<PAGE> 1
As filed with the Securities and Exchange Commission on March ___, 1996
Registration No. 33-58514
811-7516
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. __
Post-Effective Amendment No. 4
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 6
(Check appropriate box or boxes)
------------------------
MAXUS LAUREATE FUND
(Exact name of registrant as specified in charter)
28601 Chagrin Boulevard, Cleveland, Ohio 44122
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (216) 292-3434
RICHARD A. BARONE
28601 CHAGRIN BOULEVARD
CLEVELAND, OHIO 44122
(Name and address of agent for service)
Copy to:
MICHAEL J. MEANEY, ESQ.
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Total Number of Pages _____
Exhibit Index at C-1
<PAGE> 2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
Registrant has elected to register an indefinite number of shares of beneficial
interest. Registrant's Rule 24f-2 Notice in respect of the fiscal year ended
December 31, 1995 was filed on or about February 27, 1996.
It is proposed that this filing will become effective (check
appropriate box):
immediately upon filing pursuant to paragraph (b) of Rule 485.
----
on (date) pursuant to paragraph (b) of Rule 485.
----
X 60 days after filing pursuant to paragraph (a) of Rule 485.
----
on (date) pursuant to paragraph (a) of Rule 485.
----
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MAXUS LAUREATE FUND
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Part A
Item No. Location
- -------- --------
<S> <C> <C>
Item 1. Cover Page Cover Page
Item 2. Synopsis Highlights
Item 3. Condensed Financial Not Applicable
Information
Item 4. General Description Investment Objective and Management
of Registrant Techniques, Investment Policies and
Restrictions, Risks and Other Considerations,
Performance, General Information, Appendix
Item 5. Management of the Fund Investment Management
Item 6. Capital Stock and General Information
Other Securities
Item 7. Purchase of Securities How to Purchase Shares
Being Offered
Item 8. Redemption or Repurchase How to Redeem Shares
Item 9. Pending Legal Proceedings None
Part B
Item No. Location
- -------- --------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information General Information
and History and History
Item 13. Investment Objectives Investment Objective
and Policies and Policies
</TABLE>
i
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<TABLE>
<S> <C> <C>
Item 14. Management of the Fund Management of the Fund
Item 15. Control Persons and Principal Principal Holders of Securities
Holders of Securities
Item 16. Investment Advisory Investment Advisory
and Other Services and Other Services
Item 17. Brokerage Allocation Portfolio Transactions
and Other Practices
Item 18. Capital Stock and Capital Stock and
Other Securities Other Securities
Item 19. Purchase, Redemption and Purchase, Redemption and Pricing
Pricing of Securities of Securities Being Offered
Being Offered
Item 20. Tax Status Tax Status
Item 21. Underwriters Distributor
Item 22. Calculation of Not Applicable
Performance Data
Item 23. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate Item, as numbered, in Part C to this Registration Statement.
ii
<PAGE> 5
LOGO
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MAXUS INCOME FUND 28601 Chagrin Blvd., Suite 500
MAXUS EQUITY FUND Cleveland, Ohio 44122
MAXUS LAUREATE FUND (216) 292-3434
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Maxus Income Fund, Maxus Equity Fund and Maxus Laureate Fund (the "Funds") are
three separate diversified, open-end management investment companies.
MAXUS INCOME FUND has an investment objective of obtaining the highest total
return, a combination of income and capital appreciation, consistent with
reasonable risk. Under normal circumstances, at least 65% of the value of this
Fund's total assets will consist of income-producing securities.
MAXUS EQUITY FUND has an investment objective of obtaining a total return, a
combination of capital appreciation and income. Under normal circumstances, at
least 65% of the value of this Fund's total assets will consist of equity
securities.
MAXUS LAUREATE FUND has an investment objective of achieving a high total
return, a combination of capital appreciation and income, consistent with
reasonable risk. This fund pursues its objective by investing exclusively in
shares of other open-end registered investment companies, commonly called mutual
funds.
<TABLE>
<S> <C>
THE FUNDS MAY BE SUITABLE FOR IMPORTANT FEATURES
- -- Individual Retirement Accounts -- Minimum initial investment $1000
- -- Qualified retirement plans -- Minimum subsequent investments $100
- -- Custodian accounts -- Systematic withdrawal plans
- -- Endowment funds
- -- Individual investors
</TABLE>
This Prospectus sets forth concisely the information about the Funds that a
prospective investor ought to know before investing. Investors should read this
Prospectus and retain it for future reference. Additional information about the
Funds has been filed with the Securities and Exchange Commission (the "SEC") in
separate Statements of Additional Information dated , 1996 and is
available upon request and without charge by calling the Funds at (216)
292-3434. Such additional information is hereby incorporated by reference into
this Prospectus.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS/ , 1996
Investors are advised to read this Prospectus and to retain it for future
reference.
<PAGE> 6
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HIGHLIGHTS
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES. Each Fund is a diversified, open-end management
investment company. The investment objective of Maxus Income Fund is to obtain
the highest total return, a combination of income and capital appreciation,
consistent with reasonable risk. The investment objective of Maxus Equity Fund
is to obtain a total return, a combination of capital appreciation and income.
The investment objective of Maxus Laureate Fund is to achieve a high total
return, a combination of capital appreciation and income, consistent with
reasonable risk. No assurance can be given that any of the Funds will achieve
its objective. See "Investment Objectives and Management Techniques."
DISTRIBUTION PLAN. Each Fund sells and redeems its shares at net asset value
without any front-end sales charges or redemption charges. Each Fund has adopted
plans for using as much as 0.5% of its net assets annually to aid the
distribution of its shares. See "Distribution Plans."
LIQUIDITY. Each Fund continuously offers and redeems shares at the net asset
value next computed after receipt by the Fund's Transfer Agent of a purchase
order or redemption request in proper form. See "How to Purchase Shares" and
"How to Redeem Shares."
MINIMUM INVESTMENT. A minimum initial investment of $1,000 is required.
Thereafter, you can invest additional amounts of $100 or more. See "How to
Purchase Shares." Each Fund has the right to redeem the shares in an account and
pay the proceeds to the shareholder if the value of the account drops below
$1,000 because of shareholder redemptions. See "How to Redeem Shares."
DIVIDENDS. Each Fund intends to pay dividends at least once annually to
shareholders. Unless otherwise directed, all dividends will be automatically
reinvested in additional shares. See "Dividends, Distributions and Taxes."
INVESTMENT ADVISER. Maxus Asset Management Inc. ("MAM" or the "Adviser") is the
investment adviser for each Fund. Its annual fee is 1% of the first $150,000,000
of the Fund's net assets and .75% of net assets in excess of $150,000,000. This
fee is higher than that paid by most other investment companies. Since 1976 MAM
has been an investment adviser to individuals, retirement plans, corporations
and foundations. MAM is controlled by Richard A. Barone, Chairman of each Fund.
See "Investment Management."
DISTRIBUTOR. Shares of each Fund are offered exclusively by Maxus Securities
Corp ("MSC"), an NASD broker-dealer, on a best efforts basis. MSC is controlled
by Richard A. Barone, Chairman of the Funds. See "Other Information Concerning
Purchase of Shares" and "Distribution Plan."
RISK FACTORS. None of the Funds are intended to provide a balanced investment
program to meet all requirements of every investor. The Funds may invest in
equity and debt securities involving a greater risk of decline in market value
than that of other securities.
Investing through Maxus Laureate Fund in an underlying portfolio of mutual funds
involves certain additional expenses and certain tax results which would not be
present in a direct investment in mutual funds. The underlying mutual funds in
which this Fund invests will themselves invest in securities which entail
certain risks. In addition, Federal law imposes certain limits on the purchase
and sale of mutual fund shares by this Fund. See "Risks and Other
Considerations". "Dividends, Distributions and Taxes" and Appendix B to this
Prospectus.
2
<PAGE> 7
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FEE TABLE
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Annual Fund Operating Expenses (as a percentage of average net assets)
<TABLE>
<CAPTION>
MAXUS MAXUS MAXUS
INCOME FUND EQUITY FUND LAUREATE FUND
----------- ----------- -------------
<S> <C> <C> <C>
Management Fees....................... 1.00% 1.00% 1.00%
12b-1 Fees............................ 0.50% 0.50% 0.50%
Other Expenses........................ 0.40% 0.46% 2.35%
Total Fund Operating Expenses......... 1.90% 1.96% 3.85%
</TABLE>
The 12b-1 fee in the foregoing table is an asset-based sales charges as
defined in the Rules of Fair Practice of the National Association of Securities
Dealers (the "Rules"). The existence of this charge may cause long-term
shareholders to pay more in total sales charges than the economic equivalent of
the maximum front-end sales charges permitted under those Rules.
A shareholder who requests that the proceeds of a redemption be sent by
wire transfer will be charged for the cost of such wire, which is $10.00 as of
the date of this Prospectus (subject to change without notice).
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:
Maxus Income Fund $ 19 $ 60 $ 103 $222
Maxus Equity Fund $ 20 $ 62 $ 106 $229
Maxus Laureate Fund $ 39 $ 118 $ 198 $408
</TABLE>
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that an investor in any Fund will bear, directly or
indirectly. THE EXAMPLE SET FORTH IN THE FOREGOING TABLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESSER THAN THOSE SHOWN.
3
<PAGE> 8
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MAXUS INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table sets forth selected data for a share of beneficial
interest for the periods shown. This information has been examined by McCurdy &
Associates C.P.A.'s, Inc., Certified Public Accountants, whose report appears in
the Fund's Statement of Additional Information, a copy of which will be supplied
upon request.
<TABLE>
<CAPTION>
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89
TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92* 12/31/91 12/31/90 12/31/89
-------- -------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of Period.......... $9.73 $10.94 $10.88 $10.98 $9.94 $10.52 $10.57
Net Investment Income.......... 0.72 0.74 0.68 0.42 0.80 0.76 0.68
Net Gains or Losses on
Securities (realized or
unrealized).................. 0.81 (1.22) 0.22 (0.01) 1.05 (.60) 0.49
-------- -------- -------- --------- -------- -------- --------
Total from Investment
Operations................... 1.53 (0.48) 0.90 0.41 1.85 0.16 1.17
Dividends (from net investment
income)...................... (0.72) (0.73) (0.68) (0.42) (0.81) (0.74) (0.89)
Distributions (from capital
gains)....................... 0.00 0.00 (0.16) (0.09) 0.00 0.00 (0.33)
Return of Capital.............. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- --------- -------- -------- --------
Total Distributions............ (0.72) (0.73) (0.84) (0.51) (0.81) (0.74) (1.22)
NET ASSET VALUE:
End of Period................ $10.54 $9.73 $10.94 $10.88 $10.98 $9.94 $10.52
Total Return................... 16.15% (4.39)% 8.74% 7.89% 19.27% 1.70% 11.41%
RATIOS/SUPPLEMENTAL DATA
Net Assets
End of Period (Thousands).... 37,387 33,425 36,147 28,591 18,200 13,307 12,968
Ratio of Expenses to Average
Net Assets................... 1.90% 1.81% l.90% 1.94% 2.00% 2.00% 2.00%
Ratio of Net Income to Average
Net Assets................... 7.01% 7.10% 6.06% 7.18% 7.59% 7.43% 6.25%
Portfolio Turnover Rate........ 1.21 1.38 0.88 0.91 1.08 1.55 1.45
</TABLE>
- ---------------
* Weighted Average Used
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
4
<PAGE> 9
- --------------------------------------------------------------------------------
MAXUS EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table sets forth selected data for a share of beneficial
interest for the periods shown. This information has been examined by McCurdy &
Associates C.P.A.'s, Inc., Certified Public Accountants, whose report appears in
the Fund's Statement of Additional Information, a copy of which will be supplied
upon request.
<TABLE>
<CAPTION>
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 10/01/89**
TO TO TO TO TO TO TO
12/31/95 12/31/94 12/31/93 12/31/92* 12/31/91* 12/31/90* 12/31/89*
-------- -------- -------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of Period...... $12.95 $13.60 $12.29 $11.41 $8.73 $9.79 $10.00
Net Investment Income...... 0.30 0.25 0.13 0.14 0.06 (0.02) 0.17
Net Gains or Losses on
Securities (realized and
unrealized).............. 2.60 (0.17) 3.13 1.91 3.22 (1.04) 0.28
-------- -------- -------- --------- --------- --------- ----------
Total from Investment
Operations............. 2.90 0.08 3.26 2.05 3.28 (1.06) 0.45
Dividends (from net
investment income)....... (0.27) (0.22) (0.12) (0.14) (0.06) 0.00 (0.66)
Distributions (from capital
gains)................... (1.01) (0.51) (1.83) (1.03) (0.54) 0.00 0.00
Return of Capital.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- --------- --------- --------- ----------
Total Distributions...... (1.28) (0.73) (1.95) (1.17) (0.60) 0.00 (0.66)
NET ASSET VALUE:
End of Period............ $14.57 $12.95 $13.60 $12.29 $11.41 $8.73 $9.79
Total Return............... 22.43% 0.62% 24.51% 13.56% 36.45% (10.83)% 4.61%
RATIOS/SUPPLEMENTAL DATA
Net Assets
End of Period
(Thousands)............ 31,576 17,018 11,343 5,962 3,081 1,850 1,014
Ratio of Expenses to
Average Net Assets....... 1.96% 2.00% 2.61% 2.89% 3.94% 5.25% 0.99%
Ratio of Net Income to
Average Net Assets....... 2.01% 1.82% 0.91% 0.80% 0.52% (0.19)% 1.16%
Portfolio Turnover Rate.... 1.73 1.84 1.75 1.87 1.89 2.21 1.09
</TABLE>
- ---------------
* Weighted Average Used
** Commencement of Operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
5
<PAGE> 10
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MAXUS LAUREATE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table sets forth selected data for a share of beneficial
interest for the periods shown. This information has been examined by McCurdy &
Associates C.P.A.'s, Inc., Certified Public Accountants, whose report appears in
the Fund's Statement of Additional Information, a copy of which will be supplied
upon request.
<TABLE>
<CAPTION>
01/01/95 01/01/94 05/01/93*
TO TO TO
12/31/95 12/31/94 12/31/93
-------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE:
Beginning of Period..................................... $9.62 $9.96 $10.00
Net Investment Income..................................... (0.19) (0.08) (0.07)
Net Gains or Losses on Securities (realized or
unrealized)............................................. 1.57 (0.26) 1.16
-------- -------- --------
Total from Investment Operations.......................... 1.38 (0.34) 1.09
Dividends (from net investment income).................... 0.00 0.00 0.00
Distributions (from capital gains)........................ (1.18) 0.00 (1.13)
Return of Capital......................................... 0.00 0.00 0.00
-------- -------- --------
Total Distributions..................................... (1.18) 0.00 (1.13)
NET ASSET VALUE:
End of Period........................................... $9.82 $9.62 $9.96
Total Return.............................................. 14.41% (3.41)% 8.62%
RATIOS/SUPPLEMENTAL DATA
Net Assets
End of Period (Thousands)............................... 1,510 1,998 2,114
Ratio of Expenses to Average Net Assets................... 3.85% 3.60% 2.42%
Ratio of Net Income to Average Net Assets................. (1.69)% (0.87)% (0.66)%
Portfolio Turnover Rate................................... 13.77 4.69 1.52
</TABLE>
- ---------------
* Commencement of Operations
Notes to Financial Statements appear in the Fund's Statement of Additional
Information.
6
<PAGE> 11
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND MANAGEMENT TECHNIQUES
- --------------------------------------------------------------------------------
MAXUS INCOME FUND.
The objective of Maxus Income Fund is to obtain the highest total return, a
combination of income and capital appreciation, consistent with reasonable risk.
This objective is a fundamental policy of this Fund and may not be changed
without approval of a majority of the fund's outstanding shares. See "General
Information." The Fund intends to invest in a wide variety of debt and equity
securities. Debt securities will include U.S. Government securities, U.S.
Government agency securities, corporate bonds and money market investments such
as commercial paper, certificates of deposit, bank or savings and loan
association interest-bearing demand accounts, bankers' acceptances and
repurchase agreements. Equity securities will include common stock, preferred
stock, preferred stock convertible into common stock and corporate bonds
convertible into common stock. In addition, for the purpose of achieving capital
appreciation a small portion of the Fund's assets (up to 5 percent) may be
invested in put and call options which trade on securities exchanges and for
which it pays a premium (cost of option). The Fund may sell the options,
exercise them or permit them to expire. See. "Risks and Other Considerations -
Maxus Income Fund and Maxus Equity Fund." There can be no assurance that the
Fund will achieve its investment objective.
In seeking its objective, Maxus Income Fund will alter the composition of
its portfolio as economic and market trends change and the Fund's portfolio may
vary considerably between debt and equity securities as these changes occur. The
Adviser will increase its investment in short-term money market debt securities
during periods when it believes interest rates will rise and stock prices will
decline and will increase its investment in long-term debt securities, such as
corporate bonds, U.S. Government securities and U.S. Government agency
securities, when it believes both interest rates and stock prices will decline.
If the Adviser anticipates that both stock prices and interest rates will rise,
it will increase its investment in equity securities, such as common stock,
preferred stock, and securities convertible into common stock. However,
individual equity securities may rise during times of generally declining stock
prices. In addition, stock prices may rise at the same time that interest rates
are declining. Therefore, the Fund may invest in a combination of debt and
equity securities and may shift its investment position as it anticipates
changes in the investment environment. Under normal circumstances, at least 65%
of this Fund's total assets will consist of income-producing securities.
Income-producing securities consist of debt securities, preferred stocks and
common and preferred shares of "closed-end" investment companies having
portfolios consisting primarily of income-producing securities. See "Investment
in Closed-End Investment Companies."
In selecting its corporate debt securities for Maxus Income Fund the
Adviser intends to invest principally in securities rated BBB or better by
Standard & Poor's Corporation rating service, but may invest in securities rated
as low as BB, B, CCC or CC or unrated securities when these investments are
believed by the Adviser to be sound. The Fund will not invest more than 20% of
its portfolio in securities rated BB or lower by Standard & Poor's Corporation
or unrated securities which, in the opinion of the Adviser, are of comparable
quality. Securities rated BBB or lower by Standard & Poor's, sometimes referred
to as "junk bonds", are usually considered lower-rated securities and have
speculative characteristics . Please refer to Appendix A of this Prospectus for
a description of these ratings. See "Risks and other Considerations - Maxus
Income Fund and Maxus Equity Fund."
In selecting commercial paper investments for Maxus Income Fund, the
Adviser will invest only in commercial paper rated A-1 or A-2 by Standard &
Poor's. Please refer to Appendix A of this Prospectus for a description of these
ratings. Except with respect to commercial paper, the Advisor is not restricted
as to any specific ratings in selecting money market investments.
In selecting equity securities for Maxus Income Fund, the Adviser will
utilize both fundamental research and technical analysis to identify securities
whose downside risk appears small relative to the potential for capital
appreciation. In doing so this Fund anticipates that the majority of its equity
investments will be made in convertible
7
<PAGE> 12
bonds and convertible preferred stock, since these securities generally have a
higher yield and a lesser risk of capital depreciation than the common stocks
into which they are convertible. Emphasis will be placed on large,
well-capitalized companies listed on a national securities exchange or actively
traded on the over-the-counter market.
Limitations expressed in this section as to the percentage of the Fund's
assets which may be invested in a given type of security do not include
investments in closed-end funds which may invest in such type of security . See
"Investment Objectives and Management Techniques-Investment in Closed-End
Investment Companies."
MAXUS EQUITY FUND.
The objective of Maxus Equity Fund is to obtain a total return, a
combination of capital appreciation and income. This objective is a fundamental
policy of this Fund and may not be changed without approval of a majority of the
fund's outstanding shares.
In seeking its objective, Maxus Equity Fund intends to invest in a wide
variety of equity and debt securities. The Fund will alter the composition of
its portfolio as economic and market trends change. Under normal circumstances
at least 65% of this Fund's total assets will consist of equity securities.
Equity securities consist of common stock and preferred stock (including common
and convertible preferred shares of "closed-end" investment companies having
portfolios consisting primarily of equity securities) and securities convertible
into common stock. The Fund may invest in a wide variety of common stocks,
including those listed on an exchange as well as those traded over the counter,
those that pay dividends as well as those that do not, and those of large and
well-established companies as well as those of smaller or newly-established
companies. Common stocks of smaller or newly-established companies often involve
a greater risk of decline in market value than may be found in common stocks of
other companies.
In selecting its equity securities, Maxus Equity Fund generally seeks
investments in companies whose break-up values are significantly higher than
their current share price; companies with high free-cash flows (net income
adjusted for non-cash expenses, less funds needed for reinvestment); companies
which have the potential for rapid growth but are selling at a low
price-to-earnings ratio; and companies in which an event or series of events may
turn around poor past performance. Most of the investments in this Fund's
portfolio have one or more of these characteristics.
Although Maxus Equity Fund intends to seek its objective primarily through
investments in equity securities, this Fund may invest up to 35% of its
portfolio in debt securities (described under "Maxus Income Fund" above) in
order to seek capital appreciation and income. In selecting its debt securities,
the Fund may invest in securities given high, low or no rating by the ratings
services. The Fund will not invest more than 5% of its portfolio in securities
rated BB or lower by Standard & Poor's Corporation or unrated securities which,
in the opinion of the Adviser, are of comparable quality. Securities rated BBB
or lower by Standard & Poor's are usually considered lower-rated securities and
have speculative characteristics. Please refer to Appendix A for a description
of these ratings. See "Risks and Other Considerations - Maxus Income Fund and
Maxus Equity Fund."
In addition, when the Adviser believes that market conditions warrant a
temporary defensive posture, the Fund may invest up to 100% of its assets in
high-quality short-term debt securities and money market instruments, such as
commercial paper, certificates of deposit and bank or savings and loan
association interest-bearing demand accounts.
Furthermore, for the purpose of achieving capital appreciation, a small
portion of the Fund's assets (up to 5%) may be invested in put and call options
which trade on securities exchanges and for which it pays a premium (cost of
option). The Fund may sell the options, exercise them, or permit them to expire.
See "Risks and Other Considerations - Maxus Income and Maxus Equity Fund."
Limitations expressed in this section as to the percentage of the Fund's
assets which may be invested in a given type of security do not include
investments in closed-end funds which may invest in such type of security. See
"Investment Objectives and Management Techniques-Investment in Closed-End
Investment Companies."
MAXUS LAUREATE FUND.
The investment objective of Maxus Laureate Fund is to obtain a high total
return, a combination of capital appreciation and income, consistent with
8
<PAGE> 13
reasonable risk. It seeks to achieve this objective by investing exclusively in
shares of other registered investment companies. The Fund will allocate its
assets among one or more of the following general types of mutual funds:
aggressive growth, growth, growth and income, equity income, small company,
sector/specialty, foreign stock, global stock, balanced, income, convertible
bond, high yield bond, corporate bond, government bond, foreign bond, global
bond, municipal bond, short-term world income and money market. The Fund is
unlikely at any particular moment to have all of its assets invested in only one
of these general types of funds, and may maintain at least some nominal
investment in many of these fund types on an ongoing basis. The Adviser will
vary the proportion of each type of underlying fund based on the mix of such
funds that may, in the Adviser's view, be most likely to achieve the Fund's
investment objective. The Fund will not invest in other funds of the Maxus
Family of Funds. All investments involve risks, and there is no assurance that
the investment objective of the Fund will be achieved. The investment objective
of the Fund is a fundamental policy and may not be changed without approval of a
majority of the Fund's outstanding shares. See "General Information."
In allocating assets among general types of underlying funds, the Adviser
will employ both fundamental and technical analysis to assess relative risk and
reward potential throughout the financial markets, with the objective of
providing the best opportunity for maximizing total return without incurring
unreasonable risk. The allocation process goes beyond the basic determination of
the degree to which the Fund's assets should be invested in equity funds versus
bond funds. The Adviser engages in continual research with regard to evolving
opportunities in various asset subclasses, including: investment discipline
(i.e. "growth investing" vs. "value investing"), market capitalization (i.e.,
"small company" vs. "blue chip", geo-economic considerations (i.e. "domestic"
vs. "foreign"), fixed-income security maturities (i.e., "short-term vs.
long-term") and sector/industry rotation (e.g., "basic materials" vs. "consumer
non-durables" or "aerospace/defense" vs. "electric utilities").
Generally, in seeking the Fund's objective, the Adviser will alter the
composition of the Fund's portfolio as economic and market trends change and the
Fund's portfolio may vary considerably among equity, bond, and money market
mutual funds as these changes occur. The Adviser will increase its investment in
money market funds during periods when it believes interest rates will rise and
stock prices will decline and will increase its investment in bond funds when it
believes both interest rates and stock prices will decline. If the Adviser
anticipates that both stock prices and interest rates will rise, it will
increase its investment in equity funds. However, individual equity funds may
rise during times of generally declining stock prices. In addition, equity fund
prices may rise at the same time that interest rates are declining. Therefore,
the Fund may invest in a combination of equity and bond funds and may shift its
investment positions as it anticipates changes in the investment environment.
Within the framework of the foregoing guidelines, the underlying funds in
which the Fund will invest will consist of funds which seek capital growth and
appreciation by investing primarily in common stock or securities convertible
into or exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants); funds which seek a combination of capital
appreciation and current income (including income from dividends, income from
interest, growth of income or any combination thereof) by investing primarily in
common stocks, preferred stocks, bonds and other fixed income securities
(including convertible preferred stock and convertible debentures); funds which
seek high current income by investing primarily in long or short-term bonds and
other fixed income securities (such as securities issued, guaranteed or insured
by the U.S. Government, its agencies or instrumentalities, commercial paper,
preferred stock, convertible preferred stock or convertible debentures); and
funds which seek as high a level of current income as is consistent with
preservation of capital and liquidity by investing in a broad range of high
quality, short-term money market instruments which have remaining maturities not
exceeding one year (including U.S. Government securities, bank obligations,
commercial paper, corporate debt securities and repurchase agreements). Certain
additional investments which the underlying funds may make, together with the
risks associated with those investments, are described in Appendix B to this
Prospectus.
The Fund may also deposit cash in a money market deposit account,
maintained by the Fund's custodian, (i) for temporary defensive purposes
(without monetary limitation) when and to the extent that, in the judgement of
the Adviser, other investments involve unreasonable risk, or (ii) as
9
<PAGE> 14
may be considered necessary to accumulate cash in order to meet anticipated
redemptions. To the extent that such balances exceed $100,000, the deposit is
not protected by federal insurance.
The Adviser selects underlying funds in which to invest based, in part,
upon an analysis of their past performance (absolute, relative and
risk-adjusted), management style, and investment objectives and policies. The
Adviser also considers other factors in the selection of funds, including, but
not limited to, asset size, liquidity, expense ratios, quality of shareholder
service, reputation and tenure of portfolio managers, industry classifications
represented in their portfolios, and specific portfolio holdings. The underlying
funds may, but need not, have the same investment objective, policies and
limitations as the Fund. The Fund may be affected by the losses of such
underlying funds, and the level of risk arising from the investment practices of
such funds (such as repurchase agreements, quality standards, lending of
securities, or investment concentration) and has no control over the risks taken
by such funds. The Fund can also elect to redeem (subject to the 1% limitation
discussed in the section titled "Risks and Other Considerations") its investment
in an underlying fund if that action is considered necessary or appropriate.
PORTFOLIO TURNOVER.
The Funds are not restricted with regard to portfolio turnover and will
make changes in their investment portfolios from time to time as business and
economic conditions and market prices may dictate and their respective
investment policies may require. The portfolio turnover rates in 1995 and 1994,
respectively, were 121% and 138% for Maxus Income Fund, 173% and 184% for Maxus
Equity Fund and 1,377% and 469% for Maxus Laureate Fund. These rates are greater
than those of many other investment companies. A high rate of portfolio turnover
in any year will increase brokerage commissions paid and could result in high
amounts of realized investment gain subject to the payment of taxes by
shareholders. Any realized net short-term investment gain will be taxed to
shareholders as ordinary income. See "Dividends, Distributions and Taxes" below.
Because Maxus Laureate Fund intends to employ flexible defensive investment
strategies when market trends are not considered favorable, and to reallocate
fund investments across potentially numerous asset subclasses as evolving
economic and financial conditions warrant, the portfolio turnover rate of the
Fund in any given year may be higher than that of most other funds with similar
objectives. Although the Fund invests exclusively in underlying funds that do
not charge front-end or deferred sales loads, the Custodian of the Fund does
impose a small transaction charge for each purchase or sale of underlying fund
shares. The higher the portfolio turnover rate, the greater will be the
custodial transaction charges borne by the Fund.
INVESTMENT IN CLOSED-END INVESTMENT COMPANIES.
Maxus Income Fund and Maxus Equity Fund may invest in "closed-end"
investment companies (or "closed-end funds"), subject to the investment
restrictions set forth below. Typically, the common shares of closed-end funds
are offered to the public in a one-time initial public offering by a group of
underwriters who retain a spread or underwriting commission. Such securities are
then listed for trading on a national securities exchange or in the over-
the-counter markets. Because the common shares of closed-end funds cannot be
redeemed upon demand to the issuer like the shares of an open-end investment
company (such as each Fund), investors seek to buy and sell common shares of
closed-end funds in the secondary market. The common shares of many closed-end
funds, after their initial public offering, frequently trade at a price per
share which is less than the net asset value per share, the difference
representing the "market discount" of such common shares. These Funds purchase
common shares of closed-end funds which trade at a market discount and which the
Adviser believes present the opportunity for capital appreciation or increased
income due in part to such market discount.
However, there can be no assurance that the market discount on common
shares of any closed-end fund will ever decrease. In fact, it is possible that
this market discount may increase and a Fund may suffer realized or unrealized
capital losses due to further decline in the market price of the securities of
such closed-end funds, thereby adversely affecting the net asset value of that
Fund's shares. Similarly, there can be no assurance that the common shares of
closed-end funds which trade at a premium will continue to trade at a premium or
that the premium will not decrease subsequent to a purchase of such shares by
the Fund. These Funds
10
<PAGE> 15
may also invest in preferred shares of closed-end funds.
Maxus Income Fund and Maxus Equity Fund each will structure its investments
in the securities of closed-end funds to comply with applicable provisions of
the Investment Company Act of 1940 (the "1940 Act"). The presently applicable
provisions require that (i) each Fund and affiliated person of such Fund not own
together more than 3% of the total outstanding stock of any one investment
company, (ii) each Fund not offer its shares at a public offering price that
includes a sales load of more than 1 1/2% and (iii) each Fund either seek
instructions from its shareholders with regard to the voting of all proxies with
respect to its investment in the securities of closed-end funds and vote such
proxies with respect to its investment in the securities of closed-end funds and
vote such instructions, or vote the shares held by it in the same proportion as
the vote of all other holders of such securities. The Fund intends to vote the
shares of any closed-end fund held by it in the same proportion as the vote of
all other holders of such fund's securities. The effect of such "mirror" voting
will be to neutralize each Fund's influence on corporate governance matters
regarding the closed-end funds in which such Fund invests.
Maxus Income Fund and Maxus Equity Fund will not invest directly in the
securities of open-end investment companies. However, such Funds may retain the
securities of a closed-end investment company that has converted to an open-end
fund status subsequent to such Fund's investment in the securities of such
closed-end fund. Generally, shares of an open-end investment company can be
redeemed, at their net asset value, upon demand to the issuer. However, pursuant
to applicable provisions of the 1940 Act, a Fund may not redeem more than 1% of
the outstanding redeemable securities of an open-end investment company during
any period of 30 days or less. Consequently, if a Fund should own more than 1%
of the outstanding redeemable securities of an open-end investment company after
such fund's conversion from closed-end fund status, the amount in excess of 1%
may be treated as an investment in illiquid securities. Because such Fund may
not hold at any time more than 10% of the value of its net assets in illiquid
securities (e.g. securities that are not readily marketable within seven days),
such Fund may seek to divest itself, prior to any such conversion, of securities
in excess of 1% of the outstanding redeemable securities of a converting fund.
Such Fund may, however, retain such securities and any amount in excess of 1% of
the open-end fund and thereby subject to the limits on redemption would be
treated as an investment in illiquid securities subject to the aggregate limit
of 10% of such Fund's total assets.
Maxus Income Fund and Maxus Equity Fund each may invest in the securities
of closed-end funds which (i) concentrate their portfolios in issuers in
specific industries or in specific geographic areas and (ii) are non-diversified
for purposes of the 1940 Act. However, because such Funds do not intend to
concentrate their investments in any single industry and because the closed-end
funds in which each Fund will invest generally satisfy the diversification
requirements applicable to a regulated investment company under the Internal
Revenue Code, the Funds do not believe that their investments in closed-end
funds which concentrate in specific industries or geographic areas or which are
non-diversified for purposes of the 1940 Act will represent any special risks to
the shareholders of the Funds. Each Fund will treat its entire investment in the
securities of a closed-end fund that concentrates in a specific industry as an
investment in securities of an issuer in such industry.
Some of the closed-ends funds in which Maxus Income Fund and Maxus Equity
Fund invest may incur more risks than others. For example, some of these
closed-end funds may have policies that permit them to invest up to 100% of
their assets in securities of foreign issuers and to engage in foreign currency
transactions with respect to their investments; invest up to 100% of their
assets in corporate bonds which are not considered investment grade bonds by
Standard & Poor's Corporation or Moody's Investor Services, Inc., or which are
unrated; invest some portion of their net assets in illiquid securities; invest
some portion of their net assets in warrants; lend their portfolio securities;
sell securities short; borrow money in amounts up to some designated percentage
of their assets for investment purposes; write (sell) or purchase call or put
options on securities or on stock indexes; concentrate 25% or more of their
total assets in assets in one industry; enter into future contracts; and write
(sell) or purchase options on futures contracts. The risks associated with these
investment policies are described in Appendix B to this Prospectus.
Like the Funds, closed-end funds frequently pay an advisory fee for the
management of their
11
<PAGE> 16
portfolios, as well as other expenses. Therefore, investment by a Fund in such
funds often results in a "layering" of advisory fees and other expenses, thereby
increasing the overall charge to the net asset value of such Fund's shares.
LENDING OF PORTFOLIO SECURITIES.
Consistent with applicable regulatory requirements, Maxus Income Fund and
Maxus Equity Fund each may lend its portfolio securities (principally to
broker-dealers) without limit where such loans are callable at any time and are
continuously secured by collateral (cash or government securities) equal to no
less than the market value, determined daily, of the securities loaned. As an
operating policy which may be changed without shareholders vote, the Adviser
will limit such lending to not more than one-third of the value of each Fund's
total assets. The Fund lending its portfolio securities will receive amounts
equal to dividends or interest on the securities loaned. It will also earn
income for having made the loan. Any cash collateral pursuant to these loans
will be invested in money market instruments. Where voting or consent rights
with respect to loaned securities pass to the borrower, management will follow
the policy of calling the loan, in whole or in part as may be appropriate, to
permit the exercise of such voting or consent rights if the issues involved have
a material effect on the Fund's investment in the securities loaned.
As with any extensions of credit, there are risks of delay in recovery and
in some cases even loss of rights in the collateral should the borrower of the
securities fail financially. Also, any securities purchased with cash collateral
are subject to market fluctuations while the loan is outstanding.
- --------------------------------------------------------------------------------
INVESTMENT POLICIES AND RESTRICTIONS
- --------------------------------------------------------------------------------
Each Fund has adopted certain fundamental policies which may not be changed
without the approval of the holders of a majority of the Fund's outstanding
voting securities (as defined in the 1940 Act). Certain of these policies are
detailed below, while other policies are set forth in the Statement of
Additional Information.
MAXUS INCOME FUND AND MAXUS EQUITY FUND
Neither Maxus Income Fund nor Maxus
Equity Fund may:
(1) invest more than 5% of the value of its total assets in the securities
of any one issuer (except obligations issued or guaranteed by the United States
Government, its agencies and instrumentalities);
(2) acquire more than 10% of the outstanding voting securities of any one
issuer;
(3) invest more than 25% of the value of such Fund's total assets in
securities of companies in a particular industry (except obligations issued or
guaranteed by the United States Government, its agencies and instrumentalities);
(4) invest in securities of other registered investment companies, except
by purchase in the open market involving only customary brokerage commissions,
or except as part of a merger, consolidation, reorganization or acquisition; or
(5) invest in securities of any registered closed-end investment company,
if immediately after such purchase or acquisition such Fund would own more than
3% of the total outstanding voting stock of such closed-end company.
MAXUS LAUREATE FUND
Maxus Laureate Fund may not:
(1) invest in securities other than those issued by open-end registered
investment companies, including money market funds (this restriction does not
preclude the use of the Custodian's money market deposit account for idle cash
balances of the Fund);
(2) invest more than 25% of its total assets in the securities of
underlying funds which concentrate (i.e., invest more than 25% of their assets)
in the same industry, provided that (i) through its investment in underlying
funds, the Fund indirectly may invest more than 25% of its assets in one
industry, and (ii) the Fund will concentrate more than 25% of its assets in the
mutual fund industry; or
12
<PAGE> 17
(3) invest more than 25% of its assets in the shares of any one open-end
registered investment company.
Maxus Laureate Fund must also structure its investments to comply with
certain provisions of federal and state securities laws. Under these provisions,
among other things, this Fund may not:
(1) invest in any registered investment company if a purchase of its shares
would result in the Fund and its affiliates owning more than 3% of the total
outstanding stock of such investment company; or
(2) purchase the securities of any issuer if, as a result, more than 10% of
the value of the Fund's net assets would be invested in securities that are not
readily marketable; for this purpose, securities which are not readily
marketable include shares of an open-end registered investment company owned by
the Fund in an amount exceeding 1% of the issuer's total outstanding securities
(see "Risks and Other Considerations").
Changes in values of particular Fund assets or the assets of the Fund as a
whole will not cause a violation of the investment restrictions so long as
percentage restrictions are observed by the Fund at the time it purchases any
security. Other investment policies are discussed in this Fund's Statement of
Additional Information under the heading "Investment Policies and Restrictions."
- --------------------------------------------------------------------------------
RISKS AND OTHER CONSIDERATIONS
- --------------------------------------------------------------------------------
MAXUS INCOME FUND AND MAXUS EQUITY FUND
Maxus Income Fund and Maxus Equity Fund each may invest in equity and debt
securities involving a greater risk of decline in market value than that of
other securities. Investments in equity securities will include common stock,
preferred stock and convertible preferred stock. While these securities will
generally be chosen for their ability to pay dividends, there can be no
assurance that the dividends will be continued. Also, individual market values
of these securities will fluctuate based on individual corporate developments as
well as general economic conditions.
Investments by these Funds in corporate debt securities will be principally
in those rated BBB or better by Standard & Poor's Corporation rating service but
may be in lower rated and unrated securities. Securities rated BBB or lower by
Standard & Poor's are usually considered lower-rated securities and have
speculative characteristics. It should be noted that (a) the market prices of
lower-rated securities fluctuate more than prices of higher-rated securities;
(b) the prices of lower-rated securities may decline significantly in periods of
general economic difficulty or rising interest rates; (c) there is a greater
possibility of a financial reversal affecting the ability of issuers of
lower-rated securities to make payments of income and principal on time; (d)
lower-rated or unrated securities may include securities which are in default or
which are issued by companies in bankruptcy; and (e) the secondary trading
market for lower-rated or unrated securities may be less liquid than the market
for higher rated securities, thus possibly limiting the ability of the Fund to
dispose of such securities when the Adviser deems it desirable to do so. Unrated
securities are not necessarily of lower quality than rated securities, but they
may not be attractive to as many buyers.
Each Fund also may invest in closed-end investment companies. See
"Investment Objectives and Management Techniques-Investment in Closed-End
Investment Companies" for a discussion of the risks of such investments.
Each Fund may also invest a small portion of its assets (up to five
percent) in put and call options which trade on securities exchanges and for
which it pays a premium. The Fund may suffer a total loss of its investment if
the underlying security decreases in value in the case of a call option or
increases in value in the case of a put option.
The operating expenses of these Funds are higher than those of many other
funds.
MAXUS LAUREATE FUND
Any investment in a mutual fund involves risk, and, although Maxus Laureate
Fund invests in a number of underlying funds, this practice does not eliminate
investment risk. Some of the underlying funds in which the Fund invests may
incur more risks than others. For example, some of the underly-
13
<PAGE> 18
ing funds may have policies that permit them to invest up to 100% of their
assets in securities of foreign issuers and to engage in foreign currency
transactions with respect to their investments; invest up to 100% of their
assets in corporate bonds which are not considered investment grade bonds by
Standard & Poor's Corporation or Moody's Investor Services, Inc., or which are
unrated; invest some portion of their net assets in illiquid securities; invest
some portion of their net assets in warrants; lend their portfolio securities;
sell securities short; borrow money in amounts up to some designated percentage
of their assets for investment purposes; write (sell) or purchase call or put
options on securities or on stock indexes; concentrate 25% or more of their
total assets in assets in one industry; enter into future contracts; and write
(sell) or purchase options on futures contracts. The risks associated with these
investment policies are described in Appendix B to this Prospectus.
Through its investment in underlying funds, Maxus Laureate Fund indirectly
may invest more than 25% of its assets in one industry. Such indirect
concentration of the Fund's assets may subject the shares of the Fund to greater
fluctuation in value than would be the case in the absence of such
concentration.
Maxus Laureate Fund, together with any "affiliated persons" (as defined in
the 1940 Act) may purchase only up to 3% of the total outstanding securities of
any underlying fund. For this purpose, shares of underlying funds held by
private discretionary investment advisory accounts managed by the Adviser will
be aggregated with those held by the Fund. Accordingly, when affiliated persons
and other accounts managed by the Adviser hold shares of any of the underlying
funds, the Fund's ability to invest fully in shares of those funds is
restricted, and the Adviser must then in some instances, select alternative
investments that would not have been in first preference.
Under certain circumstances, an underlying fund may determine to make a
payment for redemption of its shares to Manus Laureate Fund wholly or partly by
a distribution in kind of securities from its portfolio, in lieu of cash, in
conformity with the rules of the SEC. In such cases, the Fund may hold
securities distributed by an underlying fund until the Adviser determines that
it is appropriate to dispose of such securities. Such disposition may entail
additional costs to the Fund.
Investment decisions by the investment advisers of the underlying funds are
made independently of Maxus Laureate Fund and the Adviser. Therefore, the
investment advisor of an underlying fund may be purchasing securities of the
same issuer whose securities are being sold by the investment adviser of another
underlying fund. The result of this would be an indirected expense to the Fund
without accomplishing any investment purpose.
An investor in Maxus Laureate Fund will bear not only his proportionate
share of the expenses of the Fund but also indirectly similar expenses of the
underlying funds. These expenses consist of advisory fees, expenses related to
the distribution of shares, brokerage commissions, accounting, pricing and
custody expenses, printing, legal and audit expenses and other miscellaneous
expenses.
The operating expenses of this Fund are higher than those of many other
funds.
In the event Maxus Laureate Fund holds more than one percent (1%) of an
underlying fund's shares, the 1940 Act provides that the underlying fund will be
obligated to redeem only one percent (1%) of the underlying fund's outstanding
shares during any period of less than 30 days. To the extent that, due to this
restriction, the Fund is unable at its discretion to dispose of shares of an
underlying fund, the Fund would not be able to protect itself against a decline
in value of such shares during the period such restrictions remains in effect.
Any shares of an underlying fund held by the Fund in excess of one percent (1%)
of the underlying fund's outstanding shares will be considered not readily
marketable securities that, together with other such securities, may not exceed
10% of the Fund's net assets.
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
From time to time, the Funds may advertise performance data represented by
a cumulative total return or an average annual total return. Total returns are
based on the overall or percentage change in value of a hypothetical investment
in a Fund and assume all of the Fund's dividends and
14
<PAGE> 19
capital gain distributions are reinvested. A cumulative total return reflects
the Fund's performance over a stated period of time. An average annual total
return reflects the hypothetical annually compounded return that would have
produced the same cumulative total return if the Fund's performance had been
constant over the entire period. Because average annual returns tends to smooth
out variations in the Fund's returns, it should be recognized that they are not
the same as actual year-by-year results. The total returns for each Fund for
periods ended December 31, 1995 were as follows:
MAXUS INCOME FUND
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
ONE THREE FIVE LIFE OF ONE THREE FIVE LIFE OF
YEAR YEARS YEARS FUND* YEAR YEARS YEARS FUND*
- ----- ----- ----- ------- ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
16.15% 6.46 % 9.20 % 7.97% 16.15% 20.66% 55.26% 128.10 %
</TABLE>
* From commencement of operations, March 31, 1985.
MAXUS EQUITY FUND
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
ONE THREE FIVE LIFE OF ONE THREE FIVE LIFE OF
YEAR YEARS YEARS FUND* YEAR YEARS YEARS FUND*
- ----- ----- ----- ------- ----- ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
22.43% 15.33% 18.90% 12.97% 22.43% 53.38% 137.68% 114.34 %
</TABLE>
* From commencement of operations, October 1, 1989.
MAXUS LAUREATE FUND
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
LIFE LIFE
ONE OF ONE OF
YEAR FUND* YEAR FUND*
- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
14.41% 7.08 % 14.41% 20.02%
</TABLE>
* From commencement of operations, May 1, 1993.
Performance may be compared to well-known indices such as the Dow Jones
Industrial Average or alternative investments such as Treasury Bills. Also, the
Funds may include published editorial comments compiled by independent
organizations such as Lipper Analytical Services or Morningstar, Inc.
All performance information is historical in nature and is not intended to
represent or guarantee future results. The value of Fund shares when redeemed
may be more or less than their original cost.
Further information about the performance of each of the Funds is contained
in the Fund's Annual Report to Shareholders which may be obtained from the Fund
without charge.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
The shares of each Fund are sold on a continuing basis without a sales
charge. A minimum initial investment of $1,000 is required to open an account
with subsequent minimum investments of $100. Investment minimums may be waived
at the discretion of each Fund.
SHAREHOLDERS ACCOUNTS.
When a shareholder invests in a Fund, Maxus Information Systems Inc., the
Transfer Agent for each Fund, will establish an open account to which all full
and fractional shares (to three decimal places) will be credited, together with
any dividends and capital gains distributions, which are paid in additional
shares unless the shareholder otherwise instructs the Transfer Agent. Stock
certificates will be issued for full shares only when requested in writing. Each
shareholder is notified of the status of his account following each purchase or
sale transaction.
INITIAL PURCHASE.
The initial purchase may be made by check or by wire in the following
manner:
15
<PAGE> 20
BY CHECK. The Account Application which accompanies this Prospectus should be
completed, signed, and, along with a check for the initial investment payable to
Maxus Income Fund, Maxus Equity Fund or Maxus Laureate Fund, mailed to: Maxus
Information Systems Inc., 28601 Chagrin Boulevard, Cleveland, Ohio 44122.
BY WIRE. In order to expedite the investment of funds, investors may advise
their bank or broker to transmit funds via Federal Reserve Wire System to: Star
Bank, N.A. Cinti/Trust, ABA #0420-0001-3, F/F/C Account No. 19-6201 Maxus Mutual
Funds DDA 483617213 (Star Bank Trust). Also provide the shareholder's name and
account number. In order to obtain this needed account number and receive
additional instructions, the investor may contact, prior to wiring funds, Maxus
Information Systems Inc., at (216) 292-3434. The investor's bank may charge a
fee for the wire transfer of funds.
SUBSEQUENT PURCHASES.
Investors may make additional purchases (minimum $100) in the following manner:
BY CHECK. Checks made payable to Maxus Income Fund, Maxus Equity Fund or Maxus
Laureate Fund should be sent, along with the stub from a previous purchase or
sale confirmation, to Maxus Information Systems Inc., 28601 Chagrin Boulevard,
Cleveland, OH 44122.
BY WIRE. Funds may be wired by following the previously discussed wire
instructions for an initial purchase.
BY TELEPHONE. Investors may purchase shares up to an amount equal to 3 times the
market value of shares held in the shareholder's account in a Fund on the
preceding day for which payment has been received, by telephoning Maxus
Information Systems Inc., at (216) 292-3434 and identifying their account by
number. Shareholders wishing to avail themselves of this privilege must complete
a Telephone Purchase Authorization Form which is available from the Fund. A
confirmation will be mailed and payment must be received within 3 business days
of date of purchase. If payment is not received within 3 business days the Fund
reserves the right to redeem the shares purchased by telephone, and if such
redemption results in a loss to the Fund, redeem sufficient additional shares
from the shareholder's account to reimburse the Fund for the loss. Payment may
be made by check or by wire. The Adviser has agreed to hold the Fund harmless
from net losses resulting from this service to the extent, if any, not
reimbursed from the shareholder's account. This telephone purchase option may be
discontinued without notice.
PRICE OF SHARES.
The price paid for shares is the net asset value per share of each Fund
next determined after receipt by the Transfer Agent of properly identified
purchase funds, except that the price for shares purchased by telephone is the
net asset value per share next determined after receipt of telephone
instructions. Net asset value per share is computed for each Fund as of the
close of business (currently 4:00 P.M., New York time) each day the New York
Stock Exchange is open for trading and on each other day during which there is a
sufficient degree of trading in such Fund's investments to affect materially net
asset value of its redeemable securities. Net asset value is determined by
totaling the value of all portfolio securities, cash, other assets held by the
Fund, and interest and dividends accrued and subtracting from that amount all
liabilities, including accrued expenses. The total net asset value is divided by
the total number of shares outstanding to determine the net asset value of each
share.
For purposes of computing the net asset value per share of Maxus Income
Fund and Maxus Equity Fund, securities listed on a national securities exchange
or on the NASDAQ National Market System will be valued on the basis of the last
sale of the date on which the valuation is made or, in the absence of sales, at
the closing bid price. Over-the-counter securities will be valued on the basis
of the bid price at the close of business on each day or, if market quotations
are not readily available, at fair value as determined in good faith by each
Fund's Board of Trustees. Unless the particular circumstances (such as an
impairment of the credit-worthiness of the issuer) dictate otherwise, the fair
value of short-term securities with maturities of 60 days or less shall be their
amortized cost. All other securities and other assets of each such Fund will be
valued at their fair value as determined in good faith by that Fund's Board of
Trustees.
The assets of Maxus Laureate Fund (other than cash and cash equivalents)
consist of the underlying funds that are valued at their respective net asset
values under the 1940 Act. An underlying fund values securities in its portfolio
for which
16
<PAGE> 21
market quotations are readily available at their current market value (generally
the last reported sales price) and all other securities and assets at fair value
pursuant to methods established in good faith by the board of directors of the
underlying fund. Money market funds with portfolio securities that mature in one
year or less may use the amortized cost or penny-rounding methods to value their
securities.
OTHER INFORMATION CONCERNING PURCHASE OF SHARES.
Each Fund reserves the right to reject any order, to cancel any order due
to non-payment and to waive or lower the investment minimums with respect to any
person or class of persons. If an order is cancelled because of non-payment or
because your check does not clear, you will be responsible for any loss that the
Fund incurs. If you are already a shareholder, the Fund can redeem shares from
your account to reimburse it for any loss. The Adviser has agreed to hold each
Fund harmless from net losses to that Fund resulting from the failure of a check
to clear to the extent, if any, not recovered from the investor. For purchases
of $50,000 or more, each Fund may, in its discretion, require payment by wire or
cashier's or certified check.
Shares of each Fund are offered exclusively, on a best efforts basis, by
the Funds' Distributor, Maxus Securities Corp ("MSC"), an NASD broker-dealer.
Purchases of the Fund's shares through MSC will be transmitted promptly to the
Transfer Agent so that the investor's purchase order receives the net asset
value next determined following receipt of the order by MSC. The address of MSC
is 28601 Chagrin Boulevard, Cleveland, Ohio 44122. MSC, which is controlled by
Richard A. Barone, Chairman of each Fund, receives for its services as
Distributor an annual distribution fee of .25% of average net assets. In
addition, each Fund has authorized MSC to make payments for activities and
expenses permitted by that Fund's Distribution Plan, and each Fund reimburses
MSC for such expenditures. See "Distribution Plans." Certain employees of MSC
may receive compensation under the Distribution Plans.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
All shares of each Fund offered for redemption will be redeemed at the net
asset value per share of that Fund next determined after receipt of the
redemption request, if in good order, by the Transfer Agent. See "Price of
Shares." Because the net asset value of each Fund's shares will fluctuate as a
result of changes in the market value of securities owned, the amount a
stockholder receives upon redemption may be more or less than the amount paid
for the shares. Redemption proceeds will be mailed to the shareholder's
registered address of record or, if $5,000 or more, may be transmitted by wire,
upon request, to the shareholder's pre-designated account at a domestic bank.
The shareholder will be charged for the cost of such wire. If shares have been
purchased by check and are being redeemed, redemption proceeds will be paid only
after the check used to make the purchase has cleared (usually within 15 days
after payment by check). This delay can be avoided if, at the time of purchase,
the shareholder provides payment by certified or cashier's check or by wire
transfer.
REDEMPTION BY MAIL.
Shares may be redeemed by mail by writing directly to the Funds' Transfer
Agent, Maxus Information Systems Inc., 28601 Chagrin Boulevard, Cleveland, Ohio
44122. The redemption request must be signed exactly as the shareholder's name
appears on the registration form, with the signature guaranteed, and must
include the account number. If shares are owned by more than one person, the
redemption request must be signed by all owners exactly as the names appear on
the registration.
If a shareholder is in possession of the stock certificate, these
certificates must accompany the redemption request and must be endorsed as
registered with a signature guarantee. Additional documents may be required for
registered certificates owned by corporations, executors, administrators,
trustees or guardians. A request for redemption will not be processed until all
of the necessary documents have been received in proper form by the Transfer
Agent. A shareholder in doubt as to what documents are required should contact
Maxus Information Systems Inc. at (216) 292-3434.
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<PAGE> 22
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association. A notary public is not an
acceptable guarantor. A Fund may in its discretion waive the signature guarantee
in certain instances.
REDEMPTION BY TELEPHONE.
Shares may be redeemed by telephone by
calling Maxus Information Systems Inc. at (216) 292-3434 between 9:00 A.M. and
4:00 P.M. eastern time on any day the New York Stock Exchange is open for
trading. An election to redeem by telephone must be made on the initial
application form or on other forms prescribed by the Fund which may be obtained
by calling the Funds at (216) 292-3434. This form contains a space for the
shareholder to supply his own four digit identification number which must be
given upon request for redemption. A Fund will not be liable for following
instructions communicated by telephone that the Fund reasonably believes to be
genuine. If a Fund fails to employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, the Fund may be liable for
any losses due to unauthorized or fraudulent instructions. Any changes or
exceptions to the original election must be made in writing with signature
guaranteed, and will be effective upon receipt by the Transfer Agent. The
Transfer Agent and each Fund reserve the right to refuse any telephone
instructions and may discontinue the aforementioned redemption option without
notice. The minimum telephone redemption is $1,000.
OTHER INFORMATION CONCERNING REDEMPTION.
Each Fund reserves the right to take up to seven days to make payment if,
in the judgment of the Fund's Investment Adviser, such Fund could be affected
adversely by immediate payment. In addition, the right of redemption for a Fund
may be suspended or the date of payment postponed (a) for any period during
which the NYSE is closed (other than for customary week-end and holiday
closings), (b) when trading in the markets that the Fund normally utilizes is
restricted, or when an emergency, as defined by the rules and regulations of the
SEC, exists, making disposal of that Fund's investments or determination of its
net asset value not reasonably practicable, or (c) for any other periods as the
SEC by order may permit for protection of that Fund's shareholders.
Due to the high cost of maintaining accounts, each Fund has the right to
redeem, upon not less than 30 days written notice, all of the shares of any
shareholder if, through redemptions, the shareholder's account has a net asset
value of less than $1,000. A shareholder will be given at least 30 days written
notice prior to any involuntary redemption and during such period will be
allowed to purchase additional shares to bring his account up to the applicable
minimum before the redemption is processed.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN
- --------------------------------------------------------------------------------
Shareholders who own shares of a Fund valued at $15,000 or more may elect
to receive a monthly or quarterly check in a stated amount (minimum check amount
is $100 per month or quarter). Shares will be redeemed at net asset value as may
be necessary to meet the withdrawal payments. If withdrawal payments exceed
reinvested dividends and distributions, the investor's shares will be reduced
and eventually depleted. A withdrawal plan may be terminated at any time by the
shareholder or the applicable Fund. Costs associated with a withdrawal plan are
borne by the applicable Fund. Additional information regarding systematic
withdrawal plans may be obtained by calling Maxus Information Systems Inc. at
(216) 292-3434.
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT
- --------------------------------------------------------------------------------
TRUSTEES AND OFFICERS.
The business and affairs of each Fund are managed under the direction of
its Trustees as required by Ohio law. The day-to-day operations of each Fund are
conducted through or under the direction of its officers. By virtue of the
responsibili-
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<PAGE> 23
ties assumed by MAM as investment adviser (see below), the Funds have no
executive employees other than their officers, each of whom is employed by MAM
or its affiliates and none of whom devotes full time to the affairs of any Fund.
No officer, director or employee of MAM of any of its affiliates receives any
compensation from any Fund for serving as a Trustee or officer of such Fund.
Each Fund pays each Trustee who is not an officer, director or employee of MAM
or any of its affiliates a fee of $100 per meeting attended and reimburses each
such Trustee for travel and out-of-pocket expenses.
THE INVESTMENT ADVISER.
Each Fund has retained as its investment adviser Maxus Asset Management Inc
("MAM" or the "Adviser"), 28601 Chagrin Boulevard, Cleveland, Ohio 44122, an
investment management organization founded in 1976. The Adviser is actively
engaged in providing discretionary investment management services to
institutional and individual clients and is registered under the Investment
Advisers Act of 1940. The Adviser has not been sponsored, recommended or
approved, nor have its abilities or qualifications been passed upon, by the
Securities and Exchange Commission or any other government agency.
MAM is a wholly owned subsidiary of Resource Management Inc ("RMI"), an
Ohio corporation with interests primarily in the financial services industry.
RMI also owns all of the shares of Maxus Securities Corp ("MSC"), the NASD
broker/dealer through which shares of each Fund are being offered and with whom
each Fund has entered into a Distribution Agreement reimbursing MSC for certain
expenses and activities permitted under each Fund's Distribution Plan. See
"Distribution Plans." Mr. Richard A. Barone is the president and majority
shareholder of RMI and therefore is deemed to be in control of MAM and MSC.
Subject to the supervision and direction of each Fund's Trustees, MAM, as
investment adviser, manages each Fund's portfolio in accordance with the stated
policies of that Fund. MAM makes investment decisions for each Fund and places
the purchase and sale orders for portfolio transactions. In addition, MAM or its
affiliates furnishes office facilities and clerical and administrative services,
pays the salaries of all officers and employees who are employed by both it and
the Funds and, subject to the direction of each Fund's Board of Trustees, is
responsible for the overall management of the business affairs of each Fund,
including the provision of personnel for recordkeeping, the preparation of
governmental reports and responding to shareholder communications.
Richard A. Barone is the person primarily responsible for the management of
the portfolio of each of the Funds. Mr. Barone has been President of MAM since
1976 and has been Chairman of each of the Funds since their inception.
ADVISORY FEE.
The Adviser receives from each Fund as compensation for its services to
each Fund an annual fee of 1% on the first $150,000,000 of each Fund's net
assets, and 0.75% of each Fund's net assets in excess of $150,000,000. This fee
is higher than that paid by most other investment companies. The fee is paid
monthly and calculated on the basis of that month's net assets. For the year
ended December 31, 1995, each Fund paid the Adviser a fee equal to 1.00% of that
Fund's average net assets.
EXPENSES BORNE BY EACH FUND.
Each Fund pays all expenses not assumed by the Adviser, including brokerage
fees and commissions, fees of Trustees not affiliated with MAM, expenses of
registration of the Fund and of the shares of the Fund with the Securities and
Exchange Commission and the various states, charges of the custodian, dividend
and transfer agent, outside auditing and legal expenses, liability insurance
premiums on property or personnel (including officers and trustees), maintenance
of trust existence such as the filing of reports required by state law, any
taxes payable by the Fund, interest payments relating to Fund borrowings, costs
of preparing, printing and mailing registration statements, prospectuses,
periodic reports and other documents furnished to shareholders and regulatory
authorities, fees and expenses of legal counsel, and costs of printing share
certificates, portfolio pricing services and shareholder meetings,
reimbursements to RMI for organizational expenses, and costs pursuant to each
Fund's plan of distribution described below.
An investor in Maxus Laureate Fund should recognize that he may invest
directly in mutual funds and that, by investing in mutual funds indirectly
through the Fund, he will bear not only his proportionate share of the expenses
of the Fund but also indirectly similar expenses of the underlying
19
<PAGE> 24
funds. In addition, a Maxus Laureate Fund shareholder will bear his
proportionate share of expenses related to the distribution of the Fund's shares
(see "Distribution Plan") and also may indirectly bear expenses paid by an
underlying fund related to the distribution of its shares. An investor should
also recognize that, as a result of Maxus Laureate Fund's policy of investing in
other mutual funds, he may receive taxable capital gains distributions to a
greater extent than would be the case if he invested directly in the underlying
funds. See "Dividends, Distributions and Taxes."
RMI, the parent company of the Adviser, paid the organizational expenses of
each Fund incurred prior to the initial offering of that Fund's shares,
including expenses involved in preparing, printing and mailing registration
statements and prospectuses to potential investors.
Each Fund agreed to reimburse RMI for such expenses which aggregated
$46,820 for Maxus Income Fund, $29,575 for Maxus Equity Fund and $27,193 for
Maxus Laureate Fund. Such reimbursed expenses were deferred and amortized by
each Fund on a straightline basis over a period of five years from the date of
commencement of operations.
DISTRIBUTION PLANS.
Rule 12b-1 (the "Rule") under the Act regulates the circumstances under
which an investment company may, directly or indirectly, bear the expenses of
distributing its shares. The Rule defines such distribution expenses to include
the cost of "any activity which is primarily intended to result in the sale of
fund shares." The Rule provides, among other things, that an investment company
may bear such expenses only pursuant to a Plan adopted in accordance with the
Rule.
Each Fund has adopted a Plan. The Plan of Maxus Income Fund permits, among
other things, payment for distribution in the form of (a) compensation to
securities brokers and dealers for selling shares; (b) compensation to
securities brokers and dealers, accountants, attorneys, investment advisors,
pension actuaries and service organizations for services rendered by them to
their clients in reviewing, explaining or interpreting the Fund's prospectus and
other selling materials; (c) advertising costs; (d) costs of telephone, mail, or
other direct solicitation of prospective investors and of responding to
inquiries, as well as the compensation of persons who do the soliciting or
respond to inquiries; (e) preparing and printing prospectuses and other selling
materials and the cost of distributing them (including postage); (f)
reimbursement of travel, entertainment and like expenditures made by the
Trustees in promoting the fund and its investment objective and policies; (g)
fee of public relations consultants and (h) awards.
The Plans of Maxus Equity Fund and Maxus Laureate Fund permit, among other
things, payment for distribution in the form of (a) compensation to securities
brokers and dealers for selling shares; (b) compensation to securities brokers
and dealers, accountants, attorneys, investment advisors, pension actuaries and
service organizations for services rendered by them to their clients in
reviewing, explaining or interpreting the Fund's prospectus and other selling
materials; (c) advertising costs; (d) cost of telephone, mail or other direct
solicitation of prospective investors and of responding to inquiries, as well as
the compensation of persons who do the soliciting or respond to the inquiries;
(e) printing prospectuses and other selling materials and the cost of
distributing them (including postage) to other than current shareholders; (f)
reimbursement of travel, entertainment and like expenditures made by the
Trustees in promoting the Fund and its investment objective and policies; (g)
fee of public relations consultants, and (h) awards.
Each Fund may expend as much as, but not more than, .50% of its average net
assets annually pursuant to its Plan. This amount is higher than that paid under
most distribution plans. Included in such amount are fees paid to certain
persons for advising their clients regarding the purchase, sale or retention of
Fund shares, sometimes referred to as "service fees," which can range up to .25%
(on an annual basis) of the average total net asset value of Fund shares owned
by the clients of such persons. Expenses exceeding such limits in any fiscal
year may not be carried forward to the next year. For the year ended December
31, 1995, the total amount spent pursuant to each Fund's Plan constituted .50%
of average net assets.
The Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities such as shares of the Funds.
Although the scope of this prohibition under the Glass-Steagall Act has not been
fully defined, in the
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<PAGE> 25
Distributor's opinion it should not prohibit banks from being paid for
shareholder servicing. If, because of changes in law or regulation, or because
of new interpretations of existing law, a bank or one of the Funds were
prevented from entering into or continuing these arrangements, it is expected
that the board of such Fund would make other arrangements for these services and
that shareholders would not suffer adverse financial consequences.
A report of the amounts expended under the Plan of each Fund and the
purpose of the expenditures must be made to and reviewed by the Board of
Trustees of each Fund at least quarterly. In addition, each Plan provides that
it may not be amended to increase materially the costs which the Fund may bear
for distribution pursuant to that Plan without shareholder approval and that
other material amendments of that Plan must be approved by the Board of
Trustees, and by the Trustees who are not "interested persons" of such Fund (as
defined in the 1940 Act) and who have not direct or indirect financial interest
in the operation of that Plan or in any agreements related to that plan, by vote
cast in person at a meeting called for the purpose of voting on that Plan. Each
Plan is terminable at any time by vote of a majority of the Trustees who are not
"interested persons" and who have no direct or indirect financial interest in
the operation of the Plan or in any related service agreement or by vote of the
majority of that Fund's shares. Any service agreement related to the Plan of any
Fund terminates upon assignment and is terminable at any time, without penalty,
upon not more than 60 days' written notice to any other party to the agreement,
by a vote of a majority of the Trustees of such Fund who are not "interested"
persons and who have no direct or indirect financial interest in the operation
of the Plan or in any of the related service agreements or by vote of a majority
of such Fund's shares.
No Fund is charged for interest, carrying or any other financing charges on
any unreimbursed distribution or other expense incurred in a prior plan year,
nor is any Fund under a legal obligation to pay all or part of any amount
carried over.
Each Fund's Distribution Agreement with MSC (i) provides for the payment by
such Fund to MSC of a distribution fee (the "Distribution Fee") of .25% of
average net assets and (ii) authorizes MSC to make payments for activities and
expenses permitted by the Plan of such Fund, including the payment of service
fees (subject to the .25% limit on service fees described above) and provides
that such Fund shall reimburse MSC for such expenditures, in addition to payment
of the Distribution Fee. The Distribution Fee is payable without regard to the
amount of expenses incurred by MSC. MSC is not required to bear any expenses in
connection with the offering of Fund shares. Certain employees of Resource
Management Inc., MSC and the Adviser may receive compensation under each Fund's
Plan.
EXECUTION OF PORTFOLIO TRANSACTIONS.
Maxus Income Fund and Maxus Equity Fund. Orders for transactions in
portfolio securities for Maxus Income Fund and Maxus Equity Fund are placed by
the Adviser with securities broker-dealers with the objective of obtaining the
best available price, investment services and execution. Cost of execution
(commissions) is an important consideration but may not be the overriding
determinant. Based upon this consideration the Adviser makes substantial use of
the services of MSC, an affiliate of each Fund and of the Adviser, but is not
required to do so.
Maxus Laureate Fund. Orders for portfolio transactions of Maxus Laureate
Fund generally are placed through MSC, which charges the Fund a fee for each
such purchase or sale transaction. In connection therewith, MSC receives orders
from the Adviser, places them with the underlying fund's distributor, transfer
agent or other person as appropriate, confirms the trades, prices and numbers of
shares purchased or sold, assures prompt payment by or to the Fund and proper
completion of the order.
MSC also may receive distribution payments from the underlying funds or
their underwriter in accordance with the distribution plans of those funds. If
such distribution payments are received by MSC (or any affiliated person with
MSC), MSC immediately will remit all of such monies to the Fund.
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DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
Each Fund will declare and pay, at least annually, dividends to
shareholders of substantially all of its net investment income, if any, earned
during the year from investments, and will distribute net realized capital
gains, if any, once each year. All dividends and distributions will be
reinvested automatically at net asset value in additional shares of a Fund
unless the shareholder has notified such Fund in writing of his election to
receive distributions in cash. The Board of Trustees of Maxus Income Fund has
adopted a policy of making distributions of net income on a monthly basis, but
that policy is subject to change at any time.
Each Fund intends to qualify continually as a regulated investment company
under Subchapter M of the Internal Revenue Code (the "Code"). Such qualification
removes from the Fund any liability for federal income taxes upon the portion of
its income distributed to shareholders and makes federal income tax upon such
distributed income generated by such Fund's investments the sole responsibility
of the shareholders. Continued qualification requires each Fund to distribute to
its shareholders each year substantially all of its income and capital gains. In
addition, amounts not distributed on a timely basis in accordance with a
calendar year distribution requirement are subject to a nondeductible four
percent (4%) excise tax. To prevent imposition of the excise tax each Fund must
distribute for each calendar year an amount equal to the sum of (1) at least 98%
of its calendar year net ordinary income, (2) at least 98% of the excess of its
capital gains over capital losses (adjusted for certain ordinary losses)
realized during the one-year period ending December 31 of such year, and (3)
100% of any undistributed net ordinary income and net capital gains for previous
years. A distribution will be treated as paid on December 31 of the calendar
year if it is declared by the Fund in December of that year with a record date
in December and paid by the Fund during January of the following calendar year.
Such distributions will be taxable to shareholders in the calendar year in which
the distributions are declared, rather than the calendar year in which the
distributions are received. Each Fund will notify shareholders of the tax status
of dividends and distributions.
Any dividend or distribution paid by a Fund has the effect of reducing the
net asset value per share on the ex-dividend date by the amount of the dividend
or distribution. Therefore, a dividend or distribution paid shortly after a
purchase of shares by an investor would represent, in substance, a return of
capital to the shareholder, even though subject to income taxes.
Each Fund may also, from time to time, pay dividends in excess of net
income and net realized capital gains. Any such excess dividends would
constitute a non-taxable return of capital to the shareholder.
Depending on the residence of the shareholder for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes. Shareholders should consult their own tax advisers as to the
tax consequences of ownership of shares of a Fund in their particular
circumstances.
In accordance with the Code, each Fund may be required to withhold a
portion of dividends or redemptions or capital gains paid to a shareholder and
remit such amount to the Internal Revenue Service if the shareholder fails to
furnish the Fund with a correct taxpayer identification number, if the
shareholder fails to supply the Fund with a tax identification number
altogether, if the investor fails to make a required certification that his
taxpayer identification number is correct and that he is not subject to backup
withholding, or if the Internal Revenue Service notifies the Fund to withhold a
portion of such distributions from a shareholder's account.
SPECIAL CONSIDERATIONS FOR MAXUS LAUREATE FUND.
Income received by Maxus Laureate Fund from a mutual fund in that Fund's
portfolio (including dividends and distributions of short-term capital gains),
as well as interest received on cash held in the Custodian's money market
deposit account and net short-term capital gains received by the Fund on the
sale of mutual fund shares, will be distributed by the Fund (net of expenses
incurred by the Fund) and will be taxable to shareholders as ordinary income.
Because the Fund is actively managed and can realize taxable net short-term
capital gains by selling shares of an underlying fund with unrealized portfolio
appreciation, investing in the Fund rather than directly in the underlying funds
may result in increased tax liability to the shareholder, since the
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<PAGE> 27
Fund must distribute its gain in accordance with the rules of the Code.
Distributions of net capital gains received by Maxus Laureate Fund from
underlying mutual funds, as well as net long-term capital gains realized by the
Fund from the purchase and sale of underlying mutual fund shares held by the
Fund for more than one year, will be distributed by the Fund and will be taxable
to shareholders as long-term capital gains (even if the shareholder has held the
shares for less than one year). However, if a shareholder who has received a
capital gains distribution suffers a loss on the sale of his shares not more
than six months after purchase, the loss will be treated as a long-term capital
loss to the extent of the capital gains distribution received.
For purposes of determining the character of income received by Maxus
Laureate Fund when an underlying fund distributes net capital gains to the Fund,
the Fund will treat the distribution as a long-term capital gain, even if it has
held shares of the mutual fund for less than one year. However, any loss
incurred by the Fund on the sale of that underlying fund's shares held for six
months or less will be treated as a long-term capital loss only to the extent of
the gain distribution. The tax treatment of distributions from the Fund is the
same whether the distributions are received in additional shares or in cash.
Shareholders receiving distributions in the form of additional shares will have
a cost basis for federal income tax purposes in each share received equal to the
net asset value of a share of the Fund on the reinvestment date.
Maxus Laureate Fund may invest in underlying funds with capital loss
carry-forwards. If such an underlying fund realizes capital gains, it will be
able to offset the gains to the extent of its loss carrying forwards in
determining the amount of capital gains which must be distributed to its
shareholders.
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GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Funds are separate, diversified, open-end management investment
companies, organized as Trusts under the laws of the State of Ohio by
Declarations of Trust dated October 31, 1984 (Maxus Income Fund), July 12, 1989
(Maxus Equity Fund) and February 10, 1993 (Maxus Laureate Fund). The Declaration
of Trust of each Fund provides for an unlimited number of authorized shares of
beneficial interest in such Fund, par value $.10 per share. All shares are of
the same class and are freely transferable. Each share has equal dividend rights
and is entitled to one vote at all shareholder meetings. Shares of each Fund
have non-cumulative voting rights, so that the holders of more than 50% of the
shares voting for the election of Trustees can, if they choose to do so, elect
all the Trustees of such Fund, in which event the holders of the remaining
shares will be unable to elect any person as a Trustee. Whenever the approval of
a majority of the outstanding shares of a Fund is required in connection with
shareholder approval of an investment advisory contract, changes in the
investment objective and policies or the investment restrictions, or approval of
a distribution expense plan, a "majority" shall mean the vote of (i) 67% or more
of the shares of such Fund present at a meeting, if the holders of more than 50%
of the outstanding shares of such Fund are present in person or by proxy, or
(ii) more than 50% of the outstanding shares of such Fund, whichever is less.
The Funds each hold annual shareholder meetings.
Upon issuance and sale in accordance with the terms of this Prospectus,
each share will be fully paid and non-assessable. Shares of the Fund have no
preemptive, subscription or conversion rights and are redeemable as set forth
under "How to Redeem Shares." The Declaration of Trust of each Fund also
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of such Fund and that every agreement, obligation or
instrument entered into or executed by such Fund shall contain a provision to
the effect that the shareholders are not personally liable thereunder. Although
each Fund is offering its own shares, it is possible that one Fund may become
liable for any misstatement in this Prospectus about one of the other Funds.
Maxus Laureate Fund intends to vote the shares of the underlying funds held
by it in the same proportion as the vote of all other holders of such underlying
fund's securities. The effect of such "mirror" voting will be to neutralize such
Fund's
23
<PAGE> 28
influence on corporate governance matters regarding the underlying funds in
which the Fund invests.
Shareholders of Maxus Laureate Fund will not have the opportunity to vote
on matters submitted to shareholders of the underlying funds. However,
shareholders of such Fund will, of course, have the opportunity to vote on
matters required to be submitted to shareholders of the Fund.
Maxus Laureate Fund is not available to residents of the State of Texas.
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45201, is the
custodian for each Fund's securities and cash. Maxus Information Systems Inc.
("MIS"), 28601 Chagrin Boulevard, Cleveland, Ohio 44122, is each Fund's
Transfer, Redemption and Dividend Distributing Agent. MIS is a subsidiary of
RMI, the parent company of the Adviser.
McCurdy & Associates C.P.A.'s, Inc., 27955 Clemens Road, Westlake, Ohio
44145, have been appointed as independent accountants for the Funds.
Benesch, Friedlander, Coplan & Aronoff, 2300 BP America Building, 200
Public Square, Cleveland, Ohio 44114, is legal counsel to the Funds and to the
Adviser.
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APPENDIX A
DESCRIPTION OF BOND AND COMMERCIAL PAPER RATINGS*
STANDARD & POOR'S CORPORATION
- --------------------------------------------------------------------------------
BONDS
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in the higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for the bonds in higher rated categories.
BB, B, CCC AND CC: Bonds rated BB, B, CCC and CC are regarded on balance as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
COMMERCIAL PAPER
A-1: Commercial paper rated A-1 indicates that the degree of safety
regarding timely payment is very strong.
A-2: Commercial paper rated A-2 indicates that the capacity for timely
payment is strong. However, the relative degree of safety is not as overwhelming
as for issues designated A-1.
- ------------------------
*As described by Standard & Poor's Corporation.
25
<PAGE> 30
- --------------------------------------------------------------------------------
APPENDIX B
DESCRIPTION OF VARIOUS SECURITIES INVESTED IN,
AND TECHNIQUES EMPLOYED BY,
FUNDS IN WHICH THE MAXUS FUNDS MAY INVEST
- --------------------------------------------------------------------------------
As described in this Prospectus under "Investment Objectives and Management
Techniques" and under "Risks and Other Considerations", Maxus Income Fund and
Maxus Equity Fund may invest in the shares of closed-end investment companies
(or "closed-end funds") and Maxus Laureate Funds may invest in the shares of
open-end investment companies (or "mutual funds"). These closed-end funds and
mutual funds (collectively referred to in this Appendix as "underlying funds")
may incur certain risks which are described in this Appendix B.
FOREIGN SECURITIES
An underlying fund may invest up to 100% of its assets in securities of
foreign issuers. Investments in foreign securities involve risks relating to
political and economic developments abroad as well as those that may result from
the differences between the regulation to which U.S. issuers are subject and
that applicable to foreign issuers. These risks may include expropriation,
confiscatory taxation, withholding taxes on dividends and interest, limitations
on the use or transfer of an underlying fund's assets and political or social
instability or diplomatic developments.
Individual foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Securities of many foreign companies may be less liquid and
their prices more volatile than securities of comparable U.S. companies.
Moreover, the underlying funds generally calculate their net asset values and
complete orders to purchase, exchange or redeem shares only on days when the New
York Stock Exchange is open. However, foreign securities in which the underlying
funds may invest may be listed primarily on foreign stock exchanges that may
trade on other days (such as U.S. holidays and weekends). As a result, the net
asset value of an underlying fund's portfolio may be significantly affected by
such trading on days when the Adviser does not have access to the underlying
funds and shareholders do not have access to the Fund.
Additionally, because foreign securities ordinarily are denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect an underlying fund's net asset value, the value of dividends
and interest earned, gains and losses realized on the sale of securities and net
investment income and capital gain, if any, to be distributed to shareholders by
the underlying fund. If the value of a foreign currency rises against the U.S.
dollar, the value of the underlying fund's assets denominated in that currency
will increase; correspondingly, if the value of a foreign currency declines
against the U.S. dollar, the value of the underlying fund's assets denominated
in that currency will decrease. The exchange rates between the U.S. dollar and
other currencies are determined by supply and demand in the currency exchange
markets, international balance of payments, governmental intervention,
speculation and other economic and political conditions. The costs attributable
to foreign investment that an underlying fund must bear frequently are higher
than those attributable to domestic investing. For example, the costs of
maintaining custody of foreign securities exceed custodian costs relating to
domestic securities.
FOREIGN CURRENCY TRANSACTIONS
In connection with its portfolio transactions in securities traded in a
foreign currency, an underlying fund may enter into forward contracts to
purchase or sell an agreed upon amount of a specific currency at a future date
that may be any fixed number of days from the date of the contract agreed upon
by the parties at a price set at the time of the contract. Under such an
arrangement, concurrently with the entry into a contract to acquire a foreign
security for a specified amount of currency, the fund would purchase with U.S.
dollars the required amount of foreign currency for delivery at the settlement
date of the purchase; the fund would enter into similar forward currency
transactions in connection with the sale of foreign securities. The effect of
such transactions would be to fix a U.S. dollar
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<PAGE> 31
price for the security to protect against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date the security purchased or
sold and the date on which payment is made or received, the normal range of
which is three to fourteen days. These contracts are traded in the interbank
market conducted directly between currency traders (usually large commercial
banks) and their customers. A forward contract generally has no deposit
requirement, and no commissions are charged at any stage for trades. Although
such contracts tend to minimize the risk of loss due to a decline in the value
of the subject currency, they tend to limit commensurately any potential gain
that might result should the value of such currency increase during the contract
period.
HIGH-YIELD SECURITIES
The Funds may, from time to time, invest in shares of underlying funds
which invest in lower-rated securities (rated BBB or lower by Standard & Poor's
Corporation Rating Service) or in unrated securities, when, in the view of the
Adviser, such investments are consistent with the Fund's investment objective.
Certain risk factors that investors should recognize as being associated with
the Adviser's discretion to invest in such underlying funds are set forth below.
In general, when interest rates decline, the value of fixed income
securities can be expected to rise. Conversely, when interest rates rise, the
value of fixed income securities can be expected to decline. Prices of
lower-rated securities (also sometimes referred to as "high-yield" securities)
have been found to be less sensitive to interest rate changes than higher-rated
investments, but more sensitive to adverse economic changes or individual
corporate developments. In addition, periods of economic uncertainty and changes
can be expected to result in increased volatility of market prices of
lower-rated securities.
The values of lower-rated securities tend to reflect individual corporate
developments to a greater extent than higher-rated securities, which react
primarily to fluctuations in the general level of interest rates. Further,
securities rated BB or lower by Standard & Poor's are below investment grade and
are considered, on balance, to be predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the terms of the
obligation and will generally involve more credit risk than securities in the
higher rating categories. In some cases, such securities are subordinated to the
prior payment of senior indebtedness, thus potentially limiting the underlying
fund's ability to receive payments when senior securities are in default or to
recover full principal. Many issuers of lower-rated corporate debt securities
are substantially leveraged, which may impair their ability to meet debt service
obligations. Also, during an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress which
would adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain additional
financing. Upon any default, the underlying fund may incur additional expenses
to the extent it is required to seek recovery of the payment of principal or
interest on the relevant portfolio holding.
In addition, lower-rated securities may tend to trade in markets that are
relatively less liquid than the market for higher rated securities. It is thus
possible that the underlying fund's ability to dispose of such securities, when
its investment adviser deems it desirable to do so, may be limited. The lack of
a liquid secondary market may also have an adverse impact on market price and
the underlying fund's ability to dispose of particular issues when necessary to
meet the underlying fund's liquidity needs or in response to a specific economic
event, such as a deterioration in the creditworthiness of the issuer. In
addition, a less liquid market may interfere with the ability of the underlying
fund to accurately value lower-rated securities and, consequently, value the
fund's assets. Furthermore, adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and liquidity of
lower-rated securities, especially in a thinly-traded market.
The market for "high yield" fixed-income securities has not weathered a
major economic recession and it is unknown what effect a recession might have on
such securities. It is likely, however, that any such recession could severely
disrupt the market for such securities and may have an adverse impact on the
value of such securities. In addition, it is likely that any such economic
downturn would adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon.
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<PAGE> 32
Standard & Poor's Corporation ("S&P") is a private service that provides
rates of the credit quality of debt obligations. A description of ratings
assigned to commercial paper and corporate debt obligations by S&P can be found
in Appendix A to this Prospectus. These ratings represent S&P's opinion as to
the quality of the securities that they undertake to rate. It should be
emphasized, however, that ratings are general and are not absolute standards of
quality. Consequently, securities with the same maturity, interest rate and
rating may have different market prices. Subsequent to its purchase by an
underlying fund, an issue of securities may cease to be rated or its ratings may
be reduced below the minimum rating required for purchase by an underlying fund.
CONVERTIBLE PREFERRED STOCKS AND DEBT SECURITIES
Certain preferred stocks and debt securities that may be held by an
underlying fund have conversion features allowing the holder to convert
securities into another specified security (usually common stock) of the same
issuer at a specified conversion ratio (e.g., two shares of preferred for one
share of common stock) at some specified future date or period. The market value
of convertible securities generally includes a premium that reflects the
conversion right. That premium may be negligible or substantial. To the extent
that any preferred stock or debt security remains unconverted after the
expiration of the conversion period, the market value will fall to the extent
represented by that premium.
ILLIQUID SECURITIES
An underlying fund may invest in securities for which no readily available
market exists ("illiquid securities") or securities the disposition of which
would be subject to legal restrictions (so-called "restricted securities") and
repurchase agreements maturing in more than seven days. A considerable period
may elapse between an underlying fund's decision to sell securities and the time
when the fund is able to sell such securities. If, during such a period, adverse
market conditions were to develop, the underlying fund might obtain a less
favorable price than prevailed when it decided to sell.
INDUSTRY CONCENTRATION
An underlying fund may concentrate its investments within one industry.
Because the scope of investment alternatives within an industry is limited, the
value of the shares of such an underlying fund may be subject to greater market
fluctuation than an investment in a fund that invests in a broader range of
securities.
OPTION ACTIVITIES
An underlying fund may write (i.e., sell) call options ("calls") if the
calls are "covered" throughout the life of the option. A call is "covered" if
the fund owns the optioned securities. When a fund writes a call, it receives a
premium and gives the purchaser the right to buy the underlying security at any
time during the call period (usually not more than nine months in the case of
common stock) at a fixed exercise price regardless of market price changes
during the call period. If the call is exercised, the fund will forego any gain
from an increase in the market price of the underlying security over the
exercise price.
An underlying fund may purchase a call on securities only to effect a
"closing transaction," which is the purchase of a call covering the same
underlying security and having the same exercise price and expiration date as a
call previously written by the fund on which it wishes to terminate its
obligation. If the fund is unable to effect a closing transaction, it will not
be able to sell the underlying security until the call previously written by the
fund expires (or until the call is exercised and the fund delivers the
underlying security).
An underlying fund also may write and purchase put options ("puts"). When a
fund writes a put, it receives a premium and gives the purchaser of the put the
right to sell the underlying security to the fund at the exercise price at any
time during the option period. When a fund purchases a put, it pays a premium in
return for the right to sell the underlying security at the exercise price at
any time during the option period. An underlying fund also may purchase stock
index puts, which differ from puts on individual securities in that they are
settled in cash based on the values of the securities in the underlying index
rather than by delivery of the underlying securities. Purchase of a stock index
put is designed to protect against a decline in the value of the portfolio
generally rather than an individual security in the portfolio. If any put is not
exercised or sold, it will become worthless on its expiration date.
An underlying fund's option positions may be closed out only on an exchange
that provides a
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<PAGE> 33
secondary market for options of the same series, but there can be no assurance
that a liquid secondary market will exist at any given time for any particular
option. In this regard, trading in options on certain securities (such as U.S.
Government securities) is relatively new, so that it is impossible to predict to
what extent liquid markets will develop or continue.
An underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the fund has
written puts or calls, or as to other securities acceptable for such escrow so
that no margin deposit is required of the fund. Until the underlying securities
are released from escrow, they cannot be sold by the fund.
In the event of a shortage of the underlying securities deliverable on
exercise of an option, the Options Clearing Corporation ("OCC") has the
authority to permit other, generally comparable securities to be delivered in
fulfillment of option exercise obligations. If the OCC exercises its
discretionary authority to allow such other securities to be delivered, it may
also adjust the exercise prices of the affected options by setting different
prices at which otherwise ineligible securities may be delivered. As an
alternative to permitting such substitute deliveries, the OCC may impose special
exercise settlement procedures.
FUTURES CONTRACTS
An underlying fund may enter into futures contracts for the purchase or
sale of debt securities and stock indexes. A futures contract is an agreement
between two parties to buy and sell a security or an index for a set price on a
future date. Futures contracts are traded on designated "contract markets" that,
through their clearing corporation, guarantee performance of the contracts.
Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for the
sale of debt securities has an effect similar to the actual sale of securities,
although sale of the futures contract might be accomplished more easily and
quickly. For example, if an underlying fund holds long-term U.S. Government
securities and it anticipates a rise in long-term interest rates (and therefore
a decline in the value of those securities), it could, in lieu of disposing of
those securities, enter into futures contracts for the sale of similar long-term
securities. If rates thereafter increase and the value of the fund's portfolio
securities thus declines, the value of the fund's futures contracts would
increase, thereby protecting the fund by preventing the net asset value from
declining as much as it otherwise would have. Similarly, entering into futures
contracts for the purchase of debt securities has an effect similar to the
actual purchase of the underlying securities, but permits the continued holding
of securities other than the underlying securities. For example, if an
underlying fund expects long-term interest rates to decline, it might enter into
futures contracts for the purchase of long-term securities so that it could gain
rapid market exposure that may offset anticipated increases in the cost of
securities it intends to purchase while continuing to hold higher-yield
short-term securities or waiting for the long-term market to stabilize.
A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to a
specific security. A stock index futures contract does not require the physical
delivery of securities, but merely provides for profits and losses resulting
from changes in the market value of the contract to be credited or debited at
the close of each trading day to the respective accounts of the parties to the
contract. On the contract's expiration date, a final cash settlement occurs.
Changes in the market value of a particular stock index futures contract reflect
changes in the specified index of equity securities on which the contract is
based.
There are several risks in connection with the use of futures contracts. In
the event of an imperfect correlation between the futures contract and the
portfolio position that is intended to be protected, the desired protection may
not be obtained and the fund may be exposed to risk of loss. Further,
unanticipated changes in interest rates or stock price movements may result in a
poorer overall performance for the fund than if it had not entered into futures
contracts on debt securities or stock indexes.
In addition, the market price of futures contracts may be affected by
certain factors. First, all participants in the futures market are subject to
margin deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close futures contracts through
offsetting transactions that could distort the normal relationship between the
securities and futures markets. Second, from the point of view of speculators,
the deposit requirements in the futures
29
<PAGE> 34
market are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market may also
cause temporary price distortions.
Finally, positions in futures contracts may be closed out only on an
exchange or board of trade that provides a secondary market for such futures.
There is no assurance that a liquid secondarv market on an exchange or board of
trade will exist at any particular time.
OPTIONS ON FUTURES CONTRACTS
An underlying fund may purchase and write (sell) put and call options on
futures contracts. An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put), at a specified exercise price at any time during the option
period. When an option on a futures contract is exercised, delivery of the
futures position is accompanied by cash representing the difference between the
current market price of the futures contract and the exercise price of the
option. A fund may purchase put options on futures contracts in lieu of, and for
the same purpose as, a sale of a futures contract. It also may purchase such put
options in order to hedge a long position in the underlying futures contract in
the same manner as it purchases "protective puts" on securities.
As with options on securities, the holder of an option on a futures
contract may terminate its position by selling an option of the same series.
There is no guarantee that such closing transactions can be effected. An
underlying fund is required to deposit initial margin and variation margin with
respect to put and call options on futures contracts written by it pursuant to
brokers' requirements similar to those applicable to futures contracts described
above and, in addition, net option premiums received will be included as initial
margin deposits.
In addition to the risks that apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. There can be no
certainty that liquid secondary markets for all options on futures contracts
will develop. Compared to the use of futures contracts, the purchase of options
on futures contracts involves less potential risk to an underlying fund because
the maximum amount of risk is the premium paid for the options (plus transaction
costs). However, there may be circumstances when the use of an option on a
futures contract would result in a loss to the fund when the use of a futures
contract would not, such as when there is no movement in the prices of the
underlying securities. Writing an option on a futures contract involves risks
similar to those arising in the sale of futures contracts, as described above.
SHORT SALES
An underlying fund may sell securities short. In a short sale, the fund
sells securities that it does not own, making delivery with securities
"borrowed" from a broker. The fund is then obligated to replace the borrowed
securities by purchasing them at the market price at the time of replacement.
This price may or may not be less than the price at which the securities were
sold by the fund. Until the securities are replaced, the fund is required to pay
to the lender any dividends or interest that accrue during the period of the
loan. In order to borrow the securities, the fund may also have to pay a premium
that would increase the cost of the securities sold. The proceeds of the short
sale will be retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out.
The fund also must deposit in a segregated account an amount of cash or
U.S. Government securities equal to the difference between (a) the market value
of the securities sold short at the time they were sold short and (b) the value
of the collateral deposited with the broker in connection with the sale (not
including the proceeds from the short sale). Each day the short position is
open, the fund must maintain the segregated account at such a level that the
amount deposited in it plus the amount deposited with the broker as collateral
(1) equals the current market value of the securities sold short and (2) is not
less than the market value of the securities at the time they were sold short.
Depending upon market conditions, up to 80% of the value of a fund's net assets
may be deposited as collateral for the obligation to replace securities borrowed
to effect short sales and allocated to a segregated account in connection with
short sales.
An underlying fund will incur a loss as a result of a short sale if the
price of the security increases between the date of the short sale and the date
on which the fund replaces the borrowed security. The
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<PAGE> 35
fund will realize a gain if the security declines in price between those dates.
The amounts of any gain will be decreased and the amount of any loss increased
by the amount of any premium, dividends or interest the fund may be required to
pay in connection with the short sale.
A short sale is "against the box" if at all times when the short position
is open the fund owns an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for, securities
of the same issue as the securities sold short. Such a transaction serves to
defer a gain or loss for federal income tax purposes.
WARRANTS
An underlying fund may invest in warrants, which are options to purchase a
specified security, usually an equity security such as common stock, at a
specified price (usually representing a premium over the applicable market value
of the underlying equity security at the time of the warrant's issuance) and
usually during a specified period of time. Moreover, they are usually issued by
the issuer of the security to which they relate. While warrants may be traded,
there is often no secondary market for them. The prices of the warrants do not
necessarily move parallel to the prices of the underlying securities. Holders of
warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer. To the extent that the market value of the
security that may be purchased upon exercise of the warrant rises above the
exercise price, the value of the warrant will tend to rise. To the extent that
the exercise price equals or exceeds the market value of such security, the
warrant is not exercised within the specified time period, it will become
worthless and the fund will lose the purchase price paid for the warrant and the
right to purchase the underlying security.
MASTER DEMAND NOTES
Although the Funds themselves will not do so, underlying funds
(particularly money market mutual funds) may invest up to 100% of their assets
in master demand notes. Master demand notes are unsecured obligations of U.S.
corporations redeemable upon notice that permit investment by a fund of
fluctuating amounts at varying rates of interest pursuant to direct arrangements
between the fund and the issuing corporation. Because they are direct
arrangements between the fund and the issuing corporation, there is no secondary
market for the notes. However, they are redeemable at face value, plus accrued
interest, at any time.
REPURCHASE AGREEMENTS
Underlying funds, particularly money market funds, may enter into
repurchase agreements with banks and broker-dealers under which they acquire
securities subject to an agreement with the seller to repurchase the securities
at an agreed upon time and price. These agreements are considered under the
Investment Company Act of 1940 to be loans by the purchaser collateralized by
the underlying securities. If the seller should default on its obligation to
repurchase the securities, the underlying fund may experience delay or
difficulties in exercising its rights to realize upon the securities held as
collateral and might incur a loss if the value of the securities should decline.
LOANS OF PORTFOLIO SECURITIES
An underlying fund may lend its portfolio securities provided: (1) the loan
is secured continuously by collateral of U.S. Government securities or cash or
cash equivalents maintained on a daily mark-to-market basis in an amount at
least equal to the current market value of the securities loaned; (2) the fund
may at any time call the loan and obtain the return of the securities loaned;
(3) the fund will receive any interest or dividends paid on the loaned
securities; and (4) the aggregate market value of securities loaned will not at
any time exceed one-third of the total assets of the fund. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral .
HEDGING
An underlying fund may employ many of the investment techniques described
in this section not only for investment purposes, but also for hedging purposes.
For example, an underlying fund may purchase or sell put and call options on
common stocks to hedge against movements in individual common stock prices, or
purchase and sell stock index futures and related options to hedge against
marketwide movements in common stock prices. Although such hedging techniques
generally tend to minimize the risk of loss that is hedged against, they also
may limit commensurately the potential gain that might have resulted had the
hedging transac-
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tion not occurred. Also, the desired protection generally resulting from hedging
transactions may not always be achieved.
LEVERAGE THROUGH BORROWING
An underlying fund may borrow up to 25% of the value of its net assets on
an unsecured basis from banks to increase its holdings of portfolio securities.
Under the Investment Company Act of 1940, the fund is required to maintain
continuous asset coverage of 300% with respect to such borrowings and to sell
(within three days) sufficient portfolio holdings to restore such coverage if it
should decline to less than 300% due to market fluctuations or otherwise, even
if disadvantageous from an investment standpoint. Leveraging will exaggerate the
effect of any increase or decrease in value of portfolio securities on the
fund's net asset value, and money borrowed will be subject to interest costs
(which may include commitment fees and/or the cost of maintaining minimum
average balances) which may or may not exceed the interest and option premiums
received from the securities purchased with borrowed funds.
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No dealer, salesman, or other person has been authorized to give any information
or to make any representations, other than those contained in this Prospectus,
and, if given or made, such other information or representations must not be
relied upon as having been authorized by the Funds or the Adviser. This
Prospectus does not constitute an offering in any state in which such offering
may not lawfully be made.
<TABLE>
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TABLE OF CONTENTS PAGE
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Highlights........................... 2
Financial Highlights................. 4
Investment Objectives and Management
Techniques......................... 7
Investment Policies and
Restrictions....................... 12
Risk and Other Considerations........ 13
Performance.......................... 14
How to Purchase Shares............... 15
How to Redeem Shares................. 17
Systematic Withdrawal Plan........... 18
Investment Management................ 18
Dividends, Distributions and Taxes... 22
General Information.................. 23
Appendix A........................... 25
Appendix B........................... 26
</TABLE>
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Investors are advised to read
this Prospectus and to retain
it for future reference.
MUTUAL FUNDS
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PROSPECTUS
, 1996
INCOME - EQUITY - LAUREATE FUNDS
<PAGE> 41
REGISTRATION INSTRUCTIONS
Please use this form to establish an account with a purchase by check or wire
into any Maxus Fund.
If you need assistance, a Maxus Associate will be happy to help you. Call us
toll-free at 1-800-44-MAXUS.
THIS FORM MAY NOT BE USED TO OPEN AN IRA OR OTHER RETIREMENT PLAN. Please call
us for the correct retirement account form.
- ------------------------------------------------------------------------------
1 YOUR ACCOUNT REGISTRATION
Please provide the information exactly as you wish it to appear on your account
(e.g., as your name appears on your other financial/legal records, such as your
bank account, will, etc.). Corporations, trusts, or others in any representative
capacity may need to provide additional documents before registering an account.
Call Maxus (1-800-44-MAXUS) for details. PLEASE PROVIDE YOUR TAXPAYER
IDENTIFICATION NUMBER. FOR MOST INDIVIDUALS, THIS IS YOUR SOCIAL SECURITY
NUMBER.
- ------------------------------------------------------------------------------
2 YOUR ADDRESS
Please provide your complete mailing address in addition to the other requested
information.
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3 YOUR INVESTMENT
Please be sure to indicate Maxus Fund(s) and amount.
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4 DIVIDENDS AND CAPITAL GAINS OPTIONS
Unless a box is checked, all distributions will be reinvested.
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5 PERSONAL FINANCIAL DATA
Please check all the appropriate boxes.
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6 SIGNATURES
Please sign exactly as your name is registered in Section 1.
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7 TELEPHONE PURCHASE AND REDEMPTION
AUTHORIZATION (TPR)
Enjoy the privilege of telephone purchase and redemption associated with your
Maxus Fund account(s) (minimum $1,000). Simply sign the agreement on the
application form in exactly the same manner that you signed under Section 6.
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8 WIRING AND SYSTEMATIC WITHDRAWAL
OPTIONS
For the convenience of redeeming shares by wire, please complete this section
now. Proceeds will be wired to your bank account upon your request.
WIRE REDEMPTION -- a voided, preprinted check from your checking account or a
preprinted deposit slip from your checking or savings account must be attached.
SYSTEMATIC WITHDRAWAL PLAN (SWP) -- transfers money from your Maxus account to
your bank account on a monthly, bi-monthly, quarterly, semi-annual, or annual
basis. (Minimum $15,000 initial investment and $100/withdrawal.).
To arrange for this service, please specify the type of service and attach a
voided, preprinted check from your checking account or a preprinted deposit slip
from your checking or savings account. Please note that passbook savings
accounts are not eligible for this service, and that your bank must be a member
of the Automated Clearing House (ACH) network. NOTE: PLEASE SPECIFY THE AMOUNT
OF WITHDRAWAL ($100 MINIMUM) AND THE TRANSACTION DATE.
If you are establishing options that use more than one bank account, please
indicate the appropriate option on your voided check or deposit slip.
<PAGE> 42
<TABLE>
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MAIL TO: LOGO Account Number
Maxus Mutual Funds Broker/Dealer
Maxus Information Systems Inc. Agent
28601 Chagrin Boulevard, Suite 500 Number
Cleveland, Ohio 44122
</TABLE>
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- ------------------------------------------------
ACCOUNT REGISTRATION FORM
BEFORE YOU COMPLETE THE ACCOUNT REGISTRATION FORM, PLEASE BE SURE TO READ THE
INSTRUCTIONS ON THE REVERSE SIDE.
PLEASE DO NOT USE THIS APPLICATION TO OPEN AN IRA OR OTHER RETIREMENT PLAN
PLEASE PRINT, PREFERABLY WITH BLACK INK.
- ------------------------------------------------------------------------------
1 YOUR ACCOUNT REGISTRATION (CHECK ONE BOX)
/ / INDIVIDUAL OR JOINT ACCOUNT
<TABLE>
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Owner's Name: First, Initial (if used), Last
---------------------------------- ---------------------------------------
Owner's Date of Birth Owner's Social Security Number
----------------------------------------------------------------------------
Joint Owner's name: First, Initial (if used), Last
---------------------------------- ---------------------------------------
Joint Owner's Date of Birth Joint Owner's Social Security Number
</TABLE>
JOINT ACCOUNTS WILL BE REGISTERED JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP
UNLESS OTHERWISE SPECIFIED.
/ / GIFT OR TRANSFER TO MINOR
<TABLE>
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Custodian's Name (One Name Only): First, Initial (if used), Last
----------------------------------------------------------------------------
Minor's Name (One Name Only): First, Initial (if used), Last
under the Uniform Gifts/Transfers to Minors Act.
(State of Minor's Residence)
---------------------------------------
Minor's Social Security Number
</TABLE>
/ / TRUST
<TABLE>
<S> <C>
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Trustee(s) Name
----------------------------------------------------------------------------
Name of Trust Agreement
----------------------------------------------------------------------------
Beneficiary's Name
---------------------------------- ---------------------------------------
Date of Trust Document
Taxpayer ID Number (must be completed for registration)
</TABLE>
/ / CORPORATION, PARTNERSHIP, OR OTHER ENTITY
/ / Corporation / / Partnership / / Other
<TABLE>
<S> <C>
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Name of Corporation or Other Entity
---------------------------------- ---------------------------------------
Taxpayer ID Number Officer or Authorized Individual
</TABLE>
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2 YOUR ADDRESS
Do you have other Maxus accounts? / / Yes / / No
<TABLE>
<S> <C>
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Street or P.O. Box Number
----------------------------------------------------------------------------
City State Zip
Citizenship: / / U.S. / / Resident Alien
/ / Non-Resident Alien
(Country)
( ) ( )
Daytime Telephone Evening Telephone
----------------------------------------------------------------------------
Employer Name, City and State
----------------------------------------------------------------------------
Occupation
</TABLE>
- ------------------------------------------------------------------------------
3 YOUR INVESTMENT
Enclosed is my check made payable to the applicable Fund:
<TABLE>
<S> <C>
/ / Maxus Income Fund $
/ / Maxus Equity Fund $
/ / Maxus Laureate Fund $
</TABLE>
FOR HELP WITH THIS APPLICATION, OR FOR MORE INFORMATION, CALL US TOLL FREE:
1-800-44-MAXUS (800-446-2987)
- ------------------------------------------------------------------------------
4 DIVIDENDS AND CAPITAL GAINS OPTIONS
All income dividends and capital gains distributions will be reinvested in
shares unless noted below:
<TABLE>
<S> <C>
/ / Pay all income in cash
/ / Pay all capital gains in cash
</TABLE>
- ------------------------------------------------------------------------------
5 PERSONAL FINANCIAL DATA
<TABLE>
<S> <C>
INVESTMENT OBJECTIVES RISK TOLERANCE
/ / Aggressive Growth / / Aggressive
/ / Long-Term Growth / / Moderate
/ / Income / / Conservative
ANNUAL INCOME NET WORTH
/ / Less than $25,000 / / Less than $50,000
/ / $25,000 - $75,000 / / $50,000 - $150,000
/ / Greater than $75,000 / / Greater than $150,000
</TABLE>
- ------------------------------------------------------------------------------
6 SIGNATURE (SIGN BELOW)
By signing this form, I/we certify that:
I/We have full authority and legal capacity to purchase Fund shares.
I/We have received a current prospectus of the Fund and agree to be bound by
its terms.
Under penalty of perjury, I/we also certify that--
a. The number shown on this form is my correct taxpayer ID number.
b. I am not subject to backup withholding because (i) I have not been notified
by the Internal Revenue Service that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (ii) the IRS
has notified me that I am no longer subject to backup withholding. (CROSS
OUT ITEM "B" IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO
BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR
TAX RETURN.)
PLEASE SIGN BELOW: (IF JOINT ACCOUNT, BOTH OWNERS MUST SIGN.)
- ------------------------------------------------------------------------------
- ------------------------------------------------------
- -------------------
SIGNATURE (OWNER, TRUSTEE, CUSTODIAN, ETC.) DATE
- ------------------------------------------------------
- -------------------
SIGNATURE (JOINT OWNER, CO-TRUSTEE) DATE
- ------------------------------------------------------------------------------
7 TELEPHONE PURCHASE AND REDEMPTION
AUTHORIZATION (TPR)
The undersigned hereby authorizes Maxus Information Systems Inc. ("Transfer
Agent"), acting as the undersigned's attorney in fact, to accept telephone
purchases and redemptions from the undersigned (or any of the undersigned if
more than one owner) at the net asset value per share next determined after the
receipt of the call. The minimum telephone purchase or redemption is $1,000. The
maximum purchase for any Fund is three (3) times the net asset value of unissued
shares of that Fund held in the undersigned's account on the day preceding such
telephone purchase for which payment has been received. THE UNDERSIGNED
UNDERSTANDS AND AGREES THAT PAYMENT FOR THE TELEPHONE PURCHASE MUST BE RECEIVED
BY THE TRANSFER AGENT WITHIN THREE (3) BUSINESS DAYS. IF SUCH PAYMENT IS NOT
RECEIVED, THE TRANSFER AGENT WILL REDEEM THE TELEPHONE PURCHASE SHARES, AND IF
SUCH REDEMPTION RESULTS IN A LOSS TO THE FUND, REDEEM SUFFICIENT ADDITIONAL
SHARES FROM THE UNDERSIGNED'S ACCOUNT TO REIMBURSE THE FUND FOR SUCH LOSS.
A check for the net amount of a REDEMPTION will be made payable to owner(s)
as designated on the registration of account and mailed to the owner's address
as designated on the registration, within five (5) business days.
The undersigned hereby authorizes the Transfer Agent to honor any telephone
purchase or redemption believed by the Transfer Agent to be genuine and agrees
to be bound by the Transfer Agent's records of such instructions and the
undersigned and his assigns and successors release the Transfer Agent and the
Fund and their respective officers and employees from any and all liability for
so acting.
It is understood that this Authorization Form will continue in effect until
the Transfer Agent receives written notice of its cancellation from the
undersigned. This service may be discontinued without notice. A current
prospectus of the Fund should be read in advance of purchase hereunder.
- ------------------------------------------------------------------------------
- ---------------------------------------------------
- ----------------------
INVESTOR'S SIGNATURE ACCOUNT NUMBER
- ---------------------------------------------------
- ----------------------
CO-INVESTOR'S SIGNATURE AUTHORIZATION NUMBER
NOTE: A bill is not received for telephone purchases. Confirmation Statements
are sent by the Transfer Agent after payments have been received for purchases
or instructions received for redemptions. Shareholders should send payments
promptly with a payment stub from a prior Confirmation Statement or enclose an
explanatory note. Four digit authorization numbers must be selected for your
protection and presented to the Transfer Agent for each telephone redemption.
<PAGE> 43
- --------------------------------------------------------------------------------
8 WIRING AND SYSTEMATIC WITHDRAWAL OPTIONS
To arrange for the wire redemption service, please provide your bank's telephone
number below and attach a voided, preprinted check from your checking account or
a preprinted deposit slip from your checking or savings account. A canceled
check or deposit receipt WILL NOT be accepted. Passbook savings accounts ARE NOT
eligible for these services.
( )
Bank Telephone Number
PLEASE INDICATE THE TYPE OF SERVICE YOU WISH TO ESTABLISH:
/ / WIRE REDEMPTION
/ / SYSTEMATIC WITHDRAWAL PLAN (SWP) (MINIMUM $100/WITHDRAWAL): Please transfer
$ from my Maxus account to my bank account.
Please indicate the payment frequency (e.g., monthly, every other month,
quarterly, semi-annually) .
MINIMUM INITIAL INVESTMENT FOR SYSTEMATIC WITHDRAWAL PLAN $15,000
- --------------------------------------------------------------------------------
9 APPOINTMENT OF INVESTMENT ADVISOR
1.
I (we) have provided full investment discretion to
(Customer(s) Signature)
("Customer's
Adviser") by a separate agreement and Customer's Adviser has full authority
to purchase and redeem shares of the Fund.
2.
Upon receipt of management fee bills from Customer's Adviser,
(Customer(s) Signature)
the Fund is authorized and directed to redeem enough of my (our) shares in
the Fund to pay such fees and to send the proceeds directly to Customer's
Adviser.
F U N D S
ACCOUNT REGISTRATION FORM
<PAGE> 44
STATEMENT OF ADDITIONAL INFORMATION __________, 1996
MAXUS LAUREATE FUND
28601 Chagrin Blvd., Suite 500
Cleveland, Ohio 44122
(216) 292-3434
Maxus Laureate Fund (formerly named "Maxus Prism Fund") (the "Fund")
is a diversified, open-end management investment company with an investment
objective of achieving a high total return, a combination of capital
appreciation and income, consistent with reasonable risk. The Fund pursues its
objective by investing exclusively in shares of other open-end registered
investment companies, commonly called mutual funds. This Statement of
Additional Information relating to the Fund is not a prospectus and should be
read in conjunction with the Fund's prospectus. A copy of the Fund's
prospectus can be obtained from the Fund's distributor, Maxus Securities Corp,
28601 Chagrin Blvd., Suite 500, Cleveland, Ohio 44122, telephone number (216)
292-3434. The date of the prospectus to which this Statement relates is
__________, 1996.
The date of this Statement of Additional Information is __________,
1996.
<PAGE> 45
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
CAPTION PAGE LOCATION IN PROSPECTUS
- ------- ---- ----------------------
<S> <C> <C>
General Information and 1 General Information
History
Investment Objective and 1 Investment Objective and
Policies Management Techniques/Investment
Policies and Restrictions
Management of the Fund 2 Investment Management
Principal Holders of 4 Not Applicable
Securities
Investment Advisory and 5 Investment Management
Other Services
Portfolio Transactions 7 Execution of Portfolio Transactions
Capital Stock and Other 8 General Information
Securities
Purchases, Redemptions 8 How to Purchase Shares/
and Pricing of Securities How to Redeem Shares
Being Offered
Determination of Net 8 How to Purchase Shares
Asset Value
Tax Status 8 Dividends, Distributions
and Taxes
Distributor 9 Investment Management
Financial Statements Not Applicable
</TABLE>
<PAGE> 46
GENERAL INFORMATION AND HISTORY
Maxus Laureate Fund (the "Fund") is a diversified, open-end management
investment company that seeks a high total return, a combination of capital
appreciation and income, consistent with reasonable risk, by investing
exclusively in shares of other open-end registered investment companies. The
Fund was organized as a Trust under the laws of the State of Ohio pursuant to a
Declaration of Trust dated February 10, 1993.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are briefly
described in the Fund's prospectus under the headings "Investment Objective and
Management Techniques" and "Investment Policies and Restrictions." The Fund
has adopted the following fundamental investment policies and restrictions in
addition to the fundamental investment policies described in the Prospectus
under the "Investment Policies and Restrictions." These policies cannot be
changed without approval by the holders of a majority of the outstanding voting
securities of the Fund. As defined in the Investment Company Act of 1940 (the
"Act"), the "vote of a majority of the outstanding voting securities" means the
lesser of the vote of (a) 67% of the shares of the Fund at a meeting where more
than 50% of the outstanding shares are present in person or by proxy or (b)
more than 50% of the outstanding shares of the Fund. The Fund may not:
1. Invest in securities of issuers which have a record
of less than three (3) years' continuous operation or which are
subject to restrictions on disposition under the Securities Act of
1933 if, at the time of such purchase, more than ten percent (10%) of
its assets (taken at value) would be so invested.
2. Lend money or securities, provided that the making of
interest-bearing demand deposits with banks and the purchase of mutual
funds which invest in debt securities in accordance with their
objectives and policies are not prohibited.
3. Borrow money except for temporary or emergency
purposes from banks (but not for the purpose of investments) and then
only in an amount not to exceed five percent (5%) of the Fund's net
assets; or pledge the Fund's securities or receivables or transfer or
assign or otherwise encumber them in an amount exceeding the amount of
the borrowings secured thereby.
4. Make short sales of securities, or purchase any
securities on margin except to obtain such short-term credits as may
be necessary for the clearance of transactions.
5. Purchase warrants, or purchase or write (sell) put or
call options, or any combinations thereof.
<PAGE> 47
6. Purchase or retain any securities of an issuer if any
of the officers or Trustees of the Fund or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and
together own more than 5% of the securities of such issuer.
7. Invest for the purpose of exercising control or
management of another issuer.
8. Invest in commodities or commodity futures contracts
or in real estate or real estate limited partnerships, although it may
invest in open-end investment companies which invest in real estate
securities.
9. Purchase participations or other direct interests in
oil, gas, or other mineral exploration or development programs.
10. Underwrite securities issued by others except to the
extent the Fund may be deemed to be an underwriter, under the federal
securities laws, in connection with the disposition of portfolio
securities.
11. Issue securities or other obligations senior to the
Fund's shares of beneficial interest.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation.
The Fund may maintain cash in a money market deposit account
maintained by Bank One Trust, the Fund's custodian. To the extent such
balances exceed $100,000, the deposit is not protected by federal insurance.
The Fund's portfolio turnover rate (see "INVESTMENT OBJECTIVES AND
MANAGEMENT TECHNIQUES" in Prospectus) for the fiscal year ended December 31,
1995 was 1,377%.
MANAGEMENT OF THE FUND
The following table provides biographical information with respect to
each current Trustee and officer of the Fund. Each Trustee who is an
"interested person" of the Fund, as defined in the Act, is indicated by an
asterisk. Each Trustee of the Fund is also a Trustee of both Maxus Income Fund
and Maxus Equity Fund, two other open-end management investment companies.
Also, Messrs. Barone, Dietrich, Morgan, Rossi and Walter are directors of
Morgan Funshares, Inc., a closed-end management investment company.
-2-
<PAGE> 48
<TABLE>
<CAPTION>
Position Held Principal Occupation(s)
Name and Address With the Fund During Past 5 Years
- ---------------- ------------- -----------------------
<S> <C> <C>
Richard A. Barone* Chairman, President of Maxus Securities
28601 Chagrin Blvd. Treasurer Corp (broker-dealer), Maxus
Suite 500 and Trustee Asset Management Inc
Cleveland, Ohio 44122 (investment adviser) and
Resource Management Inc.
(financial services);
Chairman of Maxus Income
Fund and Maxus Equity Fund
(mutual funds)
N. Lee Dietrich Trustee Retired; formerly Vice
7090 Morley Road President, Ohio Convenient
Painesville, Ohio 44077 Food Mart, Inc.
Sanford A. Fox, D.D.S. Trustee Endodontist
6789 Ridge Road, #301
Parma, Ohio 44129
Burton D. Morgan Trustee Chairman, Morgan Bank
Park Place (bank); President, Basic
10 West Streetsboro Search Inc. (venture capital);
Hudson, Ohio 44236 Chairman, Multi-Color Corporation
(printing); Director, Morgan
Adhesives Company (manufacturer
of adhesive paper foil and film)
Michael A. Rossi, C.P.A. Trustee Certified Public Accountant
6559 Wilson Mills
Highland Heights, Ohio 44143
Robert A. Schenkelberg, Jr.* Trustee President, Entrust Inc.
One Commerce Park (financial planning)
Suite 300
23200 Chagrin Blvd.
Beachwood, Ohio 44122
F. Carl Walter Trustee President, Chess Financial
30050 Chagrin Blvd. Corp. (financial services)
Suite 380
Pepper Pike, Ohio 44124
</TABLE>
-3-
<PAGE> 49
<TABLE>
<S> <C> <C>
Robert W. Curtin Secretary Senior Vice President and
28601 Chagrin Blvd. Secretary, Maxus Securities
Suite 500 Corp; formerly Executive
Cleveland, Ohio 44122 Vice President, Roulston &
Company, Inc.
</TABLE>
No officer, director or employee of Maxus Asset Management Inc ("MAM"
or the "Adviser") or of any parent or subsidiary receives any compensation from
the Fund for serving as an officer or Trustee of the Fund. Currently, the Fund
pays each Trustee who is not an officer or employee of MAM a fee of $100 per
meeting attended and reimbursement for travel and out-of-pocket expenses. For
the fiscal year ended December 31, 1995, the Fund paid $1,300 in Trustee's
fees.
PRINCIPAL HOLDERS OF SECURITIES
As of March 1, 1996, the following persons were known by the Fund to
be the beneficial owners of more than 5% of the outstanding shares of the Fund:
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE OF
NAME AND ADDRESS SHARES BENEFICIALLY OWNED
<S> <C>
Richard A. Barone* 10,090 (6.8%)
Suite 500
28601 Chagrin Boulevard
Cleveland, OH 44122
Donald E. Caravona 7,973 (5.4%)
1900 Terminal Tower
Cleveland, OH 44113
N. Lee Dietrich 12,313 (8.3%)
7090 Morley Road
Painesville, OH 44077
M.A. Geiger, H.A. Madorsky and A. Gressel, 8,303 (5.6%)
Trustees of the Research Environmental
Industries, Inc. Salaried 401K Plan
21010 Center Ridge Road
Cleveland, OH 44116
__________________________________
<FN>
* Includes 10,000 shares owned by Resource Management, Inc., a
corporation of which Mr. Barone is the President.
</TABLE>
-4-
<PAGE> 50
<TABLE>
<S> <C>
Rand Kaiser 9,276 (6.3%)
10176 Luman Lane
Twinsburg, OH 44087
Lawrence Loxterman 12,235 (8.2%)
270 Barrington Ridge Road
Painesville, OH 44077
William H. Loxterman 12,210 (8.2%)
10100 Hoose Road
Mentor, OH 44060
Evelyn J. Wells 7,449 (5.0%)
6780 Seneca Road
Mayfield Village, OH 44143
</TABLE>
As of March 1, 1996, all nine officers and Trustees as a group
beneficially owned 26,255 shares, constituting 17.7% of the outstanding shares
of the Fund.
INVESTMENT ADVISORY AND OTHER SERVICES
MAM, the Fund's investment adviser, is a wholly-owned subsidiary of
RMI. MAM is registered as an investment adviser under the Investment Advisers
Act of 1940. MAM has not been sponsored, recommended or approved, nor have its
abilities or qualifications been passed upon by the Securities and Exchange
Commission or any other governmental agency.
As compensation for MAM's services to the Fund, the Fund pays a fee,
computed and paid monthly, at an annual rate of 1% of the average value of the
first $150,000,000 of the Fund's daily net assets and 0.75% of average daily
net assets in excess of $150,000,000. This fee is higher than that paid by
most other investment companies. For the fiscal years ended December 31, 1995
and 1994 and the period from May 1, 1993 (commencement of operations) to
December 31, 1993, the Adviser received management fees from the Fund in the
amount of $16,939, $25,803 and $11,856, respectively.
MAM acts as investment adviser to the Fund pursuant to an Investment
Advisory and Administration Agreement dated February 10, 1993. Subject to the
supervision and direction of the Fund's Trustees, MAM, as investment adviser,
manages the Fund's portfolio in accordance with the stated policies of the
Fund. MAM makes investment decisions for the Fund and places the purchase and
sale orders for portfolio transactions. In addition, MAM furnishes office
facilities and clerical and administrative services, and pays the salaries of
all officers and employees who are employed by both it and the Fund and,
subject to the direction of the Fund's Board of Trustees, is responsible for
the overall management of the business affairs of the Fund, including the
provision of personnel for recordkeeping, the preparation of governmental
reports and responding to shareholder communications.
-5-
<PAGE> 51
Other expenses are borne by the Fund and include brokerage fees and
commissions, if applicable, fees of Trustees not affiliated with MAM, expenses
of registration of the Fund and of the shares of the Fund with the Securities
and Exchange Commission (the "SEC") and the various states, charges of the
custodian, dividend and transfer agent, portfolio pricing services, outside
auditing and legal fees and expenses, liability insurance premiums on property
or personnel (including officers and trustees), maintenance of trust existence
such as the filing of reports required by state law, any taxes payable by the
Fund, interest payments relating to Fund borrowings, costs of preparing,
printing and mailing registration statements, prospectuses, proxy statements,
periodic reports and other documents furnished to shareholders and regulatory
authorities, costs of holding shareholder meetings, costs of printing share
certificates, reimbursements to RMI for organizational expenses, and costs
incurred pursuant to the Fund's Plan of Distribution described below.
The Investment Advisory and Administration Agreement is subject to
annual approval by (i) the Trustees of the Fund or (ii) vote of a majority (as
defined in the Act) of the outstanding voting securities of the Fund, provided
that in either event the continuance is also approved by a majority of the
Trustees who are not "interested persons" (as defined in the Act) of the Fund
or MAM by vote cast in person at a meeting called for the purpose of voting on
such approval. The Board of Trustees, including a majority of the Trustees who
are not "interested persons," most recently voted to continue the Investment
Advisory and Administration Agreement at a meeting held on February 14, 1996.
The Investment Advisory and Administration Agreement is terminable without
penalty, on not less than 60 days' notice, by the Board of Trustees of the Fund
or by vote of the holders of a majority of the Fund's shares or, upon not less
than 90 days' notice, by MAM. The Investment Advisory and Administration
Agreement will terminate automatically in the event of its assignment.
The Fund has a Plan of Distribution (the "Plan") pursuant to Rule
12b-1 under the Act, pursuant to which the Fund may expend up to .50% of its
average net assets annually for the costs of activities intended to result in
the sale of Fund shares. See "Investment Management -- Distribution Plan" in
the Fund's Prospectus. The Fund's Distribution Agreement with Maxus Securities
Corp ("MSC") (i) provides for the payment by the Fund to MSC of a distribution
fee of .25% of average net assets and (ii) authorizes MSC to make payments for
activities and expenditures permitted by the Plan, including the payment of
service fees (subject to a .25% limit on service fees), and provides that the
Fund shall reimburse MSC for such expenditures in addition to payment of the
distribution fee. During the fiscal year ended December 31, 1995, $8,467 (.50%
of average net assets) was expended by the Fund pursuant to the Plan.
The Trustees believe that the Plan has benefitted and will continue to
benefit the Fund and its shareholders. Among these benefits are: (1)
reductions in the per share expenses of the Fund as a result of increased
assets in the Fund; and (2) a more predictable flow of cash which may provide
investment flexibility in seeking the Fund's investment objective and may
better enable the Fund to meet redemption demands without liquidating portfolio
securities at inopportune times.
-6-
<PAGE> 52
The Fund has entered into an Administration Agreement with Maxus
Information Systems Inc. ("MIS"), 28601 Chagrin Blvd., Suite 500, Cleveland,
Ohio 44122, pursuant to which MIS has agreed to act as the Fund's Transfer,
Redemption and Dividend Disbursing Agent and as Administrator of Plans of the
Fund. As such, MIS maintains the Fund's official record of shareholders and is
responsible for crediting dividends to shareholders' accounts. In
consideration of such services, the Fund has agreed to pay MIS an annual fee,
paid monthly, equal to $6.75 per shareholder account (subject to a monthly
minimum fee equal to 0.0155% of average net assets of the Fund if the net asset
value of the Fund is less than $5,000,000 and a minimum monthly fee of $775 if
the net asset value of the Fund is equal to or greater than $5,000,000) plus
out-of-pocket expenses. In addition, the Fund has entered into an Accounting
Services Agreement with MIS, pursuant to which MIS has agreed to provide
portfolio pricing and related services. If the net asset value of the Fund is
less than $5,000,000, the Fund will pay a monthly fee equal to 0.029% of
average net assets for the month. If the net asset value of the Fund is equal
to or greater than $5,000,000, the Fund will pay an annual fee, paid monthly,
equal to $17,400 for the first $25,000,000 in net assets, $8,500 for the next
$25,000,000 in net assets and $4,750 for each additional $25,000,000 in net
assets, plus out-of-pocket expenses. Under the Administration Agreement and
the Accounting Services Agreement, the Fund paid MIS $3,526 and $5,518
respectively, during the fiscal year ended December 31, 1995. MIS is a
wholly-owned subsidiary of RMI, the parent company of the Investment Adviser.
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45201, serves as
the Fund's custodian. As custodian, Star Bank maintains custody of the Fund's
cash and portfolio securities.
McCurdy & Associates C.P.A.'s Inc., independent certified public
accountants located at 27955 Clemens Road, Westlake, Ohio 44145, has been
selected as auditors for the Fund. In such capacity, McCurdy & Associates
C.P.A.'s Inc. periodically reviews the accounting and financial records of the
Fund and examines its financial statements.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by MAM
subject to the overall supervision and review by the Fund's Trustees.
Portfolio security transactions for the Fund are effected by or under the
supervision of MAM.
A fundamental policy of the Fund prohibits investment in shares of
registered investment companies that charge front-end or deferred sales loads.
It is therefore unnecessary for security transactions of the Fund to be placed
with a brokerage firm. The most expeditious and cost effective means of
executing the Fund's transactions, in the opinion of MAM, is to place purchase
and sale orders for the Fund through its custodian, Bank One Ohio Trust
Company, N.A. The mutual fund department of the custodian will then effect the
transaction with the underlying fund. Orders from MAM must be placed with the
custodian before 10:30 A.M. to allow the custodian sufficient opportunity to
place its corresponding order with the underlying fund in a timely manner for
acceptance as
-7-
<PAGE> 53
current day business activity of the underlying fund. The custodian charges
the Fund a "per transaction" fee for initiating and settling trades.
MSC, Distributor of the Fund's shares, may assist in the placement of
Fund portfolio transactions, either through the Fund's custodian or directly
with the underlying fund. In such capacity, MSC may receive distribution
payments from the underlying funds or their underwriters or sponsors in
accordance with the normal distribution arrangements of those funds. In
providing execution assistance, MSC may receive orders from the Adviser; place
them with the underlying fund's distributor, transfer agent or other person, as
appropriate; confirm the trade, price and number of shares purchased or sold;
and assure prompt and proper settlement of the order. MSC is a wholly-owned
subsidiary of RMI, the parent company of the Adviser.
CAPITAL STOCK AND OTHER SECURITIES
See "General Information" in the Fund's prospectus.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
The information pertaining to the purchase and redemption of the
Fund's shares appearing in the Prospectus under the captions "How to Purchase
Shares" and "How to Redeem Shares" is hereby incorporated by reference.
DETERMINATION OF NET ASSET VALUE
The information pertaining to the determination of net asset value
appearing in the Prospectus under the caption "How to Purchase Shares -- Price
of Shares" is hereby incorporated by reference.
TAX STATUS
In order to qualify for treatment as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended, the Fund must
distribute annually to its shareholders at least 90% of its investment company
taxable income (consisting generally of net investment income plus net
short-term capital gain, if any) and must meet several additional requirements.
These requirements include the following: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of
securities and certain other income; (2) the Fund must derive less than 30% of
its gross income each taxable year from the sale or other disposition of
securities held for less than three months; (3) at the close of each quarter of
the Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with those other securities limited, in
respect
-8-
<PAGE> 54
of any one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets and that does not represent more than 10% of the
outstanding voting securities of the issuer; and (4) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. Government securities and
securities of other RICs) of any one issuer.
Dividends and other distributions declared by the Fund in December of
any year and payable to shareholders of record on a date in that December will
be deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year if the distributions are paid by the Fund during the
following January. Accordingly, those distributions will be taxed to
shareholders for the year in which that December falls.
A portion of the dividends from the Fund's investment company taxable
income (whether paid in cash or reinvested in additional Fund shares) may be
eligible for the dividends-received deduction allowed to corporations. The
eligible portion may not exceed the aggregate dividends received by the Fund
indirectly from U.S. corporations through underlying funds in which it invests.
However, dividends received by a corporate shareholder and deducted by it
pursuant to the dividends-received deduction are subject indirectly to the
alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital
loss to the extent of any capital gain distributions received on those shares.
Investors also should be aware that if shares are purchased shortly before the
record date for any distribution, the shareholder will pay full price for the
dividend or capital gain distribution.
Shareholders must furnish the Fund with their correct Taxpayer
Identification Number to avoid being subject to a 20% federal backup
withholding tax on dividend distributions. Investors also must certify on the
Account Application that the stated Taxpayer Identification Number is correct
and that the investor is not subject to 20% backup withholding for previous
under-reporting to the IRS. Shareholders not subject to income taxation do not
have to pay an income tax on the dividend or capital gain distributions.
Shareholders shall upon demand disclose to the Fund in writing such
information with respect to direct and indirect ownership of Shares of the Fund
as the Trustees of the Fund deem necessary to comply with the provisions of the
Internal Revenue Code, or to comply with the requirements of any other taxing
authority.
Statements as to the tax status of each shareholder's dividends and
distributions will be mailed annually by the Fund's transfer agent.
Shareholders are urged to consult their own tax advisers regarding specific
questions as to federal, state or local taxes.
-9-
<PAGE> 55
DISTRIBUTOR
Shares of the Fund are offered on a best-efforts basis by Maxus
Securities Corp, a registered NASD broker-dealer. MSC is a wholly-owned
subsidiary of RMI, which is controlled by Richard A. Barone, Chairman of the
Fund.
Pursuant to the Distribution Agreement between the Fund and MSC, MSC
has agreed to hold itself available to receive orders, satisfactory to MSC, for
the purchase of the Fund's shares, to accept such orders on behalf of the Fund
as of the time of receipt of such orders and to transmit such orders to the
Fund's transfer agent as promptly as practicable. MSC receives an annual
distribution fee of .25% of average net assets for distributing and marketing
the shares of the Fund. The Distribution Agreement also authorizes MSC to make
payments for activities and expenses permitted by the Fund's Distribution Plan,
including the payment of so-called "service fees" (subject to an annual limit
on service fees of .25% of average net assets), and provides that the Fund
shall reimburse MSC for such expenditures in addition to payment of the
distribution fee. Certain employees of MSC may receive compensation under the
Distribution Plan. See "Investment Advisory and Other Services."
The Distribution Agreement provides that MSC shall arrange to sell the
Fund's Shares as agent for the Fund and may enter into agreements with
registered broker-dealers as it may select to arrange for the sale of such
shares. MSC is not obligated to sell any certain number of shares.
-10-
<PAGE> 56
[LOGO] 27955 Clemens Road
McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145
CERTIFIED PUBLIC ACCOUNTANTS Phone: (216) 835-8500
Fax: (216) 835-1093
INDEPENDENT AUDITOR'S REPORT
----------------------------
To The Shareholders and
Board of Directors:
Maxus Laureate Fund
We have audited the accompanying statement of assets and liabilities of Maxus
Laureate Fund, including the schedule of portfolio investments, as of December
31, 1995, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the periods
then ended, and financial highlights for each of the two years in the periods
then ended and for the period from May 1, 1993 (commencement of operations) to
December 31, 1993. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held
by the custodian as of December 31, 1995, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Maxus
Laureate Fund as of December 31, 1995, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
periods then ended, and the financial highlights for each of the two years in
the periods then ended and for the period from May 1, 1993 to December 31,
1993, in conformity with generally accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
January 22, 1996
-11-
<PAGE> 57
MAXUS LAUREATE FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1995
<S> <C>
Assets:
Investment Securities at Market Value
(Identified Cost - $1,256,119) ....................................... $ 1,248,073
Cash .................................................................. 231,849
Receivables:
Investment Securities Sold ........................................... 0
Dividends and Interest ............................................... 37,821
Other Assets .......................................................... 13,313
-----------
Total Assets ...................................................... $ 1,531,056
Liabilities
Payables:
Investment Securities Purchased ...................................... $ 0
Shareholder Distributions ............................................ 0
Accrued Expenses ..................................................... 7,425
Other ................................................................ 13,640
-----------
Total Liabilities ................................................. $ 21,065
Net Assets ............................................................. $ 1,509,991
Net Assets Consist of:
Capital Paid In ....................................................... $ 1,536,866
Accumulated Realized Gain (Loss) on Investments - Net.................. (18,829)
Unrealized Appreciation in Value
of Investments Based on Identified Cost - Net ........................ (8,046)
-----------
Net Assets, for 153,780 Shares Outstanding ............................. $ 1,509,991
Net Asset Value and Redemption Price
Per Share ($1,509,991/153,780 shares) ................................ $ 9.82
Offering Price Per Share ............................................... $ 9.82
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
DECEMBER 31, 1995
<S> <C>
Investment Income:
Dividends ............................................................ $ 19,173
Interest ............................................................. 17,467
-----------
Total Investment Income .......................................... $ 36,640
Expenses:
Accounting and Pricing ............................................... 9,044
Amortization of Organization Expense ................................. 5,712
Audit ................................................................ 6,066
Custody .............................................................. 5,301
Distribution Plan Expenses ........................................... 8,467
Legal ................................................................ 5,460
Management Fees (Note 2) ............................................. 16,939
Registration ......................................................... 2,025
Trustee Fees (Note 3) ................................................ 1,300
Printing & Miscellaneous ............................................. 5.099
-----------
Total Expenses ................................................... 65,413
Net Investment Income (Loss) ........................................... (28,773)
Realized and Unrealized Gain (Loss) on Investments
Realized Gain (Loss) on Investments .................................. 263,105
Unrealized Gain (Loss) from Appreciation (Depreciation) on Investments (12,316)
-----------
Net Realized and Unrealized Gain (Loss) on Investments ................. $ 250,789
Net Increase (Decrease) in Net Assets from Operations .................. $ 222,016
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-12-
<PAGE> 58
MAXUS LAUREATE FUND
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
01/01/95 01/01/94
to to
12/31/95 12/31/94
<S> <C> <C>
From Operations:
Net Investment Income (Loss) ........................................... $ (28,773) $ (22,131)
Net Realized Gain (Loss) on Investments ................................ 263,105 (112,382)
Net Unrealized Appreciation (Depreciation) ............................. (12,316) 40,980
---------- ----------
Increase (Decrease) in Net Assets from Operations....................... 222,016 (93,533)
From Distributions to Shareholders
Net Investment Income (Loss) ........................................... 0 0
Net Realized Gain (Loss) from Security Transactions..................... (163,629) 0
---------- ----------
Net Increase (Decrease) from Distributions ............................. (163,629) 0
From Capital Share Transactions:
Proceeds From Sale of 12,041 Shares ................................... 121,069 802,743
Net Asset Value of 14,922 Shares Issued on Reinvestment of Dividends .. 147,644 182,239
Cost of 80,976 Shares Redeemed ........................................ (815,064) (1,007,386)
---------- ----------
(546,351) (22,404)
Net Increase (Decrease) in Net Assets .................................... (487,964) (115,937)
Net Assets at Beginning of Period (including undistributed net investment
income of $0 and $0, respectively) ..................................... 1,997,955 2,113,892
Net Assets at End of Period (including undistributed net investment income
of $0 and $10, respectively) ........................................... $1,509,991 $1,997,955
========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout the period:
<TABLE>
<CAPTION>
01/01/95 01/01/94 05/01/93
to to to
12/31/95 12/31/94 12/31/93*
-------- -------- --------
<S> <C> <C> <C>
Net Asset Value -
Beginning of Period ......................... $ 9.62 $ 9.96 $ 10.00
Net Investment Income ......................... (0.19) (0.08) (0.07)
Net Gains or (Losses) on Securities
(realized and unrealized) ................... 1.57 (0.26) 1.16
------------ ------------ ----------
Total from Investment Operations .............. 1.38 (0.34) 1.09
Dividends
(from net investment income) ............... 0.00 0.00 0.00
Distributions (from capital gains) ............ (1.18) 0.00 (1.13)
Return of Capital ............................. 0.00 0.00 0.00
------------ ------------ ----------
Total Distributions ........................ (1.18) 0.00 (1.13)
Net Asset Value -
End of Period .............................. $ 9.82 $ 9.62 $ 9.96
Total Return .................................. 14.41% (3.41)% 8.62%
Ratios/Supplemental Data
Net Assets -
End of Period (Thousands) .................. 1,510 1,998 2,114
Ratio of Expenses to Average Net Assets ....... 3.85% 3.60% 2.42%
Ratio of Net Income to Average Net Assets ..... (1.69)% (0.87) (0.66)%
Porifolio Turnover Rate ....................... 13.77 4.69 1.52
<FN>
* Weighted average used
</TABLE>
The accompanying notes are an integral part of the financial statetments.
-13-
<PAGE> 59
MAXUS LAUREATE FUND
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<S> <C> <C> <C>
===================================================================================================================
SHARES COST MARKET VALUE % OF ASSETS
- -------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH
17,921 Rydex Nova ...................................................... 250,035 250,538
---------- ----------
250,035 250,538 16.59%
GROWTH
206 Heartland Value ................................................ 5,952 5,766
19,380 Neuberger & Berman Manhattan F ................................. 250,025 235,271
---------- ----------
255,977 241,037 15.96%
SPECIALTY/SECTOR
22,645 Invesco Energy Fund ............................................ 250,025 257,246
10,808 T. Rowe Price New Era Fund ..................................... 250,025 244,812
---------- ----------
500,050 502,058 33.25%
ASSET ALLOCATION
18,465 Roberts Stephens Contrarian .................................... 250,057 254,440 16.85%
TOTAL INVESTMENTS ....................................................... $1,256,119 $1,248,073 82.65%
Other Assets Less Liabilities .................................. $ 261,918 17.35%
Net Assets - Equivalent to $9.82 per share on 153,780
shares of capital stock outstanding ............................ $1,509,991 100.00%
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-14-
<PAGE> 60
MAXUS LAUREATE FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1.) SIGNIFICANT ACCOUNTING POLICIES
The Fund is a diversified, open-end management
investment company, organized as a Trust under the
laws of the State of Ohio by a Declaration of Trust
dated February 10, 1993. Significant accounting
policies of the Fund are presented below:
SECURITY VALUATION:
The Fund intends to invest exclusively in other
open-end management investment companies (mutual
funds). The investments in mutual funds are carried at
market value. The market quotation used for mutual
funds is the net asset value on the date on which the
valuation is made. The cost of securities sold is
determined on the identified cost basis.
INCOME TAXES:
It is the Fund's policy to distribute annually, prior
to the end of the calendar year, dividends sufficient
to satisfy excise tax requirements of the Internal
Revenue Service. This Internal Revenue Service
requirement may cause an excess of distributions over
the book year-end accumulated income. In addition, it
is the Fund's policy to distribute annually, after the
end of the calendar year, any remaining net investment
income and net realized capital gains.
2.) INVESTMENT ADVISORY AGREEMENT
The Fund has entered into an investment advisory and
administration agreement with Maxus Asset Management
Inc, a wholly owned subsidiary of Resource Management
Inc. The Investment Advisor receives from the Fund as
compensation for its services to the Fund an annual
fee of 1% on the first $150,000,000 of the Fund's net
assets, and 0.75% of the Fund's net assets in excess
of $150,000,000.
3.) RELATED PARTY TRANSACTIONS
Resource Management, Inc. has three wholly owned
subsidiaries which provide services to the Fund.
These subsidiaries are Maxus Asset Management Inc,
Maxus Securities Corp, and Mutual + Shareholder
Services Corporation. Maxus Asset Management was paid
$16,939 in investment advisory fees during the twelve
months ended December 31, 1995. Maxus Securities, who
served as the national distributor of the Fund's
shares, was reimbursed $8,467 for distribution
expenses. Mutual + Shareholder Services, who provides
accounting and shareholder services, received fees
totaling $9,044 for services rendered to the Fund for
the twelve months ended December 31, 1995. Maxus
Securities is a registered broker-dealer. Maxus
Securities effected substantially all of the
investment portfolio transactions for the Fund. For
this service Maxus Securities received commissions of
$5,100 for the twelve months ended December 31, 1995
At December 31, 1995, Resource Management owned 10,000
shares in the Fund.
Certain officers and/or trustees of the Fund are
officers and/or directors of the Investment Advisor
and Administrator. Each director who is not an
"affiliated person" receives an attendance fee of $100
per meeting.
4.) CAPITAL STOCK AND DISTRIBUTION
At December 31, 1995 an indefinite number of shares of
capital stock ($.10 par value) were authorized, and
paid-in capital amounted to $1,524,992. Transactions
in common stock were as follows:
<TABLE>
<S> <C>
Shares sold .............................................. 12,041
Shares issued to shareholders in reinvestment of dividends 14,922
-------
26,963
Shares redeemed .......................................... 80,976
-------
Net Increase (Decrease) .................................. (54,013)
Shares Outstanding:
Beginning of Period .................................. 207,793
-------
End of Period ............................................. 153,780
=======
</TABLE>
-15-
<PAGE> 61
MAXUS LAUREATE FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
Distributions to sharehohders are recorded on the ex-dividend date.
Payments in excess of net investment income or of accumulated net realized
gains reported in the financial statements are due primarily to book/tax
differences. Payments due to permanent differences have been charged to
paid in capital. Payments due to temporary differences have been charged
to distributions in excess of net investment income or realized gains.
15.) ORGANIZATION COSTS
Organization costs are being amortized on a straight line basis over
a five year period.
16.) SECURITY TRANSACTION TIMING
Security transactions are recorded on the dates transactions are
entered into (the trade dates). Dividend income and distributions
to shareholders are recorded on the ex-dividend date. Interest income
is recorded as earned. The Fund uses the identified cost basis in
computing gain or loss on sale of investment securities.
17.) PURCHASES AND SALES OF SECURITIES
During the twelve months ended December 31, 1995 purchases and sales
of investment securities other than U.S. Government obligations and
short-term investments aggregated $19,435,502 and $20,253,623
respectively.
18.) FINANCIAL INSTRUMENTS DISCLOSURE
There are no reportable financial instruments which have any
off-balance sheet risk as of December 31, 1995.
19.) SECURITY TRANSACTIONS
For Federal income tax purposes, the cost of investments owned at
December 31, 1995 was the same as identified cost.
At December 31, 1995, the composition of unrealized appreciation (the
excess of value over tax cost) and depreciation (the excess of tax cost
over value) was as follows:
<TABLE>
<CAPTION>
Appreciation (Depreciation) Net Appreciation (Depreciation)
------------ -------------- -------------------------------
<S> <C> <C>
12,107 (20,153) (8,046)
</TABLE>
20.) RECLASSIFICATION OF CAPITAL ACCOUNTS
The Fund has adopted Statement of Position 93-2, Determination,
Disclosure and Financial Statement Presentation of Income, Capital
Gain and Return of Capital Distributions by Investment Companies. As a
result of this statement, the Fund changed the classification of
distributions to shareholders to better disclose the differences
between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, undistributed net
investment loss has been adjusted to paid in capital as of December,
1995 in the following amounts. These restatements did not affect net
investment income, net realized gain (loss) or net assets for the year
ended December 31, 1995.
<TABLE>
<CAPTION>
Capital Paid In Undistributed Net Investment Gain
--------------- ---------------------------------
<S> <C>
(28,773) 28,773
</TABLE>
-16-
<PAGE> 62
APPENDIX
DESCRIPTION OF STANDARD & POOR'S CORPORATE DEBT RATINGS
- -------------------------------------------------------
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong; AA -
Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree. A - Debt rated
A has a strong capacity to pay interest and repay principal although it is
somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than debt in higher rated categories; BBB - Debt rated
BBB is regarded as having an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories; BB, B, CCC, CC, C - Debt rated BB, B,
CCC, CC and C is regarded, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions. BB - Debt rated
BB has less near-term vulnerability to default than other speculative issues.
However, it faces major ongoing uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to inadequate capacity to
meet timely interest and principal payments. The BB rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BBB- rating; B - Debt rated B has a greater vulnerability to default but
currently has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions will likely impair capacity
or willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied BB or BB- rating; CCC - Debt rated CCC has a currently indefinable
vulnerability to default, and is dependent upon favorable business, financial
and economic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial or economic conditions,
it is not likely to have the capacity to pay interest and repay principal. The
CCC rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied B or B- rating; CC - The rating CC is typically
applied to debt subordinated to senior debt that is assigned an actual or
implied CCC rating; C - The rating C is typically applied to debt subordinated
to senior debt which is assigned an actual or implied CCC- debt rating; CI -
The rating CI is reserved for income bonds on which no interest is being paid;
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal repayments are not made on the date due even if
the applicable grace period has not expired, unless Standard & Poor's believes
that such payments will be made during such grace period.
DESCRIPTION OF STANDARD & POOR'S COMMERCIAL PAPER RATINGS
A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation; A-2 - Capacity for timely
A-1
<PAGE> 63
payment on issues with this designation is satisfactory. However, the relative
degree of safety is not as high as for issues designated "A-1"; A-3 - Issues
carrying this designation have adequate capacity for timely payment. They are,
however, more vulnerable to the adverse effects of changes in circumstances
than obligations carrying the higher designations; B - Issues rated "B" are
regarded as having only speculative capacity for timely payment; C - This
rating is assigned to short-term debt obligations with a doubtful capacity for
payment; D - Debt rated "D" is in payment default. The "D" rating category is
used when interest payments or principal payments are not made on the date due,
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period.
A-2
<PAGE> 64
PART C
OTHER INFORMATION
Item 24. Financial Statement and Exhibits.
---------------------------------
(a) Financial Statements:
The Financial Statements filed as part of this
Registration Statement are as follows:
Statement of Assets and Liabilities as of December
31, 1995.
Statement of Operations for the year ended December
31, 1995.
Statement of Changes in Net Assets for the year ended
December 31, 1995.
Supplementary Information for the years ended
December 31, 1995 and 1994 and the period from May 1,
1993 (commencement of operations) to December 31,
1993.
Schedule of Investments as of December 31, 1995.
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
1 Registrant's Declaration of Trust dated February 10, 1993.(1)
2 Registrant's By-Laws.(1)
3 None.
4 Specimen Certificate for Registrant's Shares of Beneficial Interest.(1)
5 Form of Investment Advisory and Administration Agreement.(1)
6 Form of Distribution Agreement.(2)
7 None.
8 Form of Custodian Agreement.(2)
</TABLE>
C-1
<PAGE> 65
<TABLE>
<S> <C>
9(a) Form of Administration Agreement.(1)
9(b) Form of Accounting Services Agreement.(1)
10 Opinion and consent of Benesch, Friedlander,
Coplan & Aronoff.(2)
11 Consent of Independent Auditors.
12 None.
13 Form of Subscription Agreement Between the Fund and Resource Management Inc.(1)
14 Individual Retirement Account Documents.(3)
15 Form of Plan of Distribution Pursuant to Rule 12b-1.(1)
17 Financial Data Schedule
<FN>
(1) Incorporated by reference to the corresponding
exhibit to Registration Statement No. 33-58514.
(2) Incorporated by reference to the corresponding
exhibit to Pre-Effective Amendment No. 1 to
Registration Statement No. 33-58514.
(3) Incorporated by reference to the corresponding
exhibit to Pre-Effective Amendment No. 2 to
Registration Statement No. 33-58514.
</TABLE>
Item 25. Persons Controlled by or Under Common Control with Registrant.
-------------------------------------------------------------
The Fund, together with Maxus Income Fund and Maxus
Equity Fund, two other investment companies, may be deemed to
be under common control on the basis of the fact that all
officers and Trustees of the Fund are also officers and
Trustees of the other two funds.
In addition, the Fund and Resource Management Inc.
(together with its subsidiaries, MAM, MSC and MIS) may be
deemed to be under common control of Richard A. Barone, the
Chairman of the Fund and the President and controlling
shareholder of Resource Management Inc.
Item 26. Number of Holders of Securities.
--------------------------------
As of March 1, 1996, there were 976 record holders of
the Fund's Shares of Beneficial Interest.
C-2
<PAGE> 66
Item 27. Indemnification.
----------------
The following is a summary of certain terms and
provisions of Section 3.9 and Article V of the Declaration of
Trust (the "Declaration") of the Registrant, filed as Exhibit
1 to this Registration Statement, and is not intended to set
forth all of such terms and provisions. This summary is
qualified in its entirety by reference to the full text of
Section 3.9 and Article V of the Declaration.
Section 3.9
-----------
The Trustees have the power to purchase, and pay for
out of Trust Property, insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
investment advisers, distributors, selected dealers or
independent contractors of the Fund against all claims arising
by reason of holding any such position or by reason of any
action taken or omitted by any such person in such capacity,
except with respect to claims arising from actions involving
willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their
offices, provided that the Trustees may purchase such
insurance policies covering any of the latter enumerated
categories, if (i) such policies merely provide for payment to
the Fund of any damages caused by any such person and (ii) the
insurer shall be subrogated to the rights of the Fund to
recover from such person.
Article V
---------
Subject to the exceptions and limitations contained
in the Investment Company Act of 1940 (the "1940 Act") and the
further exceptions and limitations hereinafter described,
every Trustee, officer, employee or agent of the Fund shall be
indemnified by the Fund to the fullest extent now or hereafter
permitted by law against all liabilities and expenses
reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he becomes involved
as a party or otherwise by virtue of his being or having been
a Trustee, officer, employee or agent of the Fund and against
amounts paid or incurred by him in the settlement thereof.
However, no indemnification shall be provided to a
Trustee, officer, employee or agent of the Fund: (a) against
any liability to the Fund or its Shareholders, whether or not
there is an adjudication of liability, arising by reasons of
willful misfeasance, bad faith, gross negligence or reckless
disregard of his duties involved in the conduct of his office;
or (b) with respect to any matter as to which he has not acted
in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the Fund; or (c) in
the case of any criminal proceeding, with respect to any
conduct which he had reasonable cause to believe was unlawful.
C-3
<PAGE> 67
Any indemnification shall be made by the Fund only
after (a) a final decision on the merits by a court or other
body before which the claim, action, suit or proceeding was
brought that the person to be indemnified was not liable by
reason of conduct described in the preceding paragraph, or (b)
in the absence of such a decision, a reasonable determination
based upon a review of the facts, that the person to be
indemnified was not liable by reason of such conduct, such
determination to be made in the manner set forth in Section
5.6 of the Declaration.
Under the circumstances set forth in Section 5.7 of
the Declaration, expenses (including attorneys' fees) incurred
in defending any claim, action, suit or proceeding may be paid
by the Trustees in advance of the final disposition thereof.
The rights of indemnification set forth above are not
to be deemed exclusive of any other rights to which a person
may be entitled at law or in equity or under any By-Law,
agreement, vote of shareholders or disinterested Trustees, or
otherwise. The rights of indemnification provided for in
Article V of the Declaration may be insured against by
policies maintained by the Fund.
Insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to Trustees,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant 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 Registrant in the successful defense of any
action, suit or proceeding) is asserted for 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 28. Business and Other Connections of Investment Adviser.
----------------------------------------------------
Reference is made to the captions "Investment
Management" in the Prospectus and "Management of the Fund" in
the Statement of Additional Information.
Item 29. Principal Underwriters.
----------------------
(a) Maxus Securities Corp, the distributor for
the Fund, also distributes securities for Maxus Income Fund
and Maxus Equity Fund.
C-4
<PAGE> 68
(b) The following information is provided with
respect to each director and officer of Maxus Securities Corp:
<TABLE>
<CAPTION>
Positions & Positions &
Name and Principal Offices With Offices With
Business Address Underwriter Registrant
-------------------- ------------ -------------
<S> <C> <C>
Richard A. Barone President, Chairman, Treasurer
28601 Chagrin Blvd. Treasurer and and a Trustee
Suite 500 Director
Cleveland, Ohio 44122
Robert W. Curtin Senior Vice Secretary
28601 Chagrin Blvd. President and
Suite 500 Secretary
Cleveland, Ohio 44122
</TABLE>
Item 30. Location of Accounts and Records.
---------------------------------
All accounts, books and documents required to be
maintained by the Registrant pursuant to Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3
thereunder are maintained at the office of the Registrant and
the Transfer Agent at 28601 Chagrin Blvd., Suite 500,
Cleveland, Ohio 44122, except that all records relating to the
activities of the Fund's Custodian are maintained at the
office of the Custodian, Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45201
Item 31. Management Services.
-------------------
Not applicable.
Item 32. Undertakings.
------------
Registrant hereby undertakes to file a post-effective
amendment, using reasonably current financial statements which
need not be certified, within four to six months from the
effective date of Registrant's registration statement under
the Securities Act of 1933.
C-5
<PAGE> 69
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cleveland, State of Ohio, on the 22nd
day of March, 1996.
MAXUS LAUREATE FUND
By: /s/ Richard A. Barone
---------------------------
Richard A. Barone, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Richard A. Barone Chairman, Treasurer and March 22, 1996
Trustee (Principal Executive
Officer, Financial Officer,
and Accounting Officer)
Sanford A. Fox Trustee March 22, 1996
Michael A. Rossi Trustee March 22, 1996
Robert A. Schenkelberg, Jr. Trustee March 22, 1996
F. Carl Walter Trustee March 22, 1996
</TABLE>
Richard A. Barone, by signing his name below, signs this Amendment to
Registration Statement on behalf of the above-named Trustees pursuant to Powers
of Attorney filed with the Securities and Exchange Commission.
Dated: March 22, 1996 /s/ Richard A. Barone
--------------------------------------
RICHARD A. BARONE, Attorney-in-Fact
<PAGE> 70
POWER OF ATTORNEY
-----------------
The undersigned Trustee of Maxus Laureate Fund (the "Fund"), an Ohio
business trust, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, a
Post-Effective Amendment to its registration statement on Form N-1A, hereby
constitutes and appoints RICHARD A. BARONE with full power of substitution and
resubstitution, as attorney to sign for the undersigned and in my name, place
and stead, as Trustee of said Fund, said Amendment and any and all amendments
and exhibits thereto, and any and all applications and documents to be filed
with the Securities and Exchange Commission pertaining to such Amendment, with
full power and authority to do and perform any and all acts and things
whatsoever requisite, necessary or advisable to be done in the premises, as
fully and for all intents and purposes as the undersigned could do if
personally present, hereby approving the acts of said attorney, and any such
substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of
March, 1996.
/s/ Sanford A. Fox, D.D.S.
--------------------------
SANFORD A. FOX, D.D.S.
<PAGE> 71
POWER OF ATTORNEY
-----------------
The undersigned Trustee of Maxus Laureate Fund (the "Fund"), an Ohio
business trust, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, a
Post-Effective Amendment to its registration statement on Form N-1A, hereby
constitutes and appoints RICHARD A. BARONE with full power of substitution and
resubstitution, as attorney to sign for the undersigned and in my name, place
and stead, as Trustee of said Fund, said Amendment and any and all amendments
and exhibits thereto, and any and all applications and documents to be filed
with the Securities and Exchange Commission pertaining to such Amendment, with
full power and authority to do and perform any and all acts and things
whatsoever requisite, necessary or advisable to be done in the premises, as
fully and for all intents and purposes as the undersigned could do if
personally present, hereby approving the acts of said attorney, and any such
substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of
March, 1996.
/s/ Michael A. Rossi
--------------------
MICHAEL A. ROSSI
<PAGE> 72
POWER OF ATTORNEY
-----------------
The undersigned Trustee of Maxus Laureate Fund (the "Fund"), an Ohio
business trust, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, a
Post-Effective Amendment to its registration statement on Form N-1A, hereby
constitutes and appoints RICHARD A. BARONE with full power of substitution and
resubstitution, as attorney to sign for the undersigned and in my name, place
and stead, as Trustee of said Fund, said Amendment and any and all amendments
and exhibits thereto, and any and all applications and documents to be filed
with the Securities and Exchange Commission pertaining to such Amendment, with
full power and authority to do and perform any and all acts and things
whatsoever requisite, necessary or advisable to be done in the premises, as
fully and for all intents and purposes as the undersigned could do if
personally present, hereby approving the acts of said attorney, and any such
substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of
March, 1996.
/s/ Robert A. Schenkelberg, Jr.
-------------------------------
ROBERT A. SCHENKELBERG, JR.
<PAGE> 73
POWER OF ATTORNEY
-----------------
The undersigned Trustee of Maxus Laureate Fund (the "Fund"), an Ohio
business trust, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, a
Post-Effective Amendment to its registration statement on Form N-1A, hereby
constitutes and appoints RICHARD A. BARONE with full power of substitution and
resubstitution, as attorney to sign for the undersigned and in my name, place
and stead, as Trustee of said Fund, said Amendment and any and all amendments
and exhibits thereto, and any and all applications and documents to be filed
with the Securities and Exchange Commission pertaining to such Amendment, with
full power and authority to do and perform any and all acts and things
whatsoever requisite, necessary or advisable to be done in the premises, as
fully and for all intents and purposes as the undersigned could do if
personally present, hereby approving the acts of said attorney, and any such
substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of
March, 1996.
/s/ F. Carl Walter
------------------
F. CARL WALTER
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the use in this Post-Effective Amendment No. 4 to Maxus
Laureate Fund's Registration Statement on Form N-1A of our report dated January
22, 1996 on the financial statements of Maxus Laureate Fund and the Summary
Financial Information included in the Prospectus and to the references made to
us under the caption "General Information" included in the Prospectus and under
the caption "Investment Advisory and Other Services" included in the Statement
of Additional Information.
/s/ McCURDY & ASSOCIATES CPA'S, INC.
McCURDY & ASSOCIATES CPA'S, INC.
Westlake, Ohio
January 23, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000897567
<NAME> MAXUS LAUREATE
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1,256,119
<INVESTMENTS-AT-VALUE> 1,248,073
<RECEIVABLES> 37,821
<ASSETS-OTHER> 245,162
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,531,056
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,065
<TOTAL-LIABILITIES> 21,065
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,536,866
<SHARES-COMMON-STOCK> 153,780
<SHARES-COMMON-PRIOR> 207,793
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18,829)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8,046)
<NET-ASSETS> 1,509,991
<DIVIDEND-INCOME> 19,173
<INTEREST-INCOME> 17,467
<OTHER-INCOME> 0
<EXPENSES-NET> 65,413
<NET-INVESTMENT-INCOME> (28,773)
<REALIZED-GAINS-CURRENT> 263,105
<APPREC-INCREASE-CURRENT> (12,316)
<NET-CHANGE-FROM-OPS> 222,016
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 163,629
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,041
<NUMBER-OF-SHARES-REDEEMED> 80,976
<SHARES-REINVESTED> 14,922
<NET-CHANGE-IN-ASSETS> (487,964)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16,939
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 65,413
<AVERAGE-NET-ASSETS> 1,698,422
<PER-SHARE-NAV-BEGIN> 9.62
<PER-SHARE-NII> (0.19)
<PER-SHARE-GAIN-APPREC> 1.57
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.18
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.82
<EXPENSE-RATIO> 3.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
