PROSPECTUS
AND APPLICATION
(See Inside Back Cover)
FEBRUARY 28, 1997
AS REVISED JULY 9, 1997
MONTAG & CALDWELL GROWTH FUND
(CLASS I SHARES)
CT&T FUNDS
Montag & Caldwell, Inc., Investment Advisor
(800) 992-8151
<PAGE>
INVESTMENT ADVISOR
Montag & Caldwell, Inc.
1100 Atlanta Financial Center
3343 Peachtree Road, NE
Atlanta, GA 30326-1450
ADMINISTRATOR
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601-3294
CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, NY 10005
FOR ADDITIONAL INFORMATION ABOUT CT&T FUNDS, CALL:
(800) 992-8151
<PAGE>
CT&T FUNDS
MONTAG & CALDWELL GROWTH FUND
FOR INSTITUTIONAL SHAREHOLDERS
CLASS I SHARES
1100 ATLANTA FINANCIAL CENTER
ATLANTA, GEORGIA 30326-1450
PROSPECTUS
February 28, 1997
as revised July 9, 1997
CT&T FUNDS (the "Company") is a no-load, open-end management
investment
company which consists of eight separate diversified investment
series
(collectively referred to as the "Funds") designed to offer
investors a variety
of investment opportunities. This Prospectus pertains only to the
Class I
shares of the Montag & Caldwell Growth Fund (the "Fund").
MONTAG & CALDWELL GROWTH FUND seeks long-term capital
appreciation consistent
with investments primarily in a combination of equity,
convertible, fixed
income, and short-term securities. Capital appreciation is
emphasized, and
generation of income is secondary. The Fund's Investment Advisor
is Montag &
Caldwell, Inc. ("Montag & Caldwell").
The shares of the Fund may be purchased or redeemed without any
purchase or
redemption charge imposed by the Company, although institutions
may charge
their customers for services provided in connection with their
investments.
Shares of the Fund are not deposits, obligations of, or endorsed
by any bank,
and are not insured or guaranteed by any bank, the Federal Deposit
Insurance
Corporation, the Federal Reserve Board, or any other agency. An
investment in
the Fund involves investment risks, including the possible loss of
principle.
This Prospectus sets forth concisely the information a
prospective investor
should know before investing. Investors should read and retain
this Prospectus
for future reference. Additional information about the Fund is
contained in the
Statement of Additional Information dated February 28, 1997, as
supplemented
from time to time, which has been filed with the Securities and
Exchange
Commission ("SEC") and is available upon request and without
charge from the
Company, at the addresses and telephone numbers below. The
Statement of
Additional Information is incorporated by reference into this
Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
CT&T Funds:
Investment Advisor:
171 North Clark Street Montag &
Caldwell, Inc.
Chicago, IL 60601-3294 1100 Atlanta
Financial Center
(800) 992-8151 3343
Peachtree Road, NE
Atlanta,
GA 30326-1450
(800) 992-8151
1
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TABLE OF CONTENTS
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PAGE
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<S>
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PROSPECTUS
SUMMARY.........................................................
3
EXPENSE
INFORMATION.......................................................
. 4
FINANCIAL
HIGHLIGHTS.......................................................
6
INVESTMENT OBJECTIVE AND
POLICIES.......................................... 7
INVESTMENT STRATEGIES AND RISK
CONSIDERATIONS.............................. 8
MANAGEMENT OF THE
FUND..................................................... 14
PORTFOLIO MANAGEMENT
METHODS............................................... 15
ADMINISTRATION OF THE
FUND................................................. 16
PURCHASE OF
SHARES.........................................................
17
REDEMPTION OF
SHARES....................................................... 18
NET ASSET
VALUE............................................................
20
DIVIDENDS AND
TAXES........................................................ 20
PERFORMANCE OF THE
FUND.................................................... 21
GENERAL
INFORMATION.......................................................
. 22
APPENDIX
Debt
Ratings...........................................................
.... 24
</TABLE>
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN
DESCRIBED IN ANY
JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUNDS
TO MAKE SUCH
AN OFFER OR SOLICITATION. NO SALES REPRESENTATIVE, DEALER, OR
OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS.
2
<PAGE>
PROSPECTUS SUMMARY
THE FUND
The Company is an open-end, management investment company
commonly known as a
mutual fund. The Company was established as a Delaware business
trust on
September 10, 1993. The Company currently offers eight separate
series of
shares (collectively referred to as "Funds"). This Prospectus
offers only Class
I shares of MONTAG & CALDWELL GROWTH FUND (the "Fund").
INVESTMENT DEFINITIONS
EQUITY SECURITIES -- The term "equity securities" as used herein
typically
refers to common stock or preferred stock, which represent a
stockholder's
equity or ownership of shares in a company.
DEBT SECURITIES -- Examples of "debt securities" are bills,
notes and bonds,
each representing a promise by the issuer to re-pay a debt which
is generally
secured by the assets of such issuer. Also in this investment
category are
debentures, which are bonds or promissory notes that are backed by
the general
credit of the issuer, but not secured by specific assets of such
issuer.
CONVERTIBLE FEATURES -- Equity or debt securities purchased by
the Fund may
have "convertible" features, whereby they can be exchanged for
another class of
securities, according to the terms of their respective issuers.
SHORT-TERM INSTRUMENTS -- "Short-term (or money market)
instruments" are
generally private or Government obligations with maturities of one
year or less
and may include (but are not limited to) certificates of deposit,
bankers'
acceptances, corporate commercial paper, and Government
obligations.
DERIVATIVE INVESTMENTS -- the term "derivatives" has been used
to identify a
range and variety of financial categories. In general, a
derivative is commonly
defined as a financial instrument whose performance is derived, at
least in
part, from the performance of an underlying asset, such as a
specific security
or an index of securities. Derivatives which may be used from time
to time by
the Fund and the investment risks associated with such instruments
are
discussed in detail under "INVESTMENT STRATEGIES AND RISK
CONSIDERATIONS."
INVESTMENT OBJECTIVE OF THE FUND
The Fund seeks long-term capital appreciation consistent with
investments
primarily in a combination of equity, convertible, fixed income,
and short-term
securities. Capital appreciation is emphasized, and generation of
income is
secondary.
HOW TO PURCHASE SHARES
The minimum initial investment for Class I shares is $40
million. Class I
shares of the Fund do not impose any sales load, redemption or
exchange fees or
have a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company
Act of 1940, as amended (the "1940 Act"). The public offering
price is the net
asset value per share next determined after receipt of a purchase
order in
proper form. See "PURCHASE OF SHARES."
HOW TO REDEEM SHARES
Shares may be redeemed at the net asset value per share of Class
I shares of
the Fund next determined after receipt by the Transfer Agent of a
redemption
request in proper form. Signature guarantees may be required. See
"REDEMPTION
OF SHARES."
3
<PAGE>
DIVIDENDS
The Fund intends to distribute substantially all of its net
investment income
and net realized capital gains, if any, to shareowners.
Distributions of net
capital gains, if any, will be made annually. All distributions
are reinvested
at net asset value, in additional full and fractional shares of
the Fund unless
and until the shareowner notifies the Transfer Agent in writing
requesting
payments in cash. The Fund declares and pay dividends quarterly.
See "DIVIDENDS
AND TAXES."
MANAGEMENT OF THE FUND
Montag & Caldwell, Inc. ("Montag & Caldwell"), 1100 Atlanta
Financial Center,
3343 Peachtree Road, NE, Atlanta, Georgia 30326-1450, a registered
investment
advisor, is the Investment Advisor for the Fund.
As of December 31, 1996, Montag & Caldwell managed over $8.5
billion in
assets primarily for employee benefit, endowment, charitable and
other
institutional clients, mutual funds, and high net worth
individuals.
The Bank of Mississippi may be deemed to be a "control person"
(as defined in
the 1940 Act) of the Fund, because as of January 30, 1997, it
owned of record
62.60% of the Fund. Please see "GENERAL INFORMATION--Voting
Rights" herein.
First Data Distributors, Inc., 4400 Computer Drive, Westborough,
Massachusetts 01581 serves as the Fund's Distributor. Bankers
Trust Company, 16
Wall Street, New York, New York 10005, serves as the Custodian of
the Fund's
assets. The Chicago Trust Company, 171 North Clark Street, Chicago
Illinois
60601, serves as the Fund's Administrator. First Data Investor
Services Group,
Inc., 53 State Street, Boston, Massachusetts serves as the Fund's
Sub-
Administrator. First Data Investor Services Group, Inc., 4400
Computer Drive,
Westborough, Massachusetts 01581, serves as the Fund's Transfer
Agent.
EXPENSE INFORMATION
SHAREOWNER TRANSACTION EXPENSES OF THE FUND:
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Maximum Sales Load Imposed on
Purchases.................................... None
Maximum Sales Load Imposed on Reinvested
Dividends......................... None
Maximum Deferred Sales
Load................................................ None
Redemption
Fees............................................................
None
Exchange
Fees..............................................................
None
</TABLE>
If you want to redeem shares by wire transfer, the Fund's
Transfer Agent
charges a fee, currently $20.00, for each wire redemption.
Institutions may
independently charge fees for shareowner transactions or for
advisory services;
please see their materials for details.
ANNUAL FUND OPERATING EXPENSES AS A PERCENTAGE OF AVERAGE NET
ASSETS:
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<S>
<C>
Investment Advisory
Fees.................................................. 0.80%
12b-1
Fees..............................................................
.. None
Other
Expenses..........................................................
.. 0.18%
- -----
Net Expense
Ratio.........................................................
0.98%
=====
</TABLE>
4
<PAGE>
The purpose of this table is to assist the investor in
understanding the
various expenses that an investor in the Fund will bear directly
or indirectly.
The figures in the above table are estimates since the fund is new
and are
based on the Fund's operating expenses for the fiscal period ended
October 31,
1996. Montag & Caldwell has voluntarily undertaken to waive its
fee or
reimburse the Fund for total operating expenses in excess of
0.98%.
Based on the level of expenses listed above after reimbursement,
the total
expenses relating to an investment of $1,000 would be as follows
assuming a 5%
annual return and redemption at the end of each time period.
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<CAPTION>
1 YEAR 3 YEARS
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<S> <C>
$10 $31
</TABLE>
The foregoing tables are designed to assist the investor in
understanding the
various costs and expenses that a shareowner will bear directly or
indirectly.
While the example assumes a 5% annual return, the Fund's actual
performance
will vary and may result in actual returns greater or less than
5%. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The Fund offers two classes of shares that invest in the same
portfolio of
securities. Shareowners of Class N are subject to a 12b-1 Plan,
and the
shareowners of Class I are not; therefore, expenses and
performance figures
will vary between the classes. The information set forth in the
foregoing
tables and example relates only to the Class I shares. See
"GENERAL
INFORMATION."
5
<PAGE>
FINANCIAL HIGHLIGHTS
The following Financial Highlights are part of the financial
statements for
the Fund. The audited period presented is from the Fund's
commencement of
operations to October 31, 1996, the end of the Company's most
recent fiscal
year. These Financial Highlights have been audited by KPMG Peat
Marwick llp,
independent certified public accountants, for the period indicated
in their
report thereon appearing in the Company's related Statement of
Additional
Information.
The following table sets forth financial data for a share of
beneficial
interest outstanding throughout the period presented. This should
therefore be
read in conjunction with the financial statements and related
notes also
included as Appendix "A" in the Statement of Additional
Information.
<TABLE>
<CAPTION>
PERIOD ENDED
10/31/96*
-
- -----------
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NET ASSET VALUE, BEGINNING OF PERIOD...........................
$ 15.59
- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income........................................
0.02
Net realized and unrealized gain on investments..............
1.49
- -------
Total from investment operations...........................
1.51
Less Distributions from and in excess of net investment income.
(0.02)
- -------
NET ASSET VALUE, END OF PERIOD.................................
$ 17.08
=======
TOTAL RETURN...................................................
9.67%(/2/)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's).........................
$52,407
Ratio of expenses to average net assets before reimbursement
of expenses by Advisor......................................
0.98%(/1/)
Ratio of expenses to average net assets after reimbursement
of expenses by Advisor......................................
0.98%(/1/)
Ratio of net investment income to average net assets before
reimbursement of expenses by Advisor........................
0.17%(/1/)
Ratio of net investment income to average net assets after
reimbursement of expenses by Advisor........................
0.17%(/1/)
Portfolio turnover...........................................
26.36%(/2/)
Average commission rate paid.................................
$0.0639
</TABLE>
- --------
* MONTAG & CALDWELL GROWTH FUND Class I Shares commenced
operations on June 28,
1996.
(/1/)Annualized.
(/2/)Not Annualized.
PERFORMANCE MEASURES
From time to time, the Fund may advertise performance measures
as set forth
under "PERFORMANCE OF THE FUNDS."
Performance measures will be based on historical earnings and
are not
intended to indicate future performance. Management's detailed
discussion of
the Company's performance data will be found in the most recent
Annual Report
to Shareowners, which will be available upon request and without
charge, by
calling
(800) 992-8151.
PORTFOLIO TURNOVER
The portfolio turnover rate for the Fund is calculated by
dividing the lesser
of purchases or sales of portfolio investments for the reporting
period by the
monthly average value of the portfolio investments owned
6
<PAGE>
during the reporting period. The calculation excludes all
securities, including
options, whose maturities or expiration dates at the time of
acquisition are
one year or less. Portfolio turnover may vary greatly from year to
year as well
as within a particular year, and may be affected by cash
requirements for
redemption of units and by requirements which enable the Fund to
receive a
favorable tax treatment. In any event, portfolio turnover is
generally not
expected to exceed 100% in the Fund. A high rate of portfolio
turnover (i.e.,
over 100%) may result in the realization of substantial capital
gains and
involves correspondingly greater transaction costs.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is fundamental and may not
be changed
without a vote of the holders of the majority of the voting
securities of the
Fund. Unless otherwise stated in this Prospectus or the Statement
of Additional
Information, the Fund's investment policies are not fundamental
and may be
changed without shareowner approval. While a non-fundamental
policy or
restriction may be changed by the Trustees of the Company without
shareowner
approval, the Fund intends to notify shareowners before making any
change in
any such policy or restriction. Fundamental policies may not be
changed without
shareowner approval.
The Fund strives to attain its investment objective, but there
can, of
course, be no assurance that it will do so. Please refer to the
policies and
risk disclosures more fully described under "INVESTMENT STRATEGIES
AND RISK
CONSIDERATIONS." Additional investment policies and restrictions
are described
in the Statement of Additional Information.
The Fund seeks long-term capital appreciation consistent with
investments
primarily in a combination of convertible and non-convertible
equity
securities, convertible and non-convertible debt securities, and
short-term
instruments. Capital appreciation is emphasized, and generation of
income is
secondary. Montag & Caldwell selects equity securities that it
believes are
undervalued based upon the issuer's estimated earning power and
ability to
produce strong earnings growth over the next twelve to eighteen
months. Issuers
include, but are not limited to, established companies with a
history of growth
and companies that are expected to enter periods of earnings
growth. Montag &
Caldwell may purchase securities of companies which do not pay
dividends, but
which are believed to have superior growth potential. The Fund may
invest in
securities listed on a stock exchange as well as those traded
over-the-counter.
While it is this Fund's policy to remain substantially invested
in common
stock or securities convertible into common stock, it may invest
in non-
convertible preferred stock and non-convertible debt securities.
When Montag &
Caldwell has determined that adverse market and economic
conditions warrant,
the Fund may invest all or part of its assets in high-quality
money market
securities and repurchase agreements for temporary defensive
purposes. The Fund
may invest up to 30% of its total assets in foreign securities in
the form of
American Depositary Receipts ("ADRs") and European Depositary
Receipts
("EDRs"), although it has no current intention of investing in
unsponsored ADRs
or EDRs. The Fund may also engage in futures and options
transactions for
hedging purposes. Such investments are generally considered to be
derivative
securities. These and other applicable investment activities with
respect to
this Fund are more fully described in the next section of this
Prospectus.
Debt securities consist of obligations of the U.S. Government,
its agencies
or instrumentalities, obligations of U.S. companies and of U.S.
banks such as
bonds, debentures, zero coupon bonds, and convertible debentures.
The Fund will
invest only in investment-grade debt securities which include
those securities
that are rated "Baa3" or better by Moody's Investors Service, Inc.
("Moody's")
or "BBB-" or better by Standard & Poor's Corporation ("S&P"), or
if not rated,
of comparable quality in the opinion of Montag & Caldwell. The
dollar weighted
average quality of the debt securities rated by Moody's will be
"A3" or better,
the dollar weighted average quality of the investment-grade debt
securities
rated by S&P will be "A" or better, and the dollar weighted
average quality of
unrated debt securities will be comparable, as determined by
Montag & Caldwell.
The Appendix contains an explanation of Moody's and S&P ratings.
In the event a
rated security
7
<PAGE>
held by the Fund is downgraded below an investment-grade rating by
Moody's or
S&P, the Investment Advisor shall promptly reassess the risks
involved and take
such actions as it determines will be in the best interests of the
Fund and its
shareowners.
INVESTMENT STRATEGIES AND RISK CONSIDERATIONS
IN GENERAL
Shareowners should understand that all investments involve risk
and there can
be no guarantee against loss resulting from an investment in the
Fund, nor can
there be any assurance that the Fund's investment objective will
be attained.
Unless otherwise indicated, all percentage limitations governing
the
investments of the Fund apply only at the time of transaction.
Accordingly, if
a percentage restriction is adhered to at the time of investment,
a later
increase or decrease in the percentage represented by such
investment which
results from a relative change in values or from a change in the
Fund's total
assets will not be considered a violation.
GOVERNMENT OBLIGATIONS
The Fund may invest in obligations issued or guaranteed by the
U.S.
Government, its agencies or instrumentalities to the extent
described above.
Obligations of certain agencies and instrumentalities of the U.S.
Government,
such as the Government National Mortgage Association ("GNMA"), are
supported by
the full faith and credit of the U.S. Treasury; others, such as
those of
Federal Home Loan Banks, are supported by the right of the issuer
to borrow
from the Treasury; others, such as those of the Federal National
Mortgage
Association ("FNMA"), are supported by the discretionary authority
of the U.S.
Government to purchase the agency's obligations; still others,
such as those of
the Student Loan Marketing Association, are supported only by the
credit of the
instrumentality. No assurance can be given that the U.S.
Government would
provide financial support to U.S. Government-sponsored
instrumentalities if it
is not obligated to do so by law. Some Government obligations may
be issued as
variable or floating-rate instruments.
Securities issued or guaranteed by the U.S. Government, its
agencies and
instrumentalities have historically involved little risk of loss
of principal.
However, due to fluctuations in interest rates, the market value
of such
securities may vary during the period of time the shareowner owns
shares of the
Fund.
MONEY MARKET SECURITIES
The Fund may invest in money market securities, including bank
obligations
and commercial paper. Bank obligations may include bankers'
acceptances,
negotiable certificates of deposit, and non-negotiable time
deposits earning a
specified return, issued for a definite period of time by a U.S.
bank that is a
member of the Federal Reserve System or is insured by the Federal
Deposit
Insurance Corporation, or by a savings and loan association or
savings bank
that is insured by the Federal Deposit Insurance Corporation. Bank
obligations
also include U.S. dollar-denominated obligations of foreign
branches of U.S.
banks or of U.S. branches of foreign banks, all of the same type
as domestic
bank obligations. Investments in bank obligations are limited to
the
obligations of financial institutions having more than $1 billion
in total
assets at the time of purchase.
Domestic and foreign banks are subject to extensive but
different government
regulations which may limit the amount and types of their loans
and the
interest rates that may be charged. In addition, the profitability
of the
banking industry is largely dependent upon the availability and
cost of funds
to finance lending operations and the quality of underlying bank
assets.
Investments in obligations of foreign branches of U.S. banks and
of U.S.
branches of foreign banks may subject the Fund to additional
investment risks,
including future political and economic developments, the
8
<PAGE>
possible imposition of withholding taxes on interest income,
possible seizure
or nationalization of foreign deposits, the possible establishment
of exchange
controls, or the adoption of other foreign governmental
restrictions which
might adversely affect the payment of principal and interest on
such
obligations. In addition, foreign branches of U.S. banks and U.S.
branches of
foreign banks may be subject to less stringent reserve
requirements and to
different accounting, auditing, reporting, and record keeping
standards than
those applicable to domestic branches of U.S. banks. Investments
in the
obligations of U.S. branches of foreign banks or foreign branches
of U.S. banks
will be made only when the Investment Advisor believes that the
credit risk
with respect to the investment is minimal.
Commercial paper may include variable and floating-rate
instruments, which
are unsecured instruments that permit the interest on indebtedness
thereunder
to vary. Variable-rate instruments provide for periodic
adjustments in the
interest rate. Floating-rate instruments provide for automatic
adjustment of
the interest rate whenever some other specified interest rate
changes. Some
variable and floating-rate obligations are direct lending
arrangements between
the purchaser and the issuer and there may be no active secondary
market.
However, in the case of variable and floating-rate obligations
with the demand
feature, the Fund may demand payment of principal and accrued
interest at a
time specified in the instrument or may resell the instrument to a
third party.
In the event an issuer of a variable or floating-rate obligation
defaulted on
its payment obligation, the Fund might be unable to dispose of the
note because
of the absence of a secondary market and could, for this or other
reasons,
suffer a loss to the extent of the default. Substantial holdings
of variable
and floating-rate instruments could reduce portfolio liquidity.
BORROWING
The Fund may not borrow money or issue senior securities, except
as described
in this paragraph. The Fund may borrow from banks or enter into
reverse
repurchase agreements for temporary purposes in amounts up to 10%
of the value
of its total assets. The Fund may not mortgage, pledge, or
hypothecate any
assets, except that the Fund may mortgage, pledge, or hypothecate
its assets in
connection with any such borrowing and in amounts not in excess of
the lesser
of the dollar amounts borrowed or 10% of the value of the total
assets of the
Fund. The Fund will not purchase securities while its borrowings
(including
reverse repurchase agreements) exceed 5% of its total assets. The
Fund may
borrow money as a temporary measure for extraordinary purposes or
to facilitate
redemptions. The Fund will not borrow money in excess of 25% of
the value of
its total assets. The Fund has no intention of increasing its net
income
through borrowing. Any borrowing will be done from a bank with the
required
asset coverage of at least 300%. In the event that such asset
coverage shall at
any time fall below 300%, the Fund shall, within three days
thereafter (not
including Sundays or holidays) or such longer period as the SEC
may prescribe
by rules and regulations, reduce the amount of its borrowings to
such an extent
that the asset coverage of such borrowings shall be at least 300%.
ILLIQUID SECURITIES
The Fund may invest up to 15% of its net assets in securities
which are
illiquid. Illiquid securities will generally include, but are not
limited to:
repurchase agreements and time deposits with notice/termination
dates in excess
of seven days; unlisted over-the-counter options; interest rate,
currency and
mortgage swap agreements; interest rate caps, floors and collars;
and certain
securities which are subject to trading restrictions because they
are not
registered under the Securities Act of 1933 (the "1933 Act").
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements pursuant to which
the Fund
purchases portfolio assets from a bank or broker-dealer
concurrently with an
agreement by the seller to repurchase the same assets from the
Fund at a later
date at a fixed price. Repurchase agreements are considered, under
the 1940
Act, to be collateralized loans by the Fund to the seller secured
by the
securities transferred to the Fund. Repurchase agreements will be
fully
collateralized by securities in which the Fund may invest
directly. Such
collateral will
9
<PAGE>
be marked-to-market daily. If the seller of the underlying
security under the
repurchase agreement should default on its obligation to
repurchase the
underlying security, the Fund may experience delay or difficulty
in exercising
its right to realize upon the security and, in addition, may incur
a loss if
the value of the security should decline, as well as disposition
costs in
liquidating the security. The Fund must treat each repurchase
agreement as a
security for tax diversification purposes and not as cash, a cash
equivalent or
receivable.
REVERSE REPURCHASE AGREEMENTS
The Fund may enter into reverse repurchase agreements with banks
and broker-
dealers. Reverse repurchase agreements involve sales by the Fund
of portfolio
assets concurrently with an agreement by the Fund to repurchase
the same assets
at a later date at a fixed price. During the reverse repurchase
agreement
period, the Fund continues to receive principal and interest
payments on these
securities. During the time a reverse repurchase agreement is
outstanding, the
Fund will maintain a segregated custodial account consisting of
cash or liquid
securities having a value at least equal to the resale price.
Reverse
repurchase agreements are considered to be borrowings by the Fund,
and as such
are subject to the investment limitations discussed above under
the sub-section
titled "Borrowing."
RULE 144A SECURITIES
The Fund may purchase securities which are not registered under
the 1933 Act
but which can be sold to "qualified institutional buyers" in
accordance with
Rule 144A under the 1933 Act. Any such security will not be
considered illiquid
so long as it is determined by the Investment Advisor under
guidelines approved
by the Company's Board of Trustees, that an adequate trading
market exists for
that security. This investment practice could have the effect of
increasing the
level of illiquidity in the Fund during any period that qualified
institutional
buyers become uninterested in purchasing these restricted
securities.
SECURITIES LENDING
The Fund may seek additional income from time to time by lending
its
portfolio securities on a short-term basis to banks, brokers and
dealers under
agreements. Loans of portfolio securities by the Fund will be
collateralized by
cash held in non-interest bearing demand accounts, letters of
credit or
securities issued or guaranteed by the U.S. Government or its
agencies or
instrumentalities which will be maintained at all times in an
amount equal to
the current market value of the loaned securities. The Fund may
not make such
loans in excess of 25% of the value of its total assets. The major
risk to
which the Fund would be exposed on a loan transaction is the risk
that the
borrower would become bankrupt at a time when the value of the
security goes
up. Therefore, the Fund will only enter into loan arrangements
after a review
by the Investment Advisor, subject to overall supervision by the
Board of
Trustees, including a review of the creditworthiness of the
borrowing broker-
dealer or other institution and then only if the consideration to
be received
from such loans would justify the risk. Creditworthiness will be
monitored on
an ongoing basis by the Investment Advisor.
SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest in securities issued by other investment
companies which
invest in securities in which the Fund is permitted to invest and
which
determine their net asset value per share based on the amortized
cost or penny-
rounding method. In addition, the Fund may invest in securities of
other
investment companies within the limits prescribed by the 1940 Act,
so that, as
determined immediately after a purchase of such securities is
made: (i) not
more than 5% of the value of the Fund's total assets will be
invested in the
securities of any one investment company; (ii) not more than 10%
of its total
assets will be invested in the aggregate in securities of
investment companies
as a group; and (iii) not more than 3% of the outstanding voting
stock of any
one investment company will be owned by the Fund. The Fund is
subject to
additional limitations in these purchases as described under
"INVESTMENT
RESTRICTIONS" in the Statement of Additional Information.
10
<PAGE>
As a shareowner of another investment company, the Fund would
bear, along with
other shareowners, its pro rata portion of the such investment
company's
expenses, including advisory fees. These expenses would be in
addition to the
advisory and other expenses that the Fund bears directly in
connection with its
own operations.
SHORT-TERM TRADING
The Fund may engage in short-term trading. Securities may be
sold in
anticipation of a market decline or purchased in anticipation of a
market rise
and later sold. In addition, a security may be sold and another
purchased at
approximately the same time to take advantage of what the Fund
believes to be a
temporary disparity in the normal yield relationship between the
two
securities. Such trading may be expected to increase the Fund's
portfolio
turnover rate and the expenses incurred in connection with such
trading.
FOREIGN SECURITIES
The Fund may invest in foreign securities. Investment in foreign
securities
is subject to special investment risks that differ in some
respects from those
related to investments in securities of U.S. domestic issuers.
Such risks
include: political, social or economic instability in the country
of the
issuer; the difficulty of predicting international trade patterns;
the
possibility of the imposition of exchange controls; expropriation;
limits on
removal of currency or other assets; nationalization of assets;
foreign
withholding and income taxation; and foreign trading practices
(including
higher trading commissions, custodial charges and delayed
settlements). Such
securities may be subject to greater fluctuations in price than
securities
issued by U.S. corporations or issued or guaranteed by the U.S.
Government, its
agencies or instrumentalities. The markets on which such
securities trade may
have less volume and liquidity, and may be more volatile, than
securities
markets in the U.S. In addition, there may be less publicly
available
information about a foreign company than about a U.S. domiciled
company.
Foreign companies generally are not subject to uniform accounting,
auditing and
financial reporting standards comparable to those applicable to
U.S. domestic
companies. There is generally less government regulation of
securities
exchanges, brokers and listed companies abroad than in the U.S.
Confiscatory
taxation or diplomatic developments could also affect investment
in those
countries.
In addition, foreign branches of U.S. banks, foreign banks and
foreign
issuers may be subject to less stringent reserve requirements and
to different
accounting, auditing, reporting, and record keeping standards than
those
applicable to domestic branches of U.S. banks and U.S. domestic
issuers.
For many foreign securities, U.S. dollar-denominated American
Depositary
Receipts, or ADRs, which are traded in the United States on
exchanges or over-
the-counter, are issued by domestic banks. ADRs represent the
right to receive
securities of foreign issuers deposited in a domestic bank or a
correspondent
bank. ADRs do not eliminate the risk inherent in investing in the
securities of
foreign issuers. However, by investing in ADRs rather than
directly in stock of
foreign issuers, the Fund can avoid currency risks during the
settlement period
for either purchases or sales. In general, there is a large,
liquid market in
the United States for many ADRs. The information available for
ADRs is subject
to the accounting, auditing and financial reporting standards of
the domestic
market or exchange on which they are traded, which standards are
more uniform
and more exacting than those to which many foreign issuers may be
subject. The
Fund may also invest in European Depositary Receipts, or EDRs,
which are
receipts evidencing an arrangement with a European bank similar to
that for
ADRs and are designed for use in the European securities markets.
Certain ADRs and EDRs, typically those denominated as
unsponsored, require
the holders thereof to bear most of the costs of such facilities
while issuers
of sponsored facilities normally pay more of the costs thereof.
The depositary
of an unsponsored facility frequently is under no obligation to
distribute
shareowner communications received from the issuer of the
deposited securities
or to pass through the voting rights to facility holders in
respect to the
deposited securities, whereas the depositary of a sponsored
facility typically
distributes shareowner communications and passes through the
voting rights.
11
<PAGE>
DERIVATIVE INVESTMENTS
The term "derivatives" has been used to identify a range and
variety of
financial instruments. In general, a derivative is commonly
defined as a
financial instrument whose performance and value are derived, at
least in part,
from another source, such as the performance of an underlying
asset, or a
specific security, or an index of securities. As is the case with
other types
of investments, the Fund's derivative instruments may entail
various types and
degrees of risk, depending upon the characteristics of a
derivative instrument
and the Fund's overall portfolio.
The Fund may engage in such practices for hedging purposes, or
to maintain
liquidity, or in anticipation of changes in the composition of its
portfolio
holdings. The Fund will not engage in derivative investments
purely for
speculative purposes. The Fund will invest in one or more
derivatives only to
the extent that the instrument under consideration is judged by
the Investment
Advisor to be consistent with the Fund's overall investment
objective and
policies. In making such judgment, the potential benefits and
risks will be
considered in relation to the Fund's other portfolio investments.
Where not specified, investment limitations with respect to the
Fund's
derivative instruments will be consistent with the Fund's existing
percentage
limitations with respect its overall investment policies and
restrictions.
While not a fundamental policy, the total of all instruments
deemed derivative
in nature by the Investment Advisor will generally not exceed 20%
of total
assets for the Fund; however, as this policy is not fundamental,
it may be
changed from time to time when deemed appropriate by the Board of
Trustees.
Listed below, including risks and policies with respect thereto,
are the types
of securities in which the Fund is permitted to invest that are
considered by
the Investment Advisor to be derivative in nature.
1. OPTIONS:
The Fund may engage in options, including those described below.
A call option enables the purchaser, in return for the premium
paid, to
purchase securities from the writer of the option at an agreed
price up to an
agreed date. The advantage is that the purchaser may hedge against
an increase
in the price of securities it ultimately wishes to buy or may take
advantage of
a rise in a particular index. The Fund will only purchase call
options to the
extent premiums paid on all outstanding call options do not exceed
20% of the
Fund's total assets. The Fund will only sell or write call options
on a covered
basis (e.g. on securities it holds in its portfolio).
A put option enables the purchaser of the option, in return for
the premium
paid, to sell the security underlying the option to the writer at
the exercise
price during the option period, and the writer of the option has
the obligation
to purchase the security from the purchaser of the option. The
advantage is
that the purchaser can be protected should the market value of the
security
decline or should a particular index decline. The Fund will only
purchase put
options to the extent that the premiums on all outstanding put
options do not
exceed 20% of the Fund's total assets. The Fund will only purchase
put options
on a covered basis and write put options on a secured basis. Cash
or other
collateral will be held in a segregated account for such options.
The Fund will
receive premium income from writing put options, although it may
be required,
when the put is exercised, to purchase securities at higher prices
than the
current market price. At the time of purchase, the Fund will
receive premium
income from writing call options, which may offset the cost of
purchasing put
options and may also contribute to the Fund's total return. The
Fund may lose
potential market appreciation if the judgment of its Investment
Advisor is
incorrect with respect to interest rates, security prices or the
movement of
indices.
An option on a securities index gives the purchaser of the
option, in return
for the premium paid, the right to receive cash from the seller
equal to the
difference between the closing price of the index and the exercise
price of the
option.
12
<PAGE>
Closing transactions essentially let the Fund offset put options
or call
options prior to exercise or expiration. If the Fund cannot effect
a closing
transaction, it may have to hold a security it would otherwise
sell or deliver
a security it might want to hold.
The Fund may use options traded on U.S. exchanges, and to the
extent
permitted by law, options traded over-the-counter. It is the
position of the
Securities and Exchange Commission ("SEC") that over-the-counter
options are
illiquid. Accordingly, the Fund will invest in such options only
to the extent
consistent with its 15% limit on investments in illiquid
securities. Please see
"General Risk Factors" below and refer to the Statement of
Additional
Information for a more detailed discussion of the applicable risk
considerations.
2. FORWARD COMMITMENTS, WHEN-ISSUED SECURITIES, AND DELAYED-
DELIVERY
TRANSACTIONS:
The Fund may purchase or sell securities on a when-issued or
delayed-delivery
basis and make contracts to purchase or sell securities for a
fixed price at a
future date beyond customary settlement time. Securities purchased
or sold on a
when-issued, delayed-delivery, or forward commitment basis involve
a risk of
loss if the value of the security to be purchased declines prior
to the
settlement date. Although the Fund would generally purchase
securities on a
when-issued, delayed-delivery, or forward commitment basis with
the intention
of acquiring the securities, the Fund may dispose of such
securities prior to
settlement if its Investment Advisor deems it appropriate to do
so. Please see
"General Risk Factors" below and refer to the Statement of
Additional
Information for a more detailed discussion of the applicable risk
considerations.
3. FUTURES CONTRACTS AND RELATED OPTIONS:
The Fund may engage in futures contracts and options on futures
contracts for
hedging purposes or to maintain liquidity. However, the Fund may
not purchase
or sell a futures contract unless immediately after any such
transaction the
sum of the aggregate amount of margin deposits on its existing
futures
positions and the amount of premiums paid for related options is
5% or less of
its total assets, after taking into account unrealized profits and
unrealized
losses on any such contracts. At maturity, a futures contract
obligates the
Fund to take or make delivery of certain securities or the cash
value of a
securities index. The Fund may sell a futures contract in order to
offset a
decrease in the market value of its portfolio securities that
might otherwise
result from a market decline. The Fund may do so either to hedge
the value of
its portfolio of securities as a whole, or to protect against
declines,
occurring prior to sales of securities, in the value of the
securities to be
sold. Conversely, the Fund may purchase a futures contract in
anticipation of
purchases of securities. In addition, the Fund may utilize futures
contracts in
anticipation of changes in the composition of its portfolio
holdings.
Any gain derived by the Fund from the use of such instruments
will be treated
as a combination of short-term and long-term capital gain and, if
not offset by
realized capital losses incurred by the Fund, will be distributed
to
shareowners and will be taxable to shareowners as a combination of
ordinary
income and long-term capital gain.
The Fund may purchase and sell call and put options on futures
contracts
traded on an exchange or board of trade. When the Fund purchases
an option on a
futures contract, it has the right to assume a position as a
purchaser or
seller of a futures contract at a specified exercise price at any
time during
the option period. When the Fund sells an option on a futures
contract, it
becomes obligated to purchase or sell a futures contract if the
option is
exercised. In anticipation of a market advance, the Fund may
purchase call
options on futures contracts as a substitute for the purchase of
futures
contracts to hedge against a possible increase in the price of
securities which
the Fund intends to purchase. Similarly, if the market is expected
to decline,
the Fund might purchase put options or sell call options on
futures contracts
rather than sell futures contracts. In connection with the Fund's
position in a
futures contract or option thereon, the Fund will create a
segregated account
of cash or liquid securities, or will otherwise cover its position
in
accordance with applicable requirements of the SEC. Please see
"General Risk
Factors" below and refer to the Statement of Additional
Information for a more
detailed discussion of the applicable risk considerations.
13
<PAGE>
GENERAL RISK FACTORS
1. OPTIONS, FUTURES, AND FORWARD CONTRACTS:
The Fund may engage in such investment practices. The primary
risks
associated with the use of futures contracts and options are: (i)
imperfect
correlation between the change in market value of the securities
held by the
Fund and the price of futures contracts and options; (ii) possible
lack of a
liquid secondary market for a futures contract and the resulting
inability to
close a futures contract when desired; (iii) losses, which are
potentially
unlimited, due to unanticipated market movements; and (iv) the
Investment
Advisor's inability to predict correctly the direction of security
prices,
interest rates and other economic factors. For a further
discussion, see
"INVESTMENT POLICIES AND RISK CONSIDERATIONS" in the Statement of
Additional
Information.
2. FIXED INCOME INVESTING:
The Fund may engage in fixed income investment practices. There
are two
principal types of risks associated with investing in debt
securities: (1)
market (or interest rate) risk and (2) credit risk.
Market risk relates to the change in market value caused by
fluctuations in
prevailing rates, while credit risk relates to the ability of the
issuer to
make timely interest payments and to repay the principal upon
maturity. The
value of debt securities will normally increase in periods of
falling interest
rates; conversely, the value of these instruments will normally
decline in
periods of rising interest rates.
In an effort to obtain maximum income consistent with its
investment
objective, the Fund may, at times, change the average maturity of
its
investment portfolio, consistent with a three- to ten-year
weighted average
maturity range, by investing a larger portion of its assets in
relatively
longer-term obligations when periods of declining interest rates
are
anticipated and, conversely, emphasizing shorter- and
intermediate-term
maturities when a rise in interest rates is indicated.
Credit risk refers to the possibility that a bond issuer will
fail to make
timely payments of interest or principal. The ability of an issuer
to make such
payments could be affected by general economic conditions,
litigation,
legislation or other events including the bankruptcy of the
issuer. For a
further discussion, see "INVESTMENT POLICIES AND RISK
CONSIDERATIONS" in the
Statement of Additional Information.
MANAGEMENT OF THE FUND
THE BOARD OF TRUSTEES
Under Delaware law, the business and affairs of the Company are
managed under
the direction of the Board of Trustees. The Statement of
Additional Information
contains the name of each Trustee and background information
regarding the
Trustees.
MONTAG & CALDWELL, INC.
The Investment Advisor for the Fund is Montag & Caldwell, Inc.
("Montag &
Caldwell"), a registered investment advisor located at 1100
Atlanta Financial
Center, 3343 Peachtree Road NE, Atlanta, Georgia 30326-1450. As of
December 31,
1996, Montag & Caldwell managed over $8.5 billion in assets,
primarily for
employee benefit, endowment, charitable and other institutional
clients, as
well as high net worth individuals. Montag & Caldwell, founded in
1945, is an
indirect wholly-owned subsidiary of the Alleghany Corporation,
which is engaged
through its subsidiaries in the business of title insurance,
reinsurance, other
financial services and industrial minerals. Alleghany Corporation
is located at
Park Avenue Plaza, New York, New York 10055.
Pursuant to an Investment Advisory Agreement with the Company,
Montag &
Caldwell provides an investment program for the Fund in accordance
with its
investment policies, limitations and restrictions, and The Chicago
Trust
Company furnishes executive, administrative and clerical services
required for
the transaction of the Fund's business.
14
<PAGE>
For providing investment advisory services, the Fund has agreed
to pay Montag
& Caldwell a monthly fee at the annual rate of 0.80% based on the
Fund's
average daily net assets, which is higher than the advisory fees
paid by most
other funds; however, this fee is comparable with those of other
mutual funds
with similar investment objectives.
Montag & Caldwell has voluntarily undertaken to waive its fee or
reimburse
the Fund for total operating expenses in excess of 0.98%. Such fee
reimbursements may be terminated at the discretion of Montag &
Caldwell.
PORTFOLIO MANAGEMENT METHODS
INVESTMENT MANAGEMENT TEAM
Investment decisions for the Fund are made by an investment
management team
at Montag & Caldwell. Ronald E. Canakaris heads the team and is
the portfolio
manager for the Fund.
The Montag & Caldwell equity performance objective is to produce
solid
returns over the long-term. Equity portfolios are managed with a
fundamental
selection process in which valuation of the long-term earning
power of the
company is interrelated with expected rate of growth in short-term
reported
earnings for that company. Among the factors important in the
valuation process
are: the estimated per share earning power of the company's
assets; return on
equity; long-term estimated reported earnings growth rate;
financial strength;
capital structure; competitive position; and quality of
management. Securities
are selected based upon extensive research and seasoned judgment
of experienced
professionals. Industry group weightings and asset allocation are
incorporated
in the selection process.
Mr. Ronald E. Canakaris, President and Chief Investment Officer
of Montag &
Caldwell, Inc. since 1984, manages the investment program of
Montag & Caldwell
Growth Fund. He is primarily responsible for the day-to-day
management of the
Fund's portfolio. Mr. Canakaris, a Chartered Financial Analyst,
has been a
portfolio manager and the Director of Research at Montag &
Caldwell since 1973.
He has been the portfolio manager and primarily responsible for
making the
investment decisions of the Enterprise Growth Fund since 1980. The
Enterprise
Growth Fund had net assets of $201.2 million as of December 31,
1996. Average
annual returns for the one-year, three-year, five-year, ten-year
and since
inception periods ended December 31, 1996 compared with the
performance of the
Standard & Poor's 500 Composite Stock Price Index were:
<TABLE>
<CAPTION>
MONTAG & CALDWELL
ENTERPRISE GROWTH
GROWTH FUND ENTERPRISE GROWTH
FUND- S&P 500
CLASS I (1) FUND (1)(3) NET
OF LOAD (2)(3) INDEX (4)
----------------- ----------------- -----
- ------------- ---------
<S> <C> <C> <C>
<C>
Since 6/28/96*.......... 15.31% 14.79%
9.35% 11.69%
One Year................ -- 32.60
26.30 22.95
Three Years............. -- 22.49
20.53 19.66
Five Years.............. -- 16.69
15.56 15.20
Ten Years............... -- 16.54
15.97 15.28
</TABLE>
- --------
* Montag & Caldwell Growth Fund Class I commenced operations on
June 28, 1996.
The total returns listed from 6/28/96 to 12/31/96 are not
annualized.
(1) Average total return reflects changes in share prices and
reinvestment of
dividends and distributions and is net of fund expenses. The
returns for
three, five and ten years are annualized.
(2) Average annual total return reflects changes in the share
prices and
reinvestment of dividends and distributions and is net of fund
expenses and
the front-end sales load of 4.75%. This column reflects load-
adjusted
returns, which are net of this front-end load.
(3) The expense ratio of Enterprise Growth Fund has been capped at
1.60% from
January 1, 1990 through December 31, 1996. From September 15,
1987 to
December 31, 1989, the expense ratio was capped at 2.50%; from
January 1,
1987 through September 15, 1987, the expense ratio was capped
at 1.50%. For
each of the years 1987 through 1993, a portion of the
Enterprise Growth
Fund's expenses were reimbursed. The expense ratio of the
MONTAG & CALDWELL
GROWTH FUND CLASS I SHARES has been capped at 0.98% from
inception on June
28, 1996 through December 31, 1996.
15
<PAGE>
(4) The Standard & Poor's 500 Composite Price Index is an
unmanaged index of
common stocks that is considered to be generally
representative of the
United States stock market. The Index is adjusted to reflect
reinvestment
of dividends.
The investment objectives, policies and strategies of the
Enterprise Growth
Fund are substantially similar in all material aspects to the
MONTAG & CALDWELL
GROWTH FUND. Historical performance is not indicative of future
performance.
The Enterprise Growth Fund is a separate fund and its historical
performance is
not indicative of the past or future performance of the MONTAG &
CALDWELL
GROWTH FUND. Share prices and investment returns will fluctuate
reflecting
market conditions, as well as changes in company-specific
fundamentals of
portfolio securities.
ADMINISTRATION OF THE FUND
THE ADMINISTRATOR AND SUB-ADMINISTRATOR
Chicago Trust (the "Administrator") acts as the Company's
Administrator
pursuant to an Administration Agreement with the Company. For
services provided
as Administrator, Chicago Trust receives a fee at the annual rate
of: 0.060% of
the first $2 billion of average daily net assets; 0.045% of the
average daily
net assets between $2 billion and $3.5 billion and 0.040% of the
average daily
net assets in excess of $3.5 billion. Chicago Trust also receives
a custody
liaison fee equal to an annual fee per Fund of $10,000 for average
daily net
assets up to $100 million, $15,000 for average daily net assets
between $100
million and $500 million, and $20,000 per Fund for average daily
net assets in
excess of $500 million.
Pursuant to a Sub-Administration Agreement with the
Administrator, First Data
Investor Services Group, Inc. (the "Sub-Administrator"), 53 State
Street,
Boston, Massachusetts 02109, acts as Sub-Administrator and
receives a fee from
the Administrator equal to that set out above. The Sub-
Administrator also
retains a portion of the Fund's custody fees.
The services provided to the Fund under these Agreements
include:
coordinating and monitoring of any third parties furnishing
services to the
Fund; providing the necessary office space, equipment and
personnel to perform
administrative and clerical functions for the Fund; preparing,
filing and
distributing proxy materials, periodic reports to shareowners,
registration
statements and other documents; and responding to shareowner
inquiries.
The Sub-Administrator also performs certain accounting and
pricing services
for the Fund, including the daily calculation of the Fund's net
asset value.
THE TRANSFER AGENT
First Data Investor Services Group, Inc. (the "Transfer Agent"),
4400
Computer Drive, Westborough, Massachusetts 01581, performs the
following duties
in its capacity as Transfer Agent to the Fund: maintains the
records of
shareowner's accounts; answers shareowner inquiries concerning
accounts;
processes purchases and redemptions of Fund shares; acts as
dividend and
distribution disbursing agent; and performs other shareowner
service functions.
Shareowner inquiries should be addressed to the Transfer Agent at
(800) 992-
8151.
THE DISTRIBUTOR
First Data Distributors, Inc. (the "Distributor"), 4400 Computer
Drive,
Westborough, Massachusetts 01581, is the principal underwriter and
distributor
of the Fund pursuant to a distribution agreement with the Fund.
16
<PAGE>
THE CUSTODIAN
Bankers Trust Company (the "Custodian"), 16 Wall Street, New
York, New York
10005, is Custodian for the cash and securities of the Fund.
EXPENSES
Expenses attributable to the Company, but not to a particular
Fund, will be
allocated to each Fund thereof on the basis of relative net
assets. Similarly,
expenses attributable to a particular Fund, but not to a
particular class, will
be allocated to each class thereof on the basis of relative net
assets. General
Company expenses may include but are not limited to: insurance
premiums;
Trustee fees; expenses of maintaining the Company's legal
existence; and fees
of industry organizations. General Fund expenses may include but
are not
limited to: audit fees; brokerage commissions; registration of
Fund shares with
the SEC and notification fees to the various state securities
commissions; fees
of the Fund's Custodian, Administrator, Sub-Administrator and
Transfer Agent or
other "service providers"; costs of obtaining quotations of
portfolio
securities; and pricing of Fund shares.
Class-specific expenses which may differ among classes, or which
are
determined by the Trustees to be class-specific, will be borne
solely by
shareowners of the relevant class. These expenses may include but
are not
limited to: certain distribution fee payments; printing and
postage expenses
related to preparing and distributing required documents such as
shareowner
reports, prospectuses, and proxy statements to current shareowners
of a
specific class; SEC registration fees and state "blue sky" fees
incurred by a
specific class; litigation or other legal expenses relating to a
specific
class; expenses incurred as a result of issues relating to a
specific class;
and different transfer agency fees attributable to a specific
class.
Notwithstanding the foregoing, the Investment Advisor or other
service
provider may waive or reimburse the expenses of a specific class
or classes to
the extent permitted under Rule 18f-3 under the 1940 Act.
PURCHASE OF SHARES
IN GENERAL
Shares of the Fund may be purchased directly from the Fund at
the net asset
value next determined after receipt of the order in proper form by
the Transfer
Agent. The minimum initial investment is $40 million; there is no
minimum
subsequent investment. There is no sales load or charge in
connection with the
purchase of shares. The Company reserves the right to reject any
purchase order
and to suspend the offering of shares of the Fund. The Fund also
reserves the
right to vary the initial and subsequent investment minimums, or
to waive the
minimum investment requirements for any investor.
Purchase orders for shares of the Fund which are received by the
Transfer
Agent in proper form, including money order, check or bank draft,
by the
regular closing of the New York Stock Exchange ("NYSE") (currently
4:00 p.m.
Eastern time) will be priced at the Fund's net asset value
determined that day.
If you invest by check, allow one business day after receipt for
conversion
into federal funds. Checks must be made payable to the Fund. If
you wire money
in the form of federal funds, your money will be invested at the
share price
next determined after receipt of the wire. Orders for shares
received in proper
form after 4:00 p.m. will be priced at the net asset value
determined on the
next day that the NYSE is open for trading.
MONTAG & CALDWELL GROWTH FUND offers two classes of shares. Only
the Class I
shares are offered under this Prospectus.
The Fund may accept telephone orders from broker-dealers or
service
organizations which have been previously approved by the Fund. It
is the
responsibility of such broker-dealers or service organizations to
promptly
forward purchase orders and payments for same to the Company.
Shares of the
Fund may be purchased through broker-dealers, banks, and bank
trust departments
which may charge the investor a transaction fee or other fee for
their services
at the time of purchase. Such fees would not otherwise be charged
if the shares
were purchased directly from the Company.
17
<PAGE>
Purchases may be made in one of the following ways:
INITIAL PURCHASES BY MAIL
Shares of the Fund may be purchased initially by completing the
application
accompanying this Prospectus and mailing it to the Transfer Agent,
together
with a check payable to "Montag & Caldwell Growth Fund Class I
Shares", c/o
First Data Investor Services Group Inc., P.O. Box 5164,
Westborough,
Massachusetts 01581. The Fund will not accept third party checks
for the
purchase of shares. Third party checks are those that are made out
to someone
other than the Fund and are endorsed over to the Fund.
INITIAL PURCHASES BY WIRE
An investor desiring to purchase shares of the Fund by wire
should call the
Transfer Agent first at (800) 992-8151 and request an account
number and
furnish the Fund with your tax identification number. Following
such
notification to the Transfer Agent, federal funds and registration
instructions
should be wired through the Federal Reserve System to:
Boston Safe Deposit & Trust
ABA # 01-10-01234
FOR: CT&T Funds
A/C 140414
FBO "SHAREOWNER NAME"
"SHAREOWNER ACCOUNT NUMBER"
A completed application with signature(s) of registrant(s) must
be filed with
the Transfer Agent immediately subsequent to the initial wire.
Investors should
be aware that some banks may impose a wire service fee.
SUBSEQUENT INVESTMENTS
Once an account has been opened, subsequent purchases may be
made by mail,
bank wire,
or by telephone. When making additional investments by mail,
simply return the
remittance portion of a previous confirmation with your investment
in the
envelope provided. Your check must be made payable to "MONTAG &
CALDWELL GROWTH
FUND--CLASS I SHARES" and mailed to the CT&T Funds, P.O. Box 5163,
Westborough,
Massachusetts 01581.
All investments must be made in U.S. dollars, and, to avoid fees
and delays,
checks must be drawn only on banks located in the U.S. In order to
help ensure
the receipt of good funds, the Trust reserves the right to delay
sending your
redemption proceeds up to 15 days if you purchased shares by
check. A charge
($20 minimum) will be imposed if any check used for the purchase
of shares is
returned. The Fund and the Transfer Agent each reserve the right
to reject any
purchase order in whole or in part.
REDEMPTION OF SHARES
IN GENERAL
Shares of the Fund may be redeemed without charge on any
business day that
the NYSE is open for business. Redemptions will be effective at
the net asset
value per share next determined after the receipt by the Transfer
Agent of a
redemption request meeting the requirements described below. The
Fund normally
sends redemption proceeds on the next business day, but in any
event redemption
proceeds are sent within seven calendar days of receipt of a
redemption request
in proper form. However, your redemption proceeds may be delayed
up to 15 days
if you purchased the shares to be redeemed by check until such
check has
cleared. Payment may also be made by wire directly to any bank
previously
designated by the shareowner in a shareowner account application.
A shareowner
will be charged $20 for redemptions by wire. Also, please note
that the
shareowner's bank may impose a fee for this wire service.
18
<PAGE>
Except as noted below, redemption requests received in proper
form by the
Transfer Agent prior to the close of regular trading hours on the
NYSE on any
business day that the Fund calculates its per share net asset
value are
effective that day.
Redemption requests received after the close of the NYSE are
effective as of
the time the net asset value per share is next determined. No
redemption will
be processed until the Transfer Agent has received a completed
application with
respect to the account.
The Fund will satisfy redemption requests in cash to the fullest
extent
feasible, so long as such payments would not, in the opinion of
the Board of
Trustees, result in the necessity of the Fund selling assets under
disadvantageous conditions or to the detriment of the remaining
shareowners of
the Fund. Pursuant to the Company's Declaration of Trust, payment
for shares
redeemed may be made either in cash or in-kind, or partly in cash
and partly
in-kind. However, the Company has elected pursuant to Rule 18f-1
under the 1940
Act to redeem its shares solely in cash up to the lesser of
$250,000 or 1% of
the net asset value of the Fund, during any ninety-day period for
any one
shareowner. Payments in excess of this limit by the Fund will also
be made
wholly in cash unless the Board of Trustees believes that economic
conditions
exist which would make such a practice detrimental to the best
interests of the
Fund. Any portfolio securities paid or distributed in-kind would
be valued as
described under "NET ASSET VALUE". In the event that an in-kind
distribution is
made, a shareowner may incur additional expenses, such as the
payment of
brokerage commissions, on the sale or other disposition of the
securities
received from the Fund. In-kind payments need not constitute a
cross-section of
the Fund's portfolio.
Shares may be redeemed in one of the following ways:
REDEMPTIONS BY MAIL
Shareowners may submit a written request for redemption to: CT&T
Funds, P.O.
Box 5164, Westborough, Massachusetts 01581. The request must be in
good order
which means that it must: (i) identify the shareowner's account
name and
account number; (ii) state the fund name; (iii) state the number
of shares to
be redeemed; and (iv) be signed by each registered owner exactly
as the shares
are registered.
To prevent fraudulent redemptions, a signature guarantee for the
signature of
each person in whose name the account is registered is required on
all written
redemption requests over $50,000. A guarantee may be obtained from
any
commercial bank, trust company, savings and loan association,
federal savings
bank, a member firm of a national securities exchange or other
eligible
financial institution. Credit unions must be authorized to issue
signature
guarantees; notary public endorsements will not be accepted. The
Transfer Agent
may require additional supporting documents for redemptions made
by
corporations, executors, administrators, trustees, guardians, and
retirement
plans.
A redemption request will not be deemed to be properly received
until the
Transfer Agent receives all required documents in proper form.
Questions with
respect to the proper form for redemption requests should be
directed to the
Transfer Agent at (800) 992-8151.
REDEMPTIONS BY TELEPHONE
Shareowners who have so indicated on the application, or have
subsequently
arranged in writing to do so, may redeem shares by instructing the
Transfer
Agent by telephone at (800) 992-8151.
In order to arrange for redemption by wire or telephone after an
account has
been opened, or to change the bank or account designated to
receive redemption
proceeds, a written request must be sent to the Transfer Agent at
the address
listed under "Redemptions by Mail" above. Such requests must be
signed by the
shareowner, with signatures guaranteed (see "Redemptions by Mail"
for details
regarding signature guarantees). Further documentation may be
requested from
corporations, executors, administrators, trustees, or guardians.
19
<PAGE>
The Fund reserves the right to refuse a wire or telephone
redemption if it is
believed advisable to do so. Procedures for redeeming Fund shares
by wire or
telephone may be modified or terminated at any time by the Fund.
Neither the
Fund nor any of its service contractors will be liable for any
loss or expense
in acting upon telephone instructions that are reasonably believed
to be
genuine. In attempting to confirm that telephone instructions are
genuine, the
Fund will use such procedures as are considered reasonable,
including
requesting a shareowner to correctly state its Fund account
number, the name in
which its account is registered, its tax identification number,
banking
institution, bank account number, and the name in which its bank
account is
registered.
Shares of the Fund may be redeemed through certain broker-
dealers, banks and
bank trust departments who may charge the investor a transaction
fee or other
fee for their services at the time of redemption. Such fees would
not otherwise
be charged if the shares were redeemed from the Company.
NET ASSET VALUE
The net asset value per share of each Fund is computed as of the
close of
regular trading on the NYSE on each day the NYSE is open for
trading. The NYSE
is closed on New Year's Day, Presidents' Day, Good Friday,
Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
The net asset value per share is computed by adding the value of
all
securities and other assets in the portfolio, deducting any
liabilities
(expenses and fees are accrued daily) and dividing by the number
of shares
outstanding. The portfolio securities of the Fund listed or traded
on a stock
exchange are valued at the latest sale price. If no sale price is
reported, the
mean of the latest bid and asked prices is used. Securities traded
over-the-
counter are priced at the mean of the latest bid and asked prices.
When market
quotations are not readily available, securities and other assets
are valued at
fair value as determined in good faith by the Board of Trustees.
Bonds are valued through valuations obtained from a commercial
pricing
service or at the mean of the most recent bid and asked prices
provided by
investment dealers in accordance with procedures established by
the Board of
Trustees. Options, futures and options on futures are valued at
the settlement
price as determined by the appropriate clearing corporation.
DIVIDENDS AND TAXES
DIVIDENDS
Dividends, if any, from the Fund's net investment income will be
declared and
paid quarterly. Aggregate net profits, if any, realized from the
sale of
portfolio securities, are distributed at least once each year
unless they are
used to offset losses carried forward from prior years, in which
case no such
gain will be distributed.
Income dividends and capital gain distributions are reinvested
automatically
in additional shares at net asset value, unless you elect to
receive them in
cash. Distribution options may be changed at any time by
requesting a change in
writing. Any check in payment of dividends or other distributions
which cannot
be delivered by the Post Office or which remains uncashed for a
period of more
than one year may be reinvested in the shareowner's account at the
then current
net asset value and the dividend option may be changed from cash
to reinvest.
Dividends are reinvested on the ex-dividend date (the "ex-date")
at the net
asset value determined at the close of business on that date.
Please note that
shares purchased shortly before the record date for a dividend or
distribution
may have the effect of returning capital although such dividends
and
distributions are subject to taxes.
20
<PAGE>
Dividends paid by the Fund with respect to Class N shares are
calculated in
the same manner and at the same time as Class I shares. Both Class
N and Class
I shares of the Fund will share proportionately in the investment
income and
general expenses of the Fund, but the per share dividends of Class
N shares
will differ from the per share dividends of Class I shares as a
result of
class-specific expenses as discussed in "Expenses" under
"ADMINISTRATION OF THE
FUND."
TAXES
The Fund intends to continue to qualify as a "regulated
investment company"
under the Internal Revenue Code ("the Code"). Such qualification
relieves the
Fund of liability for Federal income taxes to the extent the
Fund's earnings
are distributed in accordance with the Code. The Fund is treated
as a separate
entity for Federal tax purposes. Distributions of any net
investment income and
of any net realized short-term capital gains are taxable to
shareowners as
ordinary income. Distributions of net capital gain (the excess of
net long-term
capital gain over net short-term capital loss) are taxable to
shareowners as
long-term capital gain regardless of how long a shareowner may
have held shares
of the Fund. The tax treatment of distributions of ordinary income
or capital
gains will be the same whether the shareowner reinvests the
distributions or
elects to receive them in cash. A distribution will be treated as
paid on
December 31 of the current calendar year if it is declared in
October, November
or December with a record date in such a month and paid during
January of the
following calendar year. Such distributions will be taxable to
shareowners in
the calendar year in which the distributions are declared, rather
than the
calendar year in which the distributions are received.
Shareowners will be advised annually of the source and tax
status of all
distributions for Federal income tax purposes. Dividends and
distributions may
be subject to state and local income taxes. Further information
regarding the
tax consequences of investing in the Fund is included in the
Statement of
Additional Information. The above discussion is intended for
general
information only. Investors should consult their own tax advisors
for more
specific information on the tax consequences of particular types
of
distributions.
Redemptions of Fund shares, and the exchange of shares between
Funds of the
Company, are taxable events and, accordingly, shareowners may
realize capital
gains or losses on these transactions.
Shareowners may be subject to back-up withholding on reportable
dividend and
redemption payments ("back-up withholding") if a certified
taxpayer
identification number is not on file with the Fund, or if, to the
Fund's
knowledge, an incorrect number has been furnished. An individual's
taxpayer
identification number is his/her social security number.
PERFORMANCE OF THE FUND
IN GENERAL
Performance may be advertised to present or prospective
shareowners. The
figures are based on historical performance and should not be
considered
representative of future results. The value of an investment in
the Fund will
fluctuate and an investor's shares, when redeemed, may be worth
more or less
than their original cost. Performance information for the Fund may
be compared
to various unmanaged indices such as the Dow Jones Industrial
Averages and the
Standard & Poor's 500 Stock Index, and to the performance of other
mutual funds
tracked by mutual fund rating services. Further information about
the
performance of the Fund is included in the Statement of Additional
Information,
which may be obtained without charge by contacting the Fund at
(800) 992-8151.
TOTAL RETURN
Total Return is defined as the change in value of an investment
in the Fund
over a particular period, assuming that all distributions have
been reinvested.
Thus, total return reflects not only income earned, but also
variations in
share prices at the beginning and end of the period. Average
annual total
return is determined by computing the annual compound return over
a stated
period of time that would have produced the Fund's cumulative
total return over
the same period if the Fund's performance had remained constant
throughout.
21
<PAGE>
GENERAL INFORMATION
ORGANIZATION
The Fund is a separate, diversified, series of the Company, a
Delaware
business trust organized pursuant to a Trust Instrument dated
September 10,
1993. The Company is registered under the 1940 Act as an open-end
management
investment company, commonly known as a mutual fund. The Trustees
of the
Company may establish additional series or classes of shares
without the
approval of shareowners. The assets of each series belong only to
that series,
and the liabilities of each series are borne solely by that series
and no
other.
DESCRIPTION OF SHARES
The Fund is authorized to issue an unlimited number of shares of
beneficial
interest without par value. Shares of the Fund represent equal
proportionate
interests in the assets of the Fund only and have identical
voting, dividend,
redemption, liquidation, and other rights. All shares issued are
fully paid and
non-assessable, and shareowners have no preemptive or other right
to subscribe
to any additional shares and no conversion rights. Currently,
there is only one
class of shares issued by the Funds of the Company, except for
MONTAG &
CALDWELL GROWTH FUND which offers two classes of shares: Class I
shares which
are offered by this Prospectus, and Class N shares. Class N shares
are offered
to retail investors. Information about Class N shares is available
by calling
(800) 992-8151.
VOTING RIGHTS
Each issued and outstanding full and fractional share of the
Fund is entitled
to one full and fractional vote in the Fund and all shares of the
Fund
participate equally in regard to dividends, distributions, and
liquidations
except that Class I shares have no voting rights with respect to
the
distribution plan. Shareowners do not have cumulative voting
rights. On any
matter submitted to a vote of shareowners, shares of the Fund or
class will
vote separately except when a vote of shareowners in the aggregate
is required
by law, or when the Trustees have determined that the matter
affects the
interests of the Fund, in which case the shareowners of the Fund
shall be
entitled to vote thereon. The Bank of Mississippi is deemed a
"control person"
of the Fund because as of January 30, 1997, it owned of record
62.60% of the
Fund. This does not mean, however, that the bank manages the
affairs of the
Fund. The business and affairs of the Fund are managed under the
direction of
the Board of Trustees. See "PRINCIPAL HOLDERS OF SECURITIES" in
the Statement
of Additional Information.
SHAREOWNER MEETINGS
The Trustees of the Company do not intend to hold annual
meetings of
shareowners of the Fund. The Trustees have undertaken to the SEC,
however, that
they will promptly call a meeting for the purpose of voting upon
the question
of removal of any Trustee when requested to do so by not less than
10% of the
outstanding shareowners of the Funds. In addition, subject to
certain
conditions, shareowners may apply to the Company to communicate
with other
shareowners to request a shareowners' meeting to vote upon the
removal of a
Trustee or Trustees.
CERTAIN PROVISIONS OF TRUST INSTRUMENT
Under Delaware law, the shareowners of the Fund will not be
personally liable
for the obligations of the Fund; a shareowner is entitled to the
same
limitation of personal liability extended to shareowners of
corporations. To
guard against the risk that the Delaware law might not be applied
in other
states, the Trust Instrument requires that every written
obligation of the
Company or the Fund contain a statement that such obligation may
only be
enforced against the assets of the Company or Fund and provides
for
indemnification out of Company or Fund property of any shareowner
nevertheless
held personally liable for Company or Fund obligations.
22
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
The Fund will attempt to obtain the best overall price and most
favorable
execution of transactions in portfolio securities. However,
subject to policies
established by the Board of Trustees of the Company, the Fund may
pay a broker-
dealer a commission for effecting a portfolio transaction for the
Fund in
excess of the amount of commission another broker-dealer would
have charged if
Montag & Caldwell determines in good faith that the commission
paid was
reasonable in relation to the brokerage or research services
provided by such
broker-dealer, viewed in terms of that particular transaction or
such firm's
overall responsibilities with respect to the clients, including
the Fund, as to
which it exercises investment discretion. In selecting and
monitoring broker-
dealers and negotiating commissions, consideration will be given
to a broker-
dealer's reliability, the quality of its execution services on a
continuing
basis and its financial condition.
Subject to the foregoing considerations, preference may be given
in executing
portfolio transactions for the Fund to brokers which have sold
shares of the
Fund.
SHAREOWNER REPORTS AND INQUIRIES
Shareowners will receive Semi-Annual Reports showing portfolio
investments
and other information as of April 30 and Annual Reports audited by
independent
accountants as of October 31. Shareowners with inquiries should
call the Fund
at (800) 992-8151 or write to CT&T Funds, P.O. Box 5164,
Westborough,
Massachusetts 01581.
23
<PAGE>
APPENDIX
DEBT RATINGS
MOODY'S INVESTORS SERVICE, INC. describes classifications of
corporate bonds as
follows:
"AAA" -- These bonds are judged to be of the best quality. They
carry the
smallest degree of investment risk and are generally referred to
as "gilt-
edged". Interest payments are protected by a large or by an
exceptionally
stable margin and principal is secure. While the various
protective elements
are likely to change, such changes as can be visualized are most
unlikely to
impair the fundamentally strong position of such issues.
"AA" -- These bonds are judged to be of high quality by all
standards. Together
with the "Aaa" group they comprise what are generally known as
high-grade
bonds. They are rated lower than the best bonds because margins of
protection
may not be as large as in "Aaa" securities or fluctuation of
protective
elements may be of greater amplitude or there may be other
elements present
which make the long-term risks appear somewhat larger than in
"Aaa" securities.
"A" -- These bonds possess many favorable investment attributes
and are to be
considered as upper medium-grade obligations. Factors giving
security to
principal and interest are considered adequate, but elements may
be present
which suggest a susceptibility to impairment sometime in the
future.
"BAA" -- These bonds are considered as medium-grade obligations,
i.e., they are
neither highly protected nor poorly secured. Interest payments and
principal
security appear adequate for the present but certain protective
elements may be
lacking or may be characteristically unreliable over any great
length of time.
Such bonds lack outstanding investment characteristics and in fact
have
speculative characteristics as well.
Moody's may modify a rating of "AA", "A" OR "BAA" by adding
numerical modifiers
1, 2, 3 to show relative standing within these categories.
STANDARD & POOR'S CORPORATION describes classifications of
corporate and
municipal debt as follows:
"AAA" -- This is the highest rating assigned by Standard & Poor's
to a debt
obligation and indicates an extremely strong capacity to pay
interest and repay
principal.
"AA" -- These bonds also qualify as high-quality debt obligations.
Their
capacity to pay interest and repay principal is very strong and
differs from
the "AAA" issues only in small degree.
"A" -- These bonds have a strong capacity to pay interest and
repay principal,
although they are somewhat more susceptible to the adverse effects
of changes
in circumstances and economic conditions than debt in higher rated
categories.
"BBB" -- These bonds are regarded as having an adequate capacity
to pay
interest and repay principal. Whereas they normally exhibit
adequate protection
parameters, adverse economic conditions or changing circumstances
are more
likely to lead to a weakened capacity to pay interest and repay
principal for
bonds in this category than for bonds in the higher rated
categories.
PLUS (+) OR MINUS (-) -- The ratings from "AA" through "CCC" may
be modified by
the addition of a plus or minus sign to show relative standing
within the major
rating categories.
24
