<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /__/
Pre-Effective Amendment No. /__/
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Post-Effective No. 11 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /___/
Amendment No. 12 / X /
------
(Check appropriate box or boxes)
JOHNSON MUTUAL FUNDS TRUST- File Nos. 33-52970 and 811-7254
-----------------------------------------------------------
3777 West Fork Road, Cincinnati, Ohio 45247
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(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number, including Area Code: (513) 661-3100
--------------------------
Dianna J. Rosenberger, 3777 West Fork Road , Cincinnati, Ohio 45247
- --------------------------------------------------------------------
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective:
/___/ immediately upon filing pursuant to paragraph (b)
/_X_/ on May 1, 1999 pursuant to paragraph (b)
/___/ 60 days after filing pursuant to paragraph (a)(1)
/___/ on (date) pursuant to paragraph (a)(1)
/ __/ 75 days after filing pursuant to paragraph (a)(2)
/___/ on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/__/ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE> 2
JOHNSON
MUTUAL FUNDS
Prospectus dated May 1, 1999
Johnson Growth Fund
Johnson Opportunity Fund
Johnson Realty Fund
Johnson Fixed Income Fund
Johnson Municipal Income Fund
Johnson Mutual Funds Trust
3777 West Fork Road
Cincinnati, OH 45247
(513) 661-3100
(800) 541-0170
FAX (513) 661-4901
Like all mutual fund shares and prospectuses, the Securities and Exchange
Commission has not approved or disapproved these shares or this prospectus. Any
representation to the contrary is a criminal offense.
<PAGE> 3
JOHNSON GROWTH FUND
INVESTMENT OBJECTIVE
The investment objective of the Growth Fund is long term capital growth.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests primarily in common stocks of larger-sized U.S. companies
(those with a market capitalization above $5 billion) that its Adviser believes
have above average prospects for appreciation. The Fund emphasizes common stocks
of high quality growth companies which tend to have strong performance records,
solid market positions and reasonable financial strength. The Fund may also
invest up to 30% of its assets in foreign securities.
PRINCIPAL RISKS OF INVESTING IN THE FUND
All investments carry risks to some degree. The principal risks of
investing in the Fund are stock market risk and foreign investment risk. Stock
market risk means that the stock price might decrease in value in response to
the activities and financial prospects of an individual company or in response
to general market and economic conditions. Foreign investment risk means that
the foreign stocks may decrease in value due to the risks associated with
international investing, such as restrictions on foreign currency transactions
and rates of exchange, and changes in the administrations or economic and
monetary policies of foreign governments. Common stocks tend to be more volatile
than other investment choices. The value of the Fund's portfolio may decrease if
the value of an individual company in the portfolio decreases. As with any
mutual fund investment, the Fund's returns may vary and you could lose money.
IS THIS FUND RIGHT FOR YOU?
The Fund may be a suitable investment for:
- - long term investors seeking a Fund with a growth investment strategy
investors willing to accept price fluctuations in their investment
investors who can tolerate the greater risks associated with common stock
investments
HOW THE FUND HAS PERFORMED
The chart and table below show the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The bar chart
shows changes in the Fund's returns from year to year since the Fund's
inception. The table shows how the Fund's average annual total returns compare
to those of a broad-based securities market index. Of course, the Fund's past
performance is not necessarily an indication of its future performance.
[Insert bar chart with the following plot points:]
1993 5.93%
1994 -4.22%
1995 31.61%
1996 16.85%
1997 33.96%
1998 29.10%
Since January 1, 1993 (the Fund's inception), the highest return for a quarter
was 15.31% (Q2, 1997); and the lowest return was -3.31% (Q1, 1994).
Average Annual Total Returns:
1 Year 5 Years Since
------ ------- -----
Inception
---------
The Fund 29.10% 20.57% 18.00%
S&P 500 Index 28.59% 24.05% 21.61%
3
<PAGE> 4
JOHNSON OPPORTUNITY FUND
INVESTMENT OBJECTIVE
The investment objective of the Opportunity Fund is long term capital
growth.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests primarily in equity securities of medium-sized companies
(those with a market capitalization less than $5 billion) which the Fund's
Adviser believes offer opportunities for capital appreciation. The Fund
emphasizes securities of companies with significant potential to appreciate in
value due to dynamic business changes, including changing consumer demands and
lifestyles, or specific company developments such as new product or
technological breakthroughs, new channels of distribution, revitalized
management or industry competitive position, or any other similar new
opportunity. The Fund may also invest up to 30% of its assets in foreign
securities.
PRINCIPAL RISKS OF INVESTING IN THE FUND
All investments carry risks to some degree. The principal risks of
investing in the Fund are stock market risk and foreign investment risk. Stock
market risk means that the stock price might decrease in value in response to
the activities and financial prospects of an individual company or in response
to general market and economic conditions. Foreign investment risk means that
the foreign stocks may decrease in value due to the risks associated with
international investing, such as restrictions on foreign currency transactions
and rates of exchange, and changes in the administrations or economic and
monetary policies of foreign governments. Common stocks tend to be more volatile
than other investment choices. The value of the Fund's portfolio may decrease if
the value of an individual company in the portfolio decreases. In addition, the
stocks of medium sized companies are subject to certain risks including:
- - possible dependence on a limited product line, market, financial
resources or management group
- - less frequent trading and trading with smaller volume than exchange
listed stocks, which may make it difficult for the Fund to buy or sell the
stocks greater fluctuation in value than larger, more established company
stocks As with any mutual fund investment, loss of money is a risk of
investing.
IS THIS FUND RIGHT FOR YOU?
The Fund may be a suitable investment for:
- - long term investors seeking a Fund with a growth investment strategy
investors willing to accept price fluctuations in their investment
investors who can tolerate the greater risks associated with common stock
investments.
HOW THE FUND HAS PERFORMED
The chart and table below show the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The bar chart
shows changes in the Fund's returns form year to year since the Fund's
inception. The table shows how the Fund's average annual total returns compare
to those of a broad-based securities market index. Of course, the Fund's past
performance is not necessarily an indication of its future performance.
[Insert bar chart with the following plot points:]
1994 4.99%
1995 25.27%
1996 23.10%
1997 27.26%
1998 18.93%
Since May 16, 1994 (the Fund's inception), the highest return for a
quarter was 13.53% (Q3, 1997); and the lowest return was -1.06% (Q1, 1997).
AVERAGE ANNUAL TOTAL RETURNS:
1 Year Since Inception
------ ---------------
The Fund 18.93% 21.51%
S&P Midcap Index 19.09% 20.77%
4
<PAGE> 5
JOHNSON REALTY FUND
INVESTMENT OBJECTIVE
The investment objective of the Realty Fund is above average income and
long term capital growth.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests primarily in equity securities of companies in the real
estate industry, including but not limited to REITs (real estate investment
trusts) and other real estate related equity securities, such as common stock,
preferred stock and/or convertible securities of companies engaged in real
estate related businesses.
PRINCIPAL RISKS OF INVESTING IN THE FUND
All investments carry risks to some degree. The principal risks of
investing in the Fund are stock market risk and real estate risk. Stock market
risk means that the stock price might decrease in value in response to the
activities and financial prospects of an individual company or in response to
general market and economic conditions. Real estate risk means that the Fund may
be subject to risks associated with the real estate market as a whole, such as
taxation, regulations and economic and political factors that negatively impact
the real estate market. In addition, the individual securities held by the Fund
are subject to the same risks associated with direct ownership of real estate,
such as:
- - decreases in real estate values overbuilding environmental liabilities
increases in operating costs, interest rates and/or property taxes
regulatory limitations on rental income changes in local zoning laws
Some real estate related investments are not fully diversified, and thus
are subject to the risks associated with financing a limited number of projects.
REITS are also heavily dependent upon the management team and are subject to
heavy cash flow dependency, defaults by borrowers, and self-liquidation. The
Adviser seeks to mitigate these risks by selecting REITs diversified by sector
as well as geographic location. The Fund will invest primarily in equity REITs
that invest in office, residential, retail, industrial, and other specialty
properties including hotels, self-storage facilities, healthcare facilities, and
parking facilities. As with any mutual fund investment, the Fund's returns may
vary and you could lose money.
IS THIS FUND RIGHT FOR YOU?
Due to the Fund's concentration in the real estate industry, the Fund is
not intended to be a complete investment program; however, the Fund may be a
suitable investment for:
- - long term investors
- - investors looking to diversify into real estate securities
- - investors willing to accept fluctuations in the value of their
investments
HOW THE FUND HAS PERFORMED
The chart and table below show the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The bar chart
shows changes in the Fund's returns since the Fund's inception. The table shows
how the Fund's average annual total returns compare to those of a broad-based
securities market index. Of course, the Fund's past performance is not
necessarily an indication of its future performance.
[Insert bar chart with the following plot points:]
1998 -18.56%
Since January 1, 1998 (the Fund's inception), the highest return for a
quarter was -2.26% (Q1, 1998); and the lowest return was -10.86% (Q3, 1998).
Average Annual Total Returns:
Since Inception
The Fund -18.56%
NAREIT Index -17.50%
5
<PAGE> 6
JOHNSON FIXED INCOME FUND
INVESTMENT OBJECTIVE
The investment objective of the Fixed Income Fund is a high level of
income over the long term consistent with preservation of capital.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests primarily in a broad range of investment grade fixed
income securities, including bonds, notes, convertible bonds, mortgage-backed
securities, collateralized mortgage obligations, domestic and foreign corporate
and government securities, municipal securities, zero coupon bonds and short
term obligations, such as commercial paper and repurchase agreements.
PRINCIPAL RISKS OF INVESTING IN THE FUND
All investments carry risks to some degree. The principal risks of
investing in the Fund are interest rate risk, credit risk and prepayment risk.
Interest rate risk means that the value of you investment may decrease when
interest rates rise. Credit risk means that the issuer of the fixed income
security may not be able to make interest and principal payments when due.
Prepayment risk means that the mortgage securities held by the Fund may be
negatively affected by changes in prepayment rates on the underlying mortgages.
As with any mutual fund investment, the Fund's returns may vary and you could
lose money.
IS THIS FUND RIGHT FOR YOU?
The Fund may be a suitable investment for:
- - long term investors investors seeking to diversify their holdings with
bonds and other fixed income securities investors willing to accept price
fluctuations in their investments.
HOW THE FUND HAS PERFORMED
The chart and table below show the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The bar chart
shows changes in the Fund's returns form year to year since the Fund's
inception. The table shows how the Fund's average annual total returns compare
to those of a broad-based securities market index. Of course, the Fund's past
performance is not necessarily an indication of its future performance.
[Insert bar chart with the following plot points:]
1993 9.51%
1994 -5.14%
1995 17.70%
1996 3.11%
1997 8.44%
1998 9.05%
Since January 1, 1993 (the Fund's inception), the highest return for a quarter
was 6.04% (Q2, 1995); and the lowest return was -3.42% (Q1, 1994).
Average Annual Total Returns:
1 Year 5 Years Since
------ ------- -----
Inception
---------
The Fund 9.05% 6.36% 6.89%
Lehman
Intermediate Index 8.44% 6.60% 6.89%
6
<PAGE> 7
JOHNSON MUNICIPAL INCOME FUND
INVESTMENT OBJECTIVE
The investment objective of the Municipal Income Fund is a high level of
federally tax-free income over the long term consistent with preservation of
capital.
HOW THE FUND PURSUES ITS OBJECTIE
The Fund invests primarily in investment grade municipal securities issued
by or on behalf of states, territories and possessions of the United States, the
District of Columbia and other political subdivisions, agencies,
instrumentalities and authorities, the income from which is exempt from regular
federal income tax. It is anticipated that the majority of the investments in
the Fund will be Ohio municipal bonds, notes, and short term obligations which
provide income that is exempt from both Ohio personal income tax and regular
federal income tax. In addition, the Fund may concentrate its investments in a
particular segment of the bond market, such as housing agency bonds or airport
bonds.
PRINCIPAL RISKS OF INVESTING IN THE FUND
All investments carry risks to some degree. The principal risks of
investing in the Fund are interest rate risk, credit risk, political risk,
geographic risk and segment risk. Interest rate risk means that the value of
your investment may decrease when interest rates rise. Credit risk means that
the issuer of a bond may not be able to make interest and principal payments
when due. Political risk means that a substantial change in federal income tax
laws could cause municipal bond prices to decline. This is because the demand
for municipal bonds is strongly influenced by the value of tax-exempt income to
investors. For example, as federal income tax rates decrease, the advantages to
owning municipal bonds also decreases. Geographic risk means that because the
Fund invests primarily in bonds from the State of Ohio, it is particularly
sensitive to political and economic factors that negatively affect Ohio. Segment
risk means that economic or political factors affecting one bond in a particular
segment of the bond market may affect other bonds within the segment in the same
manner. As with any mutual fund investment, the Fund's returns may vary and you
could lose money.
In addition, as the Fund is not diversified, its portfolio may be invested
in securities of fewer issuers than the portfolio of a diversified fund. This
concentration may cause greater fluctuation in the Fund's net asset value and
may make the Fund more susceptible to any single risk, described above, than a
diversified fund. There also are risks of reduced diversification because the
Fund invests primarily in securities of issuers within the State of Ohio. The
Adviser tries to minimize these risks by carefully selecting investments.
IS THIS FUND RIGHT FOR YOU?
The Fund may be a suitable investment for:
- - long term investors investors seeking federally tax-free income investors
willing to concentrate their investment in the State of Ohio investors
willing to accept price fluctuations in their investment
HOW THE FUND HAS PERFORME
The chart and table below show the variability of the Fund's returns,
which is one indicator of the risks of investing in the Fund. The bar chart
shows changes in the Fund's returns from year to year since May 16, 1994 (the
Fund's inception). The table shows how the Fund's average annual total returns
compare to those of a broad-based securities market index. Of course, the Fund's
past performance is not necessarily an indication of its future performance.
[Insert bar chart with the following plot points:]
1994 0.81%
1995 10.88%
1996 3.43%
1997 6.23%
1998 5.19%
Since May 16, 1994 (the Fund's inception), the highest return for a quarter was
4.21% (Q1, 1995); and the lowest return was -0.51% (Q4, 1994).
AVERAGE ANNUAL TOTAL RETURNS:
1 Year Since Inception
------ ---------------
The Fund 5.19% 5.73%
Lehman G.O. Index 5.85% 6.42%
7
<PAGE> 8
COSTS OF INVESTING IN THE FUNDS:
This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund.
<TABLE>
<CAPTION>
FIXED MUNICIPAL
GROWTH OPPORTUNITY REALTY INCOME INCOME
SHAREHOLDER FEES (1)
<S> <C> <C> <C> <C> <C>
(fees paid directly from your investment) None None None None None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
Management Fees 1.00% 1.00% 1.00% 1.00% 1.00%
Distribution Fees None None None None None
Total Annual Fund Operating Expenses 1.00% 1.00% 1.00% 1.00% 1.00%
Fee Waiver 05% .05% .05% .15% .35%
Net Expenses 95% .95% .95% .85% .65%
NET EXPENSES
(1) A processing fee will be deducted from any wire sales proceeds and paid
to the Custodian.
</TABLE>
Expense Example:
- ----------------
The example below is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. The example uses the
same assumptions as other mutual fund prospectuses: a $10,000 initial
investment, 5% annual total return, constant operating expenses, and sale of all
shares at the end of each time period. Your actual expenses may be different.
[USING NET EXPENSES]
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth Fund $97 $304 $528 $1171
Opportunity Fund $97 $304 $528 $1171
Realty Fund $97 $304 $528 $1171
Fixed Income Fund $87 $272 $473 $1052
Municipal Income Fund $67 $209 $363 $812
</TABLE>
8
<PAGE> 9
HOW TO BUY, SELL OR EXCHANGE SHARES IN THE FUND
The Funds and their transfer agent, Johnson Financial Services, Inc., can
be contacted at the same mailing address and telephone numbers. If you need
additional information on how to buy, sell or exchange shares in the Fund,
please contact:
FUNDS:
Johnson Mutual Funds Trust
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100
(800)-541-0170
FAX: (513) 661-4901
TRANSFER AGENT:
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100
(800) 541-0170
FAX: (513) 661-4901
HOW TO BUY SHARES
INITIAL PURCHASE: The minimum initial investment for each Fund is $2,000. Due to
Federal Limitations, the minimum initial investment for an Education IRA is
$500.00. You may diversify your investments by choosing a combination of any of
the Funds for your investment program.
BY MAIL - You may purchase shares of any Fund by following these steps
- - Complete and sign an application; Draft a check made payable to: Johnson
Mutual Funds; Identify on the check and on the application the Fund(s)
in which you would like to invest; Mail the application, check and any
letter of instruction to the Transfer Agent.
BY WIRE - You may purchase shares of any Fund by wiring Federal Funds from your
bank, which may charge you a fee for doing so. If money is to be wired for a
newly established account, you must call the Transfer Agent first to open an
account and obtain an account number. Your bank must then wire the specified
amount according to the following instructions:
The Provident Bank/Cincinnati,
Johnson Mutual Funds
ABA #042000424
Account #0198-483
For Further Credit to: Johnson Mutual Funds
Shareholder Account Name -___________________
Shareholder Account Number - __________ (4 digit)
You must mail a completed application to Johnson Mutual Funds after
opening an account by wire transfer. Wire orders will be accepted only on a day
on which the Funds and the custodian bank are open for business. A wire purchase
will not be considered made until the wired money is received and the purchase
is accepted by the Funds. Any delays that may occur in wiring money, including
delays that may occur in processing by the banks, are not the responsibility of
the Funds or the custodian bank. There is presently no fee for the receipt of
wired funds, but the Funds may charge a fee in the future.
ADDITIONAL PURCHASES
You may buy additional shares of a Fund at any time (minimum of $100) by
mail or by bank wire. Each additional purchase request must contain:
- - Name of your account(s);
Account number(s);
Name of the Fund(s) in which you wish to invest.
Checks should be made payable to "Johnson Mutual Funds" and should be sent
to the Johnson Mutual Funds at the address indicated throughout this prospectus.
A bank wire should be sent as outlined above. ACH (Automatic Clearing House)
transactions should be established in advance by contacting the Transfer Agent.
AUTOMATIC INVESTMENT OPTION
You may arrange to make additional investments ($100 minimum)
automatically on a monthly or bi-monthly basis by transfers from your checking
account. You must complete the "Optional Automatic Investment Plan" section of
the application and provide the Trust with a voided check from the account you
wish to use for the automatic investment. You may terminate this automatic
investment program at any time.
9
<PAGE> 10
The Funds may limit the amount of purchases and reject any purchase
request in whole or in part. If your check or wire does not clear, you will be
responsible for any loss incurred and the Fund can sell other shares your own as
reimbursement for any loss incurred.
HOW TO SELL SHARES
The proceeds of the sale may be more or less than the purchase price of
your shares, depending on the market value of the Fund's securities at the time
of your sale. Your request for a sale should be addressed to the Johnson Mutual
Funds and must include:
- - Letter of instruction;
Fund name;
Account number(s);
Account name(s);
Dollar amount or the number of shares you wish to sell.
All registered share owner(s) must sign this request in the exact name(s)
and any special capacity in which they are registered. For joint accounts with
right of survivorship, only one signature is required for withdrawal.
For sales in excess of $50,000, the Funds may require that signatures be
guaranteed by a bank or member firm of a national securities exchange. Signature
guarantees are for the protection of shareholders. At the discretion of any
Fund, a shareholder may be required to furnish additional legal documents to
insure proper authorization. If you are not certain of the requirements for a
sale, please call the Transfer Agent at the number indicated throughout this
prospectus.
BY TELEPHONE - Telephone redemption privileges are automatically available to
all shareholders. Shareholders may sell shares on any business day the New York
Stock Exchange is open by calling the Transfer Agent before 4:00 p.m. Eastern
Time. The Funds will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures will include requiring a
form of personal identification from the caller. Sale proceeds will be mailed or
wired at the shareholder's direction to the designated account. The minimum
amount that may be wired is $1,000 (wire charges of $10 will be deducted from
sales proceeds).
By using the telephone redemption and exchange privileges, a shareholder
authorizes the Funds to act upon the instruction of any person by telephone to
sell shares from the account and transfer the proceeds to the bank account
designated or effect an exchange into another Fund. The Funds and the Transfer
Agent are not liable for following instructions communicated by telephone that
they reasonably believe to be genuine. However, if they do not employ reasonable
procedures to confirm that telephone instructions are genuine, they may be
liable for any losses due to unauthorized or fraudulent instructions. The Funds
may change, modify or terminate the telephone redemption or exchange privilege
at any time.
BY SYSTEMATIC WITHDRAWAL PROGRAM - Shareholders may request that a predetermined
amount be sent by check or wired to them periodically, each month or calendar
quarter. A shareholder's account must have Fund shares with a value of at least
$10,000 in order to start a Systematic Withdrawal
10
<PAGE> 11
Program, and the minimum amount that may be withdrawn each month or quarter
under the Systematic Withdrawal Program is $100. This program may be terminated
by a shareholder or the Funds at any time without charge or penalty and will
become effective five business days following receipt of your instructions.
In order to facilitate the delivery of the checks as close as possible to
the end of the month, shares will be sold on the 24th day of the month or the
last business day prior to the 24th day if the 24th falls on a holiday or
weekend. A withdrawal under the Systematic Withdrawal Program involves a sale of
shares, and may result in a gain or loss for federal income tax purposes. In
addition, if the amount withdrawn exceeds the dividends credited to the
shareholder's account, the account ultimately may be depleted.
ADDITIONAL INFORMATION - Sale requests specifying a certain date or share price
cannot be accepted and will be returned. If you invest by wire, you may sell
your shares on the first business day following such purchase. However, if you
invest by a personal, corporate, cashier's or government check, or through any
of our telephone services, the sales proceeds will not be paid until the first
business day after the 10th calendar day following receipt of payment by the
Fund. Exchanges into any of the other Funds are, however, permitted without the
ten day waiting period.
We will mail or wire the proceeds to you on or before the 5th business day
following the sale. Also, when the New York Stock Exchange is closed (or when
trading is restricted) for any reason other than its customary weekend or
holiday closing or under any emergency circumstances, as determined by the
Securities and Exchange Commission, we may suspend sales of Fund shares or
postpone payment dates. If you are unable to accomplish your transaction by
telephone (for example, during times of unusual market activity), consider
sending your order by express mail to the Funds, or facsimile to (513) 661-4901.
Because the Funds incur certain fixed costs in maintaining shareholder
accounts, each Fund may require any shareholder to sell all of his or her shares
in the Fund on 30 days' written notice if the value of his or her shares in the
Fund is less than $2,000 due to sales of Fund shares, or such other minimum
amount as the Fund may determine from time to time. An involuntary sale will
create a capital gain or a capital loss, which may have tax consequences about
which you should consult your tax adviser. A shareholder may increase the value
of his or her shares in the Fund to the minimum amount within the 30 day period.
Each share of each Fund are subject to a sale at any time if the Board of
Trustees determines in its sole discretion that failure to sell may have
materially adverse consequences to all or any of the shareholders of the Trust
or any Fund of the Trust.
HOW TO EXCHANGE SHARES
As a shareholder in any Fund, you may exchange shares valued at $1,000 or
more for shares of any other Fund in the Johnson Mutual Fund Trust. You may make
an exchange by telephone or by written request.
BY TELEPHONE - Shareholders may call the Transfer Agent to exchange
shares. An exchange may also be made by written request signed by all registered
owners of the account mailed to the Transfer Agent. Requests for exchanges
received prior to close of trading on the New York Stock Exchange (4:00 p.m.
Eastern Time) will be processed at the next determined net asset value (NAV) as
of the close of business on the same day.
An exchange is made by selling shares of one Fund and using the proceeds
to buy shares of another Fund, with the NAV for the sale and the purchase
calculated on the same day. See "How to Sell Shares". An exchange results in a
sale of shares for federal income tax purposes. If you make use of the exchange
privilege, you may realize either a long term or short term capital gain or loss
on the shares sold.
Before making an exchange, you should consider the investment objective of
the Fund to be purchased. If your exchange creates a new account, you must
satisfy the requirements of the Fund in which shares are being purchased. You
may make an exchange to a new account or an existing account; however, the
account ownership must be identical. Exchanges may be made only in states where
an exchange may legally be made. The Funds reserve the right to terminate or
modify the exchange
11
<PAGE> 12
privilege in the future upon 60 days prior notice to the shareholders.
SHARE PRICE CALCULATION
The value of an individual share in a Fund, the net asset value (NAV), is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (normally 4:00 p.m. Eastern Time) on each day that the exchange
is open for business, and on any other day on which there is sufficient trading
in the Fund's securities to materially affect the net asset value. The net asset
value per share of each Fund will fluctuate.
The Funds' assets are generally valued at their market value. If market
prices are not available, or if an event occurs after the close of the trading
market that materially affects the values, assets may be valued at their fair
value. Requests to purchase, exchange and redeem shares are processed at the NAV
calculated after the Transfer Agent receives your order in proper form.
DIVIDENDS AND DISTRIBUTIONS
The Growth Fund, the Realty Fund, the Fixed Income Fund and the Municipal
Income Fund intend to distribute substantially all of their net investment
income as dividends to shareholders on a quarterly basis. The Opportunity Fund
intends to distribute substantially all of its net investment income as
dividends to shareholders on an annual basis at year end. Each Fund intends to
distribute its capital gains once a year, at year end.
Dividends and capital gain distributions are automatically reinvested in
additional shares at the net asset value per share on the distribution date. An
election to receive a cash payment of dividends and/or capital gain
distributions may be made in the application to purchase shares or by separate
written notice to the Transfer Agent. You will receive a confirmation statement
reflecting the payment and reinvestment of dividends and summarizing all other
transactions. If cash payment is requested, a check normally will be mailed
within five business days after the payable date. If you withdraw your entire
account, all dividends accrued to the time of withdrawal, including the day of
withdrawal, will be paid at that time. Distributions of less than $10 and
distributions on shares purchased within the last 30 days, however, will not be
paid in cash and will be reinvested. You may elect to have distributions on
shares held in IRA's and 403(b) plans paid in cash only if you are 59 1/2 years
old or permanently and totally disabled or if you otherwise qualify under the
applicable plan.
TAXES
In general, selling shares of a Fund and receiving distributions (whether
reinvested or taken in cash) are taxable events. Depending on the purchase price
and the sale price, you may have a gain or a loss on any shares sold. Any tax
liabilities generated by your transactions or by receiving distributions are
your responsibility. Because distributions of long term capital gains are
subject to capital gains taxes, regardless of how long you have owned your
shares, you may want to avoid making a substantial investment when a Fund is
about to make a long term capital gain distribution. Any capital gains
distributed by the Municipal Income Fund may be taxable. The tax consequences
described in this section apply whether distributions are taken in cash or
reinvested in additional shares.
You are not required to pay federal regular income tax on any dividends
received from a Fund that represent net interest on tax-exempt municipal bonds.
However, dividends representing net interest earned on some municipal bonds may
be included in calculating the federal alternative minimum tax. Income that is
exempt from federal tax may be subject to state and local income tax.
The IRS treats interest on certain "private activity" bonds as a tax
preference item. Unlike traditional governmental purpose municipal bonds, which
finance roads, schools, libraries, prisons and other public facilities, private
activity bonds provide benefits to private parties. The Municipal Income Fund
may purchase all types of municipal bonds, including private activity bonds. If
it does so, a portion of its dividends may be treated as a tax preference item.
In addition, although the Municipal Income Fund invests primarily in tax-exempt
securities, a portion of its assets may generate
12
<PAGE> 13
income that is not exempt from federal or state income tax.
Each Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. You should consult with your tax adviser
regarding specific questions as to federal, state or local taxes, the tax effect
of distributions and withdrawals from the Funds and the use of the Exchange
Privilege.
Unless you furnish your certified taxpayer identification number (social
security number for individuals) and certify that you are not subject to backup
withholding, the Funds will be required to withhold and remit to the IRS 31% of
the dividends, distributions and sales proceeds payable to the shareholder. The
Funds may be fined $50 annually for each account for which a certified taxpayer
identification number is not provided. In the event that such a fine is imposed
with respect to a specific shareholder account in any year, the Fund will make a
corresponding charge against the shareholder account.
MANAGEMENT OF THE FUNDS
Johnson Investment Counsel, Inc., 3777 West Fork Road, Cincinnati, Ohio
45247 ("Johnson") serves as investment adviser to the Funds. In this capacity,
Johnson is responsible for the selection and on-going monitoring of the
securities in each Fund's investment portfolio and managing the Funds' business
affairs. Johnson is a Cincinnati-based company that has grown, since its
inception in 1965, to become the largest independent investment advisory firm in
the Cincinnati area. Johnson has over $2.3 billion of assets under management
with services extending to a wide range of clients, including businesses,
individuals, foundations, institutions and endowments. Johnson solely provides
investment management, through individually managed portfolios, and has no
commission-based affiliations from the sale of products. An investment committee
of Johnson is responsible for the investment decisions and the day-to-day
management of the Funds. The management fees paid by each Fund are shown on page
7.
OTHER INFORMATION ABOUT INVESTMENTS
JOHNSON GROWTH FUND AND JOHNSON OPPORTUNITY FUND
The Adviser generally intends to stay fully invested (subject to liquidity
requirements), regardless of the movement of stock prices.
JOHNSON FIXED INCOME FUND AND JOHNSON MUNICIPAL INCOME FUND
The Fixed Income Fund and Municipal Income Fund may invest in fixed income
securities which are unrated if the Adviser determines that they are of
comparable quality to securities rated investment grade. Investment grade debt
securities generally have adequate to strong protection of principal and
interest payments. In the lower end of this category, credit quality may be more
susceptible to potential future changes in circumstances and the securities have
speculative elements. If the rating of a security drops below investment grade,
the Adviser will dispose of the security as soon as practicable (depending on
market conditions) unless the Adviser determines based on its own credit
analysis that the security provides the opportunity of meeting the Fund's
objective without presenting excessive risk.
From time to time, the Municipal Income Fund may invest more than 25% of
the value of its total assets in industrial development bonds which, although
issued by industrial development authorities, may be backed only by the assets
and revenues of the non-governmental users. However, the Fund will not invest
more than 25% of its assets in securities backed by non-governmental users which
are in the same industry.
JOHNSON REALTY FUND
Under normal circumstances, at least 65% of the Fund's total assets will
be in the real estate industry. The Fund will not attempt to duplicate the real
estate market as a whole in terms of the proportion of invested assets in any
specific region or property category.
A REIT is an investment vehicle that invests in interests in real estate.
REITs typically have high income pay-out ratios and therefore may provide
significant income returns a REIT can be categorized as an equity REIT, mortgage
REIT or hybrid REIT. An equity REIT owns or leases land or buildings and
13
<PAGE> 14
receives most of its income from rental income. In addition, an equity REIT may
realize capital gains or losses upon the sale of land or buildings that have
appreciated or depreciated in value from the time of purchase to the time of
sale. A mortgage REIT invests in real estate mortgage loans and generates income
primarily from the interest payments on mortgage loans. A hybrid REIT has both
the characteristics of an equity REIT and a mortgage REIT and derives its income
primarily from rental income and mortgage loan interest.
GENERAL
For temporary defensive purposes, any Fund may hold all or a portion of
its assets in money market instruments, securities of other no-load mutual funds
or repurchase agreements. If a Fund invests in shares of another mutual fund,
the shareholders of the Fund generally will be subject to duplicative management
fees. As a result of engaging in these temporary measures, the Funds may not
achieve their investment objectives. The investment objectives and strategies of
any Fund may be changed without shareholder approval.
YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by the Advisor or the Funds' various service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Issue." The
Advisor, the Funds, and the transfer agent have taken steps that it believes are
reasonably designed to address the Year 2000 Issue with respect to computer
systems that are used and to obtain reasonable assurances that comparable steps
are being taken by the Funds' major service providers. At this time, however,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on the Funds. In addition, the Advisor, the Fund and the transfer
agent cannot make any assurances that the Year 2000 Issue will not affect the
companies in which the Funds invest or worldwide markets and economies.
14
<PAGE> 15
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
Fund's financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in each Fund, assuming reinvestment of all dividends and distributions. This
information has been audited by McCurdy & Associates CPA's., whose report, along
with each Funds' financial statements, are included in the Funds' annual report,
which is available upon request and without charge.
<TABLE>
<CAPTION>
Beginning Net Net Gains Total Distributions Distributions Total NAV end Total
NAV$ Investment (Losses) Operations from from Distributions of Return
Income$(a) $ $ Dividends$ Capital period %
(b) Gains $ $
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH
1998 25.38 0.05 7.32 7.37 0.05 1.72 1.77 30.98 29.10
1997 21.16 0.16 7.01 7.17 0.16 2.79 2.95 25.38 33.96
1996 18.86 0.19 2.98 3.17 0.19 0.68 0.87 21.16 16.85
1995 14.82 0.24 4.41 4.65 0.24 0.37 0.61 18.86 31.61
1994 15.71 0.24 -0.89 -0.65 0.24 0.00 0.24 14.82 -4.22
1993 15.00 0.18 0.71 0.89 0.18 0.00 0.18 15.71 5.93
OPPORTUNITY
1998 26.44 -0.02 5.02 5.00 0.00 0.34 0.34 31.10 18.93
1997 22.65 0.03 6.13 6.16 0.03 2.34 2.37 26.44 27.26
1996 19.42 0.06 4.43 4.49 0.06 1.20 1.26 22.65 23.10
1995 15.70 0.08 3.89 3.97 0.08 0.17 0.25 19.42 25.27
1994 15.00 0.05 0.70 0.75 0.05 0.00 0.05 15.70 4.99
REALTY
1998 15.00 0.73 -3.46 -2.73 0.73 0.00 0.73 11.54 -18.56
FIXED
INCOME
1998 15.84 0.86 0.55 1.41 0.86 0.03 0.89 16.36 9.05
1997 15.45 0.88 0.39 1.27 0.88 0.00 0.88 15.84 8.44
1996 15.84 0.86 -0.39 0.47 0.86 0.00 0.86 15.45 3.11
1995 14.20 0.83 1.64 2.47 0.83 0.00 0.83 15.84 17.70
1994 15.80 0.80 -1.60 -0.80 0.80 0.00 0.80 14.20 -5.14
1993 15.00 0.60 0.83 1.43 0.60 0.03 0.63 15.80 9.51
MUNICIPAL
INCOME
1998 15.88 0.64 0.18 0.82 0.64 0.07 0.71 15.99 5.19
1997 15.57 0.64 0.32 0.96 0.64 0.01 0.65 15.88 6.23
1996 15.68 0.63 -0.11 0.52 0.63 0.00 0.63 15.57 3.43
1995 14.73 0.63 0.96 1.59 0.63 0.01 0.64 15.68 10.88
1994 15.00 0.39 -0.27 0.12 0.39 0.00 0.39 14.73 0.81
Net Assets Ratio of Ratio Portfolio
end of Expenses of Net Turnover
period to Avg Income to Rate %
$millions Net Avg Net
Assets% Assets%
<S> <C> <C> <C> <C>
GROWTH
1998 48.40 0.95 0.19 39.71
1997 31.90 0.97 0.65 54.44
1996 21.42 1.00 0.99 26.78
1995 14.87 1.00 1.42 52.91
1994 9.30 1.00 1.65 30.38
1993 6.58 1.00 1.38 23.57
OPPORTUNITY
1998 48.20 0.95 -0.06 41.46
1997 35.06 0.97 0.11 55.05
1996 22.09 1.00 0.28 46.43
1995 15.19 1.00 0.59 62.15
1994 6.29 1.00 1.01 58.73
REALTY
1998 5.10 0.57 5.17 12.07
FIXED
INCOME
1998 24.00 0.85 5.40 24.89
1997 18.87 0.85 5.67 29.33
1996 16.14 0.85 5.56 14.04
1995 15.97 0.85 5.54 4.95
1994 12.46 0.85 5.53 0.04
1993 10.08 0.85 5.08 10.14
MUNICIPAL
INCOME
1998 3.90 0.65 4.01 20.70
1997 3.90 0.63 4.19 9.95
1996 2.81 0.75 4.18 6.25
1995 2.28 0.68 4.28 7.81
1994 1.49 0.01 5.46 0.00
(a) Realty Fund includes income from return of capital (b) Realty Fund includes
income from return of capital
</TABLE>
<PAGE> 16
INVESTMENT ADVISER TRANSFER AGENT
Johnson Investment Counsel, Inc. Johnson Financial, Inc.
3777 West Fork Road 3777 West Fork Road
Cincinnati, Ohio 45247 Cincinnati, Ohio 45247
AUDITORS CUSTODIAN
McCurdy & Associates CPA's, Inc. The Provident Bank
27955 Clemens Road Three East Fourth Street
Westlake, Ohio 44145 Cincinnati, Ohio 45202
LEGAL COUNSEL
Brown Cummins & Brown
3500 Carew Tower
441 Vine Street
Cincinnati, OH 45202
16
<PAGE> 17
[BACK COVER PAGE]
Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated into this prospectus by
reference, contains detailed information on Fund policies and operations.
Shareholder reports contain management's discussion of market conditions,
investment strategies and performance results as of the Funds' latest
semi-annual or annual fiscal year end.
Call the Funds at 800-541-0170 to request free copies of the SAI and the
Funds' annual and semi-annual reports, to request other information about the
Funds and to make shareholder inquiries.
You may also obtain information about the fund (including the SAI and
other reports) from the Securities and Exchange Commission on their Internet
site at http://www.sec.gov or at their Public Reference Room in Washington, D.C.
Call the SEC at 800-SEC-0330 for room hours and operation. You may also obtain
fund information by sending a written request and duplicating fee to the Public
Reference Section of the SEC, Washington, D.C. 20549-6609.
17
<PAGE> 18
JOHNSON
MUTUAL FUNDS
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1999
JOHNSON GROWTH FUND
JOHNSON OPPORTUNITY FUND
JOHNSON REALTY FUND
JOHNSON FIXED INCOME FUND
JOHNSON MUNICIPAL INCOME FUND
JOHNSON MUTUAL FUNDS TRUST
3777 WEST FORK ROAD
CINCINNATI, OH 45247
(513) 661-3100
(800) 541-0170
FAX (513) 661-4901
This Statement of Additional Information ("SAI") is not a prospectus. It should
be read in conjunction with the Prospectus of Johnson Mutual Funds dated May 1,
1999. This SAI incorporates by reference the financial statements and
independent auditor's report in the Trust's Annual Report to Shareholders for
the period ended December 31, 1998 (the "Annual Report"). A free copy of the
Prospectus and Annual Report can be obtained by writing the Trust at 3777 West
Fork Road, Cincinnati, Ohio 45247, or by calling the Trust at (800) 541-0170.
<PAGE> 19
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE
----
<S> <C>
DESCRIPTION OF THE TRUST........................................... 3
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS...................... 3
INVESTMENT LIMITATIONS............................................. 8
STATE RESTRICTIONS................................................. 9
TRUSTEES AND OFFICERS.............................................. 9
THE INVESTMENT ADVISER............................................. 11
PORTFOLIO TRANSACTIONS AND BROKERAGE............................... 12
DETERMINATION OF SHARE PRICE....................................... 13
INVESTMENT PERFORMANCE............................................. 13
CUSTODIAN ......................................................... 14
TRANSFER AGENT..................................................... 15
ACCOUNTANTS........................................................ 15
FINANCIAL STATEMENTS............................................... 15
</TABLE>
2
<PAGE> 20
DESCRIPTION OF THE TRUST
Johnson Mutual Funds Trust (the "Trust") is an open-end investment
company established under the laws of Ohio by an Agreement and Declaration of
Trust dated September 30, 1992 (the "Trust Agreement"). The Board of Trustees
supervises the business activities of the Trust. The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. Shares of five series have been authorized,
which shares constitute the interests in the Johnson Growth Fund, the Johnson
Opportunity Fund (established February 15, 1994), the Johnson Realty Fund
(established November 12, 1997), the Johnson Fixed Income Fund (established
September 30, 1992), and the Johnson Municipal Income Fund (established February
14, 1994. The Growth Fund, Opportunity Fund, Fixed Income Fund and Realty Fund
are diversified; the Municipal Income Fund is not diversified.
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the officers of the Trust, subject to
the review and approval of the Board of Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his express consent.
Each of the Funds, at its discretion and with shareholder consent, may
use securities from a Fund's portfolio to pay you for your shares, provided that
the Adviser deems that such a distribution of securities will not adversely
affect the Fund's portfolio. Any such transfer of securities to you will be a
taxable event and you may incur certain transaction costs relating to the
transfer. Contact the Funds for additional information.
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
This section contains a more detailed discussion of some of the
investments the Funds may make and some of the techniques they may use.
A. Equity Securities. Equity Securities are common stocks, preferred
stocks, convertible preferred stocks, convertible debentures, rights, REITs
(real estate investment trusts), REOCs (real estate operating companies) and
warrants. Convertible preferred stock is preferred stock that can be converted
into common stock pursuant to its terms. Convertible debentures are debt
instruments that can be converted into common stock pursuant to their terms.
Warrants are options to purchase equity securities at a specified price valid
for a specific time period. Rights are similar to warrants, but normally have
shorter durations. A Fund may not invest more than 5% of its net assets at the
time of purchase in rights and warrants. For the purpose of determining whether
the Realty Fund has at least 65% of its total assets invested in the real estate
industry, the Realty Fund will include a maximum of 5% of its assets invested in
securities of companies considered to be real estate related solely because the
companies have substantial real estate holdings as part of their operations (and
not as investments).
In addition to REITs, the Realty Fund may invest in other real estate
related equity securities, such as equity securities issued by real estate
developers, home-builders, and hotels; companies with substantial real estate
holdings as an investment, or as part of their operations; and companies whose
products and services are directly related to the real estate industry, such as
building supply manufacturers, mortgage lenders, or mortgage servicing
companies.
B. Corporate Debt Securities. Corporate debt securities are bonds or
notes issued by corporations and other business organizations, including
business trusts, in order to finance their credit needs. Corporate debt
securities include commercial paper which consists of short term (usually from
one to two hundred seventy days) unsecured promissory notes issued by
corporations in order to finance their current operations. The Adviser considers
corporate debt securities to be of investment grade quality if they are rated
BBB or higher by Standard & Poor's Corporation ("S&P"), Baa or higher by Moody's
Investors Services, Inc. ("Moody's"), or if unrated, determined by the Adviser
to be of comparable quality. Investment grade debt securities generally have
adequate to strong protection of principal and interest payments. In the lower
end of this category, credit quality may be more susceptible to potential future
changes in circumstances and the securities have speculative elements. If the
rating of a security by S&P or Moody's drops below investment grade, the Adviser
will dispose of the security as soon as practicable (depending on market
conditions) unless the Adviser determines based on its own credit analysis that
the security provides the opportunity of meeting the Fund's objective without
presenting excessive risk. No Fund will invest more than 5% of the value of its
net assets in securities that are below investment grade. If, as a result of a
downgrade, a Fund holds more than 5% of the value of its net assets in
securities rated below investment grade, the Fund will take action to reduce the
value of such securities below 5%.
3
<PAGE> 21
C. Fixed Income Securities include corporate debt securities, U.S.
government securities, mortgage-backed securities, zero coupon bonds,
asset-backed and receivable-backed securities and participation interests in
such securities. Preferred stock and certain common stock equivalents may also
be considered to be fixed income securities. Fixed income securities are
generally considered to be interest rate sensitive, which means that their value
will generally decrease when interest rates rise and increase when interest
rates fall. Securities with shorter maturities, while offering lower yields,
generally provide greater price stability than longer term securities and are
less affected by changes in interest rates.
D. Municipal Securities. Municipal securities are long and short term
debt obligations issued by or on behalf of states, territories and possessions
of the United States, the District of Columbia and their political subdivisions,
agencies, instrumentalities and authorities, as well as other qualifying issuers
(including the U.S. Virgin Islands, Puerto Rico and Guam), the income from which
is exempt from regular federal income tax and exempt from state tax in the state
of issuance. Municipal securities are issued to obtain funds to construct,
repair or improve various public facilities such as airports, bridges, highways,
hospitals, housing, schools, streets and water and sewer works, to pay general
operating expenses or to refinance outstanding debts. They also may be issued to
finance various private activities, including the lending of funds to public or
private institutions for construction of housing, educational or medical
facilities or the financing of privately owned or operated facilities. Municipal
securities consist of tax exempt bonds, tax exempt notes and tax exempt
commercial paper. Municipal notes, which are generally used to provide short
term capital needs and have maturities of one year of less, include tax
anticipation notes, revenue anticipation notes, bond anticipation notes and
construction loan notes. Tax exempt commercial paper typically represents short
term, unsecured, negotiable promissory notes. The Funds may invest in other
municipal securities such as variable rate demand instruments.
The two principal classifications of municipal securities are
"general obligations" and "revenue" bonds. General obligation bonds are backed
by the issuer's full credit and taxing power. Revenue bonds are backed by the
revenues of a specific project, facility or tax. Industrial development revenue
bonds are a specific type of revenue bond backed by the credit of the private
issuer of the facility, and therefore investments in these bonds have more
potential risk that the issuer will not be able to meet scheduled payments of
principal and interest.
The Adviser considers municipal securities to be of
investment grade quality if they are rated BBB or higher by S&P, Baa or higher
by Moody's, or if unrated, determined by the Adviser to be of comparable
quality. Investment grade debt securities generally have adequate to strong
protection of principal and interest payments. In the lower end of this
category, credit quality may be more susceptible to potential future changes in
circumstances and the securities have speculative elements. If the rating of a
security by S&P or Moody's drops below investment grade, the Adviser will
dispose of the security as soon as practicable (depending on market conditions)
unless the Adviser determines based on its own credit analysis that the security
provides the opportunity of meeting the Fund's objective without presenting
excessive risk. No Fund will invest more than 5% of the value of its net assets
in securities that are below investment grade. If, as a result of a downgrade, a
Fund holds more than 5% of the value of its net assets in securities rated below
investment grade, the Fund will take action to reduce the value of such
securities below 5%.
As the Municipal Income Fund concentrates its investments in the State
of Ohio, it is particularly sensitive to political and economic factors
affecting Ohio which could affect the creditworthiness and the value of the
securities in the Fund's portfolio. The Ohio economy, while diversifying more
into the service and other non-manufacturing areas, continues to rely in part on
durable goods manufacturing largely concentrated in motor vehicles and
equipment, steel, rubber products and household appliances. As a result, general
economic activity in Ohio, as in many other industrially developed states, tends
to be more cyclical than in some other states and in the nation as a whole.
Economic problems, including high unemployment, have had and may have varying
effects on the different geographic areas of the state and its political
subdivisions. In line with national trends, the state has experienced budget
short falls due to weak revenue results and higher-than-budgeted human service
expenditures. Future national, regional or statewide economic difficulties, and
the resulting impact on state or local government finances generally, could
adversely affect the market value of Ohio municipal securities held in the
portfolio of the Fund or the ability of particular obligors to make timely
payments of debt service on those obligations.
E. U.S. Government Securities. U.S. government securities may be backed
by the credit of the government as a whole or only by the issuing agency. U.S.
Treasury bonds, notes, and bills and some agency securities, such as those
issued by the Federal Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the U.S.
government as to payment of principal and interest and are the highest quality
government securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S.
government.
F. Mortgage-Backed Securities. Mortgage-Backed Securities represent an
interest in a pool of mortgages. These securities, including securities issued
by FNMA and GNMA, provide investors with payments consisting of both interest
and principal as the mortgages in the underlying mortgage pools are repaid.
Unscheduled or early payments on the underlying mortgages may shorten the
4
<PAGE> 22
securities' effective maturities. The average life of securities representing
interests in pools of mortgage loans is likely to be substantially less than the
original maturity of the mortgage pools as a result of prepayments or
foreclosures of such mortgages. Prepayments are passed through to the registered
holder with the regular monthly payments of principal and interest, and have the
effect of reducing future payments. To the extent the mortgages underlying a
security representing an interest in a pool of mortgages are prepaid, a Fund may
experience a loss (if the price at which the respective security was acquired by
the Fund was at a premium over par, which represents the price at which the
security will be sold upon prepayment). In addition, prepayments of such
securities held by a Fund will reduce the share price of the Fund to the extent
the market value of the securities at the time of prepayment exceeds their par
value. Furthermore, the prices of mortgage-backed securities can be
significantly affected by changes in interest rates. Prepayments may occur with
greater frequency in periods of declining mortgage rates because, among other
reasons, it may be possible for mortgagors to refinance their outstanding
mortgages at lower interest rates. In such periods, it is likely that any
prepayment proceeds would be reinvested by a Fund at lower rates of return.
G. Collateralized Mortgage Obligations (CMOs). CMOs are securities
Collateralized by mortgages or mortgage-backed securities. CMOs are issued with
a variety of classes or series, which have different maturities and are often
retired in sequence. CMOs may be issued by governmental or non-governmental
entities such as banks and other mortgage lenders. Non-government securities may
offer a higher yield but also may be subject to greater price fluctuation than
government securities. Investments in CMOs are subject to the same risks as
direct investments in the underlying mortgage and mortgage-backed securities. In
addition, in the event of a bankruptcy or other default of an entity who issued
the CMO held by a Fund, the Fund could experience both delays in liquidating its
position and losses.
H. Zero Coupon and Pay in Kind Bonds. Corporate debt securities and
municipal obligations include so-called "zero coupon" bonds and "pay-in-kind"
bonds. Zero coupon bonds do not make regular interest payments. Instead they are
sold at a deep discount from their face value. Each Fund will accrue income on
such bonds for tax and accounting purposes, in accordance with applicable law.
This income will be distributed to shareholders. Because no cash is received at
the time such income is accrued, the Fund may be required to liquidate other
portfolio securities to satisfy its distribution obligations. Because a zero
coupon bond does not pay current income, its price can be very volatile when
interest rates change. In calculating its dividend, the Funds take into account
as income a portion of the difference between a zero coupon bond's purchase
price and its face value. Certain types of CMOs pay no interest for a period of
time and therefore present risks similar to zero coupon bonds.
The Federal Reserve creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the coupon
payments and the principal payment from an outstanding Treasury security and
selling them as individual securities. A broker-dealer creates a derivative zero
by depositing a Treasury security with a custodian for safekeeping and then
selling the coupon payments and principal payment that will be generated by this
security separately. Examples are Certificates of Accrual on Treasury Securities
(CATs), Treasury Investment Growth Receipts (TIGRs) and generic Treasury
Receipts (TRs). These derivative zero coupon obligations are not considered to
be government securities unless they are part of the STRIPS program. Original
issue zeros are zero coupon securities issued directly by the U.S. government, a
government agency, or by a corporation.
Pay-in-kind bonds allow the issuer, at its option, to make
current interest payments on the bonds either in cash or in additional bonds.
The value of zero coupon bonds and pay-in-kind bonds is subject to greater
fluctuation in response to changes in market interest rates than bonds which
make regular payments of interest. Both of these types of bonds allow an issuer
to avoid the need to generate cash to meet current interest payments.
Accordingly, such bonds may involve greater credit risks than bonds which make
regular payment of interest. Even though zero coupon bonds and pay-in-kind bonds
do not pay current interest in cash, the applicable Fund is required to accrue
interest income on such investments and to distribute such amounts at least
annually to shareholders. Thus, a Fund could be required at times to liquidate
other investments in order to satisfy its dividend requirements. No Fund will
invest more than 5% of its net assets in pay-in-kind bonds.
I. Financial Service Industry Obligations. Financial service industry
obligations include among others, the following:
(1) Certificates of Deposit. Certificates of deposit are
negotiable certificates evidencing the indebtedness of a commercial bank or a
savings and loan association to repay funds deposited with it for a definite
period of time (usually from fourteen days to one year) at a stated or variable
interest rate.
(2) Time Deposits. Time deposits are non-negotiable deposits
maintained in a banking institution or a savings and loan association for a
specified period of time at a stated interest rate. Time Deposits are considered
to be illiquid prior to their maturity.
(3) Bankers' Acceptances. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft which has been
drawn on it by a customer, which instruments reflect the obligation both of the
bank and of the drawer to pay the face amount of the instrument upon maturity.
5
<PAGE> 23
J. Asset-Backed and Receivable-Backed Securities. Asset-backed and
receivable-backed securities are undivided fractional interests in pools of
consumer loans (unrelated to mortgage loans) held in a trust. Payments of
principal and interest are passed through to certificate holders and are
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guaranty, or senior/subordination. The degree of
credit enhancement varies, but generally amounts to only a fraction of the
asset-backed or receivable-backed security's par value until exhausted. If the
credit enhancement is exhausted, certificateholders may experience losses or
delays in payment if the required payments of principal and interest are not
made to the trust with respect to the underlying loans. The value of these
securities also may change because of changes in the market's perception of the
creditworthiness of the servicing agent for the loan pool, the originator of the
loans or the financial institution providing the credit enhancement.
Asset-backed and receivable-backed securities are ultimately dependent upon
payment of consumer loans by individuals, and the certificateholder generally
has no recourse against the entity that originated the loans. The underlying
loans are subject to prepayments which shorten the securities' weighted average
life and may lower their return. As prepayments flow through at par, total
returns would be affected by the prepayments: if a security were trading at a
premium, its total return would be lowered by prepayments, and if a security
were trading at a discount, its total return would be increased by prepayments.
No Fund will invest more than 5% of its net assets in asset-backed or
receivable-backed securities.
K. Forward Commitments and Reverse Repurchase Agreements. Each Fund
will direct its Custodian to place cash or U.S. government obligations in a
separate account of the Trust in an amount equal to the commitments of the Fund
to purchase or repurchase securities as a result of its forward commitment or
reverse repurchase agreement obligations. With respect to forward commitments to
sell securities, the Trust will direct its Custodian to place the securities in
a separate account. When a separate account is maintained in connection with
forward commitment transactions to purchase securities or reverse repurchase
agreements, the securities deposited in the separate account will be valued
daily at market for the purpose of determining the adequacy of the securities in
the account. If the market value of such securities declines, additional cash or
securities will be placed in the account on a daily basis so that the market
value of the account will equal the amount of the Fund's commitments to purchase
or repurchase securities. To the extent funds are in a separate account, they
will not be available for new investment or to meet redemptions. Reverse
repurchase agreements constitute a borrowing by the Fund and will not represent
more than 5% of the net assets of either Fund. No Fund will invest more than 25%
of its total assets in forward commitments.
Securities purchased on a forward commitment basis, securities
subject to reverse repurchase agreements and the securities held in each Fund's
portfolio are subject to changes in market value based upon the public's
perception of the creditworthiness of the issuer and changes in the level of
interest rates (which will generally result in all of those securities changing
in value in the same way, i.e., all those securities experiencing appreciation
when interest rates decline and depreciation when interest rates rise).
Therefore, if in order to achieve a higher level of income, the Fund remains
substantially fully invested at the same time that it has purchased securities
on a forward commitment basis or entered into reverse repurchase transactions,
there will be a possibility that the market value of the Fund's assets will have
greater fluctuation.
With respect to 75% of the total assets of each Fund, the value of
the Fund's commitments to purchase or repurchase the securities of any one
issuer, together with the value of all securities of such issuer owned by the
Fund, may not exceed 5% of the value of the Fund's total assets at the time the
commitment to purchase or repurchase such securities is made; provided, however,
that this restriction does not apply to U.S. government obligations or
repurchase agreements with respect thereto. In addition, each Fund will maintain
an asset coverage of 300% for all of its borrowings and reverse repurchase
agreements. Subject to the foregoing restrictions, there is no limit on the
percentage of the Fund's total assets which may be committed to such purchases
or repurchases.
L. Restricted Securities. Restricted securities are securities the
resale of which is subject to legal or contractual restrictions. Restricted
securities may be sold only in privately negotiated transactions, in a public
offering with respect to which a registration statement is in effect under the
Securities Act of 1933 or pursuant to Rule 144 or Rule 144A promulgated under
such Act. Where registration is required, the Fund may be obligated to pay all
or part of the registration expense, and a considerable period may elapse
between the time of the decision to sell and the time such security may be sold
under an effective registration statement. If during such a period adverse
market conditions were to develop, the Fund might obtain a less favorable price
than the price it could have obtained when it decided to sell. No Fund will
invest more than 5% of its net assets in restricted securities.
M. Option Transactions. The Funds may engage in option transactions
involving individual securities and market indexes and engage in related closing
transactions. An option involves either (a) the right or the obligation to buy
or sell a specific instrument at a specific price until the expiration date of
the option, or (b) the right to receive payments or the obligation to make
payments representing the difference between the closing price of a market index
and the exercise price of the option expressed in dollars times a specified
multiple until the expiration date of the option. Options are sold (written) on
securities and market indexes. The purchaser of an option on a security pays the
seller (the writer) a premium for the right granted but is not obligated to buy
or sell the underlying security. The purchaser of an option on a market index
pays the seller a premium for the right granted, and in return the seller of
such an option is obligated to make the payment. A writer of an option may
terminate the obligation prior to expiration of the option by making an
offsetting purchase of an identical option (a closing transaction). Options are
traded on organized exchanges and in the over-the-counter market. Options on
securities which the Fund sells (writes) will be covered or secured, which means
that it will own the underlying security in the
6
<PAGE> 24
case of a call option. When the Fund writes options, it may be required to
maintain a margin account, to pledge the underlying securities or U.S.
government obligations or to deposit assets in escrow with the Custodian. Each
Fund may purchase put and call options on individual securities and on stock
indices for the purpose of hedging against the risk of unfavorable price
movements adversely affecting the value of the Fund's securities or securities
the Fund intends to buy. Each Fund may also sell put and call options in closing
transactions.
The purchase and writing of options involves certain risks. The
purchase of options limits the Fund's potential loss to the amount of the
premium paid and can afford the Fund the opportunity to profit from favorable
movements in the price of an underlying security to a greater extent than if
transactions were effected in the security directly. However, the purchase of an
option could result in the Fund losing a greater percentage of its investment
than if the transaction were effected directly. When the Fund writes a covered
call option, it will receive a premium, but it will give up the opportunity to
profit from a price increase in the underlying security above the exercise price
as long as its obligation as a writer continues, and it will retain the risk of
loss should the price of the security decline. In addition, there can be no
assurance that the Fund can effect a closing transaction on a particular option
it has written.
N. Loans of Portfolio Securities. Each Fund may make short and long
term loans of its portfolio securities. Under the lending policy authorized by
the Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral. No loan of securities will be made if, as a result, the aggregate
amount of such loans would exceed 5% of the value of the Fund's net assets.
O. Foreign Securities. The Growth Fund and Opportunity Fund may invest
in foreign equity securities through the purchase of American Depository
Receipts. American Depository Receipts are certificates of ownership issued by a
U.S. bank as a convenience to the investors in lieu of the underlying shares
which it holds in custody. These Funds may also invest in dollar denominated
foreign fixed-income securities issued by foreign companies, foreign governments
or international organizations and determined by the Adviser to be comparable in
quality to investment grade domestic securities. Neither Fund will invest in a
foreign security if, immediately after a purchase and as a result of the
purchase, the total value of foreign securities owned by the Fund would exceed
30% of the value of the total assets of the Fund. To the extent that a Fund does
invest in foreign securities, such investments may be subject to special risks,
such as changes in restrictions on foreign currency transactions and rates of
exchange, and changes in the administrations or economic and monetary policies
of foreign governments.
P. Repurchase Agreements. A repurchase agreement is a short term
investment in which the purchaser acquires ownership of a U.S. Government
security (which may be of any maturity) and the seller agrees to repurchase the
obligation at a future time at a set price, thereby determining the yield during
the purchaser's holding period (usually not more than seven days from the date
of purchase). Any repurchase transaction in which a Fund engages will require
full collateralization of the seller's obligation during the entire term of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller, a Fund could experience both delays in liquidating the underlying
security and losses in value. However, the Funds intend to enter into repurchase
agreements only with the Trust's custodian, other banks with assets of $1
billion or more and registered securities dealers determined by the Adviser
(subject to review by the Board of Trustees) to be creditworthy. The Adviser
monitors the creditworthiness of the banks and securities dealers with which a
Fund engages in repurchase transactions, and a Fund will not invest more than
15% of its net assets in illiquid securities, including repurchase agreements
maturing in more than seven days.
Q. When Issued Securities and Forward Commitments. Each Fund may buy
and sell securities on a when-issued or delayed delivery basis, with payment and
delivery taking place at a future date. The price and interest rate that will be
received on the securities are each fixed at the time the buyer enters into the
commitment. A Fund may enter into such forward commitments if they hold, and
maintain until the settlement date in a separate account at the Fund's
Custodian, cash or U.S. government securities in an amount sufficient to meet
the purchase price. The Funds will not invest more than 25% of their respective
total assets in forward commitments. Forward commitments involve a risk of loss
if the value of the security to be purchased declines prior to the settlement
date. Any change in value could increase fluctuations in a Fund's share price
and yield. Although a Fund will generally enter into forward commitments with
the intention of acquiring securities for its portfolio, a Fund may dispose of a
commitment prior to the settlement if the Adviser deems it appropriate to do so.
R. Short Sales. Each Fund [EXCEPT THE REALTY FUND] may engage in short
sales if, at the time of the short sale, the Fund owns or has the right to
obtain an equal amount of the security being sold short at no additional cost.
7
<PAGE> 25
INVESTMENT LIMITATIONS
Fundamental. The investment limitations described below have been
adopted by the Trust with respect to each Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the applicable Fund. As used in the
Prospectus and this Statement of Additional Information, the term "majority" of
the outstanding shares of the Trust (or of any series) means the lesser of (1)
67% or more of the outstanding shares of the Trust (or the applicable series)
present at a meeting, if the holders of more than 50% of the outstanding shares
of the Trust (or applicable series) are present or represented at such meeting;
or (2) more than 50% of the outstanding shares of the Trust (or the applicable
series). Other investment practices which may be changed by the Board of
Trustees without the approval of shareholders to the extent permitted by
applicable law, regulation or regulatory policy are considered non-fundamental
("Non-Fundamental").
1. Borrowing Money. The Funds will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude a Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. Senior Securities. The Funds will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
3. Underwriting. The Funds will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. Real Estate. The Funds will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-backed securities or investing in
companies engaged in the real estate business.
5. Commodities. The Funds will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts or from investing in securities or other instruments backed by
commodities.
6. Loans. The Funds will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase of a portion of an
issue of publicly distributed bonds, debentures or other securities.
7. Concentration. A Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
Non-Fundamental. The following limitations have been adopted by the
Trust with respect to each Fund and are Non-Fundamental.
I. Pledging. The Funds will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security
8
<PAGE> 26
interests, liens and collateral arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques are not deemed to be a mortgage, pledge or
hypothecation of assets for purposes of this limitation.
ii. Borrowing. The Funds will not purchase any security while
borrowings (including reverse repurchase agreements) representing more than 5%
of its total assets are outstanding.
iii. Margin Purchases. The Funds will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. Short Sales. The Funds will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. Options. The Funds will not purchase or sell puts, calls, options or
straddles except as described in the Prospectus and this Statement of Additional
Information.
vi. Illiquid Investments. A Fund will not invest more than 15% of its
net assets in securities for which there are legal or contractual restrictions
on resale and other illiquid securities.
STATE RESTRICTIONS
To comply with the current blue sky regulations of the State of Ohio,
each Fund presently intends to observe the following restrictions, which may be
changed by the Board of Trustees without shareholder approval. Each Fund will
not purchase or retain securities of any issuer if the Trustees and officers of
the Trust or of the Adviser, who individually own beneficially more than 0.5% of
the outstanding securities of such issuer, together own beneficially more than
5% of such securities. Each Fund will not purchase securities issued by other
investment companies except by purchase in the open market where no commission
or profit to a sponsor or dealer results from such purchase other than customary
broker's commission or except when such purchase is part of a plan of merger,
consolidation, reorganization or acquisition. Each Fund will not borrow (other
than by entering into reverse repurchase agreements), pledge, mortgage or
hypothecate more than one-third of its total assets. In addition, each Fund will
engage in borrowing (other than reverse repurchase agreements) only for
emergency or extraordinary purposes and not for leverage. Each Fund will not
invest more than 15% of its total assets in securities of issuers which,
together with any predecessors, have a record of less than three years
continuous operation or securities of issuers which are restricted as to
disposition. Each Fund will not purchase the securities of any issuer if such
purchase at the time thereof would cause more than 10% of the voting securities
of any issuer to be held by the Fund.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust and their principal
occupations during the last five years are set forth below. Each Trustee who is
an "interested person" of the Trust, as defined in the Investment Company Act of
1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
NAME (AGE) POSITIONS HELD PRINCIPAL OCCUPATIONS
- ---- ----- -------------- ---------------------
<S> <C> <C> <C>
Timothy E. Johnson (56)* President and Trustee President and a Director of Johnson Investment
3777 West Fork Road Counsel, Inc., the Trust's Adviser and
Cincinnati, Ohio 45247 Professor of Finance at the University of
Cincinnati. President and Director of Johnson
Financial, Inc. (a)
John W. Craig (65) Trustee Retired director of Corporate Affairs at
5813 Twin Oak Drive R.A. Jones & Co., Inc. a manufacturing and
Cincinnati, Ohio 45224 packaging company, and the Chairman and Chief
Executive Officer of CP&I, Inc., a real estate
property development and management company.
Ronald H. McSwain (56) Trustee President of McSwain Carpets, Inc. and a
765 Hedgerow Lane partner of P&R Realty, a real estate
Cincinnati, Ohio 45246 development partnership.
Kenneth S. Shull (69) Trustee Retired plant engineer at The Procter &
2145 Bluebell Drive Gamble Company.
Cincinnati, Ohio 45224
</TABLE>
9
<PAGE> 27
<TABLE>
<S> <C> <C> <C>
Dale H. Coates (40) Vice President Portfolio Manager of the Trust's Adviser.
3777 West Fork Road
Cincinnati, Ohio 45247
Richard T. Miller (53) Vice President Portfolio Manager of the Trust's Adviser.
3777 West Fork Road
Cincinnati, Ohio 45247
Dianna J. Rosenberger (34) Chief Financial Officer Portfolio Manager of the Trust's Adviser.
3777 West Fork Road and Treasurer Chief Operating Officer of Johnson Financial,
Cincinnati, Ohio 45247 Inc. (a) a financial servicing company.
David C. Tedford (45) Secretary Office Administrator of the Trust's
3777 West Fork Road Adviser.
Cincinnati, Ohio 45247
</TABLE>
(a) Johnson Financial, Inc. is a wholly owned subsidiary of Johnson
Investment Counsel, Inc., the Adviser.
The compensation paid to the Trustees of the Trust for the year ended December
31, 1998 is set forth in the following table UPDATE:
<TABLE>
<CAPTION>
TOTAL COMPENSATION
FROM TRUST (THE TRUST IS
NAME NOT IN A FUND COMPLEX) (1)
------------------------- ----------------------------
<S> <C>
Timothy E. Johnson $0
John W. Craig $3,000
Ronald H. McSwain $3,000
Kenneth S. Shull; $3,000
</TABLE>
(1) Trustee fees are Trust expenses. However, because the management
agreement obligates the Adviser to pay all of the operating expenses of
the Trust (with limited exceptions), the Adviser makes the actual
payment.
As of ___________, 1999, the following persons may be deemed to
beneficially own five percent (5%) or more of the outstanding shares of each of
the Funds:
UPDATE:
Growth Fund:
- ------------
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion - 13.95%;
Johnson Investment Counsel, Inc. Employee Profit Sharing Plan - 8.80%;
The Covenant Foundation, 5807 McCray Court, Cincinnati, Ohio 45224 - 7.68%. The
Covenant Foundation is an entity which may be deemed to be controlled by
officers and/or employees of Johnson Investment Counsel, Inc.
Opportunity Fund:
- -----------------
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion -- 75.35%;
The Oakmont Trust, 3777 West Fork Road, Cincinnati, Ohio 45247 - 5.37%. The
Oakmont Trust is an entity which may be deemed to be controlled by officers
and/or employees of Johnson Investment Counsel, Inc
Realty Fund:
- ------------
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion -- 18.82%;
The Covenant Foundation - 11.20%; Johnson Investment Counsel, Inc. Employee
Profit Sharing Plan -- 8.53%.
Municipal Income Fund:
- ----------------------
The Oakmont Trust- 18.31%;
Client accounts held at Johnson Investment Counsel, Inc., with full advisory
discretion - 56.72%;
The Bahr Family Trust, 6019 Gothic Place, Dayton, Ohio 45459 - 8.54%;
10
<PAGE> 28
As a result of the above described beneficial ownership, Johnson
Investment Counsel, Inc., Johnson Investment Counsel, Inc. Profit Sharing Plan,
discretionary accounts of Johnson Investment Counsel, Inc., and other accounts
which its officers and/or employees may control, may have the power to invest
and/or may have the power to vote more than twenty-five percent (25%) of the
shares of the Growth Fund, the Opportunity Fund, the Fixed Income Fund and the
Municipal Income Fund, and may be deemed to control those Funds.
In addition to the applicable beneficial ownership described above, the
officers and Trustees as a group beneficially owned as of ______________, 1999,
the following percent of the outstanding shares of each of the Funds:
UPDATE:
Growth Fund: 4.99% Opportunity Fund: 5.07% Realty Fund ___%
Fixed Income Fund: 0.66% Municipal Income Fund: 0.0%
SHAREHOLDER RIGHTS
Any Trustee of the Trust may be removed by vote of the shareholders
holding not less than two-thirds of the outstanding shares of the Trust. The
Trust does not hold an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is entitled to one vote
for each whole share he owns and fractional votes for fractional shares he owns.
All shares of a Fund have equal voting rights and liquidation rights.
The beneficial ownership, either directly or indirectly, of more than
25% of the voting securities of a Fund creates a presumption of control of the
Fund under Section 2(a)(9) of the Investment Company Act of 1940. As of March
31, 1998, the Johnson Investment Counsel, Inc. Profit Sharing Plan,
discretionary advisory accounts of Johnson Investment Counsel, Inc., and other
accounts which officers and/or employees may control, may be deemed to have
owned in the aggregate more than 25% of the shares of the Growth Fund, the
Opportunity Fund, the Fixed Income Fund and the Municipal Income Fund.
THE INVESTMENT ADVISER
The Trust's investment adviser is Johnson Investment Counsel, Inc.,
3777 West Fork Road, Cincinnati, Ohio 45247. Timothy E. Johnson may be deemed to
be a controlling person and an affiliate of the Adviser due to his ownership of
its shares and his position as the President and a director of the Adviser. Mr.
Johnson, because of such affiliation, may receive benefits from the management
fees paid to the Adviser.
Under the terms of the Management Agreement, the Adviser manages the
Funds' investments subject to approval of the Board of Trustees and pays all of
the expenses of the Funds except brokerage, taxes, interest and extraordinary
expenses. As compensation for its management services and agreement to pay the
Funds' expenses, the Funds are obligated to pay the Adviser a fee computed and
accrued daily and paid monthly at an annual rate of 1.00% of the average daily
net assets of each Fund. However, the Adviser has committed to waive its fee to
0.95% of such assets for the Growth Fund, Opportunity Fund and Realty Fund,
0.85% of such assets for the Fixed Income Fund and 0.65% of such assets for the
Municipal Income Fund. The Adviser intends that these fee limitations will be
permanent, although the Adviser reserves the right to remove them at any time
after December 31, 1999.
For the fiscal years indicated below, the following advisory fees were
paid, and the following voluntary fee waivers were implemented.
Advisory Fees Paid:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Growth Fund $_____ $263,695 $189,616
Opportunity Fund $_____ $285,002 $193,372
Realty Fund $_____ N/A N/A
Fixed Income Fund $_____ $148,777 $134,800
Municipal Income Fund $_____ $ 21,597 $ 18,132
</TABLE>
Voluntary Fee Reductions that otherwise would have been payable to the Adviser
by the Funds respectively:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Growth Fund $_____ $89,711 $56,885
Opportunity Fund $_____ $96,959 $58,012
Realty Fund $_____ N/A N/A
Fixed Income Fund $_____ $52,510 $47,576
Municipal Income Fund $_____ $17,821 $ 9,670
</TABLE>
11
<PAGE> 29
The Adviser retains the right to use the name "Johnson" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated. The Trust's right to use the name "Johnson"
automatically ceases thirty days after termination of the Management Agreement
and may be withdrawn by the Adviser on thirty days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Funds believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Funds believes that there would be no material impact on the Funds or their
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Funds may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Funds, no preference will be shown for such
securities.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Trust's portfolio decisions and the placing
of the Trust's portfolio transactions. In placing portfolio transactions, the
Adviser seeks the best qualitative execution for the Trust, taking into account
such factors as price (including the applicable brokerage commission or dealer
spread), the execution capability, financial responsibility and responsiveness
of the broker or dealer and the brokerage and research services provided by the
broker or dealer. The Adviser generally seeks favorable prices and commission
rates that are reasonable in relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Trust and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the Adviser determines in good faith that the commission
is reasonable in relation to the value of the brokerage and research services
provided. The determination may be viewed in terms of a particular transaction
or the Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Trust effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Trust. Although research services and other information are useful to the Trust
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Trust
under the Management Agreement. For the twelve months ended December 31, 1998,
due in part to research services provided by brokers, the Growth Fund directed
to brokers $____________ of brokerage transactions (on which the commissions
were $_______), and the Opportunity Fund directed to brokers $____________ of
brokerage transactions (on which the commissions were $_______).
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Fixed income securities are
normally purchased directly from the issuer, an underwriter or a market maker.
Purchases include a concession paid by the issuer to the underwriter and the
purchase price paid to market makers may include the spread between the bid and
asked prices.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be allocated
using the following rules: (1) All client accounts would have their entire order
filled or receive no shares at all, unless the
12
<PAGE> 30
account's purchase would exceed $50,000. In that case, filling part of the order
for that account would be acceptable. (2) The orders would be filled beginning
with the account least invested in that security type, relative to its goal, and
proceed through the list with the last order filled for the account most
invested in that security type, relative to its goal. Based on rule 1, some
accounts may be skipped to meet the exact number of shares purchased. For the
sale of a security, the orders would be filled beginning with the most fully
invested account moving to the least fully invested.
For the fiscal years ended indicated below, the following brokerage
commissions were paid by the Funds:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Growth Fund $_____ $35,290 $26,430
Opportunity Fund $_____ $57,043 $36,852
Realty Fund $_____ n/a n/a
Fixed Income Fund $_____ none none
Municipal Income Fund $_____ none none
</TABLE>
DETERMINATION OF SHARE PRICE
The prices (net asset values) of the shares of each Fund are determined
as of the close of trading of the New York Stock Exchange (4:00 P.M., Eastern
time) on each day the Trust is open for business and on any other day on which
there is sufficient trading in the Fund's securities to materially affect the
net asset value. The Trust is open for business on every day except Saturdays,
Sundays and the following holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
TAXES
Each Fund has qualified, and intends to continue to qualify, under
Subchapter M of the Internal Revenue Code. By so qualifying, no Fund will be
liable for federal income taxes to the extent its taxable net investment income
and net realized capital gains are distributed to shareholders. Each Fund is
required by federal law to withhold and remit to the U.S. Treasury a portion
(31%) of the dividend income and capital gains distributions of any account
unless the shareholder provides a taxpayer identification number and certifies
that the taxpayer identification number is correct and that the shareholder is
not subject to backup withholding.
INVESTMENT PERFORMANCE
Each Fund may periodically advertise "average annual total return." The
"total return" of a Fund refers to the dividends and distributions generated by
an investment in the Fund plus the change in the value of the investment from
the beginning of the period to the end of the period. The "average annual total
return" of a Fund refers to the rate of total return for each year of the period
which would be equivalent to the cumulative total return for the period.
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one and five year periods and the period from initial public
offering through the end of a Fund's most recent fiscal year) that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are
reinvested at the net asset value on the reinvestment dates and that a complete
redemption occurs at the end of the applicable period.
Each Fund may also periodically advertise its total return and
cumulative total return over various periods in addition to the value of a
$10,000 investment (made on the date of the initial public offering of the
Fund's shares) as of the end of a specified period. The "total return" and
"cumulative total return" for each Fund are calculated as indicated above for
"total return."
The Realty Fund, Fixed Income Fund and Municipal Income Fund may each
periodically advertise its yield for a thirty day or one month period. The
"yield" of a Fund refers to the income generated by an investment in the Fund
over the period, calculated on a per
13
<PAGE> 31
share basis (using the net asset value per share on the last day of the period
and the average number of shares outstanding during the period). A Fund's yield
quotation will always be accompanied by the Fund's average annual total return
information described above. In addition, the Municipal Income Fund may
advertise together with its "yield" a tax-equivalent yield which reflects the
yield which would be required of a taxable investment at a stated income tax
rate in order to equal the Fund's "yield".
A Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Funds
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the appropriate
Fund or considered to be representative of the stock market in general or the
fixed income securities market in general. The Growth Fund will use the Standard
& Poor's 500 Stock Index and the Dow Jones Industrial Average. The Opportunity
Fund will use the Standard & Poor's MidCap 400 Index, which is a
capitalization-weighed index that measures the performance of the mid-range of
the medium-sized U.S. companies market. The median market capitalization of the
companies in the Index is approximately $700 million. The Index was developed
with a base level of 100 as of December 31, 1990. The Index contains companies
chosen by committee at Standard & Poor's for their size and industry
characteristics. None of the companies in the S&P MidCap 400 Index are included
in the S&P 500 Stock Index. However, some of the companies in the S&P MidCap 400
Index are larger than some in the S&P 500 Stock Index, which is a function of
the normal drift that takes place in any index as the stock prices of some
companies appreciate while the stock prices of others depreciate.
The performance of the Realty Fund may be compared to indices of broad
groups of unmanaged securities considered to be representative of or similar to
the portfolio holdings of the Fund or considered to be representative of the
real estate securities market in general. The Fund will use the NAREIT Index and
the Wilshire REIT Index. The NAREIT Index measures the price, income and total
return of all publicly traded REITs, including mortgage-backed REITs and equity
REITs. The Wilshire REIT Index includes all publicly traded REITs with
capitalizations above $100 million.
The Fixed Income Fund will use the Lehman Intermediate
Government/Corporate Bond Index. The Lehman Intermediate Government/Corporate
Bond Index measures the price, income and total return of a group of fixed
income securities maturing in one to ten years. It contains all public
obligations of the U.S. Treasury (excluding flower bonds and foreign-targeted
issues), all publicly traded debt of agencies of the U.S. Government,
quasi-federal corporations and corporate debt guaranteed by the U.S. Government,
and all public, fixed rate, non-convertible, investment grade, domestic
corporate debt. The Index does not include mortgage-backed securities or
Collateralized mortgage obligations. The Municipal Income Fund will use the
Lehman 5 Year General Obligation Index. The Lehman 5 Year General Obligation
Index measures price, income and total return on state and local general
obligation bonds maturing in four to six years. It contains all general
obligations within this maturity range that were part of an issue with a credit
rating of Baa or higher, original issue size of at least $50 million, and has at
least $3 million of the issue still outstanding. The Index does not contain
bonds subject to an alternative minimum tax or bonds with floating or zero
coupons. The investment performance figures for the Funds and the indices will
include reinvestment of dividends and capital gains distributions.
All Funds may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Morningstar or Lipper Analytical Services). Performance information may
be quoted numerically or may be presented in a table, graph or other
illustration. Performance rankings and ratings reported periodically in national
financial publications such as Barron's may also be used. The objectives,
policies, limitations and expenses of other mutual funds in a group may not be
the same as those of the applicable Fund. The Trust's annual report contains
additional performance information that will be made available upon request and
without charge.
The advertised performance data of each Fund is based on historical
performance and is not intended to indicate future performance. Yields and rates
of total return quoted by a Fund may be higher or lower than past quotations,
and there can be no assurance that any yield rate of total return will be
maintained. The principal value of an investment in each Fund will fluctuate so
that a shareholder's shares, when sold, may be worth more or less than the
shareholder's original investment.
CUSTODIAN
The Provident Bank, One East Fourth Street, Cincinnati, Ohio is the
current custodian of the Funds' investments. The Custodian acts as each Fund's
depository, holds its portfolio securities in safekeeping, collects all income
and other payments with respect thereto, disburses funds at the Fund's request
and maintains records in connection with its duties.
14
<PAGE> 32
TRANSFER AGENT
Johnson Financial, Inc. ("JFI") 3777 West Fork Road, Cincinnati, Ohio
acts as each Fund's transfer agent and, in such capacity, maintains the records
of each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other accounting and
shareholder service functions. For its services as fund accountant, JFI receives
an annual fee of $18,000 from each Fund. For the fiscal years indicated below,
the following fees were paid to JFI for fund accounting services:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Growth Fund $_____ $_____ $_____
Opportunity Fund $_____ $_____ $_____
Realty Fund $_____ not applicable not applicable
Fixed Income Fund $_____ $_____ $_____
Municipal Income Fund $_____ $_____ $_____
</TABLE>
ACCOUNTANTS
The firm of McCurdy & Associates CPA's, Inc. of Westlake, Ohio has been
selected as independent public accountants for the Trust for the fiscal year
ending December 31, 1999. McCurdy & Associates CPA's, Inc. performs and annual
audit of the Trust's financial statements and provides financial, tax and
accounting consulting services as requested.
FINANCIAL STATEMENTS
The financial statements and independent auditor's report required to
be included in this Statement of Additional Information are incorporated herein
by reference to the Trust's Annual Report to Shareholders for the period ended
December 31, 1998. The Funds will provide the Annual Report without charge at
written request or request by telephone.
15
<PAGE> 33
JOHNSON MUTUAL FUNDS TRUST
PART C. OTHER INFORMATION
-----------------
Item 23 Exhibits
- ----------------
(a) Articles of Incorporation.
(i) Copy of Registrant's Declaration of Trust, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 9, is hereby incorporated by
reference.
(ii) Copy of Amendment No. 1 to Registrant's Declaration of Trust, which was
filed as an Exhibit to Registrant's Post-Effective Amendment No. 9, is hereby
incorporated by reference.
(b) By-Laws. Copy of Registrant's By-Laws, which was filed as an Exhibit to
Registrant's Post-Effective Amendment No. 9, is hereby incorporated by
reference.
(c) Instruments Defining Rights- None.
(d) Investment Advisory Contracts.
(i) Copy of Registrant's Management Agreement with its Adviser, Johnson
Investment Counsel, Inc., for the Johnson Growth Fund and Johnson Fixed Income
Fund, which was filed as an Exhibit to Registrant's Pre-Effective Amendment No.
9, is hereby incorporated by Reference.
(ii) Copy of Registrant's Management Agreement with its Adviser, Johnson
Investment Counsel, Inc., for the Johnson Opportunity Fund and Johnson Municipal
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 9, is hereby incorporated by reference.
(iii) Copy of Registrant's Management Agreement with Johnson Investment Counsel,
Inc., for the Johnson Realty Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 8 is hereby incorporated by reference.
(iv) Copy of Amendment to Registrant's Management Agreement for the Johnson
Growth Fund and Johnson Fixed Income Fund is filed herewith.
(v) Copy of Amendment to Registrant's Management Agreement for the Johnson
Opportunity Fund and Johnson Municipal Income Fund is filed herewith.
(vi) Copy of Amendment to Registrant's Management Agreement for the Johnson
Realty Fund is filed herewith.
<PAGE> 34
(e) Underwriting Contracts. - None.
(f) Bonus or Profit Sharing Contracts - None.
(g) Custodial Agreement.
(i) Copy of Registrant's Agreement with the Custodian, The Provident Bank, which
was filed as an Exhibit to Registrant's Post-Effective Amendment No. 9, is
hereby incorporated by reference.
(ii) Amended Schedule of Custodian Fees, which was filed as an exhibit to
Registrants Post-Effective Amendment No.7, is hereby incorporated by reference.
(h) Other Material Contracts. -None.
(i) Legal Opinion (i) Opinion of Brown, Cummins & Brown Co., L.P.A.
which was filed as an Exhibit to Registrant's Post-Effective Amendment No. 7, is
hereby incorporated by reference.
(ii) Consent of Brown, Cummins & Brown Co., L.P.A. is filed herewith.
(j) Other Opinions. Consent of Independent Public accountants is filed herewith.
(k) Omitted Financial Statements.- None.
(l) Initial Capital Agreements.
(i) Copy of Letter of Initial Stockholder for the Growth Fund and the Fixed
Income Fund, which was filed as an Exhibit to Registrant's Post-Effective
Amendment No. 9, is hereby incorporated by reference.
(ii) Copy of Letter of Initial Stockholder for the Opportunity Fund and the
Municipal Income Fund, which was filed as an Exhibit to Registrant's
Post-Effective Amendment No. 9, is hereby incorporated by reference
(m) Rule 12b-1 Plan.- None
(n) Financial Data Schedule - None.
(o) Rule 18f-3 Plan - None.
(p) Power of Attorney
(i) Power of Attorney for Registrant and Certificate with respect there to,
which were filed as an Exhibit to Registrant's Post-Effective Amendment No.7,
are hereby incorporated by reference.
(ii) Powers of Attorney for Trustees and Officers of Registrant, which were
filed as an Exhibit to Registrant's Post-Effective Amendment No. 7, are hereby
incorporated by reference.
<PAGE> 35
Item 24. Persons Controlled by or Under Common Control with the Registrant
- -------- -----------------------------------------------------------------
(a) As of March 31, 1999, Johnson Investment Counsel, Inc., an Ohio
corporation, the Johnson Investment Counsel, Inc. Profit Sharing Plan,
discretionary accounts of Johnson Investment Counsel, Inc., and other accounts
which its officers and/or employees may control, may be deemed to control the
Growth Fund, the Opportunity Fund, the Realty Fund, the Fixed Income Fund and
the Municipal Income Fund as a result of their beneficial ownership of those
Funds.
(b) Johnson Financial Services, Inc. and Johnson Trust Company are wholly owned
subsidiaries of Johnson Investment Counsel, Inc., and therefore may be deemed to
be under common control with the Registrant.
Item 25. Indemnification
- -------- ---------------
(a) Article VI of the Registrant's Declaration of Trust provides for
indemnification of officers and Trustees as follows:
SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. Subject to and
except as otherwise provided in the Securities Act of 1933, as amended, and the
1940 Act, the Trust shall indemnify each of its Trustees and Officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person") against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including
reasonable accountants' and counsel fees, incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee or Officer, director or trustee, and except that no Covered
Person shall be indemnified against any liability to the Trust or its
Shareholders to which such Covered Person would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
SECTION 6.5 ADVANCES OF EXPENSES. The Trust shall advance attorneys' fees
or other expenses incurred by a Covered Person in defending a proceeding to the
full extent permitted by the Securities Act of 1933, as amended, the 1940 Act,
and Ohio Revised Code Chapter 1707, as amended. In the event any of these laws
conflict with Ohio Revised Code Section 1701.13(E), as amended, these laws, and
not Ohio Revised Code Section 1701.13(E), shall govern.
SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other
<PAGE> 36
than Trustees and Officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such person.
The registrant may not pay for insurance which protects the Trustees and
Officers against liabilities rising from action involving willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of their offices.
(b) The Registrant maintains a standard mutual fund investment advisory
professional and directors and officers liability policy. The policy provides
coverage to the Registrant, its Trustees and Officers, and its Adviser, among
others. Coverage under the policy includes losses by reason of any act, error,
omission, misstatement, misleading statement, neglect or breach of duty.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to Trustees, Officers and controlling persons of the
Registrant pursuant to the provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of the Registrant, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, Officer or controlling
person of the Johnson Mutual Funds Trust in the successful defense of any
action, suit or proceedings) in asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
- -------- ----------------------------------------------------
(A) Johnson Investment Counsel, Inc., 3777 West Fork Road, Cincinnati, Ohio
45247 (the "Adviser") is a registered investment adviser. It has engaged in no
other business during the past two fiscal years.
(2) The following list sets forth the business and other connections of the
Directors and Officers of Johnson Investment Counsel, Inc. during the past two
years.
(a) Timothy E. Johnson
(i) President and a Director of Johnson Investment Counsel, Inc., 3777 West Fork
Road, Cincinnati, Ohio 45247.
(ii) President and a Trustee of Johnson Mutual Funds Trust, 3777 West Fork Road
, Cincinnati, Ohio 45247.
(iii)President of Johnson Financial Services, Inc., 3777 West Fork Road,
Cincinnati, Ohio 45247.
<PAGE> 37
(b) Janet L. Johnson
(i) Vice President, Secretary and Director of Johnson Investment Counsel, Inc.,
3777 West Fork Road, Cincinnati, Ohio 45247.
(ii) Vice President, Secretary and Director of Johnson Financial Services, Inc.,
3777 West Fork Road, Cincinnati, Ohio 45247.
Item 27. Principal Underwriters
- -------- ----------------------
None.
Item 28. Location of Accounts and Records
- -------- --------------------------------
Accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder
will be maintained by the Registrant and Transfer Agent at, 3777 West Fork Road,
Cincinnati, Ohio 45247, or by The Provident Bank, the Registrant's custodian at
One East Fourth Street, Cincinnati, Ohio 45202.
Item 29. Management Services Not Discussed in Parts A or B - None.
- -------- ---------------------------------------------------------
Item 30. Undertakings
- -------- ------------
None.
<PAGE> 38
POST-EFFECTIVE AMENDMENT CERTIFICATION OF EFFECTIVENESS
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Cincinnati, State of Ohio, on the 30th day of April, 1999
JOHNSON MUTUAL FUNDS TRUST
By: /s/ TIMOTHY E. JOHNSON
-------------------------------------
TIMOTHY E. JOHNSON
President
By: /s/ DIANNA J. ROSENBERGER
-------------------------------------
DIANNA J. ROSENBERGER
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
RONALD H. McSWAIN TRUSTEE )
) By:
) TIMOTHY E. JOHNSON
) Attorney-In-Fact
)
KENNETH S. SHULL TRUSTEE ) April 30, 1999
)
)
)
JOHN W. CRAIG TRUSTEE )
/s/ TIMOTHY E JOHNSON
- -------------------------
TIMOTHY E JOHNSON
Trustee and President
/s/ DIANNA J. ROSENBERGER
- -------------------------
DIANNA J. ROSENBERGER
Treasurer and Chief Financial Officer
<PAGE> 39
<TABLE>
<CAPTION>
EXHIBIT INDEX
-------------
<S> <C>
1. Amendment to Management Agreement EX-99.B5.1
2. Amendment to Management Agreement EX-99.B5.2
3. Amendment to Management Agreement EX-99.B5.3
4. Consent of Brown, Cummins & Brown Co., L.P.A. EX-99.B10
5. Consent of Independent Public Accountants EX-99.B11
</TABLE>
<PAGE> 1
Exhibit 99.B5.3
SECOND AMENDMENT TO MANAGEMENT AGREEMENT
Amendment dated as of January 1, 1999 to the Management Agreement dated
December 30, 1997 (the "Agreement") between Johnson Mutual Funds Trust (the
"Trust"), on behalf of the Johnson Realty Fund (the "Fund"), and Johnson
Investment Counsel, Inc. (the "Adviser").
RECITALS
A. The Agreement authorizes the payment of a monthly management fee
equal to an annual rate of 1.30% of the Fund's average value of its daily net
assets.
B. At various times since the inception of the Fund, the Adviser has
voluntarily waived all or a portion of its fee.
C. The Adviser has made a permanent reduction of its fee and desires
to extend the period of time during which temporary reductions are in place
and the Trust has agreed to accept such reductions.
NOW THEREFORE, it is agreed that:
1. Effective immediately, the first paragraph of Section 3 of the
Agreement is replaced in its entirety with the following:
For all services to be rendered and payments to be made as provided in
the
Agreement, as of the last day of each month, the Fund will pay the
Adviser
a fee at the annual rate of 1.00% of the average value of its daily
net assets.
2. Effective immediately and through April 30, 2002, the Adviser shall
reduce its fee by 0.05%, resulting in a fee at the annual rate of 0.95% of the
Fund's average value of its daily net assets.
3. The Agreement is unchanged in all other respects.
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed
by their officers designated below, all as of the date first written above.
Attest: JOHNSON MUTUAL FUNDS
TRUST
By: /s/
---------------------------------
By: /s/ David C. Tedford,
-------------------------------
Secretary Timothy E. Johnson, President
Accepted by:
------------
Attest: JOHNSON INVESTMENT COUNSEL, INC.
By: /s/ By: /s/
-------------------------------------- ---------------------------------
Janet Johnson, Secretary Timothy E. Johnson, President
<PAGE> 1
Exhibit 99.B5.2
SECOND AMENDMENT TO MANAGEMENT AGREEMENT
Amendment dated as of January 1, 1999 to the Management Agreement dated
February 15, 1994 (the "Agreement") between Johnson Mutual Funds Trust (the
"Trust"), on behalf of the Johnson Opportunity Fund and the Johnson Municipal
Income Fund (the "Funds"), and Johnson Investment Counsel, Inc. (the "Adviser").
RECITALS
A. The Agreement authorizes the payment of a monthly management fee
equal to an annual rate of 1.30% of the Johnson Opportunity Fund's average value
of its daily net assets and 1.15% of the Johnson Municipal Income Fund's average
value of its daily net assets.
B. At various times since the inception of the Funds, the Adviser has
voluntarily waived a portion of its fees.
C. The Adviser has made a permanent reduction of its fees and desires
to extend the period of time during which temporary reductions are in place
and the Trust has agreed to accept such reductions.
NOW THEREFORE, it is agreed that:
1. Effective immediately, the first paragraph of Section 3 of the
Agreement is replaced in its entirety with the following:
For all services to be rendered and payments to be made as provided in
the Agreement, as of the last day of each month, the Johnson
Opportunity Fund and the Johnson Municipal Income Fund will each pay
you a fee at an annual rate of 1.00% of the average value of its daily
net assets.
2. Effective immediately and through April 30, 2002, the Adviser shall
reduce its fee for the Johnson Opportunity Fund by 0.05%, resulting in a fee at
the annual rate of 0.95% of the Fund's average value of its daily net assets and
shall reduce its fee for the Johnson Municipal Income Fund by 0.35%, resulting
in a fee at the annual rate of 0.65% of the Fund's average value of its daily
net assets.
3. The Agreement is unchanged in all other respects.
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed
by their officers designated below, all as of the date first written above.
Attest: JOHNSON MUTUAL FUNDS
TRUST
By: /s/
---------------------------
By: /s/ David C. Tedford,
---------------------------------
Secretary Timothy E. Johnson, President
Accepted by:
------------
Attest: JOHNSON INVESTMENT COUNSEL, INC.
By: /s/ By: /s/
----------------------------- ----------------------------------------
Janet Johnson, Secretary Timothy E. Johnson, President
<PAGE> 1
Exhibit 99.B5.1
SECOND AMENDMENT TO MANAGEMENT AGREEMENT
Amendment dated as of January 1, 1999 to the Management Agreement dated
December 18, 1992 (the "Agreement") between Johnson Mutual Funds Trust (the
"Trust"), on behalf of the Johnson Growth Fund and the Johnson Fixed Income Fund
(the "Funds"), and Johnson Investment Counsel, Inc. (the "Adviser").
RECITALS
A. The Agreement authorizes the payment of a monthly management fee
equal to an annual rate of 1.30% of the Johnson Growth Fund's average value of
its daily net assets and 1.15% of the Johnson Fixed Income Fund's average value
of its daily net assets.
B. At various times since the inception of the Funds, the Adviser has
voluntarily waived a portion of its fees.
C. The Adviser has made a permanent reduction of its fees and desires
to extend the period of time during which temporary reductions are in place
and the Trust has agreed to accept such reductions.
NOW THEREFORE, it is agreed that:
1. Effective immediately, the first paragraph of Section 3 of the
Agreement is replaced in its entirety with the following:
For all services to be rendered and payments to be made as provided in
the Agreement, as of the last day of each month, the Johnson Growth
Fund and the Johnson Fixed Income Fund will each pay you a fee at an
annual rate of 1.00% of the average value of its daily net assets.
2. Effective immediately and through April 30, 2002, the Adviser shall
reduce its fee for the Johnson Growth Fund by 0.05%, resulting in a fee at the
annual rate of 0.95% of the Fund's average value of its daily net assets and
shall reduce its fee for the Johnson Fixed Income Fund by 0.15%, resulting in a
fee at the annual rate of 0.85% of the Fund's average value of its daily net
assets.
3. The Agreement is unchanged in all other respects.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed
by their officers designated below, all as of the date first written above.
Attest: JOHNSON MUTUAL FUNDS
TRUST
By /s/
-------------------------------
By: /s/ David C. Tedford,
--------------------------------
Secretary Timothy E. Johnson, President
Accepted by:
------------
Attest: JOHNSON INVESTMENT COUNSEL, INC.
By: /s/ By: /s/
----------------------------- ----------------------------------
Janet Johnson, Secretary Timothy E. Johnson, President
<PAGE> 1
BROWN,CUMMINS & BROWN CO., L.P.A.
ATTORNEYS AND COUNSELORS AT LAW
3500 CAREW TOWER
J. W. BROWN (1911-1995) 441 VINE STREET JOANN M. STRASSER
JAMES R. CUMMINS Cincinnati, Ohio 45202 PAMELA L. KOGUT
ROBERT S BROWN TELEPHONE (513) 381-2121 AARON A. VANDERLAAN
DONALD S. MENDELSOHN TELECOPIER (513) 381-2125
LYNNE SKILKEN OF COUNSEL
AMY G. APPLEGATE GILBERT BETTMAN
KATHRYN KNUE PRZYWARA
MELANIE S. CORWIN
April 30, 1999
Johnson Mutual Funds Trust
3777 West Fork Road
Cincinnati, Ohio 45247
Gentlemen:
A legal opinion that we prepared was filed with your Post-Effective
Amendment No. 7 to your Registration Statement (the "Legal Opinion"). We hereby
give you our consent to incorporate by reference the Legal Opinion into
Post-Effective Amendment No. 11 to your Registration Statement (the
"Amendment"), and consent to all references to us in the Amendment.
Very truly yours,
/s/
Brown, Cummins & Brown Co., L.P.A.
BCB/jlm
<PAGE> 1
Exhibit 99.B11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to all references made to us in this Post-Effective Amendment No. 11
to the Johnson Mutual Funds Trust's Registration Statement on Form N1-A.
/S/
McCurdy & Associates CPA's, Inc.
April 27, 1999
