Filed with the Securities and Exchange Commission on October 28, 1997
1933 Act Registration File No. 33-84762
1940 Act File No. 811-8648
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 5 x
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 8 x
KIEWIT MUTUAL FUND
(Exact Name of Registrant as Specified in Charter)
1000 Kiewit Plaza, Omaha, NE 68131-3374
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (402) 342-2052
Kenneth D. Gaskins, Esq., Secretary Copy to:
Kiewit Mutual Fund Joseph V. Del Raso, Esq.
1000 Kiewit Plaza Stradley, Ronan, Stevens & Young, LLP
Omaha, NE 68131-3374 2600 One Commerce Square
(Name and Address of Agent for Service) Philadelphia, PA 19102
It is proposed that this filing will become effective
X immediately upon filing pursuant to paragraph (b)
on pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
X This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
CROSS-REFERENCE SHEET
Pursuant to Rule 481(a)
KIEWIT MUTUAL FUND
Items Required By Form N-1A
PART A - PROSPECTUS
Item No. Item Caption Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Highlights; Expense Table
3. Condensed Financial Financial Highlights;
Information Performance Information
4. General Description of Cover Page; Highlights; Investment
Registrant Objective and Policies; Risk Factors;
General Information
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Dividends, Capital Gains Distributions
Securities and Taxes; Shareholder Accounts; General
Information
7. Purchase of Securities Highlights; Purchase of Shares;
Being Offered Shareholder Accounts; Valuation of
Shares; Exchange of Shares
8. Redemption or Repurchase Shareholder Accounts; Redemption of Shares
9. Pending Legal Proceedings Not Applicable
CROSS-REFERENCE SHEET
Pursuant to Rule 481(a)
KIEWIT MUTUAL FUND
Items Required By Form N-1A (continued)
PART B - STATEMENT OF ADDITIONAL INFORMATION
Caption in Statement of
Item No. Item Caption Additional Information
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information History
and History
13. Investment Objectives Investment Limitations and Policies
and Policies
14. Management of the Fund Management of the Fund
15. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities
16. Investment Advisory and Management of the Fund; Other
Other Services Information
17. Brokerage Allocation Brokerage Transactions
18. Capital Stock and Other Not Applicable
Securities
19. Purchase, Redemption and Purchase and Redemption of Shares
Pricing of Securities
Being Offered
20. Tax Status Tax Matters
21. Underwriters Management of the Fund
22. Calculation of Performance Calculation of Performance Data
Data
23. Financial Statements Financial Statements;
Report of Independent Accountants
KIEWIT MUTUAL FUND
K CLASS SHARES
PROSPECTUS
October 31, 1997
This prospectus describes the Kiewit Money Market Portfolio,
Kiewit Government Money Market Portfolio, Kiewit Short-Term
Government Portfolio, Kiewit Intermediate-Term Bond Portfolio,
Kiewit Tax-Exempt Portfolio and Kiewit Equity Portfolio
(collectively the "Portfolios" or "Feeder Portfolios" and
individually a "Portfolio"), each a series of shares issued by
Kiewit Mutual Fund (the "Fund"), 1000 Kiewit Plaza, Omaha, NE
68131-3344, (800) 2KIEWIT. Each Portfolio is an open-end,
diversified, management investment company which currently offers
two separate classes of shares: K Class Shares and S Class Shares.
Shares of each class represent equal, pro-rata interests in a
Portfolio and accrue dividends in the same manner, except that S
Class Shares bear distribution expenses payable by the Class as
compensation for distribution of the S Class shares. The
securities offered in this Prospectus are K Class Shares, which are
not subject to any sales or distribution charges. Information
concerning the Fund's S Class shares may be obtained by calling the
Fund at the telephone number stated above.
The Fund issues six series of shares, each of which represents
a separate class of the Fund's shares of beneficial interest,
having its own investment objective and policies. The investment
objective of the Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio is to provide high current income
while maintaining a stable share price. The investment objective
of the Kiewit Short-Term Government Portfolio is to provide
investors with as high a level of current income as is consistent
with the maintenance of principal and liquidity. The investment
objective of the Kiewit Intermediate-Term Bond Portfolio is to
provide as high a level of current income as is consistent with
reasonable risk. The investment objective of the Kiewit Tax-
Exempt Portfolio is to provide as high a level of current income
exempt from federal income tax as is consistent with reasonable
risk. The investment objective of the Kiewit Equity Portfolio is
to achieve long-term capital appreciation.
Unlike many other investment companies which directly acquire
and manage their own portfolio of securities, each Portfolio seeks
to achieve its investment objective by investing all of its
investable assets in a corresponding series of shares of Kiewit
Investment Trust (the "Trust"), an open-end, management investment
company that issues series of shares (individually and
collectively, the "Series") having the same investment objective,
policies and limitations as each of the Portfolios. The investment
experience of each Feeder Portfolio will correspond directly with
the investment experience of its corresponding Series. Investors
should carefully consider this investment approach. For additional
information, see "Special Information About The Portfolios'
Structure."
This prospectus contains information about the Portfolios that
prospective investors should know before investing and should be
read carefully and retained for future reference. A Statement of
Additional Information dated October 31, 1997 is incorporated
herein by reference, has been filed with the Securities and
Exchange Commission and is available upon request, without charge,
by writing or calling the Fund at the above address or telephone
number.
The shares of the Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio are neither insured nor
guaranteed by the U.S. Government. While such Portfolios will make
every effort to maintain a stable net asset value of $1.00 per
share, there is no assurance that the Portfolios will be able to do
so.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
TABLE OF CONTENTS
Page
HIGHLIGHTS 4
EXPENSE TABLE 7
FINANCIAL HIGHLIGHTS 9
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE 12
INVESTMENT OBJECTIVES AND POLICIES 13
Kiewit Money Market Portfolio 13
Kiewit Government Money Market Portfolio 15
Kiewit Short-Term Government Portfolio 16
Kiewit Intermediate-Term Bond Portfolio 17
Kiewit Tax-Exempt Portfolio 18
Kiewit Equity Portfolio 19
Other Investment Policies 21
RISK FACTORS 22
MANAGEMENT OF THE FUND 23
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES 26
PURCHASE OF SHARES 28
SHAREHOLDER ACCOUNTS 29
VALUATION OF SHARES 30
EXCHANGE OF SHARES 31
REDEMPTION OF SHARES 31
PERFORMANCE INFORMATION 33
GENERAL INFORMATION 33
APPENDIX - DESCRIPTION OF RATINGS 36
HIGHLIGHTS
The Fund
The Fund is an open-end, diversified management investment
company commonly known as a "mutual fund." The Fund was organized
as a Delaware business trust on June 1, 1994 and is registered
under the Investment Company Act of 1940 (the "1940" Act). The
Fund currently offers six series of shares: Kiewit Money Market
Portfolio, Kiewit Government Money Market Portfolio, Kiewit Short-
Term Government Portfolio, Kiewit Intermediate-Term Bond Portfolio,
Kiewit Tax-Exempt Portfolio and Kiewit Equity Portfolio. Each
Portfolio offers two classes of shares, K Class Shares and S Class
Shares. All shares that were registered and outstanding as of
February 28, 1997 were redesignated as K Class Shares.
Investment Objectives
The investment objective of each Portfolio of Kiewit Mutual
Fund is to provide its investors with:
Money Market High current income, while maintaining a
stable share price. The Money Market
Portfolio will invest all of its assets
in the Money Market Series of the Trust,
which in turn invests in short-term money
market securities.
Government Money Market High current income, while maintaining a
stable share price and a credit rating in
the highest category for money market
funds as determined by an independent
rating agency. The Government Money
Market Portfolio will invest all of its
assets in the Government Money Market
Series of the Trust, which in turn
invests in securities issued or
guaranteed by the U.S. Government, its
agencies or instrumentalities.
Short-Term Government High level of current income,
consistent with the maintenance of
principal and liquidity. The Short-Term
Government Portfolio will invest all of
its assets in the Short-Term Government
Series of the Trust, which in turn
invests in securities issued or
guaranteed by the U.S. Government, its
agencies, or instrumentalities.
Intermediate-Term Bond High level of current income,
consistent with reasonable risk. The
Portfolio will invest all of its assets
in the Kiewit Intermediate-Term Bond
Series of the Trust, which in turn
invests in investment grade debt
securities.
Tax-Exempt High level of current income, exempt from
federal income tax, consistent with
reasonable risk. The Tax-Exempt
Portfolio will invest all of its assets
in the Tax-Exempt Series of the Trust,
which in turn invests primarily in
municipal obligations exempt from federal
income tax.
Equity Long-term capital appreciation. The Portfolio
will invest all of its assets
in the Kiewit Equity Series of the Trust,
which in turn invests in the equity
securities of companies which appear, in
the opinion of the investment adviser, to
be undervalued in the marketplace at the
time of purchase.
Although the investment objective of each Portfolio is not
fundamental and may be changed by the Board of Trustees without
shareholder approval, the Fund intends to notify shareholders
before making any material change. Due to the inherent risks of
investments, there can be no assurance that a Portfolio will
achieve its objective. See "Investment Objectives And Policies."
How to Purchase Shares
After you open an account, you may purchase K Class Shares by
(a) writing the Fund and enclosing your check as payment or (b) by
calling the Fund at (800) 2KIEWIT to arrange for payment by wire
transfer. You may open an account by mailing a completed
application form to the Fund. The public offering price of the
shares of each Portfolio is the net asset value per share next
determined after acceptance of the purchase order and payment. The
K Class Shares may be purchased without a sales load, exchange fee,
or distribution fee under a Rule 12b-1 plan. See "Purchase Of
Shares."
How to Redeem Shares
You may redeem K Class Shares by mailing written instructions
to the Fund or by calling the Fund at (800) 2KIEWIT (if you
requested telephone redemption privileges on an application form).
Shares will be redeemed at the net asset value per share next
determined after acceptance of a redemption request. The Fund will
promptly mail you a check, unless other arrangements have been
made. See "Redemption Of Shares."
Dividend Reinvestment
Each Portfolio, except the Kiewit Equity Portfolio, intends to
pay monthly dividends from its net investment income and will pay
net capital gains, if any, annually. The Kiewit Equity Portfolio
intends to pay annual dividends from net investment income,
together with any net capital gains.
You may choose to receive dividends and capital gains
distributions in cash or you may choose to automatically reinvest
them in additional shares of the Portfolio. See "Dividends,
Capital Gains Distributions And Taxes."
Investment Manager, Underwriter and Servicing Agents
Kiewit Investment Management Corp. serves as the investment
manager of each Series of the Trust and also provides the
Portfolios with certain administrative services. Rodney Square
Distributors, Inc. serves as the Portfolios' underwriter.
Wilmington Trust Company serves as the custodian of the Portfolios'
assets and Rodney Square Management Corporation serves as the
Portfolios' administrator, transfer agent and accounting services
agent. See "Management Of The Fund."
Risk Factors
Each Portfolio, through its investment in a corresponding
Series of the Trust, is subject to certain risks. Investors should
consider a number of factors: (i) each Series of the Trust invests
in securities that fluctuate in value, and there can be no
assurance that the objective of any Portfolio will be achieved;
(ii) each Series of the Trust may invest in repurchase and reverse
repurchase agreements, which involve the risk of loss if the
counterparty defaults on its obligations under the agreement; (iii)
each Series of the Trust has reserved the right to borrow amounts
not exceeding 33% of its net assets; and (iv) the Kiewit
Intermediate-Term Bond Series may invest in mortgage securities,
whose market values may vary with changes in market interest rates
to a greater or lesser extent than the market values of other debt
securities. Additionally, the policy of the Portfolios to invest
in the corresponding Series of the Trust also involves certain
risks. See "Risk Factors."
Peter Kiewit Sons', Inc.
An investment in the Fund is not a direct or indirect
investment in the common stock of Peter Kiewit Sons', Inc. ("PKS").
Virtually all of PKS' common stock is owned by employees or former
employees of PKS. The Fund is restricted from investing in the
securities of PKS and its affiliates. PKS and its affiliates do
not guarantee that an investment in the Fund will produce
satisfactory results.
EXPENSE TABLE
Shareholder Transaction Costs None
Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Govern-
Money ment Short-Term Intermediate- Tax-
Market Money Government Term Bond Exempt Equity
Portfolio Market Portfolio Portfolio Portfolio Portfolio
Portfolio
Management Fees
(after fee
waiver) .13% .13% .16% .32% .35% .56%
12b-1 Fees none none none none none none
Other
Expenses .07% .07% .14% .18% .15% .24%
Total Portfolio
Operating
Expenses .20% .20% .30% .50% .50% .80%
The information in the Expense Table has been restated to reflect
changes in the amounts of management fees waived and Fund expenses
assumed. The table summarizes the aggregate estimated annual
operating expenses of both the Portfolios' K Class Shares and the
Series of the Trust in which the Portfolios invest. (See
"Management Of The Fund" for a description of Portfolio and Series
expenses.) Through June 30, 1998, Kiewit Investment Management
Corp. has agreed to waive all or a portion of its advisory fee and
to assume certain expenses in order to limit annual operating
expenses of the K Class Shares to not more than the following
percentage of the average daily net assets of each Portfolio:
Kiewit Money Market Portfolio 0.20%; Kiewit Government Money Market
Portfolio 0.20%; Kiewit Short-Term Government Portfolio 0.30%;
Kiewit Intermediate Term Bond Portfolio 0.50%; Kiewit Tax-Exempt
Bond Portfolio 0.50%; and Kiewit Equity Portfolio 0.80%. Without
the waiver of fees by Kiewit Investment Management Corp., the total
expenses of each Portfolio's K Class Shares for the fiscal year
ended June 30, 1997, would have been: Kiewit Money Market
Portfolio 0.27%; Kiewit Short-Term Government Portfolio 0.44%;
Kiewit Intermediate-Term Bond Portfolio 0.58%; Kiewit Tax-Exempt
Portfolio 0.55% and Kiewit Equity Portfolio 0.94%. Without the
waiver of fees, the total expenses of the Kiewit Government Money
Market Portfolio's K Class Shares on an annual basis are estimated
to be 0.27%.
Prior to March 3, 1997, the Portfolios sought to achieve their
investment objectives by acquiring and managing their own
portfolios of securities rather than by investing all of their
assets in the corresponding Series of the Trust. The above figures
have been restated to reflect estimated aggregate annualized
operating expenses of each Feeder Portfolio's K Class Shares and
its corresponding Series as though the Feeder Portfolio's assets
had been invested in the Series during the entire fiscal year ended
June 30, 1997.
Example
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time
period:
1 Year 3 Years 5 Years 10 Years
Money Market Portfolio 2 6 11 26
Government Money Market
Portfolio 2 6 n/a n/a
Short-Term Government
Portfolio 3 10 17 38
Intermediate-Term Bond
Portfolio 5 16 28 63
Tax-Exempt Portfolio 5 16 28 63
Equity Portfolio 8 26 44 99
The purpose of the above Expense Table and Example is to assist
investors in understanding the various costs and expenses that an
investor in the Portfolios' K Class Shares will bear directly or
indirectly. The information set forth above relates only to the
Portfolios' K Class Shares, which shares are subject to different
total fees and expenses than S Class Shares.
The Example should not be considered a representation of past or
future expenses. Actual expenses may be greater or lesser than
those shown. The above Example is based on the Portfolios' actual
expenses for the most recent fiscal period and estimated expenses
for the Government Money Market Portfolio.
The Board of Trustees of the Fund has considered whether such
expenses will be more or less than they would be if the Feeder
Portfolios invest directly in the securities held by the Trust
Series. The aggregate amount of expenses for a Feeder Portfolio
and its corresponding Trust Series may be greater than if the
Portfolio were to invest directly in the securities held by the
corresponding Trust Series. However, the total expense ratios for
the Feeder Portfolios and the Trust Series are expected to be less
over time than such ratios would have been if the Portfolios had
continued to invest directly in the underlying securities. This is
because this arrangement enables various institutional investors,
including the Feeder Portfolios, to pool their assets, which may be
expected to result in economies by spreading certain fixed costs
over a larger asset base. Each shareholder in a Trust Series,
including a Feeder Portfolio, will pay its proportionate share of
the expenses of that Trust Series.
The following tables include selected data for a K Class Share
outstanding from the effective date of the Fund's registration
statement under the Securities Act of 1933 (December 6, 1994) or
commencement of operations, whichever occurs later, through the
end of the Fund's fiscal year on June 30, 1997. The amounts in
these tables are derived from, and should be read in conjunction
with, the Fund's audited financial statements, the notes thereto
and the report of independent accountants thereon all of which
are incorporated by reference into the Fund's Statement of
Additional Information. With reference to the period ended June
30, 1995, see the report of independent accountants included in
the Fund's registration statement and which is available upon
request, without charge, by writing or calling the Fund at 1000
Kiewit Plaza, Omaha, NE 68131-3344, (800) 2KIEWIT. Financial
data is not presented for the Kiewit Government Money Market
Portfolio which had not commenced operations as of June 30, 1997.
For the Period
For the Fiscal For the Fiscal December 6, 1994+
Year Ended Year Ended through
June 30, 1997 June 30, 1996 June 30, 1995
Money Market Portfolio
Net Asset Value - Beginning
of Period $ 1.00 $ 1.00 $ 1.00
Investment Operations:
Net investment income 0.05 0.05 0.03
Distributions:
From net investment
income (0.05) (0.05) (0.03)
Net Asset Value - End
of Period $ 1.00 $ 1.00 $ 1.00
Total Return 5.43% 5.61% 3.31% 1
Ratios (to average net
assets)/Supplemental Data:
Expenses 2 0.20% 0.20% 0.30% 3
Net investment income 2 5.31% 5.47% 5.82% 3
Net assets at end of
period (000) $ 415,285 $ 389,967 $ 380,708
For the Period
For the Fiscal For the Fiscal December 6, 1994+
Year Ended Year Ended through
June 30, 1997 June 30, 1996 June 30, 1995
Short-Term Government Portfolio++
Net Asset Value - Beginning
of Period $ 10.00 $ 10.15 $ 9.90
Investment Operations:
Net investment income 0.60 0.60 0.35
Net realized and unrealized
gain (loss) on investments 0.05 (0.15) 0.25
Total from investment
operations 0.65 0.45 0.60
Distributions:
From net investment income (0.60) (0.60) (0.35)
Net Asset Value - End
of Period $ 10.05 $ 10.00 $ 10.15
Total Return 6.51% 4.66% 6.18% 1
Ratios (to average net assets)/Supplemental Data:
Expenses 2 0.30% 0.30% 0.40% 3
Net investment income 2 5.76% 6.06% 6.17% 3
Portfolio turnover -- 4 57.52% 69.57% 3
Net assets at end of
period (000) $ 129,494 $ 183,316 $ 132,828
+ Effective date of the Fund's registration statement.
++ The above per share data, for the Short-Term Government
Portfolio, has been restated to reflect a 1 for 5 reverse
stock split which occurred on September 25, 1997.
1 The total return for the period has not been annualized.
2 The annualized expense ratio for the Money Market Portfolio,
had there been no fees waived by the Manager, would have been
0.27%, 0.27% and 0.30% for the fiscal years ended June 30,
1997, 1996, and for the period ended June 30, 1995,
respectively. The annualized net investment income ratio for
the Money Market Portfolio, had there been no fees waived by
the Manager, would have been 5.24%, 5.40% and 5.82% for the
fiscal years ended June 30, 1997, 1996 and for the period ended
June 30, 1995, respectively. The annualized expense ratio for
the Short-Term Government Portfolio, had there been no fees
waived by the Manager, would have been 0.44%, 0.43% and 0.46%
for the fiscal years ended June 30, 1997, 1996, and for the
period ended June 30, 1995, respectively. The annualized net
investment income ratio for the Short-Term Government
Portfolio, had there been no fees waived by the Manager, would
have been 5.62%, 5.93% and 6.11% for the fiscal years ended
June 30, 1997, 1996 and for the period ended June 30, 1995,
respectively. The expense and net investment income ratios for
the fiscal year ending June 30, 1997 include expenses allocated
from the Series.
3 Annualized.
4 The Portfolio turnover rate for the Short-Term Government Series was 44.24%.
For the Period
For the Fiscal For the Fiscal December 6, 1994+
Year Ended Year Ended through
June 30, 1997 June 30, 1996 June 30, 1995
Intermediate - Term Bond Portfolio++
Net Asset Value - Beginning
of Period $ 10.05 $ 10.25 $ 9.80
Investment Operations:
Net investment income 0.65 0.65 0.40
Net realized and unrealized
gain (loss) on investments 0.10 (0.20) 0.45
Total from investment
operations 0.75 0.45 0.85
Distributions:
From net investment income (0.65) (0.65) (0.40)
Net Asset Value - End
of Period $ 10.15 $ 10.05 $ 10.25
Total Return 7.51% 4.48% 8.63% 1
Ratios (to average net assets)/Supplemental Data:
Expenses 5 0.50% 0.50% 0.50% 3
Net investment income 5 6.27% 6.37% 6.72% 3
Portfolio turnover -- 6 86.06% 121.36% 3
Net assets at end of
period (000) $ 108,314 $ 122,952 $ 105,020
For the Period
For the Fiscal For the Fiscal December 6, 1994+
Year Ended Year Ended through
June 30, 1997 June 30, 1996 June 30, 1995
Tax-Exempt Portfolio++
Net Asset Value -
Beginning of Period $ 10.10 $ 10.10 $ 9.80
Investment Operations:
Net investment income 0.45 0.45 0.25
Net realized and unrealized
gain (loss) on investments 0.16 - 0.30
Total from investment
operations 0.61 0.45 0.55
Distributions:
From net investment income (0.45) (0.45) (0.25)
From net realized capital gain (0.01) - -
Total distributions (0.46) (0.45) (0.25)
Net Asset Value - End
of Period $ 10.25 $ 10.10 $ 10.10
Total Return 6.15% 4.55% 5.73% 1
Ratios (to average net assets)/Supplemental Data:
Expenses 5 0.50% 0.50% 0.50% 3
Net investment income 5 4.31% 4.47% 4.50% 3
Portfolio turnover - 7 100.61% 92.53% 3
Net assets at end of
period (000) $ 137,903 $ 142,185 $ 135,518
+ Effective date of the Fund's registration statement.
++ The above per share data, for the Intermediate-Term Bond
Portfolio and Tax-Exempt Portfolio, has been restated to
reflect a 1 for 5 reverse stock split which occurred on
September 25, 1997.
1 The total return for the period has not been annualized.
3 Annualized.
5 The annualized expense ratio for the Intermediate-Term Bond
Portfolio, had there been no fees waived by the Manager, would
have been 0.58%, 0.57% and 0.63% for the fiscal years ended
June 30, 1997, 1996, and for the period ended June 30, 1995,
respectively. The annualized net investment income ratio for
the Intermediate-Term Bond Portfolio, had there been no fees
waived by the Manager, would have been 6.19%, 6.30% and 6.59%
for the fiscal years ended June 30, 1997, 1996 and for the
period ended June 30, 1995, respectively. The annualized
expense ratio for the Tax-Exempt Portfolio, had there been no
fees waived by the Manager, would have been 0.55%, 0.54% and
0.53% for the fiscal years ended June 30, 1997, 1996, and for
the period ended June 30, 1995, respectively. The annualized
net investment income ratio for the Tax-Exempt Portfolio, had
there been no fees waived by the Manager, would have been
4.26%, 4.43% and 4.47% for the fiscal years ended June 30,
1997, 1996 and for the period ended June 30, 1995,
respectively. The expense and net investment income ratios for
the fiscal year ending June 30, 1997 include expenses allocated
from the Series.
6 The Portfolio turnover rate for the Intermediate-Term Bond
Series was 51.57%.
7 The Portfolio turnover rate for the Tax-Exempt Series was
62.70%.
For the Period
For the Fiscal For the Fiscal January 5, 1995+
Year Ended Year Ended through
June 30, 1997 June 30, 1996 June 30, 1995
Equity Portfolio
Net Asset Value - Beginning
of Period $ 16.58 $ 14.04 $ 12.50
Investment Operations:
Net investment income 0.13 0.13 0.11
Net realized and unrealized
gain (loss) on investments 4.09 2.56 1.43
Total from investment
operations 4.22 2.69 1.54
Distributions:
From net investment income (0.15) (0.15) -
From net realized capital
gain (0.09) - -
Total distributions (0.24) (0.15) -
Net Asset Value - End
of Period $ 20.56 $ 16.58 $ 14.04
Total Return 25.67% 19.24% 12.32% 1
Ratios (to average net assets)/Supplemental Data:
Expenses 8 0.80% 0.80% 0.80% 3
Net investment income 8 0.80% 1.34% 3.06% 3
Portfolio turnover - 9 16.95% 0.00% 3
Average commission rate paid - 9 $ 0.0637 -
Net assets at end of
period (000) $ 88,763 $ 66,137 $ 20,865
+ Commencement of Operations.
1 The total return for the period has not been annualized.
3 Annualized.
8 For the period from January 5, 1995 through June 30, 1997,
Kiewit Investment Management Corp. (the "Manager") agreed to
waive all or a portion of its fee in an amount that will limit
annual operating expenses to not more than 0.80% of the average
daily net assets of the Portfolio. The annualized expense
ratio, had there been no fees waived by the Manager, would have
been 0.94%, 1.05% and 2.56% for the fiscal years ended June 30,
1997, 1996, and for the period ended June 30, 1995,
respectively. The annualized net investment income ratio for
the Equity Portfolio, had there been no fees waived by the
Manager, would have been 0.66%, 1.09% and 1.30% for the fiscal
years ended June 30, 1997, 1996 and for the period ended June
30, 1995, respectively. The expense and net investment income
ratios for the fiscal year ending June 30, 1997 include
expenses allocated from the Series.
9 The Portfolio turnover rate for the Equity Series was 26.33%
and the combined average commission rate paid by both the
Equity Portfolio and Series was $0.0563.
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE
Each of the six Portfolios of the Fund, unlike many other
investment companies which directly acquire and manage their own
portfolio of securities, seeks to achieve its investment objective
by investing all of its investable assets in a corresponding Series
of the Trust, an open-end, management investment company,
registered under the 1940 Act, that issues Series having the same
investment objective as each of the Portfolios. The investment
objectives of the Portfolios and their corresponding Series may be
changed without shareholder approval. Shareholders of a Feeder
Portfolio will receive written notice at least 30 days prior to the
effective date of any change in the investment objective of the
Portfolio or its corresponding Trust Series.
This prospectus describes the investment objective, policies
and restrictions of each Feeder Portfolio and its corresponding
Series. (See "Portfolio Characteristics And Policies - Kiewit
Money Market Portfolio, Kiewit Government Money Market Portfolio,
Kiewit Short-Term Government Portfolio, Kiewit Intermediate-Term
Bond Portfolio, Kiewit Tax-Exempt Portfolio and Kiewit Equity
Portfolio.") In addition, an investor should read "Management Of
The Fund" for a description of the management and other expenses
associated with the Feeder Portfolios' investment in the Trust.
Other institutional investors, including other mutual funds, may
invest in each Series, and the expenses of such other funds and,
correspondingly, their returns may differ from those of the
Portfolios. Please contact the Fund at 1000 Kiewit Plaza, Omaha,
NE 08131-3344, 1-800-2KIEWIT for information about the
availability of investing in a Series of the Trust other than
through a Feeder Portfolio.
The shares of the Trust Series will be offered to
institutional investors for the purpose of increasing the funds
available for investment, to reduce expenses as a percentage of
total assets and to achieve other economies that might be available
at higher asset levels. While investment in a Series by other
institutional investors offers potential benefits to the Series
and, through their investment in the Series, the Feeder Portfolios
also, institutional investment in the Series also entails the risk
that economies and expense reductions might not be achieved, and
additional investment opportunities, such as increased
diversification, might not be available if other institutions do
not invest in the Series. Also, if an institutional investor were
to redeem its interest in a Series, the remaining investors in that
Series could experience higher pro rata operating expenses, thereby
producing lower returns, and the Series' security holdings may
become less diverse, resulting in increased risk. Institutional
investors that have a greater pro rata ownership interest in a
Series than the corresponding Feeder Portfolio could have effective
voting control over the operation of the Series.
Further, if a Series changes its investment objective in a
manner which is inconsistent with the investment objective of a
corresponding Feeder Portfolio and the Portfolio does not make a
similar change in its investment objective, the Portfolio would be
forced to withdraw its investment in the Series and either seek to
invest its assets in another registered investment company with the
same investment objective as the Portfolio, which might not be
possible, or retain an investment advisor to manage the Portfolio's
assets in accordance with its own investment objective, possibly at
increased cost. A withdrawal by a Feeder Portfolio of its
investment in the corresponding Series could result in a
distribution in kind of portfolio securities (as opposed to a cash
distribution) to the Portfolio. Should such a distribution occur,
the Portfolio could incur brokerage fees or other transaction costs
in converting such securities to cash in order to pay redemptions.
In addition, a distribution in kind to the Portfolio could result
in a less diversified portfolio of investments and could affect
adversely the liquidity of the Portfolio. Moreover, a distribution
in kind may constitute a taxable exchange for federal income tax
purposes resulting in gain or loss to the Feeder Portfolios. Any
net capital gains so realized will be distributed to such a
Portfolio's shareholders as described in "Dividends, Capital Gains
Distributions And Taxes" below.
Finally, the Feeder Portfolios' investment in the shares of a
registered investment company such as the Trust is relatively new
and results in certain operational and other complexities.
However, management believes that the benefits to be gained by
shareholders outweigh the additional complexities and that the
risks attendant to such investment are not inherently different
from the risks of direct investment in securities of the type in
which the Trust Series invest.
INVESTMENT OBJECTIVES AND POLICIES
Kiewit Money Market Portfolio
The Kiewit Money Market Portfolio pursues its investment
objective by investing all of its assets in the Money Market Series
of the Trust (the "Money Market Series") which has the same
investment objective and policies as the Portfolio. The investment
objective of the Money Market Series is to provide high current
income while maintaining a stable share price by investing in
short-term money market securities. The Money Market Series
invests in U.S. dollar-denominated money market instruments that
mature in 13 months or less, maintains an average weighted maturity
of 90 days or less and limits its investments to those investments
which the Board of Trustees determines present minimal credit
risks.
The Money Market Series will invest in the following money
market obligations issued by financial institutions, nonfinancial
corporations, and the U.S. Government, state and municipal
governments and their agencies or instrumentalities:
(1) United States Treasury obligations including bills,
notes, bonds and other debt obligations issued by the United States
Treasury. These securities are backed by the full faith and credit
of the U.S. Government.
(2) Obligations of agencies and instrumentalities of the
U.S. Government which are supported by the full faith and credit of
the U.S. Government, such as securities of the Government National
Mortgage Association, or which are supported by the right of the
issuer to borrow from the U.S. Treasury, such as securities issued
by the Federal Financing Bank; or which are supported by the credit
of the agency or instrumentality itself, such as securities of
Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by
the securities listed in (1) and (2) above.
(4) Commercial paper at the time of purchase rated in the
highest category of short-term debt ratings of any two Nationally
Recognized Statistical Ratings Organization ("NRSROs") (such as
Moody's Investor Services, Inc. and Standard & Poor's Rating
Services) or, if unrated, issued by a corporation having
outstanding comparable obligations that are rated in the highest
category of short-term debt ratings. See "Appendix - Description
Of Ratings."
(5) Corporate obligations having a remaining maturity of 397
calendar days or less, issued by corporations having outstanding
comparable obligations that are (a) rated in the two highest
categories of any two NRSROs or (b) rated no lower than the two
highest long-term debt ratings categories by any NRSRO. See
"Appendix - Description Of Ratings."
(6) Obligations of U.S. banks, such as certificates of
deposit, time deposits and bankers' acceptances. The banks must
have total assets exceeding $1 billion.
(7) Short-term Eurodollar and Yankee obligations of banks
having total assets exceeding one billion dollars. Eurodollar bank
obligations are dollar-denominated certificates of deposit or time
deposits issued outside the U.S. capital markets by foreign
branches of U.S. banks or by foreign banks; Yankee bank obligations
are dollar-denominated obligations issued in the U.S. capital
markets by foreign banks.
The Money Market Series will not invest more than 5% of its
total assets in the securities of a single issuer. Up to 10% of the
Money Market Series' net assets may be invested in "restricted" and
other illiquid money market securities, which are not freely
marketable under the Securities Act of 1933 (the "1933 Act").
The Money Market Series may invest in repurchase agreements.
A repurchase agreement is a means of investing monies for a short
period. In a repurchase agreement, a seller--a U.S. commercial
bank or recognized U.S. securities dealer--sells securities to the
Money Market Series and agrees to repurchase the securities at the
Money Market Series' cost plus interest within a specified period
(normally one day). In these transactions, the securities
purchased by the Money Market Series will have a total value equal
to or in excess of the value of the repurchase agreement, and will
be held by the Money Market Series' custodian bank until
repurchased. Under the 1940 Act, a repurchase agreement is deemed
to be the loan of money by the Money Market Series to the seller,
collateralized by the underlying securities.
Eurodollar and Yankee obligations are subject to the same
risks that pertain to domestic issues, notably credit risk, market
risk and liquidity risk. Additionally, Eurodollar (and to a
limited extent, Yankee) obligations are subject to certain
sovereign risks. One such risk is the possibility that a foreign
government might prevent dollar-denominated funds from flowing
across its borders. Other risks include: adverse political and
economic developments in a foreign country; the extent and quality
of government regulation of financial markets and institutions; the
imposition of foreign withholding taxes; and expropriation or
nationalization of foreign issuers. However, Eurodollar and Yankee
obligations will undergo the same credit analysis as domestic
issues in which the Money Market Series invests, and foreign
issuers will be required to meet the same tests of financial
strength as the domestic issuers approved for the Money Market
Series.
Kiewit Government Money Market Portfolio
The Kiewit Government Money Market Portfolio pursues its
investment objective by investing all of its assets in the
Government Money Market Series of the Trust (the "Government Money
Market Series"). The investment objective of the Government Money
Market Series is to provide as high a level of current income as is
consistent with maintaining a stable share by investing in
securities issued by the U.S. Government, its agencies or
instrumentalities. The Series invests in U.S. dollar-denominated
money market instruments that mature in 13 months or less and will
maintain an average weighted maturity of 60 days or less.
The Series will invest in the following money market
obligations issued by the U.S. government, its agencies or
instrumentalities:
(1) United States Treasury obligations including bills,
notes, bonds and other debt obligations issued by the United
States Treasury. These securities are backed by the full
faith and credit of the United States government.
(2) Obligations of agencies and instrumentalities of the
U.S. Government which are supported by the full faith and
credit of the U.S. Government, such as securities of the
Government National Mortgage Association, or which are
supported by the right of the issuer to borrow from the U.S.
Treasury, such as securities issued by the Federal Financing
Bank; or which are supported by the credit of the agency or
instrumentality itself, such as securities of Federal Farm
Credit Banks.
(3) Repurchase agreements that are fully collateralized by
the securities listed in (1) and (2) above.
The Series intends to maintain an AAAm credit rating from
Standard & Poor's Rating Group. The AAAm credit rating indicates
that the Series is composed exclusively of investments that are
rated AAA and/or eligible short-term investments.
The Series may invest in repurchase agreements. A repurchase
agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller--a U.S. commercial bank or
recognized U.S. securities dealer--sells securities to the Series
and agrees to repurchase the securities at the Series' cost plus
interest within a specified period (normally one day). In these
transactions, the securities purchased by the Series will have a
total value equal to or in excess of the value of the repurchase
agreement, and will be held by the Series' custodian bank until
repurchased. Under the 1940 Act, a repurchase agreement is deemed
to be the loan of money by the Series to the seller, collateralized
by the underlying securities.
Kiewit Short-Term Government Portfolio
The Kiewit Short-Term Government Portfolio pursues its
investment objective by investing all of its assets in the Kiewit
Short-Term Government Series of the Trust (the "Short-Term
Government Series") which has the same investment objective and
policies as the Portfolio. The investment objective of the Short-
Term Government Series is to provide investors with as high a level
of current income as is consistent with the maintenance of
principal and liquidity. The Short-Term Government Series invests
at least 65% of its assets in U.S. Treasury securities and U.S.
Government agency securities. The Short-Term Government Series may
also invest in repurchase agreements collateralized by U.S.
Treasury or U.S. Government agency securities. In an effort to
minimize fluctuations in market value, the Short-Term Government
Series will maintain a dollar-weighted average maturity between one
and three years.
U.S. Government agency securities are debt obligations of
agencies and instrumentalities of the U.S. Government which are
supported by the full faith and credit of the U.S. Government, such
as securities of the Government National Mortgage Association; or
which are supported by the right of the issuer to borrow from the
U.S. Treasury, such as securities issued by the Federal Financing
Bank; or which are supported by the credit of the agency or
instrumentality itself, such as securities of Federal Farm Credit
Banks.
Kiewit Intermediate-Term Bond Portfolio
The Kiewit Intermediate-Term Bond Portfolio pursues its
investment objective by investing all of its assets in the Kiewit
Intermediate-Term Bond Series of the Trust (the "Intermediate-Term
Bond Series") which has the same investment objective and policies
as the Portfolio. The investment objective of the Intermediate-
Term Bond Series is to provide as high a level of current income as
is consistent with reasonable risk. It seeks to achieve its
objective by investing substantially all of its total assets in a
diversified portfolio of the following investment grade debt
securities: U.S. Treasury and U.S. Government agency securities,
mortgage-backed securities, asset-backed securities and corporate
bonds. The Intermediate-Term Bond Series may also invest in
repurchase agreements collateralized by U.S. Treasury and U.S.
Government agency securities and other short-term debt securities.
Under normal circumstances, the Intermediate-Term Bond Series will
have an average effective maturity (i.e., the market value weighted
average time to repayment of principal) of between three and ten
years.
Debt securities rated by an NRSRO, in the lowest investment
grade debt category, have speculative characteristics; a change in
economic conditions could lead to a weakened capacity of the issuer
to make principal and interest payments. To the extent that the
rating of a debt obligation held by the Intermediate-Term Bond
Series falls below investment grade, the Intermediate-Term Bond
Series, as soon as practicable, will dispose of the security,
unless such disposal would be detrimental to the Intermediate-Term
Bond Series in light of market conditions. See "Appendix -
Description Of Ratings."
The Intermediate-Term Bond Series may invest in both fixed and
variable or floating rate instruments. Variable and floating rate
securities bear interest at rates which vary with changes in
specified market rates or indices, such as a Federal Reserve
composite index. The interest rate on these securities may be
reset daily, weekly, quarterly or some other reset period, and may
have a floor or ceiling on interest rate changes. There is a risk
that the current interest rate on such securities may not
accurately reflect existing market interest rates. Some of these
securities carry a demand feature which permits the Intermediate-
Term Bond Series to sell them during a predetermined time period at
par value plus accrued interest. The demand feature is often
backed by a credit instrument, such as a letter of credit, or by a
creditworthy insurer. The Intermediate-Term Bond Series may rely
on such instrument or the creditworthiness of the insurer in
purchasing a variable or floating rate security.
Kiewit Tax-Exempt Portfolio
The Kiewit Tax-Exempt Portfolio pursues its investment
objective by investing all of its assets in the Kiewit Tax-Exempt
Series of the Trust (the "Tax-Exempt Series") which has the same
investment objective and policies as the Portfolio. The investment
objective of the Tax-Exempt Series is to provide as high a level of
current income exempt from federal income tax as is consistent with
reasonable risk. Because of this emphasis, capital appreciation is
not an investment objective. The Tax-Exempt Series pursues its
objective by investing primarily in municipal obligations whose
interest is, in the opinion of counsel to the issuer, exempt from
federal income tax. As a fundamental policy, the Tax-Exempt Series
will normally invest at least 80% of its net assets in securities
the interest on which is exempt from federal income tax, including
the alternative minimum tax. However, the Tax-Exempt Series may
invest up to 20% of its net assets in municipal securities, the
interest on which is a preference item for purposes of the federal
alternative minimum tax ("AMT bonds"). When the Manager is unable
to locate investment opportunities with desirable risk/reward
characteristics, the Tax-Exempt Series may invest up to 20% of its
net assets in the following: cash, cash equivalent short-term
obligations, certificates of deposit, commercial paper, obligations
issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities, and repurchase agreements.
Municipal obligations are issued by states, territories and
possessions of the United States and the District of Columbia and
their political subdivisions, agencies and instrumentalities to
raise money for various public purposes. Municipal obligations
consist of general obligation bonds, revenue bonds and notes.
General obligation bonds are backed by the issuer's pledge of its
full faith, credit and taxing power for the payment of principal
and interest and are considered the safest type of municipal
investment. Revenue bonds are backed by revenues derived from a
specific project, facility or revenue source. At times, the Tax-
Exempt Series may invest more than 25% of the value of its assets
in industrial development bonds, a type of revenue bond. Although
issued by a public authority, some industrial revenue bonds may be
backed only by the credit and security of a private issuer and may
involve greater credit risk. Municipal notes are issued to finance
short-term capital needs of a municipality and include tax and
revenue anticipation notes, bond anticipation notes and commercial
paper. Municipal obligations bear fixed, floating and variable
rates of interest.
AMT bonds are tax-exempt "private activity" bonds issued after
August 7, 1986, whose proceeds are directed at least in part to a
private, for-profit organization. While the income from AMT bonds
is exempt from regular federal income tax, it is a tax preference
item for purposes of the alternative minimum tax. The alternative
minimum tax is a special separate tax that applies to a limited
number of taxpayers who have certain adjustments to income or tax
preference items.
The Tax-Exempt Series also may invest up to 5% of its total
assets in the following municipal-based obligations: municipal
lease obligations, inverse floaters, tender option bonds, when-
issued securities and zero coupon bonds. See the Fund's Statement
of Additional Information for a discussion of these types of
investments.
The Tax-Exempt Series may invest in the various types of
municipal securities in any proportion. Although the Tax-Exempt
Series does not currently intend to do so on a regular basis, it
may invest more than 25% of its assets in tax-exempt securities
that are repayable out of revenue streams generated from
economically related projects or facilities, if such investment is
deemed necessary or appropriate by the Manager. To the extent that
the Tax-Exempt Series' assets are concentrated in tax-exempt
securities payable from revenues on economically related projects
and facilities, the Tax-Exempt Series will be subject to the risks
presented by such projects to a greater extent than it would be if
the Tax-Exempt Series' assets were not so concentrated.
The Tax-Exempt Series will invest only in investment grade
obligations, or if unrated, in obligations that the Manager
determines to be of comparable quality. The Tax-Exempt Series will
have an average effective maturity (i.e., the market value weighted
average time to repayment of principal) of between three and ten
years. See "Appendix - Description Of Ratings."
Kiewit Equity Portfolio
The Kiewit Equity Portfolio pursues its investment objective
by investing all of its assets in the Kiewit Equity Series of the
Trust (the "Equity Series") which has the same investment objective
and policies as the Portfolio. The Equity Series invests primarily
in a diversified portfolio of equity securities, including common
stocks, preferred stocks and securities convertible into common
stock, which, in the Manager's opinion, are undervalued in the
marketplace at the time of purchase. Dividend income is an
incidental consideration compared to growth in capital. In
selecting securities for the Equity Series, the Manager or sub-
adviser may evaluate factors it believes are likely to affect long-
term capital appreciation such as the issuer's background, industry
position, historical returns on equity and experience and
qualifications of the management team. The Manager may rotate the
Equity Series' holdings among various market sectors based on
economic analysis of the overall business cycle. Under normal
conditions, at least 65 percent of the Equity Series' net assets
will be invested in equity securities.
The Equity Series invests in equity securities only if they
are listed on registered exchanges or actively traded in the over-
the-counter market. Under normal circumstances the Equity Series,
to the extent not invested in the securities described above, may
invest in investment grade securities issued by corporations and
U.S. Government securities. In order to meet liquidity needs, the
Equity Series may hold cash reserves and invest in money market
instruments (including securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, repurchase
agreements, certificates of deposit and bankers' acceptances issued
by banks or savings and loan associations, and commercial paper)
rated at time of purchase in the top two categories by an NRSRO or
determined to be of comparable quality by the Manager at the time
of purchase.
The Equity Series may also purchase and sell American
Depository Receipts ("ADRs"). ADRs are receipts typically issued
by a U.S. bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. Generally,
ADRs in registered form are designed for use in the U.S. securities
markets. The Equity Series may invest in ADRs through "sponsored"
or "unsponsored" facilities. A sponsored facility is established
jointly by the issuer of the underlying security and a depository,
whereas a depository may establish an unsponsored facility without
participation of the issuer of the deposited security. The Series
does not consider any ADR purchase to be foreign. Holders of
unsponsored ADRs generally bear all the costs of such facilities
and the depository of an unsponsored facility frequently is under
no obligation to distribute shareholder communications received
from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited
securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market
value of an unsponsored ADR.
The Equity Series may invest in convertible securities issued
by U.S. companies. Convertible debentures include corporate bonds
and notes that may be converted into or exchanged for common stock.
These securities are generally convertible either at a stated
price or a stated rate (that is, for a specific number of shares of
common stock or other security). As with other fixed income
securities, the price of a convertible debenture to some extent
varies inversely with interest rates. While providing a fixed-
income stream, a convertible debenture also affords the investor an
opportunity, through its conversion feature, to participate in the
capital appreciation of the common stock into which it is
convertible. Common stock acquired by the Equity Series upon
conversion of a convertible debenture will generally be held for so
long as the Manager anticipates such stock will provide the Series
with opportunities which are consistent with the Series' investment
objective and policies.
For temporary defensive purposes when the Manager determines
that market conditions warrant, the Equity Series may invest up to
100% of its assets in the money market instruments described above
and other short-term debt instruments that are rated, at the time
of purchase, investment grade, and may hold a portion of its assets
in cash.
Other Investment Policies
Other Registered Investment Companies. Each Portfolio's
corresponding Series reserves the right to invest in the shares of
other registered investment companies. By investing in shares of
investment companies, a Series would indirectly pay a portion of
the operating expenses, management expenses and brokerage costs of
such companies as well as the expense of operating the Series.
Thus, the Series' investors may pay higher total operating expenses
and other costs than they might pay by owning the underlying
investment companies directly. The Manager will attempt to
identify investment companies that have demonstrated superior
management in the past, thus possibly offsetting these factors by
producing better results and/or lower expenses than other
investment companies with similar investment objectives and
policies. There can be no assurance that this result will be
achieved. However, the Manager will waive its advisory fee with
respect to the assets of a Series invested in other investment
companies, to the extent of the advisory fee charged by any
investment adviser to such investment company. In addition, the
1940 Act limits investment by a Series in shares of other
investment companies to no more than 10% of the value of the
Series' total assets.
Securities Loans. Each Series may lend securities to
qualified brokers, dealers, banks and other financial institutions
for the purpose of earning additional income. While a Series may
earn additional income from lending securities, such activity is
incidental to the investment objective of a Series. The value of
securities loaned may not exceed 33 1/3% of the value of a Series'
total assets. In connection with such loans, a Series will receive
collateral consisting of cash or U.S. Government securities, which
will be maintained at all times in an amount equal to at least 100%
of the current market value of the loaned securities. In addition,
the Series will be able to terminate the loan at any time, will
retain the authority to vote the loaned securities and will receive
reasonable interest on the loan, as well as amounts equal to any
dividends, interest or other distributions on the loaned
securities. In the event of the bankruptcy of the borrower, the
Fund could experience delay in recovering the loaned securities.
Management believes that this risk can be controlled through
careful monitoring procedures.
Reverse Repurchase Agreements. A Series may enter into
reverse repurchase agreements with banks and broker-dealers.
Reverse repurchase agreements involve sales by a Series of its
assets concurrently with an agreement by the Series to repurchase
the same assets at a later date at a fixed price. A Series will
establish a segregated account with its custodian bank in which it
will maintain cash or liquid securities equal in value to its
obligations with respect to reverse repurchase agreements.
Options. The Kiewit Short-Term Government Series, Kiewit
Intermediate-Term Bond Series and Kiewit Equity Series each may
sell and/or purchase exchange-traded call options and purchase
exchange-traded put options on securities in the Portfolio.
Options will be used to generate income and to protect against
price changes and will not be engaged in for speculative purposes.
The aggregate value of option positions may not exceed 10% of each
Series' net assets as of the time the Series enters into such
options.
A put option gives the purchaser of the option the right to
sell, and the writer the obligation to buy, the underlying security
at any time during the option period. A call option gives the
purchaser of the option the right to buy, and the writer of the
option the obligation to sell, the underlying security at any time
during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option
contract. There are risks associated with option transactions
including the following: (i) the success of an options strategy may
depend on the ability of the Manager to predict movements in the
prices of the individual securities, fluctuations in markets and
movements in interest rates; (ii) there may be an imperfect
correlation between the changes in market value of the securities
held by a Series and the prices of options; (iii) there may not be
a liquid secondary market for options; and (iv) while a Series will
receive a premium when it writes covered call options, it may not
participate fully in a rise in the market value of the underlying
security.
RISK FACTORS
Each Series has reserved the right to borrow amounts not
exceeding 33% of its net assets for the purposes of making
redemption payments. When advantageous opportunities to do so
exist, a Series may also borrow amounts not exceeding 5% of the
value of the Series' net assets for the purpose of purchasing
securities. Such purchases can be considered to result in
"leveraging," and in such circumstances, the net asset value of the
Series may increase or decrease at a greater rate than would be the
case if the Series had not leveraged. A Series would incur
interest on the amount borrowed and if the appreciation and income
produced by the investments purchased when the Series has borrowed
are less than the cost of borrowing, the investment performance of
the Series may be further reduced as a result of leveraging.
In addition, each Series may invest in repurchase agreements
and reverse repurchase agreements. The use of repurchase
agreements involves certain risks. For example, if the seller of
the agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities
has declined, a Series may incur a loss upon disposition of them.
If the seller of the agreement becomes insolvent and subject to
liquidation or reorganization under the bankruptcy code or other
laws, a bankruptcy court may determine that the underlying
securities are collateral not within the control of the Series and
therefore subject to sale by the trustee in bankruptcy. Finally,
it is possible that a Series may not be able to substantiate its
interest in the underlying securities. While the Fund's management
acknowledges these risks, it is expected that they can be
controlled through stringent security selection and careful
monitoring. Reverse repurchase agreements involve the risk that
the market value of the securities retained by the Series may
decline below the price of the securities the Series has sold but
is obligated to repurchase under the agreement. In the event the
buyer of securities under a reverse repurchase agreement files for
bankruptcy or become insolvent, the Series' use of the proceeds of
the agreement may be restricted pending a determination by the
other party, or its trustee or receiver, whether to enforce the
Series' obligation to repurchase the securities. Reverse
repurchase agreements are considered borrowings by the Series and
as such are subject to the investment limitations discussed above.
The mortgage-backed and asset-backed securities in which the
Kiewit Intermediate-Term Bond Series may invest differ from
conventional bonds in that principal is paid back over the life of
the security rather than at maturity. As a result, the holder of
those types of securities (the Series) receives monthly scheduled
payments of principal and interest, and may receive unscheduled
principal payments representing prepayments on the underlying
mortgages or assets. Such prepayments occur more frequently during
periods of declining interest rates. When the holder reinvests the
payments and any unscheduled prepayments of principal it receives,
it may receive a rate of interest which is lower than the rate on
the existing mortgage-backed and asset-backed securities. For this
reason, these securities may be less effective than other types of
securities as a means of "locking in" long-term interest rates.
The market value of mortgage securities, like other debt
securities, generally varies inversely with changes in market
interest rates, declining when interest rates rise and rising when
interest rates decline. However, mortgage securities, due to
changes in the rates of prepayments on the underlying mortgages,
may experience less capital appreciation in declining interest rate
environments and greater capital losses in periods of increasing
interest rates than other investments of comparable maturities.
In addition, to the extent mortgage securities are purchased
at a premium, mortgage foreclosures and unscheduled principal
prepayments may result in some loss of the holders' principal
investment to the extent of the premium paid. On the other hand,
if mortgage securities are purchased at a discount, both a
scheduled payment of principal and an unscheduled prepayment of
principal increases current and total returns and accelerates the
recognition of income which, when distributed to shareholders, is
taxable as ordinary income.
MANAGEMENT OF THE FUND
The Fund was organized as a Delaware business trust. Under
Delaware law the Fund's Board of Trustees is responsible for
establishing Fund policies and for overseeing the management of the
Fund.
Each of the Trustees and officers of the Fund is also a
Trustee and officer of the Trust. Information as to the Trustees
and Officers of the Fund and the Trust is set forth in the
Statement of Additional Information under "Trustees and Officers."
Investment Management Agreement. Kiewit Investment Management
Corp. (the "Manager"), 1000 Kiewit Plaza, Omaha, NE 68131-3344,
serves as the investment manager to each Series of the Trust. The
Manager, organized in 1994, is an indirect wholly-owned subsidiary
of Peter Kiewit Sons', Inc., a construction, mining and
telecommunications company. The Manager provides the Trust with
records concerning the Manager's activities which the Trust is
required to maintain and renders regular reports to the Trust's
officers and the Board of Trustees. The Manager also selects
brokers and dealers to effect securities transactions. Under the
investment management agreement between the Manager and the Trust
on behalf of each Series, the monthly fees of the Series are at the
following annual rates of their average monthly net assets: Kiewit
Money Market Series .20%; Kiewit Government Money Market Series
.20%; Kiewit Short-Term Government Series .30%; Kiewit
Intermediate-Term Series .40%; Kiewit Tax-Exempt Series .40%; and
Kiewit Equity Series .70%. Through June 30, 1997, the Manager has
agreed to waive all or a portion of its advisory fee and assume
certain Fund expenses in an amount that will limit annual operating
expenses to not more than the following percentage of the average
daily net assets of the K Class Shares of each Portfolio: Kiewit
Money Market Portfolio - .20%; Kiewit Government Money Market
Portfolio - .20%; Kiewit Short-Term Government Portfolio - .30%;
Kiewit Intermediate-Term Bond Portfolio - .50%; Kiewit Tax-Exempt
Portfolio - .50%; and Kiewit Equity Portfolio - .80%.
Each Series of the Trust is co-managed by Livingston G.
Douglas and Brian J. Mosher. Mr. Douglas is the Chief Investment
Officer of the Manager; Chief Financial Officer, Vice President
and Treasurer of the Trust and the Fund; and a chartered
financial analyst. He has co-managed the Fund since July 1997.
From August 1993 to July 1997, Mr. Douglas served as a Senior
Portfolio Manager and Director of Fixed-Income Research at
Investment Advisers, Inc. in Minneapolis, Minnesota. He managed
both mutual funds and large separate accounts for institutional
clients. From July 1987 to April 1993, Mr. Douglas was a
Director, Senior Portfolio Manager, and Director of Quantitative
Research at MacKay-Shields Financial Corporation in New York
City. He has written five books on fixed-income investing.
Brian J. Mosher, co-manager of each Series of the Trust, is
a Senior Portfolio Manager and Vice President of the Manager; a
Vice President of the Trust and the Fund; and a chartered
financial analyst. Mr. Mosher has been a co-manager of the Fund
since 1994. From March 1989 to December 1994, Mr. Mosher served
as Investment Manager of Meridian Mutual Insurance Company in
Indianapolis, Indiana. From April 1984 to March 1989, he was
Vice President and Trust Officer of The
Provident Bancorporation of Cincinnati, Ohio.
The Fund has entered into an Administrative Services Agreement
with the Manager, on behalf of each Feeder Portfolio. Pursuant to
this agreement, the Manager performs various services, including:
supervision of the services provided by the Portfolio's custodian
and transfer and dividend disbursing agent and others who provide
services to the Fund for the benefit of the Portfolio; providing
shareholders with information about the Portfolio and their
investments as they or the Fund may request; assisting the
Portfolio in conducting meetings of shareholders; furnishing
information as the Board of Trustees may require regarding the
corresponding Series; and any other administrative services for the
benefit of the Portfolio as the Board of Trustees may reasonably
request. For its services, each Feeder Portfolio pays the Manager
a monthly fee equal to one-twelfth of .02% of the Portfolio's
average net assets.
Administration and Accounting Services Agreements. Under
separate Administration Agreements and Accounting Services
Agreements with the Trust and the Fund, Rodney Square Management
Corporation ("Rodney Square"), 1100 North Market Street,
Wilmington, Delaware 19890, serves, respectively, as Administrator
and Accounting Services Agent for the Trust and the Fund. In these
joint capacities, Rodney Square manages and administers all regular
day-to-day operations (other than management of the Trust's
investments) of each of the Trust's various Series and each of the
Fund's various Portfolios, subject to the supervision of the
Trust's and the Fund's respective Boards of Trustees. Pursuant to
its respective agreements with Rodney Square, the Trust has agreed
to pay Rodney Square, on behalf of each Trust Series, the Series'
proportionate share of a complex-wide annual: (a) administration
services charge of 0.015% of the Trust's aggregate total assets in
excess of $125 million; and (b) accounting services charge of
0.015% of the Trust's aggregate total assets in excess of $100
million. The foregoing Rodney Square annual asset-based fees are
determined on an average daily total asset basis, and are subject
to prescribed fixed minimums.
Transfer Agency Agreement. Rodney Square serves as Transfer
Agent and Dividend Paying Agent for each Portfolio of the Fund
pursuant to a Transfer Agency Agreement with the Fund.
Investment Management Expenses. The Fund and the Trust each
bears all of its own costs and expenses, including: services of its
independent accountants, legal counsel, brokerage fees, commissions
and transfer taxes in connection with the acquisition and
disposition of portfolio securities, taxes, insurance premiums,
costs incidental to meetings of its shareholders and directors or
trustees, the cost of filing its registration statements under the
federal securities laws and the cost of any notice filings required
under state securities laws, reports to shareholders, and transfer
and dividend disbursing agency, administrative services and
custodian fees. Expenses allocable to a particular Portfolio or
Series are so allocated, and expenses which are not allocable to a
particular Portfolio or Series are borne by each Portfolio or
Series on the basis of its relative net assets.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Portfolios seek to achieve their investment objectives by
investing all of their investable assets in a corresponding Series
of shares of the Trust. Each Series is classified as a partnership
for U.S. federal income tax purposes. A Portfolio is allocated its
proportionate share of the income and realized and unrealized gains
and losses of its corresponding Series.
Each Portfolio of the Fund is treated as a separate entity for
federal income tax purposes. Each Portfolio intends to qualify each
year as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). As such,
each Portfolio will not be subject to federal income tax, or to any
excise tax, to the extent its earnings are distributed as provided
in the Code and by satisfying certain other requirements relating
to the sources of its income and diversification of its assets.
Dividends paid by a Portfolio with respect to its K Class
Shares and S Class Shares are calculated in the same manner and at
the same time. Both K Class Shares and S Class Shares of a
Portfolio will share proportionally in the investment income and
expenses of the Portfolio, except that the per share dividends of S
Class Shares will ordinarily be lower than the per share dividends
of K Class Shares as a result of the distribution expenses charged
to S Class Shares.
Dividends consisting of substantially all of the ordinary
income of each Portfolio, except the Kiewit Equity Portfolio, are
declared daily and are payable to shareholders of record at the
time of declaration. Such dividends are paid on the first business
day of each month. Net capital gains distributions, if any, will
be made annually. The Fund's policy is to distribute substantially
all net investment income from the Kiewit Equity Portfolio,
together with any net realized capital gains annually.
Shareholders of the Fund will automatically receive all income
dividends and capital gains distributions in additional shares of
the Portfolio whose shares they hold at net asset value (as of the
business date following the dividend record date), unless as to
each Portfolio, upon written notice to the Fund's Transfer Agent,
Rodney Square, the shareholder selects one of the following
options: (i) Income Option -- to receive income dividends in cash
and capital gains distributions in additional shares at net asset
value; (ii) Capital Gains Option -- to receive capital gains
distributions in cash and income dividends in additional shares at
net asset value; or (iii) Cash Option -- to receive both income
dividends and capital gains distributions in cash. If a
shareholder has elected to receive dividends and/or capital gain
distributions in cash and the postal or other delivery service is
unable to deliver checks to the shareholder's address of record,
such shareholder's distribution option will automatically be
converted to having all dividends and other distributions
reinvested in additional shares. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.
Distributions paid by a Portfolio from long-term capital gains
(which are allocated from a Series), whether received in cash or in
additional shares, are taxable to investors as long-term capital
gains, regardless of the length of time an investor has owned
shares in the Portfolio. The Portfolios (through the operation of
the Series) do not seek to realize any particular amount of capital
gains during a year; rather, realized gains are a byproduct of
management activities. Consequently, capital gains distributions
may be expected to vary considerably from year to year. Also, if
purchases of shares in a Portfolio are made shortly before the
record date for a capital gains distribution or a dividend, a
portion of the investment will be returned as a taxable
distribution.
Dividends which are declared in October, November or December
to shareholders of record in such a month but which, for
operational reasons, may not be paid to the shareholder until the
following January, will be treated for tax purposes as if paid by a
Portfolio and received by the shareholder on December 31 of the
calendar year in which they are declared.
A sale or redemption of shares of a Portfolio is a taxable
event and may result in a capital gain or loss to shareholders
subject to tax. Any loss incurred on sale or exchange of a
Portfolio's shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain dividends
received with respect to such shares.
The Portfolios may be required to report to the Internal
Revenue Service ("IRS") any taxable dividend or other reportable
payment (including share redemption proceeds) and withhold 31% of
any such payments made to shareholders who have not provided a
correct taxpayer identification number and made certain required
certifications. A shareholder may also be subject to backup
withholding if the IRS or a broker notifies the Fund that the
number furnished by the shareholder is incorrect or that the
shareholder is subject to backup withholding for previous under-
reporting of interest or dividend income.
Shareholders of the Portfolios who are not U.S. persons for
purposes of federal income taxation, should consult with their
financial or tax advisors regarding the applicability of U.S.
withholding and other taxes to distributions received by them from
the Portfolios and the application of foreign tax laws to these
distributions. Shareholders should also consult their tax advisors
with respect to the applicability of any state and local intangible
property or income taxes to their shares of the Portfolios and
distributions and redemption proceeds received from the Portfolios.
Shareholders who hold shares of a Portfolio in an employer-
sponsored 401(k) or profit sharing plan, or other tax-advantaged
plan, such as an IRA, should read their plan documents with respect
to options available for receipt of dividends and federal tax
treatment of transactions involving such shares.
The tax discussion set forth above is included for general
information only. Prospective investors should consult their own
tax advisers concerning the federal, state, local or foreign tax
consequences of an investment in a Portfolio.
PURCHASE OF SHARES
After you open an account with the Fund, you may purchase K
Class Shares by (a) writing to the Fund and enclosing your check as
payment or (b) by calling (800) 2KIEWIT to arrange for payment by
wire transfer.
To Open an Account. Send a completed application form by
regular mail to Kiewit Mutual Fund, c/o Rodney Square, P.O. Box
8987, Wilmington, DE 19899, or by express mail to Kiewit Mutual
Fund, c/o Rodney Square, 1105 N. Market Street, Wilmington, DE
19801. You may request an application form by calling (800)
2KIEWIT.
To Purchase by Mail. Your initial purchase may be indicated
on your application. For additional purchases, you may send the
Fund a simple letter or use order forms supplied by the Fund.
Please enclose your check drawn on a U.S. bank payable to "Kiewit
Mutual Fund." Please indicate the amount to be invested in each
Portfolio and your Portfolio account number.
To Purchase by Wire Transfer: Please call the Fund at (800)
2KIEWIT to make specific arrangements before each wire transfer.
Then, instruct your bank to wire federal funds to Rodney Square
Management Corporation, c/o Wilmington Trust Company, Wilmington,
DE -- ABA #0311-0009-2, attention: Kiewit Mutual Fund, DDA# 2648-
0337, further credit -- your account number, the desired Portfolio
and class of shares and your name.
Minimum Initial Investment. The minimum initial investment is
$10,000, but subsequent investments may be made in any amount.
Purchase Price and Timing. K Class Shares of each Portfolio
are offered at their net asset value next determined after a
purchase order is received and accepted. Purchase orders received
by and accepted before the close of regular trading on the New York
Stock Exchange ("NYSE"), usually 4:00 p.m. Eastern time, on any
Business Day of the Fund will be priced at the net asset value per
share that is determined as of the close of regular trading on the
NYSE. However, purchase orders for shares of the Kiewit Money
Market Portfolio and the Kiewit Government Money Market Portfolio
received and accepted before 2:00 p.m., Eastern time, on any
Business Day of the Fund will be priced at the net asset value per
share that is determined at 2:00 p.m., Eastern time. (See
"Valuation Of Shares.") Purchase orders received and accepted
after those daily deadlines will be priced as of the deadline on
the following Business Day of the Fund. A "Business Day of the
Fund" is any day on which the NYSE and Federal Reserve Bank are
open for business. The Fund and RSD each reserves the right to
reject any purchase order and may suspend the offering of shares of
any Portfolio for a period of time.
In Kind Purchases. If accepted by the Fund, K Class Shares of
each Portfolio may be purchased in exchange for securities which
are eligible for acquisition by the Portfolio and its corresponding
Series of the Trust as described in the Statement of Additional
Information. Please contact Rodney Square about this purchase
method.
SHAREHOLDER ACCOUNTS
Shareholder Inquiries. Shareholder inquiries may be made by
writing the Fund at 1100 North Market Street, Wilmington, DE 19890
or calling (800) 2KIEWIT.
Shareholder Statements. The Fund will mail a statement at
least quarterly showing all purchases, redemptions and balances in
each Portfolio. Shareholdings are expressed in terms of full and
fractional shares of each Portfolio rounded to the nearest 1/1000th
of a share. In the interest of economy and convenience, the
Portfolios do not issue share certificates.
Individual Retirement Accounts. Shares of the Portfolios may
be purchased for a tax-deferred retirement plan such as an
individual retirement account ("IRA"). For an IRA Application,
call Rodney Square at (800) 2KIEWIT. Wilmington Trust Company
("WTC") provides IRA custodial services for each shareholder
account that is established as an IRA. For these services, WTC
receives an annual fee of $10.00 per account, which fee is paid
directly to WTC by the IRA shareholder. If the fee is not paid by
the date due, Portfolio shares owned by the IRA shareholder will be
redeemed automatically for purposes of making the payment.
Non-Individual Accounts. Corporations, partnerships,
fiduciaries and other non-individual investors may be required to
furnish certain additional documentation to make purchases,
exchanges and redemptions.
Minimum Account Size. Due to the relatively high cost of
maintaining small shareholder accounts, the Fund reserves the right
to automatically close any account with a current value of less
than $5,000 by involuntarily redeeming all shares in the account
and mailing the proceeds to the shareholder. Shareholders will be
notified if their account value is less than $5,000 and will be
allowed 60 days in which to increase their account balance to
$5,000 or more to prevent the account from being closed.
Reductions in value that result solely from market activity will
not trigger an involuntary redemption.
VALUATION OF SHARES
The net asset values per share of each Portfolio's K Class
Shares and shares of corresponding Series are calculated by
dividing the net assets attributable to the class, by the total
outstanding shares of the stock of the class of the Portfolio or
Series. The value of the shares of each Series will fluctuate in
relation to its own investment experience. The value of the shares
of the Feeder Portfolios will fluctuate in relation to the
investment experience of the Trust Series in which such Portfolios
invest. On each Business Day of the Fund, net asset value is
determined as of the close of business of the NYSE, usually 4:00
p.m. Eastern time; except for the Kiewit Money Market Portfolio and
Kiewit Government Money Market Portfolio, which is determined at
2:00 p.m., Eastern time. Securities held by the Series which are
listed on a securities exchange and for which market quotations are
available are valued at the last quoted sale price of the day or,
if there is no such reported sale, at the mean between the most
recent quoted bid and asked prices. Price information on listed
securities is taken from the exchange where the security is
primarily traded. Unlisted securities for which market quotations
are readily available are valued at the mean between the most
recent bid and asked prices. The value of other assets and
securities for which no quotations are readily available (including
restricted securities) are determined in good faith at fair value
in accordance with procedures adopted by the Board of Trustees.
Money market instruments with a maturity of more than 60 days
are valued at current market value, as discussed above. Money
market instruments with a maturity of 60 days or less are valued at
their amortized cost, which the Board of Trustees has determined in
good faith constitutes fair value for purposes of complying with
the 1940 Act. This valuation method will continue to be used until
such time as the Trustees determine that it does not constitute
fair value for such purposes.
The net asset value of the shares of each Portfolio, except
the Kiewit Money Market Portfolio and the Kiewit Government Money
Market Portfolio, will fluctuate in relation to its own investment
experience. The Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio will attempt to maintain a stable
net asset value of $1.00 per share.
The offering price of shares of each Portfolio is the net
asset value next determined after the purchase order is received
and accepted; no sales charge or reimbursement fee is imposed.
EXCHANGE OF SHARES
You may exchange all or a portion of your K Class Shares in a
Portfolio for K Class Shares of any other Portfolio of the Fund
that currently offers its shares to investors. A redemption of
shares through an exchange will be effected at the net asset value
per share next determined after receipt by the Fund of the request,
and a purchase of shares through an exchange will be effected at
the net asset value per share next determined.
Exchange transactions will be subject to the minimum initial
investment and other requirements of the Portfolio into which the
exchange is made. An exchange may not be made if the exchange
would leave a balance in a shareholder's Portfolio account of less
than $5,000.
To obtain more information about exchanges, or to place
exchange orders, contact the Fund. The Fund, on behalf of the
Portfolios, reserves the right to terminate or modify the exchange
offer described here. This exchange offer is valid only in those
jurisdictions where the sale of the Portfolio's shares to be
acquired through such exchange may be legally made.
REDEMPTION OF SHARES
You may redeem K Class Shares by mailing instructions to the
Fund or calling the Fund at (800) 2KIEWIT. The Fund will promptly
mail you a check or wire transfer funds to your bank, as described
below.
To Redeem By Mail: You may send written instructions, with
signature guarantees, by regular mail to: Kiewit Mutual Fund, c/o
Rodney Square Management Corporation, P.O. Box 8987, Wilmington, DE
19899-9752, or by express mail to Kiewit Mutual Fund, c/o Rodney
Square Management Corporation, 1105 N. Market Street, Wilmington,
DE 19801. The instructions should indicate the Portfolio from
which shares are to be redeemed, the number of shares or dollar
amount to be redeemed, the Portfolio account number and the name of
the person in whose name the account is registered. A signature
and a signature guarantee are required for each person in whose
name the account is registered. A signature may be guaranteed by
an eligible institution acceptable to the Fund, such as a bank,
broker, dealer, municipal securities dealer, government securities
dealer, credit union, national securities exchange, registered
securities association, clearing agency, or savings association.
To Redeem By Telephone: If you want to redeem your shares by
telephone you must elect to do so by checking the appropriate box
of your initial Application or by calling the Fund at (800) 2KIEWIT
to obtain a separate application for telephone redemptions. In
order to redeem by telephone, you must call the Fund Monday through
Friday during normal business hours of 9 a.m. to 4 p.m., Eastern
time, and indicate your name, Kiewit Mutual Fund, the Portfolio's
name, your Portfolio account number and the number of shares you
wish to redeem. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine and
will not be liable for any losses to a shareholder due to
unauthorized or fraudulent telephone transactions. If the Fund,
the Manager, the Transfer Agent or any of their employees fails to
abide by their procedures, the Fund may be liable to a shareholder
for losses he/she suffers from any resulting unauthorized
transactions. During times of drastic economic or market changes,
the telephone redemption privilege may be difficult to implement.
In the event that you are unable to reach the Fund by telephone,
you may make a redemption request by mail.
Additional Redemption Information. You may redeem all or any
part of the value of your account on any Business Day. Redemptions
are made at the net asset value next calculated after the Fund has
received and accepted your redemption request. (See "Valuation Of
Shares.") The Fund imposes no fee when shares are redeemed.
Redemption checks are mailed on the next Business Day of the
Fund following acceptance of redemption instructions but in no
event later than 7 days following such receipt and acceptance.
Amounts redeemed by wire from each Portfolio, except the Kiewit
Money Market Portfolio, are normally wired on the next business day
after acceptance of redemption instructions (if received by Rodney
Square before the close of regular trading on the NYSE or 2:00 p.m.
Eastern time, for the Kiewit Money Market Portfolio). In no event
are redemption proceeds wired later than 7 days following such
receipt and acceptance. If the shares to be redeemed were
purchased by check, the Fund reserves the right not to make the
redemption proceeds available until it has reasonable grounds to
believe that the check has been collected (which could take up to
10 days).
Redemption proceeds exceeding $10,000 may be wired to your
predesignated bank account in any commercial bank in the United
States. The receiving bank may charge a fee for this service.
Alternatively, proceeds may be mailed to your bank or, for amounts
of less than $10,000, mailed to your Portfolio account address of
record if the address has been established for a minimum of 60
days. In order to authorize the Fund to mail redemption proceeds
to your Portfolio account address of record, complete the
appropriate section of the application for telephone redemptions or
include your Portfolio account address of record when you submit
written instructions. You may change the account which you have
designated to receive amounts redeemed at any time. Any request to
change the account designated to receive redemption proceeds should
be accompanied by a guarantee of the shareholder's signature by an
eligible institution. A signature and a signature guarantee are
required for each person in whose name the account is registered.
Further documentation will be required to change the designated
account when shares are held by a corporation, partnership,
fiduciary or other non-individual investor.
For more information on redemption services, call the Fund at
(800) 2KIEWIT.
Redemption Policies. Redemption payments in cash will
ordinarily be made within seven days after receipt of the
redemption request in good form. However, the right of redemption
may be suspended or the date of payment postponed in accordance
with the 1940 Act. The amount received upon redemption may be more
or less than the amount paid for the shares depending upon the
fluctuations in the market value of the assets owned by the
Portfolio. If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders of
any Portfolio to make a particular payment in cash, the Fund may
pay all or part of the redemption price by distributing portfolio
securities from the Portfolio of the shares being redeemed in
accordance with Rule 18f-1 under the 1940 Act. Investors may incur
brokerage charges and other transaction costs selling securities
that were received in payment of redemptions.
PERFORMANCE INFORMATION
From time to time, performance information, such as yield or
total return for a Portfolio, may be quoted in advertisements or in
communications to shareholders. Performance quotations represent
past performance and should not be considered as representative of
future results. The current yield will be calculated by dividing
the net investment income earned per share during the period stated
in the advertisement (based on the average daily number of shares
entitled to receive dividends outstanding during the period) by the
closing net asset value per share on the last day of the period and
annualizing the result on a semi-annual compounded basis. A
Portfolio's total return may be calculated on an annualized and
aggregate basis for various periods (which periods will be stated
in the advertisement). Average annual return reflects the average
percentage change per year in value of an investment in a
Portfolio. Aggregate total return reflects the total percentage
change in value of an investment in the Portfolio over the stated
period.
The principal value of an investment in a Portfolio will
fluctuate so that an investor's shares when redeemed, may be worth
more or less than the investor's original cost. Performance will be
calculated separately for K Class and S Class Shares. The K Class
Shares have different expenses from the S Class Shares which may
affect performance.
Further information about the performance of each Portfolio and
Class is included in the Fund's Annual Report to Shareholders which
may be obtained without charge by contacting the Fund at (800)
2KIEWIT.
GENERAL INFORMATION
The Fund, formerly named "Kiewit Institutional Fund", issues two
separate classes of shares of beneficial interest for each
Portfolio with a par value of $.01 per share. The shares of each
Portfolio, when issued and paid for in accordance with the Fund's
prospectus, will be fully paid and non-assessable shares, with
equal, non-cumulative voting rights and no preferences as to
conversion, exchange, dividends, redemption or any other feature.
The separate classes of shares each represent interests in the
same portfolio of investments, have the same rights and are
identical in all respects, except that the S Class Shares bear
distribution plan expenses, and have exclusive voting rights with
respect to the Rule 12b-1 Distribution Plan pursuant to which the
distribution fee may be paid. The two classes have different
exchange privileges. See "Exchange Of Shares." The net income
attributable to S Class Shares and the dividends payable on S Class
Shares will be reduced by the amount of the distribution fees;
accordingly, the net asset value of the S Class Shares will be
reduced by such amount to the extent the Portfolio has
undistributed net income.
Shareholders shall have the right to vote only (i) for removal
of Trustees, (ii) with respect to such additional matters relating
to the Fund as may be required by the applicable provisions of the
1940 Act, including Section 16(a) thereof, and (iii) on such other
matters as the Trustees may consider necessary or desirable. In
addition, the shareholders of each Portfolio will be asked to vote
on any proposal to change a fundamental investment policy (i.e. a
policy that may be changed only with the approval of shareholders)
of that Portfolio. All shares of the Fund entitled to vote on a
matter shall vote without differentiation between the separate
Portfolios on a one-vote-per-share basis; provided however, if a
matter to be voted on does not affect the interests of all
Portfolios, then only the shareholders of each affected Portfolio
shall be entitled to vote on the matter. If liquidation of the
Fund should occur, shareholders would be entitled to receive on a
per Portfolio basis the assets of the particular Portfolio whose
shares they own, as well as a proportionate share of Fund assets
not attributable to any particular Portfolio then in existence.
Ordinarily, the Fund does not intend to hold annual meetings of
shareholders, except as required by the 1940 Act or other
applicable law. The Fund's by-laws provide that meetings of
shareholders shall be called for the purpose of voting upon the
question of removal of one or more Trustees upon the written
request of the holders of not less than 10% of the outstanding
shares.
Kiewit Investment Trust was organized as a Delaware business
trust on January 23, 1997. The Trust offers shares of its Series
only to institutional investors in private offerings. The Fund may
withdraw the investment of a Feeder Portfolio in a Series of the
Trust at any time, if the Board of Trustees of the Fund determines
that it is in the best interests of the Portfolio to do so. Upon
any such withdrawal, the Board of Trustees of the Fund would
consider what action might be taken, including the investment of
all of the assets of the Portfolio in another pooled investment
entity having the same investment objective as the Portfolio or the
hiring of an investment advisor to manage the Portfolio's assets in
accordance with the investment policies described above.
Whenever a Feeder Portfolio, as an investor in its corresponding
Trust Series, is asked to vote on a shareholder proposal, the Fund
will hold a special meeting of the Feeder Portfolio's shareholders
to solicit their votes with respect to the proposal. The Trustees
of the Fund will then vote the Feeder Portfolio's shares in the
Series in accordance with the voting instructions received from the
Feeder Portfolio's shareholders. The Trustees of the Fund will
vote shares of the Feeder Portfolio for which they receive no
voting instructions in accordance with their best judgment.
Peter Kiewit Sons', Inc., a Delaware corporation with principal
offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the direct or
indirect parent of shareholders of more than 25% of the voting
securities of each Portfolio and therefore may be deemed to control
each Portfolio.
APPENDIX - DESCRIPTION OF RATINGS
Description of Bond Ratings - Moody's Investors Services, Inc.
("Moody's") description of its bond ratings are:
Aaa--Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are 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 maybe other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A--Bonds which are 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 some time in the future.
Baa--Bonds which are 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 which are 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 which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments
or of maintenance of other terms of the contract over any long
period of time may be small.
Caa--Bonds which are 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 which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or
have other market shortcomings.
C--Bonds which are 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 also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the
higher end of its rating category; the modifier 2 indicates a mid-
range ranking; and 3 indicates a ranking toward the lower end of
the category.
Standard & Poor's Ratings Group's ("S&P") description of its bond
ratings are:
AAA--The highest degree of safety with overwhelming repayment
capacity.
AA--Very high degree of safety with very strong capacity for
repayment. These issues differ from higher rated issues only in a
small degree.
A--A strong degree of safety and capacity for repayment, but these
issues are somewhat more susceptible in the long term to adverse
economic conditions than those rated in higher categories.
BBB--A satisfactory degree of safety and capacity for repayment,
but these issues are more vulnerable to adverse economic conditions
or changing circumstances than higher-rated issues.
BB--This designation reflects less near-term vulnerability to
default than other speculative issues. However, the issues face
major ongoing uncertainties or exposures to adverse economic or
financial conditions threatening capacity to meet interest and
principal payments on a timely basis.
B--This designation indicates that the issues 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 to
pay interest and repay principal.
CCC--Issues rated CCC have currently identifiable vulnerability to
default, and are dependent upon favorable business, financial, and
economic conditions to meet timely interest and principal
repayments. Adverse business, financial, or economic developments
would render repayment capacity unlikely.
S&P applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major
rating categories.
Description of Commercial Paper Ratings
The rating A-1 is the highest commercial paper rating assigned by
S&P. Commercial paper rated A-1 has the following characteristics:
(1) liquidity ratios are adequate to meet cash requirements; (2)
long-term senior debt is rated "A" or better; (3) the issuer has
access to at least two additional channels of borrowing; (4) basic
earnings and cash flow have an upward trend with allowance made for
unusual circumstances; (5) typically, the issuer's industry is well
established and the issuer has a strong position within the
industry; and (6) the reliability and quality of management are
unquestioned. The rating Prime-1 is the highest commercial paper
rating assigned by Moody's. Among the factors considered by
Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and the appraisal of speculative-
type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term
debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of
obligations which may be present or may arise as a result of public
interest questions and preparations to meet such obligations.
KIEWIT MUTUAL FUND
S CLASS SHARES
PROSPECTUS
October 31, 1997
This prospectus describes the Kiewit Money Market Portfolio,
Kiewit Government Money Market Portfolio, Kiewit Short-Term
Government Portfolio, Kiewit Intermediate-Term Bond Portfolio,
Kiewit Tax-Exempt Portfolio and Kiewit Equity Portfolio
(collectively the "Portfolios" or "Feeder Portfolios" and
individually a "Portfolio"), each a series of shares issued by
Kiewit Mutual Fund (the "Fund"), 1000 Kiewit Plaza, Omaha, NE
68131-3344, (800) 2KIEWIT. Each Portfolio is an open-end,
diversified management investment company which currently offers
two separate classes of shares: K Class Shares and S Class Shares.
Shares of each class represent equal, pro-rata interests in a
Portfolio and accrue dividends in the same manner, except that S
Class Shares bear distribution expenses payable by the Class as
compensation for distribution of the S Class Shares. The
securities offered in this Prospectus are S Class Shares subject to
a distribution charge. Information concerning the Fund's K Class
Shares may be obtained by calling the Fund at the telephone number
stated above.
The Fund issues six series of shares, each of which represents
a separate class of the Fund's shares of beneficial interest,
having its own investment objective and policies. The investment
objective of the Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio is to provide high current income
while maintaining a stable share price. The investment objective
of the Kiewit Short-Term Government Portfolio is to provide
investors with as high a level of current income as is consistent
with the maintenance of principal and liquidity. The investment
objective of the Kiewit Intermediate-Term Bond Portfolio is to
provide as high a level of current income as is consistent with
reasonable risk. The investment objective of the Kiewit Tax-
Exempt Portfolio is to provide as high a level of current income
exempt from federal income tax as is consistent with reasonable
risk. The investment objective of the Kiewit Equity Portfolio is
to achieve long-term capital appreciation.
Unlike many other investment companies which directly acquire
and manage their own portfolio of securities, each Portfolio seeks
to achieve its investment objective by investing all of its
investable assets in a corresponding series of shares of Kiewit
Investment Trust (the "Trust"), an open-end, management investment
company that issues series of shares (individually and
collectively, the "Series") having the same investment objective,
policies and limitations as each of the Portfolios. The investment
experience of each Feeder Portfolio will correspond directly with
the investment experience of its corresponding Series. Investors
should carefully consider this investment approach. For additional
information, see "Special Information About The Portfolios'
Structure."
This prospectus contains information about the Portfolios that
prospective investors should know before investing and should be
read carefully and retained for future reference. A Statement of
Additional Information dated October 31, 1997 is incorporated
herein by reference, has been filed with the Securities and
Exchange Commission and is available upon request, without charge,
by writing or calling the Fund at the above address or telephone
number.
The shares of the Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio are neither insured nor
guaranteed by the U.S. Government. While such Portfolios will make
every effort to maintain a stable net asset value of $1.00 per
share, there is no assurance that the Portfolios will be able to do
so.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
TABLE OF CONTENTS
Page
HIGHLIGHTS 4
EXPENSE TABLE 7
FINANCIAL HIGHLIGHTS 9
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE 9
INVESTMENT OBJECTIVES AND POLICIES 10
Kiewit Money Market Portfolio 10
Kiewit Government Money Market Portfolio 12
Kiewit Short-Term Government Portfolio 13
Kiewit Intermediate-Term Bond Portfolio 14
Kiewit Tax-Exempt Portfolio 15
Kiewit Equity Portfolio 16
Other Investment Policies 18
RISK FACTORS 19
MANAGEMENT OF THE FUND 21
DISTRIBUTION PLAN 23
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES 23
PURCHASE OF SHARES 25
SHAREHOLDER ACCOUNTS 26
VALUATION OF SHARES 27
EXCHANGE OF SHARES 28
REDEMPTION OF SHARES 28
PERFORMANCE INFORMATION 30
GENERAL INFORMATION 31
APPENDIX - DESCRIPTION OF RATINGS 33
HIGHLIGHTS
The Fund
The Fund is an open-end, diversified management investment
company commonly known as a "mutual fund." The Fund was organized
as a Delaware business trust on June 1, 1994 and is registered
under the Investment Company Act of 1940 (the "1940 Act"). The
Fund currently offers six series of shares: Kiewit Money Market
Portfolio, Kiewit Government Money Market Portfolio, Kiewit Short-
Term Government Portfolio, Kiewit Intermediate-Term Bond Portfolio,
Kiewit Tax-Exempt Portfolio and Kiewit Equity Portfolio. Each
Portfolio offers two classes of shares, K Class Shares and S Class
Shares.
Investment Objectives
The investment objective of each Portfolio of Kiewit Mutual
Fund is to provide its investors with:
Money Market High current income, while maintaining a
stable share price. The Money Market
Portfolio will invest all of its assets
in the Money Market Series of the Trust,
which in turn invests in short-term money
market securities.
Government Money Market High current income, while maintaining a
stable share price and a credit rating in
the highest category for money market
funds as determined by an independent
rating agency. The Government Money
Market Portfolio will invest all of its
assets in the Government Money Market
Series of the Trust, which in turn
invests in securities issued or
guaranteed by the U.S. Government, its
agencies or instrumentalities.
Short-Term Government High level of current income,
consistent with the maintenance of
principal and liquidity. The Short-Term
Government Portfolio will invest all of
its assets in the Short-Term Government
Series of the Trust, which in turn
invests in securities issued or
guaranteed by the U.S. Government, its
agencies or instrumentalities.
Intermediate-Term Bond High level of current income,
consistent with reasonable risk. The
Portfolio will invest all of its assets
in the Kiewit Intermediate-Term Bond
Series of the Trust, which in turn
invests in investment grade debt securities.
Tax-Exempt High level of current income, exempt from
federal income tax, consistent with
reasonable risk. The Tax-Exempt
Portfolio will invest all of its assets
in the Tax-Exempt Series of the Trust,
which in turn invests primarily in
municipal obligations exempt from federal
income tax.
Equity Long-term capital appreciation. The
Portfolio will invest all of its assets
in the Kiewit Equity Series of the Trust,
which in turn invests in the equity
securities of companies which appear, in
the opinion of the investment adviser, to
be undervalued in the marketplace at the
time of purchase.
Although the investment objective of each Portfolio is not
fundamental and may be changed by the Board of Trustees without
shareholder approval, the Fund intends to notify shareholders
before making any material change. Due to the inherent risks of
investments, there can be no assurance that a Portfolio will
achieve its objective. See "Investment Objectives And Policies."
How to Purchase Shares
After you open an account, you may purchase S Class Shares by
(a) writing the Fund and enclosing your check as payment or (b) by
calling the Fund at (800) 2KIEWIT to arrange for payment by wire
transfer. You may open an account by mailing a completed
application form to the Fund. The public offering price of the
shares of each Portfolio is the net asset value per share next
determined after acceptance of the purchase order and payment. The
S Class Shares may be purchased without a sales load or exchange
fee, but are subject to a distribution fee under a Rule 12b-1 plan.
See "Purchase Of Shares."
How to Redeem Shares
You may redeem S Class Shares by mailing written instructions
to the Fund or by calling the Fund at (800) 2KIEWIT (if you
requested telephone redemption privileges on an application form).
Shares will be redeemed at the net asset value per share next
determined after acceptance of a redemption request. The Fund will
promptly mail you a check, unless other arrangements have been
made. See "Redemption Of Shares."
Dividend Reinvestment
Each Portfolio, except the Kiewit Equity Portfolio, intends to
pay monthly dividends from its net investment income and will pay
net capital gains, if any, annually. The Kiewit Equity Portfolio
intends to pay annual dividends from net investment income,
together with any net capital gains.
You may choose to receive dividends and capital gains
distributions in cash or you may choose to automatically reinvest
them in additional shares of the Portfolio. See "Dividends,
Capital Gains Distributions And Taxes."
Investment Manager, Underwriter and Servicing Agents
Kiewit Investment Management Corp. serves as the investment
manager of each Series of the Trust and also provides the
Portfolios with certain administrative services. Rodney Square
Distributors, Inc. serves as the Portfolios' underwriter.
Wilmington Trust Company serves as the custodian of the Portfolios'
assets and Rodney Square Management Corporation serves as the
Portfolios' administrator, transfer agent and accounting services
agent. See "Management Of The Fund."
Risk Factors
Each Portfolio, through its investment in a corresponding
Series of the Trust, is subject to certain risks. Investors should
consider a number of factors: (i) each Series of the Trust invests
in securities that fluctuate in value, and there can be no
assurance that the objective of any Portfolio will be achieved;
(ii) each Series of the Trust may invest in repurchase and reverse
repurchase agreements, which involve the risk of loss if the
counterparty defaults on its obligations under the agreement; (iii)
each Series of the Trust has reserved the right to borrow amounts
not exceeding 33% of its net assets; and (iv) the Kiewit
Intermediate-Term Bond Series may invest in mortgage securities,
whose market values may vary with changes in market interest rates
to a greater or lesser extent than the market values of other debt
securities. Additionally, the policy of the Portfolios to invest
in the corresponding Series of the Trust also involves certain
risks. See "Risk Factors."
Peter Kiewit Sons', Inc.
An investment in the Fund is not a direct or indirect
investment in the common stock of Peter Kiewit Sons', Inc. ("PKS").
Virtually all of PKS' common stock is owned by employees or former
employees of PKS. The Fund is restricted from investing in the
securities of PKS and its affiliates. PKS and its affiliates do
not guarantee that an investment in the Fund will produce
satisfactory results.
EXPENSE TABLE
Shareholder Transaction Costs None
Estimated Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Govern-
Money ment Short-Term Intermediate- Tax-
Market Money Government Term Bond Exempt Equity
Portfolio Market Portfolio Portfolio Portfolio Portfolio
Portfolio
Management Fees
(after fee
waiver) .13% .13% .16% .32% .35% .56%
12b-1 Fees* .25% .25% .25% .25% .25% .25%
Other Expenses
(after expenses
assumed) .07% .07% .14% .18% .15% .24%
Total Portfolio
Operating
Expenses .45% .45% .55% .75% .75% 1.05%
*Long-term shareholders may pay more than the economic equivalent
of the maximum front-end sales charge permitted by rules of the
National Association of Securities Dealers, Inc.
The information in the Expense Table has been restated to reflect
changes in the amounts of management fees waived and Fund expenses
assumed. The table summarizes the aggregate estimated annual
operating expenses of both the Portfolios' S Class Shares and the
Series of the Trust in which the Portfolios invest. (See
"Management Of The Fund" for a description of Portfolio and Series
expenses.) Through June 30, 1998, Kiewit Investment Management
Corp. has agreed to waive all or a portion of its advisory fee and
to assume certain expenses in order to limit annual operating
expenses of the S Class Shares to not more than the following
percentage of the average daily net assets of each Portfolio:
Kiewit Money Market Portfolio 0.45%; Kiewit Government Money Market
Portfolio 0.45%; Kiewit Short-Term Government Portfolio 0.55%;
Kiewit Intermediate Term Bond Portfolio 0.75%; Kiewit Tax-Exempt
Bond Portfolio 0.75%; and Kiewit Equity Portfolio 1.05%. Without
the waiver of fees by Kiewit Investment Management Corp., the total
expenses of the Portfolios' S Class Shares for the fiscal year
ending June 30, 1998, are estimated to be: Kiewit Money Market
Portfolio 0.52%; Kiewit Short-Term Government Portfolio 0.68%;
Kiewit Intermediate-Term Bond Portfolio 0.82%; Kiewit Tax-Exempt
Portfolio 0.79% and Kiewit Equity Portfolio 1.30%. Without the
waiver of fees, the total expenses of the Kiewit Government Money
Market Portfolio's S Class Shares, on an annual basis are estimated
to be 0.52%.
Prior to March 3, 1997, the Portfolios sought to achieve their
investment objectives by acquiring and managing their own
portfolios of securities rather than by investing all of their
assets in the corresponding Series of the Trust. The above figures
have been restated to reflect estimated aggregate annualized
operating expenses of each Feeder Portfolio's S Class Shares and
its corresponding Series as though the Feeder Portfolio's assets
had been invested in the Series during the entire fiscal year ended
June 30, 1997.
Example
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time
period:
1 Year 3 Years 5 Years 10 Years
Money Market Portfolio 5 14 25 57
Government Money Market
Portfolio 5 14 n/a n/a
Short-Term Government
Portfolio 6 18 31 69
Intermediate-Term Bond
Portfolio 8 24 42 93
Tax-Exempt Portfolio 8 24 42 93
Equity Portfolio 11 33 58 128
The purpose of the above Expense Table and Example is to
assist investors in understanding the various costs and expenses
that an investor in the Portfolios' S Class Shares will bear
directly or indirectly. The information set forth above relates
only to the Portfolios' S Class Shares, which shares are subject to
different total fees and expenses than K Class Shares.
The Example should not be considered a representation of past
or future expenses. Actual expenses may be greater or lesser than
those shown. The above Example is based on the Portfolio's actual
expenses for the most recent fiscal period and estimated expenses
for the Government Money Market Portfolio.
The Board of Trustees of the Fund has considered whether such
expenses will be more or less than they would be if the Feeder
Portfolios invest directly in the securities held by the Trust
Series. The aggregate amount of expenses for a Feeder Portfolio
and its corresponding Trust Series may be greater than if the
Portfolio were to invest directly in the securities held by the
corresponding Trust Series. However, the total expense ratios for
the Feeder Portfolios and the Trust Series are expected to be less
over time than such ratios would have been if the Portfolios had
continued to invest directly in the underlying securities. This is
because this arrangement enables various institutional investors,
including the Feeder Portfolios, to pool their assets, which may be
expected to result in economies by spreading certain fixed costs
over a larger asset base. Each shareholder in a Trust Series,
including a Feeder Portfolio, will pay its proportionate share of
the expenses of that Trust Series.
FINANCIAL HIGHLIGHTS
Financial highlights for the Fund's S Class Shares are not
provided because the Portfolios had not commenced selling S Class
Shares as of the date of this Prospectus.
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE
Each of the six Portfolios of the Fund, unlike many other
investment companies which directly acquire and manage their own
portfolio of securities, seeks to achieve its investment objective
by investing all of its investable assets in a corresponding Series
of the Trust, an open-end, management investment company,
registered under the 1940 Act, that issues Series having the same
investment objective as each of the Portfolios. The investment
objectives of the Portfolios and their corresponding Series may be
changed without shareholder approval. Shareholders of a Feeder
Portfolio will receive written notice at least 30 days prior to the
effective date of any change in the investment objective of the
Portfolio or its corresponding Trust Series.
This prospectus describes the investment objective, policies
and restrictions of each Feeder Portfolio and its corresponding
Series. (See "Portfolio Characteristics And Policies - Kiewit
Money Market Portfolio, Kiewit Government Money Market Portfolio,
Kiewit Short-Term Government Portfolio, Kiewit Intermediate-Term
Bond Portfolio, Kiewit Tax-Exempt Portfolio and Kiewit Equity
Portfolio.") In addition, an investor should read "Management Of
The Fund" for a description of the management and other expenses
associated with the Feeder Portfolios' investment in the Trust.
Other institutional investors, including other mutual funds, may
invest in each Series, and the expenses of such other funds and,
correspondingly, their returns may differ from those of the
Portfolios. Please contact the Fund at 1000 Kiewit Plaza, Omaha,
NE 08131-3344, 1-800-2KIEWIT for information about the
availability of investing in a Series of the Trust other than
through a Feeder Portfolio.
The shares of the Trust Series will be offered to
institutional investors for the purpose of increasing the funds
available for investment, to reduce expenses as a percentage of
total assets and to achieve other economies that might be available
at higher asset levels. While investment in a Series by other
institutional investors offers potential benefits to the Series
and, through their investment in the Series, the Feeder Portfolios
also, institutional investment in the Series also entails the risk
that economies and expense reductions might not be achieved, and
additional investment opportunities, such as increased
diversification, might not be available if other institutions do
not invest in the Series. Also, if an institutional investor were
to redeem its interest in a Series, the remaining investors in that
Series could experience higher pro rata operating expenses, thereby
producing lower returns, and the Series' security holdings may
become less diverse, resulting in increased risk. Institutional
investors that have a greater pro rata ownership interest in a
Series than the corresponding Feeder Portfolio could have effective
voting control over the operation of the Series.
Further, if a Series changes its investment objective in a
manner which is inconsistent with the investment objective of a
corresponding Feeder Portfolio and the Portfolio does not make a
similar change in its investment objective, the Portfolio would be
forced to withdraw its investment in the Series and either seek to
invest its assets in another registered investment company with the
same investment objective as the Portfolio, which might not be
possible, or retain an investment advisor to manage the Portfolio's
assets in accordance with its own investment objective, possibly at
increased cost. A withdrawal by a Feeder Portfolio of its
investment in the corresponding Series could result in a
distribution in kind of portfolio securities (as opposed to a cash
distribution) to the Portfolio. Should such a distribution occur,
the Portfolio could incur brokerage fees or other transaction costs
in converting such securities to cash in order to pay redemptions.
In addition, a distribution in kind to the Portfolio could result
in a less diversified portfolio of investments and could affect
adversely the liquidity of the Portfolio. Moreover, a distribution
in kind may constitute a taxable exchange for federal income tax
purposes resulting in gain or loss to the Feeder Portfolios. Any
net capital gains so realized will be distributed to such a
Portfolio's shareholders as described in "Dividends, Capital Gains
Distributions And Taxes" below.
Finally, the Feeder Portfolios' investment in the shares of a
registered investment company such as the Trust is relatively new
and results in certain operational and other complexities.
However, management believes that the benefits to be gained by
shareholders outweigh the additional complexities and that the
risks attendant to such investment are not inherently different
from the risks of direct investment in securities of the type in
which the Trust Series invest.
INVESTMENT OBJECTIVES AND POLICIES
Kiewit Money Market Portfolio
The Kiewit Money Market Portfolio pursues its investment
objective by investing all of its assets in the Money Market Series
of the Trust (the "Money Market Series") which has the same
investment objective and policies as the Portfolio. The investment
objective of the Money Market Series is to provide high current
income while maintaining a stable share price by investing in
short-term money market securities. The Money Market Series
invests in U.S. dollar-denominated money market instruments that
mature in 13 months or less, maintains an average weighted maturity
of 90 days or less and limits its investments to those investments
which the Board of Trustees determines present minimal credit
risks.
The Money Market Series will invest in the following money
market obligations issued by financial institutions, nonfinancial
corporations, and the U.S. Government, state and municipal
governments and their agencies or instrumentalities:
(1) United States Treasury obligations including bills,
notes, bonds and other debt obligations issued by the United States
Treasury. These securities are backed by the full faith and credit
of the U.S. Government.
(2) Obligations of agencies and instrumentalities of the U.S.
Government which are supported by the full faith and credit of the
U.S. Government, such as securities of the Government National
Mortgage Association, or which are supported by the right of the
issuer to borrow from the U.S. Treasury, such as securities issued
by the Federal Financing Bank; or which are supported by the credit
of the agency or instrumentality itself, such as securities of
Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by
the securities listed in (1) and (2) above.
(4) Commercial paper at the time of purchase rated in the
highest category of short-term debt ratings of any two Nationally
Recognized Statistical Ratings Organization ("NRSROs") (such as
Moody's Investor Services, Inc. and Standard & Poor's Rating
Services) or, if unrated, issued by a corporation having
outstanding comparable obligations that are rated in the highest
category of short-term debt ratings. See "Appendix - Description
Of Ratings."
(5) Corporate obligations having a remaining maturity of 397
calendar days or less, issued by corporations having outstanding
comparable obligations that are (a) rated in the two highest
categories of any two NRSROs or (b) rated no lower than the two
highest long-term debt ratings categories by any NRSRO. See
"Appendix - Description Of Ratings."
(6) Obligations of U.S. banks, such as certificates of
deposit, time deposits and bankers' acceptances. The banks must
have total assets exceeding $1 billion.
(7) Short-term Eurodollar and Yankee obligations of banks
having total assets exceeding one billion dollars. Eurodollar bank
obligations are dollar-denominated certificates of deposit or time
deposits issued outside the U.S. capital markets by foreign
branches of U.S. banks or by foreign banks; Yankee bank obligations
are dollar-denominated obligations issued in the U.S. capital
markets by foreign banks
The Money Market Series will not invest more than 5% of its
total assets in the securities of a single issuer. Up to 10% of
the Money Market Series' net assets may be invested in "restricted"
and other illiquid money market securities, which are not freely
marketable under the Securities Act of 1933 (the "1933 Act").
The Money Market Series may invest in repurchase agreements.
A repurchase agreement is a means of investing monies for a short
period. In a repurchase agreement, a seller--a U.S. commercial
bank or recognized U.S. securities dealer--sells securities to the
Money Market Series and agrees to repurchase the securities at the
Money Market Series' cost plus interest within a specified period
(normally one day). In these transactions, the securities
purchased by the Money Market Series will have a total value equal
to or in excess of the value of the repurchase agreement, and will
be held by the Money Market Series' custodian bank until
repurchased. Under the 1940 Act, a repurchase agreement is deemed
to be the loan of money by the Money Market Series to the seller,
collateralized by the underlying securities.
Eurodollar and Yankee obligations are subject to the same
risks that pertain to domestic issues, notably credit risk, market
risk and liquidity risk. Additionally, Eurodollar (and to a
limited extent, Yankee) obligations are subject to certain
sovereign risks. One such risk is the possibility that a foreign
government might prevent dollar-denominated funds from flowing
across its borders. Other risks include: adverse political and
economic developments in a foreign country; the extent and quality
of government regulation of financial markets and institutions; the
imposition of foreign withholding taxes; and expropriation or
nationalization of foreign issuers. However, Eurodollar and Yankee
obligations will undergo the same credit analysis as domestic
issues in which the Money Market Series invests, and foreign
issuers will be required to meet the same tests of financial
strength as the domestic issuers approved for the Money Market
Series.
Kiewit Government Money Market Portfolio
The Kiewit Government Money Market Portfolio pursues its
investment objective by investing all of its assets in the
Government Money Market Series of the Trust (the "Government Money
Market Series"). The investment objective of the Government Money
Market Series is to provide as high a level of current income as is
consistent with maintaining a stable share price by investing in
securities issued by the U.S. Government, its agencies or
instrumentalities. The Series invests in U.S. dollar-denominated
money market instruments that mature in 13 months or less and will
maintain an average weighted maturity of 60 days or less.
The Series will invest in the following money market
obligations issued by the U.S. government, its agencies or
instrumentalities:
(1) United States Treasury obligations including bills,
notes, bonds and other debt obligations issued by the United States
Treasury. These securities are backed by the full faith and credit
of the United States government.
(2) Obligations of agencies and instrumentalities of the
U.S. Government which are supported by the full faith and credit of
the U.S. Government, such as securities of the Government National
Mortgage Association, or which are supported by the right of the
issuer to borrow from the U.S. Treasury, such as securities issued
by the Federal Financing Bank; or which are supported by the credit
of the agency or instrumentality itself, such as securities of
Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by
the securities listed in (1) and (2) above.
The Series intends to maintain an AAAm credit rating from
Standard & Poor's Ratings Group. The AAAm credit rating indicates
that the Series is composed exclusively of investments that are
rated AAA and/or eligible short-term investments.
The Series may invest in repurchase agreements. A repurchase
agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller--a U.S. commercial bank or
recognized U.S. securities dealer--sells securities to the Series
and agrees to repurchase the securities at the Series' cost plus
interest within a specified period (normally one day). In these
transactions, the securities purchased by the Series will have a
total value equal to or in excess of the value of the repurchase
agreement, and will be held by the Series' custodian bank until
repurchased. Under the 1940 Act, a repurchase agreement is deemed
to be the loan of money by the Series to the seller, collateralized
by the underlying securities.
Kiewit Short-Term Government Portfolio
The Kiewit Short-Term Government Portfolio pursues its
investment objective by investing all of its assets in the Kiewit
Short-Term Government Series of the Trust (the "Short-Term
Government Series") which has the same investment objective and
policies as the Portfolio. The investment objective of the Short-
Term Government Series is to provide investors with as high a level
of current income as is consistent with the maintenance of
principal and liquidity. The Short-Term Government Series invests
at least 65% of its assets in U.S. Treasury securities and U.S.
Government agency securities. The Short-Term Government Series may
also invest in repurchase agreements collateralized by U.S.
Treasury or U.S. Government agency securities. In an effort to
minimize fluctuations in market value, the Short-Term Government
Series will maintain a dollar-weighted average maturity between one
and three years.
U.S. Government agency securities are debt obligations of
agencies and instrumentalities of the U.S. Government which are
supported by the full faith and credit of the U.S. Government, such
as securities of the Government National Mortgage Association; or
which are supported by the right of the issuer to borrow from the
U.S. Treasury, such as securities issued by the Federal Financing
Bank; or which are supported by the credit of the agency or
instrumentality itself, such as securities of Federal Farm Credit
Banks.
Kiewit Intermediate-Term Bond Portfolio
The Kiewit Intermediate-Term Bond Portfolio pursues its
investment objective by investing all of its assets in the Kiewit
Intermediate-Term Bond Series of the Trust (the "Intermediate-Term
Bond Series") which has the same investment objective and policies
as the Portfolio. The investment objective of the Intermediate-
Term Bond Series is to provide as high a level of current income as
is consistent with reasonable risk. It seeks to achieve its
objective by investing substantially all of its total assets in a
diversified portfolio of the following investment grade debt
securities: U.S. Treasury and U.S. Government agency securities,
mortgage-backed securities, asset-backed securities and corporate
bonds. The Intermediate-Term Bond Series may also invest in
repurchase agreements collateralized by U.S. Treasury and U.S.
Government agency securities and other short-term debt securities.
Under normal circumstances, the Intermediate-Term Bond Series will
have an average effective maturity (i.e., the market value weighted
average time to repayment of principal) of between three and ten
years.
Debt securities rated by an NRSRO, in the lowest investment
grade debt category, have speculative characteristics; a change in
economic conditions could lead to a weakened capacity of the issuer
to make principal and interest payments. To the extent that the
rating of a debt obligation held by the Intermediate-Term Bond
Series falls below investment grade, the Intermediate-Term Bond
Series, as soon as practicable, will dispose of the security,
unless such disposal would be detrimental to the Intermediate-Term
Bond Series in light of market conditions. See "Appendix -
Description Of Ratings."
The Intermediate-Term Bond Series may invest in both fixed and
variable or floating rate instruments. Variable and floating rate
securities bear interest at rates which vary with changes in
specified market rates or indices, such as a Federal Reserve
composite index. The interest rate on these securities may be
reset daily, weekly, quarterly or some other reset period, and may
have a floor or ceiling on interest rate changes. There is a risk
that the current interest rate on such securities may not
accurately reflect existing market interest rates. Some of these
securities carry a demand feature which permits the Intermediate-
Term Bond Series to sell them during a predetermined time period at
par value plus accrued interest. The demand feature is often
backed by a credit instrument, such as a letter of credit, or by a
creditworthy insurer. The Intermediate-Term Bond Series may rely
on such instrument or the creditworthiness of the insurer in
purchasing a variable or floating rate security.
Kiewit Tax-Exempt Portfolio
The Kiewit Tax-Exempt Portfolio pursues its investment
objective by investing all of its assets in the Kiewit Tax-Exempt
Series of the Trust (the "Tax-Exempt Series") which has the same
investment objective and policies as the Portfolio. The investment
objective of the Tax-Exempt Series is to provide as high a level of
current income exempt from federal income tax as is consistent with
reasonable risk. Because of this emphasis, capital appreciation is
not an investment objective. The Tax-Exempt Series pursues its
objective by investing primarily in municipal obligations whose
interest is, in the opinion of counsel to the issuer, exempt from
federal income tax. As a fundamental policy, the Tax-Exempt Series
will normally invest at least 80% of its net assets in securities
the interest on which is exempt from federal income tax, including
the alternative minimum tax. However, the Tax-Exempt Series may
invest up to 20% of its net assets in municipal securities, the
interest on which is a preference item for purposes of the federal
alternative minimum tax ("AMT bonds"). When the Manager is unable
to locate investment opportunities with desirable risk/reward
characteristics, the Tax-Exempt Series may invest up to 20% of its
net assets in the following: cash, cash equivalent short-term
obligations, certificates of deposit, commercial paper, obligations
issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities, and repurchase agreements.
Municipal obligations are issued by states, territories and
possessions of the United States and the District of Columbia and
their political subdivisions, agencies and instrumentalities to
raise money for various public purposes. Municipal obligations
consist of general obligation bonds, revenue bonds and notes.
General obligation bonds are backed by the issuer's pledge of its
full faith, credit and taxing power for the payment of principal
and interest and are considered the safest type of municipal
investment. Revenue bonds are backed by revenues derived from a
specific project, facility or revenue source. At times, the Tax-
Exempt Series may invest more than 25% of the value of its assets
in industrial development bonds, a type of revenue bond. Although
issued by a public authority, some industrial revenue bonds may be
backed only by the credit and security of a private issuer and may
involve greater credit risk. Municipal notes are issued to finance
short-term capital needs of a municipality and include tax and
revenue anticipation notes, bond anticipation notes and commercial
paper. Municipal obligations bear fixed, floating and variable
rates of interest.
AMT bonds are tax-exempt "private activity" bonds issued after
August 7, 1986, whose proceeds are directed at least in part to a
private, for-profit organization. While the income from AMT bonds
is exempt from regular federal income tax, it is a tax preference
item for purposes of the alternative minimum tax. The alternative
minimum tax is a special separate tax that applies to a limited
number of taxpayers who have certain adjustments to income or tax
preference items.
The Tax-Exempt Series also may invest up to 5% of its total
assets in the following municipal-based obligations: municipal
lease obligations, inverse floaters, tender option bonds, when-
issued securities and zero coupon bonds. See the Fund's Statement
of Additional Information for a discussion of these types of
investments.
The Tax-Exempt Series may invest in the various types of
municipal securities in any proportion. Although the Tax-Exempt
Series does not currently intend to do so on a regular basis, it
may invest more than 25% of its assets in tax-exempt securities
that are repayable out of revenue streams generated from
economically related projects or facilities, if such investment is
deemed necessary or appropriate by the Manager. To the extent that
the Tax-Exempt Series' assets are concentrated in tax-exempt
securities payable from revenues on economically related projects
and facilities, the Tax-Exempt Series will be subject to the risks
presented by such projects to a greater extent than it would be if
the Tax-Exempt Series' assets were not so concentrated.
The Tax-Exempt Series will invest only in investment grade
obligations, or if unrated, in obligations that the Manager
determines to be of comparable quality. The Tax-Exempt Series will
have an average effective maturity (i.e., the market value weighted
average time to repayment of principal) of between three and ten
years. See "Appendix - Description Of Ratings."
Kiewit Equity Portfolio
The Kiewit Equity Portfolio pursues its investment objective
by investing all of its assets in the Kiewit Equity Series of the
Trust (the "Equity Series") which has the same investment objective
and policies as the Portfolio. The Equity Series invests primarily
in a diversified portfolio of equity securities, including common
stocks, preferred stocks and securities convertible into common
stock, which, in the Manager's opinion, are undervalued in the
marketplace at the time of purchase. Dividend income is an
incidental consideration compared to growth in capital. In
selecting securities for the Equity Series, the Manager or sub-
adviser may evaluate factors it believes are likely to affect long-
term capital appreciation such as the issuer's background, industry
position, historical returns on equity and experience and
qualifications of the management team. The Manager may rotate the
Equity Series' holdings among various market sectors based on
economic analysis of the overall business cycle. Under normal
conditions, at least 65 percent of the Equity Series' net assets
will be invested in equity securities.
The Equity Series invests in equity securities only if they
are listed on registered exchanges or actively traded in the over-
the-counter market. Under normal circumstances the Equity Series,
to the extent not invested in the securities described above, may
invest in investment grade securities issued by corporations and
U.S. Government securities. In order to meet liquidity needs, the
Equity Series may hold cash reserves and invest in money market
instruments (including securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, repurchase
agreements, certificates of deposit and bankers' acceptances issued
by banks or savings and loan associations, and commercial paper)
rated at time of purchase in the top two categories by an NRSRO or
determined to be of comparable quality by the Manager at the time
of purchase.
The Equity Series may also purchase and sell American
Depository Receipts ("ADRs"). ADRs are receipts typically issued
by a U.S. bank or trust company which evidence ownership of
underlying securities issued by a foreign corporation. Generally,
ADRs in registered form are designed for use in the U.S. securities
markets. The Equity Series may invest in ADRs through "sponsored"
or "unsponsored" facilities. A sponsored facility is established
jointly by the issuer of the underlying security and a depository,
whereas a depository may establish an unsponsored facility without
participation of the issuer of the deposited security. The Series
does not consider any ADR purchase to be foreign. Holders of
unsponsored ADRs generally bear all the costs of such facilities
and the depository of an unsponsored facility frequently is under
no obligation to distribute shareholder communications received
from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited
securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market
value of an unsponsored ADR.
The Equity Series may invest in convertible securities issued
by U.S. companies. Convertible debentures include corporate bonds
and notes that may be converted into or exchanged for common stock.
These securities are generally convertible either at a stated
price or a stated rate (that is, for a specific number of shares of
common stock or other security). As with other fixed income
securities, the price of a convertible debenture to some extent
varies inversely with interest rates. While providing a fixed-
income stream, a convertible debenture also affords the investor an
opportunity, through its conversion feature, to participate in the
capital appreciation of the common stock into which it is
convertible. Common stock acquired by the Equity Series upon
conversion of a convertible debenture will generally be held for so
long as the Manager anticipates such stock will provide the Series
with opportunities which are consistent with the Series' investment
objective and policies.
For temporary defensive purposes when the Manager determines
that market conditions warrant, the Equity Series may invest up to
100% of its assets in the money market instruments described above
and other short-term debt instruments that are rated, at the time
of purchase, investment grade, and may hold a portion of its assets
in cash.
Other Investment Policies
Other Registered Investment Companies. Each Portfolio's
corresponding Series reserves the right to invest in the shares of
other registered investment companies. By investing in shares of
investment companies, a Series would indirectly pay a portion of
the operating expenses, management expenses and brokerage costs of
such companies as well as the expense of operating the Series.
Thus, the Series' investors may pay higher total operating expenses
and other costs than they might pay by owning the underlying
investment companies directly. The Manager will attempt to
identify investment companies that have demonstrated superior
management in the past, thus possibly offsetting these factors by
producing better results and/or lower expenses than other
investment companies with similar investment objectives and
policies. There can be no assurance that this result will be
achieved. However, the Manager will waive its advisory fee with
respect to the assets of a Series invested in other investment
companies, to the extent of the advisory fee charged by any
investment adviser to such investment company. In addition, the
1940 Act limits investment by a Series in shares of other
investment companies to no more than 10% of the value of the
Series' total assets.
Securities Loans. Each Series may lend securities to
qualified brokers, dealers, banks and other financial institutions
for the purpose of earning additional income. While a Series may
earn additional income from lending securities, such activity is
incidental to the investment objective of a Series. The value of
securities loaned may not exceed 33 1/3% of the value of a Series'
total assets. In connection with such loans, a Series will receive
collateral consisting of cash or U.S. Government securities, which
will be maintained at all times in an amount equal to at least 100%
of the current market value of the loaned securities. In addition,
the Series will be able to terminate the loan at any time, will
retain the authority to vote the loaned securities and will receive
reasonable interest on the loan, as well as amounts equal to any
dividends, interest or other distributions on the loaned
securities. In the event of the bankruptcy of the borrower, the
Fund could experience delay in recovering the loaned securities.
Management believes that this risk can be controlled through
careful monitoring procedures.
Reverse Repurchase Agreements. A Series may enter into
reverse repurchase agreements with banks and broker-dealers.
Reverse repurchase agreements involve sales by a Series of its
assets concurrently with an agreement by the Series to repurchase
the same assets at a later date at a fixed price. A Series will
establish a segregated account with its custodian bank in which it
will maintain cash or liquid securities equal in value to its
obligations with respect to reverse repurchase agreements.
Options. The Kiewit Short-Term Government Series, Kiewit
Intermediate-Term Bond Series and Kiewit Equity Series each may
sell and/or purchase exchange-traded call options and purchase
exchange-traded put options on securities in the Portfolio.
Options will be used to generate income and to protect against
price changes and will not be engaged in for speculative purposes.
The aggregate value of option positions may not exceed 10% of each
Series' net assets as of the time the Series enters into such
options.
A put option gives the purchaser of the option the right to
sell, and the writer the obligation to buy, the underlying security
at any time during the option period. A call option gives the
purchaser of the option the right to buy, and the writer of the
option the obligation to sell, the underlying security at any time
during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option
contract. There are risks associated with option transactions
including the following: (i) the success of an options strategy may
depend on the ability of the Manager to predict movements in the
prices of the individual securities, fluctuations in markets and
movements in interest rates; (ii) there may be an imperfect
correlation between the changes in market value of the securities
held by a Series and the prices of options; (iii) there may not be
a liquid secondary market for options; and (iv) while a Series will
receive a premium when it writes covered call options, it may not
participate fully in a rise in the market value of the underlying
security.
RISK FACTORS
Each Series has reserved the right to borrow amounts not
exceeding 33% of its net assets for the purposes of making
redemption payments. When advantageous opportunities to do so
exist, a Series may also borrow amounts not exceeding 5% of the
value of the Series' net assets for the purpose of purchasing
securities. Such purchases can be considered to result in
"leveraging," and in such circumstances, the net asset value of the
Series may increase or decrease at a greater rate than would be the
case if the Series had not leveraged. A Series would incur
interest on the amount borrowed and if the appreciation and income
produced by the investments purchased when the Series has borrowed
are less than the cost of borrowing, the investment performance of
the Series may be further reduced as a result of leveraging.
In addition, each Series may invest in repurchase agreements
and reverse repurchase agreements. The use of repurchase
agreements involves certain risks. For example, if the seller of
the agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities
has declined, a Series may incur a loss upon disposition of them.
If the seller of the agreement becomes insolvent and subject to
liquidation or reorganization under the bankruptcy code or other
laws, a bankruptcy court may determine that the underlying
securities are collateral not within the control of the Series and
therefore subject to sale by the trustee in bankruptcy. Finally,
it is possible that a Series may not be able to substantiate its
interest in the underlying securities. While the Fund's management
acknowledges these risks, it is expected that they can be
controlled through stringent security selection and careful
monitoring. Reverse repurchase agreements involve the risk that
the market value of the securities retained by the Series may
decline below the price of the securities the Series has sold but
is obligated to repurchase under the agreement. In the event the
buyer of securities under a reverse repurchase agreement files for
bankruptcy or become insolvent, the Series' use of the proceeds of
the agreement may be restricted pending a determination by the
other party, or its trustee or receiver, whether to enforce the
Series' obligation to repurchase the securities. Reverse
repurchase agreements are considered borrowings by the Series and
as such are subject to the investment limitations discussed above.
The mortgage-backed and asset-backed securities in which the
Kiewit Intermediate-Term Bond Series may invest differ from
conventional bonds in that principal is paid back over the life of
the security rather than at maturity. As a result, the holder of
those types of securities (the Series) receives monthly scheduled
payments of principal and interest, and may receive unscheduled
principal payments representing prepayments on the underlying
mortgages or assets. Such prepayments occur more frequently during
periods of declining interest rates. When the holder reinvests the
payments and any unscheduled prepayments of principal it receives,
it may receive a rate of interest which is lower than the rate on
the existing mortgage-backed and asset-backed securities. For this
reason, these securities may be less effective than other types of
securities as a means of "locking in" long-term interest rates.
The market value of mortgage securities, like other debt
securities, generally varies inversely with changes in market
interest rates, declining when interest rates rise and rising when
interest rates decline. However, mortgage securities, due to
changes in the rates of prepayments on the underlying mortgages,
may experience less capital appreciation in declining interest rate
environments and greater capital losses in periods of increasing
interest rates than other investments of comparable maturities.
In addition, to the extent mortgage securities are purchased
at a premium, mortgage foreclosures and unscheduled principal
prepayments may result in some loss of the holders' principal
investment to the extent of the premium paid. On the other hand,
if mortgage securities are purchased at a discount, both a
scheduled payment of principal and an unscheduled prepayment of
principal increases current and total returns and accelerates the
recognition of income which, when distributed to shareholders, is
taxable as ordinary income.
MANAGEMENT OF THE FUND
The Fund was organized as a Delaware business trust. Under
Delaware law the Fund's Board of Trustees is responsible for
establishing Fund policies and for overseeing the management of the
Fund.
Each of the Trustees and officers of the Fund is also a
Trustee and officer of the Trust. Information as to the Trustees
and Officers of the Fund and the Trust is set forth in the
Statement of Additional Information under "Trustees and Officers."
Investment Management Agreement. Kiewit Investment Management
Corp. (the "Manager"), 1000 Kiewit Plaza, Omaha, NE 68131-3344,
serves as the investment manager to each Series of the Trust. The
Manager, organized in 1994, is an indirect wholly-owned subsidiary
of Peter Kiewit Sons', Inc., a construction, mining and
telecommunications company. The Manager provides the Trust with
records concerning the Manager's activities which the Trust is
required to maintain and renders regular reports to the Trust's
officers and the Board of Trustees. The Manager also selects
brokers and dealers to effect securities transactions. Under the
investment management agreement between the Manager and the Trust
on behalf of each Series, the monthly fees of the Series are at the
following annual rates of their average monthly net assets: Kiewit
Money Market Series .20%; Kiewit Government Money Market Series
.20%; Kiewit Short-Term Government Series .30%; Kiewit
Intermediate-Term Series .40%; Kiewit Tax-Exempt Series .40%; and
Kiewit Equity Series .70%.
Each Series of the Trust is co-managed by Livingston G.
Douglas and Brian J. Mosher. Mr. Douglas is the Chief Investment
Officer of the Manager; Chief Financial Officer, Vice President
and Treasurer of the Trust and the Fund; and a chartered
financial analyst. He has co-managed the Fund since July 1997.
From August 1993 to July 1997, Mr. Douglas served as a Senior
Portfolio Manager and Director of Fixed-Income Research at
Investment Advisers, Inc. in Minneapolis, Minnesota. He managed
both mutual funds and large separate accounts for institutional
clients. From July 1987 to April 1993, Mr. Douglas was a
Director, Senior Portfolio Manager, and Director of Quantitative
Research at MacKay-Shields Financial Corporation in New York
City. He has written five books on fixed-income investing.
Brian J. Mosher, co-manager of each Series of the Trust, is
a Senior Portfolio Manager and Vice President of the Manager; a
Vice President of the Trust and the Fund; and a chartered
financial analyst. Mr. Mosher has been a co-manager of the Fund
since 1994. From March 1989 to December 1994, Mr. Mosher served
as Investment Manager of Meridian Mutual Insurance Company in
Indianapolis, Indiana. From April 1984 to March 1989, he was
Vice President and Trust Officer of The Provident Bancorporation
of Cincinnati, Ohio.
The Fund has entered into an Administrative Services Agreement
with the Manager, on behalf of each Feeder Portfolio. Pursuant to
this agreement, the Manager performs various services, including:
supervision of the services provided by the Portfolio's custodian
and transfer and dividend disbursing agent and others who provide
services to the Fund for the benefit of the Portfolio; providing
shareholders with information about the Portfolio and their
investments as they or the Fund may request; assisting the
Portfolio in conducting meetings of shareholders; furnishing
information as the Board of Trustees may require regarding the
corresponding Series; and any other administrative services for the
benefit of the Portfolio as the Board of Trustees may reasonably
request. For its services, each Feeder Portfolio pays the Manager
a monthly fee equal to one-twelfth of .02% of the Portfolio's
average net assets.
Administration and Accounting Services Agreements. Under
separate Administration Agreements and Accounting Services
Agreements with the Trust and the Fund, Rodney Square Management
Corporation ("Rodney Square"), 1100 North Market Street,
Wilmington, Delaware 19890, serves, respectively, as Administrator
and Accounting Services Agent for the Trust and the Fund. In these
joint capacities, Rodney Square manages and administers all regular
day-to-day operations (other than management of the Trust's
investments) of each of the Trust's various Series and each of the
Fund's various Portfolios, subject to the supervision of the
Trust's and the Fund's respective Boards of Trustees. Pursuant to
its respective agreements with Rodney Square, the Trust has agreed
to pay Rodney Square, on behalf of each Trust Series, the Series'
proportionate share of a complex-wide annual: (a) administration
services charge of 0.015% of the Trust's aggregate total assets in
excess of $125 million; and (b) accounting services charge of
0.015% of the Trust's aggregate total assets in excess of $100
million. Pursuant to its respective agreements with the Fund,
Rodney Square receives from the Fund, on behalf of each Fund
Portfolio, separate annual administration and accounting services
fees of 0.02% of that portion of the Portfolio's total assets
attributable to S Class Fund Shares. The foregoing Rodney Square
annual asset-based fees are determined on an average daily total
asset basis, and are subject to prescribed fixed minimums.
Transfer Agency Agreement. Rodney Square serves as Transfer
Agent and Dividend Paying Agent for each Portfolio of the Fund
pursuant to a Transfer Agency Agreement with the Fund.
Investment Management Expenses. The Fund and the Trust each
bears all of its own costs and expenses, including: services of its
independent accountants, legal counsel, brokerage fees, commissions
and transfer taxes in connection with the acquisition and
disposition of portfolio securities, taxes, insurance premiums,
costs incidental to meetings of its shareholders and directors or
trustees, the cost of filing its registration statements under the
federal securities laws and the cost of any notice filings required
under state securities laws, reports to shareholders, and transfer
and dividend disbursing agency, administrative services and
custodian fees. Expenses allocable to a particular Portfolio or
Series are so allocated, and expenses which are not allocable to a
particular Portfolio or Series are borne by each Portfolio or
Series on the basis of its relative net assets.
DISTRIBUTION PLAN
The Fund has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "12b-1 Plan"), whereby it may
reimburse Rodney Square Distributors, Inc. (the "Distributor") or
others for expenses actually incurred by the Distributor or others
in the promotion and distribution of the Fund's S Class Shares.
These expenses include, but are not limited to, the printing of
prospectuses and reports used for sales purposes, the preparation
of sales literature and related expenses, advertisements, and other
distribution-related expenses, including payments to securities
dealer and others participating in the sale and servicing of S
Class Shares. The maximum amount which the Fund may pay to the
Distributor and others (and which the Distributor may re-allow to
securities dealers and others participating in the sale of shares)
for such distribution expenses is 0.25% per annum of average daily
net assets of a Portfolio's S Class payable on a monthly basis.
All expenses of distribution and marketing in excess of 0.25% per
annum will be borne by the Advisor. The 12b-1 Plan also covers any
payments made by the Fund, the Manager, the Distributor, or other
parties on behalf of the Fund, the Advisor, the Manager, or the
Distributor, to the extent such payments are deemed to be for the
financing of any activity primarily intended to result in the sale
of S Class Shares issued by the Fund within the context of Rule
12b-1.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Portfolios seek to achieve their investment objectives by
investing all of their investable assets in a corresponding Series
of shares of the Trust. Each Series is classified as a partnership
for U.S. federal income tax purposes. A Portfolio is allocated its
proportionate share of the income and realized and unrealized gains
and losses of its corresponding Series.
Each Portfolio of the Fund is treated as a separate entity for
federal income tax purposes. Each Portfolio intends to qualify each
year as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). As such,
each Portfolio will not be subject to federal income tax, or to any
excise tax, to the extent its earnings are distributed as provided
in the Code and by satisfying certain other requirements relating
to the sources of its income and diversification of its assets.
Dividends paid by a Portfolio with respect to its K Class
Shares and S Class Shares are calculated in the same manner and at
the same time. Both K Class and S Class Shares of a Portfolio will
share proportionally in the investment income and expenses of the
Portfolio, except that the per share dividends of S Class Shares
will ordinarily be lower than the per share dividends of K Class
Shares as a result of the distribution expenses charged to S Class
Shares.
Dividends consisting of substantially all of the ordinary
income of each Portfolio, except the Kiewit Equity Portfolio, are
declared daily and are payable to shareholders of record at the
time of declaration. Such dividends are paid on the first business
day of each month. Net capital gains distributions, if any, will
be made annually. The Fund's policy is to distribute substantially
all net investment income from the Kiewit Equity Portfolio,
together with any net realized capital gains annually.
Shareholders of the Fund will automatically receive all income
dividends and capital gains distributions in additional shares of
the Portfolio whose shares they hold at net asset value (as of the
business date following the dividend record date), unless as to
each Portfolio, upon written notice to the Fund's Transfer Agent,
Rodney Square, the shareholder selects one of the following
options: (i) Income Option -- to receive income dividends in cash
and capital gains distributions in additional shares at net asset
value; (ii) Capital Gains Option -- to receive capital gains
distributions in cash and income dividends in additional shares at
net asset value; or (iii) Cash Option -- to receive both income
dividends and capital gains distributions in cash. If a
shareholder has elected to receive dividends and/or capital gain
distribution in cash and the postal or other delivery service is
unable to deliver checks to the shareholder's address of record,
such shareholder's distribution option will automatically be
converted to having all dividend and other distributions reinvested
in additional shares. No interest will accrue on amounts
represented by uncashed distribution or redemption checks.
Distributions paid by a Portfolio from long-term capital gains
(which are allocated from a Series), whether received in cash or in
additional shares, are taxable to investors as long-term capital
gains, regardless of the length of time an investor has owned
shares in the Portfolio. The Portfolios (through the operation of
the Series) do not seek to realize any particular amount of capital
gains during a year; rather, realized gains are a byproduct of
management activities. Consequently, capital gains distributions
may be expected to vary considerably from year to year. Also, if
purchases of shares in a Portfolio are made shortly before the
record date for a capital gains distribution or a dividend, a
portion of the investment will be returned as a taxable
distribution.
Dividends which are declared in October, November or December
to shareholders of record in such a month but which, for
operational reasons, may not be paid to the shareholder until the
following January, will be treated for tax purposes as if paid by a
Portfolio and received by the shareholder on December 31 of the
calendar year in which they are declared.
A sale or redemption of shares of a Portfolio is a taxable
event and may result in a capital gain or loss to shareholders
subject to tax. Any loss incurred on sale or exchange of a
Portfolio's shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain dividends
received with respect to such shares.
The Portfolios may be required to report to the Internal
Revenue Service ("IRS") any taxable dividend or other reportable
payment (including share redemption proceeds) and withhold 31% of
any such payments made to shareholders who have not provided a
correct taxpayer identification number and made certain required
certifications. A shareholder may also be subject to backup
withholding if the IRS or a broker notifies the Fund that the
number furnished by the shareholder is incorrect or that the
shareholder is subject to backup withholding for previous under-
reporting of interest or dividend income.
Shareholders of the Portfolios who are not U.S. persons for
purposes of federal income taxation, should consult with their
financial or tax advisors regarding the applicability of U.S.
withholding and other taxes to distributions received by them from
the Portfolios and the application of foreign tax laws to these
distributions. Shareholders should also consult their tax advisors
with respect to the applicability of any state and local intangible
property or income taxes to their shares of the Portfolios and
distributions and redemption proceeds received from the Portfolios.
Shareholders who hold shares of a Portfolio in an employer-
sponsored 401(k) or profit sharing plan, or other tax-advantaged
plan, such as an IRA, should read their plan documents with respect
to options available for receipt of dividends and federal tax
treatment of transactions involving such shares.
The tax discussion set forth above is included for general
information only. Prospective investors should consult their own
tax advisers concerning the federal, state, local or foreign tax
consequences of an investment in a Portfolio.
PURCHASE OF SHARES
After you open an account with the Fund, you may purchase S
Class Shares by (a) writing to the Fund and enclosing your check as
payment or (b) by calling (800) 2KIEWIT to arrange for payment by
wire transfer.
To Open an Account. Send a completed application form by
regular mail to Kiewit Mutual Fund, c/o Rodney Square, P.O. Box
8987, Wilmington, DE 19899, or by express mail to Kiewit Mutual
Fund, c/o Rodney Square, 1105 N. Market Street, Wilmington, DE
19801. You may request an application form by calling (800)
2KIEWIT.
To Purchase by Mail. Your initial purchase may be indicated
on your application. For additional purchases, you may send the
Fund a simple letter or use order forms supplied by the Fund.
Please enclose your check drawn on a U.S. bank payable to "Kiewit
Mutual Fund." Please indicate the amount to be invested in each
Portfolio and your Portfolio account number.
To Purchase by Wire Transfer: Please call the Fund at (800)
2KIEWIT to make specific arrangements before each wire transfer.
Then, instruct your bank to wire federal funds to Rodney Square
Management Corporation, c/o Wilmington Trust Company, Wilmington,
DE -- ABA #0311-0009-2, attention: Kiewit Mutual Fund, DDA# 2648-
0337, further credit -- your account number, the desired Portfolio
and class of shares and your name.
Minimum Initial Investment. The minimum initial investment is
$10,000, but subsequent investments may be made in any amount.
Purchase Price and Timing. S Class Shares of each Portfolio
are offered at their net asset value next determined after a
purchase order is received and accepted. Purchase orders received
by and accepted before the close of regular trading on the New York
Stock Exchange ("NYSE"), usually 4:00 p.m. Eastern time, on any
Business Day of the Fund will be priced at the net asset value per
share that is determined as of the close of regular trading on the
NYSE. However, purchase orders for shares of the Kiewit Money
Market Portfolio and the Kiewit Government Money Market Portfolio
received and accepted before 2:00 p.m., Eastern time, on any
Business Day of the Fund will be priced at the net asset value per
share that is determined at 2:00 p.m., Eastern time. (See
"Valuation Of Shares.") Purchase orders received and accepted
after those daily deadlines will be priced as of the deadline on
the following Business Day of the Fund. A "Business Day of the
Fund" is any day on which the NYSE and Federal Reserve Bank are
open for business. The Fund and RSD each reserves the right to
reject any purchase order and may suspend the offering of shares of
any Portfolio for a period of time.
In Kind Purchases. If accepted by the Fund, S Class Shares of
each Portfolio may be purchased in exchange for securities which
are eligible for acquisition by the Portfolio and its corresponding
Series of the Trust as described in the Statement of Additional
Information. Please contact Rodney Square about this purchase
method.
SHAREHOLDER ACCOUNTS
Shareholder Inquiries. Shareholder inquiries may be made by
writing the Fund at 1100 North Market Street, Wilmington, DE 19890
or calling (800) 2KIEWIT.
Shareholder Statements. The Fund will mail a statement at
least quarterly showing all purchases, redemptions and balances in
each Portfolio. Shareholdings are expressed in terms of full and
fractional shares of each Portfolio rounded to the nearest 1/1000th
of a share. In the interest of economy and convenience, the
Portfolios do not issue share certificates.
Individual Retirement Accounts. Shares of the Portfolios may
be purchased for a tax-deferred retirement plan such as an
individual retirement account ("IRA"). For an IRA Application,
call Rodney Square at (800) 2KIEWIT. Wilmington Trust Company
("WTC") provides IRA custodial services for each shareholder
account that is established as an IRA. For these services, WTC
receives an annual fee of $10.00 per account, which fee is paid
directly to WTC by the IRA shareholder. If the fee is not paid by
the date due, Portfolio shares owned by the IRA shareholder will be
redeemed automatically for purposes of making the payment.
Non-Individual Accounts. Corporations, partnerships,
fiduciaries and other non-individual investors may be required to
furnish certain additional documentation to make purchases,
exchanges and redemptions.
Minimum Account Size. Due to the relatively high cost of
maintaining small shareholder accounts, the Fund reserves the right
to automatically close any account with a current value of less
than $5,000 by involuntarily redeeming all shares in the account
and mailing the proceeds to the shareholder. Shareholders will be
notified if their account value is less than $5,000 and will be
allowed 60 days in which to increase their account balance to
$5,000 or more to prevent the account from being closed.
Reductions in value that result solely from market activity will
not trigger an involuntary redemption.
VALUATION OF SHARES
The net asset values per share of each Portfolio's S Class
Shares and shares of each corresponding Series are calculated by
dividing the total market value of the corresponding Series'
investments and other assets, less any liabilities, by the total
outstanding shares of the stock of the Portfolio or Series. The
value of the shares of each Series will fluctuate in relation to
its own investment experience. The value of the shares of the
Feeder Portfolios will fluctuate in relation to the investment
experience of the Trust Series in which such Portfolios invest. On
each Business Day of the Fund, net asset value is determined as of
the close of business of the NYSE, usually 4:00 p.m. Eastern time;
except for the Kiewit Money Market Portfolio and Kiewit Government
Money Market Portfolio, which is determined at 2:00 p.m., Eastern
time. Securities held by the Series which are listed on a
securities exchange and for which market quotations are available
are valued at the last quoted sale price of the day or, if there is
no such reported sale, at the mean between the most recent quoted
bid and asked prices. Price information on listed securities is
taken from the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily
available are valued at the mean between the most recent bid and
asked prices. The value of other assets and securities for which
no quotations are readily available (including restricted
securities) are determined in good faith at fair value in
accordance with procedures adopted by the Board of Trustees.
Money market instruments with a maturity of more than 60 days
are valued at current market value, as discussed above. Money
market instruments with a maturity of 60 days or less are valued at
their amortized cost, which the Board of Trustees has determined in
good faith constitutes fair value for purposes of complying with
the 1940 Act. This valuation method will continue to be used until
such time as the Trustees determine that it does not constitute
fair value for such purposes.
The net asset value of the shares of each Portfolio, except
the Kiewit Money Market Portfolio and the Kiewit Government Money
Market Portfolio, will fluctuate in relation to its own investment
experience. The Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio will attempt to maintain a stable
net asset value of $1.00 per share.
The offering price of shares of each Portfolio is the net
asset value next determined after the purchase order is received
and accepted; no sales charge or reimbursement fee is imposed.
EXCHANGE OF SHARES
You may exchange all or a portion of your S Class Shares in a
Portfolio for S Class Shares of any other Portfolio of the Fund
that currently offers its shares to investors. A redemption of
shares through an exchange will be effected at the net asset value
per share next determined after receipt by the Fund of the request,
and a purchase of shares through an exchange will be effected at
the net asset value per share next determined.
Exchange transactions will be subject to the minimum initial
investment and other requirements of the Portfolio into which the
exchange is made. An exchange may not be made if the exchange
would leave a balance in a shareholder's Portfolio account of less
than $5,000.
To obtain more information about exchanges, or to place
exchange orders, contact the Fund. The Fund, on behalf of the
Portfolios, reserves the right to terminate or modify the exchange
offer described here. This exchange offer is valid only in those
jurisdictions where the sale of the Portfolio's shares to be
acquired through such exchange may be legally made.
REDEMPTION OF SHARES
You may redeem S Class Shares by mailing instructions to the
Fund or calling the Fund at (800) 2KIEWIT. The Fund will promptly
mail you a check or wire transfer funds to your bank, as described
below.
To Redeem By Mail: You may send written instructions, with
signature guarantees, by regular mail to: Kiewit Mutual Fund, c/o
Rodney Square Management Corporation, P.O. Box 8987, Wilmington, DE
19899-9752, or by express mail to Kiewit Mutual Fund, c/o Rodney
Square Management Corporation, 1105 N. Market Street, Wilmington,
DE 19801. The instructions should indicate the Portfolio from
which shares are to be redeemed, the number of shares or dollar
amount to be redeemed, the Portfolio account number and the name of
the person in whose name the account is registered. A signature
and a signature guarantee are required for each person in whose
name the account is registered. A signature may be guaranteed by
an eligible institution acceptable to the Fund, such as a bank,
broker, dealer, municipal securities dealer, government securities
dealer, credit union, national securities exchange, registered
securities association, clearing agency, or savings association.
To Redeem By Telephone: If you want to redeem your shares by
telephone you must elect to do so by checking the appropriate box
of your initial Application or by calling the Fund at (800) 2KIEWIT
to obtain a separate application for telephone redemptions. In
order to redeem by telephone, you must call the Fund Monday through
Friday during normal business hours of 9 a.m. to 4 p.m., Eastern
time, and indicate your name, Kiewit Mutual Fund, the Portfolio's
name, your Portfolio account number and the number of shares you
wish to redeem. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine and
will not be liable for any losses to a shareholder due to
unauthorized or fraudulent telephone transactions. If the Fund,
the Manager, the Transfer Agent or any of their employees fails to
abide by their procedures, the Fund may be liable to a shareholder
for losses he/she suffers from any resulting unauthorized
transactions. During times of drastic economic or market changes,
the telephone redemption privilege may be difficult to implement.
In the event that you are unable to reach the Fund by telephone,
you may make a redemption request by mail.
Additional Redemption Information. You may redeem all or any
part of the value of your account on any Business Day. Redemptions
are made at the net asset value next calculated after the Fund has
received and accepted your redemption request. (See "Valuation Of
Shares.") The Fund imposes no fee when shares are redeemed.
Redemption checks are mailed on the next Business Day of the
Fund following acceptance of redemption instructions but in no
event later than 7 days following such receipt and acceptance.
Amounts redeemed by wire from each Portfolio, except the Kiewit
Money Market Portfolio, are normally wired on the next business day
after acceptance of redemption instructions (if received by Rodney
Square before the close of regular trading on the NYSE or 2:00 p.m.
Eastern time, for the Kiewit Money Market Portfolio). In no event
are redemption proceeds wired later than 7 days following such
receipt and acceptance. If the shares to be redeemed were
purchased by check, the Fund reserves the right not to make the
redemption proceeds available until it has reasonable grounds to
believe that the check has been collected (which could take up to
10 days).
Redemption proceeds exceeding $10,000 may be wired to your
predesignated bank account in any commercial bank in the United
States. The receiving bank may charge a fee for this service.
Alternatively, proceeds may be mailed to your bank or, for amounts
of less than $10,000, mailed to your Portfolio account address of
record if the address has been established for a minimum of 60
days. In order to authorize the Fund to mail redemption proceeds
to your Portfolio account address of record, complete the
appropriate section of the application for telephone redemptions or
include your Portfolio account address of record when you submit
written instructions. You may change the account which you have
designated to receive amounts redeemed at any time. Any request to
change the account designated to receive redemption proceeds should
be accompanied by a guarantee of the shareholder's signature by an
eligible institution. A signature and a signature guarantee are
required for each person in whose name the account is registered.
Further documentation will be required to change the designated
account when shares are held by a corporation, partnership,
fiduciary or other non-individual investor.
For more information on redemption services, call the Fund at
(800) 2KIEWIT.
Redemption Policies. Redemption payments in cash will
ordinarily be made within seven days after receipt of the
redemption request in good form. However, the right of redemption
may be suspended or the date of payment postponed in accordance
with the 1940 Act. The amount received upon redemption may be more
or less than the amount paid for the shares depending upon the
fluctuations in the market value of the assets owned by the
Portfolio. If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders of
any Portfolio to make a particular payment in cash, the Fund may
pay all or part of the redemption price by distributing portfolio
securities from the Portfolio of the shares being redeemed in
accordance with Rule 18f-1 under the 1940 Act. Investors may incur
brokerage charges and other transaction costs selling securities
that were received in payment of redemptions.
PERFORMANCE INFORMATION
From time to time, performance information, such as yield or
total return for a Portfolio, may be quoted in advertisements or in
communications to shareholders. Performance quotations represent
past performance and should not be considered as representative of
future results. The current yield will be calculated by dividing
the net investment income earned per share during the period stated
in the advertisement (based on the average daily number of shares
entitled to receive dividends outstanding during the period) by the
closing net asset value per share on the last day of the period and
annualizing the result on a semi-annual compounded basis. A
Portfolio's total return may be calculated on an annualized and
aggregate basis for various periods (which periods will be stated
in the advertisement). Average annual return reflects the average
percentage change per year in value of an investment in a
Portfolio. Aggregate total return reflects the total percentage
change in value of an investment in the Portfolio over the stated
period.
The principal value of an investment in a Portfolio will
fluctuate so that an investor's shares when redeemed, may be worth
more or less than the investor's original cost. Performance will
be calculated separately for K Class and S Class Shares. The K
Class Shares have different expenses from the S Class Shares which
may affect performance.
Further information about the performance of each Portfolio
and Class is included in the Fund's Annual Report to Shareholders
which may be obtained without charge by contacting the Fund at
(800) 2KIEWIT.
GENERAL INFORMATION
The Fund, formerly named "Kiewit Institutional Fund", issues
two separate classes of shares of beneficial interest for each
Portfolio with a par value of $.01 per share. The shares of each
Portfolio, when issued and paid for in accordance with the Fund's
prospectus, will be fully paid and non-assessable shares, with
equal, non-cumulative voting rights and no preferences as to
conversion, exchange, dividends, redemption or any other feature.
The separate classes of shares each represent interests in the
same portfolio of investments, have the same rights and are
identical in all respects, except that the S Class Shares bear
distribution plan expenses, and have exclusive voting rights with
respect to the Rule 12b-1 Distribution Plan pursuant to which the
distribution fee may be paid. The two classes have different
exchange privileges. See "Exchange Of Shares." The net income
attributable to S Class Shares and the dividends payable on S Class
Shares will be reduced by the amount of the distribution fees;
accordingly, the net asset value of the S Class Shares will be
reduced by such amount to the extent the Portfolio has
undistributed net income.
Shareholders shall have the right to vote only (i) for removal
of Trustees, (ii) with respect to such additional matters relating
to the Fund as may be required by the applicable provisions of the
1940 Act, including Section 16(a) thereof, and (iii) on such other
matters as the Trustees may consider necessary or desirable. In
addition, the shareholders of each Portfolio will be asked to vote
on any proposal to change a fundamental investment policy (i.e. a
policy that may be changed only with the approval of shareholders)
of that Portfolio. All shares of the Fund entitled to vote on a
matter shall vote without differentiation between the separate
Portfolios on a one-vote-per-share basis; provided however, if a
matter to be voted on does not affect the interests of all
Portfolios, then only the shareholders of each affected Portfolio
shall be entitled to vote on the matter. If liquidation of the
Fund should occur, shareholders would be entitled to receive on a
per Portfolio basis the assets of the particular Portfolio whose
shares they own, as well as a proportionate share of Fund assets
not attributable to any particular Portfolio then in existence.
Ordinarily, the Fund does not intend to hold annual meetings of
shareholders, except as required by the 1940 Act or other
applicable law. The Fund's by-laws provide that meetings of
shareholders shall be called for the purpose of voting upon the
question of removal of one or more Trustees upon the written
request of the holders of not less than 10% of the outstanding
shares.
Kiewit Investment Trust was organized as a Delaware business
trust on January 23, 1997. The Trust offers shares of its Series
only to institutional investors in private offerings. The Fund may
withdraw the investment of a Feeder Portfolio in a Series of the
Trust at any time, if the Board of Trustees of the Fund determines
that it is in the best interests of the Portfolio to do so. Upon
any such withdrawal, the Board of Trustees of the Fund would
consider what action might be taken, including the investment of
all of the assets of the Portfolio in another pooled investment
entity having the same investment objective as the Portfolio or the
hiring of an investment advisor to manage the Portfolio's assets in
accordance with the investment policies described above.
Whenever a Feeder Portfolio, as an investor in its
corresponding Trust Series, is asked to vote on a shareholder
proposal, the Fund will hold a special meeting of the Feeder
Portfolio's shareholders to solicit their votes with respect to the
proposal. The Trustees of the Fund will then vote the Feeder
Portfolio's shares in the Series in accordance with the voting
instructions received from the Feeder Portfolio's shareholders.
The Trustees of the Fund will vote shares of the Feeder Portfolio
for which they receive no voting instructions in accordance with
their best judgment.
Peter Kiewit Sons', Inc., a Delaware corporation with
principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the
direct or indirect parent of shareholders of more than 25% of the
voting securities of each Portfolio and therefore may be deemed to
control each Portfolio.
APPENDIX - DESCRIPTION OF RATINGS
Description of Bond Ratings - Moody's Investors Services, Inc.
("Moody's") description of its bond ratings are:
Aaa--Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are 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 maybe other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A--Bonds which are 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 some time in the future.
Baa--Bonds which are 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 which are 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 which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments
or of maintenance of other terms of the contract over any long
period of time may be small.
Caa--Bonds which are 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 which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or
have other market shortcomings.
C--Bonds which are 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 also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the
higher end of its rating category; the modifier 2 indicates a mid-
range ranking; and 3 indicates a ranking toward the lower end of
the category.
Standard & Poor's Ratings Group's ("S&P") description of its bond
ratings are:
AAA--The highest degree of safety with overwhelming repayment
capacity.
AA--Very high degree of safety with very strong capacity for
repayment. These issues differ from higher rated issues only in a
small degree.
A--A strong degree of safety and capacity for repayment, but these
issues are somewhat more susceptible in the long term to adverse
economic conditions than those rated in higher categories.
BBB--A satisfactory degree of safety and capacity for repayment,
but these issues are more vulnerable to adverse economic conditions
or changing circumstances than higher-rated issues.
BB--This designation reflects less near-term vulnerability to
default than other speculative issues. However, the issues face
major ongoing uncertainties or exposures to adverse economic or
financial conditions threatening capacity to meet interest and
principal payments on a timely basis.
B--This designation indicates that the issues 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 to
pay interest and repay principal.
CCC--Issues rated CCC have currently identifiable vulnerability to
default, and are dependent upon favorable business, financial, and
economic conditions to meet timely interest and principal
repayments. Adverse business, financial, or economic developments
would render repayment capacity unlikely.
S&P applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major
rating categories.
Description of Commercial Paper Ratings
The rating A-1 is the highest commercial paper rating assigned by
S&P. Commercial paper rated A-1 has the following characteristics:
(1) liquidity ratios are adequate to meet cash requirements; (2)
long-term senior debt is rated "A" or better; (3) the issuer has
access to at least two additional channels of borrowing; (4) basic
earnings and cash flow have an upward trend with allowance made for
unusual circumstances; (5) typically, the issuer's industry is well
established and the issuer has a strong position within the
industry; and (6) the reliability and quality of management are
unquestioned. The rating Prime-1 is the highest commercial paper
rating assigned by Moody's. Among the factors considered by
Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and the appraisal of speculative-
type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term
debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of
obligations which may be present or may arise as a result of public
interest questions and preparations to meet such obligations.
KIEWIT MUTUAL FUND
1000 Kiewit Plaza
Omaha, NE 68131-3344
Telephone: (800) 2KIEWIT
Investment Advisor
KIEWIT INVESTMENT MANAGEMENT CORP.
1000 Kiewit Plaza
Omaha, NE 68131-3344
Custodian
WILMINGTON TRUST COMPANY
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-0001
Administrator and Transfer Agent
RODNEY SQUARE MANAGEMENT CORPORATION
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-0001
Distributor
RODNEY SQUARE DISTRIBUTORS, INC.
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-00014
KIEWIT MUTUAL FUND
S CLASS SHARES
PROSPECTUS
October 31, 1997
This prospectus describes the Kiewit Money Market Portfolio,
Kiewit Government Money Market Portfolio, and Kiewit Short-Term
Government Portfolio (collectively the "Portfolios" or "Feeder
Portfolios" and individually a "Portfolio"), each a series of
shares issued by Kiewit Mutual Fund (the "Fund"), 1000 Kiewit
Plaza, Omaha, NE 68131-3344, (800) 2KIEWIT. Each Portfolio is an
open-end, diversified management investment company which currently
offers two separate classes of shares: K Class Shares and S Class
Shares. Shares of each class represent equal, pro-rata interests
in a Portfolio and accrue dividends in the same manner, except that
S Class Shares bear distribution expenses payable by the Class as
compensation for distribution of the S Class Shares. The
securities offered in this Prospectus are S Class Shares subject to
a distribution charge. Information concerning the Fund's K Class
Shares may be obtained by calling the Fund at the telephone number
stated above.
The Fund issues six series of shares, each of which represents
a separate class of the Fund's shares of beneficial interest,
having its own investment objective and policies. The investment
objective of the Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio is to provide high current income
while maintaining a stable share price. The investment objective
of the Kiewit Short-Term Government Portfolio is to provide
investors with as high a level of current income as is consistent
with the maintenance of principal and liquidity.
Unlike many other investment companies which directly acquire
and manage their own portfolio of securities, each Portfolio seeks
to achieve its investment objective by investing all of its
investable assets in a corresponding series of shares of Kiewit
Investment Trust (the "Trust"), an open-end, management investment
company that issues series of shares (individually and
collectively, the "Series") having the same investment objective,
policies and limitations as each of the Portfolios. The investment
experience of each Feeder Portfolio will correspond directly with
the investment experience of its corresponding Series. Investors
should carefully consider this investment approach. For additional
information, see "Special Information About The Portfolios'
Structure."
This prospectus contains information about the Portfolios that
prospective investors should know before investing and should be
read carefully and retained for future reference. A Statement of
Additional Information dated October 31, 1997, is incorporated
herein by reference, has been filed with the Securities and
Exchange Commission and is available upon request, without charge,
by writing or calling the Fund at the above address or telephone
number.
The shares of the Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio are neither insured nor
guaranteed by the U.S. Government. While such Portfolios will make
every effort to maintain a stable net asset value of $1.00 per
share, there is no assurance that the Portfolios will be able to do
so.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page
HIGHLIGHTS 4
EXPENSE TABLE 7
FINANCIAL HIGHLIGHTS 9
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE 9
INVESTMENT OBJECTIVES AND POLICIES 10
Kiewit Money Market Portfolio 10
Kiewit Government Money Market Portfolio 12
Kiewit Short-Term Government Portfolio 13
Other Investment Policies 14
RISK FACTORS 15
MANAGEMENT OF THE FUND 16
DISTRIBUTION PLAN 18
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES 18
PURCHASE OF SHARES 21
SHAREHOLDER ACCOUNTS 22
VALUATION OF SHARES 23
EXCHANGE OF SHARES 23
REDEMPTION OF SHARES 24
PERFORMANCE INFORMATION 26
GENERAL INFORMATION 26
APPENDIX - DESCRIPTION OF RATINGS 29
HIGHLIGHTS
The Fund
The Fund is an open-end, diversified management investment
company commonly known as a "mutual fund." The Fund was organized
as a Delaware business trust on June 1, 1994 and is registered
under the Investment Company Act of 1940 (the "1940 Act"). The
Fund currently offers six series of shares: Kiewit Money Market
Portfolio, Kiewit Government Money Market Portfolio, Kiewit Short-
Term Government Portfolio, Kiewit Intermediate-Term Bond Portfolio,
Kiewit Tax-Exempt Portfolio and Kiewit Equity Portfolio. Each
Portfolio offers two classes of shares, K Class Shares and S Class
Shares.
Investment Objectives
The investment objective of the Portfolios described in this
prospectus is to provide investors with:
Money Market High current income, while maintaining a
stable share price. The Money Market
Portfolio will invest all of its assets
in the Money Market Series of the Trust,
which in turn invests in short-term money
market securities.
Government Money Market High current income, while maintaining a
stable share price and a credit rating in
the highest category for money market
funds as determined by an independent
rating agency. The Government Money
Market Portfolio will invest all of its
assets in the Government Money Market
Series of the Trust, which in turn
invests in securities issued or
guaranteed by the U.S. Government, its
agencies or instrumentalities.
Short-Term Government High level of current income,
consistent with the maintenance of
principal and liquidity. The Short-Term
Government Portfolio will invest all of
its assets in the Short-Term Government
Series of the Trust, which in turn
invests in securities issued or
guaranteed by the U.S. Government, its
agencies or instrumentalities.
Although the investment objective of each Portfolio is not
fundamental and may be changed by the Board of Trustees without
shareholder approval, the Fund intends to notify shareholders
before making any material change. Due to the inherent risks of
investments, there can be no assurance that a Portfolio will
achieve its objective. See "Investment Objectives And Policies."
How to Purchase Shares
After you open an account, you may purchase S Class Shares by
(a) writing the Fund and enclosing your check as payment or (b) by
calling the Fund at (800) 2KIEWIT to arrange for payment by wire
transfer. You may open an account by mailing a completed
application form to the Fund. The public offering price of the
shares of each Portfolio is the net asset value per share next
determined after acceptance of the purchase order and payment. The
S Class Shares may be purchased without a sales load or exchange
fee, but are subject to a distribution fee under a Rule 12b-1 plan.
See "Purchase Of Shares."
How to Redeem Shares
You may redeem S Class Shares by mailing written instructions
to the Fund or by calling the Fund at (800) 2KIEWIT (if you
requested telephone redemption privileges on an application form).
Shares will be redeemed at the net asset value per share next
determined after acceptance of a redemption request. The Fund will
promptly mail you a check, unless other arrangements have been
made. See "Redemption Of Shares."
Dividend Reinvestment
Each Portfolio intends to pay monthly dividends from its net
investment income and will pay net capital gains, if any, annually.
You may choose to receive dividends and capital gains
distributions in cash or you may choose to automatically reinvest
them in additional shares of the Portfolio. See "Dividends,
Capital Gains Distributions And Taxes."
Investment Manager, Underwriter and Servicing Agents
Kiewit Investment Management Corp. serves as the investment
manager of each Series of the Trust and also provides the
Portfolios with certain administrative services. Rodney Square
Distributors, Inc. serves as the Portfolios' underwriter.
Wilmington Trust Company serves as the custodian of the Portfolios'
assets and Rodney Square Management Corporation serves as the
Portfolios' administrator, transfer agent and accounting services
agent. See "Management Of The Fund."
Risk Factors
Each Portfolio, through its investment in a corresponding
Series of the Trust, is subject to certain risks. Investors should
consider a number of factors: (i) each Series of the Trust invests
in securities that fluctuate in value, and there can be no
assurance that the objective of any Portfolio will be achieved;
(ii) each Series of the Trust may invest in repurchase and reverse
repurchase agreements, which involve the risk of loss if the
counterparty defaults on its obligations under the agreement; and
(iii) each Series of the Trust has reserved the right to borrow
amounts not exceeding 33% of its net assets. Additionally, the
policy of the Portfolios to invest in the corresponding Series of
the Trust also involves certain risks. See "Risk Factors."
Peter Kiewit Sons', Inc.
An investment in the Fund is not a direct or indirect
investment in the common stock of Peter Kiewit Sons', Inc. ("PKS").
Virtually all of PKS' common stock is owned by employees or former
employees of PKS. The Fund is restricted from investing in the
securities of PKS and its affiliates. PKS and its affiliates do
not guarantee that an investment in the Fund will produce
satisfactory results.
EXPENSE TABLE
Shareholder Transaction Costs None
Estimated Annual Portfolio Operating Expenses of S Class Shares
(as a percentage of average net assets)
Short-Term
Government Government
Money Market Money Market Portfolio
Portfolio Portfolio
Management Fees
(after fee
waiver) .13% .13% .16%
12b-1 Fees* .25% .25% .25%
Other Expenses
(after expenses
assumed) .07% .07% .14%
Total Portfolio
Operating
Expenses .45% .45% .55%
*Long-term shareholders may pay more than the economic equivalent
of the maximum front-end sales charge permitted by rules of the
National Association of Securities Dealers, Inc.
The information in the Expense Table has been restated to
reflect changes in the amounts of management fees waived and Fund
expenses assumed. The table summarizes the aggregate estimated
annual operating expenses of both the Portfolios' S Class Shares
and the Series of the Trust in which the Portfolios invest. (See
"Management Of The Fund" for a description of Portfolio and Series
expenses.) Through June 30, 1998, Kiewit Investment Management
Corp. has agreed to waive all or a portion of its advisory fee and
to assume certain expenses in order to limit annual operating
expenses of the S Class Shares to not more than the following
percentage of the average daily net assets of each Portfolio:
Kiewit Money Market Portfolio 0.45%; Kiewit Government Money Market
Portfolio 0.45%; and Kiewit Short-Term Government Portfolio 0.55%.
Without the waiver of fees by Kiewit Investment Management Corp.,
the total expenses of the Portfolios' S Class Shares for the fiscal
year ending June 30, 1998, are estimated to be: Kiewit Money
Market Portfolio 0.52%. Kiewit Short-Term Government Portfolio
0.69%. Without the waiver of fees, the total expenses of the
Kiewit Government Money Market Portfolio, on an annual basis, are
estimated to be 0.52%.
Prior to March 3, 1997, the Portfolios sought to achieve their
investment objectives by acquiring and managing their own
portfolios of securities rather than by investing all of their
assets in the corresponding Series of the Trust. The above figures
have been restated to reflect estimated aggregate annualized
operating expenses of each Feeder Portfolio's S Class Shares and
its corresponding Series as though the Feeder Portfolio's
assets had been invested in the Series during the entire fiscal
year ended June 30, 1997.
Example
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and redemption at the end of each time
period:
1 Year 3 Years 5 Years 10 Years
Money Market Portfolio 5 14 25 57
Government Money Market
Portfolio 5 14 n/a n/a
Short-Term Government
Portfolio 6 18 31 69
The purpose of the above Expense Table and Example is to
assist investors in understanding the various costs and expenses
that an investor in the Portfolios' S Class Shares will bear
directly or indirectly. The information set forth above relates
only to the Portfolios' S Class Shares, which shares are subject to
different total fees and expenses than K Class Shares.
The Example should not be considered a representation of past
or future expenses. Actual expenses may be greater or lesser than
those shown. The above Example is based on actual expenses of the
Money Market and Short-Term Government Portfolios for the most
recent fiscal period and estimated expenses of the Government Money
Market Portfolio.
The Board of Trustees of the Fund has considered whether such
expenses will be more or less than they would be if the Feeder
Portfolios invest directly in the securities held by the Trust
Series. The aggregate amount of expenses for a Feeder Portfolio
and its corresponding Trust Series may be greater than if the
Portfolio were to invest directly in the securities held by the
corresponding Trust Series. However, the total expense ratios for
the Feeder Portfolios and the Trust Series are expected to be less
over time than such ratios would have been if the Portfolios had
continued to invest directly in the underlying securities. This is
because this arrangement enables various institutional investors,
including the Feeder Portfolios, to pool their assets, which may be
expected to result in economies by spreading certain fixed costs
over a larger asset base. Each shareholder in a Trust Series,
including a Feeder Portfolio, will pay its proportionate share of
the expenses of that Trust Series.
FINANCIAL HIGHLIGHTS
Financial highlights for the Portfolios' S Class Shares are
not provided because the Portfolios had not commenced selling S
Class Shares as of the date of this prospectus.
SPECIAL INFORMATION ABOUT THE PORTFOLIOS' STRUCTURE
Each of the Portfolios, unlike many other investment companies
which directly acquire and manage their own portfolio of
securities, seeks to achieve its investment objective by investing
all of its investable assets in a corresponding Series of the
Trust, an open-end, management investment company, registered under
the 1940 Act, that issues Series having the same investment
objective as each of the Portfolios. The investment objectives of
the Portfolios and their corresponding Series may be changed
without shareholder approval. Shareholders of a Feeder Portfolio
will receive written notice at least 30 days prior to the effective
date of any change in the investment objective of the Portfolio or
its corresponding Trust Series.
This prospectus describes the investment objective, policies
and restrictions of the Portfolios and their corresponding Series.
(See "Portfolio Characteristics And Policies - Kiewit Money Market
Portfolio, Kiewit Government Money Market Portfolio, and Kiewit
Short-Term Government Portfolio.") In addition, an investor should
read "Management Of The Fund" for a description of the management
and other expenses associated with the Feeder Portfolios'
investment in the Trust. Other institutional investors, including
other mutual funds, may invest in each Series, and the expenses of
such other funds and, correspondingly, their returns may differ
from those of the Portfolios. Please contact the Fund at 1000
Kiewit Plaza, Omaha, NE 08131-3344, 1-800-2KIEWIT for information
about the availability of investing in a Series of the Trust other
than through a Feeder Portfolio.
The shares of the Trust Series will be offered to
institutional investors for the purpose of increasing the funds
available for investment, to reduce expenses as a percentage of
total assets and to achieve other economies that might be available
at higher asset levels. While investment in a Series by other
institutional investors offers potential benefits to the Series
and, through their investment in the Series, the Feeder Portfolios
also, institutional investment in the Series also entails the risk
that economies and expense reductions might not be achieved, and
additional investment opportunities, such as increased
diversification, might not be available if other institutions do
not invest in the Series. Also, if an institutional investor were
to redeem its interest in a Series, the remaining investors in that
Series could experience higher pro rata operating expenses, thereby
producing lower returns, and the Series' security holdings may
become less diverse, resulting in increased risk. Institutional
investors that have a greater pro rata ownership interest in a
Series than the corresponding Feeder Portfolio could have effective
voting control over the operation of the Series.
Further, if a Series changes its investment objective in a
manner which is inconsistent with the investment objective of a
corresponding Feeder Portfolio and the Portfolio does not make a
similar change in its investment objective, the Portfolio would be
forced to withdraw its investment in the Series and either seek to
invest its assets in another registered investment company with the
same investment objective as the Portfolio, which might not be
possible, or retain an investment advisor to manage the Portfolio's
assets in accordance with its own investment objective, possibly at
increased cost. A withdrawal by a Feeder Portfolio of its
investment in the corresponding Series could result in a
distribution in kind of portfolio securities (as opposed to a cash
distribution) to the Portfolio. Should such a distribution occur,
the Portfolio could incur brokerage fees or other transaction costs
in converting such securities to cash in order to pay redemptions.
In addition, a distribution in kind to the Portfolio could result
in a less diversified portfolio of investments and could affect
adversely the liquidity of the Portfolio. Moreover, a distribution
in kind may constitute a taxable exchange for federal income tax
purposes resulting in gain or loss to the Feeder Portfolios. Any
net capital gains so realized will be distributed to such a
Portfolio's shareholders as described in "Dividends, Capital Gains
Distributions And Taxes" below.
Finally, the Feeder Portfolios' investment in the shares of a
registered investment company such as the Trust is relatively new
and results in certain operational and other complexities.
However, management believes that the benefits to be gained by
shareholders outweigh the additional complexities and that the
risks attendant to such investment are not inherently different
from the risks of direct investment in securities of the type in
which the Trust Series invest.
INVESTMENT OBJECTIVES AND POLICIES
Kiewit Money Market Portfolio
The Kiewit Money Market Portfolio pursues its investment
objective by investing all of its assets in the Money Market Series
of the Trust (the "Money Market Series") which has the same
investment objective and policies as the Portfolio. The investment
objective of the Money Market Series is to provide high current
income while maintaining a stable share price by investing in
short-term money market securities. The Money Market Series
invests in U.S. dollar-denominated money market instruments that
mature in 13 months or less, maintains an average weighted maturity
of 90 days or less and limits its investments to those investments
which the Board of Trustees determines present minimal credit
risks.
The Money Market Series will invest in the following money
market obligations issued by financial institutions, nonfinancial
corporations, and the U.S. Government, state and municipal
governments and their agencies or instrumentalities:
(1) United States Treasury obligations including bills,
notes, bonds and other debt obligations issued by the United States
Treasury. These securities are backed by the full faith and credit
of the U.S. Government.
(2) Obligations of agencies and instrumentalities of the U.S.
Government which are supported by the full faith and credit of the
U.S. Government, such as securities of the Government National
Mortgage Association, or which are supported by the right of the
issuer to borrow from the U.S. Treasury, such as securities issued
by the Federal Financing Bank; or which are supported by the credit
of the agency or instrumentality itself, such as securities of
Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by
the securities listed in (1) and (2) above.
(4) Commercial paper rated in the highest category of short-
term debt ratings of any two Nationally Recognized Statistical
Ratings Organization ("NRSROs") (such as Moody's Investor Services,
Inc. and Standard & Poor's Rating Services) or, if unrated, issued
by a corporation having outstanding comparable obligations that are
rated in the highest category of short-term debt ratings. See
"Appendix - Description Of Ratings."
(5) Corporate obligations having a remaining maturity of 397
calendar days or less, issued by corporations having outstanding
comparable obligations that are (a) rated in the two highest
categories of any two NRSROs or (b) rated no lower than the two
highest long-term debt ratings categories by any NRSRO. See
"Appendix - Description Of Ratings."
(6) Obligations of U.S. banks, such as certificates of
deposit, time deposits and bankers' acceptances. The banks must
have total assets exceeding $1 billion.
(7) Short-term Eurodollar and Yankee obligations of banks
having total assets exceeding one billion dollars. Eurodollar bank
obligations are dollar-denominated certificates of deposit or time
deposits issued outside the U.S. capital markets by foreign
branches of U.S. banks or by foreign banks; Yankee bank obligations
are dollar-denominated obligations issued in the U.S. capital
markets by foreign banks.
The Money Market Series will not invest more than 5% of its
total assets in the securities of a single issuer. With respect to
any security rated in the second highest rating category by an
NRSRO, the Money Market Series will not invest more than (i) 1% of
its total assets in such securities issued by a single issuer and
(ii) 5% of its total assets in such securities of all issuers. Up
to 10% of the Money Market Series' net assets may be invested in
"restricted" and other illiquid money market securities, which are
not freely marketable under the Securities Act of 1933 (the "1933
Act").
The Money Market Series may invest in repurchase agreements.
A repurchase agreement is a means of investing monies for a short
period. In a repurchase agreement, a seller--a U.S. commercial
bank or recognized U.S. securities dealer--sells securities to the
Money Market Series and agrees to repurchase the securities at the
Money Market Series' cost plus interest within a specified period
(normally one day). In these transactions, the securities
purchased by the Money Market Series will have a total value equal
to or in excess of the value of the repurchase agreement, and will
be held by the Money Market Series' custodian bank until
repurchased. Under the 1940 Act, a repurchase agreement is deemed
to be the loan of money by the Money Market Series to the seller,
collateralized by the underlying securities.
Eurodollar and Yankee obligations are subject to the same
risks that pertain to domestic issues, notably credit risk, market
risk and liquidity risk. Additionally, Eurodollar (and to a
limited extent, Yankee) obligations are subject to certain
sovereign risks. One such risk is the possibility that a foreign
government might prevent dollar-denominated funds from flowing
across its borders. Other risks include: adverse political and
economic developments in a foreign country; the extent and quality
of government regulation of financial markets and institutions; the
imposition of foreign withholding taxes; and expropriation or
nationalization of foreign issuers. However, Eurodollar and Yankee
obligations will undergo the same credit analysis as domestic
issues in which the Money Market Series invests, and foreign
issuers will be required to meet the same tests of financial
strength as the domestic issuers approved for the Money Market
Series.
Kiewit Government Money Market Portfolio
The Kiewit Government Money Market Portfolio pursues its
investment objective by investing all of its assets in the
Government Money Market Series of the Trust (the "Government Money
Market Series"). The investment objective of the Government Money
Market Series is to provide as high a level of current income as is
consistent with maintaining a stable share price by investing in
securities issued by the U.S. Government, its agencies or
instrumentalities. The Series invests in U.S. dollar-denominated
money market instruments that mature in 13 months or less and will
maintain an average weighted maturity of 60 days or less.
The Series will invest in the following money market
obligations issued by the U.S. government, its agencies or
instrumentalities:
(1) United States Treasury obligations including bills,
notes, bonds and other debt obligations issued by the United States
Treasury. These securities are backed by the full faith and credit
of the United States government.
(2) Obligations of agencies and instrumentalities of the U.S.
Government which are supported by the full faith and credit of the
U.S. Government, such as securities of the Government National
Mortgage Association, or which are supported by the right of the
issuer to borrow from the U.S. Treasury, such as securities issued
by the Federal Financing Bank; or which are supported by the credit
of the agency or instrumentality itself, such as securities of
Federal Farm Credit Banks.
(3) Repurchase agreements that are fully collateralized by
the securities listed in (1) and (2) above.
The Series has a AAAm credit rating from Standard & Poor's
Ratings Group. The AAAm credit rating indicates that the Series is
composed exclusively of investments that are rated AAA and/or
eligible short-term investments.
The Series may invest in repurchase agreements. A repurchase
agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller--a U.S. commercial bank or
recognized U.S. securities dealer--sells securities to the Series
and agrees to repurchase the securities at the Series' cost plus
interest within a specified period (normally one day). In these
transactions, the securities purchased by the Series will have a
total value equal to or in excess of the value of the repurchase
agreement, and will be held by the Series' custodian bank until
repurchased. Under the 1940 Act, a repurchase agreement is deemed
to be the loan of money by the Series to the seller, collateralized
by the underlying securities.
Kiewit Short-Term Government Portfolio
The Kiewit Short-Term Government Portfolio pursues its
investment objective by investing all of its assets in the Kiewit
Short-Term Government Series of the Trust (the "Short-Term
Government Series") which has the same investment objective and
policies as the Portfolio. The investment objective of the Short-
Term Government Series is to provide investors with as high a level
of current income as is consistent with the maintenance of
principal and liquidity. The Short-Term Government Series invests
at least 65% of its assets in U.S. Treasury securities and U.S.
Government agency securities. The Short-Term Government Series may
also invest in repurchase agreements collateralized by U.S.
Treasury or U.S. Government agency securities. In an effort to
minimize fluctuations in market value, the Short-Term Government
Series will maintain a dollar-weighted average maturity between one
and three years.
U.S. Government agency securities are debt obligations of
agencies and instrumentalities of the U.S. Government which are
supported by the full faith and credit of the U.S. Government, such
as securities of the Government National Mortgage Association; or
which are supported by the right of the issuer to borrow from the
U.S. Treasury, such as securities issued by the Federal Financing
Bank; or which are supported by the credit of the agency or
instrumentality itself, such as securities of Federal Farm Credit
Banks.
Other Investment Policies
Other Registered Investment Companies. Each Portfolio's
corresponding Series reserves the right to invest in the shares of
other registered investment companies. By investing in shares of
investment companies, a Series would indirectly pay a portion of
the operating expenses, management expenses and brokerage costs of
such companies as well as the expense of operating the Series.
Thus, the Series' investors may pay higher total operating expenses
and other costs than they might pay by owning the underlying
investment companies directly. The Manager will attempt to
identify investment companies that have demonstrated superior
management in the past, thus possibly offsetting these factors by
producing better results and/or lower expenses than other
investment companies with similar investment objectives and
policies. There can be no assurance that this result will be
achieved. However, the Manager will waive its advisory fee with
respect to the assets of a Series invested in other investment
companies, to the extent of the advisory fee charged by any
investment adviser to such investment company. In addition, the
1940 Act limits investment by a Series in shares of other
investment companies to no more than 10% of the value of the
Series' total assets.
Securities Loans. Each Series may lend securities to
qualified brokers, dealers, banks and other financial institutions
for the purpose of earning additional income. While a Series may
earn additional income from lending securities, such activity is
incidental to the investment objective of a Series. The value of
securities loaned may not exceed 33 1/3% of the value of a Series'
total assets. In connection with such loans, a Series will receive
collateral consisting of cash or U.S. Government securities, which
will be maintained at all times in an amount equal to at least 100%
of the current market value of the loaned securities. In addition,
the Series will be able to terminate the loan at any time, will
retain the authority to vote the loaned securities and will receive
reasonable interest on the loan, as well as amounts equal to any
dividends, interest or other distributions on the loaned
securities. In the event of the bankruptcy of the borrower, the
Fund could experience delay in recovering the loaned securities.
Management believes that this risk can be controlled through
careful monitoring procedures.
Reverse Repurchase Agreements. A Series may enter into
reverse repurchase agreements with banks and broker-dealers.
Reverse repurchase agreements involve sales by a Series of its
assets concurrently with an agreement by the Series to repurchase
the same assets at a later date at a fixed price. A Series will
establish a segregated account with its custodian bank in which it
will maintain cash or liquid securities equal in value to its
obligations with respect to reverse repurchase agreements.
Options. The Kiewit Short-Term Government Series may sell
and/or purchase exchange-traded call options and purchase exchange-
traded put options on its portfolio securities. Options will be
used to generate income and to protect against price changes and
will not be engaged in for speculative purposes. The aggregate
value of option positions may not exceed 10% of each Series' net
assets as of the time the Series enters into such options.
A put option gives the purchaser of the option the right to
sell, and the writer the obligation to buy, the underlying security
at any time during the option period. A call option gives the
purchaser of the option the right to buy, and the writer of the
option the obligation to sell, the underlying security at any time
during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option
contract. There are risks associated with option transactions
including the following: (i) the success of an options strategy may
depend on the ability of the Manager to predict movements in the
prices of the individual securities, fluctuations in markets and
movements in interest rates; (ii) there may be an imperfect
correlation between the changes in market value of the securities
held by a Series and the prices of options; (iii) there may not be
a liquid secondary market for options; and (iv) while a Series will
receive a premium when it writes covered call options, it may not
participate fully in a rise in the market value of the underlying
security.
RISK FACTORS
Each Series has reserved the right to borrow amounts not
exceeding 33% of its net assets for the purposes of making
redemption payments. When advantageous opportunities to do so
exist, a Series may also borrow amounts not exceeding 5% of the
value of the Series' net assets for the purpose of purchasing
securities. Such purchases can be considered to result in
"leveraging," and in such circumstances, the net asset value of the
Series may increase or decrease at a greater rate than would be the
case if the Series had not leveraged. A Series would incur
interest on the amount borrowed and if the appreciation and income
produced by the investments purchased when the Series has borrowed
are less than the cost of borrowing, the investment performance of
the Series may be further reduced as a result of leveraging.
In addition, each Series may invest in repurchase agreements
and reverse repurchase agreements. The use of repurchase
agreements involves certain risks. For example, if the seller of
the agreement defaults on its obligation to repurchase the
underlying securities at a time when the value of these securities
has declined, a Series may incur a loss upon disposition of them.
If the seller of the agreement becomes insolvent and subject to
liquidation or reorganization under the bankruptcy code or other
laws, a bankruptcy court may determine that the underlying
securities are collateral not within the control of the Series and
therefore subject to sale by the trustee in bankruptcy. Finally,
it is possible that a Series may not be able to substantiate its
interest in the underlying securities. While the Fund's management
acknowledges these risks, it is expected that they can be
controlled through stringent security selection and careful
monitoring. Reverse repurchase agreements involve the risk that
the market value of the securities retained by the Series may
decline below the price of the securities the Series has sold but
is obligated to repurchase under the agreement. In the event the
buyer of securities under a reverse repurchase agreement files for
bankruptcy or become insolvent, the Series' use of the proceeds of
the agreement may be restricted pending a determination by the
other party, or its trustee or receiver, whether to enforce the
Series' obligation to repurchase the securities. Reverse
repurchase agreements are considered borrowings by the Series and
as such are subject to the investment limitations discussed above.
MANAGEMENT OF THE FUND
The Fund was organized as a Delaware business trust. Under
Delaware law the Fund's Board of Trustees is responsible for
establishing Fund policies and for overseeing the management of the
Fund.
Each of the Trustees and officers of the Fund is also a
Trustee and officer of the Trust. Information as to the Trustees
and Officers of the Fund and the Trust is set forth in the
Statement of Additional Information under "Trustees and Officers."
Investment Management Agreement. Kiewit Investment Management
Corp. (the "Manager"), 1000 Kiewit Plaza, Omaha, NE 68131-3344,
serves as the investment manager to each Series of the Trust. The
Manager, organized in 1994, is an indirect wholly-owned subsidiary
of Peter Kiewit Sons', Inc., a construction, mining and
telecommunications company. The Manager provides the Trust with
records concerning the Manager's activities which the Trust is
required to maintain and renders regular reports to the Trust's
officers and the Board of Trustees. The Manager also selects
brokers and dealers to effect securities transactions. Under the
investment management agreement between the Manager and the Trust
on behalf of each Series, the monthly fees of the Series are at the
following annual rates of their average monthly net assets: Kiewit
Money Market Series .20%; Kiewit Government Money Market Series
.20%; and Kiewit Short-Term Government Series .30%.
Each Series of the Trust is co-managed by Livingston G.
Douglas and Brian J. Mosher. Mr. Douglas is the Chief Investment
Officer of the Manager; Chief Financial Officer, Vice President
and Treasurer of the Trust and the Fund; and a chartered
financial analyst. He has co-managed the Fund since July 1997.
From August 1993 to July 1997, Mr. Douglas served as a Senior
Portfolio Manager and Director of Fixed-Income Research at
Investment Advisers, Inc. in Minneapolis, Minnesota. He managed
both mutual funds and large separate accounts for institutional
clients. From July 1987 to April 1993, Mr. Douglas was a
Director, Senior Portfolio Manager, and Director of Quantitative
Research at MacKay-Shields Financial Corporation in New York
City. He has written five books on fixed-income investing.
Brian J. Mosher, co-manager of each Series of the Trust, is
a Senior Portfolio Manager and Vice President of the Manager; a
Vice President of the Trust and the Fund; and a chartered
financial analyst. Mr. Mosher has been a co-manager of the Fund
since 1994. From March 1989 to December 1994, Mr. Mosher served
as Investment Manager of Meridian Mutual Insurance Company in
Indianapolis, Indiana. From April 1984 to March 1989, he was
Vice President and Trust Officer of The Provident Bancorporation
of Cincinnati, Ohio.
The Fund has entered into an Administrative Services Agreement
with the Manager, on behalf of each Feeder Portfolio. Pursuant to
this agreement, the Manager performs various services, including:
supervision of the services provided by the Portfolio's custodian
and transfer and dividend disbursing agent and others who provide
services to the Fund for the benefit of the Portfolio; providing
shareholders with information about the Portfolio and their
investments as they or the Fund may request; assisting the
Portfolio in conducting meetings of shareholders; furnishing
information as the Board of Trustees may require regarding the
corresponding Series; and any other administrative services for the
benefit of the Portfolio as the Board of Trustees may reasonably
request. For its services, each Feeder Portfolio pays the Manager
a monthly fee equal to one-twelfth of .02% of the Portfolio's
average net assets.
Administration and Accounting Services Agreements. Under
separate Administration Agreements and Accounting Services
Agreements with the Trust and the Fund, Rodney Square Management
Corporation ("Rodney Square"), 1100 North Market Street,
Wilmington, Delaware 19890, serves, respectively, as Administrator
and Accounting Services Agent for the Trust and the Fund. In these
joint capacities, Rodney Square manages and administers all regular
day-to-day operations (other than management of the Trust's
investments) of each of the Trust's various Series and each of the
Fund's various Portfolios, subject to the supervision of the
Trust's and the Fund's respective Boards of Trustees. Pursuant to
its respective agreements with Rodney Square, the Trust has agreed
to pay Rodney Square, on behalf of each Trust Series, the Series'
proportionate share of a complex-wide annual: (a) administration
services charge of 0.015% of the Trust's aggregate total assets in
excess of $125 million; and (b) accounting services charge of
0.015% of the Trust's aggregate total assets in excess of $100
million. Pursuant to its respective agreements with the Fund,
Rodney Square receives from the Fund, on behalf of each Fund
Portfolio, separate annual administration and accounting services
fees of 0.02% of that portion of the Portfolio's total assets
attributable to S Class Fund Shares. The foregoing Rodney Square
annual asset-based fees are determined on an average daily total
asset basis, and are subject to prescribed fixed minimums.
Transfer Agency Agreement. Rodney Square serves as Transfer
Agent and Dividend Paying Agent for each Portfolio of the Fund
pursuant to a Transfer Agency Agreement with the Fund.
Investment Management Expenses. The Fund and the Trust each
bears all of its own costs and expenses, including: services of its
independent accountants, legal counsel, brokerage fees, commissions
and transfer taxes in connection with the acquisition and
disposition of portfolio securities, taxes, insurance premiums,
costs incidental to meetings of its shareholders and directors or
trustees, the cost of filing its registration statements under the
federal securities laws and the cost of any notice filings required
under state securities laws, reports to shareholders, and transfer
and dividend disbursing agency, administrative services and
custodian fees. Expenses allocable to a particular Portfolio or
Series are so allocated, and expenses which are not allocable to a
particular Portfolio or Series are borne by each Portfolio or
Series on the basis of its relative net assets.
DISTRIBUTION PLAN
The Fund has adopted a plan pursuant to Rule 12b-1 under the
1940 Act (the "12b-1 Plan"), whereby it may reimburse Rodney Square
Distributors, Inc. (the "Distributor") or others for expenses
actually incurred by the Distributor or others in the promotion and
distribution of the Fund's S Class Shares. These expenses include,
but are not limited to, the printing of prospectuses and reports
used for sales purposes, the preparation of sales literature and
related expenses, advertisements, and other distribution-related
expenses, including payments to securities dealer and others
participating in the sale and servicing of S Class Shares. The
maximum amount which the Fund may pay to the Distributor and others
(and which the Distributor may re-allow to securities dealers and
others participating in the sale of shares) for such distribution
expenses is 0.25% per annum of average daily net assets of a
Portfolio's S Class payable on a monthly basis. All expenses of
distribution and marketing in excess of 0.25% per annum will be
borne by the Advisor. The 12b-1 Plan also covers any payments made
by the Fund, the Manager, the Distributor, or other parties on
behalf of the Fund, the Advisor, the Manager, or the Distributor,
to the extent such payments are deemed to be for the financing of
any activity primarily intended to result in the sale of S Class
Shares issued by the Fund within the context of Rule 12b-1.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
The Portfolios seek to achieve their investment objectives by
investing all of their investable assets in a corresponding Series
of shares of the Trust. Each Series is classified as a partnership
for U.S. federal income tax purposes. A Portfolio is allocated its
proportionate share of the income and realized and unrealized gains
and losses of its corresponding Series.
Each Portfolio of the Fund is treated as a separate entity for
federal income tax purposes. Each Portfolio intends to qualify each
year as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). As such,
each Portfolio will not be subject to federal income tax, or to any
excise tax, to the extent its earnings are distributed as provided
in the Code and by satisfying certain other requirements relating
to the sources of its income and diversification of its assets.
Dividends paid by a Portfolio with respect to its K Class
Shares and S Class Shares are calculated in the same manner and at
the same time. Both K Class and S Class Shares of a Portfolio will
share proportionally in the investment income and expenses of the
Portfolio, except that the per share dividends of S Class Shares
will ordinarily be lower than the per share dividends of K Class
Shares as a result of the distribution expenses charged to S Class
Shares.
Dividends consisting of substantially all of the ordinary
income of each Portfolio, except the Kiewit Equity Portfolio, are
declared daily and are payable to shareholders of record at the
time of declaration. Such dividends are paid on the first business
day of each month. Net capital gains distributions, if any, will
be made annually. The Fund's policy is to distribute substantially
all net investment income from the Kiewit Equity Portfolio,
together with any net realized capital gains annually.
Shareholders of the Fund will automatically receive all income
dividends and capital gains distributions in additional shares of
the Portfolio whose shares they hold at net asset value (as of the
business date following the dividend record date), unless as to
each Portfolio, upon written notice to the Fund's Transfer Agent,
Rodney Square, the shareholder selects one of the following
options: (i) Income Option -- to receive income dividends in cash
and capital gains distributions in additional shares at net asset
value; (ii) Capital Gains Option -- to receive capital gains
distributions in cash and income dividends in additional shares at
net asset value; or (iii) Cash Option -- to receive both income
dividends and capital gains distributions in cash. If a
shareholder has elected to receive dividends and/or capital gain
distributions in cash and the postal or other delivery service is
unable to deliver checks to the shareholder's address of record,
such shareholder's distribution option will automatically be
converted to having all dividend and other distributions reinvested
in additional shares. No interest will accrue on amounts
represented by uncashed distribution or redemption checks.
Distributions paid by a Portfolio from long-term capital gains
(which are allocated from a Series), whether received in cash or in
additional shares, are taxable to investors as long-term capital
gains, regardless of the length of time an investor has owned
shares in the Portfolio. The Portfolios (through the operation of
the Series) do not seek to realize any particular amount of capital
gains during a year; rather, realized gains are a byproduct of
management activities. Consequently, capital gains distributions
may be expected to vary considerably from year to year. Also, if
purchases of shares in a Portfolio are made shortly before the
record date for a capital gains distribution or a dividend, a
portion of the investment will be returned as a taxable
distribution.
Dividends which are declared in October, November or December
to shareholders of record in such a month but which, for
operational reasons, may not be paid to the shareholder until the
following January, will be treated for tax purposes as if paid by a
Portfolio and received by the shareholder on December 31 of the
calendar year in which they are declared.
A sale or redemption of shares of a Portfolio is a taxable
event and may result in a capital gain or loss to shareholders
subject to tax. Any loss incurred on sale or exchange of a
Portfolio's shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain dividends
received with respect to such shares.
The Portfolios may be required to report to the Internal
Revenue Service ("IRS") any taxable dividend or other reportable
payment (including share redemption proceeds) and withhold 31% of
any such payments made to shareholders who have not provided a
correct taxpayer identification number and made certain required
certifications. A shareholder may also be subject to backup
withholding if the IRS or a broker notifies the Fund that the
number furnished by the shareholder is incorrect or that the
shareholder is subject to backup withholding for previous under-
reporting of interest or dividend income.
Shareholders of the Portfolios who are not U.S. persons for
purposes of federal income taxation, should consult with their
financial or tax advisors regarding the applicability of U.S.
withholding and other taxes to distributions received by them from
the Portfolios and the application of foreign tax laws to these
distributions. Shareholders should also consult their tax advisors
with respect to the applicability of any state and local intangible
property or income taxes to their shares of the Portfolios and
distributions and redemption proceeds received from the Portfolios.
Shareholders who hold shares of a Portfolio in an employer-
sponsored 401(k) or profit sharing plan, or other tax-advantaged
plan, such as an IRA, should read their plan documents with respect
to options available for receipt of dividends and federal tax
treatment of transactions involving such shares.
The tax discussion set forth above is included for general
information only. Prospective investors should consult their own
tax advisers concerning the federal, state, local or foreign tax
consequences of an investment in a Portfolio.
PURCHASE OF SHARES
After you open an account with the Fund, you may purchase S
Class Shares by (a) writing to the Fund and enclosing your check as
payment or (b) by calling (800) 2KIEWIT to arrange for payment by
wire transfer.
To Open an Account. Send a completed application form by
regular mail to Kiewit Mutual Fund, c/o Rodney Square, P.O. Box
8987, Wilmington, DE 19899, or by express mail to Kiewit Mutual
Fund, c/o Rodney Square, 1105 N. Market Street, Wilmington, DE
19801. You may request an application form by calling (800)
2KIEWIT.
To Purchase by Mail. Your initial purchase may be indicated
on your application. For additional purchases, you may send the
Fund a simple letter or use order forms supplied by the Fund.
Please enclose your check drawn on a U.S. bank payable to "Kiewit
Mutual Fund." Please indicate the amount to be invested in each
Portfolio and your Portfolio account number.
To Purchase by Wire Transfer: Please call the Fund at (800)
2KIEWIT to make specific arrangements before each wire transfer.
Then, instruct your bank to wire federal funds to Rodney Square
Management Corporation, c/o Wilmington Trust Company, Wilmington,
DE -- ABA #0311-0009-2, attention: Kiewit Mutual Fund, DDA# 2648-
0337, further credit -- your account number, the desired Portfolio
and class of shares and your name.
Minimum Initial Investment. The minimum initial investment is
$10,000, but subsequent investments may be made in any amount.
Purchase Price and Timing. S Class Shares of each Portfolio
are offered at their net asset value next determined after a
purchase order is received and accepted. Purchase orders received
by and accepted before the close of regular trading on the New York
Stock Exchange ("NYSE"), usually 4:00 p.m. Eastern time, on any
Business Day of the Fund will be priced at the net asset value per
share that is determined as of the close of regular trading on the
NYSE. However, purchase orders for shares of the Kiewit Money
Market Portfolio and the Kiewit Government Money Market Portfolio
received and accepted before 2:00 p.m., Eastern time, on any
Business Day of the Fund will be priced at the net asset value per
share that is determined at 2:00 p.m., Eastern time. (See
"Valuation Of Shares.") Purchase orders received and accepted
after those daily deadlines will be priced as of the deadline on
the following Business Day of the Fund. A "Business Day of the
Fund" is any day on which the NYSE and Federal Reserve Bank are
open for business. The Fund and RSD each reserves the right to
reject any purchase order and may suspend the offering of shares of
any Portfolio for a period of time.
In Kind Purchases. If accepted by the Fund, S Class Shares of
each Portfolio may be purchased in exchange for securities which
are eligible for acquisition by the Portfolio and its corresponding
Series of the Trust as described in the Statement of Additional
Information. Please contact Rodney Square about this purchase
method.
SHAREHOLDER ACCOUNTS
Shareholder Inquiries. Shareholder inquiries may be made by
writing the Fund at 1100 North Market Street, Wilmington, DE 19890
or calling (800) 2KIEWIT.
Shareholder Statements. The Fund will mail a statement at
least quarterly showing all purchases, redemptions and balances in
each Portfolio. Shareholdings are expressed in terms of full and
fractional shares of each Portfolio rounded to the nearest 1/1000th
of a share. In the interest of economy and convenience, the
Portfolios do not issue share certificates.
Individual Retirement Accounts. Shares of the Portfolios may
be purchased for a tax-deferred retirement plan such as an
individual retirement account ("IRA"). For an IRA Application,
call Rodney Square at (800) 2KIEWIT. Wilmington Trust Company
("WTC") provides IRA custodial services for each shareholder
account that is established as an IRA. For these services, WTC
receives an annual fee of $10.00 per account, which fee is paid
directly to WTC by the IRA shareholder. If the fee is not paid by
the date due, Portfolio shares owned by the IRA shareholder will be
redeemed automatically for purposes of making the payment.
Non-Individual Accounts. Corporations, partnerships,
fiduciaries and other non-individual investors may be required to
furnish certain additional documentation to make purchases,
exchanges and redemptions.
Minimum Account Size. Due to the relatively high cost of
maintaining small shareholder accounts, the Fund reserves the right
to automatically close any account with a current value of less
than $5,000 by involuntarily redeeming all shares in the account
and mailing the proceeds to the shareholder. Shareholders will be
notified if their account value is less than $5,000 and will be
allowed 60 days in which to increase their account balance to
$5,000 or more to prevent the account from being closed.
Reductions in value that result solely from market activity will
not trigger an involuntary redemption.
VALUATION OF SHARES
The net asset values per share of each Portfolio's S Class
Shares and shares of each corresponding Series are calculated by
dividing the total market value of the corresponding Series'
investments and other assets, less any liabilities, by the total
outstanding shares of the stock of the Portfolio or Series. The
value of the shares of each Series will fluctuate in relation to
its own investment experience. The value of the shares of the
Feeder Portfolios will fluctuate in relation to the investment
experience of the Trust Series in which such Portfolios invest. On
each Business Day of the Fund, net asset value is determined as of
the close of business of the NYSE, usually 4:00 p.m. Eastern time;
except for the Kiewit Money Market Portfolio and Kiewit Government
Money Market Portfolio, which is determined at 2:00 p.m., Eastern
time. Securities held by the Series which are listed on a
securities exchange and for which market quotations are available
are valued at the last quoted sale price of the day or, if there is
no such reported sale, at the mean between the most recent quoted
bid and asked prices. Price information on listed securities is
taken from the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily
available are valued at the mean between the most recent bid and
asked prices. The value of other assets and securities for which
no quotations are readily available (including restricted
securities) are determined in good faith at fair value in
accordance with procedures adopted by the Board of Trustees.
Money market instruments with a maturity of more than 60 days
are valued at current market value, as discussed above. Money
market instruments with a maturity of 60 days or less are valued at
their amortized cost, which the Board of Trustees has determined in
good faith constitutes fair value for purposes of complying with
the 1940 Act. This valuation method will continue to be used until
such time as the Trustees determine that it does not constitute
fair value for such purposes.
The net asset value of the shares of each Portfolio, except
the Kiewit Money Market Portfolio and the Kiewit Government Money
Market Portfolio, will fluctuate in relation to its own investment
experience. The Kiewit Money Market Portfolio and Kiewit
Government Money Market Portfolio will attempt to maintain a stable
net asset value of $1.00 per share.
The offering price of shares of each Portfolio is the net
asset value next determined after the purchase order is received
and accepted; no sales charge or reimbursement fee is imposed.
EXCHANGE OF SHARES
You may exchange all or a portion of your S Class Shares in a
Portfolio for S Class Shares of any other Portfolio of the Fund
that currently offers its shares to investors. A redemption of
shares through an exchange will be effected at the net asset value
per share next determined after receipt by the Fund of the request,
and a purchase of shares through an exchange will be effected at
the net asset value per share next determined.
Exchange transactions will be subject to the minimum initial
investment and other requirements of the Portfolio into which the
exchange is made. An exchange may not be made if the exchange
would leave a balance in a shareholder's Portfolio account of less
than $5,000.
To obtain more information about exchanges, or to place
exchange orders, contact the Fund. The Fund, on behalf of the
Portfolios, reserves the right to terminate or modify the exchange
offer described here. This exchange offer is valid only in those
jurisdictions where the sale of the Portfolio's shares to be
acquired through such exchange may be legally made.
REDEMPTION OF SHARES
You may redeem S Class Shares by mailing instructions to the
Fund or calling the Fund at (800) 2KIEWIT. The Fund will promptly
mail you a check or wire transfer funds to your bank, as described
below.
To Redeem By Mail: You may send written instructions, with
signature guarantees, by regular mail to: Kiewit Mutual Fund, c/o
Rodney Square Management Corporation, P.O. Box 8987, Wilmington, DE
19899-9752, or by express mail to Kiewit Mutual Fund, c/o Rodney
Square Management Corporation, 1105 N. Market Street, Wilmington,
DE 19801. The instructions should indicate the Portfolio from
which shares are to be redeemed, the number of shares or dollar
amount to be redeemed, the Portfolio account number and the name of
the person in whose name the account is registered. A signature
and a signature guarantee are required for each person in whose
name the account is registered. A signature may be guaranteed by
an eligible institution acceptable to the Fund, such as a bank,
broker, dealer, municipal securities dealer, government securities
dealer, credit union, national securities exchange, registered
securities association, clearing agency, or savings association.
To Redeem By Telephone: If you want to redeem your shares by
telephone you must elect to do so by checking the appropriate box
of your initial Application or by calling the Fund at (800) 2KIEWIT
to obtain a separate application for telephone redemptions. In
order to redeem by telephone, you must call the Fund Monday through
Friday during normal business hours of 9 a.m. to 4 p.m., Eastern
time, and indicate your name, Kiewit Mutual Fund, the Portfolio's
name, your Portfolio account number and the number of shares you
wish to redeem. The Fund will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine and
will not be liable for any losses to a shareholder due to
unauthorized or fraudulent telephone transactions. If the Fund,
the Manager, the Transfer Agent or any of their employees fails to
abide by their procedures, the Fund may be liable to a shareholder
for losses he/she suffers from any resulting unauthorized
transactions. During times of drastic economic or market changes,
the telephone redemption privilege may be difficult to implement.
In the event that you are unable to reach the Fund by telephone,
you may make a redemption request by mail.
Additional Redemption Information. You may redeem all or any
part of the value of your account on any Business Day. Redemptions
are made at the net asset value next calculated after the Fund has
received and accepted your redemption request. (See "Valuation Of
Shares.") The Fund imposes no fee when shares are redeemed.
Redemption checks are mailed on the next Business Day of the
Fund following acceptance of redemption instructions but in no
event later than 7 days following such receipt and acceptance.
Amounts redeemed by wire from each Portfolio, except the Kiewit
Money Market Portfolio and the Kiewit Government Money Market
Portfolio, are normally wired on the next business day after
acceptance of redemption instructions (if received by Rodney Square
before the close of regular trading on the NYSE or 2:00 p.m.
Eastern time, for the Kiewit Money Market Portfolio and the Kiewit
Government Money Market Portfolio). In no event are redemption
proceeds wired later than 7 days following such receipt and
acceptance. If the shares to be redeemed were purchased by check,
the Fund reserves the right not to make the redemption proceeds
available until it has reasonable grounds to believe that the check
has been collected (which could take up to 10 days).
Redemption proceeds exceeding $10,000 may be wired to your
predesignated bank account in any commercial bank in the United
States. The receiving bank may charge a fee for this service.
Alternatively, proceeds may be mailed to your bank or, for amounts
of less than $10,000, mailed to your Portfolio account address of
record if the address has been established for a minimum of 60
days. In order to authorize the Fund to mail redemption proceeds
to your Portfolio account address of record, complete the
appropriate section of the application for telephone redemptions or
include your Portfolio account address of record when you submit
written instructions. You may change the account which you have
designated to receive amounts redeemed at any time. Any request to
change the account designated to receive redemption proceeds should
be accompanied by a guarantee of the shareholder's signature by an
eligible institution. A signature and a signature guarantee are
required for each person in whose name the account is registered.
Further documentation will be required to change the designated
account when shares are held by a corporation, partnership,
fiduciary or other non-individual investor.
For more information on redemption services, call the Fund at
(800) 2KIEWIT.
Redemption Policies. Redemption payments in cash will
ordinarily be made within seven days after receipt of the
redemption request in good form. However, the right of redemption
may be suspended or the date of payment postponed in accordance
with the 1940 Act. The amount received upon redemption may be more
or less than the amount paid for the shares depending upon the
fluctuations in the market value of the assets owned by the
Portfolio. If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders of
any Portfolio to make a particular payment in cash, the Fund may
pay all or part of the redemption price by distributing portfolio
securities from the Portfolio of the shares being redeemed in
accordance with Rule 18f-1 under the 1940 Act. Investors may incur
brokerage charges and other transaction costs selling securities
that were received in payment of redemptions.
PERFORMANCE INFORMATION
From time to time, performance information, such as yield or
total return for a Portfolio, may be quoted in advertisements or in
communications to shareholders. Performance quotations represent
past performance and should not be considered as representative of
future results. The current yield will be calculated by dividing
the net investment income earned per share during the period stated
in the advertisement (based on the average daily number of shares
entitled to receive dividends outstanding during the period) by the
closing net asset value per share on the last day of the period and
annualizing the result on a semi-annual compounded basis. A
Portfolio's total return may be calculated on an annualized and
aggregate basis for various periods (which periods will be stated
in the advertisement). Average annual return reflects the average
percentage change per year in value of an investment in a
Portfolio. Aggregate total return reflects the total percentage
change in value of an investment in the Portfolio over the stated
period.
The principal value of an investment in a Portfolio will
fluctuate so that an investor's shares when redeemed, may be worth
more or less than the investor's original cost. Performance will
be calculated separately for K Class and S Class Shares. The K
Class Shares have different expenses from the S Class Shares which
may affect performance.
Further information about the performance of each Portfolio
and Class is included in the Fund's Annual Report to Shareholders
which may be obtained without charge by contacting the Fund at
(800) 2KIEWIT.
GENERAL INFORMATION
The Fund, formerly named "Kiewit Institutional Fund", issues
two separate classes of shares of beneficial interest for each
Portfolio with a par value of $.01 per share. The shares of each
Portfolio, when issued and paid for in accordance with the Fund's
prospectus, will be fully paid and non-assessable shares, with
equal, non-cumulative voting rights and no preferences as to
conversion, exchange, dividends, redemption or any other feature.
The separate classes of shares each represent interests in the
same portfolio of investments, have the same rights and are
identical in all respects, except that the S Class Shares bear
distribution plan expenses, and have exclusive voting rights with
respect to the Rule 12b-1 Distribution Plan pursuant to which the
distribution fee may be paid. The two classes have different
exchange privileges. See "Exchange Of Shares." The net income
attributable to S Class Shares and the dividends payable on S Class
Shares will be reduced by the amount of the distribution fees;
accordingly, the net asset value of the S Class Shares will be
reduced by such amount to the extent the Portfolio has
undistributed net income.
Shareholders shall have the right to vote only (i) for removal
of Trustees, (ii) with respect to such additional matters relating
to the Fund as may be required by the applicable provisions of the
1940 Act, including Section 16(a) thereof, and (iii) on such other
matters as the Trustees may consider necessary or desirable. In
addition, the shareholders of each Portfolio will be asked to vote
on any proposal to change a fundamental investment policy (i.e. a
policy that may be changed only with the approval of shareholders)
of that Portfolio. All shares of the Fund entitled to vote on a
matter shall vote without differentiation between the separate
Portfolios on a one-vote-per-share basis; provided however, if a
matter to be voted on does not affect the interests of all
Portfolios, then only the shareholders of each affected Portfolio
shall be entitled to vote on the matter. If liquidation of the
Fund should occur, shareholders would be entitled to receive on a
per Portfolio basis the assets of the particular Portfolio whose
shares they own, as well as a proportionate share of Fund assets
not attributable to any particular Portfolio then in existence.
Ordinarily, the Fund does not intend to hold annual meetings of
shareholders, except as required by the 1940 Act or other
applicable law. The Fund's by-laws provide that meetings of
shareholders shall be called for the purpose of voting upon the
question of removal of one or more Trustees upon the written
request of the holders of not less than 10% of the outstanding
shares.
Kiewit Investment Trust was organized as a Delaware business
trust on January 23, 1997. The Trust offers shares of its Series
only to institutional investors in private offerings. The Fund may
withdraw the investment of a Feeder Portfolio in a Series of the
Trust at any time, if the Board of Trustees of the Fund determines
that it is in the best interests of the Portfolio to do so. Upon
any such withdrawal, the Board of Trustees of the Fund would
consider what action might be taken, including the investment of
all of the assets of the Portfolio in another pooled investment
entity having the same investment objective as the Portfolio or the
hiring of an investment advisor to manage the Portfolio's assets in
accordance with the investment policies described above.
Whenever a Feeder Portfolio, as an investor in its
corresponding Trust Series, is asked to vote on a shareholder
proposal, the Fund will hold a special meeting of the Feeder
Portfolio's shareholders to solicit their votes with respect to the
proposal. The Trustees of the Fund will then vote the Feeder
Portfolio's shares in the Series in accordance with the voting
instructions received from the Feeder Portfolio's shareholders.
The Trustees of the Fund will vote shares of the Feeder Portfolio
for which they receive no voting instructions in accordance with
their best judgment.
Peter Kiewit Sons', Inc., a Delaware corporation with
principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the
direct or indirect parent of shareholders of more than 25% of the
voting securities of each Portfolio and therefore may be deemed to
control each Portfolio.
APPENDIX - DESCRIPTION OF RATINGS
Description of Bond Ratings - Moody's Investors Services, Inc.
("Moody's") description of its bond ratings are:
Aaa--Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are 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 maybe other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.
A--Bonds which are 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 some time in the future.
Baa--Bonds which are 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 which are 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 which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments
or of maintenance of other terms of the contract over any long
period of time may be small.
Caa--Bonds which are 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 which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or
have other market shortcomings.
C--Bonds which are 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 also supplies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the
higher end of its rating category; the modifier 2 indicates a mid-
range ranking; and 3 indicates a ranking toward the lower end of
the category.
Standard & Poor's Ratings Group's ("S&P") description of its bond
ratings are:
AAA--The highest degree of safety with overwhelming repayment
capacity.
AA--Very high degree of safety with very strong capacity for
repayment. These issues differ from higher rated issues only in a
small degree.
A--A strong degree of safety and capacity for repayment, but these
issues are somewhat more susceptible in the long term to adverse
economic conditions than those rated in higher categories.
BBB--A satisfactory degree of safety and capacity for repayment,
but these issues are more vulnerable to adverse economic conditions
or changing circumstances than higher-rated issues.
BB--This designation reflects less near-term vulnerability to
default than other speculative issues. However, the issues face
major ongoing uncertainties or exposures to adverse economic or
financial conditions threatening capacity to meet interest and
principal payments on a timely basis.
B--This designation indicates that the issues 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 to
pay interest and repay principal.
CCC--Issues rated CCC have currently identifiable vulnerability to
default, and are dependent upon favorable business, financial, and
economic conditions to meet timely interest and principal
repayments. Adverse business, financial, or economic developments
would render repayment capacity unlikely.
S&P applies indicators "+," no character, and "-" to its rating
categories. The indicators show relative standing within the major
rating categories.
Description of Commercial Paper Ratings
The rating A-1 is the highest commercial paper rating assigned by
S&P. Commercial paper rated A-1 has the following characteristics:
(1) liquidity ratios are adequate to meet cash requirements; (2)
long-term senior debt is rated "A" or better; (3) the issuer has
access to at least two additional channels of borrowing; (4) basic
earnings and cash flow have an upward trend with allowance made for
unusual circumstances; (5) typically, the issuer's industry is well
established and the issuer has a strong position within the
industry; and (6) the reliability and quality of management are
unquestioned. The rating Prime-1 is the highest commercial paper
rating assigned by Moody's. Among the factors considered by
Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and the appraisal of speculative-
type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term
debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationships which
exist with the issuer; and (8) recognition by the management of
obligations which may be present or may arise as a result of public
interest questions and preparations to meet such obligations.
KIEWIT MUTUAL FUND
1000 Kiewit Plaza
Omaha, NE 68131-3344
Telephone: (800) 2KIEWIT
Investment Advisor
KIEWIT INVESTMENT MANAGEMENT CORP.
1000 Kiewit Plaza
Omaha, NE 68131-3344
Custodian
WILMINGTON TRUST COMPANY
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-0001
Administrator and Transfer Agent
RODNEY SQUARE MANAGEMENT CORPORATION
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-0001
Distributor
RODNEY SQUARE DISTRIBUTORS, INC.
Rodney Square North, 1100 N. Market Street
Wilmington, DE 19890-00014
Kiewit Mutual Fund
K CLASS SHARES
1000 Kiewit Plaza, Omaha, NE 68131-3344
Telephone: (800) 2KIEWIT
STATEMENT OF ADDITIONAL INFORMATION
October 31, 1997
This statement of additional information is not a prospectus
but should be read in conjunction with the prospectus of Kiewit
Mutual Fund (the "Fund"), relating to the Fund's K Class Shares,
dated October 31, 1997, which can be obtained from the Fund by
writing to the Fund at the above address or by calling the above
telephone number.
TABLE OF CONTENTS
Page
HISTORY 2
INVESTMENT LIMITATIONS AND POLICIES 2
MANAGEMENT OF THE FUND 5
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 10
BROKERAGE TRANSACTIONS 14
PURCHASE AND REDEMPTION OF SHARES 14
TAX MATTERS 17
CALCULATION OF PERFORMANCE DATA 18
OTHER INFORMATION 24
FINANCIAL STATEMENTS 24
HISTORY
Kiewit Institutional Fund was organized as a Delaware
business trust on June 1, 1994. The name of the trust was changed
to Kiewit Mutual Fund on October 7, 1994.
INVESTMENT LIMITATIONS AND POLICIES
The following information supplements the information set
forth in the prospectus under the caption "Investment Objectives
And Policies." The following information applies to the Feeder
Portfolios and to the corresponding Trust Series.
Fundamental Limitations - All Portfolios
Each of the Portfolios has adopted certain limitations which
may not be changed with respect to any Portfolio without the
approval of a majority of the outstanding voting securities of the
Portfolio. A "majority" is defined as the lesser of: (1) at least
67% of the voting securities of the Portfolio (to be affected by
the proposed change) present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Portfolio are
present or represented by proxy, or (2) more than 50% of the
outstanding voting securities of such Portfolio.
The Portfolios either directly or indirectly through their
investment in the Series of the Trust will not: (1) as to 75% of
the total assets of a Portfolio, invest in the securities of any
issuer (except obligations of the U.S. Government and its
instrumentalities) if, as a result more than 5% of the Portfolio's
total assets, at market, would be invested in the securities of
such issuer, provided that this restriction applies to 100% of the
total assets of the Kiewit Money Market Portfolio; (2) borrow,
except that a Portfolio may borrow from banks for temporary or
emergency purposes or to pay redemptions and then, in no event, in
excess of 33% of its net assets and a Portfolio may pledge not more
than 33% of such assets to secure such loans; (3) pledge, mortgage,
or hypothecate any of its assets to an extent greater than 10% of
its total assets at fair market value, except as described in (2)
above; (4) invest more than 15% of the value of the Portfolio's net
assets in illiquid securities which include certain restricted
securities, repurchase agreements with maturities of greater than
seven days, and other illiquid investments; (5) invest its assets
in securities of any investment company in excess of the limits set
forth in the Investment Company Act of 1940 (the "1940 Act") and
rules thereunder, except in connection with a merger, acquisition
of assets, consolidation or reorganization; (6) acquire any
securities of companies within one industry if, as a result of such
acquisition, more than 25% of the value of the Portfolio's total
assets would be invested in securities of companies within such
industry; (7) engage in the business of underwriting securities
issued by others, except that, in connection with the disposition
of a security, a Portfolio may be deemed to be an "underwriter" as
that term is defined in the Securities Act of 1933 (the "1933
Act"); (8) purchase or sell commodities except that each Portfolio
may purchase or sell financial futures contracts and options
thereon; (9) invest in real estate, including limited partnership
interests therein, although they may purchase and sell securities
which deal in real estate and securities which are secured by
interests in real estate; (10) purchase securities on margin or
sell securities short, except that a Portfolio may satisfy margin
requirements with respect to futures transactions; and (11) make
loans, except that this restriction shall not prohibit (a) the
purchase of obligations customarily purchased by institutional
investors, (b) the lending of Portfolio securities or (c) entry
into repurchase agreements.
The investment limitations described above do not prohibit
each Feeder Portfolio from investing all or substantially all of
its assets in the shares of another registered, open-end investment
company such as the Series of the Trust. The investment policies
and limitations of each Series are the same as those of the
corresponding Feeder Portfolio.
For the purposes of (4) above, each Portfolio (indirectly
through its investment in the corresponding Trust Series) may
invest in commercial paper that is exempt from the registration
requirements of the 1933 Act subject to the requirements regarding
credit ratings stated in the prospectus under "Investment
Objectives And Policies." Further, pursuant to Rule 144A under the
1933 Act, the Portfolios (indirectly through their investment in
the corresponding Trust Series) may purchase certain unregistered
(i.e. restricted) securities upon a determination that a liquid
institutional market exists for the securities. If it is decided
that a liquid market does exist, the securities will not be subject
to the 15% limitation on holdings of illiquid securities stated in
(4) above. While maintaining oversight, the Board of Trustees has
delegated the day-to-day function of making liquidity
determinations to Kiewit Investment Management Corp. (the
"Manager"). For Rule 144A securities to be considered liquid,
there must be at least one dealer making a market in such
securities. After purchase, the Board of Trustees and the Manager
will continue to monitor the liquidity of Rule 144A securities.
There is no limit on the Portfolios' (indirectly though their
investment in the corresponding Series) investment in Rule 144A
securities that are determined to be liquid.
For the purposes of (6) above, (i) utility companies will be
divided according to their services; e.g., gas, gas transmission,
electric and gas, electric, water and telephone will each be
considered a separate industry; and (ii) the Kiewit Money Market
Portfolio (indirectly through its investment in the corresponding
Series) may invest more than 25% of the value of its total assets
in obligations of U.S. banks, such as certificates of deposits,
time deposits and bankers' acceptances. The banks must have total
assets exceeding one billion dollars.
Non-Fundamental Limitations - All Portfolios
The following policies are non-fundamental and may be changed
by the Board of Trustees, without shareholder approval:
The Portfolios (indirectly through their investment in the
corresponding Series) will not: (1) invest for the purpose of
exercising control over management of any company or (2) acquire
more than 10% of the voting securities of any issuer.
Non-Fundamental Policies - Kiewit Bond Portfolios
The following policies are non-fundamental and may be changed
by the Board of Trustees, without shareholder approval:
The Kiewit Short-Term Government, Kiewit Tax-Exempt and
Kiewit Intermediate-Term Bond Portfolios (each referred to herein
as a "Kiewit Bond Portfolio"), through their investment in the
corresponding Series, may invest in obligations that permit
repayment of the principal amount of the obligation prior to
maturity. Variable and floating rate obligations are relatively
long-term instruments that often carry demand features permitting
the holder to demand payment of principal at any time or at
specified intervals prior to maturity. Standby commitments, which
are similar to a put, give a Kiewit Bond Portfolio the option to
obligate a broker, dealer or bank to repurchase a security held by
a Kiewit Bond Portfolio at a specified price. Tender option bonds
are relatively long-term bonds that are coupled with the agreement
of a third party (such as a broker, dealer or bank) to grant the
holders of such securities the option to tender the securities to
the institution at periodic intervals. A Kiewit Bond Portfolio will
purchase these types of instruments primarily for the purpose of
increasing the liquidity of its portfolio.
New issues of bonds are often issued on a "when-issued"
basis, which means that actual payment for the delivery of the
securities generally takes place 15 to 45 days after the purchase
date. During this period, a Kiewit Bond Portfolio bears the risk
that interest rates on debt securities at the time of delivery may
be higher or lower than those contracted for on the when-issued
securities. To alleviate this risk, each Kiewit Bond Portfolio
does not intend to invest more than 5% of its assets in when-issued
securities.
A Kiewit Bond Portfolio also may invest up to 5% of its
assets in zero coupon bonds or "strips." Zero coupon bonds do not
make regular interest payments, rather they are sold at a discount
from face value. Principal and accretive discount (representing
interest accrued but not paid) are paid at maturity. Strips are
debt securities that are stripped of their interest after the
securities are issued, but are otherwise comparable to zero coupon
bonds. The market values of zero coupon bonds and strips generally
fluctuate in response to changes in interest rates to a greater
degree than interest paying securities of comparable term and
quality. The strips in which a Kiewit Bond Portfolio may invest
may or may not be a part of the U.S. Treasury Separately Traded
Registered Interest and Principal Securities program. Each Kiewit
Bond Portfolio may also purchase inverse floaters, which are
instruments whose interest bears an inverse relationship to the
interest rate on another security.
Generally, a Kiewit Bond Portfolio's average maturity will
tend to be shorter when the Manager expects interest rates to rise
and longer when it expects interest rates to decline.
Portfolio Turnover
The portfolio turnover rates for the fiscal year ended June
30, 1996, for the Kiewit Short-Term Government Portfolio, Kiewit
Intermediate-Term Bond Portfolio, Kiewit Tax-Exempt Portfolio and
Kiewit Equity Portfolio and for the year ended June 30, 1997 for
the Kiewit Short-Term Government Series, Kiewit Intermediate-Term
Bond Series, Kiewit Tax-Exempt Series and Kiewit Equity Series were
as follows:
Name June 30, 1997 June 30, 1996
Short-Term Government 44.24% 57.52%
Intermediate-Term Bond 51.57% 86.06%
Tax-Exempt 62.70% 100.61%
Equity 26.33% 16.95%
In the current fiscal year, the portfolio turnover rate of
each of the Kiewit Short-Term Government, Kiewit Intermediate-Term
Bond and Kiewit Tax-Exempt Series is not expected to exceed 100%.
The annual portfolio turnover rate of the Kiewit Equity Series is
not expected to exceed 75%. Generally, securities held by the
Kiewit Equity Series will not be sold to realize short-term
profits, but when circumstances warrant, they may be sold without
regard to the length of time held. Generally, securities held by
the Kiewit Equity Series will be purchased with the expectation
that they will be held for longer than one year.
MANAGEMENT OF THE FUND
Trustees and Officers
The names, addresses and ages of the trustees and officers of
the Fund and a brief statement or their present positions and
principal occupations during the past five years is set forth
below. Trustees who are deemed to be "interested persons" as
defined in the 1940 Act are indicated by an asterisk (*).
Ann C. McCulloch*
1000 Kiewit Plaza
Omaha, NE 68131-3344
Ms. McCulloch, age 39, is Chairman, President and a Trustee of the
Fund and Kiewit Investment Trust, President of the Manager and Vice
President and Treasurer of PKS. From 1989 to 1993, Ms. McCulloch
was Treasurer and Vice President of Central Maine Power in Augusta,
ME.
George Lee Butler*
1000 Kiewit Plaza
Omaha, NE 68131-3344
Mr. Butler, age 58, is a Trustee of the Fund and Kiewit Investment
Trust. From 1991 to March 1994, Mr. Butler was Commander-in-Chief
of the U.S. Strategic Command and from 1989 to 1994 was Director,
Strategic Plans and Policy, for the U.S. Joint Chiefs of Staff.
Lawrence B. Thomas
One ConAgra Drive
Omaha, NE 68102
Mr. Thomas, age 61, is a Trustee of the Fund and Kiewit Investment
Trust, and Senior Vice-President. He retired in October 1996,
after having served in numerous financial positions at ConAgra,
Inc. (an international food company) including Treasurer,
Secretary, Risk Officer, and Senior Vice President-Finance
(Principal Financial Officer). In his thirty-six years at ConAgra,
he also served as director and officer of numerous of its
subsidiaries.
Robert H. Arnold
152 W. 57th Street, 44th Floor
New York, NY 10019
Mr. Arnold, age 53, is a Trustee of the Fund and Kiewit
Investment Trust. In 1989, Mr. Arnold founded, and currently co-
manages, R. H. Arnold & Co., Inc., an investment banking company.
Prior to forming R. H. Arnold & Co., Inc., Mr. Arnold was
Executive Vice President and a director to Cambrian Capital
Corporation, an investment banking firm he co-founded in 1987.
Livingston G. Douglas*
1000 Kiewit Plaza
Omaha, NE 68131
Mr. Douglas, age 37, is Chief Financial Officer, Vice President
and Treasurer of the Fund and Kiewit Investment Trust and Chief
Investment Officer and Vice President of the Manager. From 1993
to July 1997, Mr. Douglas was Senior Fixed-Income Portfolio
Manager and Director of Fixed-Income Research for Investment
Advisers, Inc. From 1987 to 1993, Mr. Douglas was Senior
Fixed-Income Portfolio Manager and Director of Quantitative
Research.
Brian J. Mosher
1000 Kiewit Plaza
Omaha, NE 68131-3344
Mr. Mosher, age 40, is a Vice President of the Fund and Kiewit
Investment Trust, and a Vice President of the Manager. From March
1989 to December 1994, Mr. Mosher served as Investment Manager of
Meridian Mutual Insurance Company in Indianapolis, Indiana.
Kenneth D. Gaskins, Esquire
1000 Kiewit Plaza
Omaha, NE 68131-3344
Mr. Gaskins, age 51, is Secretary of the Fund and Kiewit Investment
Trust, Assistant Secretary of the Manager, and Corporate Counsel of
Kiewit Diversified Group Inc.
The fees and expenses of the Trustees who are not "interested
persons" of the Fund ("Independent Trustees"), as defined in the
1940 Act, are paid by each Portfolio. For the fiscal year ended
June 30, 1997, such fees amounted to $27,500 for the Fund and
$15,000 for the Trust. The following table shows the fees paid
during the fiscal year to the Independent Trustees for their
service to the Fund.
Compensation Table
Aggregate Total Compensation
Compensation from the from the Fund
Fund Complex
Independent Trustee
John J. Quindlen* $12,500 $17,500
Lawrence B. Thomas $12,500 $17,500
Robert H. Arnold* $ 2,500 $ 5,000
* On March 7, 1997, John J. Quindlen resigned as a Trustee of the
Fund and the Trust. At that time Mr. Arnold was appointed a
Trustee of both the Fund and the Trust.
On September 30, 1997, the Trustees and officers of the Fund,
as a group, owned beneficially, or may be deemed to have owned
beneficially, less than 1% of the outstanding shares of the
Portfolios.
Investment Manager
For the services it provides as investment manager to each
Portfolio's corresponding Series of the Trust, the Manager is paid
a monthly fee calculated as a percentage of average net assets of
the corresponding Series. Pursuant to the investment management
agreements, the manager's fees for the fiscal years ended June 30,
1997 and 1996 and for the period ended 1995, would have been the
following:
1997 1996 1995
(000) (000) (000)
Kiewit Money Market
Portfolio $833,621** $843,989 $436,236
Kiewit Short-Term
Government Portfolio $434,306** $492,172 $332,931
Kiewit Intermediate-Term
Portfolio $544,147** $563,114 $624,955
Kiewit Tax-Exempt
Portfolio $445,922** $499,823 $331,508
Kiewit Equity Portfolio $517,000** $354,646 $ 35,890
** Includes manager's fees payable by the Portfolio's
corresponding Series of the Trust, commencing March 3, 1997,
pursuant to the Series' investment advisory agreements.
The Manager has agreed to waive all or a portion of its
advisory fee for each Portfolio's corresponding Series and to
assume certain expenses of the Portfolios and Series. This
undertaking, which is not contained in the investment management
agreements, may be amended or rescinded in the future. During the
fiscal year ended June 30, 1997 and 1996 and the period ended June
30, 1995, the Manager waived the following amounts to the
Portfolios and, commencing March 3, 1997, their corresponding
Series:
Name 1997 1996 1995
Kiewit Money Market Portfolio $334,909 $298,011 $ 70,100
Kiewit Short-Term Government
Portfolio 211,769 219,505 92,745
Kiewit Intermediate-Term Bond
Portfolio 92,541 86,597 117,862
Kiewit Tax-Exempt Portfolio 70,323 57,267 121,067
Kiewit Equity Portfolio 109,204 126,289 90,032
Each investment management agreement is in effect for a
period of two years. Thereafter, each agreement may continue in
effect for successive annual periods, provided such continuance is
specifically approved at least annually by a vote of the Trust's
Board of Trustees or, by a vote of the holders of a majority of a
Series' outstanding voting securities, and in either event by a
majority of the Trustees who are not parties to the agreement or
interested persons of any such party (other than as Trustees of the
Trust), cast in person at a meeting called for that purpose. An
investment management agreement may be terminated without penalty
at any time by the Series or by the Manager on 60 days' written
notice and will automatically terminate in the event of its
assignment as defined in the 1940 Act.
Distributor
Rodney Square Distributors, Inc. ("RSD") serves as the
Distributor of each Portfolio's K Class Shares pursuant to a
Distribution Agreement with the Fund. Under the terms of the
Distribution Agreement, RSD agrees to assist in securing purchasers
for shares of the Portfolios. RSD will receive no compensation for
distribution of K Class Shares of the Portfolios, except for
reimbursement of out-of-pocket expenses.
The Distribution Agreement provides that RSD, in the absence
of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its
obligations and duties under the agreement, will not be liable to
the Fund or its shareholders for losses arising in connection with
the sale of Portfolio K
Class Shares.
The Distribution Agreement, dated February 19, 1997,
continues in effect for a period of two years. Thereafter, the
agreement may continue in effect for successive annual periods
provided such continuance is approved at least annually by a
majority of the Trustees, including a majority of the Independent
Trustees. The Distribution Agreement terminates automatically in
the event of its assignment. The Agreement is also terminable
without payment of any penalty with respect to each Portfolio
either (i) by the Fund (by vote of a majority of the Independent
Trustees or by vote of a majority of the outstanding voting
securities of the Fund) on sixty (60) days' written notice to RSD;
or (ii) by RSD on sixty (60) days' written notice to the Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Money Market Portfolio:
Name and Address Percentage Ownership
Kiewit Coal Properties Inc. 15.73%
1000 Kiewit Plaza
Omaha, NE 68131
Wasatch Constructors 14.05%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Group Inc. 12.18%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Construction Company 7.20%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit-Granite, Joint Venture 6.35%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Holdings Inc. 5.09%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Short-Term Government Portfolio:
Name and Address Percentage Ownership
Kiewit Diversified Holdings Inc. 39.60%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Group 21.58%
1000 Kiewit Plaza
Omaha, NE 68131
Continental Holdings Inc. 8.21%
1000 Kiewit Plaza
Omaha, NE 68131
Peter Kiewit Sons', Inc. 8.07%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Coal Properties Inc. 7.37%
1000 Kiewit Plaza
Omaha, NE 68131
Northern Trust Company as Trustee 6.73%
For Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Intermediate-Term Bond Portfolio:
Name and Address Percentage Ownership
Continental Holdings Inc. 26.84%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Holdings Inc. 20.87%
1000 Kiewit Plaza
Omaha, NE 68131
Northern Trust Company as Trustee 17.53%
for Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 16.99%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Group Inc. 8.94%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Tax-Exempt Portfolio:
Name and Address Percentage Ownership
KMI Continental Lease 1, Inc. 95.01%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Equity Portfolio:
Name and Address Percentage Ownership
Northern Trust Company as Trustee 28.48%
For Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 24.99%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Co. as Trustee 24.61%
For Kiewit Construction Group Inc.
Retirement Savings Plan
1100 N. Market Street
Wilmington, DE 19890
Kiewit Diversified Group Inc. 8.31%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Co. as Trustee 6.30%
For Decker Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
Peter Kiewit Sons', Inc., a Delaware corporation with
principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the
direct or indirect parent of shareholders of more than 25% of the
voting securities of each Portfolio and therefore may be deemed to
control each Portfolio.
BROKERAGE TRANSACTIONS
Brokerage transactions will be placed with a view to
receiving the best price and execution. Each Portfolio's
corresponding Series will seek to acquire and dispose of securities
in a manner which would cause as little fluctuation in the market
prices of stocks being purchased or sold as possible in light of
the size of the transactions being effected, and brokers will be
selected with this goal in view. The Manager monitors the
performance of brokers which effect transactions for each Series to
determine the effect that the Series' trading has on the market
prices of the securities in which they invest. Transactions also
may be placed with brokers who provide the Manager with investment
research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research
services. Each Series' Investment Management Agreement permits the
Manager knowingly to pay commissions on such transactions which are
greater than another broker might charge if the Manager, in good
faith, determines that the commissions paid are reasonable in
relation to the research or brokerage services provided by the
broker or dealer when viewed in terms of either a particular
transaction or the Manager's overall responsibilities to the Trust.
Prior to February 28, 1997, the individual Portfolios sought
to achieve their investment objectives by purchasing and managing
their own investment portfolios. As a consequence, the Portfolios
incurred brokerage commissions directly rather than indirectly
through their investment in the corresponding Series. During the
fiscal year ended June 30, 1997, the Kiewit Short-Term Government
Series, , the Kiewit Intermediate-Term Bond Series and the Kiewit
Tax-Exempt Series paid no brokerage commissions. The Kiewit Equity
Series paid $28,600 in brokerage commissions for the period March
3, 1997 to June 30, 1997. The Kiewit Equity Portfolio paid
$32,578 in brokerage commissions for the fiscal year ended June 30,
1997, $82,485 for the fiscal year ended June 30, 1996 and $34,515
for the period ended June 30, 1995.
PURCHASE AND REDEMPTION OF SHARES
The Fund reserves the right, in its sole discretion, to
suspend the offering of shares of any or all Portfolios or reject
purchase orders when, in the judgment of management, such
suspension or rejection is in the best interest of the Fund or a
Portfolio. Securities accepted in exchange for shares of a
Portfolio will be acquired for investment purposes and will be
considered for sale under the same circumstances as other
securities in the Portfolio.
The Fund may suspend redemption privileges or postpone the
date of payment: (1) during any period when the New York Stock
Exchange (the "NYSE") is closed, or trading on the NYSE is
restricted as determined by the Securities and Exchange Commission
(the "SEC"), (2) during any period when an emergency exists as
defined by the rules of the SEC as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned
by it, or fairly to determine the value of its assets and (3) for
such other periods as the SEC may permit.
The valuation of the securities held by the Kiewit Money
Market Series and the Kiewit Government Money Market Series
(including any securities held in a separate account maintained for
when-issued securities) is based upon their amortized costs which
does not take into account unrealized capital gains or loses. This
involves valuing an instrument at its cost and thereafter assuming
a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the
market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the
price such Series would receive if they sold the instrument.
During periods of declining interest rates, the daily yields on
shares of the Series computed as described above may tend to be
higher than a like computation made by a fund with identical
investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio
instruments. Thus, if the use of amortized cost by the Series
resulted in a lower aggregate portfolio value on a particular day,
a prospective investor in the Series would be able to obtain a
somewhat higher yield than would result from investment in a fund
utilizing solely market values, and existing investors in the
Series would receive less investment income. The converse would
apply in a period of rising interest rates.
The Kiewit Money Market and Kiewit Government Money Market
Series' use of amortized cost, which facilitates the maintenance of
their corresponding Portfolios' per share net asset value of $1.00,
is permitted by a rule adopted by the SEC, pursuant to which the
Series must adhere to certain conditions.
The Kiewit Money Market and Kiewit Government Money Market
Series each must maintain a dollar-weighted average portfolio
maturity of 90 days or less, only purchase instruments having
remaining maturities of 397 calendar days or less, and invest only
in those U.S. dollar-denominated instruments that the Manager has
determined, pursuant to guidelines adopted by the Board of
Trustees, present minimal credit risks and which are, as required
by the federal securities laws (i) rated in one of the two highest
rating categories as determined by nationally recognized
statistical rating agencies, (ii) instruments deemed comparable in
quality to such rated instruments, or (iii) instruments, the
issuers of which, with respect to an outstanding issue of short-
term debt that is comparable in priority and protection, have
received a rating within the two highest categories of nationally
recognized statistical rating agencies. Securities subject to
floating or variable interest rates with demand features in
compliance with applicable rules of the SEC may have stated
maturities in excess of 397 days. The Trustees have established
procedures designed to stabilize, to the extent reasonably
possible, the Series' price per share as computed for the purpose
of sales and redemptions at $1.00. Such procedures will include
review of the portfolio holdings by the Trustees, at such intervals
as they may deem appropriate, to determine whether the Series' net
asset value calculated by using available market quotations
deviates from $1.00 per share based on amortized cost. The extent
of any deviation will be examined by the Trustees. If such
deviation exceeds 1/2 of 1%, the Trustees will promptly consider what
action, if any, will be initiated. In the event the Trustees
determine that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, they will take such corrective action as they regard
as necessary and appropriate, which may include the sale of
portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding
dividends, redemptions of shares in kind, or establishing a net
asset value per share by using available market quotations.
In-Kind Purchases. If accepted by the Fund, shares of each
Portfolio may be purchased in exchange for securities which are
eligible for acquisition by the Portfolios or their corresponding
Series, as described in this Statement of Additional Information.
Please contact Rodney Square about this purchase method. Securities
to be exchanged which are accepted by the Fund and Portfolio shares
to be issued therefore will be valued, as set forth under
"Valuation Of Shares," at the time of the next determination of net
asset value after such acceptance. All dividends, interest,
subscription, or other rights pertaining to such securities shall
become the property of the Portfolio whose shares are being
acquired and must be delivered to the Fund by the investor upon
receipt from the issuer.
The Fund will not accept securities in exchange for shares of
a Portfolio unless: (1) current market quotations are readily
available for such securities; (2) the investor represents and
agrees that all securities offered to be exchanged are not subject
to any restrictions upon their sale by the Portfolio (or its
corresponding Series) under the 1933 Act or under the laws of the
country in which the principal market for such securities exists,
or otherwise; (3) at the discretion of the Portfolio (or its
corresponding Series), the value of any such security (except U.S.
Government securities) being exchanged together with other
securities of the same issuer owned by the corresponding Series
will not exceed 5% of the net assets of the corresponding Series
immediately after the transaction; and (4) the Portfolio (or its
corresponding Series) acquires the securities for investment and
not for resale. In addition, nearly all of the securities accepted
in an exchange must be, at the time of the exchange, eligible to be
included in the Portfolio (or corresponding Series) whose shares
are issued. Investors interested in such exchanges should contact
the Manager.
TAX MATTERS
The Internal Revenue Code of 1986, as amended (the "Code")
imposes a nondeductible 4% excise tax on a regulated investment
company which does not distribute to investors in each calendar
year an amount equal to (i) 98% of its calendar year ordinary
income, (ii) 98% of its capital gain net income (the excess of
short and long-term capital gain over short and long-term capital
loss) for the one-year period ending each October 31, and (iii)
100% of any undistributed ordinary income and capital gain net
income from the prior year. Each Portfolio intends to declare and
pay dividends and capital gain distributions in a manner to avoid
imposition of the excise tax. Each Portfolio also intends to
comply with other Code requirements such as (1) appropriate
diversification of portfolio investments; (2) realization of 90% of
annual gross income from dividends, interest, gains from sales of
securities, or other "qualifying income," and (3) for each
Portfolio's taxable year ending June 30, 1998, realization of less
than 30% of gross income from gains on sale or other disposition of
securities held less than three months.
For any Portfolio that has a principal investment policy of
investing in non-equity investments, it is anticipated that either
none or only a small portion of that Portfolio's dividends will
qualify for the corporate dividends received deduction. The
portion of the dividends so qualified depends on the aggregate
qualifying dividend income received by a Portfolio from domestic
(U.S.) sources. To the extent that any Portfolio pays dividends
which qualify for this deduction, the availability of the deduction
is subject to certain holding period and debt financing
restrictions imposed under the Code on the corporation claiming the
deduction.
The Fund in its sole discretion may accept securities in
exchange for shares of a Portfolio. A gain or loss for federal
income tax purposes may be realized by investors in a Portfolio who
are subject to federal taxation upon the exchange. The amount of
such gain or loss realized with respect to a security is measured
by the difference between the fair market value of the contributed
security on the date of contribution and its adjusted tax basis.
Any loss realized on the exchange may be subject to certain
provisions of the Code which either disallow the recognition of any
such loss or result in a deferral of the time for recognizing such
loss.
CALCULATION OF PERFORMANCE DATA
The performance of a Portfolio's classes of shares (or its
corresponding Series) may be quoted in terms of its yield and its
total return in advertising and other promotional materials
("performance advertisements"). Performance data quoted represents
past performance and is not intended to indicate future
performance. The investment return of an investment in the
Portfolios and the principal value of an investment in any
Portfolio except the Money Market Portfolio and the Government
Money Market Portfolio will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
Performance of the Portfolios will vary based on changes in market
conditions and the level of each Portfolio's expenses. These
performance figures are calculated in the following manner:
A. Yield is the net annualized yield for a specified 7
calendar days calculated at simple interest rates. From
time to time, the Money Market Portfolio and the
Government Money Market Portfolio may advertise their
yields. Yield is calculated by determining the net
change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of
one share at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the
value of the account at the beginning of the base period
to obtain the base period return. The yield is
annualized by multiplying the base period return by
365/7. The yield figure is stated to the nearest
hundredth of one percent.
The yield for the 7-day period ended June 30, 1997 was
5.48% for the Money Market Portfolio.
B. Effective Yield is the net annualized yield for a
specified 7 calendar days assuming reinvestment of
income or compounding. From time to time the Money
Market Portfolio and the Government Money Market
Portfolio may advertise their effective yields.
Effective yield is calculated by the same method as
yield except the yield figure is compounded by adding 1,
raising the sum to a power equal to 365 divided by 7,
and subtracting 1 from the result, according to the
following formula:
Effective Yield = [(Base Period Return + 1) 365/7] - 1.
The effective yield for the 7-day period ended June 30,
1997 was 5.64% for the Money Market Portfolio.
C. Tax-Equivalent Yield is the rate an investor would have
to earn from a fully taxable investment after taxes to
equal a Portfolio's tax-exempt yield. From time to
time, the Tax-Exempt Portfolio may advertise its tax-
equivalent yield. Tax-equivalent yield is computed by:
(i) dividing that portion of a Portfolio's yield which
is tax-exempt by one minus a stated income tax rate; and
(ii) adding the product of that portion, if any, of the
Portfolio's yield that is not tax-exempt. For purposes
of this formula, tax-exempt yield is a yield which is
exempt from federal income tax.
The following table, which is based upon federal income tax
rates in effect on the date of this Statement of Additional
Information, illustrates the yields that would have to be achieved
on taxable investments to produce a range of hypothetical tax-
equivalent yields:
Tax-Equivalent Yield Table
Federal Marginal
Income Tax Bracket Tax-Equivalent Yields Based on Tax-Exempt Yields of:
4% 5% 6% 7% 8% 9% 10% 11%
28% 5.6 6.9 8.3 9.7 11.1 12.5 13.9 15.3
31% 5.8 7.2 8.7 10.1 11.6 13.0 14.5 15.9
36% 6.3 7.8 9.4 10.9 12.5 14.1 15.6 17.2
39.6% 6.6 8.3 9.9 11.6 13.2 14.9 16.6 18.2
D. Yield of the Short-Term Government Portfolio,
Intermediate-Term Bond Portfolio, and the Tax-Exempt
Portfolio is calculated by dividing the Portfolio's
investment income for a 30-day period, net of expenses,
by the average number of shares entitled to receive
dividends during that period according to the following
formula:
YIELD = 2[((a-b)/cd + 1)6-1]
Where:
a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of the period.
The result is expressed as an annualized percentage (assuming
semiannual compounding) of the maximum offering price per share at
the end of the period.
Except as noted below, in determining interest earned during
the period (variable "a" in the above formula), the interest earned
on each debt instrument held by a Portfolio (or its corresponding
Series) during the period is calculated by: (i) computing the
instrument's yield to maturity, based on the value of the
instrument (including actual accrued interest) as of the last
business day of the period or, if the instrument was purchased
during the period, the purchase price plus accrued interest; (ii)
dividing the yield to maturity by 360; and (iii) multiplying the
resulting quotient by the value of the instrument (including actual
accrued interest). Once interest earned is calculated in this
fashion for each debt instrument held by the Portfolio (or its
corresponding Series), interest earned during the period is then
determined by totaling the interest earned on all debt instruments
held by the Portfolio.
For purposes of these calculations, the maturity of a debt
instrument with one or more call provisions is assumed to be the
next date on which the instrument reasonably can be expected to be
called or, if none, the maturity date. In general, interest income
is reduced with respect to debt instruments trading at a premium
over their par value by subtracting a portion of the premium from
income on a daily basis, and increased with respect to debt
instruments trading at a discount by adding a portion of the
discount to daily income.
For the 30-day period ended June 30, 1997, the yields for the
Short-Term Government Portfolio, Intermediate-Term Bond Portfolio
and the Tax-Exempt Portfolio were 5.66%, 6.36% and 4.15%,
respectively. The tax-equivalent yield for the same period for the
Tax-Exempt Portfolio assuming a tax bracket of 28%, 31%, 36% and
39.6% was 5.76%, 6.01%, 6.48% and 6.87%, respectively.
Since yield accounting methods differ from the accounting
methods used to calculate net investment income for other purposes,
a Portfolio's yield may not equal the dividend income actually paid
to investors or the net investment income reported with respect to
the Portfolio in the Fund's financial statements.
Yield information may be useful in reviewing a Portfolio's
performance and in providing a basis for comparison with other
investment alternatives. Nevertheless, the Portfolios' yields
fluctuate, unlike investments that pay a fixed interest rate over a
stated period of time. Investors should recognize that in periods
of declining interest rates, the Portfolios' yields will tend to be
somewhat higher than prevailing market rates, and in periods of
rising interest rates, the Portfolios' yields will tend to be
somewhat lower. Also, when interest rates are falling, the inflow
of net new money to the Portfolios from the continuous sale of
their shares will likely be invested in instruments producing lower
yields than the balance of the Portfolios' holdings, thereby
reducing the current yields of the Portfolios. In periods of
rising interest rates, the opposite can be expected to occur.
E. Average Annual Total Return is the average annual
compound rate of return for the periods of one year,
five years, ten years and the life of a Portfolio, where
quotations reflect changes in the price of a Portfolio's
shares, if any, and assume that all dividend and capital
gains distributions, if any, during the respective
periods were reinvested in Portfolio shares. Each
Portfolio may advertise its average annual total return
from time to time. Average annual total return is
calculated by finding the average annual compound rates
of return of a hypothetical investment over such
periods, according to the following formula (average
annual total return is then expressed as a percentage):
P (1 + T)n = ERV
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value, at the
end of the applicable period, of a hypothetical $1,000
investment made at the beginning of
the applicable period.
Average Annual Total Returns for the one-year period
ended June 30, 1997 and for the periods from the
effective date of the Fund's registration statement
under the Securities Act of 1933 or commencement of
operations1, whichever occurred later, through June 30,
1997:
1 year ended Since Effectiveness 1
June 30, 1997 through June 30, 1997
Money Market Portfolio 5.43% 5.60%
Short-Term Government Portfolio 6.51% 6.78%
Intermediate-Term Bond Portfolio 7.51% 8.05%
Tax-Exempt Portfolio 6.15% 6.42%
Equity Portfolio 25.67% 23.28%
1 The Money Market Portfolio, Short-Term Government
Portfolio, Intermediate-Term Bond Portfolio and Tax-
Exempt Portfolio became effective on December 6,
1994. The Equity Portfolio commenced operations on
January 5, 1995.
F. Cumulative Total Return is the cumulative rate of return
on a hypothetical initial investment of $1,000 for a
specified period. Cumulative total return quotations
reflect the change in the price of a Portfolio's shares,
if any, and assume that all dividends and capital gains
distributions, if any, during the period were reinvested
in Portfolio shares. Cumulative total return is
calculated by finding the cumulative rates of return of
a hypothetical investment over such periods, according
to the following formula (cumulative total return is
then expressed as a percentage):
C = (ERV/P) - 1
Where: C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made
at the beginning of the applicable period.
Cumulative Total Returns for the one-year period ended
June 30, 1997 and for the periods from the effective
date of the Fund's registration statement under the
Securities Act of 1933 or commencement of operations1,
whichever occurred later, through June 30, 1997:
1 year ended Since Effectiveness 1
June 30, 1997 through June 30, 1997
Money Market Portfolio 5.43% 15.04%
Short-Term Government Portfolio 6.51% 18.36%
Intermediate-Term Bond Portfolio 7.51% 22.03%
Tax-Exempt Portfolio 6.15% 17.34%
Equity Portfolio 25.67% 68.30%
1 The Money Market Portfolio, Short-Term Government
Portfolio, Intermediate-Term Bond Portfolio and Tax-
Exempt Portfolio became effective on December 6,
1994. The Equity Portfolio commenced operations on
January 5, 1995.
The preceding performance figures were affected by fee waivers
and expenses assumed by the Portfolios' investment manager.
Without such fee waivers and expense assumptions, the performance
figures quoted above would have been lower. Performance quotations
are not provided for the Government Money Market Portfolio because
such Portfolio had not commenced operations as of the date of this
Statement of Additional Information.
The Portfolios may also from time to time present some or all
of their investments ranked by their percentage representation
within the respective Portfolio or in the form of the schedule of
"Investments" included in the Annual Report to the shareholders of
the Portfolios as of and for the fiscal year ended June 30, 1997,
which is incorporated by reference into this document.
Performance advertisements for the Money Market Portfolio and
the Government Money Market Portfolio may include yield
calculations for the 7-day period ending on the most recent
practicable date considering the media used for the advertisement.
Performance advertisements for the other four Portfolios may
include average annual total returns and 30-day yield calculations
as of the end of the most recent quarter practicable considering
the media used for the advertisement. Such advertisements may
include a schedule of investments for the corresponding date,
employing presentation principles used in annual reports to
shareholders.
To help investors better evaluate how an investment in a
Portfolio might satisfy their investment objective, advertisements
regarding a Portfolio may discuss yield or total return as reported
by various financial publications. Advertisements may also compare
yield or total return to other investments, indices and averages.
The following publications, benchmarks, indices, and averages may
be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices; Salomon Brothers
Indices; Lehman Brothers Indices; Dow Jones Composite Average or
its component indices; Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500") or its component indices; The New York Stock
Exchange composite or component indices; CDA Mutual Fund Report;
Weisenberger - Mutual Fund Panorama and Investment Companies;
Mutual Fund Values and Mutual Fund Service Book, published by
Morningstar, Inc.; and financial publications such as Business
Week, Kiplinger's Personal Finance, Financial World, Forbes,
Fortune, Money Magazine, The Wall Street Journal, Barron's, et al.,
which rate mutual fund performance over various time periods.
Currently the performance of the Kiewit Money Market Portfolio
and the Government Money Market Portfolio may be compared to the
performance of IBC's Money Fund Average. The IBC's Money Fund
Average is a composition of all reporting money market funds with
similar objectives and restrictions. The Kiewit Short-Term
Government Portfolio is currently compared to the Lehman 1-3 Year
Government Index. The Lehman 1-3 Year Government Index is a total
return performance benchmark consisting of U.S. Government agency
and Treasury securities with maturities from one to three years.
The Kiewit Intermediate-Term Bond Portfolio is currently compared
to the Lehman Intermediate Corporate Index. The Lehman
Intermediate Corporate Index is a total return performance
benchmark consisting of publicly issued corporate debt issues rated
at least investment grade with maturities from one to ten years.
The Kiewit Tax-Exempt Portfolio is currently compared to the Lehman
5-Year Municipal Bond Index. The Lehman 5-Year Municipal Bond
Index is a total return performance benchmark consisting of tax-
exempt municipal bonds rated at least investment grade with
maturities from four to six years. The Kiewit Equity Portfolio is
currently compared to the S&P 500. The S&P 500 is an unmanaged
capitalization weighted index of five hundred publicly traded
stocks.
OTHER INFORMATION
The Fund does not intend to hold annual meetings; it may,
however, hold a meeting for such purposes as changing fundamental
investment limitations, approving a new investment management
agreement or any other matters which are required to be acted on by
shareholders under the 1940 Act. Shareholders may receive
assistance in communicating with other shareholders in connection
with the election or removal of Trustees similar to the provisions
contained in Section 16(c) of the 1940 Act.
Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, DE 19890-0001, a Delaware-chartered
banking institution, is the Fund's Custodian.
Price Waterhouse LLP, Thirty South 17th Street, Philadelphia,
Pennsylvania 19103, is the Fund's independent accountant.
FINANCIAL STATEMENTS
The audited financial statements and the financial highlights
for the Fund for its fiscal year ended June 30, 1997, as set forth
in the Fund's annual report to shareholders, and the report thereon
of Price Waterhouse LLP, the Fund's independent accountants, also
appearing in the Fund's annual report are incorporated herein by
reference. With reference to the period ended June 30, 1995, see
the report of independent accountants included in the Fund's
registration statement and which is available upon request, without
charge, by writing or calling the Fund at 1000 Kiewit Plaza, Omaha,
NE 68131-3344, (800) 2KIEWIT. The annual report does not contain
any financial data for the Government Money Market Portfolio
because such Portfolio had not commenced operations as of June 30,
1997.
Kiewit Mutual Fund
S CLASS SHARES
1000 Kiewit Plaza, Omaha, NE 68131-3344
Telephone: (800) 2KIEWIT
STATEMENT OF ADDITIONAL INFORMATION
October 31, 1997
This statement of additional information is not a prospectus
but should be read in conjunction with the prospectus of Kiewit
Mutual Fund (the "Fund"), relating to the Fund's S Class Shares,
dated October 31, 1997, which can be obtained from the Fund by
writing to the Fund at the above address or by calling the above
telephone number.
TABLE OF CONTENTS
Page
HISTORY 2
INVESTMENT LIMITATIONS AND POLICIES 2
MANAGEMENT OF THE FUND 5
DISTRIBUTION PLAN 9
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 11
BROKERAGE TRANSACTIONS 14
PURCHASE AND REDEMPTION OF SHARES 15
TAX MATTERS 18
CALCULATION OF PERFORMANCE DATA 19
OTHER INFORMATION 25
FINANCIAL STATEMENTS 26
HISTORY
Kiewit Institutional Fund was organized as a Delaware
business trust on June 1, 1994. The name of the trust was changed
to Kiewit Mutual Fund on October 7, 1994.
INVESTMENT LIMITATIONS AND POLICIES
The following information supplements the information set
forth in the prospectus under the caption "Investment Objectives
And Policies." The following information applies to the Feeder
Portfolios and to the corresponding Trust Series.
Fundamental Limitations - All Portfolios
Each of the Portfolios has adopted certain limitations which
may not be changed with respect to any Portfolio without the
approval of a majority of the outstanding voting securities of the
Portfolio. A "majority" is defined as the lesser of: (1) at least
67% of the voting securities of the Portfolio (to be affected by
the proposed change) present at a meeting if the holders of more
than 50% of the outstanding voting securities of the Portfolio are
present or represented by proxy, or (2) more than 50% of the
outstanding voting securities of such Portfolio.
The Portfolios either directly or indirectly through their
investment in the Series of the Trust will not: (1) as to 75% of
the total assets of a Portfolio, invest in the securities of any
issuer (except obligations of the U.S. Government and its
instrumentalities) if, as a result more than 5% of the Portfolio's
total assets, at market, would be invested in the securities of
such issuer, provided that this restriction applies to 100% of the
total assets of the Kiewit Money Market Portfolio; (2) borrow,
except that a Portfolio may borrow from banks for temporary or
emergency purposes or to pay redemptions and then, in no event, in
excess of 33% of its net assets and a Portfolio may pledge not more
than 33% of such assets to secure such loans; (3) pledge, mortgage,
or hypothecate any of its assets to an extent greater than 10% of
its total assets at fair market value, except as described in (2)
above; (4) invest more than 15% of the value of the Portfolio's net
assets in illiquid securities which include certain restricted
securities, repurchase agreements with maturities of greater than
seven days, and other illiquid investments; (5) invest its assets
in securities of any investment company in excess of the limits set
forth in the Investment Company Act of 1940 (the "1940 Act") and
rules thereunder, except in connection with a merger, acquisition
of assets, consolidation or reorganization; (6) acquire any
securities of companies within one industry if, as a result of such
acquisition, more than 25% of the value of the Portfolio's total
assets would be invested in securities of companies within such
industry; (7) engage in the business of underwriting securities
issued by others, except that, in connection with the disposition
of a security, a Portfolio may be deemed to be an "underwriter" as
that term is defined in the Securities Act of 1933 (the "1933
Act"); (8) purchase or sell commodities except that each Portfolio
may purchase or sell financial futures contracts and options
thereon; (9) invest in real estate, including limited partnership
interests therein, although they may purchase and sell securities
which deal in real estate and securities which are secured by
interests in real estate; (10) purchase securities on margin or
sell securities short, except that a Portfolio may satisfy margin
requirements with respect to futures transactions; and (11) make
loans, except that this restriction shall not prohibit (a) the
purchase of obligations customarily purchased by institutional
investors, (b) the lending of Portfolio securities or (c) entry
into repurchase agreements.
The investment limitations described above do not prohibit
each Feeder Portfolio from investing all or substantially all of
its assets in the shares of another registered, open-end investment
company such as the Series of the Trust. The investment policies
and limitations of each Series are the same as those of the
corresponding Feeder Portfolio.
For the purposes of (4) above, each Portfolio (indirectly
through its investment in the corresponding Trust Series) may
invest in commercial paper that is exempt from the registration
requirements of the 1933 Act subject to the requirements regarding
credit ratings stated in the prospectus under "Investment
Objectives And Policies." Further, pursuant to Rule 144A under the
1933 Act, the Portfolios (indirectly through their investment in
the corresponding Trust Series) may purchase certain unregistered
(i.e. restricted) securities upon a determination that a liquid
institutional market exists for the securities. If it is decided
that a liquid market does exist, the securities will not be subject
to the 15% limitation on holdings of illiquid securities stated in
(4) above. While maintaining oversight, the Board of Trustees has
delegated the day-to-day function of making liquidity
determinations to Kiewit Investment Management Corp. (the
"Manager"). For Rule 144A securities to be considered liquid,
there must be at least one dealer making a market in such
securities. After purchase, the Board of Trustees and the Manager
will continue to monitor the liquidity of Rule 144A securities.
There is no limit on the Portfolios' (indirectly though their
investment in the corresponding Series) investment in Rule 144A
securities that are determined to be liquid.
For the purposes of (6) above, (i) utility companies will be
divided according to their services; e.g., gas, gas transmission,
electric and gas, electric, water and telephone will each be
considered a separate industry; and (ii) the Kiewit Money Market
Portfolio (indirectly through its investment in the corresponding
Series) may invest more than 25% of the value of its total assets
in obligations of U.S. banks, such as certificates of deposits,
time deposits and bankers' acceptances. The banks must have total
assets exceeding one billion dollars.
Non-Fundamental Limitations - All Portfolios
The following policies are non-fundamental and may be changed
by the Board of Trustees, without shareholder approval:
The Portfolios (indirectly through their investment in the
corresponding Series) will not: (1) invest for the purpose of
exercising control over management of any company or (2) acquire
more than 10% of the voting securities of any issuer.
Non-Fundamental Policies - Kiewit Bond Portfolios
The following policies are non-fundamental and may be changed
by the Board of Trustees, without shareholder approval:
The Kiewit Short-Term Government, Kiewit Tax-Exempt and
Kiewit Intermediate-Term Bond Portfolios (each referred to herein
as a "Kiewit Bond Portfolio"), through their investment in the
corresponding Series, may invest in obligations that permit
repayment of the principal amount of the obligation prior to
maturity. Variable and floating rate obligations are relatively
long-term instruments that often carry demand features permitting
the holder to demand payment of principal at any time or at
specified intervals prior to maturity. Standby commitments, which
are similar to a put, give a Kiewit Bond Portfolio the option to
obligate a broker, dealer or bank to repurchase a security held by
a Kiewit Bond Portfolio at a specified price. Tender option bonds
are relatively long-term bonds that are coupled with the agreement
of a third party (such as a broker, dealer or bank) to grant the
holders of such securities the option to tender the securities to
the institution at periodic intervals. A Kiewit Bond Portfolio will
purchase these types of instruments primarily for the purpose of
increasing the liquidity of its portfolio.
New issues of bonds are often issued on a "when-issued"
basis, which means that actual payment for the delivery of the
securities generally takes place 15 to 45 days after the purchase
date. During this period, a Kiewit Bond Portfolio bears the risk
that interest rates on debt securities at the time of delivery may
be higher or lower than those contracted for on the when-issued
securities. To alleviate this risk, each Kiewit Bond Portfolio
does not intend to invest more than 5% of its assets in when-issued
securities.
A Kiewit Bond Portfolio also may invest up to 5% of its
assets in zero coupon bonds or "strips." Zero coupon bonds do not
make regular interest payments, rather they are sold at a discount
from face value. Principal and accretive discount (representing
interest accrued but not paid) are paid at maturity. Strips are
debt securities that are stripped of their interest after the
securities are issued, but are otherwise comparable to zero coupon
bonds. The market values of zero coupon bonds and strips generally
fluctuate in response to changes in interest rates to a greater
degree than interest paying securities of comparable term and
quality. The strips in which a Kiewit Bond Portfolio may invest
may or may not be a part of the U.S. Treasury Separately Traded
Registered Interest and Principal Securities program. Each Kiewit
Bond Portfolio may also purchase inverse floaters, which are
instruments whose interest bears an inverse relationship to the
interest rate on another security.
Generally, a Kiewit Bond Portfolio's average maturity will
tend to be shorter when the Manager expects interest rates to rise
and longer when it expects interest rates to decline.
Portfolio Turnover
The portfolio turnover rates for the fiscal year ended June
30, 1996, for the Kiewit Short-Term Government Portfolio, Kiewit
Intermediate-Term Bond Portfolio, Kiewit Tax-Exempt Portfolio and
Kiewit Equity Portfolio and for the year ended June 30, 1997 for
the Kiewit Short-Term Government Series, Kiewit Intermediate-Term
Bond Series, Kiewit Tax-Exempt Series and Kiewit Equity Series were
as follows:
Name June 30, 1997 June 30, 1996
Short-Term Government 44.24% 57.52%
Intermediate-Term Bond 51.57% 86.06%
Tax-Exempt 62.70% 100.61%
Equity 26.33% 16.95%
In the current fiscal year, the portfolio turnover rate of
each of the Kiewit Short-Term Government, Kiewit Intermediate-Term
Bond and Kiewit Tax-Exempt Series is not expected to exceed 100%.
The annual portfolio turnover rate of the Kiewit Equity Series is
not expected to exceed 75%. Generally, securities held by the
Kiewit Equity Series will not be sold to realize short-term
profits, but when circumstances warrant, they may be sold without
regard to the length of time held. Generally, securities held by
the Kiewit Equity Series will be purchased with the expectation
that they will be held for longer than one year.
MANAGEMENT OF THE FUND
Trustees and Officers
The names, addresses and ages of the trustees and officers of
the Fund and a brief statement or their present positions and
principal occupations during the past five years is set forth
below. Trustees who are deemed to be "interested persons" as
defined in the 1940 Act are indicated by an asterisk (*).
Ann C. McCulloch*
1000 Kiewit Plaza
Omaha, NE 68131-3344
Ms. McCulloch, age 39, is Chairman, President and a Trustee of the
Fund and Kiewit Investment Trust, President of the Manager and Vice
President and Treasurer of PKS. From 1989 to 1993, Ms. McCulloch
was Treasurer and Vice President of Central Maine Power in Augusta,
ME.
George Lee Butler*
1000 Kiewit Plaza
Omaha, NE 68131-3344
Mr. Butler, age 58, is a Trustee of the Fund and Kiewit Investment
Trust. From 1991 to March 1994, Mr. Butler was Commander-in-Chief
of the U.S. Strategic Command and from 1989 to 1994 was Director,
Strategic Plans and Policy, for the U.S. Joint Chiefs of Staff.
Lawrence B. Thomas
One ConAgra Drive
Omaha, NE 68102
Mr. Thomas, age 61, is a Trustee of the Fund and Kiewit Investment
Trust, and Senior Vice-President. He retired in October 1996,
after having served in numerous financial positions at ConAgra,
Inc. (an international food company) including Treasurer,
Secretary, Risk Officer and Senior Vice President-Finance
(Principal Financial Officer). In his thirty-six years at ConAgra,
he also served as director and officer of numerous of its
subsidiaries.
Robert H. Arnold
152 W. 57th Street, 44th Floor
New York, NY 10019
Mr. Arnold, age 53, is a Trustee of the Fund and Kiewit
Investment Trust. In 1989, Mr. Arnold founded, and currently co-
manages, R. H. Arnold & Co., Inc., an investment banking company.
Prior to forming R. H. Arnold & Co., Inc., Mr. Arnold was
Executive Vice President and a director to Cambrian Capital
Corporation, an investment banking firm he co-founded in 1987.
Livingston G. Douglas
1000 Kiewit Plaza
Omaha, NE 68131
Mr. Douglas, age 37, is Chief Financial Officer, Vice President
and Treasurer of the Fund and Kiewit Investment Trust and Chief
Investment Officer and Vice President of the Manager. From 1993
to July 1997, Mr. Douglas was Senior Fixed-Income Portfolio
Manager and Director of Fixed-Income Research for Investment
Advisers, Inc. From 1987 to 1993, Mr. Douglas was Senior
Fixed-Income Portfolio Manager and Director of Quantitative
Research.
Brian J. Mosher
1000 Kiewit Plaza
Omaha, NE 68131-3344
Mr. Mosher, age 40, is a Vice President of the Fund and Kiewit
Investment Trust, and a Vice President of the Manager. From March
1989 to December 1994, Mr. Mosher served as Investment Manager of
Meridian Mutual Insurance Company in Indianapolis, Indiana.
Kenneth D. Gaskins, Esquire
1000 Kiewit Plaza
Omaha, NE 68131-3344
Mr. Gaskins, age 51, is Secretary of the Fund and Kiewit Investment
Trust, Assistant Secretary of the Manager, and Corporate Counsel of
Kiewit Diversified Group Inc.
The fees and expenses of the Trustees who are not "interested
persons" of the Fund ("Independent Trustees"), as defined in the
1940 Act, are paid by each Portfolio. For the fiscal year ended
June 30, 1997, such fees amounted to $27,500 for the Fund and
$15,000 for the Trust. The following table shows the fees paid
during the fiscal year to the Independent Trustees for their
service to the Fund.
Compensation Table
Aggregate Total Compensation
Compensation from the from the Fund
Fund Complex
Independent Trustee
John J. Quindlen* $12,500 $17,500
Lawrence B. Thomas $12,500 $17,500
Robert H. Arnold* $ 2,500 $ 5,000
* On March 7, 1997, John J. Quindlen resigned as a Trustee of the
Fund and the Trust. At that time, Mr. Arnold was appointed a
Trustee of both the Fund and the Trust.
On September 30, 1997, the Trustees and officers of the Fund,
as a group, owned beneficially, or may be deemed to have owned
beneficially, less than 1% of the outstanding shares of the
Portfolios.
Investment Manager
For the services it provides as investment manager to each
Portfolio's corresponding Series of the Trust, the Manager is paid
a monthly fee calculated as a percentage of average net assets of
the corresponding Series. Pursuant to the investment management
agreements, the manager's fees for the fiscal years ended June 30,
1997 and 1996 and the period ended June 30, 1995, would have been
the following:
1997 1996 1995
(000) (000) (000)
Kiewit Money Market Portfolio $833,621** $843,989 $436,236
Kiewit Short-Term Government
Portfolio $434,306** $492,172 $332,931
Kiewit Intermediate-Term
Portfolio $445,922** $563,114 $624,955
Kiewit Tax-Exempt Portfolio $544,147** $499,823 $331,508
Kiewit Equity Portfolio $517,000** $354,646 $ 35,890
** Includes manager's fees payable by the Portfolio's corresponding
Series of the Trust, commencing March 3, 1997, pursuant to the
Series' investment advisory agreements.
The Manager has agreed to waive all or a portion of its
advisory fee for each Portfolio's corresponding Series and to
assume certain expenses of the Portfolios and Series. This
undertaking, which is not contained in the investment management
agreements, may be amended or rescinded in the future. During the
fiscal years ended June 30, 1997 and 1996 and the period ended June
30, 1995, the Manager waived the following amounts to the
Portfolios and, commencing March 3, 1997, their corresponding
Series:
Name 1997 1996 1995
Money Market Portfolio $334,909 $298,011 $ 70,100
Short-Term Government Portfolio 211,769 219,505 92,745
Intermediate-Term Bond Portfolio 92,541 86,597 117,862
Tax-Exempt Portfolio 70,323 57,267 121,067
Equity Portfolio 109,204 126,289 90,032
Each investment management agreement is in effect for a
period of two years. Thereafter, each agreement may continue in
effect for successive annual periods, provided such continuance is
specifically approved at least annually by a vote of the Trust's
Board of Trustees or, by a vote of the holders of a majority of a
Series' outstanding voting securities, and in either event by a
majority of the Trustees who are not parties to the agreement or
interested persons of any such party (other than as Trustees of the
Trust), cast in person at a meeting called for that purpose. An
investment management agreement may be terminated without penalty
at any time by the Series or by the Manager on 60 days' written
notice and will automatically terminate in the event of its
assignment as defined in the 1940 Act.
DISTRIBUTION PLAN
Rodney Square Distributors, Inc. ("RSD") serves as the
Distributor of each Portfolio's shares pursuant to a Distribution
Agreement with the Fund. Under the terms of the Distribution
Agreement, RSD agrees to assist in securing purchasers for shares
of the Portfolios.
As noted in the Fund's Prospectus, the S Class Shares of each
Portfolio have adopted a Plan pursuant to Rule 12b-1 under the 1940
Act (the "Plan") whereby the Fund may pay up to a maximum of 0.25%
per annum of the average daily net assets of the S Class Shares for
expenses incurred by the Distributor in the distribution of the S
Class Shares. The fees are paid on a monthly basis, based on the
average daily net assets of each Portfolio's S Class Shares.
Pursuant to the Plan, the Distributor is entitled to a
reimbursement each month up to the maximum of 0.25% for S Class
Shares per annum of average net assets of the S Class Shares, for
the actual expenses incurred in the distribution and promotion of
the Fund's shares, including but not limited to, printing of
prospectuses and reports used for sales purposes, preparation and
printing of sales literature and related expenses, advertisements,
and other distribution-related expenses as well as any distribution
or service fees paid to securities dealers or others who have
executed a dealer agreement with the Underwriter. Any expense of
distribution in excess of 0.25% per annum will be borne by the
Manager without any reimbursement or payment by the Fund.
The Plan also provides that to the extent that the Fund, the
Manager, the Distributor, or other parties on behalf of the Fund,
the Manager, or the Underwriter make payments that are deemed to be
payments for the financing of any activity primarily intended to
result in the sale of shares issued by the Fund within the context
of Rule 12b-1, such payments shall be deemed to be made pursuant to
the Plan. In no event shall the payments made under the Plan, plus
any other payments deemed to be made pursuant to the Plan, exceed
the amount permitted to be paid pursuant to applicable rules of the
National Association of Securities Dealers, Inc.
The Board of Trustees has determined that a consistent cash
flow resulting from the sale of new shares is necessary and
appropriate to meet redemptions and to take advantage of buying
opportunities without having to make unwarranted liquidations of
portfolio securities. The Board therefore believes that it will
likely benefit the Fund to have monies available for the direct
distribution activities of the Distributor in promoting the sale of
the Fund's shares, and to avoid any uncertainties as to whether
other payments constitute distribution expenses on behalf of the
Fund. The Board of Trustees, including the non-interested
trustees, has concluded that in the exercise of their reasonable
business judgment and in light of their fiduciary duties, there is
a reasonable likelihood that the Plan will benefit the Fund and its
shareholders.
The Plan has been approved by the Fund's Board of Trustees,
including all of the trustees who are non-interested persons as
defined in the 1940 Act. The Plan must be renewed annually by the
Fund's Board of Trustees, including a majority of the trustees who
are non-interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan. The
votes must be cast in person at a meeting called for that purpose.
It is also required that the selection and nomination of such
trustees be done by the non-interested trustees. The Plan and any
related agreements may be terminated at any time, without any
penalty: 1) by vote of a majority of the non-interested trustees
on not more than 60 days' written notice, 2) by the Distributor on
not more than 60 days' written notice, 3) by vote of a majority of
the Fund's outstanding shares, on 60 days' written notice, and 4)
automatically by any act that terminates the Distribution Agreement
with the Distributor. The Distributor or any dealer or other firm
may also terminate their respective agreements at any time upon
written notice.
The Plan and any related agreement may not be amended to
increase materially the amounts to be spent for distribution
expenses without approval by a majority of the Fund's outstanding
shares, and all material amendments to the Plan or any related
agreements shall be approved by a vote of the non-interested
trustees, cast in person at a meeting called for the purpose of
voting on any such amendment.
The Underwriter is required to report in writing to the Board
of Trustees of the Fund, at least quarterly, on the amounts and
purpose of any payments made under the Plan, as well as to furnish
the Board with such other information as may reasonably be
requested in order to enable the Board to make an informed
determination of whether the Plan should be continued.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Money Market Portfolio:
Name and Address Percentage Ownership
Kiewit Coal Properties Inc. 15.73%
1000 Kiewit Plaza
Omaha, NE 68131
Wasatch Constructors 14.05%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Group 12.18%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Construction Company 7.20%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit-Granite, Joint Venture 6.35%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Holdings Inc. 5.09%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Short-Term Government Portfolio:
Name and Address Percentage Ownership
Kiewit Diversified Holdings Inc. 39.60%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Group Inc. 21.58%
1000 Kiewit Plaza
Omaha, NE 68131
Continental Holdings Inc. 8.21%
1000 Kiewit Plaza
Omaha, NE 68131
Peter Kiewit Sons', Inc. 8.07%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Coal Properties Inc. 7.37%
1000 Kiewit Plaza
Omaha, NE 68131
Northern Trust Company as Trustee 6.73%
For Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Intermediate-Term Bond Portfolio:
Name and Address Percentage Ownership
Continental Holdings Inc. 26.84%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Holdings Inc. 20.87%
1000 Kiewit Plaza
Omaha, NE 68131
Northern Trust Company as Trustee 17.53%
for Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 16.99%
1000 Kiewit Plaza
Omaha, NE 68131
Kiewit Diversified Group Inc. 8.94%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Tax-Exempt Portfolio:
Name and Address Percentage Ownership
KMI Continental Lease 1, Inc. 95.01%
1000 Kiewit Plaza
Omaha, NE 68131
As of September 30, 1997, the following shareholders were
known to own of record more than 5% of the total outstanding shares
of the Equity Portfolio:
Name and Address Percentage Ownership
Northern Trust Company as Trustee 28.48%
For Continental Kiewit Inc. Pension Plan
ATTN Curtis Pence
P.O. Box 92956
Chicago, IL 60675-2956
Decker Coal Reclamation 24.99%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Co. as Trustee 24.61%
For Kiewit Construction Group Inc.
Retirement Savings Plan
1100 N. Market Street
Wilmington, DE 19890
Kiewit Diversified Group Inc. 8.31%
1000 Kiewit Plaza
Omaha, NE 68131
Wilmington Trust Co. as Trustee 6.30%
For Decker Coal Company Pension Plan
1100 N. Market Street
Wilmington, DE 19890
Peter Kiewit Sons', Inc., a Delaware corporation with
principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, is the
direct or indirect parent of shareholders of more than 25% of the
voting securities of each Portfolio and therefore may be deemed to
control each Portfolio.
BROKERAGE TRANSACTIONS
Brokerage transactions will be placed with a view to
receiving the best price and execution. Each Portfolio's
corresponding Series will seek to acquire and dispose of securities
in a manner which would cause as little fluctuation in the market
prices of stocks being purchased or sold as possible in light of
the size of the transactions being effected, and brokers will be selected
with this goal in view. The Manager monitors the performance of brokers
which effect transactions for each Series to determine the effect that the
Series' trading has on the market prices of the securities in which
they invest. Transactions also may be placed with brokers who
provide the Manager with investment research, such as reports
concerning individual issuers, industries and general economic and
financial trends and other research services. Each Series'
Investment Management Agreement permits the Manager knowingly to
pay commissions on such transactions which are greater than another
broker might charge if the Manager, in good faith, determines that
the commissions paid are reasonable in relation to the research or
brokerage services provided by the broker or dealer when viewed in
terms of either a particular transaction or the Manager's overall
responsibilities to the Trust.
Prior to February 28, 1997, the individual Portfolios sought
to achieve their investment objectives by purchasing and managing
their own investment portfolios. As a consequence, the Portfolios
incurred brokerage commissions directly rather than indirectly
through their investment in the corresponding Series. During the
fiscal year ended June 30, 1997, the Kiewit Short-Term Government
Series, , the Kiewit Intermediate-Term Bond Series and the Kiewit
Tax-Exempt Series paid no brokerage commissions. The Kiewit Equity
Series paid $28,600 in brokerage commissions for the period March
3, 1997 to June 30, 1997. The Kiewit Equity Portfolio paid $32,578
in brokerage commissions for the fiscal year ended June 30, 1997,
$82,485 for the fiscal year ended June 30, 1996 and $34,515 for the
period ended June 30, 1995.
PURCHASE AND REDEMPTION OF SHARES
The Fund reserves the right, in its sole discretion, to
suspend the offering of shares of any or all Portfolios or reject
purchase orders when, in the judgment of management, such
suspension or rejection is in the best interest of the Fund or a
Portfolio. Securities accepted in exchange for shares of a
Portfolio will be acquired for investment purposes and will be
considered for sale under the same circumstances as other
securities in the Portfolio.
The Fund may suspend redemption privileges or postpone the
date of payment: (1) during any period when the New York Stock
Exchange (the "NYSE") is closed, or trading on the NYSE is
restricted as determined by the Securities and Exchange Commission
(the "SEC"), (2) during any period when an emergency exists as
defined by the rules of the SEC as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned
by it, or fairly to determine the value of its assets and (3) for
such other periods as the SEC may permit.
The valuation of the securities held by the Kiewit Money
Market Series and the Kiewit Government Money Market Series
(including any securities held in a separate account maintained for
when-issued securities) is based upon their amortized costs which
does not take into account unrealized capital gains or loses. This
involves valuing an instrument at its cost and thereafter assuming
a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the
market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the
price such Series would receive if they sold the instrument.
During periods of declining interest rates, the daily yields on
shares of the Series computed as described above may tend to be
higher than a like computation made by a fund with identical
investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio
instruments. Thus, if the use of amortized cost by the Series
resulted in a lower aggregate portfolio value on a particular day,
a prospective investor in the Series would be able to obtain a
somewhat higher yield than would result from investment in a fund
utilizing solely market values, and existing investors in the
Series would receive less investment income. The converse would
apply in a period of rising interest rates.
The Kiewit Money Market and Kiewit Government Money Market
Series' use of amortized cost, which facilitates the maintenance of
their corresponding Portfolios' per share net asset value of $1.00,
is permitted by a rule adopted by the SEC, pursuant to which the
Series must adhere to certain conditions.
The Kiewit Money Market and Kiewit Government Money Market
Series each must maintain a dollar-weighted average portfolio
maturity of 90 days or less, only purchase instruments having
remaining maturities of 397 calendar days or less, and invest only
in those U.S. dollar-denominated instruments that the Manager has
determined, pursuant to guidelines adopted by the Board of
Trustees, present minimal credit risks and which are, as required
by the federal securities laws (i) rated in one of the two highest
rating categories as determined by nationally recognized
statistical rating agencies, (ii) instruments deemed comparable in
quality to such rated instruments, or (iii) instruments, the
issuers of which, with respect to an outstanding issue of short-
term debt that is comparable in priority and protection, have
received a rating within the two highest categories of nationally
recognized statistical rating agencies. Securities subject to
floating or variable interest rates with demand features in
compliance with applicable rules of the SEC may have stated
maturities in excess of 397 days. The Trustees have established
procedures designed to stabilize, to the extent reasonably
possible, the Series' price per share as computed for the purpose
of sales and redemptions at $1.00. Such procedures will include
review of the portfolio holdings by the Trustees, at such intervals
as they may deem appropriate, to determine whether the Series' net
asset value calculated by using available market quotations
deviates from $1.00 per share based on amortized cost. The extent
of any deviation will be examined by the Trustees. If such
deviation exceeds 1/2 of 1%, the Trustees will promptly consider what
action, if any, will be initiated. In the event the Trustees
determine that a deviation exists which may result in material
dilution or other unfair results to investors or existing
shareholders, they will take such corrective action as they regard
as necessary and appropriate, which may include the sale of
portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity, withholding
dividends, redemptions of shares in kind, or establishing a net
asset value per share by using available market quotations.
In-Kind Purchases. If accepted by the Fund, shares of each
Portfolio may be purchased in exchange for securities which are
eligible for acquisition by the Portfolios or their corresponding
Series, as described in this Statement of Additional Information.
Please contact Rodney Square about this purchase method. Securities
to be exchanged which are accepted by the Fund and Portfolio shares
to be issued therefore will be valued, as set forth under
"Valuation Of Shares," at the time of the next determination of net
asset value after such acceptance. All dividends, interest,
subscription, or other rights pertaining to such securities shall
become the property of the Portfolio whose shares are being
acquired and must be delivered to the Fund by the investor upon
receipt from the issuer.
The Fund will not accept securities in exchange for shares of
a Portfolio unless: (1) current market quotations are readily
available for such securities; (2) the investor represents and
agrees that all securities offered to be exchanged are not subject
to any restrictions upon their sale by the Portfolio (or its
corresponding Series) under the 1933 Act or under the laws of the
country in which the principal market for such securities exists,
or otherwise; (3) at the discretion of the Portfolio (or its
corresponding Series), the value of any such security (except U.S.
Government securities) being exchanged together with other
securities of the same issuer owned by the corresponding Series
will not exceed 5% of the net assets of the corresponding Series
immediately after the transaction; and (4) the Portfolio (or its
corresponding Series) acquires the securities for investment and
not for resale. In addition, nearly all of the securities accepted
in an exchange must be, at the time of the exchange, eligible to be
included in the Portfolio (or corresponding Series) whose shares
are issued. Investors interested in such exchanges should contact
the Manager.
TAX MATTERS
The Internal Revenue Code of 1986, as amended (the "Code")
imposes a nondeductible 4% excise tax on a regulated investment
company which does not distribute to investors in each calendar
year an amount equal to (i) 98% of its calendar year ordinary
income, (ii) 98% of its capital gain net income (the excess of
short and long-term capital gain over short and long-term capital
loss) for the one-year period ending each October 31, and (iii)
100% of any undistributed ordinary income and capital gain net
income from the prior year. Each Portfolio intends to declare and
pay dividends and capital gain distributions in a manner to avoid
imposition of the excise tax. Each Portfolio also intends to
comply with other Code requirements such as (1) appropriate
diversification of portfolio investments; (2) realization of 90% of
annual gross income from dividends, interest, gains from sales of
securities, or other "qualifying income," and (3) for each
Portfolio's taxable year ending June 30, 1998, realization of less
than 30% of gross income from gains on sale or other disposition of
securities held less than three months.
For any Portfolio that has a principal investment policy of
investing in non-equity investments, it is anticipated that either
none or only a small portion of that Portfolio's dividends will
qualify for the corporate dividends received deduction. The
portion of the dividends so qualified depends on the aggregate
qualifying dividend income received by a Portfolio from domestic
(U.S.) sources. To the extent that any Portfolio pays dividends
which qualify for this deduction, the availability of the deduction
is subject to certain holding period and debt financing
restrictions imposed under the Code on the corporation claiming the
deduction.
The Fund in its sole discretion may accept securities in
exchange for shares of a Portfolio. A gain or loss for federal
income tax purposes may be realized by investors in a Portfolio who
are subject to federal taxation upon the exchange. The amount of
such gain or loss realized with respect to a security is measured
by the difference between the fair market value of the contributed
security on the date of contribution and its adjusted tax basis.
Any loss realized on the exchange may be subject to certain
provisions of the Code which either disallow the recognition of any
such loss or result in a deferral of the time for recognizing such
loss.
CALCULATION OF PERFORMANCE DATA
The performance of a Portfolio's classes of shares (or its
corresponding Series) may be quoted in terms of its yield and its
total return in advertising and other promotional materials
("performance advertisements"). Performance data quoted represents
past performance and is not intended to indicate future
performance. The investment return of an investment in the
Portfolios and the principal value of an investment in any
Portfolio except the Money Market Portfolio and the Government
Money Market Portfolio will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
Performance of the Portfolios will vary based on changes in market
conditions and the level of each Portfolio's expenses. The
performance of the S Class Shares is not presented because such
Shares had not commenced operations as of December 31, 1996. Since
S Class Shares of the Portfolios bear additional distribution
expenses, the performance of the S Class Shares of the Portfolios
will generally be lower than that of the K Class Shares.
Performance figures for the Portfolios' K Class Shares are
presented below and are calculated in the following manner:
A. Yield is the net annualized yield for a specified 7
calendar days calculated at simple interest rates. From
time to time, the Money Market Portfolio and the
Government Money Market Portfolio may advertise their
yields. Yield is calculated by determining the net
change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of
one share at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the
value of the account at the beginning of the base period
to obtain the base period return. The yield is
annualized by multiplying the base period return by
365/7. The yield figure is stated to the nearest
hundredth of one percent.
The yield for the 7-day period ended June 30, 1997 was
5.48% for the Money Market Portfolio.
B. Effective Yield is the net annualized yield for a
specified 7 calendar days assuming reinvestment of
income or compounding. From time to time the Money
Market Portfolio and the Government Money Market
Portfolio may advertise their effective yields.
Effective yield is calculated by the same method as
yield except the yield figure is compounded by adding 1,
raising the sum to a power equal to 365 divided by 7,
and subtracting 1 from the result, according to the
following formula:
Effective Yield = [(Base Period Return + 1) 365/7] - 1.
The effective yield for the 7-day period ended June 30,
1997 was 5.64% for the Money Market Portfolio.
C. Tax-Equivalent Yield is the rate an investor would have
to earn from a fully taxable investment after taxes to
equal a Portfolio's tax-exempt yield. From time to
time, the Tax-Exempt Portfolio may advertise its tax-
equivalent yield. Tax-equivalent yield is computed by:
(i) dividing that portion of a Portfolio's yield which
is tax-exempt by one minus a stated income tax rate; and
(ii) adding the product of that portion, if any, of the
Portfolio's yield that is not tax-exempt. For purposes
of this formula, tax-exempt yield is a yield which is
exempt from federal income tax.
The following table, which is based upon federal income tax
rates in effect on the date of this Statement of Additional
Information, illustrates the yields that would have to be achieved
on taxable investments to produce a range of hypothetical tax-
equivalent yields:
Tax-Equivalent Yield Table
Federal Marginal
Income Tax Bracket Tax-Equivalent Yields Based on Tax-Exempt Yields of:
4% 5% 6% 7% 8% 9% 10% 11%
28% 5.6 6.9 8.3 9.7 11.1 12.5 13.9 15.3
31% 5.8 7.2 8.7 10.1 11.6 13.0 14.5 15.9
36% 6.3 7.8 9.4 10.9 12.5 14.1 15.6 17.2
39.6% 6.6 8.3 9.9 11.6 13.2 14.9 16.6 18.2
D. Yield of the Short-Term Government Portfolio,
Intermediate-Term Bond Portfolio, and the Tax-Exempt
Portfolio is calculated by dividing the Portfolio's
investment income for a 30-day period, net of expenses,
by the average number of shares entitled to receive
dividends during that period according to the following
formula:
YIELD = 2[((a-b)/cd + 1)6-1]
Where:
a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of the period.
The result is expressed as an annualized percentage (assuming
semiannual compounding) of the maximum offering price per share at
the end of the period.
Except as noted below, in determining interest earned during
the period (variable "a" in the above formula), the interest earned
on each debt instrument held by a Portfolio (or its corresponding
Series) during the period is calculated by: (i) computing the
instrument's yield to maturity, based on the value of the
instrument (including actual accrued interest) as of the last
business day of the period or, if the instrument was purchased
during the period, the purchase price plus accrued interest; (ii)
dividing the yield to maturity by 360; and (iii) multiplying the
resulting quotient by the value of the instrument (including actual
accrued interest). Once interest earned is calculated in this
fashion for each debt instrument held by the Portfolio (or its
corresponding Series), interest earned during the period is then
determined by totaling the interest earned on all debt instruments
held by the Portfolio.
For purposes of these calculations, the maturity of a debt
instrument with one or more call provisions is assumed to be the
next date on which the instrument reasonably can be expected to be
called or, if none, the maturity date. In general, interest income
is reduced with respect to debt instruments trading at a premium
over their par value by subtracting a portion of the premium from
income on a daily basis, and increased with respect to debt
instruments trading at a discount by adding a portion of the
discount to daily income.
For the 30-day period ended June 30, 1997, the yields for the
Short-Term Government Portfolio, Intermediate-Term Bond Portfolio
and the Tax-Exempt Portfolio were 5.66%, 6.36% and 4.15%,
respectively. The tax-equivalent yield for the same period for the
Tax-Exempt Portfolio assuming a tax bracket of 28%, 31%, 36% and
39.6% was 5.76%, 6.01%, 6.48% and 6.87%, respectively.
Since yield accounting methods differ from the accounting
methods used to calculate net investment income for other purposes,
a Portfolio's yield may not equal the dividend income actually paid
to investors or the net investment income reported with respect to
the Portfolio in the Fund's financial statements.
Yield information may be useful in reviewing a Portfolio's
performance and in providing a basis for comparison with other
investment alternatives. Nevertheless, the Portfolios' yields
fluctuate, unlike investments that pay a fixed interest rate over a
stated period of time. Investors should recognize that in periods
of declining interest rates, the Portfolios' yields will tend to be
somewhat higher than prevailing market rates, and in periods of
rising interest rates, the Portfolios' yields will tend to be
somewhat lower. Also, when interest rates are falling, the inflow
of net new money to the Portfolios from the continuous sale of
their shares will likely be invested in instruments producing lower
yields than the balance of the Portfolios' holdings, thereby
reducing the current yields of the Portfolios. In periods of
rising interest rates, the opposite can be expected to occur.
E. Average Annual Total Return is the average annual
compound rate of return for the periods of one year,
five years, ten years and the life of a Portfolio, where
quotations reflect changes in the price of a Portfolio's
shares, if any, and assume that all dividend and capital
gains distributions, if any, during the respective
periods were reinvested in Portfolio shares. Each
Portfolio may advertise its average annual total return
from time to time. Average annual total return is
calculated by finding the average annual compound rates
of return of a hypothetical investment over such
periods, according to the following formula (average
annual total return is then expressed as a percentage):
P (1 + T)n = ERV
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value, at
the end of the applicable period, of a hypothetical
$1,000 investment made at the beginning of
the applicable period.
Average Annual Total Returns for the one-year period
ended June 30, 1997 and for the periods from the
effective date of the Fund's registration statement
under the Securities Act of 1933 or commencement of
operations1, whichever occurred later, through June 30,
1997:
1 year ended Since Effectiveness 1
June 30, 1997 through June 30, 1997
Money Market Portfolio 5.43% 5.60%
Short-Term Government Portfolio 6.51% 6.78%
Intermediate-Term Bond Portfolio 7.51% 8.05%
Tax-Exempt Portfolio 6.15% 6.42%
Equity Portfolio 25.67% 23.28%
1 The Money Market Portfolio, Short-Term Government
Portfolio, Intermediate-Term Bond Portfolio and Tax-
Exempt Portfolio became effective on December 6,
1994. The Equity Portfolio commenced operations on
January 5, 1995.
F. Cumulative Total Return is the cumulative rate of return
on a hypothetical initial investment of $1,000 for a
specified period. Cumulative total return quotations
reflect the change in the price of a Portfolio's shares,
if any, and assume that all dividends and capital gains
distributions, if any, during the period were reinvested
in Portfolio shares. Cumulative total return is
calculated by finding the cumulative rates of return of
a hypothetical investment over such periods, according
to the following formula (cumulative total return is
then expressed as a percentage):
C = (ERV/P) - 1
Where: C = Cumulative Total Return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value,
at the end of the applicable period, of a
hypothetical $1,000 investment made
at the beginning of the applicable period.
Cumulative Total Returns for the one-year period ended
June 30, 1997 and for the periods from the effective
date of the Fund's registration statement under the
Securities Act of 1933 or commencement of operations1,
whichever occurred later, through June 30, 1997:
1 year ended Since Effectiveness 1
June 30, 1997 through June 30, 1997
Money Market Portfolio 5.43% 15.04%
Short-Term Government Portfolio 6.51% 18.36%
Intermediate-Term Bond Portfolio 7.51% 22.03%
Tax-Exempt Portfolio 6.15% 17.34%
Equity Portfolio 25.67% 68.30%
1 The Money Market Portfolio, Short-Term Government
Portfolio, Intermediate-Term Bond Portfolio and Tax-
Exempt Portfolio became effective on December 6,
1994. The Equity Portfolio commenced operations on
January 5, 1995.
The preceding performance figures were affected by fee waivers
and expenses assumed by the Portfolios' investment manager.
Without such fee waivers and expense assumptions, the performance
figures quoted above would have been lower. Performance quotations
are not provided for the Government Money Market Portfolio because
such Portfolio had not commenced operations as of the date of this
Statement of Additional Information.
The Portfolios may also from time to time present some or all
of their investments ranked by their percentage representation
within the respective Portfolio or in the form of the schedule of
"Investments" included in the Annual Report to the shareholders of
the Portfolios as of and for the fiscal year ended June 30, 1997,
which is incorporated by reference into this document.
Performance advertisements for the Money Market Portfolio and
the Government Money Market Portfolio may include yield
calculations for the 7-day period ending on the most recent
practicable date considering the media used for the advertisement.
Performance advertisements for the other four Portfolios may
include average annual total returns and 30-day yield calculations
as of the end of the most recent quarter practicable considering
the media used for the advertisement. Such advertisements may
include a schedule of investments for the corresponding date,
employing presentation principles used in annual reports to
shareholders.
To help investors better evaluate how an investment in a
Portfolio might satisfy their investment objective, advertisements
regarding a Portfolio may discuss yield or total return as reported
by various financial publications. Advertisements may also compare
yield or total return to other investments, indices and averages.
The following publications, benchmarks, indices, and averages may
be used: Lipper Mutual Fund Performance Analysis; Lipper Fixed
Income Analysis; Lipper Mutual Fund Indices; Salomon Brothers
Indices; Lehman Brothers Indices; Dow Jones Composite Average or
its component indices; Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500") or its component indices; The New York Stock
Exchange composite or component indices; CDA Mutual Fund Report;
Weisenberger - Mutual Fund Panorama and Investment Companies;
Mutual Fund Values and Mutual Fund Service Book, published by
Morningstar, Inc.; and financial publications such as Business
Week, Kiplinger's Personal Finance, Financial World, Forbes,
Fortune, Money Magazine, The Wall Street Journal, Barron's, et al.,
which rate mutual fund performance over various time periods.
Currently the performance of the Kiewit Money Market Portfolio
and the Government Money Market Portfolio may be compared to the
performance of IBC's Money Fund Average. The IBC's Money Fund
Average is a composition of all reporting money market funds with
similar objectives and restrictions. The Kiewit Short-Term
Government Portfolio is currently compared to the Lehman 1-3 Year
Government Index. The Lehman 1-3 Year Government Index is a total
return performance benchmark consisting of U.S. Government agency
and Treasury securities with maturities from one to three years.
The Kiewit Intermediate-Term Bond Portfolio is currently compared
to the Lehman Intermediate Corporate Index. The Lehman
Intermediate Corporate Index is a total return performance
benchmark consisting of publicly issued corporate debt issues rated
at least investment grade with maturities from one to ten years.
The Kiewit Tax-Exempt Portfolio is currently compared to the Lehman
5-Year Municipal Bond Index. The Lehman 5-Year Municipal Bond
Index is a total return performance benchmark consisting of tax-
exempt municipal bonds rated at least investment grade with
maturities from four to six years. The Kiewit Equity Portfolio is
currently compared to the S&P 500. The S&P 500 is an unmanaged
capitalization weighted index of five hundred publicly traded
stocks.
OTHER INFORMATION
The Fund does not intend to hold annual meetings; it may,
however, hold a meeting for such purposes as changing fundamental
investment limitations, approving a new investment management
agreement or any other matters which are required to be acted on by
shareholders under the 1940 Act. Shareholders may receive
assistance in communicating with other shareholders in connection
with the election or removal of Trustees similar to the provisions
contained in Section 16(c) of the 1940 Act.
Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, DE 19890-0001, a Delaware-chartered
banking institution, is the Fund's Custodian.
Price Waterhouse LLP, Thirty South 17th Street, Philadelphia,
Pennsylvania 19103, is the Fund's independent accountant.
FINANCIAL STATEMENTS
The audited financial statements and the financial highlights
for the Fund for its fiscal year ended June 30, 1997, as set forth
in the Fund's annual report to shareholders, and the report thereon
of Price Waterhouse LLP, the Fund's independent accountants, also
appearing in the Fund's annual report are incorporated herein by
reference. With reference to the period ended June 30, 1995, see
the report of independent accountants included in the Fund's
registration statement and which is available upon request, without
charge, by writing or calling the Fund at 1000 Kiewit Plaza, Omaha,
NE 68131-3344, (800) 2KIEWIT. The annual report does not contain
any financial data for the Government Money Market Portfolio
because such Portfolio had not commenced operations as of June 30,
1997.
KIEWIT MUTUAL FUND
Items Required By Form N-1A
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Included in the Prospectus (Part A):
Financial Highlights for Kiewit Mutual Fund
for the Period Ended June 30, 1997.
Included in Part B:
(i) Report of Independent Public Accountants dated August 7,
1997*
(ii) Audited Financial Statements of Kiewit Money Market
Portfolio for the Period Ended June 30, 1997*
(iii) Audited Financial Statements of Kiewit Short-Term
Government Portfolio for the Period Ended June 30, 1997*
(iv) Audited Financial Statements of Kiewit Intermediate-Term
Bond Portfolio for the Period Ended June 30, 1997*
(v) Audited Financial Statements of Kiewit Tax-Exempt Portfolio
for the Period Ended June 30, 1997*
(vi) Audited Financial Statements of Kiewit Equity Portfolio for
the Period Ended June 30, 1997*
The audited financial statements of Kiewit
Investment Trust for the fiscal period ended June 30, 1997,
as set forth in its annual report to shareholders, were
filed with the SEC via EDGAR and are incorporated by
reference into the Fund's Part B.
* Incorporated by reference to the Fund's
annual report to shareholders for the fiscal year ended June
30, 1997, filed via EDGAR on September 8, 1997.
(b) Exhibits:
Exhibit No. Description of Exhibit
(1) (i) Agreement and Declaration of Trust*
(ii) Certificate of Trust*
(iii) Certificate of Amendment to Certificate of Trust**
(2) By-Laws*
(3) None
(4) Not applicable
(5) Not applicable
(6) Distribution Agreement with Rodney Square Distributors, Inc.**
(7) None
(8) Custody Agreement with Wilmington Trust Company*
(9) (i) Transfer Agency Agreement with Rodney Square Management
Corporation dated February 19, 1997**
(ii) Accounting Services Agreement with Rodney Square Management
Corporation dated February 19, 1997**
(iii) Administration Agreement with Rodney Square Management
Corporation dated February 19, 1997**
(iv) Administrative Services Agreements with Kiewit
Investment Management Corp. dated February 19, 1997**
(10) Not applicable
(11) (i) Consent of Independent Accountants
(ii) Report of Independent Accountants dated August 7, 1997 for the
period ended June 30, 1995
(12) Not applicable
(13) Not applicable
(14) Not applicable
(15) Plan of Distribution Pursuant to Rule 12b-1 under the Investment
Company Act of 1940, effective March 3, 1997**
(16) Schedule of Performance Calculations
(17) Financial Data Schedules
(18) Plan Pursuant to Rule 18f-3 under the Investment Company Act of 1940
dated February 19, 1997**
(19) Secretary's Certificate and Power of Attorney**
* Previously filed with the Securities and Exchange
Commission on Form N-1A on July 25, 1994 and incorporated
herein by reference.
** Previously filed with the Securities and Exchange
Commission with Post-Effective Amendment No. 4 on Form N1-A
on February 28, 1997 and incorporated herein by reference.
Item 25. Persons controlled by or under common control with
Registrant.
None.
Item 26. Number of Holders of Securities.
Number of Record Holders
K Class Shares as of September 30, 1997
Shares of Beneficial Interest, Par Value $.01
Kiewit Money Market Portfolio
Kiewit Short-Term Government Portfolio
Kiewit Intermediate-Term Bond Portfolio
Kiewit Tax-Exempt Portfolio
Kiewit Equity Portfolio
Item 27. Indemnification.
Reference is made to Article VII of the Registrant's Agreement
and Declaration of Trust (Exhibit 24(b)(1)(i)) and to Article X
of the Registrant's By-Laws (Exhibit 24(b)(2)), which are
incorporated herein by reference. Pursuant to Rule 484 under the
Securities Act of 1933, as amended, the Registrant furnishes the
following undertaking:
"Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to 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 Act 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 Act and will be governed by the final adjudication of such
issue."
Item 28. Business and Other Connections of Investment Adviser.
Kiewit Investment Management Corp. (the "Manager") is a Delaware
corporation organized in 1994. Under Investment Management
Agreements with respect to each Portfolio, dated November 15,
1994, the Manager, subject to the supervision of the Board of
Trustees, provides investment management services to each
Portfolio. Kiewit Diversified Holdings Inc., a wholly-owned
subsidiary of Kiewit Diversified Group Inc. ("KDG") owns 60% of
the Manager and Kiewit Construction Company, a wholly-owned
subsidiary of Kiewit Construction Group Inc. ("KCG") owns the
remaining 40% of the Manager. Both KDG and KCG are wholly-owned
by Peter Kiewit Sons', Inc.
The business, profession, vocation or employment of a substantial
nature in which each director and officer of the Manager is or
has been, during the past two fiscal years, engaged for his own
account in the capacity of director, officer, employee, partner
or trustee is set forth below.
Kiewit Investment Management Corp.
Walter Scott, Jr. is a Director of the Manager. Mr. Scott is
also Chairman and President of PKS.
Kenneth E. Stinson is a Director of the Manager. Mr. Stinson is
also Executive Vice President of PKS and Chairman and CEO of
Kiewit Construction Group Inc.
Ann C. McCulloch is President of the Manager. Ms. McCulloch is
also President and the Chairman of the Fund, and Vice President
and Treasurer of PKS.
Kenneth D. Gaskins, Esquire is an Assistant Secretary of the
Manager. Mr. Gaskins is also the Secretary of the Fund and
Corporate Counsel of Kiewit Diversified Group Inc.
Livingston G. Douglas is a Vice President and Chief Investment
Officer of the Manager. Mr. Douglas is also the Chief Financial
Officer, Vice President and Treasurer of the Fund. From 1993 to
July 1997, Mr. Douglas was Senior Fixed-Income Portfolio Manager
and Director of Fixed-Income Research for Investment Advisers,
Inc.
Brian J. Mosher is a Vice President of the Manager. Mr. Mosher
is also a Vice President of the Fund.
Theodore Dutcher has been a Vice President of the Manager since
April 1997. From November 1995 until February 1997, Mr. Dutcher
was a consultant with Asset Advisory, Inc., Eden Prairie, MN, a
cash management consulting firm.
Item 29. Principal Underwriters
(a) The Rodney Square Fund
The Rodney Square Tax-Exempt Fund
The Rodney Square Strategic Fixed-Income Fund
The Rodney Square Multi-Manager Fund
Heitman Securities Trust/Institutional Class
1838 Investment Advisors Funds
The Olstein Funds
The HomeState Group
Kalmar Pooled Investment Trust
Brazos Mutual Funds
The Mallard Fund
(b) The principal business address for the Officers and
Directors of Rodney Square Distributors, Inc. is: 1100
North Market Street, Wilmington, DE 19890-0001.
(1) (2) (3)
Position
Name and Principal Position and Offices with and Offices
Business Address Rodney Square Distributors, Inc. with Registrant
Jeffrey O. Stroble President, Secretary, None
Treasurer & Director
Martin L. Klopping Director None
Cornelius G. Curran Vice President None
(c) None.
Item 30. Locations of Accounts and Records
All accounts and records are maintained by the Registrant, or on
its behalf by the Fund's administrator, transfer agent, dividend
paying agent and accounting services agent, Rodney Square
Management Corporation, at Rodney Square North, 1100 North Market
Street, Wilmington, DE 19890.
Item 31. Management Services.
There are no management-related service contracts not discussed
in Part A or Part B.
SIGNATURES
Kiewit Investment Trust consents to the filing of this
Amendment to the Registration Statement of Kiewit Mutual Fund
signed on its behalf by the undersigned, thereto duly authorized,
in the City of Omaha, the State of Nebraska, on the 28th day of
October, 1997.
KIEWIT INVESTMENT TRUST
BY: /s/ Ann C. McCulloch*
Ann C. McCulloch, President
The undersigned Trustees and principal officers of Kiewit
Investment Trust consent to the filing of this Amendment to the
Registration Statement of Kiewit Mutual Fund on the dates
indicated.
Signature Title Date
/s/ Ann C. McCulloch* Chairman and Trustee October 28, 1997
Ann C. McCulloch (Principal Executive Officer)
/s/ Livingston G. Douglas* Chief Financial Officer, October 28, 1997
Livingston G. Douglas Vice President and Treasurer
(Principal Financial Officer)
/s/ Lawrence B. Thomas* Trustee October 28, 1997
Lawrence B. Thomas
/s/ George Lee Butler* Trustee October 28, 1997
George Lee Butler
/s/ Robert H. Arnold* Trustee October 28, 1997
Robert H. Arnold
* By: /s/ Kenneth D. Gaskins Attorney-in-Fact October 28, 1997
Kenneth D. Gaskins
(Pursuant to authority granted in Power of Attorney)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant, Kiewit
Mutual Fund certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized,
in the City of Omaha, the State of Nebraska, on the 28th day of
October, 1997.
KIEWIT MUTUAL FUND
BY: /s/ Ann C. McCulloch*
Ann C. McCulloch, President
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.
Signature Title Date
/s/ Ann C. McCulloch* Chairman and Trustee October 28, 1997
Ann C. McCulloch (Principal Executive Officer)
/s/ Livingston G. Douglas* Chief Financial Officer, October 28, 1997
Livingston G. Douglas Vice President and Treasurer
(Principal Financial Officer)
/s/ Lawrence B. Thomas* Trustee October 28, 1997
Lawrence B. Thomas
/s/ George Lee Butler* Trustee October 28, 1997
George Lee Butler
/s/ Robert H. Arnold* Trustee October 28, 1997
Robert H. Arnold
* By: /s/ Kenneth D. Gaskins Attorney-in-Fact October 28, 1997
Kenneth D. Gaskins
(Pursuant to authority granted in Power of Attorney)
Exhibit 24(b)(11)(i)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectuses
and Statements of Additional Information constituting parts of this
Post-Effective Amendment No. 5 to the registration statement on Form N-
1A (the "Registration Statement") of our report dated August 7, 1997,
relating to the financial statements and financial highlights of Kiewit
Money Market Portfolio, Kiewit Short-Term Government Portfolio, Kiewit
Intermediate-Term Bond Portfolio, Kiewit Tax-Exempt Portfolio and Kiewit
Equity Portfolio (five of the series, hereafter referred to as the
"Portfolios," constituting Kiewit Mutual Fund, hereafter referred to as
the "Fund") appearing in the June 30, 1997 Annual Report of the Fund,
which is also incorporated by reference into the Registration Statement.
We also consent to the use in Part C of the Registration Statement of
our report dated August 7, 1997, relating to the financial statements
and financial highlights of the Portfolios. We also consent to the
references to us under the heading "Financial Highlights" in the
Prospectuses and under the headings "Other Information" and "Financial
Statements" in the Statements of Additional Information.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
October 27, 1997
Exhibit 24(b)(11)(ii)
Thirty South Seventeenth Street Telephone 215 575 5000
Philadelphia, PA 19103-4094
Price Waterhouse LLP
Report of Independent Accountants
August 7, 1997
To the Trustees and Shareholders of
Kiewit Mutual Fund
In our opinion, the accompanying statements of assets and
liabilities and the related statements of operations and of
changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of
Kiewit Money Market Portfolio, Kiewit Short-Term Government
Portfolio, Kiewit Intermediate-Term Bond Portfolio, Kiewit Tax-
Exempt Portfolio and Kiewit Equity Portfolio (five of the series
constituting Kiewit Mutual Fund, hereafter referred to as the
"Fund") at June 30, 1997, the results of each of their operations
for the year then ended, the changes in each of their net assets
for each of the two years in the period then ended and the
financial highlights for each of the two years in the period then
ended and the financial highlights for each of the two years in
the period then ended and the periods July 28, 1994, July 29,
1994, July 25, 1994, July 25, 1994, and January 5, 1995
(commencement of operations) through June 30, 1995 for the Kiewit
Money Market Portfolio, Kiewit Short-Term Government Portfolio,
Kiewit Intermediate-Term Bond Portfolio, Kiewit Tax-Exempt
Portfolio and Kiewit Equity Portfolio, respectively, in
conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits,
which included confirmation of securities at June 30, 1997 by
correspondence with the custodian and brokers and, where
appropriate, the application of alternative auditing procedures
for unsettled security transactions, provide a reasonable basis
for the opinion expressed above.
Our audit was made for the purpose of forming an opinion on the
financial statements taken as a whole. The financial highlights
from December 6, 1994 to June 30, 1995 of each of the four
portfolios appearing on pages 9 and 10 of the Class K Prospectus
are required to be presented in the Fund's registration statement
on Form N-1A and are not a required part of the basic financial
statements. These financial highlights have been subjected to
the auditing procedures applied to the basic financial statements
and, in our opinion, are fairly stated in all material respects
in relation to the financial statements taken as a whole.
/s/ Price Waterhouse LLP
Exhibit 24(b)(16)
Kiewit Money Market Portfolio
June 30, 1997
Seven Days
Base Period Return:
June 24, 1997 0.000149698
June 25, 1997 0.000149790
June 26, 1997 0.000149780
June 27, 1997 0.000149876
June 28, 1997 0.000149876
June 29, 1997 0.000149876
June 30, 1997 0.000151394
------------
0.001050290
============
Yield for Period: (Base Period Return *365)/7
5.48% (0.001050290*365)/7
Effective Yield
for Period (Base Period Return +1) 365/7 - 1
5.64% (0.00105290 + 1) 365/7 - 1
KIEWIT MUTUAL FUND
JUNE 30, 1997
# Yrs Average Annual Cumulative
in Period Total Return Total Return
Money Market Portfolio 2.569863 5.60% 15.04%
Short-Term Government Portfolio 2.569863 6.78% 18.36%
Intermediate-Term Bond Portfolio 2.569863 8.05% 22.03%
Tax-Exempt Portfolio 2.569863 6.42% 17.34%
Equity Portfolio 2.487671 23.28% 68.30%
Average Annual Cumulative
For the Period Ending 6/30/96 Total Return Total Return
FORMULA (ERV/P) 1/N - 1 =T (ERV/P) -1 = T
Money Market Portfolio: (1,150.41/1,000)1/2.569863-1=T (1,150.41/1,000)-1 = T
0.0560 = T 0.1504 = T
5.60% = T 15.04% = T
Short-Term Government
Portfolio: (1,183.63/1,000)1/2.569863-1=T (1,183.63/1,000)-1 = T
0.0678 = T 0.1836 = T
6.78% = T 18.36% = T
Intermediate-Term Bond
Portfolio: (1,220.25/1,000)1/2.569863-1=T (1,220.25/1,000)-1 = T
0.0805 = T 0.2203 = T
8.05% = T 22.03% = T
Tax-Exempt Portfolio: (1,173.39/1,000)1/2.569863-1=T (1,173.39/1,000)-1 = T
0.0642 = T 0.1734 = T
6.42% = T 17.34% = T
Equity Portfolio: (1,683.04/1,000)1/2.487671-1 = T (1,683.04/1,000)-1 = T
0.2328 = T 0.6830 = T
23.28% = T 68.30% = T
Fund Name: Kiewit Mutual Fund
Yield for the Thirty Day Period Ended June 30, 1997
Formula : Yield = 2[((a-b)/cd + 1)^6 - 1]
Short-Term Government Portfolio
Yield = 2[((614,738.87 - 30,815.99)/62,324,402.757 * 2.01 + 1)^6 - 1]
Yield = .05659074
Yield = 5.66%
Intermediate -Term Bond Portfolio
Yield = 2[((610,186.17 - 44,455.75)/53,269,107.021 * 2.03 + 1)^6 - 1]
Yield = .06360657
Yield = 6.36%
Tax - Exempt Portfolio
Yield = 2[((538,681.47 - 57,656.83)/68,435,616.421 * 2.05 + 1)^6 - 1]
Yield = .04149887
Yield = 4.15%
<TABLE> <S> <C>
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<NAME> KIEWIT MUTUAL FUND
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<NAME> KIEWIT MONEY MARKET PORTFOLIO
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<NAME> KIEWIT MUTUAL FUND
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<NAME> KIEWIT MUTUAL FUND
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