As filed with the Securities and Exchange Commission on December 15, 1995
File Nos. 33-89628
811-8978
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 1
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 2
GRANDVIEW INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
105 North Washington St., Rocky Mount, NC 27802
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: 800-525-3863
Winsor H. Aylesworth, 127 Grandview Drive,
Glastonbury, CT 06033
(Name and Address of Agent for Service)
Copy to:
Roger P. Joseph, Bingham, Dana & Gould, 150 Federal Street,
Boston, MA 02110
It is proposed that this filing will become effective immediately upon filing
pursuant to paragraph (b) of Rule 485.
Registrant has registered an indefinite number of shares of Registrant and any
series thereof hereinafter created, under the Securities Act of 1933, as
amended, pursuant to Rule 24f-2 under the Investment Company Act of 1940, as
amended.
GrandView Investment Trust
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
N-1A
Item No N-1A Item Location
PART A PROSPECTUS
Item 1 Cover Page Cover Page
Item 2 Synopsis Expense Information
Item 3 Condensed Financial Information Not Applicable
Item 4 General Description of Registrant Investment Objectives and
Policies; Description of
Shares and Voting Rights;
Appendix
Item 5 Management of the Fund Management of the Funds;
Expense Information
Item 5A Management's Discussion of Not Applicable
Fund Performance
Item 6 Capital Stock and Other Securities Information About Fund Shares
Item 7 Purchase of Securities Being Offered Information About Fund Shares
Item 8 Redemption or Repurchase Information About Fund Shares
Item 9 Pending Legal Proceedings Not Applicable
PART B STATEMENT OF
ADDITIONAL
INFORMATION
Item 10 Cover Page Cover Page
Item 11 Table of Contents Cover Page
Item 12 General Information and History The Funds
Item 13 Investment Objectives and Policies Investment Objectives, Policies
and Restrictions
Item 14 Management of the Fund Management
Item 15 Control Persons and Principal Management - Principal Holders of
Holders of Securities Voting Securities
Item 16 Investment Advisory and Other Management
Services
Item 17 Brokerage Allocation and Other Portfolio Transactions
Practices
Item 18 Capital Stock and Other Securities Description of Shares, Voting
Rights and Liabilities
Item 19 Purchase, Redemption and Pricing of Description of Shares, Voting
Securities Being Offered Rights and Liabilities;
Determination of
Net Asset Value; Valuation of
Securities; Additional Purchase
and Redemption Information
Item 20 Tax Status Certain Additional Tax Matters
Item 21 Underwriters Management
Item 22 Calculation of Performance Data Performance Information
Item 23 Financial Statements Financial Statements
PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
THE GRANDVIEW FUNDS
Series of the GrandViewSM Investment Trust
SUPPLEMENT DATED DECEMBER 19, 1995
TO THE PROSPECTUS DATED JULY 1, 1995
The information on the GrandView REIT Index Fund, GrandView Realty Growth Fund,
GrandView Residential Realty Income Fund, GrandView Retail Realty Income Fund,
and GrandView Healthcare Realty Income Fund (the "Funds"), each a series of the
GrandView Investment Trust (the "Trust"), contained in the Funds' Prospectus
dated July 1, 1995 (the "Prospectus"), is amended to reflect the following
updated information:
1. The date of the Statement of Additional Information referenced on
the cover page of the Prospectus is changed to December 19, 1995,
and as amended or supplemented from time to time.
2. The following "FINANCIAL HIGHLIGHTS" section is added to the
Prospectus:
FINANCIAL HIGHLIGHTS
The financial data included in the table below has been derived from unaudited
financial statements of the Funds. The information in the table below should be
read in conjunction with each Fund's latest unaudited financial statements and
notes thereto for the fiscal period ended September 30, 1995, which are included
in the Statement of Additional Information, a copy of which may be obtained at
no charge by calling the Funds at (800) 525-3863. Further information about the
performance of each Fund will be contained in the Annual Report of each Fund, a
copy of which may be obtained, when available, at no charge by calling the
Funds.
(For a Share Outstanding Throughout the Fiscal Period)
For the period from July 3, 1995
(commencement of operations) to September 30, 1995
<TABLE>
<CAPTION> Residential Retail Healthcare
REIT Realty Realty Realty Realty
Index Growth Income Income Income
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
Income from investment operations
Net investment income (loss) 0.10 0.00 0.11 0.15 0.10
Net realized and unrealized
gain on investments 0.20 (0.21) (0.19) (0.32) (0.01)
Total from investment operations 0.30 (0.21) (0.08) (0.17) 0.09
Distributions to shareholders from
Net investment income (0.11) 0.00 (0.05) (0.06) (0.05)
Net realized gain from
investment transactions 0.00 0.00 (0.00) (0.00) (0.00)
Total distributions (0.11) 0.00 (0.05) (0.06) (0.05)
Net asset value, end of period $10.19 $9.79 $9.87 $9.77 $10.04
Total return (a) 3.00% (1.75)% (0.90)% (0.75)% 0.93%
Ratios/supplemental data
Net assets, end of period $109,206 $90,374 $57,870 $59,036 $71,935
Ratio of expenses to average net assets
Before expense reimbursements (b) 5.03% 2.20% 27.29% 29.48% 24.78%
After expense reimbursements (b) 1.05% 0.65% 1.74% 1.74% 1.74%
Ratio of net investment loss to average net assets
Before expense reimbursements (b) 6.89% (0.77)% (17.72)% (16.55)% (14.72)%
After expense reimbursements (b) 10.87% 0.77% 7.83% 11.19% 8.31%
Portfolio turnover rate 0.00% 4.77% 0.00% 0.00% 0.00%
</TABLE>
(a) Does not reflect payment of the maximum sales charge.
(b) Annualized.
3. The information under "Information About Fund Shares - Net Asset Value
and Pricing of Orders" is deleted in its entirety and updated with the
following information:
Net Asset Value and Pricing of Orders
Shares of each Fund are sold at their public offering price, which is the net
asset value per share plus the applicable sales charge, if any. Net asset value
per share of a Fund is determined by dividing the value of its assets, less
liabilities, by the number of shares outstanding. The net asset value is
computed once daily, on each day the New York Stock Exchange (the "Exchange") is
open, at 4:00 p.m. New York time.
Securities are valued at the last quoted sale price, at the time the valuation
is made, on the principal exchange or market where they are traded. Securities
which have not traded on the date of valuation, or securities for which sales
prices are not generally reported, are valued at the mean between the current
bid and asked prices. All assets of the Fund for which there is no other
readily available valuation method are valued at their fair value as determined
in good faith at the direction of the Trustees.
An order for shares received by a broker-dealer or bank prior to 4:00 p.m. New
York time is effected at the offering price determined at such time on the day
the order is received. It is the responsibility of broker-dealers and banks to
transmit orders promptly to the Distributor. An order received by a broker-
dealer or bank after 4:00 p.m. time will be confirmed at the offering price as
of 4:00 p.m. New York time on the next trading day.
4. The information under "Information About Fund Shares - How to Redeem
Shares - Redemption Fee - REIT Index Fund" is supplemented with folling
additional information:
The Board of Trustees of the Trust has adopted a policy of waiving the
redemption fee in certain circumstances.
An order to purchase shares is not binding on, and may be rejected by, the Trust
or the Distributor until it has been confirmed in writing by the Distributor and
payment has been received.
5. The information on the shares of the Funds as described under
"Information About Fund Shares - Description of Shares and Voting
Rights" in the Prospectus is supplemented with the following additional
information:
As of December 15, 1995, the following persons or entities owned of record or
beneficially more that 25% of the shares of the Funds: GrandView Advisers,
Inc., 127 GrandView Drive, East Glastonbury, Connecticut 06033, record holder
with respect to 31.201% of the GrandView Residential Realty Income Fund;
Maryanne S. Aylesworth, 127 GrandView Drive, East Glastonbury, Connecticut
06033, record holder with respect to 25.518% of the GrandView Residential Realty
Income Fund; Winsor H. Aylesworth, 127 GrandView Drive, East Glastonbury,
Connecticut 06033, record holder with respect to 32.264% of the GrandView
Residential Realty Income Fund; GrandView Advisers, Inc., 127 GrandView Drive,
East Glastonbury, Connecticut 06033, record holder with respect to 28.066% of
the GrandView Retail Realty Income Fund; and Winsor H. Aylesworth, 127 GrandView
Drive, East Glastonbury, Connecticut 06033, record holder with respect to
29.297% of the GrandView Retail Realty Income Fund. Accordingly, these persons
or entities may be deemed to be "controlling persons" of the Funds within the
meaning of the 1940 Act.
STATEMENT OF ADDITIONAL INFORMATION
GrandView REIT Index Fund
GrandView Realty Growth Fund
GrandView Residential Realty Income Fund
GrandView Retail Realty Income Fund
GrandView Healthcare Realty Income Fund
December 19, 1995
Series of
GrandViewSM Investment Trust
105 North Washington Street,
Post Office Drawer 69
Rocky Mount, North Carolina 27802-0069
Telephone 1-800-525-FUND
Table of Contents
1. THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. . . . . . . . . . . 2
3. PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 14
4. DETERMINATION OF NET ASSET VALUE; VALUATION OF
SECURITIES; ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . 14
5. MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. PORTFOLIO TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . 23
7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES. . . . . . . . . 23
8. CERTAIN ADDITIONAL TAX MATTERS. . . . . . . . . . . . . . . . . . . . 24
9. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 25
GrandView Investment Trust (the "Trust") is an open-end, registered management
investment company offering five mutual funds which are described in this
Statement of Additional Information: GrandView REIT Index Fund, GrandView
Realty Growth Fund, GrandView Residential Realty Income Fund, GrandView Retail
Realty Income Fund and GrandView Healthcare Realty Income Fund (the "Funds").
Each of the Funds (other than the GrandView REIT Index Fund) is a
non-diversified fund. The address and telephone number of the Trust are 105
North Washington St., Rocky Mount, North Carolina 27802, 1-800-525-3863.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED
BY, ANY BANK OR INSURED DEPOSITARY INSTITUTION, NOR ARE THEY INSURED OR
OTHERWISE PROTECTED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
AGENCY. INVESTMENTS IN MUTUAL FUNDS INVOLVE INVESTMENT RISK, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
This Statement of Additional Information sets forth information which may be of
interest to investors but which is not necessarily included in the Trust's
Prospectus dated July 1, 1995, as supplemented by a Supplement dated December
19, 1995, by which shares of the Funds are offered. This Statement of
Additional Information should be read in conjunction with the Prospectus, a copy
of which may be obtained by an investor without charge by contacting the Funds'
Distributor (see inside back cover for address and phone number).
This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by an
effective prospectus.
1. THE FUNDS
GrandView Investment Trust (the "Trust") is an open-end management investment
company that was organized as a business trust under the laws of the
Commonwealth of Massachusetts on February 6, 1995. This Statement of Additional
Information describes shares of the GrandView REIT Index Fund ("REIT Index
Fund"), GrandView Realty Growth Fund ("Realty Growth Fund"), GrandView
Residential Realty Income Fund ("Residential Realty Income Fund"), GrandView
Retail Realty Income Fund ("Retail Realty Income Fund") and GrandView Healthcare
Realty Income Fund ("Healthcare Realty Income Fund"), which are series of the
Trust. References in this Statement of Additional Information to the
"Prospectus" are to the Prospectus, dated July 1, 1995, as supplemented by a
Supplement dated December 19, 1995, of the Trust by which shares of the Funds
are offered.
GrandView Advisers, Inc. (the "Adviser") is investment adviser to each of the
Funds. The Adviser manages the investments of the Funds from day to day in
accordance with each Fund's investment objective and policies. The selection of
investments for the Funds and the way they are managed depend on the conditions
and trends in the economy and the financial marketplaces.
The Board of Trustees of the Trust provides broad supervision over the affairs
of the Funds. The Nottingham Company, L.L.C., the administrator and fund
accounting, dividend disbursing and transfer agent of each Fund ("Nottingham" or
the "Administrator"), supervises the overall administration of the Funds.
Shares of the Funds are continuously sold by Capital Investment Group, Inc., the
Funds' distributor ("Capital Investment Group" or the "Distributor"). Shares of
each Fund are sold at net asset value, plus any applicable sales charge. The
sales charge may be reduced on purchases involving substantial amounts and may
be eliminated in certain circumstances. The Trust has adopted a Distribution
Plan (the "Distribution Plan") in accordance with Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act") which provides for
payment of a distribution fee to Capital Investment Group from each Fund. The
Board of Trustees does not currently intend to authorize the payment of any such
fee from the REIT Index Fund, although they have the authority under the
Distribution Plan to do so in the future.
2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
Investment Objectives
The REIT Index Fund, the Realty Growth Fund, the Residential Realty Income Fund,
the Retail Realty Income Fund and the Healthcare Realty Income Fund seek both
current income and long-term growth of capital. Each Fund invests primarily in
securities of real estate investment trusts ("REITs") and other real estate
industry companies. The Funds differ in the degree to which they emphasize
income or capital growth, and employ different policies to achieve their
objectives.
The investment objective of the REIT Index Fund is to provide its investors with
investment results which correspond to the performance of the GrandView REIT
Index. The Fund seeks to achieve its objective by investing in the equity
securities of the REITs comprising the Index.
The primary investment objective of the Realty Growth Fund is long-term growth
of capital. Current income is a secondary objective.
The primary investment objective of each of the Residential Realty Income Fund,
the Retail Realty Income Fund and the Healthcare Realty Income Fund is current
income. Long-term growth of capital is a secondary objective of each of these
Funds.
The investment objective of each Fund may be changed without approval by that
Fund's shareholders, but shareholders will be given written notice at least 30
days before any change is implemented. Of course, there can be no assurance
that any Fund will achieve its investment objective.
Investment Policies
The Prospectus contains a discussion of the various types of securities in which
each Fund may invest and the risks involved in such investments. The following
supplements the information contained in the Prospectus concerning the
investment objective, policies and techniques of each Fund.
The investment objective of the REIT Index Fund is to provide its investors with
investment results which correspond to the performance of the GrandView REIT
Index (the "Index"). The Fund seeks to achieve its objective by investing in
the equity securities of the REITs comprising the Index. The REIT Index Fund
intends to be as fully invested at all times as is reasonably practicable and
will attempt to approximate the weightings of the securities held in its
portfolio to the weightings of the securities in the Index.
The Index was developed and is maintained by the Adviser. It currently consists
of the equity securities of 60 REITs which, as of March 31, 1995, represented
approximately 65% of the total market capitalization of all REITs which are
publicly traded in the United States and includes REITs within each of thirteen
industry sectors identified by the Adviser. Any changes made to the
composition of the Index by the Adviser will be based solely on market
capitalization criteria. The Index is weighted by market capitalization, and in
formulating the list of REITs which comprise the Index, the Adviser chooses
REITs which represent all sectors of the REIT industry as identified by the
Adviser. The Index is reset as needed in order to reflect changes in the market,
and in any event, at least semiannually. The Index is presently comprised of
the following REITs:
GrandView REIT Index Composition
9/95 Market
Sector/Name Exchange Capitalization
APARTMENT
Security Capital Pacific Trust NYSE $1,375,140,561
Equity Residential Prop. NYSE $1,035,340,639
United Dominion Realty NYSE $798,644,556
Merry Land & Inv. Co. NYSE $712,229,375
Avalon Properties NYSE $578,088,506
Post Properties Inc. NYSE $550,068,371
BRE Properties, Inc. NYSE $369,528,750
Oasis Residential, Inc. NYSE $365,347,035
Wellsford Residential Tr. NYSE $361,436,523
Evans Withycombe Res. NYSE $325,228,750
Camden Property Trust NYSE $321,066,141
HOTEL
Starwood Lodging Trust NYSE $388,396,631
RFS Hotel Investors, Inc. NASDAQ $375,500,750
Felcor Suite Hotels, Inc. NASDAQ $244,957,500
IND/WARE
Security Capital Ind. Trust NYSE $1,059,337,500
Liberty Property Trust NYSE $449,289,770
First Industrial Rlty. Trust NYSE $377,627,980
MANUF. HOUSING
Manufacturer Home Com. NYSE $420,417,000
ROC Communities, Inc. NYSE $287,293,438
Sun Communities NYSE $257,556,000
MEDICAL
Meditrust NYSE $1,717,019,125
Health Care Property Investors NYSE $966,923,732
Health & Retirement Properties NYSE $924,846,344
Nationwide Health Prop. NYSE $793,760,000
National Health Investors NYSE $566,745,185
Omega HealthCare Investors NYSE $531,424,461
American Health Properties NYSE $452,395,000
MIXED
Duke Realty Investments, Inc. NYSE $742,331,250
Spieker Properties NYSE $641,179,776
Washington REIT SBI ASE $470,730,046
MORTGAGE
CWM Mortgage Holdings, Inc. NYSE $548,562,200
Capstead Mortgage Corporation NYSE $493,554,000
Resource Mortgage Capital, Inc. NYSE $407,612,473
OFFICE
Crescent R. E. Equities, Inc. NYSE $652,588,554
Cousins Properties NASDAQ $511,492,750
Highwood Properties, Inc. NYSE $495,850,000
Beacon Properties Corp. NYSE $411,468,750
RETAIL-MALL
Simon Property Group NYSE $1,359,935,113
Debartolo Realty Corp. NYSE $766,670,226
General Growth Properties, Inc NYSE $562,496,550
Taubman Centers, Inc. NYSE $443,303,130
CBL & Associates Prop. NYSE $431,883,798
Crown American Realty Trust NYSE $226,129,745
RETAIL-OUTLET
Chelsea GCA Realty NYSE $332,359,375
Mills Corp. NYSE $306,420,398
Factory Stores of America Inc. NYSE $234,795,280
RETAIL-STRIP
New Plan Realty Trust NYSE $1,172,492,250
Weingarten Realty Investors NYSE $934,713,625
Vornado Realty Trust NYSE $908,960,138
Kimco Realty Corp. NYSE $894,711,080
Federal Realty Investment Trust NYSE $740,777,125
Developers Diversified Realty NYSE $562,075,624
Glimcher Realty Trust NYSE $445,519,750
Realty Income Corp. NYSE $412,000,875
SELF STORAGE
Storage Equities Inc. NYSE $783,043,723
Shurgard Storage Centers, Inc. NYSE $562,075,177
Storage USA Inc. REIT NYSE $532,707,373
SPECIALTY
Franchise Finance Corp. NYSE $865,390,459
National Golf Properties, Inc. NYSE $232,356,250
CA. Jockey Club & Bay Meadows ASE $92,771,269
REITs pool investors' funds for investment primarily in income producing real
estate or real estate related loans or interests. A REIT is not taxed on income
distributed to its shareholders or unitholders if it complies with regulatory
requirements relating to its organization, ownership, assets and income and a
regulatory requirement that it distribute to its shareholders or unitholders at
least 95% of its taxable income for each taxable year. Generally, REITs can be
classified as Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs
invest the majority of their assets directly in real property and derive their
income primarily from rents and capital gains from appreciation realized through
property sales. Equity REITs may be affected by changes in the value of the
underlying property owned by the REITs. Mortgage REITs invest the majority of
their assets in real estate mortgages and derive their income primarily from
interest payments. Mortgage REITs are sensitive to the credit quality of the
underlying borrowers. Hybrid REITs combine the characteristics of both Equity
and Mortgage REITs. The value of REITs may be affected by management skill,
cash flow and tax and regulatory requirements.
The investment objective of the Realty Growth Fund is long-term growth of
capital. Current income is a secondary objective. In selecting investments for
the Fund, the Adviser will emphasize equity securities of real estate industry
companies which it believes are undervalued or which it believes to have
significant "turnaround" potential. For purposes of the Fund's investments, a
"real estate industry company" is a company that derives at least 50% of its
gross revenues or net profits from the ownership, development, construction,
financing, management or sale of commercial, industrial or residential real
estate. The equity securities in which the Fund will invest may include common
stocks, shares of beneficial interest and securities with common stock
characteristics, such as preferred stock, warrants and debt securities
convertible into common stock. The debt securities in which the Fund will
invest may include bonds, notes and other short-term debt obligations. In
determining whether a security is undervalued, the Adviser may take into account
price- earnings ratios, cash flows, relationships of asset value to market
prices of the securities, interest or dividend payment histories and other
factors which it believes to be relevant. The Adviser may determine that a
company has "turnaround" potential based on, for example, changes in management
or financial restructurings. The Fund's performance depends on conditions in
the real estate industry.
The investment objective of the Residential Realty Income Fund is current
income. Long-term growth of capital is a secondary objective of the Fund. Under
normal circumstances, at least 65% of the Fund's total assets are invested in
debt and equity securities of REITs and other companies in the residential
sector of the real estate industry. A company will be deemed to be in the
residential sector of the real estate industry if it derives at least 50% of its
gross revenues or net profits from the ownership, development, construction,
financing, management or sale of real estate used primarily for residential
purposes.
The investment objective of the Retail Realty Income Fund is current income.
Long-term growth of capital is a secondary objective of the Fund. Under normal
circumstances, at least 65% of the Fund's total assets are invested in debt and
equity securities of REITs and other companies in the retail sector of the real
estate industry. A company will be deemed to be in the retail sector of the
real estate industry if it derives at least 50% of its gross revenues or net
profits from the ownership, development, construction, financing, management or
sale of real estate used primarily for retail purposes.
The investment objective of the Healthcare Realty Income Fund is current income.
Long-term growth of capital is a secondary objective of the Fund. Under normal
circumstances, at least 65% of the Fund's total assets are invested in debt and
equity securities of REITs and other companies in the healthcare sector of the
real estate industry. A company will be deemed to be in the healthcare sector
of the real estate industry if it derives at least 50% of its gross revenues or
net profits from the ownership, development, construction, financing, management
or sale of real estate used primarily for healthcare purposes.
Because the Funds invest primarily in the real estate industry, their
investments may be subject to certain risks associated with the direct ownership
of real estate. These risks include: declines in the value of real estate;
risks related to general and local economic conditions, overbuilding and
increased competition; increases in property taxes and operating expenses; and
variations in rental income. For more information on these and other risks of
investing in the real estate industry, see "INVESTMENT OBJECTIVE AND POLICIES -
Risks of Investing" in the Prospectus.
The policies described above and those described below are not fundamental and
may be changed without shareholder approval.
Mortgage-Backed Securities
The Funds (other than the REIT Index Fund) may invest in securities that
directly or indirectly represent participations in, or are collateralized by and
payable from, mortgage loans secured by real property ("Mortgage-Backed
Securities").
Mortgage-Backed Securities represent pools of mortgage loans assembled for sale
to investors by various governmental agencies such as the Government National
Mortgage Association ("Ginnie Mae") and government-related organizations such as
the Federal National Mortgage Association ("Fannie Mae") and the Federal Home
Loan Mortgage Corporation ("Freddie Mac"), as well as by nongovernmental issuers
such as commercial banks, savings and loan institutions, mortgage bankers, and
private mortgage insurance companies. Although certain Mortgage-Backed
Securities are guaranteed by a third party or otherwise similarly secured, the
market value of the security, which may fluctuate, is not so secured. If the
Adviser purchases a Mortgage-Backed Security at a premium, that portion may be
lost if there is a decline in the market value of the security whether resulting
from changes in interest rates or prepayments in the underlying mortgage
collateral. As with other interest-bearing securities, the prices of such
securities are inversely affected by changes in interest rates. However, though
the value of a Mortgage-Backed Security may decline when interest rates rise,
the converse is not necessarily true since in periods of declining interest
rates the mortgages underlying the securities are prone to prepayment. For this
and other reasons, a Mortgage-Backed Security's stated maturity may be shortened
by unscheduled prepayments on the underlying mortgages and, therefore, it is not
possible to predict accurately the securities' return to a Fund. In addition,
regular payments received in respect of Mortgage-Backed Securities include both
interest and principal. No assurance can be given as to the return a Fund will
receive when these amounts are reinvested.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue Mortgage-Backed Securities
and among the securities that they issue. Mortgage-Backed Securities issued by
Ginnie Mae include Ginnie Mae Mortgage Pass-Through Certificates which are
guaranteed as to the timely payment of principal and interest by Ginnie Mae.
This guarantee is backed by the full faith and credit of the United States.
Ginnie Mae is a wholly-owned U.S. Government corporation within the Department
of Housing and Urban Development. Ginnie Mae certificates also are supported by
the authority of Ginnie Mae to borrow funds from the U.S. Treasury to make
payments under its guarantee. Mortgage-Backed Securities issued by Fannie Mae
include Fannie Mae Guaranteed Mortgage Pass-Through Certificates (also known as
"Fannie Maes") which are guaranteed as to timely payment of the principal and
interest by Fannie Mae. Fannie Maes are solely the obligations of Fannie Mae
and are not backed by or entitled to the full faith and credit of the United
States. Fannie Mae is a government-sponsored organization owned entirely by
private stockholders. Mortgage-Backed Securities issued by Freddie Mac include
Freddie Mac Mortgage Participation Certificates (also known as "Freddie Macs" or
"PC's"). Freddie Mac is a corporate instrumentality of the United States,
created pursuant to an Act of Congress, which is owned entirely by Federal Home
Loan Banks. Freddie Macs are not guaranteed by the United States or by any
Federal Home Loan Banks and do not constitute a debt or obligation of the United
States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to
timely payment of interest, which is guaranteed by Freddie Mac. Freddie Mac
guarantees either ultimate collection or timely payment of all principal
payments on the underlying mortgage loans. When Freddie Mac does not guarantee
timely payment of principal, Freddie Mac may remit the amount due on account of
its guarantee of ultimate payment of principal at any time after default on an
underlying mortgage, but in no event later than one year after it becomes
payable.
The Funds (other than the REIT Index Fund) may also invest in Mortgage-Backed
Securities which are collateralized mortgage obligations structured on pools of
mortgage pass-through certificates or mortgage loans ("CMOs" and "REMICs") and
derivative multiple-class mortgage-backed securities ("Stripped Mortgage-Backed
Securities" or "SMBSs").
Short-Term Investments
For temporary defensive purposes, each Fund (other than the REIT Index Fund) may
invest up to 100% of its total assets in short-term investments. Each Fund
(including the REIT Index Fund) may also make short-term investments for
liquidity purposes (e.g., in anticipation of redemptions or purchases of
securities). The Funds may invest in short-term investments consisting of
corporate commercial paper and other short-term commercial obligations, in each
case rated or issued by companies with similar securities outstanding that are
rated Prime-l, Aa or better by Moody's Investors Service, Inc. ("Moody's") or A-
1, AA or better by Standard & Poor's Ratings Group ("Standard & Poor's");
obligations (including certificates of deposit, time deposits, demand deposits
and bankers' acceptances) of banks with securities outstanding that are rated
Prime-l, Aa or better by Moody's, or A-1, AA or better by Standard & Poor's;
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities with remaining maturities not exceeding 18 months; securities
of registered investment companies, subject to the provisions of the 1940 Act;
and repurchase agreements. These investments may have a lower yield than would
be available from investments with a lower quality or longer term.
Lower Rated Debt Securities
The Funds (other than the REIT Index Fund) may invest in debt securities which
are rated Caa or higher by Moody's or CCC or higher by Standard & Poor's or
Fitch Investors Service, Inc. ("Fitch") or equivalent unrated securities.
However, no Fund may invest more than 10% of its assets (25% for the Realty
Growth Fund) in debt securities rated lower than Baa by Moody's or BBB by
Standard & Poor's or Fitch or securities not rated by Moody's, Standard & Poor's
or Fitch which the Adviser deems to be of equivalent quality. Bonds rated BB or
Ba or below (or comparable unrated securities) are commonly referred to as "junk
bonds" and are considered speculative and may be questionable as to principal
and interest payments. In some cases, such bonds may be highly speculative,
have poor prospects for reaching investment standing and be in default. As a
result, investment in such bonds will entail greater risks than those associated
with investment in investment-grade bonds (i.e., bonds rated BBB or better by
Standard & Poor's or Fitch or Baa or better by Moody's).
An economic downturn could severely affect the ability of highly leveraged
issuers to service their debt obligations or to repay their obligations upon
maturity. Factors having an adverse impact on the market value of lower rated
securities will have an adverse effect on a Fund's net asset value to the extent
it invests in such securities. In addition, the Fund may incur additional
expenses to the extent it is required to seek recovery upon a default in payment
of principal or interest on its portfolio holdings.
The secondary market for junk bond securities, which is concentrated in
relatively few market makers, may not be as liquid as the secondary market for
more highly rated securities, a factor which may have an adverse effect on a
Fund's ability to dispose of a particular security when necessary to meet its
liquidity needs. Under adverse market or economic conditions, the secondary
market for junk bond securities could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result,
the Adviser could find it more difficult to sell these securities or may be able
to sell the securities only at prices lower than if such securities were widely
traded. Prices realized upon the sale of such lower rated or unrated
securities, under these circumstances, may be less than the prices used in
calculating the Fund's net asset value.
Since investors generally perceive that there are greater risks associated with
the medium to lower rated securities of the type in which certain of the Funds
may invest, the yields and prices of such securities may tend to fluctuate more
than those for higher rated securities. In the lower quality segments of the
fixed-income securities market, changes in perceptions of issuers'
creditworthiness tend to occur more frequently and in a more pronounced manner
than do changes in higher quality segments of the fixed-income securities market
resulting in greater yield and price volatility.
Another factor which causes fluctuations in the prices of fixed-income
securities is the supply and demand for similarly rated securities. In
addition, the prices of fixed-income securities fluctuate in response to the
general level of interest rates. Fluctuations in the prices of portfolio
securities subsequent to their acquisition will not affect cash income from such
securities but will be reflected in a Fund's net asset value.
Medium to lower rated and comparable non-rated securities tend to offer higher
yields than higher rated securities with the same maturities because the
historical financial condition of the issuers of such securities may not have
been as strong as that of other issuers. In addition to the risk of default,
there are the related costs of recovery on defaulted issues. The Adviser will
attempt to reduce these risks through diversification of each Fund's portfolio
and by analysis of each issuer and its ability to make timely payments of income
and principal, as well as broad economic trends in corporate developments.
Foreign Real Estate Companies and Associated Risks
Each Fund (other than the REIT Index Fund) may invest in securities of non-U.S.
real estate companies. The risks of investing in real estate and real estate
companies are described in the Prospectus and above under "Investment Policies."
Investing in securities issued by companies whose principal business activities
are outside the United States may involve significant risks not present in U.S.
investments. For example, the value of these securities fluctuates based on the
relative strength of the U.S. dollar. In addition, there is generally less
publicly available information about non-U.S. issuers, particularly those not
subject to the disclosure and reporting requirements of the U.S. securities
laws. Non-U.S. issuers are generally not bound by uniform accounting, auditing
and financial reporting requirements comparable to those applicable to U.S.
issuers. Investments in securities of non-U.S. issuers also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of a Fund, political or financial instability or diplomatic and
other developments which would affect such investments. Further, economies of
other countries or areas of the world may differ favorably or unfavorably from
the economy of the U.S.
It is anticipated that in most cases the best available market for securities of
non-U.S. real estate companies would be on exchanges or in over-the-counter
markets located outside the U.S. Non-U.S. securities markets, while growing in
volume and sophistication, are generally not as developed as those in the U.S.,
and securities of some non-U.S. real estate companies (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. companies. Non-U.S. security trading practices,
including those involving securities settlement where Fund assets may be
released prior to receipt of payments, may expose the Funds to increased risk in
the event of a failed trade or the insolvency of a non-U.S. broker-dealer. In
addition, non-U.S. brokerage commissions are generally higher than commissions
on securities traded in the U.S. and may be non-negotiable. In general, there
is less overall governmental supervision and regulation of non-U.S. securities
exchanges, brokers and listed companies than in the U.S.
American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
Global Depositary Receipts ("GDRs") and other forms of depositary receipts for
securities of non-U.S. issuers provide an alternative method for the Funds to
make non-U.S. investments. These securities are not usually denominated in the
same currency as the securities into which they may be converted. Generally,
ADRs, in registered form, are designed for use in U.S. securities markets and
EDRs and GDRs, in bearer form, are designed for use in European and global
securities markets. ADRs are receipts typically issued by a U.S. bank or trust
company evidencing ownership of the underlying securities. EDRs and GDRs are
European and global receipts, respectively, evidencing a similar arrangement.
The Funds may invest in securities of non-U.S. real estate companies that impose
restrictions on transfer within the United States or to United States persons.
Although securities subject to such transfer restrictions may be marketable
abroad, they may be less liquid than securities of non-U.S. real estate
companies of the same class that are not subject to such restrictions.
Repurchase Agreements
Each Fund may invest in repurchase agreements collateralized by securities in
which that Fund may otherwise invest. Repurchase agreements are agreements by
which the Fund purchases a security and simultaneously commits to resell that
security to the seller (which is usually a member bank of the U.S. Federal
Reserve System or a member firm of the New York Stock Exchange (or a subsidiary
thereof)) at an agreed-upon date within a number of days (usually not more than
seven) from the date of purchase. The resale price reflects the purchase price
plus an agreed-upon market rate of interest which is unrelated to the coupon
rate or maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is in
effect secured by the value of the underlying security, usually U.S. Government
or Government agency issues. Under the 1940 Act, repurchase agreements may be
considered to be loans by the buyer. The Fund's risk is limited to the ability
of the seller to pay the agreed-upon amount on the delivery date. If the seller
defaults, the underlying security constitutes collateral for the seller's
obligation to pay although that Fund may incur certain costs in liquidating this
collateral and in certain cases may not be permitted to liquidate this
collateral. All repurchase agreements entered into by the Funds are fully
collateralized, with such collateral being marked to market daily.
Reverse Repurchase Agreements
Each Fund may enter into reverse repurchase agreements. Reverse repurchase
agreements involve the sale of securities held by the Fund and the agreement by
the Fund to repurchase the securities at an agreed upon price, date and interest
payment. When the Fund enters into reverse repurchase transactions, securities
of a dollar amount equal in value to the securities subject to the agreement
will be maintained in a segregated account with the Fund's custodian. The
segregation of assets could impair the Fund's ability to meet its current
obligations or impede investment management if a large portion of the Fund's
assets are involved. Reverse repurchase agreements are considered to be a form
of borrowing.
Lending of Portfolio Securities
Consistent with applicable regulatory requirements and in order to generate
income, each Fund may lend its securities to broker-dealers and other
institutional borrowers. Such loans will usually be made only to member banks
of the U.S. Federal Reserve System and to member firms of the New York Stock
Exchange (and subsidiaries thereof). Loans of securities would be secured
continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. The Fund would have the right to call a
loan and obtain the securities loaned at any time on customary industry
settlement notice (which will not usually exceed three days). During the
existence of a loan, the Fund would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned and would also
receive compensation based on investment of the cash collateral. The Fund would
not, however, have the right to vote any securities having voting rights during
the existence of the loan, but would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the giving or
withholding of their consent on a material matter affecting the investment. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower fail financially. However,
the loans would be made only to entities deemed by the Adviser to be of good
standing, and when, in the judgment of the Adviser, the consideration which can
be earned currently from loans of this type justifies the attendant risk. If
the Adviser determines to make loans, it is not intended that the value of the
securities loaned by the Fund would exceed 30% of the value of its net assets.
Restricted Securities and Illiquid Investments
The Trust may purchase securities for the Funds that are not registered
("restricted securities") under the Securities Act of 1933 (the "Securities
Act"), but can be offered and sold to "qualified institutional buyers" under
Rule 144A under the Securities Act. Provided that a dealer or institutional
trading market in such securities exists, these restricted securities are not
treated as illiquid securities for purposes of the Fund's investment
limitations.
The Trust does not invest more than 15% of any Fund's net assets in illiquid
investments, which include securities for which there is no readily available
market, securities subject to contractual restrictions on resale and restricted
securities, unless the Trustees determine, based on the trading markets for the
specific restricted security, that it is liquid. The Trust's Trustees may adopt
guidelines and delegate to the Adviser the daily function of determining and
monitoring liquidity of restricted securities. The Trust's Trustees, however,
retain sufficient oversight and are ultimately responsible for the
determinations.
"When-Issued" Securities
Each Fund may purchase securities on a "when-issued" or on a "forward delivery"
basis. It is expected that, under normal circumstances, the applicable Fund
would take delivery of such securities. When the Fund commits to purchase a
security on a "when-issued" or on a "forward delivery" basis, it sets up
procedures consistent with SEC policies. Since those policies currently require
that an amount of the Fund's assets equal to the amount of the purchase be held
aside or segregated to be used to pay for the commitment, the Fund will always
have cash, cash equivalents or high quality debt securities sufficient to cover
any commitments or to limit any potential risk. However, even though the Funds
do not intend to make such purchases for speculative purposes and intend to
adhere to the provisions of SEC policies, purchases of securities on such bases
may involve more risk than other types of purchases. For example, the Fund may
have to sell assets which have been set aside in order to meet redemptions.
Also, if the Adviser determines it is advisable as a matter of investment
strategy to sell the "when-issued" or "forward delivery" securities, the Fund
would be required to meet its obligations from the then available cash flow or
the sale of securities, or, although it would not normally expect to do so, from
the sale of the "when-issued" or "forward delivery" securities themselves (which
may have a value greater or less than the Fund's payment obligation).
Options and Futures Contracts
To hedge against changes in securities prices, each Fund may purchase and sell
various kinds of futures contracts, and purchase and write (sell) call and put
options on any of such futures contracts. Each Fund may also purchase put and
call options on securities indices that are based on securities in which it may
invest. The futures contracts may be based on various securities (such as U.S.
Government securities), securities indices and other financial instruments and
indices. A Fund may engage in futures and related options transactions for bona
fide hedging and non-hedging purposes as described below. All futures contracts
entered into by a Fund are traded on U.S. exchanges or boards of trade that are
licensed and regulated by the Commodity Futures Trading Commission (the "CFTC")
or on foreign exchanges.
A futures contract may generally be described as an agreement between two
parties to buy and sell particular financial instruments for an agreed price
during a designated month (or to deliver the final cash settlement price, in the
case of a contract relating to an index or otherwise not calling for physical
delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, a Fund can seek
to offset a decline in the value of its current portfolio securities through
the sale of futures contracts. When interest rates are falling or securities
prices are rising, a Fund, through the purchase of futures contracts, can
attempt to secure better rates or prices than might later be available in the
market when it effects anticipated purchases.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. A clearing corporation associated with the exchange on which futures
on securities are traded guarantees that, if still open, the sale or purchase
will be performed on the settlement date.
Hedging, by use of futures contracts, seeks to establish with more certainty the
effective price and rate of return on portfolio securities and securities that a
Fund owns or proposes to acquire. A Fund may, for example, take a "short"
position in the futures market by selling futures contracts in order to hedge
against an anticipated rise in interest rates that would adversely affect the
value of the Fund's portfolio securities. Such futures contracts may include
contracts for the future delivery of securities held by a Fund or securities
with characteristics similar to those of a Fund's portfolio securities. If, in
the opinion of the Adviser, there is a sufficient degree of correlation between
price trends for a Fund's portfolio securities and futures contracts based on
securities indices, a Fund may also enter into such futures contracts as part of
its hedging strategy. Although under some circumstances prices of securities in
a Fund's portfolio may be more or less volatile than prices of such futures
contracts, the Adviser will attempt to estimate the extent of this volatility
difference based on historical patterns and compensate for any such differential
by having a Fund enter into a greater or lesser number of futures contracts or
by attempting to achieve only a partial hedge against price changes affecting a
Fund's securities portfolio. When hedging of this character is successful, any
depreciation in the value of portfolio securities will be substantially offset
by appreciation in the value of the futures position. On the other hand, any
unanticipated appreciation in the value of a Fund's portfolio securities would
be substantially offset by a decline in the value of the futures position.
On other occasions, a Fund may take a "long" position by purchasing futures
contracts. This would be done, for example, when a Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
The acquisition of put and call options on futures contracts will give a Fund
the right (but not the obligation) for a specified price to sell or to purchase,
respectively, the underlying futures contract at any time during the option
period. As the purchaser of an option on a futures contract, a Fund obtains the
benefit of the futures position if prices move in a favorable direction but
limits its risk of loss in the event of an unfavorable price movement to the
loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of a Fund's assets. By writing a call
option, a Fund becomes obligated, in exchange for the premium, to sell a
futures contract, which may have a value higher than the exercise price.
Conversely, the writing of a put option on a futures contract generates a
premium which may partially offset an increase in the price of securities that a
Fund intends to purchase. However, a Fund becomes obligated to purchase a
futures contract which may have a value lower than the exercise price. Thus,
the loss incurred by a Fund in writing options on futures is potentially
unlimited and may exceed the amount of the premium received. A Fund will incur
transaction costs in connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series.
There is no guarantee that such closing transactions can be effected. A Fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
A Fund may use options on futures contracts for bona fide hedging or non-hedging
purposes as discussed below.
A Fund will engage in futures and related options transactions only for bona
fide hedging or non-hedging purposes in accordance with CFTC regulations which
permit investment companies registered under the 1940 Act to engage in such
transactions without requiring their sponsors to be registered as commodity pool
operators. No Fund is permitted to engage in speculative futures trading. A
Fund will determine that the price fluctuations in the futures contracts and
options on futures used for hedging purposes are substantially related to price
fluctuations in securities held by the Fund or in securities which it expects to
purchase. Except as stated below, a Fund's futures transactions will be entered
into for traditional hedging purposes -- i.e., futures contracts will be sold to
protect against a decline in the price of securities that the Fund owns, or
futures contracts will be purchased to protect the Fund against an increase in
the price of securities it intends to purchase. In particular cases, when it is
economically advantageous for a Fund to do so, a long futures position may be
terminated or an option may expire without the corresponding purchase of
securities or other assets.
No Fund may purchase or sell non-hedging futures contracts or purchase or sell
related non-hedging options, except for closing purchase or sale transactions,
if immediately thereafter the sum of the amount of initial margin deposits on
the Fund's existing non-hedging futures and related non-hedging options
positions and the amount of premiums paid for existing non-hedging options on
futures (net of the amount the positions are "in the money") would exceed 5% of
the market value of the Fund's total assets. These transactions involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating a Fund to purchase securities and currencies, require the
Fund to segregate assets to cover such contracts and options.
Transaction costs associated with futures contracts and related options involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating a Fund to purchase securities or currencies, require a Fund
to segregate assets to cover such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while a Fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for a Fund than if it had not entered into any
futures contracts or options transactions. In the event of an imperfect
correlation between a futures position and a portfolio position which is
intended to be protected, the desired protection may not be obtained and the
Fund may be exposed to risk of loss.
Investment Restrictions
Fundamental Restrictions
The Trust, on behalf of the Funds, has adopted the following policies which may
not be changed with respect to any Fund without approval by holders of a
majority of the outstanding voting securities of that Fund, which as used in
this Statement of Additional Information means the vote of the lesser of (i) 67%
or more of the outstanding voting securities of the respective Fund present at a
meeting at which the holders of more than 50% of the outstanding voting
securities of the Fund are present or represented by proxy, or (ii) more than
50% of the outstanding voting securities of the respective Fund. The term
"voting securities" as used in this paragraph has the same meaning as in the
1940 Act.
A Fund may not:
(1) Borrow money, except that as a temporary measure for
extraordinary or emergency purposes it may borrow from banks
and enter into reverse repurchase agreements in an amount not
to exceed 33 1/3% of the current value of its respective net
assets, including the amount borrowed (and no Fund may
purchase any securities at any time at which borrowings exceed
5% of the total assets of the Fund, taken at market value). It
is intended that a Fund would borrow money only from banks and
only to accommodate requests for the repurchase of shares of
the Fund while effecting an orderly liquidation of portfolio
securities.
(2) Make short sales of securities or purchase securities on
margin, except that the Trust may purchase and sell various
types of futures contracts and may obtain short term credits
as necessary for the clearance of security transactions.
(3) Underwrite securities issued by other persons, except to the
extent that the Fund may be considered an underwriter within
the meaning of the Securities Act of 1933 in the disposition
of restricted securities.
(4) Make loans to other persons except (a) through the lending of
its portfolio securities, but not in excess of 33 1/3%, of the
Fund's net assets,(b) through the use of fixed time deposits
or repurchase agreements or the purchase of short-term
obligations or (c) by purchasing all or a portion of an issue
of debt securities; for purposes of this paragraph 4 the
purchase of short-term commercial paper or a portion of an
issue of debt securities which are part of an issue to the
public shall not be considered the making of a loan.
(5) Purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or
interests therein), interests in oil, gas or mineral leases,
commodities or commodity contracts in the ordinary course of
business, except that the Fund may purchase and sell mortgage-
related securities and may hold and sell real estate acquired
as a result of the ownership of securities by the Fund.
(6) Issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940
Act or the rules and regulations promulgated thereunder,
except as appropriate to evidence a debt incurred without
violating Investment Restriction (1) above.
(7) In the case of the REIT Index Fund, with respect to 75% of its
total assets, purchase securities of any issuer if such
purchase at the time thereof would cause more than 5% of the
Fund's assets (taken at market value) to be invested in the
securities of such issuer (other than securities or
obligations issued or guaranteed by the United States
government or any agency or instrumentality thereof); provided
that, for purposes of this restriction the issuer of an option
or futures contract shall not be deemed to be the issuer of
the security or securities underlying such contract.
(8) In the case of the REIT Index Fund, with respect to 75% of its
total assets, purchase securities of any issuer if such
purchase at the time thereof would cause more than 10% of the
voting securities of such issuer to be held by the Fund.
(9) Invest 25% or more of its assets in securities of issuers in
any one industry (other than securities or obligations issued
or guaranteed by the United States government or any agency or
instrumentality thereof), except that it will invest at least
25% of its assets in securities of issuers in the real estate
industry.
State and Federal Restrictions
In order to comply with certain state and federal statutes and policies each
Fund does not as a matter of operating policy: (i) borrow money for any purpose
in excess of 10% of the net assets of the Fund (taken at cost) (the Fund will
not purchase any securities for the Fund at any time at which borrowings exceed
5% of the total assets of the Fund (taken at market value)), (ii) sell any
security which the Fund does not own unless by virtue of the ownership of other
securities there is at the time of sale a right to obtain securities, without
payment of further consideration, equivalent in kind and amount to the
securities sold and provided that if such right is conditional the sale is made
upon the same conditions, (iii) invest for the purpose of exercising control or
management, (iv) purchase securities issued by any registered investment
company, except by purchase in the open market where no commission or profit to
a sponsor or dealer results from such purchase other than the customary broker's
commission, or except when such purchase, though not made in the open market, is
part of a plan of merger or consolidation; provided, however, that the Fund will
not purchase the securities of any registered investment company if such
purchase at the time thereof would cause more than 10% of the total assets of
the Fund (taken in each case at the greater of cost or market value) to be
invested in the securities of such issuers or would cause more than 3% of the
outstanding voting securities of any such issuer to be held for the Fund, (v)
invest more than 15% of the net assets of the Fund in securities that are not
readily marketable or which are subject to legal or contractual restrictions on
resale including debt securities for which there is no established market and
fixed time deposits and repurchase agreements maturing in more than seven days,
(vi) purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee of
the Trust, or is an officer or director of the Adviser, if after the purchase of
the securities of such issuer by the Fund, one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all taken
at market value, of such issuer, and such persons owning more than 1/2 of 1% of
such shares or securities together own beneficially more than 5% of such shares
or securities, or both, all taken at market value, (vii) make short sales of
securities, except that the Trust may purchase and sell various types of futures
contracts and may obtain short term credits as necessary for the clearance of
security transactions, (viii) invest more than 5% of the Fund's net assets in
warrants (valued at the lower of cost or market), but not more than 2% of the
Fund's net assets may be invested in warrants not listed on the New York Stock
Exchange or the American Stock Exchange, (ix) with respect to 50% of the Fund's
total assets, invest more than 5% of its total assets in the securities of any
one issuer and, as to the remaining 50% of the Fund's total assets, invest more
than 25% in the securities of any one issuer, (x) purchase securities of any
issuer if, as to 75% of the assets of the Fund at the time of purchase, more
than 10% of the voting securities of any issuer would be held by the Fund, or
(xi) invest more than 15% of the Fund's total assets in the securities of
issuers which together with any predecessors (including public and private
predecessor operating companies) have a record of less than three years of
continuous operating or securities of issuers which are restricted as to
disposition, despite any determinations made by the Board of Trustees that such
securities are liquid.
Except as provided below, in order to comply with Rule 260.140.85(b) of Title 10
of the California Code of Regulations, a Fund will not engage in short sales
(other than sales against the box) or margin purchases, in writing, buying or
selling puts and calls on securities, stock index futures, options on stock
index futures, securities, stock index futures, options on stock index futures,
financial futures contracts or options thereon, or in other investment practices
which, in the opinion of the California Commissioner of Corporations, are highly
speculative, unless the securities of the Fund are offered only to a limited
class of purchasers and are subject to other sales limitations as the California
Commissioner of Corporations may require, and adequate disclosure is made of the
speculative nature of the security. However, a Fund may engage in writing puts
or calls if each of the following conditions are met: (i) the security
underlying the put or call is within the investment policies of the Fund and the
option is issued by the Options Clearing Corporation, (ii) the aggregate value
of the securities underlying the calls or obligations underlying the puts
determined as of the date the options are sold shall not exceed 25% of the net
assets of the Fund, (iii) the securities subject to the exercise of a call
written by the Fund must be owned by the Fund at the time the call is sold and
must continue to be owned by the Fund until the call has been exercised, has
lapsed, or the Fund has purchased a closing call, and such purchase has been
confirmed, thereby extinguishing the Fund's obligation to deliver securities
pursuant to the call it has sold, and (iv) at the time a put is written the Fund
must establish a segregated account with its custodian consisting of cash or
short term United States Government securities equal in value to the amount the
Fund will be obligated to pay upon exercise of the put; this account must be
maintained until the put is exercised, has expired, or the Fund has purchased a
closing put, which is a put of the same series as the one previously written. A
Fund may buy and sell puts and calls on securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, if such options are written by other persons and if (i) the options or
futures are offered through the facilities of a national securities association
approved by the California Commissioner of Corporations or are listed on a
national securities or commodities exchange, (ii) the aggregate premiums paid on
all such options which are held at any time do not exceed 20% of the Fund's
total net assets, and (iii) the aggregate margin deposits required on all such
futures or options thereon held at any time do not exceed 5% of the Fund's total
assets.
These policies are not fundamental and may be changed by each Fund without the
approval of its shareholders in response to changes in state and federal
requirements.
Percentage Restrictions
If a percentage restriction on investment or utilization of assets set forth
above or referred to in the Prospectus is adhered to at the time an investment
is made or assets are so utilized, a later change in percentage resulting from
changes in the value of the securities held for a Fund will not be considered a
violation of policy.
3. PERFORMANCE INFORMATION
A total rate of return quotation for each Fund is calculated for any period by
(a) dividing (i) the sum of the net asset value per share on the last day of the
period and the net asset value per share on the last day of the period of shares
purchasable with dividends and capital gains distributions declared during such
period with respect to a share held at the beginning of such period and with
respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price per share on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate
of return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting 1
from the result. Total rates of return may also be calculated on investments at
various sales charge levels or at net asset value. Any performance data which
is based on a reduced sales charge or net asset value per share would be reduced
if the maximum sales charge were taken into account.
Any current yield quotation for a Fund consists of an annualized historical
yield, carried at least to the nearest hundredth of one percent, based on a 30
calendar day or one month period and is calculated by (a) raising to the sixth
power the sum of 1 plus the quotient obtained by dividing the Fund's net
investment income earned during the period by the product of the average daily
number of shares outstanding during the period that were entitled to receive
dividends and the maximum public offering price per share on the last day of the
period, (b) subtracting 1 from the result, and (c) multiplying the result by 2.
The aggregate total rate of return for the Funds for the period from July 3,
1995 (commencement of operations) to September 30, 1995 was as follows: REIT
Index Fund, ***% (with maximum sales load) and ***% (with no sales load); Realty
Growth Fund, ***% (with maximum sales load) and ***% (with no sales load);
Residential Realty Income Fund, ***% (with maximum sales load) and ***% (with no
sales load); Retail Realty Income Fund, ***% (with maximum sales load) and ***%
(with no sales load); and Healthcare Realty Income Fund, ***% (with maximum
sales load) and ***% (with no sales load). For the thirty day period ended
September 30, 1995, the yield of the Funds was as follows: REIT Index Fund,
***% (with maximum sales load) and ***% (with no sales load); Realty Growth
Fund, ***% (with maximum sales load) and ***% (with no sales load); Residential
Realty Income Fund, ***% (with maximum sales load) and ***% (with no sales
load); Retail Realty Income Fund, ***% (with maximum sales load) and ***% (with
no sales load); and Healthcare Realty Income Fund, ***% (with maximum sales
load) and ***% (with no sales load). For the thirty day period ended September
30, 1995, the effective yield of the Funds was as follows: REIT Index Fund,
***% (with maximum sales load) and ***% (with no sales load); Realty Growth
Fund, ***% (with maximum sales load) and ***% (with no sales load); Residential
Realty Income Fund, ***% (with maximum sales load) and ***% (with no sales
load); Retail Realty Income Fund, ***% (with maximum sales load) and ***% (with
no sales load); and Healthcare Realty Income Fund, ***% (with maximum sales
load) and ***% (with no sales load). These performance quotations should not be
considered as representative of the Funds' performance for any specified period
in the future. Aggregate total return is calculated similarly to annual total
rate of return, except that the return is aggregated rather than annualized.
4. DETERMINATION OF NET ASSET VALUE; VALUATION OF
SECURITIES; ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The net asset value of each share of each Fund is determined each day during
which the New York Stock Exchange is open for trading (a "Business Day"). As of
the date of this Statement of Additional Information, the New York Stock
Exchange is open for trading every weekday except for the following holidays (or
the days on which they are observed): New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. This determination of net asset value of shares of a Fund is made
once each day at 4 p.m. New York time by dividing the value of each Fund's net
assets (i.e., the value of its assets less its liabilities, including expenses
payable or accrued) by the number of shares of the Fund outstanding at the time
the determination is made. A share's net asset value is effective for orders
received by the Distributor prior to its calculation and prior to the close of
the Business Day on which such net asset value is determined.
For purposes of calculating net asset value per share, all assets and
liabilities initially expressed in non-U.S. currencies will be converted into
U.S. dollars at the prevailing market rates at the time of valuation. Equity
securities are valued at the last quoted sale price, at the time of valuation,
on the principal exchange or market where they are traded. Securities which
have not traded on the date of valuation, or securities for which sales prices
are not generally reported, are valued at the mean between the current bid and
asked prices. Securities listed on a non-U.S. exchange are valued at the last
quoted sale price available before the time when net assets are valued. Bonds
and other fixed income securities (other than short-term obligations) are valued
on the basis of valuations furnished by a pricing service, use of which has been
approved by the Board of Trustees. In making such valuations, the pricing
service utilizes both dealer-supplied valuations and electronic data processing
techniques that take into account appropriate factors such as institutional-size
trading in similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics and other market data, without exclusive
reliance upon quoted prices or exchange or over-the-counter prices, since such
valuations are believed to reflect more accurately the fair value of such
securities. Short- term obligations (maturing in 60 days or less) are valued at
amortized cost, which constitutes fair value as determined by the Board of
Trustees. Futures contracts are normally valued at the settlement price on the
exchange on which they are traded. Securities for which there are no such
valuations are valued at fair value as determined in good faith by or at the
direction of the Board of Trustees.
Trading in securities on most non-U.S. exchanges and over-the-counter markets is
normally completed before 4:00 p.m. New York time and may also take place on
days on which the New York Stock Exchange is closed. If events materially
affecting the value of non-U.S. securities occur between the time when the
exchange on which they are traded closes and the time when a Fund's net asset
value is calculated, such securities will be valued at fair value in accordance
with procedures established by and under the general supervision of the Board of
Trustees.
Interest income on long-term obligations held for a Fund is determined on the
basis of interest accrued plus amortization of "original issue discount"
(generally, the difference between issue price and stated redemption price at
maturity) and premiums (generally, the excess of purchase price over stated
redemption price at maturity). Interest income on short-term obligations is
determined on the basis of interest accrued less amortization of any premium.
Subject to compliance with applicable regulations, the Trust has reserved the
right to pay the redemption price of shares of each Fund, either totally or
partially, by a distribution in kind of readily marketable securities (instead
of cash). The securities so distributed would be valued at the same amount as
that assigned to them in calculating the net asset value for the shares being
sold. If a holder of shares received a distribution in kind, that holder could
incur brokerage or other charges in converting the securities to cash.
Redemptions of shares of the REIT Index Fund made within six months of purchase
are subject to a redemption fee in the amount of 1% of the net asset value of
the shares redeemed. Redemptions of shares of the REIT Index Fund made between
six and twelve months after purchase will be subject to a redemption fee of
0.50% of the net asset value of the shares redeemed. No redemption fee is
imposed if the proceeds are immediately invested in shares of one or more of the
other Funds, but a further redemption of shares of the other Fund may result in
a redemption fee at the rate which would have been applicable if the shareholder
had continued to hold shares of the REIT Index Fund. All redemption fees are
payable to the applicable Fund.
Redemption proceeds are normally paid by check within seven days after receipt
of a redemption request. However, the right of any shareholder to receive
payment with respect to any redemption may be suspended or the payment of the
redemption proceeds postponed during any period in which (a) trading in the
markets a Fund normally utilizes is restricted, or an emergency, as defined by
the rules and regulations of the SEC, exists making disposal of a Fund's
investments or determination of its net asset value not reasonably practicable;
(b) the New York Stock Exchange is closed (other than customary weekend and
holiday closings); or (c) the SEC has by order permitted such suspension.
Letter of Intent
If an investor anticipates purchasing sufficient shares to entitle the investor
to a quantity discount alone or in combination with any shares of other series
of the Trust within a 13-month period, the investor may obtain such shares at
the same reduced sales charge as though the total quantity were invested in one
lump sum by completing a Letter of Intent on the terms described below. Subject
to acceptance by the Distributor and the conditions mentioned below, each
purchase will be made at a public offering price applicable to a single
transaction of the dollar amount specified in the Letter of Intent. The
shareholder must inform the Distributor that the Letter of Intent is in effect
each time shares are purchased. The shareholder makes no commitment to purchase
additional shares, but if his or her purchases within 13 months plus the value
of shares credited toward completion of the Letter of Intent do not total the
sum specified, an increased sales charge will apply as described below. A
purchase not originally made pursuant to a Letter of Intent may be included
under a subsequent Letter of Intent executed within 90 days of the original
purchase if the Distributor is informed in writing of this intent within the
90-day period. The value of shares of a Fund held prior to the commencement of
a Letter of Intent may be included, at their cost or maximum offering price
(whichever is higher), as a credit toward the completion of a Letter of Intent,
but the reduced sales charge applicable to the amount covered by such Letter is
applied only to new purchases. Neither income dividends nor capital gain
distributions taken in additional shares will apply toward the completion of the
Letter of Intent. The value of any shares redeemed or otherwise disposed of by
the purchaser prior to termination or completion of the Letter of Intent is
deducted from the total purchases made under such Letter.
If the investment specified in the Letter of Intent is not completed (either
prior to or by the end of the 13-month period), the Administrator will redeem,
within 20 days of the expiration of the Letter of Intent, an appropriate number
of the shares in order to realize the difference between the reduced sales
charge that would apply if the investment under the Letter of Intent had been
completed and the sales charge that would normally apply to the number of shares
actually purchased. By completing and signing the Letter of Intent, the
shareholder irrevocably appoints the Administrator his or her attorney to
surrender for redemption any or all shares purchased under the Letter of Intent
with full power of substitution in the premises.
Right of Accumulation
A shareholder qualifies for cumulative quantity discounts on the purchase of
shares when his or her new investment, together with the current offering price
value of all holdings of that shareholder in the Funds, reaches a discount
level. See "INFORMATION ABOUT FUND SHARES - How to Purchase Shares" in the
Prospectus for the sales charges on quantity discounts. A shareholder must
provide the Distributor with information to verify that the quantity sales
charge discount is applicable at the time the investment is made.
Exchange Privilege
Shares of each Fund for which payment has been received (i.e., an established
account) may be exchanged at their net asset value for shares of each other
Fund. No initial sales charge is imposed on shares being acquired through an
exchange unless the sales charge of the Fund being exchanged into is greater
than the current sales charge of the Fund (in which case an initial sales charge
will be imposed at a rate equal to the difference). No redemption fee is
imposed on shares being disposed of through an exchange; however, a redemption
fee may apply to redemptions of shares acquired through an exchange of shares of
the REIT Index Fund at the rate which would have been applicable if the
shareholder had continued to hold shares of the REIT Index Fund. Exchanges will
be made only after proper instructions in writing or by telephone (an "Exchange
Request") are received for an established account by the Distributor.
Each Exchange Request must be in proper form (see "How to Redeem Shares" in the
Prospectus), and each exchange must involve either shares having an aggregate
value of at least $1,000 ($5,000 for the REIT Index Fund) or all the shares in
the shareholder's account. Each exchange involves the redemption of the shares
of a Fund to be exchanged and the purchase at net asset value of the shares of
the other Fund. Any gain or loss on the redemption of the shares exchanged is
reportable on the shareholder's Federal income tax return, unless such shares
were held in a tax-deferred retirement plan or other tax-exempt account. If the
Exchange Request is received by the Distributor in writing or by telephone on
any business day prior to 4:00 p.m. New York time, the exchange usually will
occur on that day if all the restrictions set forth above have been complied
with at that time. However, payment of the redemption proceeds by a Fund, and
thus the purchase of shares of the other Fund, may be delayed for up to seven
days if the Fund determines that such delay would be in the best interest of all
of its shareholders.
5. MANAGEMENT
The Trustees and officers of the Trust, their ages, and their principal
occupations during the past five years are set forth below. Their titles may
have varied during that period. Asterisks indicate that those Trustees and
officers are "interested persons" (as defined in the 1940 Act) of the Trust.
Trustees of the Trust
Winsor H. Aylesworth*, age 48 - President and Treasurer of the Trust; President
and Director, GrandView Advisers, Inc. (since March, 1995); President and
Director, WHA Enterprises, Inc. (since September, 1991); Executive Vice
President, Loan Review Department, Bank of Boston Connecticut (1990 - 1993).
His address is 127 Grandview Drive, Glastonbury CT 06033.
Arthur Collins, age 66 - Trustee of the Trust; President, Collins Enterprises
LLC/Collins Development Corporation (since 1972); Director, Connecticut National
Bank (1986 - 1992). His address is 53 Forest Avenue, Old Greenwich, CT 06870.
Richard W. Jagolta, age 61 - Trustee of the Trust; Business Development Manager,
Polaroid Corporation (1957 - April, 1995). His address is 40 Blueridge Avenue,
Saugus, MA 01906.
Raymond H. Weaving, age 54 - Trustee of the Trust; Director of Lending,
Massachusetts Housing Investment Corporation (since November, 1993); Vice
President and Team Leader, Baybank Boston, Inc. (1992 - 1993); Consultant,
Malden Trust Co. (1991 - 1992); Division Executive, Bank of Boston (1965 -
1991). His address is 11 Perry Henderson Drive, Framingham, MA 01701.
Officers of the Trust
Winsor H. Aylesworth*, age 48 - President and Treasurer of the Trust; President
and Director, GrandView Advisers, Inc. (since March, 1995); President and
Director, WHA Enterprises, Inc. (since September, 1991); Executive Vice
President, Loan Review Department, Bank of Boston Connecticut (1990 - 1993).
His address is 127 Grandview Drive, Glastonbury CT 06033.
Lucille C. Carlson*, age 37 - Vice President of the Trust; Director, GrandView
Advisers, Inc. (since March, 1995); Director of Research, WHA Enterprises, Inc.
(since July, 1993) Assistant Vice President, Loan Review Department, Bank of
Boston Connecticut (1991 - April, 1995); Real Estate Management Officer, John
Hancock Properties, Inc. (1987 - 1990). Her address is 127 Grandview Drive,
Glastonbury CT 06033.
David F. Wolf*, age 48 - Vice President of the Trust; Director, GrandView
Advisers, Inc. (since March, 1995); Director of Marketing, WHA Enterprises, Inc.
(since July, 1993); Financial Planning Consultant, John Hancock Financial
Services, Inc. (1992 - May, 1995); real estate developer (1991 - 1992); Account
Executive, NCNB Securities, Inc. (1990 - 1991); Stock Broker, Shearson Lehman
Brothers, Inc. (1983 - 1990). Mr. Wolf is a registered representative of the
Funds' Distributor, Capital Investment Group, Inc. His address is 127 Grandview
Drive, Glastonbury CT 06033.
Frank P. Meadows, III*, age 34 - Secretary of the Trust; Commission Based
Broker, Capital Investment Group, Inc. (since October, 1993); Managing Director,
The Nottingham Company, Inc. (since January, 1988); Commission Based Broker,
Mid- Atlantic Securities (1989 - 1993). His address is 105 North Washington
Street, Rocky Mount, NC 27802.
To provide the initial capital of the Trust, on May 18, 1995, GrandView
Advisers, Inc. purchased an aggregate of 2000 shares of each of the Funds at the
net asset value of $10 per share for an aggregate purchase price of $100,000.
The Declaration of Trust of the Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, unless, as to liability to the Trust, it is finally adjudicated that they
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in their offices, or unless with respect to any
other matter it is finally adjudicated that they did not act in good faith in
the reasonable belief that their actions were in the best interests of the
Trust. In the case of settlement, such indemnification will not be provided
unless it has been determined by a court or other body approving the settlement
or other disposition, or by a reasonable determination, based upon a review of
readily available facts, by vote of a majority of disinterested Trustees of the
Trust, or in a written opinion of independent counsel, that such officers or
Trustees have not engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.
Principal Holders of Voting Securities
As of December 15, 1995, the Trustees and officers of the Trust as a group owned
beneficially (i.e., had voting and/or investment power) 58.426% of the then
outstanding shares of the REIT Index Fund; 68.050% of the then outstanding
shares of the Realty Growth Fund; 97.009% of the then outstanding shares of the
Residential Realty Income Fund; 95.730% of the then outstanding shares of the
Retail Realty Income Fund; and 77.885% of the then outstanding shares of the
Healthcare Realty Income Fund. On the same date the following shareholders
owned of record more than 5% of the outstanding shares of beneficial interest of
the Funds. Except as provided below, no person is known by the Trust to be the
beneficial owner of more than 5% of the outstanding shares of the Funds as of
November 9, 1995.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership* Percent
<S> <C> <C>
REIT Index Fund
Winsor H. Aylesworth 1,972.283 shares 14.464%
127 GrandView Drive
Glastonbury, Connecticut 06033
Marie T. Aylesworth 972.763 shares 7.134%
435 South Gulfstream
Sarasota, Florida 34236
Maryanne S. Aylesworth 1,572.044 shares 11.529%
127 GrandView Drive
Glastonbury, Connecticut 06033
Lucille C. Carlson & Suk-Ying Chan 1,004.016 shares 7.363%
31 Glendale Road
West Hartford, Connecticut 06107
GrandView Advisers, Inc. 2,000.000 shares 14.667%
127 GrandView Drive
Glastonbury, Connecticut 06033
Chuck K. Chan 1,416.311 shares 10.387%
2146 Woodley Way
Mountain View, California 94040
Peter A. Harvey 995.857 shares 7.303%
42 Lords Hill Road
Stonington, Connecticut 06378
Robert F. Schatz 1,542.145 shares 11.310%
120 GrandView Drive
Glastonbury, Connecticut 06033
Realty Growth Fund
Winsor H. Aylesworth 2,100.138 shares 19.172%
127 GrandView Drive
Glastonbury, Connecticut 06033
Maryanne S. Aylesworth 1,678.593 shares 15.324%
127 GrandView Drive
Glastonbury, Connecticut 06033
GrandView Advisers, Inc. 2,000.000 shares 18.258%
127 GrandView Drive
Glastonbury, Connecticut 06033
Peter A. Harvey 1,057.758 shares 9.656%
42 Lords Hill Road
Stonington, Connecticut 06378
Charles P. Collins 630.042 shares 5.752%
31 Glendale Road
West Hartford, Connecticut 06107
Chuck K. Chan 987.975 shares 9.019%
2146 Woodley Way
Mountain View, California 94040
Residential Realty Income Fund
Winsor H. Aylesworth 2,068.079 shares 32.264%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Maryanne S. Aylesworth 1,635.671 shares 25.518%**
127 GrandView Drive
Glastonbury, Connecticut 06033
GrandView Advisers, Inc. 2,000.000 shares 31.201%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Richard & Lillia Jagolta 513.875 shares 8.017%
40 Blueridge Avenue
Saugus, Massachusetts 01906
Retail Realty Income Fund
Winsor H. Aylesworth 2,105.047 shares 29.297%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Maryanne S. Aylesworth 1,661.504 shares 23.124%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Lucille Carlson & Suk-Ying Chan 534.885 shares 7.444%
31 Glendale Road
West Hartford, Connecticut 06107
GrandView Advisers, Inc. 2,016.538 shares 28.066%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Richard & Lillia Jagolta 560.361 shares 7.799%
40 Blueridge Avenue
Saugus, Massachusetts 01906
Healthcare Realty Income Fund
Winsor H. Aylesworth 2,017.763 shares 23.792%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Marie T. Aylesworth 987.167 shares 11.640%
435 South Gulfstream
Sarasota, Florida 34236
Maryanne S. Aylesworth 1,603.786 shares 18.910%
127 GrandView Drive
Glastonbury, Connecticut 06033
Lucille C. Carlson & Suk-Ying Chan 490.634 shares 5.785%
31 Glendale Road
West Hartford, Connecticut 06107
GrandView Advisers, Inc. 2,000.000 shares 23.582%**
127 GrandView Drive
Glastonbury, Connecticut 06033
Dorothy J. Wolf 500.510 shares 5.902%
P.O Box 116
Conegtoga, Pennsylvania 17516
Richard & Lillia Jagolta 493.268 shares 5.816%
40 Blueridge Avenue
Saugus, Massachusetts 01906
</TABLE>
* All amounts indicated are believed by the Trust to be owned both of record
and beneficially by the indicated shareholders.
** Under applicable SEC regulations, this shareholder is deemed to control the
Fund in question.
Adviser
GrandView Advisers, Inc. manages the assets of each Fund pursuant to separate
investment advisory agreements (the "Advisory Agreements"). Subject to such
policies as the Board of Trustees may determine, the Adviser manages the
securities of each Fund and makes investment decisions for each Fund. The
Adviser furnishes at its own expense all services, facilities and personnel
necessary in connection with managing each Fund's investments and effecting
securities transactions for each Fund. Each of the Advisory Agreements will
continue in effect until April 26, 1997 and thereafter as long as such
continuance is specifically approved at least annually by the Board of Trustees
or by a vote of a majority of the outstanding voting securities of the
applicable Fund, and, in either case, by a majority of the Trustees of the Trust
who are not parties to the Advisory Agreement or interested persons of any such
party, at a meeting called for the purpose of voting on the Advisory Agreement.
Winsor H. Aylesworth, Lucille C. Carlson and David F. Wolf own, respectively,
60%, 20% and 20% of the outstanding capital stock of the Adviser, and serve as
co-portfolio managers for the Funds. They collectively have over 50 years
experience in the commercial real estate finance and management and securities
businesses. Winsor H. Aylesworth, President, Treasurer and Director of the
Adviser, has had over ten years of experience with Bank of Boston Corporation
and Bank of Boston Connecticut. At Bank of Boston, Mr. Aylesworth's
responsibilities included forming and managing workout and OREO groups and
overseeing the disposition of real estate properties and other assets by the
OREO groups. Mr. Aylesworth was also responsible for managing Bank of Boston
Corporation's Florida Loan Production Office and for overseeing the granting of
construction loans on investment grade real estate. Lucille C. Carlson, a
Director of the Adviser, has managed cases on non-performing assets, including
loan restructuring and OREO management and disposition, for Bank of Boston
Connecticut. Ms. Carlson has served as a real estate asset management officer,
managing an institutional grade real estate portfolio comprised of commercial
property and other portfolios consisting of real estate property and mortgages
for John Hancock Properties Inc. and Cigna Investments Inc., and has served as a
securities and equity analyst. David F. Wolf, a Director of the Adviser, has
over eight years of experience as a financial consultant, serving as a
consultant for John Hancock Financial Services and Shearson Lehman Brothers. Mr.
Wolf has acted as an account executive for NCNB Securities and has professional
experience in the areas of real estate developing, lending, workouts and asset
management. Mr. Aylesworth, Ms. Carlson and Mr. Wolf also own all of the
outstanding capital stock of WHA Enterprises, Inc., which since 1991 has
published a monthly newsletter on the REIT industry known as The Winsor Report.
The Adviser was organized in March, 1995 and has no previous experience as an
investment adviser.
Each of the Advisory Agreements provides that the Adviser may render services to
others. Each Advisory Agreement is terminable without penalty on not more than
60 days' nor less than 30 days' written notice by the Trust when authorized
either by a vote of a majority of the outstanding voting securities of the
applicable Fund or by a vote of a majority of the Board of Trustees, or by the
Adviser on not more than 60 days' nor less than 30 days' written notice, and
will automatically terminate in the event of its assignment. Each Advisory
Agreement provides that neither the Adviser nor its personnel shall be liable
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of security transactions
for the applicable Fund, except for willful misfeasance, bad faith or gross
negligence or reckless disregard of its or their obligations and duties under
the Advisory Agreement.
Upon termination of any contract with GrandView Advisers, Inc., or any
corporation affiliated therewith, acting as investment adviser or manager, the
Board of Trustees will promptly change the name of the Trust and of each of the
Funds to a name which does not include "GrandView" or any approximation or
abbreviation thereof.
The Prospectus contains a description of the fees payable to the Adviser for
services under the Advisory Agreements.
Administrator
Pursuant to an administrative services agreement (the "Administrative Services
Agreement"), Nottingham serves as the administrator and fund accounting,
dividend disbursing and transfer agent for the Funds. Under the Administrative
Services Agreement Nottingham provides the Trust with general office facilities
and supervises the overall administration of the Trust, including, among other
responsibilities, the negotiation of contracts and fees with, and the monitoring
of performance and billings of, the Trust's independent contractors and agents;
the preparation and filing of all documents required for compliance by the Trust
with applicable laws and regulations; and arranging for the maintenance of books
and records of the Trust. The Administrator provides persons satisfactory to
the Board of Trustees to serve as Trustees and officers of the Trust. Such
Trustees and officers, as well as certain other employees and Trustees of the
Trust, may be directors, officers or employees of Nottingham or its affiliates.
The Administrative Services Agreement with the Trust provides that Nottingham
may render administrative services to others. The Administrative Services
Agreement with the Trust terminates automatically if it is assigned and may be
terminated without penalty by vote of a majority of the outstanding voting
securities of the Trust or by either party on not more than 90 days' written
notice. The Administrative Services Agreement with the Trust also provides that
neither Nottingham, as the Administrator, nor its personnel shall be liable for
any error of judgment or mistake of law or for any act or omission in the
administration or management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of its or their duties or by reason
of reckless disregard of its or their obligations and duties under the Trust's
Administrative Services Agreement.
The Prospectus contains a description of the fees payable to the Administrator
under the Administrative Services Agreement.
Distributor
Capital Investment Group serves as the Distributor of each Fund's shares
pursuant to a Distribution Agreement (the "Distribution Agreement") with the
Trust. Unless otherwise terminated, the Distribution Agreement for the Funds
remains in effect until April 26, 1996 and, for each Fund, thereafter will
continue from year to year upon annual approval by the Trust's Board of
Trustees, or by the vote of a majority of the outstanding voting securities of
the Trust and by the vote of a majority of the Board of Trustees who are not
parties to the Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval. The Agreement
will terminate in the event of its assignment, as defined in the 1940 Act.
The Trust has adopted a Distribution Plan in accordance with Rule 12b-1 under
the 1940 Act with respect to shares of the Funds after concluding that there is
a reasonable likelihood that the Distribution Plan will benefit each Fund and
its shareholders. The Distribution Plan provides that each Fund will pay a
monthly distribution fee to the Distributor at an annual rate not to exceed
0.25% of such Fund's average daily net assets. The Board of Trustees does not
currently intend to authorize the payment of any such fee from the REIT Index
Fund, although they have the authority under the Distribution Plan to do so in
the future.
The Distributor may use all or any portion of any such distribution fee to pay
for employee salaries, bonuses and other overhead expenses, service fees to be
paid to certain banks and broker-dealers which provide certain services to their
customers who hold Fund shares, and other such distribution-related expenses.
The Distribution Plan continues in effect if such continuance is specifically
approved at least annually by a vote of both a majority of the Trust's Trustees
and a majority of the Trustees who are not "interested persons" of the Trust and
who have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreement related to the Plan (for purposes of this
paragraph "Qualified Trustees"). The Distribution Plan requires that the Trust
and the Distributor provide to the Board of Trustees, and the Board of Trustees
review, at least quarterly, a written report of the amounts expended (and the
purposes therefor) under the Distribution Plan. The Distribution Plan further
provides that the selection and nomination of the Qualified Trustees is
committed to the discretion of the disinterested Trustees (as defined in the
1940 Act) then in office. The Distribution Plan may be terminated with respect
to any Fund at any time by a vote of a majority of the Trust's Qualified
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund. The Distribution Plan may not be amended to increase materially the
amount of a Fund's permitted expenses thereunder without the approval of a
majority of the outstanding securities of that Fund and may not be materially
amended in any case without a vote of a majority of both the Trustees and
Qualified Trustees. The Distributor will preserve copies of any plan, agreement
or report made pursuant to the Distribution Plan for a period of not less than
six years from the date of the Plan, and for the first two years the Distributor
will preserve such copies in an easily accessible place.
As contemplated by the Distribution Plan, Capital Investment Group acts as the
agent of the Trust in connection with the offering of shares of the Funds
pursuant to the Distribution Agreement. After the prospectuses and periodic
reports of the Funds have been prepared, set in type and mailed to existing
shareholders, the Distributor pays for the printing and distribution of copies
thereof which are used in connection with the offering of shares of the Funds to
prospective investors.
David F. Wolf, a registered representative of the Funds' Distributor, may
receive brokerage commissions from the Distributor in connection with sales of
shares of the Funds. Mr. Wolf is a Vice President of the Trust and a Director
of GrandView Advisers, Inc.
Custodian
The Trust has entered into a Custodian Agreement with Wachovia Bank of North
Carolina, N.A., pursuant to which custodial services are provided for the Trust
and the Funds. The address of Wachovia Bank of North Carolina, N.A. is 301
North Main Street, Winston-Salem, North Carolina 27102.
Auditors
KPMG Peat Marwick LLP are the independent auditors for the Trust. The address
of KPMG Peat Marwick LLP is Suite 1900, 1021 East Cary Street, Richmond,
Virginia 23219.
Counsel
Bingham, Dana & Gould serve as counsel for the Trust. The address of Bingham,
Dana & Gould is 150 Federal Street, Boston, Massachusetts 02110.
6. PORTFOLIO TRANSACTIONS
The Trust trades securities for a Fund if it believes that a transaction net of
costs (including custodian charges) will help achieve the Fund's investment
objective. Changes in the portfolio of the REIT Index Fund will be effected
primarily to accommodate cash flows into and out of the Fund and changes in the
GrandView REIT Index. Changes in a Fund's investments are generally made
without regard to the length of time a security has been held, or whether a sale
would result in the recognition of a profit or loss. Therefore, the rate of
turnover is not a limiting factor when changes are appropriate. It is
anticipated that the portfolio turnover rate of the REIT Index Fund and of each
of the other Funds will not exceed 75% and 100%, respectively, in the coming
year. The amount of a Fund's brokerage commissions and realization of taxable
capital gains will tend to increase as the level of portfolio activity
increases.
The primary consideration in placing portfolio securities transactions with
broker-dealers for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. The Adviser attempts to achieve this result by selecting
broker-dealers to execute transactions on behalf of each Fund on the basis of
their professional capability, the value and quality of their brokerage
services, and the level of their brokerage commissions. In the case of
securities traded in the over-the- counter market (where no stated commissions
are paid but the prices include a dealer's markup or markdown), the Adviser
normally seeks to deal directly with the primary market makers, unless in its
opinion, best execution is available elsewhere. In the case of securities
purchased from underwriters, the cost of such securities generally includes a
fixed underwriting commission or concession. From time to time, soliciting
dealer fees are available to the Adviser on the tender of a Fund's securities in
so-called tender or exchange offers. Such soliciting dealer fees are in effect
recaptured for the Funds by the Adviser. At present no other recapture
arrangements are in effect.
Under the Advisory Agreements, in connection with the selection of such brokers
or dealers and the placing of such orders, the Adviser is directed to seek for
each Fund in its best judgment, prompt execution in an effective manner at the
most favorable price. Subject to this requirement of seeking the most favorable
price, securities may be bought from or sold to broker-dealers who have
furnished statistical, research and other information or services to the Adviser
or the Funds, subject to any applicable laws, rules and regulations.
The investment advisory fee that each Fund pays to the Adviser will not be
reduced as a consequence of the Adviser's receipt of brokerage and research
services. While such services are not expected to reduce the expenses of the
Adviser, the Adviser would, through the use of the services, avoid the
additional expenses which would be incurred if it should attempt to develop
comparable information through its own staff.
In certain instances there may be securities that are suitable as an investment
for a Fund, as well as for one or more of the Adviser's other clients (including
other Funds). When two or more clients are simultaneously engaged in the
purchase or sale of the same security, the securities are allocated among
clients in a manner believed to be equitable to each. It is recognized that in
some cases this system could adversely affect the price of or the size of the
position obtainable in a security for a Fund. When purchases or sales of the
same security for a Fund and for other portfolios managed by the Adviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large volume purchases or sales.
7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional Shares of Beneficial Interest (par value $0.0001
per share) of each series and to divide or combine the shares of any series into
a greater or lesser number of shares of that series without thereby changing the
proportionate beneficial interests in that series. While there are at present
no series of the Trust other than the Funds, the Trust has reserved the right to
create and issue additional series of shares, as well as classes of shares
within each series. Each share of each Fund represents an equal proportionate
interest in the Fund with each other share. Shares of each series participate
equally in the earnings, dividends and distribution of net assets of the
particular series upon liquidation or dissolution. Shares of each series are
entitled to vote separately to approve advisory agreements or changes in
investment policy, but shares of all series may vote together in the election or
selection of Trustees and accountants for the Trust. In matters affecting only
a particular Fund, only shares of that particular Fund are entitled to vote.
Shareholders are entitled to one vote for each share held on matters on which
they are entitled to vote. Shareholders in the Trust do not have cumulative
voting rights, and shareholders owning more than 50% of the outstanding shares
of the Trust may elect all of the Trustees of the Trust if they choose to do so
and in such event the other shareholders in the Trust would not be able to elect
any Trustee. The Trust is not required to hold, and has no present intention of
holding, annual meetings of shareholders, but the Trust will hold special
meetings of shareholders when in the judgment of the Trustees it is necessary or
desirable to submit matters for a shareholder vote. Shareholders have, under
certain circumstances (e.g., upon the application and submission of certain
specified documents to the Trustees by a specified number of shareholders), the
right to communicate with other shareholders in connection with requesting a
meeting of shareholders for the purpose of removing one or more Trustees.
Shareholders also have under certain circumstances the right to remove one or
more Trustees without a meeting by a declaration in writing by a specified
number of shareholders. No material amendment may be made to the Trust's
Declaration of Trust without the affirmative vote of the holders of a majority
of the outstanding shares of each series affected by the amendment. Shares have
no preference, pre-emptive, conversion or similar rights. Shares, when issued,
are fully paid and non-assessable, except as set forth below.
The Trust may enter into a merger or consolidation, or sell all or substantially
all of its assets (or all or substantially all of the assets belonging to any
series of the Trust), if approved by a vote of the holders of two-thirds of the
Trust's outstanding shares, voting as a single class, or of the affected series
of the Trust, as the case may be, except that if the Trustees of the Trust
recommend such sale of assets, merger or consolidation, the approval by vote of
the holders of a majority of the Trust's outstanding shares, or of the affected
series, would be sufficient. The Trust or any series of the Trust, as the case
may be, may be terminated (i) by a vote of a majority of the outstanding voting
securities of the Trust or the affected series or (ii) by the Trustees by
written notice to the shareholders of the Trust or the affected series. If not
so terminated, the Trust will continue indefinitely.
It is not contemplated that share certificates will be issued for the shares.
However, upon the written request of a shareholder, the Trustees, in their
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use.
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a business trust may,
under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Trust
and provides for indemnification and reimbursement of expenses out of Trust
property for any shareholder held personally liable for the obligations of the
Trust. The Declaration of Trust of the Trust also provides that the Trust may
maintain appropriate insurance (e.g., fidelity bonding, and errors and omissions
insurance) for the protection of the Trust, its shareholders, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Trust's Declaration of Trust further provides that obligations of the Trust
are not binding upon the Trustees individually but only upon the property of the
Trust and that the Trustees will not be liable for any action or failure to act,
but nothing in the Declaration of Trust of the Trust protects a Trustee against
any liability to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
8. CERTAIN ADDITIONAL TAX MATTERS
Each of the Funds has elected to be treated and intends to qualify each year as
a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), by meeting all applicable requirements of
Subchapter M, including requirements as to the nature of a Fund's gross income,
the amount of Fund distributions, and the composition and holding period of a
Fund's portfolio assets. Provided all such requirements are met, no U.S.
federal income or excise taxes will be required to be paid by the Funds,
although non- U.S. source income earned by each Fund may be subject to non-U.S.
withholding taxes. If a Fund should fail to qualify as a "regulated investment
company" for any year, the Fund would incur a regular corporate federal income
tax upon its taxable income, and distributions by that Fund would generally be
taxable as ordinary income to shareholders.
The portion of each Fund's ordinary income dividends attributable to dividends
received in respect of equity securities of U.S. issuers is normally eligible
for the dividends received deduction for corporations subject to U.S. federal
income taxes. Availability of the deduction for particular shareholders is
subject to certain limitations, and deducted amounts may be subject to the
alternative minimum tax and result in certain basis adjustments. Any dividend
that is declared by a Fund in October, November or December of any calendar
year, that is payable to shareholders of record in such a month and that is paid
the following January will be treated as if received by the shareholders on
December 31 of the year in which the dividend is declared.
Any Fund distribution will have the effect of reducing the per share net asset
value of shares in the Fund by the amount of the distribution. Shareholders
purchasing shares shortly before the record date of any distribution may thus
pay the full price for the shares and then effectively receive a portion of the
purchase price back as a taxable distribution.
In general, any gain or loss realized upon a taxable disposition of shares of
any of the Funds by a shareholder that holds such shares as a capital asset will
be treated as long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise as a short-term capital gain or loss.
However, any loss realized upon a disposition of shares in a Fund held for six
months or less will be treated as long-term capital loss to the extent of any
distributions of net capital gain made with respect to those shares. Any loss
realized upon a disposition of shares may also be disallowed under rules
relating to wash sales. Gain may be increased (or loss reduced) upon a
redemption of shares of a Fund within 90 days after their purchase followed by
any purchase (including purchases by exchange or by reinvestment) of shares of
that same Fund.
The Funds' transactions in forward contracts will be subject to special tax
rules that may affect the amount, timing and character of Fund income and
distributions to shareholders. For example, certain positions held by a Fund on
the last business day of each taxable year will be marked to market (i.e.,
treated as if closed out) on that day, and any gain or loss associated with the
positions will be treated as 60% long-term and 40% short-term capital gain or
loss. Certain positions held by a Fund that substantially diminish its risk of
loss with respect to other positions in its portfolio may constitute
"straddles," and may be subject to special tax rules that would cause deferral
of Fund losses, adjustments in the holding periods of Fund securities and
conversion of short- term into long-term capital losses. Certain tax elections
exist for straddles that may alter the effects of these rules. The Funds will
limit their activities in forward contracts to the extent necessary to meet the
requirements of Subchapter M of the Code.
Special tax considerations apply with respect to non-U.S. investments of the
Funds. Investment income received by a Fund from non-U.S. securities may be
subject to non-U.S. income taxes withheld at the source. The United States has
entered into tax treaties with many other countries that may entitle a Fund to a
reduced rate of tax or an exemption from tax on such income. The Funds intend
to qualify for treaty-reduced rates where available. It is not possible,
however, to determine the Funds' effective rate of non-U.S. tax in advance since
the amount of the Funds' respective assets to be invested within various
countries is not known.
9. FINANCIAL STATEMENTS
Attached.
GRANDVIEW INVESTMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
MAY 22, 1995
<TABLE>
<S> <S> <S> <S> <S> <S>
GrandView GrandView Residential GrandView GrandView
REIT Index Realty Growth Realty Retail Retail Healthcare Realty
Fund Fund Income Fund Income Fund Income Fund
ASSETS
Cash $20,000 $20,000 $20,000 $20,000 $20,000
Deferred organized expenses,
net (note B) 26,775 26,775 26,775 26,775 26,775
Total assets 46,775 46,775 46,775 46,775 46,775
LIABILITIES
Accrued organization expenses 26,775 26,775 26,775 26,775 26,775
Total liabilities 26,775 26,775 26,775 26,775 26,775
NET ASSETS
(applicable to 2,000 shares outstanding each;
unlimited shares of no par value beneficial
interest authorized) $20,000 $20,000 $20,000 $20,000 $20,000
NET ASSET VALUE PER SHARES (note F) $10,000 $10,000 $10,000 $10,000 $10,000
NET ASSETS CONSIST OF
Paid in capital $20,000 $20,000 $20,000 $20,000 $20,000
</TABLE>
See accompanying notes to financial statements
GRANDVIEW INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
May 22, 1995
(A) GrandView Investment Trust (the "Trust") was organized as a business trust
under the laws of the Commonwealth of Massachusetts on February 7, 1995.
The GrandView REIT Index Fund, GrandView Realty Growth Fund, GrandView
Residential Realty Income Fund, Grandview Retail Realty Income Fund, and
GrandView Healthcare Realty Income Fund (collectively the "Funds") are
open-ended management investment companies, each a series of the GrandView
Investment Trust. GrandView REIT Index Fund is a diversified fund and
GrandView Realty Growth Fund, GrandView Residential Realty Income Fund,
GrandView Retail Realty Income Fund, and GrandView Healthcare Realty Income
Fund are non-diversified funds. The Funds have an unlimited number of
authorized shares. The Funds had no operations other than organizational
matters and activities in connection with the purchase of 2,000 shares from
each of the five funds by GrandView Advisers, Inc. It is currently
intended that, upon the effectiveness of the Trust's registration statement
with the Securities and Exchange Commission, shares will be offered to the
public.
(B) The Funds will bear the cost of all organizational expenses including the
fees for registering and qualifying the Funds' shares for distribution.
Fees and expenses for the organization and registration of shares of the
Funds are estimated to be $133,875 and will be amortized over 60 months. In
the event any of the initial shares are redeemed by any holder thereof
during the 60 month amortization period, redemption proceeds will be
reduced by any unamortized organizational expenses in the same proportion
as the number of initial shares of the Fund(s) being redeemed bears to the
number of initial shares of the Fund(s) outstanding at the time of the
redemption.
(C) The Funds intend to qualify each year and elect to be taxed as regulated
investment companies under Subchapter M of the United States Internal
Revenue Code of 1986, as amended (the Code). Thus, the Funds intend to be
relieved of any federal income tax liability by distributing virtually all
of their net investment income and capital gains, if any, to their
shareholders. The Funds intend to avoid excise taxable tax liability by
making the required distributions under the Code.
(D) Subject to the general supervision of the Funds' Board of Trustees and in
accordance with the Funds' investment policies, GrandView Advisers, Inc.,
of East Glastonbury, Connecticut (the "Adviser"), will manage the Funds'
investments. For its advisory services, the Adviser will receive a monthly
management fee based on an annual percentage of the Funds' daily net assets
indicated as follows:
Management Fees
<TABLE>
<S> <C> <C> <C> <C>
Residential Retail Healthcare
REIT Realty Realty Realty Realty
Index Growth Income Income Income
Fund Fund Fund Fund Fund
0.35% 1.00% 0.70% 0.70% 0.70%
</TABLE>
(E) Capital Investment Group, Inc. will be the Funds' Distributor (the
"Distributor"). For its services, which include making payments to
qualified securities dealers for sales of Fund shares, the Distributor
will receive commissions consisting of the portion of the sales charge
on sales of fund shares remaining after amounts allowed to securities
dealers. Under a Distribution Plan applicable to all of the Funds
except for the Grandview REIT Index Fund, payments of up to 0.25%
annually of a Fund's average net assets may be made to the Distributor
and others to compensate and reimburse them for activities intended to
result in the sale of Fund shares and the servicing of accounts of
Fund shareholders.
GrandView REIT Index Fund
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Unaudited)
Market
Shares Value
COMMON STOCKS - 81.16%
Real Estate Investment Trust
American Health Properties, Inc. 100 $2,162
Avalon Properties, Inc. 100 2,038
Camden Property Trust 200 4,425
Carr Realty Corporation 100 1,875
Chelsea GCA Realty, Inc. 100 2,987
Federal Realty Investment Trust 300 7,013
First Industrial Realty Trust, Inc 400 8,000
HGI Realty, Inc. 100 2,400
Meditrust Corporation 100 3,462
Merry Land & Investment Company 200 4,225
Mills Corp. 100 1,813
New Plan Realty Trust 100 2,212
Oasis Residential, Inc. 100 2,250
ROC Communities, Inc. 100 2,312
Realty Income Corporation 550 11,619
Security Capital Pacific Trust 500 9,500
Taubman Centers, Inc. 200 2,000
Washington Real Estate Investment 200 3,050
Weingarten Realty Investors 100 3,538
Wellsford Residential Property Trust 550 11,756
Total Common Stocks (Cost $88,384) 88,637
PREFERRED STOCKS - 0.15%
Real Estate Investment Trust
American Health Properties, Inc. 10 163
Total Preferred Stocks (Cost $196) 163
Total Value of Investments (Cost $88,580) 81.31% 88,800
Other Assets Less Liabilities 18.69% 20,406
Net Assets 100.00% $109,206
(a) Aggregate cost for federal income tax purposes is the same. Unrealized
appreciation (depreciation) of securities for federal income tax purposes
is as follow:
Unrealized appreciation $1,170
Unrealized depreciation (950)
Net unrealized appreciation/depreciation $220
See acccompanying notes to financial statements
GrandView REIT Index Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(Unaudited)
ASSETS
Investments at value (Cost $88,580) $88,800
Cash 18,993
Interest receivable 103
Dividends receivable 905
Reserve premium 50
Deferred organization expenses, net (note 3) 26,775
Total assets 135,626
LIABILITIES
Payable to advisor 26,420
Total liabilities 26,420
NET ASSETS
(applicable to 10,710 shares outstanding; unlimited
shares of no par value beneficial interest authorized) $109,206
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE
($109,206 / 10,710 shares) $10.20
OFFERING PRICE PER SHARE
(100 / 97 of $10.20 adjusted to nearest cent) $10.51
NET ASSETS CONSIST OF:
Paid-in capital $109,042
Undistributed net investment loss (56)
Net unrealized appreciation on investments 220
$109,206
See accompanying notes to financial statements
GrandView REIT Index Fund
STATEMENT OF OPERATIONS
September 30, 1995
(Unaudited)
INVESTMENT INCOME
Income
Interest $174
Dividends 1,047
Total Income 1,221
Expenses
Investment advisory fees (note 2) 36
Fund administration fees (note 2) 23
Professional fees 29
Custody fees 12
Shareholder recordkeeping fees 27
Registration and filing administration fees 129
Operating expenses 91
Shareholder servicing expenses 168
Total expenses 515
Less:
Expense reimbursements (note 2) (355)
Investment advisory fees waived (note 2) (36)
Fund administration fees waived (note 2) (16)
Net expenses 108
Net investment income 1,113
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Increase in unrealized appreciation on investments 220
Net realized and unrealized gain on investments 220
Net increase in net assets resulting from operations $1,333
See accompanying notes to financial statements
GrandView REIT Index Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the
period from
July 3, 1995
(commencement
of operations) to
September 30,
1995
(Unaudited)
INCREASE IN NET ASSETS
Operations
Net investment income $1,113
Increase in unrealized appreciation on investments 220
Net increase in net assets resulting from operations 1,333
Distributions to shareholders from
Net investment income (1,169)
Capital share transactions
(a)Increase in net assets resulting from
capital share transactions 109,042
Total increase in net assets 109,206
NET ASSETS
Beginning of period 0
End of period $109,206
(a) A summary of capital share activity follows:
For the period from July 3, 1995
(commencement of operations)
to September 30, 1995
Shares Value
Shares sold 10,627 $108,200
Shares issued for reinvestment
of distributions 83 842
10,710 109,042
Shares redeemed 0 0
Net increase 10,710 $109,042
See accompanying notes to financial statements
GrandView REIT Index Fund
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
For the
period from
July 3, 1995
(commencement
of operations)
September 30
1995
(Unaudited)
Net Asset Value, Beginning of Period $10.00
Income from investment operations
Net investment income 0.10
Net realized and unrealized gain on investments 0.21
Total from investment operations 0.30
Distributions to shareholders from
Net investment income (0.11)
Net Asset Value, End of Period $10.20
Total return (a) 3.00%
Ratios/supplemental data
Net assets, end of period $109,206
Ratio of expenses to average net assets
Before expense reimbursements 5.03%(b)
After expense reimbursements 1.05%(b)
Ratio of net investment income to average net assets
Before expense reimbursements 6.89%(b)
After expense reimbursements 10.87%(b)
Portfolio turnover rate 0.00%
(a) Does not include sales load.
(b) Annualized.
See accompanying notes to financial statements
GrandView REIT Index Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GrandView REIT Index Fund (the "Fund") is a non-diversified series of
shares of beneficial interest of GrandView Investment Trust (the "Trust").
The Trust, an open-end registered management investment company, was
organized on February 6, 1995 as a Massachusetts Business Trust and is
registered under the Investment Company Act of 1940. The Fund began
operations on July 3, 1995. The following is a summary of significant
accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at market value. Securities listed on an exchange or quoted
on a national market system are valued at 4:00 p.m., New York time
on the day of valuation. Other securities traded in the over-the-
counter market and listed securities for which no sale was reported
on that date are valued at the most recent bid price. Securities
for which market quotations are not readily available, if any, are
valued by an independent pricing service or determined following
procedures approved by the Board of Trustees. Short-term
investments are valued at cost which approximates market value.
B. Federal Income Taxes - No provision has been made for federal income
taxes since it is the policy of the Fund to comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies and to make sufficient distributions of taxable income to relieve
it from all federal income taxes.
C. Investment Transactions - Investment transactions are recorded on
the trade date. Realized gains and losses are determined using the
specific identification cost method. Interest income is recorded
daily on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares
dividends quarterly payable on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in
December out of net realized gains through October 31 of that year.
The Fund may make a supplemental distribution subsequent to the end
of its fiscal year ending March 31.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, GrandView Advisers, Inc.
(the "Advisor") provides the Fund with a continuous program of supervision
of the Fund's assets, including the composition of its portfolio, and
furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. As
compensation for its services, the Advisor receives a fee at the annual
rate of 0.35% of the Fund's average daily net assets.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor currently
intends to voluntarily waive or reimburse all or a portion of its fee to
limit total Fund operating expenses to 1.05% of the average daily net
assets of the Fund. There can be no assurance that the foregoing
voluntary fee waivers or reimbursements will continue. The Advisor has
voluntarily waived its fee amounting to $36 ($0.01 per share) and has
voluntarily reimbursed a portion of the Fund's operating expenses for the
period ended September 30, 1995. The total fees waived and expenses
reimbursed by the Advisor amounted to $391.
GrandView REIT Index Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The Fund's administrator, The Nottingham Company, Inc. (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives a fee
at the annual rate of 0.225% of the Fund's first $25 million of average
daily net assets, 0.20% of the next $25 million of average daily net
assets,and 0.175% of average daily net assets over $50 million. Addition-
ally, the Administrator charges the Fund for servicing of shareholder
accounts and registration of the Fund's shares. The Administrator also
charges the Fund for certain expenses involved with the daily valuation of
portfolio securities. The Administrator has voluntarily waived a portion
of its fees and reimbursed the Fund for expenses amounting to $16 for the
period ended September 30, 1995.
Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any sales
charges imposed on purchases of shares and re-allocates a portion of such
charges to dealers through whom the sale was made, if any. For the period
from July 3, 1995 to September 30, 1995, the Distributor retained sales
charges in the amount of $17.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the distributor or the Administrator.
At September 30, 1995, the Advisor held 2,000 or 19% of the Fund shares
outstanding.
NOTE 3 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization and
the registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.
In the event any of the initial shares of the Fund are redeemed during the
amortization period, the redemption proceeds will be reduced by a pro rata
portion of any unamortized organization expenses in the same proportion as
the number of initial shares being redeemed bears to the number of initial
shares of the Fund outstanding at the time of the redemption.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases of investments, other than short-term investments, aggregated
$88,580 for the period ended September 30, 1995. There were no sales of
investments during this period.
NOTE 5 - DISTRIBUTIONS TO SHAREHOLDERS
For the period ended September 30, 1995, the Fund made distributions
classified as ordinary income in the amount of $1,169. Shareholders
should consult a tax advisor on how to report distributions for state and
local income tax purposes.
GrandView Realty Growth Fund
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Unaudited)
Market
Shares Value
COMMON STOCKS - 87.47%
Real Estate Investment Trust - 87.47%
(a)Angeles Participating Mortgage Trus 3,000 $1,687
(a)Banyan Hotel Investment Fund 1,500 1,875
Bedford Property Investors, Inc. 200 1,325
Burnham Pacific Properties, Inc. 200 2,350
Crescent Real Estate Equities, Inc. 200 6,150
Crown American Realty Trust 300 2,475
First Union Real Estate Investments 200 1,475
G&L Realty Corporation 200 2,025
Highwoods Properties, Inc. 200 5,275
(a)Homeplex Mortgage Investments Corpo 1,000 1,750
Innkeepers USA Trust 600 5,700
IRT Property Company 400 3,850
Jameson Inns, Inc. 400 3,550
(a)Koger Equity, Inc. 400 3,950
(a)Meridian Point Realty Trust VII Com 2,000 1,750
MGI Properties, Inc. 300 4,650
(a)Mortgage and Realty Trust 3,000 937
RFS Hotel Investors, Inc. 200 3,050
RPS Realty Trust 500 2,250
RYMAC Mortgage Investment Corporati 5,700 6,412
Sizeler Property Investors, Inc. 300 2,813
(a)TIS Mortgage Investment Company 1,000 2,000
United Mobile Homes, Inc. 300 2,925
(a)Vinland Property Trust 2,900 3,263
Winston Hotels, Inc. 500 5,625
Total Common Stocks (Cost $79,041) 79,112
Principal Market
Amount Value
REPURCAHSE AGREEMENT (b) - 11.55%
Wachovia Bank $10,448 10,448
5.34%, due October 2, 1995
(Cost $10,448)
Total Value of Investments (Cost $89,489) 99.03% 89,560
Other Assets Less Liabilities 0.97% 880
Net Assets 100.00% $90,440
(Continued)
GrandView Realty Growth Fund
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Unaudited)
(a) Non-income producing investment.
(b) Joint repurchase agreement entered into September 30, 1995, with a
maturity value of $15,080,609 collateralized by $11,129,000 U.S.
Treasury Notes, 9.8750%, due November 15, 2015. The aggregate market
value of the collateral at September 30, 1995 was $15,374,653. The
Fund's pro rata interest in the collateral at September 30, 1995 was
$10,655. The Fund's pro rata interest in the joint repurchase
agreement is taken into possession by the Fund upon entering into the
repurchase agreement. The collateral is marked to market daily to
ensure its market value is at least 102 percent of the sales price of
the repurchase agreement.
(c) Aggregate cost for federal income tax purposes is the same. Unrealized
appreciation (depreciation) of securities for federal income tax
purposes is as follow:
Unrealized appreciation $1,793
Unrealized depreciation (1,721)
Net unrealized appreciation $72
See acccompanying notes to financial statements
GrandView Realty Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(Unaudited)
ASSETS
Investments at value (Cost $89,488) $89,561
Interest receivable 151
Dividends receivable 223
Deferred organization expenses, net (note 4) 26,775
Due from advisor (note 2) 508
Total assets 117,218
LIABILITIES
Accrued expenses (66)
Payable to Adviser 26,775
Disbursements in excess of cash on demand deposit 69
Total liabilities 26,778
NET ASSETS
(applicable to 9,233 shares outstanding; unlimited
shares of no par value beneficial interest authorized) $90,440
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE
($90,440 / 9,233 shares) $9.80
OFFERING PRICE PER SHARE
(100 / 95.5 of $9.80 adjusted to nearest cent) $10.26
NET ASSETS CONSIST OF:
Paid-in capital $89,520
Undistributed net investment loss 64
Undistributed net realized gain on investments 784
Net unrealized appreciation on investments 72
$90,440
See accompanying notes to financial statements
GrandView Realty Growth Fund
STATEMENT OF OPERATIONS
September 30, 1995
(Unaudited)
INVESTMENT INCOME
Income
Interest $295
Dividends 295
Total Income 590
Expenses
Investment advisory fees (note 2) 102
Fund administration fees (note 2) 31
Professional fees 29
Custody fees 12
Securities pricing fees 60
Shareholder recordkeeping fees 11
Registration and filing administration fees 146
Operating expenses 342
Shareholder servicing expenses 178
Total expenses 911
Less:
Expense reimbursements (note 2) (574)
Investment advisory fees waived (note 2) (102)
Fund administration fees waived (note 2) (31)
Net expenses 204
Net investment income 386
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions 784
Increase in unrealized appreciation on investments 72
Net realized and unrealized gain on investments 856
Net increase in net assets resulting from operations $1,242
See accompanying notes to financial statements
GrandView Realty Growth Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the
period from
July 3,
(commencement
of operations) to
September 30,
1995
(Unaudited)
INCREASE IN NET ASSETS
Operations
Net investment income $386
Net realized gain from investment transactions 784
Increase in unrealized appreciation on
investments 72
Net increase in net assets resulting from
operations 1,242
Distributions to shareholders from
Net investment income (322)
Net realized gain from investment transactions 0
Decrease in net assets resulting from distributions (322)
Capital share transactions
(a)Increase in net assets resulting from
capital share transactions 89,520
Total increase in net assets 90,440
NET ASSETS
Beginning of period 0
End of period $90,440
(a) A summary of capital share activity follows:
For the period from July 3, to
(commencement of operations) to
September 30, 1995
Shares Value
Shares sold 9,207 $89,268
Shares issued for reinvestment
of distributions 26 252
9,233 89,520
Shares redeemed 0 0
Net increase 9,233 $89,520
See accompanying notes to financial statements
GrandView Realty Growth Fund
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
For the
period from
July 3,
(commencement
of operations
September 30,
1995
(Unaudited)
Net Asset Value, Beginning of Period $10.00
Income from investment operations
Net realized and unrealized gain on investments (0.20)
Total from investment operations (0.19)
Net Asset Value, End of Period $9.80
Total return (a) (1.75)%
Ratios/supplemental data
Net assets, end of period $90,440
Ratio of expenses to average net assets
Before expense reimbursements 8.92%(b)
After expense reimbursements 1.99%(b)
Ratio of net investment income to average net assets
Before expense reimbursements (0.77)%(b)
After expense reimbursements 0.93% (b)
Portfolio turnover rate 4.77%
(a) Does not include sales load.
(b) Annualized.
See accompanying notes to financial statements
GrandView Realty Growth Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GrandView Realty Growth Fund (the "Fund") is a non-diversified
series of shares of beneficial interest of GrandView Investment Trust
(the "Trust"). The Trust, an open-end registered management investment
company, was organized on February 6, 1995 as a Massachusetts Business
Trust and is registered under the Investment Company Act of 1940. The
Fund began operations on July 3, 1995. The following is a summary of
significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at market value. Securities listed on an exchange or
quoted on a national market system are valued at 4:00 p.m., New
York time on the day of valuation. Other securities traded in the
over-the-counter market and listed securities for which no sale was
reported on that date are valued at the most recent bid price.
Securities for which market quotations are not readily available,
if any, are valued by an independent pricing service or determined
following procedures approved by the Board of Trustees. Short-term
investments are valued at cost which approximates market value.
B. Federal Income Taxes - No provision has been made for federal
income taxes since it is the policy of the Fund to comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies and to make sufficient distributions of
taxable income to relieve it from all federal income taxes.
C. Investment Transactions - Investment transactions are recorded on
the trade date. Realized gains and losses are determined using the
specific identification cost method. Interest income is recorded
daily on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares
dividends semi-annually payable on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in
December out of net realized gains through October 31 of that year.
The Fund may make a supplemental distribution subsequent to the end
of its fiscal year ending March 31.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, GrandView Advisers, Inc.
(the "Advisor") provides the Fund with a continuous program of
supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sale of
securities. As compensation for its services, the Advisor receives a
fee at the annual rate of 1.00% of the Fund's average daily net assets.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor
currently intends to voluntarily waive or reimburse all or a portion of
its fee to limit total Fund operating expenses to 2.00% of the average
daily net assets of the Fund. There can be no assurance that the
foregoing voluntary fee waivers or reimbursements will continue. The
Advisor has voluntarily waived its fee amounting to $102 ($0.01 per
share) and has voluntarily reimbursed a portion of the Fund's operating
expenses for the period ended September 30, 1995. The total fees
waived and expenses reimbursed by the Advisor amounted to $676.
GrandView Realty Growth Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The Fund's administrator, The Nottingham Company, Inc. (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives a
fee at the annual rate of 0.30% of the Fund's first $25 million of
average daily net assets, 0.275% of the next $25 million of average
daily net assets,and 0.225% of average daily net assets over $50
million. Additionally, the Administrator charges the Fund for
servicing of shareholder accounts and registration of the Fund's
shares. The Administrator also charges the Fund for certain expenses
involved with the daily valuation of portfolio securities. The
Administrator has voluntarily waived a portion of its fees amounting to
$31 for the period ended September 30, 1995.
Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any
sales charges imposed on purchases of shares and re-allocates a portion
of such charges to dealers through whom the sale was made, if any. For
the period from July 3, 1995 to September 30, 1995, the Distributor
retained sales charges of $8.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the distributor or the Administrator.
At September 30, 1995, the Advisor held 2,000 shares or 22% of the Fund
shares outstanding.
NOTE 3 - DISTRIBUTION COSTS
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company
Act of 1940 (the "Act"), adopted a distribution plan pursuant to Rule
12b-1 of the Act (the "Plan"). The Act regulates the manner in which
a regulated investment company may assume costs of distributing and
promoting the sales of its shares and servicing of its shareholder
accounts.
The Plan provides that the Fund may incur certain costs, which may not
exceed 0.25% per annum of the Fund's average daily net assets for each
year elapsed subsequent to adoption of the Plan, for payment to the
distributor for items such as advertising expenses, selling expenses,
commissions, travel or other expenses reasonably intended to result in
sales of shares of the Fund or support servicing of shareholder
accounts.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization
and the registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses
only as they are amortized against the Fund's investment income.
GrandView Realty Growth Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
In the event any of the initial shares of the Fund are redeemed during
the amortization period, the redemption proceeds will be reduced by a
pro rata portion of any unamortized organization expenses in the same
proportion as the number of initial shares being redeemed bears to the
number of initial shares of the Fund outstanding at the time of the
redemption.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales investments, other than short-term investments,
aggregated $80,068 and $ 1,811 respectively, for the period ended
September 30, 1995.
GrandView Residential Realty Income Fund
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Unaudited)
Market
Shares Value
COMMON STOCKS - 78.28%
Real Estate Investment Trust -78.28%
Asset Investors Corporation 500 $1,375
ASR Investments Corporation 400 7,200
Boddie-Noell Properties, Inc. 200 2,575
Bay Apartment Communities, Inc. 100 2,150
Columbus Realty Trust 200 3,800
Essex Property Trust, Inc. 300 5,287
Irvine Apartment Communitites, Inc. 100 1,762
Merry Land & Investment Company, Inc. 100 2,113
Pacific Gulf Properties, Inc. 200 3,250
Real Estate Investment Trust of Californi 200 3,325
American Real Estate Investment Corporati 400 3,300
Sizeler Property Investors, Inc. 200 1,875
South West Property Trust 200 2,550
United Dominion Realty 200 2,850
Walden Residential Properties, Inc. 100 1,888
Total Common Stocks (Cost $45,642) 45,300
Principal Interes Maturity Market
Amount Rate Date Value
REPURCHASE AGREEMENT (a) - 19.85%
Wachovia Bank 11,487 6.45% 10-01-95 11,487
(Cost $11,487)
Total Value of Investments (Cost $57,129)(b) 98.13% 56,787
Other Assets Less Liabilities 1.87% 1,083
Net Assets 100.00% $57,870
(a) Joint repurchase agreement entered into September 30, 1995, with a
maturity value of $15,080,609 collateralized by $11,129,000 U.S.
Treasury Notes, 9.8750%, due November 15, 2015. The aggregate market
value of the collateral at September 30, 1995 was $15,374,653. The
Fund's pro rata interest in the collateral at September 30, 1995 was
$11,715. The Fund's pro rata interest in the joint repurchase
agreement is taken into possession by the Fund upon entering into the
repurchase agreement. The collateral is marked to market daily to
ensure its market value is at least 102 percent of the sales price of
the repurchase agreement.
(b) Aggregate cost for federal income tax purposes is the same. Unrealized
appreciation (depreciation) of securities for federal income tax
purposes is as follow:
Unrealized appreciation $427
Unrealized depreciation (769)
Net unrealized depreciation ($342)
See acccompanying notes to financial statements
GrandView Residential Realty Income Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(Unaudited)
ASSETS
Investments at value (Cost $57,129) $56,787
Interest receivable 114
Dividends receivable 463
Reserve premium 50
Deferred organization expenses, net (note 4) 26,775
Total assets 84,189
LIABILITIES
Accrued expenses 1,352
Payable to advisor 24,817
Disbursements in excess of cash on demand deposit 150
Total liabilities 26,319
NET ASSETS
(applicable to 5,860 shares outstanding; unlimited
shares of no par value beneficial interest authorized) $57,870
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE
($57,870 / 5,860 shares) $9.87
OFFERING PRICE PER SHARE
(100 / 95.5 of $9.87 adjusted to nearest cent) $10.34
NET ASSETS
Paid-in capital $57,885
Undistributed net investment income 327
Net unrealized depreciation on investments (342)
$57,870
See accompanying notes to financial statements
GrandView Residential Realty Income Fund
STATEMENT OF OPERATIONS
For the period ended September 30, 1995
(Unaudited)
INVESTMENT INCOME
Income
Interest $187
Dividends 570
Total Income 757
Expenses
Custody fees 293
Registration and filing administration fees 278
Professional fees 154
Investment advisory fees (note 2) 55
Fund administration fees (note 2) 24
Securities pricing fees 33
Shareholder recordkeeping fees 9
Operating expenses 991
Shareholder servicing expenses 316
Total expenses 2,153
Less:
Expense reimbursements (note 2) (1,958)
Investment advisory fees waived (note 2) (55)
Fund administration fees waived (note 2) (2)
Net expenses 138
Net investment income 619
UNREALIZED LOSS ON INVESTMENTS
Increase in unrealized depreciation on investments (342)
Unrealized loss on investments (342)
Net increase in net assets resulting from operations $277
See accompanying notes to financial statements
GrandView Residential Realty Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the
period from
July 3, 1995
(commencement
of operations) to
September 30,
1995
(Unaudited)
INCREASE IN NET ASSETS
Operations
Net investment income $619
Increase in unrealized depreciation on investments (342)
Net increase in net assets resulting from operations 277
Distributions to shareholders from
Net investment income (292)
Decrease in net assets resulting from distributions (292)
Capital share transactions
Increase in net assets resulting from
capital share transactions (a) 57,885
Total increase in net assets 57,870
NET ASSETS
Beginning of period 0
End of period $57,870
(a) A summary of capital share activity follows:
For the period from July 3, 1995
(commencement of operations)
to September 30, 1995
Shares Value
Shares sold 5,841 $57,693
Shares issued for reinvestment
of distributions 19 192
Net increase 5,860 $57,885
See accompanying notes to financial statements
GrandView Residential Realty Income Fund
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
For the
period from
July 3, 1995
(commencement
of operations)
September 30,
1995
(Unaudited)
Net Asset Value, Beginning of Period $10.00
Income(loss) from investment operations
Net investment income 0.11
Net unrealized loss on investments (0.19)
Total from investment operations (0.08)
Distributions to shareholders from
Net investment income (0.05)
Total distributions (0.05)
Net Asset Value, End of Period $9.87
Total return (a) (0.90%)
Ratios/supplemental data
Net assets, end of period $57,870
Ratio of expenses to average net assets
Before expense reimbursements 27.29%(b)
After expense reimbursements 1.74%(b)
Ratio of net investment income to average net assets
Before expense reimbursements (17.72%)(b)
After expense reimbursements 7.83%(b)
Portfolio turnover rate 0.00%
(a) Does not include sales load.
(b) Annualized
See accompanying notes to financial statements
GrandView Residential Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GrandView Residential Realty Income Fund (the "Fund") is a non-
diversified series of shares of beneficial interest of GrandView
Investment Trust (the "Trust"). The Trust, an open-end registered
management investment company, was organized on February 6, 1995 as a
Massachusetts Business Trust and is registered under the Investment
Company Act of 1940. The Fund began operations on July 3, 1995. The
following is a summary of significant accounting policies followed by
the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at market value. Securities listed on an exchange or
quoted on a national market system are valued at 4:00 p.m., New
York time on the day of valuation. Other securities traded in the
over-the-counter market and listed securities for which no sale
was reported on that date are valued at the most recent bid price.
Securities for which market quotations are not readily available,
if any, are valued by an independent pricing service or determined
following procedures approved by the Board of Trustees.
Short-term investments are valued at cost which approximates
market value.
B. Federal Income Taxes - No provision has been made for
federal income taxes since it is the policy of the Fund to
comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and to make
sufficient distributions of taxable income to relieve it
from all federal income taxes.
C. Investment Transactions - Investment transactions are
recorded on the trade date. Realized gains and losses are
determined using the specific identification cost method.
Interest income is recorded daily on the accrual basis.
Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares
dividends monthly payable on a date selected by the Trust's
Trustees. In addition, distributions may be made annually
in December out of net realized gains through October 31 of
that year. The Fund may make a supplemental distribution
subsequent to the end of its fiscal year ending March 31.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, GrandView Advisers, Inc.
(the "Advisor") provides the Fund with a continuous program of supervision
of the Fund's assets, including the composition of its portfolio, and
furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. As
compensation for its services, the Advisor receives a fee at the annual
rate of 0.70% of the Fund's average daily net assets.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor currently
intends to voluntarily waive or reimburse all or a portion of its fee to
limit total Fund operating expenses to 1.75% of the average daily net
assets of the Fund. There can be no assurance that the foregoing
voluntary fee waivers or reimbursements will continue. The Advisor has
voluntarily waived its fee amounting to $55 ($0.02 per share) and has
voluntarily reimbursed a portion of the Fund's operating expenses for the
period ended September 30, 1995. The total fees waived and expenses
reimbursed by the Advisor amounted to $2,013.<PAGE>
GrandView Residential Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The Fund's administrator, The Nottingham Company, Inc. (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives a fee
at the annual rate of 0.30% of the Fund's first $25 million of average
daily net assets, 0.275% of the next $25 million of average daily net
assets,and 0.225% of average daily net assets over $50 million.
Additionally, the Administrator charges the Fund for servicing of
shareholder accounts and registration of the Fund's shares. The
Administrator also charges the Fund for certain expenses involved with the
daily valuation of portfolio securities. The Administrator has
voluntarily waived a portion of its fees and reimbursed the Fund for
expenses amounting to $2 for the period ended September 30, 1995.
Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any sales
charges imposed on purchases of shares and re-allocates a portion of such
charges to dealers through whom the sale was made, if any. For the period
from July 3, 1995 to September 30, 1995, the Distributor retained sales
charges in the amount of $8.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the distributor or the Administrator.
At September 30, 1995, the Advisor held 2,000 shares or 34% of the Fund
shares outstanding.
NOTE 3 - DISTRIBUTION COSTS
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act
of 1940 (the "Act"), adopted a distribution plan pursuant to Rule 12b-1 of
the Act (the "Plan"). The Act regulates the manner in which a regulated
investment company may assume costs of distributing and promoting the
sales of its shares and servicing of its shareholder accounts.
The Plan provides that the Fund may incur certain costs, which may not
exceed 0.25% per annum of the Fund's average daily net assets for each
year elapsed subsequent to adoption of the Plan, for payment to the
distributor for items such as advertising expenses, selling expenses,
commissions, travel or other expenses reasonably intended to result in
sales of shares of the Fund or support servicing of shareholder accounts.
The distributor has voluntarily waived all of such expenses under the Plan
for the period ended September 30, 1995.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization and
the registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.
GrandView Residential Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
In the event any of the initial shares of the Fund are redeemed during the
amortization period, the redemption proceeds will be reduced by a pro rata
portion of any unamortized organization expenses in the same proportion as
the number of initial shares being redeemed bears to the number of initial
shares of the Fund outstanding at the time of the redemption.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases of investments, other than short-term investments, aggregated
$45,642 for the period ended September 30, 1995. There were no sales of
investments during this period.
NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS
For the period ended September 30, 1995, the Fund made distributions
classified as ordinary income in the amount of $292. Shareholders should
consult a tax advisor on how to report distributions for state and local
income tax purposes.
GrandView Retail Realty Income Fund
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Unaudited)
Market
Shares Value
COMMON STOCKS - 93.55%
Real Estate Investment Trust
Alexander Haagen Properties, Inc. 100 $1,163
Burnham Pacific Properties, Inc. 400 4,700
Crown American Realty Trust 300 2,475
DeBartolo Realty Corporation 200 2,800
Excel Realty Trust, Inc. 200 3,950
Factory Stores of America, Inc. 200 3,975
First Washington Realty Trust, Inc. 200 3,500
HRE Properties 200 2,800
IRT Property Company 200 1,925
Kranzco Realty Trust 300 5,063
Malan Realty Investors, Inc. 200 3,125
Mark Centers Trust 200 2,450
Mid-America Realty 600 4,725
Mid-Atlantic Realty Trust 300 2,681
Regency Realty Corporation 200 3,525
Sizeler Property Investors, Inc. 200 1,875
Tucker Properties Corporation 200 2,225
Western Investment Real Estate Trust 200 2,275
Total Common Stocks (Cost $55,990) 55,232
Principal Market
Amount Value
REPURCHASE AGREEMENT (a) - 4.58%
Wachovia Bank $2,703 2,703
6.45%, due October 1, 1995
(Cost $2,703)
Total Value of Investments (Cost $58,693) 98.13% 57,935
Other Assets Less Liabilities 1.86% 1,101
Net Assets 100.00% $59,036
(a) Joint repurchase agreement entered into September 30, 1995, with a
maturity value of $15,080,609 collateralized by $11,129,000 U.S.
Treasury Notes, 9.8750%, due November 15, 2015. The aggregate market
value of the collateral at September 30, 1995 was $15,374,653. The
Fund's pro rata interest in the collateral at September 30, 1995 was
$2,752. The Fund's pro rata interest in the joint repurchase agreement
is taken into possession by the Fund upon entering into the repurchase
agreement. The collateral is marked to market daily to ensure its
market value is at least 102 percent of the sales price of the
repurchase agreement.
(b) Aggregate cost for federal income tax purposes is the same. Unrealized
appreciation (depreciation) of securities for federal income tax
purposes is as follow:
Unrealized appreciation $638
Unrealized depreciation (1,397)
Net unrealized appreciation/depreciation ($759)
See acccompanying notes to financial statements
GrandView Retail Realty Income Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(Unaudited)
ASSETS
Investments at value (Cost $58,694) $57,935
Cash 122
Interest receivable 83
Dividends receivable 525
Deferred organization expenses, net (note 4) 26,775
Total assets 85,440
LIABILITIES
Accrued expenses 1,715
Payable to advisor 24,689
Total liabilities 26,404
NET ASSETS
(applicable to 6,041 shares outstanding; unlimited
shares of no par value beneficial interest authorized) $59,036
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE
($59,036 / 6,041 shares) $9.77
OFFERING PRICE PER SHARE
(100 / 95.5 of $9.77 adjusted to nearest cent) $10.23
NET ASSETS CONSIST OF:
Paid-in capital $59,263
Undistributed net investment income 532
Net unrealized depreciation on investments (759)
$59,036
See acccompanying notes to financial statements
GrandView Retail Realty Income Fund
STATEMENT OF OPERATIONS
September 30, 1995
(Unaudited)
INVESTMENT INCOME
Income
Interest $155
Dividends 843
Total Income 998
Expenses
Investment advisory fees (note 2) 54
Fund administration fees (note 2) 21
Professional fees 154
Custody fees 296
Securities pricing fees 142
Shareholder recordkeeping fees 10
Registration and filing administration fees 269
Operating expenses 991
Shareholder servicing expenses 338
Total expenses 2,275
Less:
Expense reimbursements (note 2) (2,086)
Investment advisory fees waived (note 2) (54)
Net expenses 135
Net investment income 863
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Increase in unrealized depreciation on investments (759)
Net realized and unrealized loss on investments (759)
Net increase in net assets resulting from operations $104
See accompanying notes to financial statements
GrandView Retail Realty Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the
period from
July 3, 1995
(commencement
of operations) to
September 30,
1995
(Unaudited)
INCREASE IN NET ASSETS
Operations
Net investment income $863
Increase in unrealized depreciation on investments (759)
Net increase in net assets resulting from
operations 104
Distributions to shareholders from
Net investment income (331)
Decrease in net assets resulting from distributions (331)
Capital share transactions
(a)Increase in net assets resulting from
capital share transactions 59,263
Total increase in net assets 59,036
NET ASSETS
Beginning of period 0
End of period $59,036
(a) A summary of capital share activity follows:
For the period from July 3, 1995
(commencement of operations)
to September 30, 1995
Shares Value
Shares sold 6,020 $59,061
Shares issued for reinvestment
of distributions 21 203
6,041 59,263
Shares redeemed 0 0
Net increase(decrease) 6,041 $59,263
See accompanying notes to financial statements
GrandView Retail Realty Income Fund
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
For the
period from
July 3, 1995
(commencement
of operations)
September 30,
1995
(Unaudited)
Net Asset Value, Beginning of Period $10.00
Income from investment operations
Net investment income 0.15
Net realized and unrealized loss on investments (0.32)
Total from investment operations (0.17)
Distributions to shareholders from
Net investment income (0.06)
Total distributions (0.06)
Net Asset Value, End of Period $9.77
Total return (a) (1.75%)
Ratios/supplemental data
Net assets, end of period $59,036
Ratio of expenses to average net assets
Before expense reimbursements 29.48%(b)
After expense reimbursements 1.74%(b)
Ratio of net investment income(loss) to average net assets
Before expense reimbursements (16.55%) (b)
After expense reimbursements 11.19%(b)
Portfolio turnover rate 0.00%
(a) Does not include sales load
(b) Annualized.
See accompanying notes to financial statements
GrandView Retail Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GrandView Retail Realty Income Fund (the "Fund") is a non-diversified
series of shares of beneficial interest of GrandView Investment Trust (the
"Trust"). The Trust, an open-end registered management investment
company, was organized on February 6, 1995 as a Massachusetts Business
Trust and is registered under the Investment Company Act of 1940. The
Fund began operations on July 3, 1995. The following is a summary of
significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at market value. Securities listed on an exchange or quoted
on a national market system are valued at 4:00 p.m., New York time
on the day of valuation. Other securities traded in the over-the-
counter market and listed securities for which no sale was reported
on that date are valued at the most recent bid price. Securities
for which market quotations are not readily available, if any, are
valued by an independent pricing service or determined following
procedures approved by the Board of Trustees. Short-term
investments are valued at cost which approximates market value.
B. Federal Income Taxes - No provision has been made for federal income
taxes since it is the policy of the Fund to comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies and to make sufficient distributions of taxable
income to relieve it from all federal income taxes.
C. Investment Transactions - Investment transactions are recorded on
the trade date. Realized gains and losses are determined using the
specific identification cost method. Interest income is recorded
daily on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares
dividends monthly payable on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in
December out of net realized gains through October 31 of that year.
The Fund may make a supplemental distribution subsequent to the end
of its fiscal year ending March 31.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, GrandView Advisers, Inc.
(the "Advisor") provides the Fund with a continuous program of supervision
of the Fund's assets, including the composition of its portfolio, and
furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. As
compensation for its services, the Advisor receives a fee at the annual
rate of 0.70% of the Fund's average daily net assets.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor currently
intends to voluntarily waive or reimburse all or a portion of its fee to
limit total Fund operating expenses to 1.75% of the average daily net
assets of the Fund. There can be no assurance that the foregoing
voluntary fee waivers or reimbursements will continue. The Advisor has
voluntarily waived its fee amounting to $54 ($0.02 per share) and has
voluntarily reimbursed a portion of the Fund's operating expenses for the
period ended September 30, 1995. The total fees waived and expenses
reimbursed by the Advisor amounted to $2,140.
GrandView Retail Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The Fund's administrator, The Nottingham Company, Inc. (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives a fee
at the annual rate of 0.30% of the Fund's first $25 million of average
daily net assets, 0.275% of the next $25 million of average daily net
assets,and 0.225% of average daily net assets over $50 million. Addition-
ally, the Administrator charges the Fund for servicing of shareholder
accounts and registration of the Fund's shares. The Administrator also
charges the Fund for certain expenses involved with the daily valuation of
portfolio securities.
Capital Investment Group, Inc. (the "Distributor") serves a s the Fund's
principal underwriter and distributor. The Distributor receives any sales
charges imposed on purchases of shares and re-allocates a portion of such
charges to dealers through whom the sale was made, if any. For the period
from July 3, 1995 to September 30, 1995, there were no sales charges
distributed.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the distributor or the Administrator.
At September 30, 1995, the Advisor held 2,025 shares or 34% of the Fund
shares outstanding.
NOTE 3 - DISTRIBUTION COSTS
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act
of 1940 (the "Act"), adopted a distribution plan pursuant to Rule 12b-1 of
the Act (the "Plan"). The Act regulates the manner in which a regulated
investment company may assume costs of distributing and promoting the
sales of its shares and servicing of its shareholder accounts.
The Plan provides that the Fund may incur certain costs, which may not
exceed 0.25% per annum of the Fund's average daily net assets for each
year elapsed subsequent to adoption of the Plan, for payment to the
distributor for items such as advertising expenses, selling expenses,
commissions, travel or other expenses reasonably intended to result in
sales of shares of the Fund or support servicing of shareholder accounts.
The distributor has voluntarily waived all of such expenses under the Plan
for the period ended September 30, 1995.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization and
the registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.
GrandView Retail Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
In the event any of the initial shares of the Fund are redeemed during the
amortization period, the redemption proceeds will be reduced by a pro rata
portion of any unamortized organization expenses in the same proportion as
the number of initial shares being redeemed bears to the number of initial
shares of the Fund outstanding at the time of the redemption.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases of investments, other than short-term investments, aggregated
$55,990 for the period ended September 30, 1995. There were no sales of
investments during this period.
NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS
For the period ended September 30, 1995, the Fund made distributions
classified as ordinary income in the amount of $331. Shareholders should
consult a tax advisor on how to report distributions for state and local
income tax purposes.
GrandView Healthcare Realty Income Fund
PORTFOLIO OF INVESTMENTS
September 30, 1995
(Unaudited)
Market
Shares Value
COMMON STOCKS - 90.64%
Real Estate Investment Trust
American Health Properties, Inc. 100 $2,162
Capstone Capital Trust, Inc. 400 7,550
G&L Realty Corporation 500 5,062
Health Care Property Investors, Inc. 100 3,387
Health Care REIT, Inc. 600 9,375
Health and Retirement Property Trust 500 7,813
Healthcare Realty Trust, Inc. 100 2,075
LTC Properties, Inc. 200 2,875
Meditrust Corporation 100 3,463
National Health Investors, Inc. 100 3,025
Nationwide Health Properties, Inc. 100 4,100
OMEGA Healthcare Investors, Inc. 100 2,675
Universal Health Realty Income Trust 700 11,638
Total Common Stocks (Cost $65,630) 65,200
Principal Market
Amount Value
REPURCAHSE AGREEMENT (b) - 6.80%
Wachovia Bank 4,894 4,894
6.45%, due October 1, 1995
(Cost $4,894)
Total Value of Investments (Cost $70,524) 97.44% 70,094
Other Assets Less Liabilities 2.56% 1,841
Net Assets 100.00% $71,935
(a) Joint repurchase agreement entered into September 30, 1995, with a
maturity value of $15,080,609 collateralized by $11,129,000 U.S. Treasury
Notes, 9.8750%, due November 15, 2015. The aggregate market value of the
collateral at September 30, 1995 was $15,374,653. The Fund's pro rata
interest in the collateral at September 30, 1995 was $4,997. The Fund's
pro rata interest in the joint repurchase agreement is taken into
possession by the Fund upon entering into the repurchase agreement. The
collateral is marked to market daily to ensure its market value is at
least 102 percent of the sales price of the repurchase agreement.
(b) Aggregate cost for federal income tax purposes is the same. Unrealized
appreciation (depreciation) of securities for tax purposes is as follow
Unrealized appreciation $2,067
Unrealized depreciation (2,496)
Net unrealized appreciation/depreciation ($430)
See acccompanying notes to financial statements
GrandView Healthcare Realty Income Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
(Unaudited)
ASSETS
Investments at value (Cost $70,524) $70,094
Cash 1,063
Interest receivable 150
Dividends receivable 285
Deferred organization expenses, net (note 4) 26,775
Total assets 98,367
LIABILITIES
Accrued expenses 1,676
Payable to advisor 24,756
Total liabilities 26,432
NET ASSETS
(applicable to 7,164 shares outstanding; unlimited
shares of no par value beneficial interest authorized) $71,935
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE
($71,935 / 7,164 shares) $10.04
OFFERING PRICE PER SHARE
(100 / 95.5 of $10.04 adjusted to nearest cent) $10.51
NET ASSETS CONSIST OF:
Paid-in capital $71,988
Undistributed net investment income 377
Net unrealized depreciation on investments (430)
$71,935
See accompanying notes to financial statements
GrandView Healthcare Realty Income Fund
STATEMENT OF OPERATIONS
September 30, 1995
(Unaudited)
INVESTMENT INCOME
Income
Interest $262
Dividends 649
Total Income 911
Expenses
Investment advisory fees (note 2) 63
Fund administration fees (note 2) 25
Professional fees 154
Custody fees 278
Securities pricing fees 111
Shareholder recordkeeping fees 11
Registration and filing administration fees 269
Operating expenses 991
Shareholder servicing expenses 339
Total expenses 2,241
Less:
Expense reimbursements (note 2) (2,019)
Investment advisory fees waived (note 2) (63)
Net expenses 159
Net investment income 752
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS
Increase in unrealized depreciation on investments (430)
Net realized and unrealized loss on investments (430)
Net increase in net assets resulting from operations $322
See accompanying notes to financial statements
GrandView Healthcare Realty Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the
period from
July 3, 1995
(commencement
of operations) to
September 30,
1995
(Unaudited)
INCREASE IN NET ASSETS
Operations
Net investment income $752
Increase in unrealized depreciation on investments (430)
Net increase in net assets resulting from
operations 322
Distributions to shareholders from
Net investment income (375)
Decrease in net assets resulting from distributions (375)
Capital share transactions
(a)Increase in net assets resulting from
capital share transactions 71,988
Total increase in net assets 71,935
NET ASSETS
Beginning of period 0
End of period $71,935
(a) A summary of capital share activity follows:
For the period from July 3, 1995 to
(commencement of operations)
to September 30, 1995
Shares Value
Shares sold 7,145 $71,801
Shares issued for reinvestment
of distributions 19 187
7,164 71,988
Shares redeemed 0 0
Net increase(decrease) 7,164 $71,988
See accompanying notes to financial statements
GrandView Healthcare Realty Income Fund
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
For the
period from
July 3, 1995
(commencement
of operations)
September 30,
1995
(Unaudited)
Net Asset Value, Beginning of Period $10.00
Income from investment operations
Net investment income 0.10
Net realized and unrealized loss on investments (0.01)
Total from investment operations 0.09
Distributions to shareholders from
Net investment income (0.05)
Total distributions (0.05)
Net Asset Value, End of Period $10.04
Total return (a)
0.93%
Ratios/supplemental data
Net assets, end of period $71,935
Ratio of expenses to average net assets
Before expense reimbursements 24.78%(b)
After expense reimbursements 1.74%(b)
Ratio of net investment income(loss) to average net assets
Before expense reimbursements (14.72%)(b)
After expense reimbursements 8.31%(b)
Portfolio turnover rate 0.00%
(a) Does not include sales load
(b) Annualized
See accompanying notes to financial statements
GrandView Healthcare Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GrandView Healthcare Realty Income Fund (the "Fund") is a non-
diversified series of shares of beneficial interest of GrandView
Investment Trust (the "Trust"). The Trust, an open-end registered
management investment company, was organized on February 6, 1995 as a
Massachusetts Business Trust and is registered under the Investment
Company Act of 1940. The Fund began operations on July 3, 1995. The
following is a summary of significant accounting policies followed by the
Fund.
A. Security Valuation - The Fund's investments in securities are
carried at market value. Securities listed on an exchange or quoted
on a national market system are valued at 4:00 p.m., New York time
on the day of valuation. Other securities traded in the over-the-
counter market and listed securities for which no sale was reported
on that date are valued at the most recent bid price. Securities
for which market quotations are not readily available, if any, are
valued by an independent pricing service or determined following
procedures approved by the Board of Trustees. Short-term
investments are valued at cost which approximates market value.
B. Federal Income Taxes - No provision has been made for federal income
taxes since it is the policy of the Fund to comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies and to make sufficient distributions of taxable
income to relieve it from all federal income taxes.
C. Investment Transactions - Investment transactions are recorded on
the trade date. Realized gains and losses are determined using the
specific identification cost method. Interest income is recorded
daily on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund generally declares
dividends monthly payable on a date selected by the Trust's
Trustees. In addition, distributions may be made annually in
December out of net realized gains through October 31 of that year.
The Fund may make a supplemental distribution subsequent to the end
of its fiscal year ending March 31.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, GrandView Advisers, Inc.
(the "Advisor") provides the Fund with a continuous program of supervision
of the Fund's assets, including the composition of its portfolio, and
furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. As
compensation for its services, the Advisor receives a fee at the annual
rate of 0.70% of the Fund's average daily net assets.
Currently, the Fund does not offer its shares for sale in states which
require limitations to be placed on its expenses. The Advisor currently
intends to voluntarily waive or reimburse all or a portion of its fee to
limit total Fund operating expenses to 1.75% of the average daily net
assets of the Fund. There can be no assurance that the foregoing
voluntary fee waivers or reimbursements will continue. The Advisor has
voluntarily waived its fee amounting to $63 ($0.02 per share) and has
voluntarily reimbursed a portion of the Fund's operating expenses for the
period ended September 30, 1995. The total fees waived and expenses
reimbursed by the Advisor amounted to $2,082.
GrandView Healthcare Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The Fund's administrator, The Nottingham Company, Inc. (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives a fee
at the annual rate of 0.30% of the Fund's first $25 million of average
daily net assets, 0.275% of the next $25 million of average daily net
assets,and 0.225% of average daily net assets over $50 million. Addition-
ally, the Administrator charges the Fund for servicing of shareholder
accounts and registration of the Fund's shares. The Administrator also
charges the Fund for certain expenses involved with the daily valuation of
portfolio securities.
Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any sales
charges imposed on purchases of shares and re-allocates a portion of such
charges to dealers through whom the sale was made, if any. For the period
from July 3, 1995 to September 30, 1995, there were no sales charges
distributed.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the distributor or the Administrator.
At September 30, 1995, the Advisor held 2,000 shares or 28% of the Fund
shares outstanding.
NOTE 3 - DISTRIBUTION COSTS
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act
of 1940 (the "Act"), adopted a distribution plan pursuant to Rule 12b-1 of
the Act (the "Plan"). The Act regulates the manner in which a regulated
investment company may assume costs of distributing and promoting the
sales of its shares and servicing of its shareholder accounts.
The Plan provides that the Fund may incur certain costs, which may not
exceed 0.25% per annum of the Fund's average daily net assets for each
year elapsed subsequent to adoption of the Plan, for payment to the
distributor for items such as advertising expenses, selling expenses,
commissions, travel or other expenses reasonably intended to result in
sales of shares of the Fund or support servicing of shareholder accounts.
The distributor has voluntarily waived all of such expenses under the Plan
for the period ended September 30, 1995.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization and
the registration of its shares have been assumed by the Fund.
The organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.
GrandView Healthcare Realty Income Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
In the event any of the initial shares of the Fund are redeemed during the
amortization period, the redemption proceeds will be reduced by a pro rata
portion of any unamortized organization expenses in the same proportion as
the number of initial shares being redeemed bears to the number of initial
shares of the Fund outstanding at the time of the redemption.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases of investments, other than short-term investments, aggregated
$65,630 for the period ended September 30, 1995. There were no sales of
investments during this period.
NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS
For the period ended September 30, 1995, the Fund made distributions
classified as ordinary income in the amount of $375. Shareholders should
consult a tax advisor on how to report distributions for state and local
income tax purposes.
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
a) Financial Statements:
Financial Statements Included in Part A:
Financial Highlights
Financial Statements Included in Part B:
Statements of Assets and Liabilities at May 22, 1995
Notes to Financial Statements
Report of Independent Auditors - May 23, 1995
For each Series of Registrant:
Schedule of Investments (unaudited) at September 30, 1995
Statement of Assets and Liabilities (unaudited) at September 30, 1995
Statement of Operations (unaudited) for the period ended September 30,
1995
Statement of Changes in Net Assets (unaudited) for the period ended
September 30, 1995
Financial Highlights (unaudited) for the period ended September 30,
1995
Notes to Financial Statements (unaudited) - September 30, 1995
b) Exhibits Filed Herewith:
* (1) (a) Declaration of Trust of Registrant
(b) Amendment to Declaration of Trust of Registration
* (2) By-Laws of Registrant
** (5) Investment Advisory Agreements between the Registrant and GrandView
Advisers, Inc., as adviser
** (6) Form of Distribution Agreement between the Registrant and Capital
Investment Group, Inc., as distributor
** (8) Form of Custodian Agreement between the Registrant and Wachovia Bank
of North Carolina, N.A., as custodian
** (9) Fund Accounting, Dividend Disbursing & Transfer Agent and
Administration Agreement between the Registrant and The Nottingham
Company, as administrator
** (10) Opinion and consent of Bingham, Dana & Gould, counsel to the
Registrant
** (11) (a) Consent of KPMG Peat Marwick LLP, independent auditors of the
Registrant
(b) Consent of Bingham, Dana & Gould, counsel to the Registrant
** (13) Initial Share Purchase Agreement
** (15) Distribution Plan of the Registrant
(16) Performance Calculation Schedules
** (25) Powers of Attorney for the Registrant
_____________________
* Incorporated by reference to the Registrant's initial Registration
Statement on Form N-1A (File No. 33-89628, 811-8978), as filed with the
Securities and Exchange Commission on February 22, 1995.
** Incorporated by reference to the Registrant's Pre-Effective Amendment No. 1
to its Registration Statement on Form N-1A (File No. 33-89628, 811-8978),
as filed with the Securities and Exchange Commission on May 31, 1995.
ITEM 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
ITEM 26. Number of Record Holders of Securities
Number of
Title of Class Record Holders
Shares of Beneficial Interest
(par value $0.0001 per share) As of December 15, 1995
GrandView REIT Index Fund 14
GrandView Realty Growth Fund 13
GrandView Residential Realty Income Fund 5
GrandView Retail Realty Income Fund 7
GrandView Healthcare Realty Income Fund 9
ITEM 27. Indemnification
Reference is hereby made to Article V of the Registrant's Declaration of
Trust, filed as Exhibit 1 herein.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions
liability insurance policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940.
ITEM 28. Business and other Connections of Investment Advisor
Winsor H. Aylesworth is the President, Treasurer and Director of GrandView
Advisers, Inc. During the period from 1990 to 1993 Mr. Aylesworth served
as the Executive Vice President in the Loan Review Department of the Bank
of Boston Connecticut. From 1991 to the present Mr. Aylesworth has served
as President and Director of WHA Enterprises, Inc. ("WHA"). The principal
business address of WHA is 127 Grandview Drive, Glastonbury, Connecticut
06033. At WHA Mr. Aylesworth is responsible for publishing a financial
newsletter on the REIT industry. Lucille C. Carlson is a Director of
GrandView Advisers, Inc. During the period from 1991 to April, 1995 Ms.
Carlson served as Assistant Vice President in the Loan Review Department at
the Bank of Boston Connecticut. From 1993 to the present, Ms. Carlson has
acted as Director of Research at WHA. David F. Wolf is a Director of
GrandView Advisers, Inc. During the period from 1992 to May, 1995 Mr. Wolf
was employed as a financial planning consultant for John Hancock Financial
Services, Inc. From 1993 to the present, Mr. Wolf has served as Director
of Marketing for WHA. Maryanne S. Aylesworth is the Secretary of GrandView
Advisers, Inc. During the period from 1993 to 1994 Ms. Aylesworth served
as a substitute teacher in the Glastonbury, Connecticut School District.
From 1991 to the present Ms. Aylesworth has served as Secretary of WHA, and
from 1994 to the present, Ms. Aylesworth has served as a medical laboratory
technician.
ITEM 29. Principal Underwriter
(a) Capital Investment Group, Inc., the Registrant's distributor, is
also the underwriter and distributor for The Chesapeake Growth
Fund, The Chesapeake Fund, Capital Value Fund, ZSA Equity Fund,
ZSA Asset Allocation Fund, ZSA Social Conscience Fund, The Brown
Capital Management Equity Fund, The Brown Capital Management
Balanced Fund, The Brown Capital Management Small Company Fund,
Amelia Earhart: Eagle Equity Fund, Legacy Equity Fund, Nottingham
Short Term Income Fund, Greater Cincinnati Fund, The
CarolinasFund, and Mississippi Opportunity Fund.
(b)
Position(s) and Position(s) and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
Richard K. Bryant President No position with
17 Glenwood Avenue the Registrant or its
Raleigh, North Carolina Series
Elmer O. Edgerton, Jr. Vice President No position with
17 Glenwood Avenue the Registrant or its
Raleigh, North Carolina Series
(c) Not applicable.
ITEM 30. Location of Accounts and Records
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
Name Address
The Nottingham Company 105 North Washington Street
(administrator, disbursing and Rocky Mount, NC 27802
transfer agent)
Wachovia Bank of North Carolina N.A. 301 North Main Street
(custodian) Winston-Salem, NC 27102
GrandView Advisers, Inc. 127 Grandview Drive
(investment advisor) Glastonbury, CT 06033
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
The Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of one or more of the
Trust's Trustees when requested in writing to do so by the holders of at
least 10% of the Registrant's outstanding shares, and in connection
therewith to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communication.
The Registrant hereby undertakes to furnish each person to whom a
Prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
NOTICE
A copy of the Declaration of Trust for GrandView Investment Trust (the "Trust")
is on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this Registration Statement has been executed on
behalf of the Trust by an officer of the Trust as an officer and by its Trustees
as trustees and not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers, or
Shareholders individually but are binding only upon the assets and property of
the Trust.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and Commonwealth
of Massachusetts on the 18th day of December, 1995.
GRANDVIEW INVESTMENT TRUST
By:
Winsor H. Aylesworth
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated below on December 18, 1995.
President, Treasurer and Trustee
Winsor H. Aylesworth (Chief Executive Officer, Chief
Financial Officer and Chief
Accounting Officer)
Officer
*
Trustee
Arthur Collins
*
Trustee
Richard W. Jagolta
*
Trustee
Raymond H. Weaving
* By:
Winsor H. Aylesworth, Attorney-in-Fact
GRANDVIEW INVESTMENT TRUST
EXHIBIT INDEX
SEQUENTIAL PAGE
EXHIBIT NUMBER DESCRIPTION NUMBER
1(b) Amendment to Declaration of Trust of Registrant
11(a) Consent of KPMG Peat Marwick LLP,
independent auditors of the Registrant
11(b) Consent of Bingham, Dana & Gould,
counsel to Registrant
16 Performance Calculation Schedules
GRANDVIEW INVESTMENT TRUST
__________________________________
DECLARATION OF TRUST
Dated as of February 6, 1995
TABLE OF CONTENTS
PAGE
ARTICLE I--Name and Definitions 1
Section 1.1 Name 1
Section 1.2 Definitions 1
ARTICLE II--Trustees3
Section 2.1 Number of Trustees 3
Section 2.2 Term of Office of Trustees 3
Section 2.3 Resignation and Appointment of Trustees 4
Section 2.4 Vacancies 4
Section 2.5 Delegation of Power to Other Trustees 5
ARTICLE III--Powers of Trustees 5
Section 3.1 General 5
Section 3.2 Investments 6
Section 3.3 Legal Title 7
Section 3.4 Issuance and Repurchase of Securities 8
Section 3.5 Borrowing Money; Lending Trust Property 8
Section 3.6 Delegation; Committees 8
Section 3.7 Collection and Payment 8
Section 3.8 Expenses 8
Section 3.9 Manner of Acting; By-Laws 9
Section 3.10 Miscellaneous Powers 9
Section 3.11 Principal Transactions 10
Section 3.12 Trustees and Officers as Shareholders 10
ARTICLE IV--Investment Adviser, Distributor, Administrator,
Transfer Agent and Shareholder Servicing Agents 11
Section 4.1 Investment Adviser 11
Section 4.2 Distributor 12
Section 4.3 Administrator 12
Section 4.4 Transfer Agent and Shareholder
Servicing Agents 12
Section 4.5 Parties to Contract 12
ARTICLE V--Limitations of Liability of Shareholders, Trustees and
Others 13
Section 5.1 No Personal Liability of Shareholders,
Trustees, etc. 13
Section 5.2 Non-Liability of Trustees, etc. 14
Section 5.3 Mandatory Indemnification; Insurance 14
Section 5.4 No Bond Required of Trustees 16
Section 5.5 No Duty of Investigation; Notice in Trust
Instruments, etc. 16
Section 5.6 Reliance on Experts, etc. 16
ARTICLE VI--Shares of Beneficial Interest 17
Section 6.1 Beneficial Interest 17
Section 6.2 Rights of Shareholders 17
Section 6.3 Trust Only 18
Section 6.4 Issuance of Shares 18
Section 6.5 Register of Shares 18
Section 6.6 Transfer of Shares 19
Section 6.7 Notices 19
Section 6.8 Voting Powers 19
Section 6.9 Series Designation 20
ARTICLE VII--Redemptions 23
Section 7.1 Redemptions 23
Section 7.2 Suspension of Right of Redemption 23
Section 7.3 Disclosure of Holding 24
Section 7.4 Redemptions of Accounts of Less than
Minimum Amount 24
ARTICLE VIII--Determination of Net Asset Value, Net Income and
Distributions25
ARTICLE IX--Duration; Termination of Trust; Amendment;
Mergers, etc. 25
Section 9.1 Duration 25
Section 9.2 Termination of Trust 25
Section 9.3 Amendment Procedure 26
Section 9.4 Merger, Consolidation and Sale of Assets 28
Section 9.5 Incorporation, Reorganization 28
Section 9.6 Incorporation or Reorganization of Series 29
ARTICLE X--Reports to Shareholders and Shareholder
Communications 29
ARTICLE XI--Miscellaneous 29
Section 11.1 Filing 29
Section 11.2 References and Headings 30
Section 11.3 Governing Law 30
Section 11.4 Counterparts 30
Section 11.5 Reliance by Third Parties 30
Section 11.6 Provisions in Conflict with Law or Regulations 30
Section 11.7 Principal Office and Registered Agent 31
APPENDIX I--Series Designation 33
<PAGE>
DECLARATION OF TRUST
OF
GRANDVIEW INVESTMENT TRUST
__________________________________
Dated as of February 6, 1995
__________________________________
WHEREAS, the Trustees desire to establish a trust for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable Shares of Beneficial Interest (par value
$0.0001 per share) ("Shares") issued in one or more series as hereinafter
provided; and
NOW THEREFORE, the Trustees and any successor Trustees elected or appointed
in accordance with this Declaration of Trust hereby declare that all money and
property contributed to the trust established hereunder shall be held and
managed in trust for the benefit of holders, from time to time, of the Shares
issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is "GrandView
Investment Trust."
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means a party furnishing services to the Trust
pursuant to any contract described in Section 4.3 hereof.
(b) "By-Laws" means the By-laws referred to in Section 3.9 hereof, as
amended from time to time.
(c) "Commission" has the meaning given that term in the 1940 Act.
(d) "Custodian" means a party employed by the Trust to furnish services
as described in Article X of the By-Laws.
(e) "Declaration" means this Declaration of Trust as amended or restated
from time to time. Reference in this Declaration of Trust to "Declaration,"
"hereof," "herein" and "hereunder" shall be deemed to refer to this
Declaration rather than the article or section in which such words appear.
(f) "Distributor" means a party furnishing services to the Trust pursuant
to any contract described in Section 4.2 hereof.
(g) "Interested Person" has the meaning given that term in the 1940 Act.
(h) "Investment Adviser" means a party furnishing services to the Trust
pursuant to any contract described in Section 4.1 hereof.
(i) "Majority Shareholder Vote" has the same meaning as the phrase "vote
of a majority of the outstanding voting securities" as defined in the 1940
Act, except that such term may be used herein with respect to the Shares of
the Trust as a whole or the Shares of any particular series, as the context
may require.
(j) "1940 Act" means the Investment Company Act of 1940 (and any
successor statute) and the Rules and Regulations thereunder, as amended from
time to time.
(k) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not legal
entities, and governments and agencies and political subdivisions thereof,
whether domestic or foreign.
(1) "Shareholder" means a record owner of outstanding Shares.
(m) "Shares" means the Shares of Beneficial Interest into which the
beneficial interest in the Trust shall be divided from time to time or, when
used in relation to any particular series of Shares established by the
Trustees pursuant to Section 6.9 hereof, equal proportionate transferable
units into which such series of Shares shall be divided from time to time.
The term "Shares" includes fractions of Shares as well as whole Shares.
(n) "Shareholder Servicing Agent" means a party furnishing services to
the Trust pursuant to any shareholder servicing contract described in Section
4.4 hereof.
(o) "Transfer Agent" means a party furnishing services to the Trust
pursuant to any transfer agency contract described in Section 4.4 hereof.
(p) "Trust" refers to the Massachusetts voluntary association established
by this Declaration.
(q) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees, including, without limitation, any and all property
allocated or belonging to any series of Shares pursuant to Section 6.9 hereof.
(r) "Trustees" means the persons who have signed the Declaration, so long
as they shall continue in office in accordance with the terms hereof, and all
other persons who may from time to time be duly elected or appointed,
qualified and serving as Trustees in accordance with the provisions hereof,
and reference herein to a Trustee or the Trustees shall refer to such person
or persons in their capacity as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by a majority of the Trustees,
provided, however, that the number of Trustees shall in no event be less than
three nor more than 15. Except as determined from time to time by resolution
of the Trustees, no decrease in the number of Trustees shall have the effect
of removing any Trustee from office prior to the expiration of his term, but
the number of Trustees may be decreased in conjunction with the removal of a
Trustee pursuant to Section 2.2 hereof.
Section 2.2. Term of Office of Trustees. Subject to the provisions of
Section 16(a) of the 1940 Act, the Trustees shall hold office during the
lifetime of this Trust and until its termination as hereinafter provided;
except that (a) any Trustee may resign his trust (without need for prior or
subsequent accounting) by an instrument in writing signed by him and delivered
to the other Trustees, which shall take effect upon such delivery or upon such
later date as is specified therein; (b) any Trustee may be removed with cause,
at any time by written instrument signed by at least two-thirds of the
remaining Trustees, specifying the date when such removal shall become
effective; (c) any Trustee who has attained a mandatory retirement age
established pursuant to any written policy adopted from time to time by at
least two-thirds of the Trustees shall, automatically and without action of
such Trustee or the remaining Trustees, be deemed to have retired in
accordance with the terms of such policy, effective as of the date determined
in accordance with such policy; (d) any Trustee who has become incapacitated
by illness or injury as determined by a majority of the other Trustees, may be
retired by written instrument signed by a majority of the other Trustees,
specifying the date of his retirement; and (e) a Trustee may be removed at any
meeting of Shareholders by a vote of two-thirds of the outstanding Shares.
For purposes of the foregoing clause (b), the term "cause" shall include, but
not be limited to, willful misconduct, dishonesty, fraud, a felony conviction,
or failure to comply with such written policies as may from time to time be
adopted by at least two-thirds of the Trustees with respect to the conduct of
Trustees and attendance at meetings. Upon the resignation, retirement or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall
execute and deliver such documents as the remaining Trustees shall require for
the purpose of conveying to the Trust or the remaining Trustees any Trust
Property held in the name of the resigning, retiring or removed Trustee. Upon
the incapacity or death of any Trustee, his legal representative shall execute
and deliver on his behalf such documents as the remaining Trustees shall
require as provided in the preceding sentence.
Section 2.3. Resignation and Appointment of Trustees. In case of the
declination, death, resignation, retirement, removal or inability of any of
the Trustees, or in case a vacancy shall, by reason of an increase in number,
or for any other reason, exist, a majority of the remaining Trustees shall
fill such vacancy by appointing such other individual as they in their
discretion shall see fit. Any such appointment shall not become effective,
however, until the person named in the written instrument of appointment shall
have accepted in writing such appointment and agreed in writing to be bound by
the terms of the Declaration. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act.
Section 2.4. Vacancies. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall not operate
to annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided in Section 2.3, or the number
of Trustees as fixed is reduced, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by the Declaration.
Section 2.5. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six months at
any one time to any other Trustee or Trustees; provided that in no case shall
fewer than two Trustees personally exercise the powers granted to the Trustees
under the Declaration except as herein otherwise expressly provided.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the Commonwealth of
Massachusetts, in any and all states of the United States of America, in the
District of Columbia, and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities of the
United States of America and of foreign governments, and to do all such other
things and execute all such instruments as the Trustees deem necessary, proper
or desirable in order to promote the interests of the Trust although such
things are not herein specifically mentioned. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of the Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
The Trustees in all instances shall act as principals, and are and shall be
free from the control of the Shareholders. The Trustees shall have full power
and authority to do any and all acts and to make and execute any and all
contracts and instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The Trustees shall not in any
way be bound or limited by present or future laws or customs in regard to
Trust investments, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
accomplish the purposes of this Trust.
The Trust shall be of the type commonly called a Massachusetts business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2. Investments. (a) The Trustees shall have the power:
(i) to conduct, operate and carry on the business of an investment
company;
(ii) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, own, hold, pledge, sell, assign, transfer, exchange, distribute, lend
or otherwise deal in or dispose of U.S. and foreign currencies, any form of
gold or other precious metal, commodity contracts, any form of option
contract, contracts for the future acquisition or delivery of fixed income or
other securities, shares of, or any other interest in, any investment company
as defined in the Investment Company Act of 1940, and securities and related
derivatives of every nature and kind, including, without limitation, all types
of bonds, debentures, stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers acceptances,
and other securities of any kind, issued, created, guaranteed or sponsored by
any and all Persons, including, without limitation,
(A) states, territories and possessions of the United States and the
District of Columbia and any political subdivision, agency or instrumentality
of any such Person,
(B) the U.S. Government, any foreign government, any political
subdivision or any agency or instrumentality of the U.S. Government, any
foreign government or any political subdivision of the U.S. Government or any
foreign government,
(C) any international or supranational instrumentality,
(D) any bank or savings institution, or
(E) any corporation, trust, partnership or other organization organized
under the laws of the United States or of any state, territory or possession
thereof, or under any foreign law;
or in "when issued" contracts for any such securities, to retain Trust assets
in cash and from time to time to change the securities or obligations in which
the assets of the Trust are invested; and to exercise any and all rights,
powers and privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation, the
right to consent and otherwise act with respect thereto, with power to
designate one or more Persons to exercise any of said rights, powers and
privileges in respect of any of said investments;
(iii) to hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form; or either in its own
name or in the name of a custodian or a nominee or nominees, subject in either
case to proper safeguards according to the usual practice of Massachusetts
trust companies or investment companies;
(iv) to definitively interpret the investment objectives, policies and
limitations of the Trust or any series; and
(v) to carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary, proper or desirable
for the accomplishment of any purpose or the attainment of any object or the
furtherance of any power herein before set forth, and to do every other act or
thing incidental or appurtenant to or connected with the aforesaid purposes,
objects or powers.
(b) The Trustees shall not be limited to investing in securities or
obligations maturing before the possible termination of the Trust, nor shall
the Trustees be limited by any law limiting the investments which may be made
by fiduciaries.
(c) Notwithstanding any other provision of this Declaration to the
contrary, the Trustees shall have the power in their discretion without any
requirement of approval by Shareholders to either invest all or a portion of
the Trust Property, or sell all or a portion of the Trust Property and invest
the proceeds of such sales, in another investment company that is registered
under the 1940 Act.
Section 3.3. Legal Title. Legal title to all Trust Property shall be
vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust, or in the name of
any other Person or nominee, on such terms as the Trustees may determine. The
right, title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee, such Trustee shall automatically
cease to have any right, title or interest in any of the Trust Property, and
the right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed
and delivered.
Section 3.4. Issuance and Repurchase of Securities. The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in Shares and,
subject to the provisions set forth in Articles VII, VIII and IX and Section
6.9 hereof, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds of the Trust or other Trust
Property whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts governing
business corporations.
Section 3.5. Borrowing Money; Lending Trust Property. The Trustees shall
have power to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the Trust
Property, to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other Person and to lend Trust
Property.
Section 3.6. Delegation; Committees. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees,
independent contractors or agents of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Trustees or otherwise as the Trustees may deem expedient.
Section 3.7. Collection and Payment. Subject to Section 6.9
hereof, the Trustees shall have power to collect all property due to the
Trust; to pay all claims, including taxes, against the Trust Property;
to prosecute, arbitrate, defend, compromise or abandon any claims
relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the
Trust; and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. Subject to Section 6.9 hereof, the
Trustees shall have the power to incur and pay any expenses which in the
opinion of the Trustees are necessary or incidental to carry out any of
the purposes of the Declaration, and to pay reasonable compensation from
the funds of the Trust to themselves as Trustees. The Trustees shall
fix the compensation of all officers, employees and Trustees. The
Trustees shall be reimbursed from the Trust estate or the assets
belonging to the appropriate series for their expenses and disbursements
and for all losses and liabilities by them incurred in administering the
Trust; and for the payment of such expenses, disbursements, losses and
liabilities, the Trustees shall have a lien on the assets belonging to
the appropriate series prior to any rights of interests of the
Shareholders thereto.
Section 3.9. Manner of Acting; By-Laws. Except as otherwise
provided herein or in the By-Laws, any action to be taken by the
Trustees may be taken by a majority of the Trustees present at a meeting
of Trustees at which a quorum (as determined in the By-Laws) is present,
including any meeting held by means of a conference telephone circuit or
similar communications equipment by means of which all persons
participating in the meeting can hear each other, or by written consents
of a majority of the Trustees. The Trustees may adopt By-Laws not
inconsistent with this Declaration to provide for the conduct of the
business of the Trust and may amend or repeal such By-Laws to the extent
such power is not reserved to the Shareholders.
Section 3.10. Miscellaneous Powers. The Trustees shall have the
power to: (a) employ or contract with such Persons as the Trustees may
deem desirable for the transaction of the business of the Trust; (b)
enter into joint ventures, partnerships and any other combinations or
associations; (c) remove Trustees or fill vacancies in or add to their
number, elect and remove such officers and appoint and terminate such
agents or employees as they consider appropriate, and appoint from their
own number, and terminate, any one or more committees which may exercise
some or all of the power and authority of the Trustees as the Trustees
may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, the Administrator,
Trustees, officers, employees, agents, the Investment Adviser, the
Distributor, selected dealers or independent contractors of the Trust
against all claims arising by reason of holding any such position or by
reason of any action taken or omitted by any such Person in such
capacity, whether or not constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such
liability; (e) establish pension, profit-sharing, Share purchase, and
other retirement, incentive and benefit plans for any Trustees,
officers, employees or agents of the Trust; (f) to the extent permitted
by law, indemnify any person with whom the Trust has dealings, including
any Investment Adviser, Administrator, Custodian, Distributor, Transfer
Agent, Shareholder Servicing Agent, any dealer, or any other agent or
independent contractor, to such extent as the Trustees shall determine;
(g) guarantee indebtedness or contractual obligations of others; (h)
determine and change the fiscal year of the Trust and the method by
which its accounts shall be kept; (i) adopt a seal for the Trust,
provided, that the absence of such seal shall not impair the validity of
any instrument executed on behalf of the Trust; (j) set record dates for
any purpose; (k) subject to Section 9.4 and Section 9.6, merge or
consolidate the Trust with any other corporation, association, trust or
other organization and sell, convey, transfer, or lease all or
substantially all of the assets of the Trust; and (l) set apart, from
time to time, out of any funds of the Trust a reserve or reserves for
any proper purpose, and abolish any such reserve.
Section 3.11. Principal Transactions. Except in transactions
permitted by the 1940 Act, or any order of exemption issued by the
Commission, the Trustees shall not, on behalf of the Trust, buy any
securities (other than Shares) from or sell any securities (other than
Shares) to, or lend any assets of the Trust to, any Trustee or officer
of the Trust or any firm of which any such Trustee or officer is a
member acting as principal, or have any such dealings with any
Investment Adviser, Administrator, Shareholder Servicing Agent,
Custodian (other than repurchase agreements), Distributor or Transfer
Agent or with any Interested Person of such Person; but the Trust may,
upon customary terms, employ any such Person, or firm or company in
which such Person is an Interested Person, as broker, legal counsel,
registrar, transfer agent, dividend disbursing agent or custodian.
Section 3.12. Trustees and Officers as Shareholders. Except as
hereinafter provided, no officer, Trustee or member of any advisory
board of the Trust, and no member, partner, officer, director or trustee
of the Investment Adviser, Administrator or of the Distributor, and no
Investment Adviser, Administrator or Distributor of the Trust, shall
take long or short positions in the securities issued by the Trust. The
foregoing provision shall not prevent:
(a) The Distributor from purchasing Shares from the Trust if
such purchases are limited (except for reasonable allowances for
clerical errors, delays and errors of transmission and cancellation of
orders) to purchases for the purpose of filling orders for Shares
received by the Distributor and provided that orders to purchase from
the Trust are entered with the Trust or the Custodian promptly upon
receipt by the Distributor of purchase orders for Shares, unless the
Distributor is otherwise instructed by its customer;
(b) The Distributor from purchasing Shares as agent for the
account of the Trust;
(c) The purchase from the Trust or from the Distributor of
Shares by any officer, Trustee or member of any advisory board of the
Trust or by any member, partner, officer, director or trustee of the
Investment Adviser or of the Distributor at a price not lower than the
net asset value of the Shares at the moment of such purchase, provided
that any such sales are only to be made pursuant to a uniform offer
described in the current prospectus or statement of additional
information for the Shares being purchased; or
(d) The Investment Adviser, the Distributor, the Administrator,
or any of their officers, partners, directors or trustees from
purchasing Shares prior to the effective date of the Trust's
Registration Statement under the Securities Act of 1933, as amended,
relating to the Shares.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR, ADMINISTRATOR, TRANSFER AGENT AND
SHAREHOLDER SERVICING AGENTS
Section 4.1. Investment Adviser. Subject to a Majority
Shareholder Vote of the Shares of each series affected thereby, the
Trustees may in their discretion from time to time enter into one or
more investment advisory or management contracts whereby the other party
to each such contract shall undertake to furnish the Trust such
management, investment advisory, statistical and research facilities and
services, promotional activities, and such other facilities and
services, if any, with respect to one or more series of Shares, as the
Trustees shall from time to time consider desirable and all upon such
terms and conditions as the Trustees may in their discretion determine.
Notwithstanding any provision of the Declaration, the Trustees may
delegate to the Investment Adviser authority (subject to such general or
specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales, loans or exchanges of assets of the Trust on
behalf of the Trustees or may authorize any officer, employee or Trustee
to effect such purchases, sales, loans or exchanges pursuant to
recommendations of the Investment Adviser (and all without further
action by the Trustees). Any of such purchases, sales, loans or
exchanges shall be deemed to have been authorized by all the Trustees.
Such services may be provided by one or more Persons.
Upon termination of any contract with GrandView Advisers, Inc., or
any corporation affiliated therewith, acting as investment adviser or
manager, the Trustees will promptly change the name of the Trust (and
any series thereof of which GrandView Advisers, Inc. or any corporation
affiliated therewith is not then acting as investment adviser or
manager) to a name which does not include "GrandView" or any
approximation or abbreviation thereof.
Section 4.2. Distributor. The Trustees may in their discretion
from time to time enter into one or more distribution contracts
providing for the sale of Shares whereby the Trust may either agree to
sell the Shares to the other party to any such contract or appoint any
such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may
in their discretion determine, provided that such terms and conditions
are not inconsistent with the provisions of the Declaration or the By-
Laws; and such contract may also provide for the repurchase or sale of
Shares by such other party as principal or as agent of the Trust and may
provide that such other party may enter into selected dealer and sales
agreements with registered securities dealers and depository
institutions to further the purpose of the distribution or repurchase of
the Shares. Such services may be provided by one or more Persons.
Section 4.3. Administrator. The Trustees may in their discretion
from time to time enter into one or more administrative services
contracts whereby the other party to each such contract shall undertake
to furnish such administrative services to the Trust as the Trustees
shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine, provided
that such terms and conditions are not inconsistent with the provisions
of this Declaration or the By-Laws. Such services may be provided by
one or more Persons.
Section 4.4. Transfer Agent and Shareholder Servicing Agents.
The Trustees may in their discretion from time to time enter into one or
more transfer agency and shareholder servicing contracts whereby the
other party to each such contract shall undertake to furnish such
transfer agency and/or shareholder services to the Trust or to
Shareholders of the Trust as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the
Trustees may in their discretion determine, provided that such terms and
conditions are not inconsistent with the provisions of this Declaration
or the By-Laws. Such services may be provided by one or more Persons.
Except as otherwise provided in the applicable shareholder servicing
contract, a Shareholder Servicing Agent shall be deemed to be the record
owner of outstanding Shares beneficially owned by customers of such
Shareholder Servicing Agent for whom it is acting pursuant to such
shareholder servicing contract.
Section 4.5. Parties to Contract. Any contract of the character
described in Section 4.1, 4.2, 4.3 or 4.4 of this Article IV or any
Custodian contract as described in Article X of the By-Laws may be
entered into with any Person, although one or more of the Trustees or
officers of the Trust may be an officer, partner, director, trustee,
shareholder, or member of such other party to the contract, or otherwise
interested in such contract, and no such contract shall be invalidated
or rendered voidable by reason of the existence of any such
relationship; nor shall any Person holding such relationship be liable
merely by reason of such relationship for any loss or expense to the
Trust under or by reason of any such contract or accountable for any
profit realized directly or indirectly therefrom, provided that the
contract when entered into was not inconsistent with the provisions of
this Article IV or the By-Laws. The same Person may be the other party
to contracts entered into pursuant to Sections 4.1, 4.2, 4.3 and 4.4
above or any Custodian contract as described in Article X of the By-
Laws, and any individual may be financially interested or otherwise
affiliated with Persons who are parties to any or all of the contracts
mentioned in this Section 4.5.
ARTICLE V
LIMITATIONS ON LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders, Trustees,
etc. No Shareholder shall be subject to any personal liability
whatsoever to any Person in connection with Trust Property or the acts,
obligations or affairs of the Trust. No Trustee, officer or employee of
the Trust shall be subject to any personal liability whatsoever to any
Person, other than the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust and all such Persons shall
look solely to the Trust Property for satisfaction of claims of any
nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer or employee, as such, of the Trust, is
made a party to any suit or proceeding to enforce any such liability, he
shall not, on account thereof, be held to any personal liability. The
Trust shall indemnify and hold each Shareholder harmless from and
against all claims and liabilities to which such Shareholder may become
subject by reason of his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses reasonably
incurred by him in connection with any such claim or liability. The
rights accruing to a Shareholder under this Section 5.1 shall not
exclude any other right to which such Shareholder may be lawfully
entitled, nor shall anything herein contained restrict the right of the
Trust to indemnify or reimburse a Shareholder in any appropriate
situation even though not specifically provided herein. Notwithstanding
any other provision of this Declaration to the contrary, no Trust
Property shall be used to indemnify or reimburse any Shareholder of any
Shares of any series other than Trust Property allocated or belonging to
that series.
Section 5.2. Non-Liability of Trustees, etc. No Trustee, officer
or employee of the Trust shall be liable to the Trust or to any
Shareholder, Trustee, officer, employee, or agent thereof for any action
or failure to act (including without limitation the failure to compel in
any way any former or acting Trustee to redress any breach of trust), or
for any error of judgment or mistake of fact or law, except for his own
bad faith, willful misfeasance, gross negligence or reckless disregard
of his duties.
Section 5.3. Mandatory Indemnification; Insurance. (a) Subject
to the exceptions and limitations contained in paragraph (b) below:
(i) every person who is or has been a Trustee, officer or
employee of the Trust shall be indemnified by the Trust, to the fullest
extent permitted by law (including the 1940 Act) as currently in effect
or as hereafter amended, against all liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action,
suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee, officer or employee and
against amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit" or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened; and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee,
officer or employee:
(i) against any liability to the Trust or the Shareholders by
reason of a final adjudication by the court or other body before which
the proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(iii) in the event of a settlement involving a payment by a
Trustee, officer or employee or other disposition not involving a final
adjudication as provided in paragraph (b) (i) or (b) (ii) above
resulting in a payment by a Trustee, officer or employee, unless there
has been either a determination that such Trustee, officer or employee
did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office
by the court or other body approving the settlement or other disposition
or by a reasonable determination, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that he did
not engage in such conduct:
(a) by vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested Trustees
then in office act on the matter); or
(b) by written opinion of independent legal counsel.
(c) Subject to the provisions of the 1940 Act, the Trust may
maintain insurance for the protection of the Trust Property, its present
or former Shareholders, Trustees, officers, employees, independent
contractors and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability (whether or not the Trust
would have the power to indemnify such Persons against such liability),
and such other insurance as the Trustees in their sole judgment shall
deem advisable.
(d) The rights of indemnification herein provided shall be
severable, shall not affect any other rights to which any Trustee,
officer or employee may now or hereafter be entitled, shall continue as
to a Person who has ceased to be such a Trustee, officer or employee and
shall inure to the benefit of the heirs, executors and administrators of
such Person. Nothing contained herein shall affect any rights to
indemnification to which personnel other than Trustees, officers and
employees may be entitled by contract or otherwise under law.
(e) Expenses of preparation and presentation of a defense to any
claim, action, suit, or proceeding of the character described in
paragraph (a) of this Section 5.3 shall be advanced by the Trust prior
to final disposition thereof upon receipt of an undertaking by or on
behalf of the recipient to repay such amount if it is ultimately
determined that he is not entitled to indemnification under this Section
5.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses
arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter) or an independent legal counsel in a written
opinion, shall determine, based upon a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.
As used in this Section 5.3 a "Disinterested Trustee" is one (i)
who is not an "Interested Person" of the Trust (including anyone who has
been exempted from being an "Interested Person" by any rule, regulation
or order of the Commission), and (ii) against whom none of such actions,
suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or had been pending.
Section 5.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any
of his duties hereunder.
Section 5.5. No Duty of Investigation; Notice in Trust
Instruments, etc. No purchaser, lender, Shareholder Servicing Agent,
Transfer Agent or other Person dealing with the Trustees or any officer,
employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other security of
the Trust or undertaking, and every other act or thing whatsoever
executed in connection with the Trust shall be conclusively presumed to
have been executed or done by the executors thereof only in their
capacity as Trustees under the Declaration or in their capacity as
officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking made or issued by the Trustees shall recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of any such instrument are not
binding upon any of the Trustees or Shareholders individually, but bind
only the trust estate, and may contain any further recital which they or
he may deem appropriate, but the omission of such recital shall not
operate to bind any of the Trustees or Shareholders individually. The
Trustees shall at all times maintain insurance for the protection of the
Trust Property, Shareholders, Trustees, officers, employees and agents
in such amount as the Trustees shall deem adequate to cover possible
tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
Section 5.6. Reliance on Experts, etc. Each Trustee and officer
or employee of the Trust shall, in the performance of his duties, be
fully and completely justified and protected with regard to any act or
any failure to act resulting from reliance in good faith upon the books
of account or other records of the Trust, upon an opinion of counsel, or
upon reports made to the Trust by any of its officers or employees or by
the Investment Adviser, the Distributor, Transfer Agent, any Shareholder
Servicing Agent, selected dealers, accountants, appraisers or other
experts or consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the
beneficiaries hereunder may be divided into transferable Shares, which
may be divided into one or more series as provided in Section 6.9
hereof. Each such series shall have such class or classes of Shares as
the Trustees may from time to time determine. The number of Shares
authorized hereunder is unlimited. The Trustees may divide or combine
the Shares into a greater or lesser number, and may classify or
reclassify any unissued Shares into one or more series or classes of
Shares. All Shares issued hereunder including, without limitation,
Shares issued in connection with a dividend in Shares or a split of
Shares, shall be fully paid and non-assessable.
Section 6.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business
hereinbefore described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial
interest conferred by their Shares, and they shall have no right to call
for any partition or division of any property, profits, rights or
interests of the Trust nor can they be called upon to assume any losses
of the Trust or suffer an assessment of any kind by virtue of their
ownership of Shares. The Shares shall be personal property giving only
the rights specifically set forth in the Declaration. The Shares shall
not entitle the holder to preference, preemptive, appraisal, conversion
or exchange rights, except as the Trustees may determine with respect to
any series of Shares. Every Shareholder by virtue of having become a
Shareholder shall be held expressly to have assented and agreed to the
terms of this Declaration and to have become a party hereto. The death
of a Shareholder during the continuance of the Trust shall not operate
to terminate the Trust nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said
decedent under this Trust.
Section 6.3. Trust Only. It is the intention of the Trustees to
create only the relationship of Trustee and beneficiary between the
Trustees and the Shareholders. It is not the intention of the Trustees
to create a general partnership, limited partnership, joint stock
association, corporation, bailment or any form of legal relationship
other than a trust. Nothing in the Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 6.4. Issuance of Shares. The Trustees, in their
discretion may, from time to time without vote of the Shareholders,
issue Shares, in addition to the then issued and outstanding Shares and
Shares held in the treasury, to such party or parties and for such
amount and type of consideration, including cash or property, and on
such terms as the Trustees may deem best, and may in such manner acquire
other assets (including the acquisition of assets subject to, and in
connection, with the assumption of liabilities) and businesses. In
connection with any issuance of Shares, the Trustees may issue
fractional Shares. The Trustees may from time to time divide or combine
the Shares of any series into a greater or lesser number without thereby
changing their proportionate beneficial interests in Trust Property
allocated or belonging to such series. Contributions to the Trust may be
accepted for, and Shares shall be redeemed as, whole Shares and/or
fractions of a Share.
Section 6.5. Register of Shares. A register or registers shall
be kept at the principal office of the Trust or at an office of the
Transfer Agent (and/or any sub-transfer agent which may be a Shareholder
Servicing Agent) which register or registers, taken together, shall
contain the names and addresses of the Shareholders and the number of
Shares held by them respectively and a record of all transfers thereof.
Such register or registers shall be conclusive as to who are the holders
of the Shares and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of
Shareholders. No Shareholder shall be entitled to receive payment of
any dividend or distribution, nor to have notice given to him as herein
or in the By-Laws provided, until he has given his address to the
Transfer Agent, a sub-transfer agent, or such other officer or agent of
the Trustees as shall keep the said register for entry thereon. It is
not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance
of Share certificates and promulgate appropriate rules and regulations
as to their use.
The Trust shall be entitled to treat the holder of record of any
Share or Shares as the holder in fact thereof, and shall not be bound to
recognize any equitable or other claim of interest in such Share or
Shares on the part of any other person except as may be otherwise
expressly provided by law.
Section 6.6. Transfer of Shares. Shares shall be transferable on
the records of the Trust only by the record holder thereof or by his
agent thereunto authorized in writing, upon delivery to the Trustees,
the Transfer Agent or a sub-transfer agent, of a duly executed
instrument of transfer together with any certificate or certificates (if
issued) for such Shares and such evidence of the genuineness of each
such execution and authorization and of other matters as may reasonably
be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of
record shall be deemed to be the holder of such Shares for all purposes
hereunder and neither the Trustees nor any Transfer Agent, a sub-
transfer agent or registrar nor any officer, employee or agent of the
Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the
death, bankruptcy, or incompetence of any Shareholder, or otherwise by
operation of law, shall be recorded on the register of Shares as the
holder of such Shares upon production of the proper evidence thereof to
the Trustees, the Transfer Agent or a sub-transfer agent; but until such
record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent, sub-transfer agent or registrar nor any
officer or agent of the Trust shall be affected by any notice of such
death, bankruptcy or incompetence, or other operation of law.
Section 6.7. Notices. Any and all notices to which any
Shareholder may be entitled and any and all communications shall be
deemed duly served or given if mailed, postage prepaid, addressed to any
Shareholder of record at his last known address as recorded on the
register of the Trust.
Section 6.8. Voting Powers. The Shareholders shall have power to
vote only (i) for the election of Trustees as provided in Section 16 of
the 1940 Act, (or any other applicable current or successor provision),
(ii) for the removal of Trustees as provided in Section 2.2 hereof (iii)
with respect to any investment advisory or management contract as
provided in Section 4.1 hereof, (iv) with respect to termination of the
Trust as provided in Section 9.2 hereof, (v) with respect to any
amendment of this Declaration to the extent and as provided in Section
9.3 hereof, (vi) with respect to any merger, consolidation or sale of
assets as provided in Sections 9.4 and 9.6 hereof, (vii) with respect to
incorporation of the Trust or any series to the extent and as provided
in Sections 9.5 and 9.6 hereof, (viii) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or
not a court action, proceeding or claim should or should not be brought
or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (ix) with respect to such additional matters
relating to the Trust as may be required by the Declaration, the By-Laws
or any registration of the Trust with the Commission (or any successor
agency) or any state, or as the Trustees may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote, except that Shares held
in the treasury of the Trust shall not be voted. Shares shall be voted
by individual series on any matter submitted to a vote of the
Shareholders of the Trust except as provided in Section 6.9(g) hereof.
There shall be no cumulative voting in the election of Trustees. Until
Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required by law, the Declaration or the By-Laws
to be taken by Shareholders. The By-Laws may include further provisions
for Shareholder votes and meetings and related matters.
Section 6.9. Series Designation. As set forth in Appendix I
hereto, the Trustees have authorized the division of Shares into series,
as designated and established pursuant to the provisions of Appendix I
and this Section 6.9. The Trustees, in their discretion, may authorize
the division of Shares into one or more additional series, and the
different series shall be established and designated, and the variations
in the relative rights, privileges and preferences as between the
different series shall be fixed and determined by the Trustees upon and
subject to the following provisions:
(a) All Shares shall be identical except that there may be such
variations as shall be fixed and determined by the Trustees between
different series as to purchase price, right of redemption and the
price, terms and manner of redemption, and special and relative rights
as to dividends and on liquidation.
(b) The number of authorized Shares and the number of Shares of
each series that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously
issued and reacquired of any series into one or more series that may be
established and designated from time to time. The Trustees may hold as
treasury shares (of the same or some other series), reissue for such
consideration and on such terms as they may determine, or cancel any
Shares of any series reacquired by the Trust at their discretion from
time to time.
(c) All consideration received by the Trust for the issuance or
sale of Shares of a particular series, together with all assets in which
such consideration is invested or reinvested, all income and earnings
thereon, profits therefrom, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that series
for all purposes, subject only to the rights of creditors of such
series, and shall be so recorded upon the books of account of the Trust.
In the event that there are any assets, income, earnings, profits,
proceeds, funds or payments which are not readily identifiable as
belonging to any particular series, the Trustees shall allocate them to
and among any one or more of the series established and designated from
time to time in such manner and on such basis as the Trustees, in their
sole discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
series for all purposes. No Shareholder of any particular series shall
have any claim on or right to any assets allocated or belonging to any
other series of Shares.
(d) The assets belonging to each particular series shall be
charged with the liabilities of the Trust in respect of that series and
all expenses, costs, charges and reserves attributable to that series,
and any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular
series shall be allocated and charged by the Trustees to and among any
one or more of the series established and designated from time to time
in such manner and on such basis as the Trustees, in their sole
discretion, deem fair and equitable. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all series for all
purposes. The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders. Under no circumstances shall the assets allocated or
belonging to any particular series be charged with liabilities,
expenses, costs, charges or reserves attributable to any other series.
All Persons who have extended credit which has been allocated to a
particular series, or who have a claim or contract which has been
allocated to any particular series, shall look only to the assets of
that particular series for payment of such credit, claim or contract.
(e) The power of the Trustees to invest and reinvest the Trust
Property allocated or belonging to any particular series shall be
governed by Section 3.2 hereof unless otherwise provided in the
instrument of the Trustees establishing such series which is hereinafter
described.
(f) Each Share of a series shall represent a beneficial interest
in the net assets allocated or belonging to such series only, and such
interest shall not extend to the assets of the Trust generally.
Dividends and distributions on Shares of a particular series may be paid
with such frequency as the Trustees may determine, which may be monthly
or otherwise, pursuant to a standing vote or votes adopted only once or
with such frequency as the Trustees may determine, to the Shareholders
of that series only, from such of the income and capital gains, accrued
or realized, from the assets belonging to that series, as the Trustees
may determine, after providing for actual and accrued liabilities
belonging to that series. All dividends and distributions on Shares of
a particular series shall be distributed pro rata to the Shareholders of
that series in proportion to the number of Shares of that series held by
such Shareholders at the date and time of record established for the
payment of such dividends or distributions. Shares of any particular
series of the Trust may be redeemed solely out of Trust Property
allocated or belonging to that series. Upon liquidation or termination
of a series of the Trust, Shareholders of such series shall be entitled
to receive a pro rata share of the net assets of such series only.
(g) Notwithstanding any provision hereof to the contrary, on any
matter submitted to a vote of the Shareholders of the Trust, all Shares
then entitled to vote shall be voted by individual series, except that
(i) when required by the 1940 Act to be voted in the aggregate, Shares
shall not be voted by individual series, and (ii) when the Trustees have
determined that the matter affects only the interests of Shareholders of
one or more series or classes of Shares of a series, only Shareholders
of such series or class shall be entitled to vote thereon.
(h) The establishment and designation of any series of Shares
shall be effective upon the execution by a majority of the Trustees of
an instrument setting forth such establishment and designation and the
relative rights and preferences of such series (in the case of the
series designated as set forth in Appendix I, such instrument being this
Declaration including such Appendix I), or as otherwise provided in such
instrument, or upon a resolution adopted by a majority of the Trustees
and the execution by an officer of the Trust on behalf of the Trustees
of an instrument setting forth such establishment and designation and
the relative rights and preferences of such series, or as otherwise
provided in such instrument. At any time that there are no Shares
outstanding of any particular series previously established and
designated, the Trustees may by an instrument executed by a majority of
their number abolish that series and the establishment and designation
thereof. Each instrument referred to in this paragraph shall have the
status of an amendment to this Declaration.
(i) Notwithstanding anything in this Declaration to the
contrary, the Trustees may, in their discretion, authorize the division
of Shares of any series into Shares of one or more classes or subseries
of such series. All Shares of a class or a subseries shall be identical
with each other and with the Shares of each other class or subseries of
the same series except for such variations between classes or subseries
as may be approved by the Board of Trustees and be permitted under the
1940 Act or pursuant to any exemptive order issued by the Commission.
ARTICLE VII
REDEMPTIONS
Section 7.1 Redemptions. In case any Shareholder at any time
desires to dispose of his Shares, he may deposit his certificate or
certificates therefor, duly endorsed in blank or accompanied by an
instrument of transfer executed in blank, or if the Shares are not
represented by any certificate, a written request or other such form of
request as the Trustees may from time to time authorize, at the office
of the Transfer Agent or a sub-transfer agent keeping the register of
Shares with respect to such Shareholders, or at the office of any bank
or trust company, either in or outside of the Commonwealth of
Massachusetts, which is a member of the Federal Reserve System and which
the said Transfer Agent or the said sub-transfer agent has designated in
writing for that purpose, together with an irrevocable offer in writing
in a form acceptable to the Trustees to sell the Shares represented
thereby to the Trust at the net asset value per Share thereof (less any
applicable redemption fee or sales charge), next determined after such
deposit as provided in Article VIII hereof. Payment (which may be in
cash or in kind) for said Shares shall be made to the Shareholder within
seven days after the date on which the deposit is made, unless (i) the
date of payment is postponed pursuant to Section 7.2 hereof, or (ii) the
receipt, or verification of receipt, of the purchase price for the
Shares to be redeemed is delayed, in either of which events payment may
be delayed beyond seven days.
Section 7.2 Suspension of Right of Redemption. The Trust may
declare a suspension of the right of redemption or postpone the date of
payment of the redemption proceeds for the whole or any part of any
period (i) during which the New York Stock Exchange is closed other than
customary week-end and holiday closings, (ii) during which trading on
the New York Stock Exchange is restricted, (iii) during which an
emergency exists as a result of which disposal by the Trust of
securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Trust fairly to determine the value of
its net assets, or (iv) during which the Commission for the protection
of Shareholders by order permits the suspension of the right of
redemption or postponement of the date of payment of the redemption
proceeds; provided that applicable rules and regulations of the
Commission shall govern as to whether the conditions prescribed in (ii),
(iii) or (iv) exist. Such suspension shall take effect at such time as
the Trust shall specify but not later than the close of business on the
business day next following the declaration of suspension, and
thereafter there shall be no right of redemption or payment of the
redemption proceeds until the Trust shall declare the suspension at an
end, except that the suspension shall terminate in any event on the
first day on which said stock exchange shall have reopened or the period
specified in (ii) or (iii) shall have expired (as to which, in the
absence of an official ruling by the Commission, the determination of
the Trust shall be conclusive). In the case of a suspension of the
right of redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the net asset value existing
after the termination of the suspension.
Section 7.3. Disclosure of Holding. The Shareholders of the
Trust shall upon demand disclose to the Trustees in writing such
information with respect to direct and indirect ownership of Shares of
the Trust as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), or to
comply with the requirements of any other authority. Upon the failure
of a Shareholder to disclose such information and to comply with such
demand of the Trustees, the Trust shall have the power to redeem such
Shares at a redemption price determined in accordance with Section 7.1
hereof.
Section 7.4 Redemptions of Accounts of Less than Minimum Amount.
The Trustees shall have the power at any time to redeem Shares of any
Shareholder at a redemption price determined in accordance with Section
7.1 hereof if at such time the aggregate net asset value of the Shares
owned by such Shareholder is less than a minimum amount as determined
from time to time and disclosed in a prospectus of the Trust. A
Shareholder shall be notified that the aggregate value of his Shares is
less than such minimum amount and allowed 60 days to make an additional
investment before redemption is processed.
<PAGE>
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
(a) The Trustees may from time to time declare and pay dividends
and other distributions. The Trustees, in their absolute discretion,
may prescribe and shall set forth in the By-Laws or in a duly adopted
vote or votes of the Trustees such bases and times for determining the
per Share net asset value of the Shares or net income, or the
declaration and payment of dividends and distributions, as they may deem
necessary or desirable.
(b) Dividends and other distributions may be declared pursuant
to a standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, and may be payable in Shares of
that series or class thereof, as appropriate, at the election of each
Shareholder of that series or class. All dividends and distributions on
Shares of a particular series shall be distributed pro rata to the
holders of that series in proportion to the number of Shares of that
series held by such payment of such dividends or distributions, except
that such dividends and distributions shall approximately reflect
expenses allocated to a particular class of such series.
(c) Anything in this instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a "stock dividend"
pro rata among the Shareholders of a particular series or of a class
thereof as of the record date of that series.
ARTICLE IX
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 9.1. Duration. The Trust shall continue without
limitation of time but subject to the provisions of this Article IX.
Section 9.2. Termination of Trust. (a) The Trust may be
terminated (i) by a Majority Shareholder Vote of its Shareholders, or
(ii) by the Trustees by written notice to the Shareholders. Any series
of the Trust may be terminated (i) by a Majority Shareholder Vote of the
Shareholders of that series, or (ii) by the Trustees by written notice
to the Shareholders of that series. Upon the termination of the Trust
or any series of the Trust:
(i) The Trust or series of the Trust shall carry on no business
except for the purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the
Trust or series of the Trust and all the powers of the Trustees under
this Declaration shall continue until the affairs of the Trust or
series of the Trust shall have been wound up, including the power to
fulfill or discharge the contracts of the Trust, collect the assets of
the Trust or series of the Trust, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining Trust
Property of the Trust or series of the Trust to one or more Persons at
public or private sale for consideration which may consist in whole or
in part of cash, securities or other property of any kind, discharge or
pay the liabilities of the Trust or series of the Trust, and to do all
other acts appropriate to liquidate the business of the Trust or series
of the Trust; provided, that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all of the Trust
Property of the Trust or series of the Trust shall require Shareholder
approval in accordance with Section 9.4 or 9.6 hereof, respectively; and
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property of the Trust or
series of the Trust, in cash or in kind or partly in cash and partly in
kind, among the Shareholders of the Trust or series of the Trust
according to their respective rights.
(b) After termination of the Trust or series of the Trust and
distribution to the Shareholders of the Trust or series of the Trust as
herein provided, a majority of the Trustees shall execute and lodge
among the records of the Trust an instrument in writing setting forth
the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder with
respect to the Trust or series of the Trust, and the rights and
interests of all Shareholders of the Trust or series of the Trust shall
thereupon cease.
Section 9.3. Amendment Procedure. All rights granted to
Shareholders hereunder are granted subject to a right to amend this
Declaration, except as otherwise provided.
(a) This Declaration may be amended by a Majority Shareholder
Vote of the Shareholders or by any instrument in writing, without a
meeting, signed by a majority of the Trustees and consented to by the
holders of not less than a majority of the Shares of the Trust. The
Trustees may also amend this Declaration without the vote or consent of
Shareholders to designate series in accordance with Section 6.9 hereof,
to change the name of the Trust, to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or to conform this Declaration to the requirements of applicable
federal laws or regulations or the requirements of the regulated
investment company provisions of the Code, but the Trustees shall not be
liable for failing so to do.
(b) No amendment which the Trustees have determined would affect
the rights, privileges or interests of holders of a particular series of
Shares, but not the rights, privileges or interests of holders of all
series of Shares generally, and which would otherwise require a Majority
Shareholder Vote under paragraph (a) of this Section 9.3, may be made
except with the vote or consent by a Majority Shareholder Vote of
Shareholders of such series.
(c) Notwithstanding any other provision of this Declaration to
the contrary, the Trustees shall have the power in their discretion
without any requirement of approval by Shareholders to either invest all
or a portion of the Trust Property, or sell all or a portion of the
Trust Property and invest the proceeds of such sales, in another
investment company that is registered under the 1940 Act.
(d) Notwithstanding any other provision hereof, no amendment may
be made under this Section 9.3 which would change any rights with
respect to the Shares, or any series of Shares, by reducing the amount
payable thereon upon liquidation of the Trust or by diminishing or
eliminating any voting rights pertaining thereto, except with the
Majority Shareholder Vote of the Shares or that series of Shares.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the
Shareholders, Trustees, officers, employees and agents of the Trust or
to permit assessments upon Shareholders.
(e) A certificate signed by a majority of the Trustees setting
forth an amendment and reciting that it was duly adopted by the
Shareholders or by the Trustees as aforesaid, and executed by a majority
of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
(f) Notwithstanding any other provision hereof, until such time
as a Registration Statement under the Securities Act of 1933, as
amended, covering the first public offering of Shares of the Trust shall
have become effective, this Declaration may be amended in any respect by
the affirmative vote of a majority of the Trustees or by an instrument
signed by a majority of the Trustees.
Section 9.4. Merger, Consolidation and Sale of Assets. The Trust
may merge or consolidate with any other corporation, association, trust
or other organization or may sell, lease or exchange all or
substantially all of the Trust Property (or all or substantially all of
the Trust Property allocated or belonging to a particular series of the
Trust) including its good will, upon such terms and conditions and for
such consideration when and as authorized at any meeting of Shareholders
called for such purpose by the vote of the holders of two-thirds of the
outstanding Shares of all series of the Trust voting as a single class,
or of the affected series of the Trust, as the case may be, or by an
instrument or instruments in writing without a meeting, consented to by
the vote of the holders of two-thirds of the outstanding Shares of all
series of the Trust voting as a single class, or of the affected series
of the Trust, as the case may be; provided, however, that if such
merger, consolidation, sale, lease or exchange is recommended by the
Trustees, the vote or written consent by Majority Shareholder Vote shall
be sufficient authorization; and any such merger, consolidation, sale,
lease or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to the statutes of the Commonwealth of
Massachusetts. Nothing contained herein shall be construed as requiring
approval of Shareholders for any sale of assets in the ordinary course
of the business of the Trust.
Section 9.5. Incorporation, Reorganization. With the approval of
the holders of a majority of the Shares outstanding and entitled to
vote, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction, or any
other trust, unit investment trust, partnership, association or other
organization to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust Property to any
such corporation, trust, partnership, association or organization in
exchange for the shares or securities thereof or otherwise, and to lend
money to, subscribe for the shares or securities of, and enter into any
contracts with any such corporation, trust, partnership, association or
organization in which the Trust holds or is about to acquire shares or
any other interest. Subject to Section 9.4 hereof, the Trustees may
also cause a merger or consolidation between the Trust or any successor
thereto and any such corporation, trust, partnership, association or
other organization if and to the extent permitted by law. Nothing
contained in this Section 9.5 shall be construed as requiring approval
of Shareholders for the Trustees to organize or assist in organizing one
or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the
Trust Property to such organization or entities.
Section 9.6. Incorporation or Reorganization of Series. With the
approval of a Majority Shareholder Vote of any series, the Trustees may
sell, lease or exchange all of the Trust Property allocated or belonging
to that series, or cause to be organized or assist in organizing a
corporation or corporations under the laws of any other jurisdiction, or
any other trust, unit investment trust, partnership, association or
other organization, to take over all of the Trust Property allocated or
belonging to that series and to sell, convey and transfer such Trust
Property to any such corporation, trust, unit investment trust,
partnership, association, or other organization in exchange for the
shares or securities thereof or otherwise.
ARTICLE X
REPORTS TO SHAREHOLDERS AND SHAREHOLDER COMMUNICATIONS
The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the transactions of the
Trust, including financial statements which shall at least annually be
certified by independent public accountants.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Filing. This Declaration and any amendment hereto
shall be filed in the office of the Secretary of the Commonwealth of
Massachusetts and in such other place or places as may be required under
the laws of the Commonwealth of Massachusetts and may also be filed or
recorded in such other places as the Trustees deem appropriate. Each
amendment shall be signed a majority of the Trustees or shall be
accompanied by a certificate of an appropriate officer of the Trust
stating that such amendment was properly approved. Unless such
amendment or certificate sets forth a later date on which it shall take
effect, any amendment shall take effect as of its approval. A restated
Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be
executed from time to time by a majority of the Trustees and shall be
conclusive evidence of all amendments contained therein and may
thereafter be referred to in lieu of this original Declaration and the
various amendments thereto.
Section 11.2. References and Headings. Masculine pronouns shall
be deemed to include the feminine and the neuter, as the context shall
require. Headings are placed herein for convenience of reference only,
and in case of any conflict, the text of this instrument, rather than
the headings, shall control.
Section 11.3. Governing Law. This Declaration is executed by the
Trustees and delivered in the Commonwealth of Massachusetts and with
reference to the laws thereof, and the rights of all parties and the
validity and construction of every provision hereof shall be subject to
and construed according to the laws of said Commonwealth.
Section 11.4. Counterparts. This Declaration may be
simultaneously executed in several counterparts, each of which shall be
deemed to be an original, and such counterparts, together, shall
constitute one and the same instrument, which shall be sufficiently
evidenced by any such original counterpart.
Section 11.5. Reliance by Third Parties. Any certificate
executed by an individual who, according to the records of the Trust, is
a Trustee hereunder certifying to: (i) the number or identity of
Trustees or Shareholders, (ii) the due authorization of the execution of
any instrument or writing, (iii) the form of any vote passed at a
meeting of Trustees or Shareholders, (iv) the fact that the number of
Trustees or Shareholders present at any meeting or executing any written
instrument satisfies the requirements of this Declaration, (v) the form
of any By-Laws adopted by or the identity of any officers elected by the
Trustees, or (vi) the existence of any fact or facts which in any manner
relates to the affairs of the Trust, shall be conclusive evidence as to
the matters so certified in favor of any Person dealing with the
Trustees and their successors.
Section 11.6. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any such
provision is in conflict with the 1940 Act, the regulated investment
company provisions of the Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of this Declaration; provided however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of this Declaration shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in any
other jurisdiction or any other provision of the Declaration in any
jurisdiction.
Section 11.7. Principal Office and Registered Agent. The name of
the registered agent of the Trust is Corporation Service Company at 131
Highland Avenue, Somerville, Massachusetts 02143. The principal office
of the Trust is 105 North Washington Street, Rocky Mount, North Carolina
27802. The Trustees may, without the approval of Shareholders, change
the registered agent of the Trust and the principal office of the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument
as of the 6th day of February, 1995.
Winsor H. Aylesworth
Winsor H. Aylesworth
as Trustee
and not individually
127 GrandView Drive
Glastonbury, CT 06033
Lucy C. Carlson
Lucy C. Carlson
as Trustee
and not individually
127 GrandView Drive
Glastonbury, CT 06033
David F. Wolf
David F. Wolf
as Trustee
and not individually
226 Pine Bridge Lane
Lancaster, PA 17603
<PAGE>
Appendix I
GRANDVIEW INVESTMENT TRUST
Establishment and Designation of Series of Shares of
Beneficial Interest (par value $0.0001 per share)
Dated as of February 6, 1995
Pursuant to Section 6.9 of the Declaration of Trust, dated as of
February 6, 1995 (the "Declaration of Trust"), of GrandView Investment
Trust (the "Trust"), the Trustees of the Trust hereby establish and
designate five initial series of Shares (as defined in the Declaration
of Trust) but reserve the right to create additional series from time to
time (each such series a "Fund" and collectively the "Funds") to have
the following special and relative rights:
1. The Funds shall be designated as follows:
GrandView REIT Index Fund
GrandView Realty Growth Fund
GrandView Residential Realty Income Fund
GrandView Retail Realty Income Fund
GrandView Healthcare Realty Income Fund
2. Each Share of each Fund shall be redeemable, shall be
entitled to one vote (or fraction thereof in respect of a
fractional share) on matters on which Shares of the Fund
shall be entitled to vote, shall represent a pro rata
beneficial interest in the assets allocated or belonging to
each Fund, and shall be entitled to receive its pro rata
share of the net assets of each Fund upon liquidation of
each Fund, all as provided in Section 6.9 of the Declaration
of Trust. The proceeds of sales of Shares of each Fund,
together with any income and gain thereon, less any
diminution or expenses thereof, shall irrevocably belong to
each Fund, unless otherwise required by law.
3. Shareholders of each Fund shall vote separately as a class
on any matter to the extent required by, and any matter
shall be deemed to have been effectively acted upon with
respect to such Fund as provided in, Rule 18f-2, as from
time to time in effect, under the Investment Company Act of
1940, as amended, or any successor rule, and by the
Declaration of Trust.
4. The assets, income, earnings, profits, proceeds, funds or
payments which are not readily identifiable as belonging to
any particular Fund and the liabilities of the Trust shall
be allocated among the Funds as set forth in Section 6.9 of
the Declaration of Trust.
5. Subject to the provisions of Section 6.9 and Article IX of
the Declaration of Trust, the Trustees (including any
successor Trustees) shall have the right at any time and
from time to time to reallocate assets and expenses, to
change the designation of any Fund now or hereafter created,
or otherwise to change the special and relative rights of
any Fund.
GRANDVIEW INVESTMENT TRUST
Amendment to the Declaration of Trust
The undersigned being a majority of the Trustees of GrandView Investment
Trust (the "Trust"), a Massachusetts business trust, acting pursuant to
Section 9.3(e) of the Declaration of Trust, dated February 6, 1995 (the
"Declaration"), of the Trust, hereby certify that the Trustees of the Trust
have duly adopted the following amendment to the Declaration.
VOTED:That Section 11.7 of Article XI of the Declaration be, and it hereby is,
amended in its entirety to read as follows:
Section 11.7. Principal Office and Registered Agent. The name
of the registered agent of the Trust is Corporation Service Company
at 84 State Street, Boston, Massachusetts 02109. The principal
office of the Trust is 105 North Washington Street, Rocky Mount,
North Carolina 27802. The Trustees may, without the approval of
Shareholders, change the registered agent of the Trust and the
principal office of the Trust.
IN WITNESS WHEREOF, the undersigned have executed this amendment to the
Declaration as of the 8th day of November, 1995.
Winsor H. Aylesworth
Winsor H. Aylesworth
as Trustee
and not individually
Arthur Collins
Arthur Collins
as Trustee
and not individually
Richard W. Jagolta
Richard W. Jagolta
as Trustee
and not individually
Raymond H. Weaving
as Trustee
and not individually
This amendment to the Declaration is not made by the Trustees of the Trust
individually, but as Trustees under the Declaration, and the obligations under
this amendment to the Declaration are not binding upon any of the Trustees or
shareholders of the Trust individually, but bind only the trust estate.
INDEPENDENT AUDITORS' CONSENT
The Trustees and Shareholder
GrandView Investment Trust
We consent to the use of our report dated May 23, 1995 on the statements of
assets and liabilities of the GrandView REIT Index Fund, GrandView Realty Growth
Fund, GrandView Residential Realty Income Fund, GrandView Retail Realty Income
Fund, and GrandView Healthcare Realty Income Fund, each a series of the
GrandView Investment Trust, as of May 22, 1995 included in the registration
statement on Form N-1A.
KPMG Peat Marwick LLP
Richmond, Virginia
December 15, 1995
Exhibit 16
Computation of Performance
THE GRANDVIEW FUNDS
A total rate of return quotation for each Fund is calculated for any period by
(a) dividing (i) the sum of the net asset value per share on the last day of the
period and the net asset value per share on the last day of the period of shares
purchasable with dividends and capital gains distributions declared during such
period with respect to a share held at the beginning of such period and with
respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price per share on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate
of return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting 1
from the result. Total rates of return may also be calculated on investments at
various sales charge levels or at net asset value. Any performance data which
is based on a reduced sales charge or net asset value per share would be reduced
if the maximum sales charge were taken into account.
Any current yield quotation for a Fund consists of an annualized historical
yield, carried at least to the nearest hundredth of one percent, based on a 30
calendar day or one month period and is calculated by (a) raising to the sixth
power the sum of 1 plus the quotient obtained by dividing the Fund's net
investment income earned during the period by the product of the average daily
number of shares outstanding during the period that were entitled to receive
dividends and the maximum public offering price per share on the last day of the
period, (b) subtracting 1 from the result, and (c) multiplying the result by 2.
Cumulative Total Return
(ERV - P)/P = TR
Where: ERV = ending redeemable value at the end of the period covered by
the computation of a hypothetical $1,000 payment made at
the beginning of the period
P = hypothetical initial payment of $1,000 from which the
maximum sales load is deducted
TR = total return
<TABLE> <S> <C>
<ARTICLE> 6
<RESTATED>
<SERIES>
<NUMBER> 01
<NAME> GRANDVIEW REIT INDEX FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 88580
<INVESTMENTS-AT-VALUE> 88800
<RECEIVABLES> 1008
<ASSETS-OTHER> 45818
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 135626
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26420
<TOTAL-LIABILITIES> 26420
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 109042
<SHARES-COMMON-STOCK> 10710
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (56)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 220
<NET-ASSETS> 109206
<DIVIDEND-INCOME> 1047
<INTEREST-INCOME> 173
<OTHER-INCOME> 0
<EXPENSES-NET> (107)
<NET-INVESTMENT-INCOME> 1113
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 220
<NET-CHANGE-FROM-OPS> 1333
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1169
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10627
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 83
<NET-CHANGE-IN-ASSETS> 111544
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 36
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 515
<AVERAGE-NET-ASSETS> 41486
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.20
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<RESTATED>
<SERIES>
<NUMBER> 02
<NAME> GRANDVIEW REALTY GROWTH FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 89488
<INVESTMENTS-AT-VALUE> 89561
<RECEIVABLES> 882
<ASSETS-OTHER> 26775
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 117218
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26778
<TOTAL-LIABILITIES> 26778
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 89520
<SHARES-COMMON-STOCK> 9233
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 64
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 784
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 72
<NET-ASSETS> 90440
<DIVIDEND-INCOME> 295
<INTEREST-INCOME> 295
<OTHER-INCOME> 0
<EXPENSES-NET> (204)
<NET-INVESTMENT-INCOME> 386
<REALIZED-GAINS-CURRENT> 784
<APPREC-INCREASE-CURRENT> 72
<NET-CHANGE-FROM-OPS> 1242
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 322
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9207
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 26
<NET-CHANGE-IN-ASSETS> 91084
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 102
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 910
<AVERAGE-NET-ASSETS> 41364
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.80
<EXPENSE-RATIO> 1.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<RESTATED>
<SERIES>
<NUMBER> 03
<NAME> GRANDVIEW RESIDENTIAL REALTY INCOME FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 57128
<INVESTMENTS-AT-VALUE> 56787
<RECEIVABLES> 2535
<ASSETS-OTHER> 26825
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 86147
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28277
<TOTAL-LIABILITIES> 28277
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 57885
<SHARES-COMMON-STOCK> 5859
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 327
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (342)
<NET-ASSETS> 57870
<DIVIDEND-INCOME> 570
<INTEREST-INCOME> 187
<OTHER-INCOME> 0
<EXPENSES-NET> (138)
<NET-INVESTMENT-INCOME> 619
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (342)
<NET-CHANGE-FROM-OPS> 277
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 292
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5840
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 19
<NET-CHANGE-IN-ASSETS> 58454
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 55
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2154
<AVERAGE-NET-ASSETS> 31988
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.87
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<RESTATED>
<SERIES>
<NUMBER> 04
<NAME> GRANDVIEW RETAIL REALTY INCOME FUND
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 58693
<INVESTMENTS-AT-VALUE> 57935
<RECEIVABLES> 608
<ASSETS-OTHER> 26897
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 85440
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26404
<TOTAL-LIABILITIES> 26404
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59263
<SHARES-COMMON-STOCK> 6041
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 532
<OVERDISTRIBUTION-NII> 0
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