INSTITUTIONAL RESERVES FUND
PROSPECTUS
July 28, 2000
AS WITH OTHER MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
RISK/RETURN SUMMARY...........................................................3
FEES AND EXPENSES OF THE FUND.................................................4
DESCRIPTION OF THE FUND.......................................................4
MANAGEMENT OF THE FUND ......................................................7
PURCHASE AND SALE OF SHARES...................................................8
o........How the Fund Values Its Shares.......................................8
o How to Purchase Shares...............................................9
o Automatic Investment Plan............................................9
o How to Sell Shares...................................................9
o Selling Shares Directly to the Fund.................................10
o Auto Withdrawal Plan................................................10
o Automatic Redemption................................................10
DIVIDENDS, DISTRIBUTIONS, AND TAXES..........................................11
DISTRIBUTION ARRANGEMENTS....................................................13
FOR MORE INFORMATION ABOUT THE FUND..................................BACK COVER
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RISK/RETURN SUMMARY
OBJECTIVES. The investment objectives of the Fund are safety of principal and
liquidity, and to the extent consistent with these objectives, maximum current
income.
PRINCIPAL INVESTMENT STRATEGIES. The Fund is a "money market fund" that seeks to
maintain a stable net asset value of $1.00 per share. The Fund pursues its
objective by maintaining a diversified portfolio of high-quality money market
securities. The Fund primarily invests in:
o Federally insured student loans purchased through a trust, subject to
unconditional repurchase commitments from financial institutions on five
business days' notice;
o U.S. Treasury bills or notes and other obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities; and
o repurchase agreements collateralized by the types of securities listed.
PRINCIPAL RISKS. The principal risks of investing in the Fund are interest rate
risk, credit risk, management risk. An investment in the Fund is not a deposit
in a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Although the Fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money by
investing in the Fund.
o INTEREST RATE RISK. This is the risk that returns will fluctuate more than
expected because of changes in the level of interest rates.
o CREDIT RISK. This is the risk associated with the ability of the firm that
issues or guarantees securities to meet its obligations on those securities
or guarantees.
o MANAGEMENT RISK. This risk is the possibility that the Fund's managers may
make poor choices in selecting securities and that the Fund will not
perform as well as other funds.
PERFORMANCE:
Since this is a new Fund, performance information is not required to be
included.
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FEES AND EXPENSES OF THE FUND
SHAREHOLDER TRANSACTION EXPENSES
(Fees paid directly from your investment) NONE
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
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OPERATING EXPENSES
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Management Fees 0.35%(1)
Distribution (12b-1) Fees 0.00%(2)
Other Expenses 0.41%
Total Fund Operating Expenses 0.76%(1)
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(1) The Fund' s Adviser has voluntarily waived a portion of the management fee
for an actual fee of 0.25 percent. The Adviser may reduce or eliminate the
fee waiver at any time. As a result, total fees have been voluntarily
reduced for an actual fee of 0.66 percent.
(2) The Fund' s plan allows charges of up to .25 percent but no fees are
currently being imposed under the plan.
EXAMPLES
The Examples are to help you compare the cost of investing in the Fund with the
cost of investing in other funds. They assume that you invest $10,000 in the
Fund for the periods indicated and then redeem all your shares at the end of
those periods. They also assume that your investment has a 5 percent return each
year and that the Fundss.s operating expenses stay the same. Your actual costs
may be higher or lower.
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EXPENSE EXAMPLES
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After 1 year $78
After 3 years $243
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DESCRIPTION OF THE FUND
This section of the Prospectus provides a more complete description of the
Fund's investment objectives, principal strategies, and risks. There can, of
course, be no assurance that the Fund will achieve its investment objectives.
OBJECTIVES
The Fund' s investment objectives are safety of principal and liquidity, and to
the extent consistent with these objectives, maximum current income. As a money
market fund, the Fund must meet the requirements of SEC Rule 2a-7. The Rule
imposes strict requirements on the investment quality, maturity, and
diversification of the Fund's investments. Under Rule 2a-7, the Fund's
investments must each have a remaining maturity of no more than 397 days and the
Fund must maintain an average weighted maturity that does not exceed 90 days.
PRINCIPAL INVESTMENT STRATEGIES
The Fund pursues its objectives by investing in high-quality money market
obligations, that is those which have a high probability of timely payment. The
Fund may invest in:
o redeemable, guaranteed interest-bearing participation interests ("Trust
Certificates") issued by one or more trusts created for the purpose of
acquiring federally insured student loans, which may comprise up to 80
percent of the Fund's portfolio;
o U.S. Treasury bills, notes and other obligations issued or guaranteed by
the U.S. Government, its agencies, or instrumentalities; and
o repurchase agreements collateralized by the types of securities listed.
The Fund will only purchase Trust Certificates from Student Loan Trusts formed
for the purpose of purchasing federally insured student loans. The Trust
Certificates will have an original maturity of not more than 397 days, but are
backed by the unconditional obligation of one or more rated financial
institutions to repurchase the student loans or the Trust Certificates from the
trust upon five business days' notice from the Fund. Each financial institution
providing an unconditional repurchase commitment will have one or more ratings
in the highest category for short-term securities, which indicates the issuer
has the greatest capacity for timely payment.
RISK CONSIDERATIONS
The Fund is subject to management risk. This risk is the possibility that the
Fund's managers may make poor choices in selecting securities and that the Fund
will not perform as well as other funds. In addition, specific risks of the
Fund's portfolio include:
INTEREST RATE RISK. Because the Fund invests in short-term securities, a decline
in interest rates will affect the Fund's yields as these securities mature or
are sold and the Fund purchases new short-term securities with lower yields.
Generally, an increase in interest rates causes the value of a debt instrument
to decrease. The change in value for shorter-term securities is usually smaller
than for securities with longer maturities.
CREDIT RISK. This is the risk that a security's credit rating will be downgraded
or that the issuer of a security or a guarantor will default (fail to make
scheduled interest and principal payments or fail to fulfill its promise to
repurchase securities). The Fund invests in highly rated securities to minimize
credit risk.
OTHER INVESTMENT INFORMATION
U.S. GOVERNMENT SECURITIES. U.S. Government securities include obligations
issued or guaranteed by the U.S. Treasury, such as Treasury bills, notes, bonds,
and certificates of indebtedness, and obligations issued or guaranteed by
agencies or instrumentalities of the U.S. Government.
TEMPORARY DEFENSIVE POSITION. For temporary defensive purposes in response to
adverse market or other conditions, the Fund may make investments, including
short-term money market instruments or holding substantial cash reserves, which
are inconsistent with the Fund's primary investment strategies. While the Fund
is investing for temporary defensive purposes, it may not meet its investment
objectives.
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MANAGEMENT OF THE FUND
INVESTMENT ADVISER
The Fund's Adviser is Investors Management Group, Ltd. ("IMG"), 2203 Grand
Avenue, Des Moines, Iowa 50312. IMG is a wholly owned subsidiary of AMCORE
Investment Group, N.A. that provides continuous investment management to pension
and profit-sharing plans, insurance companies, public agencies, banks,
endowments and charitable institutions, other mutual funds, individuals and
others. As of June 30, 2000, IMG had approximately $4.2 billion in equity,
fixed-income and money market assets under management.
IMG provides investment advisory services and order placement facilities for the
Fund. For these advisory services, the Fund has contracted to pay IMG a fee of
0.35 percent as a percentage of average daily net assets of the Fund. IMG has
waived a portion of the fee for an actual fee of 0.25 percent. IMG may reduce or
eliminate the fee waiver at any time.
PORTFOLIO MANAGERS
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio:
o Kathryn D. Beyer, CFA
- Managing Director and Fixed Income Strategist.
- Ms. Beyer is a member of the Investment Strategy Committee and the Bond
Research Committee.
- She has been with IMG since 1993.
o Jeffrey D. Lorenzen, CFA
- Managing Director and Fixed Income Strategist.
- Mr. Lorenzen is a member of the Investment Strategy Committee and
chairperson of the Bond Research Committee.
- He has been with IMG since 1992.
o Elizabeth S. Pierson, CFA
- Vice President and Senior Fixed-Income Manager.
- Ms. Pierson is a member of the Investment Strategy Committee and the
Bond Research Committee.
- She became an employee of IMG effective with the acquisition of IMG by
AMCORE Financial, Inc. in February 1998 and has been with IMG
affiliates since 1984.
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PURCHASE AND SALE OF SHARES
HOW THE FUND VALUES ITS SHARES
The Fund's NAV is calculated at 11:00 a.m. Central Time each day the Federal
Reserve Bank ("Fed") or New York Stock Exchange ("Exchange") is open for
business.
To calculate NAV, the Fund's assets are valued and totaled, liabilities are
subtracted, and the balance, called net assets, is divided by the number of
shares outstanding. The Fund values its securities at their amortized cost. This
method involves valuing a security at its cost and thereafter applying a
constant amortization to maturity of any discount or premium, regardless of the
effect of fluctuating interest rates on the market value of the investment.
A purchase order for shares received in good order by the Fund by 11:00 a.m.
Central Time is effected at the net asset value per share calculated as of 11:00
a.m. Central Time, and investors will receive the dividend declared that day.
HOW TO PURCHASE SHARES
You may purchase the Fund's shares through qualified institutions. A qualified
institution is an institution that has a business relationship with Union Bank
and Trust Company, Lincoln, Nebraska ("Union Bank") and/or its affiliates as
determined by Union Bank in its sole discretion.
The minimum initial investment amount is $100,000. To purchase shares of the
Fund, complete an Account Application, which is available by calling (800)
798-1819, and mail it to:
Vintage Mutual Funds, Inc.
2203 Grand Avenue
Des Moines, IA 50312
Payment for your initial purchase, along with subsequent purchases, may be made
by means of a wire, automated clearing house (ACH), or a check made payable to
Institutional Reserves Fund. The wire and ACH instructions are as follows:
Union Bank & Trust Company
Lincoln, Nebraska
Trust Department, ABA #104910785
Lincoln, Nebraska 68506
Account of Institutional Reserves Fund
FBO: (Account Registration Name)
If you are an existing Fund shareholder, you may request a purchase of
additional shares by calling (800) 798-1819 or by visiting www.ipasonline.com to
access your account to initiate the purchase.
When purchasing your shares by check or electronic funds transfer, the purchase
may be delayed until the Fund is reasonably satisfied that the check or
electronic funds transfer has been collected (which may take up to 10 business
days).
The Fund is required to withhold 31 percent of taxable dividends, capital gains
distributions, and redemptions paid to shareholders that have not provided the
Fund with their certified taxpayer identification number. To avoid this, you
must provide your correct Tax Identification Number (Social Security Number for
most individual investors) on your Account Application.
The Fund may refuse any order to purchase shares. In particular, the Fund
reserves the right to restrict purchases of shares when they appear to evidence
a pattern of frequent purchases and sales made in response to short-term
conditions.
AUTOMATIC INVESTMENT PLAN
The Automatic Investment Plan enables you, as a shareholder of the Fund, to make
regular monthly purchases of shares. With your authorization, the Transfer Agent
will automatically purchase shares at NAV on the dates of the specified purchase
and have it automatically withdrawn from your bank account. In order to
participate the required minimum purchase is $500.
To participate in the Automatic Investment Plan, you should call (800) 798-1819
for more information.
HOW TO SELL SHARES
You may redeem your shares (i.e., sell your shares back to the Fund) on any day
the Fed and Exchange are open, either directly or through your financial
intermediary. Your sales price will be the next-determined NAV after the Fund
receives your sales request in proper form. Normally, proceeds will be sent to
you within 3 days. If you recently purchased your shares by check or electronic
funds transfer, your redemption payment may be delayed until the Fund is
reasonably satisfied that the check or electronic funds transfer has been
collected (which may take up to 10 business days).
SELLING SHARES DIRECTLY TO THE FUND
BY MAIL:
Send a signed letter of instruction to:
Vintage Mutual Funds, Inc.
2203 Grand Avenue
Des Moines, IA 50312
For your protection, a bank, a member firm of a national stock exchange, a
credit union, a clearing agency, a savings association, or other eligible
guarantor institution, must guarantee signatures. Additional documentation is
required for the sale of shares by corporations, intermediaries, fiduciaries and
surviving joint owners. If you have any questions about the procedures, contact
IMG.
BY TELEPHONE:
You may redeem your shares by telephone request unless you choose not to have
this option on the Account Application. Call the Fund at (800) 798-1819 with
instructions on how you wish to receive your sale proceeds.
BY INTERNET:
You may initiate your redemption by visiting www.ipasonline.com on the Internet.
Call the Fund at (800) 798-1819 to obtain authorization and instructions.
AUTO WITHDRAWAL PLAN
The Auto Withdrawal Plan enables you, as a shareholder of the Fund, to make
regular monthly redemptions of shares. With your authorization, the Transfer
Agent will automatically redeem shares at NAV on the dates of the withdrawal and
have it automatically deposited into your bank account or a check in the amount
specified mailed to you. In order to participate:
o the required minimum withdrawal is $500; and
o the Fund must maintain a $10,000 minimum balance.
To participate in the Auto Withdrawal Plan, you should call (800) 798-1819 for
more information.
AUTOMATIC REDEMPTION
The Fund may automatically redeem your shares at NAV if your account drops below
$500. Before the Fund exercises its right to redeem these shares, you will be
given notice that the value of your shares is less than the minimum amount and
will be allowed 60 days to make an additional investment that will increase the
value of your account to at least $500.
If you elect to receive distributions in cash, and checks (1) are returned and
marked as "undeliverable" or (2) remain uncashed for six months, your cash
election will be changed automatically and your future dividend and capital
gains distributions will be reinvested in the Fund at the per share NAV
determined as of the date of payment of the distribution. In addition, any
undeliverable checks or checks that remain uncashed for six months will be
canceled and will be reinvested in the Fund.
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DIVIDENDS, DISTRIBUTIONS, AND TAXES
DIVIDENDS AND CAPITAL GAINS
The Fund intends to declare net investment income daily as a dividend to
shareholders at the close of business on the day of declaration. The Fund will
generally pay such dividends monthly.
The Fund also intends to distribute its capital gains, if any, at least
annually, normally in December of each year. A shareholder will automatically
receive all income dividends and capital gains distributions in additional full
and fractional shares of the Fund at NAV as of the ex-dividend date, unless the
shareholder elects to receive dividends or distributions in cash. Such election
must be made on the Account Application; any change in such election must be
made in writing to the Fund at 2203 Grand Avenue, Des Moines, Iowa 50312 and
will become effective with respect to dividends and distributions having record
dates after its receipt by the Transfer Agent. Dividends are paid in cash not
later than seven business days after a shareholder' s complete redemption of his
or her shares.
TAX CONSIDERATIONS
All shareholders are required to report the receipt of dividends and
distributions on their federal income tax returns, even if dividends have been
reinvested in additional shares.
Dividends paid out of the Fund's investment company taxable income (including
dividends, taxable interest and net short-term capital gains) will be taxable to
a U.S. shareholder as ordinary income. Distributions of net capital gains (the
excess of net long-term capital gains over net short-term capital losses), if
any, designated by the Fund as capital gain dividends are taxable as long-term
capital gains, regardless of the length of time the shareholder has held Fund
shares.
A distribution will be treated as paid on December 31 of the current calendar
year if it is declared by the Fund in October, November or December of that year
to shareholders of record on a date in such a month and paid by the Fund during
January of the following calendar year. Such distributions will be treated as
received by shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are received.
Each year the Fund will notify shareholders of the tax status of dividends and
distributions.
Distributions from the Fund may be subject to state and local taxes.
Distributions of the Fund that are derived from interest on U.S. Government
securities may be exempt from state and local taxes in certain states.
Shareholders should consult their tax advisors regarding the possible exclusion
for state and local income tax purposes of the portion of dividends paid by the
Fund which is attributable to interest from U.S. Government securities and the
particular tax consequences to them of an investment in the Fund, including the
application of state and local tax laws.
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DISTRIBUTION ARRANGEMENTS
SHARE CLASSES
The Fund offers only one class of shares at present, although it has authority
to offer multiple classes in the future.
DISTRIBUTION
Shares of the Fund pay no shareholder or servicing fees and are normally offered
directly by the distributor or through qualified institutions.
RULE 12B-1 AND ADMINISTRATIVE SERVICE FEES
The Fund has adopted a plan under SEC Rule 12b-1 and an Administrative Services
Plan that allows the Fund to pay asset-based distribution and service fees for
the distribution and sale of its shares. Because these fees are paid out of the
Fund' s assets on an on-going basis, over time these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges. The plans allow charges of up to .50 percent but no fees are currently
being imposed under the plans.
HOUSEHOLDING REGULATORY MATERIALS
To reduce the volume of mail you receive, only one copy of financial reports,
prospectuses, and other regulatory materials is mailed to your household. You
can call us at (800) 798-1819, or write to us at the Fund's address, to request
(1) additional copies free of charge, or (2) that we discontinue our practice of
householding regulatory materials.
For more information about the Funds, the following documents are available:
ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS
Annual and Semi-Annual Reports to shareholders contain additional information on
each Fund's investments. In the Annual Report, you will find a discussion of the
market conditions and investment strategies that significantly affected each
Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The Vintage Funds have an SAI, which contains more detailed information about
each Fund, including its operations and investment policies. The Funds' SAI is
incorporated by reference into (and is legally part of) this Prospectus.
You may request a free copy of the current Annual/Semi-Annual Report or the SAI,
by contacting your broker or other financial intermediary, or by contacting the
Funds:
By mail: c/o Vintage Mutual Funds, Inc.
2203 Grand Avenue
Des Moines, IA 50312
By phone: For Information and Literature: (800) 798-1819
By email: [email protected]
By Internet: www.VintageFunds.com
OR YOU MAY VIEW OR OBTAIN THESE DOCUMENTS FROM THE SEC:
In person: at the SEC's Public Reference Room in Washington, DC
By phone: 1-202-942-8090(For information only)
By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(Duplicating fee required)
By email: [email protected]
By Internet: www.sec.gov
The Vintage Funds may not be available in all states. Please contact the Funds
to determine if the Funds are available for sale in your state.
File No. 811-08910
