As filed with the Securities and Exchange Commission on June 14, 1996
File Nos. 33-81754
811-8646
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 3
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 6
JURIKA & VOYLES FUND GROUP
(Exact Name of Registrant as Specified in its Charter)
1999 Harrison Street, Suite 700
Oakland, California 94612
(Address of Principal Executive Office)
(800) 852-1991
(Registrant's Telephone Number, Including Area Code)
KARL O. MILLS
1999 Harrison Street, Suite 700
Oakland, California 94612
(Name and Address of Agent for Service)
-------------------------
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to Rule 485(b)
___ on _______________, pursuant to Rule 485(b)
_X_ 60 days after filing pursuant to Rule 485(a)(1)
___ 75 days after filing pursuant to Rule 485(a)(2)
___ on _______________,pursuant to Rule 485(a)
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has registered an indefinite number of securities under the
Securities Act of 1933. The Rule 24f-2 Notice for the Registrant's fiscal year
ended June 30, 1995 was filed on August 26, 1995.
----------
Please Send Copy of Communications to:
STEVEN J. PAGGIOLI, ESQ. JULIE ALLECTA, ESQ.
Investment Company Administration DAVID A. HEARTH, ESQ.
Corporation Heller, Ehrman, White & McAuliffe
479 W. 22nd Street 333 Bush Street
New York, New York 10011 San Francisco, California 94104
(212) 633-9700 (415) 772-6000
<PAGE>
JURIKA & VOYLES FUND GROUP
CONTENTS OF REGISTRATION STATEMENT
This registration statement contains the following documents:
Facing Sheet
Contents of Registration Statement
Cross - Reference Sheets for Jurika & Voyles Fund Group
Part A Combined Prospectus for Jurika & Voyles Fund Group - Class J Shares
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Combined Prospectus for Jurika & Voyles Fund Group - Class K Shares
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Part B Combined Statement of Additional Information for Jurika & Voyles
Fund Group
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Jurika & Voyles Small/Mid Cap Fund
<PAGE>
Part C Other Information
Signature Page
This Post-Effective Amendment does not relate to the prospectus for Jurika &
Voyles Small/Mid Cap Fund.
<PAGE>
Jurika & Voyles Fund Group
Cross Reference Sheets
Form N-1A
Part A: Information Required in Prospectus
(Combined Prospectus for Jurika & Voyles Fund Group- Class J Shares)
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth
Jurika & Voyles Balanced Fund
Location in the
N-1A Registration Statement
Item No. Item by Heading
- -------- ---- ----------
1. Cover Page Cover Page
2. Synopsis "Prospectus Summary" and "Summary
of Expenses and Example"
3. Condensed Financial "Financial Highlights"
Information
4. General Description of Cover Page, "Prospectus Summary,"
Registrant "Investment Objectives and
Policies", "Risk Considerations,"
"Portfolio Securities and
Investment Techniques" and
"General Information"
5. Management of the Fund "Investment Objectives and
Policies," "Organization and
Management" and "Purchasing Class
J Shares"
5A. Management's Discussion of Not Applicable(Included in Annual
Fund Performance Report to Shareholders)
6. Capital Stock and Other "Organizations and Management,"
Securities "Dividends, Distributions and Tax
Status" and "General Information"
7. Purchase of Securities Being "Purchasing Class J Shares,"
Offered "Exchange of Class J Shares,"
"Selling Class J Shares
(Redemptions)," "Shareholder
Services" and "Class J Share
Price Calculation"
8. Redemption or Repurchase "Selling Class J Shares
(Redemptions)" and "General
Information"
9. Pending Legal Proceedings Not Applicable
<PAGE>
Jurika & Voyles Fund Group
Cross Reference Sheets
Form N-1A
Part A: Information Required in Prospectus
(Combined Prospectus for Jurika & Voyles Fund Group- Class K Shares)
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth
Jurika & Voyles Balanced Fund
Location in the
N-1A Registration Statement
Item No. Item by Heading
- -------- ---- ----------
1. Cover Page Cover Page
2. Synopsis "Prospectus Summary" and "Summary
of Expenses and Example"
3. Condensed Financial Information "Financial Highlights"
4. General Description of Registrant Cover Page, "Prospectus Summary,"
"Investment Objectives and
Policies", "Risk Considerations,"
"Portfolio Securities and
Investment Techniques" and
"General Information"
5. Management of the Fund "Investment Objectives and
Policies," "Organization and
Management" and "Purchasing Class
K Shares"
5A. Management's Discussion of Not Applicable(Included in Annual
Fund Performance Report to Shareholders)
6. Capital Stock and Other "Organizations and Management,"
Securities "Dividends, Distributions and
Tax Status" and "General
Information"
7. Purchase of Securities Being "Purchasing Class K Shares,"
Offered "Exchange of Class K Shares,"
"Selling Class K Shares
(Redemptions)," "Shareholder
Services" and "Class K Share
Price Calculation"
8. Redemption or Repurchase "Selling Class K Shares
(Redemptions)" and "General
Information"
9. Pending Legal Proceedings Not Applicable
<PAGE>
PART B: Information Required in
Statement of Additional Information
-----------------------------------
(Combined Statement of Additional Information for Jurika & Voyles Fund Group)
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth
Jurika & Voyles Balanced Fund
Jurika & Voyles Small/Mid Cap Fund
Location in the
N-1A Registration Statement
Item No. Item by Heading
- -------- ---- ----------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Cover Page and "Additional
Information"
13. Investment Objectives "Investment Objectives and
Policies" and "The Funds'
Investment Limitations"
14. Management of the Registrant "Management of the Funds"
15. Control Persons and Principal "Management of the Funds" and
Holders of Securities "Additional Information"
16. Investment Advisory and Other "Management of the Funds," "The
Services Funds' Administrator," "The
Funds' Distributor" and "Transfer
Agent and Custodian"
17. Brokerage Allocation "Management of the Funds"
18. Capital Stock and Other "Additional Information"
Securities
19. Purchase, Redemption and "Share Purchases and Redemptions"
Pricing of Securities Being and "How Net Asset Value is
Offered Determined"
20. Tax Status "Dividends, Distributions and
Taxes"
21. Underwriters "The Funds' Distributor"
22. Calculation of Performance Data "How Performance is Determined"
23. Financial Statements "Financial Statements"
<PAGE>
- --------------------------------------------------------------------------------
PART A
COMBINED PROSPECTUS
JURIKA & VOYLES FUND GROUP
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Class J Shares
Class K Shares
- --------------------------------------------------------------------------------
<PAGE>
Prospectus
____________, 1996
Mini-Cap Fund
Value + Growth Fund
Balanced Fund
Class J Shares
[INSERT PASTE-UP HERE]
Fund Group
<PAGE>
JURIKA & VOYLES FUND GROUP
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Class J Shares
- --------------------------------------------------------------------------------
Jurika & Voyles Fund Group (the "Trust") is an open-end investment company
consisting of separate diversified series, three of which are offered through
this prospectus (the "Funds"). Each Fund has its own objective, assets and
liabilities. Jurika & Voyles, Inc. ("Jurika & Voyles" or the "Adviser") serves
as investment adviser to the Funds. This prospectus describes Class J Shares of
the Funds.
The Mini-Cap Fund seeks to maximize long-term capital appreciation. This Fund
invests primarily in the common stock of quality companies having small market
capitalizations that offer current value and significant future growth
potential.
The Value + Growth Fund seeks long-term capital appreciation. This Fund invests
primarily in the common stock of quality companies of all market capitalizations
that offer current value and significant future growth potential.
The Balanced Fund seeks to provide investors with a balance of long-term capital
appreciation and current income. This Fund invests primarily in a diversified
portfolio that combines stocks, bonds and cash-equivalent securities.
This prospectus sets forth the basic information that prospective investors
should know before investing in Class J shares of a Fund. Investors should read
this Prospectus carefully and retain it for future reference. A Statement of
Additional Information dated _________, 1996, as may be amended from time to
time, has been filed with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus. You may obtain this Statement of
Additional Information without charge by writing to the Funds at the address
noted below or by calling (800) JV-INVST.
Jurika & Voyles Fund Group
1999 Harrison Street, Suite 700
Oakland, California 94612
(800) JV-INVST
- --------------------------------------------------------------------------------
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK OR THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated _________,1996
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Summary of Expenses and Example.............................................. 1
Prospectus Summary........................................................... 2
Financial Highlights......................................................... 3
Investment Objectives and Policies........................................... 4
The Mini-Cap Fund......................................................... 4
The Value + Growth Fund................................................... 4
The Balanced Fund......................................................... 5
Additional Investment Considerations...................................... 6
Risk Considerations.......................................................... 6
Portfolio Securities, Investment Techniques and Risks........................ 8
Organization and Management..................................................12
Purchasing Class J Shares....................................................14
Exchange of Class J Shares...................................................16
Selling Class J Shares (Redemptions).........................................16
Shareholder Services.........................................................18
Class J Share Price Calculation..............................................18
Dividends, Distributions and Tax Status......................................19
Performance Information......................................................20
General Information..........................................................21
<PAGE>
SUMMARY OF EXPENSES
- --------------------------------------------------------------------------------
This table is designed to help you understand the costs of investing in Class J
shares of a Fund. These are the estimated expenses of each Fund for the current
fiscal year. Although not required to do so, the Adviser has agreed to reimburse
each Fund in the current fiscal year to the extent necessary so that its ratio
of total operating expenses to average net assets will not exceed the following
levels: Mini-Cap Fund - 1.50%*; Value + Growth Fund - 1.25%*; and Balanced Fund
- - 1.25%*.
<TABLE>
<CAPTION>
Mini-Cap Value + Growth Balanced
-------- -------------- --------
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Shareholder Transaction Expenses
(as a percentage of offering price)
Maximum sales charge on purchases None None None
Sales charge on reinvested dividends None None None
Redemption fee+ None None None
Exchange fee None None None
Total Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees 1.00% 0.85% 0.85%
12b-1 expenses None None None
Other expenses after expense reimbursement 0.50% 0.40% 0.40%
---- ---- ----
Total operating expenses after expense reimbursement 1.50%* 1.25% 1.25%*
</TABLE>
* For the fiscal period ended June 30, 1996, the ratios of total operating
expenses to average net assets for each Fund before the Adviser's voluntary
reimbursement were as follows: Mini-Cap Fund - ____% (_____% other expenses);
Value + Growth Fund - ___% (____% other expenses); and Balanced Fund ____%
(____% other expenses). In subsequent years, overall operating expenses for
Class J Shares of each Fund may not fall below the applicable percentage
limitation until the Adviser has been fully reimbursed for fees foregone or
expenses paid by it under the Management Agreement. Each Fund will reimburse the
Adviser in the three following years if operating expenses (before
reimbursement) are less than the applicable percentage limitation charged to the
Fund.
+ Shareholders who effect redemptions via wire transfer will be charged a $10.00
fee and may be required to pay a third-party service provider charge that will
be directly deducted from redemption proceeds.
Example
This table illustrates the net transaction and operating expenses that
would be incurred by an investment in Class J Shares of each Fund over different
time periods assuming a $1,000 investment, a 5% annual return, and redemption at
the end of one, three, five and ten years. The Funds charge no redemption fees.
The Example should not be considered a representation of past or future expenses
and actual expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
Mini-Cap Value + Growth Balanced
-------- -------------- --------
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
One year............................................................. $15 $13 $13
Three years.......................................................... $47 $40 $40
Five years........................................................... $82 $69 $69
Ten years............................................................ $179 $151 $151
</TABLE>
The Example shown above assumes that the Adviser will limit the annual operating
expenses of Class J Shares of each Fund to the totals shown. In addition,
federal regulations require the Example to assume a 5% annual return, but the
Funds' actual returns may be higher or lower. See "Organization and Management"
on page 12.
<PAGE>
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
Investment Objectives and Policies
Each Fund has its own investment objective. See "Investment Objectives and
Policies" for a full discussion of the objectives of the Mini-Cap Fund, Value +
Growth Fund, and Balanced Fund. The investment objective of each Fund is
fundamental and may not be changed without shareholder approval.
The Investment Adviser
Jurika and Voyles, founded in 1983, in Oakland, California, serves as the
investment adviser to the Trust and the Funds. The Adviser currently manages
over $3.6 billion of discretionary assets for various clients including
corporations, pension plans, 401(k) plans, profit sharing plans, trusts and
estates, foundations and charitable endowments, and high net worth individuals.
The Adviser has previously managed a registered investment company.
Management Fee
For its services, the Adviser receives a fee, accrued daily and paid
monthly, at the following annual percentages of average net assets: Mini-Cap
Fund - 1.00%; Value + Growth Fund - 0.85%; and Balanced Fund - 0.85%. These fees
are higher than those paid by most mutual funds.
Minimum Purchase
The minimum initial investment in each Fund is $250,000. Each Fund may waive
the minimum for certain retirement and other employee benefit plans; for the
Adviser's employees, clients and their affiliates; for advisers or financial
institutions offering investors a program of services; or for any other person
or organization deemed appropriate by the Trust.
Offering Price
Shares are offered at their net asset value without a sales charge and may
be redeemed at their net asset value on any business day. See "Purchasing
Shares" and "Selling Shares (Redemptions)" on pages 14-18.
Dividends and Distributions
The Mini-Cap Fund and the Value + Growth Fund intend to pay dividends and
make capital distributions annually. The Balanced Fund intends to pay dividends
quarterly and to make capital distributions annually.
Risk Considerations
Like all investments, an investment in each Fund involves certain risks. The
equity and fixed income securities held by the Funds and the value of the Funds'
shares will fluctuate with market and other economic conditions, so that
investors' shares, when redeemed, may be worth more or less than their original
cost. The Funds may invest in mortgage-backed securities (including CMOs and
REMICs), asset-backed securities, interest-only and principal-only securities,
foreign securities and junk bonds. See "Risk Considerations" on page 6 for a
further discussion of certain risks.
Organization
The Funds are organized as distinct series within a Delaware business trust
(the "Trust"), which is registered as an open-end diversified management
investment company. The Trust currently consists of four separate diversified
series, each of which has its own objective, assets, liabilities and net assets.
The Funds offer another class of shares to investors eligible to purchase
those shares. The other class of shares may pay different fees and expenses than
the class of shares offered in this prospectus, and those different fees and
expenses may affect performance. To obtain information concerning the other
class of shares not offered in this prospectus, call the Funds at (800)
JV-INVST.
Transfer Agent, Custodian
and Fund Accountant:
State Street Bank & Trust Company
Auditor:
McGladrey & Pullen, LLP
Distributor:
First Fund Distributors, Inc.
Legal Counsel:
Heller Ehrman White & McAuliffe
The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus and in the Statement of Additional Information.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information has been audited by McGladrey & Pullen, LLP,
independent certified public accountants whose unqualified reports covering the
fiscal periods ended June 30, 1995 and 1996 are incorporated by reference herein
and appear in the annual report to shareholders. This information should be read
in conjunction with the financial statements and accompanying notes thereto
which appear in the annual report. Further information about the Funds'
performance is included in the annual report which may be obtained without
charge by writing or calling the address or telephone number on the Prospectus
cover page.
<TABLE>
<CAPTION>
Mini-Cap Fund Value + Growth Fund Balanced Fund
07/01/95 - 9/30/94- 07/01/95 - 9/30/94- 07/01/95 - 10/01/94- 11/01/93- 11/01/92- 03/09/92-
-------- -------- -------- -------- -------- -------- -------- -------- ---------
06/30/96 06/30/95(4)06/30/96 06/30/95(4)06/30/96 06/30/95 09/30/94 10/31/93 10/31/92(1)
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $10.00 $12.41 $12.82 $10.84 $10.00
------- ------ ------ ------ ------ ------
Income from investment operations
Net investment income 0.01 0.05 0.24 0.16 0.16 0.11
Net realized & unrealized gain on investments 4.13 2.79 1.59 0.05 1.98 0.83
------- ------ ------ ------ ------ ------
Total from investment operations 4.14 2.84 1.83 0.21 2.14 0.94
------- ------ ------ ------ ------ ------
Less distributions
From net investment income (0.02) (0.02) (0.24) (0.18) (0.16) (0.10)
From net realized gains - - (0.04) (0.44) - -
------- ------ ------ ------ ------ ------
Total distributions (0.02) (0.02) (0.28) (0.62) (0.16) (0.10)
------- ------ ------ ------ ------ ------
Net asset value, end of period $14.12 $12.82 $13.96 $12.41 $12.82 $10.84
======= ====== ====== ====== ====== ======
Total return(3) 41.47% 28.43% 14.98% 3.66% 19.83% 14.67%
======= ====== ====== ====== ====== ======
Net assets at end of period (in 000's) $10,397 $12,989 $38,836 $34,659 $20,931 $6,008
======= ====== ====== ====== ====== ======
Ratio of expenses to average net assets(2) 1.50%* 1.35%* 1.33%* 1.63%* 1.47% 1.50%*
======= ====== ====== ====== ====== ======
Ratio of net investment income to average net
assets 0.04%* 1.18%* 2.51%* 1.77%* 1.51% 1.93%*
======= ====== ====== ====== ====== ======
Portfolio turnover rate 102.85% 31.64% 54.02% 60.90% 44.12% 20.00%
======= ====== ====== ===== ====== ======
</TABLE>
- -----------
* Annualized
(1) The Jurika & Voyles Balanced Fund commenced operations on March 9,
1992.
(2) Net of expense reimbursements. The annualized ratio of total operating
expenses to average net assets before expense reimbursements would have been
4.99%, 5.21% and 1.42% for the Mini-Cap Fund, the Value + Growth Fund and the
Balanced Fund, respectively, for the period ended June 30, 1995.
(3) Not annualized for periods less than one year.
(4) The Jurika & Voyles Mini-Cap Fund and Value + Growth Fund each
commenced operations on September 30, 1994.
Note: Information for fiscal periods of the Balanced Fund ending on September
30, 1994, October 31, 1993 and October 31, 1992 was audited by other independent
accountants whose report is not included herein.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The investment objective and policies of each Fund are described below. The
investment objective of each Fund is fundamental and may not be changed without
shareholder approval. In addition, each of the Funds may make use of certain
types of investments and investing techniques that are described under the
caption "Portfolio Securities, Investment Techniques and Risks" on page 8. The
value of the Funds' investments will fluctuate with market and other economic
conditions.
THE MINI-CAP FUND
The Fund seeks to maximize long-term capital appreciation. The Fund
invests primarily in the common stock of quality companies having small market
capitalizations that offer current value and significant future growth
potential.
The Fund will invest at least 65% of its total assets in the common stock of
companies having market capitalizations at the time of purchase of between $50
million and $500 million. The fund typically expects that at least 80% of its
equity holdings will fall within this capitalization range. The average and
median market capitalizations will fluctuate over time as a result of market
valuation levels and the availability of specific investment opportunities.
The Fund seeks value in quality companies selling at lower price to earnings
("P/E") multiples relative to their growth rates and lower P/E multiples than
the Standard & Poor's 500 Composite Price Index and/or Russell 2000 Small Stock
Index. Quality companies possess some or all of the following characteristics:
significant potential for future growth in earnings; a strong competitive
advantage; a clearly defined business focus; strong financial health; and
management ownership.
Jurika & Voyles places heavy emphasis on in-house research, which includes
personal contacts, site visits and meetings with company management.
The securities of smaller-sized companies may present greater opportunities for
capital appreciation, but may also involve greater risks. These securities have
the characteristics and risks described under the caption "Risk Considerations"
on page 6.
The Fund may continue to hold its investment in a company whose capitalization
subsequently grows above $500 million if the company continues to satisfy the
other investment policies of the Fund.
The Fund invests primarily in common stocks, but also may invest in other equity
securities including convertible preferred stocks, convertible debt securities
and warrants. A warrant represents a right to acquire other equity securities,
often for consideration and subject to certain conditions. In addition, the Fund
may invest up to 25% of its total assets in foreign securities such as U.S.
dollar-denominated securities of foreign issuers and American Depositary
Receipts ("ADRs"), but will limit its investments in any one foreign country to
5% of its total assets. As part of this, the Fund may invest up to 5% of its net
assets in securities denominated in foreign currencies. See "Risk
Considerations" on page 6.
Although the Fund does not anticipate maintaining a large non-equity position,
the Fund may invest up to 35% of its total assets in debt securities, including
up to 25% of its total assets in debt securities (and convertible debt
securities) rated below investment grade. Debt securities may include bonds,
notes, convertible bonds, mortgage-backed and asset-backed securities (including
CMOs and REMICs) and other types. See "Portfolio Securities, Investment
Techniques and Risks." See "Risk Considerations" for a discussion of the
characteristics of the debt securities.
For a description of cash-equivalent securities in which a Fund may invest, U.S.
Government securities, repurchase agreements, securities lending and other
investments and techniques a Fund may use, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
THE VALUE + GROWTH FUND
The Value + Growth Fund seeks long-term capital appreciation. The Fund
invests primarily in the common stock of quality companies of all market
capitalizations that offer current value total and significant future growth
potential.
The fund will invest at least 65% of its total assets in the common stock of
companies having market capitalizations at the time of purchase of $500 million
and over. The fund typically expects that at least 80% of its equity holdings
will fall within this capitalization range. The average and median market
capitalizations will fluctuate over time as a result of market valuation levels
and the availability of specific investment opportunities.
The Fund seeks value in quality companies selling at lower P/E multiples
relative to their growth rates and lower P/E multiples than the S&P 500. Quality
companies possess some or all of the following characteristics: significant
potential of future growth in earnings; a strong competitive advantage; a
clearly defined business focus; strong financial health; and management
ownership.
Jurika & Voyles places heavy emphasis on in-house research, which includes
personal contacts, site visits and meetings with company managements.
The Fund may hold equity securities of companies with smaller market
capitalizations. These securities have the characteristics and risks described
under the caption "Risk Considerations" on page 6.
The Fund invests primarily in common stocks, but also may invest in other equity
securities including convertible preferred stocks, convertible debt securities
and warrants. A warrant represents a right to acquire other equity securities,
often for consideration and subject to certain conditions. In addition, the Fund
may invest up to 25% of its total assets in foreign securities such as U.S.
dollar-denominated securities of foreign issuers and ADRs, but will limit its
investments in any one foreign country to 5% of its total assets. As part of
this, the Fund may invest up to 5% of its net assets in securities denominated
in foreign currencies. See "Portfolio Securities, Investment Techniques and
Risks." See "Risk Considerations" on page 6.
Although the Fund does not anticipate maintaining a large non-equity position,
the Fund may invest up to 35% of its total assets in debt securities, including
up to 25% of its total assets in debt securities (and convertible debt
securities) rated below investment grade. Debt securities may include bonds,
notes, convertible bonds, mortgage-backed and asset-backed securities (including
CMOs and REMICs) and other types. See "Risk Considerations" for a discussion of
the characteristics of the debt securities in which the Fund may invest.
For a description of cash-equivalent securities in which a Fund may invest, U.S.
Government securities, repurchase agreements, securities lending and other
investments and techniques a Fund may use, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
THE BALANCED FUND
The Balanced Fund's objective is to provide investors with a balance of
long-term capital appreciation and current income. The Fund seeks to achieve
this objective with less volatility and risk than that of the broad stock market
by investing primarily in a diversified portfolio that combines stocks, bonds
and cash-equivalent securities.
Equity securities normally will constitute from 40% to 70% of the Fund's total
assets. The Fund will invest at least 25% of its total assets in fixed-income
debt securities. Cash-equivalent securities normally will constitute from 0% to
35% of the Fund's total assets. The Adviser will shift the balance between
equity, debt and cash-equivalent securities based on economic conditions, the
current interest rate environment and the availability of specific investment
opportunities consistent with the Fund's objective.
The Fund's equity investments will emphasize equity securities of companies
having market capitalizations at the time of purchase of $500 million and over.
The fund typically expects that at least 80% of its equity holdings will fall
within this capitalization range. The average and median market capitalizations
will fluctuate over time as a result of market valuation levels and the
availability of specific investment opportunities.
The Fund seeks quality companies selling at lower P/E multiples relative to
their growth rates and P/E multiples than the S&P 500. Quality companies which
possess some or all of the following characteristics: significant potential for
future growth in earnings; a strong competitive advantage; a clearly defined
business focus; strong financial health; and management ownership.
Jurika & Voyles places heavy emphasis on in-house research, which includes
personal contacts, site visits, and meetings with company management.
The Fund may hold securities of companies with smaller market capitalizations.
These securities have the characteristics and risks described under the caption
"Risk Considerations" on page 6.
The Fund invests primarily in common stocks and senior debt securities, but also
may invest in convertible preferred stocks, convertible debt securities and
warrants. A warrant represents a right to acquire other equity securities, often
for consideration and subject to certain conditions. In addition, the Fund may
invest up to 25% of its total assets in foreign securities such as U.S.
dollar-denominated securities of foreign issuers and ADRs, but will limit its
investments in any one foreign country to 5% of its net assets. As part of this,
the Fund may invest up to 5% of its total assets in securities denominated in
foreign currencies. See "Risk Considerations" on page 6.
The Fund may invest up to 25% of its total assets in debt securities (and
convertible debt securities) rated below investment grade sometimes referred to
as "high-yield/high-risk" or "junk" bonds. Debt securities may include bonds,
notes, convertible bonds, mortgage-backed and asset-backed securities (including
CMOs and REMICs) and other types. See "Portfolio Securities, Investment
Techniques and Risks." See "Risk Considerations" for a discussion of the
characteristics of the debt securities in which the Fund may invest.
For a description of cash-equivalent securities in which a Fund may invest, U.S.
Government securities, repurchase agreements, securities lending and other
investments and techniques a Fund may use, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
ADDITIONAL INVESTMENT CONSIDERATIONS
The Adviser supports its selection of individual securities through
intensive research and pursues qualitative and quantitative disciplines to
determine when securities should be purchased and sold. In unusual
circumstances, economic, monetary and other factors may cause the Adviser to
assume a temporary, defensive position during which all or a substantial portion
of each Fund's assets may be invested in cash and short-term instruments. The
Funds also may lend securities and use repurchase agreements. For more
information on these investments, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
RISK CONSIDERATIONS
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Price Fluctuation. Investments in equity securities in general are subject to
market risks that may cause their prices to fluctuate over time. The value of
debt securities changes as interest rates fluctuate.
The value of securities, such as warrants or convertible debt, exercisable for
or convertible into equity securities is also affected by prevailing interest
rates, the credit quality of the issuer and any call provisions. Fluctuations in
the value of securities in which a Fund invests will cause the net asset value
of that Fund to fluctuate. An investment in a Fund therefore may be more
suitable for long-term investors who can bear the risk of short-term principal
fluctuations.
Small Companies. Smaller companies present greater opportunities for capital
appreciation, but may also involve greater risks than larger companies. Although
smaller companies can benefit from the development of new products and services,
they also may have limited product lines, markets or financial resources, and
their securities may trade less frequently and in more limited volume than the
securities of larger, more mature companies. As a result, the prices of the
securities of such smaller companies may fluctuate to a greater degree than the
prices of the securities of other issuers.
Debt Securities. Debt securities held by the Funds may be subject to several
types of investment risk. Market or interest rate risk relates to the change in
market value caused by fluctuations in prevailing interest rates, while credit
risk relates to the ability of the issuer to make timely interest payments and
to repay the principal upon maturity. Call or income risk relates to corporate
bonds during periods of falling interest rates, and involves the possibility
that securities with high interest rates will be prepaid or "called" by the
issuer prior to maturity. Such an event would require a Fund to invest the
resulting proceeds elsewhere, at generally lower interest rates, which could
cause fluctuations in a Fund's net income. A Fund also may be exposed to event
risk, which is the possibility that corporate debt securities held by a Fund may
suffer a substantial decline in credit quality and market value due to a
corporate restructuring.
The value of debt securities will normally increase in periods of falling
interest rates; conversely, the value of these instruments will normally decline
in periods of rising interest rates. Generally, the longer the remaining
maturity of a debt security, the greater the effect of interest rate changes on
its market value. In an effort to maximize income consistent with its investment
objective, the Balanced Fund may, at times, change the average maturity of its
investment portfolio. This can be done by investing a larger portion of assets
in relatively longer term obligations when periods of declining interest rates
are anticipated and, conversely, emphasizing shorter and intermediate term
maturities when a rise in interest rates is indicated. See "Portfolio
Securities, Investment Techniques and Risks."
Investment Grade Debt Securities. Investment grade debt securities include those
rated at least Baa by Moody's Investors Services, Inc. ("Moody's") or BBB by
Standard & Poor's Corporation ("S&P") or, if unrated, deemed to be of equivalent
quality as determined by the Adviser. Debt securities in this lowest tier of
investment grade are generally regarded as having adequate capacity to pay
interest and repay principal, but have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make interest and principal payments than is the case with higher
grade bonds.
Below Investment Grade Debt Securities. Below investment grade securities are
sometimes referred to as "high-yield/high-risk" or "junk" bonds. The Funds will
invest in debt securities rated at least Ba or B by Moody's or BB or B by S&P
or, if unrated, deemed to be of equivalent quality as determined by the Adviser.
These debt securities have greater speculative characteristics. Securities rated
B are regarded as having a great vulnerability to default although currently
having the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The ability to maintain other
terms of the contract over any long period of time may be small. Junk bonds are
more subject to default during periods of economic downturns or increases in
interest rates and their yields will fluctuate over time. It may be more
difficult to dispose of or to value junk bonds. Achievement of a Fund's
investment objective may also be more dependent on the Adviser's own credit
analysis to the extent a Fund's portfolio includes junk bonds.
Foreign Securities. Foreign securities include both U.S. dollar- and foreign
currency-denominated securities of foreign issuers. In most cases the Adviser
will invest in foreign securities that are listed and traded on a domestic
national securities exchange.
There may be less publicly available information about issuers of foreign
securities than is available about companies in the U.S. and foreign auditing
requirements may not be comparable to those in the U.S. Interest or dividends on
foreign securities may be subject to foreign withholding taxes. Investments in
foreign countries may be subject to the possibility of expropriation or
confiscatory taxation, exchange controls, political or social instability or
diplomatic developments that could adversely affect the value of those
investments. In addition, the value of the foreign securities may be adversely
affected by movements in the exchange rates between foreign currencies and the
U.S. dollar, as well as other political and economic developments.
PORTFOLIO SECURITIES, INVESTMENT
TECHNIQUES AND RISKS
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Short-Term Investments. As noted above, the Funds may invest in short-term cash
equivalent securities either for temporary, defensive purposes or, for the
Balanced Fund, as part of an overall investment strategy. These consist of
high-quality debt obligations eligible to be included in money market
portfolios, such as U.S. Government securities, certificates of deposit,
bankers' acceptances and commercial paper. High-quality means the obligations
have been rated at least A-1 by S&P or Prime-1 by Moody's, have an outstanding
issue of debt securities rated at least A by S&P or Moody's, or are of
comparable quality in the opinion of the Adviser.
Repurchase Agreements. Short-term investments also include repurchase
agreements, reverse repurchase agreements and dollar roll transactions. A
reverse repurchase agreement involves a sale by a Fund of a security that it
holds to a bank, broker-dealer or other financial institution concurrently with
an agreement by that Fund to repurchase the same security at an agreed-upon
price and date. A dollar roll transaction involves a sale by a Fund of a
security to a financial institution, such as a bank or broker-dealer,
concurrently with an agreement by that Fund to repurchase a similar security
from the institution at a later date at an agreed-upon price. In a dollar roll
transaction, the Fund would be compensated by the difference between the current
sales price and the forward price for the future purchase, as well as the
interest earned on the cash proceeds on the initial sale. For financial
reporting and tax purposes, the Funds propose to treat dollar rolls as two
separate transactions: one involving the purchase of a security and a separate
transaction involving the sale of a security. The Funds do not currently intend
to enter into dollar rolls that are accounted for as a financing. All repurchase
agreements, reverse repurchase agreements and dollar roll transactions will be
fully collateralized in a segregated account with liquid high-grade debt
obligations on a daily marked-to-market basis. Because those transactions depend
on the performance of the other party, the Adviser will carefully assess the
creditworthiness of any bank or broker-dealer involved in these transactions
under procedures adopted by the Board of Trustees.
Debt Securities. The Funds' investments in debt securities include all types of
domestic or U.S. dollar-denominated foreign debt securities in any proportion,
including bonds, notes, convertible bonds, mortgage-backed and asset-backed
securities, including collateralized mortgage obligations and real estate
mortgage investment conduits, U.S. Government and U.S. Government agency
securities, zero coupon bonds, and short-term obligations such as commercial
paper and notes, bank deposits and other financial obligations, and longer-term
repurchase agreements. Under normal circumstances, the Adviser intends, but is
not obligated, to construct the portfolio with a higher proportion of corporate
issues than government or government agency securities. Bonds, notes and other
corporate debt instruments include obligations of varying maturities within the
overall maturity range noted above over a cross section of industries.
In determining whether or not to invest in a particular debt security, the
Adviser considers factors such as the price, coupon and yield to maturity, the
credit quality of the issuer, the issuer's cash flow and related coverage
ratios, the property, if any, securing the obligation and the terms of the debt
instrument, including subordination, default, sinking fund and early redemption
provisions.
Subsequent to purchase, the rating of a debt issue may be reduced below the
minimum rating acceptable for purchase by a Fund. A subsequent downgrade does
not require the sale of the security, but the Adviser will consider such an
event in determining whether to continue to hold the obligation. The Statement
of Additional Information contains a description of Moody's and S&P ratings.
U.S. Government Securities. U.S. Government securities include direct
obligations issued by the United States Treasury, such as Treasury bills,
certificates of indebtedness, notes and bonds. U.S. Government agencies and
instrumentalities that issue or guarantee securities include, but are not
limited to, the Federal Home Loan Banks, the Federal National Mortgage
Association ("FNMA"), and the Student Loan Marketing Association. Except for
U.S. Treasury securities, obligations of U.S. Government agencies and
instrumentalities may or may not be supported by the full faith and credit of
the United States. Some, such as those of the Federal Home Loan Banks, are
backed by the right of the issuer to borrow from the Treasury, others by
discretionary authority of the U.S. Government to purchase the agencies'
obligations, while still others, such as the Student Loan Marketing Association,
are supported only by the credit of the instrumentality. In the case of
securities not backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment and may not be able to assert a claim against
the United States itself in the event the agency or instrumentality does not
meet its commitment.
Asset-backed Securities. Asset-backed securities represent undivided fractional
interests in a trust with assets consisting of a pool of domestic loans such as
motor vehicle retail installment sales contracts or credit card receivables.
Asset-backed securities generally are issued by governmental, government-related
and private organizations. Payments typically are made monthly, consisting of
both principal and interest payments. Asset-backed securities may be prepaid
prior to maturity and hence the actual life of the security cannot be accurately
predicted. During periods of falling interest rates, prepayments may accelerate,
which would require a Fund to reinvest the proceeds at a lower interest rate. In
addition, like other debt securities, the value of asset-backed securities will
normally decline in periods of rising interest rates. Although generally rated
AAA, it is possible that the securities could become illiquid or experience
losses if guarantors or insurers default. See "Risk Considerations - Debt
Securities."
Mortgage-Related Securities. Mortgage-related securities are interests in a pool
of mortgage loans. Most mortgage-related securities are pass-through securities,
which means that investors receive payments consisting of a pro rata share of
both principal and interest (less servicing and other fees), as well as
unscheduled prepayments, as mortgages in the underlying mortgage pool are paid
off by the borrowers. In the case of mortgage-related securities, including real
estate mortgage investment conduits and collateralized mortgage obligations,
prepayments of principal by mortgagors or mortgage foreclosures will affect the
average life of the mortgage-related securities remaining in a Fund's portfolio.
Mortgage prepayments are affected by the level of interest rates and by factors
including general economic conditions, the underlying location and age of the
mortgage and other social and demographic conditions. In periods of rising
interest rates, the rate of prepayments tends to decrease, thereby lengthening
the average life of a pool of mortgage-related securities. Conversely, in
periods of falling interest rates, the rate of prepayments tends to increase,
thereby shortening the average life of a pool of mortgages. Thus,
mortgage-related securities may have less potential for capital appreciation in
periods of falling interest rates than other fixed-income securities of
comparable duration, although these securities may have a comparable risk of
decline in market value in periods of rising interest rates. Unscheduled
prepayments, which are made at par, will result in a loss equal to any
unamortized premium. See also "Risk Considerations - Debt Securities."
Agency Mortgage-Related Securities. The dominant issuers or guarantors of
mortgage-related securities today are the Government National Mortgage
Association ("GNMA"), FNMA and the Federal Home Loan Mortgage Corporation
("FHLMC"). GNMA creates pass-through securities from pools of U.S. government
guaranteed or insured (Federal Housing Authority or Veterans Administration)
mortgages originated by mortgage bankers, commercial banks and savings
associations. FNMA and FHLMC issue pass-through securities from pools of
conventional and federally insured and/or guaranteed residential mortgages
obtained from various entities, including savings associations, savings banks,
commercial banks, credit unions and mortgage bankers.
The principal and interest on GNMA pass-through securities are guaranteed by
GNMA and backed by the full faith and credit of the U.S. Government. FNMA
guarantees full and timely payment of all interest and principal, while FHLMC
guarantees timely payment of interest and ultimate collection of principal of
its pass-through securities. Securities from FNMA and FHLMC are not backed by
the full faith and credit of the U.S. Government; however, they are generally
considered to present minimal credit risks. The yields provided by these
mortgage-related securities historically have exceeded the yields on other types
of U.S. Government securities with comparable maturities in large measure due to
the risks associated with prepayment.
Adjustable rate mortgage securities ("ARMs") are a form of pass-through security
representing interests in pools of mortgage loans, the interest rates of which
are adjusted from time to time. The adjustments usually are determined in
accordance with a predetermined interest rate index and may be subject to
certain limits. The adjustment feature of ARMs tends to make their values less
sensitive to interest rate changes.
Collateralized mortgage obligations ("CMOs") are debt obligations issued by
finance subsidiaries or trusts that are secured by mortgage-backed certificates,
including, in many cases, certificates issued by government-related guarantors,
such as GNMA, FNMA and FHLMC, together with certain funds and other collateral.
Although payment of the principal of and interest on the mortgage-backed
certificates pledged to secure the CMOs may be guaranteed by a U.S. Government
agency or instrumentality, such as FHLMC, the CMOs represent obligations solely
of the CMO issuer and are not insured or guaranteed by a U.S. Government agency
or instrumentality. The issuers of CMOs typically have no significant assets
other than those pledged as collateral for the obligations. The Funds will not
invest in any new types of collateralized mortgage obligations without prior
disclosure to the shareholders. Stripped mortgage securities, which are a form
of CMO, are usually structured with classes that receive different proportions
of the interest and principal payments on a pool of mortgages. Sometimes, one
class will receive all of the interest (the interest only or "IO" class) while
the other class will receive all of the principal (the principal only or "PO"
class). The yield to maturity on any IO class or PO class is extremely sensitive
not only to changes in prevailing interest rates but also to the rate of
principal payments and prepayments on the related underlying mortgages and, in
the most extreme cases, an IO class may become worthless.
The liquidity of IOs and POs that are issued by the U.S. Government or its
agencies and instrumentalities and backed by fixed-rate mortgage-related
securities will be determined by the Adviser under the direct supervision of the
Trust's Pricing Committee and approved by the Board of Trustees, and all other
IOs and POs will be deemed illiquid for purposes of the Funds' limitation on
illiquid securities.
Privately Issued Mortgage-Related Securities. The Funds may invest in
mortgage-related securities offered by private issuers, including pass-through
securities for pools of conventional residential mortgage loans; mortgage
pay-through obligations and mortgage-backed bonds, which are considered to be
obligations of the institution issuing the bonds and are collateralized by
mortgage loans; and bonds and CMOs that are collateralized by mortgage-related
securities issued by GNMA, FNMA, FHLMC or by pools of conventional mortgages.
Mortgage-related securities created by private issuers generally offer a higher
rate of interest (and greater credit and interest rate risk) than U.S.
Government and agency mortgage-related securities because they offer no direct
or indirect governmental guarantees of payments. However, many issuers or
servicers of mortgage-related securities guarantee, or provide insurance for,
timely payment of interest and principal on such securities.
The Funds may purchase some mortgage-related securities through private
placements without right to registration under the Securities Act of 1933, as
amended. See "Illiquid and Restricted Securities" on page 11.
When-Issued Securities. The Funds may purchase securities on a when-issued or
delayed-delivery basis, generally in connection with an underwriting or other
offering. When-issued and delayed delivery transactions occur when securities
are bought with payment for and delivery of the securities scheduled to take
place at a future time, beyond normal settlement dates, generally from 15 to 45
days after the transaction. Each Fund will segregate cash, U.S. Government
securities or other liquid, high-quality debt securities in an amount sufficient
to meet its payment obligations with respect to these transactions.
Investment Companies. Each Fund may invest up to 10% of its total assets in
shares of other investment companies. As a shareholder in another investment
company, a Fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees. In accordance with
applicable state regulatory provisions, the Adviser has agreed to waive its
management fee with respect to the portion of a Fund's assets invested in shares
of other open-end investment companies. In the case of a closed-end fund,
shareholders would bear the expenses of both a Fund and the fund in which that
Fund invests.
Illiquid and Restricted Securities. No Fund may invest more than 15% of its net
assets in illiquid securities, including (1) securities for which there is no
readily available market; (2) securities which may be subject to legal
restrictions (so-called "restricted securities") other than Rule 144A securities
noted below; (3) repurchase agreements having more than seven days to maturity
and (4) fixed time deposits subject to withdrawal penalties (other than those
with a term of less than seven days). Restricted securities do not include those
which meet the requirements of Rule 144A under the Securities Act of 1933, as
amended, and which the Trustees have determined to be liquid based on the
applicable trading markets and the availability of reliable price information.
These Rule 144A securities could have the effect of increasing a Fund's
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing these securities.
Fund Turnover. The Funds do not intend to engage in short-term trading. Under
normal market conditions, the portfolio turnover rate for each Fund should be
less than 100%. For the total fiscal year ended June 3, 1996, the portfolio
turnover for the Mini-Cap Fund was ____% (103% for the 9 months ended June 30,
1995); Value & Growth Fund, ___% (32% for the 9 months ended June 30, 1995); and
Balanced Fund, ___% (54% for the 9 months ended June 30, 1995).
Securities Lending. Each Fund may lend its securities in an amount not exceeding
30% of its assets to financial institutions such as banks and brokers if the
loan is collateralized in accordance with applicable regulations. Under the
present regulatory requirements which govern loans of fund securities, the loan
collateral must, on each business day, at least equal the value of the loaned
securities and must consist of cash, letters of credit of domestic banks or
domestic branches of foreign banks, or securities of the U.S. Government or its
agencies.
Borrowing. Each Fund may borrow money from banks in an aggregate amount not to
exceed one-third of the value of the Fund's total assets to meet temporary or
emergency purposes, and each Fund may pledge its assets in connection with such
borrowings. A Fund will not purchase any securities while any such borrowings
exceed 5% of that Fund's total assets (including reverse repurchase agreements
and dollar roll transactions that are accounted for as financings.).
The Fund aggregates reverse repurchase agreements and dollar roll transactions
that are accounted for as financings with its bank borrowings for purposes of
limiting borrowings to one-third of the value of the Fund's total assets. See
the Statement of Additional Information for further information.
Leverage. Leveraging the Funds through various forms of borrowing creates an
opportunity for increased net income but, at the same time, creates special risk
considerations. For example, leveraging may exaggerate changes in the net asset
value of a Fund's shares and in the yield on a Fund's portfolio. Although the
principal of such borrowings will be fixed, a Fund's assets may change in value
during the time the borrowing is outstanding. Leveraging will create interest
expenses for a Fund that can exceed the income from the assets retained. To the
extent the income derived from securities purchased with borrowed funds exceeds
the interest a Fund will have to pay, that Fund's net income will be greater
than if leveraging were not used. Conversely, if the income from the assets
retained with borrowed funds is not sufficient to cover the cost of leveraging,
the net income of a Fund will be less than if leveraging were not used, and
therefore the amount available for distribution to shareholders as dividends
will be reduced.
Pooled Fund. The initial shareholders of each Fund have approved a fundamental
policy authorizing each Fund, subject to authorization by the Board of Trustees,
and notwithstanding any other investment restriction, to invest all of its
assets in the securities of a single open-end investment company (a "pooled
fund"). If authorized by the Trustees, a Fund would seek to achieve its
investment objective by investing in a pooled fund which would invest in a
portfolio of securities that complies with the Fund's investment objective,
policies and restrictions. The Board currently does not intend to authorize
investing in pooled funds.
Other Investment Restrictions and Techniques. Each Fund has adopted certain
other investment restrictions and uses various other investment techniques,
which are described in the Statement of Additional Information. Like each Fund's
investment objective, certain of these restrictions are fundamental and may be
changed only by a majority vote of that Fund's outstanding shares.
ORGANIZATION AND MANAGEMENT
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Organization. The Trust is registered as an open-end diversified management
investment company and was organized as a Delaware business trust on July 11,
1994. The Trust currently consists of four separate diversified series. The
Trust's Board of Trustees decides on matters of general policy for all series
and reviews the activities of the Adviser, Distributor and Administrator. The
Trust's officers conduct and supervise the daily business operations of the
Trust and each series.
The Adviser. The Funds' Adviser, Jurika & Voyles, is a professional investment
management firm founded in 1983 by William K. Jurika and Glenn C. Voyles. Mr.
Jurika and Mr. Voyles control the majority of the Adviser's voting stock. As of
June 30, 1995, the Adviser had discretionary management authority with respect
to approximately $3 billion of assets for various clients including
corporations, pension plans, 401(k) plans, profit sharing plans, trusts and
estates, foundations and charitable endowments, and high net worth individuals.
The principal business address of the Adviser is 1999 Harrison Street, Suite
700, Oakland, California 94612.
Management Fee. Subject to the direction and control of the Trustees, the
Adviser formulates and implements an investment program for each Fund, including
determining which securities should be bought and sold. In addition to providing
certain administrative services, the Adviser also provides certain of the
officers of the Trust. For its services, the Adviser receives a fee, accrued
daily and paid monthly, at the following annual percentages of average net
assets: Mini-Cap Fund 1.00%; Value + Growth Fund 0.85%; and Balanced Fund 0.85%.
These fees are higher than those paid by most mutual funds.
Compensation of Other Parties. The Adviser may in its discretion and out of its
own funds compensate third parties for the sale and marketing of Class J shares
of the Funds. The Adviser also may use its own funds to sponsor seminars and
educational programs on the Funds for financial intermediaries and shareholders.
Managers of the Funds. The Portfolio Managers primarily responsible for the
day-to-day management of the Funds are William K. Jurika (for equity
investments), Glenn C. Voyles (for debt investments) and Irene Gorman Hoover
(for small and mini-cap investments). General management of the Funds' equity
and debt portfolio securities is conducted by Mr. Jurika and Mr. Voyles,
respectively. Ms. Hoover assists with the management of the Mini-Cap Fund by
identifying investment opportunities in small and mini-capitalization companies.
Mr. Jurika and Mr. Voyles have been associated with the Adviser since they
co-founded the firm in 1983. Prior to joining the Adviser in September 1991, Ms.
Hoover served as Vice President of Research at Pacific Securities, of San
Francisco, California.
Expense Limitation. Class J shares of each Fund are responsible for paying the
pro-rata share of Fund expenses attributable to such shares as well as class-
specific expenses. Fund expenses include legal and auditing fees, fees and
expenses of its custodian, accounting services and third-party shareholder
servicing agents, trustees' fees, the cost of communicating with shareholders
and registration fees, as well as its other operating expenses. Although not
required to do so, the Adviser has agreed to reimburse each Fund to the extent
necessary so that its ratio of operating expenses to average net assets will not
exceed the following levels with respect to Class J shares: Mini-Cap Fund -
1.50%; Value + Growth Fund - 1.25%; and Balanced Fund - 1.25%. The Adviser may
terminate these reductions at any time. Any reductions made by the Adviser in
its fees and any payments or reimbursement of expenses made by the Adviser which
are a Fund's obligation are subject to reimbursement within the following three
years by that Fund provided the Fund is able to effect such reimbursement and
remain in compliance with applicable expense limitations described in this
Prospectus and that may be imposed by regulatory authorities. The Trustees
believe that the Funds may be of a sufficient size to permit the reimbursement
of any such reductions or payments. A description of any such reimbursements and
the amounts paid will be set forth in financial statements that are included in
the Funds' annual and semi-annual reports to shareholders.
Fund Transactions and Brokerage. The Adviser considers a number of factors in
determining which brokers or dealers to use for a Fund's portfolio transactions.
These factors include, but are not limited to, the reasonableness of
commissions, quality of services and execution, and the availability of research
which the Adviser may lawfully and appropriately use in its investment
management and advisory capacities. Provided a Fund receives prompt execution at
competitive prices, the Adviser also may consider the sale of Fund shares by
brokers as a factor in selecting those broker-dealers for the Fund's portfolio
transactions. For more information, please refer to the Statement of Additional
Information.
The Administrator. Investment Company Administration Corporation (the
"Administrator"), pursuant to an administration agreement with the Funds,
supervises the overall administration of the Trust and the Funds including,
among other responsibilities, the preparation and filing of all documents
required for compliance by the Trust or the Funds with applicable laws and
regulations, arranging for the maintenance of books and records of the Trust and
the Funds, and supervision of other organizations that provide services to the
Trust and the Funds. Certain officers of the Trust and the Funds may be provided
by the Administrator. The Trust has agreed to pay the Administrator an annual
fee of 0.10% of the value of the total net assets of the Trust.
Multiple Classes. Under the Trust's charter documents, the Board of Trustees has
the power to classify or reclassify any unissued shares of a Fund into one or
more additional classes by setting or changing in any one or more respects their
relative rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption. The Board of Trustees of
a Fund may similarly classify or reclassify any class of its shares into one or
more series and, without shareholder approval, may increase the number of
authorized shares of the Fund. The Board of Trustees has designated two classes
of shares for each Fund
PURCHASING CLASS J SHARES
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General. The Funds' Class J shares are offered directly to the public at their
respective net asset values next determined after receipt of an order by the
Transfer Agent with complete information and meeting all the requirements
discussed in this Prospectus. There is no sales load or charge in connection
with the purchase of Class J shares. The Funds' Class J shares are offered for
sale by the Funds' underwriter, First Fund Distributors, Inc.
The minimum initial investment in each Fund is $250,000, including investments
for individual investors, individual retirement accounts ("IRAs"), SEPs, Keoghs,
401(k) and 401(a) plans and other retirement plans. Subsequent investments for
all Funds must be at least $1,000. Each Fund reserves the right to vary the
initial and additional investment minimums. In addition, the Adviser may waive
the minimum initial investment requirement for any investor. The Funds reserve
the right to reject any purchase order and to suspend the offering of Class J
shares of any Fund.
Purchase orders for Class J shares of a Fund that are received by the Transfer
Agent in proper form by 4:00 p.m., New York time, on any day that the NYSE is
open for trading, will be purchased at the Fund's next determined net asset
value. Orders for Fund shares received after 4:00 p.m. New York time will be
purchased at the next determined net asset value determined the business day
following receipt of the order.
At the discretion of the Funds, investors may be permitted to purchase a Fund's
Class J shares by transferring securities to the Fund that meet the Fund's
investment objectives and policies. Securities transferred to a Fund will be
valued in accordance with the same procedures used to determine the Fund's net
asset value at the time of the next determination of net asset value after such
acceptance. Class J shares issued by a Fund in exchange for securities will be
issued at net asset value determined as of the same time. All dividends,
interest, subscription, or other rights pertaining to such securities shall
become the property of the Fund and must be delivered to the Fund by the
investor upon receipt from the issuer. Investors who are permitted to transfer
such securities will be required to recognize a gain or loss on such transfer
and pay income tax thereon, if applicable, measured by the difference between
the fair market value of the securities and the investor's basis therein.
Securities will not be accepted in exchange for Class J shares of a Fund unless:
(1) such securities are, at the time of the exchange, eligible to be included in
the Fund's portfolio and current market quotations are readily available for
such securities; (2) the investor represents and warrants that all securities
offered to be exchanged are not subject to any restrictions upon their sale by
the Fund under the Securities Act of 1933; and (3) the value of any such
security (except U.S. Government securities), being exchanged together with
other securities of the same issuer owned by the Fund, will not exceed 5% of the
Fund's net assets immediately after the transaction.
Each Fund may accept telephone orders from brokers, financial institutions or
service organizations which have been previously approved by that Fund. It is
the responsibility of such brokers, financial institutions or service
organizations to forward promptly purchase orders and payments to the Funds.
Class J shares of a Fund may be purchased through brokers, financial
institutions, service organizations, banks, and bank trust departments, each of
which may charge the investor a transaction fee or other fee for its services at
the time of purchase. Such fees would not otherwise be charged if the shares
were purchased directly from the Funds.
Shares or classes of shares of each Fund may, at some point, be available
through certain brokerage services that do not charge transaction fees to
investors. However, the Adviser, from its own resources, may pay service fees
charged by these brokers for distribution and subaccounting services with
respect to Fund shares held by such brokers. Typically these fees are based on a
percentage of the annual average value of these accounts.
Shareholders who invest through sponsored retirement plans should contact their
program administrators responsible for transmitting all orders for the purchase,
redemption or exchange of program-sponsored shares. The availability of each
Fund and the procedures for investing depend on the provisions of the program
and whether the program sponsor has contracted with the Fund or its transfer
agent for special processing services, including sub-accounting.
Purchases by Mail. Class J shares of each Fund may be purchased initially by
completing the application accompanying this Prospectus and mailing it to the
Transfer Agent, together with a check payable to the respective Fund, Jurika &
Voyles Fund Group, P.O. Box 9291, Boston, MA 02266-9291.
Subsequent investments in an existing account in the Funds may be made at any
time by sending a check payable to the respective Fund to Jurika & Voyles Fund
Group, P.O. Box 9291, Boston, MA 02266-9291. Please enclose the stub of the
account statement and include the amount of the investment, the name of the
account for which the investment is to be made and the account number.
Purchases by Wire. Investors who wish to purchase Class J shares of any of the
Funds by federal funds wire should first call the Transfer Agent at (800)
JV-INVST to advise the Transfer Agent that an initial investment will be made by
wire and to receive an account number. Following notification to the Transfer
Agent, investors must request the originating bank to transmit immediately
available funds by wire to the Transfer Agent's affiliated bank as follows:
Jurika & Voyles Fund Group
State Street Bank & Trust Company
ABA No. 011000028
Acct. No. 99042665
FBO Jurika & Voyles [Name of Fund]
Shareholder Name ____________
Shareholder Fund Acct. No. ________
A completed application with signature(s) of the registrant(s) must be mailed to
the Transfer Agent immediately following to the initial wire. Investors should
be aware that banks generally impose a wire service fee. The Funds will not be
responsible for the consequence of delays, including delays in the banking or
Federal Reserve wire systems.
Subsequent Investments. Once an account has been opened, subsequent purchases
may be made by mail, bank wire, exchange, direct deposit or automatic investing.
The minimum for subsequent investments is $1,000 for all Funds.
When making additional investments by mail, simply return the remittance portion
of a previous confirmation with the investment in the envelope provided with
each confirmation statement. Checks should be made payable to the particular
Fund in which an investment is to be made and mailed to the Fund to Jurika &
Voyles Fund Group, P.O. Box 9291, Boston, MA 02266-9291. Orders to purchase
shares are effective on the day the Transfer Agent receives the check or money
order.
If an order, together with payment in proper form, is received by the Transfer
Agent or previously approved broker or financial institution by 4:00 p.m. New
York time, on any day that the NYSE is open for trading, Class J shares will be
purchased at each Fund's next determined net asset value. Orders for Class J
Fund shares received after 4:00 p.m. New York time will be purchased at the net
asset value determined on the business day following receipt of the order.
All cash purchases must be made in U.S. dollars, and, to avoid fees and delays,
checks must be drawn only on banks located in the U.S. A charge (minimum of $20)
will be imposed if any check used for the purchase of Class J shares is
returned. The Funds and the Transfer Agent each reserve the right to reject any
purchase order in whole or in part.
EXCHANGE OF CLASS J SHARES
- --------------------------------------------------------------------------------
Class J shares of any of the Funds may be exchanged for Class J shares of any of
the other Funds, provided such other Class J shares may be sold legally in the
state of the investor's residence. You also may exchange your Class J shares for
shares of the Seven Seas Money Market Fund, which is not affiliated with the
Trust or the Adviser, if such shares are offered in your state of residence.
Prior to making such exchange you should obtain and carefully read the
prospectus for the Seven Seas Money Market Fund. This exchange privilege does
not constitute an offering or recommendation on the part of the Trust or the
Adviser of an investment in the Seven Seas Money Market Fund.
Class J shares may be exchanged by: (1) written request; or (2) telephone, if a
special authorization form has been completed and is on file with the Transfer
Agent in advance. Requests for telephone exchanges must be received by the
Transfer Agent by the close of regular trading on the NYSE (currently 4:00 p.m.
New York time) on any day that the NYSE is open for regular trading. Exchanges
are subject to the minimum initial investment requirement.
The exchange privilege is a convenient way to respond to changes in investment
goals or in market conditions. This privilege is not designed for frequent
trading in response to short-term market fluctuations. The telephone exchange
privilege may be difficult to implement during times of drastic economic or
market changes. The purchase of Class J shares for any Fund through an exchange
transaction is accepted immediately. An exchange is treated as a redemption for
federal and state income tax purposes, which may result in taxable gain or loss,
and a new purchase, each at net asset value of the appropriate Fund. The Funds
and the Transfer Agent reserve the right to limit, amend, impose charges upon,
terminate or otherwise modify the exchange privilege on 60 days' prior written
notice to shareholders.
SELLING CLASS J SHARES (REDEMPTIONS)
- --------------------------------------------------------------------------------
Shareholders may redeem Class J shares of any Fund without charge on any
business day that the NYSE is open for business. Redemptions will be effective
at the net asset value per share next determined after the receipt by the
Transfer Agent, broker or financial intermediary of a redemption request meeting
the requirements described below. Each Fund normally sends redemption proceeds
on the next business day, but in any event redemption proceeds are sent within
seven calendar days of receipt of a redemption request in proper form. Payment
for redemption of recently purchased Class J shares will be delayed until the
Transfer Agent has been advised that the purchase check has been honored, up to
12 calendar days from the time of receipt by the Transfer Agent. Payment may
also be made by wire directly to any bank previously designated by the
shareholder on a shareholder account application. There is a $10 charge for
redemptions made by wire. Please note that the shareholder's bank may also
impose a fee for wire service. There may be fees for redemptions made through
brokers, financial institutions and service organizations.
The Funds will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of the Board of
Trustees, require a Fund to sell assets under disadvantageous conditions or to
the detriment of the remaining shareholders of the Fund.
The Funds may suspend the right of redemption or postpone the date of payment
for more than seven days during any period when (1) trading on the NYSE is
restricted or the NYSE is closed, other than customary weekend and holiday
closings; (2) the SEC has by order permitted such suspension; or (3) an
emergency, as defined by rules of the SEC, exists making disposal of portfolio
investments or determination of the value of the net assets of the Funds not
reasonably practicable.
Minimum Balances. Due to the relatively high cost of maintaining smaller
accounts, each Fund reserves the right to make involuntary redemptions of all
shares in any account (other than the account of a shareholder who is a
participant in a qualified plan) for their then-current net asset value if at
any time the total investment does not have a value of at least $10,000 because
of redemptions. The shareholder will be notified that the value of the account
is less than the required minimum and will be allowed at least 60 days to bring
the value of the account up to at least $10,000 before the redemption is
processed.
Redemption by Mail. Class J shares may be redeemed by submitting a written
request for redemption to Jurika & Voyles Fund Group, P.O. Box 9291, Boston, MA
02266-9291.
A written request must be in good order, which means that it must: (1) identify
the shareholder's account name; (2) state the number of shares or dollar amount
to be redeemed; and (3) be signed by each registered owner exactly as the shares
are registered.
Signature Guarantee. To prevent fraudulent redemptions, a signature guarantee
for the signature of each person in whose name the account is registered is
required on all written redemption requests over $50,000. A guarantee may be
obtained from any commercial bank, trust company, savings and loan association,
federal savings bank, broker-dealer, or member firm of a national securities
exchange or other eligible financial institution. Credit unions must be
authorized to issue signature guarantees. Broker-dealers guaranteeing signatures
must be a member of a clearing corporation or maintain net capital of at least
$100,000. Notary public endorsements will not be accepted as a substitute for a
signature guarantee. The Transfer Agent may require additional supporting
documents for redemptions made by corporations, executors, administrators,
trustees or guardians and retirement plans.
Redemption by Telephone. Shareholders who have so indicated on the application,
or have subsequently arranged in writing to do so, may redeem Class J shares by
instructing the Transfer Agent by telephone. Shareholders may redeem shares by
calling the Transfer Agent at (800) JV-INVST between the hours of 8:30 a.m. and
5:00 p.m. (Eastern time) on a day when the NYSE is open for trading. Redemptions
by telephone must be at least $1,000.
In order to arrange for redemption by wire or telephone after an account has
been opened, or to change the bank or account designated to receive redemption
proceeds, a written request must be sent to the Transfer Agent with a signature
guarantee at the address listed under "Redemption by Mail," above.
Special Factors Regarding Telephone Redemptions. Neither the Funds nor any of
their service contractors will be liable for any loss or expense in acting on
telephone instructions that are reasonably believed to be genuine. In attempting
to confirm that telephone instructions are genuine, the Funds will use
procedures that are considered reasonable, including requesting a shareholder to
correctly state the Fund account number, the name in which the account is
registered, the social security number, banking institution, bank account number
and the name in which the bank account is registered. To the extent that the
Funds fail to use reasonable procedures to verify the genuineness of telephone
instructions, they and/or their service contractors may be liable for any such
instructions that prove to be fraudulent or unauthorized.
The Funds reserve the right to refuse a wire or telephone redemption if it is
believed advisable to do so. Procedures for redeeming Class J shares by wire or
telephone may be modified or terminated at any time by any of the Funds after at
least 30 days' prior written notice to shareholders.
Class J shares of the Funds may be redeemed through certain brokers, financial
institutions or service organizations who may charge the investor a transaction
fee or other fee for their services at the time of redemption. Such fees would
not otherwise be charged if the shares were redeemed directly from the Funds.
Redemption by Automated Clearing House ("ACH"). A shareholder may elect to have
redemption proceeds, cash distributions or systematic cash withdrawal payments
transferred to a bank, savings and loan association or credit union that is an
on-line member of the ACH system. There are no fees associated with the use of
the ACH service.
ACH redemption requests must be received by the Funds' Transfer Agent before
4:00 p.m. New York time to receive that day's closing net asset value. ACH
redemptions will be sent by the Transfer Agent on the day following the
shareholder's request. The funds from the ACH redemption will be available to
the shareholder two days after the redemption has been processed.
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
The following special account options are available to individual shareholders
but not to participants in employer-sponsored retirement plans. There are no
charges for the programs noted below, and an investor may change or stop these
plans at any time by written notice to the Funds.
Systematic Withdrawal Plan. The Systematic Withdrawal Program is an option that
may be utilized by an investor who wishes to withdraw funds from an account on a
regular basis. To participate in this option, an investor must either own or
purchase Class J shares having a value of $250,000 or more. Automatic payments
by check will be mailed to the investor on either a monthly, quarterly,
semi-annual or annual basis in amounts of $1,000 or more. All withdrawals are
processed on the last business day of the month or, if such day is not a
business day, on the next business day and paid promptly thereafter. Please
complete the appropriate section on the New Account Application indicating the
amount of the distribution and the desired frequency.
Automatic Investing. This service allows a shareholder to make regular
investments once an account is established. A shareholder simply authorizes the
automatic withdrawal of funds from a bank account into the specified Fund. The
minimum initial and subsequent investment pursuant to this plan is $1,000 per
month. An initial Fund account must be opened first with the $250,000 minimum
prior to participating in this plan. Please complete the appropriate section on
the New Account Application indicating the amount of the automatic investment.
Retirement Plans. The Funds are available for investment by pension and profit
sharing plans, including IRAs, SEPs, Keoghs and Defined Contribution Plans
through which investors may purchase Class J Fund shares. The Funds, however, do
not sponsor Defined Contribution Plans. For details concerning any of the
retirement plans, please call the Funds at (800) JV-INVST.
CLASS J SHARE PRICE CALCULATION
- --------------------------------------------------------------------------------
Class J Share Price. Class J shares of a Fund are purchased at the net asset
value after an order in proper form is received by the Transfer Agent. An order
in proper form must include all correct and complete information, documents and
signatures required to process your purchase, as well as a check or bank wire
payment properly drawn and collectable. The net asset value per share is
determined as of the close of trading of the NYSE on each day the Exchange is
open for normal trading. Orders received before 4:00 p.m. (Eastern time) on a
day when the Exchange is open for normal trading will be processed as of the
close of trading on that day. Otherwise, processing will occur on the next
business day. The Distributor reserves the right to reject any purchase order.
Net Asset Value. The net asset value of each Fund is determined as of the close
of trading (currently 4:00 p.m., New York time) on each day that the NYSE is
open for trading. The net asset value per Class J share of each Fund is the
value of the Fund's assets attributable to Class J shares, less its liabilities
attributable to Class J shares, divided by the number of outstanding Class J
shares of the Fund. Each Fund values its investments on the basis of the market
value of its securities. Portfolio securities that are listed or admitted to
trading on a U.S. exchange are valued at the last sale price on the principal
exchange on which the security is traded or, if there has been no sale that day,
at the mean between the closing bid and asked prices. Securities admitted to
trading on the NASDAQ National Market System and securities traded only in the
U.S. over-the-counter market are valued at the last sale price or, if there has
been no sale that day, at the mean between the closing bid and asked prices.
Securities and other assets for which market prices are not readily available
are valued at fair value as determined in good faith by the Board of Trustees.
Debt securities with remaining maturities of 60 days or less are normally valued
at amortized cost, unless the Board of Trustees determines that amortized cost
does not represent fair value. Cash and receivables will be valued at their face
amounts. Interest will be recorded as accrued, and dividends will be recorded on
their ex-dividend date.
Share Certificates. Shares are credited to your account and certificates are not
issued. This eliminates the costly problem of lost or destroyed certificates.
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
- --------------------------------------------------------------------------------
Dividends and Distributions. The Mini-Cap and Value + Growth Funds pay dividends
annually. The Balanced Fund pays dividends quarterly. Each Fund makes
distributions of its net capital gains, if any, at least annually. The Board of
Trustees may determine to declare dividends and make distributions more
frequently.
Dividends and capital gain distributions are automatically reinvested in
additional Class J shares of the Fund at the net asset value per share on the
reinvestment date unless the shareholder has previously requested in writing to
the Transfer Agent that payment be made in cash.
Any dividend or distribution paid by a Fund reduces its net asset value per
share on the reinvestment date by the per share amount of the dividend or
distribution. Investors should note that a dividend or distribution paid on
shares purchased shortly before such dividend or distribution was declared will
be subject to income taxes as discussed below even though the dividend or
distribution represents, in substance, a partial return of capital to the
shareholder.
Tax Status. Each Fund intends to continue to qualify and elect to be treated as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986 (the "Code"). As long as the Fund continues to qualify, and as long as
the Fund distributes all of its income each year to the shareholders, the Fund
will not be subject to any federal income or excise taxes based on net income.
The distributions made by the Fund will be taxable to shareholders whether
received in shares (through dividend reinvestment) or in cash. Distributions
derived from net investment income, including net short-term capital gains, are
taxable to shareholders (other than tax-exempt shareholders who have not
borrowed to purchase or carry their shares) as ordinary income. A portion of
these distributions may qualify for the intercorporate dividends-received
deduction. Distributions designated as capital gains dividends are taxable as
long-term capital gains regardless of the length of time shares of the Fund have
been held. Although distributions are generally taxable when received, certain
distributions made in January are taxable as if received the prior December.
Shareholders will be informed annually of the amount and nature of the Fund's
distributions. A Fund may be required to impose backup withholding at a current
rate of 31% from income dividends and capital gain distributions and upon
payment of redemption proceeds if provisions of the Code relating to the
furnishing and certification of taxpayer identification numbers and reporting of
dividends are not complied with by a shareholder. Any such accounts without a
tax identification number may be liquidated and distributed to a shareholder,
net of withholding, after the 60th day of investment.
Additional information about taxes is set forth in the Statement of Additional
Information. Shareholders should consult their own advisers concerning federal,
state and local taxation of distributions from the Funds. Heller, Ehrman White &
McAuliffe, counsel to the Trust, has expressed no opinion in respect thereof.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
Total Return. From time to time, each Fund may publish its total return in
advertisements and communications to investors. Performance data may be quoted
separately for Class J shares as for other classes of shares of the Funds. Total
return information will include the Fund's average annual compounded rate of
return over the four most recent calendar quarters and over the period from the
Fund's inception of operations. Each Fund may also advertise aggregate and
average total return information over different periods of time. Each Fund's
total return will be based upon the value of the shares acquired through a
hypothetical $1,000 investment (at beginning of the specified period and the net
asset value of such shares at the end of the period, assuming reinvestment of
all the distributions) at the maximum public offering price. Total return
figures will reflect all recurring charges against Fund income. Investors should
note that the investment results of each Fund will fluctuate over time, and any
presentation of a Fund's total return for any prior period should not be
considered as a representation of what an investor's total return may be in any
future period.
Yield. The Balanced Fund may also refer in its advertising and promotional
materials to its yield. This Fund's yield shows the rate of income that it earns
on its investments, expressed as a percentage of the net asset value of Fund
shares. The Fund calculates yield by determining the interest income it earned
from its portfolio investments for a specified 30-period (net of expenses),
dividing such income by the average number of Fund shares outstanding, and
expressing the result as an annualized percentage based on the net asset value
at the end of that 30-day period. Yield accounting methods differ from the
methods used for other accounting purposes; accordingly, this Fund's yield may
not equal the dividend income actually paid to investors or the income reported
in this Fund's financial statements.
In addition to standardized return, performance advertisements and sales
literature may also include other total return performance data
("non-standardized return"). Non-standardized return may be quoted for the same
or different periods as those for which standardized return is quoted and may
consist of aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof.
All data included in performance advertisements will reflect past performance
and will not necessarily be indicative of future results. The Funds may also
advertise their relative rankings by mutual fund ranking services such as Lipper
Analytical Services ("Lipper") or Morningstar, Inc. ("Morningstar") Provided the
Funds are eligible for reporting by rating services such as Lipper or
Morningstar, such ranking services would include the Funds in the following
categories: Mini-Cap Fund - Small Company; Value + Growth Fund - Growth; and
Balanced Fund - Balanced. The investment return and principal value of an
investment in a Fund will fluctuate and an investor's proceeds upon redeeming
Class J shares may be more or less than the original cost of the Class J shares.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
Voting Rights. Shareholders are entitled to one vote for each dollar of net
asset value per Class J share of each series (and fractional votes for
fractional dollar amounts) and may vote in the election of Trustees and on other
matters submitted to meetings of shareholders. It is not contemplated that
regular annual meetings of shareholders will be held. Rule 18f-2 under the
Investment Company Act of 1940, as amended, provides that matters submitted to
shareholders be approved by a majority of the outstanding securities of each
series, unless it is clear that the interests of each series in the matter are
identical or the matter does not affect a series. However, the rule exempts the
selection of accountants and the election of Trustees from the separate voting
requirements.
Except as set forth herein, all classes of shares issued by a Fund shall have
identical voting, dividend, liquidation and other rights, preferences, and terms
and conditions. The only differences among the classes of shares relate solely
to the following: (a) each class may be subject to different class expenses; (b)
each class may bear a different identifying designation; (c) each class may have
exclusive voting rights with respect to matters solely affecting such class; (d)
each class may have different exchange privileges; and (e) each class may
provide for the automatic conversion of that class into another class.
Shareholder Meetings. The Trustees have undertaken to the SEC that they will
promptly call a meeting for the purpose of voting on the question of removal of
any Trustee when requested to do so by not less than 10% of the dollar-weighted
total votes of the respective Fund. In addition, subject to certain conditions,
shareholders of each Fund may apply to the Fund to communicate with other
shareholders to request a shareholders' meeting to vote on the removal of a
Trustee or Trustees.
Shareholder Reports and Inquires. Shareholders will receive annual financial
statements which are examined by the Funds' independent accounts, as well as
unaudited semi-annual financial statements. Unless otherwise requested, only one
copy of each shareholder report or other material sent to shareholders will be
sent to each household or address regardless of the number of shareholders or
accounts at that household or address. Shareholder inquiries should be addressed
to the Funds c/o Jurika & Voyles Fund Group, 1999 Harrison Street, Suite 700,
Oakland, California 94612, (800) JV-INVST.
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
Prospectus
____________, 1996
Mini-Cap Fund
Value + Growth Fund
Balanced Fund
Class K Shares
[INSERT PASTE-UP HERE]
Fund Group
<PAGE>
JURIKA & VOYLES FUND GROUP
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Class K Shares
- --------------------------------------------------------------------------------
Jurika & Voyles Fund Group (the "Trust") is an open-end investment company
consisting of separate diversified series, three of which are offered through
this prospectus (the "Funds"). Each Fund has its own objective, assets and
liabilities. Jurika & Voyles, Inc. ("Jurika & Voyles" or the "Adviser") serves
as investment adviser to the Funds. This prospectus describes Class K Shares of
the Funds.
The Mini-Cap Fund seeks to maximize long-term capital appreciation. This Fund
invests primarily in the common stock of quality companies having small market
capitalizations that offer current value and significant future growth
potential.
The Value + Growth Fund seeks long-term capital appreciation. This Fund invests
primarily in the common stock of quality companies of all market capitalizations
that offer current value and significant future growth potential.
The Balanced Fund seeks to provide investors with a balance of long-term capital
appreciation and current income. This Fund invests primarily in a diversified
portfolio that combines stocks, bonds and cash-equivalent securities.
This prospectus sets forth the basic information that prospective investors
should know before investing in Class K shares of a Fund. Investors should read
this Prospectus carefully and retain it for future reference. A Statement of
Additional Information dated _________, 1996, as may be amended from time to
time, has been filed with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus. You may obtain this Statement of
Additional Information without charge by writing to the Funds at the address
noted below or by calling (800) JV-INVST.
Jurika & Voyles Fund Group
1999 Harrison Street, Suite 700
Oakland, California 94612
(800) JV-INVST
- --------------------------------------------------------------------------------
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK OR THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated _________,1996
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Summary of Expenses and Example....................................... 1
Prospectus Summary.................................................... 2
Financial Highlights.................................................. 3
Investment Objectives and Policies.................................... 4
The Mini-Cap Fund.................................................. 4
The Value + Growth Fund............................................ 4
The Balanced Fund.................................................. 5
Additional Investment Considerations............................... 6
Risk Considerations................................................... 6
Portfolio Securities, Investment Techniques and Risks................. 8
Organization and Management........................................... 12
Purchasing Class K Shares............................................. 14
Exchange of Class K Shares............................................ 16
Selling Class K Shares (Redemptions).................................. 16
Shareholder Services.................................................. 18
Class K Share Price Calculation....................................... 18
Dividends, Distributions and Tax Status............................... 19
Performance Information............................................... 20
General Information................................................... 21
<PAGE>
SUMMARY OF EXPENSES
- --------------------------------------------------------------------------------
This table is designed to help you understand the costs of investing in Class K
shares of a Fund. These are the estimated expenses of Class K shares of each
Fund for the current fiscal year. Although not required to do so, the Adviser
has agreed to reimburse each Fund in the current fiscal year to the extent
necessary so that its ratio of total operating expenses to average net assets
will not exceed the following levels: Mini-Cap Fund - 1.75%*; Value + Growth
Fund - 1.50%*; and Balanced Fund
- - 1.50%*.
<TABLE>
<CAPTION>
Mini-Cap Value + Growth Balanced
-------- -------------- --------
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
Shareholder Transaction Expenses
(as a percentage of offering price)
Maximum sales charge on purchases None None None
Sales charge on reinvested dividends None None None
Redemption fee+ None None None
Exchange fee None None None
Total Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees 1.00% 0.85% 0.85%
12b-1 expenses** 0.25% 0.25% 0.25%
Other expenses after expense reimbursement 0.50% 0.40% 0.40%
---- ---- ----
Total operating expenses after expense reimbursement 1.75%* 1.50%* 1.50%*
</TABLE>
* Absent reduction and including the Rule 12b-1 fee for Class K shares, for the
fiscal period ended June 30, 1996, the ratios of total operating expenses to
average net assets for Class K shares of each Fund would have been as follows:
Mini-Cap Fund - ____% (_____% other expenses); Value + Growth Fund - ___% (____%
other expenses); and Balanced Fund ____% (____% other expenses). The foregoing
figures reflect the actual expenses of Class J shares of the Funds to which the
Rule 12b-1 fees applicable to Class K shares have been added. Class K shares
were not offered during the period indicated. In subsequent years, overall
operating expenses for each Fund may not fall below the applicable percentage
limitation until the Adviser has been fully reimbursed for fees foregone or
expenses paid by it under the Management Agreement. Each Fund will reimburse the
Adviser in the three following years if operating expenses (before
reimbursement) are less than the applicable percentage limitation charged to the
Fund.
** Because Rule 12b-1 distribution charges are accounted for on a class-level
basis (and not on an individual shareholder-level basis), individual long-term
investors in the Class K shares of a Fund may over time pay more than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc. ("NASD"), even though all
shareholders of that Class in the aggregate will not. This is recognized and
permitted by the NASD.
+ Shareholders who effect redemptions via wire transfer will be charged a $10.00
fee and may be required to pay a third-party service provider charge that will
be directly deducted from redemption proceeds.
Example
This table illustrates the net transaction and operating expenses that
would be incurred by an investment in Class K Shares of each Fund over different
time periods assuming a $1,000 investment, a 5% annual return, and redemption at
the end of one, three, five and ten years. The Funds charge no redemption fees.
The Example should not be considered a representation of past or future expenses
and actual expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
Mini-Cap Value + Growth Balanced
-------- -------------- --------
Fund Fund Fund
---- ---- ----
<S> <C> <C> <C>
One year.................................................................. $18 $15 $15
Three years............................................................... $55 $47 $47
Five years................................................................ $95 $82 $82
Ten years................................................................. $206 $179 $179
The Example shown above assumes that the Adviser will limit the annual operating
expenses of Class K shares of each Fund to the totals shown. In addition,
federal regulations require the Example to assume a 5% annual return, but the
Funds' actual returns may be higher or lower. See "Organization and Management"
on page 12.
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
Investment Objectives and Policies
Each Fund has its own investment objective. See "Investment Objectives and
Policies" for a full discussion of the objectives of the Mini-Cap Fund, Value +
Growth Fund, and Balanced Fund. The investment objective of each Fund is
fundamental and may not be changed without shareholder approval.
The Investment Adviser
Jurika and Voyles, founded in 1983, in Oakland, California, serves as the
investment adviser to the Trust and the Funds. The Adviser currently manages
over $3.6 billion of discretionary assets for various clients including
corporations, pension plans, 401(k) plans, profit sharing plans, trusts and
estates, foundations and charitable endowments, and high net worth individuals.
The Adviser has previously managed a registered investment company.
Management Fee
For its services, the Adviser receives a fee, accrued daily and paid
monthly, at the following annual percentages of average net assets: Mini-Cap
Fund - 1.00%; Value + Growth Fund - 0.85%; and Balanced Fund - 0.85%. These fees
are higher than those paid by most mutual funds.
Rule 12b-1 Fee
Class K shares of the Funds are subject to a Rule 12b-1 fee at the rate of
0.25% per year. Proceeds from the Rule 12b-1 fee are paid to the Adviser to
reimburse the Adviser for its distribution related expenses incurred in
connection with the distribution of Class K shares of the Funds.
Minimum Purchase
The minimum initial investment in each Fund is $250,000. Each Fund may waive
the minimum for certain retirement and other employee benefit plans; for the
Adviser's employees, clients and their affiliates; for advisers or financial
institutions offering investors a program of services; or for any other person
or organization deemed appropriate by the Trust.
Offering Price
Shares are offered at their net asset value without a sales charge and may
be redeemed at their net asset value on any business day. See "Purchasing
Shares" and "Selling Shares (Redemptions)" on pages 14-18.
Dividends and Distributions
The Mini-Cap Fund and the Value + Growth Fund intend to pay dividends and
make capital distributions annually. The Balanced Fund intends to pay dividends
quarterly and to make capital distributions annually.
Risk Considerations
Like all investments, an investment in each Fund involves certain risks. The
equity and fixed income securities held by the Funds and the value of the Funds'
shares will fluctuate with market and other economic conditions, so that
investors' shares, when redeemed, may be worth more or less than their original
cost. The Funds may invest in mortgage-backed securities (including CMOs and
REMICs), asset-backed securities, interest-only and principal-only securities,
foreign securities and junk bonds. See "Risk Considerations" on page 6 for a
further discussion of certain risks.
Organization
The Funds are organized as distinct series within a Delaware business trust
(the "Trust"), which is registered as an open-end diversified management
investment company. The Trust currently consists of four separate diversified
series, each of which has its own objective, assets, liabilities and net assets.
The Funds offer another class of shares to investors eligible to purchase
those shares. The other class of shares may pay different fees and expenses than
the class of shares offered in this prospectus, and those different fees and
expenses may affect performance. To obtain information concerning the other
class of shares not offered in this prospectus, call the Funds at (800)
JV-INVST.
Transfer Agent, Custodian
and Fund Accountant:
State Street Bank & Trust Company
Auditor:
McGladrey & Pullen, LLP
Distributor:
First Fund Distributors, Inc.
Legal Counsel:
Heller Ehrman White & McAuliffe
The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus and in the Statement of Additional Information.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information has been audited by McGladrey & Pullen, LLP,
independent certified public accountants whose unqualified reports covering the
fiscal periods ended June 30, 1995 and 1996 are incorporated by reference herein
and appear in the annual report to shareholders. This information should be read
in conjunction with the financial statements and accompanying notes thereto
which appear in the annual report. The financial information shown relates to
another class of shares of the Funds not subject to the Class K Rule 12b-1 fee
because the Class K shares were not offered during the periods shown. Further
information about the Funds' performance is included in the annual report which
may be obtained without charge by writing or calling the address or telephone
number on the Prospectus cover page.
<TABLE>
<CAPTION>
Value + Growth
Mini-Cap Fund Fund Balanced Fund
07/01/95- 9/30/94- 07/01/95- 9/30/94- 07/01/95- 10/01/94- 11/01/93- 11/01/92- 03/09/92-
--------- -------- -------- -------- -------- -------- --------- --------- --------
06/30/96 06/30/95(4)06/30/96 06/30/95(4)06/30/96 06/30/95 09/30/94 10/31/93 10/31/92(1)
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $12.41 $12.82 $10.84 $10.00
------- ------- ------- ------- ------- ------
Income from investment operations
Net investment income 0.01 0.05 0.24 0.16 0.16 0.11
Net realized & unrealized gain on 4.13 2.79 1.59 0.05 1.98 0.83
investments ------- ------- ------- ------- ------- ------
Total from investment operations 4.14 2.84 1.83 0.21 2.14 0.94
------- ------- ------- ------- ------- ------
Less distributions
From net investment income (0.02) (0.02) (0.24) (0.18) (0.16) (0.10)
From net realized gains - - (0.04) (0.44) - -
------- ------- ------- ------- ------- ------
Total distributions (0.02) (0.02) (0.28) (0.62) (0.16) (0.10)
Net asset value, end of period $14.12 $12.82 $13.96 $12.41 $12.82 $10.84
======= ======= ======= ======= ======= ======
Total return(3) 41.47% 28.43% 14.98% 3.66% 19.83% 14.67%
======= ======= ======= ======= ======= ======
Net assets at end of period (in 000's) $10,397 $12,989 $38,836 $34,659 $20,931 $6,008
======= ======= ======= ======= ======= ======
Ratio of expenses to average net assets(2) 1.50%* 1.35%* 1.33%* 1.63%* 1.47% 1.50%*
======= ======= ======= ======= ======= ======
Ratio of net investment income to average net
assets 0.04%* 1.18%* 2.51%* 1.77%* 1.51% 1.93%*
======= ======= ======= ======= ======= ======
Portfolio turnover rate 102.85% 31.64% 54.02% 60.90% 44.12% 20.00%
======= ======= ======= ======= ======= ======
</TABLE>
- -----------
* Annualized
(1) The Jurika & Voyles Balanced Fund commenced operations on March 9,
1992.
(2) Net of expense reimbursements. The annualized ratio of total operating
expenses to average net assets before expense reimbursements would have been
4.99%, 5.21% and 1.42% for the Mini-Cap Fund, the Value + Growth Fund and the
Balanced Fund, respectively, for the period ended June 30, 1995.
(3) Not annualized for periods less than one year.
(4) The Jurika & Voyles Mini-Cap Fund and Value + Growth Fund each
commenced operations on September 30, 1994.
Note: Information for fiscal periods of the Balanced Fund ending on September
30, 1994, October 31, 1993 and October 31, 1992 was audited by other independent
accountants whose report is not included herein.
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
The investment objective and policies of each Fund are described below. The
investment objective of each Fund is fundamental and may not be changed without
shareholder approval. In addition, each of the Funds may make use of certain
types of investments and investing techniques that are described under the
caption "Portfolio Securities, Investment Techniques and Risks" on page 8. The
value of the Funds' investments will fluctuate with market and other economic
conditions.
THE MINI-CAP FUND
The Fund seeks to maximize long-term capital appreciation. The Fund
invests primarily in the common stock of quality companies having small market
capitalizations that offer current value and significant future growth
potential.
The Fund will invest at least 65% of its total assets in the common stock of
companies having market capitalizations at the time of purchase of between $50
million and $500 million. The fund typically expects that at least 80% of its
equity holdings will fall within this capitalization range. The average and
median market capitalizations will fluctuate over time as a result of market
valuation levels and the availability of specific investment opportunities.
The Fund seeks value in quality companies selling at lower price to earnings
("P/E") multiples relative to their growth rates and lower P/E multiples than
the Standard & Poor's 500 Composite Price Index and/or Russell 2000 Small Stock
Index. Quality companies possess some or all of the following characteristics:
significant potential for future growth in earnings; a strong competitive
advantage; a clearly defined business focus; strong financial health; and
management ownership.
Jurika & Voyles places heavy emphasis on in-house research, which includes
personal contacts, site visits and meetings with company management.
The securities of smaller-sized companies may present greater opportunities for
capital appreciation, but may also involve greater risks. These securities have
the characteristics and risks described under the caption "Risk Considerations"
on page 6.
The Fund may continue to hold its investment in a company whose capitalization
subsequently grows above $500 million if the company continues to satisfy the
other investment policies of the Fund.
The Fund invests primarily in common stocks, but also may invest in other equity
securities including convertible preferred stocks, convertible debt securities
and warrants. A warrant represents a right to acquire other equity securities,
often for consideration and subject to certain conditions. In addition, the Fund
may invest up to 25% of its total assets in foreign securities such as U.S.
dollar-denominated securities of foreign issuers and American Depositary
Receipts ("ADRs"), but will limit its investments in any one foreign country to
5% of its total assets. As part of this, the Fund may invest up to 5% of its net
assets in securities denominated in foreign currencies. See "Risk
Considerations" on page 6.
Although the Fund does not anticipate maintaining a large non-equity position,
the Fund may invest up to 35% of its total assets in debt securities, including
up to 25% of its total assets in debt securities (and convertible debt
securities) rated below investment grade. Debt securities may include bonds,
notes, convertible bonds, mortgage-backed and asset-backed securities (including
CMOs and REMICs) and other types. See "Portfolio Securities, Investment
Techniques and Risks." See "Risk Considerations" for a discussion of the
characteristics of the debt securities.
For a description of cash-equivalent securities in which a Fund may invest, U.S.
Government securities, repurchase agreements, securities lending and other
investments and techniques a Fund may use, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
THE VALUE + GROWTH FUND
The Value + Growth Fund seeks long-term capital appreciation. The Fund
invests primarily in the common stock of quality companies of all market
capitalizations that offer current value total and significant future growth
potential.
The fund will invest at least 65% of its total assets in the common stock of
companies having market capitalizations at the time of purchase of $500 million
and over. The fund typically expects that at least 80% of its equity holdings
will fall within this capitalization range. The average and median market
capitalizations will fluctuate over time as a result of market valuation levels
and the availability of specific investment opportunities.
The Fund seeks value in quality companies selling at lower P/E multiples
relative to their growth rates and lower P/E multiples than the S&P 500. Quality
companies possess some or all of the following characteristics: significant
potential of future growth in earnings; a strong competitive advantage; a
clearly defined business focus; strong financial health; and management
ownership.
Jurika & Voyles places heavy emphasis on in-house research, which includes
personal contacts, site visits and meetings with company managements.
The Fund may hold equity securities of companies with smaller market
capitalizations. These securities have the characteristics and risks described
under the caption "Risk Considerations" on page 6.
The Fund invests primarily in common stocks, but also may invest in other equity
securities including convertible preferred stocks, convertible debt securities
and warrants. A warrant represents a right to acquire other equity securities,
often for consideration and subject to certain conditions. In addition, the Fund
may invest up to 25% of its total assets in foreign securities such as U.S.
dollar-denominated securities of foreign issuers and ADRs, but will limit its
investments in any one foreign country to 5% of its total assets. As part of
this, the Fund may invest up to 5% of its net assets in securities denominated
in foreign currencies. See "Portfolio Securities, Investment Techniques and
Risks." See "Risk Considerations" on page 6.
Although the Fund does not anticipate maintaining a large non-equity position,
the Fund may invest up to 35% of its total assets in debt securities, including
up to 25% of its total assets in debt securities (and convertible debt
securities) rated below investment grade. Debt securities may include bonds,
notes, convertible bonds, mortgage-backed and asset-backed securities (including
CMOs and REMICs) and other types. See "Risk Considerations" for a discussion of
the characteristics of the debt securities in which the Fund may invest.
For a description of cash-equivalent securities in which a Fund may invest, U.S.
Government securities, repurchase agreements, securities lending and other
investments and techniques a Fund may use, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
THE BALANCED FUND
The Balanced Fund's objective is to provide investors with a balance of
long-term capital appreciation and current income. The Fund seeks to achieve
this objective with less volatility and risk than that of the broad stock market
by investing primarily in a diversified portfolio that combines stocks, bonds
and cash-equivalent securities.
Equity securities normally will constitute from 40% to 70% of the Fund's total
assets. The Fund will invest at least 25% of its total assets in fixed-income
debt securities. Cash-equivalent securities normally will constitute from 0% to
35% of the Fund's total assets. The Adviser will shift the balance between
equity, debt and cash-equivalent securities based on economic conditions, the
current interest rate environment and the availability of specific investment
opportunities consistent with the Fund's objective.
The Fund's equity investments will emphasize equity securities of companies
having market capitalizations at the time of purchase of $500 million and over.
The fund typically expects that at least 80% of its equity holdings will fall
within this capitalization range. The average and median market capitalizations
will fluctuate over time as a result of market valuation levels and the
availability of specific investment opportunities.
The Fund seeks quality companies selling at lower P/E multiples relative to
their growth rates and P/E multiples than the S&P 500. Quality companies which
possess some or all of the following characteristics: significant potential for
future growth in earnings; a strong competitive advantage; a clearly defined
business focus; strong financial health; and management ownership.
Jurika & Voyles places heavy emphasis on in-house research, which includes
personal contacts, site visits, and meetings with company management.
The Fund may hold securities of companies with smaller market capitalizations.
These securities have the characteristics and risks described under the caption
"Risk Considerations" on page 6.
The Fund invests primarily in common stocks and senior debt securities, but also
may invest in convertible preferred stocks, convertible debt securities and
warrants. A warrant represents a right to acquire other equity securities, often
for consideration and subject to certain conditions. In addition, the Fund may
invest up to 25% of its total assets in foreign securities such as U.S.
dollar-denominated securities of foreign issuers and ADRs, but will limit its
investments in any one foreign country to 5% of its net assets. As part of this,
the Fund may invest up to 5% of its total assets in securities denominated in
foreign currencies. See "Risk Considerations" on page 6.
The Fund may invest up to 25% of its total assets in debt securities (and
convertible debt securities) rated below investment grade sometimes referred to
as "high-yield/high-risk" or "junk" bonds. Debt securities may include bonds,
notes, convertible bonds, mortgage-backed and asset-backed securities (including
CMOs and REMICs) and other types. See "Portfolio Securities, Investment
Techniques and Risks." See "Risk Considerations" for a discussion of the
characteristics of the debt securities in which the Fund may invest.
For a description of cash-equivalent securities in which a Fund may invest, U.S.
Government securities, repurchase agreements, securities lending and other
investments and techniques a Fund may use, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
ADDITIONAL INVESTMENT CONSIDERATIONS
The Adviser supports its selection of individual securities through
intensive research and pursues qualitative and quantitative disciplines to
determine when securities should be purchased and sold. In unusual
circumstances, economic, monetary and other factors may cause the Adviser to
assume a temporary, defensive position during which all or a substantial portion
of each Fund's assets may be invested in cash and short-term instruments. The
Funds also may lend securities and use repurchase agreements. For more
information on these investments, see "Portfolio Securities, Investment
Techniques and Risks" on page 8.
RISK CONSIDERATIONS
- --------------------------------------------------------------------------------
Price Fluctuation. Investments in equity securities in general are subject to
market risks that may cause their prices to fluctuate over time. The value of
debt securities changes as interest rates fluctuate. The value of securities,
such as warrants or convertible debt, exercisable for or convertible into equity
securities is also affected by prevailing interest rates, the credit quality of
the issuer and any call provisions. Fluctuations in the value of securities in
which a Fund invests will cause the net asset value of that Fund to fluctuate.
An investment in a Fund therefore may be more suitable for long-term investors
who can bear the risk of short-term principal fluctuations.
Small Companies. Smaller companies present greater opportunities for capital
appreciation, but may also involve greater risks than larger companies. Although
smaller companies can benefit from the development of new products and services,
they also may have limited product lines, markets or financial resources, and
their securities may trade less frequently and in more limited volume than the
securities of larger, more mature companies. As a result, the prices of the
securities of such smaller companies may fluctuate to a greater degree than the
prices of the securities of other issuers.
Debt Securities. Debt securities held by the Funds may be subject to several
types of investment risk. Market or interest rate risk relates to the change in
market value caused by fluctuations in prevailing interest rates, while credit
risk relates to the ability of the issuer to make timely interest payments and
to repay the principal upon maturity. Call or income risk relates to corporate
bonds during periods of falling interest rates, and involves the possibility
that securities with high interest rates will be prepaid or "called" by the
issuer prior to maturity. Such an event would require a Fund to invest the
resulting proceeds elsewhere, at generally lower interest rates, which could
cause fluctuations in a Fund's net income. A Fund also may be exposed to event
risk, which is the possibility that corporate debt securities held by a Fund may
suffer a substantial decline in credit quality and market value due to a
corporate restructuring.
The value of debt securities will normally increase in periods of falling
interest rates; conversely, the value of these instruments will normally decline
in periods of rising interest rates. Generally, the longer the remaining
maturity of a debt security, the greater the effect of interest rate changes on
its market value. In an effort to maximize income consistent with its investment
objective, the Balanced Fund may, at times, change the average maturity of its
investment portfolio. This can be done by investing a larger portion of assets
in relatively longer term obligations when periods of declining interest rates
are anticipated and, conversely, emphasizing shorter and intermediate term
maturities when a rise in interest rates is indicated. See "Portfolio
Securities, Investment Techniques and Risks."
Investment Grade Debt Securities. Investment grade debt securities include those
rated at least Baa by Moody's Investors Services, Inc. ("Moody's") or BBB by
Standard & Poor's Corporation ("S&P") or, if unrated, deemed to be of equivalent
quality as determined by the Adviser. Debt securities in this lowest tier of
investment grade are generally regarded as having adequate capacity to pay
interest and repay principal, but have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make interest and principal payments than is the case with higher
grade bonds.
Below Investment Grade Debt Securities. Below investment grade securities are
sometimes referred to as "high-yield/high-risk" or "junk" bonds. The Funds will
invest in debt securities rated at least Ba or B by Moody's or BB or B by S&P
or, if unrated, deemed to be of equivalent quality as determined by the Adviser.
These debt securities have greater speculative characteristics. Securities rated
B are regarded as having a great vulnerability to default although currently
having the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The ability to maintain other
terms of the contract over any long period of time may be small. Junk bonds are
more subject to default during periods of economic downturns or increases in
interest rates and their yields will fluctuate over time. It may be more
difficult to dispose of or to value junk bonds. Achievement of a Fund's
investment objective may also be more dependent on the Adviser's own credit
analysis to the extent a Fund's portfolio includes junk bonds.
Foreign Securities. Foreign securities include both U.S. dollar- and foreign
currency-denominated securities of foreign issuers. In most cases the Adviser
will invest in foreign securities that are listed and traded on a domestic
national securities exchange.
There may be less publicly available information about issuers of foreign
securities than is available about companies in the U.S. and foreign auditing
requirements may not be comparable to those in the U.S. Interest or dividends on
foreign securities may be subject to foreign withholding taxes. Investments in
foreign countries may be subject to the possibility of expropriation or
confiscatory taxation, exchange controls, political or social instability or
diplomatic developments that could adversely affect the value of those
investments. In addition, the value of the foreign securities may be adversely
affected by movements in the exchange rates between foreign currencies and the
U.S. dollar, as well as other political and economic developments.
PORTFOLIO SECURITIES, INVESTMENT
TECHNIQUES AND RISKS
- --------------------------------------------------------------------------------
Short-Term Investments. As noted above, the Funds may invest in short-term cash
equivalent securities either for temporary, defensive purposes or, for the
Balanced Fund, as part of an overall investment strategy. These consist of
high-quality debt obligations eligible to be included in money market
portfolios, such as U.S. Government securities, certificates of deposit,
bankers' acceptances and commercial paper. High-quality means the obligations
have been rated at least A-1 by S&P or Prime-1 by Moody's, have an outstanding
issue of debt securities rated at least A by S&P or Moody's, or are of
comparable quality in the opinion of the Adviser.
Repurchase Agreements. Short-term investments also include repurchase
agreements, reverse repurchase agreements and dollar roll transactions. A
reverse repurchase agreement involves a sale by a Fund of a security that it
holds to a bank, broker-dealer or other financial institution concurrently with
an agreement by that Fund to repurchase the same security at an agreed-upon
price and date. A dollar roll transaction involves a sale by a Fund of a
security to a financial institution, such as a bank or broker-dealer,
concurrently with an agreement by that Fund to repurchase a similar security
from the institution at a later date at an agreed-upon price. In a dollar roll
transaction, the Fund would be compensated by the difference between the current
sales price and the forward price for the future purchase, as well as the
interest earned on the cash proceeds on the initial sale. For financial
reporting and tax purposes, the Funds propose to treat dollar rolls as two
separate transactions: one involving the purchase of a security and a separate
transaction involving the sale of a security. The Funds do not currently intend
to enter into dollar rolls that are accounted for as a financing. All repurchase
agreements, reverse repurchase agreements and dollar roll transactions will be
fully collateralized in a segregated account with liquid high-grade debt
obligations on a daily marked-to-market basis. Because those transactions depend
on the performance of the other party, the Adviser will carefully assess the
creditworthiness of any bank or broker-dealer involved in these transactions
under procedures adopted by the Board of Trustees.
Debt Securities. The Funds' investments in debt securities include all types of
domestic or U.S. dollar-denominated foreign debt securities in any proportion,
including bonds, notes, convertible bonds, mortgage-backed and asset-backed
securities, including collateralized mortgage obligations and real estate
mortgage investment conduits, U.S. Government and U.S. Government agency
securities, zero coupon bonds, and short-term obligations such as commercial
paper and notes, bank deposits and other financial obligations, and longer-term
repurchase agreements. Under normal circumstances, the Adviser intends, but is
not obligated, to construct the portfolio with a higher proportion of corporate
issues than government or government agency securities. Bonds, notes and other
corporate debt instruments include obligations of varying maturities within the
overall maturity range noted above over a cross section of industries.
In determining whether or not to invest in a particular debt security, the
Adviser considers factors such as the price, coupon and yield to maturity, the
credit quality of the issuer, the issuer's cash flow and related coverage
ratios, the property, if any, securing the obligation and the terms of the debt
instrument, including subordination, default, sinking fund and early redemption
provisions.
Subsequent to purchase, the rating of a debt issue may be reduced below the
minimum rating acceptable for purchase by a Fund. A subsequent downgrade does
not require the sale of the security, but the Adviser will consider such an
event in determining whether to continue to hold the obligation. The Statement
of Additional Information contains a description of Moody's and S&P ratings.
U.S. Government Securities. U.S. Government securities include direct
obligations issued by the United States Treasury, such as Treasury bills,
certificates of indebtedness, notes and bonds. U.S. Government agencies and
instrumentalities that issue or guarantee securities include, but are not
limited to, the Federal Home Loan Banks, the Federal National Mortgage
Association ("FNMA"), and the Student Loan Marketing Association. Except for
U.S. Treasury securities, obligations of U.S. Government agencies and
instrumentalities may or may not be supported by the full faith and credit of
the United States. Some, such as those of the Federal Home Loan Banks, are
backed by the right of the issuer to borrow from the Treasury, others by
discretionary authority of the U.S. Government to purchase the agencies'
obligations, while still others, such as the Student Loan Marketing Association,
are supported only by the credit of the instrumentality. In the case of
securities not backed by the full faith and credit of the United States, the
investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment and may not be able to assert a claim against
the United States itself in the event the agency or instrumentality does not
meet its commitment.
Asset-backed Securities. Asset-backed securities represent undivided fractional
interests in a trust with assets consisting of a pool of domestic loans such as
motor vehicle retail installment sales contracts or credit card receivables.
Asset-backed securities generally are issued by governmental, government-related
and private organizations. Payments typically are made monthly, consisting of
both principal and interest payments. Asset-backed securities may be prepaid
prior to maturity and hence the actual life of the security cannot be accurately
predicted. During periods of falling interest rates, prepayments may accelerate,
which would require a Fund to reinvest the proceeds at a lower interest rate. In
addition, like other debt securities, the value of asset-backed securities will
normally decline in periods of rising interest rates. Although generally rated
AAA, it is possible that the securities could become illiquid or experience
losses if guarantors or insurers default. See "Risk Considerations - Debt
Securities."
Mortgage-Related Securities. Mortgage-related securities are interests in a pool
of mortgage loans. Most mortgage-related securities are pass-through securities,
which means that investors receive payments consisting of a pro rata share of
both principal and interest (less servicing and other fees), as well as
unscheduled prepayments, as mortgages in the underlying mortgage pool are paid
off by the borrowers. In the case of mortgage-related securities, including real
estate mortgage investment conduits and collateralized mortgage obligations,
prepayments of principal by mortgagors or mortgage foreclosures will affect the
average life of the mortgage-related securities remaining in a Fund's portfolio.
Mortgage prepayments are affected by the level of interest rates and by factors
including general economic conditions, the underlying location and age of the
mortgage and other social and demographic conditions. In periods of rising
interest rates, the rate of prepayments tends to decrease, thereby lengthening
the average life of a pool of mortgage-related securities. Conversely, in
periods of falling interest rates, the rate of prepayments tends to increase,
thereby shortening the average life of a pool of mortgages. Thus,
mortgage-related securities may have less potential for capital appreciation in
periods of falling interest rates than other fixed-income securities of
comparable duration, although these securities may have a comparable risk of
decline in market value in periods of rising interest rates. Unscheduled
prepayments, which are made at par, will result in a loss equal to any
unamortized premium. See also "Risk Considerations - Debt Securities."
Agency Mortgage-Related Securities. The dominant issuers or guarantors of
mortgage-related securities today are the Government National Mortgage
Association ("GNMA"), FNMA and the Federal Home Loan Mortgage Corporation
("FHLMC"). GNMA creates pass-through securities from pools of U.S. government
guaranteed or insured (Federal Housing Authority or Veterans Administration)
mortgages originated by mortgage bankers, commercial banks and savings
associations. FNMA and FHLMC issue pass-through securities from pools of
conventional and federally insured and/or guaranteed residential mortgages
obtained from various entities, including savings associations, savings banks,
commercial banks, credit unions and mortgage bankers.
The principal and interest on GNMA pass-through securities are guaranteed by
GNMA and backed by the full faith and credit of the U.S. Government. FNMA
guarantees full and timely payment of all interest and principal, while FHLMC
guarantees timely payment of interest and ultimate collection of principal of
its pass-through securities. Securities from FNMA and FHLMC are not backed by
the full faith and credit of the U.S. Government; however, they are generally
considered to present minimal credit risks. The yields provided by these
mortgage-related securities historically have exceeded the yields on other types
of U.S. Government securities with comparable maturities in large measure due to
the risks associated with prepayment.
Adjustable rate mortgage securities ("ARMs") are a form of pass-through security
representing interests in pools of mortgage loans, the interest rates of which
are adjusted from time to time. The adjustments usually are determined in
accordance with a predetermined interest rate index and may be subject to
certain limits. The adjustment feature of ARMs tends to make their values less
sensitive to interest rate changes.
Collateralized mortgage obligations ("CMOs") are debt obligations issued by
finance subsidiaries or trusts that are secured by mortgage-backed certificates,
including, in many cases, certificates issued by government-related guarantors,
such as GNMA, FNMA and FHLMC, together with certain funds and other collateral.
Although payment of the principal of and interest on the mortgage-backed
certificates pledged to secure the CMOs may be guaranteed by a U.S. Government
agency or instrumentality, such as FHLMC, the CMOs represent obligations solely
of the CMO issuer and are not insured or guaranteed by a U.S. Government agency
or instrumentality. The issuers of CMOs typically have no significant assets
other than those pledged as collateral for the obligations. The Funds will not
invest in any new types of collateralized mortgage obligations without prior
disclosure to the shareholders. Stripped mortgage securities, which are a form
of CMO, are usually structured with classes that receive different proportions
of the interest and principal payments on a pool of mortgages. Sometimes, one
class will receive all of the interest (the interest only or "IO" class) while
the other class will receive all of the principal (the principal only or "PO"
class). The yield to maturity on any IO class or PO class is extremely sensitive
not only to changes in prevailing interest rates but also to the rate of
principal payments and prepayments on the related underlying mortgages and, in
the most extreme cases, an IO class may become worthless.
The liquidity of IOs and POs that are issued by the U.S. Government or its
agencies and instrumentalities and backed by fixed-rate mortgage-related
securities will be determined by the Adviser under the direct supervision of the
Trust's Pricing Committee and approved by the Board of Trustees, and all other
IOs and POs will be deemed illiquid for purposes of the Funds' limitation on
illiquid securities.
Privately Issued Mortgage-Related Securities. The Funds may invest in
mortgage-related securities offered by private issuers, including pass-through
securities for pools of conventional residential mortgage loans; mortgage
pay-through obligations and mortgage-backed bonds, which are considered to be
obligations of the institution issuing the bonds and are collateralized by
mortgage loans; and bonds and CMOs that are collateralized by mortgage-related
securities issued by GNMA, FNMA, FHLMC or by pools of conventional mortgages.
Mortgage-related securities created by private issuers generally offer a higher
rate of interest (and greater credit and interest rate risk) than U.S.
Government and agency mortgage-related securities because they offer no direct
or indirect governmental guarantees of payments. However, many issuers or
servicers of mortgage-related securities guarantee, or provide insurance for,
timely payment of interest and principal on such securities.
The Funds may purchase some mortgage-related securities through private
placements without right to registration under the Securities Act of 1933, as
amended. See "Illiquid and Restricted Securities" on page 11.
When-Issued Securities. The Funds may purchase securities on a when-issued or
delayed-delivery basis, generally in connection with an underwriting or other
offering. When-issued and delayed delivery transactions occur when securities
are bought with payment for and delivery of the securities scheduled to take
place at a future time, beyond normal settlement dates, generally from 15 to 45
days after the transaction. Each Fund will segregate cash, U.S. Government
securities or other liquid, high-quality debt securities in an amount sufficient
to meet its payment obligations with respect to these transactions.
Investment Companies. Each Fund may invest up to 10% of its total assets in
shares of other investment companies. As a shareholder in another investment
company, a Fund would bear its ratable share of that investment company's
expenses, including its advisory and administration fees. In accordance with
applicable state regulatory provisions, the Adviser has agreed to waive its
management fee with respect to the portion of a Fund's assets invested in shares
of other open-end investment companies. In the case of a closed-end fund,
shareholders would bear the expenses of both a Fund and the fund in which that
Fund invests.
Illiquid and Restricted Securities. No Fund may invest more than 15% of its net
assets in illiquid securities, including (1) securities for which there is no
readily available market; (2) securities which may be subject to legal
restrictions (so-called "restricted securities") other than Rule 144A securities
noted below; (3) repurchase agreements having more than seven days to maturity
and (4) fixed time deposits subject to withdrawal penalties (other than those
with a term of less than seven days). Restricted securities do not include those
which meet the requirements of Rule 144A under the Securities Act of 1933, as
amended, and which the Trustees have determined to be liquid based on the
applicable trading markets and the availability of reliable price information.
These Rule 144A securities could have the effect of increasing a Fund's
illiquidity to the extent that qualified institutional buyers become, for a
time, uninterested in purchasing these securities.
Fund Turnover. The Funds do not intend to engage in short-term trading. Under
normal market conditions, the portfolio turnover rate for each Fund should be
less than 100%. For the fiscal year ended June 30, 1996, the portfolio turnover
for the Mini-Cap fund was ____% (103% for the 9 months ended June 30, 1995);
Value + Growth, ____% (32% for the 9 months ended June 30, 1995); Balanced Fund,
___% (54% for the 9 months ended June 30, 1995).
Securities Lending. Each Fund may lend its securities in an amount not exceeding
30% of its assets to financial institutions such as banks and brokers if the
loan is collateralized in accordance with applicable regulations. Under the
present regulatory requirements which govern loans of fund securities, the loan
collateral must, on each business day, at least equal the value of the loaned
securities and must consist of cash, letters of credit of domestic banks or
domestic branches of foreign banks, or securities of the U.S. Government or its
agencies.
Borrowing. Each Fund may borrow money from banks in an aggregate amount not to
exceed one-third of the value of the Fund's total assets to meet temporary or
emergency purposes, and each Fund may pledge its assets in connection with such
borrowings. A Fund will not purchase any securities while any such borrowings
exceed 5% of that Fund's total assets (including reverse repurchase agreements
and dollar roll transactions that are accounted for as financings.).
The Fund aggregates reverse repurchase agreements and dollar roll transactions
that are accounted for as financings with its bank borrowings for purposes of
limiting borrowings to one-third of the value of the Fund's total assets. See
the Statement of Additional Information for further information.
Leverage. Leveraging the Funds through various forms of borrowing creates an
opportunity for increased net income but, at the same time, creates special risk
considerations. For example, leveraging may exaggerate changes in the net asset
value of a Fund's shares and in the yield on a Fund's portfolio. Although the
principal of such borrowings will be fixed, a Fund's assets may change in value
during the time the borrowing is outstanding. Leveraging will create interest
expenses for a Fund that can exceed the income from the assets retained. To the
extent the income derived from securities purchased with borrowed funds exceeds
the interest a Fund will have to pay, that Fund's net income will be greater
than if leveraging were not used. Conversely, if the income from the assets
retained with borrowed funds is not sufficient to cover the cost of leveraging,
the net income of a Fund will be less than if leveraging were not used, and
therefore the amount available for distribution to shareholders as dividends
will be reduced.
Pooled Fund. The initial shareholders of each Fund have approved a fundamental
policy authorizing each Fund, subject to authorization by the Board of Trustees,
and notwithstanding any other investment restriction, to invest all of its
assets in the securities of a single open-end investment company (a "pooled
fund"). If authorized by the Trustees, a Fund would seek to achieve its
investment objective by investing in a pooled fund which would invest in a
portfolio of securities that complies with the Fund's investment objective,
policies and restrictions. The Board currently does not intend to authorize
investing in pooled funds.
Other Investment Restrictions and Techniques. Each Fund has adopted certain
other investment restrictions and uses various other investment techniques,
which are described in the Statement of Additional Information. Like each Fund's
investment objective, certain of these restrictions are fundamental and may be
changed only by a majority vote of that Fund's outstanding shares.
ORGANIZATION AND MANAGEMENT
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Organization. The Trust is registered as an open-end diversified management
investment company and was organized as a Delaware business trust on July 11,
1994. The Trust currently consists of four separate diversified series. The
Trust's Board of Trustees decides on matters of general policy for all series
and reviews the activities of the Adviser, Distributor and Administrator. The
Trust's officers conduct and supervise the daily business operations of the
Trust and each series.
The Adviser. The Funds' Adviser, Jurika & Voyles, is a professional investment
management firm founded in 1983 by William K. Jurika and Glenn C. Voyles. Mr.
Jurika and Mr. Voyles control the majority of the Adviser's voting stock. As of
June 30, 1995, the Adviser had discretionary management authority with respect
to approximately $3 billion of assets for various clients including
corporations, pension plans, 401(k) plans, profit sharing plans, trusts and
estates, foundations and charitable endowments, and high net worth individuals.
The principal business address of the Adviser is 1999 Harrison Street, Suite
700, Oakland, California 94612.
Management Fee. Subject to the direction and control of the Trustees, the
Adviser formulates and implements an investment program for each Fund, including
determining which securities should be bought and sold. In addition to providing
certain administrative services, the Adviser also provides certain of the
officers of the Trust. For its services, the Adviser receives a fee, accrued
daily and paid monthly, at the following annual percentages of average net
assets: Mini-Cap Fund 1.00%; Value + Growth Fund 0.85%; and Balanced Fund 0.85%.
These fees are higher than those paid by most mutual funds.
Rule 12b-1 Fee. Rule 12b-1, adopted by the Securities and Exchange Commission
(the "SEC") under the Investment Company Act of 1940, as amended, permits an
investment company directly or indirectly to pay expenses associated with the
distribution of its shares ("distribution expenses") in accordance with a plan
adopted by the investment company's Board of Trustees and approved by its
shareholders. Pursuant to that Rule, the Trust's Board of Trustees and the
initial shareholder of the Class K shares of each Fund have approved, and each
Fund has entered into, a Share Marketing Plan (the "Plan") with the Adviser, as
the distribution coordinator, for the Class K shares. Under the Plan, each Fund
will pay distribution fees to the Adviser at an annual rate of 0.25% of the
Fund's aggregate average daily net assets attributable to its Class K shares, to
reimburse the Adviser for its distribution costs with respect to that Class.
The fee paid under the Plan may be used to pay for any expenses primarily
intended to result in the sale of Class K shares ("distribution services"),
including, but not limited to: (a) costs of payments, including incentive
compensation, made to agents for and consultants to the Adviser, any affiliate
of the Adviser or the Trust, including pension administration firms that provide
distribution and shareholder related services and broker-dealers that engage in
the distribution of Class K shares; (b) payments made to, and expenses of,
persons who provide support services in connection with the distribution of
Class K shares and servicing of Class K shareholders, including, but not limited
to, personnel of the Adviser, office space and equipment, telephone facilities,
answering routine inquiries regarding Class K shares, processing shareholder
transactions and providing any other shareholder services not otherwise provided
by the Trust's transfer agency or other servicing arrangements; (c) all payments
made pursuant to the Distribution Agreement; (d) costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (e) costs of printing and
distributing prospectuses, statements of additional information and reports of
the Funds and/or the Trust to prospective shareholders of Class K shares; (f)
costs involved in preparing, printing and distributing sales literature
pertaining to Class K shares; and (g) costs involved in obtaining whatever
information, analyses and reports with respect to marketing and promotional
activities that the Trust may, from time to time, deem advisable. Such expenses
shall be deemed incurred whether paid directly by the Adviser as distribution
coordinator or by a third party to the extent reimbursed therefor by the
Adviser.
In adopting the Plan, the Board of Trustees determined that there was a
reasonable likelihood that the Plan would benefit the Funds and the shareholders
of Class K shares. Information with respect to distribution revenues and
expenses is presented to the Board of Trustees quarterly for their consideration
in connection with their deliberations as to the continuance of the Plan. In
their review of the Plan, the Board of Trustees is asked to take into
consideration expenses incurred in connection with the separate distribution of
the Class K shares.
The Class K shares are not obligated under the Plan to pay any distribution
expenses in excess of the distribution fee. Thus, if the Plan was terminated or
otherwise not continued, no amounts (other than current amounts accrued but not
yet paid) would be owed by the Class to the Adviser.
The distribution fee attributable to the Class K shares is designed to permit an
investor to purchase Class K shares through financial planners, retirement and
pension plan administrators, broker-dealers and other financial intermediaries
without the assessment of a front-end sales charge and at the same time to
permit the Adviser to compensate those persons on an ongoing basis in connection
with the sale of the Class K shares.
The Plan provides that it shall continue in effect from year to year provided
that a majority of the Board of Trustees of the Trust, including a majority of
the Trustees who are not "interested persons" of the Trust (as defined in the
Investment Company Act) and who have no direct or indirect financial interest in
the operation of the Plan or any agreement related to the Plan (the "Independent
Trustees"), vote annually to continue the Plan. The Plan may be terminated at
any time by vote of a majority of the Independent Trustees or of a majority of
the outstanding shares (as defined in the Investment Company Act) of the Class K
shares.
Compensation of Other Parties. The Adviser may in its discretion and out of its
own funds compensate third parties for the sale and marketing of Classs K shares
of the Funds. The Adviser also may use its own funds to sponsor seminars and
educational programs on the Funds for financial intermediaries and shareholders.
Managers of the Funds. The Portfolio Managers primarily responsible for the
day-to-day management of the Funds are William K. Jurika (for equity
investments), Glenn C. Voyles (for debt investments) and Irene Gorman Hoover
(for small and mini-cap investments). General management of the Funds' equity
and debt portfolio securities is conducted by Mr. Jurika and Mr. Voyles,
respectively. Ms. Hoover assists with the management of the Mini-Cap Fund by
identifying investment opportunities in small and mini-capitalization companies.
Mr. Jurika and Mr. Voyles have been associated with the Adviser since they
co-founded the firm in 1983. Prior to joining the Adviser in September 1991, Ms.
Hoover served as Vice President of Research at Pacific Securities, of San
Francisco, California.
Expense Limitation. Class K shares of each Fund are responsible for paying the
pro-rata share of Fund expenses attributable to such shares as well as class-
specific expenses. Fund expenses include legal and auditing fees, fees and
expenses of its custodian, accounting services and third-party shareholder
servicing agents, trustees' fees, the cost of communicating with shareholders
and registration fees, as well as its other operating expenses. Although not
required to do so, the Adviser has agreed to reimburse each Fund to the extent
necessary so that its ratio of operating expenses to average net assets will not
exceed the following levels with respect to Class K shares: Mini-Cap Fund -
1.75%; Value + Growth Fund - 1.50%; and Balanced Fund - 1.50%. The Adviser may
terminate these reductions at any time. Any reductions made by the Adviser in
its fees and any payments or reimbursement of expenses made by the Adviser which
are a Fund's obligation are subject to reimbursement within the following three
years by that Fund provided the Fund is able to effect such reimbursement and
remain in compliance with applicable expense limitations described in this
Prospectus and that may be imposed by regulatory authorities. The Trustees
believe that the Funds may be of a sufficient size to permit the reimbursement
of any such reductions or payments. A description of any such reimbursements and
the amounts paid will be set forth in financial statements that are included in
the Funds' annual and semi-annual reports to shareholders.
Fund Transactions and Brokerage. The Adviser considers a number of factors in
determining which brokers or dealers to use for a Fund's portfolio transactions.
These factors include, but are not limited to, the reasonableness of
commissions, quality of services and execution, and the availability of research
which the Adviser may lawfully and appropriately use in its investment
management and advisory capacities. Provided a Fund receives prompt execution at
competitive prices, the Adviser also may consider the sale of Fund shares by
brokers as a factor in selecting those broker-dealers for the Fund's portfolio
transactions. For more information, please refer to the Statement of Additional
Information.
The Administrator. Investment Company Administration Corporation (the
"Administrator"), pursuant to an administration agreement with the Funds,
supervises the overall administration of the Trust and the Funds including,
among other responsibilities, the preparation and filing of all documents
required for compliance by the Trust or the Funds with applicable laws and
regulations, arranging for the maintenance of books and records of the Trust and
the Funds, and supervision of other organizations that provide services to the
Trust and the Funds. Certain officers of the Trust and the Funds may be provided
by the Administrator. The Trust has agreed to pay the Administrator an annual
fee of 0.10% of the value of the total net assets of the Trust.
Multiple Classes. Under the Trust's charter documents, the Board of Trustees
has the power to classify or reclassify any unissued shares of a Fund into one
or more additional classes by setting or changing in any one or more respects
their relative rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption. The Board of Trustees of
a Fund may similarly classify or reclassify any class of its shares into one or
more series and, without shareholder approval, may increase the number of
authorized shares of the Fund. The Board of Trustees has designated two classes
of shares for each Fund .
PURCHASING CLASS K SHARES
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General. The Funds' Class K shares are offered to the public through financial
planners, retirement and pension plan administrators, broker-dealers and other
financial intermediaries at their respective net asset values next determined
after receipt of an order by the Transfer Agent with complete information and
meeting all the requirements discussed in this Prospectus. There is no sales
load or charge in connection with the purchase of Class K shares. The Funds'
Class K shares are offered for sale by the Funds' underwriter, First Fund
Distributors, Inc.
The minimum initial investment in each Fund is $250,000, including investments
for individual investors, individual retirement accounts ("IRAs"), SEPs, Keoghs,
401(k) and 401(a) plans and other retirement plans. Subsequent investments for
all Funds must be at least $1,000. Each Fund reserves the right to vary the
initial and additional investment minimums. In addition, the Adviser may waive
the minimum initial investment requirement for any investor. The Funds reserve
the right to reject any purchase order and to suspend the offering of shares of
any Fund.
Purchase orders for Class K shares of a Fund that are received by the Transfer
Agent in proper form by 4:00 p.m., New York time, on any day that the NYSE is
open for trading, will be purchased at the Fund's next determined net asset
value. Orders for Fund shares received after 4:00 p.m. New York time will be
purchased at the next determined net asset value determined the business day
following receipt of the order.
At the discretion of the Funds, investors may be permitted to purchase a Fund's
Class K shares by transferring securities to the Fund that meet the Fund's
investment objectives and policies. Securities transferred to a Fund will be
valued in accordance with the same procedures used to determine the Fund's net
asset value at the time of the next determination of net asset value after such
acceptance. Class K shares issued by a Fund in exchange for securities will be
issued at net asset value determined as of the same time. All dividends,
interest, subscription, or other rights pertaining to such securities shall
become the property of the Fund and must be delivered to the Fund by the
investor upon receipt from the issuer. Investors who are permitted to transfer
such securities will be required to recognize a gain or loss on such transfer
and pay income tax thereon, if applicable, measured by the difference between
the fair market value of the securities and the investor's basis therein.
Securities will not be accepted in exchange for Class K shares of a Fund unless:
(1) such securities are, at the time of the exchange, eligible to be included in
the Fund's portfolio and current market quotations are readily available for
such securities; (2) the investor represents and warrants that all securities
offered to be exchanged are not subject to any restrictions upon their sale by
the Fund under the Securities Act of 1933; and (3) the value of any such
security (except U.S. Government securities), being exchanged together with
other securities of the same issuer owned by the Fund, will not exceed 5% of the
Fund's net assets immediately after the transaction.
Each Fund may accept telephone orders from brokers, financial institutions or
service organizations which have been previously approved by that Fund. It is
the responsibility of such brokers, financial institutions or service
organizations to forward promptly purchase orders and payments to the Funds.
Class K shares of a Fund may be purchased through brokers, financial
institutions, service organizations, banks, and bank trust departments, each of
which may charge the investor a transaction fee or other fee for its services at
the time of purchase. Such fees would not otherwise be charged if the Class K
shares were purchased directly from the Funds.
Shares or classes of shares of each Fund may, at some point, be available
through certain brokerage services that do not charge transaction fees to
investors. However, the Adviser, from its own resources, may pay service fees
charged by these brokers for distribution and subaccounting services with
respect to Fund shares held by such brokers. Typically these fees are based on a
percentage of the annual average value of these accounts.
Shareholders who invest through sponsored retirement plans should contact their
program administrators responsible for transmitting all orders for the purchase,
redemption or exchange of program-sponsored shares. The availability of each
Fund and the procedures for investing depend on the provisions of the program
and whether the program sponsor has contracted with the Fund or its transfer
agent for special processing services, including sub-accounting.
Shareholders who invest through financial planners, broker-dealers and other
financial intermediaries should contact their financial intermediary to
determine the appropriate procedures for purchasing Class K shares of the Funds.
Purchases by Mail. Class K shares of each Fund may be purchased initially by
completing the application accompanying this Prospectus and mailing it to the
Transfer Agent, together with a check payable to the respective Fund, Jurika &
Voyles Fund Group, P.O. Box 9291, Boston, MA 02266-9291.
Subsequent investments in an existing account in the Funds may be made at any
time by sending a check payable to the respective Fund to Jurika & Voyles Fund
Group, P.O. Box 9291, Boston, MA 02266-9291. Please enclose the stub of the
account statement and include the amount of the investment, the name of the
account for which the investment is to be made and the account number.
Purchases by Wire. Investors who wish to purchase shares of any of the Funds by
federal funds wire should first call the Transfer Agent at (800) JV-INVST to
advise the Transfer Agent that an initial investment in Class K shares of a Fund
will be made by wire and to receive an account number. Following notification to
the Transfer Agent, investors must request the originating bank to transmit
immediately available funds by wire to the Transfer Agent's affiliated bank as
follows:
Jurika & Voyles Fund Group
State Street Bank & Trust Company
ABA No. 011000028
Acct. No. 99042665
FBO Jurika & Voyles [Name of Fund]
Shareholder Name ____________
Shareholder Fund Acct. No. ________
A completed application with signature(s) of the registrant(s) must be mailed to
the Transfer Agent immediately following to the initial wire. Investors should
be aware that banks generally impose a wire service fee. The Funds will not be
responsible for the consequence of delays, including delays in the banking or
Federal Reserve wire systems.
Subsequent Investments. Once an account has been opened, subsequent purchases
may be made by mail, bank wire, exchange, direct deposit or automatic investing.
The minimum for subsequent investments is $1,000 for all Funds.
When making additional investments by mail, simply return the remittance portion
of a previous confirmation with the investment in the envelope provided with
each confirmation statement. Checks should be made payable to the particular
Fund in which an investment is to be made and mailed to the Fund to Jurika &
Voyles Fund Group, P.O. Box 9291, Boston, MA 02266-9291. Orders to purchase
shares are effective on the day the Transfer Agent receives the check or money
order.
If an order, together with payment in proper form, is received by the Transfer
Agent or previously approved broker or financial institution by 4:00 p.m. New
York time, on any day that the NYSE is open for trading, Class K shares will be
purchased at each Fund's next determined net asset value with respect to Class K
shares. Orders for Class K shares received after 4:00 p.m. New York time will be
purchased at the net asset value determined on the business day following
receipt of the order.
All cash purchases must be made in U.S. dollars, and, to avoid fees and delays,
checks must be drawn only on banks located in the U.S. A charge (minimum of $20)
will be imposed if any check used for the purchase of Class K shares is
returned.
The Funds and the Transfer Agent each reserve the right to reject any purchase
order in whole or in part.
EXCHANGE OF CLASS K SHARES
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Class K shares of any of the Funds may be exchanged for Class K shares of any of
the other Funds, provided such other Class K shares may be sold legally in the
state of the investor's residence. You also may exchange your Class K shares for
shares of the Seven Seas Money Market Fund, which is not affiliated with the
Trust or the Adviser, if such shares are offered in your state of residence.
Prior to making such exchange you should obtain and carefully read the
prospectus for the Seven Seas Money Market Fund. This exchange privilege does
not constitute an offering or recommendation on the part of the Trust or the
Adviser of an investment in the Seven Seas Money Market Fund.
Class K shares may be exchanged by: (1) written request; or (2) telephone, if a
special authorization form has been completed and is on file with the Transfer
Agent in advance. Requests for telephone exchanges must be received by the
Transfer Agent by the close of regular trading on the NYSE (currently 4:00 p.m.
New York time) on any day that the NYSE is open for regular trading. Exchanges
are subject to the minimum initial investment requirement.
The exchange privilege is a convenient way to respond to changes in investment
goals or in market conditions. This privilege is not designed for frequent
trading in response to short-term market fluctuations. The telephone exchange
privilege may be difficult to implement during times of drastic economic or
market changes. The purchase of Class K shares for any Fund through an exchange
transaction is accepted immediately. An exchange is treated as a redemption for
federal and state income tax purposes, which may result in taxable gain or loss,
and a new purchase, each at net asset value of the appropriate Fund. The Funds
and the Transfer Agent reserve the right to limit, amend, impose charges upon,
terminate or otherwise modify the exchange privilege on 60 days' prior written
notice to shareholders.
Class K shares of a Fund may not be exchanged for Class J shares of the same or
another Fund. However, each Class K share of each Fund will convert
automatically to a Class J share of the same Fund upon the Class K share's
having been subject to the cumulative maximum permitted Rule 12b-1 fees under
the applicable limitations of the NASD. Such conversion shall be effected on the
basis of the net asset values of the Class K and Class J shares of such Fund
without the imposition of a front-end sales load, contingent deferred sales
charge or other charge. In no event will a class of shares convert automatically
into shares of a class with a distribution arrangement that could be viewed as
less favorable to the shareholder as measured by overall cost. The
implementation of this conversion feature is subject to the receipt and
continuing availability of a ruling of the Internal Revenue Service, or of an
opinion of counsel or tax adviser, stating that the conversion of one class of
shares to another does not constitute a taxable event under federal income tax
law. The conversion feature may be suspended if such a ruling or opinion is not
available.
SELLING CLASS K SHARES (REDEMPTIONS)
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Shareholders may redeem Class K shares of any Fund without charge on any
business day that the NYSE is open for business. Redemptions will be effective
at the net asset value per share next determined after the receipt by the
Transfer Agent, broker or financial intermediary of a redemption request meeting
the requirements described below. Each Fund normally sends redemption proceeds
on the next business day, but in any event redemption proceeds are sent within
seven calendar days of receipt of a redemption request in proper form. Payment
for redemption of recently purchased Class K shares will be delayed until the
Transfer Agent has been advised that the purchase check has been honored, up to
12 calendar days from the time of receipt by the Transfer Agent. Payment may
also be made by wire directly to any bank previously designated by the
shareholder on a shareholder account application. There is a $10 charge for
redemptions made by wire. Please note that the shareholder's bank may also
impose a fee for wire service. There may be fees for redemptions made through
brokers, financial institutions and service organizations.
The Funds will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of the Board of
Trustees, require a Fund to sell assets under disadvantageous conditions or to
the detriment of the remaining shareholders of the Fund.
The Funds may suspend the right of redemption or postpone the date of payment
for more than seven days during any period when (1) trading on the NYSE is
restricted or the NYSE is closed, other than customary weekend and holiday
closings; (2) the SEC has by order permitted such suspension; or (3) an
emergency, as defined by rules of the SEC, exists making disposal of portfolio
investments or determination of the value of the net assets of the Funds not
reasonably practicable.
Minimum Balances. Due to the relatively high cost of maintaining smaller
accounts, each Fund reserves the right to make involuntary redemptions of all
shares in any account (other than the account of a shareholder who is a
participant in a qualified plan) for their then-current net asset value if at
any time the total investment does not have a value of at least $10,000 because
of redemptions. The shareholder will be notified that the value of the account
is less than the required minimum and will be allowed at least 60 days to bring
the value of the account up to at least $10,000 before the redemption is
processed.
Redemption by Mail. Class K shares may be redeemed by submitting a written
request for redemption to Jurika & Voyles Fund Group, P.O. Box 9291, Boston, MA
02266-9291.
A written request must be in good order, which means that it must: (1) identify
the shareholder's account name; (2) state the number of shares or dollar amount
to be redeemed; and (3) be signed by each registered owner exactly as the shares
are registered.
Signature Guarantee. To prevent fraudulent redemptions, a signature guarantee
for the signature of each person in whose name the account is registered is
required on all written redemption requests over $50,000. A guarantee may be
obtained from any commercial bank, trust company, savings and loan association,
federal savings bank, broker-dealer, or member firm of a national securities
exchange or other eligible financial institution. Credit unions must be
authorized to issue signature guarantees. Broker-dealers guaranteeing signatures
must be a member of a clearing corporation or maintain net capital of at least
$100,000. Notary public endorsements will not be accepted as a substitute for a
signature guarantee. The Transfer Agent may require additional supporting
documents for redemptions made by corporations, executors, administrators,
trustees or guardians and retirement plans.
Redemption by Telephone. Shareholders who have so indicated on the application,
or have subsequently arranged in writing to do so, may redeem Class K shares by
instructing the Transfer
Agent by telephone. Shareholders may redeem shares by calling the Transfer Agent
at (800) JV-INVST between the hours of 8:30 a.m. and 5:00 p.m. (Eastern time) on
a day when the NYSE is open for trading. Redemptions by telephone must be at
least $1,000.
In order to arrange for redemption by wire or telephone after an account has
been opened, or to change the bank or account designated to receive redemption
proceeds, a written request must be sent to the Transfer Agent with a signature
guarantee at the address listed under "Redemption by Mail," above.
Special Factors Regarding Telephone Redemptions. Neither the Funds nor any of
their service contractors will be liable for any loss or expense in acting on
telephone instructions that are reasonably believed to be genuine. In attempting
to confirm that telephone instructions are genuine, the Funds will use
procedures that are considered reasonable, including requesting a shareholder to
correctly state the Fund account number, the name in which the account is
registered, the social security number, banking institution, bank account number
and the name in which the bank account is registered. To the extent that the
Funds fail to use reasonable procedures to verify the genuineness of telephone
instructions, they and/or their service contractors may be liable for any such
instructions that prove to be fraudulent or unauthorized.
The Funds reserve the right to refuse a wire or telephone redemption if it is
believed advisable to do so. Procedures for redeeming Fund shares by wire or
telephone may be modified or terminated at any time by any of the Funds after at
least 30 days' prior written notice to shareholders.
Class K shares of the Funds may be redeemed through certain brokers, financial
institutions or service organizations who may charge the investor a transaction
fee or other fee for their services at the time of redemption. Such fees would
not otherwise be charged if the Class K shares were redeemed directly from the
Funds.
Redemption by Automated Clearing House ("ACH"). A shareholder may elect to have
redemption proceeds, cash distributions or systematic cash withdrawal payments
transferred to a bank, savings and loan association or credit union that is an
on-line member of the ACH system. There are no fees associated with the use of
the ACH service.
<PAGE>
ACH redemption requests must be received by the Funds' Transfer Agent before
4:00 p.m. New York time to receive that day's closing net asset value. ACH
redemptions will be sent by the Transfer Agent on the day following the
shareholder's request. The funds from the ACH redemption will be available to
the shareholder two days after the redemption has been processed.
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
The following special account options are available to individual shareholders
but not to participants in employer-sponsored retirement plans. There are no
charges for the programs noted below, and an investor may change or stop these
plans at any time by written notice to the Funds.
Systematic Withdrawal Plan. The Systematic Withdrawal Program is an option that
may be utilized by an investor who wishes to withdraw funds from an account on a
regular basis. To participate in this option, an investor must either own or
purchase Class K shares having a value of $250,000 or more. Automatic payments
by check will be mailed to the investor on either a monthly, quarterly,
semi-annual or annual basis in amounts of $1,000 or more. All withdrawals are
processed on the last business day of the month or, if such day is not a
business day, on the next business day and paid promptly thereafter. Please
complete the appropriate section on the New Account Application indicating the
amount of the distribution and the desired frequency.
Automatic Investing. This service allows a shareholder to make regular
investments once an account is established. A shareholder simply authorizes the
automatic withdrawal of funds from a bank account into the specified Fund. The
minimum initial and subsequent investment pursuant to this plan is $1,000 per
month. An initial Fund account must be opened first with the $250,000 minimum
prior to participating in this plan. Please complete the appropriate section on
the New Account Application indicating the amount of the automatic investment.
Retirement Plans. The Funds are available for investment by pension and profit
sharing plans, including IRAs, SEPs, Keoghs and Defined Contribution Plans
through which investors may purchase Class K Fund shares. The Funds, however, do
not sponsor Defined Contribution Plans. For details concerning any of the
retirement plans, please call the Funds at (800) JV-INVST.
CLASS K SHARE PRICE CALCULATION
- --------------------------------------------------------------------------------
Class K Share Price. Class K shares of a Fund are purchased at the net asset
value after an order in proper form is received by the Transfer Agent. An order
in proper form must include all correct and complete information, documents and
signatures required to process your purchase, as well as a check or bank wire
payment properly drawn and collectable. The net asset value per share is
determined as of the close of trading of the NYSE on each day the Exchange is
open for normal trading. Orders received before 4:00 p.m. (Eastern time) on a
day when the Exchange is open for normal trading will be processed as of the
close of trading on that day. Otherwise, processing will occur on the next
business day. The Distributor reserves the right to reject any purchase order.
Net Asset Value. The net asset value of each Fund is determined as of the close
of trading (currently 4:00 p.m., New York time) on each day that the NYSE is
open for trading. The net asset value per Class K share of each Fund is the
value of the Fund's assets attributable to Class K shares, less its liabilities
attributable to Class K shares, divided by the number of outstanding Class K
shares of the Fund. Each Fund values its investments on the basis of the market
value of its securities. Portfolio securities that are listed or admitted to
trading on a U.S. exchange are valued at the last sale price on the principal
exchange on which the security is traded or, if there has been no sale that day,
at the mean between the closing bid and asked prices. Securities admitted to
trading on the NASDAQ National Market System and securities traded only in the
U.S. over-the-counter market are valued at the last sale price or, if there has
been no sale that day, at the mean between the closing bid and asked prices.
Securities and other assets for which market prices are not readily available
are valued at fair value as determined in good faith by the Board of Trustees.
Debt securities with remaining maturities of 60 days or less are normally valued
at amortized cost, unless the Board of Trustees determines that amortized cost
does not represent fair value. Cash and receivables will be valued at their face
amounts. Interest will be recorded as accrued, and dividends will be recorded on
their ex-dividend date.
Share Certificates. Shares are credited to your account and certificates are not
issued. This eliminates the costly problem of lost or destroyed certificates.
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
- --------------------------------------------------------------------------------
Dividends and Distributions. The Mini-Cap and Value + Growth Funds pay dividends
annually. The Balanced Fund pays dividends quarterly. Each Fund makes
distributions of its net capital gains, if any, at least annually. The Board of
Trustees may determine to declare dividends and make distributions more
frequently.
Dividends and capital gain distributions are automatically reinvested in
additional Class K shares of the Fund at the net asset value per share on the
reinvestment date unless the shareholder has previously requested in writing to
the Transfer Agent that payment be made in cash.
Any dividend or distribution paid by a Fund reduces its net asset value per
share on the reinvestment date by the per share amount of the dividend or
distribution. Investors should note that a dividend or distribution paid on
shares purchased shortly before such dividend or distribution was declared will
be subject to income taxes as discussed below even though the dividend or
distribution represents, in substance, a partial return of capital to the
shareholder.
Tax Status. Each Fund intends to continue to qualify and elect to be treated as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986 (the "Code"). As long as the Fund continues to qualify, and as long as
the Fund distributes all of its income each year to the shareholders, the Fund
will not be subject to any federal income or excise taxes based on net income.
The distributions made by the Fund will be taxable to shareholders whether
received in shares (through dividend reinvestment) or in cash. Distributions
derived from net investment income, including net short-term capital gains, are
taxable to shareholders (other than tax-exempt shareholders who have not
borrowed to purchase or carry their shares) as ordinary income. A portion of
these distributions may qualify for the intercorporate dividends-received
deduction. Distributions designated as capital gains dividends are taxable as
long-term capital gains regardless of the length of time shares of the Fund have
been held. Although distributions are generally taxable when received, certain
distributions made in January are taxable as if received the prior December.
Shareholders will be informed annually of the amount and nature of the Fund's
distributions. A Fund may be required to impose backup withholding at a current
rate of 31% from income dividends and capital gain distributions and upon
payment of redemption proceeds if provisions of the Code relating to the
furnishing and certification of taxpayer identification numbers and reporting of
dividends are not complied with by a shareholder. Any such accounts without a
tax identification number may be liquidated and distributed to a shareholder,
net of withholding, after the 60th day of investment.
Additional information about taxes is set forth in the Statement of Additional
Information. Shareholders should consult their own advisers concerning federal,
state and local taxation of distributions from the Funds. Heller, Ehrman White &
McAuliffe, counsel to the Trust, has expressed no opinion in respect thereof.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
Total Return. From time to time, each Fund may publish its total return in
advertisements and communications to investors. Performance data may be quoted
separately for Class K shares as for other classes of shares of the Funds. Total
return information will include the Fund's average annual compounded rate of
return over the four most recent calendar quarters and over the period from the
Fund's inception of operations. Each Fund may also advertise aggregate and
average total return information over different periods of time. Each Fund's
total return will be based upon the value of the shares acquired through a
hypothetical $1,000 investment (at beginning of the specified period and the net
asset value of such shares at the end of the period, assuming reinvestment of
all the distributions) at the maximum public offering price. Total return
figures will reflect all recurring charges against Fund income. Investors should
note that the investment results of each Fund will fluctuate over time, and any
presentation of a Fund's total return for any prior period should not be
considered as a representation of what an investor's total return may be in any
future period.
Yield. The Balanced Fund may also refer in its advertising and promotional
materials to its yield. This Fund's yield shows the rate of income that it earns
on its investments, expressed as a percentage of the net asset value of Fund
shares. The Fund calculates yield by determining the interest income it earned
from its portfolio investments for a specified 30-period (net of expenses),
dividing such income by the average number of Fund shares outstanding, and
expressing the result as an annualized percentage based on the net asset value
at the end of that 30-day period. Yield accounting methods differ from the
methods used for other accounting purposes; accordingly, this Fund's yield may
not equal the dividend income actually paid to investors or the income reported
in this Fund's financial statements.
In addition to standardized return, performance advertisements and sales
literature may also include other total return performance data
("non-standardized return"). Non-standardized return may be quoted for the same
or different periods as those for which standardized return is quoted and may
consist of aggregate or average annual percentage rate of return, actual
year-by-year rates or any combination thereof.
All data included in performance advertisements will reflect past performance
and will not necessarily be indicative of future results. The Funds may also
advertise their relative rankings by mutual fund ranking services such as Lipper
Analytical Services ("Lipper") or Morningstar, Inc. ("Morningstar") Provided the
Funds are eligible for reporting by rating services such as Lipper or
Morningstar, such ranking services would include the Funds in the following
categories: Mini-Cap Fund - Small Company; Value + Growth Fund - Growth; and
Balanced Fund - Balanced. The investment return and principal value of an
investment in a Fund will fluctuate and an investor's proceeds upon redeeming
Class K Fund shares may be more or less than the original cost of the Class K
Fund shares.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
Voting Rights. Shareholders are entitled to one vote for each dollar of net
asset value per Class K share of each series (and fractional votes for
fractional dollar amounts) and may vote in the election of Trustees and on other
matters submitted to meetings of shareholders. It is not contemplated that
regular annual meetings of shareholders will be held. Rule 18f-2 under the
Investment Company Act of 1940, as amended, provides that matters submitted to
shareholders be approved by a majority of the outstanding securities of each
series, unless it is clear that the interests of each series in the matter are
identical or the matter does not affect a series. However, the rule exempts the
selection of accountants and the election of Trustees from the separate voting
requirements.
Except as set forth herein, all classes of shares issued by a Fund shall have
identical voting, dividend, liquidation and other rights, preferences, and terms
and conditions. The only differences among the classes of shares relate solely
to the following: (a) each class may be subject to different class expenses; (b)
each class may bear a different identifying designation; (c) each class may have
exclusive voting rights with respect to matters solely affecting such class; (d)
each class may have different exchange privileges; and (e) each class may
provide for the automatic conversion of that class into another class.
Shareholder Meetings. The Trustees have undertaken to the SEC that they will
promptly call a meeting for the purpose of voting on the question of removal of
any Trustee when requested to do so by not less than 10% of the dollar-weighted
total votes of the respective Fund. In addition, subject to certain conditions,
shareholders of each Fund may apply to the Fund to communicate with other
shareholders to request a shareholders' meeting to vote on the removal of a
Trustee or Trustees.
Shareholder Reports and Inquires. Shareholders will receive annual financial
statements which are examined by the Funds' independent accounts, as well as
unaudited semi-annual financial statements. Unless otherwise requested, only one
copy of each shareholder report or other material sent to shareholders will be
sent to each household or address regardless of the number of shareholders or
accounts at that household or address. Shareholder inquiries should be addressed
to the Funds c/o Jurika & Voyles Fund Group, 1999 Harrison Street, Suite 700,
Oakland, California 94612, (800) JV-INVST.
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
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PART B
COMBINED STATEMENT OF ADDITIONAL INFORMATION
JURIKA & VOYLES FUND GROUP
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Jurika & Voyles Small/Mid Cap Fund
- --------------------------------------------------------------------------------
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
JURIKA & VOYLES FUND GROUP
INVESTMENT ADVISER:
Jurika & Voyles, Inc.
1999 Harrison Street, Suite 700
Oakland, CA 94612
(800) JV-INVST
This Statement of Additional Information pertains to Jurika & Voyles
Mini-Cap Fund (the "Mini-Cap Fund"), Jurika & Voyles Value + Growth Fund (the
"Value + Growth Fund"), Jurika & Voyles Balanced Fund (the "Balanced Fund"), and
Jurika & Voyles Small/Mid Cap Fund (the "Small/Mid Cap Fund"), each a series of
Jurika & Voyles Fund Group (the "Trust"). It supplements the information
contained in the Funds' current Prospectuses dated ________, 1996(which may be
revised from time to time), and should be read in conjunction therewith. The
Prospectuses for the Funds may be obtained by writing or calling First Fund
Distributors, Inc. at (800) JV-INVST. This Statement of Additional Information,
although not in and of itself a prospectus, is incorporated by reference into
the Prospectuses in its entirety.
TABLE OF CONTENTS
CAPTION PAGE
- ------- ----
Investment Objectives and Policies.........................................B- 2
The Funds' Investment Limitations..........................................B-11
Management of the Funds................................................... B-16
The Funds' Administrator.................................................. B-22
The Funds' Distributor.................................................... B-23
Transfer Agent and Custodian.............................................. B-23
How Net Asset Value is Determined......................................... B-24
Share Purchases and Redemptions........................................... B-26
Dividends, Distributions and Taxes........................................ B-26
How Performance is Determined..............................................B-31
Additional Information.....................................................B-34
Financial Statements...................................................... B-34
For ease of reference, the same section headings are used in both the
Prospectuses and this Statement of Additional Information with respect to the
same subject matter, except for "Share Purchases and Redemptions" (see the
sections in the Prospectuses "How to Purchase Shares" and "How to Redeem
Shares").
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS STATEMENT OF ADDITIONAL
INFORMATION AND THE PROSPECTUSES DATED ______, 1996, AS REVISED FROM TIME TO
TIME, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND.
This Statement of Additional Information is dated ______, 1996.
B-1
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Funds are managed by Jurika & Voyles, Inc. ("Jurika & Voyles" or the
"Adviser"). The investment objectives and policies of the Funds are described in
detail in the Prospectuses. The achievement of each Fund's investment objective
will depend on market conditions generally and on the analytical and portfolio
management skills of the Adviser. The following discussion supplements the
discussion in the Prospectuses.
Lower-Rated Debt Securities
The Funds may purchase lower-rated debt securities (e.g., those rated BB and B
by Standard & Poor's Corporation ("S&P") or Ba and B by Moody's Investors
Service, Inc. ("Moody's")) that have poor protection of payment of principal and
interest. See Appendix A for a description of these ratings. These securities
often are considered to be speculative and involve greater risk of default or
price changes due to changes in the issuer's creditworthiness. Market prices of
these securities may fluctuate more than higher-rated debt securities and may
decline significantly in periods of general economic difficulty which may follow
periods of rising rates. While the market for high-yield corporate debt
securities has been in existence for many years and has weathered previous
economic downturns, the market in recent years has experienced a dramatic
increase in the large-scale use of such securities to fund highly leveraged
corporate acquisitions and restructurings. Accordingly, past experience may not
provide an accurate indication of future performance of the high-yield bond
market, especially during periods of economic recession.
The market for lower-rated securities may be thinner and less active
than that for higher-rated securities, which can adversely affect the prices at
which these securities can be sold. If market quotations are not available,
these securities are valued in accordance with procedures established by the
Board of Trustees, including the use of outside pricing services. Judgment plays
a greater role in valuing high-yield corporate debt securities than is the case
for securities for which more external sources for quotations and last-sale
information are available. Adverse publicity and changing investor perceptions
may affect the ability of outside pricing services used by the Funds to value
their portfolio securities, and their ability to dispose of these lower-rated
debt securities.
Because the risk of default is higher for lower-quality securities and
sometimes increases with the age of these securities, the Adviser's research and
credit analysis are an integral part of managing any securities of this type
held by the Funds. In considering investments
B-2
<PAGE>
for the Funds, the Adviser attempts to identify those issuers of high-yielding
securities whose financial condition is adequate to meet future obligations, has
improved, or is expected to improve in the future. The Adviser's analysis
focuses on relative values based on such factors as interest or dividend
coverage, asset coverage, earnings prospects, and the experience and managerial
strength of the issuer.
Each Fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as a security holder to seek
to protect the interests of security holders if it determines this to be in the
best interest of Fund shareholders.
Foreign Investments
As noted in the Prospectuses, the Funds may invest in foreign
securities and securities denominated in or indexed to foreign currencies. Each
Fund currently intends to invest no more than 25% of its total assets in such
foreign securities and will limit its exposure to the currency and political
risk of a single foreign country to 5% of its total assets.
Foreign investments can involve significant risks in addition to the
risks inherent in U.S. investments. The value of securities denominated in or
indexed to foreign currencies, and of dividends and interest from such
securities, can change significantly when foreign currencies strengthen or
weaken relative to the U.S. dollar. Foreign securities markets generally have
less trading volume and less liquidity than U.S. markets, and prices on some
foreign markets can be highly volatile. Many foreign countries lack uniform
accounting and disclosure standards comparable to those applicable to U.S.
companies, and it may be more difficult to obtain reliable information regarding
an issuer's financial condition and operations. In addition, the costs of
foreign investing, including withholding taxes, brokerage commissions, and
custodial costs, generally are higher than for U.S.
investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays. It also may be difficult to enforce legal rights
in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments adverse to
the interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory
B-3
<PAGE>
taxation, restrictions on U.S. investment or on the ability to repatriate assets
or convert currency into U.S. dollars, or other government intervention. There
may be a greater possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also involve
a risk of local political, economic, or social instability, military action or
unrest, or adverse diplomatic developments. There is no assurance that the
Adviser will be able to anticipate or counter these potential events and adverse
impacts they may have on a Fund's share price.
The Funds may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject to
transfer restrictions may be marketable abroad, they may be less liquid than
foreign securities of the same class that are not subject to such restrictions.
American Depositary Receipts and Global Depositary Receipts ("ADRs" and
"GDRs") are certificates evidencing ownership of shares of a foreign-based
issuer held by a bank or similar financial institution as depository. Designed
for use in U.S. and global securities markets, respectively, ADRs and GDRs are
alternatives to the direct purchase of the underlying securities in their
national markets and currencies.
Foreign Currency Transactions. Because the Funds may invest in foreign
securities, the Funds may hold foreign currency deposits from time to time, and
may convert U.S. dollars and foreign currencies in the foreign exchange markets.
Currency conversion involves dealer spreads and other costs, although
commissions usually are not charged. Currencies may be exchanged on a spot
(i.e., cash) basis, or by entering into forward contracts to purchase or sell
foreign currencies at a future date and price. Forward contracts generally are
traded in an interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. The parties to a forward
contract may agree to offset or terminate the contract before its maturity,
or may hold the contract to maturity and complete the contemplated currency
exchange.
In connection with purchases and sales of securities denominated in
foreign currencies, the Funds may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's settlement
date. This technique is sometimes referred to as a "settlement hedge" or
"transaction hedge." The Adviser expects to enter into settlement hedges in the
normal course of managing the Funds' foreign investments. A Fund also could
enter into forward contracts to purchase or sell a foreign currency in
anticipation of future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected by the
Adviser.
B-4
<PAGE>
The Funds also may use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For example,
if a Fund owned securities denominated in Deutsche marks, it could enter into a
forward contract to sell Deutsche marks in return for U.S. dollars to hedge
against possible declines in the Deutsche mark's value. Such a hedge (sometimes
referred to as a "position hedge") would tend to offset both positive and
negative currency fluctuations, but would not offset changes in security values
caused by other factors. A Fund also could hedge the position by selling another
currency expected to perform similarly to the Deutsche mark -- for example, by
entering into a forward contract to sell Deutsche marks or European Currency
Units in return for U.S. dollars. This type of hedge, sometimes referred to as a
"proxy hedge," could offer advantages in terms of cost, yield, or efficiency,
but generally will not hedge currency exposure as effectively as a simple hedge
into U.S. dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedge securities
are denominated.
SEC guidelines require mutual funds to segregate cash and appropriate
liquid assets to cover currency forward contracts that are deemed speculations.
The Funds do not currently intend to enter into any such forward contracts. The
Funds are not required to segregate assets to cover forward contracts entered
into for hedging purposes, including settlement hedges, position hedges, and
proxy hedges.
The successful use of forward currency contracts will depend on the
Adviser's skill in analyzing and predicting currency values. Forward contracts
may change a Fund's investment exposure to changes in currency exchange rates
substantially, and could result in losses to a Fund if exchange rates do not
perform as the Adviser anticipates. For example, if a currency's value rose at a
time when the Adviser had hedged a Fund by selling currency in exchange for
dollars, a Fund would be unable to participate in the currency's appreciation.
If the Adviser hedges currency exposure through proxy hedges, a Fund could
realize currency losses from the hedge and the security position at the same
time if the two currencies do not move in tandem. Similarly, if the Adviser
increases a Fund's exposure to a foreign currency, and that currency's value
declines, the Fund will realize a loss. There is no assurance that the Adviser's
use of forward currency contracts will be advantageous to any Fund or that the
Adviser will hedge at an appropriate time. If the Adviser is not correct in its
forecast of interest rates, market values and other economic factors, a Fund
would be better off without a hedge. The policies described in this section are
non-fundamental policies of the Funds.
B-5
<PAGE>
Indexed Securities
The Funds may purchase securities whose prices are indexed to the
prices of other securities, securities indices, currencies, precious metals or
other commodities, or other financial indicators. No Fund will invest more than
5% of its net assets in indexed securities. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic.
Gold-indexed securities, for example, typically provide for a maturity value
that depends on the price of gold, resulting in a security whose price tends to
rise and fall together with gold prices. Currency-indexed securities typically
are short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed securities
may be positively or negatively indexed; for example, their maturity value may
increase when the specified currency value increases, resulting in a security
whose price characteristics are similar to a call option on the underlying
currency. Currency-indexed securities also may have prices that depend on the
values of a number of different foreign currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, commodity or other instrument to which
they are indexed, and also may be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the credit
risks associated with the issuer of the security, and their values may decline
substantially if the issuer's creditworthiness deteriorates. Recent issuers of
indexed securities have included banks, corporations, and certain U.S.
Government agencies.
Repurchase Agreements
In a repurchase agreement, a Fund purchases a security and
simultaneously commits to resell that security to the seller at an agreed upon
price on an agreed upon date within a specified number of days (usually not more
than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed upon incremental amount which is unrelated to the coupon
rate or maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is, in
effect, secured by the value (at least equal to the amount of the agreed upon
resale price and marked to market daily) of the underlying security. A Fund may
engage in a repurchase agreement with respect to any security in which it is
authorized to invest. Any repurchase transaction in which a Fund engages will
require at least 100% collateralization of the seller's
B-6
<PAGE>
obligation during the entire term of the repurchase agreement. Each Fund may
engage in straight repurchase agreements and tri-party repurchase agreements.
While it does not presently appear possible to eliminate all risks from these
transactions (particularly the possibility of a decline in the market value of
the underlying securities, as well as delays and costs to a Fund in connection
with bankruptcy proceedings), it is each Fund's current policy to limit
repurchase agreement transactions to those parties whose creditworthiness has
been reviewed and deemed satisfactory by the Adviser.
Reverse Repurchase Agreements
The Funds may engage in reverse repurchase agreements. In a reverse
repurchase agreement, a Fund sells a portfolio instrument to another party, such
as a bank, broker-dealer or other financial institution, in return for cash, and
agrees to repurchase the instrument at a particular price and time. While a
reverse repurchase agreement is outstanding, a Fund generally will segregate
cash and high quality liquid assets to cover its obligation under the agreement.
The Funds enter into reverse repurchase agreements only with parties whose
creditworthiness has been reviewed and deemed satisfactory by the Adviser. A
Fund's reverse repurchase agreements and dollar roll transactions that are
accounted for as financings will be included among that Fund's borrowings for
purposes of its investment policies and limitations.
Zero Coupon Debt Securities
The Funds may invest in zero coupon securities. Zero coupon debt
securities do not make interest payments; instead, they are sold at a discount
from face value and are redeemed at face value when they mature. Because zero
coupon bonds do not pay current income, their prices can be very volatile when
interest rates change. In calculating its daily net asset value, a Fund takes
into account as income a portion of the difference between a zero coupon bond's
purchase price and its face value.
Securities Lending
The Funds may lend securities to parties such as broker-dealers, banks,
or institutional investors. Securities lending allows the Funds to retain
ownership of the securities loaned and, at the same time, to earn additional
income. Because there may be delays in the recovery of loaned securities, or
even a loss of rights in collateral supplied, should the borrower fail
financially, loans will be made only to parties whose creditworthiness has been
reviewed and deemed satisfactory by the Adviser. Furthermore, they will only be
made if, in the judgment of the
B-7
<PAGE>
Adviser, the consideration to be earned from such loans would justify the risk.
The Adviser understands that it is the current view of the SEC staff
that the Funds may engage in loan transactions only under the following
conditions: (1) a Fund must receive 100% collateral in the form of cash, cash
equivalents (e.g., U.S. Treasury bills or notes) or other high-grade liquid debt
instruments from the borrower; (2) the borrower must increase the collateral
whenever the market value of the securities loaned (determined on a daily basis)
rises above the value of the collateral; (3) after giving notice, a Fund must be
able to terminate the loan at any time; (4) a Fund must receive reasonable
interest on the loan or a flat fee from the borrower, as well as amounts
equivalent to any dividends, interest, or other distributions on the securities
loaned and to any increase in market value; (5) a Fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees must
be able to vote proxies on the securities loaned, either by terminating the loan
or by entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security
in which the Funds are authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
Short Sales
The Funds currently have no intention to seek to hedge investments or
realize additional gains through short sales that are not covered or "against
the box," but may do so in the future. Short sales are transactions in which a
Fund sells a security it does not own, in anticipation of a decline in the
market value of that security. To complete such a transaction, a Fund must
borrow the security to make delivery to the buyer. A Fund then is obligated to
replace the security borrowed by purchasing it at the market price at or prior
to the time of replacement. The price at such time may be more or less than the
price at which the security was sold by a Fund. Until the security is replaced,
a Fund is required to repay the lender any dividends or interest that accrue
during the period of the loan. To borrow the security, a Fund also may be
required to pay a premium, which would increase the cost of the security sold.
The net proceeds of the short sale will be retained by the broker (or by the
Fund's custodian in a special custody account) to the extent necessary to meet
margin requirements until the short position is closed out. A Fund also will
incur transaction costs in effecting short sales.
B-8
<PAGE>
A Fund will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on which
a Fund replaces the borrowed security. A Fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses a Fund may be required to pay in connection with
a short sale.
When a Fund engages in short sales, its custodian segregates an amount
of cash or U.S. Government securities or other high-grade liquid debt securities
equal to the difference between (1) the market value of the securities sold
short at the time they were sold short and (2) any cash or U.S. Government
securities required to be deposited with the broker in connection with the short
sale (not including the proceeds from the short sale). The segregated assets are
marked-to-market daily, provided that at no time will the amount segregated plus
the amount deposited with the broker be less than the market value of the
securities at the time they were sold short.
In addition, the Funds in the future also may make short sales "against
the box," i.e., when a security identical to one owned by a Fund is borrowed and
sold short. If a Fund enters into a short sale against the box, it is required
to segregate securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities), and is
required to hold such securities while the short sale is outstanding. A Fund
will incur transaction costs, including interest, in connection with opening,
maintaining, and closing short sales against the box.
Illiquid Investments
Illiquid investments are investments that cannot be sold or disposed of
in the ordinary course of business at approximately the prices at which they are
valued. Under the supervision of the Board of Trustees, the Adviser determines
the liquidity of the Funds' investments and, through reports from the Adviser,
the Board monitors trading activity in illiquid investments. In determining the
liquidity of the Funds' investments, the Adviser may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of dealers
and prospective purchasers in the marketplace, (3) dealer undertakings to make a
market, (4) the nature of the security (including any demand or tender
features), (5) the nature of the marketplace for trades (including the ability
to assign or offset a Fund's rights and obligations relating to the investment);
and (6) in the case of foreign currency-denominated securities, any restriction
on currency conversion. Investments currently considered by a Fund to be
illiquid include repurchase agreements not entitling the holder to payments of
principal and interest
B-9
<PAGE>
within seven days, over-the-counter options (and securities underlying such
options), non-government stripped fixed-rate mortgage-backed securities,
restricted securities and government-stripped fixed-rate mortgage-backed
securities determined by the Adviser to be illiquid. In the absence of market
quotations, illiquid investments are priced at fair value as determined in good
faith by a committee appointed by the Board of Trustees. If through a change in
values, net assets, or other circumstances, a Fund were in a position where more
than 15% of its net assets were invested in illiquid securities, it would seek
to take appropriate steps to protect liquidity.
Restricted Securities. Restricted securities, which are one type of
illiquid securities, generally can be sold in privately negotiated transactions,
pursuant to an exemption from registration under the Securities Act of 1933, or
in a registered public offering. Where the registration is required, a Fund may
be obligated to pay all or part of the registration expense and a considerable
period may elapse between the time it decides to seek registration and the time
a Fund may be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to develop,
a Fund might obtain a less favorable price than the price that prevailed when it
decided to seek registration of the security. Currently, no Fund invests more
than 10% of its assets in illiquid securities which have legal or contractual
restrictions on their resale unless there is an actual dealer market for the
particular issue and it has been determined to be a liquid issue as described
below.
In recent years a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including securities sold
in private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not determinative of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a safe harbor from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
sold pursuant to Rule 144A in many cases provide both readily ascertainable
values for restricted securities and the ability to liquidate an investment to
satisfy share redemption orders. Such markets might include automated systems
for the trading, clearance and settlement of unregistered securities of domestic
and foreign issuers, such as the PORTAL System sponsored by the National
Association of Securities Dealers, Inc. An insufficient number of qualified
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
B-10
<PAGE>
The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Adviser pursuant to guidelines approved by
the Board. The Adviser takes into account a number of factors in reaching
liquidity decisions, including but not limited to (1) the frequency of trades
for the security, (2) the number of dealers that make quotes for the security,
(3) the number of dealers that have undertaken to make a market in the security,
(4) the number of other potential purchasers and (5) the nature of the security
and how trading is effected (e.g., the time needed to sell the security, how
bids are solicited and the mechanics of transfer). The Adviser monitors the
liquidity of restricted securities in the Fund's portfolio and reports
periodically on such decisions to the Board of Trustees.
THE FUNDS' INVESTMENT LIMITATIONS
As stated in the Prospectuses and as set forth in greater detail below,
various restrictions apply to each Fund's investments. In particular, each Fund
has adopted certain fundamental investment limitations. These fundamental
restrictions cannot be changed in any material fashion without the approval of
the holders of the majority of a Fund's outstanding shares, which, for this
purpose, means the lesser of (1) more than 50% of a Fund's outstanding shares,
or (2) 67% of the shares represented at a meeting where more than 50% of a
Fund's shares are represented. The Board of Trustees, as a matter of policy or
in response to specific state and/or federal legal requirements, has adopted
certain additional investment restrictions which may be changed at the Board's
discretion (consistent with any applicable legal requirements).
These restrictions (both fundamental and discretionary) may make
reference to certain activities -- such as futures and options -- in which the
Funds currently do not engage, but which might be used by a Fund in the future.
A Fund will not engage in any substantive new activity without prior Board of
Trustees' approval, notification to shareholders, and, in the case of
fundamental restrictions, shareholder approval. Unless otherwise provided, all
references to the value of a Fund's assets are in terms of current market value
at the time of calculation.
B-11
<PAGE>
As a matter of fundamental restriction, a Fund may not:
(1) Change its status as a diversified series, which requires that
each Fund, with respect to 75% of its total assets, not invest
in the securities of any one issuer (other than the U.S.
Government and its agencies and instrumentalities) if
immediately after and as a result of such investment more than
5% of the total assets of the Fund would be invested in such
issuer (the remaining 25% of the Fund's total assets may be
invested without restriction except to the extent other
investment restrictions may be applicable);
(2) invest 25% or more of the value of the Fund's total assets in
the securities of companies engaged in any one industry
(except securities issued by the U.S. Government, its agencies
and instrumentalities or tax-exempt securities issued by state
governments or political subdivisions);
(3) borrow money, except each Fund may (1) enter into bank loans
or engage in otherwise permissible leveraging activities
(including reverse repurchase agreements and dollar roll
transactions that are accounted for as financings) in any
amount not in excess of one-third of the value of the Fund's
total assets (at the lesser of acquisition cost or current
market value) and (2) borrow up to 5% of its total assets on a
temporary basis for periods of up to 60 days. No investments
will be made by any Fund if its borrowings exceed 5% of total
assets;
(4) issue senior securities, as defined in the 1940 Act, except
that this restriction shall not be deemed to prohibit the Fund
from making any otherwise permissible borrowings, mortgages or
pledges, or entering into permissible reverse repurchase
agreements, and options and futures transactions, or issuing
shares of beneficial interest in multiple classes;
(5) make loans of more than one-third of the Fund's net assets,
including loans of securities, except that the Fund may,
subject to the other restrictions or policies stated herein,
purchase debt securities or enter into repurchase agreements
with banks or other institutions to the extent a repurchase
agreement is deemed to be a loan;
(6) purchase or sell commodities or commodity contracts, or
interests in oil, gas, or other mineral leases, or other
mineral exploration or development programs, except that the
Fund may invest in companies that engage in such businesses to
B-12
<PAGE>
the extent otherwise permitted by the Fund's investment
policies and restrictions and by applicable law, and may
engage in otherwise permissible options and futures activities
as described in the Prospectuses and this Statement of
Additional Information [currently none authorized];
(7) purchase or sell real estate, except that the Fund may invest
in securities secured by real estate or real estate interests,
or issued by companies, including real estate investment
trusts, that invest in real estate or real estate interests;
(8) underwrite securities of any other company, except that the
Fund may invest in companies that engage in such businesses,
and except to the extent that the Fund may be considered an
underwriter within the meaning of the Securities Act of 1933,
as amended, in the disposition of restricted securities; and
(9) notwithstanding any other fundamental investment restriction
or policy, each Fund reserves the right to invest all of its
assets in the securities of a single open-end investment
company with substantially the same fundamental investment
objectives, restrictions and policies as that Fund.
As a matter of additional investment restriction, implemented at the
discretion of the Board of Trustees, a Fund may not:
(10) purchase or write put, call, straddle or spread options or
engage in futures transactions except as described in the
Prospectuses or Statement of Additional Information [none
currently authorized];
(11) make short sales (except covered or "against the box" short
sales) or purchases on margin, except that the Fund may obtain
short-term credits necessary for the clearance of purchases
and sales of its portfolio securities and, as required in
connection with permissible options, futures, short selling
and leveraging activities as described elsewhere in the
Prospectuses and Statement of Additional Information [none
currently authorized];
(12) mortgage, hypothecate, or pledge any of its assets as security
for any of its obligations, except as required for otherwise
permissible borrowings (including reverse repurchase
agreements, short sales, financial options and other hedging
activities);
B-13
<PAGE>
(13) purchase the securities of any company for the purpose of
exercising management or control (but this restriction shall
not restrict the voting of any proxy);
(14) purchase more than 10% of the outstanding voting securities of
any one issuer;
(15) purchase the securities of other investment companies, except
as permitted by the 1940 Act, except as otherwise provided in
the Prospectuses (each Fund reserves the right to invest all
of its assets in shares of another investment company);
(16) invest more than 5% of the value of its total assets in
securities of any issuer which has not had a record, together
with its predecessors, of at least three years of continuous
operations;
(17) except as required in connection with otherwise permissible
options and futures activities [none currently authorized],
invest more than 5% of the value of the Fund's total assets in
rights or warrants (other than those that have been acquired
in units or attached to other securities), or invest more than
2% of its total assets in rights or warrants that are not
listed on the New York or American Stock Exchanges;
(18) participate on a joint basis in any trading account in
securities, although the Adviser may aggregate orders for the
sale or purchase of securities with other accounts it manages
to reduce brokerage costs or to average prices;
(19) invest, in the aggregate, more than 15% of its net assets in
illiquid securities or more than 10% of its net assets in
illiquid restricted securities;
(20) purchase or retain in the Fund's portfolio any security if any
officer, trustee or shareholder of the issuer is at the same
time an officer, trustee or employee of the Trust or the
Adviser and such person owns beneficially more than 1/2 of 1%
of the securities and all such persons owning more than 1/2 of
1% own in the aggregate more than 5% of the outstanding
securities of the issuer;
(21) invest more than 25% of its total assets in foreign
securities, invest more than 5% of its total assets in any one
foreign country, or invest more than 5% of its net assets in
securities denominated in foreign currencies;
B-14
<PAGE>
(22) invest more than 5% of its net assets in indexed securities;
and
(23) invest more than 10% of the value of its total assets in real
estate investment trusts.
Except as otherwise noted, all percentage limitations set forth above
apply immediately after a purchase and a subsequent change in the applicable
percentage resulting from market fluctuations does not require elimination of
any security from the portfolio.
B-15
<PAGE>
MANAGEMENT OF THE FUNDS
Trustees and Officers
Set forth below is certain information about the Trust's trustees and
executive officers:
*WILLIAM K. JURIKA, Chairman of the Board of Trustees and Principal
Executive Officer (Age 56)
c/o Jurika & Voyles, 1999 Harrison Street, Suite 700, Oakland, CA
94612. Mr. Jurika has been a principal, the President and a portfolio
manager at Jurika & Voyles since 1983.
*GLENN C. VOYLES, Trustee and President (Age 55)
c/o Jurika & Voyles, 1999 Harrison Street, Suite 700, Oakland, CA
94612. Mr. Voyles has been a principal, the Chairman and a portfolio
manager at Jurika & Voyles since 1983.
*KARL O. MILLS, Trustee, (Age 35) Executive Vice President, Treasurer,
Secretary, Principal Financial and Principal Accounting Officer
c/o Jurika & Voyles, 1999 Harrison Street, Suite 700, Oakland, CA
94612. Mr. Mills has been a principal, the Senior Vice President and a
portfolio manager at Jurika & Voyles since 1988.
DARLENE T. DeREMER, Trustee (Age 40)
c/o DeRemer & Associates, 155 South Street, P.O. Box 487, Wrentham, MA
02093. Ms. DeRemer has been the founder and President of DeRemer &
Associates since 1987. DeRemer & Associates is a marketing consulting
firm to the financial services industry.
ROBERT E. BOND, Trustee (Age 55)
221 Bonita Avenue, Piedmont, CA 94611. Mr. Bond has been the principal
of Bond & Associates since 1988, a real estate, business and franchise
consultant. Mr. Bond also has been the principal of Source Book
Publications since 1983, a book publishing and distribution company.
Finally, Mr. Bond has been a principal of The Center for Independent
Financial Analysis since 1992, an
- --------
* Denotes a Trustee who is an "interested person," as defined in
the Investment Company Act of 1940, as amended (the "1940
Act").
B-16
<PAGE>
independent contractor to the U.S. Department of Commerce with regard
to franchise publications.
BRUCE M. MOWAT, Trustee (Age 52)
1999 Harrison Street, Suite 750, Oakland, CA 94612-3517. Mr. Mowat has
been a partner of Mowat Mackie & Anderson, CPAs since 1976, an
accounting firm.
The following compensation was paid to each of the following Trustees for the
fiscal year ended June 30, 1996. No other compensation or retirement benefits
were received by any Trustee or officer from the Registrant or other registered
investment company in the Trust.
Name of Trustee Total Compensation
- --------------- ------------------
Darlene T.DeRemer $5,7501
Robert E. Bond $5,7501
Bruce M. Mowat $5,7501
(1) Compensation was paid by the registrant
b-17
<PAGE>
Control Persons and Share Ownership
As of August 31, 1995, to the knowledge of the Funds, the following
shareholders owned of record 5% or more of the outstanding shares of the
respective Funds indicated:
<TABLE>
<CAPTION>
Number of
Shares Percent
------ of
Name of Fund Name and Address of Record Owner Owned Shares
------------ -------------------------------- ----- ------
<S> <C> <C> <C>
Mini-Cap Fund Charles Schwab & Co, Inc. 365,914 40.21%
Special Custody Account for
For Bnft Customer
Attn. Mutual Funds
101 Montgomery St.
San Francisco, CA 94101-4122
Value + Growth Charles Schwab & Co., Inc. 403,357 40.01%
Fund Special Custody Account for
For Bnft Cust
Attn. Mutual Funds
101 Montgomery St
San Francisco, CA 94104-4122
Larry N. Sweet Ttee 61,718 6.12%
Marin Radiology Medical Group, Inc.
Retirement and 401K Trust
Dtd 7/1/89
8 Inverness Drive
San Rafael, CA 94901-2418
The Lefevre Limited Partnership 161,137 15.98%
c/o Waverley Associates
Attn. Meredith Tennent
525 University Avenue
Palo Alto, CA 94301-1918
FTC & Co. 84,716 8.40%
Attn. Datalynx #128
PO Box 173736
Denver, CO 80217-3736
</TABLE>
As of August 31, 1995, the Trustees and officers of the Trust, as a
group, owned less than 1% of the outstanding shares of each Fund except the
Mini-Cap Fund. As of August 31, 1995, the Trustees and officers of the Trust, as
a group, owned 4.93% of the Mini-Cap Fund.
The Adviser
As set forth in the Prospectuses, Jurika & Voyles is the Adviser for
the Funds. Pursuant to an Investment Advisory Agreement (the "Advisory
Agreement"), the Adviser determines the composition of the Funds' portfolios,
the nature and timing of the changes to the Funds' portfolios and the manner of
implementing such changes. The Adviser also
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<PAGE>
(a) provides the Funds with investment advice, research and related services for
the investment of their assets, subject to such directions as it may receive
from the Board of Trustees; (b) pays all of the Trust's executive officers'
salaries and executive expenses (if any); (c) pays all expenses incurred in
performing its investment advisory duties under the Advisory Agreement; and (d)
furnishes the Funds with office space and certain administrative services. The
services of the Adviser to the Funds are not deemed to be exclusive, and the
Adviser or any affiliate thereof may provide similar services to other series of
the Trust, other investment companies and other clients, and may engage in other
activities. The Funds may reimburse the Adviser (on a cost recovery basis only)
for any services performed for a Fund by the Adviser outside its duties under
the Advisory Agreement.
Jurika & Voyles is a California corporation incorporated in 1983.
William K. Jurika and Glenn C. Voyles control the majority of the Adviser's
voting stock. As of June 30, 1996, the Adviser had discretionary management
authority for approximately $5 billion of assets.
The Advisory Agreement for the Funds permits the Adviser to seek
reimbursement of any reductions made to its management fee within the three-year
period following such reduction, subject to a Fund's ability to effect such
reimbursement and remain in compliance with applicable expense limitations. Any
such management fee reimbursement will be accounted for on the financial
statements of the Fund as a contingent liability of the Fund, and will appear as
a footnote to the Fund's financial statements until such time as it appears that
the Fund will be able to effect such reimbursement. At such time as it appears
probable that the Fund is able to effect such reimbursement, the amount of
reimbursement that the Fund is able to effect will be accrued as an expense of
the Fund for that current period.
The Advisory Agreement for the Funds was approved by the Trust's Board
of Trustees on September 14, 1994 and each Fund's initial shareholder on
September 20, 1994. The Advisory Agreements may be terminated by the Advisers or
the Trust, without penalty, on 60 days' written notice to the other and will
terminate automatically in the event of its assignment.
Expenses
Each Fund will pay all expenses related to its operation which are not
borne by the Adviser or the Distributor. These expenses include, among others:
legal and auditing expenses; interest; taxes; governmental fees; fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; brokerage
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<PAGE>
commissions or charges; fees of custodians, transfer agents, registrars,
third-party servicing agents or other agents; distribution plan fees; expenses
relating to the redemption or repurchase of a Fund's shares; expenses of
registering and qualifying Fund shares for sale under applicable federal and
state laws and maintaining such registrations and qualifications; expenses of
preparing, printing and distributing to Fund shareholders prospectuses, proxy
statements, reports, notices and dividends; costs of stationery; costs of
shareholders' and other meetings of a Fund; fees paid to members of the Board of
Trustees (other than members who are affiliated persons of the Adviser or
Distributor); a Fund's pro rata portion of premiums of any fidelity bond and
other insurance covering a Fund and the Trust's officers and trustees or other
expenses of the Trust; and expenses including prorated portions of overhead
expenses (in each case on cost recovery basis only) of services for a Fund
performed by the Adviser outside of its investment advisory duties under the
Advisory Agreement. A Fund also is liable for such nonrecurring expenses as may
arise, including litigation to which a Fund may be a party. Each Fund has agreed
to indemnify its trustees and officers with respect to any such litigation. Each
Fund also paid its own organizational expenses, which are being amortized over
five years.
Total operating expenses of a Fund are subject to applicable
limitations under rules and regulations of the states in which that Fund is
authorized to sell its shares; therefore, operating expenses are effectively
subject to the most restrictive of such expense limitations as the same may be
amended from time to time. The most restrictive expense limitation currently
requires that the Adviser make arrangements (including reduction of management
fees otherwise payable) to limit certain expenses of a Fund, including the
management fees paid to the Adviser under the Advisory Agreement (excluding
interest, taxes, brokerage fees and commissions, and certain extraordinary
charges), in any fiscal year in which a Fund's expenses exceed 2.5% of a Fund's
average daily net assets up to $30 million, 2.0% of average daily net assets
between $30 million and $100 million, and 1.5% of such net assets over $100
million.
As noted in the Prospectuses, the Adviser has agreed to reduce its fee
to each Fund by the amount, if any, necessary to keep the Fund's annual
operating expenses (excluding any Rule 12b-1 fees)(expressed as a percentage of
its average daily net assets), at or below the lesser of the following levels:
Mini-Cap Fund -- 1.50%; Value + Growth Fund -- ; Balanced Fund -- 1.25%ll/Mid
Cap Fund -- 1.40%; and/or the maximum expense ratio allowed by any state in
which such Fund's shares are then qualified for sale. The Adviser also may at
its discretion from time to time pay for other respective Fund expenses from its
own assets, or reduce the management fee of a Fund in excess of that required.
B-20
<PAGE>
During the fiscal year ended June 30, 1996, the Advisory Fees for the Mini-Cap
Fund, the Value + Growth Fund, and the Balanced Fund were $_________,
$__________, and $_________, respectively, and the Adviser reimbursed other
expenses totalling $_________, $__________, and $_________, respectively. For
the initial fiscal period ended June 30, 1995, the Advisor reimbursed expenses
in the aggregate amount of $102,398 and $103,440 to the Mini-Cap Fund and to the
Value + Growth Fund, respectively. During the fiscal year ended June 30, 1995,
the Advisory Fee for the Balanced Fund was $222,439 and the Advisor reimbursed
other expenses totaling $23,858. During the fiscal years 1994 and 1993, the
Balanced Fund paid $256,000 and $80,000 in advisory fees, respectively.
Share Marketing Plan
The Trust has adopted a Share Marketing Plan (or Rule 12b-1 Plan) (the
"12b-1 Plan") with respect to the Funds pursuant to Rule 12b-1 under the
Investment Company Act. The Adviser serves as the distribution coordinator under
the 12b-1 Plan and, as such, receives any fees paid by the Funds pursuant to the
12b-1 Plan.
Prior to ____________, 1996, the Funds offered only one class of
shares. On May 1, 1996, the Board of Trustees of the Trust, including a majority
of the Trustees who are not interested persons of the Trust and who have no
direct or indirect financial interest in the operation of the 12b-1 Plan or in
any agreement related to the 12b-1 Plan (the "Independent Trustees"), at their
regular quarterly meeting, adopted the 12b-1 Plan for the newly designated Class
K shares of each Fund. The initial shareholder of the Class K shares of each
Fund approved the 12b-1 Plan covering Class K as of __________, 1996. The single
class of shares existing before that date was redesignated the Class J shares.
Class J shares are not covered by the 12b-1 Plan.
Under the 12b-1 Plan, each Fund pays distribution fees to the Adviser
at an annual rate of 0.25% of the Fund's aggregate average daily net assets
attributable to its Class K shares to reimburse the Adviser for its expenses in
connection with the promotion and distribution of Class K shares.
B-21
<PAGE>
The 12b-1 Plan provides that the Adviser may use the distribution fees
received from the Class of the Fund covered by the 12b-1 Plan only to pay for
the distribution expenses of that Class. Distribution fees are accrued daily and
paid monthly, and are charged as expenses of the Class K shares as accrued.
Class K shares are not obligated under the 12b-1 Plan to pay any
distribution expense in excess of the distribution fee. Thus, if the 12b-1 Plan
were terminated or otherwise not continued, no amounts (other than current
amounts accrued but not yet paid) would be owed by the Class to the Adviser.
The 12b-1 Plan provides that it shall continue in effect from year to
year provided that a majority of the Board of Trustees of the Trust, including a
majority of the Independent Trustees, vote annually to continue the 12b-1 Plan.
The 12b-1 Plan (and any distribution agreement between the Trust, the
Distributor or the Adviser and a selling agent with respect to the Class K) may
be terminated without penalty upon at least 60-days' notice by the Distributor
or the Adviser, or by the Trust by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding shares (as defined in the
Investment Company Act) of the Class to which the 12b-1 Plan applies.
All distribution fees paid by the Funds under the 12b-1 Plan will be
paid in accordance with Article III, Section 26 of the Rules of Fair Practice of
the National Association of Securities Dealers, Inc., as such Section may change
from time to time. Pursuant to the 12b-1 Plan, the Board of Trustees will review
at least quarterly a written report of the distribution expenses incurred by the
Adviser on behalf of the Class K shares of each Fund. In addition, as long as
the 12b-1 Plan remains in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Investment Company Act) of the
Trust shall be made by the Trustees then in office who are not interested
persons of the Trust.
Portfolio Transactions and Brokerage
Subject to policies established by the Board of Trustees, the Adviser
is primarily responsible for arranging the execution of the Funds' portfolio
transactions and the allocation of brokerage activities. In arranging such
transactions, the Adviser will seek to obtain the best execution for each Fund,
taking into account such factors as price, size of order, difficulty of
execution, operational facilities of the firm involved, the firm's risk in
positioning a block of securities and research, market and statistical
information provided by such firm. While the Adviser generally seeks reasonably
competitive commission
B-22
<PAGE>
rates, a Fund will not necessarily always receive the lowest commission
available.
The Funds have no obligation to deal with any broker or group of
brokers in executing transactions in portfolio securities. Brokers who provide
supplemental research, market and statistical information to the Adviser may
receive orders for transactions by a Fund. The term "research, market and
statistical information" includes advice as to the value of securities, the
advisability of purchasing or selling securities, the availability of securities
or purchasers or sellers of securities, and furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts. Information so received
will be in addition to and not in lieu of the services required to be performed
by the Adviser under the Advisory Agreement and the expenses of the Adviser will
not necessarily be reduced as a result of the receipt of such supplemental
information. Such information may be useful to the Adviser in providing services
to clients other than the Funds, and not all such information may be used by the
Adviser in connection with a Fund. Conversely, such information provided to the
Adviser by brokers and dealers through whom other clients of the Adviser in the
future may effect securities transactions may be useful to the Adviser in
providing services to a Fund. To the extent the Adviser receives valuable
research, market and statistical information from a broker-dealer, the Adviser
intends to direct orders for Fund transactions to that broker-dealer, subject to
the foregoing policies, regulatory constraints, and the ability of that
broker-dealer to provide competitive prices and commission rates. In accordance
with the rules of the National Association of Securities Dealers, Inc., the
Funds may also direct brokerage to broker-dealers who facilitate sales of the
Funds' shares, subject to also obtaining best execution as described above from
such broker-dealer.
A portion of the securities in which the Funds may invest are traded in
the over-the-counter markets, and each Fund intends to deal directly with the
dealers who make markets in the securities involved, except as limited by
applicable law and in certain circumstances where better prices and execution
are available elsewhere. Securities traded through market makers may include
markups or markdowns, which are generally not determinable. Under the 1940 Act,
persons affiliated with a Fund are prohibited from dealing with that Fund as
principal in the purchase and sale of securities except after application for
and receipt of an exemptive order. The 1940 Act restricts transactions involving
a Fund and its "affiliates," including, among others, the Trust's trustees,
officers, and employees and the Adviser, and any affiliates of such affiliates.
Affiliated persons of a Fund are permitted to serve as its broker in
over-the-counter transactions conducted on an agency basis only.
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<PAGE>
Investment decisions for each Fund are made independently from those of
accounts advised by the Adviser or its affiliates. However, the same security
may be held in the portfolios of more than one account. When two or more
accounts advised by the Adviser simultaneously engage in the purchase or sale of
the same security, the prices and amounts will be equitably allocated among each
account. In some cases, this procedure may adversely affect the price or
quantity of the security available to a particular account. In other cases,
however, an account's ability to participate in large volume transactions may
produce better executions and prices.
During the fiscal periods ended June 30, 1996 and 1995, brokerage commissions
paid by the Value + Growth Fund totaled $ _______ and $14,454, respectively. For
the fiscal periods ended June 30, 1996 and 1995, brokerage commissions paid by
the Mini-Cap Fund totaled $ _______ and $17,131, respectively.
Brokerage commissions paid by the Balanced Fund were $ _______, $29,137, and
$39,459 for the fiscal years ended June 30, 1996, 1995, and 1994 respectively.
THE FUNDS' ADMINISTRATOR
The Funds have an Administration Agreement with Investment Company
Administration Corporation (the "Administrator"), with offices at 2025 East
Financial Way, Suite 101, Glendora, CA 91741. The Administration Agreement
provides that the Administrator will prepare and coordinate reports and other
materials supplied to the Trustees; prepare and/or supervise the preparation and
filing of all securities filings, periodic financial reports, prospectuses,
statements of additional information, marketing materials, tax returns,
shareholder reports and other regulatory reports or filings required of the
Funds; prepare all required filings necessary to maintain the Funds'
qualifications and/or registrations to sell shares in all states where each Fund
currently does, or intends to do, business; coordinate the preparation, printing
and mailing of all materials (e.g., Annual Reports) required to be sent to
shareholders; coordinate the preparation and payment of Fund-related expenses;
monitor and oversee the activities of the Funds' servicing agents (i.e.,
transfer agent, custodian, fund accountants, etc.); review and adjust as
necessary each Fund's daily expense accruals; and perform such additional
services as may be agreed upon by the Funds and the
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<PAGE>
Administrator. For its services, the Administrator receives an annual fee equal
to the greater of 0.10% of the first $100 million of the Trust's average daily
net assets, 0.05% of the next $150 million, 0.03% of the next $250 million and
0.01% thereafter, subject to a $50,000 ($30,000 for the first year) minimum per
annum per fund. During the fiscal year ended June 30, 1996, the Administrator
received fees of $______, $______ and $______ from the Mini-Cap, Value + Growth
and Balanced Funds, respectively.
THE FUNDS' DISTRIBUTOR
First Fund Distributors, Inc. (the "Distributor"), a broker-dealer
affiliated with the Administrator, acts as each Fund's principal underwriter in
a continuous public offering of the Fund's shares. The Distribution Agreement
between the Funds and the Distributor continues in effect for periods not
exceeding one year if approved at least annually by (I) the Board of Trustees or
the vote of a majority of the outstanding shares of each Fund (as defined in the
1940 Act) and (ii) a majority of the Trustees who are not interested persons of
any such party, in each case cast in person at a meeting called for the purpose
of voting on such approval. The Distribution Agreement may be terminated without
penalty by the parties thereto upon 60 days' written notice, and is
automatically terminated in the event of its assignment as defined in the 1940
Act.
TRANSFER AGENT AND CUSTODIAN
Boston Financial Data Services, Inc., an affiliate of State Street Bank
& Trust Company, serves as the Funds' Transfer Agent. As Transfer Agent, it
maintains records of shareholder accounts, processes purchases and redemptions
of shares, acts as dividend and distribution disbursing agent and performs other
related shareholder functions. State Street Bank & Trust Company serves as the
Funds' Custodian. As Custodian, it and subcustodians designated by the Board of
Trustees hold the securities in the Funds' portfolio and other assets for
safekeeping. The Transfer Agent and Custodian do not and will not participate in
making investment decisions for the Funds.
HOW NET ASSET VALUE IS DETERMINED
The net asset values of each class of the Funds' shares are calculated
once daily, as of 4:00 p.m. New York time (the "Portfolio Valuation Time"), on
each day that the New York Stock Exchange (the "NYSE") is open for trading by
dividing each Fund's net assets (assets less liabilities)attributable to each
class by the total number of shares of such class outstanding and adjusting to
the nearest cent per share.
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<PAGE>
The NYSE is closed on Saturdays, Sundays, New Year's Day, Presidents Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas
Day. The Funds do not expect to determine the net asset value of their shares on
any day when the NYSE is not open for trading even if there is sufficient
trading in their portfolio securities on such days to materially affect the net
asset value per share.
Because of the difference between the bid and asked prices of the
over-the-counter securities in which a Fund may invest, there may be an
immediate reduction in the net asset value of the shares of a Fund after a Fund
has completed a purchase of such securities. This is because such OTC securities
will be valued at the last sale price (which is generally below the asked
price), but usually are purchased at or near the asked price.
Each Fund's portfolio is expected to include foreign securities listed
on foreign stock exchanges and debt securities of foreign governments and
corporations. Generally, trading in and valuation of foreign securities is
substantially completed each day at various times prior to the Portfolio
Valuation Time. In addition, trading in and valuation of foreign securities may
not take place on every day that the NYSE is open for trading. Furthermore,
trading takes place in various foreign markets on days on which the NYSE is not
open for trading and on which the Funds' net asset values are not calculated.
Any changes in the value of foreign currency forward contracts due to exchange
rate fluctuations are included in determination of net asset value.
Generally, each Fund's investments are valued at market value or, in
the absence of a market value, at fair value as determined in good faith by the
Adviser and the Board of Trustees. Portfolio securities that are listed or
admitted to trading on a U.S. exchange are valued at the last sale price on the
principal exchange on which the security is traded, or, if there has been no
sale that day, at the mean between the closing bid and asked prices. Securities
admitted to trading on the NASDAQ National Market System and securities traded
only in the U.S. over-the-counter market are valued at the last sale price, or,
if there has been no sale that day, at the mean between the closing bid and
asked prices. Foreign securities are valued at the last sale price in the
principal market where they are traded, or if the last sale price is
unavailable, at the mean between the last bid and asked prices available
reasonably prior to the time the Funds' net asset values are determined.
Securities and assets for which market quotations are not readily available
(including restricted securities which are subject to limitations as to their
sale) are valued at fair value as determined in good faith by or under the
direction of the Board of Trustees.
B-26
<PAGE>
Short-term debt obligations with remaining maturities in excess of 60
days are valued at current market prices, as discussed above. Short- term
securities with 60 days or less remaining to maturity are, unless conditions
indicate otherwise, amortized to maturity based on their cost to a Fund if
acquired within 60 days of maturity or, if already held by a Fund on the 60th
day, based on the value determined on the 61st day.
Corporate and government debt securities held by the Funds are valued
on the basis of valuations provided by dealers in those instruments, by an
independent pricing service approved by the Board of Trustees, or at fair value
as determined in good faith by procedures approved by the Board of Trustees. Any
such pricing service, in determining value, is expected to use information with
respect to transactions in the securities being valued, quotations from dealers,
market transactions in comparable securities, analyses and evaluations of
various relationships between securities and yield to maturity information.
If any securities held by a Fund are restricted as to resale or do not
have readily available market quotations, the Adviser and the Board of Trustees
determine their fair value. The Trustees periodically review such valuations and
valuation procedures. The fair value of such securities is generally determined
as the amount which a Fund could reasonably expect to realize from an orderly
disposition of such securities over a reasonable period of time. The valuation
procedures applied in any specific instance are likely to vary from case to
case. However, consideration is generally given to the financial position of the
issuer and other fundamental analytical data relating to the investment and to
the nature of the restrictions on disposition of the securities (including any
registration expenses that might be borne by a Fund in connection with such
disposition). In addition, specific factors are also generally considered, such
as the cost of the investment, the market value of any unrestricted securities
of the same class (both at the time of purchase and at the time of valuation),
the size of the holding relative to current average trading volume, the prices
of any recent transactions or offers with respect to such securities and any
available analysts' reports regarding the issuer.
Foreign securities quoted in foreign currencies are translated into
U.S. dollars using the latest available exchange rates. As a result,
fluctuations in the value of such currencies in relation to the U.S. dollar will
affect the net asset value of a Fund's shares even though there has not been any
change in the market values of such securities. Any changes in the value of
foreign currency forward contracts due to exchange rate fluctuations are
included in determination of net asset value.
B-27
<PAGE>
All other assets of the Funds are valued in such manner as the Board of
Trustees in good faith deems appropriate to reflect their fair value.
SHARE PURCHASES AND REDEMPTIONS
Information concerning the purchase and redemption of the Funds' shares
is contained in the Prospectuses under "How to Purchase Shares" and "How to
Redeem Shares."
The Trust reserves the right in its sole discretion (i) to suspend the
continued offering of each Fund's shares, (ii) to reject purchase orders in
whole or in part when in the judgment of the Adviser or the Distributor such
rejection is in the best interest of a Fund, and (iii) to reduce or waive the
minimum for initial and subsequent investments for certain fiduciary accounts or
under circumstances where certain economies can be achieved in sales of a Fund's
shares.
During any 90-day period, the Trust is committed to pay in cash all
requests to redeem shares by any one shareholder, up to the lesser of $250,000
or 1% of the value of the Trust's net assets at the beginning of the period.
Should redemptions by any individual shareholder (excluding street name or
omnibus accounts maintained by financial intermediaries) exceed this limitation,
the Trust reserves the right to redeem the excess amount in whole or in part in
securities or other assets. If shares are redeemed in this manner, the redeeming
shareholder usually will incur additional brokerage costs in converting the
securities to cash.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. In determining amounts of capital gains to
be distributed, any capital loss carryovers from prior years will be offset
against capital gains of the current year. Unless a shareholder elects cash
distributions on the Account Application form or submits a written request to a
Fund at least 10 full business days prior to the record date for a distribution
in which the shareholder elects to receive such distribution in cash,
distributions will be credited to the shareholder's account in additional shares
of a Fund based on the net asset value per share at the close of business on the
day following the record date for such distribution.
Each Fund has qualified and elected, and intends to continue to qualify
and elect, to be treated as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), and intends to
maintain such qualification. In order to qualify, a Fund must meet certain
requirements with respect to the source
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<PAGE>
of its income, diversification of its assets and distributions to its
shareholders. The Trustees reserve the right not to maintain the qualification
of a Fund as a regulated investment company if they determine such course of
action to be more beneficial to the shareholders. In such case, a Fund will be
subject to federal and state corporate income taxes on its income and gains, and
all dividends and distributions to shareholders will be ordinary dividend income
to the extent of a Fund's earnings and profits. Dividends declared by a Fund in
October, November, or December of any calendar year to shareholders of record as
of a record date in such a month will be treated for federal income tax purposes
as having been received by shareholders on December 31 of that year if they are
paid during January of the following year.
Under Subchapter M, a Fund will not be subject to federal income taxes
on the net investment income and capital gains it distributes to shareholders,
provided that at least 90% of its investment company taxable income for the
taxable year is so distributed. A Fund will generally be subject to federal
income taxes on its undistributed net investment income and capital gains. A
nondeductible 4% excise tax also is imposed on each regulated investment company
to the extent that it does not distribute to investors in each calendar year an
amount equal to 98% of its ordinary income for such calendar year plus 98% of
its capital gain net income for the one-year period ending on October 31 of such
year plus 100% of any undistributed ordinary or capital gain net income for the
prior period. Each Fund intends to declare and pay dividends and capital gain
distributions in a manner to avoid imposition of the excise tax.
The Funds may write, purchase or sell certain option contracts. Such
transactions are subject to special tax rules that may affect the amount, timing
and character of distributions to shareholders. Unless the Funds are eligible to
make and make a special election, such option contracts that are "Section 1256
contracts" will be "marked-to-market" for federal income tax purposes at the end
of each taxable year, i.e., each option contract will be treated as sold for its
fair market value on the last day of the taxable year. In general, unless the
special election referred to in the previous sentence is made, gain or loss from
transactions in such option contracts will be 60% long-term and 40% short-term
capital gain or loss.
Section 1092 of the Code, which applies to certain "straddles," may
affect the taxation of the Funds' transactions in option contracts. Under
Section 1092, the Funds may be required to postpone recognition for tax purposes
of losses incurred in certain closing transactions in options.
B-29
<PAGE>
Section 988 of the Code contains special tax rules applicable to
certain foreign currency transactions that may affect the amount, timing, and
character of income, gain or loss recognized by a Fund. Under these rules,
foreign exchange gain or loss realized with respect to foreign
currency-denominated debt instruments, foreign currency forward contracts,
foreign currency-denominated payables and receivables, and foreign currency
options and futures contracts (other than options and futures contracts that are
governed by the mark-to-market and 60%-40% rules of Section 1256 of the Code and
for which no election is made) is treated as ordinary income or loss. Some part
of a Fund's gain or loss on the sale or other disposition of shares of a foreign
corporation may, because of changes in foreign currency exchange rates, be
treated as ordinary income or loss under Section 988 of the Code, rather than as
capital gain or loss.
One of the requirements for qualification as a regulated investment
company is that less than 30% of a Fund's gross income must be derived from
gains from the sale or other disposition of securities held for less than three
months. (Legislation has been pending from time to time in Congress that would
eliminate this limitation, however.) Accordingly, a Fund may be restricted in
effecting closing transactions within three months after entering into an option
contract.
A Fund may be subject to foreign withholding taxes on dividends and
interest earned with respect to securities of foreign corporations.
The Funds also may invest in the stock of foreign companies that may be
treated as "passive foreign investment companies" ("PFICs") under the Code.
Certain other foreign corporations, not operated as investment companies, may
nevertheless satisfy the PFIC definition. A portion of the income and gains that
the Funds derive from PFIC stock may be subject to a non-deductible federal
income tax at the Fund level. In some cases, each of the Funds may be able to
avoid this tax by electing to be taxed currently on its share of the PFIC's
income, whether or not such income is actually distributed by the PFIC. The
Funds will endeavor to limit their exposure to the PFIC tax by investing in
PFICs only where the election to be taxed currently will be made. Since it is
not always possible to identify a foreign issuer as a PFIC in advance of making
the investment, these Funds may incur the PFIC tax in some instances.
Dividends of net investment income (including any net realized
short-term capital gains) paid by a Fund are taxable to shareholders of the Fund
as ordinary income, whether such distributions are taken in cash or reinvested
in additional shares. Distributions of net capital gain (i.e., the excess of net
long-term capital gains over net short-term capital losses), if any, by a Fund
are taxable as long-term capital gains, whether such distributions are taken in
cash or reinvested in
B-30
<PAGE>
additional shares, and regardless of how long shares of a Fund have been held.
Fund distributions also will be included in individual and corporate
shareholders' income on which the alternative minimum tax may be imposed.
Tax-exempt shareholders will not be required to pay taxes on amounts distributed
to them, unless they have borrowed to purchase or carry their shares of a Fund.
Statements as to the tax status of distributions to shareholders will be mailed
annually.
Any dividend from net investment income or distribution of long-term
capital gains received by a shareholder will have the effect of reducing the net
asset value of a Fund's shares held by such shareholder by the amount of the
dividend or distribution. If the net asset value of the shares should be reduced
below a shareholder's cost as a result of the dividend of net investment income
or a long-term capital gains distribution, such dividend or distribution,
although constituting a return of capital, nevertheless will be taxable as
described above. Investors should be careful to consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time may include the amount of the forthcoming distribution. Those
investors purchasing shares just prior to a distribution will then receive a
partial return of their investment upon such distribution, which will
nevertheless be taxable to them.
Any gain or loss realized upon an exchange or redemption of shares in a
Fund by a shareholder who holds the shares as a capital asset will be treated as
a long-term capital gain or loss if the shares have been held for more than one
year, and otherwise as a short-term capital gain or loss. However, any loss
realized by a shareholder upon an exchange or redemption of shares of a Fund
held (or treated as held) for six months or less will be treated as a long-term
capital loss to the extent of any long-term capital gain distribution received
on the redeemed shares. All or a portion of a loss realized upon the redemption
of shares may be disallowed to the extent shares are purchased (including shares
acquired by means of reinvested dividends) within 30 days before or after such
redemption.
Dividends paid by a Fund will be eligible for the 70% dividends
received deduction for corporate shareholders, to the extent that a Fund's
income is derived from certain qualifying dividends received from domestic
corporations. Availability of the deduction is subject to certain holding period
and debt-financing limitations. Capital gains distributions are not eligible for
the 70% dividends received deduction.
Special tax treatment is accorded distributions from accounts
maintained as IRAs. For example, IRA distributions made to account holders who
are not at least 59 1/2 are subject to a special penalty tax.
B-31
<PAGE>
Each Fund is required to withhold 31% of reportable payments (including
dividends, capital gain distributions and redemption proceeds) paid to
individuals and other nonexempt shareholders who have not complied with
applicable regulations. In order to avoid this backup withholding requirement,
each shareholder must provide a social security number or other taxpayer
identification number and certify that the number provided is correct and that
the shareholder is not currently subject to backup withholding, or the
shareholder should indicate that it is exempt from backup withholding. Even
though all certifications have been made on the Application, a Fund may be
required to impose backup withholding if it is notified by the IRS or a broker
that such withholding is required for previous under-reporting of interest or
dividend income or use of an incorrect taxpayer identification number.
Nonresident aliens, foreign corporations, and other foreign entities may be
subject to withholding of up to 30% on certain payments received from a Fund.
Each Fund has applied for a ruling of the Internal Revenue Service to
the effect that, concerning the Funds' offering of two classes of shares, (1)
dividends paid by a Fund with respect to different classes will not be
preferential dividends; and (2) with respect to the conversion of Class K shares
into Class J shares as described in the prospectus, such conversion will not
result in the recognition of a gain or loss for a shareholder, the shareholder's
basis in the shares remains the same, and the shareholder's holding period with
respect to such shares remains the same. The failure of a Fund to receive a
favorable ruling on the foregoing points could result in adverse tax
consequences for the Fund and its shareholders.
The foregoing discussion and related discussion in the Prospectuses do
not purport to be a complete description of all tax implications of an
investment in a Fund. A shareholder should consult his or her own tax adviser
for more information about federal, state, local, or foreign taxes. Heller,
Ehrman, White & McAuliffe has expressed no opinion in respect thereof.
B-32
<PAGE>
HOW PERFORMANCE IS DETERMINED
Standardized Performance Information
Average Annual Total Return The average annual total return included with any
presentation of a Fund's performance data will be calculated according to the
following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of
$10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a
hypothetical $10,000 payment (made
at the beginning of the 1-, 5-, or
10-year periods) at the end of the
1-, 5-, or 10-year periods (or
fractional portion thereof).
Aggregate Total Return. A Fund's "aggregate total return" figures represent the
cumulative change in the value of an investment in that Fund for the specified
period and are computed by the following formula:
ERV - P
-------
P
Where: P = a hypothetical initial payment of
$10,000
ERV = ending redeemable value of a
hypothetical $10,000 investment made
at the beginning of 1-, 5- or 10
-year period (or fractional portion
thereof), assuming reinvestment of
all dividends and distributions and
complete redemption of the
hypothetical investment at the end
of the measuring period.
Performance figures will be calculated separately for Class J and Class
K shares of each Fund. Each Fund's performance will vary from time to time
depending upon market conditions, the composition of its portfolio and its
operating expenses. Consequently, any given performance quotation should not be
considered representative of performance of such class of such fund for any
specified period in the future. In addition, because performance will fluctuate,
it may not provide a basis for comparing an investment in that Fund with certain
bank deposits or other investments that pay a fixed yield for a stated period of
time. Investors comparing a Fund's performance with that of other investment
companies should give consideration to the quality and maturity of the
respective investment companies' portfolio securities.
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<PAGE>
The average annual total return for each Fund for the periods indicated
was as follows:
Year Ended Inception*
Fund 6/30/96 Through 6/30/96
- ---------------------------------- ------- ---------------
Jurika & Voyles Mini-Cap Fund
Jurika & Voyles Value + Growth Fund
Jurika & Voyles Balanced Fund
Jurika & Voyles Small/Mid Cap Fund NA NA
* Total return for periods of less than one year are aggregate, not annualized,
return figures. The dates of inception for the Funds were: Mini-Cap Fund,
September 30, 1994; Value + Growth Fund, September 30, 1994; and Balanced Fund,
March 9, 1992. As of the date of this Statement of Additional Information, the
Small/Mid Cap Fund has not commenced operations.
The Funds impose no sales load on initial purchases or on reinvested
dividends. Accordingly, no sales charges are deducted for purposes of this
calculation. The calculation of total return assumes that all dividends, if any,
and distributions paid by a Fund would be reinvested at the net asset value on
the day of payment.
Investment Philosophy
From time to time the Funds may publish or distribute information and
reasons why the Adviser believes investors should invest in the Funds. For
example, the Funds may refer to the Adviser's equity investment approach, which
is founded on the principles of Value + Growth. The Funds may state that the
Adviser's investment professionals actively research quality companies that are
not only undervalued based on their current earnings, but also offer significant
potential for future growth.
The Funds also may state that the Adviser uses a practical approach to
investing that emphasizes sound business judgment and common sense,
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<PAGE>
and that this approach involves building the Funds' portfolios as a collection
of ownership in individual companies that represent both excellent businesses
and excellent investments, based upon such companies' competitive advantage,
financial health and price. The Funds may also state that this approach has
produced above market returns while minimizing the "swings" associated with
certain investment styles. The Balanced Fund may, from time to time, state that
bonds are used to reduce volatility of the Fund.
Indices and Publications
In the same shareholder communications, sales literature, and
advertising, a Fund may compare its performance with that of appropriate indices
such as the Standard & Poor's Composite Index of 500 stocks ("S&P 500"),
Standard & Poor's MidCap 400 Index ("S&P 400"), the NASDAQ Industrial Index, the
NASDAQ Composite Index, the Russell 2000 Small Stock Index (the "Russell 2000"),
or other unmanaged indices so that investors may compare the Fund's results with
those of a group of unmanaged securities. The S&P 500, the S&P 400, the NASDAQ
Industrial Index, the NASDAQ Composite Index and the Russell 2000 are unmanaged
groups of common stocks traded principally on national securities exchanges and
the over the counter market, respectively. A Fund also may, from time to time,
compare its performance to other mutual funds with similar investment objectives
and to the industry as a whole, as quoted by rating services and publications,
such as Lipper Analytical Services, Inc., Morningstar Mutual Funds, Forbes,
Money and Business Week.
In addition, one or more portfolio managers or other employees of the
Adviser may be interviewed by print media, such as The Wall Street Journal or
Business Week, or electronic news media, and such interviews may be reprinted or
excerpted for the purpose of advertising regarding the Fund.
ADDITIONAL INFORMATION
Legal Opinion
The validity of the shares offered by the Prospectuses will be passed
upon by Heller, Ehrman, White & McAuliffe, 333 Bush Street, San Francisco,
California 94104.
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<PAGE>
Auditors
The annual financial statements of the Funds will be audited by
McGladrey & Pullen, LLP, independent public accountant for the Funds.
License to Use Name
Jurika & Voyles, Inc. has granted the Trust and each Fund the right to
use the designation "Jurika & Voyles" in their names, and has reserved the right
to withdraw its consent to the use of such designation under certain conditions,
including the termination of the Adviser as the Funds' investment adviser.
Jurika & Voyles, Inc. also has reserved the right to license others to use this
designation, including any other investment company.
Other Information
The Prospectuses and this Statement of Additional Information,
together, do not contain all of the information set forth in the Registration
Statement of Jurika & Voyles Fund Group filed with the Securities and Exchange
Commission. Certain information is omitted in accordance with rules and
regulations of the Commission. The Registration Statement may be inspected at
the Public Reference Room of the Commission at Room 1024, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549, and copies thereof may be
obtained from the Commission at prescribed rates.
FINANCIAL STATEMENTS
Audited financial statements for the fiscal year ended June 30, 1996
for the Mini-Cap Fund, the Value + Growth Fund and the Balanced Fund, as
contained in the Annual Report to Shareholders are incorporated herein by
reference to the Annual
Reports.
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<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
This Appendix describes ratings applied to corporate bonds by Standard & Poor's
Corporation ("S&P") and Moody's Investors Service, Inc. ("Moody's").
S&P's Ratings
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A: Bonds rated A has a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher rated categories.
BB: Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
B: Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.
The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB-rating.
CCC: Bonds rated CCC have a currently identifiable vulnerability to default, and
are dependent upon favorable business, financial, and
B-37
<PAGE>
economic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic conditions,
they are not likely to have the capacity to pay interest and repay principal.
CC: Bonds rated CC are typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC bond rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- bond rating.
The C rating may be used to cover a situation where a bankruptcy petition has
been filed but debt service payments are continued.
CI: The rating CI is reserved for income bonds on which no interest is being
paid.
D: Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized. The
ratings from AA to B may be modified by the addition of a plus or minus to show
relative standing within the major rating categories.
Moody's Ratings
Aaa: Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of these issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
B-38
<PAGE>
A: Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds rated Baa are considered as medium-grade obligations, i.e, they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba: Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
B: Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or maintenance of other terms of
the contract over any long period of time may be small.
Caa: Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
Ca: Bonds rated Ca represent obligations which are speculative in a high degree.
Such issues are often in default or have other marked short-comings.
C: Bonds rated C are the lowest rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
B-39
<PAGE>
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
- --------------------------------------------------------------------------------
<PAGE>
JURIKA & VOYLES FUND GROUP
--------------
FORM N-1A
--------------
PART C
--------------
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1)
Schedules of Investments as of June 30, 1995,
Statements of Assets and Liabilities as of June 30,
1995, Statements of Operations for the Period from
September 30, 1994 (inception) through June 30, 1995,
Statements of Changes in Net Assets for the Period
from September 30, 1994 (inception) through June 30,
1995, Financial Highlights for a Share Outstanding
for the Period from September 30, 1994 (inception)
through June 30, 1995, Notes to Financial Statements,
all for the Jurika & Voyles Mini-Cap Fund, the Jurika
& Voyles Value + Growth Fund and the Jurika & Voyles
Balanced Fund; and Statements of Changes in Net
Assets for the Periods November 1, 1993 to September
30, 1994 and October 1, 1994 to June 30, 1995 and
Financial Highlights for a Share Outstanding for the
Period from March 9, 1992 (inception) through June
30, 1995 for the Jurika & Voyles Balanced Fund only.
(b) Exhibits:
(1) Agreement and Declaration of Trust.1
(2) By-Laws.1
(3) Voting Trust Agreement - Not applicable.
(4) Specimen Share Certificate - Not applicable.
(5) Form of Investment Management Agreement.1
(6) Form of Share Distribution Agreement.2
(7) Benefit Plan(s) - Not applicable.
(8) Form of Custodian Agreement.2
(9) a) Form of Administrative Services Agreement.2
b) Form of Multiple Class Plan
(10) Consent and Opinion of Counsel as to legality of
shares.3
(11) Consent of Independent Public Accountants.
(12) Financial Statements omitted from Item 23 - Not
applicable.
- --------
1 Previously filed as part of Registrant's initial filing on Form N-1A, filed
on July 21, 1994.
2 Previously filed as part of Pre-Effective Amendment No. 2 filed on
September 16, 1994.
3 Previously filed as part of Pre-Effective Amendment No. 3 filed on
September 26, 1994.
4 Previously filed as an Exhibit to Registrant's Form N-SAR Report on
February 28, 1996 and incorporated herein by reference.
(13) Form of Subscription Agreement.2
(14) Model Retirement Plan Documents - Not applicable.
(15) Form of Share Marketing Plan.
(16) Performance Computation.
(17) Power of Attorney.2
(27) Financial Data Schedule.4
Item 25. Persons Controlled by or Under Common Control with Registrant.
Jurika & Voyles, Inc., a California corporation, is the
manager of each series of the Registrant. William K. Jurika and Glenn C. Voyles
control a majority of the common stock of Jurika & Voyles, Inc.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class May 31, 1996
-------------- ------------
Jurika & Voyles Mini-Cap Fund 3,277
Jurika & Voyles Value + Growth Fund 367
Jurika & Voyles Balanced Fund 571
Jurika & Voyles Small/Mid Cap Fund -0-
Item 27. Indemnification
Article VII of the Agreement and Declaration of Trust empowers
the Trustees of the Trust, to the full extent permitted by law, to purchase with
Trust assets insurance for indemnification from liability and to pay for all
expenses reasonably incurred or paid or expected to be paid by a Trustee or
officer in connection with any claim, action, suit or proceeding in which he or
she becomes involved by virtue of his or her capacity or former capacity with
the Trust.
Article VI of the By-Laws of the Trust provides that the Trust
shall indemnify any person who was or is a party or is threatened to be made a
party to any proceeding by reason of the fact that such person is or was an
agent of the Trust, against expenses, judgments, fines, settlement and other
amounts actually and reasonably incurred in connection with such proceeding if
that person acted in good faith and reasonably believed his or her conduct to be
in the best interests of the Trust. Indemnification will not be provided in
certain circumstances, however, including instances of willful misfeasance, bad
faith, gross negligence, and reckless disregard of the duties involved in the
conduct of the particular office involved.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to the Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable in the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such Trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 28. Business and Other Connections of Investment Adviser.
Information about William K. Jurika and Glenn C. Voyles is set
forth in Part B under "Management of the Funds."
Irene Gorman Hoover, a portfolio manager for Jurika & Voyles,
Inc. with respect to the Jurika & Voyles Mini-Cap and Small/Mid Cap Funds,
joined Jurika & Voyles, Inc. in September 1991. Prior to that time, she served
as Vice President of Research at Pacific Securities, of San Francisco,
California.
Item 29. Principal Underwriter.
(a) First Fund Distributors, Inc. is the principal underwriter for
the following investment companies or series thereof:
RNC Liquid Assets Fund, Inc..
PIC Investment Trust
Hotchkis and Wiley Funds
Professionally Managed Portfolios
- Avondale Total Return Fund
- Perkins Opportunity Fund
- Crescent Fund
- Osterweis Fund
- ProConscience Women's Equity Mutual Fund
- Academy Value Fund
- Kayne, Anderson Rising Dividends Fund
- Trent Equity Fund
- Matrix Growth Fund
- Matrix Emerging Growth Fund
- Leonetti Balanced Fund
- Lighthouse Growth Fund
- U.S. Global Leaders Growth Fund
- Boston Managed Growth Fund
- Harris Bretall Sullivan & Smith Growth Fund
- Insightful Investor Growth Fund
- Hodges Fund
- Penza Growth Fund
- Titan Investment Fund
Rainier Investment Management Mutual Funds
(b) The following information is furnished with respect to the
officers of First Fund Distributors, Inc.:
<TABLE>
<CAPTION>
Name and Principal Position and Offices with First Positions and Offices
Business Address* Fund Distributors, Inc. with Registrant
- ----------------- ----------------------- ---------------
<S> <C> <C>
Robert H. Wadsworth President & Treasurer None
Steven J. Paggioli VP & Secretary None
Eric M. Banhazl Vice President None
</TABLE>
* The principal business address of persons and entities listed is 479
West 22nd Street, New York, New York 10011.
Item 30. Location of Accounts and Records.
The accounts, books, or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 will be kept
by the Registrant's Custodian, Fund Accountant, and Transfer Agent, State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, except
those records relating to portfolio transactions and the basic organizational
and Trust documents of the Registrant (see Subsections (2)(iii), (4), (5), (6),
(7), (9), (10) and (11) of Rule 31a-1(b)), which will be kept by the Registrant
at 1999 Harrison Street, Suite 700, Oakland California 94612.
Item 31. Management Services.
There are no management-related service contracts not
discussed in Parts A and B.
Item 32. Undertakings.
(a) Registrant has undertaken to comply with Section 16(a) of
the Investment Company Act of 1940, as amended, which requires the prompt
convening of a meeting of shareholders to elect trustees to fill existing
vacancies in the Registrant's Board of Trustees in the event that less than a
majority of the trustees have been elected to such position by shareholders.
Registrant has also undertaken promptly to call a meeting of shareholders for
the purpose of voting upon the question of removal of any Trustee or Trustees
when requested in writing to do so by the record holders of not less than 10
percent of the Registrant's outstanding shares and to assist its shareholders in
communicating with other shareholders in accordance with the requirements of
Section 16(C) of the Investment Company Act of 1940, as amended.
[Remainder of Page Intentionally Left Blank]
<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 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Oakland, and State of
California on the 14th day of June 1996.
JURIKA & VOYLES FUND GROUP
By: William K. Jurika*
------------------
William K. Jurika
Chairman and Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ William K. Jurika* Principal Executive June 14,1996
- ---------------------- Officer and Trustee
William K. Jurika
/s/ Glenn C. Voyles* Trustee June 14, 1996
- ----------------------
Glenn C. Voyles
/s/ Karl O. Mills* Principal Financial June 14, 1996
- ---------------------- and Accounting
Officer and Trustee
Karl O. Mills
/s/ Darlene T. DeRemer* Trustee June 14, 1996
- ----------------------
Darlene T. DeRemer
/s/ Bruce M. Mowat* Trustee June 14, 1996
- ---------------------
Bruce M. Mowat
/s/ Robert E. Bond* Trustee June 14, 1996
- ---------------------
Robert E. Bond
* By: /s/ Eric M. Banhazl
-------------------
Eric M. Banhazl,
pursuant to Power of Attorney
previously filed
</TABLE>
<PAGE>
File Nos. 33-81754
811-8646
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
EXHIBITS
to
FORM N-1A
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
and
under
THE INVESTMENT COMPANY ACT OF 1940
-------------------------
JURIKA & VOYLES FUND GROUP
(Exact Name of Registrant as Specified in its Charter)
<PAGE>
Exhibit Index
Exhibit No. Document
- ----------- --------
(9)(b) Form of Multiple Class Plan
(11) Consent of Independent Auditors
(15) Form of Share Marketing Plan
MULTIPLE CLASS PLAN
OF
JURIKA & VOYLES FUND GROUP
This Multiple Class Plan (this "Plan") is required by Securities and
Exchange Commission Rule 18f-3 promulgated under the Investment Company Act of
1940 (the "1940 Act").
This Plan shall govern the terms and conditions under which Jurika &
Voyles Fund Group (the "Trust") may issue separate classes of shares
representing interests in the series of the Trust (the "Funds") listed on
Appendix A. To the extent that a subject matter herein is covered by the Trust's
Agreement and Declaration of Trust or Bylaws, the Agreement and Declaration of
Trust and Bylaws will control in the event of any inconsistencies with the
descriptions herein.
SECTION 1. Rights and Obligations. Except as set forth herein, all
classes of shares issued by a Fund shall have identical voting, dividend,
liquidation and other rights, preferences, powers, restrictions, limitations,
qualifications, designations, and terms and conditions. The only differences
among the various classes of shares relate solely to the following: (a) each
class may be subject to different class expenses as discussed under Section 3 of
this Plan; (b) each class may bear a different identifying designation; (c) each
class has exclusive voting rights with respect to matters solely affecting such
class (except as set forth in Section 6 below); (d) each class may have
different exchange privileges; and (e) each class may provide for the automatic
conversion of that class into another class.
SECTION 2. Classes of Shares and Designation Thereof. Each Fund may
offer any or all of the following classes of shares:
(a) Class J Shares. "Class J Shares" will be sold at
their net asset value without the imposition of a front-end sales load
or contingent deferred sales charge ("CDSC").
Class J Shares will not be subject to a Rule 12b-1 distribution fee and
will not be subject to a shareholder service fee.
(b) Class K Shares. "Class K Shares" will be sold at
their net asset value without the imposition of a front-end sales load
or CDSC.
Class K Shares will be subject to a Rule 12b-1
distribution fee at an annual rate of up to 0.25 percent of the daily
net assets attributable to the Class K Shares. Class K shares will not
be subject to a shareholder service fee.
The current "Share Marketing Plan" for Jurika &
Voyles Fund Group shall be applicable to the Class K Shares.
The Class K Shares may be offered only to one or more
of the following categories of investors: (1) benefit plans that are
not affiliated with Jurika & Voyles, Inc. (the "Manager") such as
qualified retirement plans, other than individual retirement accounts
and self-employed retirement plans, with such characteristics as a Fund
may establish, provided that any such unaffiliated benefit plans have a
separate trustee who is vested with investment discretion as to plan
assets, has limitations on the ability of plan beneficiaries to access
their plan investments without incurring adverse tax consequences, and
will not include self- directed plans; (2) tax-exempt retirement plans
consisting of qualified defined contribution plans maintained pursuant
to Section 401(a) of the Internal Revenue Code of 1986 (the "Code"), as
amended, under which assets will be held in trust by a trustee and as
to which employees will have limited pre-retirement access to assets;
(3) banks and insurance companies that are not affiliated with the
Manager purchasing for their own account or on behalf of customers; and
(4) financial advisers, broker-dealers and financial intermediaries
that hold accounts or provide services to shareholders or both.
SECTION 3. Allocation of Expenses.
(a) Class Expenses. Each class of shares may be
subject to different class expenses consisting of: (1) Rule 12b-1 plan
distribution fees, if applicable to a particular class; (2) transfer
agency and other recordkeeping costs to the extent allocated to a
particular class; (3) Securities and Exchange Commission ("SEC") and
blue sky registration fees incurred separately by a particular class;
(4) litigation or other legal expenses relating solely to a particular
class; (5) printing and postage expenses related to the preparation and
distribution of class specific materials such as shareholder reports,
prospectuses and proxies to shareholders of a particular class; (6)
expenses of administrative personnel and services as required to
support the shareholders of a particular class; (7) audit or accounting
fees or expenses relating solely to a particular class; (8) director
fees and expenses incurred as a result of issues relating solely to a
particular class and (9) any other expenses subsequently identified
that should be properly allocated to a particular class, which shall be
approved by the Board of Trustees (collectively, "Class Expenses").
(b) Other Expenses. Except for the Class Expenses
discussed above (which may be allocated to the appropriate class), all
expenses incurred by each Fund will be allocated to each class of
shares on the basis of the net asset value of each class to the net
asset value of the Trust or the Fund, as the case may be.
-2-
<PAGE>
(c) Waivers and Reimbursements of Expenses. The
Manager and any provider of services to the Funds may waive or
reimburse the expenses of a particular class or classes, provided,
however, that such waiver shall not result in cross- subsidization
between classes.
SECTION 4. Allocation of Income. The Funds will allocate income and
realized and unrealized capital gains and losses based on the relative net
assets of each class of shares.
SECTION 5. Exchange Privileges. A class of shares of a Fund may be
exchanged only for the same class of shares of another Fund. All exchanges will
be subject to such conditions as may be imposed from time to time as disclosed
in Appendix B.
SECTION 6. Conversions. Each Class K Share shall convert automatically
to a Class J Share upon that Class K Share's having been subject to the
cumulative maximum permitted Rule 12b-1 fees under the applicable limitations of
the National Association of Securities Dealers, Inc. The conversion of such
share shall be effected on the basis of net asset value without the imposition
of a front-end sales loan, CDSC or other charge. In no event will a class of
shares automatically convert into shares of a class with a distribution
arrangement that could be viewed as less favorable to the shareholder as
measured by overall cost.
The implementation of this conversion feature is subject to the
continuing availability of a ruling of the Internal Revenue Service, or of an
opinion of counsel or tax adviser, stating that the conversion of one class of
shares to another does not constitute a taxable event under federal income tax
law. The conversion feature may be suspended if such a ruling or opinion is not
available.
SECTION 7. Effective When Approved. This Plan shall not take effect
until a majority of the trustees of the Trust, including a majority of the
trustees who are not interested persons of the Trust, find that the Plan, as
proposed and including the expense allocations, is in the best interests of each
class individually and the Trust as a whole.
SECTION 8. Amendments. This Plan may not be amended to materially
change the provisions of this Plan unless such amendment is approved in the
manner specified in Section 7 above.
-3-
<PAGE>
APPENDIX A TO
MULTIPLE CLASS PLAN
OF
JURIKA & VOYLES FUND GROUP
Jurika & Voyles Mini-Cap Fund
Class J Shares
Class K Shares
Jurika & Voyles Value + Growth Fund
Class J Shares
Class K Shares
Jurika & Voyles Balanced Fund
Class J Shares
Class K Shares
-1-
<PAGE>
APPENDIX B TO
MULTIPLE CLASS PLAN
OF
JURIKA & VOYLES FUND GROUP
EXCHANGE PRIVILEGES
SECTION 1. TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the Funds
discussed herein may participate in exchanges as described below.
An exchange is permitted only in the following circumstances:
(a) if the Funds offer more than one class of shares, the exchange must
be between the same class of shares (e.g., Class J and Class K shares
of a Fund cannot be exchanged for each other);
(b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the Fund acquired
through such exchange;
(c) the shares of the Fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides;
(d) the exchange must be made between accounts having identical
registrations and addresses;
(e) the full amount of the purchase price for the shares being
exchanged must have already been received by the Fund;
(f) the account from which shares have been exchanged must be coded as
having a certified taxpayer identification number on file or, in the
alternative, an appropriate IRS Form W-8 (certificate of foreign
status) or Form W-9 (certifying exempt status) must have been received
by the Fund;
(g) newly acquired shares (through either an initial or subsequent
investment) are held in an account for at least ten days, and all other
shares are held in an account for at least one day, prior to the
exchange; and
(h) certificates representing shares must be returned before shares can
be exchanged.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT
IS PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY
BE MODIFIED OR DISCONTINUED BY ANY SUCH FUNDS OR BY THE MANAGER OR DISTRIBUTOR
AT ANY TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
-1-
<PAGE>
Shares to be exchanged will be redeemed at their net asset value as
determined at the close of business on the day that an exchange request in
proper form (described below) is received, as described in the applicable
prospectus. Exchange requests received after the required time will result in
the redemption of shares at their net asset value as determined at the close of
business on the next business day.
In the event of unusual market conditions, a Fund reserves the right to
reject any exchange request if, in the judgment of the Manager, the number of
requests or the total value of the shares that are the subject of the exchange
places a material burden on a Fund. For example, the number of exchanges by
investment managers making market timing exchanges may be limited.
SECTION 2. FEES. There is no fee for exchanges among the Funds.
SEE THE APPLICABLE PROSPECTUS FOR MORE INFORMATION ABOUT SHARE
EXCHANGES.
-2-
EXHIBIT 11
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference of our report dated
July 28, 1995 on the financial statements of the Jurika & Voyles Mini-Cap Fund,
Jurika & Voyles Value + Growth Fund, and Jurika & Voyles Balanced Fund, series
of Jurika & Voyles Fund Group, referred to therein in Post-Effective Amendment
No. 3 to the Registration Statement on Form N-1A, File No. 33-81754, as filed
with the Securities and Exchange Commission.
We also consent to the reference to our firm in each prospectus under
the caption "Financial Highlights" for the periods ended June 30, 1995 and in
the Statement of Additional Information under the caption "Independent
Auditors".
/s/ McGladrey & Pullen
- ----------------------
New York, New York
June 14, 1996
JURIKA & VOYLES FUND GROUP
--------------------------
SHARE MARKETING PLAN
(Rule 12b-1 Plan)
This Share Marketing Plan (the "Plan") is adopted in
accordance with Rule 12b-1 (the "Rule") under the Investment Company Act of
1940, as amended (the "Act"), by JURIKA & VOYLES FUND GROUP, a Delaware business
trust (the "Trust") with respect to certain classes of each series of its shares
(each such class covered by this Plan, a "Class" and each such series, a
"Fund"). The Plan has been approved by a majority of the Trust's Board of
Trustees, including a majority of the Trustees who are not interested persons of
the Trust and who have no direct or indirect financial interest in the operation
of the Plan (the "independent Trustees"), cast in person at a meeting called for
the purpose of voting on the Plan and by a majority of the shareholders of each
Class of each Fund as required by the Act.
In reviewing the Plan, the Board of Trustees considered the
proposed range and nature of payments and terms of the Investment Management
Agreement between the Trust on behalf of each Fund and Jurika & Voyles, Inc.
(the "Adviser") and the nature and amount of other payments, fees and
commissions that may be paid to the Adviser, its affiliates and other agents of
the Trust. The Board of Trustees, including the independent Trustees, concluded
that the proposed overall compensation of the Adviser and its affiliates was
fair and not excessive.
In its considerations, the Board of Trustees also recognized
that uncertainty may exist from time to time with respect to whether payments to
be made by the Trust to the Adviser, as the initial "distribution coordinator,"
or other firms under agreements with respect to a Fund may be deemed to
constitute impermissible distribution expenses. As a general rule, an investment
company may not finance any activity primarily intended to result in the sale of
its shares, except pursuant to the Rule. Accordingly, the Board of Trustees
determined that the Plan also should provide that payments by the Trust and
expenditures made by others out of monies received from the Trust which are
later deemed to be for the financing of any activity primarily intended to
result in the sale of Class shares shall be deemed to have been made pursuant to
the Plan.
The approval of the Board of Trustees included a determination
that in the exercise of the Trustees' reasonable business judgment and in light
of their fiduciary duties, there is a reasonable likelihood that the Plan will
benefit the Trust, the Class of each Fund to which the Plan applies and its
shareholders. The Plan also has been approved by a vote of at least a majority
of the outstanding voting securities of the Class of each Fund, as defined in
the Act.
-1-
<PAGE>
The provisions of the Plan are:
1. Annual Fee. The Trust will pay to Adviser, as the Funds'
distribution coordinator, an annual fee for the Adviser's services in such
capacity including its expenses in connection with the promotion and
distribution of the Class's shares and related shareholder servicing
(collectively, "Distribution Expenses"). The annual fee paid to Adviser under
the Plan will be calculated daily and paid monthly by the Class of each Fund on
the first day of each month based on the average daily net assets of the
specified Class of each Fund, as follows:
Class K at an annual rate of up to 0.25%.
2. Distribution Expenses in Excess of or Less Than Amount of
Fee. All Distribution Expenses in excess of the fee rates provided for in this
Plan may be carried forward and resubmitted in a subsequent fiscal year provided
that (i) Distribution Expenses cannot be carried forward for more than three
years following initial submission; and (ii) the Trust's Board of Trustees has
made a determination at the time of initial submission that the Distribution
Expenses are appropriate to be reimbursed. The fees paid by the Trust on behalf
of the Class of each Fund shall be refundable if in any given year the fees are
greater than the Distribution Expenses for that year. Distribution expenses will
be paid on a first-in, first-out basis.
3. Expenses Covered by the Plan. The fee paid under Section 1
of the Plan may be used to pay for any expenses primarily intended to result in
the sale of the Class's shares ("distribution services"), including, but not
limited to: (a) costs of payments, including incentive compensation, made to
agents for and consultants to Adviser, any affiliate of the Adviser or the
Trust, including pension administration firms that provide distribution and
shareholder related services and broker-dealers that engage in the distribution
of the Class's shares; (b) payments made to, and expenses of, persons who
provide support services in connection with the distribution of a Class's shares
and servicing of a Class's shareholders, including, but not limited to,
personnel of Adviser, office space and equipment, telephone facilities,
answering routine inquiries regarding the Class, processing shareholder
transactions and providing any other shareholder services not otherwise provided
by the Trust's transfer agency or other servicing arrangements; (c) all payments
made pursuant to the form of Distribution Agreement attached hereto as an
exhibit; (d) costs relating to the formulation and implementation of marketing
and promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (e) costs of printing and distributing prospectuses, statements of
additional information and reports of the Fund to prospective shareholders of
the Class; (f) costs involved in preparing, printing and distributing sales
literature pertaining to the Class; and (g) costs involved in obtaining whatever
information, analyses and reports with respect to marketing and
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<PAGE>
promotional activities that the Trust may, from time to time, deem advisable.
Such expenses shall be deemed incurred whether paid directly by Adviser as
distribution coordinator or by a third party to the extent reimbursed therefor
by Adviser.
4. Written Reports. Adviser shall furnish to the Board of
Trustees of the Trust, for its review, on a quarterly basis, a written report of
the monies paid to it under the Plan with respect to the Class of each Fund, and
shall furnish the Board of Trustees of the Trust with such other information as
the Board of Trustees may reasonably request in connection with the payments
made underthe Plan in order to enable the Board of Trustees to make an informed
determination of whether the Plan should be continued as to the Class of each
Fund.
5. Termination. The Plan may be terminated as to the Class of
any Fund at any time, without penalty, by vote of a majority of the outstanding
voting securities of the Class of a Fund, and any Distribution Agreement under
the Plan may be likewise terminated on not more than sixty (60) days' written
notice. Once terminated, no further payments shall be made under the Plan
notwithstanding the existence of any unreimbursed current or carried forward
Distribution Expenses.
6. Amendments. The Plan and any Distribution Agreement may not
be amended to increase materially the amount to be spent for distribution and
servicing of Class shares pursuant to Section 1 hereof without approval by a
majority of the outstanding voting securities of the Class of a Fund. All
material amendments to the Plan and any Distribution Agreement entered into with
third parties shall be approved by the independent Trustees cast in person at a
meeting called for the purpose of voting on any such amendment. The Adviser may
assign its responsibilities and liabilities under the Plan to another party who
agrees to act as "distribution coordinator" for the Trust with the consent of a
majority of the independent Trustees.
7. Selection of Independent Trustees. So long as the Plan is
in effect, the selection and nomination of the Trust's independent Trustees
shall be committed to the discretion of such independent Board of Trustees.
8. Effective Date of Plan. The Plan shall take effect at such
time as it has received requisite Trustee and shareholder approval and, unless
sooner terminated, shall continue in effect for a period of more than one year
from the date of its execution only so long as such continuance is specifically
approved at least annually by the Board of Trustees of the Trust, including the
independent Trustees, cast in person at a meeting called for the purpose of
voting on such continuance.
9. Preservation of Materials. The Trust will preserve copies
of the Plan, any agreements relating to the Plan and any report made pursuant to
Section 5 above, for a period of
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<PAGE>
not less than six years (the first two years in an easily accessible place) from
the date of the Plan, agreement or report.
10. Meanings of Certain Terms. As used in the Plan, the terms
"interested person" and "majority of the outstanding voting securities" will be
deemed to have the same meaning that those terms have under the Act and the
rules and regulations under the Act, subject to any exemption that may be
granted to the Trust under the Act by the Securities and Exchange Commission.
This Plan and the terms and provisions thereof are hereby
accepted and agreed to by the Trust and Adviser, as distribution coordinator, as
evidenced by their execution hereof, as of this __th day of _____ 1996.
JURIKA & VOYLES FUND GROUP
By:_________________________________
Title:______________________________
JURIKA & VOYLES, INC.,
as Distribution Coordinator
By:_________________________________
Title:______________________________
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<PAGE>
JURIKA & VOYLES FUND GROUP
--------------------------
Share Marketing Agreement
EXHIBIT ONLY
- -----------------------------------
- -----------------------------------
- -----------------------------------
- -----------------------------------
Ladies and Gentlemen:
This Share Marketing Agreement has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Company
Act"), by JURIKA & VOYLES FUND GROUP, a Delaware business trust (the "Trust"),
on behalf of various classes of the series of the Trust (each series, a "Fund"),
as governed by the terms of a Share Marketing Plan (Rule 12b-1 Plan) (the
"Plan").
The Plan has been approved by a majority of the Trustees who
are not interested persons of the Trust or the Funds and who have no direct or
indirect financial interest in the operation of the Plan (the "independent
Trustees"), cast in person at a meeting called for the purpose of voting on such
Plan. Such approval included a determination that in the exercise of the
reasonable business judgment of the Board of Trustees and in light of the
Trustees' fiduciary duties, there is a reasonable likelihood that the Plan will
benefit each class of each Fund and its shareholders. The Plan also has been
approved by a vote of at least a majority of the outstanding voting securities
of each class of each Fund, as defined in the Company Act.
1. To the extent you provide eligible shareholder services of
the type identified in the Plan to the Funds and the class (the "Class") of
those Funds identified in the attached Schedule (the "Schedule"), we shall pay
you a monthly fee based on the average net asset value of Class shares during
any month which are attributable to customers of your firm, at the rate set
forth on the Schedule.
2. In no event may the aggregate annual fee paid to you
pursuant to the Schedule exceed ____ percent of the value of the net assets of
the Class of each Fund held in your customers' accounts which are eligible for
payment pursuant to this Agreement (determined in the same manner as the Class
uses to compute its net assets as set forth in its then effective Prospectus),
without approval by a majority of the outstanding shares of the Class of each
Fund.
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<PAGE>
3. You shall furnish us and the Trust with such information as
shall reasonably be requested by the Trust's Board of Trustees with respect to
the services performed by you and the fees paid to you pursuant to the Schedule.
4. We shall furnish to the Board of Trustees of the Trust, for
its review, on a quarterly basis, a written report of the amounts expended under
the Plan by us with respect to the Class of each Fund and the purposes for which
such expenditures were made.
5. You agree to make shares of the Class of the Funds
available only (a) to your customers or entities that you service at the net
asset value per share next determined after receipt of the relevant purchase
instruction or (b) to each such Fund itself at the redemption price for shares
of the Class, as described in each Fund's then-effective Prospectus.
6. No person is authorized to make any representations
concerning a Fund or shares of a Fund except those contained in each Fund's
then-effective Prospectus or Statement of Additional Information and any such
information as may be released by a Fund as information supplemental to such
Prospectus or Statement of Additional Information.
7. Additional copies of each such Prospectus or Statement of
Additional Information and any printed information issued as supplemental to
each such Prospectus or Statement of Additional Information will be supplied by
each Fund to you in reasonable quantities upon request.
8. In no transaction shall you have any authority whatever to
act as agent of the Funds and nothing in this Agreement shall constitute you or
the Fund the agent of the other. You are not authorized to act as an underwriter
of shares of the Funds or as a dealer in shares of the Funds.
9. All communications to the Funds shall be sent to: Jurika &
Voyles, Inc., as Distribution Coordinator for the Funds, 1999 Harrison Street,
Suite 700, Oakland, California 94612-3517. Any notice to you shall be duly given
if mailed or telegraphed to you at your address as indicated in this Agreement.
10. This Agreement may be terminated by us or by you, by the
vote of a majority of the Trustees of the Trust who are independent Trustees, or
by a vote of a majority of the outstanding shares of the Class of a Fund, on
sixty (60) days' written notice, all without payment of any penalty. It shall
also be terminated automatically by any act that terminates the Plan.
11. The provisions of the Plan between the Trust and us,
insofar as they relate to you, are incorporated herein by reference.
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<PAGE>
This Agreement shall take effect on the date indicated below,
and the terms and provisions thereof are hereby accepted and agreed to by us as
evidenced by our execution hereof.
JURIKA & VOYLES, INC.
Distribution Coordinator
By: EXHIBIT ONLY
-----------------------
Authorized Officer
Dated: ________________________
Agreed and Accepted:
- ----------------------------
(Name)
By: ________________________
(Authorized Officer)
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<PAGE>
JURIKA & VOYLES FUND GROUP
----------
SCHEDULE TO SHARE MARKETING AGREEMENT
BETWEEN JURIKA & VOYLES, INC.
AS DISTRIBUTION COORDINATOR
AND
----------------------------------
(Name)
Pursuant to the provisions of the Share Marketing Agreement
between the above parties with respect to Jurika & Voyles Fund Group, Jurika &
Voyles, Inc., as Distribution Coordinator, shall pay a monthly fee to the
above-named party based on the average net asset value of shares of the Class of
each Fund during the previous calendar month the sales of which are attributable
to the above-named party, as follows:
Fund Class Fee
- ---- ----- ---
K
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