares in separate investment portfolios (Funds). The Funds
have individual investment goals and strategies. This prospectus gives you
important information about the Trust Class Shares of the Treasury Securities
Money Market Fund and the Tax Exempt Money Market Fund that you should know
before investing. Please read this prospectus and keep it for future reference.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN THAT IS COMMON TO EACH OF THE
FUNDS. FOR MORE DETAILED INFORMATION ABOUT EACH FUND, PLEASE SEE:
PAGE
TREASURY SECURITIES MONEY MARKET FUND............................XXX
TAX EXEMPT MONEY MARKET FUND.....................................XXX
MORE INFORMATION ABOUT RISK......................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS..........................XXX
INVESTMENT ADVISER AND SUB-ADVISER...............................XXX
PORTFOLIO MANAGER................................................XXX
PURCHASING AND SELLING FUND SHARES...............................XXX
DIVIDENDS AND DISTRIBUTIONS......................................XXX
TAXES............................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT THE
HANCOCK HORIZON FAMILY OF FUNDS..............................Back Cover
Page 2 of 16
<PAGE>
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in each Fund involves risk and there is
no guarantee that a Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in a
Fund, just as you could with other investments. A FUND SHARE IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY GOVERNMENT
AGENCY.
Page 3 of 16
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TREASURY SECURITIES MONEY MARKET FUND
FUND SUMMARY
INVESTMENT GOAL Preserve principal value and maintain a
high degree of liquidity while providing
current income
INVESTMENT FOCUS Money market instruments issued by the
U.S. Treasury
SHARE PRICE VOLATILITY As a money market fund, the Fund seeks
to maintain a stable share price of
$1.00
PRINCIPAL INVESTMENT STRATEGY Invest exclusively in short-term
obligations of the U.S. Treasury and
repurchase agreements involving such
obligations
INVESTOR PROFILE Conservative investors who want to
receive current income through a liquid
investment
INVESTMENT STRATEGY OF THE TREASURY SECURITIES MONEY MARKET FUND
The Fund invests exclusively in short-term money market instruments issued by
the U.S. Treasury and backed by its full faith and credit, and repurchase
agreements involving such obligations. The Fund will maintain an average dollar
weighted maturity of 90 days or less, and will only acquire securities that have
a remaining maturity of 397 days or less. The Adviser actively manages the
maturity of the Fund based on current market interest rates and its outlook on
the various economic factors which influence the market for short-term fixed
income instruments and future interest rate predictions.
PRINCIPAL RISKS OF INVESTING IN THE TREASURY SECURITIES MONEY MARKET FUND
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates. A FUND SHARE
IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
GOVERNMENT AGENCY. In addition, although a money market fund seeks to keep a
constant price per share of $1.00, you may lose money by investing in the Fund.
Although the Fund's U.S. Treasury securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates.
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
Page 4 of 16
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FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
TRUST CLASS SHARES
- --------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.40%
Distribution and Service (12b-1) Fees None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.70%*
Fee Waivers and Expense Reimbursement 0.12%
Net Expenses 0.58%
- --------------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses from exceeding the Net
Expenses shown above for a period of one year from the date of this prospectus.
For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
$72 $224
</TABLE>
Page 5 of 16
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TAX EXEMPT MONEY MARKET FUND
FUND SUMMARY
INVESTMENT GOAL Preserve principal value and
maintain a high degree of liquidity
while providing current income exempt
from federal income tax
INVESTMENT FOCUS U.S. municipal money market securities
SHARE PRICE VOLATILITY As a money market fund, the Fund seeks
to maintain a stable share price of
$1.00
PRINCIPAL INVESTMENT STRATEGY Investing in high quality short-term
U.S. municipal securities that pay
interest exempt from federal income tax
INVESTOR PROFILE Conservative taxable investors
who want to receive current income
through a liquid investment exempt from
federal income tax
INVESTMENT STRATEGY OF THE TAX EXEMPT MONEY MARKET FUND
The Fund invests substantially all of its assets (at least 80%) in a broad range
of high quality short-term municipal money market securities that pay interest
exempt from federal income tax. The issuer of these securities may be state and
local governments and agencies located in any of the fifty states, the District
of Columbia, Puerto Rico, and other U.S. territories and possessions. The Fund's
portfolio will be well diversified among these issuers and will be comprised
only of short-term securities that are rated in one of two highest short-term
credit rating categories, or unrated securities determined by the Adviser to be
of comparable quality. The Fund intends to invest as much of its assets as
possible in securities that are not subject to federal income taxes, including
the alternative minimum tax, but it can purchase a limited amount of taxable
securities. The Fund will maintain an average dollar-weighted portfolio maturity
of 90 days or less, and will only buy securities that have a remaining maturity
of 397 days or less.
The Adviser has engaged Weiss, Peck & Greer, L.L.C. as sub-adviser (Sub-Adviser)
to manage the Fund on a day-to-day basis. The Sub-Adviser's investment selection
process seeks to add value through a strategy that takes advantage of the
inefficient nature of the municipal securities market rather than attempting to
predict interest rate movements. Securities are chosen based on the issuer's
financial condition, the financial condition of any person or company which
guarantees the credit of the issuer, liquidity and competitive yield. The Fund
attempts to avoid purchasing or holding securities that are subject to a decline
in credit quality of the issue through careful credit screening, as well as
ongoing monitoring of each issuer and any person or company providing credit
support.
Page 6 of 16
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PRINCIPAL RISKS OF INVESTING IN THE TAX EXEMPT MONEY MARKET FUND
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates. A FUND SHARE
IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
GOVERNMENT AGENCY. In addition, although a money market fund seeks to keep a
constant price per share of $1.00, you may lose money by investing in the Fund.
There may be economic or political changes that impact the ability of municipal
issuers to repay principal and to make interest payments on municipal
securities. Changes in the financial condition or credit rating of municipal
issuers also may adversely affect the value of the Fund's securities.
Since the Fund may purchase securities supported by credit enhancements from
banks and other financial institutions, changes in the credit quality of these
institutions could cause losses to the Fund and affect its share price.
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
TRUST CLASS SHARES
- -----------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.50%
Distribution and Service (12b-1) Fees None
Other Expenses 0.35%
-----
Total Annual Fund Operating Expenses 0.85%*
Fee Waivers and Expense Reimbursements 0.20%
Net Expenses 0.65%
- --------------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses from exceeding the Net
Expenses shown above for a period of one year from the date of this prospectus.
For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."
Page 7 of 16
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
$87 $271
</TABLE>
Page 8 of 16
<PAGE>
MORE INFORMATION ABOUT RISK
<TABLE>
<S><C>
FIXED INCOME RISK -- The market value of fixed income investments Treasury Securities Money Market Fund
change in response to interest rate changes and other factors. Tax Exempt Money Market Fund
During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Moreover,
while securities with longer maturities tend to produce higher
yields, the prices of longer maturity securities are also subject
to greater market fluctuations as a result of changes in interest
rates. In addition to these fundamental risks, different types of
fixed income securities may be subject to the following additional
risks:
CREDIT RISK -- The possibility that an issuer will be Tax Exempt Money Market Fund
unable to make timely payments of either principal or
interest.
MUNICIPAL ISSUER RISK -- There may be economic or Tax Exempt Money Market Fund
political changes that impact the ability of municipal
issuers to repay principal and to make interest payments
on municipal securities. Changes to the financial
condition or credit rating of municipal issuers may also
adversely affect the value of the Fund's municipal
securities. Constitutional or legislative limits on
borrowing by municipal issuers may result in reduced
supplies of municipal securities. Moreover, certain
municipal securities are backed only by a municipal
issuer's ability to levy and collect taxes.
</TABLE>
Page 9 of 16
<PAGE>
MORE INFORMATION ABOUT FUND INVESTMENTS
In addition to the investments and strategies described in this prospectus, each
Fund also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in the Fund's Statement of
Additional Information.
The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, each Fund may invest up to 100%
of its assets in cash or money market instruments that would not ordinarily be
consistent with a Fund's objectives. A Fund will do so only if the Adviser or
Sub-Adviser believes that the risk of loss outweighs the opportunity for higher
income. Of course, we cannot guarantee that any Fund will achieve its investment
goal.
INVESTMENT ADVISER AND SUB-ADVISER
The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers each Fund's respective investment program.
In addition, the Investment Adviser oversees the Sub-Adviser to ensure
compliance with the Tax Exempt Money Market Fund's investment policies and
guidelines, and monitors the Sub-Adviser's adherence to its investment style.
The Adviser pays the Sub-Adviser out of the Investment Advisory fees it receives
(described below).
The Board of Trustees of the Hancock Horizon Family of Funds supervises the
Adviser and establishes policies that the Adviser must follow in its management
activities.
Hancock Bank Trust & Financial Services Group ("Hancock Bank"), serves as the
Adviser to the Funds. Hancock Bank is headquartered in Gulfport, Mississippi and
has provided banking, trust and financial services to individuals and businesses
since 1899. As of January 31, 2000, Hancock Bank had approximately $2.5 billion
in assets. The Adviser is entitled to receive 0.40% of the Treasury Securities
Money Market Fund's and 0.50% of the Tax Exempt Money Market Fund's average
daily net assets for its investment advisory services, but may receive less due
to its waivers.
Weiss, Peck & Greer, L.L.C. (WPG), One New York Plaza, New York, NY 10004,
serves as the Sub-Adviser and manages the Tax Exempt Money Market Fund on a
day-to-day basis. WPG was founded in 1970, and engages in investment management,
venture capital management and management buyouts. Since its founding, WPG has
been active in managing portfolios of tax exempt securities. WPG selects, buys
and sells securities for the Fund under the supervision of the Adviser and the
Board of Trustees.
WPG is entitled to a fee which is paid by the Adviser and which is calculated
daily and paid monthly, at an annual rate of: .085% on the first $50 million of
the Fund's average daily net assets; .075% on the next $100 million of the
Fund's average daily net assets; .05% on the next $350 million of the Fund's
average daily net assets; .04% on the next $500 million of the Fund's average
daily net assets; and .03% of the Fund's average daily net assets over $1
billion. This fee will be computed daily and paid to the Sub-Adviser monthly.
Page 10 of 16
<PAGE>
ADDITIONAL COMPENSATION
Hancock Bank and its affiliates may act as fiduciary or provide services in
various non-fiduciary capacities with respect to plans subject to the Employee
Retirement Income Security Act of 1974 (ERISA) and other trust and agency
accounts that invest in the Funds. In addition to the compensation payable
directly by such accounts for fiduciary and non-fiduciary services, Hancock Bank
receives compensation for acting as the Funds' investment adviser and Hancock
Bank and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. Hancock Bank serves as custodian to the Funds, and for such
services is paid an annual fee payable from the Funds' assets of .03% of each
Fund's average daily net assets.
TRANSFER AGENCY SERVICES. Hancock Bank provides transfer agency services to the
Funds. For providing these services, Hancock Bank is paid an annual fee payable
from the Funds' assets of $5,000 per class of each Fund.
PORTFOLIO MANAGER
Gerald Dugal serves as Director of Fixed Income and Trading for Hancock Bank and
is responsible for managing the Treasury Securities Money Market Fund and the
Tax Exempt Money Market Fund and is also responsible for the management of the
Strategic Income Bond Fund. He has more than 14 years of investment experience.
Prior to joining Hancock Bank in 1998, Mr. Dugal served in a similar capacity
for First Commerce Corporation.
PURCHASING AND SELLING FUND SHARES
This section tells you how to purchase and sell (sometimes called "redeem")
Trust Class Shares of the Funds.
Trust Class Shares are primarily for financial institutions investing for their
own or their customers' accounts.
HOW TO PURCHASE FUND SHARES
You may buy shares through accounts with investment professionals and financial
institutions that are authorized to place trades in Fund shares for their
customers. If you invest through an authorized institution, you will have to
follow its procedures, which may be different from the procedures for investing
directly. Your investment professional or institution may charge a fee for its
services, in addition to the fees charged by the Fund. You will also generally
have to address your correspondence or questions regarding a Fund to your
institution.
GENERAL INFORMATION
You may purchase shares on any day that the New York Stock Exchange, Hancock
Bank and the Federal Reserve are open for business (a Business Day).
A Fund may reject any purchase order if it is determined that accepting the
order would not be in the best interests of the Fund or its shareholders.
Page 11 of 16
<PAGE>
The price per share (the offering price) will be the net asset value per share
(NAV) next determined after a Fund receives your purchase order.
The Funds calculate their NAV once each Business Day at 12:00 p.m., Eastern
time. So, for you to be eligible to receive dividends declared on the day you
submit your purchase order, a Fund generally must receive your order before
12:00 p.m., Eastern time and federal funds (readily available funds) before
12:00 p.m., Eastern time.
HOW WE CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, each Fund generally values its investment portfolio using
the amortized cost valuation method, which is described in detail in our
Statement of Additional Information. If this method is determined to be
unreliable during certain market conditions or for other reasons, a Fund may
value its portfolio at market price or fair value prices may be determined in
good faith using methods approved by the Board of Trustees.
MINIMUM PURCHASES
Trust Class Shares are for trust institutional investors.
HOW TO SELL YOUR FUND SHARES
If you own your shares through an account with an investment professional or
other institution, contact that investment professional or institution to sell
your shares. Your investment professional or institution may charge a fee for
its services, in addition to the fees charged by the Fund.
The sale price of each share will be the next NAV determined after the Fund
receives your request.
RECEIVING YOUR MONEY
Normally, we will send your sale proceeds within seven Business Days after we
receive your request. Your proceeds can be wired to your bank account (subject
to a wire fee) or sent to you by check. IF YOU RECENTLY PURCHASED YOUR SHARES BY
CHECK OR THROUGH ACH, REDEMPTION PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK
HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM YOUR DATE OF PURCHASE).
Page 12 of 16
<PAGE>
REDEMPTIONS IN KIND
We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) we might pay all or part of your redemption
proceeds in liquid securities with a market value equal to the redemption price
(redemption in kind). It is highly unlikely that your shares would ever be
redeemed in kind, but if they were you would probably have to pay transaction
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.
INVOLUNTARY SALES OF YOUR SHARES
We will always give you at least 60 days' written notice to give you time to add
to your account and avoid the sale of your shares.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
A Fund may suspend your right to sell your shares during times when trading on
the NYSE is restricted or halted, or otherwise as permitted by the SEC. More
information about this is in our Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
Each Fund declares dividends daily and distributes its income monthly. Each Fund
makes distributions of capital gains, if any, at least annually. If you own Fund
shares on a Fund's record date, you will be entitled to receive the
distribution.
You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify your investment professional or institution in writing prior to the
date of the distribution. Your election will be effective for dividends and
distributions paid after the Fund receives your written notice. To cancel your
election, simply send your investment professional or institution written
notice.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Funds and their shareholders. This summary is based on current
tax laws, which may change.
Each Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from a Fund may be taxable whether or not you reinvest them. Income
distributions are generally taxable at ordinary income tax rates. Capital gains
distributions are generally taxable at the rates applicable to long-term capital
gains. EACH SALE OF FUND SHARES IS A TAXABLE EVENT.
The Tax Exempt Money Market Fund intends to distribute federally tax-exempt
income. The Fund may invest a portion of its assets in securities that generate
taxable income for federal or
Page 13 of 16
<PAGE>
state income taxes. Income exempt from federal tax may be subject to state and
local taxes. Any capital gains distributed by the Fund may be taxable.
MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.
Page 14 of 16
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
INVESTMENT ADVISER
Hancock Bank Trust & Financial Services Group
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about each Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated May 31, 2000, includes detailed information about the Hancock
Horizon Family of Funds. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list each Fund's holdings and contain information from the Funds'
managers about strategies, and recent market conditions and trends and their
impact on Fund performance. The reports also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
BY TELEPHONE: Call 1-800-522-6542, EXT. 4400
BY MAIL: Write to us
Hancock Bank Trust & Financial Services Group
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
Page 15 of 16
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual reports,
as well as other information about The Arbor Fund, from the EDGAR Database on
the SEC's website ("http://www.sec.gov"). You may review and copy documents at
the SEC Public Reference Room in Washington, DC (for information on the
operation of the Public Reference Room, call 202-942-8090). You may request
documents by mail from the SEC, upon payment of a duplicating fee, by writing
to: Securities and Exchange Commission, Public Reference Section, Washington, DC
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected]. The
Arbor Fund's Investment Company Act registration number is 811-7102.
Page 16 of 16
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
PROSPECTUS
MAY 31, 2000
TREASURY SECURITIES MONEY MARKET FUND
TAX EXEMPT MONEY MARKET FUND
THE ARBOR FUND
CLASS A SHARES
ADVISED BY
HANCOCK BANK TRUST & FINANCIAL SERVICES GROUP
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Page 1 of 17
<PAGE>
ABOUT THIS PROSPECTUS
The Hancock Horizon Family of Funds is a mutual fund family that offers
different classes of shares in separate investment portfolios (Funds). The Funds
have individual investment goals and strategies. This prospectus gives you
important information about the Class A Shares of the Treasury Securities Money
Market Fund and Tax Exempt Money Market Fund that you should know before
investing. Please read this prospectus and keep it for future reference.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN
EASILY REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME
GENERAL INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN THAT IS COMMON TO
EACH OF THE FUNDS. FOR MORE DETAILED INFORMATION ABOUT EACH FUND, PLEASE SEE:
PAGE
TREASURY SECURITIES MONEY MARKET FUND...........................XXX
TAX EXEMPT MONEY MARKET FUND....................................XXX
MORE INFORMATION ABOUT RISK.....................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS.........................XXX
INVESTMENT ADVISER AND SUB-ADVISER..............................XXX
PORTFOLIO MANAGER...............................................XXX
PURCHASING AND SELLING FUND SHARES..............................XXX
DISTRIBUTION OF FUND SHARES.....................................XXX
DIVIDENDS AND DISTRIBUTIONS.....................................XXX
TAXES...........................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT THE
HANCOCK HORIZON FAMILY OF FUNDS.............................Back Cover
Page 2 of 17
<PAGE>
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in each Fund involves risk and there is
no guarantee that a Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in a
Fund, just as you could with other investments. A FUND SHARE IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY GOVERNMENT
AGENCY.
Page 3 of 17
<PAGE>
TREASURY SECURITIES MONEY MARKET FUND
FUND SUMMARY
INVESTMENT GOAL Preserve principal value and maintain a
high degree of liquidity while providing
current income
INVESTMENT FOCUS Money market instruments issued by the
U.S. Treasury
SHARE PRICE VOLATILITY As a money market fund, the Fund seeks
to maintain a stable share price of
$1.00
PRINCIPAL INVESTMENT STRATEGY Invest exclusively in short-term
obligations of the U.S. Treasury and
repurchase agreements involving such
obligations
INVESTOR PROFILE Conservative investors who want to
receive current income through a liquid
investment
INVESTMENT STRATEGY OF THE TREASURY SECURITIES MONEY MARKET FUND
The Fund invests exclusively in short-term money market instruments issued by
the U.S. Treasury and backed by its full faith and credit, and repurchase
agreements involving such obligations. The Fund will maintain an average dollar
weighted maturity of 90 days or less, and will only acquire securities that have
a remaining maturity of 397 days or less. The Adviser actively manages the
maturity of the Fund based on current market interest rates and its outlook on
the various economic factors which influence the market for short-term fixed
income instruments and future interest rate predictions.
PRINCIPAL RISKS OF INVESTING IN THE TREASURY SECURITIES MONEY MARKET FUND
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates. A FUND SHARE
IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
GOVERNMENT AGENCY. In addition, although a money market fund seeks to keep a
constant price per share of $1.00, you may lose money by investing in the Fund.
Although the Fund's U.S. Treasury securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates.
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
Page 4 of 17
<PAGE>
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CLASS A SHARES
- ----------------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.40%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.55%
Total Annual Fund Operating Expenses 1.20%*
Fee Waivers and Expenses Reimbursements 0.12%
Net Expenses 1.08%
- ----------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses from exceeding the Net
Expenses shown above for a period of one year from the date of this prospectus.
For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
$122 $381
</TABLE>
Page 5 of 17
<PAGE>
TAX EXEMPT MONEY MARKET FUND
FUND SUMMARY
INVESTMENT GOAL Preserve principal value and maintain a
high degree of liquidity while providing
current income exempt from federal
income tax
INVESTMENT FOCUS U.S. municipal money market securities
SHARE PRICE VOLATILITY As a money market fund, the Fund seeks
to maintain a stable share price of
$1.00
PRINCIPAL INVESTMENT STRATEGY Investing in high quality short-term
U.S. municipal securities that pay
interest exempt from federal income tax
INVESTOR PROFILE Conservative taxable investors who want
to receive current income through a
liquid investment exempt from federal
income tax
INVESTMENT STRATEGY OF THE TAX EXEMPT MONEY MARKET FUND
The Fund invests substantially all of its assets (at least 80%) in a broad range
of high quality short-term municipal money market securities that pay interest
exempt from federal income tax. The issuers of these securities may be state and
local governments and agencies located in any of the fifty states, the District
of Columbia, Puerto Rico, and other U.S. territories and possessions. The Fund's
portfolio will be well diversified among these issuers and will be comprised
only of short-term securities that are rated in one of the two highest credit
rating categories, or unrated securities determined by the Adviser to be of
comparable quality. The Fund intends to invest as much of its assets as possible
in securities that are not subject to federal taxes, including the alternative
minimum tax, but it can purchase a limited amount of taxable securities. The
Fund will maintain an average dollar-weighted portfolio maturity of 90 days or
less, and will only buy securities that have a remaining maturity of 397 days or
less.
The Adviser has engaged Weiss, Peck & Greer, L.L.C. as sub-adviser (Sub-Adviser)
to manage the Fund on a day-to-day basis. The Sub-Adviser's investment selection
process seeks to add value through a strategy that takes advantage of the
inefficient nature of the municipal securities market rather than attempting to
predict interest rate movements. Securities are chosen based on the issuer's
financial condition, the financial condition of any person or company which
guarantees the credit of the issuer, liquidity and competitive yield. The Fund
attempts to avoid purchasing or holding securities that are subject to a decline
in credit quality of the issue through careful credit screening, as well as
ongoing monitoring of each issuer and any person or company providing credit
support.
Page 6 of 17
<PAGE>
PRINCIPAL RISKS OF INVESTING IN THE TAX EXEMPT MONEY MARKET FUND
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates. A FUND SHARE
IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
GOVERNMENT AGENCY. In addition, although a money market fund seeks to keep a
constant price per share of $1.00, you may lose money by investing in the Fund.
There may be economic or political changes that impact the ability of municipal
issuers to repay principal and to make interest payments on municipal
securities. Changes in the financial condition or credit rating of municipal
issuers also may adversely affect the value of the Fund's securities.
Since the Fund may purchase securities supported by credit enhancements from
banks and other financial institutions, changes in the credit quality of these
institutions could cause losses to the Fund and affect its share price.
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
CLASS A SHARES
- ----------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.50%
Distribution and Service (12b-1) Fees None
Other Expenses 0.60%
-----
Total Annual Fund Operating Expenses 1.10%*
Fee Waivers and Expense Reimbursements 0.20%
Net Expenses 0.90%
- --------------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses from exceeding the Net
Expenses for a period of one year from the date of this prospectus.
For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."
Page 7 of 17
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
$61 $192
</TABLE>
Page 8 of 17
<PAGE>
MORE INFORMATION ABOUT RISK
<TABLE>
<S> <C>
FIXED INCOME RISK -- The market value of fixed income investments Treasury Securities Money Market Fund
change in response to interest rate changes and other factors. Tax Exempt Money Market Fund
During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Moreover,
while securities with longer maturities tend to produce higher
yields, the prices of longer maturity securities are also subject
to greater market fluctuations as a result of changes in interest
rates. In addition to these fundamental risks, different types of
fixed income securities may be subject to the following additional
risks:
CREDIT RISK -- The possibility that an issuer will be Tax Exempt Money Market Fund
unable to make timely payments of either principal or
interest.
MUNICIPAL ISSUER RISK -- There may be economic or Tax Exempt Money Market Fund
political changes that impact the ability of municipal
issuers to repay principal and to make interest payments
on municipal securities. Changes to the financial
condition or credit rating of municipal issuers may also
adversely affect the value of the Fund's municipal
securities. Constitutional or legislative limits on
borrowing by municipal issuers may result in reduced
supplies of municipal securities. Moreover, certain
municipal securities are backed only by a municipal
issuer's ability to levy and collect taxes.
</TABLE>
Page 9 of 17
<PAGE>
MORE INFORMATION ABOUT FUND INVESTMENTS
In addition to the investments and strategies described in this prospectus, each
Fund also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in the Fund's Statement of
Additional Information.
The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, each Fund may invest up to 100%
of its assets in cash or money market instruments that would not ordinarily be
consistent with a Fund's objectives. A Fund will do so only if the Adviser or
Sub-Adviser believes that the risk of loss outweighs the opportunity for higher
income. Of course, we cannot guarantee that any Fund will achieve its investment
goal.
INVESTMENT ADVISER AND SUB-ADVISER
The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers each Fund's respective investment program.
In addition, the Investment Adviser oversees the Sub-Adviser to ensure
compliance with the Tax Exempt Money Market Fund's investment policies and
guidelines, and monitors the Sub-Adviser's adherence to its investment style.
The Adviser pays the Sub-Adviser out of the Investment Advisory fees it receives
(described below).
The Board of Trustees of the Hancock Horizon Family of Funds supervises the
Adviser and establishes policies that the Adviser must follow in its management
activities.
Hancock Bank Trust & Financial Services Group ("Hancock Bank"), serves as the
Adviser to the Funds. Hancock Bank is headquartered in Gulfport, Mississippi and
has provided banking, trust and financial services to individuals and businesses
since 1899. As of January 31, 2000, Hancock Bank had approximately $2.5 billion
in assets. The Adviser is entitled to receive 0.40% of the Treasury Securities
Money Market Fund's and 0.50% of the Tax Exempt Money Market Fund's average
daily net assets for its investment advisory services, but may receive less due
to its waivers.
Weiss, Peck & Greer, L.L.C. (WPG), One New York Plaza, New York, NY 10004,
serves as the Sub-Adviser and manages the Tax Exempt Money Market Fund on a
day-to-day basis. WPG was founded in 1970, and engages in investment management,
venture capital management and management buyouts. Since its founding, WPG has
been active in managing portfolios of tax exempt securities. WPG selects, buys
and sells securities for the Fund under the supervision of the Adviser and the
Board of Trustees.
WPG is entitled to a fee which is paid by the Adviser and which is calculated
daily and paid monthly, at an annual rate of: .085% on the first $50 million of
the Fund's average daily net assets; .075% on the next $100 million of the
Fund's average daily net assets; .05% on the next $350 million of the Fund's
average daily net assets; .04% on the next $500 million of the Fund's average
daily net assets; and .03% of the Fund's average daily net assets over $1
billion. This fee will be computed daily and paid to the Sub-Adviser monthly.
Page 10 of 17
<PAGE>
ADDITIONAL COMPENSATION
Hancock Bank and its affiliates may act as fiduciary or provide services in
various non-fiduciary capacities with respect to plans subject to the Employee
Retirement Income Security Act of 1974 (ERISA) and other trust and agency
accounts that invest in the Funds. In addition to the compensation payable
directly by such accounts for fiduciary and non-fiduciary services, Hancock Bank
receives compensation for acting as the Funds' investment adviser and Hancock
Bank and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. Hancock Bank serves as custodian to the Funds, and for such
services is paid an annual fee payable from the Funds' assets of .03% of each
Fund's average daily net assets.
DISTRIBUTION AND SERVICING FEES. As described above, to the extent that Class A
Shares are held through Hancock Bank or any of its affiliates providing
custodial, brokerage or investment-related services, including Hancock
Investment Services, Inc. (H.I.S., Inc.), those entities may receive the
distribution and servicing fees, payable from the Funds' assets, applicable to
that class of shares.
H.I.S., Inc., member NASD and SIPC, is a wholly owned brokerage subsidiary of
Hancock Bank.
TRANSFER AGENCY SERVICES. Hancock Bank provides transfer agency services to the
Funds. For providing these services, Hancock Bank is paid an annual fee payable
from the Funds' assets of $5,000 per class of each Fund.
SHAREHOLDER SERVICING FEES. To the extent that Class A Shares are held through
Hancock Bank or any of its affiliates providing custodial, brokerage or
investment-related services, including Hancock Investment Services, Inc., those
entities may receive shareholding servicing fees, payable from the Funds'
assets, of up to .25% of each Fund's average daily net assets.
PORTFOLIO MANAGER
Gerald Dugal serves as Director of Fixed Income and Trading for Hancock Bank and
is responsible for managing the Treasury Securities Money Market Fund and the
Tax Exempt Money Market Fund and is also responsible for the management of the
Strategic Income Bond Fund. He has more than 14 years of investment experience.
Prior to joining Hancock Bank in 1998, Mr. Dugal served in a similar capacity
for First Commerce Corporation.
PURCHASING AND SELLING FUND SHARES
This section tells you how to purchase and sell (sometimes called "redeem")
Class A Shares of the Funds.
HOW TO PURCHASE FUND SHARES
You may buy shares through accounts with investment professionals and financial
institutions that are authorized to place trades in Fund shares for their
customers. If you invest through an authorized institution, you will have to
follow its procedures, which may be different from the procedures for investing
directly. Your investment professional or institution may charge a fee for its
services, in addition to the fees charged by the Fund. You will also generally
have to address your correspondence or questions regarding a Fund to your
institution.
Page 11 of 17
<PAGE>
GENERAL INFORMATION
You may purchase shares on any day that the New York Stock Exchange, Hancock
Bank and the Federal Reserve are open for business (a Business Day).
A Fund may reject any purchase order if it is determined that accepting the
order would not be in the best interests of the Fund or its shareholders.
The price per share (the offering price) will be the net asset value per share
(NAV) next determined after a Fund receives your purchase order.
The Funds calculate their NAV once each Business Day at 12:00 p.m., Eastern
time. So, for you to be eligible to receive dividends declared on the day you
submit your purchase order, a Fund generally must receive your order and federal
funds (readily available funds) before 12:00 p.m., Eastern time.
HOW WE CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, each Fund generally values its investment portfolio using
the amortized cost valuation method, which is described in detail in our
Statement of Additional Information. If this method is determined to be
unreliable during certain market conditions or for other reasons, a Fund may
value its portfolio at market price or fair value prices may be determined in
good faith using methods approved by the Board of Trustees.
MINIMUM PURCHASES
To purchase Class A Shares for the first time, you must invest in any Fund at
least $1,000.
Your subsequent investments in any Fund must be made in amounts of at least $50.
A Fund may accept investments of smaller amounts at its discretion.
HOW TO SELL YOUR FUND SHARES
If you own your shares through an account with an investment professional or
other institution, contact that investment professional or institution to sell
your shares. Your investment professional or institution may charge a fee for
its services, in addition to the fees charged by the Fund.
The sale price of each share will be the next NAV determined after the Fund
receives your request.
RECEIVING YOUR MONEY
Normally, we will send your sale proceeds within one Business Day after we
receive your request. Your proceeds will be wired to your bank account. IF YOU
RECENTLY PURCHASED YOUR SHARES BY CHECK OR THROUGH ACH, REDEMPTION PROCEEDS MAY
NOT BE AVAILABLE UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM
YOUR DATE OF PURCHASE).
Page 12 of 17
<PAGE>
REDEMPTIONS IN KIND
We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) we might pay all or part of your redemption
proceeds in liquid securities with a market value equal to the redemption price
(redemption in kind). It is highly unlikely that your shares would ever be
redeemed in kind, but if they were you would probably have to pay transaction
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.
INVOLUNTARY SALES OF YOUR SHARES
If your account balance drops below the minimum level required by your cash
management agreement, you may be required to sell your shares. But, we will
always give you at least 60 days' written notice to give you time to add to your
account and avoid the sale of your shares.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
A Fund may suspend your right to sell your shares during times when trading on
the NYSE is restricted or halted, or otherwise as permitted by the SEC. More
information about this is in our Statement of Additional Information.
HOW TO EXCHANGE YOUR SHARES
You may exchange shares on any Business Day through your financial institution
by mail or telephone. Exchange requests must be for an amount of at least
$1,000.
You may exchange Class A Shares of any Hancock Horizon Fund for Class A Shares
of any other Hancock Horizon Fund. If you exchange shares that you purchased
without a sales charge or with a lower sales charge into a Fund with a sales
charge or with a higher sales charge, the exchange is subject to an incremental
sales charge (e.g., the difference between the lower and higher applicable sales
charges). If you exchange shares into a Fund with the same, lower or no sales
charge there is no incremental sales charge for the exchange.
You may exchange your shares up to 10 times during a calendar year. To avoid
excessive short-term trading or market timing activity, which can negatively
impact other shareholders, you may be charged a fee for each additional exchange
should you exchange your shares more than 10 times during a year. You will be
notified before any fee is charged.
IF YOU RECENTLY PURCHASED SHARES BY CHECK OR THROUGH ACH, YOU MAY NOT BE ABLE TO
EXCHANGE YOUR SHARES UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS
FROM YOUR DATE OF PURCHASE). This exchange privilege may be changed or canceled
at any time upon 30 days' notice.
When you exchange shares, you are really selling your shares and buying other
Fund shares. So, your sale price and purchase price will be based on the NAV
next calculated after the Fund receives your exchange request.
Page 13 of 17
<PAGE>
TELEPHONE TRANSACTIONS
Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although the Fund has certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, the Fund is not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with the Fund over the telephone, you will
generally bear the risk of any loss.
DISTRIBUTION OF FUND SHARES
Each Fund has adopted a distribution plan that allows the Fund to pay
distribution and service fees for the sale and distribution of its shares, and
for services provided to shareholders. Because these fees are paid out of a
Fund's assets continuously, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
Distribution fees, as a percentage of average daily net assets are as follows:
<TABLE>
<S> <C>
Treasury Securities Money Market Fund 0.25%
Tax Exempt Money Market Fund None
</TABLE>
DIVIDENDS AND DISTRIBUTIONS
Each Fund declares dividends daily and distributes its income monthly. Each Fund
makes distributions of capital gains, if any, at least annually. If you own Fund
shares on a Fund's record date, you will be entitled to receive the
distribution.
Class A shareholders automatically receive dividends and distributions in the
form of additional Fund shares unless you elect to receive payment in cash. To
elect cash payment, you must notify the Fund in writing prior to the date of the
distribution. Your election will be effective for dividends and distributions
paid after the Fund receives your written notice. To cancel your election,
simply send the Fund written notice.
Page 14 of 17
<PAGE>
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Funds and their shareholders. This summary is based on current
tax laws, which may change.
Each Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from a Fund may be taxable whether or not you reinvest them. Income
distributions are generally taxable at ordinary income tax rates. Capital gains
distributions are generally taxable at the rates applicable to long-term capital
gains. EACH SALE OF FUND SHARES IS A TAXABLE EVENT.
The Tax Exempt Money Market Fund intends to distribute federally tax-exempt
income. The Fund may invest a portion of its assets in securities that generate
taxable income for federal or state income taxes. Income exempt from federal tax
may be subject to state and local taxes. Any capital gains distributed by the
Fund may be taxable.
MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.
Page 15 of 17
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
INVESTMENT ADVISER
Hancock Bank Trust & Financial Services Group
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about each Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated May 31, 2000, includes detailed information about the Hancock
Horizon Family of Funds. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list each Fund's holdings and contain information from the Funds'
managers about strategies, and recent market conditions and trends and their
impact on Fund performance. The reports also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
BY TELEPHONE: Call 1-800-738-2625, EXT. 7200
BY MAIL: Write to us
Hancock Trust Operations/Transfer Agent
301 Main Street
Baton Rouge, LA 70816
Page 16 of 17
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual reports,
as well as other information about The Arbor Fund, from the EDGAR Database on
the SEC's website ("http://www.sec.gov"). You may review and copy documents at
the SEC Public Reference Room in Washington, DC (for information on the
operation of the Public Reference Room, call 202-942-8090). You may request
documents by mail from the SEC, upon payment of a duplicating fee, by writing
to: Securities and Exchange Commission, Public Reference Section, Washington, DC
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected]. The
Arbor Fund's Investment Company Act registration number is 811-7102.
Page 17 of 17
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
PROSPECTUS
MAY 31, 2000
STRATEGIC INCOME BOND FUND
GROWTH AND INCOME FUND
THE ARBOR FUND
TRUST CLASS, CLASS A AND CLASS C SHARES
ADVISED BY
HANCOCK BANK TRUST & FINANCIAL SERVICES GROUP
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Page 1 of 22
<PAGE>
ABOUT THIS PROSPECTUS
The Hancock Horizon Family of Funds is a mutual fund family that offers
different classes of shares in separate investment portfolios (Funds). The Funds
have individual investment goals and strategies. This prospectus gives you
important information about the Trust Class, Class A and Class C Shares of the
Funds that you should know before investing. Please read this prospectus and
keep it for future reference.
Trust Class, Class A and Class C Shares have different expenses and other
characteristics, allowing you to choose the class that best suits your needs.
You should consider the amount you want to invest, how long you plan to have it
invested, and whether you plan to make additional investments.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN
EASILY REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME
GENERAL INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN THAT IS COMMON TO EACH
OF THE FUNDS. FOR MORE DETAILED INFORMATION ABOUT EACH FUND, PLEASE SEE:
PAGE
STRATEGIC INCOME BOND FUND.......................................XXX
GROWTH AND INCOME FUND...........................................XXX
MORE INFORMATION ABOUT RISK......................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS..........................XXX
INVESTMENT ADVISER AND PORTFOLIO MANAGERS........................XXX
PURCHASING, SELLING AND EXCHANGING FUND SHARES...................XXX
DISTRIBUTION OF FUND SHARES......................................XXX
DIVIDENDS AND DISTRIBUTIONS......................................XXX
TAXES............................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT THE
HANCOCK HORIZON FAMILY OF FUNDS..............................Back Cover
Page 2 of 22
<PAGE>
RISK/RETURN INFORMATION COMMON TO THE FUNDS
Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
Each Fund has its own investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in each Fund involves risk and there is
no guarantee that a Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in a
Fund, just as you could with other investments. A FUND SHARE IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY GOVERNMENT
AGENCY.
The value of your investment in a Fund is based on the market prices of the
securities the Fund holds. These prices change daily due to economic and other
events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities a Fund owns and the markets in which they trade. The
effect on a Fund of a change in the value of a single security will depend on
how widely the Fund diversifies its holdings.
Page 3 of 22
<PAGE>
STRATEGIC INCOME BOND FUND
FUND SUMMARY
INVESTMENT GOAL Total return through current income and
capital appreciation, consistent with
the preservation of capital
INVESTMENT FOCUS Fixed income securities issued by the
U.S. Treasury, U.S. government agencies
and U.S. corporations
SHARE PRICE VOLATILITY Low
PRINCIPAL INVESTMENT STRATEGY Investing in a mix of U.S. Treasury
securities, U.S. government agency
securities and investment grade
corporate debt to attempt to maximize
return while limiting risk
INVESTOR PROFILE Conservative investors who want current
income, low risk to principal, and a
total return commensurate with fixed
income investing
INVESTMENT STRATEGY OF THE STRATEGIC INCOME BOND FUND
The Fund primarily invests (at least 65% of its assets) in fixed income
obligations (i) issued by the U.S. Treasury; (ii) issued by U.S. government
agencies; (iii) in mortgage-backed securities and (iv) investment grade U.S.
corporate debt. In selecting investments for the Portfolio, the Adviser analyzes
current market conditions and anticipated changes in bond prices to attempt to
invest more of the Fund's assets in the type of security the Adviser expects to
offer the best balance between income and stability of principal. The Adviser
actively manages the maturity of the Portfolio and, under normal circumstances,
the Portfolio's dollar-weighted average maturity will be between five and
fifteen years. The Adviser may vary this average maturity in anticipation of a
change in the interest rate environment. There is no restriction on the maturity
of a single security. Securities will be considered for sale in the event of or
in anticipation of a credit downgrade; in order to change the duration or sector
weighting of the Portfolio; or, to realize an aberration in a security's market
valuation.
PRINCIPAL RISKS OF INVESTING IN THE STRATEGIC INCOME BOND FUND
The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.
The mortgages underlying mortgage-backed securities may be paid off early, which
makes it difficult to determine their actual maturity and therefore calculate
how they will respond to
Page 4 of 22
<PAGE>
changes in interest rates. The Fund may have to reinvest prepaid amounts at
lower interest rates. This risk of prepayment is an additional risk of
mortgage-backed securities.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
The Fund is also subject to the risk that its investment approach, which focuses
on U.S. government and corporate fixed income securities, may perform
differently than other mutual funds which focus on different fixed income market
segments or other asset classes.
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
TRUST CLASS SHARES CLASS A SHARES CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)* None 4.00% None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and
other Distributions
(as a percentage of offering price) None None None
Redemption Fee (as a percentage of amount redeemed, if
applicable)** None None 1.00%
Exchange Fee None None None
</TABLE>
* This sales charge varies depending upon how much you invest. See
"Purchasing Fund Shares."
** This redemption fee is only applicable to shares sold within nine
months of their purchase date. This fee is not a sales charge and is
payable directly to the Funds.
Page 5 of 22
<PAGE>
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*
<TABLE>
<CAPTION>
TRUST CLASS SHARES CLASS A SHARES CLASS C SHARES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Advisory Fees 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees None None 0.75%
Other Expenses 0.33% 0.58% 0.58%
----- ----- -----
Total Annual Fund Operating Expenses 0.93% 1.18% 1.93%
Fee Waivers and Expense Reimbursements 0.18% 0.18% 0.18%
Net Expenses 0.75% 1.00% 1.75%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and
reimburse expenses in order to keep total operating expenses from exceeding the
Net Expenses shown above for a period of one year from the date of this
prospectus.
For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
TRUST CLASS SHARES $95 $296
CLASS A SHARES $515 $760
CLASS C SHARES $196 $606
</TABLE>
Page 6 of 22
<PAGE>
GROWTH AND INCOME FUND
FUND SUMMARY
INVESTMENT GOAL Long-term capital appreciation with a
secondary goal of current income
INVESTMENT FOCUS Medium to large capitalization U.S.
common stocks
SHARE PRICE VOLATILITY Medium
PRINCIPAL INVESTMENT STRATEGY Investing in common stocks which the
Adviser believes to be "undervalued"
based on its fundamental analysis
INVESTOR PROFILE Investors who seek long-term capital
appreciation and who are willing to bear
the risks of investing in equity
securities
INVESTMENT STRATEGY OF THE GROWTH AND INCOME FUND
The Fund invests primarily (at least 65% of its assets) in common stocks of U.S.
companies with medium to large capitalizations (in excess of $1 billion). The
Fund invests in "undervalued" companies the Adviser believes are of sound
financial quality and are actively traded in the market. While capital
appreciation is the primary purpose for investing in a company, the Fund will
emphasize companies that pay current dividends. The Adviser makes investments in
these companies based on its fundamental research and analysis of various
characteristics, including a company's sales and expense trends, market
position, historic and expected earnings and dividends. The Adviser attempts to
spread the Fund's investments across all major industry sectors, and generally
keeps the sector weighting of the Fund similar to that of its benchmark.
PRINCIPAL RISKS OF INVESTING IN THE GROWTH AND INCOME FUND
Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's securities will
fluctuate from day to day. Individual companies may report poor results or be
negatively affected by industry and/or economic trends and developments. The
prices of securities issued by such companies may suffer a decline in response.
These factors contribute to price volatility, which is the principal risk of
investing in the Fund.
The Fund is also subject to the risk that the Adviser's particular investment
style, which focuses on medium to large capitalization value stocks, may
underperform other segments of the equity markets or the equity markets as a
whole.
Page 7 of 22
<PAGE>
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<TABLE>
<CAPTION>
TRUST CLASS SHARES CLASS A SHARES CLASS C SHARES
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)* None 5.75% None
Maximum Deferred Sales Charge (Load)
(as a percentage of net asset value) None None None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and other Distributions
(as a percentage of offering price) None None None
Redemption Fee
(as a percentage of amount redeemed, if applicable)** None None 1.00%
Exchange Fee None None None
</TABLE>
* This sales charge varies depending upon how much you invest. See
"Purchasing Fund Shares."
** This redemption fee is only applicable to shares sold within nine
months of their purchase date. This fee is not a sales charge and is
payable directly to the Funds.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)*
<TABLE>
<CAPTION>
TRUST CLASS SHARES CLASS A SHARES CLASS C SHARES
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Advisory Fees 0.80% 0.80% 0.80%
Distribution and Service (12b-1) Fees None None 0.75%
Other Expenses 0.35% 0.60% 0.60%
----- ----- -----
Total Annual Fund Operating Expenses 1.15% 1.40% 2.15%
Fee Waivers and Expense Reimbursements 0.15% 0.15% 0.15%
Net Expenses 1.00% 1.25% 2.00%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and
reimburse expenses in order to keep total operating expenses from exceeding the
Net Expenses shown above for a period of one year from the date of this
prospectus.
For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."
Page 8 of 22
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C> <C>
TRUST CLASS SHARES $117 $365
CLASS A SHARES $709 $993
CLASS C SHARES $218 $673
</TABLE>
Page 9 of 22
<PAGE>
MORE INFORMATION ABOUT RISK
<TABLE>
<S> <C>
EQUITY RISK -- Equity securities include public and privately issued equity Growth and Income Fund
securities, common and preferred stocks, warrants, rights to subscribe to common
stock and convertible securities, as well as instruments that attempt to track
the price movement of equity indices. Investments in equity securities and
equity derivatives in general are subject to market risks that may cause their
prices to fluctuate over time. The value of securities convertible into equity
securities, such as warrants or convertible debt, is also affected by prevailing
interest rates, the credit quality of the issuer and any call provision.
Fluctuations in the value of equity securities in which a mutual fund invests
will cause a fund's net asset value to fluctuate. An investment in a portfolio
of equity securities may be more suitable for long-term investors who can bear
the risk of these share price fluctuations.
FIXED INCOME RISK -- The market value of fixed income investments change in Strategic Income Bond Fund
response to interest rate changes and other factors. During periods of falling
interest rates, the values of outstanding fixed income securities generally
rise. Moreover, while securities with longer maturities tend to produce higher
yields, the prices of longer maturity securities are also subject to greater
market fluctuations as a result of changes in interest rates. In addition to
these fundamental risks, different types of fixed income securities may be
subject to the following additional risks:
CALL RISK -- During periods of falling interest rates, certain debt Strategic Income Bond Fund
obligations with high interest rates may be prepaid (or "called") by
the issuer prior to maturity. This may cause a Fund's average weighted
maturity to fluctuate, and may require a Fund to invest the resulting
proceeds at lower interest rates.
CREDIT RISK -- The possibility that an issuer will be unable to make Strategic Income Bond Fund
timely payments of either principal or interest.
Page 10 of 22
<PAGE>
<S> <C>
MORTGAGE-BACKED SECURITIES -- Mortgage-backed securities are fixed Strategic Income Bond Fund
income securities representing an interest in a pool of underlying
mortgage loans. They are sensitive to changes in interest rates, but
may respond to these changes differently from other fixed income
securities due to the possibility of prepayment of the underlying
mortgage loans. As a result, it may not be possible to determine in
advance the actual maturity date or average life of a mortgage-backed
security. Rising interest rates tend to discourage refinancings, with
the result that the average life and volatility of the security will
increase exacerbating its decrease in market price. When interest rates
fall, however, mortgage-backed securities may not gain as much in
market value because of the expectation of additional mortgage
prepayments that must be reinvested at lower interest rates. Prepayment
risk may make it difficult to calculate the average maturity of a
portfolio of mortgage-backed securities and, therefore, to assess the
volatility risk of that portfolio.
</TABLE>
Page 11 of 22
<PAGE>
MORE INFORMATION ABOUT FUND INVESTMENTS
In addition to the investments and strategies described in this prospectus, each
Fund also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in the Fund's Statement of
Additional Information.
The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, each Fund may invest up to 100%
of its assets in cash or money market instruments that would not ordinarily be
consistent with a Fund's objectives. A Fund will do so only if the Adviser
believes that the risk of loss outweighs the opportunity for capital gains or
higher income. Of course, we cannot guarantee that any Fund will achieve its
investment goal.
INVESTMENT ADVISER
The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers each Fund's respective investment program.
The Board of Trustees of the Hancock Horizon Family of Funds supervises the
Adviser and establishes policies that the Adviser must follow in its management
activities.
Hancock Bank Trust & Financial Services Group ("Hancock Bank"), serves as the
Adviser to the Funds. Hancock Bank is headquartered in Gulfport, Mississippi and
has provided banking, trust and financial services to individuals and businesses
since 1899. As of January 31, 2000, Hancock Bank had approximately $2.5 billion
in assets. The Adviser is entitled to receive 0.60% of the Strategic Income Bond
Fund's and 0.80% of the Growth and Income Fund's average daily net assets for
its investment advisory services, but may receive less due to its waivers.
ADDITIONAL COMPENSATION
Hancock Bank and its affiliates may act as fiduciary or provide services in
various non-fiduciary capacities with respect to plans subject to the Employee
Retirement Income Security Act of 1974 (ERISA) and other trust and agency
accounts that invest in the Funds. In addition to the compensation payable
directly by such accounts for fiduciary and non-fiduciary services, Hancock Bank
receives compensation for acting as the Funds' investment adviser and Hancock
Bank and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. Hancock Bank serves as custodian to the Funds, and for such
services is paid an annual fee payable from the Funds' assets of .03% of each
Fund's average daily net assets.
COMMISSIONS, DISTRIBUTION AND SERVICING FEES. As described above, brokerage
firms affiliated with Hancock Bank, including Hancock Investment Services, Inc.
(H.I.S., Inc.), acting as dealer in connection with the sale of Class A Shares
of the Funds will be entitled to receive a commission of up to the entire amount
of the sales charge. In addition, to the extent that Class C Shares are held
through Hancock Bank or any of its affiliates providing custodial, brokerage or
investment-related services, including H.I.S., Inc., those entities may receive
the distribution and servicing fees, payable from the Funds' assets, applicable
to that class of shares.
Page 12 of 22
<PAGE>
H.I.S., Inc., member NASD and SIPC, is a wholly owned brokerage subsidiary of
Hancock Bank.
TRANSFER AGENCY SERVICES. Hancock Bank provides transfer agency services to the
Funds. For providing these services, Hancock Bank is paid an annual fee payable
from the Funds' assets of $5,000 per class of each Fund.
SHAREHOLDER SERVICING FEES. To the extent that Class A or Class C Shares are
held through Hancock Bank or any of its affiliates providing custodial,
brokerage or investment-related services, including H.I.S., Inc., those entities
may receive shareholding servicing fees, payable from the Funds' assets, of up
to .25% of each Fund's average daily net assets.
PORTFOLIO MANAGERS
John Portwood, CFA, serves as Director of Trust Investments and Chief Investment
Strategist for Hancock Bank. He has more than 30 years of investment experience.
Prior to joining Hancock Bank in 1998, Mr. Portwood served in a similar capacity
for First Commerce Corporation.
Gerald Dugal serves as Director of Fixed Income and Trading for Hancock Bank and
is responsible for managing the Strategic Income Bond Fund and is also
responsible for the management of the Treasury Securities Money Market Fund and
the Tax Exempt Money Market Fund. He has more than 14 years of investment
experience. Prior to joining Hancock Bank in 1998, Mr. Dugal served in a similar
capacity for First Commerce Corporation.
David Lundgren Jr., CFA, serves as Director of Equities and Research for Hancock
Bank and is responsible for managing the Growth and Income Fund. He has more
than 10 years of investment experience. Prior to joining Hancock Bank in 1998,
Mr. Lundgren served in a similar capacity for First Commerce Corporation.
PURCHASING, SELLING AND EXCHANGING FUND SHARES
This section tells you how to purchase, sell (sometimes called "redeem") and
exchange Trust Class, Class A and Class C Shares of the Funds.
HOW TO PURCHASE FUND SHARES
You may buy shares through accounts with investment professionals and financial
institutions that are authorized to place trades in Fund shares for their
customers. If you invest through an authorized institution, you will have to
follow its procedures, which may be different from the procedures for investing
directly. Your investment professional or institution may charge a fee for its
services, in addition to the fees charged by the Fund. You will also generally
have to address your correspondence or questions regarding a Fund to your
institution.
GENERAL INFORMATION
You may purchase shares on any day that the New York Stock Exchange (NYSE) and
Hancock Bank are open for business (a Business Day). Shares cannot be purchased
by Federal Reserve Wire on days when either the NYSE or the Federal Reserve is
closed.
A Fund may reject any purchase order if it is determined that accepting the
order would not be in the best interests of the Fund or its shareholders.
Page 13 of 22
<PAGE>
The price per share (the offering price) will be the net asset value per share
(NAV) next determined after a Fund receives your purchase order plus, in the
case of Class A Shares, the applicable front-end sales charge.
Each Fund calculates its NAV once each Business Day at the regularly-scheduled
close of normal trading on the New York Stock Exchange (normally, 4:00 p.m.,
Eastern time). So, for you to receive the current Business Day's NAV, generally
a Fund must receive your purchase order before 4:00 p.m., Eastern time.
HOW WE CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, a Fund generally values its investment portfolio at market
price. If market prices are unavailable or a Fund thinks that they are
unreliable, fair value prices may be determined in good faith using methods
approved by the Board of Trustees.
MINIMUM PURCHASES
To purchase shares for the first time, you must invest in either Fund at least:
<TABLE>
<CAPTION>
CLASS DOLLAR AMOUNT
<S> <C>
Class A Shares $1,000
Class C Shares $1,000
</TABLE>
Your subsequent investments in any Fund must be made in amounts of at least
$500.
Trust Class Shares are for trust institutional investors.
A Fund may accept investments of smaller amounts at its discretion.
SYSTEMATIC INVESTMENT PLAN
If you have a checking or savings account with a bank, you may purchase Class A
and Class C Shares automatically through regular deductions from your account in
amounts of at least $250 per month.
Page 14 of 22
<PAGE>
SALES CHARGES
FRONT-END SALES CHARGES -- CLASS A SHARES
The offering price of Class A Shares is the NAV next calculated after a Fund
receives your request, plus the front-end sales load.
The amount of any front-end sales charge included in your offering price varies,
depending on the amount of your investment:
<TABLE>
<CAPTION>
YOUR SALES CHARGE YOUR SALES CHARGE AS
AS A PERCENTAGE A PERCENTAGE OF YOUR
FUND IF YOUR INVESTMENT IS: OF OFFERING PRICE NET INVESTMENT
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
STRATEGIC INCOME BOND FUND LESS THAN $50,000 4.00% 4.17%
$50,000 BUT LESS THAN $100,000 3.25% 3.36%
$100,000 BUT LESS THAN $250,000 2.50% 2.56%
$250,000 BUT LESS THAN $500,000 1.75% 1.78%
$500,000 BUT LESS THAN $1,000,000 1.50% 1.52%
$1,000,000 AND OVER 0.00% 0.00%
- ------------------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME FUND LESS THAN $50,000 5.75% 6.10%
$50,000 BUT LESS THAN $100,000 4.50% 4.71%
$100,000 BUT LESS THAN $250,000 3.50% 3.63%
$250,000 BUT LESS THAN $500,000 2.50% 2.56%
$500,000 BUT LESS THAN $1,000,000 2.00% 2.04%
$1,000,000 AND OVER 0.00% 0.00%
</TABLE>
WAIVER OF FRONT-END SALES CHARGE -- CLASS A SHARES
The front-end sales charge will be waived on Class A Shares purchased:
- - through reinvestment of dividends and distributions;
- - through a Hancock Investment Services asset allocation account;
- - by persons repurchasing shares they redeemed within the last 30 days (see
Repurchase of Class A Shares);
- - by investors who purchase shares with redemption proceeds (but only to the
extent of such redemption proceeds) from another investment company within
30 days of such redemption, provided that, the investors paid a front-end
sales charge on the original shares redeemed;
- - by directors, employees, and members of their immediate family (living in
the same household), of Hancock Bank and its affiliates;
- - by Trustees and officers of Hancock Horizon Family of Funds;
- - through dealers, retirement plans, asset allocation programs and financial
institutions that, under their dealer agreements with the Distributor or
otherwise, do not receive any portion of the front-end sales charge.
REPURCHASE OF CLASS A SHARES
You may repurchase any amount of Class A Shares of any Fund at NAV (without the
normal front-end sales charge), up to the limit of the value of any amount of
Class A Shares (other than those which were purchased with reinvested dividends
and distributions) that you redeemed within the past 30 days. In effect, this
allows you to reacquire shares that you may have had to redeem, without
re-paying the front-end sales charge. To exercise this privilege, the Fund must
Page 15 of 22
<PAGE>
receive your purchase order within 30 days of your redemption. In addition, you
must notify your investment professional or institution when you send in your
purchase order that you are repurchasing shares.
REDUCED SALES CHARGES -- CLASS A SHARES
RIGHTS OF ACCUMULATION. In calculating the appropriate sales charge rate, this
right allows you to add the value of the Class A Shares you already own to the
amount that you are currently purchasing. The Fund will combine the value of
your current purchases with the current value of any Class A Shares you
purchased previously for (i) your account, (ii) your spouse's account, (iii) a
joint account with your spouse, or (iv) your minor children's trust or custodial
accounts. A Trust purchasing shares for the same Trust account, trust or estate
may also use this right of accumulation. The Fund will only consider the value
of Class A Shares purchased previously that were sold subject to a sales charge.
To be entitled to a reduced sales charge based on shares already owned, you must
ask us for the reduction at the time of purchase. You must provide the Fund with
your account number(s) and, if applicable, the account numbers for your spouse
and/or children (and provide the children's ages). The Fund may amend or
terminate this right of accumulation at any time.
LETTER OF INTENT. You may purchase Class A Shares at the sales charge rate
applicable to the total amount of the purchases you intend to make over a
13-month period. In other words, a Letter of Intent allows you to purchase Class
A Shares of a Fund over a 13-month period and receive the same sales charge as
if you had purchased all the shares at the same time. The Fund will only
consider the value of Class A Shares sold subject to a sales charge. As a
result, shares of the Class A Shares purchased with dividends or distributions
will not be included in the calculation. To be entitled to a reduced sales
charge based on shares you intend to purchase over the 13-month period, you must
send the Fund a Letter of Intent. In calculating the total amount of purchases
you may include in your letter purchases made up to 90 days before the date of
the Letter. The 13-month period begins on the date of the first purchase,
including those purchases made in the 90-day period before the date of the
Letter. Please note that the purchase price of these prior purchases will not be
adjusted.
You are not legally bound by the terms of your Letter of Intent to purchase the
amount of your shares stated in the Letter. The Letter does, however, authorize
the Funds to hold in escrow 5.0% of the total amount you intend to purchase. If
you do not complete the total intended purchase at the end of the 13-month
period, the Funds' transfer agent will redeem the necessary portion of the
escrowed shares to make up the difference between the reduced rate sales charge
(based on the amount you intended to purchase) and the sales charge that would
normally apply (based on the actual amount you purchased).
COMBINED PURCHASE/QUANTITY DISCOUNT PRIVILEGE. When calculating the appropriate
sales charge rate, the Funds will combine same day purchases of Class A Shares
(that are subject to a sales charge) made by you, your spouse and your minor
children (under age 21). This combination also applies to Class A Shares you
purchase with a Letter of Intent.
GENERAL INFORMATION ABOUT SALES CHARGES
Your securities dealer is paid a commission when you buy your shares and is paid
a servicing fee as long as you hold your shares. Your securities dealer or
servicing agent may receive different levels of compensation depending on which
Class of shares you buy.
Page 16 of 22
<PAGE>
From time to time, some financial institutions, including brokerage firms
affiliated with the Adviser, may be reallowed up to the entire sales charge.
Firms that receive a reallowance of the entire sales charge may be considered
underwriters for the purpose of federal securities law.
The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs for dealers, which will be paid for by the
Distributor from any sales charge it receives or from any other source available
to it. Under any such program, the Distributor may provide incentives, in the
form of cash or other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of the Funds.
HOW TO SELL YOUR FUND SHARES
If you own your shares through an account with an investment professional or
other institution, contact that investment professional or institution to sell
your shares. Your investment professional or institution may charge a fee for
its services, in addition to the fees charged by the Fund.
If you would like to sell $100,000 or more of your shares or wish to close your
account or send your sale proceeds to a third-party, please notify the Fund in
writing and include a signature guarantee by a bank or other financial
institution (a notarized signature is not sufficient). Additionally, a signature
guaranteed letter from you is required if your account registration has changed
in the previous 30 days, if funds are being sent to an address other than the
address of record, or if the check is made payable to someone other than the
account holder.
The sale price of each share will be the next NAV determined after the Fund
receives your request.
Class C Shares will be subject to a 1.00% redemption fee if sold within nine
months of their purchase.
SYSTEMATIC WITHDRAWAL PLAN (CLASS A AND CLASS C SHARES ONLY)
If you have at least $10,000 in your account, you may use the systematic
withdrawal plan. Under the plan you may arrange monthly, quarterly, semi-annual
or annual automatic withdrawals of at least $100 from any Fund. The proceeds of
each withdrawal will be mailed to you by check or, if you have a checking or
savings account with a bank, electronically transferred to your account.
RECEIVING YOUR MONEY
Normally, we will send your sale proceeds within seven Business Days after we
receive your request. Your proceeds can be wired to your bank account (subject
to a wire fee) or sent to you by check. IF YOU RECENTLY PURCHASED YOUR SHARES BY
CHECK OR THROUGH ACH, REDEMPTION PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK
HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM YOUR DATE OF PURCHASE).
REDEMPTIONS IN KIND
We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) we might pay all or part of your redemption
proceeds in liquid securities with a market value equal to the redemption price
(redemption in kind). It is highly unlikely that your shares would
Page 17 of 22
<PAGE>
ever be redeemed in kind, but if they were you would probably have to pay
transaction costs to sell the securities distributed to you, as well as taxes on
any capital gains from the sale as with any redemption.
INVOLUNTARY SALES OF YOUR SHARES
If your account balance drops below the required minimum you may be required to
sell your shares. The account balance minimums are:
<TABLE>
<CAPTION>
CLASS DOLLAR AMOUNT
<S> <C>
Class A Shares $1,000
Class C Shares $1,000
</TABLE>
But, we will always give you at least 60 days' written notice to give you time
to add to your account and avoid the sale of your shares.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
The Fund may suspend your right to sell your shares during times when trading on
the NYSE is restricted or halted, or otherwise as permitted by the SEC. More
information about this is in our Statement of Additional Information.
HOW TO EXCHANGE YOUR SHARES
You may exchange shares on any Business Day through your financial institution
by mail or telephone. Exchange requests must be for an amount of at least
$1,000.
You may exchange your shares up to 10 times during a calendar year. To avoid
excessive short-term trading or market timing activity, which can negatively
impact other shareholders, you may be charged a fee for each additional exchange
should you exchange your shares more than 10 times during a year. You will be
notified before any fee is charged.
IF YOU RECENTLY PURCHASED SHARES BY CHECK OR THROUGH ACH, YOU MAY NOT BE ABLE TO
EXCHANGE YOUR SHARES UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS
FROM YOUR DATE OF PURCHASE). This exchange privilege may be changed or canceled
at any time upon 30 days' notice.
When you exchange shares, you are really selling your shares and buying other
Fund shares. So, your sale price and purchase price will be based on the NAV
next calculated after the Fund receives your exchange request.
TRUST CLASS SHARES
You may exchange Trust Class Shares of any Hancock Horizon Fund for Trust Class
Shares of any other Hancock Bank Fund.
CLASS A SHARES
You may exchange Class A Shares of any Hancock Horizon Fund for Class A Shares
of any other Hancock Horizon Fund. If you exchange shares that you purchased
without a sales charge or with a lower sales charge into a Fund with a sales
charge or with a higher sales charge, the
Page 18 of 22
<PAGE>
exchange is subject to an incremental sales charge (e.g., the difference between
the lower and higher applicable sales charges). If you exchange shares into a
Fund with the same, lower or no sales charge there is no incremental sales
charge for the exchange.
CLASS C SHARES
You may exchange Class C Shares of any Hancock Horizon Fund for Class C Shares
of any other Hancock Bank Fund.
TELEPHONE TRANSACTIONS
Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although the Fund has certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, the Fund is not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with the Fund over the telephone, you will
generally bear the risk of any loss.
DISTRIBUTION OF FUND SHARES
Each Fund has adopted a distribution plan that allows Class C Shares of the Fund
to pay distribution and service fees for the sale and distribution of its
shares, and for services provided to shareholders. Because these fees are paid
out of a Fund's assets continuously, over time these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges. Distribution fees for Class C Shares, as a percentage of average daily
net assets are 0.75%.
DIVIDENDS AND DISTRIBUTIONS
Each Fund declares and distributes its income as follows:
Strategic Income Bond Fund Declared and Distributed Monthly
Growth and Income Fund Declared and Distributed Quarterly
Each Fund makes distributions of capital gains, if any, at least annually. If
you own Fund shares on a Fund's record date, you will be entitled to receive the
distribution.
You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify the Fund in writing prior to the date of the distribution. Your
election will be effective for dividends and distributions paid after the Fund
receives your written notice. To cancel your election, simply send the Fund
written notice.
Page 19 of 22
<PAGE>
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Funds and their shareholders. This summary is based on current
tax laws, which may change.
Each Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from a Fund may be taxable whether or not you reinvest them. Income
distributions are generally taxable at ordinary income tax rates. Capital gains
distributions are generally taxable at the rates applicable to long-term capital
gains. EACH SALE OR EXCHANGE OF FUND SHARES IS A TAXABLE EVENT.
MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.
Page 20 of 22
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
INVESTMENT ADVISER
Hancock Bank Trust & Financial Services Group
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about each Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated May 31, 2000, includes detailed information about the Hancock
Horizon Family of Funds. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list each Fund's holdings and contain information from the Funds'
managers about strategies, and recent market conditions and trends and their
impact on Fund performance. The reports also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
BY TELEPHONE: Call 1-800-738-2625, EXT. 7200
BY MAIL: Write to us
Hancock Trust Operations/Transfer Agent
301 Main Street
Baton Rouge, LA 70816
Page 21 of 22
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual reports,
as well as other information about The Arbor Fund, from the EDGAR Database on
the SEC's website ("http://www.sec.gov"). You may review and copy documents at
the SEC Public Reference Room in Washington, DC (for information on the
operation of the Public Reference Room, call 202-942-8090). You may request
documents by mail from the SEC, upon payment of a duplicating fee, by writing
to: Securities and Exchange Commission, Public Reference Section, Washington, DC
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected]. The
Arbor Fund's Investment Company Act registration number is 811-7102.
Page 22 of 22
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
PROSPECTUS
MAY 31, 2000
TREASURY SECURITIES MONEY MARKET FUND
THE ARBOR FUND
INSTITUTIONAL SWEEP CLASS SHARES
ADVISED BY
HANCOCK BANK TRUST & FINANCIAL SERVICES GROUP
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Page 1 of 12
<PAGE>
ABOUT THIS PROSPECTUS
The Hancock Horizon Family of Funds is a mutual fund family that offers
different classes of shares in separate investment portfolios (Funds). The Fund
has individual investment goals and strategies. This prospectus gives you
important information about the Institutional Sweep Class Shares of the Treasury
Securities Money Market Fund that you should know before investing. Please read
this prospectus and keep it for future reference.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. FOR MORE DETAILED INFORMATION ABOUT THE FUND,
PLEASE SEE:
PAGE
TREASURY SECURITIES MONEY MARKET FUND..........................XXX
MORE INFORMATION ABOUT RISK....................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS........................XXX
INVESTMENT ADVISER.............................................XXX
PORTFOLIO MANAGER..............................................XXX
PURCHASING AND SELLING FUND SHARES.............................XXX
DIVIDENDS AND DISTRIBUTIONS....................................XXX
TAXES..........................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT THE
HANCOCK HORIZON FAMILY OF FUNDS............................Back Cover
Page 2 of 17
<PAGE>
RISK/RETURN INFORMATION COMMON TO THE FUND
The Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
The Fund has its own investment goal and strategies for reaching that goal. The
investment managers invest Fund assets in a way that they believe will help a
Fund achieve its goal. Still, investing in the Fund involves risk and there is
no guarantee that a Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in a
Fund, just as you could with other investments. A FUND SHARE IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY GOVERNMENT
AGENCY.
Page 3 of 12
<PAGE>
TREASURY SECURITIES MONEY MARKET FUND
FUND SUMMARY
INVESTMENT GOAL Preserve principal value and maintain a
high degree of liquidity while providing
current income
INVESTMENT FOCUS Money market instruments issued by the
U.S. Treasury
SHARE PRICE VOLATILITY As a money market fund, the Fund seeks
to maintain a stable share price of
$1.00
PRINCIPAL INVESTMENT STRATEGY Invest exclusively in short-term
obligations of the U.S. Treasury and
repurchase agreements involving such
obligations
INVESTOR PROFILE Conservative investors who want to
receive current income through a liquid
investment
INVESTMENT STRATEGY OF THE TREASURY SECURITIES MONEY MARKET FUND
The Fund invests exclusively in short-term money market instruments issued by
the U.S. Treasury and backed by its full faith and credit, and repurchase
agreements involving such obligations. The Fund will maintain an average dollar
weighted maturity of 90 days or less, and will only acquire securities that have
a remaining maturity of 397 days or less. The Adviser actively manages the
maturity of the Fund based on current market interest rates and its outlook on
the various economic factors which influence the market for short-term fixed
income instruments and future interest rate predictions.
PRINCIPAL RISKS OF INVESTING IN THE TREASURY SECURITIES MONEY MARKET FUND
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates. A FUND SHARE
IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
GOVERNMENT AGENCY. In addition, although a money market fund seeks to keep a
constant price per share of $1.00, you may lose money by investing in the Fund.
Although the Fund's U.S. Treasury securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates.
Page 4 of 12
<PAGE>
PERFORMANCE INFORMATION
The Fund is new and therefore did not have performance information at the time
this prospectus was printed.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
INSTITUTIONAL SWEEP CLASS SHARES
- --------------------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.40%
Distribution and Service (12b-1) Fees None
Other Expenses 0.55%
Total Annual Fund Operating Expenses 0.95%*
Fee Waivers and Expense Reimbursements 0.12%
Net Expenses 0.83%
- ------------------------------------------------------------------------------------------------
</TABLE>
* The Fund's Adviser has contractually agreed to waive fees and reimburse
expenses in order to keep total operating expenses from exceeding Net Expenses
shown above for a period of one year from the date of this prospectus.
For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period.
The Example also assumes that each year your investment has a 5% return, Fund
operating expenses remain the same and you reinvest all dividends and
distributions. Although your actual costs and returns might be different, your
approximate costs of investing $10,000 in the Fund would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
<S> <C>
$97 $303
</TABLE>
Page 5 of 12
<PAGE>
MORE INFORMATION ABOUT RISK
The Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.
The Fund has its own investment goal and strategies for reaching that goal. The
investment manager invests Fund assets in a way that they believe will help the
Fund achieve its goal. Still, investing in the Fund involves risk and there is
no guarantee that the Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in the
Fund, just as you could with other investments. A FUND SHARE IS NOT A BANK
DEPOSIT AND IT IS NOT INSURED OR GUARANTEED BY THE FDIC OR ANY GOVERNMENT
AGENCY.
FIXED INCOME RISK -- The market value of fixed income investments change in
response to interest rate changes and other factors. During periods of falling
interest rates, the values of outstanding fixed income securities generally
rise. Moreover, while securities with longer maturities tend to produce higher
yields, the prices of longer maturity securities are also subject to greater
market fluctuations as a result of changes in interest rates.
MORE INFORMATION ABOUT FUND INVESTMENTS
The Fund's investments and strategies are described in more detail in the Fund's
Statement of Additional Information.
The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, each Fund may invest up to 100%
of its assets in cash or money market instruments that would not ordinarily be
consistent with a Fund's objectives. A Fund will do so only if the Adviser
believes that the risk of loss outweighs the opportunity for higher income. Of
course, we cannot guarantee that any Fund will achieve its investment goal.
INVESTMENT ADVISER
The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program.
The Board of Trustees of the Hancock Horizon Family of Funds supervises the
Adviser and establishes policies that the Adviser must follow in its management
activities.
Hancock Bank Trust & Financial Services Group ("Hancock Bank"), serves as the
Adviser to the Funds. Hancock Bank is headquartered in Gulfport, Mississippi and
has provided banking, trust and financial services to individuals and businesses
since 1899. As of January 31, 2000, Hancock Bank had approximately $2.5 billion
in assets. The Adviser is entitled to receive 0.40% of the Treasury Securities
Money Market Fund's average daily net assets for its investment advisory
services, but may receive less due to its waivers.
Page 6 of 12
<PAGE>
ADDITIONAL COMPENSATION
Hancock Bank and its affiliates may act as fiduciary or provide services in
various non-fiduciary capacities with respect to plans subject to the Employee
Retirement Income Security Act of 1974 (ERISA) and other trust and agency
accounts that invest in the Funds. In addition to the compensation payable
directly by such accounts for fiduciary and non-fiduciary services, Hancock Bank
receives compensation for acting as the Funds' investment adviser and Hancock
Bank and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. Hancock Bank serves as custodian to the Funds, and for such
services is paid an annual fee payable from the Funds' assets of .03% of each
Fund's average daily net assets.
TRANSFER AGENCY SERVICES. Hancock Bank provides transfer agency services to the
Funds. For providing these services, Hancock Bank is paid an annual fee payable
from the Funds' assets of $5,000 per class of each Fund.
SHAREHOLDER SERVICING FEES. To the extent that Institutional Sweep Class Shares
are held through Hancock Bank or any of its affiliates providing custodial,
brokerage or investment-related services, including Hancock Investment Services,
Inc. (H.I.S., Inc.), those entities may receive shareholding servicing fees,
payable from the Funds' assets, of up to .25% of each Fund's average daily net
assets.
H.I.S., Inc., member NASD and SIPC, is a wholly owned brokerage subsidiary of
Hancock Bank.
PORTFOLIO MANAGER
Gerald Dugal serves as Director of Fixed Income and Trading for Hancock Bank and
is responsible for managing the Treasury Securities Money Market Fund and the
Tax Exempt Money Market Fund and is also responsible for the management of the
Strategic Income Bond Fund. He has more than 14 years of investment experience.
Prior to joining Hancock Bank in 1998, Mr. Dugal served in a similar capacity
for First Commerce Corporation.
PURCHASING AND SELLING FUND SHARES
This section tells you how to purchase and sell (sometimes called "redeem")
Institutional Sweep Class Shares of the Fund.
HOW TO PURCHASE FUND SHARES
You may buy shares through accounts with investment professionals and financial
institutions that are authorized to place trades in Fund shares for their
customers. If you invest through an authorized institution, you will have to
follow its procedures, which may be different from the procedures for investing
directly. Your investment professional or institution may charge a fee for its
services, in addition to the fees charged by the Fund. You will also generally
have to address your correspondence or questions regarding a Fund to your
institution.
GENERAL INFORMATION
You may purchase shares on any day that the New York Stock Exchange, Hancock
Bank and the Federal Reserve are open for business (a Business Day).
Page 7 of 12
<PAGE>
The Fund may reject any purchase order if it is determined that accepting the
order would not be in the best interests of the Fund or its shareholders.
The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Fund receives your purchase order.
The Fund calculates its NAV once each Business Day at 12:00 p.m., Eastern time.
So, for you to be eligible to receive dividends declared on the day you submit
your purchase order, the Fund generally must receive your order and federal
funds (readily available funds) before 12:00 p.m., Eastern time.
HOW WE CALCULATE NAV
NAV for one Fund share is the value of that share's portion of the net assets of
the Fund.
In calculating NAV, the Fund generally values its investment portfolio using the
amortized cost valuation method, which is described in detail in our Statement
of Additional Information. If this method is determined to be unreliable during
certain market conditions or for other reasons, the Fund may value its portfolio
at market price or fair value prices may be determined in good faith using
methods approved by the Board of Trustees.
MINIMUM PURCHASES
Hancock Bank may require cash management account customers to maintain minimum
banking account levels in order to participate in the cash management account
program. The minimum levels are subject to the terms of your cash management
account agreement with Hancock Bank. In general, however, if your banking
account falls below the minimum amount, your shares in the Fund may be redeemed
or you may be charged additional fees.
HOW TO SELL YOUR FUND SHARES
Shareholders may sell shares by following procedures established when they
opened their account or accounts. If you have questions, call 1-800-522-6542,
EXT. 4400.
The sale price of each share will be the next NAV determined after the Fund
receives your request.
Page 8 of 12
<PAGE>
RECEIVING YOUR MONEY
Normally, we will send your sale proceeds within one Business Day after we
receive your request. Your proceeds will be wired to your bank account. IF YOU
RECENTLY PURCHASED YOUR SHARES BY CHECK OR THROUGH ACH, REDEMPTION PROCEEDS MAY
NOT BE AVAILABLE UNTIL YOUR CHECK HAS CLEARED (WHICH MAY TAKE UP TO 15 DAYS FROM
YOUR DATE OF PURCHASE).
REDEMPTIONS IN KIND
We generally pay sale (redemption) proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund's remaining shareholders) we might pay all or part of your redemption
proceeds in liquid securities with a market value equal to the redemption price
(redemption in kind). It is highly unlikely that your shares would ever be
redeemed in kind, but if they were you would probably have to pay transaction
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.
INVOLUNTARY SALES OF YOUR SHARES
If your account balance drops below the minimum level required in your cash
management account agreement with Hancock Bank because of redemptions, you may
be required to sell your shares. But, we will always give you at least 60 days'
written notice to give you time to add to your account and avoid the sale of
your shares.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
A Fund may suspend your right to sell your shares during times when trading on
the NYSE is restricted or halted, or otherwise as permitted by the SEC. More
information about this is in our Statement of Additional Information.
DIVIDENDS AND DISTRIBUTIONS
The Fund declares dividends daily and distributes its income monthly. The Fund
makes distributions of capital gains, if any, at least annually. If you own Fund
shares on a Fund's record date, you will be entitled to receive the
distribution.
Institutional Sweep Class shareholders automatically will receive dividends and
distributions in the form of additional Fund shares unless you elect to receive
payment in cash. To elect cash payment, you must notify the Fund in writing
prior to the date of the distribution. Your election will be effective for
dividends and distributions paid after the Fund receives your written notice. To
cancel your election, simply send the Fund written notice.
Page 9 of 12
<PAGE>
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below we have summarized some important tax issues
that affect the Fund and its shareholders. This summary is based on current tax
laws, which may change.
The Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from the Fund may be taxable whether or not you reinvest them. Income
distributions are generally taxable at ordinary income tax rates. Capital gains
distributions are generally taxable at the rates applicable to long-term capital
gains. EACH SALE OF FUND SHARES IS A TAXABLE EVENT.
MORE INFORMATION ABOUT TAXES IS IN THE STATEMENT OF ADDITIONAL INFORMATION.
Page 10 of 12
<PAGE>
HANCOCK HORIZON FAMILY OF FUNDS
INVESTMENT ADVISER
Hancock Bank Trust & Financial Services Group
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about each Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated May 31, 2000, includes detailed information about the Hancock
Horizon Family of Funds. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports list each Fund's holdings and contain information from the Funds'
managers about strategies, and recent market conditions and trends and their
impact on Fund performance. The reports also contain detailed financial
information about the Funds.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
BY TELEPHONE: Call 1-800-522-6542, EXT. 4400
BY MAIL: Write to us
Hancock Bank Trust & Financial Services Group
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
Page 11 of 12
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual reports,
as well as other information about The Arbor Fund, from the EDGAR Database on
the SEC's website ("http://www.sec.gov"). You may review and copy documents at
the SEC Public Reference Room in Washington, DC (for information on the
operation of the Public Reference Room, call 202-942-8090). You may request
documents by mail from the SEC, upon payment of a duplicating fee, by writing
to: Securities and Exchange Commission, Public Reference Section, Washington, DC
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected]. The
Arbor Fund's Investment Company Act registration number is 811-7102.
Page 12 of 12
