ACCOLADE FUNDS
BONNEL GROWTH FUND
PROSPECTUS
JANUARY 15, 1996
AMENDED JUNE 21, 1996
P.O. BOX 781234
SAN ANTONIO, TEXAS 78278-1234
1-800-426-6635
(INFORMATION, SHAREHOLDER SERVICES AND REQUESTS)
This prospectus presents information that a prospective investor should
know about the Bonnel Growth Fund (the "Fund"), a diversified series of Accolade
Funds (the "Trust"). The Trust is an open-end management investment company.
Each investor is responsible for determining whether or not an investment in the
Fund is appropriate for his needs. Read and retain this prospectus for future
reference.
A Statement of Additional Information dated January 15, 1996, has been
filed with the Securities and Exchange Commission and is incorporated herein by
reference. The Statement is available free from Accolade Funds upon request at
the address set forth above or by calling 1-800-426-6635.
Please read this prospectus carefully as you are responsible for
determining whether this Fund is suitable for your investment needs. Further,
all investments have varying degrees of risk. It is important that you learn and
understand the degrees of risk associated with making an investment in this
Fund, especially in light of your own personal financial needs and risk
tolerance level.
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.
TABLE OF CONTENTS
SUMMARY OF FEES AND EXPENSES......... 2
INVESTMENT OBJECTIVES AND
CONSIDERATIONS..................... 5
OTHER INVESTMENT PRACTICES........... 6
RISK FACTORS......................... 9
HOW TO PURCHASE SHARES............... 10
HOW TO EXCHANGE SHARES............... 12
HOW TO REDEEM SHARES................. 13
HOW SHARES ARE VALUED................ 18
DIVIDENDS AND TAXES.................. 18
THE TRUST............................ 19
MANAGEMENT OF THE FUND............... 20
DISTRIBUTION EXPENSE PLAN............ 23
PERFORMANCE INFORMATION.............. 23
SUMMARY OF FEES AND EXPENSES
The following summary is provided to assist you in understanding the
various costs and expenses a shareholder in the Fund could bear directly or
indirectly.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load.............. None
Redemption Fee.................. None
Administrative Exchange Fee..... $ 5
Account Closing Fee (does not
apply to exchanges).......... $ 10
Short Term Trading Fee (shares
held less than 14 days)...... 0.10%
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)(1)
Management and Administrative
Fees......................... 1.00%
12b-1 Fees...................... 0.25%
Other Expenses, including
Transfer Agency
and Accounting Services Fees
(net of waivers and
reimbursements).............. 1.25%
Total Fund Operating Expenses
(net of waivers and
reimbursements).............. 2.50%
2
Except for active ABC Investment PlanT, UGMA/UTMA and retirement accounts,
if an account balance falls, for any reason other than market fluctuations,
below $5,000 at any time during a month that account will be subject to a
monthly small account charge of $1 which will be payable quarterly. See "Small
Accounts".
A shareholder who requests delivery of redemption proceeds by wire transfer
will be subject to a $10 charge. International wires will be higher.
HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES:(1)
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and redemption at the end of each period.
1 year............................... $ 35
3 years.............................. $ 88
The Hypothetical Example is based upon the Fund's historical expenses which
are expected to decline as the Fund's net assets increases. In conformance with
SEC regulations, the example is based upon a $1,000 investment; however, the
Fund's minimum investment is $5,000. In practice a $1,000 account would be
assessed a monthly $1.00 small account charge which is not reflected in the
example. See "Small Accounts". Included in these estimates is the account
closing fee of $10 for each period. This fee is a flat charge which does not
vary with the size of your investment. Accordingly, for investments larger than
$1,000, your total expenses will be substantially lower in percentage terms than
the illustration implies. The example should not be considered a representation
of future expenses. Actual expenses may be more or less than those shown.
- --------------------------------------------------------------------------------
(1) Annual Fund Operating Expenses are based on the Fund's historic
expenses. The Fund's Total Operating Expenses ratio of 2.50% is higher than that
of most other mutual funds. Management fees are paid to United Services
Advisors, Inc. (the "Advisor") for managing its investments and business
affairs. The Advisor then pays a portion of the management fee to Bonnel, Inc.
(the "Sub-Advisor") for serving as Sub-Advisor. See "Management of the Fund".
The Fund incurs other expenses for maintaining shareholder records, furnishing
shareholder statements and reports, and for other services. Transfer agency and
accounting service fees are paid to United Shareholder Services, Inc. ("USSI" or
"Transfer Agent"), a subsidiary of the Advisor, and are not charged directly to
individual shareholder accounts. The Transfer Agent charges the Fund $23.00 per
shareholder account per year. The account closing fee, account maintenance fee
and small account charge will be paid by the shareholder directly to the
Transfer Agent which will, in turn, reduce its charges to the Fund by like
amount. Please refer to the section entitled "Management of the Fund" for
further information.
3
During the period from October 17, 1994 (initial public offering) through
September 30, 1995, the Advisor, Sub-Advisor, and their affiliates voluntarily
agreed to waive fees as described in the Financial Highlights and accompanying
footnotes.
FINANCIAL HIGHLIGHTS
BONNEL GROWTH FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from October 17, 1994 (initial public
offering) through September 30, 1995, have been audited by Price Waterhouse LLP.
The related audited financial statements are available upon request and have
been incorporated by reference into the Statement of Additional Information
("SAI"). In addition to the data set forth below, further information about the
performance of the Fund is contained in the SAI which may be obtained without
charge.
Selected data for a capital share outstanding throughout the period October
17, 1994 (initial public offering) through September 30, 1995, is as follows:
PERIOD ENDED
(A)
------------
Per Share Operating Performance:
Net asset value, beginning of
period............................. $ 10.02
------------
Net investment income(b)........ (.07)
Net realized and unrealized gain
(loss) on investments(c)..... 4.91
------------
Total from investment operations..... 4.84
------------
Less dividends and distributions:
Dividends in excess of net
investment income............ .05
Distributions from net realized
gain......................... --
------------
Total dividends and distributions.... .05
------------
Net asset value, end of period....... $ 14.81
============
Total Investment Return(d)(e):....... 48.74%
Ratios/Supplemental Data:
Net assets, end of period (in thousands).. $ 24,673
Ratio of expenses to average net
assets(f)(g)....................... 2.48%
Ratio of net income to average net
assets(f)(g)....................... -1.46%
Portfolio turnover rate.............. 145%
- ------------
(a) For the period from October 17, 1994 (initial public offering) to September
30, 1995.
(b) Net of expense reimbursements and fee waivers.
4
(c) Includes the effect of capital share transactions throughout the year.
(d) Total return does not reflect the effect of account fees.
(e) Total investment return is not annualized.
(f) Expense ratio is net of fee waivers. Had such reimbursements not been made,
the annualized expense ratio subject to the most restrictive state
limitations would have been 2.50% and the annualized net investment income
ratio would have been (1.52)%.
(g) Annualized; the ratios are not necessarily indicative of twelve months of
operations.
INVESTMENT OBJECTIVES AND CONSIDERATIONS
Please read the Prospectus carefully before you invest. You are responsible
for determining the suitability of the Fund to meet your long term investment
goals.
The investment objective of the Bonnel Growth Fund (the "Fund") is
long-term growth of capital. Current income is not an objective and any income
received is incidental. The Fund seeks this growth by investing primarily in the
common stocks of domestic and foreign issuers. The Fund does not intend to
invest in fixed income securities other than money market instruments and
convertible bonds. There is no assurance that the Fund will achieve its
investment objective. Neither the investment objective nor the investment policy
are fundamental policies and may be changed by the Board of Trustees without
shareholder approval. However, shareholders will be notified in writing at least
30 days prior to any material change to either the Fund's investment objective
or its investment policy.
Common stocks will be selected that meet certain fundamental and technical
selection standards which, in the Sub-Advisor's opinion, have appreciation
potential. The Fund expects to focus its investments on mid-capitalization
companies with market capitalizations of around $1 billion. However, the Fund is
not limited to mid-capitalization stocks and will also invest in large and small
capitalization companies. Fundamental investment criteria include, but are not
limited to, earnings figures, equity ownership by management, market leadership,
strong management, price to earnings ratios, debt to equity ratios, and the
general growth prospects of the issuer. Common stocks will not be eliminated
simply because they do not pay a current dividend. Technical selection
considerations include, but are not limited to, stock price movement and
magnitude of trading volume. These criteria may lead the Fund to invest more or
less of its assets in specific industries as market conditions change, but the
Fund does not focus its investments in any particular industry. The Fund may
invest in securities traded on domestic or foreign exchanges, quoted on NASDAQ,
or traded on the domestic or foreign over-the-counter markets. The Sub-Advisor
is not obligated to conform to any particular fundamental or technical standard
of
5
selection or to the ranking of such standards. Standards of selection and their
ranking will vary according to the Sub-Advisor's judgment.
The Sub-Advisor intends to stay fully invested in such stocks, regardless
of the movement of stock prices generally. Under normal market conditions, the
Fund is required to have at least 80% of the value of its total assets in equity
securities and of that 80%, no more than 5% may consist of preferred stock or
bonds convertible into common stock. The remainder of the portfolio may be
invested in money market instruments to provide liquidity, purchase portfolio
securities, pay redemptions and meet other demands for cash. When the
Sub-Advisor determines that market conditions warrant, the Fund may invest up to
100% of its assets in money market instruments for temporary defensive purposes.
The Fund may invest up to 25% of its total assets in common stocks and
other equity securities of foreign issuers, but only if they are listed on a
domestic or foreign exchange, quoted on NASDAQ or traded on the domestic or
foreign over-the-counter market. See "Risk Factors" in this prospectus. As a
portion of the 25% limitation, no more than 5% of the Fund's net assets will be
invested in securities of issuers domiciled in countries considered by the
Advisor to be emerging markets.
The Fund may invest in sponsored or unsponsored American Depository
Receipts ("ADRs") representing shares of foreign issuers. ADRs are typically
issued by a U.S. bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. Generally, ADRs in registered form
are designed for use in the U.S. securities market, and ADRs in bearer form are
designed for use in securities markets outside the United States. ADRs may not
necessarily be denominated in the same currency as the underlying securities
into which they may be converted. In addition, the issuers of the securities
underlying unsponsored ADRs are not obligated to disclose material information
in the United States; and, therefore, there may be less information available
regarding such issuers. There may not be a correlation between such information
and the market value of the ADRs. For purposes of the Fund's investment
policies, the Fund's investment in ADRs will be deemed to be investments in the
underlying securities.
OTHER INVESTMENT PRACTICES
As a fundamental policy, which cannot be changed without a vote of
shareholders:
(a) the Fund may not invest more than 25% of its total assets in
securities of companies principally engaged in any one industry (other than
obligations issued or guaranteed by the United States Government or any of
its agencies or instrumentalities);
(b) with respect to 75% of its total assets, the Fund will not: (1)
invest more than 5% of the value of its total assets in the securities
6
of any one issuer (except such limitation shall not apply to obligations
issued or guaranteed by the United States Government, its agencies or
instrumentalities); nor (2) acquire more than 10% of the outstanding voting
securities of any one issuer;
(c) the Fund may lend portfolio securities with an aggregate market
value of not more than one-third of the Fund's total net assets;
(d) the Fund may borrow up to 33 1/3% of the amount of its total
assets (reduced by the amount of all liabilities and indebtedness other
than such borrowings) when deemed desirable or appropriate to effect
redemptions, provided, however, that the Fund will not purchase additional
securities while borrowings exceed 5% of the Fund's total assets.
PORTFOLIO TURNOVER
It is the policy of the Fund to seek long-term growth of capital. The Fund
will effect portfolio transactions without regard to its holding period if, in
the judgment of the Advisor and Sub-Advisor, such transactions are in the best
interests of the Fund. For the period October 17, 1994 (initial public offering)
through September 30, 1995, the Fund's portfolio turnover rate was 145%.
Increased portfolio turnover may result in higher costs for brokerage
commissions, dealer mark-ups and other transaction costs and may also result in
taxable capital gains. Certain tax rules may restrict the Fund's ability to
engage in short-term trading if the security has been held for less than three
months. See "Portfolio Turnover" in the Statement of Additional Information.
PORTFOLIO TRANSACTIONS
In executing portfolio transactions and selecting brokers or dealers, the
Fund seeks the best overall terms available. In assessing the terms of a
transaction, consideration may be given to various factors, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer (for a specified
transaction and on a continuing basis), the reasonableness of the commission, if
any, and the brokerage and research services provided. Under the Advisory and
Sub-Advisory agreements the Advisor and Sub-Advisor are permitted, in certain
circumstances, to pay a higher commission than might otherwise be obtained in
order to acquire brokerage and research services. The Advisor and Sub-Advisor
must determine in good faith, however, that such commission is reasonable in
relation to the value of the brokerage and research services provided -- viewed
in terms of that particular transaction or in terms of all the accounts over
which investment discretion is exercised. In such case, the Board of Trustees
will review the commissions paid by the Fund to determine if the commissions
paid over representative periods of time were reasonable in relation to the
benefits obtained. The advisory fee of the Advisor would not be reduced by
reason of its receipt of
7
such brokerage and research services. To the extent that any research services
of value are provided by broker dealers through or with whom the Fund places
portfolio transactions, the Advisor or Sub-Advisor may be relieved of expenses
which they might otherwise bear.
The Fund executes most of its transactions through a small group of
broker-dealers which have been selected based upon their ability to provide
brokerage and research services. The Fund may, in some instances, purchase
securities that are not listed on a national securities exchange or quoted on
NASDAQ, but rather are traded in the over-the-counter market. With respect to
transactions executed in the over-the-counter market, the Fund will usually deal
through its selected broker-dealer's commission on such transactions. The Fund
believes that the execution and brokerage services which it receives justifies
use of broker-dealers in these over-the-counter transactions. See "Portfolio
Transactions" in the Statement of Additional Information.
LENDING OF PORTFOLIO SECURITIES
The Fund may lend securities to broker/dealers or institutional investors
for their use in connection with short sales, arbitrages and other securities
transactions. The Fund may receive a fee from broker/dealers for lending its
portfolio securities. The Fund will not lend portfolio securities unless the
loan is secured by collateral (consisting of any combination of cash, United
States Government securities or irrevocable letters of credit) in an amount at
least equal (on a daily marked-to-market basis) to the current market value of
the securities loaned. In the event of a bankruptcy or breach of agreement by
the borrower of the securities, the Fund could experience delays and costs in
recovering the securities loaned. The Fund will not enter into securities
lending agreements unless its custodian bank/lending agent will fully indemnify
the Fund against loss due to borrower default. The Fund may not lend securities
with an aggregate market value of more than one-third of the Fund's total net
assets.
REPURCHASE AGREEMENTS
The Fund may invest a portion of its assets in repurchase agreements with
domestic broker/dealers, banks and other financial institutions, provided the
Fund's custodian always has possession of securities serving as collateral or
has evidence of book entry receipt of such securities. In a repurchase
agreement, the Fund purchases securities subject to the sellers agreement to
repurchase such securities at a specified time (normally one day) and price. The
repurchase price reflects an agreed-upon interest rate during the time of
investment. All repurchase agreements must be collateralized by United States
Government or government agency securities, the market values of which equal or
exceed 102% of the principal amount of the repurchase obligation. If an
institution enters an insolvency proceeding, the resulting delay in liquidation
of securities serving as collateral could
8
cause the Fund some loss if the value of the securities declined prior to
liquidation. To minimize the risk of loss, the Fund will enter into repurchase
agreements only with institutions and dealers which the Board of Trustees
considers creditworthy.
PUT AND CALL OPTIONS
The Fund may purchase or sell call options and may purchase put options on
individual securities and on equity indexes. The Fund will not purchase any
option if, immediately thereafter, the aggregate market value of all outstanding
options purchased and written by the Fund would exceed 5% of the Fund's total
assets. For a more complete discussion see, "Put and Call Options" in the
Statement of Additional Information.
RISK FACTORS
EQUITY PRICE FLUCTUATIONS
Equity securities are subject to price fluctuations depending on a variety
of factors, including market, business and economic conditions. Investment in
growth stocks can involve special risks. In seeking long term growth of capital,
the Fund may often purchase common stock of small and medium size companies
which may be unseasoned and which often fluctuate in price more than common
stocks of larger, more mature companies, such as many of those included in the
Dow Jones Industrial Average. Therefore, an investor should expect that the
share price of the Fund will often be more volatile, in both "up" and "down"
markets than most of the popular stock averages.
FOREIGN SECURITIES
Investment in foreign securities may involve risks not present in domestic
investment. These include fluctuating exchange rates; the fact that foreign
issuers may be subject to different, and in some cases, less comprehensive
accounting, financial reporting and disclosure standards than are domestic
issuers; the risk of adverse changes in foreign investment or exchange control
regulations; volatile currency markets; expropriation or confiscatory taxation;
political or financial instability; or other developments which can affect
investments. For more detailed information see, "Foreign Securities" in the
Statement of Additional Information.
PUTS AND CALLS
The Fund may purchase or sell call options and may purchase put options on
individual securities and on equity indexes. If the Fund sells a covered call
option and the securities owned by the Fund appreciates above the option's
strike price, the Fund will generally be called upon to deliver the security,
which will prevent the Fund from receiving the benefit of any price appreciation
above the strike price. When purchasing call options the Fund will realize a
loss equal to all or a portion of the premium paid for the
9
option if the price of the underlying security decreases or does not increase by
more than the premium before the call option's expiration. When purchasing put
options the Fund will realize a loss equal to all or a portion of the premium
paid for the option if the price of the underlying security increases or does
not decrease by more than the premium before the put option's expiration.
HOW TO PURCHASE SHARES
The minimum initial investment for the Fund is $5,000 for regular accounts
or $1,000 for UGMA/UTMA accounts. The minimum subsequent investment is $50. The
minimum initial investment for persons enrolled in the ABC Investment PlanT is
$1,000 and the minimum subsequent investment pursuant to such a plan is $100 or
more per month per account. There is no minimum purchase for retirement plan
accounts, including IRAs, administered by the Advisor or its agents and
affiliates.
YOU MAY INVEST IN THE FOLLOWING WAYS:
BY MAIL
Send your application and check or money order, made payable to the Bonnel
Growth Fund, to P.O. Box 781234, San Antonio, Texas 78278-1234.
When making subsequent investments, enclose your check with the return
remittance portion of the confirmation of your previous investment or indicate
on your check or a separate piece of paper your name, address and account number
and mail to the address mentioned above. Do not use the remittance portion of
your confirmation statement for a different fund as it is pre-coded. This may
cause your investment to be invested into the wrong fund. If you wish to
purchase shares in more than one fund, send a separate check or money order for
each fund. Third party checks will not be accepted; and the Fund reserves the
right to refuse to accept second party checks.
BY TELEPHONE
Once your account is open, you may make investments by telephone by calling
1-800-426-6635. Investments by telephone are not available in money market funds
or any retirement account administered by the Advisor or its agents. The maximum
telephone purchase is ten times the value of the shares owned, calculated at the
last available net asset value. Payment for shares purchased by telephone is due
within seven business days after the date of the transaction. You cannot
exchange shares purchased by telephone until after the payment has been received
and accepted by the Trust.
BY WIRE
You may make your initial or subsequent investments in the Bonnel Growth
Fund by wiring money. To do so, call the Fund at
10
1-800-4-BONNEL or 1-800-426-6635 for a confirmation number and wiring
instructions.
BY ABC INVESTMENT PLAN (R)
The ABC Investment Plan is offered as a special service for small
investors. Once your account is opened with a $1,000 minimum initial investment,
you may make investments automatically by completing the ABC Investment PlanT
(Automatically Building Capital Investment Plan) form. This form authorizes the
Fund to draw on your money market or bank account regularly for as little as
$100 a month beginning within thirty (30) days after the account is opened.
These small minimums are a special service bringing to small investors the
benefits of the Fund without requiring a $5,000 minimum initial investment. You
may call (1-800-4-BONNEL) to open a treasury money market fund or you could
inquire at your bank whether it will honor debits through the Automated Clearing
House ("ACH") or, if necessary, preauthorized checks. You may change the date or
amount of your investment or discontinue the Plan any time by letter received by
the Fund at least five business days before the change is to become effective.
ADDITIONAL INFORMATION ABOUT PURCHASES
All purchases of shares are subject to acceptance by the Fund and are not
binding until accepted. The Fund reserves the right to reject any application or
investment. Orders received by the Fund's transfer agent or a sub-agent before
4:00 p.m., Eastern time, Monday through Friday exclusive of business holidays
and accepted by the Fund will receive the share price next computed after
receipt of the order. In the event that the NYSE and other financial markets
close earlier, as on the eve of a holiday, orders will become effective earlier
in the day at the close of trading on the NYSE.
If your telephone order to purchase shares is cancelled due to nonpayment
or late payment (whether or not your check has been processed by the Fund), you
will be responsible for any loss incurred by the Fund by reason of such
cancellation.
If checks are returned unpaid due to insufficient funds, stop payment or
other reasons, the Fund will charge your account $20 and you will be responsible
for any loss incurred by the Fund with respect to cancelling the purchase.
To recover any such loss or charge, the Fund reserves the right, without
further notice, to redeem shares of any affiliated funds already owned by any
purchaser whose order is cancelled, for whichever reason, and such a purchaser
may be prohibited from placing further orders unless investments are accompanied
by full payment by wire or cashier's check.
Accolade Funds charges no sales commissions or "loads." However, investors
may purchase and sell shares through registered broker/dealers who may charge
fees for their services.
11
Investments paid for by checks drawn on foreign banks may be deferred until
such checks have cleared the normal collection process. In such instances, any
amounts charged to the Fund for collection procedures will be deducted from the
amount invested.
If the Fund incurs a charge for locating a shareholder without a current
address, such charge will be passed through to the shareholder.
TAX IDENTIFICATION NUMBER
The Fund is required by Federal law to withhold and remit to the United
States Treasury a portion of the dividends, capital gain distributions and
proceeds of redemptions paid to any shareholder who fails to furnish the Fund
with a correct taxpayer identification number, who underreports dividend or
interest income or who fails to provide certification of a tax identification
number. In order to avoid this withholding requirement, you must certify on your
application, or on a separate Form W-9 supplied by the Transfer Agent, that your
taxpayer identification number is correct and that you are not currently subject
to backup withholding or you are exempt from backup withholding. For
individuals, your taxpayer identification number is your social security number.
Instructions to exchange or transfer shares held in established accounts
will be refused until the certification has been provided. In addition, the Fund
assesses a $50 administrative fee if the taxpayer identification number is not
provided by year-end.
CERTIFICATES
When you open your account, the Fund will send you a confirmation
statement, which will be your evidence that you have opened an account with the
Fund. The confirmation statement is nonnegotiable, so if it is lost or
destroyed, you will not be required to buy a lost instrument bond or be subject
to other expense or trouble, as you would with a negotiable stock certificate.
At your written request, the Fund will issue negotiable stock certificates.
Unless your shares are purchased with wired money, a certificate will not be
issued until 15 days have elapsed from the time of purchase, or the Fund has
satisfactory proof of payment, such as a copy of your cancelled check.
Negotiable certificates will not be issued for fewer than 100 shares.
HOW TO EXCHANGE SHARES
You have the privilege of exchanging into any of the other funds offered,
affiliated or administered by United Services Advisors, Inc., for a $5 exchange
fee. An exchange involves the simultaneous redemption (sale) of shares of one
fund and purchase of shares of another fund at the respective closing net asset
value and is a taxable transaction.
12
BY TELEPHONE
You will automatically have the privilege to direct the Fund to exchange
your shares between identically registered accounts by calling toll free
1-800-4-BONNEL or 1-800-426-6635. In connection with such exchanges neither the
Fund nor the Transfer Agent will be responsible for acting upon any instructions
reasonably believed by them to be genuine. The shareholder, as a result of this
policy, will bear the risk of loss. The Fund and/or its Transfer Agent will,
however, employ reasonable procedures to confirm that instructions communicated
by telephone are genuine (including, requiring some form of personal
identification, providing written confirmation and tape recording
conversations); and if it does not employ reasonable procedures, it may be
liable for losses due to unauthorized or fraudulent transactions.
BY MAIL
You may direct the Fund in writing to exchange your shares. The request
must be signed exactly as the name appears in the registration. (Before writing,
read "Additional Information About Exchanges.")
ADDITIONAL INFORMATION ABOUT EXCHANGES
(1) There is a $5 charge, which is paid to United Shareholder Services,
Inc. ("USSI" or the "Transfer Agent") for each exchange out of any Fund account
except that retirement accounts administered by the Advisor or its agents and
affiliates are charged $5 for each exchange exceeding three per quarter. The
exchange fee is charged to cover administrative costs associated with handling
these exchanges.
(2) Like any other redemption, the Fund reserves the right to hold exchange
proceeds for up to seven days. In such event, the purchase side of the exchange
transaction will also be delayed. You will be notified immediately if the Fund
is exercising said right.
(3) If the shares you wish to exchange are represented by a negotiable
stock certificate, the certificate must be returned before the exchange can be
effected.
(4) Shares may not be exchanged unless you have furnished the Fund with
your tax identification number, certified as prescribed by the Internal Revenue
Code and Regulations, and the exchange is to an account with like registration
and tax identification number. (See "Tax Identification Number".)
(5) The exchange privilege may be terminated at any time. The exchange fee
and other terms of the privilege are subject to change.
HOW TO REDEEM SHARES
You may redeem any or all of your shares at will. Redemption requests
received in proper order by the Fund's transfer agent or a sub-agent before
13
4:00 p.m. Eastern time, Monday through Friday, exclusive of business holidays
will receive the share price next computed after receipt of the request.
BY MAIL
A written request for redemption must be in proper order, which requires
delivery of the following to the Transfer Agent:
(1) a written request for redemption signed by each registered owner
exactly as the shares are registered, the account number and the number of
shares or the dollar amount to be redeemed;
(2) negotiable stock certificates for any shares to be redeemed for
which certificates have been issued;
(3) signature guarantees when required; and
(4) such additional documents as are customarily required to evidence
the authority of persons effecting redemptions on behalf of corporations,
executors, trustees, and other fiduciaries. Redemptions will not become
effective until all documents, in the form required, have been received by
the Transfer Agent. (Before writing, read "Additional Information About
Redemptions.")
BY TELEPHONE
To redeem your Fund shares by telephone you may call the Fund and direct an
exchange out of the Fund into an identically registered account in a United
Services treasury money market fund ($1,000 minimum initial investment). You may
then write a check against your treasury money market fund account. See "How to
Exchange Shares" for a description of exchanges including the $5 exchange fee.
Call 1-800-4-BONNEL or 1-800-426-6635 for more information concerning telephone
redemption and a treasury money market fund prospectus.
Telephone redemptions without opening a treasury money market account are
available for VIPs. For more information about the Fund's VIP program call
1-800-4-BONNEL or 1-800-426-6635.
REDEMPTION ARRANGEMENTS BY WIRE TRANSFER
Special arrangements may be made by institutional investors, or on behalf
of accounts established by brokers, advisers, banks or similar institutions, to
have redemption proceeds transferred by wire to pre-established accounts upon
telephone instructions. For further information call the Fund at 1-800-4-BONNEL
or 1-800-426-6635.
SIGNATURE GUARANTEE
Redemptions in excess of $15,000 currently require a signature guarantee. A
signature guarantee is required for all redemptions, regardless of the amount
involved, when the proceeds are to be paid to someone other
14
than the registered owner of the shares to be redeemed, or if proceeds are to be
mailed to an address other than the registered address of record. When a
signature guarantee is required, each signature must be guaranteed by: (a) a
federally insured bank or thrift institution; (b) a broker or dealer (general
securities, municipal, or government) or clearing agency registered with the
U.S. Securities and Exchange Commission that maintains net capital of at least
$100,000; or (c) a national securities exchange or national securities
association. The guarantee must: (i) include the statement "Signature(s)
Guaranteed;" (ii) be signed in the name of the guarantor by an authorized
person, the person's printed name and position with guarantor; and (iii) include
a recital that the guarantor is federally insured, maintains the requisite net
capital or is a national securities exchange or association. Shareholders living
abroad may acknowledge their signatures before a U.S. consular officer. Military
personnel may acknowledge their signatures before officers authorized to take
acknowledgments (e.g., legal officers and adjutants).
REDEMPTION PROCEEDS MAY BE SENT TO YOU:
BY MAIL
If your redemption check is mailed, it is usually mailed within 48 hours;
however, the Fund reserves the right to hold redemption proceeds for up to seven
days. If the shares to be redeemed were purchased by check, the redemption
proceeds will not be mailed until the purchase check has cleared, which may take
up to seven days. You may avoid this requirement by investing by bank wire
(Federal funds). Redemption checks may be delayed if you have changed your
address in the last 30 days. Please notify the Fund promptly in writing, or by
telephone, of any change of address.
BY WIRE
You may authorize the Fund to transmit redemption proceeds by wire,
provided you send written wiring instructions with a signature guarantee at the
time of redemption. Proceeds from your redemption will usually be transmitted on
the first business day following the redemption. However, the Fund reserves the
right to hold redemption proceeds for up to seven days. If the shares to be
redeemed were purchased by check, the redemption proceeds will not be mailed or
wired until the purchase check has cleared, which may take up to seven days.
There is a $10 charge to cover the wire, which is deducted from redemption
proceeds. International wires will be higher.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS
The redemption price may be more or less than your cost, depending on the
net asset value of the Funds portfolio next determined after your request is
received.
A request to redeem shares in an IRA or similar retirement account must be
accompanied by an IRS Form W4-P and a reason for withdrawal as specified by the
IRS. Proceeds from the redemption of shares from a retirement account may be
subject to withholding tax.
15
The Fund has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Fund if the Fund
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Fund and its shareholders. The power
to redeem existing accounts will be exercised in light of the Trustees'
fiduciary duties and in conformance with Massachusetts law. The Fund will not
redeem an existing account solely to prevent the legitimate exercise of a
shareholder's rights. No account closing fee will be charged to investors whose
accounts are closed under this provision.
TRADER'S FEE PAID TO THE FUND
Effective August 1, 1996, at Trader's fee of 25 basis points or 0.25% of
the value of shares redeemed or exchanged will be assessed to shareholders who
redeem or exchange shares of the Fund held less than thirty (30) calendar days.
The Trader's Fee will be paid to the Fund to benefit remaining shareholders by
protecting them against expenses due to excessive trading. Excessive short-term
trading has an adverse impact on effective portfolio management as well as upon
Fund expenses. The Fund has reserved the right to refuse investments from
shareholders who engage in short-term trading that may be disruptive to the
Fund.
ACCOUNT CLOSING FEE
In order to reduce Fund expenses, an account closing fee of $10 will be
assessed to shareholders who redeem all shares in their Fund account and direct
that redemption proceeds be delivered to them by mail or wire. The charge is
payable directly to the Fund's Transfer Agent which, in turn, will reduce its
charges to the Fund by an equal amount. The purpose of the charge is to allocate
to redeeming shareholders a more equitable portion of the Transfer Agent's fee,
including the cost of tax reporting, which is based upon the number of
shareholder accounts. The account closing fee does not apply to exchanges
between the Fund and affiliated funds nor will it be imposed on any account
which is involuntarily redeemed.
SMALL ACCOUNTS
Fund accounts which fall, for any reason other than market fluctuations,
below $5,000 at any time during the month, will be subject to a monthly small
account charge of $1 which will be payable quarterly. The charge is payable
directly to the Fund's Transfer Agent which, in turn, will reduce its charges to
the Fund by an equal amount. The purpose of the charge is to allocate the costs
of maintaining shareholder accounts more equally among shareholders.
As a special service for small investors active ABC Investment PlanT,
UGMA/UTMA accounts with at least $1,000, and retirement plan accounts
administered by the Advisor or its agents and affiliates will not be subject to
the small account charge.
In order to reduce expenses of the Fund, it may redeem all shares in any
shareholder account, other than active ABC Investment PlanT, UGMA/UTMA and
retirement plan accounts, if, for a period of more than
16
three months, the account has a net asset value of $2,500 or less and the
reduction in value is not due to market fluctuations. If the Fund elects to
close such accounts, it will notify shareholders whose accounts are below the
minimum of its intention to do so, and will provide those shareholders with an
opportunity to increase their accounts by investing a sufficient amount to bring
their accounts up to the minimum amount within ninety (90) days of the notice.
No account closing fee will be charged to investors whose accounts are closed
under this redemption provision.
CONFIRMATION STATEMENTS
Shareholders normally will receive a confirmation statement after each
transaction showing activity in the account. However, when account activity is
produced solely from dividend reinvestment, confirmation statements will be
mailed on a semi-annual basis only.
OTHER SERVICES
The Fund has available a number of plans and services to meet the special
needs of certain investors. Plans available include:
(1) payroll deduction plans, including military allotments;
(2) custodial accounts for minors;
(3) a flexible, systematic withdrawal plan; and
(4) various retirement plans such as IRA, SEP/IRA, 403(b)(7), 401(k)
and employer-adopted defined contribution plans.
There is an annual charge for each retirement plan fund account with
respect to which Security Trust & Financial Company ("ST&FC"), a wholly-owned
subsidiary of the Advisor, acts as custodian (for example, $10 for IRAs and $15
for SEP/IRAs, 403(b)(7)s, profit sharing and other such accounts). If this
administrative charge is not paid separately prior to the last business day of a
calendar year or prior to a total redemption, it will be deducted from the
shareholder's account.
Application forms and brochures describing these plans and services can be
obtained from the Transfer Agent by calling 1-800-4-BONNEL or 1-800-426-6635.
SHAREHOLDER SERVICES
United Shareholder Services, Inc. ("USSI"), a wholly-owned subsidiary of
the Advisor, acts as transfer and dividend paying agent for all Fund accounts.
Simply write or call 1-800-4-BONNEL or 1-800-426-6635 for prompt service on any
questions about your account.
24 HOUR CURRENT INFORMATION
Shareholders can also access 24 hours a day current information on yields,
prices, latest dividends, account balances and deposits and redemptions for the
previous and current months. Just call 1-800-4-BONNEL or 1-800-426-6635 and
press the appropriate codes into your touch-tone phone.
17
HOW SHARES ARE VALUED
Shares of the Fund are purchased or redeemed, on a continuous basis without
a sales charge, at their next determined net asset value per share. The net
asset value per share of the Fund is calculated separately by United Shareholder
Services, Inc. Net asset value per share is determined and orders become
effective as of 4:00 p.m., Eastern time, Monday through Friday, exclusive of
business holidays on which the NYSE is closed, by dividing the aggregate net
assets of the Fund at market value by the total number of shares of the Fund
outstanding. In the event that the NYSE and other financial markets close
earlier, as on the eve of a holiday, the net asset value per share will be
determined earlier in the day at the close of trading on the NYSE.
A portfolio security listed or traded on a stock exchange or quoted on
NASDAQ is valued at the last reported sale price prior to the time when assets
are valued. Lacking any sales on that day, the security is valued at the mean
between the last reported bid and ask prices. Over-the-counter portfolio
securities for which market quotations are readily available are to be valued at
the mean between the most recent bid and ask prices as obtained from one or more
dealers that make markets in the securities. Portfolio securities which are
traded both in the over-the-counter market and on a stock exchange are to be
valued according to the broadest and most representative market as determined by
the Advisor. When market quotations are not readily available, or when
restricted securities or other assets are being valued, such assets are valued
at fair value as determined in good faith by or under procedures established by
the Fund's Board of Trustees.
Short-term investments with maturities of 60 days or less at the time of
purchase are valued on the basis of the amortized cost. This involves valuing an
instrument at its cost initially and, thereafter, assuming a constant
amortization to maturity of any discount or premium.
DIVIDENDS AND TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to Federal income tax on its net investment income and capital gain net income
that are distributed to shareholders.
All income dividends and capital gain distributions are normally
reinvested, without charge, in additional full and fractional shares of the
Fund. Alternatively, investors may choose: (1) automatic reinvestment of capital
gain distributions in Fund shares and payment of income dividends in cash; (2)
payment of capital gain distributions in cash and automatic reinvestment of
dividends in Fund shares; or (3) all income dividend and capital gain
distributions paid in cash. The share price of the reinvestment
18
will be the net asset value of the Fund shares computed at the close of business
on the date the dividend or distribution is paid. Dividend checks returned to
the Fund as being undeliverable and dividend checks not cashed after 180 days
will automatically be reinvested at the price of the Fund on the day returned or
on or about the 181st day, and the distribution option will be changed to
"reinvest."
At the time of purchase, the share price of the Fund may reflect
undistributed income, capital gain or unrealized appreciation of securities. Any
dividend or capital gain distribution paid to a shareholder shortly after a
purchase of shares will reduce the per share net asset value by the amount of
the distribution. Although in effect a return of capital to the shareholder,
these distributions are fully taxable.
The Fund generally pays dividends, if any, semi-annually and pays capital
gains, if any, annually.
The Fund is subject to a nondeductible four percent (4%) excise tax
calculated as a percentage of certain undistributed amounts of taxable ordinary
income and capital gains net of capital losses. The Fund intends to make such
distributions as may be necessary to avoid this excise tax.
Dividends from taxable net investment income and distributions of net
short-term capital gains paid by the Fund are taxable to shareholders as
ordinary income, whether received in cash or reinvested in additional shares of
the Fund. A portion of these dividends may qualify for the 70 percent dividends
received deduction available to corporations. Distributions of net capital gains
will be taxable to shareholders as long-term capital gains, whether paid in cash
or reinvested in additional shares, regardless of the length of time the
investor has held his shares.
Each January, the Fund will report to its shareholders the Federal tax
status of dividends and distributions paid or declared by the Fund during the
preceding calendar year. This statement will also indicate whether and to what
extent distributions qualify for the 70 percent dividends received deduction
available to corporations.
The foregoing discussion relates only to generally applicable Federal
income tax provisions in effect as of the date of this Prospectus. Shareholders
should consult their tax advisers about the status of distributions from the
Fund in their own states and localities.
THE TRUST
Accolade Funds (the "Trust") is an open-end management investment company
consisting of three separate, diversified portfolios. Only the Bonnel Growth
Fund is currently offered to the public.
The Trust was formed April 16, 1993 as a "business trust" under the laws of
the Commonwealth of Massachusetts. It is a "series" company which is authorized
to issue shares without par value in separate series.
19
Shares of the series have been authorized, each of which represents an interest
in a separate portfolio. The Board of Trustees of the Trust has the power to
create additional portfolios at any time without a vote of shareholders of the
Trust.
Under the Trust's Master Trust Agreement, no annual or regular meeting of
shareholders is required, although the Trustees may authorize special meetings
from time to time. Under the terms of the Master Trust Agreement, the Trust has
a staggered Board with terms of at least 25% of the Trustees expiring every
three years. The Trustees serve in that capacity for six-year terms. Thus there
will ordinarily be no shareholder meeting unless otherwise required by the
Investment Company Act of 1940 (the "1940 Act"). The Trust will call a meeting
of shareholders for purposes of voting on the question of removal of one or more
Trustees when requested in writing to do so by record holders of not less than
10 percent of the Trust's outstanding shares, and in connection with such
meeting to comply with the provisions of Section 16(c) of the Investment Company
Act of 1940 relating to shareholder communications.
On any matter submitted to shareholders, shares of each portfolio entitle
their holder to one vote per share, irrespective of the relative net asset
values of each portfolio's shares. On matters affecting an individual portfolio,
a separate vote of shareholders of the portfolio is required. Each portfolio's
shares are fully paid and non-assessable by the Trust, have no preemptive or
subscription rights, and are fully transferable, with no conversion rights.
MANAGEMENT OF THE FUND
TRUSTEES
The business affairs of the Fund are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.
THE SUB-ADVISOR
Effective September 21, 1994, the Advisor and the Trust contracted with
Bonnel, Inc. ("Sub-Advisor") to serve as Sub-Advisor for the Fund. The
Sub-Advisor was formed and registered by Mr. Arthur Bonnel as a registered
investment advisor. Mr. Bonnel, who serves as the Fund's portfolio manager, has
been managing money since 1970, and previously was the portfolio manager of a
successful mutual fund for a period of over 5 years. Past performance does not
guarantee future results.
The Sub-Advisor is located at P.O. Box 649, Reno, Nevada. The Sub-Advisor
manages the composition of the portfolio and furnishes the Fund advice and
recommendations with respect to its investments and its investment program and
strategy, subject to the general supervision and control of
20
the Advisor and the Trust's Board of Trustees. In connection with such services,
the Advisor pays the Sub-Advisor a minimum sub-advisory fee of $150,000 per
year. When the Fund's assets exceed $30 million, the Advisor and the Sub-Advisor
will share the management fee equally; except that the Sub-Advisor's fee will be
subject to downward adjustments for: 1) the Advisor's incurred costs and
expenses of marketing the Fund that exceed the .25% 12b-1 fee charged to the
Fund for such marketing purposes; 2) for any monies previously received as a
result of the minimum sub-advisory fee set forth above that were paid by the
Advisor or the Trust prior to the date that the Securities and Exchange
Commission declared the Fund's registration statement effective; 3) the
unrecovered costs of organizing the Fund up to $40,000 (the Advisor will be
responsible for bearing costs of organization of the Fund in excess of $40,000);
and (4) if a decision is made with respect to placing a cap on expenses, to the
extent that actual expenses of the Fund exceed the cap, and the Advisor is
required to pay or absorb any of the excess expenses, by the amount of the
excess expenses paid or absorbed by the Advisor through such downward
adjustments. The Fund is not responsible for the Sub-Advisor's fee.
THE INVESTMENT ADVISOR
United Services Advisors, Inc., 7900 Callaghan Road, San Antonio, Texas
78229, under an investment advisory agreement with the Trust dated September 21,
1994 furnishes investment advice and is responsible for overall management of
the Trust's business affairs. Frank E. Holmes is Chairman of the Board of
Directors and Chief Executive Officer of the Advisor, as well as President and
Trustee of the Trust. Since October 1989, Mr. Holmes has owned more than 25% of
the voting stock of the Advisor and is its controlling person. The Advisor was
organized in 1968. The Advisor serves as investment advisor to the United
Services Funds, a family of mutual funds with over $1.3 billion in assets.
The Advisor provides to the Trust, and to the Fund in the Trust, management
and investment advisory services. The Advisor furnishes an investment program
for the Fund, determines, subject to the overall supervision and review of the
Board of Trustees of the Trust, what investments should be purchased, sold and
held, and makes changes on behalf of the Trust in the investments of the Fund.
The Advisor provides the Trust with office space, facilities and business
equipment and provides the services of executive and clerical personnel for
administering the affairs of the Trust. The Advisor pays the expense of printing
and mailing prospectuses and sales materials used for promotional purposes.
Investment decisions for the Fund are made independently from those of
other investment companies advised by United Services Advisors, Inc.
21
The Advisory Agreement with the Trust provides for the Fund to pay the
Advisor a flat management fee of 1% of the Fund's average net assets. For the
period from October 17, 1994 (initial public offering) through September 30,
1995, the Fund did not pay the Advisor a management fee due to fee waivers.
The Advisor may, out of profits derived from its management fee, pay
certain financial institutions (which may include banks, securities dealers and
other industry professionals) a "servicing fee" for performing certain
administrative servicing functions for Fund shareholders to the extent these
institutions are allowed to do so by applicable statute, rule or regulation.
These fees will be paid periodically and will generally be based on a percentage
of the value of the institutions' client Fund shares.
The Transfer Agency Agreement with the Trust provides for the Fund to pay
USSI an annual fee of $23.00 per account ( 1/12 of $23.00 monthly). In
connection with obtaining/providing administrative services to the beneficial
owners of Fund shares through broker/dealers, banks, trust companies and similar
institutions which provide such services and maintain an omnibus account with
the Transfer Agent, the Fund shall pay to the Transfer Agent a monthly fee equal
to one-twelfth ( 1/12) of 12.5 basis points (.00125) of the value of the shares
of the fund held in accounts at the institutions, which payment shall not exceed
$1.92 multiplied by the average daily number of accounts holding Fund shares at
the institution. These fees cover the usual transfer agency functions. In
addition, the Fund bears certain other Transfer Agent expenses such as the costs
of record retention and postage, plus the telephone and line charges (including
the toll-free 800 service) used by shareholders to contact the Transfer Agent.
Transfer Agent fees and expenses, including reimbursed expenses, are reduced by
the amount of small account charges and account closing fees the Transfer Agent
is paid. For the period from October 17, 1994 (initial public offering) through
September 30, 1995, the Fund paid USSI a total of $20,906 for transfer agency,
lockbox and printing fees.
USSI performs bookkeeping and accounting services, and determines the daily
net asset value for the Fund. Bookkeeping and accounting services are provided
to the Fund at an asset based fee of .03% of the first 250 million average net
assets, .02% of the next 250 million average net assets and .01% of average net
assets in excess of 500 million -- subject to an annual minimum fee of $24,000.
For the period from October 17, 1994 (initial public offering) through September
30, 1995, the Fund paid USSI a total of $23,000 for portfolio accounting
services.
Additionally, the Advisor is reimbursed certain costs for in-house legal
services pertaining to the Fund.
The Fund pays all other expenses for its operations and activities. The
expenses borne by the Fund include the charges and expenses of any shareholder
servicing agents; custodian fees; legal and auditors' expenses;
22
brokerage commissions for portfolio transactions; the advisory fee;
extraordinary expenses; expenses of shareholders and trustee meetings; expenses
for preparing, printing, and mailing proxy statements, reports and other
communications to shareholders; and expenses of registering and qualifying
shares for sale, among others.
DISTRIBUTION EXPENSE PLAN
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
has adopted a distribution expense plan (the "Plan") under which Fund assets may
be utilized to pay for or reimburse expenditures in connection with sales and
promotional services related to the distribution of Fund shares, including
personal services provided to prospective and existing Fund shareholders, which
include the costs of: printing and distribution of prospectuses and promotional
materials; making slides and charts for presentations; assisting shareholders
and prospective investors in understanding and dealing with the Fund; and travel
and out-of-pocket expenses (e.g. copy and long distance telephone charges)
related thereto. Fund assets may be utilized to pay for or reimburse such
expenditures provided the total amount expended pursuant to this Plan does not
exceed 0.25% of net assets on an annual basis.
Under the terms of the Plan the Fund may pay a "servicing fee" of up to
0.25% of the Fund's average net assets ( 1/12 of 0.25% monthly) to persons or
institutions for performing certain servicing functions for Fund shareholders.
These fees will be paid periodically and will generally be based on a percentage
of the value of Fund shares held by the institution's clients. The Plan allows
the Fund to pay for or reimburse expenditures in connection with sales and
promotional services related to the distribution of Fund shares, including
personal services provided to prospective and existing Fund shareholders. See
"Distribution Plan" in the Statement of Additional Information.
PERFORMANCE INFORMATION
From time to time, in advertisements or in reports to shareholders or
prospective shareholders, the Fund may compare its performance, either in terms
of its yield, total return or its yield and total return, to that of other
mutual funds with similar investment objectives and to stock or other indices.
For example, the Fund may compare its performance to rankings prepared by Lipper
Analytical Services, Inc. ("Lipper"), a widely recognized independent service
which monitors the performance of mutual funds; to Morningstar's Mutual Fund
Values; to the S&P 500 Index; or to the Consumer Price Index. Performance
information and rankings as reported in Changing Times, Business Week,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, No-Load
Investor, Money Magazine, Forbes, Fortune and Barron's magazine may also be used
in comparing performance of the Fund. Performance comparisons shall not be
considered as representative of the future performance of the Fund.
23
The Fund's average annual total return is computed by determining the
average annual compounded rate of return for a specified period that, if applied
to a hypothetical $1,000 initial investment, would produce the redeemable value
of that investment at the end of the period, assuming reinvestment of all
dividends and distributions and with recognition of all recurring charges. The
Fund may also utilize a total return for differing periods computed in the same
manner but without annualizing the total return.
The Fund's "yield" refers to the income generated by an investment in the
Fund over a 30-day (or one month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month by the maximum offering price
per share on the last day of such month. This income is then "annualized." That
is, the amount of income generated by the investment during that 30-day period
is assumed to be generated each month over a 12-month period and is shown as a
percentage of the investment.
For purposes of the yield calculation, interest income is computed based on
the yield to maturity of each debt obligation and dividend income is computed
based upon the stated dividend rate of each security in the Fund's portfolio,
and all recurring charges are recognized.
The standard total return and yield results do not take into account
recurring and nonrecurring charges for optional services which only certain
shareholders elect and which involve nominal fees such as the $5 fee for
exchanges. These fees have the effect of reducing the actual return realized by
shareholders.
24
ACCOLADE FUNDS
SHARES OF THE FUND ARE SOLD
AT NET ASSET VALUE WITHOUT SALES COMMISSIONS OR
REDEMPTION FEES
Bonnel Growth Fund
INVESTMENT ADVISOR
United Services Advisors, Inc.
7900 Callaghan Road
Mailing Address: P.O. Box 29467
San Antonio, Texas 78229-0467
INVESTMENT SUB-ADVISOR
Bonnel, Inc.
P.O. Box 649
Reno, Nevada 89504
TRANSFER AGENT
United Shareholder Services, Inc.
P.O. Box 781234
San Antonio, Texas 78278-1234
CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, New York 10005
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Riverwalk Place, Ste. 900
San Antonio, Texas 78205
No-Load
Be Sure to Retain This Prospectus;
It Contains Valuable Information
