RWB/WPG U.S. LARGE STOCK FUND
Reinhardt Werba Bowen
1190 Saratoga Avenue
Suite 200
San Jose, California 95129
800-366-7266 - EXT. 124
RWB/WPG U.S. LARGE STOCK FUND (THE "FUND") is an open-end, diversified
mutual fund. The Fund's investment objective is to seek total return through
investing in equity securities of U.S. companies with large market
capitalizations. The Fund is quantitatively managed using a value-oriented
multifactor investment process. There can be no assurance that the Fund will
achieve its investment objective. The Fund's investment adviser is Weiss, Peck &
Greer, L.L.C. (the "Adviser"), a member firm of the New York Stock Exchange. The
Fund is offered exclusively to individuals, institutions and other entities that
are investment advisory clients of Reinhardt Werba Bowen Advisory Services.
TABLE OF CONTENTS
Page
----
Expense Information................................................. 2
Financial Highlights................................................ 3
Description of the Fund............................................. 4
Purchase of Shares.................................................. 5
How the Fund's Net Asset Value is Determined........................ 6
How to Redeem Shares................................................ 6
Management of the Fund.............................................. 7
Dividends, Distributions, and Taxes................................. 8
Portfolio Brokerage................................................. 9
Organization and Capitalization..................................... 10
Risk Considerations and Other Investment Practices and Policies..... 10
The Fund's Investment Performance................................... 12
This Prospectus sets forth concisely the information that a prospective
investor should know before investing in the Fund. It should be retained for
future reference. A Statement of Additional Information ("SAI") about the Fund,
dated July 18, 1997, has been filed with the Securities and Exchange Commission
("SEC") and is available, without charge, by writing or calling the Fund at the
address or telephone number shown above. The SAI for the Fund is incorporated by
reference into this Prospectus.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus Dated July 18, 1997.
<PAGE>
EXPENSE INFORMATION
The Table and Example below are included in this Prospectus to assist
your understanding of all the fees and expenses to which an investment in the
Fund would be subject. Shown below are estimated fees and expenses for the
current fiscal year based on actual fees and expenses incurred by the Fund for
the fiscal year ended December 31, 1996. Actual fees and expenses for the Fund
in the future may be greater or less than those shown below. Similarly, the
annual rate of return assumed in the Example is not an indication or guarantee
of future performance. A more complete description of all fees and expenses for
the Fund is included in this Prospectus under "Management of the Fund" and "How
to Purchase Shares."
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Sales Load Imposed on Purchase None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load Imposed on Redemptions None
Redemption Fee (1) None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (After fee reduction)(2) 0.14%
Rule 12b-1 Fees 0.00%
Other Expenses (After expense limitation)(2) 0.28%
-----
Total Operating Expenses 0.42%
=====
- ------------------
<FN>
(1) There are no charges imposed upon redemption, although the Fund's transfer
agent will charge a fee (currently $9.00) for transfers or redemptions by
wire.
(2) The Adviser has voluntarily agreed to limit temporarily the Fund's Total
Operating Expenses (excluding litigation, indemnification and other
extraordinary expenses) to 0.42% of the Fund's average daily net assets.
</FN>
</TABLE>
EXAMPLE: An investor in the Fund would pay the following Fund expenses on
a hypothetical $1,000 investment assuming a 5% annual return and
redemption at the end of each future time period.
<TABLE>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$4 $14 $24 $53
</TABLE>
-2-
<PAGE>
FINANCIAL HIGHLIGHTS
The following table represents a condensed financial history for the Fund
and uses the Fund's taxable year, which ends December 31. The table expresses
the information for the Fund in terms of a single share outstanding throughout
each period. The condensed financial information has been derived from the
Fund's financial statements, which have been audited by the Fund's independent
auditors, KPMG Peat Marwick LLP, independent certified public accountants, whose
unqualified report thereon is incorporated by reference into the Fund's SAI. The
Fund's Annual Report includes more information about the Fund's performance and
is available free of charge by writing to the Fund at the address shown on the
cover of this Prospectus.
<TABLE>
<S> <C> <C> <C> <C>
Year Year Year Period
Ended Ended Ended Ended
12/31/96 12/31/95 12/31/94 12/31/93*
-------- -------- -------- ---------
Per Share Data:
Net Asset Value at Beginning of Period......... $6.39 $ 5.05 $ 5.16 $ 5.00
----- ------ ------- -------
Net Investment Income...................... $0.13 $0.13 $ 0.14 $ 0.06
Net Realized and Unrealized Gain on
Investments........................... 1.12 1.58 (0.14) 0.20
------- ---- ------- -------
Total Income/(Loss) from Operations............ 1.25 1.71 0.00 0.26
------- ---- -------- -------
Dividends from Net Investment Income....... (0.12) (0.13) (0.11) (0.06)
Distributions from Capital Gains........... (0.87) (0.24) 0.00 (0.04)
-------- ------ ------- -------
Total Distributions............................ (0.99) (0.37) (0.11) (0.10)
-------- ------ ------- -------
Net Asset Value End of Period ................. $ 6.65 6.39 $ 5.05 $ 5.16
======= ==== ======= =======
Total Return................................... 19.33% 33.81% 0.06% 5.09%
Net Assets at End of Period (000's)............ $200,226 174,161 $ 106,850 $ 66,845
Average commission per share................... $0.033 N/A N/A N/A
Ratios:
Ratio of Expenses to Average Net Assets 0.59% + 0.69% + 0.75% + 0.77% + (A)
Ratio of Net Investment Income to Average
Net Assets................................. 1.86% + 2.26% + 2.65% + 2.54% + (A)
Portfolio Turnover Rate....................... 59.6% 27.1% 36.2% 27.1% (A)
- ------------------
<FN>
* From inception of Fund 6/8/93.
(A) Annualized
+ The Adviser agreed not to impose its full fee since inception. Had the
Adviser not so agreed, the ratio of expenses and net investment income to
average net assets would have been as follows:
Ratio of Expenses to Average Net Asset 0.62% 0.74% 0.79% 0.98%
Ratio of Investment Income to Average Net Assets 1.83% 2.21% 2.61% 2.33%
</FN>
</TABLE>
-3-
<PAGE>
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE. The RWB/WPG U.S. Large Stock Fund (the "Fund") seeks
total return through investing in equity securities of U.S. companies with
large market capitalizations. The Fund is quantitatively managed using a
value-oriented multifactor investment process.
INVESTMENT PROGRAM. The Fund seeks to achieve its objective through a
quantitative investment process that identifies value-oriented stocks of U.S.
companies with large market capitalizations using a multifactor model. Under
normal market conditions, the Fund maintains a low portfolio turnover to manage
the costs associated with trading. Because it includes many factors which have
been shown to impact the performance of equity securities, the Adviser believes
that the multifactor model identifies value-oriented stocks better than any
single factor model. The factors currently considered by the model include,
among others, a stock's book-to-price ratio, return on equity, price-to-forecast
earnings ratio, and earnings estimate dispersion.
Using the multifactor model, the Adviser constructs a portfolio for the
Fund with industry weightings that are approximately the same as the industry
weightings of the Standard & Poor's 500 Composite Stock Price Index (the "S&P
500 Index"). Although the Fund's portfolio will not contain all the stocks
included in the S&P 500 Index, the similar industry weighting of the Fund and
the S&P 500 Index is designed so that the Fund's returns are highly correlated
with the return of the S&P 500. The Fund's portfolio is monitored and rebalanced
according to quantitative criteria derived from the multifactor model's ranking
within its industry group of each stock under consideration. Under normal market
conditions, the Fund invests at least 65% of its total assets in equity
securities of U.S. companies with public stock market capitalizations of $4
billion or more at the time of investment.
The S&P 500 Index is a market weighted compilation of 500 common stocks
selected on a statistical basis by Standard & Poor's. The S&P 500 Index is
typically composed of issues in the following sectors: industrial, financial,
public utilities and transportation. Most of the stocks that comprise the Index
are traded on the New York Stock Exchange, although some are traded on the
American Stock Exchange and in the over-the-counter market.
While the Fund will generally be substantially fully invested in equity
securities, it may invest up to 10% of its assets in either (a) fixed income
obligations maturing in one year or less that are rated at least AA by Standard
& Poor's or Aa by Moody's Investors Service, Inc. or their equivalents, or
unrated obligations determined by the Adviser to be of comparable credit quality
or (b) securities of other investment companies, i.e., Standard & Poor's
Depositary Receipts (commonly referred to as "Spiders") which are
exchange-traded shares of a closed-end investment company that are designed to
replicate the price performance and dividend yield of the S&P 500 Index. The
Fund may purchase and sell futures contracts based on the S&P 500 Index. These
futures will be utilized for the sole purpose of keeping the Fund fully invested
and not for leverage purposes. The Fund may also invest in American Depositary
Receipts (ADRs) that represent securities in the S&P 500 Index, enter into
repurchase agreements and purchase securities on a when-issued basis. The
realization of current income is not a significant part of the Fund's investment
strategy, and any income generated will be incidental to the Fund's investment
objective. Because of the uncertainty inherent in all investments, no assurance
can be given that the Fund will achieve its investment objective.
For further information concerning the Fund's investment techniques,
policies and risks, see "Risk Considerations and Other Investment Practices and
Policies" in this Prospectus. "Standard & Poor's 500" and "S&P 500" are
trademarks of Standard & Poor's Ratings Group ("Standard & Poor's").
PURCHASE OF SHARES
Shares of the Fund may be purchased only by investment advisory clients of
Reinhardt Werba Bowen Advisory Services ("RWB"), a registered investment adviser
organized in 1975 and located in San Jose, California.
Because shares of the Fund are available only to clients of RWB, the
signing of either an unmanaged or managed account agreement must precede an
initial investment in the Fund. More information regarding the services provided
by
- 4 -
<PAGE>
RWB are available by calling 1-800-366-7266 - EXT.124.
It is anticipated that a limited number of institutions including banks and
brokerage firms, will be used by RWB clients to hold shares of the Fund as well
as shares of other mutual funds and other securities representing investments of
such RWB clients. RWB clients will be the beneficial owners of such shares and
other securities. In consideration of these services, the financial institutions
charge fees to the RWB client accounts serviced.
SHARE PRICE. Purchase orders for shares of the Fund will be priced at the
net asset value per share of the Fund next determined after receipt of the
purchase order by a financial institution, provided that the order has been
received by the Fund prior to its close of business. The financial institutions
utilized by RWB clients are responsible for timely transmittal of purchase
orders to the Fund. See "How the Fund's Net Asset Value is Determined."
CONDITIONS OF PURCHASE. The Fund reserves the right to reject any purchase
for any reason and to cancel any purchase due to nonpayment. Purchase orders are
not binding on the Fund or considered received until such purchase orders are
received in good order. All purchases must be made in U.S. dollars and, to avoid
fees and delays, all checks must be drawn only on U.S. banks. No cash will be
accepted. As a condition of this offering, if a purchase is canceled due to
nonpayment or because the purchase check does not clear (and, therefore, the
shares so purchased must be redeemed), the investor will be responsible for any
loss incurred by the Fund. Share certificates will not be issued.
The Fund currently does not have any minimum investment or account
requirements, although it may establish minimum account balance requirements in
the future.
CONFIRMATIONS, SHAREHOLDERS STATEMENTS AND REPORTS. Each time you buy or
sell shares you will receive a confirmation statement with respect to such
transaction. In addition, shareholders will receive account statements
reflecting any reinvestment of a dividend or distribution in the Fund as well as
the shareholder's current share balance with the Fund. Shareholders will also
receive shareholder reports no less frequently than semi-annually, as well as
year-end tax information.
SHAREHOLDER SERVICES. RWB provides account servicing functions for the
Fund. These services include but are not limited to: establishing and
maintaining a toll-free telephone number for investors to use in obtaining
current account information; providing to investors quarterly reports with
respect to the Fund's performance; and providing to investors upon request
information concerning the operation of the Fund and their investment in the
Fund. In consideration of these services, the Fund currently pays to RWB a fee
equal, on an annual basis, to 0.10% of the Fund's average daily net assets. The
rate at which this fee is paid was reduced on July 18, 1997. For the fiscal year
ended December 31, 1996, the Fund paid RWB a fee at the annual rate of 0.14% of
the Fund's average daily net assets. Questions concerning the Fund or the
Shareholder Services described above, should be directed to RWB at 800-366-7266
- - EXT. 124. Written inquiries can be sent to the RWB address shown on the front
cover of this Prospectus. The Fund and RWB may amend the shareholder services
arrangement described above or change the terms or conditions relating to such
services upon 60 days' notice to shareholders.
HOW THE FUND'S NET ASSET
VALUE IS DETERMINED
The net asset value per share of the Fund is normally calculated as of the
close of regular trading on the New York Stock Exchange (the "Exchange"),
normally 4:00 p.m. Eastern Time, every day that the Exchange is open for regular
trading. The net asset value per share, calculated as described below, is
effective for all orders received by the Fund or its agents in good order prior
to the close of regular trading on the Exchange for that day. Purchase and
redemption orders received after the close of regular trading on the Exchange or
on a day when the Exchange is not open for business will be priced at the net
asset value per share next computed.
The net asset value of the Fund's shares is determined by adding the value
of all securities, cash and other assets of the Fund, subtracting liabilities
(including accrued expenses and dividends payable), and dividing the result by
the total number of outstanding shares of the Fund.
- 5 -
<PAGE>
For the purpose of calculating the Fund's net asset value per share,
portfolio securities are valued primarily based on market quotations, or, if
market quotations are not available, by a valuation committee as appointed by
the Board of Trustees. In accordance with procedures and agreements approved by
the Board of Trustees, the Fund may use pricing services to value the securities
of the Fund.
HOW TO REDEEM SHARES
The Fund will redeem shares at the net asset value of such shares next
determined after receipt of a redemption request in good order by the Fund or
its agents. As with purchases of Fund shares, redemptions will be effected by
the Fund or its agent based on instructions from RWB.
In order to effect a redemption of shares by mail, a financial institution
should send a request in "proper form" (as explained below) to the Fund,
Attention: RWB/WPG U.S. Large Stock Fund, One New York Plaza, 31st Floor, New
York, New York 10004. If telephone redemption privileges have been established
with the Fund, shares may be redeemed by telephone by calling WPG toll free at
1-800-223-3332 between 9:00 A.M. and 4:00 P.M. (Eastern Time) on any day that
the Exchange is open for trading. Telephone redemption privileges are not
available to shareholders automatically; you must first elect the privilege. To
confirm that telephone redemption requests are genuine, the Fund will employ
reasonable procedures such as providing written confirmation of telephone
redemption transactions and tape recording of telephone redemption requests. If
the Fund does not employ such reasonable procedures, it may be liable for any
loss incurred by a shareholder due to a fraudulent or other unauthorized
telephone redemption request. Otherwise, neither the Fund nor its agents will be
liable for any loss incurred by a shareholder as a result of following
instructions communicated by telephone that they reasonably believe to be
genuine. During periods of extreme economic conditions or market changes,
requests by telephone may be difficult to make due to heavy volume. During such
times, placing orders by mail is advisable.
PROPER FORM FOR WRITTEN REDEMPTION REQUESTS. Written redemption
requests must be in proper form. Requests must include: (1) a "letter of
instruction," specifying the name of the Fund, the number of shares or dollar
amount to be sold, the name(s) in which the account is registered, and the
account number (the letter of instruction must be signed by the record
shareholder for the account using the exact name in which the account is
registered or must be accompanied by executed power(s) of attorney); (2) a
signature guarantee when the redemption proceeds are to be sent to an address
other than the address of record or to an institution other than the record
shareholder(s) for the account; and (3) other supporting legal documents, as may
be necessary, for redemption requests by corporations, estates, trusts,
guardianships, custodianships, partnerships, and pension and profit sharing
plans. Signature guarantees, when required, may be obtained from any one of the
following institutions, provided that such institution meets credit standards
established by the Fund's transfer agent: (i) a bank; (ii) a securities broker
or dealer, including a government or municipal securities broker or dealer, that
is a member of a clearing corporation or has net capital of at least $100,000;
(iii) a credit union having authority to issue signature guarantees; (iv) a
savings and loan association, a building and loan association, a cooperative
bank, a federal savings bank or association; or (v) a national securities
exchange, a registered securities exchange or a clearing agency.
A REQUEST FOR REDEMPTION WILL NOT BE PROCESSED UNLESS IT IS IN PROPER FORM,
AS DESCRIBED ABOVE.
RECEIVING REDEMPTION PAYMENT. Except under certain emergency conditions,
redemption payments will be sent to the record shareholder of the account (net
of any required withholding taxes) within three business days after receipt of
the written redemption request in proper form by the Fund's Transfer Agent.
Redemption proceeds may be wired upon request. Currently, the Fund's Transfer
Agent charges a fee for wire transfers. In the case of redemption requests
occurring within 15 days of the date shares are purchased by means of check
(other than a certified or bank check), the redemption payment will be held
until the purchase check has cleared (up to 15 days). Nevertheless, the shares
redeemed will be priced for redemption upon receipt of the redemption request.
- 6-
<PAGE>
MANAGEMENT OF THE FUND
INVESTMENT ADVISER AND ADMINISTRATOR. Weiss, Peck & Greer, L.L.C. ("WPG" or
the "Adviser"), One New York Plaza, New York, New York 10004 serves as the
investment adviser and administrator to the Fund.
Subject to the general supervision of the Board of Trustees, the Adviser is
responsible for the selection and management of all portfolio investments of the
Fund in accordance with the Fund's investment objective, policies and
restrictions.
Daniel J. Cardell is primarily responsible for the day-to-day management of
the Fund. Mr. Cardell has been a principal of WPG since May 1996. Prior to
joining WPG, Mr. Cardell was Senior Vice President and Director of Equities for
the Bank of America.
The Adviser's core large cap division is comprised of eight investment
professionals. Their responsibilities include turning raw data into a format
necessary to calculate a covariance matrix, extensive computer programming and
trading securities to implement the Fund's investment strategy.
Under the Fund's Investment Advisory Agreement, the Fund pays to the
Adviser an advisory fee equal on an annual basis to a percentage of the Fund's
average daily net assets as follows:
<TABLE>
<S> <C>
Annual
Net Assets Rate
- ---------- -----
Up to $500 million 0.26%
from $500 million to $1 billion 0.24%
from $1 billion to $2 billion 0.22%
over $2 billion 0.20%
</TABLE>
Prior to April 1, 1996, the Fund paid the Adviser an advisory fee at a
different rate. See "Management" in the SAI. For the fiscal year ended December
31, 1996, the Fund paid the Adviser an advisory fee at the annual rate of 0.27%
of the Fund's average daily net assets.
Pursuant to an Administration Agreement, WPG also acts as the administrator
of the Fund. As administrator, WPG provides personnel for supervisory,
administrative, accounting and clerical functions; oversees the performance of
administrative and professional services to the Fund by others; provides office
facilities, furnishings and office equipment; and prepares, but does not pay
for, reports to shareholders, the SEC and other regulatory authorities. For its
services under the Administration Agreement, WPG does not receive any
compensation. The Trustees of the Fund may, however, determine in the future to
compensate WPG for its administrative services.
Effective July 18, 1997, WPG has voluntarily agreed to limit the Fund's
total operating expenses (excluding taxes, brokerage commissions, interest, and
extraordinary fees and expenses) to 0.42% of the Fund's average daily net
assets. WPG has no current intention of modifying or discontinuing the expense
limitation but may do so in the future at its discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. First Data Investor Services
Group, Inc. serves as Transfer Agent and Dividend Disbursing Agent for the Fund.
EXPENSES. The Fund bears all expenses of its operation, subject to the
expense limitation agreement described above. In particular, the Fund pays:
investment advisory fees; shareholder servicing fees and expenses; custodian and
transfer agent expenses; legal, accounting and auditing fees and expenses;
expenses of computing its net asset value per share; federal and state
registration fees and expenses with respect to its shares; proxy and shareholder
meeting expenses; expenses of issuing and redeeming its shares; independent
trustees' fees and expenses; expenses of fidelity bond, liability and other
insurance coverage; brokerage commissions; taxes; trade association fees; and
certain non-recurring and extraordinary expenses. The expenses of organizing and
initially registering and qualifying the Fund's shares under federal and state
securities laws are being charged to the Fund's operations, as an expense, over
a period not to exceed 60 months from the Fund's inception date and are subject
to the expense limitation set forth under "Expense Information."
The Fund's annualized ratio of operating expenses to average net assets for
the fiscal year ended December 31, 1996 is set forth under the "Financial
Highlights" section.
- 7 -
<PAGE>
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Fund has qualified and elected to be treated as a "regulated investment
company" ("RIC") under the Internal Revenue Code of 1986, as amended ("Code"),
and intends to qualify as such for each taxable year. Provided that the Fund
continues to qualify as a RIC, it will not be subject to federal income or
excise tax on its income and gains distributed to its shareholders in accordance
with the Code's timing and other requirements.
Income dividends, if any, will be paid at least annually by the Fund.
Similarly, net capital gains, if any, realized during the taxable year will be
distributed no less frequently than annually. Income dividends are derived from
the Fund's net investment income, including dividends and interest, and net
short-term capital gains received by the Fund, and are taxable to you as
ordinary income for regular federal income tax purposes. Corporate shareholders
may be entitled to take the corporate dividends-received deduction for income
dividends received that are attributable to dividends received by the Fund from
domestic corporations, subject to certain restrictions under the Code.
Distributions designated by the Fund as from its net long-term capital gains are
taxable to you as long-term capital gains, regardless of how long you have held
your shares. Distributions declared in October, November or December as of a
record date in such a month and paid in the following January are treated under
the Code as if they were received on December 31 of the year declared. The Fund
will mail tax information to record shareholders by the end of January
indicating the federal tax status of income dividends and capital gains
distributions for the Fund. Such tax status is not affected by the investor's
choice to receive such distributions in additional shares or in cash.
Distributions of the Fund may also be subject to state and local as well as
foreign taxes.
TAX WITHHOLDING AND CERTIFICATION INSTRUCTIONS. The financial institutions
that are record holders of the Fund's shares are required by federal law to
withhold as "backup withholding" 31% of reportable payments (which may include
income dividends, capital gain distributions and share redemption proceeds) paid
to individuals and other non-exempt shareholders who have not provided the Fund
with their correct social security or other taxpayer identification number (TIN)
and certain certifications required by the IRS. In order to avoid such
withholding and possible penalties, investors must certify under penalties of
perjury on their account application to the applicable financial institution, or
on a separate W-9 Form, that the TIN provided is their correct TIN (or that a
TIN has been applied for, and the investor may be subject to withholding in the
interim) and that the investor is not currently subject to backup withholding or
is exempt from backup withholding. The applicable financial institution may also
be required to impose backup withholding if it is notified by the IRS or a
broker that the TIN provided is incorrect or that the investor is otherwise
subject to withholding. Any tax withheld may be credited against taxes owed on
the investor's federal income tax return.
An individual's TIN is generally his social security number. Special rules
apply in determining the TIN that an entity, including an exempt recipient, must
provide. Exempt recipients include corporations, tax exempt pension plans and
IRAs, governmental agencies, financial institutions, registered securities and
commodities dealers and others. Investors who are unsure of the correct TIN to
provide or of whether they are exempt recipients should consult a tax adviser.
For further information, see Section 3406 of the Code and consult a tax adviser.
Persons who are not U.S. persons under the Code should provide the
applicable financial institution with an IRS Form W-8 to avoid backup
withholding on capital gain distributions and redemption proceeds. Such
investors should consider the U.S. and foreign tax consequences of an investment
in the Fund, including the possible applicability of a U.S. withholding tax at
rates up to 30% on ordinary income dividends paid to non-U.S. persons.
REINVESTMENT OF INCOME DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. Unless a record
holder elects otherwise, as permitted in the account application, income
dividends and capital gain distributions will be reinvested in additional shares
of the Fund and will be credited to each record holder's account with the Fund
at the net asset value per share next determined as of the ex-dividend date.
Both income dividends and capital gains distributions are paid by the Fund on a
per share basis. As a result, at the time of such
-8-
<PAGE>
payment, the net asset value per share of the Fund will be reduced by the amount
of such payment. Income dividends and capital gains distributions are taxable to
investors as described above, regardless of whether they are taken in cash or
reinvested in shares of the Fund, unless the accounts of such investors are used
to fund tax-qualified retirement plans, IRAs, SEP-IRAs and other tax-deferred
plans or accounts. Participants in such plans or accounts may be subject to tax
on all or a portion of their distributions from such plans or accounts under
complex Code provisions concerning which a tax adviser should be consulted.
Written requests to change the manner in which income dividends and capital gain
distributions are received must be received by the Fund's Transfer Agent at
least ten days before the next scheduled distribution. Clients of RWB should
consult RWB concerning the dividend and distribution options for their
particular account.
PORTFOLIO BROKERAGE
In effecting securities transactions, the Fund generally seeks to obtain
the best price and execution of orders under the circumstances. Commission rates
are a component of price and are considered together with other factors
including the ability of the broker to effect the transaction and the broker's
facilities, reliability and financial responsibility. Subject to the foregoing
policy and pursuant to procedures established by the Board of Trustees to
regulate commissions paid to WPG, the Fund intends to utilize WPG as its primary
broker in connection with the purchase and sale of exchange-traded portfolio
securities. As the Fund's primary broker, WPG will receive brokerage commissions
from the Fund, limited to the "usual and customary broker's commission"
specified by the 1940 Act. The Fund intends to continue to use WPG as its
primary broker on exchange-traded securities, provided WPG is able to provide
execution at least as favorable as that provided by other qualified brokers.
The Board of Trustees for the Fund has developed procedures to limit the
commissions received by WPG to the standard specified by the 1940 Act and the
rules thereunder. On a quarterly basis, the Fund's Board of Trustees reviews
commissions paid to WPG to assure its compliance with such procedures.
The Fund may also execute its portfolio transactions through qualified
brokers other than WPG. In selecting such other brokers, the Adviser will
consider the quality and reliability of brokerage services, including execution
capability and performance and financial responsibility, and may consider the
research and other investment information provided by such brokers. Accordingly,
the commissions paid to any such broker may be greater than the amount another
firm might charge, provided WPG determines in good faith that the amount of such
commissions is reasonable in relation to the value of the brokerage services and
research information provided by such broker. Such information may be used by
WPG (and its affiliates) in managing all of its accounts and not all of such
information may be used by the Adviser in managing the Fund. In selecting other
brokers for the Fund, WPG may also consider the sale of Fund shares effected
through such other brokers as a factor in their selection, provided the Fund
obtains the best price and execution of orders under the circumstances.
Money market securities and other fixed income securities in which the Fund
may invest are traded primarily in the OTC market. For transactions effected in
the OTC market, the Fund intends to deal with the primary market-makers in the
securities involved, unless a more favorable result is obtainable elsewhere.
ORGANIZATION AND CAPITALIZATION
The Fund was organized as a business trust under the laws of the State of
Delaware on February 16, 1993. On May 1, 1996, the Fund changed its name from
"U.S. Large Stock Fund" to "RWB/WPG U.S. Large Stock Fund."
The Fund currently issues one class of shares all of which have equal
rights with regard to voting, redemptions, dividends and distributions. Shares
in the Fund, when issued, are fully paid and nonassessable. The shares in the
Fund have no preemptive or conversion rights. In the event of liquidation of the
Fund, shareholders in the Fund are entitled to a pro rata share of the Fund's
net assets available for distribution to shareholders. Although the Fund has no
current intention to do so, the Fund may issue additional classes of shares on
such terms
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and subject to such rights and preferences as the Trustees may establish. As of
March 31, 1997, RWB held 99% of the outstanding shares of the Fund in accounts
of clients with respect to which RWB exercises investment discretion. RWB
disclaims beneficial ownership of such shares.
The Fund's activities are supervised by the Board of Trustees. The Board
has overall responsibility for the management of the business of the Fund.
Shareholders in the Fund have one vote for each share held on matters as to
which they are entitled to vote. The Fund is not required to hold, and has no
current intention of holding, annual shareholder meetings. Nevertheless, special
meetings may be called for purposes such as electing or removing Trustees,
changing fundamental policies, or approving an investment advisory agreement.
The Fund will assist shareholders in communicating with other shareholders in
connection with obtaining the necessary signatures to cause the Fund to call a
meeting of shareholders to consider the removal of a Trustee in accordance with
Section 16(c) of the 1940 Act. See "Organization" in the Fund's SAI.
RISK CONSIDERATIONS AND OTHER
INVESTMENT PRACTICES AND POLICIES
FUTURES CONTRACTS. Subject to its investment objectives and policies, the
Fund may purchase and sell futures contracts based on the S&P 500 Index. The
Fund may engage in futures transactions for hedging and non-hedging purposes.
The use of futures contracts entails certain risks, including, but not
limited to the following: no assurance that futures transactions can be offset
at favorable prices; possible reduction in value of both the securities hedged
and the hedging instrument; possible lack of liquidity due to daily limits on
price fluctuations; imperfect correlation between the contract and the
securities being hedged; and potential losses in excess of the initial face
amount of the futures contracts themselves. The use of futures contracts
requires special skills in addition to those needed to select portfolio
securities. If the expectations of the Adviser regarding movements in securities
prices are incorrect, the Fund may have experienced better investment results
without the use of futures contracts. A further discussion of futures contracts
and their associated risks is contained in the Fund's SAI.
ADRs. The Fund may purchase ADRs to the extent such ADRs are included in
the S&P 500. ADRs are U.S. dollar denominated certificates issued by a U.S. bank
or trust company and represent the right to receive securities of a foreign
issuer deposited in a domestic bank or foreign branch of a U.S. bank. ADRs are
traded on domestic exchanges or in the U.S. over-the-counter market and,
generally, are in registered form. The Fund will only invest in ADRs that are
issued in a program sponsored by the issuer of the underlying securities.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. The Fund may purchase
securities on a when-issued, delayed delivery or forward commitment basis. When
such transactions are negotiated, the price of such securities is fixed at the
time of the commitment, but delivery and payment for the securities may take
place up to 90 days after the date of the commitment to purchase. The securities
so purchased are subject to market fluctuation, and no interest accrues to the
purchaser during this period. When-issued securities involve a risk of loss if
the value of the security to be purchased declines prior to settlement date.
When the Fund purchases securities on a forward commitment or when-issued basis,
the Fund's custodian will maintain in a segregated account cash or liquid
securities having a value (determined daily) at least equal to the amount of the
Fund's purchase commitment. The Fund will not enter into such transactions for
leverage purposes. The Fund may close-out a position in securities purchased on
a when-issued, delayed delivery or forward commitment basis prior to the
settlement date.
EURODOLLAR AND YANKEE DOLLAR INVESTMENTS. The Fund may invest in
obligations of foreign branches of U.S. banks (Eurodollars) and U.S. branches of
foreign banks (Yankee dollars) as well as foreign branches of foreign banks.
These investments involve risks that are different from investments in
securities of U.S. banks, including potential unfavorable political and economic
developments, different tax provisions, seizure of foreign deposits, currency
controls, interest limitations or other governmental restrictions which might
affect payment of principal or interest.
REPURCHASE AGREEMENTS. The Fund may utilize repurchase agreements through
which it may purchase a security (the "underlying security") from a domestic
securities dealer or
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bank that is a member of the Federal Reserve System. Under the agreement, the
seller of the repurchase agreement (i.e., the securities dealer or bank) agrees
to repurchase the underlying security at a mutually agreed upon time and price.
In repurchase transactions, the underlying security, which must be a
high-quality debt security, is held by the Fund's custodian through the federal
book-entry system as collateral and marked-to-market on a daily basis to ensure
full collateralization of the repurchase agreement. Should the other party to
the repurchase agreement default on its obligation or become insolvent and
subject to bankruptcy or similar laws, the Fund may be delayed in, or prevented
from, liquidating the collateral.
DIVERSIFICATION. The Fund is registered as a diversified fund under the
1940 Act. As such, the Fund has a fundamental policy that limits its investments
so that, with respect to 75% of its assets, the Fund will not purchase any
security, if, as a result, (i) more than 5% of the Fund's total assets would be
invested in the securities of a single issuer and (ii) the Fund would own more
than 10% of the outstanding voting securities of a single issuer. These
limitations do not apply to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or repurchase agreements
collateralized by U.S. Government securities.
PORTFOLIO TURNOVER. Although the Fund does not purchase securities with a
view to rapid turnover, there are no limitations on the length of time that
securities must be held by the Fund and the Fund's annual portfolio turnover
rate may vary significantly from year to year. The actual portfolio turnover
rates for the Fund are noted in the "Financial Highlights" section of this
Prospectus.
CERTAIN OTHER POLICIES TO REDUCE RISKS. The Fund has adopted certain
fundamental investment policies in managing its portfolio that are designed to
reduce risk. The Fund will not (i) issue senior securities (except as permitted
by the 1940 Act and except that it may issue shares of its beneficial interest
in multiple classes or series) or borrow money except for certain temporary or
emergency purposes and then not in excess of 33% of its assets; (ii) make loans
except through the purchase of certain fixed-income securities; (iii) engage in
underwriting securities of others except to the extent the Fund may be deemed to
be an underwriter in purchasing and selling portfolio securities; (iv) purchase
or sell real estate; (v) invest in commodities or commodities contracts other
than financial futures contracts and when-issued securities; or (vi) exceed the
issuer diversification limits set forth under "Diversification" above.
OTHER INVESTMENT COMPANIES. Notwithstanding the above policies, the Fund
may, subject to authorization by its Board of Trustees, invest all of its assets
in the securities of a single open-end investment company (a "pooled fund"). If
authorized by its Board, the Fund would seek to achieve its investment objective
by investing in a pooled fund which would invest in a portfolio of securities
that complies with the Fund's investment objective, policies and restrictions.
The Board currently does not intend to authorize investing in a pooled fund.
The Fund may invest up to 10% of its total assets in the securities of
other investment companies not affiliated with WPG. For example, the Fund may
invest in Standard & Poor's Depositary Receipts (commonly referred to as
"Spiders"), which are exchange-traded shares of a closed-end investment company
that are designed to replicate the price performance and dividend yield of the
Standard & Poor's 500 Composite Stock Price Index. The Fund will indirectly bear
its proportionate share of any management fees and other expenses paid by
investment companies in which it invests in addition to the advisory and
administration fees paid by the Fund.
FURTHER INFORMATION. The Fund's investment program is subject to further
restrictions as described in the SAI. The Fund's investment objective and
investment program, unless otherwise specified, are not fundamental and may be
changed without shareholder approval by the Board of Trustees of the Fund upon
30 days' written notice to shareholders. If there is a change in the Fund's
investment objective, shareholders should consider whether the Fund remains an
appropriate investment in light of their current financial position and needs.
THE FUND'S INVESTMENT PERFORMANCE
The Fund may illustrate in advertisements and sales literature its average
annual total return, which is the rate of growth of the Fund that would be
necessary to achieve the ending value of an investment kept in the Fund for the
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period specified and is based on the following assumptions: (1) all dividends
and distributions by the Fund are reinvested in shares of the Fund at net asset
value, and (2) all recurring fees are included for applicable periods.
The Fund may also illustrate in advertisements its cumulative total return
for several time periods throughout the Fund's life based on an assumed initial
investment of $1,000. Any such cumulative total return for the Fund will assume
the reinvestment of all income dividends and capital gains distributions for the
indicated periods and will include all recurring fees.
For additional information on the RWB Funds or for daily prices, please
call 1-800-366-7266 - EXT. 124.
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