Prospectus and Application
The Thomas White Funds Family
Capturing Value WorldwideSM
Thomas White American Growth Fund
Thomas White World Fund
November 1, 1998
Thomas White American Growth Fund (the "American Fund") seeks long-term capital
growth by primarily investing in equity securities of United States companies.
Thomas White World Fund (the "World Fund") seeks long-term capital growth
through a flexible policy of investing worldwide.
The Funds are series of the Lord Asset Management Trust (the "Trust"), which can
be contacted at the following address and telephone number:
Lord Asset Management Trust
440 S. LaSalle Street
Suite 3900
Chicago, IL 60605
1-800-811-0535
The Securities and Exchange Commission has not approved or disapproved the
Fund's shares and has expressed no opinion as to the accuracy or adequacy of
this prospectus. It is a criminal offense to make a representation to the
contrary.
<PAGE>
Contents
Goals of the Funds and
Investment Strategy 3
What You Should Know About Risk 5
How the World Fund Has Performed 7
Expenses 8
The Advisor 9
Financial Information 12
Dividends, Distributions and 13
Taxes
Your Account
How to Buy Shares 15
How to Sell Shares 19
Shareholder Services and 21
Account Policies
Contacting the Thomas White
Funds Family 24
An Important Phone Number
All Shareholder Services: 1-800-811-0535
<PAGE>
Goals of the Funds
The investment objective of the American and World Funds is long-term capital
growth.
Investment Strategy Thomas White International, Ltd. (the "Advisor" or "TWI")
buys equity securities of companies at less than its research indicates to be
their true worth. This normally produces portfolios with lower price-to-earnings
and price-to-book ratios and higher yields than many comparable mutual funds.
Companies considered attractive will typically have the following
characteristics:
o The market price of the equity is undervalued relative to earnings power,
break-up value and inherent profitability.
o Companies will most often be paying a dividend and the resulting yield will be
relatively high.
o The companies are, or may soon be, exhibiting improved financial
characteristics represented by rising cash flow, return on equity, operating
margins and book value.
o The price of its equities may have recently underperformed the general market
due to a low level of investor expectations regarding the earnings outlook.
o The companies should have the strength to operate successfully through adverse
business conditions.
This approach seeks out equities where current investor enthusiasm is low.
Positions are normally sold when the investment community's perceptions improve
and the securities approach fair valuation.
The Advisor adheres to a long-term investment approach, and it does not attempt
to project short-term changes in the general market. Each Fund intends to invest
in companies for holding periods greater than one year under normal market
conditions, so the frequency of its purchases and sales should be below many
comparable mutual funds. Lower portfolio turnover helps to reduce trading costs
and shareholders' taxes.
A high exposure to the equity market is normally maintained unless the Advisor
is unable to find undervalued securities that meet its criteria. Using this
investment management style, the Advisor seeks superior long-term performance,
below average return volatility and portfolio resilience in difficult market
environments.
<PAGE>
The American Fund
The American Fund primarily invests in equity securities of U.S. companies. The
American Fund is designed to benefit from the future economic growth of the U.S.
The American Fund may take advantage of opportunities that exist anywhere in the
U.S. equity market. It may also invest up to 35% of its assets in non-U.S.
equity securities. The Advisor may use American Depositary Receipts ("ADRs"),
which are depositary receipts, typically issued by a U.S. bank or trust company,
that allow indirect ownership of securities issued by foreign corporations.
The Advisor's research unit, the Global Capital Institute, looks for undervalued
securities in every U.S. industry.
The American Fund has the flexibility to engage in other investment techniques,
different from the principal strategies mentioned here.
The World Fund
The World Fund primarily invests in equity securities of companies located in
the world's developed countries, including the U.S. Generally, equity
investments will represent a diversified portfolio of predominantly larger
companies. There may also be a small portion of the World Fund's assets in
companies from emerging market countries.
The World Fund is designed to benefit from future growth in developed and
emerging market countries, including the U.S. The Advisor produces monthly
valuation research that covers forty-seven countries. It believes that the world
now offers excellent opportunities for growth and diversification. The Fund is
designed to complement domestic equity funds, like the American Fund.
Like the American Fund, the World Fund may engage in other investment
techniques, different from the principal strategies mentioned here.
Portfolio Diversification
In general, the more diversified a fund's portfolio of stocks, the less likely
that a specific stock's poor performance will hurt that fund. According to the
Morningstar Principia Database, as of September 30, 1998, the average world
mutual fund had 25.7% of its assets invested in its ten largest holdings, while
the World Fund had only 10.8% of its assets invested in its ten largest equity
holdings. The American Fund's top ten equity holdings are expected to equal
approximately 15% to 20% of the Fund's assets on average.
<PAGE>
What You Should Know About Risk
Those Who Should Invest in the Funds
The Funds are designed to be appropriate for prudent investors who are seeking
the long-term performance advantage of equities and who want growth of capital
rather than current income. They should appeal to investors who are interested
in low-cost mutual funds. Under normal conditions the Funds will try to limit
shareholders' taxes through relatively low portfolio turnover.
Individuals should consider improving the risk-return profile of their U.S.
mutual funds by having exposure to foreign investing. The World Fund is designed
for this purpose.
The Advisor discourages potential shareholders who are aggressive, short-term
investors from investing in the Funds.
Equities
The Funds will predominantly be invested in equity securities, including common
and preferred stocks. Common stocks represent an equity (ownership) interest in
a corporation, while preferred stocks generally pay a higher dividend but do not
represent ownership.
Each Fund is subject to market risk, which is the risk that the value of a
security may move up and down, sometimes rapidly and unpredictably, in response
to economic or other conditions. In addition, changes in interest rates affect
the value of portfolio securities held by the Funds and the operations of the
issuers of the Funds' portfolio securities.
History shows that over long periods, equities have outperformed bonds, cash
equivalents and inflation. Nevertheless, in the short term, equity performance
may be volatile and unpredictable, and may produce greater negative returns than
other asset classes. The equity securities of smaller companies may be
particularly volatile, especially during periods of economic uncertainty. The
World Fund is more likely than the American Fund to be affected by the risks of
investing in small capitalization companies.
Foreign Securities
Holding equity securities of foreign companies can entail taking more risk than
owning the securities of domestic companies. Equity securities of foreign
companies may be subject to additional risks such as changes in currency
exchange rates, political instability and inadequate or unreliable information
about the companies. These risks may be particularly acute with respect to
investments in emerging markets.
While both Funds may invest in foreign securities, the World Fund can be
expected to be particularly subject to the risks posed by foreign investing.
These risks and others are more fully discussed in the SAI.
<PAGE>
General Risks
Shareholders should understand that all investments involve risk. There can be
no guarantee against loss resulting from an investment in the Funds, nor can
there be any assurance that a Fund's investment objective will be attained.
The value of a Fund's investments and, therefore, investment performance will
vary from day to day. When you sell your shares, they may be worth more or less
than the price you paid for them, and you could lose money.
TWI recognizes the above risks and attempts in its management of the Funds to
moderate them. It believes that a professionally structured and carefully
monitored portfolio can reduce the risks associated with less diversified equity
portfolios.
The Advisor attempts to configure the Funds' portfolios to moderate the natural
volatility of equities by focusing each Fund's investments in equities that in
theory are underpriced. However, its success in doing so cannot be assured. Such
securities may never reach what the Advisor believes to be their full value, or
may even go down in price. In addition, this approach may produce returns below
aggressive equity funds, given the Advisor's efforts to limit risk.
Under adverse market conditions, the Funds could invest some or all of their
assets in money market securities and similar investments. Although the Funds
would do this only in seeking to avoid losses, it could have the effect of
reducing the benefit from any upswing in the market.
Euro
On January 1, 1999, eleven European countries begin conversion to a common
currency. Investments traded in the markets in these countries will be
denominated in the new currency starting on this date. As of September 30, 1998,
the World Fund had 19.1% of its assets invested in equities of issuers that are
domiciled in the countries where the currencies will be converted. The Advisor
does not believe that the conversion to a common currency will have a material
impact on the net asset value of the World Fund or affect the long-term outlook
of those equities.
<PAGE>
How the World Fund Has Performed
The tables to the right display the World Fund's annual returns and long-term
performance. The American Fund was launched November 1, 1998 and, therefore, had
no performance data to report when this prospectus was printed.
The first table shows that returns fluctuate from year to year. The second table
compares the World Fund's performance to that of the MSCI World Index and the
MSCI All Country World Index, recognized unmanaged indices of global stock
performance. Both tables assume the reinvestment of income dividends and capital
gains distributions.
The World Fund has a return pattern intended to appeal to the prudent investor
who has moderate risk tolerance and a long-term (over five years) investment
outlook.
Year-by-year Total Return as of 12/31 each year [Bar Chart]
1995 - 19.03%
1996 - 16.50%
1997 - 11.70%
Best Quarter: Quarter 2, 1997 10.19%
Worst Quarter: Quarter 4, 1997 -2.98%
The World Fund's year-to date total return as of 9/30/98 was -1.02%.
Average Annual Return
as of 12/31/97
Inception
1 Year 3 Year (6/28/94)
World Fund 11.70% 15.71% 13.50%
MSCI World 15.76% 16.61% 14.59%
MSCI All Country World 15.00% 15.86% 13.98%
As with all mutual funds, past performance is not a prediction of future
results.
<PAGE>
Expenses
Annual Fund operating expenses are charges paid when shareholders buy and hold
shares of a Fund. A Fund's expenses are subtracted daily and are therefore
factored into the share price as reported; expenses are not charged directly to
shareholder accounts.
Annual Fund Operating Expenses
(deducted from Fund assets)
AMERICAN FUND
Management fee 1.00%
Distribution/12b-1 fee None
Other expenses 0.35%
Total Fund operating expenses 1.35%*
WORLD FUND
Management fee 1.00%
Distribution/12b-1 fee None
Other expenses 0.47%
Total Fund operating expenses 1.47%**
* The Advisor has agreed to reimburse the American Fund to the extent that the
Fund's total operating expenses exceed 1.35% of the Fund's average daily net
assets. Absent this contractual undertaking, the Fund's total operating
expenses, based on estimates for the current fiscal year, would be 1.63%.
* * The Advisor has agreed to reimburse the World Fund for its current fiscal
year to the extent that the Fund's total operating expenses exceed 1.50% of the
Fund's average daily net assets.
Examples: These examples illustrate the effect of expenses and are intended to
help you compare the costs of investing in the Funds with the costs of investing
in other mutual funds. The examples are not meant to suggest actual or expected
cost or returns, all of which may vary.
Use of this assumed 5% return is required by the Securities and Exchange
Commission ("SEC"); it is not an illustration of past or future investment
results.
Assume that a Fund's annual return is 5%, and that its operating expenses are
exactly as shown. For every $10,000 invested, here's how much a shareholder
would have paid in total expenses if the account was closed after the number of
years indicated:
AMERICAN FUND
After 1 year $137
After 3 years $428
WORLD FUND
After 1 year $150
After 3 years $465
After 5 years $803
After 10 years $1757
The No-Load Advantage
The American and World Funds are 100% no-load, which means that all your money
is invested at a Fund's net asset value. There are no sales charges, no 12b-1
fees and no back-end load fees that reduce your investment in the Funds.
Quick Fact:
The World Fund's total expense ratio is 1.47% for the latest fiscal year,
compared to 1.91% for the average of the 219 world equity funds in the
Morningstar Principia Database on September 30, 1998.
<PAGE>
The Advisor
The Funds are managed by Thomas White International, Ltd., 440 S. LaSalle
Street, Suite 3900, Chicago, Illinois 60605. TWI chooses each Fund's investments
and handles its affairs, under the direction of the Board of Trustees. TWI
provides the Funds with investment research, advice, supervision and certain
overhead items and facilities. TWI provides investment management and advisory
services to both a domestic and international client base, including trusts,
endowments, corporations, employee benefit plans, Taft-Hartley plans and
individuals.
Thomas S. White, Jr., has been the portfolio manager of the Funds since their
inceptions and has been managing investments for more than thirty years. He is
Chairman of TWI, which he founded in 1992. Before that he was a Managing
Director of Morgan Stanley Asset Management and Chief Investment Officer of its
Chicago Group, which he began in 1982. Further information concerning TWI is
included under the heading "Investment Management and Other Services" in the
SAI.
The Global Capital Institute is TWI's fully-owned research division. Its
analysts provide the company valuations that Mr. White uses to select stocks for
the Funds' portfolios. The Institute produces monthly equity valuation
publications for research clients who are asset management organizations located
around the world.
Each Fund pays a management fee, equal to 1.00% of the Fund's average daily net
assets on an annual basis, to TWI for managing its investments and business
affairs. See "Expenses."
TWI feels that it is important for shareholders to thoroughly understand and
grow comfortable with its investment approach. The Funds' shareholder
communications are written with this goal in mind.
Year 2000
The Funds' operations depend heavily on computer technology and the computer
systems of their service providers. The Advisor has implemented and successfully
completed a testing program to address technological challenges posed by the
transition to the Year 2000. Management of the Trust is working with, and
monitoring the efforts of, other service providers to the Funds to make sure
that they take steps that are reasonably designed to address Year 2000 issues.
Of course, there is no guarantee that these efforts will completely address all
technology issues raised by the transition to Year 2000. An incomplete or
untimely resolution of Year 2000 issues could have negative effects on the
operations of the Funds and their service providers. In addition, if the value
of a Fund investment is adversely affected by a Year 2000 problem, the net asset
value of the Fund will be affected as well.
<PAGE>
The American Fund is designed to benefit from the Advisor's ability to discover
attractive investment opportunities in each of the major industries within the
United States.
The United States has the largest and most diversified economy in the world. Its
stock market ranks number one by dollar value and number of common stocks.
The Advisor's research unit, the Global Capital Institute, has produced
investment valuations of U.S. companies within the following industries.
Advertising Engineering Newspaper
Aerospace Entertainment Office Equipment
Air Transport Food Processing Oilfield Services
Aluminum Foreign Packaging & Container
Apparel/Textile Forest Products Paper
Auto & Truck Home Furnishing Petroleum (Integrated)
Auto Parts Grocery Petroleum (Producing)
Banks: National Healthcare Precision Instrument
Banks: Regional Home Appliance Publishing
Beverages Home Building Railroads
Broadcasting Hotel Real Estate
Building Materials Household Products Recreation
Cable TV Industrial Services Restaurant
Cement & Aggregates Insurance Retail: Specialty
Chemicals Internet Retail Store
Cosmetics Investment Advisors Securities Brokerage
Computers & Peripherals Machinery Semiconductors
Computer Software Maritime Steels
Drug Medical Services Telecom Equipment
Drugstore Medical Supplies Telecom Services
Electrical Equipment Metal Fabricating Tire & Rubber
Electric Utilities Metals & Mining Toiletries
Electronics Natural Gas Trucking
The American Fund seeks to obtain superior long-term returns while attempting to
limit investment risks. It employs a valuation-oriented stock selection strategy
and broad portfolio diversification. History shows that careful industry, asset
class and company diversification can lower portfolio volatility and reduce risk
during difficult market environments.
<PAGE>
The World Fund is designed to take advantage of the positive changes occurring
in the world today.
These forty-seven countries contain over 3,600 companies that are valued by the
advisor's analysts. World Fund shareholders are currently partial owners of over
200 of these companies. World Fund shareholders are at the very epicenter of
what is driving change in today's world: An unprecedented explosion of highly
beneficial global capitalism.
DEVELOPED MARKETS EMERGING MARKETS
EUROPE GREATER EUROPE
Austria Czech Republic
Belgium Greece Hungary
Denmark Russia Poland
Finland Turkey
France
Germany
Ireland MIDDLE EAST
Italy Israel
Netherlands
Norway AFRICA
Portugal South Africa
Spain
Sweden LATIN AMERICA
Switzerland Argentina Mexico
United Kingdom Brazil Peru
Chile Venezuela
NORTH AMERICA Columbia
Canada
United States INDIAN
SUBCONTINENT
PACIFIC India
Australia Pakistan
Hong Kong Sri Lanka
Japan
New Zealand FAR EAST
Singapore China Philippines
Indonesia Taiwan
Korea Thailand
Malaysia
The goal of the World Fund is to have a diversified portfolio of U.S. and
foreign equity securities representing a broad mix of industries and countries.
By combining broad diversification with its proprietary research, TWI seeks to
produce superior long-term returns and volatility that is lower than most
comparable mutual funds.
<PAGE>
Financial Information
Thomas White World Fund
This table summarizes the World Fund's financial history and performance. "Total
Return" shows how much your investment in the Fund would have increased (or
decreased) during each period, assuming you held your shares for the entire
period and had reinvested all dividends and distributions. The information,
through October 31, 1997, has been audited by McGladrey & Pullen, LLP, the
Fund's independent auditors. The information as of April 30, 1998 has not been
audited. This information, along with the World Fund's Financial Statements, are
included in the World Fund's most recent shareholder report, which is available
upon request.
<TABLE>
<S> <C> <C> <C>
Period from
For a share outstanding Period from Nov. 1, June 28,1994
throughout the period 1997 to Apr. 30, Year ended October 31 (Inception) to
1998 1997 1996 1995 Oct. 31,1994
- ------------------------------ ------ ------- ------ ------- ---------
Net Asset Value, beginning $13.23 $12.33 $11.31 $10.50 $10.00
Of period
Income From Investment Operations
Net investment income .07 0.20 0.19 0.19 0.06
Net realized and unrealized gain 1.95 1.65 1.51 0.71 0.44
- ------------------------------ ------ ------- ------ ------- --------
Total from investment operations 2.02 1.85 1.70 0.90 0.50
Less Distributions
From net investment income (0.19) (0.19) (0.20) (0.09) -
From net realized gains (0.54) (0.76) (0.48) - -
- ---------------------------------- ------ ------ -------- ------- ----------
Total distributions (0.73) (0.95) (0.68) (0.09) -
- ---------------------------------- ------ ------ -------- ------- ----------
Change in net asset value for the
period 1.29 0.90 1.02 .81 .50
- ---------------------------------- ------ ------ -------- ------- ----------
Net Asset Value, end of period $14.52 $13.23 $12.33 $11.31 $10.50
- ---------------------------------- ------ ------ -------- -------- ----------
Total Return 16.16% 15.80% 15.63% 8.65% 5.00%**
Ratios/Supplemental Data
Net assets at end of period (in $53,394 $47,996 $39,157 $32,979 $13,928
thousands)
Ratio to average net assets:
Expenses (net of reimbursement) 1.42% 1.47% 1.50% 1.49% 1.50%*+
Net investment income 1.07% 1.60% 1.63% 2.08% 1.79%*
Portfolio turnover rate 24.11% 48.19% 51.22% 64.54% 1.01%
*Annualized
**Not Annualized
+In the absence of the expense reimbursement, expenses would have been 2.36% of
average net assets.
</TABLE>
<PAGE>
Dividends, Distributions and Taxes
The Funds distribute all or substantially all of their net income and realized
gains to shareholders each year. Normally, dividends and capital gains are
distributed in December.
Your distributions are taxable when they are paid, whether you take them in cash
or reinvest them in additional shares.
Every January, the Funds will send you and the IRS a statement, called a Form
1099, to assist you with your tax preparation.
Distribution Options
When you open an account, specify on your application how you want to receive
your distributions. If you later want to change your distribution options, call
us at 1-800-811-0535.
The Funds offer four options:
Your income dividends and capital gains distributions will be automatically
reinvested in additional shares of the relevant Fund. If you do not indicate a
choice on your application, you will be assigned this option.
You will be sent a check for each income dividend and capital gains
distribution.
Your capital gains distributions will be automatically reinvested, but you will
be sent a check for each income dividend.
Your income dividends will be automatically reinvested, but you will be sent a
check for each capital gains distribution.
Understanding Distributions:
As a Fund shareholder, you are entitled to your share of your Fund's net income
and any net gains realized on investments.
Your share of each Fund's income from dividends and interest, and any net
realized short-term capital gains, are paid to you as dividends, which are taxed
at the same rate as ordinary income.
Generally each Fund realizes capital gains whenever it sells securities for a
higher price than it paid for them. Net realized long-term gains are paid to you
as capital gains distributions. Currently, long-term capital gains result from
sales of securities held for greater than one year and are taxed at a rate of
20%.
Distributions are subject to these capital gains rates regardless of how long
you have held your shares.
<PAGE>
Taxes
As with any investment, you should consider how your investment in the
Funds will be taxed.
For IRA accounts, all distributions will be automatically
reinvested because payment of distributions in cash would be a taxable
distribution from your IRA, and might be subject to tax penalties.
Taxes on Transactions
Your redemptions - including exchanges between accounts - are subject to the
federal income tax on capital gains. A capital gain or loss is the difference
between the cost of your shares and the price you receive when you sell them.
Whenever you sell shares of a Fund, we will send you a confirmation statement
showing how many shares you sold and at what price. You will also receive a
year-end statement every January. It is up to you or your tax preparer to
determine whether any given sale resulted in a capital gain or loss, and if so,
the amount of tax to be paid.
Be sure to keep regular account statements; the information they contain will be
essential in calculating the amount of your dividends and capital gains.
Understanding Portfolio Turnover
Before investing in a mutual fund, investors should consider its portfolio
turnover rate. The portfolio turnover rate is an indication of how long the
manager holds securities in the portfolio. For example, if the portfolio
turnover rate is 100%, then the average holding period is one year. If the
portfolio turnover rate is 50%, then the average holding period is two years.
Funds with low portfolio turnover rates have lower brokerage and other
transaction costs, and the tax rates attached to the capital gains they generate
may be lower. According to the Morningstar Principia Database, as of December
31, 1997, the average portfolio turnover rate for a global or domestic equity
mutual fund was 87%. The World Fund had a 53% portfolio turnover rate for the
year ended December 31, 1997. The Advisor estimates that the American Fund's
portfolio turnover will average between 40% and 60%.
<PAGE>
Your Account How to Buy Shares The Funds are 100% no-load and therefore have no
sales charges of any kind. The purchase price is a Fund's net asset value per
share (NAV), which is generally calculated as of the close of trading on the New
York Stock Exchange ("NYSE") (usually 4:00 p.m. Eastern time) every day the NYSE
is open. Shares may not be purchased on days the NYSE is closed. Because some
foreign exchanges are open days when the NYSE is closed, the NAV of a Fund, and
particularly the World Fund, may change on a day when you cannot buy or sell
shares of the Fund. Options for purchasing shares of the Funds are listed on the
table on page 16.
Shares of the Funds may be purchased or sold through certain fund supermarkets,
broker-dealers or financial institutions ("Processing Intermediaries").
Processing Intermediaries may use procedures and impose fees or restrictions in
addition to or different from those applicable to shareholders who invest
directly in the Funds. The Advisor may, out of its own resources and at no
additional costs to the Funds or shareholders, pay Processing Intermediaries for
providing services to the Funds or to shareholders.
The NAV of a Fund generally is determined on the basis of the market price of
its assets, minus its liabilities. A Fund's investment in a security listed or
traded on a recognized stock exchange or NASDAQ is valued at its last sale price
on the principal exchange on which the security is traded. The value of a
foreign security is determined as of the close of trading on the foreign
exchange on which it is traded or as of 4:00 p.m. Eastern time, if that is
earlier. That value is then converted into the U.S. dollar equivalent using
foreign exchange rates in effect at noon that day. The exception to this policy
is Canadian and Latin American securities, which generally are converted into
their U.S. dollar equivalent at 4:00 p.m. Eastern time.
Securities for which market quotations are not readily available and other
assets are valued at fair value as determined in good faith under guidelines
established by the Board of Trustees.
An order will be priced at the next NAV calculated after it is accepted by the
Funds. All purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks. Accounts may not be opened with a third party check. The Funds do
not accept cash or credit cards. If payment for a check or telephone order does
not clear, the purchase will be canceled and the shareholder will be liable for
any losses or fees the Funds or their Transfer Agent incur.
Minimum Investments
Initial Additional
Regular Account $2,500 $100
Automatic Invest $1,000 $100
Traditional IRA $1,000 $100
Roth IRA $1,000 $100
<PAGE>
THE FOLLOWING ACCOUNT TYPES CAN BE OPENED USING THE ENCLOSED APPLICATION.
Individual or Joint Ownership- For your general investment needs
Individual accounts are owned by one person. Joint accounts can have two or more
owners.
Gift or Transfer to a Minor (UGMA, UTMA) - To invest for a minor's education or
other future needs
These custodial accounts provide ways to give money to a minor. The account
application must include the minor's social security number.
Trust or Established Employee Benefit or Profit-Sharing Plan - For money being
invested by a trust, employee benefit plan, or profit-sharing plan The trust or
plan must be established before an account can be opened.
Corporation or Other Entity - For investment needs of corporations,
associations, partnerships, institutions, or other groups You will need to send
a certified corporate resolution with your application.
TO ESTABLISH ONE OF THE FOLLOWING RETIREMENT
ACCOUNTS PLEASE CALL 1-800-811-0535 FOR COMPLETE IRA INFORMATION.
Traditional IRA: An individual retirement account. Contributions may or may not
be tax deductible depending on a shareholder's circumstances. Assets can grow
tax-free. When distributions are received they are taxable as income.
Spousal IRA: An IRA funded by a working spouse in the name of a non-working
spouse.
Roth IRA: An IRA with non-deductible contributions, tax-free growth of assets,
and tax-free distributions for qualified expenses.
Simplified Employee Pension Plans (SEP-IRAs): An IRA that allow small business
owners or those with self-employment income to make tax-deductible contributions
of up to $30,000 per year for themselves and any eligible employees.
Savings Incentive Match Plan for Employees (SIMPLE): Firms with 100 or fewer
employees who do not have a retirement plan can establish a SIMPLE Plan.
Employees can establish a SIMPLE plan in the form of either an IRA or a 401(k)
plan. Employers using IRAs must either match the first 3% of pay each employee
defers under the plan, or alternatively, make a non-elective contribution of 2%
of pay for each eligible employee.
<PAGE>
How to Buy Shares of the Funds
Mail
To open an account:
Complete and sign the application.
Make your check payable to "Thomas White American Growth Fund" or
to "Thomas White World Fund." Mail to the address on the application,
or for overnight delivery:
Thomas White Funds Family
Shareholder Services Center
615 East Michigan Street
3rd Floor
Milwaukee, WI 5320
To add to an account:
Make your check payable to "Thomas White American Growth Fund" or "Thomas White
World Fund" and include the stub from one of your statements with a
letter containing your name and account number. Remember to always put your
account number on your check. Mail to the address on your statement.
Phone 1-800-811-0535
To open an account:
You may only open a new account by phone if you wire your investment to our
Transfer Agent. See the section "Wire" below.
To add to an account:
Use the telephone purchase plan to transfer funds from your bank account. Call
first to verify that this service is in place on your account. (This service is
not available for IRAs)
You must make your telephone purchases by 4:00 p.m. Eastern time.
Wire
To open an account:
If you make your initial investment by wire you must fill out an
application marked "follow-up" and send it to our Transfer Agent. The
application must be received before any of the purchased shares can be
redeemed. Prior to wiring your investment to the Transfer Agent, call and
establish an account to ensure the Transfer Agent correctly credits your
account. There is a $10 wire fee.
To add to an account:
Wire to:
Firstar Bank Milwaukee, N.A.
ABA Number 07500-00022
Trust Funds, Acct Number 112-952-137
For further credit to:
Thomas White American Fund
or
Thomas White World Fund
(Investment account number)
(name or account registration)
<PAGE>
Automatic Investment Plan
To open an account:
You may open a new account with a $1,000 minimum initial investment if you sign
up for the Automatic Investment Plan. Fill out the Automatic Investment Plan
section on the application for monthly or quarterly transfers from your bank
account.
To add to an account:
If you would like to add this service to your account, or if you already have
this service, you can easily change the frequency or amount of your automatic
investments over the phone by calling 1-800-811-0535.
Guidelines
Your bank must be a member of Automatic Clearing House (ACH).
If the transfer is from a checking account, this application must be accompanied
by a voided check.
If the transfer is from a savings account, this application must be accompanied
by an account deposit slip.
Application must be received, with initial investment, at least 15 business days
prior to initial ACH transaction.
If the automatic purchase cannot be made due to insufficient funds, a $15 fee
will be assessed. Your Automatic Investment Plan will be terminated after two
such occurrences.
This plan will terminate upon redemption of all shares in your account.
Termination of this Plan must be in writing and received by Firstar Mutual Fund
Services, LLC. Please allow five business days for the termination to become
effective.
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How to Sell Shares
You can arrange to take money out of your Fund account at any time by selling
(redeeming) some or all of your shares. Your shares will be sold at the next NAV
calculated after your order is received and accepted.
A Fund may hold payment on redemptions until it is reasonably satisfied that it
has received payment for a recent purchase made by check, by the Automatic
Investment Plan, or by telephone purchase, which can take up to fifteen days.
To sell shares in a regular (non-IRA) account, you may use any of the methods
described here. To sell shares in an IRA, your request must be made in writing.
If you need an IRA Withdrawal Request form, call us at 1-800-811-0535.
Selling Shares in Writing
Please send a letter with:
* your name;
* your Fund account number;
* the dollar amount or number of shares to be redeemed; and
* any other applicable requirements listed in the table on the next page.
Mail your letter to:
Thomas White Funds Family
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
Certain requests must include a signature guarantee, designed to protect
shareholders and the Funds from fraud. You should be able to obtain a signature
guarantee from a bank, broker-dealer, credit union (if authorized under state
law), securities exchange or savings association. A notary public cannot provide
a signature guarantee.
Your request must be made in writing and include a signature guarantee if any of
the following situations applies:
* you wish to redeem more than $50,000 worth of shares;
* your name has changed by marriage or divorce (send a letter indicating your
account number(s) and old and new names, signing the letter in both the old and
new names and having both signatures guaranteed);
* your address has changed within the last 30 days and you would like to redeem
shares;
* the check is being mailed to an address different from the one on your account
(record address);
* the check is being made payable to someone other than the account owner; or
* you are instructing us to wire the proceeds to a bank or brokerage account and
have not previously arranged for telephone redemption by wire.
<PAGE>
HOW TO SELL SHARES OF THE FUNDS
Phone 1-800-811-0535
All accounts except IRA
To verify that the telephone redemption plan is in place, call 1-800-811-0535.
This may be selected on the application.
You must make your telephone redemptions by 4:00 p.m. Eastern time.
Mail
Individuals, Joint Owners, Sole Proprietorships, UGMA, UTMA
o The letter of instruction must be signed by all persons required to sign for
transactions (usually, all owners of the account), exactly as their names appear
on the account.
IRAs
o The account owner should complete an IRA Withdrawal Request form. Call 1-
800-811-0535 to request one.
Trust
o The trustee must sign the letter indicating capacity as trustee. If the
account registration does not include the trustee's name, provide a copy of the
trust document certified within the last 30 days.
Business or Organization
o The person or persons authorized by corporate resolution to act on the account
must sign, in that person's official capacity, the redemption request on the
corporation's stationery.
o Include a corporate resolution certified within 30 days if the amount to be
redeemed exceeds $50,000.
Executor, Administrator, Conservator, Guardian
o Call 1-800-811-0535 for instructions.
<PAGE>
Shareholder Services and Account Policies
Doing Business with the Funds
For customer service call 1-800-811-0535. The Funds provide customers with
service Monday through Friday, except holidays, from 9:00 a.m. to 8:00 p.m.
Eastern time.
The Funds' automated phone system can also provide shareholder information 24
hours a day by dialing the above toll-free number.
At the discretion of the Funds, investors may be permitted to purchase Fund
shares by transferring securities to a Fund that meet that Fund's investment
objective and policies. See the SAI for further information.
Subject to limitations described in the SAI each Fund reserves the right to
redeem its shares in kind through payment of portfolio securities instead of
cash.
Investors who make excessive moves in and out of the Funds generate additional
costs that fall upon all of a Fund's shareholders. To minimize such costs, the
Funds reserve the right to reject any specific purchase order. Purchase orders
may also be refused if, in the Advisor's opinion, they are of a size that would
disrupt the management of a Fund.
Redemptions may be suspended or payment dates postponed on days when the NYSE is
closed (other than weekends or holidays), when trading on the NYSE is
restricted, or as permitted by the SEC.
If the value of an account falls below $1,000 due to redemptions or exchanges, a
notice of liquidation will be sent to the investor's address of record. The
Funds reserve the right to close that account and send the proceeds to the
shareholder unless sufficient additional shares are purchased.
If checks representing redemption proceeds or dividend and capital gains
distributions are returned "undeliverable" or remain uncashed for six months,
the checks shall be canceled and the proceeds will be reinvested in the
appropriate Fund at the per share NAV on the date of cancellation. In addition,
after such six-month period, the cash election will automatically be changed and
future dividends and distributions will be reinvested at the per share NAV
determined on the date of payment of such distributions.
Address Changes
An address may be changed by calling 1-800-811-0535. The Funds will send a
written confirmation of the change to both the old and new addresses. No
telephone redemptions may be made for 30 days after a change of address by
phone. During those 30 days, a signature guarantee will be required for any
written redemption request unless the change of address was made in writing with
a signature guarantee.
<PAGE>
Telephone Transactions
(For your protection, all transactions are completed over a recorded line.) Many
transactions may be initiated by telephone:
* Change of address;
* Request duplicate statements to be sent to someone designated by the
shareholder;
* Request a current account statement;
* Purchase shares by telephone (plan must be pre-established);
* Redeem shares and have proceeds wired to a bank checking account (bank wire
redemption plan must be pre-established, not available for IRA accounts);
* Change the frequency or amount, or discontinue the Automatic Investment Plan
on your account(s);
* Add or discontinue the telephone redemption privilege for an account;
* Change distribution option (does not apply to IRA accounts);
* Redeem shares, with a check sent to the address of record (does not apply to *
IRA accounts, and address of record must not have changed in the last 30 days);
* Exchange money from an individual account to an existing IRA account with an
identical registration;
* Change the contribution year on an IRA account to the previous year up until
April 15 of the current year.
The Funds will not be responsible for any losses resulting from unauthorized
telephone transactions if they follow reasonable procedures designed to verify
the identity of the caller. Those procedures may include recording the call,
requesting additional information, and sending written confirmation of telephone
transactions.
You should verify the accuracy of telephone transactions immediately upon
receipt of your confirmation statement. If you do not want to be able to
initiate purchase or redemption transactions by telephone, you should decline
these privileges on your account application or call the Funds for instructions
at 1-800-811-0535.
If you are unable to reach the Funds by phone (for example during periods of
unusual market activity), you should consider placing their order by mail.
Telephone Exchange Plan
The Funds' telephone exchange plan permits you to
exchange your investment between one Fund and another, or between a Fund and one
of the Firstar Money Market Funds. The Firstar Money Market Funds are:
* Money Market Fund
* U.S. Treasury Money Market Fund
* U.S. Government Money Market Fund
* Tax-Exempt Money Market Fund
Before exchanging with one of the available money market funds, please call and
request a prospectus. You will be asked if you have read the
<PAGE>
prospectus, and an exchange cannot be accepted unless you indicate that you have
done so. Each of the money market funds is a no-load fund managed by FIRMCO, a
Wisconsin limited liability company and subsidiary of Firstar Corporation, a
bank holding company.
The price at which shares are exchanged is determined by the time of day that we
receive the request. To get today's price call before 3:00 p.m. Central time.
Exchange Plan Restrictions
Exchanges will be limited to four round-trip exchanges per year (a round-trip is
the exchange out of one fund into another fund, and then back into the original
fund).
Shares of the fund being exchanged into must be available for sale in the your
state. The World Fund and the Firstar Money Market Funds are available in all 50
states. The American Fund will have a limited availability during the first two
years of operation. You can call 800-811-0535 to verify the availability in
their state.
You may only exchange between accounts that are registered in the same name,
address, and taxpayer identification number.
To establish a new account through an exchange, the exchange must be equal to
the minimum initial investment of $2,500. For exchanges between established
accounts the minimum exchange value must be at least $1,000.
The exchange plan is not available for shares of a fund for which certificates
have been issued.
Because excessive trading can hurt the Funds' performance and shareholders, the
Funds reserve the right to temporarily or permanently terminate the exchange
privilege of any investor who makes excessive use of the exchange plan.
The Funds also reserve the right to refuse exchange purchases by any person or
group, if TWI believes that the purchase will be harmful to existing
shareholders.
Please remember that exchanges between taxable/non-retirement accounts will have
tax consequences.
The Funds reserve the right to terminate or modify the exchange plan at any
time, but will try to give prior notice whenever they are able to reasonably do
so.
<PAGE>
Contacting the Thomas White Funds Family
Phone 1-800-811-0535
The following documents are available for free and provide further information
on the Funds:
Annual/Semi-Annual Reports to Shareholders
In the annual report, you will find a letter to shareholders from the Fund
manager and a discussion of the events that impacted the World Fund's
performance during the period covered, as well as a list of the World Fund's
investments. As a new fund, the American Fund does not yet have any performance
to report to shareholders.
Statement of Additional Information (SAI)
The SAI contains additional information about the Funds. A current SAI has been
filed with the SEC and is incorporated into this Prospectus by reference.
E-mail
Send your request to [email protected]
On the Internet
Fund Documents can be viewed online or downloaded from two Internet websites:
The Securities and Exchange Commission: http://www.sec.gov
Thomas White Funds Family: http://www.thomaswhite.com
By Mail
Thomas White Funds Family
440 South LaSalle Street,
Suite 3900
Chicago, IL 60605
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330 for more information) or by sending your
request and a duplicating fee to the SEC's Public Reference Section, Washington,
DC 20549-6009.
SEC file number: 811-8348
