SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 2 /X/
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT / /
OF 1940
Amendment No. 3 /X/
(Check appropriate box or boxes.)
IPS FUNDS - File Nos. 33-83132 and 811-8718
625 S. Gay Street, Suite 630, Knoxville,
Tennessee 37902
(Address of Principal Executive Offices)
Zip Code
Registrant's Telephone Number, including Area
Code: (615) 524-1676
Gregory D'Amico, 625 S. Gay Street, Suite 630,
Knoxville, TN 37902
(Name and Address of Agent for Service)
With copy to:
Donald S. Mendelsohn, Brown, Cummins & Brown
Co., L.P.A.
3500 Carew Tower, Cincinnati, Ohio 45202
Release Date: March 29, 1996
It is proposed that this filing will become
effective:
/ / immediately upon filing pursuant to
paragraph (b)
/ / on (date) pursuant to paragraph (b)
/X/ 60 days after filing pursuant to paragraph
(a)
/ / on (date) pursuant to paragraph (a) of
Rule 485
The Registrant continues its election
made by the filing of its Registration
Statement, effective December 5, 1994, to
register an indefinite number and amount of
securities under Rule 24f-2 of the Investment
Company Act of 1940. Registrant filed
pursuant to paragraph b(1)
of Rule 24f-2, a 24f-2 Notice for the fiscal
year ended November 30, 1995 on
January 26, 1996.
TOTAL NUMBER OF PAGES -
EXHIBIT INDEX ON PAGE -
<PAGE>
IPS FUNDS
CROSS REFERENCE SHEET
FORM N-1A
ITEM SECTION IN EACH PROSPECTUS
1...............Cover Page
2...............Summary of Fund Expenses
3...............The Fund, Supplement to Prospectus
4...............The Fund, Operations of the Fund, Investment Objectives
and Policies
5...............Operations of the Fund
5A..............Operations of the Fund
6...............Operations of the Fund, Cover Page, Dividends and
Distributions, Taxes
7...............Operations of the Fund, How to Purchase Fund Shares
8...............Operations of the Fund
9...............None
SECTION IN STATEMENT OF
ITEM ADDITIONAL INFORMATION
10...............Cover Page
11...............Table of Contents
12...............General Information and History
13...............Investment Restrictions and Fund Trustees and Officers
14...............Fund Trustees and Officers
15...............Fund Trustees and Officers
16...............The Investment Advisor and
Underwriter, Expenses of the
Fund, Transfer Agent,
Custodian, Independent Accountants
17...............Portfolio Transactions and Brokerage
18...............General Information and History
19...............Net Asset Value
20...............Dividends, Distributions and Taxes
21...............The Investment Advisor and Underwriter
22...............Performance
23...............Report of Independent Public Accountants, Financial
Statements
<PAGE>
THIS SUPPLEMENT IS DATE MARCH 29, 1996
IPS MILLENNIUM FUND
SUPPLEMENT TO PROSPECTUS DATED
DECEMBER 5, 1994
The following Financial Highlights for the period
December 1, 1994 through November 30, 1995 is derived
from the financial statements of the Fund. The company
began selling shares and making investments on January 4,
1995 therefore the ratios are calculated for that period of
time.. The financial statements of the Fund are included in
the Statement of Additional Information.
IPS MILLENNIUM FUND
Supplementary Information
Selected Per Share Data and Ratios
For the year ended November 30, 1995
Per share data
Investment income $ 0.121
Net realized and unrealized gain
(loss) on investments 2.982
Total income (loss) from investment operations 3.103
Dividends from net investment income 0.107
Net asset value:
Beginning of year 12.000
End of year $14.996
Total return 25.86%
Ratios
Net assets, end of period(thousands) 1625.6
Ratio of expenses to average net assets 1.4%
Ratio of net income to average net assets 1.0%
Portfolio turnover rate 26.7%
<PAGE>
IPS MILLENNIUM FUND
A NO-LOAD FUND
PROSPECTUS
December 5, 1994
625 S. GAY STREET, SUITE 630
KNOXVILLE, TN 37902
For questions about investing in the Fund: 615-524-1676
For Shareholder Services: 800-424-2295
The investment objectives of the Fund are growth of
capital along with growth of income. The Fund seeks to
accomplish this objective by investing primarily in
common stocks with constant supervision of these stocks.
The Fund is designed for long term investors and should
not be considered by investors with short term time
horizons.
The Fund is "no-load", which means there are no sales
charges or commissions. In addition, there are no 12b-1
fees, distribution expenses or deferred sales charges
which are borne by the shareholders. There is a $2,000
minimum investment requirement to open an account.
Shares of the Fund are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank, and
are not insured by the Federal Deposit Insurance
Corporation (FDIC), the Federal Reserve Board or any
other government agency, entity, or person. The
purchase of Fund shares involves investment risks,
including the possible loss of principal.
This Prospectus provides information you should know
before investing in the Fund. It should be read and
retained for future reference. A Statement of Additional
Information for the Fund dated December 5, 1994,
containing additional information about the Fund, has
been filed with the Securities and Exchange Commission,
and is incorporated by reference into this Prospectus.
The Statement of Additional Information may be obtained
without charge by writing to the Secretary of the Fund at
the above address. The Fund is a series of IPS Funds.
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF EXPENSES. . . . . . . . . 1
THE FUND . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVES AND POLICIES . 2
Investment Objectives . . . . . . 2
Achieving the Objectives. . . . . 2
Fundamental Policies. . . . . . . 3
Portfolio Turnover. . . . . . . . 3
HOW TO PURCHASE FUND SHARES. . . . . 3
By Mail . . . . . . . . . . . . . 3
Additional and Pre-authorized Purchases 4
Payment for Shares. . . . . . . . 4
DIVIDENDS AND DISTRIBUTIONS. . . . . 4
TAXES. . . . . . . . . . . . . . . . 5
OPERATIONS OF THE FUND . . . . . . . 5
Board of Trustees . . . . . . . . 5
The Investment Advisor. . . . . . 5
Advisor Compensation. . . . . . . 6
Shareholder Rights. . . . . . . . 6
Shareholder Inquiries . . . . . . 6
Portfolio Transactions. . . . . . 6
Transfer Agent. . . . . . . . . . 7
How The Fund Measures Its Performance 7
Net Asset Value . . . . . . . . . 7
How to Redeem or Sell Fund Shares 8
Systematic Withdrawals. . . . . . 9
Retirement Plans. . . . . . . . . 9
<PAGE>
<TABLE>
(i)<PAGE>
SUMMARY OF EXPENSES
This table is designed to help you understand the cost an
investor in the Fund may incur as a shareholder. The
expense information is based upon anticipated operating
expenses of the Fund for the current fiscal year; the actual
expenses may be more or less than those shown.
Shareholder Transaction Expenses
Maximum sales load on purchasesNone
Maximum sales load on reinvested dividendsNone
Deferred sales load . . . . . .None
Redemption fees . . . . . . . .None1
Exchange fees . . . . . . . . .None
Annual Fund Operating Expenses (as a percentage of
average net assets)
<S> <C>
Management fees . . . . . . 1.40%2
12b-1 expenses . . . . . . None
Other expenses. . . . . . . None
Total Fund operating expenses 1.40%
Example 1 year 3 years
You would pay the following total $15 $49
expenses on a $1,000 investment, assuming
a 5% annual return3 and redemption
at the end of the period.
______________________
<FN>
1 The Fund's Custodian charges a $10 fee for each wire
redemption.
</FN>
<FN>
2 The Fund's total operating expenses are equal to the
management fees paid to the Advisor because the Advisor
pays all of the Fund's operating expenses.
</FN>
<FN>
3 Use of this assumed 5% return is required by the
Securities and Exchange Commission; it is not an
illustration of past or future investment results.
</FN>
</TABLE>
The purpose of this table is to assist the investor in
understanding the various costs and expenses that an
investor in the Fund will bear, directly or indirectly. This
example should not be considered a representation of
past or future expenses.
Shareholders should be aware that the Fund is a no-load
fund and, accordingly, a shareholder does not pay any
sales charge or commission upon purchase or redemption
of shares of the Fund. The Fund does not have a 12b-1
Plan. Unlike most other mutual funds, the Fund does not
pay directly for transfer agency, pricing, custodial,
auditing or legal services, nor does it pay directly any
general administrative or other operating expenses. The
Advisor pays all of the expenses of the Fund except
brokerage, taxes, interest and extraordinary expenses.
<PAGE>
THE FUND
IPS Funds (the "Trust") was organized as an Ohio
business trust on August 10, 1994, and commenced
operations on December 5, 1994. The Trust offers one
series of shares: The IPS Millennium Fund (the "Fund").
The investment advisor to the Fund is IPS Advisory, Inc.
(the "Advisor").
INVESTMENT OBJECTIVES AND POLICIES
Investment Objectives
The Fund's investment objectives are long term growth of
capital and income. The Fund will strive to achieve the
objective of growth primarily through the purchase of
U.S. common stocks that the Advisor believes have
higher than average long term growth prospects, and that
may be undervalued compared with the market and their
own history. The Fund will strive to achieve its objective
of income through selection of companies with the
potential to increase dividends regularly, and whose
dividends appear well-protected.
Achieving the Objectives
The management philosophy of the Fund is to accumulate
a diversified portfolio of U.S. common stocks. The Fund
will emphasize companies which have above average
prospects for consistent, long term growth, are
undervalued on fundamentals, and have characteristics
that make them more resistant than most companies to
economic contraction. The Fund generally will be
invested in companies that pay dividends, but will invest
in some companies that do not pay dividends and may not
have any dividend history. While there can be no
assurance of its ability to do so in every case, the
Advisor's goal will be to select companies with low debt
to equity ratios, relative to their industry peers.
The Fund is managed as a whole and does not seek to
fulfill all of its objectives in any one security. It is
anticipated that under normal market conditions common
stocks (including dividend paying common stocks) will
constitute at least 65% of the Fund's investment portfolio,
with the belief they will participate in the long term
growth of American business. However, it is also
anticipated that the Fund will hold less than 35% of its
assets in money market instruments, U.S. government
securities, repurchase agreements collateralized by U.S.
Government securities, and shares of other investment
companies for liquidity purposes or when common stocks
are viewed as overvalued. In addition, for temporary
defensive purposes under abnormal market or economic
conditions, the Fund may hold up to 100% of its assets in
such securities. If the Fund acquires securities of another
investment company, the shareholders of the Fund
generally will be subject to duplicate management fees.
The Fund does not attempt to time the market. The Fund
will try to minimize fluctuations in value through
diversification among companies and industries, and
constant monitoring.
<PAGE>
A repurchase agreement is a short term investment in
which the purchaser (i.e., the Fund) acquires ownership of
a U.S. Government security and the seller agrees to
repurchase the security at a future time at a set price,
thereby determining the yield during the purchaser's
holding period. Any repurchase transaction in which the
Fund engages will require full collateralization of the
seller's obligation during the entire term of the repurchase
agreement. In the event of a bankruptcy or other default
of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value.
However, the Fund intends to enter into repurchase
agreements only with the Fund's Custodian, other banks
with assets of $1 billion or more, and registered securities
dealers determined by the Advisor (subject to review by
the Board of Trustees) to be creditworthy.
The Fund will not invest more than 5% of the market
value of its total assets at the time of investment in
securities of any one issuer. Nor will the Fund buy
securities on margin, sell securities short, use
commodities or futures contracts, or use derivative
securities of any kind. See "Investment Limitations" in
the Statement of Additional Information.
As all investment securities are subject to inherent market
risks and fluctuations in value due to earnings, economic
and political conditions and other factors, the Fund
cannot give any assurance that its investment objective
will be achieved. In addition, you should be aware that
the Advisor has no prior experience in managing
investment companies and that the Fund has no operating
history. Current rates of total return quoted by the Fund
may be higher or lower than past quotations, and there
can be no assurance that any current rate of total return
will be maintained.
Fundamental Policies
The investment limitations set forth in the Statement of
Additional Information as fundamental policies may not
be changed without the affirmative vote of the majority of
the outstanding shares of the Fund. The investment
objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of
the Fund.
Portfolio Turnover
The Fund does not intend to purchase or sell securities for
short term trading purposes. The Fund will, however, sell
any portfolio security (without regard to the length of
time it has been held) when the Advisor believes that
market conditions, company-specific factors or general
economic conditions warrant such action. It is
anticipated that the Fund will have a portfolio turnover
rate of less than 50%.
<PAGE>
HOW TO PURCHASE FUND SHARES
By Mail
The minimum investment in the Fund is $2,000. To
purchase shares in the Fund, simply complete the
application form enclosed with this Prospectus.
Make your check payable to, and mail your
application and check to:
IPS Millennium Fund
c/o The Provident Bank
P.O. Box 14967
Cincinnati, Ohio 45250-0967
The price at which the purchase will be effected is based
on the next calculation of net asset value after the order is
received by The Provident Bank, the Fund's Transfer
Agent. A confirmation indicating the details of the
transaction will be promptly sent to shareholders. The
purchase will be made in full and fractional shares
calculated to three decimal places.
Additional and Pre-authorized Purchases
Shareholders may, at any time, purchase additional shares
subject to a minimum investment of $100. A check made
payable to "IPS Millennium Fund", in the amount to be
invested, should be sent to The Provident Bank at the
address set forth above. Each additional purchase request
must contain your name and account number. If you
prefer to invest automatically each month, you may
authorize the Fund to debit your bank account for the
periodic purchase of Fund shares in the middle of the
month. You will receive a confirmation every time you
make a transaction in the Fund.
Payment for Shares
Payment for shares purchased should be made by check
or money order in dollars drawn on a United States Bank.
Funds for investment may also be wired by the investor's
bank to the Transfer Agent. Please call 1-800-424-2295
for wiring instructions.
The Fund reserves the right in its sole discretion to reject
purchase orders when, in the judgment of management,
such rejection is in the best interests of the Fund. The
Fund also reserves the right at any time to waive or
increase the minimum investment requirements applicable
to initial or subsequent investments. No application to
purchase shares is binding until accepted in writing by the
Fund.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to declare dividends representing net
investment income four times annually, generally in the
months of April, July, October, and December. It is the
present policy of the Fund to distribute annually all of its
net long term capital gains in the month of December.
When a dividend or capital gain is distributed, the net
asset value per share is reduced by the amount of the
payment.
All dividends or capital gains distributions paid by the
Fund will be automatically reinvested in shares of the
Fund at the next determined net asset value, unless an
investor specifically requests that either dividends or
capital gains distributions or both be paid in cash. If cash
payment is requested, a check normally will be mailed
within five business days after the payable date. If you
withdraw your entire account, all dividends accrued to the
time of withdrawal, including the day of withdrawal, will
be paid at that time. You may elect to have distributions
on shares held in IRA's and 403(b) plans paid in cash only
if you are 59 1/2 years old or permanently and totally
disabled or if you otherwise qualify under the applicable
plan. To change the election of dividends or capital gains
distributions, send a written request to the IPS
Millennium Fund, 625 S. Gay Street, Suite 630,
Knoxville, TN 37902.
TAXES
All dividends and capital gains are taxable whether they
are reinvested or received in cash, unless you are exempt
from taxation or entitled to tax deferral. Each year
investors are notified of the federal tax status of all
dividends and capital gains paid during the prior year. It
is the Fund's intention to meet all requirements of
Subchapter M of the Internal Revenue Code, and to
distribute to its investors all, or substantially all, of its
taxable income as defined in the Code.
If you have not furnished a certified correct taxpayer
identification number (generally your Social Security
number) and have not certified that withholding does not
apply, or if the Internal Revenue Service has notified the
Fund that the taxpayer identification number listed on
your account is incorrect according to their records or
that you are subject to backup withholding, federal law
generally requires the Fund to withhold 31% from any
dividends and/or redemptions. Shareholders should be
aware that, under regulations promulgated by the Internal
Revenue Service, the Fund may be fined $50 annually for
each account for which a certified taxpayer identification
number is not provided. In the event that such a fine is
imposed with respect to a specific account in any year,
the Fund will make a corresponding charge against the
account.
Amounts withheld are applied to your federal tax liability;
a refund may be obtained from the Internal Revenue
Service if withholding results in overpayment of taxes.
Federal law also requires the Fund to withhold 30% or
the applicable tax treaty rate from dividends paid to
certain non-resident alien, non-U.S. partnership and non-U.S. corporation
shareholder accounts.
Shareholders are urged to consult their own tax advisors
regarding specific questions as to the federal, state or
local taxes and the tax effect of distributions and
withdrawals.
<PAGE>
OPERATIONS OF THE FUND
Board of Trustees
The Fund is a diversified series of IPS Funds, an open-end
management investment company organized as an Ohio
business trust on August 10, 1994. The Board of
Trustees of the Trust supervises the operations of the
Fund according to applicable state and federal law and is
responsible for the overall management of the Fund's
business affairs.
The Investment Advisor
IPS Advisory, Inc., 625 S. Gay Street, Suite 630,
Knoxville, TN 37902 is the investment advisor engaged
to supervise the operation of the Fund, to manage its
investments and business affairs, and provide investment
research for the Fund. The principals of the Advisor are
Greg D'Amico, President and Robert Loest, Ph.D., CFA,
Chief Executive Officer. Both have extensive experience
in equities analysis, having managed investment portfolios
for individual clients, including corporations and
retirement plans, on a full time basis since 1986.
The Advisor is under the supervisory control of Securities
Service Network, Inc. ("SSN"), located at 222 S. Peters
Road, Knoxville, TN 37923. SSN is a Securities and
Exchange Commission and Tennessee registered Broker-Dealer and Investment
Advisor, and exercises supervisory control of the Advisor through a
Consent & Guaranty letter and compliance guidelines established by SSN and
approved by the Securities Division of the State of
Tennessee. SSN also acts as the exclusive agent for
distribution of shares of the Fund.
Greg D'Amico and Robert Loest will be responsible for
the day to day management of the portfolio of the Fund.
Greg D'Amico is President, Trustee and Treasurer to the
Trust. Mr. D'Amico is President and a Director of the
Advisor. Robert Loest Ph.D., CFA, is Vice President,
Trustee and Secretary of the Trust. Mr. Loest is also
Chief Executive Officer and a Director of the Advisor.
Mr. D'Amico and Mr. Loest both are controlling persons
and may be deemed affiliates of the Advisor. Mr.
D'Amico and Mr. Loest are both securities
representatives with Securities Service Network, Inc.
(since 1986).
Advisor Compensation
The Fund has approved a Management Agreement with
the Advisor. Under the Management Agreement, the
Fund has agreed to compensate the Advisor for its
services by the payment of a monthly fee at the annual
rate of 1.40% of the average daily net assets of the Fund
to and including $100,000,000, 1.15% of the average
daily net assets of the Fund from $100,000,000 to and
including $250,000,000, and .90% of the average daily
net assets of the Fund in excess of $250,000,000. The
Advisor pays all of the expenses of the Fund except
brokerage, taxes, interest and extraordinary expenses.
The rate of the advisory fees paid by most investment
companies to their investment advisors is lower than the
rate of the advisory fees paid by the Fund. In this regard,
it should be noted that most investment companies pay
their own operating expenses directly, while the Fund's
expenses (except those specified above) are paid by the
Advisor.
<PAGE>
Shareholder Rights
Any Trustee of the Fund may be removed by vote of the
shareholders holding not less than two-thirds of the
outstanding shares of the Fund. The Fund does not hold
an annual meeting of shareholders. When matters are
submitted to shareholders for a vote, each shareholder is
entitled to one vote for each whole share owned and
fractional votes for fractional shares owned. All shares of
a Fund have equal voting rights and liquidation rights.
Prior to the offering made by this Prospectus, investment
advisory clients of Securities Service Network, Inc.
purchased for investment all of the outstanding shares of
the Fund. As a result, Securities Service Network, Inc.
may be deemed to control the Fund.
Shareholder Inquiries
Shareholders can make inquiries about the Fund or their
personal account by calling the Fund's Transfer Agent at
800-424-2295 or writing the Fund at the address listed on
the cover page.
Portfolio Transactions
The Advisor places all orders for the purchase and sale of
the Fund's securities. In selecting broker-dealers, the
Advisor may consider research and brokerage services
furnished to it and its affiliates. Consistent with the Rules
of Fair Practice of the National Association of Securities
Dealers, Inc. and subject to its objective of seeking best
qualitative execution of portfolio transactions, the
Advisor may consider sales of shares of the Fund in its
selection of broker-dealers. Securities Service Network,
Inc., which may be deemed to be an affiliate of the
Advisor, will place trades for the Fund through National
Financial Services Corporation (NFSC), a subsidiary of
the Fidelity companies and a member of the New York
Stock Exchange. The Statement of Additional
Information contains more information about the Fund's
brokerage practices.
Transfer Agent
The Provident Bank, One East Fourth Street, Cincinnati,
Ohio 45202 is the Fund's Transfer Agent. The Transfer
Agent performs shareholder service functions for a fee.
How The Fund Measures Its Performance
The Fund may periodically advertise "average annual total
return." The "average annual total return" of the Fund
refers to the average annual compounded rate of return
over the stated period that would equate an initial amount
invested at the beginning of a stated period to the ending
redeemable value of the investment. The calculation of
"average annual total return" assumes the reinvestment of
all dividends and distributions.
The Fund may also periodically advertise its total return
over various periods in addition to the value of a $10,000
investment (made on the date of the initial public offering
of the Fund's shares) as of the end of a specified period.
The "total return" for the Fund refers to the percentage
change in the value of an account between the beginning
and end of the stated period, assuming no activity in the
account other than reinvestment of dividends and capital
gains distributions.
The Fund may also include in advertisements data
comparing performance with other mutual funds as
reported in non-related investment media, published
editorial comments and performance rankings compiled
by independent organizations and publications that
monitor the performance of mutual funds (such as
Morningstar or Lipper Analytical Services). Performance
information may be quoted numerically, or may be
presented in a table, graph or other illustration. In
addition, Fund performance may be compared to well-known indices of market
performance including the Standard & Poor's (S&P) 500 Index, S&P MidCap 400
Index, S&P/BARRA Growth and Value Indices, the
Value Line Composite Index (GEOM), the NASDAQ
Composite Index, or the Dow Jones Industrial Average.
The Fund's annual report will contain additional
performance information that will be made available upon
request and without charge.
<PAGE>
Net Asset Value
Shares are purchased at the next offering price after the
order is received by the Fund. The net asset value is
determined at the close of the New York Stock Exchange
each day that the exchange is open. The current value of
the Fund's total assets, less all liabilities, divided by the
total number of shares outstanding rounded to the nearest
cent, is the net asset value per share.
Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last
quoted sale price of the day. Lacking a last sale price, a
security is valued at its last bid price except when, in the
Advisor's opinion, the last bid price does not accurately
reflect the current value of the security. All other
securities for which over-the-counter market quotations
are readily available are valued at their last bid price.
When market quotations are not readily available, when
the Advisor determines the last bid price does not
accurately reflect the current value or when restricted
securities are being valued, such securities are valued as
determined in good faith by the Advisor, in conformity
with guidelines adopted by and subject to review of the
Board of Trustees of the Fund.
Since the Fund does not impose any front end sales load
or redemption fee, both the purchase price and the
redemption price of a Fund share on any date will be
equal to the next calculated net asset value of a share.
How to Redeem or Sell Fund Shares
To redeem shares, send a letter of instruction to the
Transfer Agent, specifying the number of shares or dollar
amount to be sold, your name and your account number.
The Fund will buy back (redeem), at current net asset
value (no charge), all shares of the Fund offered for
redemption and meeting the requirements of this
Prospectus. The net asset value will be the next net asset
value determined after receipt of the request for
redemption. Payment will be made within seven days of
receipt of a valid redemption request.
Redemption requests should be sent to:
IPS Millennium Fund
c/o The Provident Bank
P.O. Box 14967
Cincinnati, Ohio 45250-0967
Requests for redemption by telephone will not be
accepted.
The written request for redemption must be signed by
each registered owner exactly as the shares are registered.
A signature guarantee is required for any withdrawal
which is over $50,000, or which is mailed to another
address that is not the address of record. Signature
guarantees are available at any bank or financial
institution. The signature guarantee is used to protect
shareholders from the possibility of fraudulent application
for redemption.
Payment for shares redeemed will be made by check after
receipt by the transfer agent of the properly executed
redemption request and any outstanding certificates for
the shares to be redeemed. If shares are purchased with a
check, redemption within the first fifteen days may be
delayed until the check clears. A shareholder wishing to
redeem proceeds through wire redemption will be
charged $10 toward his or her account.
To keep Fund share expenses to a minimum, the Fund is
authorized to redeem accounts that fall below $2,000, or
such other minimum amount as the Fund may determine
from time to time. Redemption will only occur when the
account is reduced by redemptions and not by a decline in
market value. The account holder will be notified 60 days
in advance before an account is redeemed. An
involuntary redemption constitutes a sale. You should
consult your tax advisor concerning the tax consequences
of involuntary redemptions. To prevent redemption, an
account can be increased by contributing additional funds
to bring it over the account minimum. Each share of the
Fund is subject to redemption at any time if the Board of
Trustees determines in its sole discretion that failure to so
redeem may have materially adverse consequences to all
or any of the shareholders of the Fund.
<PAGE>
Systematic Withdrawals
Accounts valued at $10,000 or above, using the current
net asset value, are eligible for normal distributions under
a systematic withdrawal program. Setting up a
Systematic Withdrawal Program allows investors to
withdraw a fixed sum each month or calendar quarter.
The minimum amount that can be withdrawn each month
or quarter under the Systematic Withdraw Program is
$250. This program may be terminated by a shareholder
or the Fund at any time without charge or penalty, and
will become effective five business days following receipt
of shareholder instructions. A withdrawal under the
Systematic Withdrawal Program involves a redemption of
shares, and may result in a gain or loss for federal income
tax purposes. In addition, if the amount withdrawn
exceeds the dividends credited to the shareholder's
account, the account ultimately may be depleted.
Retirement Plans
The Fund offers several tax qualified retirement plans for
adoption by individuals and employers. The following
plans are available: IRA, Simplified Employee Pension
Plans, 403(b) plans, and 401(K) corporate profit-sharing
retirement plans. Contributions to these plans are tax-deductible
and earnings are tax exempt until distributed.
When investing in a retirement plan, you should consult
with a tax advisor to determine which plan is best for
your situation. To receive all the necessary information
on fees, plan agreements and applications, contact the
Advisor at 625 S. Gay Street, Suite 630, Knoxville, TN
37902 or call 1-615-524-1676.
<PAGE>
<PAGE>
<PAGE>
IPS MILLENNIUM FUND
PART B
STATEMENT OF ADDITIONAL INFORMATION
March 29, 1996
This Statement of Additional Information is not a
prospectus, but should be read in conjunction with the
current Prospectus, dated December 5, 1994, of IPS
Millennium Fund as supplemented through March 29,
1996. The Prospectus may be obtained by writing to the
Fund at the following address:
IPS MILLENNIUM FUND
TWO CENTER SQUARE
625 S. GAY STREET, SUITE 630
KNOXVILLE, TN 37902
Shareholder Services: 615-524-1676
<PAGE>
TABLE OF CONTENTS
Page
General Information and History. . . . . . . . . . . . . . . . . . . 1
U.S. Government Securities . . . . . . . . . . . . . . . . . . . . . 2
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . . . 2
Fundamental . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Borrowing Money. . . . . . . . . . . . . . . . . . . . . . . 2
Senior Securities. . . . . . . . . . . . . . . . . . . . . . 2
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . 2
Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . 3
Commodities. . . . . . . . . . . . . . . . . . . . . . . . . 3
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Concentration. . . . . . . . . . . . . . . . . . . . . . . . 3
Non-Fundamental . . . . . . . . . . . . . . . . . . . . . . . . . 3
Pledging . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Margin Purchases . . . . . . . . . . . . . . . . . . . . . . 4
Short Sales. . . . . . . . . . . . . . . . . . . . . . . . . 4
Options. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Illiquid Investments . . . . . . . . . . . . . . . . . . . . 4
Fund Trustees and Officers . . . . . . . . . . . . . . . . . . . . . 4
The Investment Advisor and Underwriter . . . . . . . . . . . . . . . 5
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . 6
Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Independent Accountants . . . . . . . . . . . . . . . . . . . . . . 7
Portfolio Transactions and Brokerage . . . . . . . . . . . . . . . . 7
Net Asset Value. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
<PAGE>
General Information and History
IPS Funds (the "Trust") is an open-end investment
company established under the laws of Ohio by an
Agreement and Declaration of Trust dated August 10,
1994 (the "Trust Agreement"). The Trust Agreement
permits the Trustees to issue an unlimited number of
shares of beneficial interest of separate series without par
value. Shares of one series have been authorized, which
shares constitute the interests in the IPS Millennium Fund
series (the "Fund").
Each share of a series represents an equal proportionate
interest in the assets and liabilities belonging to that series
with each other share of that series and is entitled to such
dividends and distributions out of income belonging to the
series as are declared by the Trustees. The shares do not
have cumulative voting rights or any preemptive or
conversion rights, and the Trustees have the authority
from time to time to divide or combine the shares of any
series into a greater or lesser number of shares of that
series so long as the proportionate beneficial interest in
the assets belonging to that series and the rights of shares
of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series
being liquidated will be entitled to receive as a class a
distribution out of the assets, net of the liabilities,
belonging to that series. Expenses attributable to any
series are borne by that series. Any general expenses of
the Trust not readily identifiable as belonging to a
particular series are allocated by or under the direction of
the Trustees in such manner as the Trustees determine to
be fair and equitable. No shareholder is liable to further
calls or to assessment by the Trust without his or her
express consent.
If at least ten shareholders (the "Petitioning
Shareholders") wish to obtain signatures to request a
meeting for the purpose of voting upon removal of any
Trustee of the Trust, they may make a written application
to the Trust requesting to communicate with other
shareholders. The Petitioning Shareholders must hold in
the aggregate at least 1% of the shares then outstanding
or shares then having a net asset value of $25,000,
whichever is less, and each Petitioning Shareholder must
have been a shareholder for at least six months prior to
the date of the application. The application must be
accompanied by the form of communication which the
shareholders wish to transmit. Within five business days
after receipt of the application, the Trust will (a) provide
the Petitioning Shareholders with access to a list of the
names and addresses of all shareholders of the Trust; or
(b) inform the Petitioning Shareholders of the
approximate number of shareholders and the estimated
costs of mailing such communication, and undertake such
mailing promptly after tender by the Petitioning
Shareholders to the Trust of the material to be mailed and
the reasonable expenses of such mailing. The Trustees
will promptly call a meeting for the purpose of voting
upon the question of removal of any Trustee when
requested in writing to do so by the record holders of not
less than 10% of the outstanding shares.
Upon sixty days prior written notice to shareholders, the
Fund may make redemption payments in whole or in part
in securities or other property if the Trustees determine
that existing conditions make cash payments undesirable.
For other information concerning the purchase and
redemption of shares of the Fund, see "How to Purchase
Fund Shares" and "How to Redeem or Sell Fund Shares"
in the Prospectus. For a description of the methods used
to determine the share price and value of the Fund's
assets, see "Net Asset Value" in the Prospectus.
<PAGE>
<PAGE>
U.S. Government Securities
U.S. government securities may be backed by the credit
of the government as a whole or only by the issuing
agency. U.S. Treasury bonds, notes, and bills and some
agency securities, such as those issued by the Federal
Housing Administration and the Government National
Mortgage Association (GNMA), are backed by the full
faith and credit of the U.S. government as to payment of
principal and interest and are the highest quality
government securities. Other securities issued by U.S.
government agencies or instrumentalities, such as
securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are
supported only by the credit of the agency that issued
them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land
Banks, and the Federal National Mortgage Association
(FNMA) are supported by the agency's right to borrow
money from the U.S. Treasury under certain
circumstances, but are not backed by the full faith and
credit of the U.S. government.
Investment Restrictions
Fundamental. The investment limitations
described below have been adopted by the Fund and are
fundamental ("Fundamental"), i.e., they may not be
changed without the affirmative vote of a majority of the
outstanding shares of the Fund. As used in the
Prospectus and this Statement of Additional Information,
the term "majority" of the outstanding shares of the Fund
means the lesser of (1) 67% or more of the outstanding
shares of the Fund present at a meeting, if the holders of
more than 50% of the outstanding shares of the Fund are
present or represented at such meeting; or (2) more than
50% of the outstanding shares of the Fund. Other
investment practices which may be changed by the Board
of Trustees without the approval of shareholders to the
extent permitted by applicable law, regulation or
regulatory policy are considered non-fundamental ("Non-Fundamental").
1. Borrowing Money. The Fund will not borrow
money, except (a) from a bank, provided that immediately
after such borrowing there is an asset coverage of 300%
for all borrowings of the Fund; or (b) from a bank or
other persons for temporary purposes only, provided that
such temporary borrowings are in an amount not
exceeding 5% of the Fund's total assets at the time when
the borrowing is made. This limitation does not preclude
the Fund from entering into reverse repurchase
transactions, provided that the Fund has an asset
coverage of 300% for all borrowings and repurchase
commitments of the Fund pursuant to reverse repurchase
transactions.
2. Senior Securities. The Fund will not issue
senior securities. This limitation is not applicable to
activities that may be deemed to involve the issuance or
sale of a senior security by the Fund, provided that the
Fund's engagement in such activities is (a) consistent with
or permitted by the Investment Company Act of 1940, as
amended, the rules and regulations promulgated
thereunder or interpretations of the Securities and
Exchange Commission or its staff and (b) as described in
the Prospectus and this Statement of Additional
Information.
3. Underwriting. The Fund will not act as
underwriter of securities issued by other persons. This
limitation is not applicable to the extent that, in
connection with the disposition of portfolio securities
(including restricted securities), the Fund may be deemed
an underwriter under certain federal securities laws.
<PAGE>
4. Real Estate. The Fund will not purchase or
sell real estate. This limitation is not applicable to
investments in marketable securities which are secured by
or represent interests in real estate. This limitation does
not preclude the Fund from investing in mortgage-backed
securities or investing in companies engaged in the real
estate business.
5. Commodities. The Fund will not purchase or
sell commodities unless acquired as a result of ownership
of securities or other investments.
6. Loans. The Fund will not make loans to other
persons, except (a) by loaning portfolio securities, (b) by
engaging in repurchase agreements, or (c) by purchasing
nonpublicly offered debt securities. For purposes of this
limitation, the term "loans" shall not include the purchase
of a portion of an issue of publicly distributed bonds,
debentures or other securities.
7. Concentration. The Fund will not invest 25%
or more of its total assets in a particular industry. This
limitation is not applicable to investments in obligations
issued or guaranteed by the U.S. government, its agencies
and instrumentalities or repurchase agreements with
respect thereto.
With respect to the percentages adopted by the
Fund as maximum limitations on its investment policies
and limitations, an excess above the fixed percentage due
to growth will not be a violation of the policy or
limitation unless the excess results immediately and
directly from the acquisition of any security or the action
taken. This paragraph does not apply to the borrowing
policy set forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations,
any investment company, whether organized as a trust,
association or corporation, or a personal holding
company, may be merged or consolidated with or
acquired by the Fund, provided that if such merger,
consolidation or acquisition results in an investment in the
securities of any issuer prohibited by said paragraphs, the
Fund shall, within ninety days after the consummation of
such merger, consolidation or acquisition, dispose of all
of the securities of such issuer so acquired or such portion
thereof as shall bring the total investment therein within
the limitations imposed by said paragraphs above as of the
date of consummation.
Non-Fundamental. The Fund intends to adhere to
the following limitations, which are Non-Fundamental
(see "Investment Restrictions-Fundamental" above).
1. Pledging. The Fund will not mortgage, pledge,
hypothecate or in any manner transfer, as security for
indebtedness, any assets of the Fund except as may be
necessary in connection with borrowings described in
limitation (1) above. Margin deposits, security interests,
liens and collateral arrangements with respect to
transactions involving options, futures contracts, short
sales and other permitted investments and techniques are
not deemed to be a mortgage, pledge or hypothecation of
assets for purposes of this limitation.
2. Borrowing. The Fund will not enter into
reverse repurchase agreements. The Fund will not
purchase any security while borrowings (including reverse
repurchase agreements) representing more than 5% of its
total assets are outstanding.
<PAGE>
3. Margin Purchases. The Fund will not purchase
securities or evidences of interest thereon on "margin."
This limitation is not applicable to short term credit
obtained by the Fund for the clearance of purchases and
sales or redemption of securities, or to arrangements with
respect to transactions involving permitted investments
and techniques.
4. Short Sales. The Fund will not effect short
sales of securities unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities
sold short.
5. Options. The Fund will not purchase or sell
put or call options.
6. Illiquid Investments. The Fund will not invest
more than 15% of its net assets in securities for which
there are legal or contractual restrictions on resale and
other illiquid securities.
Fund Trustees and Officers
The Trustees and executive officers of the Trust
and their principal occupations during the last five years
are set forth below. Each Trustee who is an "interested
person" of the Trust, as defined in the Investment
Company Act of 1940, is indicated by an asterisk.
NAME AND ADDRESS POSITIONS HELD
*Greg D'Amico President, Chief Financial
625 S. Gay Street, Suite 630 Officer, Treasurer and Trustee
Knoxville, TN 37902
Robert Loest Vise President, Secretary and Trustee
625 S. Gay Street, Suite 630
Knoxville, TN 37902
Woodrow Henderson Trustee
6504 Clary Lane
Knoxville, TN 37919
Veenita Bisaria Trustee
12416 Fort West Drive
Knoxville, TN 37922
Billy Wayne Stegall, Jr. Trustee
309 Kingston Court
Knoxville, TN 37919
Mr. D'Amico is also President of IPS Advisory, Inc., Vice
President of Investment Planning Services, Inc., and a
portfolio manager for individually managed accounts as a
registered representative of Securities Service Network,
Inc.
Mr. Loest is also Chief Executive Officer of IPS
Advisory, Inc., President of Investment Planning Services
Inc., and a senior portfolio manager and research analyst
for individually managed accounts as a registered
representative of Securities Service Network, Inc. Mr.
Loest is a Chartered Financial Analyst and has a Ph.D. in
Biology.
<PAGE>
Mr. Henderson is also Director of Planned Giving for the
University of Tennessee at Knoxville.
Ms. Bisaria is also Program Manager for Defense
Programs and is a Chartered Financial Analyst (CFA).
Mr. Stegall is also a teacher of history and economics at
Austin East High School in Knoxville, Tennessee.
The compensation paid to the Trustees of the
Trust for the fiscal year ended November 30, 1995 is set
forth in the following table:
<TABLE>
Aggregate Compensation Total Compensation
From Trust from Trust (the trust
is not in a Fund Complex)
<S> <C> <C>
Name
Greg D'Amico 0 0
Robert Loest 0 0
Woodrow Henderson 0 0
Veenita Bisaria 0 0
Billy Wayne Stegall, Jr 0 0
<FN>
1 Trustee fees are Trust expenses. However,
because the management agreement obligates that
Adviser to pay all of the operating expenses of the Trust
(with limited exceptions), the Adviser makes the actual
payment.
</FN>
</TABLE>
As of December 31, 1995, the following persons each
owned 5% or more of the outstanding shares of the Fund:
Apple Discount Drug Defined Benefit, Tom Bright
Trustee, 512 Clinch Avenue, Clinton, Tennessee 37716 -- 5.36%; and Thomas
Lombarto, 33356 N.E. Pacific Street, Portland, Oregon 97232 -- 5.21%.
As of December 31, 1995, the Trustees and Officers of
the Trust, as a group, beneficially owned 2.98% of the
outstanding shares of the Fund.
The Investment Advisor and Underwriter
IPS Advisory, Inc. (the "Advisor"), 625 S. Gay St., Suite
630, Knoxville, TN 37902, is the investment advisor for
the Fund. Greg D'Amico and Robert Loest may be
deemed to be controlling persons and affiliates of the
Advisor due to their ownership of its shares and their
positions as directors and officers of the Advisor.
Because of such affiliation, they may receive benefits from
the management fees paid to the Advisor. Mr. D'Amico
and Mr. Loest are also principals of Investment Planning
Services Inc. ("IPS"), which provides investment research
to them for their use as registered representatives of
Securities Service Network, Inc. The Fund retains the
Advisor to manage the business affairs of the Fund, and
to furnish advice and recommendations to the Fund
regarding securities to be purchased and sold by the Fund.
<PAGE>
Securities Service Network, Inc., 222 S. Peters Road,
Knoxville, TN 37923 (the "Underwriter") is the exclusive
agent for distribution of shares of the Fund. The
Underwriter is a registered investment advisor and
securities broker-dealer. The Underwriter is obligated to
sell the shares of the Fund on a best efforts basis only
against purchase orders for the shares. Shares of the
Fund are offered to the public on a continuous basis. The
Underwriter exerts supervisory control over the Advisor
through a Consent & Guaranty Letter, and by means of
specialized compliance procedures approved by the
Securities Division of the Tennessee Department of
Commerce and Insurance.
The Advisor is staffed by experienced investment
professionals with extensive experience in company
analysis, and who have been officers of IPS since 1986.
Analysis is performed in-house for all core portfolio
companies, using a variety of proprietary, fundamental
analytical methods.
Under the terms of the Management Agreement, the
Advisor manages the Fund's investment subject to
approval of the Board of Trustees and pays all of the
expenses of the Fund except brokerage, taxes, interest
and extraordinary expenses. As compensation for its
management services and agreement to pay the Fund's
expenses, the Fund is obligated to pay the Advisor a fee
computed and accrued daily and paid monthly at an
annual rate of 1.40% of its average daily net assets to and
including $100,000,000, 1.15% of such assets from
$100,000,000 to and including $250,000,000, and .90%
of such assets in excess of $250,000,000. For the period
from January 1, 1995, the Fund's inception, through
November 30, 1995, the Fund paid fees of $9,923 to the
Advisor.
The Advisor retains the right to use the names "IPS" and
"Millennium" in connection with another investment
company or business enterprise with which the Advisor is
or may become associated. The Fund's right to use the
names "IPS" and "Millennium" automatically ceases thirty
days after termination of the Management Agreement and
may be withdrawn by the Advisor on thirty days written
notice.
The Advisor may make payments to banks or other
financial institutions that provide shareholder services and
administer shareholder accounts. The Glass-Steagall Act
prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although
the scope of this prohibition under the Glass-Steagall Act
has not been clearly defined by the courts or appropriate
regulatory agencies, management of the Fund believes
that the Glass-Steagall Act should not preclude a bank
from providing such services. However, state securities
laws on this issue may differ from the interpretations of
federal law expressed herein and banks and financial
institutions may be required to register as dealers
pursuant to state law. If a bank were prohibited from
continuing to perform all or a part of such services,
management of the Fund believes that there would be no
material impact on the Fund or its shareholders. Banks
may charge their customers fees for offering these
services to the extent permitted by applicable regulatory
authorities, and the overall return to those shareholders
availing themselves of the bank services will be lower
than to those shareholders who do not. The Fund may
from time to time purchase securities issued by banks
which provide such services; however, in selecting
investments for the Fund, no preference will be shown for
such securities.
<PAGE>
Dividends, Distributions and Taxes
It is the Fund's intention to meet all requirements of
Subchapter M of the Internal Revenue Code, and to
distribute to its investors all, or substantially all, of its
taxable income as defined in the Internal Revenue Code.
Under Subchapter M, the Fund will be taxed only on that
portion of such investment company taxable income that
it retains.
Dividends generally are taxable to shareholders at the
time they are paid. However, dividends declared in
December and made payable to shareholders of record in
the following month are treated as paid and are thereby
taxable as of December 31, provided that the Fund pays
the dividend no later than the end of January of the
following year.
Investors who do not elect to receive their dividends and
distributions in cash, can reinvest all income dividends
and capital gains distributions as additional Fund shares.
If reinvested automatically, the additional shares will be
purchased at the net asset value determined on the first
business day following the record date.
All dividends and capital gains are taxable, whether they
are reinvested or received in cash, unless investors are
exempt from taxation or entitled to tax deferral. Each
year investors are notified of the federal tax status of all
dividends and capital gains paid during the prior year.
Dividends and capital gains distributions may also be
subject to state or local taxes. Shareholders should
consult their tax advisors to discuss their personal tax
situation.
Transfer Agent
The Fund's Transfer Agent is The Provident Bank, One
East Fourth Street, Cincinnati, Ohio 45202. The
Transfer Agent performs shareholder service functions
such as maintaining the records of each shareholder's
account, answering shareholders' inquiries concerning
their accounts, processing purchase and redemptions of
the Fund's shares, acting as dividend and distribution
disbursing agent and performing other accounting and
shareholder service functions.
Custodian
The Provident Bank, One East Fourth Street, Cincinnati,
Ohio 45202, is the Custodian of the Fund's investments.
The Custodian acts as the Fund's depository, safekeeps its
portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the
Fund's request and maintains records in connection with
its duties.
Independent Accountants
The independent accounting firm for the Fund is Cherry
Bekaert & Holland, Certified Public Accountants, located
at 625 S. Gay Street, Suite 550, Knoxville, TN 37902.
Cherry Bekaert & Holland performs an annual audit of
the Trust's financial statements and provides financial, tax
and accounting consulting services as requested.
Portfolio Transactions and Brokerage
Subject to policies established by the Board of Trustees of
the Fund, the Advisor is responsible for the Fund's
portfolio decisions and the placing of the Fund's portfolio
transactions.
<PAGE>
In placing portfolio transactions, the
Advisor seeks the best qualitative execution for the Fund,
taking into account such factors as price (including the
applicable brokerage commission or dealer spread), the
execution capability, financial responsibility and
responsiveness of the broker or dealer and the brokerage
and research services provided by the broker or dealer.
The Advisor generally seeks favorable prices and
commission rates that are reasonable in relation to the
benefits received.
The Advisor is specifically authorized to select brokers or
dealers who also provide brokerage and research services
to the Trust and/or the other accounts over which the
Advisor exercises investment discretion and to pay such
brokers or dealers a commission in excess of the
commission another broker or dealer would charge if the
Advisor determines in good faith that the commission is
reasonable in relation to the value of the brokerage and
research services provided. The determination may be
viewed in terms of a particular transaction or the
Advisor's overall responsibilities with respect to the Trust
and to other accounts over which it exercises investment
discretion.
Research services include supplemental research,
securities and economic analyses, statistical services and
information with respect to the availability of securities or
purchasers or sellers of securities and analyses of reports
concerning performance of accounts. The research
services and other information furnished by brokers
through whom the Fund effects securities transactions
may also be used by principals of the Advisor in servicing
all of their accounts. Similarly, research and information
provided by brokers or dealers serving other clients may
be useful to principals of the Advisor in connection with
the Advisor's services to the Fund. Although research
services and other information are useful to the Fund and
the Advisor, it is not possible to place a dollar value on
the research and other information received. It is the
opinion of the Board of Trustees and the Advisor that the
review and study of the research and other information
will not reduce the overall cost to the Advisor of
performing its duties to the Fund under the Agreement.
While the Fund does not deem it practicable and in its
best interests to solicit competitive bids for commission
rates on each transaction, consideration is regularly given
to posted commission rates as well as other information
concerning the level of commissions charged on
comparable transactions by qualified brokers.
The Fund has no obligation to deal with any broker or
dealer in the execution of its transactions. However, it is
contemplated that the Underwriter, in its capacity as a
registered broker-dealer, will effect substantially all
securities transactions which are executed on a national
securities exchange and over-the-counter transactions
conducted on an agency basis. Such transactions will be
executed at competitive commission rates through
National Financial Services Corporation ("NFSC").
Transactions in the over-the-counter market can be
placed directly with market makers who act as principals
for their own account and include mark-ups in the prices
charged for over-the-counter securities. Transactions in
the over-the-counter market can also be placed with
broker-dealers who act as agents and charge brokerage
commissions for effecting over-the-counter transactions.
The Fund may place its over-the-counter transactions
either directly with principal market makers, or with
broker-dealers if that is consistent with the Advisor's
obligation to obtain best qualitative execution. Under the
Investment Company Act of 1940, persons who may be
deemed to be affiliated with the Advisor such as the
Underwriter are prohibited from dealing with the Fund as
a principal in the purchase and sale of securities.
Therefore, the Underwriter will not serve as the Fund's
dealer in connection with over-the-counter transactions.
However, the Underwriter may serve as the Fund's broker
in over-the-counter transactions conducted on an agency
basis and will receive brokerage commissions in
connection with such transactions. Such agency
transactions will be executed through NFSC.
<PAGE>
The Fund will not effect any brokerage transactions in its
portfolio securities with the Underwriter if such
transactions would be unfair or unreasonable to Fund
shareholders, and the commissions will be paid solely for
the execution of trades and not for any other services.
The Underwriting Agreement provides that the
Underwriter may receive brokerage commissions in
connection with effecting such transactions for the Fund.
In determining the commissions to be paid to the
Underwriter, it is the policy of the Fund that such
commissions will, in the judgment of the Fund's Board of
Trustees, be (a) at least as favorable to the Fund as those
which would be charged by other qualified brokers having
comparable execution capability and (b) at least as
favorable to the Fund as commissions contemporaneously
charged by the Underwriter on comparable transactions
for its most favored unaffiliated customers, except for
customers of the Underwriter considered by a majority of
the Trust's disinterested Trustees not to be comparable to
the Fund. The disinterested Trustees from time to time
review, among other things, information relating to the
commissions charged by the Underwriter to the Fund and
its other customers, and rates and other information
concerning the commissions charged by other qualified
brokers.
Any profits from brokerage commissions earned by the
Underwriter as a result of portfolio transactions for the
Fund will accrue to Greg D'Amico and Robert Loest as
registered representatives of the Underwriter. The
Agreement does not provide for a reduction of the
Advisor's fee by the amount of any profits earned by the
Underwriter from brokerage commissions generated from
portfolio transactions of the Fund.
While the Fund contemplates no ongoing arrangements
with any other brokerage firms, brokerage business may
be given from time to time to other firms. The
Underwriter will not receive reciprocal brokerage
business as a result of the brokerage business placed by
the Fund with others.
To the extent that the Fund and another of the Advisor's
clients seek to acquire the same security at about the
same time, the Fund may not be able to acquire as large a
position in such security as it desires or it may have to pay
a higher price for the security. Similarly, the Fund may
not be able to obtain as large an execution of an order to
sell or as high a price for any particular portfolio security
if the other client desires to sell the same portfolio
security at the same time. On the other hand, if the same
securities are bought or sold at the same time by more
than one client, the resulting participation in volume
transactions could produce better executions for the
Fund. In the event that more than one client wants to
purchase or sell the same security on a given date, the
purchases and sales will normally be allocated on a
random selection basis.
For the fiscal year ended November 30, 1995, the Fund
paid brokerage commissions of $5,251 to Securities
Service Network, Inc. for effecting 100% of the Fund's
commission transactions.
Net Asset Value
Shares of the Fund are purchased at the next offering
price after the order is received. The offering price is
effective for orders received by the transfer agent or the
Custodian prior to the time of determination of the net
asset value prior to the close of business.
<PAGE>
The net asset value is determined at the close of the New York Stock
Exchange each day that the exchange is open. The
Exchange is closed on weekends and on New Years Day,
President's Day, Good Friday, Memorial Day, July 4,
Labor Day, Thanksgiving Day, and Christmas each year.
Securities traded on the New York Stock Exchange, the
American Stock Exchange, or the NASDAQ National
Market System are valued at the last sale price or the last
bid price if there is no sale. Securities or other assets for
which quotations are not readily available are valued at
fair values determined in good faith by the Board of
Trustees. See "Net Asset Value" in the Prospectus.
Performance
The average annual total return that will be reported by
the Fund will be calculated according to the following
formula:
P(1+T)n = ERV
Where: P is a hypothetical initial Payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of hypothetical
$1,000
payment made at the beginning of the 1, 5, or 10
year periods (or fractional portion thereof).
All total return figures reflect the deduction of a
proportional share of Fund expenses on an annual basis,
and assume that all dividends and distributions are
reinvested in the Fund when paid.
From time to time, in advertisements, sales literature and
information furnished to present or prospective
shareholders, the performance of the Fund may be
compared to indices of broad groups of unmanaged
securities considered to be representative of or similar to
the portfolio holdings of the Fund or considered to be
representative of the stock market in general or the fixed
income securities market in general. The Fund may use
the Standard & Poor's 500 Stock Index, the Dow Jones
Industrial Average, the Value Line Composite Average,
and the NASDAQ Composite Index, as well as other
appropriate indexes.
In addition, the performance of the Fund may be
compared to other groups of mutual funds tracked by any
widely used independent research firm which ranks
mutual funds by overall performance, investment
objectives and assets, such as Lipper Analytical Services,
Inc. or Morningstar, Inc. The objectives, policies,
limitations and expenses of other mutual funds in a group
may not be the same as those of the Fund. Performance
rankings and ratings reported periodically in national
financial publications such as Barron's may also be used.
The average annual total return for the Fund for the
period ended November 30, 1995 was 25.13%.
<PAGE>
<PAGE>
CHERRY, BEKAERT & HOLLAND
IPS Millennium Fund
Financial Statements
for year ended
November 30, 1995
<PAGE>
<PAGE>
IPS Millennium Fund
Contents
Page
Report of Independent Certified Public Accountants 1
Statement of Assets and Liabilities 2
Investments in Securities 3-4
Statement of Operations 5
Statement of Changes in Net Assets 6
Notes to Financial Statements 7-8
Supplementary Information 9
<PAGE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Shareholders and the Board of Trustees
IPS Funds
IPS Millennium Fund
Knoxville, Tennessee
We have audited the accompanying statement of assets
and liabilities of IPS Millennium Fund, including the
schedule for investments in securities, as of November
30, 1995, and the related statement of operations, the
statement of changes in net assets and the selected
per share data and ratios for the year then ended.
These financial statements and per share data and
ratios are the responsibility of the Fund's
management. Our responsibility is to express an
opinion on these financial statements and per share
data and ratios based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements and per share data and ratios are free of
material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our
procedures included confirmation of securities owned
as of November 30, 1995, by correspondence with the
custodian and brokers. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and selected
per share data and ratios referred to above present
fairly, in all material respects, the financial
position of IPS Millennium Fund as of November 30,
1995, the results of its operations, its cash flows,
the changes in its net assets and the selected per
share data and ratios for the year then ended, in
conformity with generally accepted accounting
principles.
Knoxville, Tennessee
January 17, 1996
<PAGE>
<TABLE>
IPS MILLENNIUM FUND
Statement of Assets and Liabilities
November 30, 1995
<S> <C>
Assets
Investments in securities, at value -
identified cost $1,593,898 $1,773,283
Cash ( 2,149)
Accrued income
Dividends 1,920
Interest 682
Other assets 13,829
Total assets 1,787,565
Liabilities
Payables - Investment securities
purchased 159,125
Accrued expenses 2,840
Total liabilities 161,965
Net assets(equivalent to $15.00
per share based on 108,344.903
shares of capital stock outstanding) $ 1,625,600
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
<TABLE>
IPS MILLENNIUM FUND
Investments in Securities
For the year ended November 30, 1995
Principal
Amount or
Shares Value
<S>
Industrial Cyclicals - 5.5% <C> <C>
Fastenal Co. 1,200 $ 49,800
Federal Signal 1,200 27,300
Sturm Ruger & Co., Inc. 700 20,475
Total industrial cyclicals 3,100 97,575
Consumer Retail - 6.2%
Nature's Sunshine Prods 600 13,500
Polaris Industries 1,350 41,513
Viking Office Products 1,200 55,200
Total consumer retail 3,150 110,213
Computer & Interest Hardware - 13.6%
Atmel Corp. 700 21,000
Cisco 700 58,887
Intel, Inc. 1,200 73,050
Linear Technology 600 27,150
Motorola, Inc. 1,000 61,250
Total computer &
interest hardware 4,200 241,337
Property/Casualty Insurance - 6.0%
Frontier Insurance Group 1,900 63,175
Harleysville Group 1,500 44,062
Total property/
casualty insurance 3,400 107,237
Banking & Brokerage - 12.7%
Corestates Financial 900 34,875
KeyCorp 800 29,500
Marshall & Ilsley 1,500 39,563
Mercury Finance Co. 2,200 31,350
Nat'l Commerce Bankcorp 1,100 28,325
Northwest Corp. 700 23,100
U.S. Bancorp 400 13,550
Valley National Bankcorp 1,000 24,625
Total banking & brokerage 8,600 224,888
Specialty Chemical - 4.8%
International Flavors 200 10,225
Ionics, Inc. 600 25,950
Sigma-Aldrich 1,000 49,250
Total specialty chemical 1,800 85,425
Communications - 9.2%
Airtouch Communications 800 23,300
Andrew 1,000 43,250
AT&T Corp. 600 39,600
LCI International 1,200 22,200
Psinet Inc. 1,600 33,800
Total communications 5,200 162,150
<PAGE>
4
</TABLE>
<PAGE>
<TABLE>
IPS MILLENNIUM FUND
Investments in Securities(continued)
For the year ended November 30, 1995
<S> <S>
Principal
Amount or Shares Value
<S>
Information & Service - 7.2% <C> <C>
Equifax 600 $25,125
H&R Block, Inc. 700 31,150
Rollins, Inc. 1,400 29,050
Rural/Metro, Inc. 1,735 42,508
Total information & service 4,435 27,833
Software - 11.1%
Computer Associates, Inc. 800 52,400
Microsoft Corp. 600 52,275
Netmanage 1,000 22,625
Oracle Systems 1,400 63,525
Physicians Comp Net 800 5,300
Total software 4,600 196,125
Drugs - 6.9%
Abbott Laboratories, Inc. 800 32,500
Johnson & Johnson 100 8,662
Mylan Lab 2,500 58,438
Pfizer, Inc. 400 23,200
Total drugs 3,800 122,800
Real Estate Investment Trust - 2.5%
New Plan Realty Trust 2,100 44,100
Electric Utilities - 1.4%
Duke Power 300 13,462
Wisconsin Energy 400 11,800
Total electric utilities 700 25,262
Money Market Funds - 12.9%
Dreyfus Treasury Prime Fund 76,474 76,474
Provident Insured Money 75,932 75,932
Riverfront U.S.
Govt Securities 75,932 75,932
Total money market funds 228,338 228,338
$ 1,773,283
</TABLE>
See notes to financial statements.<PAGE>
<PAGE>
<TABLE>
IPS MILLENNIUM FUND
Statement of Operations
For the year ending November 30, 1995
<S> <C>
Investment income:
Income
Dividend income 13,071
Interest 4,725
Total income 17,796
Expenses:
Management fees 9,932
Expense reimbursement ( 2,949)
Organizational cost 2,940
Total expense 9,923
Net investment income 7,873
Realized & unrealized gain (loss) on investments
Net realized gain on investments 15,391
Change in unrealized appreciation
of investments for the year 179,385
Net gain (loss) on investments 194,776
Net increase in net assets
resulting from operations $ 202,649
See notes to financial statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
IPS MILLENNIUM FUND
Statement of Changes in Net Assets
For the year ending November 30, 1995
<S> <C>
Increase (decrease) in net assets
from operations
Investment income-net $ 7,873
Net realized gain on investments 15,391
Change in unrealized appreciation 179,385
Net increase in net assets resulting
from operations 202,649
Distributions to shareholders from-
Investment income-net ( 7,010)
Capital share transactions
Issued-regular 1,448,251
Issued-in lieu of cash distributions 7,063
Redeemed-regular ( 25,353)
Increase (decrease) in net
assets due to capital share
transactions 1,429,961
Net assets
Beginning of year -
End of year $ 1,625,600
</TABLE>
See notes to financial statements.<PAGE>
<PAGE>
IPS MILLENNIUM FUND
Notes to Financial Statements
November 30, 1995
Note 1 - Significant accounting policies
The Company is registered under the Investment Company
Act of 1940 as a diversified, open-end management
investment company. The company began selling shares
and making investments on January 4, 1995.
Security valuation - Investments in securities
traded on a national securities exchange (or reported
on the NASDAQ national market) are stated at the last
reported sales price on the day of valuation; other
securities traded in the over-the-counter market and
listed securities for which no sale was reported on
that date are stated at the last quoted bid price.
Short-term notes are stated at amortized cost, which
is equivalent to value.
Federal income taxes - The Fund's policy is to
comply with the requirements of the Internal Revenue
Code that are applicable to regulated investment
companies and to distribute all its taxable income to
its shareholders. Therefore, no federal income tax
provision is required.
As of November 30, 1995, net unrealized appreciation
on investments for book and federal income tax
purposes aggregated $179,385. The cost of portfolio
securities for book and federal income tax purposes
was $1,593,898 at November 30, 1995.
Distributions to shareholders - Dividends to
shareholders are recorded on the ex-dividend date.
Other - The Fund follows industry practice and
records security transactions on the trade date for
performance calculations and the trade date plus one
for fund accounting. Dividend income is recognized on
the ex-dividend date, and interest income is
recognized on an accrual basis. Discounts and
premiums on securities purchased are amortized over
the life of the respective securities.
Note 2 - Distributions to shareholders
Distributions were paid as follows for 1995: April 26
was the record date for an income distribution on
April 27 of $0.0526 per share, aggregating $2,069.87;
July 27 was the record date for an income distribution
of $0.0413 per share on July 28, aggregating
$2,697.71; October 30 was the record date for an
income distribution of $0.0225 per share on October
31, aggregating $2,243.24. This income will be
taxable to shareholders as ordinary income.
Note 3 - Organizational expenses
The Fund has incurred organizational expenses in the
amount of $16,218. Organizational expenses are being
amortized monthly over a period of 60 months,
beginning on January 1, 1995. The balance outstanding
on November 30, 1995 is $12,733.
<PAGE>
<PAGE>
IPS Millennium Fund
Notes to Financial Statements(continued)
November 30, 1995
Note 4 - Capital share transactions
As of November 30, 1995, there were an unlimited
number of shares of no par value capital stock
authorized and capital paid in aggregated $1,429,961.
Transactions in capital stock were as follows:
<TABLE>
Shares Amount
<S> <C> <C>
Shares sold 109,910.579 $1,448,251
Shares issued in reinvestment
of dividends 512.742 7,063
110,423.321 1 ,455,314
Shares redeemed 2,078.418 25,353
Net increase 108,344.903 $1,429,961
</TABLE>
Note 5 - Investment transactions
The Fund made purchases and sales of investment
securities (excluding short-term securities) of
$1,547,888 and $197,719, respectively during the
period January 1, 1995 through November 30, 1995;
purchases of U.S. Government obligations were
$38,982. There was no net loss on investments for the
period.
As of November 30, 1995, the unrealized appreciation
of securities was $179,385; accumulated undistributed
net realized gains on investment transactions totaled
$15,391.
Note 6 - Investment advisory fees and other
transactions with affiliates
The Fund pays advisory fees for investment management
and advisory services under a management agreement
with IPS Advisory, Inc.(the Advisor) Under the
agreement, the advisor will pay all of the Fund's
operating expenses, excluding brokerage fees and
commissions, taxes, interest and extraordinary
expenses. The Fund is obligated to pay the Advisor a
fee computed and accrued daily and paid monthly at an
annual rate of 1.40% of its average daily net assets
to and including $100,000,000, 1.15% of such assets
from $100,000,000 to and including $250,000,000, and
0.90% of such assets in excess of $250,000,000.
Certain officers and trustees of the Fund are also
officers and directors of the investment advisor.
Securities Service Network, Inc.(SSNI), the Fund's
underwriter has received no income from sales
commissions earned on sales of the Fund shares, since
it is a no-load fund. Mr. D'Amico and Mr. Loest are
registered representatives of SSNI.
All securities trades for the Fund have been made
through SSNI. Mr. D'Amico and Mr. Loest as registered
representatives of SSNI, receive benefits from
commissions paid by the Fund to SSNI.
<PAGE>
<PAGE>
<TABLE>
IPS MILLENNIUM FUND
Supplementary Information
Selected Per Share Data and Ratios
For the year ended November 30, 1995
<S> <C>
Per share data
Investment Income $0.273
Expenses 0.152
Net Investment income 0.121
Net realized and unrealized gain
(loss) on investments 2.982
Total income (loss) from investment
operations 3.103
Dividends from net investment income 0.107
Net asset value:
Beginning of year 12.000
End of year $14.996
Total return 25.13%
<S> <C>
Ratios
Net assets, end of period(thousands) 1625.6
Ratio of expenses to
average net assets 1.4%
Ratio of net income to average
net assets 1.0%
Portfolio turnover rate 26.7%
</TABLE>
See notes to financial statements.<PAGE>
<PAGE>
<PAGE>
IPS FUNDS
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A: Financial Highlights, December 1,
1994 through November 30, 1995
Included in Part B:
(1) Report of Independent Public Accountant
(2) Schedule of Investments - November 30, 1995
(3) Statement of Assets and Liabilities - November
30, 1995
(4) Statement of Operations - November 30, 1995
(5) Statement of Changes in Net Assets - November
30, 1995
(6) Financial Highlights - December 1, 1994 through
November 30, 1995
(7) Notes to Financial Statements
(b) Exhibits
(1) (i) Copy of Registrant's Declaration of
Trust, which was filed as an Exhibit to
Registrant's Registration Statement, is
hereby incorporated by reference.
(ii) Copy of Amendment No. 1 to Registrant's
Declaration of Trust, which was filed as
an exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated
by reference.
(2) Copy of Registrant's By-Laws, as amended, which
was filed as an exhibit to Registrant's Pre-Effective Amendment No. 1,
is hereby incorporated by reference.
(3) Voting Trust Agreements - None.
(4) Specimen of Share Certificate for IPS
Millennium Fund, which was filed as an exhibit
to Registrant's Pre-Effective Amendment No. 1,
is hereby incorporated by reference.
<PAGE>
(5) Copy of Registrant's Management Agreement with
its Advisor, IPS Advisory, Inc., which was
filed as an exhibit to Registrant's Pre-Effective Amendment No. 1,
is hereby incorporated by reference.
(6) Copy of Registrant's Underwriting Agreement
with Securities Service Network, Inc., which
was filed as an exhibit to Registrant's Pre-Effective Amendment No. 1,
is hereby incorporated by reference.
(7) Bonus, Profit Sharing, Pension or Similar
Contracts for the benefit of Directors or
Officers - None.
(8) Copy of Registrant's Agreement with the
Custodian, The Provident Bank, which was filed
as an exhibit to Registrant's Pre-Effective
Amendment No. 1, is hereby incorporated by
reference.
(9) Other Material Contracts - None.
(10) Opinion and Consent of Brown, Cummins & Brown
Co., L.P.A., which was filed with Registrant's
Rule 24f-2 Notice for the fiscal year ended
November 30, 1995, is hereby incorporated by
reference.
(11) Consent of Cherry, Bekaert & Holland is filed
herewith.
(12) Financial Statements Omitted from Item 23 -
None.
(13) Letters of Initial Stockholders, which was
filed as an exhibit to Registrant's Pre-Effective Amendment No. 1, is
hereby incorporated by reference.
(14) Model Plan used in Establishment of any
Retirement Plan - None.
(15) 12b-1 Distribution Expense Plan - None.
(16) Schedule for Computation of Each Performance
Quotation is filed herewith.
(17) Power of Attorney - None
Item 25. Persons Controlled by or Under Common
Control with the Registrant - None
<PAGE>
Item 26. Number of Holders of Securities (as of
December 31, 1995)
Title of Class Number of Record Holders
IPS Millennium Fund 121
Item 27. Indemnification
(a) Article VI of the Registrant's Declaration of
Trust provides for indemnification of officers
and Trustees as follows:
Section 6.4 Indemnification of
Trustees, Officers, etc. Subject to and
except as otherwise provided in the
Securities Act of 1933, as amended, and
the 1940 Act, the Trust shall indemnify
each of its Trustees and officers
(including persons who serve at the
Trust's request as directors, officers
or trustees of another organization in
which the Trust has any interest as a
shareholder, creditor or otherwise
(hereinafter referred to as a "Covered
Person") against all liabilities,
including but not limited to amounts
paid in satisfaction of judgments, in
compromise or as fines and penalties,
and expenses, including reasonable
accountants' and counsel fees, incurred
by any Covered Person in connection with
the defense or disposition of any
action, suit or other proceeding,
whether civil or criminal, before any
court or administrative or legislative
body, in which such Covered Person may
be or may have been involved as a party
or otherwise or with which such person
may be or may have been threatened,
while in office or thereafter, by reason
of being or having been such a Trustee
or officer, director or trustee, and
except that no Covered Person shall be
indemnified against any liability to the
Trust or its Shareholders to which such
Covered Person would otherwise be
subject by reason of willful
misfeasance, bad faith, gross negligence
or reckless disregard of the duties
involved in the conduct of such Covered
Person's office.
Section 6.5 Advances of
Expenses. The Trust shall advance
attorneys' fees or other expenses
incurred by a Covered Person in
defending a proceeding to the full
<PAGE>
extent permitted by the Securities Act
of 1933, as amended, the 1940 Act, and
Ohio Revised Code Chapter 1707, as
amended. In the event any of these laws
conflict with Ohio Revised Code Section
1701.13(E), as amended, these laws, and
not Ohio Revised Code Section
1701.13(E), shall govern.
Section 6.6 Indemnification Not
Exclusive, etc. The right of
indemnification provided by this Article
VI shall not be exclusive of or affect
any other rights to which any such
Covered Person may be entitled. As used
in this Article VI, "Covered Person"
shall include such person's heirs,
executors and administrators. Nothing
contained in this article shall affect
any rights to indemnification to which
personnel of the Trust, other than
Trustees and officers, and other persons
may be entitled by contract or otherwise
under law, nor the power of the Trust to
purchase and maintain liability
insurance on behalf of any such person.
The Registrant may not pay for insurance which
protects the Trustees and officers against liabilities
rising from action involving willful misfeasance, bad
faith, gross negligence or reckless disregard of the
duties involved in the conduct of their offices.
(b) The Registrant may maintain a standard mutual
fund and investment advisory professional and
directors and officers liability policy. The
policy, if maintained, would provide coverage
to the Registrant, its Trustees and officers,
and its Advisor, among others. Coverage under
the policy would include losses by reason of
any act, error, omission, misstatement,
misleading statement, neglect or breach of
duty.
(c) 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
provisions of Ohio law and the Agreement and
Declaration of the Registrant or the By-Laws of
the Registrant, or otherwise, the Registrant
has been advised that in the opinion of the
Securities and Exchange Commission such
<PAGE<
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 Trust 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.
(d) Sections 10 and 11 of the Registrant's
Underwriting Agreement with Securities Service
Network, Inc. (the "Underwriter") provide for
indemnification of the Underwriter and the
Underwriter's employees as well as advances of
attorney's fees and other expenses. The scope
and limitations of these provisions are
analogous to Sections 6.4 and 6.5 of the
Registrant's Declaration of Trust, set forth in
Item 27(a) of this Part C.
Item 28. Business and Other Connections of
Investment Advisor
A. IPS Advisory, Inc. (the "Advisor") is a
registered investment advisor. It has engaged
in no other business during the past two fiscal
years.
B. The following list sets forth the business and
other connections of the Directors and officers
of the Advisor during the past two years.
(1) Gregory D'Amico
(a) President and a Director
of IPS Advisory, Inc.,
Suite 630, 625 South Gay
Street, Knoxville,
Tennessee 37902.
(b) President, Chief Financial
Officer, Treasurer and a
Trustee of IPS Funds,
Suite 630, 625 South Gay
Street, Knoxville,
Tennessee 37902.
(c) Registered representative
of Securities Service
Network, Inc., 222 S.
Peters Road, Knoxville,
Tennessee 37923.
<PAGE>
(2) Robert Loest
(a) Chief Executive Officer
and a Director of IPS
Advisory, Inc., Suite 630,
625 South Gay Street,
Knoxville, Tennessee
37902.
(b) Vice President, Secretary
and a Trustee of IPS
Funds, Suite 630, 625
South Gay Street,
Knoxville, Tennessee
37902.
(c) Registered representative
of Securities Service
Network, Inc., 222 S.
Peters Road, Knoxville,
Tennessee 37923.
Item 29. Principal Underwriters
(a) Securities Service Network, Inc. does not
currently act as a principal underwriter for any other
investment company.
(b)
Position With Position With
Name Underwriter Registrant
Carl President
Hollingsworth and Director None
Laura Secretary
Coffey and Director None
Michael E. Executive Vice
Neubeck President None
Carl
Hollinsworth Treasurer None
David Coffey Director None
The address of all of the above-named persons is 222
S. Peters Road, Knoxville, Tennessee 37923.
Item 30. Location of Accounts and Records
Accounts, books and other documents
required to be maintained by Section
31(a) of the Investment Company Act of
1940 and the Rules promulgated
thereunder will be maintained by the
Registrant at Suite 630, 625 South Gay
Street, Knoxville, Tennessee 37902,
and/or by The Provident Bank, the
Registrant's Custodian at One East
Fourth Street, Cincinnati, Ohio 45202.
Item 31. Management Services Not Discussed in
Parts A or B
None.
<PAGE>
Item 32. Undertakings
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to
furnish each person to whom a Prospectus
is delivered with a copy of the
Registrant's latest annual report to
shareholders, upon request and without
charge.
(d) The Registrant hereby undertakes that,
within five business days after receipt
of a written application by shareholders
holding in the aggregate at least 1% of
the shares then outstanding or shares
then having a net asset value of
$25,000, whichever is less, each of whom
shall have been a shareholder for at
least six months prior to the date of
application (hereinafter the
"Petitioning Shareholders"), requesting
to communicate with other shareholders
with a view to obtaining signatures to
a request for a meeting for the purpose
of voting upon such removal of any
Trustee of the Registrant, which
application shall be accompanied by a
form of communication and request which
such Petitioning Shareholders wish to
transmit, Registrant will:
(i) provide such Petitioning
Shareholders with access to a
list of the names and addresses
of all shareholders of the
Registrant; or
(ii) inform such Petitioning Shareholders of the approximate
number of shareholders and the estimated costs of mailing
such communication, and to undertake such mailing promptly
after tender by such Petitioning Shareholders to the
Registrant of the material to be mailed and the reasonable
expenses of such mailing.
The Registrant also undertakes to promptly call
a meeting for the purpose of voting upon the
question of the removal of any Trustee when
requested in writing to do so by the record
holders of not less than 10% of the outstanding
shares.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933 and the Investment Company Act of 1940,
the Registrant has duly caused this Registration
Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of
Knoxville, State of Tennessee, on the 29 day of
January, 1996.
IPS FUNDS
By: \s\
Gregory D'Amico, President
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been
signed below by the following persons in the
capacities and on the dates indicated.
_\s\_________________________ Date: 1/25/96
Gregory D'Amico, President
Chief Financial Officer
Treasurer and Trustee
_\s\_________________________ Date: 1/25/96
Robert Loest, Trustee
___________________________ Date: ________
Woodrow Henderson, Trustee
___________________________ Date: ________
Vanita Bisaria, Trustee
_\s\_______________________ Date: 1/25/96
Bill Stegall, Trustee<PAGE>
<PAGE>
EXHIBIT INDEX
PAGE
1. Consent of Cherry, Bekaert & Holland. . . . . . . . . . . . 1
2. Schedule for Computation of Performance
Quotation . . . . . . . . . . . . . . . . . . . . . . . . 2
<PAGE>
<PAGE>
EXHIBIT 1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants for IPS
Funds, we hereby consent to all references to our
Firm included in or made a part of this Post-Effective Amendment No. 2 to
the IPS Funds' Registration Statement.
CHERRY, BEKAERT & HOLLAND, L.L.P.
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November 30, 1995
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EXIBIT 2
STOCK FUND AVERAGE ANNUAL TOTAL RETURN CALCULATION
$1,000 (1 + T).915 = $1,230
T = 25.13%
The .915 consist of 334 days of the year.
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