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Prospectus April 27, 2000
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JOHNSON
Mutual Funds
Prospectus dated April 27, 2000
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 passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
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<PAGE>
7
JOHNSON GROWTH FUND
Investment Objective
The investment objective of the Growth Fund is long term capital growth.
Principal Strategies
The Fund invests primarily in common stocks of larger-sized U.S. companies
(those with a market capitalization above $15 billion) that its Adviser believes
will outperform other stocks based on an analysis of the stocks' growth
potential. The Adviser generally intends to stay fully invested (subject to
liquidity requirements), regardless of the movement of stock prices.
Principal Risks of Investing in the Fund
o Company risk is the risk that the Fund value might decrease in response
to the activities and financial prospects of an individual company.
o Market risk is the risk that the Fund value might decrease in response to
general market and economic conditions. o Volatility risk - Common stocks tend
to be more volatile than other investment choices. o 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:
o long term investors seeking a Fund with a growth investment strategy o
investors willing to accept price fluctuations in their investment o 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 over time
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%
1999.................. 11.31%
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Average Annual Total Returns
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For the periods ending December 31, 1999:
Since
1 Year 5 Years Inception*
The Fund 11.31% 24.23% 17.04%
S&P 500 Index 21.04% 28.55% 21.44%
* January 4, 1993
During the period shown, the highest return for a calendar quarter was 23.05% in
the fourth quarter of 1998, and the lowest return was -10.01% in the third
quarter of 1998.
<PAGE>
JOHNSON OPPORTUNITY FUND
<PAGE>
Investment Objective
The investment objective of the Opportunity Fund is long term capital
growth.
Principal Strategies
The Fund invests primarily in equity securities of medium-sized companies
(those with a market capitalization between $1 billion and $15 billion) that the
Fund's Adviser believes offer opportunities for capital appreciation. The Fund
emphasizes securities of companies with significant potential to appreciate in
value because of 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 Adviser generally intends to stay fully invested (subject to
liquidity requirements), regardless of the movement of stock prices.
Principal Risks of Investing in the Fund
o Company risk is the risk that the Fund value might decrease in response
to the activities and financial prospects of an individual company.
o Market risk is the risk that the Fund value might decrease in response to
general market and economic conditions. o Volatility risk - Common stocks tend
to be more volatile than other investment choices. o As with any mutual fund
investment, the Fund's returns may vary and you could lose money.
In addition, the stocks of medium sized companies are subject to certain
risks including: o Possible dependence on a limited product line, limited
financial resources or management group. o Less frequent trading and trading
with smaller volume than larger stocks, which may make it difficult for the Fund
to buy or
sell the stocks.
o Greater fluctuation in value than larger, more established company stocks.
Is this Fund Right for You?
The Fund may be a suitable investment for:
o long term investors seeking a Fund with a growth investment strategy o
investors willing to accept price fluctuations in their investment o 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 over time
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%
1999..................12.65%
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Average Annual Total Returns
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For the periods ending December 31, 1999:
Since
1 Year 5 Year Inception*
The Fund 12.65% 21.33% 19.76%
S&P Midcap Index 14.70% 23.04% 20.99%
* May 16, 1994
During the period shown, the highest return for a calendar quarter was 19.43% in
the fourth quarter of 1998, and the lowest return was -12.06% in the third
quarter of 1998.
<PAGE>
JOHNSON REALTY FUND
Investment Objective
The investment objective of the Realty Fund is above average income and
long term capital growth.
Principal Strategies
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. Under normal circumstances, at least 65% of the
Fund's total assets will be in the real estate industry.
The Fund will invest primarily in equity REITs that invest in office,
residential, retail, industrial, and other specialty properties such as hotels,
self-storage facilities, healthcare facilities, and parking facilities. The
Adviser intends to diversify by sector and geographic location but will not
attempt to duplicate the real estate market as a whole in terms of proportion of
invested assets in any specific region or property category.
Principal Risks of Investing in the Fund
o Company risk is the risk that the Fund value might decrease in response
to the activities and financial prospects of an individual company.
o Market risk is the risk that the Fund value might decrease in response to
general market and economic conditions. o Real estate risk - The Fund may be
subject to risk 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, and with direct ownership of real estate, such as:
o Decreases in real estate values
o Overbuilding
o Environmental liabilities
o Increases in operating costs, interest rates and/or property taxes.
o Some real estate related investments are not fully diversified and are
subject to the risks associated with financing a limited number of
projects.
o REITs are heavily dependent upon the management team and are subject to
heavy cash flow dependency, defaults by borrowers, and self-liquidation.
o 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: o long term investors o investors looking to diversify
into real estate securities o investors willing to accept fluctuations in the
value of their investments
How the Fund has Performed
The chart and table below provide some indication 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 over time 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%
1999.................. -2.47%
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Average Annual Total Returns
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For the periods ending December 31, 1999:
Since
1 Year Inception*
The Fund -2.47% -10.91%
NAREIT Index** -4.62% -11.32%
* January 2, 1998
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** NAREIT = National Association of Real Estate Investment Trust
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During the period shown, the highest return for a calendar quarter was 11.04% in
the second quarter of 1999; and the lowest return was -10.86% for the third
quarter of 1998.
<PAGE>
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.
Principal Strategies
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. The
Adviser typically selects fixed income securities with maturities between three
and fifteen years, based on the available yield at various maturity levels. The
Fund will normally invest at least 95% of its assets in investment grade fixed
income securities.
Principal Risks of Investing in the Fund
o Interest rate risk is the risk that the value of your investment may decrease
when interest rates rise.
o Credit risk is the risk that the issuer of the fixed income security may
not be able to make interest and principal payments when due.
o Prepayment risk is the risk that the value of the mortgage securities
held by the Fund may go down as a result of changes in prepayment rates
on the underlying mortgages.
o 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:
o long term investors seeking a fund with an income and capital preservation
strategy o investors seeking to diversify their holdings with bonds and other
fixed income securities o 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 from year to year since the Fund's
inception. The table shows how the Fund's average annual total returns over time
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%
1999..................-3.68%
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Average Annual Total Returns
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For the periods ending December 31, 1999:
Since
1 Year 5 Year Inception*
The Fund -3.68% 6.69% 5.32%
Lehman
Intermediate Index 0.39% 7.09% 5.94%
* January 4, 1993
During the period shown, the highest return for a calendar quarter was
6.04% in the second quarter of 1995, and the lowest return was -3.42% for the
first quarter of 1994.
<PAGE>
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.
Principal Strategies
The Fund invests primarily in investment grade municipal securities issued
by or on behalf of states, territories and possessions of the United States, and
other political subdivisions, agencies, authorities and instrumentalities, the
income from which is exempt from regular federal income tax. The Adviser
primarily invests in Ohio municipal securities which provide income that is
exempt from both Ohio and regular federal income tax. The Fund may concentrate
its investments in a particular segment of the bond market, such as housing
agency bonds or airport bonds.
The Adviser typically selects securities with maturities between three and
fifteen years, based on the available yield at various maturity levels. The Fund
will normally invest at least 95% of its assets in investment grade municipal
securities (or unrated municipal securities that the Adviser determines are of
comparable quality) which provide income that is exempt from Federal Income tax
and the alternative minimum tax.
Principal Risks of Investing in the Fund
o Interest rate risk is the risk that the value of your investment may decrease
when interest rates rise. o Credit risk is the risk that the issuer of a bond
may not be able to make interest and principal payment when due. o Political
risk is the risk that substantial changes 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. o Geographic risk - 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.
o Segment risk - 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.
o Non-diversification risk - The Fund may be invested in securities of
fewer issuers than a diversified fund. This may cause greater fluctuation
in the Fund's value and may make the Fund more susceptible to any single
risk.
o 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: o Investors seeking a fund
with a federally tax-free income strategy o investors willing to concentrate
their investment primarily in the State of Ohio o investors willing to accept
price fluctuations in their investment
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 over time
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%
1999..................-1.24%
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Average Annual Total Returns
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For the periods ending December 31, 1999:
Since
1 Year 5 Year Inception*
The Fund -1.24% 4.83% 4.42%
Lehman Five Year
General Obligation
Index 0.71% 5.81% 5.35%
* May 16, 1994
During the period shown, the highest return for a calendar quarter was 4.21% in
the first quarter of 1995, and the lowest return was -2.20% for the second
quarter of 1999.
<PAGE>
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.
Fixed Municipal
Growth Opportunity Realty Income Income
Shareholder Fees 1
(fees paid directly from your investment)
Maximum Front End Load. None None None None None
Deferred Load............None None None None None
Redemption Fee...........None None None None None
Exchange Fee.............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%
12b-1 Fees..............None None None None None
Total Annual Fund
Operating Expenses..1.00% 1.00% 1.00% 1.00% 1.00%
Fee Waiver 2............0.05% 0.05% 0.05% 0.15% 0.35%
Net Expenses............0.95% 0.95% 0.95% 0.85% 0.65%
1 A processing fee will be deducted from any wire sales proceeds and
paid to the Custodian.
2 The Adviser has contractually agreed to waive fees by the amounts
shown through April 30, 2003. The Adviser may not
unilaterally change the contract until May 1, 2003.
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 for the time periods indicated, 5% annual total return, constant
operating expenses, and sale of all shares at the end of each time period.
Although your actual expenses may be different, based on these assumptions your
cost will be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
Growth Fund $97 $304 $539 $1,215
Opportunity Fund $97 $304 $539 $1,215
Realty Fund $97 $304 $539 $1,215
Fixed Income Fund $87 $272 $508 $1,186
Municipal
Income Fund $67 $209 $446 $1,127
<PAGE>
HOW TO BUY, SELL OR EXCHANGE SHARES IN THE FUND
The Funds and their transfer agent, Johnson Financial, 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 or (800) 541-0170
FAX: (513) 661-4901
Transfer Agent:
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100 or (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. 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: o
Complete and sign an application; o Draft a check made payable to: Johnson
Mutual Funds; o Identify on the check and on the application the Fund(s) in
which you would like to invest; o 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: __________
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: o Name of
your account(s); o Account number(s); o 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. ^
Automatic Investment Option
You may arrange to make additional investments ($100 minimum)
automatically on a monthly or bi-monthly basis by transferring money 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 by contacting the Transfer Agent.
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. The Fund can sell other shares you own as
reimbursement for any loss incurred.
HOW TO SELL SHARES
You may sell shares in a Fund by mail or telephone, without a charge. 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:
o Letter of instruction;
o Fund name;
o Account number(s);
o Account name(s);
o 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.
The Funds may require that signatures on redemption requests be guaranteed
by a bank or a 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 may be deducted
from sale proceeds.
By using the telephone redemption and exchange privileges, a shareholder
authorizes the Funds to act upon the instruction of any person by telephone they
believe to be the shareholder. By telephone, this shareholder may sell shares
from the account and transfer the proceeds to the address of record or the bank
account designated or may 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, ACH
(Automated Clearing House) 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 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 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. Shares may also be sold on the 5th day of the month or the 15th day of
the month at the shareholder's request. 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, the sales
proceeds will not be paid until your investment has cleared the bank, which may
take up to 15 calendar days from the date of purchase. Exchanges into any of the
other Funds are, however, permitted without the ten day waiting period.
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 (during times of
unusual market activity), consider sending your order by express mail to the
Funds, or facsimile to (513) 661-4901 or (513) 661-3160.
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 is 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.
HOW TO EXCHANGE SHARES
As a shareholder in any Fund in the Johnson Mutual Funds Trust, you may
exchange shares for shares of any other fund in the Johnson Mutual Funds Trust,
subject to the minimum initial investment requirement of the Fund into which you
are making the exchange. 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 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 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 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 Stock Exchange is closed on weekends, Federal holidays and
Good Friday. The net asset value per share of each Fund will fluctuate.
Requests to purchase, exchange and redeem shares are processed at the NAV
calculated after the Transfer Agent receives your order in the form described
above in the applicable section. 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.
DIVIDENDS AND DISTRIBUTIONS
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 and the
Growth Fund intend to distribute substantially all of their 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 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 $2.7 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 during the fiscal year ended
December 31, 1999 by each Fund are:
Growth Fund: 0.95%; Opportunity Fund: 0.95%; Realty Fund: 0.95%;
Fixed Income Fund: 0.85%; and Municipal Income Fund: 0.65%.
OTHER INFORMATION ABOUT INVESTMENTS
Johnson Growth Fund and Johnson Opportunity Fund
Non-principal strategy:
Each of the Growth and Opportunity Funds expected under normal
circumstances to invest no more than 15% of its net assets in American
Depository Receipts (ADRs). An ADR is a certificate of ownership issued by
a U.S. bank as a convenience to investors instead of the underlying
foreign security which the bank holds in custody. In general, foreign
investments involve higher risks than U.S. investments. Foreign markets
tend to be more volatile than those of the U.S. and bring increased
exposure to foreign economic, political and other events that can have a
negative effect on the value of issuers in a particular foreign country.
Johnson Municipal Income Fund
Principal strategy:
Because 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 shortfalls 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.
Non-principal strategy:
The 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. In addition, changes in economic
conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than with higher grade
securities. 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.
General
From time to time, any Fund may take temporary defensive positions that
are inconsistent with the Fund's principal investment strategies in attempting
to respond to adverse market, economic, political, or other conditions. For
example, 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. Each Fund may also invest in such instruments at anytime to maintain
liquidity or pending selection of investments in accordance with its policies.
You should understand that REIT's purchased by the Realty Fund have their
own expenses and fees.
The investment objectives and strategies of any Fund may be changed
without shareholder approval.
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand each
Fund's financial results. Certain information 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.
<PAGE>
[BACK COVER PAGE]
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, Co. LPAs
3500 Carew Tower
441 Vine Street
Cincinnati, OH 45202
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 513-661-3100 or 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 review and copy information about the Funds (including the SAI and
other reports) at the Securities and Exchange Commission (SEC) Public Reference
Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and
operation. You may also obtain reports and other information about the Funds on
the EDGAR Database on the SEC's Internet site at http.//www.sec.gov, and copies
of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102.
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TABLE OF CONTENTS
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Investment Objective, Principal Risks and Fund Performance
Growth Fund.................................................. 1
Opportunity Fund............................................. 2
Realty Fund.................................................. 3
Fixed Income Fund............................................ 4
Municipal Income Fund ....................................... 5
Costs of Investing in the Funds....................................... 6
How to Buy, Sell or Exchange Shares in the Fund
How to Buy Shares............................................ 7
How to Sell Shares..........................................7-9
How to Exchange Shares....................................... 9
Share Price Calculation............................................... 9
Dividends and Distributions.........................................9-10
Taxes .............................................................10
Management of the Funds...............................................10
Other Information about Investments
Johnson Growth Fund and Johnson Opportunity Fund.......... 10-11
Johnson Municipal Income Fund............................... 11
General.................................................... 11
Financial Highlights................................................ 12
Investment Adviser, Transfer Agent, Auditors,
Custodian, Legal Counsel............................................Back Page
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