AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION
ON 03/01/99
FILE NOS: 811-8058
33-69798
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [5]
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. [5]
(Check appropriate box or boxes.)
THE NOAH INVESTMENT GROUP, INC.
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(Exact name of Registrant as Specified in Charter)
975 Delchester Road
Newtown Square, PA 19073
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(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code:
215-651-0460
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WILLIAM L. VAN ALEN, JR., ESQUIRE, 975 DELCHESTER ROAD
NEWTOWN SQUARE, PA 19073 - 215-651-0460
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(Name and Address of Agent for Service)
Please send copy of communications to:
DAVID D. JONES, ESQUIRE
518 Kimberton Road, # 134
Phoenixville, Pennsylvania 19460
610-718-5381
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Approximate Date of Proposed Public Offering: As soon as practicable following
effective date.
It is proposed that this filing will become effective (check appropriate box):
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on March 1, 1999 pursuant to paragraph (a)(3)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant declares hereby that an indefinite number or amount of its securities
has been registered by this Registration Statement.
A Rule 24f-2 Notice for the year ended October 31, 1998 was filed on December
31, 1998.
TOTAL NUMBER OF PAGES _____
EXHIBIT INDEX BEGINS
ON PAGE _____
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THE NOAH FUND
CROSS-REFERENCE SHEET
(As required by Rule 495)
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ITEM NO. ON FORM N-1A CAPTION OR SUBHEADING IN PROSPECTUS
- --------------------- -----------------------------------
OR STATEMENT OF ADDITIONAL INFORMATION
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PART A - INFORMATION REQUIRED IN PROSPECTUS
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<S> <C>
1. Front and Back Cover Pages. Cover Page; Back Cover Page
2. Risk/Return Summary: Investments, Risk/Return Summary; Financial Highlights;
Risks, and Performance. Fees and Expenses
3. Risk/Return Summary/ Fee Table. Fees and Expenses
4. Investment Objectives, Principal Risk/Return Summary; Investment Objectives
Investment Strategies, and Related and Policies, Risk Factors
Risks
5. Management's Discussion of Not covered in Prospectus. Included in Annual
Fund Performance Report of Fund, dated October 31, 1998.
6. Management, Organization and The Noah Investment Group; Management of the
Capital Structure Fund; Fund Service Providers; General Information
7. Shareholder Information Investing in the Noah Fund; How to Sell (Redeem)
Your Shares; Distribution Fee; Federal Taxes; General
Information; Brokerage Allocation; Dividends and
Distributions; Shareholder Services
8. Distribution Arrangements Distribution Fee; Brokerage Allocation
9. Financial Highlights Information Financial Highlights
<PAGE>
PART B. STATEMENT OF ADDITIONAL INFORMATION
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10. Cover Page and Table of Contents Cover Page; Table of Contents
11. Fund History Not covered in Statement of Additional
Information (covered under Item 6 of
Part A)
12. Description of the Fund and its Investment Objective and Policies
Investments and Risks
13. Management of the Fund. Investment Management Services; Sub-Adviser
Management of the Fund; Directors and Officers
Of the Fund
14. Control Persons and Principal Directors and Officers; Principal Holders of
Holders of Securities. Securities
15. Investment Advisory and other Investment Management Services; Sub-Adviser;
Services.
16. Brokerage Allocation and Other
Practices Special Investor Services
17. Capital Stock and Other Taxes, Dividends, and Capital Gains Securities.
18. Purchase, Redemption and Pricing Purchase and Redemption of Shares
of Securities Being Offered
19. Taxation of the Fund. Taxes, Dividends, and Capital Gains
20. Underwriters Fund Service Providers
and Transfer Agents
21. Calculations of Performance Data. Financial Statements; Additional Performance
Information for the Fund
22. Financial Statements Financial Statements.
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PART C
Information required to be included in PART C is set forth under the appropriate
Item, so numbered, in PART C of the Registration Statement.
<PAGE>
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PART A
PROSPECTUS
Dated March 1, 1999
The Noah Fund
(the "Fund")
A Portfolio of the Noah Investment Group, Inc.
The Fund's investment objective is to achieve capital growth while protecting
invested capital (adjusted for inflation), and current income. The Fund is
offered by The Noah Investment Group, Inc. (the "Company"), an open-end,
diversified management investment company.
The Fund will not invest in any business, or in the securities of any business,
that is engaged, either directly or through a subsidiary, in the alcoholic
beverage, tobacco, pornographic and/or gambling industries, nor will the Fund
invest in any company that is in the business of aborting life before birth.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A FEDERAL CRIME.
<PAGE>
TABLE OF CONTENTS
Risk/Return Summary
Fees And Expenses
Investment Objectives And Policies
Risk Factors
Investing In The Noah Fund
How To Sell (Redeem) Shares
Shareholder Services
Dividends and Distributions
The Noah Investment Group
Management of the Fund
Brokerage Allocation
Fund Service Providers
Federal Taxes
General Information
Distribution Fee
Financial Highlights
- --------------------------------------------------------------------------------
<PAGE>
RISK/RETURN SUMMARY
The Fund is a No-Load Fund whose investment objective is capital growth,
consistent with the preservation of invested capital (adjusted for inflation),
and current income. The Fund seeks to achieve its objectives by primarily
investing in a diversified portfolio of common stocks of large capitalization
companies (one billion dollars or more) that qualify under the Fund's screening
criteria. Geewax, Terker & Co., the Fund's sub-advisor, chooses securities for
the Fund by using a "bottoms-up" investment approach. This means that the
sub-advisor seeks investment opportunities from the company level on up,
utilizing extensive fundamental security analysis to develop earnings forecasts
and to identify attractive investment opportunities relative to market
valuation. Individual companies are scrutinized concerning their individual
growth prospects and their competitive positions within their respective
industries. Individual company analysis focuses upon the outlook for sales,
profit margins, returns on capital, cash flow and earnings per share.
The Company's Management believes that it is consistent with Judeo-Christian
Principals for the Fund to take a moral stance with respect to its investments.
Accordingly, as a matter of fundamental policy, the Fund will not invest in any
business, or in the securities of any business, that is engaged, either directly
or through a subsidiary, in the alcoholic beverage, tobacco, pornographic and/or
gambling industries, nor will the Fund invest in any company that is in the
business of aborting life before birth.
The Fund's Adviser, Polestar Management Company, is responsible for the
management of the Fund's assets and screening potential investments for
compliance with the Fund's moral principals. The sub-adviser invests the Fund's
assets under the supervision of the Adviser and in compliance with the Adviser's
directives concerning impermissible investments.
Principal Risks
- ---------------
You may lose money by investing in the Fund. The Fund invests in common stock,
so the Fund will be subject to the risks associated with common stocks,
including price volatility and the creditworthiness of the issuing company. The
stock market trades in a cyclical price pattern, with prices generally rising or
falling over time. These cyclical periods may last for a significant period of
time. The sub-adviser will manage the portfolio subject to Polestar Management
Company's supervision and will make decisions on buying, selling or holding
portfolio securities in compliance with the Fund's philosophical restrictions on
investing in certain kinds of companies. If the Fund has invested in a company
that is later discovered to be in violation of the Fund's investment policies,
the liquidation of that security will be required, which could result in a loss
to the Fund. Further, the sub-adviser may be prevented from investing in an
otherwise attractive investment opportunity due to the nature of that company's
activities.
The Fund is appropriate for investors who want:
o Capital appreciation and are willing to accept moderate stock market
volatility.
o Asset investment within the context of conservation of capital as adjusted
for inflation.
o Current income.
The bar chart and table below help show the risks of investing in the Fund by
showing changes in the Fund's yearly performance over the lifetime of the Fund.
They also compare the Fund's performance to the performance of the S&P 500
Index** during each period. You should be aware that the Fund's past performance
may not be an indication of how the Fund will perform in the future.
PERFORMANCE BAR
CHART AND TABLE
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31
51.33%
33.57% ---------
- ------- ---------
- ------- ---------
- ------ ---------
- ----------------------------------
Year Ended Year Ended
December 31, 1997 December 31, 1998
Best Quarter: Q 4 1998 35.95%
Worst Quarter: Q 3 1998 -8.84%
Average Annual Total Returns (For Periods ending on December 31, 1998)
Past One Since Inception
Year (May 17, 1996)
The Fund 51.3% 44.8%
S&P 500 Index 28.1% 31.9%
*The Fund's Inception Date
** The S&P 500 Index is a widely recognized, unmanaged index of the 500 largest
capitalization companies in the United States. The Index assumes reinvestment of
all dividends and distributions and does not reflect any asset-based charges for
investment management or other expenses.
FEES AND EXPENSES
This table describes the fees and expenses you may pay if you buy and hold
shares of the Fund.
Shareholder Fees
(fees paid directly from your investment): NONE*
*You will be charged a fee of $10 on redemptions paid by wire transfer.
Annual Fund Operating Expenses:
(expenses that are deducted from Fund assets)
This table sets out the regular operating expenses that are paid out of the
Fund's average daily assets. These fees are used to pay for services such as the
investment management of the Fund, maintaining shareholder records and
furnishing shareholder statements.
Management Fees. 1.00%
12b-1 Fees. 0.25%1
Other Expenses 0.50%
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Total Annual Fund Operating Expenses. 1.75%
1. Because these fees are paid out of the Fund's assets on an ongoing basis,
over time these fees will increase the cost of your investment and may cost
you more than paying other types of sales charges.
Example: This example is intended to help you compare the costs of investing in
the Fund with the costs of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
One Year Three Years Five Years Ten Years
- -------- ----------- ---------- ---------
$178.00 $551.00 $949.00 $2,062.00
The above example does not include the $10 fee that you would have to pay if you
redeemed your shares by wire transfer. Because the Fund does not charge a
redemption fee except for wire transfers, you would pay the same fees set forth
above even if you did not redeem your shares.
Prior to February 1, 1999, the Fund's Adviser operated under a voluntary
agreement to waive receipt of its fees and/or assume certain expenses of the
Fund, to the extent possible, to insure that the Fund's total expenses did not
exceed 1.75% annually. For the Fund's fiscal years ending on October 31, 1998,
October 31, 1997, and October 31, 1996, the Adviser incurred expense assumptions
and fee waivers of $51,285, $94,353, and $47,931 respectively.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES
The Fund's investment objective and principal investment strategies are
generally described in the Risk/Return Section of this Prospectus. This Section
sets out additional information you should know before you invest.
The Fund seeks to realize capital appreciation by investing at least 65% of its
average net assets in a diversified portfolio of common stocks of large
capitalization companies (one billion dollars or more). Be aware that, when
selecting companies for the Fund, no company can be included in the Fund's
portfolio unless it satisfies the Funds' moral criteria. Subject to those
restrictions, in the Adviser's opinion, large capitalization companies are
advantageously positioned to achieve superior long-term asset value and earnings
growth for the following reasons:
1. Large capitalization companies typically are able to better realize the
results of company research and new product development,
2. Large capitalization companies typically are better able to dedicate more
of their resources to capital spending and market expansion,
3. Large capitalization companies typically have greater resources and more
management depth to allow these companies to achieve significant presence
in their chosen markets.
The Fund's sub-adviser, under the direction of the Adviser, will choose stocks
for the Fund. The sub-adviser's choices are always subject to the fundamental
moral philosophy of the Fund, and no stock will be purchased for the Fund that
knowingly violates that philosophy. The sub-adviser makes its choices based, in
part, on the sub-adviser's analysis of broad macroeconomic and political factors
such as inflation, interest rates, tax developments and currency rates.
The sub-adviser also conducts extensive fundamental security analysis to develop
earnings forecasts and to identify attractive investment opportunities relative
to market valuation. Individual companies are scrutinized concerning their
individual growth prospects and their competitive positions within their
respective industries. Individual company analysis focuses upon the outlook for
sales, profit margins, returns on capital, cash flow and earnings per share.
During periods when the Fund's Adviser deems it advisable for the Fund to be in
a temporary defensive posture, the Fund may invest, without limit, in "money
market instruments," a term that includes, among other things, bank obligations
(which include U.S. Dollar denominated certificates of deposit, bankers
acceptances and time deposits issued or supported by the credit of U.S. or
foreign banks or savings institutions having total assets at the time of
purchase in excess of $1 billion), commercial paper, obligations of the U.S.
Government, its agencies and instrumentalities, and repurchase agreements backed
by U.S. Government securities.
RISK FACTORS
You may lose money by investing in the Fund. The likelihood of loss is greater
if you invest for a shorter period of time. The value of the Fund's investments
will vary from day-to-day, reflecting changes in market conditions, interest
rates and other company, political, and economic news. Over the short-term,
stock prices can fluctuate dramatically in response to these factors. There is
no assurance that the Fund can achieve its investment objective, since all
investments are inherently subject to market risk.
INVESTING IN THE NOAH FUND
Opening And Adding To Your Account
- ----------------------------------
You can invest directly in the Fund in a number of ways. Simply choose the one
that is most convenient for you. Any questions you may have can be answered by
calling 1-800-794-NOAH. You may also purchase Fund shares through broker-dealers
or other financial organizations.
Payments for Fund shares should be in U.S. dollars, and in order to avoid fees
and delays, should be drawn on a U.S. bank. Please remember that Fund management
reserves the right to reject any purchase order for Fund shares. Your purchase
of Fund shares is subject to the following minimum investment amounts:
Minimum Investment To Open Account Additional Investments
--------------- ----------------------
Regular Account $1,000 $50
IRAs $500 $50
Non-Working Spousal
IRA (1) $250 $50
IRA Rollovers $1,000 $50
401(k) Plans, Qualified
Retirement Plans and
SEP-IRAs $1,000 $50
(1) A regular IRA must be opened first.
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TO OPEN AN ACCOUNT TO ADD TO ACCOUNT
By Mail Complete an Account Make your check payable to
Registration Form, make The Noah Fund and mail
a check payable to The it to the address at left.
Noah Fund and mail the
Form and check to The Noah Please include your account
Investment Group, Inc., number on your check.
or by overnight courier,
send to 555 North Lane, Or use the convenient form
Suite 6160, Conshohocken attached to your regular
PA, 19428. Fund statement.
By Wire Ask your bank to wire funds Ask your bank to wire immediately
to Account of available funds to the location described
First Union National Bank, N.A. at the left, except that the wire should
ABA#: 031201467 note that it is to make a subsequent
Credit: The Noah Investment purchase rather than to open
Group, Inc. a new account.
Account #: 5014199596610
Further credit: The Noah Fund.
The wire should state that the Include your name and
Fund purchase is to be in your account number.
name(s).
The wire should state that you
are opening a new Fund account.
Include your name(s), address and
taxpayer identification number
or Social Security number and the
name of the Fund in which you are
purchasing shares.
Call 1-800-794-NOAH to inform us
that a wire is being sent.
By Telephone transactions may Call 1-800-794-NOAH to make
Tele- not be used for initial purchases your purchase.
Phone If you want to make
Purchases subsequent transactions via
trans- telephone, please select this
ferring service on your account
money Registration Form.
from
your
checking,
NOW or
bank
money
market
account.
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The Noah Investment Group wants you to be kept current regarding the status of
your account in the Fund. To assist you, the following statements and reports
will be sent to you:
Confirmation Statements After every transaction that affects your
account balance or your account registration.
Account Statements Quarterly.
Financial Reports Semi-annually -- to reduce Fund expenses, only
one copy of the Fund report will be mailed to each
taxpayer identification number even if you have
more than one account in the Fund.
Purchase By Mail
- ----------------
Your purchase order, if in proper form and accompanied by payment, will be
processed upon receipt by Declaration Service Company, the Fund's Transfer
Agent. If the Transfer Agent receives your order and payment by the close of
regular trading on the Exchange (currently 4:00 p.m. East Coast time), your
shares will be purchased at the Fund's net asset value calculated at the close
of regular trading on that day. Otherwise, your shares will be purchased at the
net asset value determined as of the close of regular trading on the next
business day.
The Company does not consider the U.S. Postal Service or any other independent
delivery service to be its agent. Therefore, deposit in the mail or with such
services, or receipt at Declaration Service Company's Post Office Box, of
purchase applications or redemption requests does not constitute receipt by the
Custodian or the Fund. Do not mail letters by overnight courier to the post
office box address. Correspondence mailed by overnight courier should be sent to
the Fund at:
Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
All applications to purchase shares of the Fund are subject to acceptance or
rejection by authorized officers of the Company and are not binding until
accepted. Applications will not be accepted unless they are accompanied by
payment in U.S. funds. Payment must be made by check or money order drawn on a
U.S. bank, savings & loan or credit union. The Custodian will charge a $20.00
fee against your account, in addition to any loss sustained by the Fund, for any
payment check returned to the Custodian for insufficient funds. The Company
reserves the right to refuse to accept applications under circumstances or in
amounts considered disadvantageous to shareholders. If you place an order for
Fund shares through a securities broker, and you place your order in proper form
before 4:00 p.m. East Coast time on any business day in accordance with their
procedures, your purchase will be processed at the public offering price
calculated at 4:00 p.m. on that day, if the securities broker then transmits
your order to the Transfer Agent before the end of its business day (which is
usually 5:00 p.m. East Coast time). The securities broker must send to the
Transfer Agent immediately available funds in the amount of the purchase price
within three business days for the order.
By Financial Service Organization
- ---------------------------------
If you are a client of a securities broker or other financial organization, you
should note that such organizations may charge a separate fee for administrative
services in connection with investments in Fund shares and may impose account
minimums and other requirements. These fees and requirements would be in
addition to those imposed by the Fund. If you are investing through a securities
broker or other financial organization, please refer to its program materials
for any additional special provisions or conditions that may be different from
those described in this Prospectus (for example, some or all of the services and
privileges described may not be available to you). Securities brokers and other
financial organizations have the responsibility of transmitting purchase orders
and funds, and of crediting their customers' accounts following redemptions, in
a timely manner in accordance with their customer agreements and this
Prospectus.
Telephone Purchases
- -------------------
In order to be able to purchase shares by telephone, your account authorizing
such purchases must have been established prior to your call. Your initial
purchase of shares may not be made by telephone. Shares purchased by telephone
will be purchased at the per share net asset value determined at the close of
business on the day that the transfer agent receives payment through the
Automatic Clearing House. Call the Transfer Agent for details.
You may make purchases by telephone only if you have an account at a bank that
is a member of the Automated Clearing House. Most transfers are completed within
three business days of your call. To preserve flexibility, the Company may
revise or eliminate the ability to purchase Fund shares by phone, or may charge
a fee for such service, although the Company does not currently expect to charge
such a fee.
Declaration Service Company, the Fund's transfer agent, employs certain
procedures designed to confirm that instructions communicated by telephone are
genuine. Such procedures may include, but are not limited to, requiring some
form of personal identification prior to acting upon telephonic instructions,
providing written confirmations of all such transactions, and/or tape recording
all telephonic instructions. Assuming procedures such as the above have been
followed, neither Declaration Service Company nor the Fund will be liable for
any loss, cost, or expense for acting upon telephone instructions that are
believed to be genuine. The Company shall have authority, as your agent, to
redeem shares in your account to cover any such loss. As a result of this
policy, you will bear the risk of any loss unless the Fund has failed to follow
procedures such as the above. However, if the Fund fails to follow such
procedures, it may be liable for such losses.
Wire Purchases
- --------------
If you purchase Fund shares by wire, you must complete and file an Account
Registration Form with the Transfer Agent before any of the shares purchased can
be redeemed. You should contact your bank (which will need to be a commercial
bank that is a member of the Federal Reserve System) for information on sending
funds by wire, including any charges that your bank may make for these services.
Miscellaneous Purchase Information
- ----------------------------------
Federal regulations require that you provide a certified taxpayer identification
number whenever you open or reopen an account. Congress has mandated that if any
shareholder fails to provide and certify to the accuracy of the shareholder's
social security number or other taxpayer identification number, the Company will
be required to withhold a percentage, currently 31%, of all dividends,
distributions and payments, including redemption proceeds, to such shareholder
as a backup withholding procedure.
For economy and convenience, share certificates will not be issued.
The public offering price for shares of The Noah Fund is based upon the Fund's
net asset value per share. Net asset value per share is calculated by adding the
value of Fund investments, cash and other assets, subtracting Fund liabilities,
and then dividing the result by the number of shares outstanding. Common stocks
and other equity-type securities listed on a securities exchange are valued at
the last quoted sales price on the day of valuation. Price information on listed
stocks is taken from the exchange where the security is primarily traded.
Securities which are listed on and exchange but which are not traded on the
valuation date are valued at the latest quoted bid price. Unlisted securities
for which market quotations are readily available are valued at the latest
quoted bid price. Other assets of the Fund for which no market quotations are
readily available are valued at market value as determined in good faith by the
Adviser under the supervision of the Board of Directors. Short term securities
(those with remaining maturities under 60 days) are valued at amortized cost,
which approximates market value. The net asset value of the Fund's shares is
computed on all days on which the New York Stock Exchange is open for business
at the close of regular trading hours on the Exchange, currently 4:00 p.m. East
Coast time.
HOW TO SELL (REDEEM) YOUR SHARES
You may sell (redeem) your shares at any time. You may request the sale of your
shares either by mail, by telephone or by wire.
By Mail
- -------
Sale requests should be mailed via U.S. mail or overnight courier service to:
Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
The selling price of the shares being redeemed will be the Fund's per share net
asset value next calculated after receipt of all required documents in Good
Order. Payment of redemption proceeds will be made no later than the third
business day after the valuation date unless otherwise expressly agreed by the
parties at the time of the transaction. The Fund has made an election under Rule
18f-1 of the Investment Company act of 1940, as amended, which allows the Fund
to redeem shares, under certain circumstances, "in-kind". This means that the
Fund may choose to redeem your shares with securities instead of cash. See the
Statement of Additional Information for a more detailed discussion of in-kind
redemptions.
Good Order means that the request must include:
1. Your account number.
2. The number of shares to be sold (redeemed) or the dollar value of the
amount to be redeemed.
3. The signatures of all account owners exactly as they are registered on the
account.
4. Any required signature guarantees.
5. Any supporting legal documentation that is required in the case of estates,
trusts, corporations or partnerships and certain other types of accounts.
Signature Guarantees
- --------------------
A signature guarantee of each owner is required to redeem shares in the
following situations, for all size transactions:
(i) if you change the ownership on your account;
(ii) when you want the redemption proceeds sent to a different address than is
registered on the account;
(iii) if the proceeds are to be made payable to someone other than the account's
owner(s);
(iv) any redemption transmitted by federal wire transfer to your bank; and
(v) if a change of address request has been received by the Company or
Declaration Service Company within 15 days previous to the request for
redemption.
In addition, signature guarantees are required for all redemptions of $2,500 or
more from any Fund shareholder account. A redemption will not be processed until
the signature guarantee, if required, is received in Good Order.
Signature guarantees are designed to protect both you and the Fund from fraud.
To obtain a signature guarantee, you should visit a bank, trust company, member
of a national securities exchange or other broker-dealer, or other eligible
guarantor institution. (Notaries public cannot provide signature guarantees.)
Guarantees must be signed by an authorized person at one of these institutions,
and be accompanied by the words "Signature Guarantee."
By Telephone
- ------------
You may redeem your shares in the Fund by calling the Transfer Agent at
1-800-794-NOAH if you elected to use telephone redemption on your account
application when you initially purchased shares. Redemption proceeds must be
transmitted directly to you or to your pre-designated account at a domestic
bank. You may not redeem by telephone if a change of address request has been
received by the Company or Declaration Service Company within 15 days previous
to the request for redemption. During periods of substantial economic or market
changes, telephone redemptions may be difficult to implement. If you are unable
to contact the Transfer Agent by telephone, shares may be redeemed by delivering
the redemption request in person or by mail. You should understand that with the
telephone redemption option, you may be giving up a measure of security that you
might otherwise have had were you to redeem your shares in writing. In addition,
interruptions in telephone service may mean that you will be unable to effect a
redemption by telephone if desired.
Shares purchased by check for which a redemption request has been received will
not be redeemed until the check or payment received for investment has cleared.
By Wire
- -------
You may request the redemption proceeds be wired to your designated bank if it
is a member bank or a correspondent of a member bank of the Federal Reserve
System. A $10 fee is charged for outgoing wires.
Redemption At The Option Of The Fund
- ------------------------------------
If the value of the shares in your account falls to less than $500, the Company
may notify you that, unless your account is increased to $500 in value, it will
redeem all your shares and close the account by paying you the redemption
proceeds and any dividends and distributions declared and unpaid at the date of
redemption. You will have thirty days after notice to bring the account up to
$500 before any action is taken. This minimum balance requirement does not apply
to IRAs and other tax-sheltered investment accounts. This right of redemption
shall not apply if the value of your account drops below $500 as the result of
market action. The Company reserves this right because of the expense to the
Fund of maintaining very small accounts.
SHAREHOLDER SERVICES
Automatic Investment Plan
- -------------------------
You may select the Automatic Investment Plan. Under this option, sums will be
moved from your local bank checking account to your Fund Account on a periodic
basis; i.e., monthly or quarterly. If you wish to create an Automatic Investment
Plan, complete the Automatic Investment Plan form (page ____) and return the
form and a voided blank check from your local bank checking account to the
Transfer Agent. You must allow three weeks for the Transfer Agent to confirm
that electronic transfers can be made before you make the first transfer. Check
with your bank to make sure that it is a participant in the Automated Clearing
House system. The minimum amount that may be invested under the Plan
periodically is $50.00.
For information and assistance concerning the Automatic Investment Plan, please
call the Investor Service Department at 1-800-794-NOAH.
Dollar Cost Averaging is a useful method for investing in a portfolio of
securities such as the Fund where the price per share fluctuates. Instead of
trying to time market performance, a fixed dollar amount is invested in Fund
shares at predetermined intervals. In order to be effective, Dollar Cost
Averaging should usually be followed on a sustained, consistent basis. While
regular investment plans do not guarantee a profit and will not protect you
against loss in a declining market, they can be a good way to invest for
retirement, a home, educational expenses, and other long-term financial goals.
You may cancel your Automatic Investment Plan or change the amount of your
periodic payments at any time by mailing written notification of such
cancellation or change to the Transfer Agent at 555 North Lane, Suite 6160,
Conshohocken, PA 19428 or by calling Declaration Service Company at
1-800-794-NOAH.
Retirement Plans
- ----------------
Retirement plans may provide you with a method of investing for your retirement
by allowing you to exclude from your taxable income, subject to certain
limitations, the initial and subsequent investments in your plan and also
allowing such investments to grow without the burden of current income tax until
monies are withdrawn from the plan. Contact your investment professional or call
the Fund at 1-800 794 NOAH to receive information concerning your options.
DIVIDENDS AND DISTRIBUTIONS
Dividends paid by the Fund are derived from its net investment income. Net
investment income will be distributed at least annually. The Fund's net
investment income is made up of dividends received from the stocks it holds, as
well as interest accrued and paid on any other obligations that might be held in
its portfolio.
The Fund realizes capital gains when it sells a security for more than it paid
for it. The Fund may make distributions of its net realized capital gains (after
any reductions for capital loss carryforwards), generally, once a year.
Unless you elect to have your distributions paid in cash, your distributions
will be reinvested in additional shares of the Fund. You may change the manner
in which your dividends are paid at any time by writing to Declaration Service
Company, 555 North Lane, Suite 6160, Conshohocken, PA 19428.
THE NOAH INVESTMENT GROUP
The Noah Investment Group was organized on December 16, 1992 as a Maryland
corporation, and is a mutual fund of the type known as an open-end, diversified
management investment company. It did not begin operations until 1996 nor
commence offering its shares until that time. A mutual fund permits an investor
to pool his or her assets with those of others in order to achieve economies of
scale, take advantage of professional money managers and enjoy other advantages
traditionally reserved for large investors. It is authorized to issue
500,000,000 shares of .001 cent par value common capital stock. The Noah
Investment Group's Articles of Incorporation permits its Board of Directors to
classify any unissued shares into one or more classes of shares. The Board has
authorized the issuance of 250,000,000 shares of The Noah Fund which are
currently being offered. The Fund shares are fully paid and non-assessable. They
are entitled to such dividends and distributions as may be paid with respect to
the shares and shall be entitled to such sums on liquidation of the Fund as
shall be determined. Other than these rights, they have no preference as to
conversion, exchange, dividends, retirement or other features and have no
preemption rights.
Shareholder meetings will not be held unless required by Federal or State law or
in connection with an undertaking given by the Fund (See Statement of Additional
Information).
MANAGEMENT OF THE FUND
The business affairs of the Fund are managed under the general supervision of a
Board of Directors.
Investment Adviser
- ------------------
Polestar Management Company, 975 Delchester Road, Newtown Square, PA 19073
("Polestar Management") serves as the Fund's manager and is responsible for the
management of the Fund's business affairs. Under the terms of the Management
Agreement, Polestar Management, for the fee described below, manages, or
arranges for the management of, the investment and reinvestment of the assets
contained in the Fund's portfolio and the review, supervision and administration
of the Fund's investment program. Polestar Management also provides
administrative services to the Fund. Polestar Management has secured the
services of Geewax Terker & Company as sub-adviser. See "Sub-Investment
Adviser," p. __. Polestar Management is responsible to The Noah Investment
Group's Board of Directors.
Polestar Management will receive a fee, payable monthly, for the performance of
its services at an annual rate of 1% of the average net assets of the Fund. The
fee will be accrued daily for the purpose of determining the offering and
redemption price of the Fund's shares; it is higher than those paid by most
investment companies. For the fiscal year ending October 31, 1998, the Adviser
waived its entire fee of $17, 127.
Polestar management will give a one-tenth part of the net management fee paid to
it to religious organizations (without regard to denomination) for missions,
discipleships and the needs of the poor.
The Fund shall bear all of its expenses and all expenses of the Fund's
organization, operation and business not specifically assumed or agreed to be
paid by Polestar Management. Polestar Management will pay or provide for the
payment of the cost of office space, office equipment and office services as are
adequate for the Fund's needs; provide competent personnel to perform all of the
Fund's executive, administrative and clerical functions not performed by Fund
employees or agents; and authorize persons who are officers, directors and
employees of Polestar Management who may be designated as directors, officers,
and committee members to serve in such capacities at no cost to the Fund.
Reference is made to the Statement of Additional Information for a detailed list
of the expenses that will be borne by the Fund and by Polestar Management.
Sub-Investment Adviser
- ----------------------
Geewax Terker & Company ("Geewax Terker") 99 Starr Street, Phoenixville, PA
19460, is responsible for the investment and reinvestment of the Fund's assets.
Mr. John J. Geewax, a general partner, is responsible for the day-to-day
recommendations regarding the investment of the Fund's portfolio. Mr. Geewax has
been awarded a Bachelor of Science Degree, a Masters Degree in Business
Administration and Doctorate in Philosophy (ABD) by the University of
Pennsylvania. He has taught at the University of Pennsylvania's Wharton School.
While teaching at the Wharton School, he, together with his partner, Mr. John
Terker, developed the investment strategy presently utilized by Geewax Terker.
Geewax Terker will charge a sub-advisory fee calculated as follows: on Noah Fund
average net assets up to $20 million - $1; on average net assets from $20
million to $50 million - .75%; on average net assets from $50 million to $100
million - .50% and on net assets of $100 million and above - .35%. The Noah Fund
will have no responsibility for the payment of Geewax Terker's fees; the payment
of any such fees will be the sole responsibility of Polestar Management Company.
For the fiscal year ending October 31, 1998, Geewax Terker received from the
Adviser a fee of $1.
BROKERAGE ALLOCATION
Quaker Securities, Inc. ("Quaker") a registered broker-dealer and member of the
National Association of Securities Dealers, Inc., will arrange for the execution
of portfolio transactions. In placing brokerage orders, Quaker will seek the
best overall terms available. In assessing the best overall terms available for
any transaction, Quaker shall consider all factors that it deems relevant,
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, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. Quaker is authorized to pay to a broker or dealer who
provides such brokerage services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if Quaker
determines, in good faith, that such commission was reasonable in relation to
the value of the brokerage services provided by such broker or dealer - viewed
in terms of that particular transaction or in terms of the overall
responsibilities of Quaker to the Fund. Brokerage transactions may also be
allocated in recognition of sale of Fund shares.
FUND SERVICE PROVIDERS
The Fund could not function without the services provided by certain companies.
Some of these services and the providers are listed below.
Custodian
- ---------
First Union National Bank, N.A. holds the investments and other assets that the
Fund owns. The Custodian is responsible for receiving and paying for securities
purchased, delivering against payment securities sold, receiving and collecting
income from investments, making all payments covering expenses of the Fund, and
performing other administrative duties, all as directed by persons authorized by
the Fund. The Custodian does not exercise any supervisory function in such
matters as the purchase and sale of portfolio securities, payment of dividends,
or payment of expenses of the Fund. Portfolio securities of the Fund are
maintained in the custody of the Custodian, and may be entered in the Federal
Reserve Book Entry System, or the security depository system of The Depository
Trust Company.
Transfer, Dividend Disbursing And Accounting Services Agent
- -----------------------------------------------------------
Declaration Service Company provides transfer agency and dividend disbursing
services for the Fund. This means that its job is to maintain, accurately, the
account records of all shareholders in the Fund as well as to administer the
distribution of income earned as a result of investing in the Fund. Declaration
Service Company also provides accounting services to the Fund including
portfolio accounting services, expense accrual and payment services, valuation
and financial reporting services, tax accounting services and compliance control
services.
FEDERAL TAXES
As with any investment, you should consider the tax implications of an
investment in the Fund. The following is only a short summary of the important
tax considerations generally affecting the Fund and its shareholders. You should
consult your tax adviser with specific reference to your own tax situation.
The Fund intends to qualify and maintain its qualification as a "regulated
investment company" under the Internal Revenue Code (hereafter the "Code"),
meaning that to the extent a fund's earnings are passed on to shareholders as
required by the Code, the Fund itself is not required to pay federal income
taxes on the earnings. Accordingly, the Fund will pay dividends and make such
distributions as are necessary to maintain its qualification as a regulated
investment company under the Code.
Before you purchase shares of The Noah Fund, you should consider the effect of
both dividends and capital gain distributions that are expected to be declared
or that have been declared but not yet paid. When the Fund makes these payments,
its share price will be reduced by the amount of the payment, so that you will
in effect have paid full price for the shares and then received a portion of
your price back as a taxable dividend distribution.
The Fund will notify you annually as to the tax status of dividend and capital
gains distributions paid by the Fund. Such dividends and capital gains may also
be subject to state and local taxes.
You may realize a taxable gain or loss when redeeming shares of the Fund
depending on the difference in the prices at which you purchased and sold the
shares.
Because your state and local taxes may be different than the federal taxes
described above, you should see your tax adviser regarding these taxes.
GENERAL INFORMATION
Total return for the Fund may be calculated on an average annual total return
basis or an aggregate total return basis. Average annual total return reflects
the average annual percentage change in value of an investment over the
measuring period. Aggregate total return reflects the total percentage change in
value of an investment over the measuring period. Both measures assume the
reinvestment of dividends and distributions.
Total return of The Noah Fund may be compared to those of mutual funds with
similar investment objectives and to bond, stock or other relevant indices or to
rankings prepared by independent services or other financial or industry
publications that monitor mutual fund performance.
DISTRIBUTION FEE
The Fund has adopted a distribution plan (the "Distribution Plan"), pursuant to
which the Fund may incur distribution expenses of up to .25% per annum of the
Fund's average daily net assets currently.
The Distribution Plan provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including but not
limited to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising materials and
sales literature, and payments to dealers and shareholder servicing agents.
Because these fees are paid out of the Fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE SINCE ITS INCEPTION ON MAY 17, 1996. CERTAIN INFORMATION
REFLECTS FINANCIAL RESULTS FOR A SINGLE FUND SHARE. THE TOTAL RETURNS IN THE
TABLE REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE EARNED (OR LOST) ON AN
INVESTMENT IN THE FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS). THIS INFORMATION HAS BEEN AUDITED BY SANVILLE & COMPANY, WHOSE
REPORT, ALONG WITH THE FUND'S FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUND'S
ANNUAL REPORT, WHICH IS AVAILABLE WITHOUT CHARGE UPON REQUEST.
13
<PAGE>
May 17, 1996(1)
Year Ended Year Ended through
October 31, October 31, October 31,
1998 1997 1996
-------- -------- --------
NET ASSET VALUE-
BEGINNING OF PERIOD $ 13.23 $ 10.59 $ 10.00
INVESTMENT OPERATIONS:
Net Investment Income (0.10) (0.01)(2) 0.04
Net Realized and
Unrealized Gain on
Investments 4.27 2.69 0.55
-------- -------- --------
Totals from Investment
Operations 4.17 2.68 0.59
-------- -------- --------
DISTRIBUTIONS:
From Net
Investment Income -- (0.04) --
From Net Realized
Capital Gains (0.09) -- --
-------- -------- --------
Total Distributions (0.09) -- --
-------- -------- --------
NET ASSET VALUE-
END OF PERIOD $ 17.31 $ 13.23 $ 10.59
======== ======== ========
TOTAL RETURN 31.52% 25.41% 5.90%(3)
RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period
(in 000's) $ 52,590 $ 961 $ 466
Ratio of Expenses to
Average Net Assets(4,5) 1.75% 1.75% 1.42%
Ratio of Net Investment
Income to Average Net
Assets (0.86)% (0.18)% 0.86%
Portfolio Turnover Rate 66.49% 27.07% 21.61%
(1) Commencement of Operations
(2) Net Investment Loss is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(3) Not annualized for the period May 17, 1996 through October 31, 1996.
(4) Annualized for the period may 17, 1996 through October 31, 1997.
(5) Without expense waivers of $51,285, $94,353 and $47,931 for the periods
ending October 31, 1998, 1997 and 1996 respectively, the ratio of expenses
to average net assets would have been 4.73$, 16.08% and 49.81% and the
ratio of net investment (loss) to average net assets would have been
(3.85)%, (14.51)% and (47.52)%.
See notes to financial statement contained in the Fund's Annual Report.
<PAGE>
FOR MORE INFORMATION
Additional information about the Fund is available in the Fund's annual and
semi-annual reports to shareholders. In the Fund's annual report, you will find
a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
A Statement of Additional Information (the "SAI") regarding the Fund, dated
March 1, 1999, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this Prospectus. The SAI can be
reviewed and copied at the SEC's Public Reference Room in Washington, D.C..
Information on the Public Reference Room may be obtianed by calling the SEC at
1-800-SEC-0330. You can get a copy of the SAI, the annual report of the Fund and
the semi-annual report of the Fund at no charge by writing or calling the Fund
at the address or telephone number listed below. The SEC maintains a web site
(www.sec.gov) that contains the Statement of Additional Information and other
information regarding the Fund. Copies of all this information may be obtained,
upon payment of a duplicating fee, by writing the Public Reference Section of
the SEC at Washington, D.C., 20549-6009
The Noah Fund
c/o Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19428
1-800-794-NOAH
Investment Company Act No.
811-1061
<PAGE>
THE NOAH FUND
A Portfolio Of The Noah Investment Group, Inc.
----------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
----------------------------------------------
This Statement is not a prospectus but should be read in conjunction with the
current Prospectus, dated March 1, 1999 of The Noah Fund. To obtain a copy of
the Prospectus, please call 1-800-794-NOAH.
Dated: March 1, 1999
TABLE OF CONTENTS
Investment Objective and Policies .........................
Management of the Fund ....................................
Directors and Officers of the Fund ........................
Principal Holders of Securities ...........................
Investment Management Services ............................
Sub-Advisor ...............................................
Distribution Plan .........................................
Brokerage Allocations...........................
Special Investor Services .................................
Purchase and Redemption of Shares .........................
Taxes, Dividends and Capital Gains ........................
Auditor ...................................................
Financial Statements ......................................
Additional Performance Information for the Fund ...........
INVESTMENT OBJECTIVE AND POLICIES
The investment objective, investment policies, and the fundamental
philosophical investment restriction of the Noah Fund ("Fund") are described on
pages 6 through 9 of the Fund's Prospectus. The Fund is subject to the following
additional fundamental investment restrictions. Fundamental investment
restrictions may not be changed without a vote of a majority of the Fund's
outstanding shares, as that term is defined in the Investment Company act of
1940.
The Fund will not:
(a) with respect to 75% of its assets, invest more than 5% of the market
value of its assets in the securities of any single issuer (other than
obligations issued or guaranteed as to principal and interest by the U.S.
Government or any agency or instrumentality thereof);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding securities of any issuer (other than obligations of the U.S.
Government);
(c) invest more than 5% of its assets in the securities of companies that
(with predecessors) have a continuous operating history of less than three
years;
(d) invest 25% or more of its total assets in one or more issuers
conducting their principal business activities in the same industry.
(e) borrow money except from a bank and only for temporary or emergency
`purposes, and then only in an amount not in excess of 10% of the lower of the
market value or cost of its assets, in which case it may pledge, mortgage or
hypothecate any of its assets as security for such borrowing, but not to an
extent greater than 10% of the market value of its assets: the Fund will not
purchase any securities while such borrowings exceed 5% of the Fund's assets;
(f) underwrite the securities of other issuers;
(g) make loans except by purchasing bonds, debentures or similar
obligations which are either publicly distributed or customarily purchased by
institutional investors;
(h) invest in oil, gas or mineral leases or real estate except that the
Fund may purchase the securities of companies engaged in the business of real
estate including real estate investment trusts; or
(i) invest in commodities or commodity contracts.
(j) Issue or invest in senior securities.
These investment limitations, described above, are considered at the time that
Securities are purchased.
MANAGEMENT OF THE FUND
The Fund's Directors are responsible for the Fund's management, and they
have certain fiduciary duties and obligations to the Fund and its shareholders
under the laws of the State of Maryland and applicable federal securities laws.
The information provided below sets forth biographical information regarding
each Director. Directors who are "interested persons" of the Fund, as that term
is defined by Section 2(a)(10) of the Investment Company Act of 1940, are marked
by an asterisk.
DIRECTORS AND OFFICERS OF THE FUND
William L. Van Alen, Jr., Esq.* Mr. Van Alen is an attorney and has been
Director, President and engaged in the private practice of law since
Treasurer 1962. He is President and Chairman of the
975 Delchester Road Board and a Director of Polestar Management
Newtown Square, PA 19073 Company, the Fund's investment manager. He
Age 65 is also President of Cornerstone
Entertainment, Inc., a company engaged in
the film and entertainment industry.
James L. Van Alen, II* Mr. Van Alen, is now and has been since
Director 1981, employed by the stock brokerage firm
Indian River Farm Janney, Montgomery, Scott, Philadelphia, PA.
936 Plumstock Road
Newtown Square, PA 19073
Age 63
George R. Jensen, Jr. Mr. Jensen is the founder, Chairman and
Director Chief Executive Officer of USA Technologies,
3 Sugarknoll Road Inc., a company which markets business
Devon, PA 19333 machines activated by credit cards.
Age 49 Previously, Mr. Jensen was the founder, and
until recently, was the Chairman and Chief
Executive Officer of American Film
Technologies, Inc. (AFT). He had been
Chairman and a Director of AFT since its
inception in 1985. AFT is a publicly owned
company which dominates the industry in the
colorization of black and white films. From
1979 to 1985 Mr. Jensen was President and
Chief Executive Officer of International
Film Productions, Inc.
Christina Jaumotte DeGalavis Mrs. DeGalavis has engaged in private
Director practice as a psychologist for the past ten
Village of Golf years, specializing in marital counseling.
Del Ray, FL 33436 She has also been actively engaged in a
Age 50 number of socially beneficial programs.
During 1992-93, she served as President of
the Girl Scouts of Venezuela. As an Official
of the Venezuelan Ministry of Health, she
instituted a program to improve the
condition of medical institution patients
nationwide. She started the first center for
the treatment of addicted young persons in
Venezuela. As Director of prison conditions
in Venezuela, she initiated a program to
improve the condition of prison inmates and
as Special Advisor/Assistant to the First
Lady of Venezuela, she coordinated a project
for the operation of a "Head-Start" type day
care program for socially disadvantaged
children. She has also been active in the
raising of funds for organizations devoted
to caring for orphans and abandoned children
both in Venezuela and in Austria.
3
<PAGE>
Forrest H. Anthony Forrest H. Anthony, M.D., Ph.D. is currently
Director the Director of Science and Technology at
1426 Fairview Road the University City Science Center. He was
Villanova, PA 19085 previously Chief Executive Officer at Avid
Age 48 Corporation, a biotechnology company he
founded in 1986, until its merger with
Triangle Pharmaceuticals Inc. in August
1997. Dr. Anthony received a B.A. in Biology
from Dartmouth College, an M.D. from the
University of Oregon, and a Ph.D. in
Biomedical Engineering from University of
Virginia. He previously worked in senior
staff positions at Johnson & Johnson and at
Rorer Group Inc., and served (until July
1997) on the Board of Directors and
Executive Committee of the Biotechnology
Industry Organization (BIO), a national
trade association for the biotechnology
industry.
Roger J. Knake Formerly a Systems Analyst with E.I. duPont.
Director He is currently, and has been for the last
615 Mountain View Road seven years, President and Chief Executive
Berwyn, PA 19312 Officer, XITEL, Inc., a communications
Age 57 company engaged in the development and
marketing of electronic mail software.
- ----------------
* INTERESTED PERSONS
Mr. William L. Van Alen, Jr. is an interested person by virtue of being an
officer and director of The Noah Investment Group, Inc. and an officer and
director of Polestar Management Company. Mr. James L. Van Alen is a brother and
member of the "immediate family" (as defined in Section 2(a)(10) of the
Investment Company Act of 1940) of Mr. William L. Van Alen and is an affiliated
person of a brokerage firm.
REMUNERATION OF DIRECTORS AND OFFICERS
No Director or Officer of the Fund will receive any compensation for acting
as such. In the future, the non-interested Fund Directors may receive a fee for
each Board of Directors' meeting or Committee meeting attended, plus expenses.
PRINCIPAL HOLDERS OF SECURITIES
At the close of business on December 31, 1998, the following persons were
known by the Fund to be the beneficial owners of more than 5% of the Fund's
outstanding Shares: Ms. Judy Van Alen, and Mr.George W. Cornell.
INVESTMENT MANAGEMENT SERVICES
Polestar Management Company (hereafter sometimes "Polestar Management"), a
Maryland corporation, has its principal office at 975 Delchester Road, Newtown
Square, PA 19073. Polestar Management does not serve as investment adviser to
any other investment company.
The Management Agreement whereby Polestar Management provides management
services to the Fund was last approved by a majority of The Noah Investment
Group's Board of Directors including a majority of those Directors who are not
"interested persons" at a meeting held on July 9, 1997 called for the purpose of
voting on such Agreement. The Agreement will continue in effect until March 1,
1998 and thereafter for successive annual periods provided that such continuance
is specifically approved at least annually by (a) The Noah Investment Group's
Board of Directors, or (b) the vote of a majority of the Fund's outstanding
voting shares; provided that, in either event, the continuance is also approved
by a majority of those Directors who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. The Management Agreement may be terminated
at any time, without penalty, on sixty days' prior written notice, by the vote
of a majority of the Fund's outstanding voting shares or by the vote of a
majority of The Noah Investment Group's Board of Directors or by Polestar
Management, and will terminate automatically in the event of its assignment.
Mr. William L. Van Alen, Jr. is President, Treasurer and a director of
Polestar Management. Mr. William L. Van Alen, Jr. and , and Ms. Judy Van Alen
own, respectively, 90% and 10% of the outstanding voting securities of Polestar
Management.
Polestar Management furnishes, at no cost, the services of those of
Polestar Management's officers who may be duly elected executive officers or
directors of The Noah Investment Group.
The Noah Investment Group, Inc. shall pay on behalf of and from the assets
of the Fund the following costs and expenses: the cost of determining the net
asset value of the Fund's shares, the costs incurred in connection with sales
and redemptions of its shares and all of its other administrative and
operational costs including, without limitation, transfer and dividend
disbursing and other agency fees; custodian fees; rent; auditing and legal fees;
fees for the preparation, printing and distribution of prospectuses, proxy
statements, stockholder reports and notices; supplies and postage; federal and
state registration and reporting fees; applicable taxes; the fees and expenses
of non-interested Directors and interest and brokerage commissions and other
fees and expenses of every kind not expressly assumed by Polestar Management.
Polestar Management will receive a fee, payable monthly, for the performance of
its services at an annual rate of 1% of the average net assets of the Fund. The
fee will be accrued daily for the purpose of determining the offering and
redemption price of the Fund's shares; it is higher than those paid by most
investment companies. For the fiscal year ending October 31, 1998, October 31,
1997, and October 31, 1996, the Adviser waived its entire fee of $17, 127,
$6,566, and $988.
SUB-ADVISOR
Geewax Terker & Company ("Geewax Terker") is a registered investment
adviser. It serves as sub-advisor to the Fund pursuant to a Sub-Advisory
Agreement dated January 9, 1998 ("Sub-Advisory Agreement") between Polestar
Management and Geewax Terker. The Geewax Terker Sub-Advisory Agreement was
approved by a majority of The Noah Investment Group's
Board of Directors including by a majority of The Noah Investment Group's
non-interested Directors at a directors' meeting specifically called for the
purpose of voting on the Agreement on December 11, 1997 and by the Fund's
shareholders at the annual shareholders' meeting held on January 9, 1998.
Geewax Terker has agreed to: (i) supervise and direct the investment of the
Fund's assets in accordance with applicable law and the Fund's investment
objectives, policies and restrictions, and subject to any further limitations
The Noah Investment Group may impose, from time to time, by written notice to
Polestar Management provided that Polestar Management shall have informed Geewax
Terker, in writing, of such further limitations; (ii) formulate and implement a
continuing investment program for managing the assets and resources of the Fund,
which Geewax Terker shall amend and update, from time to time, to reflect
changes in financial and economic conditions; (iii) make all determinations with
respect to the investment of the Fund's assets and the purchase and sale of
portfolio securities and shall take such steps as may be necessary to implement
the same, including advising Polestar Management and the Board of Directors as
to certain actions taken involving the Fund's portfolio securities that are not
in the nature of investment decisions; (iv) furnish Polestar Management and the
Board of Directors of The Noah Investment Group, periodically and as otherwise
requested, with reports of Geewax Terker's economic outlook and investment
strategy, as well as the Fund's portfolio activity and investment performance;
and (v) select the broker-dealers and place orders for the execution of
portfolio transactions for the Fund with such broker-dealers.
Geewax Terker shall furnish The Noah Investment Group's Board of Directors
with schedules of the securities in the Fund's portfolio on a quarterly basis.
At the Board's request, and otherwise when Geewax Terker deems it appropriate,
it will prepare and provide the Board with schedules of securities and
statistical data regarding the activity and positions in the Fund's portfolio.
The Fund will have no obligation to pay Geewax Terker's fees or the fees of
any other sub-advisor rendering sub-advisory services to any Fund series.
Polestar Management will be solely responsible for the payment of any such
sub-advisory fees.
Geewax Terker will charge a sub-advisory fee calculated as follows: on Noah Fund
average net assets up to $20 million - $1; on average net assets from $20
million to $50 million - .75%; on average net assets from $50 million to $100
million - .50% and on net assets of $100 million and above - .35%. The Noah Fund
will have no responsibility for the payment of Geewax Terker's fees; the payment
of any such fees will be the sole responsibility of Polestar Management Company.
For the fiscal years ending October 31, 1998, October 31, 1997, and October 31,
1996, Geewax Terker received from the Adviser a fee of $1 for the Fiscal year
ending October 31, 1998.
DISTRIBUTION PLAN
The Noah Investment Group has adopted a distribution plan for the Fund (the
"Distribution Plan"), pursuant to which the Fund may incur distribution expenses
of up to .25% per annum of the Fund's average daily net assets.
The Distribution Plan was approved by the Board of Directors of The Noah
Investment Group, including by all of the Rule 12b-1 Directors ("Rule 12b-1
Directors") are those directors who are not "interested persons" of The Noah
Investment Group and who have no direct or indirect financial interest in the
Distribution Plan or any related agreement), by the vote of the Fund's
shareholders at the annual shareholders' meeting held on January 9, 1998. The
Distribution Plan has been approved for a term ending December 31, 1998, unless
earlier terminated by a vote of a majority of the Rule 12b-1 Directors, or by
vote of a majority of the Fund's outstanding shares.
The Distribution Plan provides that the Fund may finance activities which
are primarily intended to result in the sale of the Fund's shares, including but
not limited to, advertising, printing and mailing of prospectuses and reports
for other than existing shareholders, printing and distribution of sales
literature, and the compensation of persons primarily engaged in the sale and
marketing of the Fund's shares.
In approving the Distribution Plan, in accordance with the requirements of
Rule 12b-1 under the Investment Company Act of 1940, the Directors considered
various factors and determined that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and its shareholders.
The Distribution Plan may not be amended to increase materially the amount
to be spent by the Fund under the Distribution Plan without shareholder
approval, and all material amendments to the provisions of the Distribution Plan
must be approved by a vote of the Board of Directors, including a majority of
the Rule 12b-1 Directors, cast at a meeting called for the purpose of such a
vote. During the continuance of the Distribution Plan, the Board of Directors of
The Noah Investment Group will receive quarterly, and in writing, the amounts
and purposes of the distribution payments. Further, during the term of the
Distribution Plan, the selection and nomination of those Directors who are not
interested persons of The Noah Investment Group must be and has been committed
to the discretion of the Rule 12b-1 Directors.
For the fiscal years ending October 31, 1998, October 31, 1997, and October 31,
1996, the Fund accrued 12b-1 fees of $0.00, $402, and$247, all of which was
reimbursed to the Fund by Polestar Management.
BROKERAGE ALLOCATION
Quaker Securities, Inc. ("Quaker") a registered broker-dealer and member of the
National Association of Securities Dealers, Inc., will arrange for the execution
of portfolio transactions. In placing brokerage orders, Quaker will seek the
best overall terms available. In assessing the best overall terms available for
any transaction, Quaker shall consider all factors that it deems relevant,
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, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. Quaker is authorized to pay to a broker or dealer who
provides such brokerage services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if Quaker
determines, in good faith, that such commission was reasonable in relation to
the value of the brokerage services provided by such broker or dealer - viewed
in terms of that particular transaction or in terms of the overall
responsibilities of Quaker to the Fund. Brokerage transactions may also be
allocated in recognition of sale of Fund shares.
For the fiscal years ending October 31, 1998, October 31, 1997, and October 31,
1996, the Fund paid $2,662, $3000, and $2000 in brokerage fees, all of which was
reimbursed to the Fund by Polestar Management.
REDEMPTION IN KIND
A Notification under Rule 18f-1 under the Investment Company Act has been
filed on behalf of the Fund, pursuant to which it has undertaken to pay in cash
all requests for redemption by any shareholder of record, limited in amount with
respect to each shareholder during any 90-day period to the lesser amount of (i)
$250,000, or (ii) 1% of the net asset value of the Fund at the beginning of such
election period. It is intended to also pay redemption proceeds in excess of
such lesser amount in cash, but the right is reserved to pay such excess amount
in kind, if it is deemed to be in the best interests of the Fund to do so. In
making a redemption in kind, the right is reserved to select from the portfolio
holding a number of shares which will reflect the portfolio make-up and the
value of which will approximate, as closely as possible, the value of the Fund
shares being redeemed, or to select from one or more portfolio investments,
shares equal in value to the total value of the Fund shares being redeemed: any
shortfall will be made up in cash.
Investors receiving an in-kind distribution are advised that they will
likely incur a brokerage charge on the disposition of such securities through a
broker. The values of portfolio securities distributed in kind will be the
values used for the purpose of calculating the per share net asset value used in
valuing the Fund shares tendered for redemption.
SPECIAL INVESTOR SERVICES
A shareholder may make arrangements for an Automatic Investing Plan (i.e.,
automatic monthly payments from the shareholder's bank account) by calling the
Fund at 1-800-794-NOAH and requesting an application. The Automatic Investing
Plan may be changed or canceled at any time upon receipt by the Fund's Transfer
Agent of written instructions or an amended application from the shareholder
with signatures guaranteed.
Since the Fund's shares are subject to fluctuations in both income and
market value, an investor contemplating making periodic investments in shares of
the Fund should consider his financial ability to continue such investments
through periods of low price levels, and should understand that such a program
cannot protect him against loss of value in a declining market.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
In general, an IRA provides certain tax advantages for participants. Under
an IRA plan, a participant's periodic contributions and all dividends and
capital gains distributions will be invested in shares of the Fund.
An individual may establish and make contributions of up to $2,000 per year
to his or her own IRA or may roll over moneys from other tax qualified plans. An
individual wishing to make an IRA investment, should consult with his or her own
tax adviser before doing so. Investors may wish to call the Transfer Agent at
1-800-794-NOAH for information and instructions.
SYSTEMATIC WITHDRAWAL PLAN
Investors owning Fund shares having a minimum value of $10,000 may adopt a
systematic withdrawal plan. Withdrawal payments to the investor may be made on a
monthly, quarterly, semi-annual or annual basis and must be in a minimum amount
of $500.
Shares are redeemed to make the requested payment on the day of the
shareholder's choosing each month in which a withdrawal is to be made and
payments are mailed within five business days following the redemption. The
redemption of shares, in order to make payments under this plan, will reduce and
may eventually exhaust the account. Each redemption of shares may result in a
gain or loss, which the investor must report on his income tax return.
Consequently, the investor should keep an accurate record of any gain or loss on
each withdrawal.
PURCHASE AND REDEMPTION OF SHARES
Information relating to the procedure for the purchase and redemption of
the Fund's shares at net asset value is contained on pages 5 through 11 of the
Fund's Prospectus.
A description of the procedure for the determination of the net asset value
of the Fund's shares is contained on page 7 of the Fund's Prospectus.
AUDITOR
Sanville & Company serves as the Fund's independent public accountants and
will audit the Fund's financial statements.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
ASSETS:
Investments, at market (identified cost $2,097,097) $ 2,553,243
Receivables:
Dividends and interest 1,283
Fund shares sold 21,056
Reimbursement by manager 38,450
Deferred organization costs 4,480
Other assets 1,509
-----------
Total assets 2,620,021
-----------
LIABILITIES:
Payables:
Investment securities purchased 18,387
Accrued expenses 11,229
-----------
Total liabilities 29,616
-----------
NET ASSETS $ 2,590,405
===========
NET ASSETS CONSIST OF:
Common stock $ 150
Additional capital paid - in 2,082,230
Undistributed net investment income (14,744)
Accumulated realized loss on investments 66,623
Net unrealized gain on investments 456,146
-----------
Total Net Assets $ 2,590,405
===========
Shares outstanding (500,000,000 shares of $0.001
par value authorized) 149,661
Net Asset Value, offering and redemption price per share $ 17.31
===========
See notes to financial statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
----------- ---------
OPERATIONS:
Net investment income (loss) $ (14,744) $ (1,195)
Net realized gain on investments 68,147 5,357
Change in unrealized appreciation on investments 314,248 126,582
----------- ---------
Net increase in net assets from operations 367,651 130,744
----------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (1,712)
Net realized gains (6,727) (151)
----------- ---------
Total distributions (6,727) (1,863)
----------- ---------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,662,691 438,766
Proceeds from shares issued to holders
In reinvestment of dividends 6,727 1,662
Cost of shares redeemed (401,653) (73,472)
Net increase in net assets from Fund share
Transactions 1,267,765 366,956
TOTAL INCREASE IN NET ASSETS 1,628,689 495,837
----------- ---------
NET ASSETS:
Beginning of period 961,716 465,879
----------- ---------
End of period $ 2,590,405 $ 961,716
=========== =========
See notes to the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
May 17, 1996(1)
Year Ended Year Ended through
October 31, October 31, October 31,
1998 1997 1996
-------- -------- --------
NET ASSET VALUE-
BEGINNING OF PERIOD $ 13.23 $ 10.59 $ 10.00
INVESTMENT OPERATIONS:
Net Investment Income (0.10) (0.01)(2) 0.04
Net Realized and
Unrealized Gain on
Investments 4.27 2.69 0.55
-------- -------- --------
Totals from Investment
Operations 4.17 2.68 0.59
-------- -------- --------
DISTRIBUTIONS:
From Net
Investment Income -- (0.04) --
From Net Realized
Capital Gains (0.09) -- --
-------- -------- --------
Total Distributions (0.09) -- --
-------- -------- --------
NET ASSET VALUE-
END OF PERIOD $ 17.31 $ 13.23 $ 10.59
======== ======== ========
TOTAL RETURN 31.52% 25.41% 5.90%(3)
RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period
(in 000's) $ 52,590 $ 961 $ 466
Ratio of Expenses to
Average Net Assets(4,5) 1.75% 1.75% 1.42%
Ratio of Net Investment
Income to Average Net
Assets (0.86)% (0.18)% 0.86%
Portfolio Turnover Rate 66.49% 27.07% 21.61%
(6) Commencement of Operations
(7) Net Investment Loss is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(8) Not annualized for the period May 17, 1996 through October 31, 1996.
(9) Annualized for the period may 17, 1996 through October 31, 1997.
(10) Without expense waivers of $51,285, $94,353 and $47,931 for the periods
ending October 31, 1998, 1997 and 1996 respectively, the ratio of expenses
to average net assets would have been 4.73$, 16.08% and 49.81% and the
ratio of net investment (loss) to average net assets would have been
(3.85)%, (14.51)% and (47.52)%. See Notes to Financial Statements
THE NOAH FUND
SCHEDULE OF INVESTMENTS OCTOBER 31, 1998
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCK -- 96.89%
ADVERTISING -- 0.45%
Interpublic Group of Companies, Inc. 11,700
200
----------
BANKING --5.59%
CitiGroup, Inc. 65,800
1,400
Comerica, Inc. 6,450
100
Fifth Third Bancorp 26,500
400
First Tennessee National Corp 12,675
400
Mellon Bank Corp 6,013
100
National Commercial Bancorp 10,650
600
Northern Trust Corp 16,594
225
----------
144,682
----------
BUILDING CONSTRUCTION -- 0.31%
Champion Enterprises 7,950
400
----------
BUSINESS SERVICES -- 2.68%
Automatic Data Processing, Inc. 38,906
500
Computer Sciences Corp* 10,550
200
Paychex, Inc. 19,900
400
----------
69,356
----------
CABLE TELEVISION SERVICES -- 1.24%
Comcast Corp 32,094
650
----------
COMPUTER & OFFICE EQUIPMENT -- 11.77%
Cisco Systems, Inc.* 106,628
1,692
Compaq Computer Corp 12,650
400
Dell Computer* 62,344
950
Intel Corp. 84,728
950
Pitney Bowes, Inc. 38,544
700
----------
304,894
----------
CONSUMER PRODUCTS -- 4.33%
Colgate Palmolive Co. 61,863
700
Ecolab, Inc. 11,950
400
The Clorox Company 38,238
350
----------
112,051
----------
FINANCIAL SERVICES -- 9.25%
Associates First Capital Corp
300 21,150
Capital One Financial Corp
250 25,438
Fannie Mae 63,731
900
Federal Home Loan Mortgage Corp 69,000
1,200
Finova Group 9,750
200
MBNA Corp 30,797
1,350
Providian Financial Corp 19,844
250
----------
239,710
----------
FOOD & BEVERAGE -- 3.60%
Coca-Cola Co. 74,388
1,100
Sysco Corp* 18,856
700
----------
93,244
----------
HUMAN RESOURCES -- 0.14%
Romac International, Inc.* 3,500
200
----------
INSURANCE -- 3.39%
General Re Corp 87,875
400
----------
INTERNET SERVICES -- 6.35%
Amazon, Inc.* 25,287
200
America Online, Inc. 78,779
620
Lycos, Inc.* 8,125
200
Yahoo, Inc.* 52,338
400
----------
164,529
----------
MANUFACTURING -- 0.71%
Danaher Corp 11,981
300
Illinois Tool Works
100 6,413
----------
18,394
----------
MEDICAL SERVICES -- 1.81%
Cardinal Health, Inc 35,461
375
HBO & Co. 7,875
300
Health Management Assoc.* 3,563
200
----------
46,899
----------
OFFICE SUPPLIES -- 2.41%
Staples, Inc.* 47,306
1,450
Office Depot, Inc.* 15,000
600
----------
62,306
----------
PHARMACEUTICALS -- 14.21%
Abbott Labs
1,745 81,906
Lilly (Eli) & Co.
500 40,469
Merck & Co.
225 30,431
Pfizer, Inc.
1,240 133,068
Schering Plough Corp.
800 82,300
----------
368,174
----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES -- 1.41%
Guidant Corp 30,600
400
Hillenbrand Industries 5,919
100
----------
36,519
----------
RETAIL STORES - 14.81%
BJ's Wholesale Club, Inc.* 28,750
800
Costco Companies, Inc.* 65,261
1,150
CVS Corp 25,127
550
Dollar Tree Stores, Inc.* 23,137
600
Gap, Inc. 21,043
350
Home Depot, Inc. 60,900
1,400
Kroger Company* 27,750
500
Safeway, Inc.* 33,468
700
Wal Mart Stores, Inc. 98,325
1,425
----------
383,761
----------
SOFTWARE -- 4.08%
Microsoft Corp 105,874
1,000
----------
TELECOMMUNICATIONS --8.35%
Airtouch Communications* 22,400
400
Lucent Technologies 76,178
950
MCI Worldcom, Inc.* 55,250
1,000
SBC Communications 62,522
1,350
----------
216,350
----------
TOTAL COMMON STOCK (COST $2,053,716) 2,509,862
----------
MISCELLANEOUS ASSETS -- 1.67%
CoreFund (Cost $43,381) 43,381
43,381
----------
Total Investments (Cost $2,097,097) -- 98.56% $2,553,243
----------
Other Assets and Liabilities -- 1.44% 37,162
----------
TOTAL NET ASSETS -- 100.00% $2,590,405
==========
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1997
THE NOAH FUND
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
October 31, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Noah Investment Group, Inc. (the "Company") was incorporated under the
laws of the state of Maryland on December 16, 1992, and consists solely of The
Noah Fund (the "Fund"). The Company is registered as a no-load, open-end
diversified management investment company of the series type under the
Investment Company Act of 1940 (the "1940 Act"). The primary investment
objective of the Fund is to seek capital appreciation consistent with the
preservation of capital, as adjusted for inflation, and current income. The Fund
will not invest in and may not acquire the securities of businesses that are
engaged, directly or through subsidiaries, in the alcoholic beverage, tobacco,
pornographic and gambling industries or companies in the business of aborting
life before birth. The Fund became effective with the Securities and Exchange
Commission ("SEC") on May 10, 1996 and commenced operations on May 17, 1996.
The costs incurred in connection with the organization, initial
registration and public offering of shares, aggregating $17,797, have been paid
by the Manager and will be reimbursed by the Fund. These costs are being
amortized over the period of benefit, but not to exceed sixty months from the
Fund's commencement of operations. The proceeds of any redemption of the initial
shares (seed money) by the original stockholder or any transferee will be
reduced by a pro-rata portion of any then unamortized organizational expenses in
the same proportion as the number of initial shares being redeemed bears to the
number of initial shares outstanding at the time of such redemption. On December
12, 1996, one of the original stockholders redeemed his shares which consisted
of 50 percent of the seed money. This stockholder's proceeds were reduced by 50
percent of the unamortized deferred organization asset ($15,756 at that time).
The unamortized deferred organization asset was reduced to $7,878 after the
adjustment. The adjusted balance will be amortized over the remaining
amortization period, not to exceed sixty months from the Fund's commencement of
operations.
<PAGE>
The following is a summary of significant accounting policies consistently
followed by the Fund.
a) Investment Valuation --- Common stocks and other equity-type securities
listed on a securities exchange are valued at the last quoted sales price on the
day of the valuation. Price information on listed stocks is taken from the
exchange where the security is primarily traded. Securities that are listed on
an exchange but which are not traded on the valuation date are valued at the
most recent bid prices. Unlisted securities for which market quotations are
readily available at the latest quoted bid price. Other assets and securities
for which no quotations are readily available are valued at fair value as
determined in good faith by the Investment Manager under the supervision of the
Board of Directors. Short-term instruments (those with remaining maturities of
60 days or less) are valued at amortized cost, which approximates market.
b) Federal Income Taxes --- No provision for federal income taxes has been made
since the Fund has complied to date with the provisions of the Internal Revenue
Code applicable to regulated investment companies and intends to so comply in
the future and to distribute substantially all of its net investment income and
realized capital gains in order to relieve the Fund from all federal income
taxes.
c) Distributions to Shareholders --- Dividends from net investment income and
distributions of net realized capital gains, if any, will be declared and paid
at least annually. Income and capital gain distributions are determined in
accordance with income tax regulations that may differ from generally accepted
accounting principles. The Fund's primary financial reporting and tax difference
relates to the differing treatment for the amortization of deferred organization
expenses. Permanent financial reporting and tax differences are reclassified to
additional capital paid-in.
d) Use of Estimates --- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
e) Other --- Investment and shareholder transactions are recorded on trade date.
The Fund determines the gain or loss realized from the investment transactions
utilizing an identified cost basis. Dividend income is recognized on the
ex-dividend date or as soon as information is available to the Fund, and
interest income is recognized on an accrual basis.
<PAGE>
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
Year Ended Year Ended
October 31, October 31,
1998 1997
-------- -------
Shares sold 102,577 35,309
Shares issued to holders in
reinvestment of dividends 472 152
Shares redeemed (26,084) (6,765)
-------- -------
Net Increase 76,965 28,696
======== =======
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the year ended October 31, 1998, were as follows:
Purchases:
U.S. Government $ 0
Other 2,316,502
Sales:
U.S. Government 0
Other 1,100,353
At October 31, 1998, gross unrealized appreciation and depreciation of
investments for tax purposes were as follows:
Appreciation $ 519,687
(Depreciation) (63,541)
Net appreciation on investments $ 456,146
---------
At October 31, 1998, the cost of investments for federal income tax
purposes was $2,098,625.
4. AGREEMENTS
The Fund has entered into a Management Agreement with Polestar Management
Company ("Polestar Management"). Pursuant to its Management Agreement with the
Fund, the Manager is entitled to receive a fee, calculated daily and payable
monthly, at the annual rate of 1.00% as applied to the Fund's daily net assets.
The Manager voluntarily agrees to reimburse its management fee and other
expenses to the extent that total operating expenses (exclusive of interest,
taxes, brokerage commissions and other costs incurred in connection with the
purchase or sale of portfolio securities, and extraordinary items) exceed the
annual rate of 1.75% of the net assets of the Fund, computed on a daily basis.
This voluntary reimbursement may be terminated upon approval of the Board of
Directors.
Polestar Management has obtained Geewax, Terker & Company to serve as the
Fund's sub-investment adviser.
Effective January 1, 1998, Declaration Service Company was engaged as
transfer agent, administrator and accounting services agent for the Fund.
Declaration Distributors, Inc. will act as underwriter/distributor of the Fund.
First Union National Bank, a publicly held bank holding company, serves as
custodian for the Fund.
<PAGE>
5. RELATED PARTY TRANSACTIONS
Martin V. Miller, Esq., an Officer of the Fund, furnishes legal services to
the Fund. For the year ended October 31, 1998, the Fund incurred $12,104 for
such services.
<PAGE>
SANVILLE AND COMPANY
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
The Noah Investment Group, Inc.:
We have audited the accompanying statement of assets and liabilities of The Noah
Fund (the "Fund") a portfolio of The Noah Investment Group, Inc., (a Maryland
Corporation), including the schedule of investments, as of October 31, 1998, the
related statement of operations for the year then ended, and the statements of
changes in net assets for the year then ended. These financial statements are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Noah Fund as of October 31, 1998, and the results of its operations, the changes
in its net assets and its financial highlights for the year then ended, in
conformity with generally accepted accounting principles.
/s/ SANVILLE & COM,PANY
CERTIFIED PUBLIC ACCOUNTANTS
Abbington, Pennsylvania
December 13, 1998
<PAGE>
ADDITIONAL PERFORMANCE INFORMATION FOR THE FUND
Total investment return is one recognized method of measuring mutual fund
investment performance. The Fund's average annual total return is the rate of
growth of the Fund that would be necessary to achieve the ending value of an
investment kept in the Fund for the period specified. This method of calculating
total return is based on the following assumptions: (1) all dividends and
distributions by the Fund are reinvested in shares of the Fund at net asset
value; and (2) all recurring fees are included for applicable periods.
The performance of the Fund may be compared with the S&P 500 Index, an
unmanaged index of 500 industrial, transportation, utility, and financial
companies, widely regarded as representative of the equity market in general,
but which does not ordinarily include all companies in which the Fund may invest
and the NASDAQ Composite Index, an unmanaged index of the price of all domestic
companies' common stocks quoted on the NASDAQ system, which may include
companies in which the Fund invests. Unlike the returns of the Fund, the returns
of the indices do not include the effect of paying the brokerage and other
transaction costs that investors normally incur when investing directly in the
stocks in those indices. The Fund's performance reflects actual investment
experience, net of all operating expenses, which are paid from the Fund's gross
investment income.
From time to time, in reports and promotional literature the Fund's total
return performance may be compared to: (1) the Dow Jones Industrial Average so
that you may compare that Fund's results with those of a group of unmanaged
securities widely regarded by investors as representative of the U.S. stock
market in general; (2) other groups of mutual funds tracked by: (A) Lipper
Analytical Services, Inc.; Value Line Mutual Fund Survey, and Morningstar Mutual
Funds, each of which is a widely-used independent research firm which ranks
mutual funds by, among other things, overall performance, investment objectives,
and asset size; (B) Forbes Magazine's Annual Mutual Funds Survey and Mutual Fund
Honor Roll; or (C) other financial or business publications, such as The Wall
Street Journal, Investors Business Daily, New York Times, Money Magazine, and
Barron's, which provide similar information; (3) indices of stocks comparable to
those in which the Fund invests; (4) the Consumer Price Index (measure for
inflation) may be used to assess the real rate of return from an investment in
the Fund; and (5) other government statistics such as GNP, may be used to
illustrate investment attributes of the Fund or the general economic, business,
investment, or financial environment in which the Fund operates.
In addition, the performance of the Fund may be compared to the Russell
2000 Index, the Wilshire 5000 Equity Index, and returns quoted by Ibbotson
Associates. The Russell 2000 Index is a capitalization weighted index which
measures total return (and includes in such calculation dividend income and
price appreciation). The Russell 2000 is generally regarded as a measure of
small capitalization performance. The Wilshire 5000 Equity Index is a broad
measure of market performance and represents the total dollar value of all
common stocks in the United States for which daily pricing information is
available. This index is capitalization weighted and measures total return. The
small company stock returns quoted by Ibbotson Associates are based upon the
smallest quintile of the NYSE, as well as similar capitalization stocks on the
American Stock Exchange and NASDAQ. This data base is also unmanaged and
capitalization weighted.
The total returns for all indices used show the changes in prices for the
stocks in each index. The performance data for the S&P 500 Index, the Russell
2000 Index, the Wilshire 5000 Equity Index and Ibbotson Associates also assumes
reinvestment of all dividends paid by the stocks in each data base, while the
NASDAQ Corporate Index does not assume the reinvestment of all dividends and
capital gains. Tax consequences are not included in such illustration, nor are
brokerage or other fees or expenses of investing reflected.
SHAREHOLDER MEETINGS
Shareholder meetings will not be held unless required by Federal or State
law. However, the directors of The Noah Investment Group, Inc. will promptly
call a meeting of shareholders for the purpose of acting upon questions of
removal of a director or directors, when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares.
<PAGE>
PART C
------
OTHER INFORMATION
Item 23. Financial Statements and Exhibits
(a) Articles of incorporation--- (Included with Pre-effective Amendment No. 2
filed on April 16, 1996)
(b) By-Laws--- (Included with Pre-effective Amendment No. 2 filed on April 16,
1996)
(c) Instruments defining rights of Shareholders---None, See Articles of
Incorporation
(d) Investment Advisory Contracts--- (Management Contract with Polestar
management and sub-advisory contract with Geewax, Terker incorporated by
reference from PEA # 2 filed on December 31, 1997)
(e) Underwriting Contracts--- (Included with PEA # 2 filed on December 31,
1997)
(f) Bonus or Profit Sharing Contracts--- None
(g) Custodian Agreements--- (Included with PEA # 2 filed on December 31, 1997)
(h) Other Material Contracts--- (Included with PEA # 2 filed on December 31,
1997)
(i) Legal Opinion--- (Included with PEA # 2 filed on December 31, 1997)
(j) Other opinions--- (Included in Part B under Financial Statements.)
(k) Omitted Financial statements--- None
(l) Initial Capital Agreements--- not Applicable
(m) Rule 12b-1 Plan--- (included with Pre-effective Amendment No. 1 filed on
September 20, 1995)
(n) Financial Data Schedule--- attached as Exhibit 23(n)
(o) Rule 18f-1 Plan--- (Included with Pre-effective Amendment No. 2 filed on
April 16, 1996)
Item 24. Persons Controlled by or Under Common Control With Registrant
-------------------------------------------------------------
See Caption "Principal Holders of Securities" in the Statement of
Additional Information
Item 25. Indemnification
---------------
(a) General. The Articles of Amendment and Restatement of Charter
(the "Articles") of the Corporation provide that to the fullest
extent permitted by Maryland and federal statutory and decisional
law, as amended or interpreted, no director or officer of this
Corporation shall be personally liable to the Corporation or the
holders of Shares for money damages for breach of fiduciary duty
as a director and each director and officer shall be indemnified
by the Corporation; provided, however, that nothing herein shall
be deemed to protect any director or officer of the Corporation
against any liability to the Corporation or the holders of Shares
to which such director or officer would otherwise be subject by
reason of breach of the director's or officer's duty of loyalty
to the Corporation or its stockholders, for acts or omissions not
in good faith or which involved intentional misconduct or a
knowing violation of law or for any transaction from which the
director derived any improper personal benefit. The By-Laws of
the Corporation provide that the Corporation shall indemnify any
individual who is a present or former director or officer of the
Corporation and who, by reason of his or her position was, is or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter collectively
referred to as a "Proceeding") against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by
such director or officer in connection with such Proceeding, to
the fullest extent that such indemnification may be lawful under
Maryland law.
(b) Disabling Conduct. The By-Laws provide that nothing therein shall
be deemed to protect any director or officer against any
liability to the Corporation or its shareholders to which such
director or officer would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her
office (such conduct hereinafter referred to as "Disabling
Conduct").
The By-Laws provide that no indemnification of a director or
officer may be made unless: (1) there is a final decision on the
merits by a court or other body before whom the Proceeding was
brought that the director or officer to be indemnified was not
liable by reason of Disabling Conduct; or (2) in the absence of
such a decision, there is a reasonable determination, based upon
a review of the facts, that the director or officer to be
indemnified was not liable by reason of Disabling Conduct, which
determination shall be made by: (i) the vote of a majority of a
quorum of directors who are neither "interested persons" of the
Corporation as defined in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the Proceeding; or (ii) an
independent legal counsel in a written opinion.
(c) Standard of Conduct. Under Maryland law, the Corporation may not
indemnify any director if it is proved that: (1) the act or
omission of the director was material to the cause of action
adjudicated in the Proceeding and (i) was committed in bad faith
or (ii) was the result of active and deliberate dishonesty; or
(2) the director actually received an improper personal benefit;
or (3) in the case of a criminal proceeding, the director had
reasonable cause to believe that the act or omission was
unlawful. No indemnification may be made under Maryland law
unless authorized for a specific proceeding after a determination
has been made, in accordance with Maryland law, that
indemnification is permissible in the circumstances because the
requisite standard of conduct has been met.
(d) Required Indemnification. Maryland law requires that a director
or officer who is successful, on the merits or otherwise, in the
defense of any Proceeding shall be indemnified against reasonable
expenses incurred by the director or officer in connection with
the Proceeding. In addition, under Maryland law, a court of
appropriate jurisdiction may order indemnification under certain
circumstances.
(e) Advance Payment. The By-Laws provide that the Corporation may pay
any reasonable expenses so incurred by any director or officer in
defending a Proceeding in advance of the final disposition
thereof to the fullest extent permissible under Maryland law. In
accordance with the By-Laws, such advance payment of expenses
shall be made only upon the undertaking by such director or
officer to repay the advance unless it is ultimately determined
that such director or officer is entitled to indemnification, and
only if one of the following conditions is met: (1) the director
or officer to be indemnified provides a security for his
undertaking; (2) the Corporation shall be insured against losses
arising by reason of any lawful advances; or (3) there is a
determination, based on a review of readily available facts, that
there is reason to believe that the director or officer to be
indemnified ultimately will be entitled to indemnification, which
determination shall be made by: (i) a majority of a quorum of
directors who are neither "interested persons" of the
Corporation, as defined in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the Proceeding; or (ii) an
independent legal counsel in a written opinion.
(f) Insurance. The By-Laws provide that, to the fullest extent
permitted by Maryland law and Section 17(h) of the Investment
Company Act of 1940, the Corporation may purchase and maintain
insurance on behalf of any officer or director of the
Corporation, against any liability asserted against him or her
and incurred by him or her in and arising out of his or her
position, whether or not the Corporation would have the power to
indemnify him or her against such liability.
Item 26. Business and Other Connections of Investment Adviser
----------------------------------------------------
None
Item 27. Principal Underwriter
---------------------
The Fund does not have a principal underwriter
Item 28. Location of Accounts and Records
--------------------------------
The books and records of the Fund, other than the accounting and
transfer agency (including dividend disbursing) records, are
maintained by the Fund at 975 Delchester Road, Newtown Square, PA
19073; the Fund's accounting and transfer agency records are
maintained at Declaration Services Company, 555 North Lane, Suite
6160, Conshocken, PA 19428.
Item 29. Management Services
-------------------
There are no management service contracts not described in Part A or
Part B of Form N-1A.
Item 30. Undertakings
------------
Not Applicable
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 3 to its Registration Statement to be signed on its
behalf by the undersigned, hereunto duly authorized in Newtown Square,
Commonwealth of Pennsylvania, on the 1st day of March, 1999.
THE NOAH INVESTMENT GROUP, INC.
/s/ William L. Van Alen, Jr.
By: ____________________________
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
NAME TITLE DATE
/s/ William L. Van Alen, Jr. March 1, 1999
_________________________________ Director, _________________
WILLIAM L. VAN ALEN, JR. President and
Treasurer
/s/ Forrest H. Anthony March 1, 1999
_________________________________ Director _________________
FORREST H. ANTHONY
/s/ James L. Van Alen, II March 1, 1999
_________________________________ Director _________________
JAMES L. VAN ALEN, II
/s/ Christina Jaumotte de Galavais March 1, 1999
_________________________________ Director _________________
CHRISTINA JAUMOTTE DE GALAVIS
/s/ Roger J. Knake March 1, 1999
____________________________ Director _________________
ROGER J. KNAKE
/s/ George R. Jensen, Jr. March 1, 1999
____________________________ Director _________________
GEORGE R. JENSEN, JR.
<PAGE>
EXHIBITS
EXHIBIT 23(N)
FINANCIAL DATA SCHEDULE
