<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FILE NO. 811-8816
ON JUNE 13, 1996 FILE NO. 33-85196
- --------------------------------------------------------------------------------
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. 1 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. 2 /X/
---------------------
MILLENNIUM INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
c/o MILLENNIUM FINANCIAL LLC
10814 Bull Valley Road
Woodstock, Illinois 60098
(Address of Principal Executive Offices, Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (815) 338-3442
Copies to:
JANIS S. ENGLAND CATHY G. O'KELLY
c/o MILLENNIUM FINANCIAL LLC VEDDER, PRICE, KAUFMAN & KAMMHOLZ
10814 Bull Valley Road 222 North LaSalle Street, Suite 2600
Woodstock, Illinois 60098 Chicago, Illinois 60601
(Name and Address of Agent for Service)
________________________________________________________________________________
Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, an indefinite number of units of beneficial interest have been
registered. No Rule 24f-2 Notice was filed for the fiscal year ended
September 30, 1995 as no shares were sold pursuant to such election.
It is proposed that this filing will become effective (check appropriate box)
/X/ immediately upon filing pursuant to paragraph (b); or
/ / on (date) pursuant to paragraph (b); or
/ / 60 days after filing pursuant to paragraph (a)(1); or
/ / on (date) pursuant to paragraph (a)(1); or
/ / 75 days after filing pursuant to paragraph (a)(2); or
/ / on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE> 2
MILLENNIUM INCOME TRUST
CROSS REFERENCE SHEET
N-1A ITEM NO. LOCATION
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PART A -
Item 1. Cover Page Cover Page
Item 2. Synopsis Expense Information
Item 3. Condensed Financial Information Financial Highlights;
Performance Information
Item 4. General Description of Registrant Designed for States and
Municipalities;
Investment Objective;
Investment Policies;
Description of Shares
Item 5. Management of the Fund Board of Trustees and
Officers; Operation of
the Fund
Item 5A. Management's Discussion of Fund *
Performance
Item 6. Capital Stock and Other Securities Dividends; Operation of
the Fund; Description of
Shares; Taxes; Quick
Reference Guide
Item 7. Purchase of Securities Being Offered Business Day; Net Asset
Value; Purchase of
Shares; Operation of the
Fund
Item 8. Redemption or Repurchase Redemption of Shares
Item 9. Pending Legal Proceedings *
<PAGE> 3
PART B -
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History *
Item 13. Investment Objectives and Policies Investment Policies;
Investment Limitations
Item 14. Management of the Fund Trustees and Officers
Item 15. Control Persons and Principal [Prospectus - Operation of
Holders of Securities
the Fund]
Item 16. Investment Advisory and Other Investment Management;
Services Transfer and Shareholder
Service Agent; Custodian;
Independent Public
Accountants
Item 17. Brokerage Allocation and Securities Transactions
Other Practices
Item 18. Capital Stock and Other Securities The Trust
Item 19. Purchase, Redemption, and Pricing Net Asset Value;
of Securities Being Offered Redemption in Kind
Item 20. Tax Status Taxes
Item 21. Underwriters Distributor
Item 22. Calculation of Performance Data Historical Performance
Information
Item 23. Financial Statements Financial Statements
PART C -
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
__________________
* Not applicable
<PAGE> 4
Prospectus June 12, 1996
TREASURERS' GOVERNMENT MONEY MARKET FUND
A PORTFOLIO OF MILLENNIUM INCOME TRUST
- ----------------------------------------
DESIGNED FOR STATES AND MUNICIPALITIES - The Treasurers' Government Money
Market Fund (the "Fund") is designed exclusively for states, municipalities,
school districts and other governmental and institutional investors and their
employee benefit plans that seek high current income consistent with protection
of capital.
- ----------------------------------------
INVESTMENTS - The Fund invests in obligations issued or guaranteed as to
principal and interest by the United States Government, its agencies or
instrumentalities with original or remaining maturities of one year or less.
THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U. S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER ENTITY, AND IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE FUND SEEKS TO MAINTAIN, BUT DOES NOT GUARANTEE,
A CONSTANT NET ASSET VALUE OF $1.00 PER SHARE.
This prospectus sets forth concisely information about the Fund that you should
know before investing. Please keep it for future reference. A Statement of
Additional Information dated June 12, 1996 has been filed with the Securities
and Exchange Commission and is hereby incorporated by reference. A copy may be
obtained without charge by writing to the Fund at 10814 Bull Valley Road,
Woodstock, IL 60098.
- --------------------------------------------------------------------------------
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> 5
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Financial highlights 3
Designed for States and Municipalities 3
Investment Objective & Policies 3
Business Day 5
Net Asset Value 5
Dividends 6
Purchase of Shares 6
Redemption of Shares 8
Sub-Accounting Services 9
Board of Trustees 9
Operation of the Fund 10
Description of Shares 11
Taxes 11
Performance Information 11
EXPENSE INFORMATION
- --------------------------------------------------------------------------------
INVESTOR TRANSACTION EXPENSES ......................... NONE
ANNUAL FUND OPERATING EXPENSES after reimbursement (as a percentage of
average net assets)
Management Fees .25%
12b-1 Fees NONE
Other Expenses .15%
Total Fund Operating Expenses................ .40%
- --------------------------------------------------------------------------------
Example: You would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return and (2) redemption at the end of
each time period:
1 YEAR 3 YEARS
------ -------
$4 $12
- --------------------------------------------------------------------------------
In order to prevent total fund operating expenses from exceeding .40% of the
average daily net asset value of the Fund the Investment Adviser has agreed to
waive all or a portion of its management fees or reimburse certain expenses of
the Fund through 9/30/96. Without the fee waiver and expense reimbursement the
Fund's other expenses for the period from 10/2/95 (commencement of operations)
to 3/31/96 would have been 10.79% annualized and total operating expenses would
have been 11.04% annualized. 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. The Example is hypothetical and
included solely for illustrative purposes. It should not be considered a
representation of future performance; actual expenses may be greater or less
than those shown. Please note $1,000 is less than the Fund's minimum
investment requirement.
2
<PAGE> 6
<TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR PERIOD FROM 10/2/95 (COMMENCEMENT OF OPERATIONS) TO 3/31/96
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------
<S> <C>
Net asset value at beginning of period $ 1.00
--------
Net investment income .027
Distributions from net investment income (.027)
Net asset value at end of period $ 1.00
========
Total Return (Annualized) 5.44%
======
RATIOS NET OF EXPENSES WAIVED OR ABSORBED BY ADVISER (ANNUALIZED)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.00%
Ratio of net investment income to average net assets 5.44%
RATIOS ASSUMING NO FEE WAIVERS OR ABSORPTION OF EXPENSES (ANNUALIZED)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 11.04%
Ratio of net investment income to average net assets -5.60%
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets at end of period $102,735
</TABLE>
DESIGNED FOR STATES AND MUNICIPALITIES
- --------------------------------------------------------------------------------
Treasurers' Government Money Market Fund is designed exclusively for states,
municipalities, school districts and other governmental and institutional
investors and their employee benefit plans that seek an economical and
convenient means for the investment of short-term funds. The Fund offers
sub-accounting and custom reporting services to assist these institutions in
meeting their unique requirements.
INVESTMENT OBJECTIVE & POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is to seek high current income, consistent
with protection of capital. The Fund pursues its objective by investing
exclusively in obligations issued or guaranteed as to principal and interest by
the United States Government, its agencies or instrumentalities ("U.S.
Government obligations"), and repurchase agreements collateralized by such
U. S. Government obligations. All securities purchased mature within 12 months
or less and the Fund maintains a weighted average portfolio maturity of 90 days
or less. Except where otherwise indicated all investment policies, practices
and limitations of the Fund are non-fundamental which means they may be changed
by the Board of Trustees (the "Trustees") without shareholder approval. There
can be no assurance that the investment objective of the Fund will be achieved.
The following is a discussion of the various investments and policies of the
Fund.
U.S. Government obligations include securities which are issued or guaranteed
by the United States Treasury, by various agencies of the United States
Government, and by various instrumentalities which have been established or
sponsored by the United States Government. U. S. Treasury obligations are
backed by
3
<PAGE> 7
the "full faith and credit" of the United States Government. Other
U. S. Government obligations may not be backed by the "full faith and credit"
of the United States. In the case of securities not backed by the "full faith
and credit" of the United States, the investor must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the United States in the event the agency
or instrumentality does not meet its commitments.
United States Treasury obligations ("U. S. Treasuries") include Treasury bills,
Treasury notes, and Treasury bonds. U. S. Treasuries also include the separate
principal and interest components of U. S. Treasuries which are traded under
the Separate Trading of Registered Interest and Principal of Securities
("STRIPS") program. Government agencies which issue or guarantee securities
backed by the "full faith and credit" of the United States include the
Government National Mortgage Association, the Student Loan Marketing
Association and the Small Business Administration. Government agencies and
instrumentalities which issue or guarantee securities not backed by the "full
faith and credit" of the United States include the Federal Farm Credit Banks,
the Federal Home Loan Banks, the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, the Federal Land Bank, the Bank for
Cooperatives, the Federal Intermediate Credit Bank, the Federal Financing Bank,
the Resolution Funding Corporation, the Financing Corporation of America and
the Tennessee Valley Authority.
The Fund may invest in securities issued or guaranteed by any of the entities
listed above or by any other agency or instrumentality established or sponsored
by the United States Government, provided that the securities are otherwise
permissible investments of the Fund. Certain U. S. Government obligations
which have a variable rate of interest readjusted no less frequently than
annually will be deemed to have a maturity equal to the period remaining until
the next readjustment of the interest rate.
The Fund, notwithstanding any other investment policy or limitation may invest
all of its assets in the securities or shares of beneficial interests of a
single pooled investment entity having substantially the same objectives,
policies and limitations as the Fund.
The Fund's yield will fluctuate due to changes in interest rates, economic
conditions, quality ratings and other factors. The prepayment experience of
the mortgages underlying mortgage-related securities, such as obligations
issued by the Government National Mortgage Association, may affect the value
of, and return on, an investment in such securities.
ADDITIONAL POLICY. As a matter of policy, the Fund will not invest in certain
derivative securities. The Fund will not invest in the types of derivative
securities that are prohibited for investment by money market funds subject to
Rule 2a-7 under the Investment Company Act of 1940, such as inverse floaters,
leveraged floaters, CMT floaters, range floaters, capped floaters, COFI
floaters, and dual index floaters. Additionally, the Fund will not invest in
securities which the Investment Manager believes involve risks inappropriate
for the Fund, including collateralized mortgage obligations (CMO's), Interest
Only securities (IO's), and Principal Only securities (PO's), except the Fund
may invest in STRIPS.
OTHER INVESTMENT TECHNIQUES
The Fund may also engage in the following investment techniques, each of which
may involve certain risks:
REPURCHASE AGREEMENTS. Repurchase agreements are transactions by which the
Fund purchases a security and simultaneously commits to resell that security to
the seller at an agreed upon time and price, thereby determining the yield
during the term of the agreement. In the event of a bankruptcy or other
default of the seller of a repurchases agreement, the Fund could experience
both delays in liquidating the underlying security and losses. To minimize
these possibilities, the Fund intends to enter in repurchase agreements only
with its Custodian, banks having assets in excess of $10 billion and primary
U.S. Government securities dealers. The Fund may only enter into repurchase
agreements fully collateralized by U.S. Government obligations. Collateral for
repurchase agreements is held in safekeeping in the customer-only account of
the
4
<PAGE> 8
Fund's Custodian at the Federal Reserve Bank. At the time the Fund enters
into a repurchase agreement, the value of the collateral, including accrued
interest, will equal or exceed the value of the repurchase agreement and, in
the case of a repurchase agreement exceeding one day, the seller agrees to
maintain sufficient collateral so that the value of the underlying collateral,
including accrued interest, will at all times equal or exceed the value of the
repurchase agreement. Although the securities subject to the repurchase
agreement might bear maturities exceeding one year, settlement for the
repurchase would never be more than one year after the Fund's acquisition of
the securities and normally would be within a shorter period of time. The Fund
will not enter into a repurchase agreement not terminable within seven business
days if, as a result thereof, more than 10% of the value of the net assets of
the Fund would be invested in such securities and other illiquid securities.
DELAYED SETTLEMENT TRANSACTIONS. The Fund may trade securities on a
"when-issued" or "to-be-announced" basis. Obligations issued on a when-issued
basis are settled by delivery and payment after the date of the transaction
usually within 15 to 45 days. In a to-be-announced transaction, the Fund has
committed to purchasing or selling securities for which all specific
information is not yet known at the time of the trade, particularly the face
amount in transactions involving mortgage-related securities. The Fund will
only make commitments to purchase obligations on a when-issued or
to-be-announced basis with the intention of actually acquiring the obligations,
but the Fund may sell these securities before the settlement date if it is
deemed advisable as a matter of investment strategy or in order to meet its
obligations, although it would not normally expect to do so. The Fund intends
to invest less than 5% of its net assets in securities purchased on this basis,
and the Fund will not enter into a delayed settlement transaction which settles
in more than 120 days.
LENDING PORTFOLIO SECURITIES. The Fund may make short-term loans of its
portfolio securities to banks, brokers and dealers. Lending portfolio
securities exposes the Fund to the risk that the borrower may fail to return
the loaned securities, may not be able to provide additional collateral or that
the Fund may experience delays in recovery of the loaned securities or loss of
rights in the collateral if the borrower fails financially. To minimize these
risks, the borrower must agree to maintain collateral marked to market daily,
in the form of cash or U.S. Government obligations, with the Fund's Custodian
in an amount at least equal to the market value of the loaned securities. The
Fund will limit the amount of its loans of portfolio securities to no more than
25% of its net assets. This lending policy is fundamental and may not be
changed without the affirmative vote of a majority of its outstanding shares.
BORROWING AND PLEDGING. The Fund may borrow money from banks (provided there
is 300% asset coverage) or other persons (in an amount not exceeding 5% of its
total assets) for temporary purposes. The Fund may pledge assets in connection
with borrowings but the Fund will not pledge more than one-third of its assets.
The Fund will not make any additional purchases of portfolio securities if
outstanding borrowings exceed 5% of the value of its total assets. The Fund's
policies on borrowing and pledging are fundamental policies which may not be
changed without the affirmative vote of a majority of its outstanding shares.
Additional information about the investment policies of the Fund appears in the
Statement of Additional Information under "Investment Policies" and "Investment
Limitations".
BUSINESS DAY
- --------------------------------------------------------------------------------
A Business Day means any day on which the New York Stock Exchange is open,
except for days on which Cincinnati or New York banks are closed for local
holidays.
NET ASSET VALUE
- --------------------------------------------------------------------------------
On each day the Fund is open for business, Net Asset Value ("NAV"), the price
of the Fund's shares, is determined as of 11:30 a.m. and 3:00 p.m. Chicago
time. The NAV per share of the Fund is calculated by dividing the sum of the
value of the securities held by the Fund plus cash or other assets minus all
liabilities
5
<PAGE> 9
(including estimated accrued expenses) by the total number of
shares outstanding of the Fund, rounded to the nearest cent.
The Fund's securities are valued on an amortized cost basis. In connection
with the use of the amortized cost method of valuation, the Fund maintains a
dollar-weighted average portfolio maturity of 90 days or less, purchases only
United States dollar-denominated securities have remaining maturities of one
year or less and invests only in securities determined by the Trustees to meet
the Fund's quality standards and to present minimal credit risks. Other assets
of the Fund are valued at their fair value as determined in good faith in
accordance with consistently applied procedures established by and under the
general supervision of the Trustees. It is anticipated, but there is no
assurance, that the Fund's use of the amortized cost method of valuation will
enable it to maintain a stable NAV per share of $1.
DIVIDENDS
- --------------------------------------------------------------------------------
Substantially all of the Fund's net investment income will be declared daily
(as of 3 p.m. Chicago time) as a dividend and distributed to shareholders
monthly. Distributions will be automatically reinvested in additional shares
of the Fund unless the shareholder elects to receive them in cash. The
election to reinvest dividends and distributions or receive them in cash can be
changed at any time upon written notice to Millennium Financial LLC ("MFL") the
Fund's investment manager and transfer agent. Dividends will be reinvested and
cash distributions will be paid on or about the first Business Day of each
month. The Fund will distribute at least annually substantially all of the
short-term and long-term capital gains in excess of available capital losses,
if any, which it realizes on disposition of securities. Although realized
gains and losses on the assets of the Fund are reflected in the net asset value
of the Fund, they are not expected to be of an amount which would affect the
Fund's net asset value of $1.00 per unit.
The Fund's net investment income consists of the excess of (i) accrued interest
or discount (including both original issue and market discount) on all
portfolio securities, and (ii) any income of the Fund from sources other than
capital gains over (iii) the amortization of market premium on all portfolio
securities and (iv) the estimated expenses of the Fund, including a
proportionate share of the general expenses of the Trust, if any.
PURCHASE OF SHARES
- --------------------------------------------------------------------------------
Fund shares are purchased at the NAV without the imposition of a sales charge.
The Fund seeks to be fully invested at all times in order to achieve maximum
income. Since it will be investing in instruments that normally require
immediate payment in Federal Funds, the Fund has adopted procedures for the
convenience of its shareholders and to ensure that it receives investable
funds. All phone numbers and addresses are included in the "Quick Reference
Guide" at the end of this prospectus.
Shares of the Fund may be purchased on any Business Day at the NAV next
determined after receipt of a purchase request. A purchase request is
considered an effective purchase order only when the transfer agent is notified
that Federal Funds have been credited to the Fund on the same day. Purchase
requests for which Federal Funds are not received will be rejected. Fund
shares are deemed to have been purchased and are entitled to dividends on Fund
shares purchased as follows:
- --------------------------------------------------------------------------------
PURCHASE REQUEST RECEIVED BY TRANSFER AGENT |AND FEDERAL FUNDS RECEIVED THE
|SAME DAY
- --------------------------------------------------------------------------------
By: 11:30 a.m.-Chicago time |Dividends Begin: Same Business Day
After: 11:30 a.m.-Chicago time |Dividends Begin: Next Business Day
- --------------------------------------------------------------------------------
The minimum initial investment in the Fund is $100,000. There is no minimum
amount required for subsequent investments. The Fund and MFL each reserves the
right to waive or change the minimum initial
6
<PAGE> 10
and subsequent investment requirements at any time for any reason. The
Fund will not issue certificates representing Fund shares. MFL will maintain a
complete record of transactions and Fund shares held in each shareholder's
account.
INITIAL INVESTMENT
When you are ready to make your initial investment call MFL and a Fund
Representative will ask you the name, address, and tax I.D. number of the
entity in whose name you want the account to be registered. You will be given
an account number and any detailed instructions you may need. The Fund
representative will also ask for the amount of the investment and the name and
address of the financial institution that will be wiring the investment to the
Fund. Then have your financial institution wire Federal Funds to the Fund's
Custodian. You will then need to complete, sign, and return the Account
Information Form immediately to MFL. Of course you may send your Account
Information Form in advance. If you do not have a form one can be Faxed to
you. No redemption will be permitted until the signed Account Information Form
is on file with MFL as described under "Redemption of Shares".
ADDITIONAL INVESTMENTS BY WIRE
The investor is responsible for providing prior telephonic or facsimile notice
of the purchase request to MFL. A purchase request for wire investment is
considered effective only when MFL is notified that the bank wire has been
credited to the Fund on the same day. To purchase additional shares of the
Fund call or fax the account name, account number and the amount of the
investment to MFL. Then have your financial institution wire Federal Funds to
the Fund's Custodian.
ADDITIONAL INVESTMENTS BY MAIL
Investing by mail is not recommended since delays in delivery may delay
your investment and you will not be certain of the actual date the Fund will
receive it. Purchase requests by mail are effected at the net asset value next
determined after receipt of the purchase request and the conversion to Federal
Funds.
Purchases of Fund shares may be made by delivering a Federal Reserve draft or
check payable to the Fund and drawn on a U.S. bank to the Fund's Custodian. Be
sure to include the name in which the account is registered and the shareholder
account number. It is expected that Federal Reserve drafts will ordinarily be
converted to Federal Funds on the day of receipt however checks must be
converted to Federal Funds which normally takes up to two Business Days after
receipt. Fund shares purchased by check may not be redeemed until the check
has cleared as described under "Redemption of Shares".
PURCHASE BY ACH TRANSFERS
Purchase of shares may also be made through an Automated Clearing House ("ACH")
transfer to Treasurers' Government Money Market Fund c/o the Fund's Custodian.
Purchase orders are effected at the net asset value next determined after
receipt of the purchase request and the conversion to Federal Funds. It is
expected that ACH transfers will ordinarily be converted to Federal Funds on
the Business Day following receipt of the ACH transfer.
SHAREHOLDER SERVICE FIRMS
MFL may have agreements with other firms ("Firms") to provide services to
shareholders. Such Firms may provide varying arrangements for their clients
with respect to the purchase and redemption of shares and may arrange with
their clients for other investment or administrative services. Some Firms are
responsible for the prompt transmission of purchase requests, Federal Funds
wires, and redemption requests. Some Firms may establish higher minimum
investment requirements than set forth above and may independently establish
and charge additional amounts to their clients for their services, which
charges would reduce their clients' yield or return. Some Firms may also hold
Fund shares in nominee or street name as agent for and on behalf of their
clients. In such instances, MFL will have no information with respect to or
control over the accounts of specific shareholders and shareholders utilizing
such Firm's services may obtain access to
7
<PAGE> 11
their accounts and information about their accounts only from their
Firm. Certain of these Firms may receive compensation through MFL for
record-keeping and other expenses relating to their accounts. See "Operation
of the Fund". This prospectus should be read in connection with such Firm's
material regarding its fees and services.
The Fund, MFL, and the Distributor each reserves the right to reject any
purchase request for any reason.
REDEMPTION OF SHARES
- --------------------------------------------------------------------------------
You can access all or part of your account by selling (redeeming) shares
without charge upon request on any Business Day at the NAV next determined
after receipt of the redemption request. Fund shares are redeemed and entitled
to proceeds and dividends in accordance with the following.
- --------------------------------------------------------------------------------
REDEMPTION REQUEST RECEIVED | REDEMPTION PROCEEDS |
BY TRANSFER AGENT | ORDINARILY | EFFECT ON DIVIDENDS
- --------------------------------------------------------------------------------
By: 11:30 a.m.-Chicago time | Wired Same Business Day | Not earned on
| | the day request is
| | received
After: 11:30 a.m.-Chicago | Wired Next Business Day | Earned on the day
time | | the request is
| | received
- --------------------------------------------------------------------------------
To redeem shares follow one of the methods described below.
REDEMPTIONS BY PHONE
Redemption requests may be made by telephoning or faxing the account name,
account number and the amount of the redemption to MFL. MFL may establish
further identification procedures. Proceeds of such redemptions by phone will
be sent only to the account at the financial institution pre-designated on the
Account Information Form. No redemptions will be processed without an Account
Information Form on file with MFL and redemption proceeds will be wired to the
bank account designated on the shareholder's Account Information Form, unless
payment by check has been requested.
REDEMPTIONS BY MAIL
Redeeming by mail is not recommended since delays in delivery may delay your
request and you will not be certain of the actual date the Fund will receive
it. However, if the proceeds are to be paid to someone other than the
shareholder of record or to a different address or financial institution than
that on the Account Information Form the redemption request must be in writing.
See "Other Redemption Information" below.
Redemption requests made by written request should be addressed to MFL. The
letter of instruction must specify the number of shares to be redeemed, the
account number, payment instructions and the exact registration of the account.
Redemptions by mail are effected at the NAV next determined after receipt of
the redemption request.
OTHER REDEMPTION INFORMATION
Additional documentation may be required by MFL for any redemption request in
order to establish that a redemption request has been properly authorized. A
redemption request will not be considered to have been received in proper form
until such additional documentation has been submitted to MFL.
Any request to: a) change the name of the registered holder or; b) the address
of the account or; c) the financial institution designated to receive proceeds
of redemptions must be in writing and signed by the authorized person(s) as
designated on the Account Information Form. These signature(s) must be
guaranteed. MFL may also require additional documentation in connection with
such request. Any such written request may also be confirmed by telephone with
the requesting party and/or the designated bank account to verify instructions.
Other procedures may be implemented from time to time in an effort to
8
<PAGE> 12
prevent unauthorized or fraudulent redemption requests.
After a wire has been initiated by MFL, neither MFL nor the Fund assumes any
further responsibility for the performance of intermediaries or the
shareholder's bank in the transfer process. If a problem with such
performances arises, the shareholder should deal directly with such
intermediaries or bank.
To keep Fund expenses low, we reserve the right to redeem any single
shareholder account that falls below $50,000 because of redemptions but we will
notify you in writing at least 60 days before your account is redeemed to allow
you to make additional share purchases to bring your account value up to the
minimum level.
SUB-ACCOUNTING SERVICES
The Fund has designed special procedures for its institutional investors
desiring to establish multiple accounts (master accounts and their
sub-accounts). For example public funds' investors may find that arbitrage
rebate record keeping requirements can be facilitated by the use of
sub-accounts. Sub-accounts may be established with registration by name and or
number. Institutions will not be charged for this service unless otherwise
agreed upon. Upon request, master accounts will be provided with a monthly
summary report which sets forth for each sub-account by account number or name
the share balance at month end and the monthly income. Such summary reports
also include the total share balance and monthly income for the master account.
To minimize your time and costs custom report formats are also available for
coordination with full service arbitrage calculation and other service
providers.
BOARD OF TRUSTEES
- --------------------------------------------------------------------------------
The Trust's Trustees have overall responsibility for the operation of the Fund.
The following is a list of the Trustees of the Fund.
Janis S. England* Chairman of the Trustees and President of the Fund
Chairman of Millennium Financial LLC and Millennium
Capital LLC. Formerly Senior Vice President,
Kemper Financial Services, Inc.
Marjorie H. O'Laughlin+ Treasurer, Health & Hospital Corporation of Marion
County. Formerly Treasurer of the State of Indiana
Courtney C. Shea* Vice President, Artemis Capital Group, Inc. Formerly
Vice President Kemper Securities, Inc.
Sally M. Tassani+ Senior Vice President, Leo Burnett Company. Previously
Executive Vice President of Bender Browing Dolby &
Sanderson. Formerly Chief Executive Officer Tassani
& Paglia, Inc.
Barbara E. Wallace+ Executive Vice President, SMG Marketing Group, Inc.
* Ms England and Ms. Shea are "interested persons" of the Trust within the
meaning of Section 2(a)(19) of the Investment Company Act of 1940.
+ Member of the Audit Committee
Like other investment companies the Trust retains various organizations to
provide specialized services for the Fund.
9
<PAGE> 13
OPERATION OF THE FUND
- --------------------------------------------------------------------------------
The Fund retains Millennium Financial LLC, 10814 Bull Valley Road, Woodstock,
Illinois, to manage the Fund's investments and its business affairs. MFL is an
Illinois limited liability company organized on January 1, 1994. Although MFL
has not previously managed mutual funds, MFL is controlled by Janis S. England
who has over 25 years of investment and mutual fund experience.
MFL also manages the business affairs of the Fund. In connection with these
responsibilities MFL supplies executive, administrative and regulatory
services, supervises the preparation of tax returns, and coordinates the
preparation of reports to shareholders and reports to and filings with the
Securities and Exchange Commission and state securities authorities. MFL also
performs such administrative and managerial oversight of the activities of the
Fund's Custodian as the Trustees may from time to time direct and maintains
such books and records as are necessary to enable it to perform its duties.
Pursuant to the investment advisory and administration agreement (the
"Management Agreement") the Fund pays MFL a fee, payable monthly, equal to the
annual rate of .25% of its average daily net assets. MFL may waive a portion
of its Management fee from time to time. The level of this voluntary fee
waiver shall be in MFL's discretion
Pursuant to the terms of a Sub-Advisory Agreement with MFL, Midwest Group
Financial Services, Inc. (the "Sub-Adviser") manages the Fund's investments and
provides fund accounting services. Subject to the supervision and direction of
the Trustees and MFL the Sub-Adviser has complete discretion to purchase,
manage and sell portfolio securities for the Fund within the Fund's investment
objectives, restrictions and policies.
The Sub-Adviser is located at 312 Walnut Street, Cincinnati, Ohio and is a
subsidiary of Leshner Financial, Inc., the controlling shareholder of which is
Robert H. Leshner. The Sub-Adviser has been engaged in the management of
investment funds for more than 20 years. In addition to serving as Sub-Adviser
to the Fund, the Sub-Adviser acts as investment adviser or principal
underwriter for 4 open-end investment companies with 16 separate portfolios and
provides investment advice and manages investment portfolios for other
corporate, pension, profit sharing and individual accounts.
MFL, not the Fund, pays the Sub-Adviser an annual fee not to exceed .12% of the
Fund's assets. Under the Sub-Advisory agreement the Sub-Adviser may, from time
to time voluntarily waive some or all of its sub-advisory fee charged to MFL,
and may terminate any such voluntary waiver at any time in its sole discretion.
Pursuant to a service agreement (the "Service Agreement") the Fund also retains
MFL to provide transfer agency and shareholder services for the Fund's
investors. For its services under the Service Agreement MFL receives a service
fee, payable monthly, at the annual rate of .10 of 1% of average daily net
assets from the Fund. Under the terms of the Service Agreement MFL may
delegate one or more of its responsibilities to various Firms. MFL may have
such agreements (the "Sub-Service Agreements") with various Firms. The Firms
may provide services including such office space and equipment, telephone
facilities, personnel and literature distribution as is necessary or
appropriate for providing services to the Fund's investors. The Sub-Service
Agreements provide that MFL, not the Fund, may pay such Firms at an annual rate
of up to .10 of 1% of average daily net assets of those accounts in the Fund
which they maintain and service.
Millennium Capital LLC, 10814 Bull Valley Road, Woodstock, Illinois (the
"Distributor") is the principal underwriter for the Fund acting as agent of the
Fund in the sale of its shares. Millennium Capital LLC is an Illinois limited
liability company organized on March 9, 1994. The Distributor is controlled by
Janis S. England. As of the date of this prospectus Janis S. England is the
sole shareholder of the Fund. The Fund is available on a no-load basis (i.e.,
there are no sales commissions or 12b-1 fees).
The Trust shall assume and pay the charges and expenses of its operations,
including but not limited to expenses for services rendered by a custodian for
the safekeeping of the Fund's securities or other property,
10
<PAGE> 14
compensation of the trustees (other than those affiliated with the
Manager), charges and expenses of independent auditors, of legal counsel, of
any transfer or dividend disbursing agent, any registrar of the Fund, costs of
acquiring and disposing of portfolio securities, interest, if any, on
obligations incurred by the Fund, costs of pricing services to obtain
valuations of portfolio securities, costs of reports, insurance premiums,
membership dues in the Investment Company Institute or any similar
organization, reports and notices to shareholders, stationery, printing,
postage, other like miscellaneous expenses and all taxes and fees payable to
federal, state or other government agencies on account of the registration of
securities issued by the Trust, filing of corporate documents or otherwise.
DESCRIPTION OF SHARES
- --------------------------------------------------------------------------------
Millennium Income Trust is a diversified, open-end management investment
company organized as a Massachusetts business trust on August 19, 1994. The
Trust Agreement permits the Trust to offer one or more separate series of units
of beneficial interest ("Shares") representing interests in separate portfolios
("Funds"). The shares in any one Fund may be offered in two or more separate
classes. At the date of this prospectus, the Trustees of the Trust have
established only the Treasurers' Government Money Market Fund.
Shareholders are entitled to one vote for each share and to the appropriate
fractional vote for each fractional share. The shares of the Trust are fully
paid and non-assessable; have no preference as to conversion, exchange,
dividends, retirement or other features; and have no preemptive rights. Such
shares have non-cumulative voting rights, meaning that the holders of 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
if they so choose.
Annual meetings of shareholders will not be held except as required by the
Investment Company Act of 1940, the Trust Agreement, or other applicable law.
The Trust will call a meeting of shareholders for the purpose of voting upon
the question of removal of a Trustee if such a meeting is requested in writing
by the holders of not less than 10% of the outstanding shares of the Trust.
For further organization information, including certain shareholder rights and
responsibilities, see "The Trust" in the Statement of Additional Information.
TAXES
- --------------------------------------------------------------------------------
The Fund intends to continue to qualify for the special tax treatment afforded
a "regulated investment company" under Subchapter M of the Internal Revenue
Code so that it does not pay federal taxes on income and capital gains
distributed to the shareholders. The Fund intends to distribute substantially
all of its net investment income and any realized capital gains to its
shareholders. Unless otherwise exempt, shareholders are subject to federal
income tax on dividends and capital gains received. Since the Fund's
investment income is derived from interest rather than dividends, no portion of
such distributions is expected to be eligible for the dividends received
deduction available to corporations.
The Fund will mail to each of its shareholders a statement indicating the
amount and federal income tax status of all distributions made during the year.
In addition to federal taxes, shareholders of the Fund may be subject to state
and local taxes on distributions. The tax consequences described in this
section apply whether distributions are taken in shares or cash.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund may advertise several types of performance
information for a Fund. These are "yield" and "effective yield." Each of
these figures is based upon historical earnings and is not necessarily
representative of the future performance of the Fund. The yield of a Fund
refers to the net investment
-11-
<PAGE> 15
income generated by a hypothetical investment in the Fund over a
specific seven-day period. This net investment income is then annualized,
which means that the net investment income generated during the seven-day
periods is assumed to be generated each week over an annual period and is shown
as a percentage of the investment. The effective yield is calculated
similarly, but the net investment income earned by the investment is assumed to
be compounded weekly when annualized. The effective yield will be slightly
higher than the yield due to this compounding effect.
The performance of the Fund may be compared to that of other money market
mutual funds tracked by mutual fund rating services, various indices of
investment performance, United States government obligations, bank certificates
of deposit, other investments for which reliable performance data is available
and well known market rates including the Federal Funds rate
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS BEING AUTHORIZED BY
THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE FUND TO SELL
SHARES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUND TO MAKE
SUCH AN OFFER IN SUCH STATE.
12
<PAGE> 16
QUICK REFERENCE GUIDE
- --------------------------------------------------------------------------------
------------------------------------------------------------------
FOR ADDITIONAL Contact the Distributor: Phone: 800-514-2001
INFORMATION Millennium Capital LLC Fax: 800-514-2004
------------------------------------------------------------------
TO Contact the Transfer Agent: Phone: 800-514-2001
OPEN AN Millennium Financial LLC Fax: 800-514-2004
ACCOUNT
------------------------------------------------------------------
TO First Call or Fax: Phone: 800-514-2001
PURCHASE Millennium Financial LLC Fax: 800-514-2004
SHARES
then Wire Fed Funds to: Fifth Third Bank
ABA # 042 000 314
Attn: TGMMF
Acct #010 032 831 501
Include your Account
Number and Name
------------------------------------------------------------------
TO CALL OR FAX: Phone: 800-514-2001
REDEEM Millennium Financial LLC Fax: 800-514-2004
SHARES
------------------------------------------------------------------
MILLENNIUM FINANCIAL LLC | MILLENNIUM CAPITAL LLC
10814 Bull Valley Road | 10814 Bull Valley Road
Woodstock, IL 60098 | Woodstock, IL 60098
------------------------------------------------------------------
<PAGE> 17
TREASURERS' GOVERNMENT MONEY MARKET FUND
BOARD OF TRUSTEES Janis S. England, Chairman
Marjorie H. O'Laughlin
Courtney C. Shea
Sally M. Tassani
Barbara E. Wallace
INVESTMENT MANAGER Millennium Financial LLC
TRANSFER AGENT Millennium Financial LLC
DISTRIBUTOR Millennium Capital LLC
A Portfolio of
MILLENNIUM INCOME TRUST
<PAGE> 18
TREASURERS' GOVERNMENT MONEY MARKET FUND
A PORTFOLIO OF
MILLENNIUM INCOME TRUST
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
June 12, 1996
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus of the Treasurers' Government Money
Market Fund dated June 12, 1996. A copy of the Prospectus can be obtained by
writing the Company at 10814 Bull Valley Road, Woodstock, IL 60098.
This Statement of Additional Information shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE> 19
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
The Trust 3
Investment Policies 3
Investment Limitations 5
Investment Management 8
Securities Transactions 9
Net Asset Value 10
Taxes 11
Redemption In Kind 11
Historical Performance Information 12
Transfer and Shareholder Service Agent 12
Distributor 13
Custodian 13
Independent Public Accountants 13
Legal Counsel 13
Report of Independent Public Accountants 14
-2-
<PAGE> 20
THE TRUST
- --------------------------------------------------------------------------------
Millennium Income Trust (the "Trust") was organized as a Massachusetts business
trust on August 19, 1994. The Trust currently offers one series of shares to
investors, the Treasurers' Government Money Market Fund (the "Fund"). This
Statement of Additional Information provides information relating to the Fund.
Each share of the Fund represents an equal proportionate interest in the assets
and liabilities belonging to the Fund with each other share of the Fund and is
entitled to such dividends and distributions out of the income belonging to the
Fund as are declared by the Board of Trustees (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 Fund into a greater or lesser number of shares of that Fund so
long as the proportionate beneficial interest in the assets belonging to the
Fund and the rights of shares of any other Fund are in no way affected. In
case of any liquidation of the Fund, the holders of shares will be entitled to
receive as a class a distribution out of the assets, net of the liabilities
belonging to the Fund. No shareholder is liable to further calls or to
assessment by the Trust without its express consent.
Under Massachusetts law, under certain circumstances, shareholders of a
Massachusetts business trust could be deemed to have the same type of personal
liability for the obligations of the Trust as does a partner of a partnership.
However, numerous investment companies registered under the Investment Company
Act of 1940 have been formed as Massachusetts business trusts and the Trust is
not aware of an instance where such result has occurred. In addition the Trust
Agreement of Millennium Income Trust disclaims shareholder liability for acts
or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees. The Trust Agreement also provides for
indemnification out of the Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Moreover,
the Trust Agreement provides that the Trust will, upon request, assume the
defense of any claim made against any shareholder for any act or obligation of
the Trust and satisfy any judgment thereon. As a result, and particularly
because the assets are readily marketable and ordinarily substantially exceed
liabilities, management believes that the risk of shareholder liability is
slight and limited to circumstances in which both inadequate insurance existed
and the Trust was unable to meet its obligations. Management believes that, in
view of the above the risk of shareholder liability is remote.
INVESTMENT POLICIES
- --------------------------------------------------------------------------------
A more detailed discussion of the terms used in the Prospectus (see "Investment
Objective" and "Investment Policies") appears below:
When-Issued Securities Purchased on a To-Be-Announced Basis. The Fund will
make commitments to purchase securities on a When-Issued ("WI") or
To-Be-Announced ("TBA") basis with the intention of actually acquiring the
securities. In addition, the Fund may purchase securities on a WI or TBA basis
only if delivery and payment for the securities takes place within 120 days
after the date of the transaction. In connection with these investments, the
Fund will direct the Custodian to place cash or U. S. Government obligations in
a segregated account in an amount sufficient to make payment for the securities
to be purchased, When a segregated account is maintained because the Fund
purchases securities on a WI or TBA basis, the assets deposited in the
segregated account will be valued daily at market for the purpose of
determining the adequacy of the securities in the account. If the market value
of such securities declines, additional cash or securities will be placed in
the account on a daily basis so that the market value of the account will equal
the amount of the Fund's commitments to purchase securities on a WI or TBA
basis. To the extent funds are in a segregated account, they will not be
available for new investment or to meet redemptions. Securities in the Fund's
portfolio are subject to changes in market value based upon changes in the
level of interest rates (which will generally result in all
-3-
<PAGE> 21
of those securities changing in value in the same way, i.e., all those
securities experiencing appreciation when interest rates decline and
depreciation when interest rates rise). Therefore, if in order to achieve
higher returns, the Fund remains substantially fully invested at the same time
that it has purchased securities on a WI or TBA basis, there will be a
possibility that the market value of the Fund's assets will have greater
fluctuation. The purchase of securities on a WI or TBA basis may involve a
risk of loss if the broker-dealer selling the securities fails to deliver after
the value of the securities has risen.
When the time comes for the Fund to make payment for securities purchased on a
WI or TBA basis, the Fund will do so by using then available cash flow, by sale
of the securities held in the segregated account, by sale of other securities
or, although it would not normally expect to do so, by directing the sale of
the securities purchased on a WI or TBA basis themselves (which may have a
market value greater or less than the Fund's payment obligation). Although the
Fund will only make commitments to purchase securities on a WI or TBA basis
with the intention of actually acquiring the securities, the Fund may sell
these securities before the settlement date if it is deemed advisable by the
Sub-Adviser as a matter of investment strategy.
STRIPS. STRIPS are U. S. Treasury bills, notes and bonds that have been
issued without interest coupon or stripped of their unmatured interest coupons,
interest coupons that have been stripped from such U. S. Treasury securities,
and receipts or certificates representing interests in such stripped U. S.
Treasury securities and coupons. A STRIPS security pays no interest in cash to
its holder during its life although interest is accrued for federal income tax
purposes. Its value to an investor consists of the difference between its face
value at the time of maturity and the price for which it was acquired, which is
generally an amount significantly less than its face value. Investing in
STRIPS may help to preserve capital during periods of declining interest rates.
For example, if interest rates decline, Government National Mortgage
Association Certificates purchased at greater than par are more likely to be
prepaid, which would cause a loss of principal. In anticipation of this, the
Fund might purchase STRIPS, the value of which would be expected to increase
when interest rates decline.
STRIPS do not entitle the holder to periodic payments of interest prior to
maturity. Accordingly, such securities usually trade at a deep discount from
their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of
comparable maturities which make periodic distributions of interest. On the
other hand, because there are no periodic interest payments to be reinvested
prior to maturity, STRIPS eliminate the reinvestment risk and lock in a rate of
return to maturity. Current federal tax law requires that a holder of a STRIPS
security accrue a portion of the discount at which the security was purchased
as income each year even though the Fund received no interest payment in cash
on the security during the year.
Repurchase Agreements. When the Fund purchases securities, it may enter into a
repurchase agreement with the seller wherein the seller agrees at the time of
sale, to repurchase the security at a mutually agreed upon time and price. The
Fund may enter into repurchase agreements with the Custodian, with banks having
assets in excess of $10 billion and with broker-dealers who are recognized as
primary dealers in U. S. Government obligations by the Federal Reserve Bank of
New York. Although the securities subject to the repurchase agreement might
bear maturities exceeding one year, settlement for the repurchase would never
be more than one year after the Fund's acquisition of the securities and
normally would be within a shorter period of time. The resale price will be in
excess of the purchase price, reflecting an agreed upon market rate effective
for the period of time the Fund's money will be invested in the securities, and
will not be related to the coupon rate of the purchased security. At the time
the Fund enters into a repurchase agreement, the value of the underlying
security, including accrued interest, will equal or exceed 102% of the value of
the repurchase agreement, and in the case of a repurchase agreement exceeding
one day, the seller will agree that the value of the underlying security,
including accrued interest, will at all times equal or exceed 102% of the value
of the repurchase agreement. The collateral securing the seller's obligation
will be held by the Custodian or in the [Fund's account in the] Federal Reserve
Book Entry System.
-4-
<PAGE> 22
For purposes of the Investment Company Act of 1940, a repurchase agreement is
deemed to be a loan from a Fund to the seller subject to the repurchase
agreement and is therefore subject to the Fund's investment restriction
applicable to loans. It is not clear whether a court would consider the
securities purchased by the Fund subject to a repurchase agreement as being
owned by the Fund or as being collateral for a loan by the Fund to the seller.
In the event of the commencement of bankruptcy or insolvency proceedings with
respect to the seller of the securities before repurchase of the security under
a repurchase agreement, the Fund may encounter delay and incur costs before
being able to sell the security. Delays may involve loss of interest or
decline in price of the security. If the court characterized the transaction
as a loan and the Fund has not perfected a security interest in the security,
the Fund may be required to return the security to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, the
Fund would be at the risk of losing some or all of the principal and income
involved in the transaction. As with any unsecured debt obligation purchased
for the Fund, the Sub-Adviser seeks to minimize the risk of loss through
repurchase agreements by analyzing the creditworthiness of the obligor, in this
case the seller. Apart from the risk of bankruptcy or insolvency proceedings,
there is also the risk that the seller may fail to repurchase the security, in
which case the Fund may incur a loss if the proceeds to the Fund of the sale to
a third party are less than the repurchase price. However, if the market value
of the securities subject to the repurchase agreement becomes less than the
repurchase price (including interest), the Fund will direct the seller of the
security to deliver additional securities so that the market value of all
securities subject to the repurchase agreement will equal or exceed 102% of the
repurchase price. It is possible that the Fund will be unsuccessful in seeking
to enforce the seller's contractual obligation to deliver additional
securities.
Loans of Portfolio Securities. The Fund may lend portfolio securities subject
to the restrictions stated in the Fund's Prospectus. Under applicable
regulatory requirements (which are subject to change), the loan collateral
must, on each business day, at least equal the value of the loaned securities.
To be acceptable as collateral, letters of credit must obligate a bank to pay
amounts demanded by the Fund if the demand meets the terms of the letter. Such
terms and the issuing bank must be satisfactory to the Fund. The Fund receives
amounts equal to the interest on loaned securities and also receives one or
more of (a) negotiated loan fees, (b) interest on securities used as
collateral, or (c) interest on short-term debt securities purchased with such
collateral; either type of interest may be shared with the borrower. The Fund
may also pay fees to placing brokers as well as custodian and administrative
fees in connection with loans. Fees may only be paid to a placing broker
provided that the Trustees determine that the fee paid to the placing broker is
reasonable and based solely upon services rendered, that the Trustees
separately consider the propriety of any fee shared by the placing broker with
the borrower, and that the fees are not used to compensate the Sub-Adviser or
any affiliated person of the Trust or an affiliated person of the Sub-Adviser
or such person. The terms of the Fund's loans must meet applicable tests under
the Internal Revenue Code and permit the Fund to reacquire the loaned
securities on five days' written notice or in time to vote on any important
matter.
Majority. As used in the Prospectus and this Statement of Additional
Information, the term "majority" of the outstanding shares of the Trust (or of
the Fund) means the lesser of (1) 67% or more of the outstanding shares of the
Trust (or the Fund) present at a meeting, if the holders of more than 50% of
the outstanding shares of the Trust (or the Fund) are present or represented at
such meeting or (2) more than 50% of the outstanding shares of the Trust (or
the Fund).
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
The Trust has adopted certain fundamental investment limitations designed to
reduce the risk of an investment in the Fund. These limitations may not be
changed without the affirmative vote of a majority of the outstanding shares of
the Fund.
-5-
<PAGE> 23
THE LIMITATIONS APPLICABLE TO THE FUND ARE:
1. Borrowing Money. The Fund will not borrow money, except (a) from a bank,
provided that immediately after such borrowing there is asset coverage of 300%
for all borrowings of the Fund; or (b) from a bank or other entity for
temporary purposes only, provided than when made, such temporary borrowings are
in an amount not exceeding 5% of the Fund's total assets. The Fund also will
not make any borrowing which would cause its outstanding borrowings to exceed
one-third of the value of its total assets.
2. Pledging. The Fund will not mortgage, pledge, or hypothecate or in any
manner transfer, as security for indebtedness, any security owned or held by
the Fund except as may be necessary in connection with borrowings described in
limitation (1) above. The Fund will not mortgage, pledge, or hypothecate more
than one-third of its assets in connection with borrowings.
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 its portfolio securities (including
restricted securities), the Fund may be deemed an underwriter under certain
federal securities laws.
4. Illiquid Investments. The Fund will not invest more than 10% of its net
assets in securities for which there are legal or contractual restrictions on
resale and other illiquid securities.
5. Real Estate. The Fund will not purchase, hold or deal in real estate.
6. Commodities. The Fund will not purchase, hold or deal in commodities or
commodities future contracts or invest in oil, gas or other mineral exploration
or development programs. This limitation is not applicable to the extent that
the U. S. Government obligations in which the Fund may otherwise invest would
be considered to be such commodities, contracts or investments.
7. Loans. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, or (b) by engaging in repurchase agreements. For
purposes of this limitation, the term "loans" shall not include the purchase of
a portion of an issue of U. S. Government obligations.
8. 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 purchase and sales or
redemptions of securities.
9. Short Sales and Options. The Fund will not sell any securities short or
sell put and call options. This limitation is not applicable to the extent
that sales by the Fund of securities in which the Fund may otherwise invest
would be considered to be sales of options.
10. Other Investment Companies. The Fund will not invest in the securities of
any investment company except as permitted by the Investment Company Act of
1940
11. Concentration. The Fund will not invest more than 25% of its total assets
in the securities of issuers in a particular industry; This limitation is not
applicable to investments in obligations issued or guaranteed by the United
States Government, its agencies and instrumentalities or repurchase agreements
with respect thereto.
12. Mineral Leases. The Fund will not purchase oil, gas or other mineral
leases or exploration or development programs.
13. Senior Securities. The Fund will not issue senior securities as defined
in the Investment Company Act of 1940.
-6-
<PAGE> 24
Notwithstanding any other investment policy the Fund may invest all, but not
less than all, of its investable assets in the securities of beneficial
interests of a single pooled investment entity having substantially the same
objective, policies and limitations as the Fund.
With respect to the percentages adopted by the Trust as maximum limitations on
the Fund's investment policies and restrictions, an excess above the fixed
percentage (except for the percentage limitations relative to the borrowing of
money) will not be a violation of the policy or restriction unless the excess
results immediately and directly from the acquisition of any security or the
action taken.
The Trust does not presently intend to pledge, mortgage, or hypothecate the
assets of the Fund. The Trust does not presently intend to acquire securities
issued by any other investment companies. The Trust does not presently intend
to invest all its assets in securities issued by any other single pooled
investment entity. The statements of intention in this paragraph reflect
non-fundamental policies which may be changed by the Board of Trustees without
shareholder approval.
TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
The following is a list of the Trustees and executive officers of the Trust.
Each Trustee who is an "interested person" of the Trust as defined by the
Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
Name and Address Position with the Trust Principal Occupations During Past 5 Years
- ---------------- ----------------------- -----------------------------------------
<S> <C> <C>
Janis S. England * Chairman of the Chairman of Millennium Financial LLC (the investment
10814 Bull Valley Road Board, manager and shareholder service and transfer agent of the
Woodstock, IL President and Trust) and Millennium Capital LLC (the principal under-
Treasurer writer of the Trust). From 1986 through 1993 she was
associated with Kemper Financial Services, Inc. (a
registered broker-dealer and investment adviser) most
recently as Senior Vice President with responsibility for,
among other things, wholesale money market funds. From 1989
through 1992 Director of Investors Fiduciary Trust Company a
Missouri state bank. Age 50.
Marjorie H. O'Laughlin+ Trustee Treasurer, Health & Hospital Corporation of Marion
3838 N. Rural Street County, a municipal corporation created by the Indiana
Indianapolis, IN General Assembly. From 1987 through February 1995
Treasurer of the State of Indiana. Age 66.
Courtney C. Shea * Trustee Vice President of Artemis Capital Group, Inc., a regis-
150 N. Wacker Drive tered broker-dealer, since 1992. From 1990 until 1992
Chicago, IL Vice President Kemper Securities, Inc. a registered
broker-dealer . Age 35.
Sally M. Tassani + Trustee From October 1995 Senior Vice President of Leo
35 W. Wacker Drive Burnett Company, an advertising agency. From August
Chicago, IL through September 1995 Executive Vice President of
Bender Browning Dolby & Sanderson an advertising agency.
Formerly Chief Executive Officer of Tassani & Paglia, Inc.
an advertising agency. Age 47.
Barbara E. Wallace + Trustee Executive Vice President of SMG Marketing Group, Inc.
875 N. Michigan Avenue a firm providing information and consulting to the health
Chicago, IL care industry. Age 46.
</TABLE>
-7-
<PAGE> 25
<TABLE>
<S> <C> <C>
Cathy G. O'Kelly Secretary Partner of Vedder, Price, Kaufman & Kammholz, a law
222 N. LaSalle Street firm, since 1990. Age 43.
Chicago, IL
</TABLE>
* Ms England, as an affiliated person of Millennium Capital LLC, the
Trust's principal underwriter, and Millennium Financial LLC, the Trust's
investment manager, and Ms. Shea, as an affiliated person of Artemis
Capital Group, Inc. a registered broker-dealer, are "interested persons"
of the Trust within the meaning of Section 2(a(19) of the Investment
Company Act of 1940.
+ Member of the Audit Committee
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
The table below shows the amounts estimated to be paid to trustees during the
Trust's 1996 fiscal year. The Fund pays trustees who are not interested
persons of the investment adviser a fee of $1,000 for each Board meeting
attended plus $250 for each committee meeting attended.
<TABLE>
<CAPTION>
Aggregate Pension or Retirement
Compensation Benefits Accrued as Total
Name of Trustee from Trust Part of Trust Expenses Compensation
<S> <C> <C> <C>
Marjorie H. O'Laughlin $ 1,000 $0 $1,000
Courtney C. Shea 1,000 0 1,000
Sally M. Tassani 1,000 0 1,000
Barbara E. Wallace 1,000 0 1,000
</TABLE>
For a full fiscal year payments to Trustees are estimated to be $4,000 each.
INVESTMENT MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Investment Manager is Millennium Financial LLC ("MFL"). Under the
terms of an investment management agreement (the "Management Agreement") with
the Fund it is MFL's responsibility to initially select, subject to review and
approval by the Trust's Board of Trustee's and shareholders, a sub-adviser for
the Fund and to review its continued performance. MFL also provides
administrative services for the Trust. In providing administrative services to
the Trust MFL supplies non-investment related statistical and research data,
internal regulatory compliance services and executive and administrative
services. MFL supervises the preparation of tax returns, reports to
shareholders of the Trust, reports to and filings with the Securities and
Exchange Commission and state securities commissions, and materials for the
meetings of the Board of Trustees.
The controlling Member of Millennium Financial LLC is Janis S. England.
MFL and the Sub-Adviser shall not be liable for any losses that may be
sustained in the purchase, holding or sale of any security or for anything done
or omitted by it except acts or omissions involving willful misfeasance, of the
duties imposed upon it by its contract with the Trust.
-8-
<PAGE> 26
The Fund is responsible for the payment of all expenses incurred in connection
with the organization, registration of shares and operations of the Fund,
including such extraordinary or non-recurring expenses as may arise, such as
litigation to which the Trust may be a party. The Fund may have an obligation
to indemnify the Trust's Officers and Trustees with respect to such litigation
except in instances of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of their office. MFL
bears promotional expenses in connection with the distribution of the Fund's
shares. The compensation and expenses of any officer, Trustee or employee of
the Trust who is an officer, member, officer or employee of MFL are paid by
MFL.
INVESTMENT MANAGEMENT FEES
For performing its responsibilities, MFL receives an annual fee from the Fund
(the "Management Fee") as described in the Prospectus. MFL in turn, makes
payments to the Sub-Adviser for its service (the "Sub-Advisory Fee") as stated
in the Prospectus.
By its terms, the Trust's Management Agreement will remain in force until March
10, 1997 and from year to year thereafter, subject to annual approval by (a)
the Board of Trustees or (b) a vote of the majority of the Fund's outstanding
voting securities; provided that in either event continuance is also approved
by a majority of the Trustees who are not interested persons of the Trust, by a
vote cast in person at a meeting called for the purpose of voting such
approval. The Management Agreement may be terminated at any time, on sixty
days' written notice, without the payment of any penalty, by the Board of
Trustees, by a vote of the majority of the Fund's outstanding voting
securities, or by MFL. The Management Agreement automatically terminates in
the event of its assignment, as defined by the Investment Company Act of 1940
and the rules thereunder.
MFL has licensed the use of the name "Millennium, " Millennium Income" or any
derivation thereof in connection with any registered investment company or
other business enterprise with which the Trust is or may become associated.
In the event MFL ceases to be the Investment Manager of the Fund the Fund will
be required to cease using the name.
THE SUB-ADVISER
Pursuant to a Sub-Advisory Agreement between MFL and Midwest Group Financial
Services, Inc. (the "Sub-Adviser") the Sub-Adviser provides the investment
advise to the Fund. The Sub-Adviser has complete discretion to purchase and
sell portfolio securities for the Fund within the Fund's investment objective,
restrictions and policies. In addition to serving as the Sub-Adviser to the
Fund the Sub-Adviser acts as investment adviser or principal underwriter for 15
open end investment companies and provides investment advice and manages
investment portfolios for other corporate, pension, profit sharing and
individual accounts. The Sub-Adviser also provides fund accounting and pricing
services to the Fund, calculating daily Net Asset Value ("NAV") and maintaining
such books and records as are necessary to enable the Sub-Adviser to perform
its duties. The Sub-Adviser is a subsidiary of Leshner Financial, Inc., of
which Robert H. Leshner is the controlling shareholder.
SECURITIES TRANSACTIONS
- --------------------------------------------------------------------------------
Decisions to buy and sell securities for the Fund and the placing of the Fund's
securities transactions and negotiation of commission rates where applicable
are made by the Sub-Adviser and are subject to review by the Trustees. In the
purchase and sale of portfolio securities, the Sub-Adviser seeks best execution
for the Funds, 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
Sub-Adviser generally seeks favorable prices and commission rates that are
reasonable in relation to the benefits received.
-9-
<PAGE> 27
Generally, the Fund attempts to deal directly with the dealers who make a
market in the securities involved unless better prices and execution are
available elsewhere. Such dealers usually act as principals for their own
account. On occasion, portfolio securities may be purchased directly from the
United States Treasury. Because the portfolio securities of the Fund are
generally traded on a net basis and transactions in such securities do not
normally involve brokerage commissions, the cost of portfolio securities
transactions of the Fund will consist primarily of dealer and underwriting
spreads.
The Sub-Adviser is specifically authorized to select brokers who also provide
brokerage and research to the Fund and/or other accounts over which the
Sub-Adviser exercises investment discretion and to pay such brokers a
commission in excess of the commission another broker would charge if the
Sub-Adviser 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
Sub-Adviser's overall responsibilities with respect to the Fund and to accounts
over which it exercises investment discretion.
Research services include securities and economic analyses, reports on issuers'
financial conditions and future business prospects, newsletters and opinions
relating to interest trends, general advice on the relative merits of possible
investment securities for the Fund and statistical services and information
with respect to the availability of securities or purchasers or sellers of
securities. Although this information is useful to the Fund and the
Sub-Adviser, it is not possible to place a dollar value on it. Research
services furnished by brokers through whom the Fund effects securities
transactions may be used by the Sub-Adviser in servicing all of its accounts
and not all such services may be used by the Sub-Adviser in connection with the
Fund.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The NAV of the shares of the Fund is determined as of 11:30 p.m. and 3:00 p.m.
Central time, on each Business Day. Business Day means any day on which the
New York Stock Exchange is open except on days on which Cincinnati or New York
banks are closed for holidays. For a description of the method used to
determine the NAV see "Net Asset Value" in the prospectus.
Pursuant to Rule 2a-7 promulgated under the Investment Company Act of 1940, the
Fund values its portfolio securities on an amortized cost basis. The use of the
amortized cost method of valuation involves valuing an instrument at is cost
and, thereafter, assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the
market value of the instrument. Under the amortized cost method of valuation,
neither the amount of daily income nor the NAV of the Fund is affected by any
unrealized appreciation or depreciation of the portfolio. The Board of
Trustees has determined in good faith that utilization of amortized cost is
appropriate and represents the fair value of the portfolio securities of the
Fund.
Pursuant to Rule 2a-7 the Fund maintains a dollar weighed average portfolio
maturity of 90 days or less, purchases only securities having remaining
maturities of one year or less and invests only in United States
dollar-denominated securities determined by the Board of Trustees to be of high
quality and to present minimal credit risks. If a security ceases to be an
eligible security, or if the Board of Trustees believes such security no longer
presents minimal credit risks, the Trustees will cause the Fund to dispose of
the security as soon as practicable. The maturity of U. S., Government
obligations which have a variable rate of interest readjusted no less
frequently then annually will be deemed to be the period of time remaining
until the next readjustment of the interest rate.
The Board of Trustees has established procedures designed to stabilize, to the
extent reasonably possible, the price per share of the Fund as computed for the
purpose of sales and redemptions at $1 per share. The procedures include
review of the Fund's portfolio holdings by the Board of Trustees to determine
whether the Fund's NAV calculated by using available market quotations deviates
more than one-half of
-10-
<PAGE> 28
one percent form $1 per share and, if so, whether such deviation may result in
material dilution or is otherwise unfair to existing shareholders. In the
event the Board of Trustees determines that such a deviation exists, it will
take corrective action as it regards necessary and appropriate, including the
sale of portfolio securities prior to maturity to realize capital gains or
losses or to shorten average portfolio maturities; withholding dividends;
redemptions of shares in kind; or establishing a NAV per share by using
available market quotations. The Board of Trustees has also established
procedures designed to ensure that the Fund complies with the quality
requirements of Rule 2a-7.
While the amortized cost method provides certainty in valuation, it may result
in periods during which the value of an instrument, as determined by amortized
cost, is higher or lower than the price the Fund would receive if it sold the
instrument. During periods of declining interest rates, the daily yield on
shares of the Fund may tend to be higher than a like computation made by a fund
with identical investments utilizing a method of valuation based upon market
prices and estimates of market prices for all of its portfolio securities.
Thus,. if the use of amortized cost by the Fund resulted in a lower aggregate
portfolio value on a particular day, a prospective investor in the Fund would
be able to obtain a somewhat higher yield than would result from investment in
a fund utilizing solely market values and existing investors would receive less
investment income. The converse would apply in a period of rising interest
rates.
TAXES
- --------------------------------------------------------------------------------
The Prospectus describes generally the tax treatment of distributions by the
Fund. This section of the Statement of Additional Information includes
additional information concerning federal taxes.
A Fund's net realized capital gains from securities transactions will be
distributed only after reducing such gains by the amount of any available
capital loss carryforwards. Capital losses may be carried forward to offset
any capital gains for eight years, after which any undeducted capital loss
remaining is lost as a deduction.
A federal excise tax at the rate of 4% will be imposed on the excess, if any,
of the Fund's "required distribution" over actual distributions in any calendar
year. Generally, the "required distribution" is 98% of the Fund's ordinary
income for the calendar year plus 98% of its net capital gains recognized
during the one year period ending on October 31 of the calendar year plus
undistributed amounts from prior years. The fund intends to make distributions
sufficient to avoid imposition of the excise tax.
The Trust is required to withhold and remit to the U. S. Treasury a portion
(31%) of dividend income on any account unless the shareholder provides a
taxpayer identification number and certifies that such number is correct and
that the shareholder is not subject to backup withholding.
REDEMPTION IN KIND
- --------------------------------------------------------------------------------
Although the Trust intends to redeem Fund shares in cash it reserves the right
under circumstances when the Board of Trustees deems it in the best interests
of the Fund's shareholders, to pay the redemption price in whole or in part in
securities of the Fund taken at current value. If any such redemption in kind
is to be made, the Fund intends to make an election pursuant to Rule 18f-1
under the Investment Company Act of 1940. This election will require the Fund
to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net
asset value of the Fund during any 90 day period for any one shareholder.
Should payment be made in securities, the redeeming shareholder will generally
incur brokerage costs in converting such securities to cash. Portfolio
securities which are issued in an "in-kind" redemption will, to the extent
available, be readily marketable.
-11-
<PAGE> 29
HISTORICAL PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
Yield quotations on investments in the Fund are provided on both a current and
an effective (compounded) basis. The current yield for the 7 day period ended
3/31/96 was 5.26%. Current yield is calculated by determining the net change
in the value of a hypothetical account for a seven calendar day period (base
period) with a beginning balance of one share, dividing by the value of the
account at the beginning of the base period to obtain the base period return,
multiplying the result by (365/7) and carrying the resulting yield figure to
the nearest hundredth of one percent. The effective yield for the 7 day period
ended 3/31/96 was 5.39%. Effective yield reflects daily compounding and is
calculated as follows: Effective yield = (base period return + 1)365/7- 1.
For purposes of these calculations, no effect is given to realized or
unrealized gains or losses (the Fund does not normally recognize unrealized
gains and losses under the amortized cost valuation method).
To help investors better evaluate how an investment in the Fund might satisfy
their investment objective, advertisements regarding the Fund may discuss
various measures of Fund performance, including current performance ratings and
or rankings appearing in financial magazines, newspapers and publications which
track mutual fund performance. Advertisements may also compare performance
(using the calculation methods set forth in the Prospectus) to performance as
reported by other investments, indices and averages. The performance of the
Fund may be compared to that of other money market mutual funds tracked by
mutual fund rating services, various indices of investment performance [or;
direct investments in United States government obligations or; bank
certificates of deposit or;] other investments for which reliable performance
data is available. The Fund performance may also be compared with other well
known market rates, including the Federal Funds rate, or investments for which
its institutional clients request comparative data. The Fund may use the
following publications or indices to discuss or compare Fund performance:
Donoghue's Money Fund Report provides a comparative analysis of performance for
various categories of money market funds. The Fund may compare performance
with any other individual money market fund or any of the taxable fund
categories.
Federal Reserve Publication H.15 and G.13 Selected Interest Rates provides
weekly and monthly averages of various direct investments including U. S.
Treasury Bills and the Federal Funds rate.
Lipper Fixed Income Fund Performance Analysis measures total return and average
current yield for the mutual fund industry and ranks individual mutual fund
performance over specified time periods assuming reinvestment of all
distributions, exclusive of sales loads. The Fund may provide comparative
performance information appearing in the Short Term U. S. Government Funds or
the Institutional Government Money Market Funds category.
In assessing such comparisons of performance with indices, averages, other
funds, direct investments or market rates, an investor should keep in mind that
the composition of the investments in the reported funds, indices and averages
is not identical to the Fund's portfolio, that the averages are generally
unmanaged and that the items included in the calculations of such averages may
not be identical to the formula used by the Fund to calculate its performance.
Additionally, some direct investments may be insured by the U.S. Government or
be direct obligations of the U.S. Government while the Fund is not. In
addition, there can be no assurance that the Fund will continue its comparative
performance record.
TRANSFER AND SHAREHOLDER SERVICE AGENT
- --------------------------------------------------------------------------------
As described in the Prospectus MFL is also the Trust's Transfer and Service
Agent. MFL maintains the records of each shareholder account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions.
-12-
<PAGE> 30
DISTRIBUTOR
- --------------------------------------------------------------------------------
Millennium Capital LLC (the "Distributor") as principal underwriter of the
Trust is the exclusive agent for distribution of shares of the Fund. The
Distributor is obligated to sell the shares on a best efforts basis only
against purchase orders for the shares. Shares of the Fund are offered on a
continuous basis.
CUSTODIAN
- --------------------------------------------------------------------------------
Fifth Third Bank has been retained to act as Custodian for the Fund's
investments. Fifth Third Bank acts as the Fund's depository, safekeeps its
portfolio securities, collects all income and other payments with respect
thereto, disburses funds as instructed and maintains records in connections
with its duties.
INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
The firm of Arthur Andersen LLP has been selected as independent public
accountants for the Trust for the fiscal year ending September 30, 1996.
Arthur Andersen LLP, 425 Walnut Street, Cincinnati, Ohio, performs an annual
audit of the Trust's financial statements.
LEGAL COUNSEL
- --------------------------------------------------------------------------------
Legal counsel is provided by Vedder, Price, Kaufman & Kammholz
-13-
<PAGE> 31
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
ARTHUR ANDERSEN LLP
To the Trustees and Shareholder of Millennium Income Trust:
We have audited the accompanying statement of assets and liabilities of
the Treasurers' Government Money Market Fund of the Millennium Income Trust as
of September 30, 1995. This financial statement is the responsibility of the
Trust's management. Our responsibility is to express an opinion on this
financial statement 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 statement of assets and
liabilities is free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the statement
of assets and liabilities. 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 statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
Treasurers' Government Money Market Fund of the Millennium Income Trust as of
September 30, 1995 in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Cincinnati, Ohio
May 29, 1996
-14-
<PAGE> 32
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
AS OF SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS:
Cash $100,000
Prepaid organizational expenses (Note 2) 20,170
--------
Total assets 120,170
--------
LIABILITIES:
Payable to related party (Note 2) 20,170
--------
Total liabilities 20,170
--------
Net assets for shares of beneficial interest outstanding $100,000
========
Shares outstanding 100,000
========
Net asset value, redemption price, and offering price per share $1.00
========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-15-
<PAGE> 33
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
NOTES TO THE STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
(1) The Millennium Income Trust (the "Trust") is an open-end diversified
management investment company established as a Massachusetts business
trust under a Declaration of Trust dated August 19, 1994. The Trust has
established one fund series, the Treasurers' Government Money Market Fund
(the "Fund"). The Trust retains Millennium Financial LLC ("MFL") to
manage the Fund's investments and its business affairs. On January 17,
1995, 100,000 shares of the Treasurers' Government Money Market Fund were
issued for cash at $1.00 per share to Janis S. England, chairman and
controlling member of MFL.
For the period from January 17, 1995 through September 30, 1995, the Fund
had no investment activity or operations other than the amortization of
$3,330 of organizational expenses which MFL absorbed. Therefore, a
statement of operations, changes in net assets and financial highlights
are not included herein. This statement has been prepared in conformity
with generally accepted accounting principles which permit management to
make certain estimates and assumptions as of the date of the financial
statement.
(2) Expenses paid by MFL, amounting to $23,500, were incurred in connection
with the organization of the Trust and the initial offering of shares.
Such organizational expenses are capitalized and amortized on a
straight-line basis over five years. As of January 17, 1995, all
outstanding shares of the Fund were held by the chairman and controlling
member of MFL, who purchased these initial shares in order to provide the
Trust with its required capital. In the event any of the initial shares
of the Fund are redeemed by the chairman and controlling member of MFL, or
by any subsequent owner, at any time prior to the complete amortization of
organizational expenses, the redemption proceeds payable with respect to
such shares will be reduced by the pro rata share of the unamortized
deferred organizational expenses as of the date of such redemption.
(3) Reference is made to the Prospectus and Statement of Additional
Information for a description of the Management Agreement, the Subadvisory
Agreement, the Transfer Agency Agreement, the Underwriting Agreement, tax
aspects of the Fund and the calculation of the net asset value per share
of the Fund.
-16-
<PAGE> 34
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
SEMI- ANNUAL REPORT
(UNAUDITED)
MARCH 31, 1996
-17-
<PAGE> 35
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MARCH 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment Securities at Value (Note 2) $101,848
Cash 1,349
Prepaid organizational expenses (Note 3) 17,790
--------
Total assets 120,987
--------
LIABILITIES:
Income Distribution Payable 462
Payable to related party (Note 3) 17,790
--------
Total liabilities 18,252
--------
Net assets for shares of beneficial interest outstanding $102,735
========
Shares outstanding 102,735
========
Net asset value, redemption price and offering price per share (Note 2) $ 1.00
========
</TABLE>
PORTFOLIO OF INVESTMENTS (Unaudited)
March 31, 1996
<TABLE>
PAR VALUE INVESTMENTS - 99.14% YIELD TO MATURITY VALUE
- --------- ---------------------- ----------------- --------
<S> <C> <C> <C>
$100,000 Federal Home Loan Mortgage Corp. Discount Note, 4/11/96 5.425% $101,848
</TABLE>
The accompanying notes are an integral part of this financial statement.
-18-
<PAGE> 36
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR PERIOD FROM 10/2/95 (COMMENCEMENT OF OPERATIONS) TO 3/31/96
<TABLE>
<S> <C>
INVESTMENT INCOME:
U. S. Government Obligations $ 139
Repurchase Agreements 2,595
-------
Total Income 2,735
EXPENSES (NOTE 3)
Adviser fees and other expenses 5,552
Less fees waived and expenses reimbursed by MFL [5,552]
-------
Total Expenses 0
NET INVESTMENT INCOME $2,735
=======
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
FOR PERIOD FROM 10/2/95 (COMMENCEMENT OF OPERATIONS) TO 3/31/96
<TABLE>
<S> <C>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY:
Net investment income $ 2,735
Dividends to shareholders from investment income [2,735]
Shares issued in reinvestment of dividends 2,735
--------
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,735
NET ASSETS:
Beginning of period $100,000
--------
End of period $102,735
========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-19-
<PAGE> 37
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
FOR PERIOD FROM 10/2/95 (COMMENCEMENT OF OPERATIONS) TO 3/31/96
<TABLE>
PER SHARE OPERATING PERFORMANCE
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 1.00
---------
Net investment income .027
Distributions from net investment income (.027)
Net asset value at end of period $ 1.00
=========
Total Return (Annualized) 5.44%
=========
RATIOS NET OF EXPENSES WAIVED OR ABSORBED BY ADVISER (ANNUALIZED ) (NOTE 3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 0.00%
Ratio of net investment income to average net assets 5.44%
RATIOS ASSUMING NO FEE WAIVERS OR ABSORPTION OF EXPENSES (ANNUALIZED) (NOTE 3)
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 11.04%
Ratio of net investment income to average net assets -5.60%
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets at end of period $ 102,735
</TABLE>
The accompanying notes are an integral part of this financial statement.
-20-
<PAGE> 38
MILLENNIUM INCOME TRUST
TREASURERS GOVERNMENT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(1) The Millennium Income Trust (the "Trust") is an open-end diversified
management investment company established as a Massachusetts business
trust under a Declaration of Trust dated August 19, 1994. The Trust has
established one fund series, the Treasurers' Government Money Market Fund
(the "Fund"). The Trust retains Millennium Financial LLC ("MFL") to
manage the Fund's investments and its business affairs. On January 17,
1995, 100,000 shares of the Treasurers' Government Money Market Fund were
issued for cash at $1.00 per share to Janis S. England, chairman and
controlling member of MFL.
(2) Significant Accounting Policies
INVESTMENT VALUATION. Securities are valued on the amortized cost basis,
which approximates market value. This involves initially valuing a
security at its original cost and thereafter assuming a constant
amortization to maturity of any discount or premium. This method of
valuation is expected to enable the Fund to maintain a constant net asset
value per share.
Repurchase agreements, which are collateralized by U.S. Government
obligations, are valued at cost which, together with accrued interest,
approximates market. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Fund's custodian, at the
Federal Reserve Bank of Cleveland. At the time each Fund enters into a
repurchase agreement, the seller agrees that the value of the underlying
securities, including accrued interest, will be equal to or exceed the
face amount of the repurchase agreement. In the event of a bankruptcy or
other default of the seller of a repurchase agreement, the Fund could
experience both delays in liquidating the underlying security and losses.
These losses would equal the face amount of the repurchase agreement(s)
and accrued interest, net of any proceeds received in liquidation of the
underlying securities. To minimize the possibility of loss, the Fund
enters into repurchase agreements only with institutions deemed to be
creditworthy by the Investment Manager, including banks having assets in
excess of $10 billion and U.S. Government securities dealers.
INVESTMENT TRANSACTIONS. Investment transactions are accounted for on the
trade date. Securities sold are valued on a specific identification
basis.
FUND SHARE VALUATION INVESTMENT INCOME AND DISTRIBUTIONS TO SHAREHOLDERS.
The net asset value per share of the Fund is calculated daily by dividing
the total value of the Fund's assets, less liabilities, by the number of
shares outstanding. Interest income is accrued as earned. Distributions
from net investment income are declared daily and paid on or about the
first business day of each month.
FEDERAL INCOME TAX. It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of Federal income tax on the
income distributed. Accordingly, no provision for income taxes has been
made.
-21-
<PAGE> 39
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital
gains (earned during the twelve months ended October 31) plus
undistributed amounts from prior years.
(3) Expenses paid by MFL amounting to $23,500, were incurred in connection
with the organization of the Trust and the initial offering of shares.
Such organizational expenses are capitalized and amortized on a
straight-line basis over five years. As of January 17, 1995, all
outstanding shares of the Fund were held by the chairman and controlling
member of MFL, who purchased these initial shares in order to provide the
Trust with its required capital. In the event any of the initial shares
of the Fund are redeemed by the chairman and controlling member of MFL or
by any subsequent owner at any time prior to the complete amortization of
organizational expenses, the redemption proceeds payable with respect to
such shares will be reduced by the pro rata share of the unamortized
deferred organizational expenses as of the date of such redemption.
The President of the Trust is the chairman and controlling member of
Millennium Financial LLC ("MFL") the Trust's investment manager and
transfer agent and Millennium Capital LLC ("MCL") the principal
underwriter for the Trust.
The Fund's investments are managed by MFL pursuant to the terms of a
management agreement. Under the terms of the Management Agreement, the
Fund pays MFL a fee, which is computed and accrued daily and paid monthly
at the annual rate of .25% of its average daily net assets. Under a
subadvisory agreement MFL has retained Midwest Group Financial Services,
Inc. (the "Sub-Adviser") to manage the Fund's investments and provide fund
accounting services. MFL pays the Sub-Adviser a fee equal to an annual
rate of .12% of the Funds average daily net assets.
States in which shares of the Fund are offered may impose an expense
limitation based upon net assets. The Adviser has agreed to reimburse the
Fund for expenses which exceed the most restrictive applicable expenses
limitation in any state. In order to reduce the operating expenses of the
Fund, MFL voluntarily waived its advisory fees and absorbed all fund
expenses including $2,380 in amortized organizational expenses.
Under the terms of the transfer agent and shareholder service agreement
MFL maintains the records of each shareholders' account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution
disbursing agent and performs other shareholder servicing functions. MFL
receives for its services a fee payable monthly at an annual rate of .10%
of the Fund's average daily net assets. MFL voluntarily waived its
service fees.
(4) Reference is made to the Prospectus and the Statement of Additional
Information for a description of the Management Agreement, the Subadvisory
Agreement, the Transfer Agency Agreement, the Underwriting Agreement, tax
aspects of the Fund and the calculation of the net asset value per share
of the Fund.
-22-
<PAGE> 40
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements
Part A:
Financial Highlights
Part B:
Statement of Assets and Liabilities at September 30, 1995
Report of Independent Accountants
Statement of Assets and Liabilities (unaudited) at March 31, 1996
Statement of Operations for period from October 2, 1995 through
March 31, 1996
Statement of Changes for period from October 2, 1995 through
March 31, 1996
(b) Additional Exhibits
(1) Agreement and Declaration of Trust(1)
(2) By-Laws(2)
(3) Not applicable
(4) Not applicable
(5)(a) Form of Management Agreement(1)
(5)(b) Form of Sub-Advisory Agreement(2)
(6) Form of Underwriting Agreement(1)
(7) Not applicable
(8) Form of Custodian Agreement(2)
(9) Form of Transfer Agency Agreement(1)
(10) Not applicable
(11) Consent of Independent Public Accountants
(12) Not applicable
(13) Form of Subscription Agreement(2)
(14) Not applicable
(15) Not applicable
(16) Schedule for Performance Quotations
(17) Financial Data Schedule
(18) Not applicable
(1) Incorporated by reference from the initial registration
statement filed on Form N-1A on October 12, 1994.
(2) Incorporated by reference from Pre-Effective Amendment No. 1 filed on
Form N-1A on February 21, 1995.
<PAGE> 41
Item 25. Persons Controlled by or Under Common Control With Registrant.
As a result of her initial investment in the Registrant, Janis S. England will
control the Trust temporarily.
Item 26. Number of Holders of Securities:
As of June 1, 1996:
Title of Class;
Units of beneficial interest Number of
without par value Record Holders
-------------------------------------- --------------
Treasurers' Government Money Market Portfolio 1
Item 27. Indemnification:
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to the
Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, officers and controlling persons of the Registrant by
the Registrant pursuant to the Declaration of Trust or otherwise, the
Registrant is aware that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is 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 trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares 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
issues.
Item 28. Business and Other Connections of Investment Adviser:
Millennium Financial LLC (the "Investment Manager") is a registered investment
adviser providing investment advice to the Registrant.
Other business, profession, vocation or employment of a substantial nature in
which each member or principal officer of the Investment Manager is or has
been, at any time during the last two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner or trustee are as
follows. Unless otherwise noted, the address of the companies listed is 10814
Bull Valley Road, Woodstock, Illinois 60098.
2
<PAGE> 42
Name and
Position With Name of Connection With
Investment Manager Other Company Other Company
- ------------------ ------------- -------------
Janis S. England, Millennium Income Trust
Chairman and (registered investment Chairman, President and
Managing Member company) Treasurer
Millennium Capital LLC Chairman and Managing
(registered broker-dealer) Member
Kemper Financial Services, Senior Vice President
Inc. (until November 1993)
John A. Lancaster,
Vice President and Millennium Capital LLC
Member (registered broker-dealer) Vice President and Member
Midwest Group Financial Services, Inc. (the "Sub-Adviser") is a registered
investment adviser providing sub-investment advisory services to the
Registrant. The Sub-Adviser also acts as adviser to three other registered
investment companies.
Other business, profession, vocation or employment of a substantial nature in
which each director or principal officer of the Sub-Adviser is or has been, at
any time during the last two fiscal years, engaged for his own account or in
the capacity of director, officer, employee, partner or trustee are as follows.
Unless otherwise noted, the address of the corporations listed below is 312
Walnut Street, Cincinnati, Ohio 45202-4004.
(1) Robert H. Leshner - Chairman of the Board and a Director of the
Sub-Adviser.
(a) President and Trustee of Midwest Strategic Trust, Midwest
Trust and Midwest Group Tax Free Trust, registered investment
companies.
(b) Chairman of the Board and a Director of Leshner Financial,
Inc., a financial services company.
(c) Chairman of the Board and a Director of MGF Service Corp., a
registered transfer agent.
(d) President and a Director of Leshner Financial Services, Inc.,
a registered investment adviser and registered broker-dealer until
December 1994.
(2) Michael F. Andrews - President of the Sub-Adviser.
(a) President of ABT Financial Services, Inc., 340 Royal Palm
Way, Palm Beach, Florida 33480, until June 1995.
(3) James A. Markley, Jr. - A Director of the Sub-Adviser.
3
<PAGE> 43
(a) President and a Director of Leshner Financial, Inc.
(b) A Director of MGF Service Corp.
(c) A Director of Sycamore National Bank, 3209 West Galbraith
Road, Cincinnati, Ohio 45239.
(d) President of the Sub-Adviser until July 1995.
(e) President of MGF Service Corp. until December 1994.
(f) A Director of Leshner Financial Services, Inc. until December
1994.
(4) John J. Goetz - Chief Investment Officer of the Sub-Adviser.
(a) Vice President of Leshner Financial, Inc.
(b) Vice President-Investments of Leshner Financial Services,
Inc. until December 1994.
(5) Maryellen Peretsky - Vice President, Assistant Secretary and
a Director of the Sub-Adviser.
(a) Vice President and a Director of Leshner Financial, Inc.
(b) Vice President of MGF Service Corp.
(c) Assistant Secretary of The Tuscarora Investment Trust.
(d) Vice President and a Director of Leshner Financial Services,
Inc. until December 1994.
(6) Sharon L. Karp - Vice President of the Sub-Adviser.
(a) Vice President of Leshner Financial, Inc.
(7) John F. Splain - Secretary and General Counsel of the Sub-Adviser.
(a) Secretary, General Counsel and a Director of Leshner
Financial, Inc.
(b) Secretary and General Counsel of MGF Service Corp.
(c) Secretary of Midwest Group Tax Free Trust, Midwest Trust,
Midwest Strategic Trust, Brundage, Store and Rose Investment Trust,
Williamsburg Investment Trust, Markman MultiFund Trust, The
Tuscarora Investment Trust, PRAGMA Investment Trust and Walnut
Investment Trust, registered investment companies.
4
<PAGE> 44
(d) Assistant Secretary of Fremont Mutual Funds, Inc. and
Schwartz Investment Trust, registered investment companies.
(e) Secretary and General Counsel of Leshner Financial Services,
Inc. until December 1994.
(8) Robert D. Dorsey - Treasurer of the Sub-Adviser.
(a) President of MGF Service Corp.
(b) Treasurer and a Director of Leshner Financial, Inc.
(c) Vice President of Brundage, Story and Rose Investment Trust,
Markman MultiFund Trust, PRAGMA Investment Trust and Walnut
Investment Trust.
(d) Assistant Vice President of Williamsburg Investment Trust,
Schwartz Investment Trust, Fremont Mutual Funds, Inc. and The
Tuscarora Investment Trust.
(e) Treasurer of Leshner Financial Services, Inc. until December
1994.
(9) Susan F. Flischel - Vice President - Investments of the Sub-Adviser.
(a) Assistant vice President - Investments of Leshner Financial
Services, Inc. until December 1994.
(10) Scott Weston - Assistant Vice President - Investments of the Sub-Adviser.
(11) Michele McClellan Hawkins - Assistant Vice President of the Sub-Adviser.
(12) Elizabeth A. Santen - - Assistant Secretary of the Sub-Adviser.
(a) Assistant Secretary of Leshner Financial Inc.
(b) Assistant Vice president of MGF Service Corp.
(c) Assistant Secretary of Midwest Group Tax Free Trust, Midwest
Trust, Midwest Strategic Trust, The Tuscarora Investment Trust and
Walnut Investment Trust.
(d) Assistant Secretary of Leshner Financial Services, Inc. until
December 1994.
Item 29. Principal Underwriters:
(a) None.
(b) See item 28 for information about the officers and members of
Millennium Capital LLC.
5
<PAGE> 45
(c) Not applicable.
Item 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained at Midwest Group Financial Services, Inc., 312 Walnut Street,
Cincinnati, Ohio 45202-4004, except for books or records required to be
maintained pursuant to paragraphs (b)(2)(iv), (b)(4) and (b)(11) of Rule 31a-1,
which shall be maintained at the Fund's offices at 10814 Bull Valley Road,
Woodstock, Illinois 60098.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings:
(a) Not applicable.
(b) Not applicable.
(c) Registrant hereby undertakes, if requested to do so by holders of at
least 10% of the registrant's outstanding shares, to call a meeting of
shareholders for the purpose of voting upon the question of removal of a
trustee or trustees and to assist in communications with other
shareholders as required by Section 16(c) of the Act.
6
<PAGE> 46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all the
requirements for effectiveness of this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized in the City of Chicago,
and State of Illinois on the 10th day of June 1996.
MILLENNIUM INCOME TRUST
By: /s/ JANIS S. ENGLAND
---------------------------
Janis S. England, 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 indicated on the 10th day of June 1996.
/s/ JANIS S. ENGLAND Chairman of the Board, Trustee, President
- -------------------------- and Treasurer (Chief Executive Officer,
Janis S. England, President Chief Financial Officer and Chief
Accounting Officer)
/s/ MARJORIE H. O'LAUGHLIN Trustee
- --------------------------
Marjorie H. O'Laughlin
/s/ COURTNEY C. SHEA Trustee
- --------------------------
Courtney C. Shea
/s/ SALLY M. TASSANI Trustee
- --------------------------
Sally M. Tassani
/s/ BARBARA E. WALLACE Trustee
- --------------------------
Barbara E. Wallace
<PAGE> 47
EXHIBIT INDEX
Page No.
(1) Agreement and Declaration of Trust(1)
(2) By-Laws(2)
(3) Not applicable
(4) Not applicable
(5)(a) Form of Management Agreement(1)
(5)(b) Form of Sub-Advisory Agreement(2)
(6) Form of Underwriting Agreement(1)
(7) Not applicable
(8) Form of Custodian Agreement(2)
(9) Form of Transfer Agency Agreement(1)
(10) Not applicable
(11) Consent of Independent Public Accountants
(12) Not applicable
(13) Form of Subscription Agreement(2)
(14) Not applicable
(15) Not applicable
(16) Schedule for Performance Quotations
(17) Financial Data Schedule
(18) Not applicable
(1) Incorporated by reference from the initial registration statement filed
on Form N-1A on October 12, 1994.
(2) Incorporated by reference from Pre-Effective Amendment No. 1 filed on
Form N-1A on February 21, 1995.
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in this
Post-Effective Amendment No. 1 of our report dated May 29, 1996 and to all
references to our Firm included in or made a part of this Post-Effective
Amendment.
/s/ ARTHUR ANDERSEN LLP
----------------------------
Arthur Andersen LLP
Cincinnati, Ohio
June 10, 1996
<PAGE> 1
EXHIBIT 16
SCHEDULE OF PERFORMANCE QUOTATIONS
The yield and the effective yield for the seven-day period ended March 31,
1996 for the Treasurers' Government Money Market Fund was calculated as
follows.
Yield
5.26 = (0.001007892813/1) * (365/7)
Effective Yield
5.39 = (((0.001007892813 + 1) 52.14285714) -1)
<TABLE> <S> <C>
<ARTICLE> CT
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> SEP-30-1995 SEP-30-1995
<PERIOD-START> JAN-17-1995 OCT-02-1995
<PERIOD-END> SEP-30-1995 MAR-31-1996
<TOTAL-ASSETS> 120,170 120,987
<COMMON> 100,000 102,735
0 0
0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 120,170 120,987
<TOTAL-REVENUES> 0 2,735
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 2,735
<EPS-PRIMARY> 0 .027
<EPS-DILUTED> 0 .027
</TABLE>
