KIEWIT MUTUAL FUND
S CLASS SHARES
PROSPECTUS
February 28, 1997
As Revised July 1, 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 February 28, 1997, including the
Fund's most recent Annual Report to Shareholders, 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 8
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 13
RISK FACTORS 15
MANAGEMENT OF THE FUND 16
DISTRIBUTION PLAN 18
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES 18
PURCHASE OF SHARES 20
SHAREHOLDER ACCOUNTS 21
VALUATION OF SHARES 22
EXCHANGE OF SHARES 23
REDEMPTION OF SHARES 23
PERFORMANCE INFORMATION 25
GENERAL INFORMATION 25
APPENDIX - DESCRIPTION OF RATINGS 28
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. 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)
Government Short-Term
Money Market Money Market Government
Portfolio Portfolio Portfolio
Management Fees
(after fee waiver) .13% .13% .17%
12b-1 Fees* .25% .25% .25%
Other Expenses
(after expenses
assumed) .07% .07% .13%
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 .45%; Kiewit Government Money Market
Portfolio .45%; and Kiewit Short-Term Government Portfolio .55%.
Without the waiver of fees by Kiewit Investment Management Corp.,
the total expenses of the Portfolios' S Class Shares for the fiscal
year ended June 30, 1996, would have been: Kiewit Money Market
Portfolio .52%. Kiewit Short-Term Government Portfolio .68%.
Without the waiver of fees, the total expenses of the Kiewit
Government Money Market Portfolio, on an annual basis, are
estimated to be .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 fiscal year ended June
30, 1996.
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 the 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 Investment Company Act of 1940, 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 two highest categories 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 two highest categories 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 Investment Company Act of 1940 (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, U.S. government securities or other 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. The Trustees of the Fund,
including all of the disinterested Trustees, have adopted written
procedures to monitor potential conflicts of interest that might
develop between the Feeder Portfolios and 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%.
Mr. P. Greggory Williams manages the investments of the Kiewit
Short-Term Government Series. Mr. Williams is a Vice President of
the Manager, Chief Financial Officer, and a Vice President of the
Fund, and a Chartered Financial Analyst. From June 1983 to December
1986, he served as Assistant Vice President-Investments at Mutual
of Omaha Fund Management Company. His duties included managing
three investment companies. From December 1986 to November 1990,
Mr. Williams served as Senior Vice President and Chief Investment
Officer of Jefferson National Life Insurance Company in
Indianapolis, Indiana. From June 1991 to August 1994, Mr. Williams
was Vice President-Investments and Treasurer of Shenandoah Life
Insurance Company of Roanoke, Virginia.
Brian J. Mosher manages the Kiewit Money Market Series and
Kiewit Government Money Market Series. Mr. Mosher is a Vice
President of the Manager, a Vice President of the Fund, and a
Chartered Financial Analyst. From April 1984 to March 1989, he was
Vice President and Trust Officer of The Provident Bancorporation of
Cincinnati, Ohio. From March 1989 to December 1994, Mr. Mosher
served as Investment Manager of Meridian Mutual Insurance Company
in Indianapolis, Indiana.
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 the fees paid by the Fund or Trust.
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 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.
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
