<PAGE> 1
SUPPLEMENT DATED AUGUST 10, 1996
TO PROSPECTUS DATED MAY 1, 1995
JHAVERI VALUE FUND
The following condensed supplementary financial information for the
period ended March 31, 1996, is derived from the audited financial statements of
the Trust and has been audited by McCurdy & Associates CPA's, Inc., the
independent public accountants for the Trust. The financial statements of the
Trust and related auditor's report are included in the Statement of Additional
Information. Additional performance information is included in the Trust's
annual report dated March 31, 1996, and is available upon request without
charge.
<PAGE> 2
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
from May 1, 1995 (Commencement of Operations)
through March 31, 1996
<TABLE>
<S> <C>
Net asset value - beginning of period $ 12.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .00
Net gain on investments both realized and unrealized .79
--------
Total from investment operations 12.79
LESS DISTRIBUTIONS
Dividends from net investment income .04
Dividends from capital gains .37
--------
Net asset value - end of period $ 12.38
========
Total Return** 7.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) 9,124
Ratio of expenses to average net assets ** 2.50%
Ratio of net investment income to average net assets** (.02)%
Portfolio turnover rate 45.23%
<FN>
**Annualized
</TABLE>
<PAGE> 3
The information about the Trust's executive officers found in the
section entitled "Trustees and Officers" on Page 10 of the Prospectus is
revised as follows:
*Ramesh C. Jhaveri Chairman of the Board, Chief Executive Officer,
Treasurer and Trustee
*Saumil R. Jhaveri President, Secretary and Trustee
The following should be read in conjunction with the section
entitled "General Information" on page 13 of the Prospectus.
As of July 17, 1996, the Triad-Erisa Partnership, Ramesh C. Jhaveri and
Nalini R. Jhaveri, M.D. may be deemed to control the Fund as a result
of their respective beneficial ownership of the shares of the Fund.
<PAGE> 4
JHAVERI VALUE FUND
PROSPECTUS MAY 1, 1996
P.O. Box 16188
Cleveland, Ohio 44116
For questions about investing in the Fund or
For Information, Shareholder Services and Requests:
(216) 331-0703 (in the Cleveland area)
(800) 977-8778 (outside the Cleveland area)
Jhaveri Value Fund is a mutual fund whose investment objective is to
provide long term capital appreciation. The Fund seeks to achieve its objective
by investing primarily in a broad range of common stocks believed by its
Adviser, Investments Technology, Inc., to have above average prospects for
appreciation, based on a proprietary investment model developed by the Adviser.
The Fund is "no-load," which means there are no sales charges or
commissions. In addition, there are no 12b-1 fees, distribution expenses or
deferred sales charges which are borne by the shareholders. The Fund is a series
of The Jhaveri Trust, an open-end management investment company.
Shares of the Fund are not deposits or obligations of any bank, are not
endorsed or guaranteed by any bank, and are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other government
agency, entity, or person. The purchase of Fund shares involves investment
risks, including the possible loss of principal.
This Prospectus sets forth the information a prospective investor ought
to know before investing and should be retained for future reference. A
Statement of Additional Information has been filed with the Securities and
Exchange Commission dated August 10, 1996, which is incorporated herein by
reference and can be obtained without charge by calling the Fund at one of the
phone numbers listed above.
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
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding
the direct and indirect expenses that an investor may incur as a shareholder in
the Fund. The expense information is based on estimated amounts for the current
fiscal year. The expenses are expressed as a percentage of average net assets.
The Example should not be considered a representation of future Fund performance
or expenses, both of which may vary.
Shareholders should be aware that the Fund is a no-load fund and,
accordingly, a shareholder does not pay any sales charge or commission upon
purchase or redemption of shares of the Fund. In addition, the Fund does not
have a 12b-1 Plan. Unlike most other mutual funds, the Fund does not pay
directly for transfer agency, pricing, custodial, auditing or legal services,
nor does it pay directly any general administrative or other operating expenses.
The Adviser pays all of the expenses of the Fund except brokerage, taxes,
interest and extraordinary expenses.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
<S> <C>
Sales Load Imposed on Purchases...................................................................................... NONE
Sales Load Imposed on Reinvested Dividends........................................................................... NONE
Deferred Sales Load.................................................................................................. NONE
Redemption Fees...................................................................................................... NONE
Exchange Fees........................................................................................................ NONE
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)(1)
Management Fees...................................................................................................... 2.50%
12b-1 Charges........................................................................................................ NONE
Total Fund Operating Expenses........................................................................................ 2.50%
<FN>
(1) The Fund's total operating expenses are equal to the management fee
paid to the Adviser because the Adviser pays all of the Fund's
operating expenses.
</TABLE>
Example
- -------
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
$25 $78 $133 $284
</TABLE>
- 2 -
<PAGE> 6
THE FUND
Jhaveri Value Fund (the "Fund") was organized as a series of The
Jhaveri Trust (the "Trust") on January 18, 1995, and commenced operations on May
1, 1995. The investment adviser to the Fund is Investments Technology, Inc. (the
"Adviser").
INVESTMENT OBJECTIVE AND STRATEGIES
The investment objective of the Fund is to provide long term capital
appreciation. The Fund seeks to achieve this objective by investing primarily in
a broad range of common stocks which the Adviser believes have above average
prospects for appreciation, based on a proprietary investment model developed by
the Adviser. However, the Fund will also invest in dividend paying stocks, and
it is expected that the Fund will generate a combination of current income and
long term capital appreciation.
The Fund is intended for investors with a long term wealthbuilding
horizon. The Adviser seeks to limit investment risk by diversifying the Fund's
investments across a broad range of industries and companies. While the Fund
ordinarily will invest in common stocks of U.S. companies, it may invest in
foreign companies through the purchase of American Depository Receipts.
The Adviser's investment model applies historical, fundamental and
technical analyses to a data base of more than 1,400 companies to determine
optimum buy and sell ranges for the common stock of each of the companies in the
data base. The Adviser uses its investment model to screen the companies in the
data base, then selects stocks to provide industry and company diversification.
The Adviser generally intends to stay fully invested (subject to
liquidity requirements and defensive purposes) in common stock regardless of the
movement of stock prices. The Fund normally will invest primarily in common
stocks of established companies whose securities, in the opinion of the Adviser,
enjoy a fair degree of marketability. Most equity securities in the Fund's
portfolio are listed on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ over-the-counter market.
For temporary defensive purposes under abnormal market or economic
conditions, the Fund may hold all or a portion of its assets in money market
instruments (high quality fixed income securities with maturities of less than
one year), securities of money market funds or repurchase agreements fully
collateralized by U.S. government obligations. The Fund may also invest in such
instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies. If the Fund acquires securities of
money market funds, the shareholders of the Fund will be subject to duplicative
management fees.
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions and
other factors, the Fund cannot give any assurance that its investment objective
will be achieved. In addition, you should be aware that the
- 3 -
<PAGE> 7
Adviser has no prior experience in managing investment companies and that the
Fund has no operating history. Rates of total return quoted by the Fund may be
higher or lower than past quotations, and there can be no assurance that any
rate of total return will be maintained. See "Investment Policies and Techniques
and Risk Considerations" for a more detailed discussion of the Fund's investment
practices.
HOW TO INVEST IN THE FUND
Subject to a minimum initial investment of $10,000 ($2,000 for
retirement accounts) and minimum subsequent investments of $1,000, you may
invest any amount you choose, as often as you want, in the Fund.
INITIAL PURCHASE
BY MAIL - You may purchase shares of the Fund by completing and signing
the investment application form which accompanies this Prospectus and mailing
it, in proper form, together with a check (subject to the above minimum amounts)
made payable to Jhaveri Value Fund, and sent to the P.O. Box listed below. If
you prefer overnight delivery, use the overnight address listed below.
U.S. mail: Jhaveri Value Fund Overnight: Jhaveri Value Fund
P.O. Box 640994 c/o Star Bank, N.A.
Cincinnati, Ohio 45264-0994 Mutual Fund Custody Dept.
425 Walnut St. M.L. 6118
Cincinnati, Ohio 45202
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment.
BY WIRE - You may also purchase shares of the Fund by wiring federal
funds from your bank, which may charge you a fee for doing so. If money is to be
wired, you must call American Data Services, Inc., the Fund's Transfer Agent, at
516-385-9580 to set up your account and obtain an account number. You should be
prepared to provide the information on the application to the Transfer Agent.
Then, you should provide your bank with the following information for purposes
of wiring your investment:
Star Bank, N.A. Cinti/Trust
ABA #0420-0001-3
Attn: Jhaveri Value Fund
D.D.A. # 48360-9483
Account Name _________________ (write in shareholder name)
For the Account # ______________ (write in account number)
You are required to mail a signed application to the Custodian at the
above address in order to complete your initial wire purchase. Wire orders will
be accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Fund. Any
- 4 -
<PAGE> 8
delays which may occur in wiring money, including delays which may occur in
processing by the banks, are not the responsibility of the Fund or the Transfer
Agent. There is presently no fee for the receipt of wired funds, but the right
to charge shareholders for this service is reserved by the Fund.
ADDITIONAL INVESTMENTS
You may purchase additional shares of the Fund at any time (minimum of
$1,000) by mail or wire. Each additional mail purchase request must contain your
name, the name of your account(s), your account number(s), and the name of the
Fund. Checks should be made payable to Jhaveri Value Fund and should be sent to
the Custodian's address. A bank wire should be sent as outlined above.
TAX SHELTERED RETIREMENT PLANS
Since the Fund is oriented to longer term investments, shares of the
Fund may be an appropriate investment medium for tax sheltered retirement plans,
including: individual retirement plans (IRAs); simplified employee pensions
(SEPs); 401(k) plans; qualified corporate pension and profit sharing plans (for
employees); tax deferred investment plans (for employees of public school
systems and certain types of charitable organizations); and other qualified
retirement plans. You should contact the Transfer Agent for the procedure to
open an IRA or SEP plan, as well as more specific information regarding these
retirement plan options. Consultation with an attorney or tax adviser regarding
these plans is advisable. Custodial fees for an IRA will be paid by the
shareholder by redemption of sufficient shares of the Fund from the IRA unless
the fees are paid directly to the IRA custodian. You can obtain information
about the IRA custodial fees from American Data Services, Inc., the Transfer
Agent.
OTHER PURCHASE INFORMATION
You may exchange securities that you own for shares of the Fund,
provided the securities meet the Fund's investment criteria and the Adviser
deems them to be a desirable investment for the Fund. Any exchange will be a
taxable event and you may incur certain transaction costs relating to the
exchange. Contact the Fund for additional information.
Dividends begin to accrue after you become a shareholder. The Fund does
not issue share certificates. All shares are held in non-certificate form
registered on the books of the Fund and the Fund's Transfer Agent for the
account of the shareholder. The rights to limit the amount of purchases and to
refuse to sell to any person are reserved by the Fund. If your check or wire
does not clear, you will be responsible for any loss incurred. If you are
already a shareholder, the Fund can redeem shares from any identically
registered account in the Fund as reimbursement for any loss incurred. You may
be prohibited or restricted from making future purchases in the Fund.
- 5 -
<PAGE> 9
HOW TO REDEEM SHARES
You may redeem any part of your account in the Fund at no charge by
mail. All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper order. The
proceeds of the redemption may be more or less than the purchase price of your
shares, depending on the market value of the Fund's securities at the time of
your redemption. Your request should be addressed to:
Jhaveri Value Fund
c/o American Data Services, Inc.
24 W. Carver Street
Huntington, New York 11743
"Proper order" means your request for a redemption must include your
letter of instruction, including the Fund name, account number, account name(s),
the address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions, the Fund
requires that signatures be guaranteed by a bank or member firm of a national
securities exchange. Signature guarantees are for the protection of
shareholders. At the discretion of the Fund or American Data Services, Inc., a
shareholder, prior to redemption, may be required to furnish additional legal
documents to insure proper authorization.
ADDITIONAL INFORMATION - If you are not certain of the requirements for
a redemption please call the Fund at (216) 331-0703 (in the Cleveland area) or
(800) 977-8778 (outside the Cleveland area). Redemptions specifying a certain
date or share price cannot be accepted and will be returned. We will mail you
the proceeds on or before the fifth business day following the redemption.
However, payment for redemption made against shares purchased by check will be
made only after the check has been collected, which normally may take up to
fifteen days. Also, when the New York Stock Exchange is closed (or when trading
is restricted) for any reason other than its customary weekend or holiday
closing or under any emergency circumstances, as determined by the Securities
and Exchange Commission, we may suspend redemptions or postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to require any shareholder to redeem all
of his or her shares in the Fund on 30 days' written notice if the value of his
or her shares in the Fund is less than $5,000 due to redemption, or such other
minimum amount as the Fund may determine from time to time. An involuntary
redemption constitutes a sale. You should consult your tax adviser concerning
the tax consequences of involuntary redemptions. A shareholder may increase the
value of his or her shares in the Fund to the minimum amount within the 30 day
period. Each share of the Fund is subject to redemption at any time if the Board
of Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
- 6 -
<PAGE> 10
SHARE PRICE CALCULATION
The value of an individual share in the Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of the close of the New York
Stock Exchange (4:00 p.m., Eastern time) on each day that the exchange is open
for business, and on any other day on which there is sufficient trading in the
Fund's securities to materially affect the net asset value. The net asset value
per share of the Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ
over-the-counter market are valued at the last quoted sale price. Lacking a last
sale price, a security is valued at its last bid price except when, in the
Adviser's opinion, the last bid price does not accurately reflect the current
value of the security. All other securities for which over-the-counter market
quotations are readily available are valued at their last bid price. When market
quotations are not readily available, when the Adviser determines the last bid
price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. When prices are not
readily available from a pricing service, or when restricted or illiquid
securities are being valued, securities are valued at fair value as determined
in good faith by the Adviser, subject to review of the Board of Trustees. Short
term investments in fixed income securities with maturities of less than 60 days
when acquired, or which subsequently are within 60 days of maturity, are valued
by using the amortized cost method of valuation, which the Board has determined
will represent fair value.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all of its net investment
income as dividends to its shareholders on an annual basis, and intends to
distribute its net long term capital gains at least once a year and its net
short term capital gains at least once a year.
Income dividends and capital gain distributions are automatically
reinvested in additional shares at the net asset value per share on the
distribution date. Shareholders will receive a confirmation statement reflecting
the payment and reinvestment of dividends and summarizing all other
transactions. If you withdraw your entire account, all dividends accrued to the
time of withdrawal, including the day of withdrawal, will be paid at that time.
- 7 -
<PAGE> 11
TAXES
The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended. By so qualifying,
the Fund will not be subject to federal income taxes to the extent that it
distributes substantially all of its net investment income and any realized
capital gains.
For federal income tax purposes, dividends paid by the Fund from
ordinary income are taxable to shareholders as ordinary income, but may be
eligible in part for the dividends received deduction for corporations. Pursuant
to the Tax Reform Act of 1986 (the "Tax Reform Act"), all distributions of net
capital gains to individuals are taxed at the same rate as ordinary income. All
distributions of net capital gains to corporations are taxed at regular
corporate rates. Any distributions designated as being made from net realized
long term capital gains are taxable to shareholders as long term capital gains
regardless of the holding period of the shareholder.
The Fund will mail to each shareholder after the close of the calendar
year a statement setting forth the federal income tax status of distributions
made during the year. Dividends and capital gains distributions may also be
subject to state and local taxes. Shareholders are urged to consult their own
tax advisers regarding specific questions as to federal, state or local taxes
and the tax effect of distributions and withdrawals from the Fund.
Unless a shareholder of the Fund furnishes his or her certified
taxpayer identification number (social security number for individuals) and
certifies that he is not subject to backup withholding, the Fund will be
required to withhold and remit to the U.S. Treasury 31% of the dividends,
distributions and redemption proceeds payable to the shareholder. Shareholders
should be aware that, under regulations promulgated by the Internal Revenue
Service, the Fund may be fined $50 annually for each account for which a
certified taxpayer identification number is not provided. In the event that such
a fine is imposed with respect to a specific account in any year, the Fund will
make a corresponding charge against the account.
TRUSTEES AND OFFICERS
The names of the Trustees and executive officers of the Trust are shown
below. Each Trustee who is an "interested person" of the Trust, as defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C> <C>
*Ramesh C. Jhaveri President, Treasurer and Trustee
*Saumil R. Jhaveri Secretary and Trustee
Mukul M. Mehta Trustee
James F. Mueller Trustee
David R. Zavagno Trustee
</TABLE>
The principal occupations of the executive officers and Trustees of the
Trust during the past five years are set forth below:
- 8 -
<PAGE> 12
Ramesh C. Jhaveri, P.O. Box 16188, Cleveland, Ohio 44116, is the
president of Investments Technology, Inc., an investment counseling firm which
he founded in 1983. He is licensed at Financial America Securities, Inc., an
NASD broker-dealer, as an account executive, options principal and general
securities principal.
Saumil R. Jhaveri, P.O. Box 16188, Cleveland, Ohio 44116, is the vice
president of Investments Technology, Inc., where he has been working full time
since 1991. He received his Bachelor of Science degree in Finance from Ohio
State University in 1991. He is the son of Ramesh C. Jhaveri.
Mukul M. Mehta, 11000 Cedar Avenue, Cleveland, Ohio 44106, is the
founder and president of Quality Sciences, Inc., a consulting and software
development firm assisting chemical industry clientele including Fortune 500
companies. Prior to May, 1992, he was an employee of BF Goodrich Company, where
he managed a consulting group using computer applications for solving technical
and business problems.
James F. Mueller, P.O. Box 280, Amherst, Ohio 44001, is advertising
director for Ed Mullinax Ford, a car dealer, and is a television sportscaster
for the Cleveland Browns.
David R. Zavagno, 30325 Bainbridge Road, Solon, Ohio 44139, is the
founder and president of Universal Medical Systems, Inc., a company specializing
in diagnostic imaging equipment design, sales and installation.
OPERATION OF THE FUND
The Fund is a diversified series of The Jhaveri Trust, an open-end
management investment company organized as an Ohio business trust on January 18,
1995. The Board of Trustees supervises the business activities of the Trust.
Like other mutual funds, the Trust retains various organizations to perform
specialized services. It retains Investments Technology, Inc., P.O. Box 16188,
Cleveland, Ohio 44116 (the "Adviser") to manage the Trust's investments and its
business affairs. The Adviser is an Ohio-based company of which Ramesh C.
Jhaveri is the controlling shareholder. Mr. Jhaveri and Saumil R. Jhaveri are
primarily responsible for the day-to-day management of the portfolio of the
Fund. Ramesh C. Jhaveri is the President, Chief Financial Officer, Treasurer and
a Trustee of the Trust, and the President, Treasurer, and a Director of the
Adviser. Saumil R. Jhaveri is the Secretary of the Trust and the Vice President,
Secretary, and a Director of the Adviser. Both are responsible for the
development and refinement of the Adviser's proprietary investment model, which
they use in the management of investments for individuals, corporations, pension
plans, trusts, retirement plans and charitable and endowment accounts.
The Fund is authorized to pay the Adviser a fee equal to an annual
average rate of 2.50% of its average daily net assets. The Adviser pays all of
the operating expenses of the Fund except brokerage, taxes, interest and
extraordinary expenses. The rate of the advisory fees paid by most investment
companies to their investment advisers is lower than the rate of the advisory
fees paid by the Fund. In this regard, it should be noted that most investment
companies pay their own operating expenses directly, while the Fund's expenses
except those specified above are paid by the Adviser.
- 9 -
<PAGE> 13
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and subject to its obligation of seeking best
qualitative execution, the Adviser may give consideration to sales of shares of
the Trust as a factor in the selection of brokers and dealers to execute
portfolio transactions. Financial America Securities, Inc., a registered
broker-dealer of which Mr. Jhaveri is an account executive, receives brokerage
commissions from the Fund. The Adviser (not the Fund) may pay fees to certain
fund consultants based on investments made and maintained by investors such
consultants have referred to the Fund. The Trust retains American Data Services,
Inc. to serve as transfer agent, dividend paying agent and shareholder service
agent.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
This section contains general information about various types of
securities and investment techniques.
EQUITY SECURITIES
The Fund may invest in common stocks and closed-end investment
companies which invest primarily in common stocks. The Fund may hold warrants
and rights issued in conjunction with common stock, but in general will sell any
such warrants or rights as soon as practicable after they are received. Warrants
are options to purchase equity securities at a specified price valid for a
specific time period. Rights are similar to warrants, but normally have a short
duration and are distributed by the issuer to its shareholders.
Equity securities include common stocks of domestic real estate
investment trusts and other companies which operate as real estate corporations
or which have a significant portion of their assets in real estate. The Fund
will not acquire any direct ownership of real estate.
The Fund may invest in foreign equity securities through the purchase
of American Depository Receipts. American Depository Receipts are certificates
of ownership issued by a U.S. bank as a convenience to the investors in lieu of
the underlying shares which it holds in custody. To the extent that the Fund
does invest in foreign securities, such investments may be subject to special
risks, such as changes in restrictions on foreign currency transactions and
rates of exchange, and changes in the administrations or economic and monetary
policies of foreign governments.
Equity securities are subject to price fluctuations depending on a
variety of factors, including market, business and economic conditions.
Investment in common stocks can involve special risks. In seeking long term
capital appreciation, the Fund may often purchase common stock of small and
medium size companies which may fluctuate in price more than common stocks of
larger, more mature companies, such as many of those included in the Dow Jones
Industrial Average. Therefore, an investor should expect that the share price of
the Fund will often be more volatile, in both "up" and "down" markets, than most
of the popular stock averages.
- 10 -
<PAGE> 14
INVESTMENT TECHNIQUES
The Fund may borrow money in an amount not exceeding 5% of the
Fund's net assets at the time the borrowing is made. The Fund may invest up to
5% of its net assets in repurchase agreements fully collateralized by U.S.
Government obligations. The Fund also is permitted to invest in money market
funds to maintain liquidity or pending selection of investments in accordance
with its policies.
GENERAL INFORMATION
FUNDAMENTAL POLICIES. The investment limitations set forth in the
Statement of Additional Information as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. The investment objective of the Fund may be changed without the
affirmative vote of a majority of the outstanding shares of the Fund. Any such
change may result in the Fund having an investment objective different from the
objective which the shareholders considered appropriate at the time of
investment in the Fund.
PORTFOLIO TURNOVER. The Fund does not intend to purchase or sell
securities for short term trading purposes. The Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
the Adviser believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. It is anticipated that the Fund will
have a portfolio turnover rate of less than 100%.
SHAREHOLDER RIGHTS. Any Trustee of the Trust may be removed by vote of
the shareholders holding not less than two-thirds of the outstanding shares of
the Trust. The Trust does not hold an annual meeting of shareholders. When
matters are submitted to shareholders for a vote, each shareholder is entitled
to one vote for each whole share he owns and fractional votes for fractional
shares he owns. All shares of the Fund have equal voting rights and liquidation
rights. Prior to the offering made by this Prospectus, Ramesh C. Jhaveri
purchased for investment all of the outstanding shares of the Fund and as a
result may be deemed to control the Fund.
PERFORMANCE INFORMATION
The Fund may periodically advertise "average annual total return." The
"average annual total return" of the Fund refers to the average annual
compounded rate of return over the stated period that would equate an initial
amount invested at the beginning of a stated period to the ending redeemable
value of the investment. The calculation of "average annual total return"
assumes the reinvestment of all dividends and distributions.
The Fund may also periodically advertise its total return over various
periods in addition to the value of a $10,000 investment (made on the date of
the initial public offering of the Fund's shares) as of the end of a specified
period. The "total return" for the Fund refers to the percentage change in the
value of an account between the beginning and end of the stated period, assuming
no activity in the account other than reinvestment of dividends and capital
gains distributions.
- 11 -
<PAGE> 15
The Fund may also include in advertisements data comparing performance
with other mutual funds as reported in non-related investment media, published
editorial comments and performance rankings compiled by independent
organizations and publications that monitor the performance of mutual funds
(such as Lipper Analytical Services, Inc., Morningstar, Inc., Fortune or
Barron's). Performance information may be quoted numerically or may be presented
in a table, graph or other illustration. In addition, Fund performance may be
compared to well-known indices of market performance including the Standard &
Poor's (S&P) 500 Index or the Dow Jones Industrial Average.
The advertised performance data of the Fund is based on historical
performance and is not intended to indicate future performance. Rates of total
return quoted by the Fund may be higher or lower than past quotations, and there
can be no assurance that any rate of total return will be maintained. The
principal value of an investment in the Fund will fluctuate so that a
shareholder's shares, when redeemed, may be worth more or less than the
shareholder's original investment.
INVESTMENT ADVISER
Investments Technology, Inc.
P.O. Box 16188
Cleveland, Ohio 44116
CUSTODIAN (ALL INITIAL AND SUBSEQUENT PURCHASES)
Star Bank, N.A.
P.O. Box 640994
Cincinnati, Ohio 45264-0994
TRANSFER AGENT (ALL REDEMPTION REQUESTS)
American Data Services, Inc.
24 West Carver Street
Huntington, New York 11743
AUDITORS
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
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 its
shares in any state to any person to whom it is unlawful to make such offer in
such state.
- 12 -
<PAGE> 16
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
SUMMARY OF FUND EXPENSES....................................................................................... 2
Shareholder Transaction Expenses...................................................................... 2
Annual Fund Operating Expenses........................................................................ 2
THE FUND....................................................................................................... 3
INVESTMENT OBJECTIVE AND STRATEGIES............................................................................ 3
HOW TO INVEST IN THE FUND...................................................................................... 5
Initial Purchase...................................................................................... 5
By Mail............................................................................................... 5
By Wire............................................................................................... 5
Additional Investments................................................................................ 5
Tax Sheltered Retirement Plans........................................................................ 6
Other Purchase Information............................................................................ 6
HOW TO REDEEM SHARES........................................................................................... 6
Additional Information................................................................................ 7
SHARE PRICE CALCULATION........................................................................................ 7
DIVIDENDS AND DISTRIBUTIONS.................................................................................... 8
TAXES.......................................................................................................... 8
TRUSTEES AND OFFICERS.......................................................................................... 9
OPERATION OF THE FUND.......................................................................................... 10
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS..................................................... 10
Equity Securities..................................................................................... 11
Investment Techniques................................................................................. 11
GENERAL INFORMATION............................................................................................ 11
Fundamental Policies.................................................................................. 11
Portfolio Turnover.................................................................................... 12
Shareholder Rights.................................................................................... 12
PERFORMANCE INFORMATION........................................................................................ 12
</TABLE>
<PAGE> 17
JHAVERI VALUE FUND
STATEMENT OF ADDITIONAL INFORMATION
August 10, 1996
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Prospectus of Jhaveri Value Fund dated May 1,
1995 and the Supplement to the Prospectus dated August 10, 1996. A copy of the
Prospectus can be obtained by writing the Transfer Agent at 24 W. Carver Street,
Huntington, New York 11743, or by calling 1-800-977-8778.
<PAGE> 18
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
DESCRIPTION OF THE TRUST....................................................................................... 1
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK
CONSIDERATIONS............................................................................................ 2
INVESTMENT LIMITATIONS......................................................................................... 3
THE INVESTMENT ADVISER......................................................................................... 5
TRUSTEE COMPENSATION........................................................................................... 6
PORTFOLIO TRANSACTIONS AND BROKERAGE........................................................................... 6
DETERMINATION OF SHARE PRICE................................................................................... 9
INVESTMENT PERFORMANCE......................................................................................... 9
CUSTODIAN...................................................................................................... 10
TRANSFER AGENT................................................................................................. 10
ACCOUNTANTS.................................................................................................... 10
FINANCIAL STATEMENTS........................................................................................... 11
</TABLE>
- i -
<PAGE> 19
DESCRIPTION OF THE TRUST
The Jhaveri Trust (the "Trust") is an open-end investment company
established under the laws of Ohio by an Agreement and Declaration of Trust
dated January 18, 1995 (the "Trust Agreement"). The Trust Agreement permits the
Trustees to issue an unlimited number of shares of beneficial interest of
separate series without par value. Shares of one series have been authorized,
which shares constitute the interests in Jhaveri Value Fund (the "Fund").
Each share of a series represents an equal proportionate interest in
the assets and liabilities belonging to that series with each other share of
that series and is entitled to such dividends and distributions out of income
belonging to the series as are declared by the Trustees. The shares do not have
cumulative voting rights or any preemptive or conversion rights, and the
Trustees have the authority from time to time to divide or combine the shares of
any series into a greater or lesser number of shares of that series so long as
the proportionate beneficial interest in the assets belonging to that series and
the rights of shares of any other series are in no way affected. In case of any
liquidation of a series, the holders of shares of the series being liquidated
will be entitled to receive as a class a distribution out of the assets, net of
the liabilities, belonging to that series. Expenses attributable to any series
are borne by that series. Any general expenses of the Trust not readily
identifiable as belonging to a particular series are allocated by or under the
direction of the Trustees in such manner as the Trustees determine to be fair
and equitable. No shareholder is liable to further calls or to assessment by the
Trust without his or her express consent.
Upon sixty days prior written notice to shareholders, the Fund may make
redemption payments in whole or in part in securities or other property if the
Trustees determine that existing conditions make cash payments undesirable. For
other information concerning the purchase and redemption of shares of the Fund,
see "How to Invest in the Fund" and "How to Redeem Shares" in the Prospectus.
For a description of the methods used to determine the share price and value of
the Fund's assets, see "Share Price Calculation" in the Prospectus.
As of July 17, 1996, the following persons may be deemed to
beneficially own five percent (5%) or more of the Fund: Ramesh C. Jhaveri and
Nalini R. Jhaveri, M.D. (including the shares owned by Triad-Erisa Partnership)
P.O. Box 16188, Cleveland, Ohio 44116 -- 34.588%; Margaret A. Weekley, 1420 W.
Bagley Road, Berea, Ohio 44017 -- 7.095%; Ramesh J. Brahmbhatt, M.D., 24224 Lake
Road, Bay Village, Ohio 44140 -- 5.109%; Chunilal K. Lalwani and Vidya C.
Lalwani, M.D., 4410 Valley Forge Drive, Fairview Park, Ohio 44126 -- 9.119%.
As of July 17, 1996, the Triad-Erisa Partnership (a partnership
controlled by Ramesh C. Jhaveri), Ramesh C. Jhaveri and Nalini R. Jhaveri, M.D.
(the wife of Ramesh C. Jhaveri) may be deemed to control the Fund as a result of
their respective beneficial ownership of the shares of the Fund. As of July 17,
1996, the officers and trustees as a group may be deemed to beneficially own
37.921% of the Fund.
- 1 -
<PAGE> 20
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the
investments the Fund may make and some of the techniques it may use, as
described in the Prospectus (see "Investment Objectives and Strategies" and
"Investment Policies and Techniques and Risk Considerations").
A. REPURCHASE AGREEMENTS. A repurchase agreement is a short-term
investment in which the purchaser (I.E., the Fund) acquires ownership of a U.S.
Government obligation (which may be of any maturity) and the seller agrees to
repurchase the obligation at a future time at a set price, thereby determining
the yield during the purchaser's holding period (usually not more than seven
days from the date of purchase). Any repurchase transaction in which the Fund
engages will require full collateralization of the seller's obligation during
the entire term of the repurchase agreement. In the event of a bankruptcy or
other default of the seller, the Fund could experience both delays in
liquidating the underlying security and losses in value. However, the Fund
intends to enter into repurchase agreements only with the Custodian, other banks
with assets of $1 billion or more and registered securities dealers determined
by the Adviser (subject to review by the Board of Trustees) to be creditworthy.
The Adviser monitors the creditworthiness of the banks and securities dealers
with which the Fund engages in repurchase transactions, and the Fund will not
invest more than 5% of its net assets in repurchase agreements.
B. LOANS OF PORTFOLIO SECURITIES. The Fund may make short and long term
loans of its portfolio securities. Under the lending policy authorized by the
Board of Trustees and implemented by the Adviser in response to requests of
broker-dealers or institutional investors which the Adviser deems qualified, the
borrower must agree to maintain collateral, in the form of cash or U.S.
government obligations, with the Fund on a daily mark-to-market basis in an
amount at least equal to 100% of the value of the loaned securities. The Fund
will continue to receive dividends or interest on the loaned securities and may
terminate such loans at any time or reacquire such securities in time to vote on
any matter which the Board of Trustees determines to be serious. With respect to
loans of securities, there is the risk that the borrower may fail to return the
loaned securities or that the borrower may not be able to provide additional
collateral.
C. ILLIQUID SECURITIES. The portfolio of the Fund may contain illiquid
securities. Illiquid securities generally include securities which cannot be
disposed of promptly and in the ordinary course of business without taking a
reduced price. Securities may be illiquid due to contractual or legal
restrictions on resale or lack of a ready market. The following securities are
considered to be illiquid: repurchase agreements maturing in more than seven
days, nonpublicly offered securities and restricted securities. The Fund will
not invest more than 5% of its net assets in illiquid securities.
D. OTHER INVESTMENT COMPANIES. The Fund is permitted to invest in
other investment companies at any time. The Fund will not purchase more than 3%
of the outstanding voting stock of any investment company. If the Fund acquires
securities of another investment company, the shareholders of the Fund may be
subject to duplicative management fees.
- 2 -
<PAGE> 21
INVESTMENT LIMITATIONS
FUNDAMENTAL. The investment limitations described below have been
adopted by the Trust with respect to the Fund and are fundamental
("Fundamental"), i.e., they may not be changed without the affirmative vote of a
majority of the outstanding shares of the Fund. As used in the Prospectus and
this Statement of Additional Information, the term "majority" of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding shares
of the Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding shares of the Fund. Other investment
practices which may be changed by the Board of Trustees without the approval of
shareholders to the extent permitted by applicable law, regulation or regulatory
policy are considered non-fundamental ("Non-Fundamental").
1. BORROWING MONEY. The Fund will not borrow money, except (a) from a
bank, provided that immediately after such borrowing there is an asset coverage
of 300% for all borrowings of the Fund; or (b) from a bank or other persons for
temporary purposes only, provided that such temporary borrowings are in an
amount not exceeding 5% of the Fund's total assets at the time when the
borrowing is made. This limitation does not preclude the Fund from entering into
reverse repurchase transactions, provided that the Fund has an asset coverage of
300% for all borrowings and repurchase commitments of the Fund pursuant to
reverse repurchase transactions.
2. SENIOR SECURITIES. The Fund will not issue senior securities. This
limitation is not applicable to activities that may be deemed to involve the
issuance or sale of a senior security by the Fund, provided that the Fund's
engagement in such activities is (a) consistent with or permitted by the
Investment Company Act of 1940, as amended, the rules and regulations
promulgated thereunder or interpretations of the Securities and Exchange
Commission or its staff and (b) as described in the Prospectus and this
Statement of Additional Information.
3. UNDERWRITING. The Fund will not act as underwriter of securities
issued by other persons. This limitation is not applicable to the extent that,
in connection with the disposition of portfolio securities (including restricted
securities), the Fund may be deemed an underwriter under certain federal
securities laws.
4. REAL ESTATE. The Fund will not purchase or sell real estate. This
limitation is not applicable to investments in marketable securities which are
secured by or represent interests in real estate. This limitation does not
preclude the Fund from investing in mortgage-related securities or investing in
companies engaged in the real estate business or have a significant portion of
their assets in real estate (including real estate investment trusts).
5. COMMODITIES. The Fund will not purchase or sell commodities unless
acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options or
futures contracts, from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities
business or have a significant portion of their assets in commodities.
6. LOANS. The Fund will not make loans to other persons, except (a) by
loaning portfolio securities, (b) by engaging in repurchase agreements, or (c)
by purchasing nonpublicly
- 3 -
<PAGE> 22
offered debt securities. For purposes of this limitation, the term "loans" shall
not include the purchase of a portion of an issue of publicly distributed bonds,
debentures or other securities.
7. CONCENTRATION. The Fund will not invest 25% or more of its total
assets in a particular industry. This limitation is not applicable to
investments in obligations issued or guaranteed by the U.S. government, its
agencies and instrumentalities or repurchase agreements with respect thereto.
With respect to the percentages adopted by the Trust as maximum
limitations on its investment policies and limitations, an excess above the
fixed percentage will not be a violation of the policy or limitation unless the
excess results immediately and directly from the acquisition of any security or
the action taken. This paragraph does not apply to the borrowing policy set
forth in paragraph 1 above.
Notwithstanding any of the foregoing limitations, any investment
company, whether organized as a trust, association or corporation, or a personal
holding company, may be merged or consolidated with or acquired by the Trust,
provided that if such merger, consolidation or acquisition results in an
investment in the securities of any issuer prohibited by said paragraphs, the
Trust shall, within ninety days after the consummation of such merger,
consolidation or acquisition, dispose of all of the securities of such issuer so
acquired or such portion thereof as shall bring the total investment therein
within the limitations imposed by said paragraphs above as of the date of
consummation.
NON-FUNDAMENTAL. The following limitations have been adopted by the
Trust with respect to the Fund and are Non-Fundamental (see "Investment
Restrictions" above).
i. PLEDGING. The Fund will not mortgage, pledge, hypothecate or in any
manner transfer, as security for indebtedness, any assets of the Fund except as
may be necessary in connection with borrowings described in limitation (1)
above. Margin deposits, security interests, liens and collateral arrangements
with respect to transactions involving options, futures contracts, short sales
and other permitted investments and techniques are not deemed to be a mortgage,
pledge or hypothecation of assets for purposes of this limitation.
ii. BORROWING. The Fund will not purchase any security while borrowings
(including reverse repurchase agreements) representing more than 5% of its total
assets are outstanding. The Fund will not enter into reverse repurchase
agreements.
iii. MARGIN PURCHASES. The Fund will not purchase securities or
evidences of interest thereon on "margin." This limitation is not applicable to
short term credit obtained by the Fund for the clearance of purchases and sales
or redemption of securities, or to arrangements with respect to transactions
involving options, futures contracts, short sales and other permitted
investments and techniques.
iv. SHORT SALES. The Fund will not effect short sales of securities
unless it owns or has the right to obtain securities equivalent in kind and
amount to the securities sold short.
v. OPTIONS. The Fund will not purchase or sell puts, calls, options
or straddles.
- 4 -
<PAGE> 23
vi. REPURCHASE AGREEMENTS. The Fund will not invest more than 5% of its
net assets in repurchase agreements.
vii. LOANS OF PORTFOLIO SECURITIES. The Fund will not make a loan of
portfolio securities which would cause the value of all such loans outstanding
to exceed 5% of the Fund's net assets.
viii. ILLIQUID INVESTMENTS. The Fund will not invest more than 5% of
its net assets in securities for which there are legal or contractual
restrictions on resale and other illiquid securities.
OTHER RESTRICTIONS. To comply with the current regulations of the State
of Ohio, the Fund presently intends to observe the following restrictions, which
may be changed by the Board of Trustees without shareholder approval.
The Fund will not purchase or retain securities of any issuer if the
Trustees and officers of the Trust or of the Adviser, who individually own
beneficially more than 0.5% of the outstanding securities of such issuer,
together own beneficially more than 5% of such securities. The Fund will not
purchase securities issued by other investment companies except by purchase in
the open market where no commission or profit to a sponsor or dealer results
from such purchase other than customary broker's commission or except when such
purchase is part of a plan of merger, consolidation, reorganization or
acquisition. The Fund will not borrow, pledge, mortgage or hypothecate more than
one-third of its total assets. In addition, the Fund will engage in borrowing
only for emergency or extraordinary purposes and not for leverage. The Fund's
aggregate investment in securities of issuers which, together with any
predecessors, have a record of less than three years continuous operation and
securities of issuers which are restricted as to disposition will not exceed 15%
of its total assets. The Fund will not purchase the securities of any issuer if
such purchase at the time thereof would cause more than 10% of the voting
securities of any issuer to be held by the Fund.
THE INVESTMENT ADVISER
The Trust's investment adviser is Investments Technology, Inc., P.O.
Box 16118, Cleveland, Ohio 44116. Ramesh C. Jhaveri and Saumil R. Jhaveri may be
deemed to be controlling persons and affiliates of the Adviser due to their
ownership of its shares and their positions as officers and directors of the
Adviser. They, because of such affiliation, may receive benefits from the
management fees paid to the Adviser.
Under the terms of the management agreement (the "Agreement"), the
Adviser manages the Fund's investments subject to approval of the Board of
Trustees and pays all of the expenses of the Fund except brokerage, taxes,
interest and extraordinary expenses. As compensation for its management services
and agreement to pay the Fund's expenses, the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
2.50% of the average daily net assets of the Fund. The Adviser may waive all or
part of its fee, at any time, and at its sole discretion, but such action shall
not obligate the Adviser to waive any fees in the future. For the period from
May 1, 1995 (the Fund's inception) through March 31, 1996, the Fund paid fees of
$181,243 to the Adviser.
- 5 -
<PAGE> 24
The Adviser retains the right to use the name "Jhaveri" in connection
with another investment company or business enterprise with which the Adviser is
or may become associated. The Trust's right to use the name "Jhaveri"
automatically ceases ninety days after termination of the Agreement and may be
withdrawn by the Adviser on ninety days written notice.
The Adviser may make payments to banks or other financial institutions
that provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act prohibits banks from engaging in the business of
underwriting, selling or distributing securities. Although the scope of this
prohibition under the Glass-Steagall Act has not been clearly defined by the
courts or appropriate regulatory agencies, management of the Fund believes that
the Glass-Steagall Act should not preclude a bank from providing such services.
However, state securities laws on this issue may differ from the interpretations
of federal law expressed herein and banks and financial institutions may be
required to register as dealers pursuant to state law. If a bank were prohibited
from continuing to perform all or a part of such services, management of the
Fund believes that there would be no material impact on the Fund or its
shareholders. Banks may charge their customers fees for offering these services
to the extent permitted by applicable regulatory authorities, and the overall
return to those shareholders availing themselves of the bank services will be
lower than to those shareholders who do not. The Fund may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Fund, no preference will be shown for such
securities.
TRUSTEE COMPENSATION
The compensation paid to the Trustees of the Trust for the fiscal year
ended March 31, 1996 is set forth in the following table:
<TABLE>
<CAPTION>
==========================================================================================================
AGGREGATE
COMPENSATION TOTAL COMPENSATION FROM TRUST (THE
NAME AGE FROM TRUST(1) TRUST IS NOT IN A FUND COMPLEX)(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ramesh C. Jhaveri 59 0 0
- ----------------------------------------------------------------------------------------------------------
Saumil R. Jhaveri 27 0 0
- ----------------------------------------------------------------------------------------------------------
Mukul M. Mehta 50 800 800
- ----------------------------------------------------------------------------------------------------------
James F. Mueller 53 800 800
- ----------------------------------------------------------------------------------------------------------
David R. Zavagno 41 800 800
==========================================================================================================
<FN>
1 Trustee fees are Trust expenses. However, because the management agreement
obligates the Adviser to pay all of the operating expenses of the Trust (with
limited exceptions), the Adviser makes the actual payment.
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to policies established by the Board of Trustees of the Trust,
the Adviser is responsible for the Fund's portfolio decisions and the placing of
the Fund's portfolio transactions.
- 6 -
<PAGE> 25
In placing portfolio transactions, the Adviser seeks the best qualitative
execution for the Fund, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), the execution capability,
financial responsibility and responsiveness of the broker or dealer and the
brokerage and research services provided by the broker or dealer. The Adviser
generally seeks favorable prices and commission rates that are reasonable in
relation to the benefits received.
The Adviser is specifically authorized to select brokers or dealers who
also provide brokerage and research services to the Fund and/or the other
accounts over which the Adviser exercises investment discretion and to pay such
brokers or dealers a commission in excess of the commission another broker or
dealer would charge if the 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 Adviser's overall responsibilities with respect to the Trust and to other
accounts over which it exercises investment discretion.
Research services include supplemental research, securities and
economic analyses, statistical services and information with respect to the
availability of securities or purchasers or sellers of securities and analyses
of reports concerning performance of accounts. The research services and other
information furnished by brokers through whom the Fund effects securities
transactions may also be used by the Adviser in servicing all of its accounts.
Similarly, research and information provided by brokers or dealers serving other
clients may be useful to the Adviser in connection with its services to the
Fund. Although research services and other information are useful to the Fund
and the Adviser, it is not possible to place a dollar value on the research and
other information received. It is the opinion of the Board of Trustees and the
Adviser that the review and study of the research and other information will not
reduce the overall cost to the Adviser of performing its duties to the Fund
under the Agreement.
While The Fund does not deem it practicable and in its best interests
to solicit competitive bids for commission rates on each transaction,
consideration is regularly given to posted commission rates as well as other
information concerning the level of commissions charged on comparable
transactions by qualified brokers.
The Fund has no obligation to deal with any broker or dealer in the
execution of its transactions. However, it is contemplated that Financial
America Securities, Inc., in its capacity as a registered broker-dealer, will
effect substantially all securities transactions which are executed on a
national securities exchange and over-the-counter transactions conducted on an
agency basis. Such transactions will be executed at competitive commission rates
through RPR Clearing Services, Inc., a division of Rauscher Pierce Refsnes, Inc.
Over-the-counter transactions will be placed either directly with
principal market makers or with broker-dealers, if the same or a better price,
including commissions and executions, is available. Purchases made directly
through a market maker may include the spread between the bid and asked prices.
Under the Investment Company Act of 1940, persons affiliated with an
affiliate of the Adviser (such as Financial America Securities, Inc.) may be
prohibited from dealing with the Fund as a principal in the purchase and sale of
securities. Therefore, Financial America Securities, Inc. will not serve as the
Fund's dealer in connection with over-the-counter transactions. However,
- 7 -
<PAGE> 26
Financial America Securities, Inc. may serve as the Fund's broker in
over-the-counter transactions conducted on an agency basis and will receive
brokerage commissions in connection with such transactions. Such agency
transactions will be executed through RPR Clearing Services, Inc., a division of
Rauscher, Pierce Refsnes, Inc.
The Fund will not effect any brokerage transactions in its portfolio
securities with Financial America Securities, Inc. if such transactions would be
unfair or unreasonable to Fund shareholders, and the commissions will be paid
solely for the execution of trades and not for any other services. The Agreement
provides that affiliates of affiliates of the Adviser may receive brokerage
commissions in connection with effecting such transactions for the Fund. In
determining the commissions to be paid to Financial America Securities, Inc., it
is the policy of the Fund that such commissions will, in the judgment of the
Trust's Board of Trustees, be (a) at least as favorable to the Fund as those
which would be charged by other qualified brokers having comparable execution
capability and (b) at least as favorable to the Fund as commissions
contemporaneously charged by Financial America Securities, Inc. on comparable
transactions for its most favored unaffiliated customers, except for customers
of Financial America Securities, Inc. considered by a majority of the Trust's
disinterested Trustees not to be comparable to the Fund. The disinterested
Trustees from time to time review, among other things, information relating to
the commissions charged by Financial America Securities, Inc. to the Fund and
its other customers, and rates and other information concerning the commissions
charged by other qualified brokers.
The Agreement does not provide for a reduction of the Adviser's fee by
the amount of any profits earned by Financial America Securities, Inc. or Mr.
Ramesh C. Jhaveri from brokerage commissions generated from portfolio
transactions of the Fund.
While the Fund contemplates no ongoing arrangements with any other
brokerage firms, brokerage business may be given from time to time to other
firms. Financial America Securities, Inc. will not receive reciprocal brokerage
business as a result of the brokerage business placed by the Fund with others.
To the extent that the Trust and another of the Adviser's clients seek
to acquire the same security at about the same time, the Trust may not be able
to acquire as large a position in such security as it desires or it may have to
pay a higher price for the security. Similarly, the Trust may not be able to
obtain as large an execution of an order to sell or as high a price for any
particular portfolio security if the other client desires to sell the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one client, the resulting
participation in volume transactions could produce better executions for the
Trust. In the event that more than one client wants to purchase or sell the same
security on a given date, the purchases and sales will normally be made by
random client selection.
For the period from May 1, 1995 (the Fund's inception) through March
31, 1996, the Fund paid brokerage commissions of $56,565.37 to Financial America
Securities, Inc. for effecting 100% of the Fund's commission transactions.
- 8 -
<PAGE> 27
DETERMINATION OF SHARE PRICE
The price (net asset value) of the shares of the Fund is determined as
of 4:00 p.m., Eastern time on each day the Trust is open for business and on any
other day on which there is sufficient trading in the Fund's securities to
materially affect the net asset value. The Trust is open for business on every
day except Saturdays, Sundays and the following holidays: New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. For a description of the methods used to determine
the net asset value (share price), see "Share Price Calculation" in the
Prospectus.
INVESTMENT PERFORMANCE
"Average annual total return," as defined by the Securities and
Exchange Commission, is computed by finding the average annual compounded rates
of return (over the one and five year periods and the period from initial public
offering through the end of the Fund's most recent fiscal year) that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)n=ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical $1,000
investment made at the beginning of the
applicable period.
The computation assumes that all dividends and distributions are reinvested at
the net asset value on the reinvestment dates and that a complete redemption
occurs at the end of the applicable period.
The Fund's investment performance will vary depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. These factors and possible differences in the methods and time periods
used in calculating non-standardized investment performance should be considered
when comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
From time to time, in advertisements, sales literature and information
furnished to present or prospective shareholders, the performance of the Fund
may be compared to indices of broad groups of unmanaged securities considered to
be representative of or similar to the portfolio holdings of the Fund or
considered to be representative of the stock market in general. The Fund may use
the Standard & Poor's 500 Stock Index or the Dow Jones Industrial Average.
In addition, the performance of the Fund may be compared to other
groups of mutual funds tracked by any widely used independent research firm
which ranks mutual funds by overall performance, investment objectives and
assets, such as Lipper Analytical Services, Inc. or
- 9 -
<PAGE> 28
Morningstar, Inc. The objectives, policies, limitations and expenses of other
mutual funds in a group may not be the same as those of the Fund. Performance
rankings and ratings reported periodically in national financial publications
such as Barron's and Fortune also may be used.
The average annual total return for the Fund for the period from May 1,
1996 (the Fund's inception) through March 31, 1996 was 7.45%, annualized.
CUSTODIAN
Star Bank, N.A., 425 Walnut Street, Cincinnati, Ohio 45202, is
Custodian of the Fund's investments. The Custodian acts as the Fund's
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Fund's request and
maintains records in connection with its duties.
TRANSFER AGENT
American Data Services, Inc. ("ADS"), 24 W. Carver Street, Huntington,
New York 11743, acts as the Fund's transfer agent and, in such capacity,
maintains the records of each shareholder's 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 accounting and shareholder service functions. In addition, ADS acts as the
Fund's administrator, providing the Fund with certain monthly reports,
record-keeping and other management-related services. For its services as
administrator, ADS will receive a monthly fee from the Adviser at an annual rate
of 0.05% of the Fund's net assets, subject to a minimum monthly fee of up to
$2,000, based on the previous month-end assets of the Fund.
ACCOUNTANTS
The firm of McCurdy & Associates, CPA's, 27955 Clemens Road, Westlake,
Ohio 44145, has been selected as independent public accountants for the Trust
for the fiscal year ending March 31, 1997. McCurdy & Associates performs an
annual audit of the Fund's financial statements and provides financial, tax and
accounting consulting services as requested.
- 10 -
<PAGE> 29
SCHEDULE OF INVESTMENTS
JHAVERI VALUE FUND
March 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS - 96.95%
Shares Company Market Value
------ ------- ------------
AUTO/TRUCK-REPLACE/ORIG.PARTS - 0.38%
<S> <C> <C>
1,000 Exide Corp $ 23,375
600 Federal-Mogul Corp 11,175
--------
34,550
AUTOMOBILE-MANUFACTURING - 2.38%
5,600 Consorcio Grupo Dina S.A. ADR 11,200
720 Ford Motor Company 24,750
3,400 General Motors Corp 181,050
--------
217,000
BANKS-MONEY CENTER - 1.24%
1,600 Bankers Trust NY 113,400
BANKS-REGIONAL - 0.47%
1,400 P N C Bank Corp 43,050
BEVERAGES-ALCOHOLIC/SOFT DRINK - 0.81%
3,100 Buenas Aires Embot 51,538
3,500 C O T T Corp (New) 22,313
--------
73,850
BROADCASTING-RADIO/TV/CABLE - 0.27%
1,000 Grupo Televisa S.A. ADR * 24,875
BUILDING-HEAVY CONSTRUCTION - 4.84%
24,400 Empresas ICA Sociedad S.A. ADR * 317,200
16,100 Grupo Tribasa S.A. ADR * 110,688
11,100 Morrison-Knudsen Corp * 13,875
--------
441,763
BUILDING-RESIDENT/COMMERCIAL - 0.35%
2,000 Kaufman & Broad Home Corp 32,000
BUSINESS PRODUCTS-RETAIL/WHLES - 0.37%
2,100 B M C West Corp * 34,125
CHEMICALS-DIVERSIFIED - 0.15%
1,000 Rexene Corp 13,375
CHEMICALS-SPECIALTY - 0.25%
3,400 Methanex Corp * 22,950
</TABLE>
The accompanying notes are an integral part of these financial statements
-11-
<PAGE> 30
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
COMMERCIAL SERVICES-MISC - 2.11%
<S> <C> <C>
2,900 First Alert Inc * 19,575
2,400 Franklin Quest Co * 64,800
3,700 Sensormatic Electronics Corp 74,925
1,200 Value Health Inc * 33,000
--------
192,300
COMPUTER-GRAPHICS - 1.89%
1,400 Diamond Multimedia Systems * 22,400
1,900 Q M S Inc * 9,025
9,600 Radius Inc * 18,600
7,000 Scitex Ltd. Ord 97,125
1,000 Silicon Graphics Inc * 25,000
--------
172,150
COMPUTER-LOCAL NETWORK - 0.10%
2,200 Tricord Sys Inc * 9,075
COMPUTER-MAINFRAMES - 1.70%
3,700 Amdahl Corporation * 31,450
3,900 Sequent Computer Systems * 45,338
13,000 Unisys Corp * 78,000
--------
154,788
COMPUTER-MINI/MICRO - 1.21%
1,200 Apple Computer * 29,475
8,000 A S T Research Inc * 38,125
1,900 Micron Electronics Inc * 18,763
2,700 Tandem Computers * 23,963
--------
110,325
COMPUTER-PERIPHERAL EQUIPMENT - 4.13%
9,600 Alliance Semiconductor Corp * 92,400
13,300 American Power Conversion * 133,000
800 Quantum Corp * 14,400
500 Read-Rite Corp * 9,375
4,218 Storage Tech Corp * 110,195
3,000 Syquest Technology Inc * 17,813
--------
377,183
COMPUTER-SERVICES - 0.54%
600 Ameridata Technologies Inc * 6,825
7,700 Intelligent Electronics Inc * 42,350
--------
49,175
COMPUTER-SOFTWARE - 2.46%
2,100 Acclaim Entertainment * 22,181
300 Adobe Systems Inc 9,675
7,300 Banyan Systems Inc * 55,663
1,200 F T P Software Inc * 14,700
2,200 Netmanage Inc * 23,925
1,500 Novell Inc. * 20,063
</TABLE>
The accompanying notes are an intergral part of these financial statements
-12-
<PAGE> 31
<TABLE>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
1,600 Symantec Corp * 20,600
3,700 Wall Data Inc * 57,350
-------
224,156
CONSUMER PRODUCTS-GLASS/METAL - 0.21%
3,340 Vitro S.A. 19,205
DIVERSIFIED OPERATION - 1.94%
1,700 A C X Technologies Inc * 30,813
500 Corning Inc 17,500
5,070 Hanson PLC ADR 76,050
1,400 Jostens Incorporated 31,325
1,700 Triarc Cos Inc.(Del) * 21,250
-------
176,938
ELECTRONIC PRODUCTS/MISC. - 0.17%
300 Texas Instruments 15,263
ELECTRONIC-EQUIPMENT - 0.20%
1,100 Teradyne Inc * 18,425
ELECTRONIC-SEMICONDUCTORS - 7.82%
3,500 Advanced Micro Devices * 60,375
400 Applied Materials Inc * 13,950
2,100 Cirrus Logic Inc * 37,931
400 Credence Systems Inc * 6,700
2,400 Cypress Semiconductor * 28,200
3,900 Integrated Device Technology * 44,363
400 Integrated Process Equiptment * 7,000
5,200 Integrated Silicon Solution * 68,900
200 Intel Corp 11,375
1,000 K L A Instruments * 22,625
1,300 Kulicke & Soffa Ind * 20,475
700 Lam Research Corp * 24,500
1,400 L S I Logic Corp * 37,450
4,100 Micron Technology Inc 128,638
300 Motorola Inc 15,900
2,500 National Semiconductor * 34,688
2,300 Network Peripherals Inc * 33,638
7,300 O P T I Inc * 41,975
500 Silicon Valley Group Inc * 12,188
1,400 Tseng Labs Inc * 14,000
3,800 V L S I Technology Inc * 48,925
-------
713,794
FINANCE-INVESTMENT BROKERS - 0.83%
1,400 Paine Webber Group Inc 30,800
1,200 Salomon Inc 45,000
-------
75,800
FINANCE-SAVINGS & LOAN - 0.29%
1,100 Great Western Financial Corp 26,538
</TABLE>
The accompanying notes are an integral part of these financial statements
-13-
<PAGE> 32
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
FOOD-MISC.PREPARATION - 4.05%
<S> <C> <C>
1,740 Archer Daniels Midland 31,973
21,800 Chiquita Brands Intl.Inc 337,900
-------
369,873
FUNERAL SVS & REL - 0.13%
400 Loewen Group Inc 11,700
HOUSEWARES - 0.66%
5,500 Shaw Industries Inc 60,500
INSURANCE-LIFE/PROPERTY/CAS. - 0.39%
2,000 John Alden Finl Corp 35,250
LEISURE PRODUCTS - 1.51%
500 Avid Technology Inc * 10,500
1,200 Brunswick Corp 27,600
20,300 C M L Group Inc 63,438
10,900 Kennetech Corp * 11,581
1,900 Score Board Inc. New * 7,006
700 Topps Company Inc * 3,850
2,300 Tyco Toys Inc * 13,800
-------
137,775
LEISURE SERVICES - 0.46%
4,400 Discovery Zone Inc * 3,850
2,500 Intl Game Technology 34,063
2,600 President Casinos Inc * 3,616
-------
41,528
MACHINERY-ELECTRICAL EQUIPMENT - 2.80%
13,250 Westinghouse Electric Corp 255,063
MEDICAL INSTRUMENTS/PRODUCTS - 1.79%
5,000 United States Surgical Corp 163,750
MEDICAL-DRUGS - 1.63%
8,500 Carter Wallace Inc 139,188
700 Perrigo Company * 9,450
-------
148,638
MEDICAL-GENERIC DRUGS - 0.45%
200 Copley Pharmaceutical * 3,350
1,800 Mylan Labs Inc 37,800
-------
41,150
MEDICAL-HOSPITALS/NURSING HOME - 0.68%
800 Beverly Enterprises Inc * 8,800
1,500 Community Psychiatric Centers Inc * 12,563
</TABLE>
The accompanying notes are an integral part of these financial statements
-14-
<PAGE> 33
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
1,200 Horizon Healthcare * 16,800
1,800 Sun Healthcare Group * 23,850
-------
62,013
MEDICAL-OUTPATIENT/HOME CARE - 2.41%
11,300 Coram Healthcare Corp * 63,563
7,000 Novacare Inc * 49,000
10,200 Quantum Health Resorts Inc * 107,100
-------
219,663
MEDICAL/DENTAL-SUPPLIES - 0.24%
600 Bausch & Lomb Inc 22,200
METAL ORES-GOLD/NON-FERROUS - 0.12%
400 Cyprus Amax Minerals Co 11,300
MISC. - 0.0%
74 Emcor Group Inc * 19
3,300 Knowledgeware Inc Escrow * 0
200 Texas General Res * 0
-------
19
OFFICE AND ART MATERIAL - 0.15%
500 American Greetings 13,813
OIL & GAS-FIELD SERVICES - 0.42%
800 McDermott Intl Inc 15,400
1,900 U S X-Delhi Group 23,038
-------
38,438
OIL & GAS-INTERNATIONAL INTEGR - 0.30%
1,400 U S X-Marathon Group 26,950
OIL & GAS-US EXPLORE & PROD. - 0.15%
1,000 Oryx Energy Co * 13,875
OIL & GAS-US INTEGRATED - 1.38%
400 Occidental Petroleum Corp 10,700
2,900 Pennzoil Company 115,275
-------
125,975
OIL REFINING & MARKETING - 0.32%
1,000 Lubrizol Corp 29,500
PAPER & PAPER PRODUCTS - 0.07%
500 Abitibi Price Inc 6,813
</TABLE>
The accompanying notes are an integral part of these financial statements
-15-
<PAGE> 34
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
POLLUTION CONTROL-EQUIPMENT/SV - 1.26%
<S> <C> <C>
6,900 Safety Kleen Corp 99,188
500 WMX Technologies Inc 15,875
-------
115,063
RETAIL-APPAREL/SHOE - 2.05%
4,100 Anntaylor Stores * 73,800
3,000 Burlington Coat Factory Whse.Corp * 35,250
6,700 Charming Shoppes Inc * 34,547
1,600 Designs Inc * 11,200
3,000 Edison Bros Stores Inc * 4,500
700 Limited Inc 13,300
400 Melville Corp * 14,350
-------
186,947
RETAIL-CONSUMER ELECTRIC - 0.95%
5,000 Best Buy Co Inc (Mn) * 86,875
RETAIL-DEPARTMENT STORES - 5.12%
22,200 Caldor Corp * 86,025
40,700 K Mart Corp * 381,563
-------
467,588
RETAIL-DISCOUNT & VARIETY - 4.53%
6,500 Bradlees Inc * 13,000
3,800 Toys R Us Inc * 102,600
500 Wal-Mart Stores Inc 11,563
18,300 Woolworth Corp * 285,938
-------
413,100
RETAIL-DIVERSIFIED/MISC. - 1.49%
2,000 Hollywood Entertainment Corp * 26,500
6,200 Michaels Stores Inc * 86,800
5,200 Musicland Stores Corp * 20,150
300 Sports & Rec Inc * 2,288
-------
135,738
RETAIL-FOOD & RESTAURANT - 0.91%
3,700 Checkers Drive-In Restaurants Inc * 4,741
4,300 Fleming Companies Inc 61,275
1,900 Shoney's Inc * 17,100
-------
83,116
RETAIL-HOME FURNISHINGS - 0.89%
10,000 Bombay Co Inc * 81,250
RETAIL-MAIL ORDER & DIRECT - 0.36%
2,300 Fingerhut Cos Inc 29,613
200 Lands End Inc 3,500
-------
33,113
</TABLE>
The accompanying notes are integral part of these financial statements
-16-
<PAGE> 35
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
RETAIL-SUPERMARKETS - 0.12%
<S> <C> <C>
1,900 Food Lion Inc Cl A 11,044
RETAIL/WHOLESALE - OFFICE SUPPLIES - 0.26%
1,200 Office Depot * 23,550
RETAIL/WHOLESALE COMPUTERS - 0.15%
300 Tandy Corp 13,875
RETAIL/WHOLESALE-BLDG.PRODS. - 0.61%
5,400 Eagle Hardware & Garden Inc * 55,350
RETAIL/WHOLESALE-JEWELRY - 0.52%
11,300 Jan Bell Marketing Inc * 34,606
2,500 Service Merchandise Co. Inc * 13,125
-------
47,731
SHOES & RELATED APPAREL - 1.21%
3,000 Brown Group Inc 40,500
400 Reebok Intl Ltd 11,050
6,400 Stride Rite Corp 58,400
-------
109,950
STEEL-PRODUCERS - 1.88%
5,900 Bethlehem Steel Corp * 77,438
4,200 Birmingham Steel Corp 61,950
600 L T V Corp. New * 7,800
2,200 W H X Corp * 24,750
-------
171,938
TELECOMMUNICATION CELLULAR - 0.17%
1,000 Cellstar Corp * 15,250
TELECOMMUNICATION EQUIPMENT - 4.08%
5,000 Antec Corp * 77,500
3,000 California Microwave Inc * 55,500
13,100 Compression Labs Inc * 72,050
2,800 General Instruments Corp * 76,650
5,100 Scientific Atlantic Inc 90,525
-------
372,225
TELECOMMUNICATION SERVICES - 0.09%
400 U.S. Long Distance Corp * 7,950
TEXTILE/APPAREL-MILL PRODUCTS - 1.18%
3,500 Fruit Of The Loom * 90,563
200 Longview Fibre Co 3,375
700 Phillips Van Heusen Corp 8,225
</TABLE>
The accompanying notes are an integral part of these financial statements
-17-
<PAGE> 36
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
700 Starter Corp * 5,863
-------
108,025
TOBACCO - 1.34%
4,031 RJR Nabisco Holdings Corp 121,938
TRANSPORTATION-AIRLINE - 0.17%
200 Delta Airlines 15,375
TRANSPORTATION-EQUIP./LEASING - 0.31%
1,500 Wabash National Corp 28,313
TRANSPORTATION-TRUCK - 0.61%
4,300 American Freightways * 55,363
TRUCKS & PARTS-LONG HAUL - 0.58%
5,100 Navistar Intl Corp * 52,913
UTILITY-ELECTRIC POWER - 4.88%
12,000 Centerior Energy Corp 96,000
9,500 Edison Intl 162,688
1,400 Entergy Corp (New) 39,200
7,300 Niagara Mohawk Power Corp * 48,363
1,000 Northeast Utility 19,750
3,000 Pacific Gas & Electric Co 67,875
400 Public Services Enterprises 11,000
-----------
444,875
UTILITY-GAS DISTRIBUTION - 0.83%
8,150 Noram Energy Corp 75,388
UTILITY-TELEPHONE - 3.18%
400 Pacific Telesis Group 11,050
8,500 Telefonos De Mexico S.A.ADR 279,438
-----------
290,488
TOTAL COMMON STOCKS (Cost $8,893,277) $ 8,846,157
SHORT TERM INVESTMENTS - 2.30%
209,494 Star Treasury Fund (Cost $209,494) $ 209,494
TOTAL INVESTMENTS - 99.25%
Total Investments (Cost $9,102,771) 9,055,651
Other assets less liabilities - 0.75% 68,700
-----------
TOTAL NET ASSETS - 100.00% $ 9,124,351
===========
* Non-Income Producing
</TABLE>
The accompanying notes are an integral part of these financial statements
-18-
<PAGE> 37
JHAVERI VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (cost $9,102,771) $9,055,651
Receivable for securities sold 119,487
Receivable for Fund shares purchased 67,349
Receivable for dividends and interest 9,943
----------
Total assets 9,252,430
----------
LIABILITIES
Payable for investment securities purchased 84,838
Payable for Fund shares redeemed 12,000
Accrued operating expenses 31,241
----------
Total Liabilities 128,079
----------
NET ASSETS
Net assets (equivalent to $12.38 per share based on 736,753
shares of capital stock outstanding) $9,124,351
==========
Composition of Net Assets:
Paid in capital $8,975,839
Accumulated net investment income/(loss) (30,766)
Accumulated net realized gain on investments 226,398
Net unrealized appreciation/(depreciation) on investments (47,120)
NET ASSETS, MARCH 31, 1996 $9,124,351
==========
</TABLE>
The accompanying notes are an integral part of these financial statements
-19-
<PAGE> 38
JHAVERI VALUE FUND
STATEMENT OF OPERATIONS
for the period from May 1, 1995
(Commencement of operations)
through March 31, 1996
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest $ 76,551
Dividends 102,750
--------
Total Investment Income 179,301
--------
EXPENSES
Operating Expenses (Note 3) 181,243
--------
Net investment income/(loss) (1,942)
--------
Net realized gain on securities transactions 493,020
Net change in unrealized appreciation/(depreciation)
on investments (47,120)
--------
Net gain on investments 445,900
--------
Net increase in net assets resulting from operations $443,958
========
</TABLE>
The accompanying notes are an integral part of these financial statements
-20-
<PAGE> 39
JHAVERI VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
for the period from May 1, 1995
(Commencement of Operations)
through March 31, 1996
<TABLE>
<CAPTION>
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C>
Net investment income/(loss) $ (1,942)
Net realized gain on securities transactions 493,020
Net change in unrealized appreciation/(depreciation)
on investments (47,120)
----------
Net increase in net assets resulting from operations 443,958
----------
DISTRIBUTION TO SHAREHOLDERS:
From net investment income (28,824)
From net realized gain on investments (266,622)
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold 9,304,052
Dividends reinvested 294,450
Payment for shares redeemed (722,663)
----------
Net increase in net assets from fund share transactions 8,875,839
----------
NET ASSETS:
Beginning of period 100,000
----------
End of period $9,124,351
==========
</TABLE>
The accompanying notes are an integral part of these financial statements
-21-
<PAGE> 40
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
NOTE 1. ORGANIZATION
The Jhaveri Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Trust was established under the laws of Ohio by an Agreement and Declaration
of Trust dated January 18, 1995 (the "Trust Agreement"). The Trust Agreement
permits the Trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value. Shares of one series have been
authorized, which shares constitute the interests in the Jhaveri Value Fund (the
"Fund").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation - Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by a pricing service when the Adviser
believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
Federal Income Taxes - The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net invesment income and any
realized capital gains.
Dividends and Distributions - The Fund intends to distribute substantially all
of its net investment income as dividends to its shareholders on an annual
basis. The Fund intends to distribute its net long term capital gains and its
net short term capital gains at least once a year.
Other - The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrued
basis.
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Trust has an investment advisory agreement with Investments Technology, Inc.
Ramesh
-22-
<PAGE> 41
C. Jhaveri and Saumil R. Jhaveri may be deemed to be controlling persons and
affiliates of the Adviser due to their ownership of its shares and their
positions as officers and directors of the Adviser. They, because of such
affiliation, may receive benefits from the management fees paid to the Adviser.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest, expenses
incurred in connection with the organization and initial registration of its
shares and extraordinary expenses. As compensation for its management services
and agreement to pay the Fundis expenses, the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
2.50% of the average daily net assets of the Fund. The rate of the advisory fees
paid by most investment companies to their investment advisers is lower than the
rate of the advisory fees paid by the Fund. In this regard, it should be noted
that most investment companies pay their own operating expenses directly, while
the Fund's expenses, except those specified above, are paid by the Adviser. For
the year ended March 31, 1996, the Adviser has received a fee of $181,243 from
the Fund.
NOTE 4. DISTRIBUTIONS TO SHAREHOLDERS
On December 26, 1995, a distribution of $0.41 aggregating $295,446 was declared
from net investment income and net realized gains from investment transactions
(including $0.37 applicable to short-term gains that are taxable to shareholders
as ordinary income dividends) during 1995. The dividend was paid December 28,
1995, to shareholders of record on December 26, 1995.
NOTE 5. CAPITAL SHARE TRANSACTIONS
As of March 31, 1996 there was an unlimited number of no par value shares of
capital stock authorized for the Fund.
Transactions in capital stock were as follows:
For the period from
May 1, 1995 (Commencement of Operations)
through March 31, 1996
<TABLE>
<CAPTION>
Shares Amount
------ ------
<S> <C> <C>
Shares sold 762,797 $ 9,304,052
Shares issued in reinvestment
of dividends 25,318 294,450
Shares redeemed (59,695) (722,663)
----------- -----------
Net increase 728,420 $ 8,875,839
=========== ===========
Total paid in capital $ 8,975,839
===========
</TABLE>
NOTE 6. INVESTMENTS
For the period from May 1, 1995 (commencement of operations) through March 31,
1996, purchases and sales of investment securities, other than short-term
investments, aggregated $11,158,838 and $2,761,543 respectively. The gross
unrealized appreciation for all securities totaled $859,651 and the gross
unrealized depreciation for all securities totaled $906,771 or a net unrealized
depreciation of $47,120. The aggregate cost of securities for federal income tax
purposes at March 31, 1996 was $9,107,527.
-23-
<PAGE> 42
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
from May 1, 1995 (Commencement of Operations)
through March 31, 1996
<TABLE>
<S> <C>
Net asset value - beginning of period $ 12.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .00
Net gain on investments both realized and unrealized .79
--------
Total from investment operations 12.79
LESS DISTRIBUTIONS
Dividends from net investment income .04
Dividends from capital gains .37
--------
Net asset value - end of period $ 12.38
========
Total Return** 7.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) 9,124
Ratio of expenses to average net assets ** 2.50%
Ratio of net investment income to average net assets** (.02)%
Portfolio turnover rate 45.23%
<FN>
**Annualized
</TABLE>
-24-
<PAGE> 43
[McCURDY & ASSOCIATES CPA'S, INC. LOGO]
[McCURDY & ASSOCIATES CPA'S, INC. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
-----------------------------
To The Shareholders and
Board of Trustees
Jhaveri Value Fund
We have audited the accompanying statement of assets and liabilities of Jhaveri
Value Fund, including the schedule of portfolio investments, as of March 31,
1996, and the related statement of operations, the statement of changes in net
assets, and financial highlights for the period from May 1, 1995 (commencement
of operations) to March 31, 1996 in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments and cash held by
the custodian as of March 31, 1996, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Jhaveri Value Fund as of March 31, 1996, the results of its operations, the
changes in its net assets, and the financial highlights for the period from May
1, 1995 (commencement of operations) to March 31, 1996 in the period then
ended, in conformity with generally accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
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McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 24, 1996
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