1933 Act File No. 33-89754
1940 Act File No. 811-8992
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ..........
Post-Effective Amendment No. 4 ............ X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 5 ........................... X
FUNDMANAGER PORTFOLIOS
(formerly, FUNDMANAGER TRUST)
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Victor R. Siclari, Esquire
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
(check appropriate box)
immediately upon filing pursuant to paragraph (b)
- --
X on January 24, 1997, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i)
75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485
-----------------
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on November 26, 1996; or
-
intends to file the Notice required by that Rule on or about
; or
------------
during the most recent fiscal year did not sell any securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant
to Rule 24f-2(b)(2), need not file the Notice.
Copies to:
John J. Danello Edward T. O'Dell, P.C
Freedom Capital Management Corporation Goodwin, Procter & Hoar
One Beacon Street One Exchange Place
Boston, Massachusetts 02108 Boston, Massachusetts 02109
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of FUNDMANAGER PORTFOLIOS
(formerly, FundManager Trust)),which is comprised of five Portfolios: (1)
Aggressive Growth Portfolio, consisting of two classes of shares (a)
Financial Adviser Class and (b) No-Load Class; (2) Growth Portfolio,
consisting of two classes of shares (a) Financial Adviser Class and (b) No-
Load Class; (3) Growth with Income Portfolio, consisting of two classes of
shares (a) Financial Adviser Class and (b) No-Load Class; (4) Bond
Portfolio, consisting of two classes of shares (a) Financial Adviser Class
and (b) No-Load Class; and (5) Managed Total Return Portfolio, consisting
of one class of shares (a) Financial Adviser Class, and is comprised of the
following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page...............(1-5) Cover Page.
Item 2. Synopsis.................(1-5) Summary of Fund Expenses.
Item 3. Condensed Financial
Information.............(1-5) Financial Highlights; (1-5).
Item 4. General Description of
Registrant..............(1-5) FundManager Portfolios; (1-5)
Investment Objectives; (1-5) Risks and
Other Considerations; (
Item 5. Management of the Fund...(1-5) Management of FundManager
Portfolios (1-5) The Adviser; (1-5) The
Administrator; (1-5) The
Distributors;(1-5) Custodian and
Transfer Agent.
Item 6. Capital Stock and Other
Securities..............(1-5) Dividends, Distributions and
Taxes; (1-5) Voting.
Item 7. Purchase of Securities Being
Offered.................(1-5) The Distributors;(1-5)
Determination of Net Asset Value;(1-5)
Purchase of Shares; (1a-5a) Retirement
Plans; (1a-5a) Individual Retirement
Accounts; (1a-5a) Defined Contribution
Plan; (1a-5a) Exchange Privilege; (1b-
4b) FundManager Advisory Program.
Item 8. Redemption or Repurchase.(1-5) Redemption of Shares; (1a-5a)
Redemption of Shares Purchased Through a
Distributor or Authorized Securities
Dealer; (1b-5b) Redemption of Shares
Purchased Through a Distributor; (1-5)
Direct Redemption; (1a-5a) Redemption By
Wire or Telephone; (1a-5a) Systematic
Withdrawal Plan.
Item 9. Legal Proceedings........None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page...............(1-5) Cover Page.
Item 11. Table of Contents........(1-5) Table of Contents.
Item 12. General Information and
History.................(1-5) Other Information.
Item 13. Investment Objectives and
Policies................(1-5) Investment Policies; (1-5)
Investment Restrictions.
Item 14. Management of the Fund...(1-5) Management; (1-5) Trustees
Compensation.
Item 15. Control Persons and Principal
Holders of Securities...(1-5) Other Information; (1-5)
Management
Item 16. Investment Advisory and Other
Services................(1-5) Management; (1-5) Investment
Adviser
Item 17. Brokerage Allocation.....(1-5) Portfolio Transactions.
Item 18. Capital Stock and Other
Securities..............(1-5) Other Information.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.................(1-5) See Part A Prospectus - Purchase
of Shares; (1-5) See Part A Prospectus -
Redemption of Shares; (1-5) See Part A
Prospectus - Determination of Net Asset
Value.
Item 20. Tax Status...............(1-5) See Part A Prospectus - Dividends,
Distributions and Taxes.
Item 21. Underwriters.............(1-5) Management; (1-5) Administrator;
(1-5) Distributors.
Item 22. Calculation of Performance
Data....................(1-5) Other Information; (1-5)
Performance Information.
Item 23. Financial Statements.....Incorporated by reference to the Annual
Report of the FundManager Portfolios
dated September 30, 1996 (File Nos. 33-
89754 and 811-8992).
FUNDMANAGER PORTFOLIOS
THE FIRST FAMILY IN MULTIFUND INVESTING
INVESTMENT ADVISER
Freedom Capital Management
Corporation
M.D. Hirsch Division
One World Financial Center
New York, NY 10281
DISTRIBUTORS
Tucker Anthony, Incorporated
200 World Financial Center
New York, NY 10281
Sutro & Co., Inc.
201 California Street
San Francisco, CA 94111
Freedom Distributors Corporation
One Beacon Street
Boston, MA 02108
Edgewood Services, Inc
Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230-0897
FUNDMANAGER PORTFOLIOS
THE FIRST FAMILY IN MULTIFUND INVESTING
PROSPECTUS
JANUARY 24, 1997
Aggressive Growth Portfolio
Growth Portfolio
Growth with Income Portfolio
Bond Portfolio
Managed Total Return Portfolio
G01966-02 (1/97)
FUNDMANAGER PORTFOLIOS -- FINANCIAL ADVISER CLASS
(FORMERLY, FUNDMANAGER TRUST)
ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108
GENERAL INFORMATION: (800) 344-9033 (TOLL FREE)
FundManager Portfolios (the "Trust") is an open-end, management investment
company consisting of five separate diversified series with different
investment objectives (individually and collectively referred to as
"Portfolio" or "Portfolios," as the context requires). Each Portfolio
(except for Managed Total Return Portfolio) offers two classes of shares.
The shares offered by this Prospectus are the Financial Adviser Class (the
"Class") of shares ("Shares"). The Portfolios seek to achieve their
objectives by investing in shares of other open-end investment companies
commonly called mutual funds. This policy involves certain expenses in
addition to those applicable to direct investment in mutual funds. See
"Risks and Other Considerations -- Expenses." The M.D. Hirsch Division of
Freedom Capital Management Corporation ("Freedom Capital Management" or the
"Adviser") continuously manages each Portfolio's investment portfolio.
AGGRESSIVE GROWTH PORTFOLIO (FORMERLY, AGGRESSIVE GROWTH FUND) SEEKS CAPITAL
APPRECIATION WITHOUT REGARD TO CURRENT INCOME.
GROWTH PORTFOLIO (FORMERLY, GROWTH FUND) PRIMARILY SEEKS LONG-TERM CAPITAL
APPRECIATION. CURRENT INCOME IS A SECONDARY CONSIDERATION.
GROWTH WITH INCOME PORTFOLIO (FORMERLY, GROWTH & INCOME FUND) SEEKS A
COMBINATION OF CAPITAL APPRECIATION AND CURRENT INCOME.
BOND PORTFOLIO (FORMERLY, BOND FUND, AND BEFORE THAT, INCOME FUND) SEEKS A
HIGH LEVEL OF CURRENT INCOME.
MANAGED TOTAL RETURN PORTFOLIO (FORMERLY, MANAGED TOTAL RETURN FUND) SEEKS
HIGH TOTAL RETURN (CAPITAL APPRECIATION AND CURRENT INCOME).
Shares of the Portfolios are offered for sale at net asset value by Edgewood
Services, Inc. ("Edgewood"), Freedom Distributors Corporation ("Freedom
Distributors"), Tucker Anthony Incorporated ("Tucker Anthony") and Sutro &
Co. Incorporated ("Sutro")(collectively, the "Distributors") as an
investment vehicle for individuals, institutions, corporations and
fiduciaries. The Portfolios pay expenses related to the distribution of
their shares. See "Management of the Trust -- The Distributors." In
addition, the Portfolios may invest in shares of mutual funds which charge
sales loads and/or pay their own distribution expenses.
INVESTMENTS IN THE PORTFOLIOS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE PORTFOLIOS IS
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
This prospectus sets forth concisely the information a prospective investor
should know before investing in the Portfolios. A Statement of Additional
Information (the "SAI") dated January 24, 1997, and as supplemented from
time to time containing additional and more detailed information about the
Portfolios has been filed with the Securities and Exchange Commission
("SEC") and is hereby incorporated by reference into this prospectus. You
may request a copy of the SAI, or a paper copy of this prospectus, if you
have received your prospectus electronically, free of charge by writing or
calling the Trust at the address and information number printed above. The
SAI, material incorporated by reference into this document, and other
information regarding the Portfolios is maintained electronically with the
SEC at internet web site (http://www.sec.gov).
This Prospectus should be read and retained for information about the
Portfolios.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JANUARY 24, 1997.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
HIGHLIGHTS 1
PORTFOLIO EXPENSES 3
Financial Highlights 4
FUNDMANAGER PORTFOLIOS 10
INVESTMENT OBJECTIVES 10
Investments of and Investment
Techniques Employed by Mutual
Funds in which the Portfolios
May Invest 14
Derivatives 17
Investment Policies and Restrictions 20
RISKS AND OTHER CONSIDERATIONS 21
Expenses 22
MANAGEMENT OF FUNDMANAGER PORTFOLIOS 23
The Adviser 23
The Administrator 23
The Distributors 24
Custodian and Transfer Agent 24
Service Organizations 25
Other Expenses 25
Portfolio Transactions 25
Determination of Net Asset Value 26
PURCHASES OF SHARES 26
Purchases By Clients of the
Distributors Or Authorized
Securities Dealers 27
Certain Service Organizations and
Other Investors -- Purchase by
Check or Wire 27
Automatic Investment Plan 27
Retirement Plans 28
Individual Retirement Accounts ("IRAs") 28
Defined Contribution Plan 28
Exchange Privilege 28
REDEMPTION OF SHARES 29
Redemption of Shares Purchased
Through a Distributor or
Authorized Securities Dealer 29
Direct Redemption 29
Redemption by Wire or Telephone 29
Systematic Withdrawal Plan 30
DIVIDENDS, DISTRIBUTION AND TAXES 30
Other Information 32
Other Classes of Shares 34
Shareholder Inquiries 34
Description of Bond Ratings 34
</TABLE>
HIGHLIGHTS
FUNDMANAGER PORTFOLIOS PAGE 10
The Trust is a Delaware business trust which consists of five separate
series: Aggressive Growth Portfolio, Growth Portfolio, Growth with Income
Portfolio, Bond Portfolio and Managed Total Return Portfolio. Each Portfolio
seeks to achieve its investment objective by investing in mutual funds
registered with the SEC.
INVESTMENT OBJECTIVES PAGE 10
Each Portfolio has distinct investment objectives. Aggressive Growth
Portfolio seeks capital appreciation without regard to current income.
Growth Portfolio primarily seeks capital appreciation with current income a
secondary consideration. Growth with Income Portfolio seeks a combination of
capital appreciation and current income. Bond Portfolio seeks a high level
of current income. Managed Total Return Portfolio seeks high total return
(capital appreciation and current income). The mutual funds in which the
Portfolios invest may invest in securities which entail certain risks. These
risks are described in "Investments of and Investment Techniques employed by
Mutual Funds in Which the Portfolios May Invest."
RISKS AND OTHER CONSIDERATIONS PAGE 21
Investing through a Portfolio in an underlying portfolio of mutual funds
involves certain additional expenses and certain tax results which would not
be present in a direct investment in mutual funds. See "Expenses" and
"Dividends, Distributions and Taxes." In addition, Federal law imposes
certain limits on the purchases of mutual fund shares by the Portfolios.
MANAGEMENT OF FUNDMANAGER PORTFOLIOS PAGE 23
The Trust has retained Freedom Capital Management to act as its investment
adviser. For its services, the Adviser receives from each Portfolio a fee at
the annual rate of 0.50% of the Portfolio's average daily net assets up to
$500 million and 0.40% of its average daily net assets in excess of $500
million. See "The Adviser."
The Trust has retained Federated Administrative Services ("FAS") to provide
certain management and administrative services to the Portfolios. For these
services, each Portfolio pays FAS a fee at the annual rate of 0.150% of the
first $250 million of that Portfolio's average daily net assets, 0.125% of
the next $250 million of such assets, 0.100% of the next $250 million of
such assets, and 0.075% of such assets in excess of $750 million. See "The
Administrator."
With respect to the Class, the Trust has adopted a Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940
Act"), under which each Portfolio will reimburse the Distributors (in
amounts up to 0.50% of that Portfolio's average daily net assets
attributable to the Class) for marketing costs and payments to other
organizations for services rendered in distributing the Portfolio's Shares.
In addition, Freedom Distributors and Edgewood may receive additional
compensation in connection with the Portfolio's purchases of mutual funds.
See "Portfolio Transactions."
The Trust also contracts with various organizations to provide
administrative services for the Class, such as maintaining shareholder
accounts and records. Each Portfolio pays fees to these organizations in
amounts up to an annual rate of 0.25% of the daily net asset value of that
Portfolio's Shares owned by shareholders with whom the organization has a
servicing relationship.
PURCHASE OF SHARES PAGE 26
Shares of the Portfolios are offered at net asset value by the Distributors
as an investment vehicle for individuals, institutions, corporations and
fiduciaries. The minimum initial investment for each Portfolio is $1,000,
and the minimum subsequent investment is $100, except that the minimum
initial investment for an Individual Retirement Account ("IRA") is $250. The
Trust may issue shares of one or more of the Portfolios in exchange for
mutual fund shares meeting that Portfolio's investment objective as
determined by the Adviser.
REDEMPTION OF SHARES PAGE 29
Shares may be redeemed at their next determined net asset value. See
"Determination of Net Asset Value." Redemptions may be made by letter or
wire. The Trust reserves the right to redeem, upon not less than 30 days'
notice, all shares of a Portfolio in an account (other than an IRA) which
has a value below $50.
DIVIDENDS, DISTRIBUTIONS AND TAXES PAGE 30
Aggressive Growth Portfolio will distribute net investment income annually;
Growth Portfolio will distribute net investment income semiannually; Growth
with Income Portfolio and Managed Total Return Portfolio will distribute net
investment income quarterly; and Bond Portfolio will distribute its net
investment income monthly. Each Portfolio will distribute any net realized
capital gains at least annually unless otherwise instructed. All dividends
and distributions will be reinvested automatically at net asset value in
additional shares of the Portfolio making the distribution.
PORTFOLIO EXPENSES
THE FOLLOWING TABLE ILLUSTRATES THE EXPENSES AND FEES THAT A SHAREHOLDER OF
EACH PORTFOLIO WILL INCUR.
ANNUAL FINANCIAL ADVISER CLASS OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
GROWTH MANAGED
AGGRESSIVE WITH TOTAL
GROWTH GROWTH INCOME BOND RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution and shareholder service expenses(1) 0.50% 0.50% 0.50% 0.50% 0.50%
Other Expenses 0.50% 0.65% 0.65% 0.40% 1.10%
Total Portfolio Operating Expenses 1.50% 1.65% 1.65% 1.40% 2.10%
</TABLE>
(1) The maximum distribution and shareholder service fee is 0.50%. Under
rules of the National Association of Securities Dealers, Inc., (the "NASD"),
a 12b-1 fee may be treated as a sales charge for certain purposes under
those rules. Because the 12b-1 fee is an annual fee charged against the
assets of a Portfolio, long-term shareholders may indirectly pay more total
sales charges than the economic equivalent of the maximum front-end sales
charge permitted by rules of the NASD. See "Management of the Trust -- The
Distributors" in the Prospectus.
Total Portfolio Operating Expenses in the table above are based on expenses
expected during the fiscal year ending September 30, 1997. The total
Portfolio operating expenses were 1.67%, 1.81%, 1.77%, 1.47% and 2.21% for
the Aggressive Growth Portfolio, Growth Portfolio, Growth with Income
Portfolio, Bond Portfolio and Managed Total Return Portfolio, respectively,
for the fiscal year ended September 30, 1996. The Total Portfolio Operating
Expenses would have been 1.73%, 1.87%, 1.83%, 1.52% and 2.27% for the
Aggressive Growth Portfolio, Growth Portfolio, Growth with Income Portfolio,
Bond Portfolio and Managed Total Return Portfolio, respectively, for the
fiscal year ended September 30, 1996, absent the voluntary waiver of a
portion of the administrative fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder will bear, either directly or
indirectly. For more complete descriptions of the various costs and
expenses, see "Management of FundManager Portfolios." Wire-transferred
redemptions may be subject to an additional fee.
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. The
Portfolio charges no redemption fees.
<TABLE>
<CAPTION>
GROWTH MANAGED
AGGRESSIVE WITH TOTAL
GROWTH GROWTH INCOME BOND RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<C> <C> <C> <C> <C> <C>
1 year $ 15 $ 17 $ 17 $ 14 $ 21
3 years $ 47 $ 52 $ 52 $ 44 $ 66
5 years $ 82 $ 90 $ 90 $ 77 $113
10 years $179 $195 $195 $168 $243
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Currently, the Portfolios (except for Managed Total Return Portfolio) offer,
by a separate prospectus, another class of shares which are sold at net
asset value by Tucker Anthony and Sutro, and do not pay expenses related to
the distribution of such shares. Because the expenses vary between the
classes, performance will vary with respect to each class. Additional
information and a prospectus concerning the Portfolios' other class of
shares may be obtained by calling toll-free (800) 344-9033.
FINANCIAL HIGHLIGHTS
The Portfolios' financial data through September 30, 1996, shown below is to
assist investors in evaluating the performance of each Portfolio. Prior to
May 8, 1995, the Portfolios were a diversified series of the Republic Funds
(the "Predecessor Funds"), also an open-end, management investment company.
The information for the years ended September 30, 1996, 1995, 1994, 1993 and
1992 in the following tables have been audited by Ernst & Young LLP, the
Portfolios' Independent Auditors. The report of Ernst & Young LLP, dated
November 21, 1996, on the Portfolios' financial statements for the year then
ended September 30, 1996, and on the following tables for the periods
presented, is included in the Annual Report, which is incorporated by
reference. These tables should be read in conjunction with the Portfolios'
financial statements and notes thereto, which are contained in the Annual
Report. Further information about the Portfolios' performance also is
contained in the Portfolios' Annual Report, dated September 30, 1996, which
can be obtained free of charge. The information in the following tables for
the fiscal year ended September 30, 1991 and for prior fiscal year ends has
been examined by other auditors who have expressed an unqualified opinion.
Freedom Capital Management is the Trust's investment adviser. From September
1, 1993 to February 21, 1995, the M.D. Hirsch Division of Republic Asset
Management Corporation ("Republic Asset Management"), an affiliate of
Republic National Bank of New York ("Republic"), served as investment
adviser to the Predecessor Funds. Prior to September 1, 1993, M.D. Hirsch
Investment Management, Inc. ("Hirsch"), also an affiliate of Republic,
served as the investment adviser to the Predecessor Funds. Prior to February
1, 1991, Republic was the investment adviser to the Predecessor Funds.
AGGRESSIVE GROWTH PORTFOLIO -- FINANCIAL ADVISER CLASS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1996 1995(A) 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $18.31 $15.57 $16.70 $14.71 $14.73 $11.84 $14.67 $12.01 $16.62 $13.13
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(operating loss) 0.12(b) (0.13) (0.08) (0.04) (0.04) 0.06 0.08 0.03 0.03 0.06
Net realized and unrealized
gain (loss) on investments 1.64 3.70 0.62 2.87 0.99 3.81 (2.23) 3.03 (2.46) 3.82
Total from investment 1.76 3.57 0.54 2.83 0.95 3.8 (2.15) 3.06 (2.43) 3.88
operations
LESS DISTRIBUTIONS
Distributions from
net investment income (0.38) -- -- -- -- (0.03) (0.07) -- (0.06) (0.02)
Distributions in execss of
net investment income -- -- -- -- -- -- -- -- (0.13) --
Distributions from
net realized gain
on investments+ (2.89) (0.83) (1.67) (0.84) (0.97) (0.95) (0.61) (0.40) (1.99) (0.37)
Total distributions (3.27) (0.83) (1.67) (0.84) (0.97) (0.98) (0.68) (0.40) (2.18) (0.39)
NET ASSET $16.80 $18.31 $15.57 $16.70 $14.71 $14.73 $11.84 $14.67 $ 12.01 $16.62
VALUE, END
OF PERIOD
Total return(c) 12.10% 24.30% 3.30% 19.90% 6.30% 34.90% (15.20%) 26.30% (12.70%) 30.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) $38,944 $33,668 $37,766 $31,201 $29,096 $22,644 $16,820 $20,929 $26,364 $49,645
Ratio of expenses to
average net assets 1.67% 1.65% 1.70% 1.52% 1.61% 1.86% 1.96% 1.83% 1.94% 1.48%
Ratio of net investment
income to average
net assets 0.74% (0.68%) (0.57%) (0.24%) (0.17%) 0.36% 0.49% 0.43% 0.23% 0.43%
Ratio of waiver to
average net assets(d) 0.06% -- -- -- -- 0.09% 0.14% 0.09% -- --
Portfolio turnover 158% 50% 43% 35% 24% 45% 31% 15% 26% 64%
+Paid from realized net
short-term gain $0.27 $0.04 $0.253 $-- $0.03 $0.360 $0.146 $0.140 $0.180 $--
</TABLE>
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge
payable on purchases of shares. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
GROWTH PORTFOLIO -- FINANCIAL ADVISER CLASS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1996 1995(A) 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $16.14 $14.09 $14.62 $14.40 $13.96 $11.68 $15.32 $12.73 $15.71 $12.82
INCOME FROM INVESTMENT OPERATIONS
Net investment income
(operating loss) 0.01(b) (0.02) (0.05) 0.02 0.07 0.14 0.24 0.26 0.23 0.22
Net realized and unrealized
gain on investments 1.85 2.99 0.69 2.10 1.23 3.01 (2.23) 2.66 (1.63) 3.05
Total from investment
operations 1.86 2.97 0.64 2.12 1.30 3.15 (1.99) 2.92 (1.40) 3.27
LESS DISTRIBUTIONS
Distributions from net
investment income (0.24) -- -- -- (0.09) (0.37) (0.19) (0.19) (0.36) (0.14)
Distributions from net
realized gain on
investments+ (2.77) (0.92) (1.17) (1.90) (0.77) (0.50) (1.46) (0.14) (1.22) (0.24)
Total distributions (3.01) (0.92) (1.17) (1.90) (0.86) (0.87) (1.65) (0.33) (1.58) (0.38)
NET ASSET VALUE,
END OF PERIOD $14.99 $16.14 $14.09 $14.62 $14.40 $13.96 $11.68 $15.32 $12.73 $15.71
Total return(c) 13.46% 22.6% 4.50% 16.00% 9.40% 28.50% (14.30%) 23.30% (7.40%) 26.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) $26,639 $26,022 $34,205 $21,919 $21,420 $26,336 $21,232 $26,160 $40,466 $48,556
Ratio of expenses to
average net assets 1.81% 1.71% 1.71% 1.70% 1.60% 1.90% 1.92% 1.78% 1.80% 1.53%
Ratio of net investment
income to average
net assets 0.05% (0.11%) (0.52%) 0.15% 0.59% 1.21% 1.64% 1.87% 1.89% 1.50%
Ratio of waiver to
average net assets(d) 0.06% -- -- -- -- 0.02% 0.08% 0.06% -- --
Portfolio turnover 98% 68% 44% 40% 44% 54% 70% 23% 51% 65%
+Paid from realized net
short-term gain $0.48 $0.10 $0.22 $0.16 $0.03 $0.060 $0.015 $0.140 $0.150 $--
</TABLE>
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge
payable on purchases of shares. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
GROWTH WITH INCOME PORTFOLIO -- FINANCIAL ADVISER CLASS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1996 1995(A) 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $18.28 $15.99 $16.50 $15.11 $14.39 $12.30 $14.96 $12.47 $14.52 $12.86
INCOME FROM INVESTMENT
OPERATIONS
Net investment 0.60(b) 0.27 0.35 0.28 0.31 0.49 0.46 0.47 0.43 0.45
income
Net realized and
unrealized gain
on investments 1.60 3.19 0.18 1.97 1.07 2.59 (2.61) 2.32 (1.14) 2.00
Total from
investment
operations 2.20 3.46 0.53 2.25 1.38 3.08 (2.15) 2.79 (0.71) 2.45
LESS DISTRIBUTIONS
Distributions from
net
investment income (0.86) (0.33) (0.30) (0.33) (0.29) (0.68) (0.51) (0.30) (0.61) (0.43)
Distributions from
net
realized gain
on investments+ (2.93) (0.84) (0.74) (0.53) (0.37) (0.31) -- -- (0.61) (0.36)
Distributions in
execss of
realized capital -- -- -- -- -- -- -- -- (0.12) --
gains
Total distributions (3.79) (1.17) (1.04) (0.86) (0.66) (0.99) (0.51) (0.30) (1.34) (0.79)
NET ASSET $16.69 $18.28 $15.99 $16.50 $15.11 $14.39 $12.30 $14.96 $12.47 $14.52
VALUE, END
OF PERIOD
Total return(c) 13.73% 23.30% 3.30% 15.50% 9.80% 26.20% (14.80%) 22.70% (3.40%) 19.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) $31,571 $35,643 $52,595 $40,269 $36,603 $35,018 $30,063 $38,852 $53,558 $91,620
Ratio of expenses
to average net 1.77% 1.59% 1.55% 1.49% 1.50% 1.85% 1.87% 1.65% 1.67% 1.39%
assets
Ratio of net
investment
income to average
net assets 3.57% 1.72% 1.88% 1.77% 2.10% 3.67% 3.31% 3.43% 3.55% 3.20%
Ratio of waiver to
average
net assets(d) 0.06% -- -- -- -- 0.02% 0.03% 0.08% -- --
Portfolio turnover 85% 12% 35% 24% 26% 48% 37% 15% 29% 20%
+Paid from realized
net
short-term gain $0.06 $-- $0.14 $0.09 $-- $0.046 $-- $-- $0.140 $0.040
</TABLE>
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge
payable on purchases of shares. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expenses and
net investment income ratios shown above.
BOND PORTFOLIO -- FINANCIAL ADVISER CLASS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1996 1995(A) 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.21 $ 9.66 $10.67 $10.28 $9.75 $9.17 $9.60 $9.77 $9.90 $10.68
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.52(b) 0.52 0.48 0.60 0.64 0.70 0.67 0.77 0.83 0.90
Net realized and
unrealized
gain (loss) on (0.14) 0.49 (0.84) 0.43 0.49 0.59 (0.43) (0.13) (0.07) (0.71)
investments
Total from
investment
operations 0.38 1.01 (0.36) 1.03 1.13 1.29 0.24 0.64 0.76 0.19
LESS DISTRIBUTIONS
Distributions from
net
investment income (0.59) (0.46) (0.53) (0.54) (0.60) (0.71) (0.67) (0.78) (0.89) (0.92)
Distributions from
net
realized gain
on investments+ -- -- (0.12) (0.10) -- -- -- -- -- (0.05)
Distributions in
execss of
realized capital -- -- -- -- -- -- -- (0.03) -- (0.01)
gains
Total distributions (0.59) (0.46) (0.65) (0.64) (0.60) (0.71) (0.67) (0.81) (0.89) (0.98)
NET ASSET $10.00 $10.21 $9.66 $10.67 $10.28 $9.75 $9.17 $9.60 $9.77 $9.90
VALUE, END
OF PERIOD
Total return(c) 3.78% 10.80% (3.60%) 10.40% 12.10% 14.70% 2.50% 6.90% 8.00% 1.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) $70,166 $77,419 $76,769 $54,057 $70,066 $57,632 $40,855 $52,094 $50,631 $53,444
Ratio of expenses
to average net assets 1.47% 1.45% 1.43% 1.29% 1.28% 1.57% 1.75% 1.58% 1.81% 1.61%
Ratio of net
investment
income to average
net assets 5.19% 5.38% 4.67% 5.70% 6.42% 7.00% 7.22% 7.89% 8.51% 8.63%
Ratio of waiver to average
net assets(d) 0.05% -- -- -- -- 0.07% 0.03% 0.04% -- --
Portfolio turnover 93% 53% 41% 53% 21% 46% 48% 109% 52% 27%
+Paid from realized
net short-term gain $-- $-- $-- $-- $-- $-- $-- $-- $-- $0.040
</TABLE>
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge
payable on purchases of shares. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
MANAGED TOTAL RETURN PORTFOLIO -- FINANCIAL ADVISER CLASS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
AUGUST 4, 1994
(COMMENCEMENT)
OF
OPERATIONS)
THROUGH
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995(A) 1994 1993 1992 1991 1990 1989 1988
NET ASSET VALUE,
BEGINNING OF PERIOD $11.65 $11.24 $12.03 $11.48 $11.07 $ 9.60 $11.45 $10.14 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.42(b) 0.28 0.18 0.29 0.34 0.44 0.51 0.54 0.04
Net realized and
unrealized gain
(loss)
on investments 0.40 1.18 (0.16) 0.90 0.57 1.42 (0.94) 0.96 0.10
Total from investment 0.82 1.46 0.02 1.19 0.91 1.86 (0.43) 1.50 0.14
operations
LESS DISTRIBUTIONS
Distributions from
net
investment income (0.50) (0.30) (0.31) (0.26) (0.41) (0.39) (0.63) (0.16) --
Distributions from net
realized
gain on (0.52) (0.75) (0.50) (0.38) (0.09) -- (0.79) (0.03) --
investments+
Total distributions (1.02) (1.05) (0.81) (0.64) (0.50) (0.39) (1.42) (0.19) --
NET ASSET $11.45 $11.65 $11.24 $12.03 $11.48 $11.07 $9.60 $11.45 $10.14
VALUE, END OF
PERIOD
Total return(c) 7.58% 14.30% 0.10% 10.80% 8.40% 20.10% (4.40%) 15.10% 1.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000's) $12,123 $14,749 $17,515 $25,519 $20,894 $14,678 $17,041 $17,031 $10,275
Ratio of expenses to
average
net assets 2.21% 2.09% 1.94% 1.80% 1.90% 2.00% 1.93% 1.62% 2.90%(e)
Ratio of net
investment
income to average
net assets 3.68% 2.29% 1.60% 2.54% 3.09% 4.41% 4.89% 5.24% 2.49%(e)
Ratio of waiver to
average
net assets(d) 0.06% -- -- -- 0.11% 0.26% 0.14% 0.16% --
Portfolio turnover 159% 50% 50% 40% 37% 15% 47% 71% 0%
+Paid from realized
net
short-term gain $0.01 $-- $0.132 $0.08 $0.015 $-- $0.313 $0.014 $--
</TABLE>
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge
payable on purchases of shares. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Annualized.
FUNDMANAGER PORTFOLIOS
The Trust was organized as a Delaware business trust on February 7, 1995,
and is an open-end management investment company registered under the 1940
Act consisting of five separate diversified series -- Aggressive Growth
Portfolio, Growth Portfolio, Growth with Income Portfolio, Income Portfolio
and Managed Total Return Portfolio. Investment in shares of one or more of
the Portfolios involves risks and there can be no assurance that the
Portfolios' investment objectives will be achieved.
INVESTMENT OBJECTIVES
Each Portfolio seeks to achieve its investment objective by investing in a
portfolio of approximately ten to fifteen mutual funds (the "underlying
funds") although it may invest up to 25% of its total assets in any one
underlying fund. At times, for temporary defensive purposes when warranted
by general economic and financial conditions, a Portfolio may invest in
money market mutual funds or invest directly in (or enter into repurchase
agreements (maturing in seven days or less) with banks and broker-dealers
with respect to) short-term debt securities, including U.S. Treasury bills
and other short-term U.S. government securities, commercial paper,
certificates of deposit and bankers' acceptances. However, except when a
Portfolio is in a temporary defensive investment position or as may be
considered necessary to accumulate cash in order to satisfy minimum purchase
requirements of the underlying funds or to meet anticipated redemptions, a
Portfolio normally will maintain its assets invested in underlying funds.
Although all of the Portfolios may invest in shares of the same underlying
fund, the percentage of each Portfolio's assets so invested may vary and the
Adviser will determine that such investments are consistent with the
investment objectives and policies of each particular Portfolio. A Portfolio
may not purchase shares of any closed-end investment company or of any
investment company which is not registered with the SEC. Each Portfolio's
investment objectives and certain of its related policies and activities are
fundamental and may not be changed by the Board of Trustees (the "Trustees")
of the Trust, on behalf of a particular Portfolio, without approval of the
shareholders of that Portfolio.
AGGRESSIVE GROWTH PORTFOLIO
The investment objective of Aggressive Growth Portfolio is capital
appreciation without regard to current income. The underlying funds in which
it invests will consist of funds which seek capital growth or appreciation
by investing primarily in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants). For temporary defensive purposes, these
funds also may invest in (or enter into repurchase agreements with banks and
broker-dealers with respect to) corporate bonds, U.S. government securities,
commercial paper, certificates of deposit or other money market securities.
The Portfolio also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities
issued or guaranteed or insured by the U.S. government, its agencies or
instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures) whenever the Adviser believes that these
funds offer a potential for capital appreciation. These underlying funds may
invest in investment grade bonds or in bonds which are not considered
investment grade (commonly referred to as "junk bonds"). The Portfolio will
limit its direct and indirect investment in junk bonds to less than 5% of
its assets. See "Bond Portfolio" and "Description of Bond Ratings."
The underlying funds in which Aggressive Growth Portfolio invests may incur
more risk than those in which Growth Portfolio and Growth with Income
Portfolio invest. For example, they may trade their portfolios more actively
(which results in higher brokerage commissions and increased realization of
taxable capital gains) and/or invest in companies whose securities are
subject to more erratic market movements. The underlying funds also may
invest up to 100% of their assets in securities of foreign issuers and
engage in foreign currency transactions with respect to these investments;
invest up to 15% of their assets in illiquid securities (excluding Rule 144A
securities which are deemed liquid by the Trustees) ("Illiquid Securities");
invest their assets in warrants; lend their portfolio securities; sell
securities short; borrow money in amounts up to one-third of their assets
for investment purposes (i.e., leverage their portfolios); write (sell) or
purchase call or put options on securities or on stock indexes; concentrate
more than 25% of their assets in one industry; invest up to 100% of their
assets in master demand notes; and enter into futures contracts and options
on futures contracts. The risks associated with these investments are
described in the "Investments of and Investment Techniques Employed by
Mutual Funds in Which the Portfolios May Invest."
As a result, an investment in Aggressive Growth Portfolio can be expected to
involve greater risk than an investment in any of the other Portfolios.
GROWTH PORTFOLIO
The primary investment objective of Growth Portfolio is long-term capital
appreciation. Current income is of secondary importance. The underlying
funds in which it invests will consist of funds which invest primarily in
common stock or securities convertible into or exchangeable for common stock
(such as convertible preferred stock, convertible debentures or warrants)
and which seek long-term capital growth or appreciation with current income
typically of secondary importance. For temporary defensive purposes, these
funds also may invest in (or enter into repurchase agreements with banks and
broker-dealers with respect to) corporate bonds, U.S. government securities,
commercial paper, certificates of deposit or other money market instruments.
The Portfolio also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities
issued or guaranteed or insured by the U.S. government, its agencies or
instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures) whenever the Adviser believes that these
funds offer a potential for capital appreciation. These underlying funds may
invest in investment grade bonds or in bonds which are not considered
investment grade (commonly referred to as "junk bonds"). The Portfolio will
limit its direct and indirect investment in junk bonds to less than 5% of
its assets. See "Bond Portfolio" and "Description of Bond Ratings."
The underlying funds in which the Portfolio invests may be authorized to
invest up to 100% of their assets in the securities of foreign issuers and
engage in foreign currency transactions with respect to these investments;
invest up to 15% of their assets in Illiquid Securities; invest their assets
in warrants; lend their portfolio securities; sell securities short; borrow
money in amounts up to one-third of their assets for investment purposes;
write or purchase call or put options on securities or stock indexes;
concentrate more than 25% of their assets in one industry; invest up to 100%
of their assets in master demand notes; and enter into futures contracts and
options on futures contracts. The risks associated with these investments
are described in "Investments of and Investment Techniques Employed by
Mutual Funds in Which the Portfolios May Invest."
GROWTH WITH INCOME PORTFOLIO
The investment objective of Growth with Income Portfolio is realization of a
combination of capital appreciation and current income. The underlying funds
in which it invests will consist of funds which seek long-term capital
appreciation and/or funds which seek: (i) income from dividends; (ii) income
from interest; or (iii) growth of income (or any combination of (i)-(iii)).
These underlying funds invest in common stocks, preferred stocks, bonds and
other fixed-income securities (including convertible preferred stock and
convertible debentures). The underlying funds also may, for temporary
defensive purposes, invest in (or enter into repurchase agreements with
banks and broker-dealers with respect to) U.S. government securities,
commercial paper, certificates of deposit or other money market securities.
The Portfolio also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities
issued or guaranteed or insured by the U.S. government, its agencies or
instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures) whenever the Adviser believes that these
funds offer a potential for capital appreciation. These underlying funds may
invest in investment grade bonds or in bonds which are not considered
investment grade (commonly referred to as "junk bonds"). The Portfolio will
limit its direct and indirect investment in junk bonds to less than 5% of
its assets. See "Bond Portfolio" and "Description of Bond Ratings."
These underlying funds may invest up to 100% of their assets in the
securities of foreign issuers and engage in foreign currency transactions
with respect to these investments; invest up to 15% of their assets in
Illiquid Securities; invest their assets in warrants; lend their portfolio
securities; sell securities short; borrow money in amounts up to one-third
of their assets for investment purposes; write or purchase call or put
options on securities or on stock indexes; concentrate more than 25% of
their assets in any one industry; invest up to 100% of their assets in
master demand notes; invest in long- or short-term corporate bonds (see
"Bond Portfolio") and other fixed income securities (such as U.S. government
securities, commercial paper, preferred stock, convertible preferred stock
and convertible debentures); and enter into futures contracts and options on
futures contracts. The risks associated with these investments are described
below.
BOND PORTFOLIO
The investment objective of Bond Portfolio is a high level of current
income. The underlying funds in which it invests will include funds which
seek high current income by investing in long- or short-term bonds and other
fixed income securities (such as securities issued or guaranteed or insured
by the U.S. government, its agencies or instrumentalities, commercial paper,
preferred stock, convertible preferred stock or convertible debentures). The
underlying funds also may lend their portfolio securities; sell securities
short; borrow money in amounts up to one-third of their assets for
investment purposes; write or purchase call or put options on securities or
on stock indexes; invest up to 100% of their assets in master demand notes;
and enter into futures contracts and options on futures contracts.
The Portfolio will invest in underlying funds which limit their corporate
bond investments to investment grade bonds which generally are considered to
be bonds rated within one of the four highest quality grades assigned by a
nationally recognized statistical rating organization ("NRSRO"), such as
Standard & Poor's Ratings Group ("S&P") or Moody's Investor Services, Inc.
("Moody's"), or which are unrated but are deemed by an underlying fund's
investment adviser to be of comparable quality. These include bonds rated
AAA, AA, A and BBB by S&P and bonds rated Aaa, Aa, A and Baa by Moody's.
Bonds rated BBB by S&P or Baa by Moody's normally indicate a greater degree
of investment risk than bonds with higher ratings.
The Portfolio also will invest (without limitation) in underlying funds
which themselves may invest in corporate bonds which are not considered
investment grade bonds (commonly referred to as "junk bonds") by an NRSRO,
such as Moody's or S&P, or which are unrated, and thus may carry a greater
degree of risk than bonds considered investment grade. These include bonds
rated BB, B, CCC and CC by S&P, and Ba, B, Caa, Ca and C by Moody's. These
ratings may indicate that the bonds are predominantly speculative with
respect to the issuer's ability to pay interest and repay principal and may
indicate that the issuer soon may be or currently is in default. The risks
associated with these investments are described in "Description of Bond
Ratings." The Portfolio will limit its direct and indirect investment in
junk bonds to less than 35% of its net assets.
As a general matter, the current value of bonds varies inversely with
changes in prevailing interest rates. If interest rates increase after a
bond is purchased, the value of that security will normally decline.
Conversely, should prevailing interest rates decrease after a bond is
purchased, its market price will normally rise.
MANAGED TOTAL RETURN PORTFOLIO
The investment objective of Managed Total Return Portfolio is to realize
high total return (capital appreciation and current income). The Portfolio
seeks to achieve its objective by investing in a broad range of underlying
funds. It will allocate its assets among one or more of five general types
of mutual funds: aggressive growth funds, growth funds, growth and income
funds, fixed income (bond) funds and money market funds. The Portfolio is
unlikely at any particular moment to have all its assets invested in only
one of these general types of funds. The Adviser will vary the proportion of
each type of underlying fund based on the mix of such funds that may, in the
Adviser's view, be most likely to achieve the Portfolio's investment
objective.
In allocating assets among the five general types of underlying funds, the
Adviser will follow a multi-step investment analysis. First, the Adviser
will consider general political and economic trends and current financial
and market conditions in order to determine the current phase of the
business and investment cycle and to assess the risks and opportunities in
the financial markets. The Adviser will seek the most likely combination of
fund types which will provide the best opportunity for maximizing total
return consistent with prudent investment risk. The Adviser will not rely on
a model in reaching asset allocation decisions, but will make its own
assessment of the relative risk-reward levels of various asset types based
on its past experience and analysis of current conditions.
If the Adviser determines that the values of equity securities are likely to
rise, it may emphasize aggressive and conservative growth funds. In periods
of rising interest rates, it may emphasize holdings of money market funds or
in periods of falling interest rates it may emphasize fixed income funds,
depending upon conditions in the equity markets.
Second, after determining the relative proportion of assets to be allocated
to particular types of funds, the Adviser will identify whether certain
specific categories of funds offer greater potential for positive returns.
For example, the Adviser may choose to emphasize international equity funds
or funds that concentrate in a particular industry sector; or the Adviser
may select fixed income funds based on whether they invest primarily in
long- or short-term debt securities.
Finally, the Adviser will select those funds within the general or more
specific categories, as discussed, that offer the greatest potential for
positive returns in the Adviser's judgment.
Within the framework of the foregoing guidelines, the underlying funds in
which the Portfolio will invest will consist of funds which seek capital
growth and appreciation by investing primarily in common stock or securities
convertible into or exchangeable for common stock (such as convertible
preferred stock, convertible debentures or warrants); funds which seek a
combination of capital appreciation and current income (including income
from dividends, income from interest, growth of income or any combination
thereof) by investing primarily in common stocks, preferred stocks, bonds
and other fixed income securities (including convertible preferred stock and
convertible debentures); funds which seek high current income by investing
primarily in long- or short-term bonds and other fixed income securities
(such as securities issued, guaranteed or insured by the U.S. government,
its agencies or instrumentalities, commercial paper, preferred stock,
convertible preferred stock or convertible debentures); and funds which seek
as high a level of current income as is consistent with preservation of
capital and liquidity by investing in a broad range of high quality,
short-term money market instruments which have remaining maturities not
exceeding one year (including U.S. government securities, bank obligations,
commercial paper, corporate debt securities and repurchase agreements).
Some of the underlying funds in which the Portfolio invests may incur more
risk than others. For example, they may trade their portfolios more actively
(which results in higher brokerage commissions and increased realization of
taxable capital gains) and/or invest in companies whose securities are
subject to more erratic market movements. The underlying funds also may
invest up to 100% of their assets in securities of foreign issuers and
engage in foreign currency transactions with respect to these investments;
invest up to 15% of their assets in Illiquid Securities; invest their assets
in warrants; lend their portfolio securities; sell securities short; borrow
money in amounts of up to one-third of their assets for investment purposes
(i.e., leverage their portfolios); write (sell) or purchase call or put
options on securities or on stock indexes; concentrate more than 25% of
their assets in one industry; invest up to 100% of their assets in master
demand notes; and enter into futures contracts and options on futures
contracts. The risks associated with these investments are described below.
The Portfolio may invest in underlying funds which limit their corporate
bond investments to investment grade bonds which generally are considered to
be bonds rated within one of the four highest quality grades assigned by an
NRSRO, such as S&P or Moody's, or underlying funds which invest in corporate
bond investments which are unrated but are deemed by an underlying fund's
investment adviser to be of comparable quality. It may also invest in
underlying funds which invest in corporate bonds which are not considered
investment grade bonds (commonly referred to as "junk bonds") by an NRSRO,
such as Moody's or S&P, or which are unrated, and thus may carry a greater
degree of risk than bonds considered investment grade. These ratings may
indicate that the bonds are predominantly speculative with respect to the
issuer's ability to pay interest and repay principal and may indicate that
the issuer soon may be or currently is in default. The risks associated with
these investments are described below. The Portfolio will limit its direct
and indirect investment in junk bonds to less than 35% of its assets.
At times, for temporary defensive purposes when warranted by general
economic and financial conditions, the Portfolio may invest in a variety of
short-term debt securities, including U.S. Treasury bills and other U.S.
government securities, commercial paper, certificates of deposit, bankers'
acceptances and repurchase agreements with respect to such securities.
However, except when the Portfolio is in a temporary defensive investment
position or as may be considered necessary to accumulate cash in order to
satisfy minimum purchase requirements of the underlying funds or to meet
anticipated redemptions, it normally will maintain its assets invested in
underlying funds.
INVESTMENTS OF AND INVESTMENT TECHNIQUES EMPLOYED BY MUTUAL FUNDS
IN WHICH THE PORTFOLIOS MAY INVEST
ILLIQUID SECURITIES. An underlying fund may invest not more than 15% of its
total assets in securities for which there is no readily available market
("Illiquid Securities") which would include certain restricted securities
the disposition of which would be subject to legal restrictions and
repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between an underlying fund's decision
to dispose of such securities and the time when the fund is able to dispose
of them, during which time the value of the securities (and therefore the
value of the underlying fund's shares held by a Portfolio) could decline.
FOREIGN SECURITIES. An underlying fund may invest up to 100% of its assets
in securities of foreign issuers. There may be less publicly available
information about these issuers than is available about companies in the
U.S. and foreign auditing requirements may not be comparable to those in the
U.S. In addition, the value of the fund's foreign securities may be
adversely affected by fluctuations in the exchange rates between foreign
currencies and the U.S. dollar, as well as other political and economic
developments, including the possibility of expropriation, confiscatory
taxation, exchange controls or other foreign governmental restrictions. In
addition, income received by an underlying fund from sources within foreign
countries, such as dividends and interest payable on foreign securities, may
be subject to foreign taxes, including taxes withheld from payments on those
securities. Moreover, the underlying funds will generally calculate their
net asset values and complete orders to purchase, exchange or redeem shares
only on a Monday-Friday basis (excluding holidays on which the New York
Stock Exchange ("NYSE") is closed). Foreign securities in which the
underlying funds may invest may be listed primarily on foreign stock
exchanges which may trade on other days (such as Saturday or NYSE holidays).
As a result, the net asset value of an underlying fund's portfolio may be
significantly affected by such trading on days when the Adviser does not
have access to the underlying funds and shareholders of the Trust do not
have access to their respective Portfolios. Under the 1940 Act, an
underlying fund may maintain its foreign securities in custody of non-U.S.
banks and securities depositories.
INDUSTRY CONCENTRATION. An underlying fund may concentrate its investments
within one industry. Because the scope of investment alternatives within an
industry is limited, the value of the shares of such an underlying fund may
be subject to greater market fluctuation than an investment in a fund which
invests in a broader range of securities.
MASTER DEMAND NOTES. Although the Portfolios themselves will not do so,
underlying funds (particularly money market mutual funds) may invest up to
100% of their assets in master demand notes. Master demand notes are
unsecured obligations of U.S. corporations redeemable upon notice that
permit investment by a fund of fluctuating amounts at varying rates of
interest pursuant to direct arrangements between the fund and the issuing
corporation. Because they are direct arrangements between the fund and the
issuing corporation, there is no secondary market for the notes. However,
they are redeemable at face value, plus accrued interest, at any time.
REPURCHASE AGREEMENTS. Underlying funds, particularly money market funds,
may enter into repurchase agreements with banks and broker-dealers under
which they acquire securities subject to an agreement with the seller to
repurchase the securities at an agreed upon time and price. The Portfolios
also may enter into repurchase agreements. These agreements are considered
under the 1940 Act to be loans by the purchaser collateralized by the
underlying securities. If the seller should default on its obligation to
repurchase the securities, the underlying fund may experience delay or
difficulties in exercising its rights to dispose of the securities held as
collateral and might incur a loss if the value of the securities should
decline. For a more complete discussion of repurchase agreements, see
"Investment Policies" in the SAI.
LOANS OF PORTFOLIO SECURITIES. An underlying fund may lend its portfolio
securities provided it complies with the following general requirements: (i)
the loan is secured continuously by collateral consisting of U.S. government
securities or cash or cash equivalents maintained on a daily mark-to-market
basis in an amount at least equal to the current market value of the
securities loaned; (ii) the fund may at any time call the loan and obtain
the return of the securities loaned; (iii) the fund will receive any
interest or dividends paid on the loaned securities; and (iv) the aggregate
market value of securities loaned will not at any time exceed one-third of
the total assets of the fund. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to provide additional
collateral.
SHORT SALES. An underlying fund may sell securities short. In a short sale,
the fund sells stock which it does not own, making delivery with securities
"borrowed" from a broker. The fund is then obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement.
This price may or may not be less than the price at which the security was
sold by the fund. Until the security is replaced, the fund is required to
pay to the lender any dividends or interest which accrue during the period
of the loan. In order to borrow the security, the fund may also have to pay
a premium which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker, to the extent necessary to
meet margin requirements, until the short position is closed out.
The fund also must deposit in a segregated account (or earmark) an amount of
cash or U.S. government securities equal to the difference between (a) the
market value of the securities sold short at the time they were sold short
and (b) the value of the collateral deposited with the broker in connection
with the short sale (not including the proceeds from the short sale). While
the short position is open, the fund must maintain daily the segregated
account at such a level that (i) the amount deposited in it plus the amount
deposited with the broker as collateral equals the current market value of
the securities sold short and (ii) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the market value of
the securities at the time they were sold short. Depending upon market
conditions, up to 80% of the value of a fund's net assets may be deposited as
collateral for the obligation to replace securities borrowed to effect short
sales and allocated to a segregated account in connection with short sales.
The fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which
the fund replaces the borrowed security. The fund will realize a gain if the
security declines in price between those dates. The amount of any gain will
be decreased and the amount of any loss increased by the amount of any
premium, dividends or interest the fund may be required to pay in connection
with a short sale.
A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities sold short. Such a
transaction serves to defer a gain or loss for Federal income tax purposes.
FOREIGN CURRENCY TRANSACTIONS. In connection with its portfolio transactions
in securities traded in a foreign currency, an underlying fund may enter
into forward contracts to purchase or sell an agreed upon amount of a
specific currency at a future date which may be any fixed number of days
from the date of the contract agreed upon by the parties at a price set at
the time of the contract. Under such an arrangement, concurrently with the
entry into a contract to acquire a foreign security for a specified amount
of currency, the fund would purchase with U.S. dollars the required amount
of foreign currency for delivery at the settlement date of the purchase; the
fund would enter into similar forward currency transactions in connection
with the sale of foreign securities. The effect of such transactions would
be to fix a U.S. dollar price for the security to protect against a possible
loss resulting from an adverse change in the relationship between the U.S.
dollar and the subject foreign currency during the period between the date
the security is purchased or sold and the date on which payment is made or
received, the normal range of which is three to 14 days. These contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement and no commissions are charged at any
stage for trades. Although such contracts tend to minimize the risk of loss
due to a decline in the value of the subject currency, they tend to limit
commensurately any potential gain which might result should the value of
such currency increase during the contract period.
LEVERAGE THROUGH BORROWING. An underlying fund may borrow up to one-third of
the value of its net assets on an unsecured basis from banks to increase its
holdings of portfolio securities. Under the 1940 Act, the fund is required
to maintain continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient portfolio holdings to
restore such coverage if it should decline to less than 300% due to market
fluctuations or otherwise, even if disadvantageous from an investment
standpoint. Leveraging will exaggerate the effect of any increase or
decrease in the value of portfolio securities on the fund's net asset value,
and money borrowed will be subject to interest costs (which may include
commitment fees and/or the cost of maintaining minimum average balances)
which may or may not exceed the interest and option premiums received from
the securities purchased with borrowed funds.
WARRANTS. An underlying fund may invest in warrants, which are options to
purchase equity securities at specific prices valid for a specific period of
time. The prices do not necessarily move parallel to the prices of the
underlying securities. Warrants have no voting rights, receive no dividends
and have no rights with respect to the assets of the issuer. If a warrant is
not exercised within the specified time period, it will become worthless and
the fund will lose the purchase price and the right to purchase the
underlying security.
HIGH YIELD SECURITIES. An underlying fund may invest in high yield, high
risk securities. Investing in high yield, high risk securities (also called
"junk bonds") involves special risks in addition to the risks associated
with investments in higher rated debt securities. High yield, high risk
securities may be regarded as predominantly speculative with respect to the
issuer's continuing ability to meet principal and interest payments.
High yield, high risk securities may be more susceptible to real or
perceived adverse economic and competitive industry conditions than higher
grade securities. The prices of high yield, high risk securities have been
found to be less sensitive to interest rate changes than more highly rated
investments, but more sensitive to adverse economic downturns or individual
corporate developments. A projection of an economic downturn or of a period
of rising interest rates, for example, could cause a decline in high yield,
high risk security prices because the advent of a recession could lessen the
ability of a highly leveraged company to make principal and interest
payments on its debt securities. If the issuer of high yield, high risk
securities defaults, a fund may incur additional expenses to seek recovery.
In the case of high yield securities structured as zero coupon or
payment-in-kind securities, the market prices of such securities are
affected to a greater extent by interest rate changes, and therefore tend to
be more volatile than securities which pay interest periodically and in
cash.
The secondary markets on which high yield, high risk securities are traded
may be less liquid than the market for higher grade securities. Less
liquidity in the secondary trading markets could adversely affect and cause
large fluctuations in the daily net asset value of a fund's shares. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of high yield, high risk
securities, especially in a thinly traded market.
There may be special tax considerations associated with investing in high
yield, high risk securities structured as zero coupon or payment-in-kind
securities. A fund records the interest on these securities as income even
though it receives no cash interest until the security's maturity or payment
date. A fund will be required to distribute all or substantially all such
amounts annually and may have to obtain the cash to do so by selling
securities which otherwise would continue to be held. Shareholders will be
taxed on these distributions.
The use of credit ratings as the sole method of evaluating high yield, high
risk securities can involve certain risks. For example, credit ratings
evaluate the safety of principal and interest payments, not the market value
risk of high yield, high risk securities. Also, credit rating agencies may
fail to change credit ratings in a timely fashion to reflect events since
the security was last rated.
DERIVATIVES
An underlying fund may invest in the following instruments that are commonly
known as derivatives. Generally, a derivative is a financial arrangement,
the value of which is based on, or "derived" from, a traditional security,
asset, or market index.
OPTIONS ACTIVITIES. An underlying fund may write (i.e., sell) listed call
options ("calls") if the calls are "covered" throughout the life of the
option. A call is "covered" if the fund owns the optioned securities. When a
fund writes a call, it receives a premium and gives the purchaser the right
to buy the underlying security at any time during the call period (usually
not more than nine months in the case of common stock) at a fixed exercise
price regardless of market price changes during the call period. If the call
is exercised, the fund will forgo any gain from an increase in the market
price of the underlying security over the exercise price.
A fund may purchase a call on securities only to effect a "closing purchase
transaction" which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call
previously written by the fund on which it wishes to terminate its
obligation. If the fund is unable to effect a closing purchase transaction,
it will not be able to sell the underlying security until the call
previously written by the fund expires (or until the call is exercised and
the fund delivers the underlying security).
An underlying fund also may write and purchase put options ("puts"). When a
fund writes a put, it receives a premium and gives the purchaser of the put
the right to sell the underlying security to the fund at the exercise price
at any time during the option period. When a fund purchases a put, it pays a
premium in return for the right to sell the underlying security at the
exercise price at any time during the option period. An underlying fund also
may purchase stock index puts which differ from puts on individual
securities in that they are settled in cash based on the values of the
securities in the underlying index rather than by delivery of the underlying
securities. Purchase of a stock index put is designed to protect against a
decline in the value of the portfolio generally rather than an individual
security in the portfolio. If any put is not exercised or sold, it will
become worthless on its expiration date.
A fund's option positions may be closed out only on an exchange which
provides a secondary market for options of the same series, but there can be
no assurance that a liquid secondary market will exist at a given time for
any particular option. In this regard, trading in options on certain
securities (such as U.S. government securities) is relatively new so that it
is impossible to predict to what extent liquid markets will develop or
continue.
The underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the fund has
written puts or calls, or as to other securities acceptable for such escrow
so that no margin deposit is required of the fund. Until the underlying
securities are released from escrow, they cannot be sold by the fund.
In the event of a shortage of the underlying securities deliverable on
exercise of an option, the Options Clearing Corporation ("OCC") has the
authority to permit other, generally comparable securities to be delivered
in fulfillment of option exercise obligations. If the OCC exercises its
discretionary authority to allow such other securities to be delivered, it
may also adjust the exercise prices of the affected options by setting
different prices at which otherwise ineligible securities may be delivered.
As an alternative to permitting such substitute deliveries, the OCC may
impose special exercise settlement procedures.
FUTURES CONTRACTS. An underlying fund may enter into futures contracts for
the purchase or sale of debt securities and stock indexes. A futures
contract is an agreement between two parties to buy and sell a security or
an index for a set price on a future date. Futures contracts are traded on
designated "contract markets" which, through their clearing corporations,
guarantee performance of the contracts.
Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for
the sale of securities has an effect similar to the actual sale of
securities, although sale of the futures contract might be accomplished more
easily and quickly. For example, if a fund holds long-term U.S. government
securities and it anticipates a rise in long-term interest rates, it could,
in lieu of disposing of its portfolio securities, enter into futures
contracts for the sale of similar long-term securities. If rates increased
and the value of the fund's portfolio securities declined, the value of the
fund's futures contracts would increase, thereby protecting the fund by
preventing the net asset value from declining as much as it otherwise would
have. Similarly, entering into futures contracts for the purchase of
securities has an effect similar to the actual purchase of the underlying
securities, but permits the continued holding of securities other than the
underlying securities. For example, if the fund expects long-term interest
rates to decline, it might enter into futures contracts for the purchase of
long-term securities so that it could gain rapid market exposure that may
offset anticipated increases in the cost of securities it intends to
purchase while continuing to hold higher-yield short-term securities or
waiting for the long-term market to stabilize.
A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to
a specific security. A stock index futures contract does not require the
physical delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the contract to be credited or
debited at the close of each trading day to the respective accounts of the
parties to the contract. On the contract's expiration date, a final cash
settlement occurs. Changes in the market value of a particular stock index
futures contract reflect changes in the specified index of equity securities
on which the future is based.
There are several risks in connection with the use of futures contracts. In
the event of an imperfect correlation between the futures contract and the
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. Further,
unanticipated changes in interest rates or stock price movements may result
in a poorer overall performance for the fund than if it had not entered into
futures contracts on debt securities or stock indexes.
In addition, the market prices of futures contracts may be affected by
certain factors. First, all participants in the futures market are subject
to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close futures
contracts through offsetting transactions which could distort the normal
relationship between the securities and futures markets. Second, from the
point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market may
also cause temporary price distortions.
Finally, positions in futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market for such
futures. There is no assurance that a liquid secondary market on an exchange
or board of trade will exist for any particular contract or at any
particular time.
OPTIONS ON FUTURES CONTRACTS. A fund also may purchase and sell listed put
and call options on futures contracts. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call and
a short position if the option is a put), at a specified exercise price at
any time during the option period. When an option on a futures contract is
exercised, delivery of the futures position is accompanied by cash
representing the difference between the current market price of the futures
contract and the exercise price of the option. The fund may purchase put
options on futures contracts in lieu of, and for the same purpose as, a sale
of a futures contract. It also may purchase such put options in order to
hedge a long position in the underlying futures contract in the same manner
as it purchases "protective puts" on securities.
As with options on securities, the holder of an option may terminate his
position by selling an option of the same series. There is no guarantee that
such closing transactions can be effected. The fund is required to deposit
initial margin and maintenance margin with respect to put and call options
on futures contracts written by it pursuant to brokers' requirements similar
to those applicable to futures contracts described above and, in addition,
net option premiums received will be included as initial margin deposits.
In addition to the risks which apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain
that this market will develop. Compared to the use of futures contracts, the
purchase of options on futures contracts involves less potential risk to the
fund because the maximum amount at risk is the premium paid for the options
(plus transaction costs). However, there may be circumstances when the use
of an option on a futures contract would result in a loss to the fund when
the use of futures contract would not, such as when there is no movement in
the prices of the underlying securities. Writing an option on a futures
contract involves risks similar to those arising in the sale of futures
contracts, as described above.
HEDGING. An underlying fund may employ many of the investment techniques
described in this section not only for investment purposes which may be
considered speculative, but also for hedging purposes. For example, an
underlying fund may purchase or sell put and call options on common stocks
to hedge against movements in individual common stock prices, or purchase
and sell stock index futures and related options to hedge against marketwide
movements in common stock prices. Although such hedging techniques generally
tend to minimize the risk of loss that is hedged against, they also may
limit commensurately the potential gain that might have resulted had the
hedging transaction not occurred. Also, the desired protection generally
resulting from hedging transactions may not always be achieved.
INVESTMENT POLICIES AND RESTRICTIONS
The Portfolios have adopted certain fundamental investment policies (i.e.,
policies which may not be changed as to a Portfolio without the vote of a
majority of that Portfolio's outstanding shares, as defined under "Other
Information -- Voting") as well as certain investment policies which are not
fundamental and therefore may be changed by the Trustees without shareholder
approval. These policies reflect self-imposed standards or the requirements
of Federal law.
The Trust may, in the future, seek to achieve each Portfolio's investment
objective by investing all of the Portfolio's assets in a no-load,
diversified, open-end management investment company having substantially the
same investment objective as the Portfolio. Each Portfolio's investment
policies permit such an investment. Shareholders will receive prior written
notice with respect to any such investment.
Under each Portfolio's fundamental investment policies, no Portfolio may
invest more than 25% of its total assets in the securities of underlying
funds which themselves concentrate (i.e., invest more than 25% of their
assets) in any one industry. Nevertheless, through its investment in
underlying funds, a Portfolio indirectly may invest more than 25% of its
assets in one industry. The Portfolio also may not borrow money, except that
a Portfolio may, as a temporary measure for extraordinary or emergency
purposes, borrow from a bank in an amount not in excess of 5% of the
Portfolio's total assets, or pledge or hypothecate its assets, except that
the Portfolio may pledge not more than 5% of its total assets to secure such
borrowings. A Portfolio will not make additional investments at any time
during which it has outstanding borrowings.
Under each Portfolio's policies which are not fundamental, no Portfolio may
(i) invest more than 25% of its assets in the shares of any one open-end
investment company; (ii) purchase or otherwise acquire the securities of any
open-end investment company (except in connection with a merger,
consolidation, acquisition of substantially all of the assets or
reorganization of another investment company) if, as a result, a Portfolio
and all of its affiliates including the other Portfolios would own more than
3% of the total outstanding stock of that company, or (iii) purchase a
security which is not readily marketable if, as a result, more than 10% of
that Portfolio's assets would consist of such securities. For this purpose,
securities which are not readily marketable include repurchase agreements
having more than seven days to maturity (see "Investments of and Investment
Techniques Employed by Mutual Funds in Which the Portfolios May Invest") and
shares of an open-end investment company owned by the Portfolio in an amount
exceeding 1% of the issuer's total outstanding securities. See "Risks and
Other Considerations."
In addition, no Portfolio will invest more than 5% of its total assets in
the securities of an underlying fund which itself invests more than 5% of
its total assets in (i) the securities of any one issuer (excluding U.S.
government securities), (ii) securities of issuers which have been in
operation for less than three years and equity securities of issuers which
are not readily marketable or (iii) puts, calls, straddles, spreads, and
combinations thereof, and futures contracts.
Each Portfolio may invest up to 5% of its net assets in repurchase
agreements with banks and broker-dealers. This and other investment policies
and restrictions are discussed in the SAI under the heading "Investment
Policies."
The underlying funds in which a Portfolio invests may, but need not, have
the same investment policies as the Portfolio. For example, although
Aggressive Growth Portfolio will not borrow money for investment purposes,
it may invest up to 25% of its total assets in an underlying fund which
borrows money for investment purposes (i.e., engages in leveraging). The
investments which may be made by underlying funds in which the Portfolios
invest and the risks associated with those investments are described under
"Investment Objectives," "Investment Policies and Restrictions" and
"Investments of and Investment Techniques Employed by Mutual Funds in Which
the Portfolios May Invest."
RISKS AND OTHER CONSIDERATIONS
Any investment in a mutual fund involves risk and, although the Portfolios
invest in a number of underlying funds, this practice does not eliminate
investment risk. Moreover, investing through the Portfolios in an underlying
portfolio of mutual funds involves certain additional expenses and certain
tax results which would not be present in a direct investment in the
underlying funds. See "Expenses" and "Dividends, Distributions and Taxes."
A Portfolio, together with the other Portfolios and any "affiliated persons"
(as defined in the 1940 Act) may purchase only up to 3% of the total
outstanding securities of any underlying fund. For this purpose, shares of
underlying funds held by private discretionary investment advisory accounts
managed by the Adviser will be aggregated with those held by the Portfolios.
Accordingly, when affiliated persons and other accounts managed by the
Adviser hold shares of any of the underlying funds, each Portfolio's ability
to invest fully in shares of those funds is restricted, and the Adviser must
then, in some instances, select alternative investments that would not have
been its first preference.
The 1940 Act also provides that an underlying fund whose shares are
purchased by a Portfolio will be obligated to redeem shares held by the
Portfolio only in an amount up to 1% of the underlying fund's outstanding
securities during any period of less than 30 days. Shares held by a
Portfolio in excess of 1% of an underlying fund's outstanding securities,
therefore, will be considered not readily marketable securities which
together with other such securities may not exceed 10% of that Portfolio's
assets. See "Investment Policies and Restrictions." These limitations are
not fundamental investment policies and may be changed by the Trustees
without shareholder approval.
Under certain circumstances, an underlying fund may determine to make
payment of a redemption by a Portfolio wholly or partly by a distribution in
kind of securities from its portfolio, in lieu of cash, in conformity with
the rules of the SEC. In such cases, the Portfolios may hold securities
distributed by an underlying fund until the Adviser determines that it is
appropriate to dispose of such securities.
Investment decisions by the investment advisers of the underlying funds are
made independently of the Trust and its Adviser. Therefore, the investment
adviser of one underlying fund may be purchasing shares of the same issuer
whose shares are being sold by the investment adviser of another such fund.
The result of this would be an indirect expense to a Portfolio without
accomplishing any investment purpose.
Each Portfolio may purchase shares of both load and no-load underlying
funds. To the extent an underlying fund offers multiple classes of shares,
the Portfolios will purchase the share class available to it with the lowest
sales charges. However, the Portfolios will not invest in shares of
underlying funds which are sold with a contingent deferred sales charge.
Under the 1940 Act, a mutual fund must sell its shares at the price
(including sales load, if any) described in its prospectus, and current
rules under the 1940 Act do not permit negotiation of sales charges.
Therefore, a Portfolio currently is not able to negotiate the level of the
sales charges at which it will purchase shares of load funds, which may be
as great as 8.5% of the public offering price (or 9.29% of the net amount
invested). Nevertheless, when appropriate, a Portfolio will purchase such
shares pursuant to (i) letters of intent, permitting it to obtain reduced
sales charges by aggregating its intended purchases over time (generally 13
months from the initial purchase under the letter); (ii) rights of
accumulation, permitting it to obtain reduced sales charges as it purchases
additional shares of an underlying fund; and (iii) the right to obtain
reduced sales charges by aggregating its purchases of several funds within a
family of mutual funds. Based upon these privileges, it is expected that, in
the majority of cases, the sales charges paid by a Portfolio on a load fund
purchase will not exceed 1% of the public offering price (1.01% of the net
amount invested). See "Portfolio Transactions."
Under certain circumstances, a sales charge incurred by a Portfolio in
acquiring shares of an underlying fund may not be taken into account in
determining the gain or loss for federal income tax purposes on the
disposition of the shares acquired. If shares are disposed of within 90 days
from the date they were purchased and if shares of a new underlying fund are
subsequently acquired without imposition of a sales charge or imposition of
a reduced sales charge pursuant to a right granted to the Portfolio to
acquire shares without payment of a sales charge or with the payment of a
reduced charge, then the sales charge paid upon the purchase of the initial
shares will be treated as paid in connection with the acquisition of the new
underlying fund's shares rather than the initial shares.
EXPENSES
As an investor in the Portfolios, you should recognize that you may invest
directly in mutual funds and that, by investing in mutual funds indirectly
through the Portfolios, you will bear not only your proportionate share of
the expenses of the Portfolios (including operating costs and investment
advisory and administrative fees) but also, indirectly, similar expenses of
the underlying funds. If you are an investor in the Portfolios through a
managed account program and pay an advisory fee for asset allocation, you
should recognize that the combined expenses of the program and of the
Portfolios (including their indirect expenses) may involve greater fees and
expenses than present in other types of investments without the benefit of
professional asset allocation recommendations. In addition, as a Portfolio
shareholder, you will bear your proportionate share of expenses related to
the distribution of the Portfolio's Shares, see "Management of the Trust --
The Distributors," and also may indirectly bear expenses paid by an
underlying fund related to the distribution of its shares. As a Portfolio
shareholder, you also will bear your proportionate share of any sales
charges incurred by the Portfolio related to the purchase of shares of the
underlying funds. Finally, as an investor, you should recognize that, as a
result of the Portfolios' policies of investing in other mutual funds, you
may receive taxable capital gains distributions to a greater extent than
would be the case if you invested directly in the underlying funds. See
"Dividends, Distributions and Taxes."
MANAGEMENT OF FUNDMANAGER PORTFOLIOS
The business and affairs of the Trust are managed under the direction of the
Trustees. Additional information about the Trustees, as well as the Trust's
executive officers, may be found in the SAI under the heading "Management
Trustees and Officers."
THE ADVISER
Freedom Capital Management has its principal office at One Beacon Street,
Boston, Massachusetts. The Adviser advises the Trust through the M.D. Hirsch
Division of Freedom Capital Management. Michael D. Hirsch, Chairman of the
M.D. Hirsch Division of Freedom Capital Management, has provided
discretionary investment advisory services relating to investments in mutual
funds to individual accounts since 1975.
Freedom Capital Management is an indirect, wholly-owned subsidiary of JHFSC
Acquisition Corp. whose stock is held by the following companies in the
approximate percentages: Thomas H. Lee Equity Fund III, L.P. (49%), a
Massachusetts limited partnership; SCP Private Equity Partners, L.P. (13%),
a Delaware limited partnership; John Hancock Subsidiaries, Inc. (4.9%), a
wholly-owned subsidiary of John Hancock Mutual Life Insurance Company; and
certain members of management and employees of John Hancock Freedom
Securities Corporation (the direct parent of the Adviser and a subsidiary of
JHFSC Acquisition Corp.) and its subsidiaries, including the Adviser (32%).
Prior to November 29, 1996, Freedom Capital Management was an indirect,
wholly-owned subsidiary of John Hancock Mutual Life Insurance Company ("John
Hancock"). John Hancock is a major mutual life insurance company based in
Boston, Massachusetts.
Pursuant to an Investment Advisory Contract, the Adviser is responsible for
the investment management of each Portfolio's assets, including the
responsibility for making investment decisions and placing orders for the
purchase and sale of the Portfolio's investments directly with the issuers
or with brokers or dealers, selected by it in its discretion, including
Freedom Distributors and Edgewood. See "Portfolio Transactions." The Adviser
also furnishes to the Trustees, which have overall responsibility for the
business and affairs of the Trust, periodic reports on the investment
performance of the Trust. For these services, the Adviser receives from each
Portfolio a fee, payable monthly, at the annual rate of 0.50% of that
Portfolio's average daily net assets up to $500 million and 0.40% of its
average daily net assets in excess of $500 million.
Michael Hirsch is the Portfolio Manager of the Portfolios and is responsible
for the day to day management of the Portfolios. Currently, Mr. Hirsch is
Chairman of the M.D. Hirsch Division of Freedom Capital Management. Prior to
February 21, 1995, Mr. Hirsch was the Vice Chairman and Managing Director of
the M.D. Hirsch Division of Republic Asset Management. Mr. Hirsch served as
President of Hirsch from February, 1991 until June, 1993 and Chief
Investment Officer of Republic from 1981 until February, 1991. Mr. Hirsch
pioneered the concept of investing his clients' assets in a portfolio of
mutual funds in 1975. Mr. Hirsch is now a noted authority on mutual funds
and has authored two books, "Multifund Investing" in 1987 and "The Mutual
Fund Wealth Builder" in 1991.
THE ADMINISTRATOR
FAS, a wholly-owned subsidiary of Federated Investors with its principal
business offices at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the
Portfolios. FAS provides these at an annual rate which relates to the
average aggregate daily net assets of the Portfolios as specified below:
MAXIMUM
ADMINISTRATIVE AVERAGE AGGREGATE
FEE DAILY NET ASSETS
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000 per Portfolio and $35,000 per each additional class of shares. FAS
may choose voluntarily to waive a portion of its fee or minimums from time
to time in its sole discretion.
THE DISTRIBUTORS
The Trustees of the Trust have approved a Distribution Contract (the
"Distribution Contract") between the Trust and each of Edgewood, Freedom
Distributors, Tucker Anthony and Sutro pursuant to which each will serve as
a Distributor of the Trust and of the Shares of each of the Portfolios.
Pursuant to a Distribution Plan adopted by the Portfolios with respect to
the Class (the "Plan"), each Portfolio will reimburse the Distributors
monthly (subject to a limit of 0.50% per annum of the Portfolio's average
daily net assets attributable to the Class) for costs and expenses incurred
by the Distributors in connection with the distribution of Portfolio Shares
and for the provision of certain shareholder services with respect to
Portfolio Shares. Payments to the Distributors will be for various types of
activities, including: (i) payments to broker-dealers who advise
shareholders regarding the purchase, sale, or retention of Portfolio Shares
and who provide shareholders with personal services and account maintenance
services ("service fee"), (ii) payments to employees of the Distributors,
and (iii) printing and advertising expenses. Such payments by the
Distributors to broker-dealers may be in amounts up to 0.50% per annum of
each Portfolio's average daily net assets attributable to the Class,
provided, however, that the service fee will be limited to 0.25% of each
Portfolio's average daily net assets attributable to the Class. The fees and
reimbursements paid by the Portfolios to the Distributors may equal up to
0.50% of each Portfolio's average daily net assets attributable to the
Class, of which up to 0.25% of the Portfolio's average daily net assets may
be paid for shareholder servicing expenses. Salary expense of salesmen who
are responsible for marketing Shares of the Portfolios and related travel
expenses may be allocated to various Portfolios on the basis of average net
assets attributable to the Class.
Any payment by a Distributor or reimbursement of a Distributor by the
Portfolio made pursuant to the Plan is contingent upon the Trustees'
approval. Each Portfolio will not be liable for distribution and shareholder
servicing expenditures in any given year in excess of the maximum amount
(0.50% per annum of each Portfolio's average daily net assets attributable
to the Class) payable under the Plan in that year. The Plan also permits the
Distributors to receive and retain brokerage commissions with respect to
portfolio transactions for underlying funds, including funds which have a
policy of considering sales of their shares in selecting broker-dealers for
the execution of their portfolio transactions.
The Distributors may provide promotional incentives to investment executives
who support the sale of shares of the Portfolios. In some instances, these
incentives may be offered only to certain investment executives which
provide services in connection with the sale or expected sale of significant
amounts of shares.
Edgewood, a registered broker/dealer, is a wholly-owned subsidiary of
Federated Investors with principal business offices at Clearing Operations,
P.O. Box 897, Pittsburgh, Pennsylvania 15230-0897. Freedom Distributors is a
registered broker/dealer with principal business offices at One Beacon
Street, Boston, Massachusetts 02108. Tucker Anthony is a brokerage firm
which is a member of the New York Stock Exchange continuing an investment
banking and brokerage business established in 1892. The principal business
address of Tucker Anthony is One Beacon Street, Boston, Massachusetts 02108.
Sutro is brokerage firm and a member of the New York Stock Exchange. The
principal business address of Sutro is 201 California Street, San Francisco,
California 94111. Freedom Distributors, Tucker Anthony, and Sutro are
subsidiaries of John Hancock Freedom Securities Corporation. See description
of "The Adviser" above.
CUSTODIAN AND TRANSFER AGENT
The Trustees of the Trust has also approved a Custodian Agreement and a
Transfer Agency and Service Agreement (the "IBT Contracts") between the
Trust and Investors Bank & Trust Company ("IBT") pursuant to which IBT
provides custodial, portfolio accounting, transfer agency, dividend
disbursing and shareholder servicing services to the Trust and each of the
Portfolios. The principal business address of IBT is 89 South Street,
Boston, Massachusetts 02111.
SERVICE ORGANIZATIONS
The Trust also contracts with various banks, trust companies, broker-dealers
(other than the Distributors) or other financial organizations
(collectively, "Service Organizations") to provide administrative services
for the Class such as maintaining shareholder accounts and records. Each
Portfolio pays fees to Service Organizations (which vary depending upon the
services provided) in amounts up to an annual rate of 0.25% of the daily net
asset value of a Portfolio's Shares owned by shareholders with whom the
Service Organization has a servicing relationship.
Some Service Organizations may impose additional or different conditions on
their clients such as requiring their clients to invest more than the
minimum initial or subsequent investments specified by the Trust or charging
a direct fee for servicing. If imposed, these fees would be in addition to
any amounts which might be paid to the Service Organization by the Trust.
Each Service Organization has agreed to transmit to its clients a schedule
of any such fees. Shareholders using Service Organizations are urged to
consult them regarding any such fees or conditions.
OTHER EXPENSES
The Trust bears all costs of its operations other than expenses specifically
assumed by the Administrator, Distributors or the Adviser. See "Management"
in the SAI. Expenses directly attributable to a Portfolio or class are
charged to that Portfolio or class; other expenses are allocated
proportionately among the Portfolios or class, as the case may be, in
relation to the net assets of each Portfolio or class.
PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Contract, the Adviser places orders for
the purchase and sale of portfolio investments for a Portfolio's accounts
with brokers or dealers, selected by it in its discretion, including Freedom
Distributors and Edgewood. With respect to purchases of certain money market
instruments, purchase orders are placed directly with the issuer or its
agent. With respect to purchases of shares of underlying funds, the
Portfolio may pay a sales charge. Sales charges of the underlying funds
generally consist of two parts, the "dealer reallowance" (which typically
comprises at least 80% of the amount of the charge and is paid to the broker
participating in the sale of the underlying fund shares) and the
underwriter's retention. To the extent permissible by law, Freedom
Distributors and Edgewood will be designated as the participating brokers
entitled to receive the dealer reallowance portion of the sales charge on
purchases of load fund shares by the Portfolios. However, Freedom
Distributors will not retain any dealer reallowance in excess of 1% of the
public offering price on any transaction nor will it be designated as the
broker entitled to receive the dealer reallowance portion of the sales
charge where such reallowance would exceed 1% of the public offering price.
With respect to purchases of underlying fund shares, the Adviser directs
substantially all of the Portfolios' orders to either Freedom Distributors
or Edgewood, which may, in its discretion, direct the order to other
broker-dealers in consideration of sales of that Portfolio's shares, except
where the direction to another broker-dealer would increase the dealer
reallowance paid by a fund to Freedom Distributors above 1% of the public
offering price.
Freedom Distributors and Edgewood may also assist in the execution of a
Portfolio's purchase of underlying fund shares and they may receive
additional compensation (such as distribution payments, shareholder
servicing fees, and/or trailer fees) from the underlying funds or their
underwriters. In providing execution assistance, Freedom Distributors and
Edgewood receive orders from the Adviser; place them with the underlying
fund's distributor, transfer agent or other person, as appropriate; confirm
the trade, price and number of shares purchased; and assure prompt payment
by the Portfolio and proper completion of the order. Payment of sales
charges or other forms of compensation to Freedom Distributors or Edgewood
is not a factor that the Adviser considers when selecting an underlying fund
for purchase.
Each Portfolio is actively managed and has no restrictions upon portfolio
turnover, although its annual turnover rate is not expected to exceed 100%.
A 100% annual portfolio turnover rate would be achieved if each security in
each Portfolio's portfolio (other than securities with less than one year
remaining to maturity) were replaced once during the year. To the extent
each Portfolio is purchasing shares of load funds, a higher turnover rate
would result in correspondingly higher sales loads paid by that Portfolio.
Trading also may result in realization of net short-term capital gains which
would not otherwise be realized, and shareholders are taxed on such gains
when distributed from that Portfolio at ordinary income tax rates. See
"Dividends, Distributions and Taxes." There is no limit on the portfolio
turnover rates of the underlying funds in which the Portfolio may invest.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Portfolio is determined as of the
close of trading (normally
4:00 p.m., Eastern time) on the NYSE, Monday through Friday, except on: (i)
days on which there are not sufficient changes in the value of a Portfolio's
portfolio securities that its net asset value might be materially affected;
(ii) days during which no shares are tendered for redemption and no orders
to purchase shares are received; and (iii) the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day. Net asset value per share is
calculated by dividing the aggregate value of a Portfolio's assets allocable
to the Class less all liabilities by the number of that Portfolio's
outstanding shares.
The assets of each Portfolio consist primarily of the underlying funds,
which are valued at their respective net asset values under the 1940 Act.
The underlying funds value securities in their portfolios for which market
quotations are readily available at their current market value (generally
the last reported sale price) and all other securities and assets at fair
value pursuant to methods established in good faith by the boards of
directors or trustees of the underlying fund. Money market mutual funds may
use the amortized cost or penny-rounding methods to value their securities.
Securities having 60 days or less remaining to maturity generally are valued
at their amortized cost which approximates market value.
Other assets of each Portfolio are valued at their current market value if
market quotations are readily available and, if market quotations are not
available, they are valued at fair value pursuant to methods established in
good faith by the Trustees. Debt instruments having 60 days or less
remaining to maturity are valued at their amortized cost.
PURCHASE OF SHARES
Shares of the Portfolios are offered by the Distributors as an investment
vehicle for individuals, institutions, corporations and fiduciaries. Shares
of the Portfolios may also be offered to participants in certain managed
account programs who receive, for a fee at a maximum annual rate based upon
a percentage of assets invested, certain services, including asset
allocation recommendations with respect to the Portfolios based on an
evaluation of their investment objectives and risk tolerances. Each
Portfolio pays expenses related to the distribution of its shares. See
"Management of the Trust -- The Distributors." Each Portfolio may invest in
underlying funds which are sold with a sales charge. Prospectuses, sales
material and applications relating to the Portfolios can be obtained from
the Distributors.
The minimum initial investment is $1,000, except that the minimum initial
investment for an IRA is $250. The minimum subsequent investment is $100.
There are no minimum investment requirements for FundManager prototype
defined contribution plans. The minimum initial investment is waived for
purchases by Trustees, officers and employees of the Trust, the Adviser or a
Distributor, including their immediate families and certain accounts. Each
Portfolio also reserves the right to vary the initial and subsequent
investment minimums. All purchase payments are invested in full and
fractional shares. The Trust and each Distributor are authorized to reject
any purchase order.
For each shareholder of record, the Trust, as the shareholder's agent,
establishes an open account to which all shares purchased are credited
together with any dividends and capital gains distributions which are paid
in additional shares. See "Dividends, Distributions and Taxes."
PURCHASES BY CLIENTS OF THE DISTRIBUTORS OR AUTHORIZED SECURITIES DEALERS
If you have a brokerage account or Program account with a Distributor or an
authorized securities dealer, you may purchase any Portfolio's Shares
through your investment executive. Your investment executive has the
responsibility of submitting your purchase order to IBT on such day in order
to obtain that day's applicable purchase price. Purchase orders received by
IBT after the time of determining that day's purchase price (generally 4:00
p.m., New York time), are priced according to the net asset value per Share
of the Portfolio next determined on the following business day. Payment for
purchase orders must be made to such Distributor or dealer within three
business days of the purchase order.
Your Distributor or dealer will receive statements and dividends directly
from the Portfolios and will in turn provide you with account statements
reflecting the Portfolios' purchases, redemptions and dividend payments. If
you wish additional information concerning your investment, please call your
investment executive.
CERTAIN SERVICE ORGANIZATIONS AND OTHER INVESTORS -- PURCHASE BY CHECK OR
WIRE
PURCHASE BY MAIL. If you do not have a brokerage account with a Distributor,
you may purchase shares of the Portfolios directly by completing the
Purchase Application included in this Prospectus and mailing it, together
with a check written on a U.S. bank in a minimum amount of $1,000 payable to
[Name of Portfolio], to Investors Bank and Trust Company, P.O. Box 1537
MFD23, Boston, MA 02205-1537. Investors wishing to purchase Shares through
their account at a Service Organization should contact the organization
directly for appropriate instructions.
Subsequent purchases of $100 or more may also be made through IBT by
forwarding payment, together with the detachable stub from your account
statement or a letter containing your account number.
PURCHASE BY WIRE. Service Organizations (on behalf of customers) may
transmit purchase payments by wire directly to the Portfolios' Custodian at
the following address:
Investors Bank and Trust Company
Boston, Massachusetts
Attn: Transfer Agent
ABA# 011001438
Acct. #796543460
For further credit to FundManager Portfolios -- Financial Adviser Class
(name of Portfolio, account name, account #).
The wire order must specify the name of the Portfolio in which the
investment is being made, the account name, number, confirmation number,
address, social security or tax identification number (where applicable),
amount to be wired, name of the wiring bank and name and telephone number of
the person to be contacted in connection with the order. Where the initial
purchase is by wire, an account number will be assigned and a Purchase
Application must be completed and mailed to the Trust.
Investors making purchases through a Service Organization should be aware
that it is the responsibility of the Service Organization to transmit orders
for purchases of shares by its customers to the Transfer Agent and to
deliver required funds on a timely basis, in accordance with the procedures
stated above.
AUTOMATIC INVESTMENT PLAN
The Trust offers a plan for regularly investing specified dollar amounts
($25 minimum in monthly, quarterly, semiannual or annual intervals) in
Shares of the Portfolios. If an Automatic Investment Plan is selected,
subsequent investments will be automatic and will continue until such time
as the Portfolio and the investor's bank are notified to discontinue further
investments. Due to the varying procedures to prepare, process and forward
the bank withdrawal information to a Portfolio, there may be a delay between
the time of the bank withdrawal and the time the money reaches the
Portfolio. The investment in the Portfolio will be made at the public
offering price per Share determined on the day that both the check and bank
withdrawal data are received in required form by the Distributor. Further
information about the plan may be obtained from IBT at the telephone number
listed on the back cover of the Prospectus.
RETIREMENT PLANS
The Trust offers Shares of each Portfolio in connection with tax-deferred
retirement plans. Application forms and further information about these
plans, including applicable fees, are available from the Trust or a
Distributor upon request. Before investing in Shares of a Portfolio through
one or more such plans, an investor should consult a tax adviser regarding
the Federal income tax treatment of contributions to retirement plans, such
as those listed below.
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAs")
Shares of the Portfolios may be used as a funding medium for an IRA. An
Internal Revenue Service-approved IRA plan is available from each
Distributor naming IBT as custodian. The minimum initial investment for an
IRA is $250; the minimum subsequent investment is $100. IRAs are available
to individuals who receive compensation or earned income and their spouses
whether or not they are active participants in a tax-qualified or
government-approved retirement plan. An IRA contribution by an individual
who participates, or whose spouse participates, in a tax-qualified or
government-approved retirement plan may not be deductible depending upon the
individual's income. Individuals also may establish an IRA to receive a
"rollover" contribution of distributions from another IRA or a qualified
plan. Tax advice should be obtained before planning a rollover.
DEFINED CONTRIBUTION PLAN
Investors who are self-employed may purchase Shares of the Portfolios for
retirement plans for self-employed persons which are known as Defined
Contribution Plans (formerly Keogh or H.R. 10 Plans). The Class offers a
prototype Defined Contribution Plan for Money Purchase or Profit Sharing
Plans, 401(k) Plans, Simplified Employee Pension Plans (SEPs) and SAR
(SEPs).
Section 401(k) Plan
Shares of the Portfolios may be used as a vehicle for a cash or deferred
arrangement designed to qualify under Section 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code").
Section 403(b) Plan
Shares of the Portfolios may be used as vehicle for certain deferred
compensation plans designed to qualify under Section 403(b) of the Code for
use by employees of certain educational, non-profit hospital and charitable
organizations.
Section 457 Plan
Shares of the Portfolios may be used as a vehicle for certain deferred
compensation plans provided for by Section 457 of the Code with respect to
service for state governments, local governments, rural electric
cooperatives and political subdivisions, agencies, instrumentalities and
certain affiliates of such entities which enjoy special treatment.
EXCHANGE PRIVILEGE
By contacting their brokerage account executive, service organization or
transfer agent, shareholders may exchange some or all of their Portfolio
Shares for Shares of one or more other Portfolios or the Freedom Cash
Management Fund ("Fund") at net asset value. An exchange may result in a
change in the number of shares held, but not in the value of such shares,
immediately after the exchange. Each exchange involves the redemption of the
Portfolio or Fund Shares to be exchanged and the purchase of the Shares of
the other Portfolio or Fund. As a result, any gain or loss on the redemption
of the shares exchanged is reportable on the shareholder's Federal income
tax return. The exchange privilege (or any aspect of it) may be changed or
discontinued upon 60 days' written notice to shareholders and is available only
to shareholders in states where such exchanges may be legally made. A
shareholder considering an exchange should obtain and read the prospectus of
the Portfolios or Fund and consider the differences in investment objectives
and policies before making any exchange.
For further information as to how to purchase or exchange shares, an
investor should contact their Service Organization or Transfer Agent.
REDEMPTION OF SHARES
Upon receipt by the Trust of a redemption request in proper form, shares of
a Portfolio will be redeemed at the next determined net asset value. See
"Determination of Net Asset Value." For the shareholder's convenience, the
Trust has established several different direct redemption procedures.
REDEMPTION OF SHARES PURCHASED THROUGH A DISTRIBUTOR OR AUTHORIZED
SECURITIES DEALER
In order to redeem your shares purchased through a brokerage account, you
should advise your investment executive, by telephone or mail, to execute
the redemption. Redemption requests received by the close of the NYSE
(generally 4:00 p.m., New York time), are effective that day. Your
investment executive has the responsibility of submitting your redemption
request to IBT on such day in order to obtain that day's applicable
redemption price. There is no redemption charge. Redemption proceeds will be
held in your brokerage account unless you give instructions to your
investment executive to remit the proceeds to you.
DIRECT REDEMPTION
Direct redemptions are not available for shares purchased through a
Distributor's brokerage account. Any such redemption requests received will
be forwarded to your investment executive who will process them as described
above.
Redemptions may be made by letter to the Trust specifying the dollar amount
or number of shares to be redeemed, account number and the applicable
Portfolio. The letter must be signed in exactly the same way the account is
registered (if there is more than one owner of the shares, all must sign)
and all signatures must be guaranteed by an Eligible Guarantor Institution,
which includes a domestic bank, broker, dealer, credit union, national
securities exchange, registered securities association, clearing agency or
savings association. The Portfolios' transfer agent, however, may reject
redemption instructions if the guarantor is neither a member of nor a
participant in a signature guarantee program (currently known as "STAMP,"
"SEMP," or "NYSE MSP"). Corporations, partnerships, trusts or other legal
entities may be required to submit additional documentation.
An investor may redeem shares in any amount by written request mailed to the
Trust at the following address:
FundManager Portfolios
c/o Investors Bank & Trust Company
P.O. Box 1537 MFD23
Boston, Massachusetts 02205-1537
If shares to be redeemed are held in certificate form, the certificates must
be enclosed with the letter. Do not sign the certificates and for protection
use registered mail.
Checks for redemption proceeds normally will be mailed within three days,
but will not be mailed until all checks in payment for the purchase of the
shares to be redeemed have been cleared, which may take up to 15 days.
Unless other instructions are given in proper form, a check for the proceeds
of a redemption will be sent to the shareholder's address of record.
REDEMPTION BY WIRE OR TELEPHONE
An investor may redeem Portfolio Shares by wire or by telephone if the
investor has checked the appropriate box on the Purchase Application or has
filed a Telephone Authorization Form with the Portfolios. These redemptions
may be paid by the Portfolios by wire or by check. The Trust reserves the
right to refuse telephone wire redemptions and may limit the amount involved
or the number of telephone redemptions. The telephone redemption procedure
may be modified or ended at any time by the Trust. Instructions for wire
redemptions are set forth in the Purchase Application. The Trust employs
reasonable procedures to confirm that instructions communicated by telephone
are genuine. For instance, the following information must be verified by the
shareholder or broker at the time a request for a telephone redemption is
effected: (i) shareholder's account number; (ii) shareholder's social
security number; and (iii) name and account number of shareholder's
designated securities dealer or bank. If the Trust fails to follow these or
other established procedures, it may be liable for any losses due to
unauthorized or fraudulent instructions.
A Service Organization may request a wire redemption, provided a Wire
Authorization Form is on file with the Trust. There is no charge to the
Service Organization for wire redemptions. The proceeds of a wire redemption
will be sent to an account with a Service Organization designated on the
appropriate form. The Trust reserves the right to restrict or terminate wire
redemption privileges. Proceeds of wire redemptions generally will be
transferred within three days after receipt of the request.
The Trust may suspend the right of redemption during any period when (i)
trading on the NYSE is restricted or the NYSE is closed, other than
customary weekend and holiday closings, (ii) the SEC has by order permitted
such suspension or (iii) an emergency, as defined by rules of the SEC,
exists making disposal of portfolio investments or determination of the
value of the net assets of the Portfolios not reasonably practicable.
If the Trustees should determine that it would be detrimental to the best
interests of the remaining shareholders of a Portfolio to make payment
wholly or partly in cash, that Portfolio may pay the redemption price in
whole or in part by a distribution in kind of readily marketable securities
(mutual fund shares or money market instruments) from the portfolio of that
Portfolio, in lieu of cash, in conformity with applicable rules of the SEC.
The Trust will, however, redeem shares solely in cash up to the lesser of
$250,000 or 1% of its net assets during any 90-day period for any one
shareholder.
The proceeds of redemption may be more or less than the amount invested and,
therefore, a redemption may result in a gain or loss for Federal income tax
purposes.
Because the Portfolios incur fixed costs in maintaining shareholder
accounts, the Portfolios reserve the right to redeem your account if its
total value falls below $500 at the end of any month, unless the decrease is
solely the result of a reduction in net asset value per share. If a
Portfolio elects to redeem your account, it will notify you of its intention
to do so and will provide you with an opportunity to increase your account
by investing a sufficient amount to bring the account up to $500 or more
within 30 days of the notice.
SYSTEMATIC WITHDRAWAL PLAN
Any shareholder who owns shares of a Portfolio with an aggregate value of
$10,000 or more may establish a Systematic Withdrawal Plan under which the
shareholder redeems at net asset value the number of full and fractional
shares which will produce the monthly, quarterly, semi-annual or annual
payments specified (minimum $50 per payment). Depending on the amounts
withdrawn, systematic withdrawals may deplete the investor's principal.
Investors contemplating participation in this Plan should consult their tax
advisers. No additional charge to the shareholder is made for this service.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio intends to continue to qualify as a regulated investment
company under Subchapter M of the Code. In any year in which a Portfolio
qualifies as a regulated investment company and distributes substantially
all of its investment company taxable income (which includes, among other
items, the excess of net short-term capital gains over net
long-term capital losses) and its net capital gains (the excess of net
long-term capital gains over net short-term capital losses), the Portfolio
will not be subject to Federal income tax to the extent it distributes to
shareholders such income and capital gains in the manner required under the
Code. Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax.
To prevent imposition of the excise tax, each Portfolio must distribute for
each calendar year an amount equal to the sum of (i) at least 98% of its net
ordinary income (excluding any capital gains or losses) for the calendar year,
(ii) at least 98% of the excess of its capital gains over capital losses
(adjusted for certain ordinary losses) realized during the one-year period
ending October 31 of such year, and (iii) all ordinary income and capital gains
for previous years that were not distributed during such years. If a
distribution is declared by the Portfolio in December to shareholders of record
as of a specified date in December and paid by the Portfolio during January of
the following calendar year, the distribution will be treated as a dividend
paid during the calendar year. Such distributions will be taxable to
shareholders in the calendar year in which the distributions are declared,
rather than the calendar year in which the distributions are received. The
Portfolio intends to distribute its income in accordance with this requirement
to prevent application of the excise tax.
Each year the Trust will notify shareholders of the tax status of dividends
and distributions.
Income received by a Portfolio from a mutual fund in that Portfolio's
portfolio (including dividends and distributions of short-term capital
gains), as well as interest received on money market instruments and net
short-term capital gains received by the Portfolio on the sale of mutual
fund shares, will be distributed by the Portfolio (after deductions for
expenses) and will be taxable to shareholders as ordinary income. Because
the Portfolios are actively managed and can realize taxable net short-term
capital gains by selling shares of an underlying fund with unrealized
portfolio appreciation, investing in the Portfolio rather than directly in
the underlying funds may result in increased tax liability to the
shareholder, since the Portfolio must distribute its gain in accordance with
the rules in the Code. The Portfolio's ability to dispose of shares of
mutual funds held less than three months may be limited by requirements
relating to a Portfolio's qualification as a regulated investment company
for federal income tax purposes.
Distributions of net capital gains (the excess of net long-term capital
gains over net short-term capital losses) received by a Portfolio from
mutual funds, as well as net long-term capital gains realized by a Portfolio
from the purchase and sale (or redemption) of mutual fund shares or other
securities held (generally) by a Portfolio for more than one year, will be
distributed by the Portfolio and will be taxable to shareholders as
long-term capital gains (even if the shareholder has held the Shares for
less than one year). However, if you receive a capital gains distribution
and suffer a loss on the sale of your shares not more than six months after
purchase, the loss will be treated as a long-term capital loss to the extent
of the capital gains distribution received. The long-term capital gains,
including distributions of net capital gains are currently subject to a
maximum federal tax rate of 28% which is less than the maximum rate imposed
on other types of taxable income. Furthermore, capital gains may be
advantageous because, unlike ordinary income, they may be offset by capital
losses.
For purposes of determining the character of income received by the
Portfolio when an underlying fund distributes net capital gains to the
Portfolio, the Portfolio will treat the distribution as a long-term capital
gain, even if it has held shares of the mutual fund for less than one year.
However, any loss incurred by the Portfolio on the sale of that underlying
fund's shares held for six months or less will be treated as a long-term
capital loss to the extent of the gain distribution.
The tax treatment of distributions from a Portfolio is the same whether the
distributions are received in additional shares or in cash. Shareholders
receiving distributions in the form of additional shares will have a cost
basis for Federal income tax purposes in each share received equal to the
net asset value of a share of the Portfolio on the reinvestment date.
A Portfolio may invest in underlying funds with capital loss carry-forwards.
If such an underlying fund realizes capital gains, it will be able to offset
the gains to the extent of its loss carry-forwards in determining the amount
of capital gains which must be distributed to its shareholders. To the
extent that gains are offset in this manner, the Portfolio will not realize
gains on the related fund until such time as the underlying fund is sold.
Depending on the residence of the shareholder for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes. Shareholders should consult their own tax advisers as to
the tax consequences of ownership of shares of the Portfolios in their
particular circumstances.
The Portfolios generally will be required to withhold Federal income tax at
a rate of 31% ("backup withholding") from dividends paid to shareholders if
(a) the payee fails to furnish the Trust with and to certify the payee's
correct taxpayer identification number or social security number, (b) the
Internal Revenue Service (the "IRS") notifies the Trust that the payee has
failed to report properly certain interest and dividend income to the IRS
and to respond to notices to that effect or (c) the payee fails to certify
that he or she is not subject to backup withholding.
Aggressive Growth Portfolio will distribute investment company taxable
income annually; Growth Portfolio will distribute investment company taxable
income semi-annually; Growth with Income Portfolio and Managed Total Return
Portfolio will distribute investment company taxable income quarterly; and
Bond Portfolio will distribute investment company taxable income monthly.
Each Portfolio will distribute any net realized capital gains at least
annually. All dividends and distributions will be reinvested automatically
at net asset value in additional shares of the Portfolio making the
distribution, unless you have notified the Portfolio in writing of your
election to receive distributions in cash.
OTHER INFORMATION
Capitalization
The Trust (initially named FundManager Trust, and since renamed FundManager
Portfolios) was organized as a Delaware business trust on February 7, 1995
as a successor, with respect to the Portfolios, to Republic Funds (formerly
FundTrust) a Massachusetts business trust (organized on April 22, 1987).
Republic Funds succeeded two previously existing Massachusetts business
trusts, FundTrust Tax-Free Trust (organized on July 30, 1986) and FundVest
(organized on July 17, 1984 and since renamed Fund Source). The Trust
currently consists of five separately-managed portfolios each offering two
classes of shares of beneficial interest, the Financial Adviser Class and
the No-Load Class (except for Managed Total Return, which only offers
Financial Adviser Class). The Trustees may establish additional portfolios
and divide shares in each portfolio into additional classes in the future.
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest with a par value of $0.001 each. When issued,
shares of the Portfolios are fully paid, non-assessable and freely
transferable.
Voting
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which by law or the provisions of the Master Trust
Agreement they may be entitled to vote. When matters are submitted for
shareholder vote, shareholders will have one vote for each full share held
and proportionate, fractional votes for fractional shares held. A separate
vote of a Portfolio or class is required on any matter affecting that
Portfolio or class on which shareholders are entitled to vote. Shareholders
of a Portfolio or class are not entitled to vote on Trust matters that do
not affect the Portfolio or class and do not require a separate vote of the
Portfolio or class. The Trust is not required to hold regular annual
meetings of its shareholders and does not intend to do so. See "Other
Information -- Voting Rights" in the SAI. As of January 8, 1997, Turtle &
Co. FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA
02209, was the owner of record of 25.72% of the voting securities of the
Growth Portfolio, and therefore, may, for certain purposes be deemed to
control the Portfolio and be able to affect the outcome of certain matters
presented for a vote of shareholders. As of January 8, 1997, Turtle & Co.
FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA
02209, was the owner of record of 25.66% of the voting securities of the
Growth with Income Portfolio, and therefore, may, for certain purposes be
deemed to control the Portfolio and be able to affect the outcome of certain
matters presented for a vote of shareholders. As of January 8, 1997, Turtle
& Co. FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston,
MA 02209, was the owner of record of 73.98% of the voting securities of the
Bond Portfolio, and therefore, may, for certain purposes be deemed to
control the Portfolio and be able to affect the outcome of certain matters
presented for a vote of shareholders.
The Master Trust Agreement provides that the holders of not less than
three-fourths of the outstanding shares of the Trust may remove a person
serving as Trustee either by declaration in writing or at a meeting called
for such purpose. The Trustees are required to call a meeting for the
purpose of considering the removal of a person serving as Trustee if
requested in writing to do so by the holders of not less than 10% of the
outstanding shares of the Trust.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote
of a majority of the outstanding shares" of the Trust, Portfolio or Class
means the vote of the lesser of: (i) 67% of the shares of the Trust,
Portfolio or Class present at a meeting if the holders of more than 50% of
the outstanding shares of the Trust, Portfolio or Class are present in
person or by proxy or (ii) more than 50% of the outstanding shares of the
Trust, Portfolio or Class.
In compliance with applicable provisions of the 1940 Act, shares of the
underlying funds owned by the Portfolios will be voted in the same
proportion as the vote of all other holders of those shares.
Performance Information
The Trust may, from time to time, include quotations of the Portfolios'
yield and total return in advertisements or reports to shareholders or
prospective investors. Quotations of yield will be based on the investment
income per share earned during a particular 30-day period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income
by the maximum public offering price per share on the last day of the
period. Quotations of total return will be expressed in terms of the average
annual compounded rate of return of a hypothetical investment in the
Portfolio over periods of 1, 5 and 10 years (up to the life of such
Portfolio). All total return figures will reflect a proportional share of
Portfolio expenses on an annual basis, and will assume that all dividends
and distributions are reinvested when paid. Quotations of yield or total
return reflect only the performance of a hypothetical investment in the
Portfolio during the particular time period on which the calculations are
based. Yield and total return for a Portfolio will vary based on changes in
market conditions and the level of such Portfolio's expenses, and no
reported performance figure should be considered an indication of
performance which may be expected in the future.
For the period prior to its establishment, the Class has adopted the
performance of the Predecessor Portfolios. The performance for this period
will reflect the deduction of expenses set forth in the Portfolio Expense
Table. See " Portfolio Expenses."
In connection with communicating the Portfolios' yield and total return to
current or prospective shareholders, the Trust also may compare these
figures to the performance of other mutual funds tracked by mutual fund
rating services or to other unmanaged indexes which may assume reinvestment
of dividends but generally do not reflect deductions for administrative and
management costs and expenses.
For a more detailed description of the methods used to calculate each
Portfolio's yield and total return, see the SAI.
OTHER CLASSES OF SHARES
The Aggressive Growth Portfolio, Growth Portfolio, Growth with Income
Portfolio and Bond Portfolio also offer another class of shares called
No-Load Class shares. No-Load Class shares are sold at net asset value to
participants in the FundManager Advisory Program (the "Program"). The
Program is an investment advisory service that directly provides to
investors asset allocation recommendations with respect to the Portfolios
based on an evaluation of an investor's investment objectives and risk
tolerances. The minimum investment by participants in the Program is
$50,000. The minimum initial investment for other qualified investors of
each Portfolio is $1,000, and the minimum subsequent investment is $100
except that the minimum initial investment for an Individual Retirement
Account ("IRA") is $250.
Both classes are subject to certain of the same expenses. However, No-Load
Class shares are distributed without 12b-1 fees.
Expense differences between classes may affect the performance of each
class.
SHAREHOLDER INQUIRES
All shareholder inquires should be directed to your investment executive or
financial adviser, or call (800) 344-9033 (Toll Free).
DESCRIPTION OF BOND RATINGS
Excerpts from Moody's description of its bond ratings: Aaa -- judged to be
the best quality. They carry the smallest degree of investment risk; Aa --
judged to be of high quality by all standards. Together with the Aaa group
they comprise what are generally known as high grade bonds; A -- possess
many favorable investment attributes and are to be considered as "upper
medium grade obligations"; Baa -- considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time; Ba -- judged to have speculative elements,
their future cannot be considered as well assured; B -- generally lack
characteristics of the desirable investment; Caa -- are of poor standing.
Such issues may be in default or there may be present elements of danger
with respect to principal or interest; Ca -- speculative in a high degree;
often in default; C -- lowest rated class of bonds; regarded as having
extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to rating categories.
The modifier 1 indicates that the security is in the higher end of its
rating category; the modifier 2 indicates a mid-range ranking; and 3
indicates a ranking toward the lower end of the category.
Excerpts from S&P's description of its bond ratings: AAA -- highest grade
obligations. Capacity to pay interest and repay principal is extremely
strong; AA -- also qualify as high grade obligations. A very strong capacity
to pay interest and repay principal and differs from AAA issues only in a
small degree; A -- regarded as upper medium grade. They have a strong
capacity to pay interest and repay principal although it is somewhat more
susceptible to the
adverse effects of changes in circumstances and economic conditions than
debt in higher rated categories; BBB -- regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated
categories. This group is the lowest which qualifies for commercial bank
investment. BB, B, CCC, CC -- predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with terms of the
obligations; BB indicates the lowest degree of speculation and CC the
highest.
S&P applies indicators "+", no character, and "-" to its rating categories.
The indicators show relative standing within the major rating categories.
FUNDMANAGER PORTFOLIOS
THE FIRST FAMILY IN MULTIFUND INVESTING
INVESTMENT ADVISER
Freedom Capital Management
Corporation
M.D. Hirsch Division
One World Financial Center
New York, NY 10281
DISTRIBUTORS
Tucker Anthony, Incorporated
200 World Financial Center
New York, NY 10281
Sutro & Co., Inc.
201 California Street
San Francisco, CA 94111
FUNDMANAGER PORTFOLIOS
THE FIRST FAMILY IN MULTIFUND INVESTING
PROSPECTUS
JANUARY 24, 1997
Aggressive Growth Portfolio
Growth Portfolio
Growth with Income Portfolio
Bond Portfolio
G01966-01 (1/97)
FUNDMANAGER PORTFOLIOS -- NO-LOAD CLASS
(FORMERLY, FUNDMANAGER TRUST)
ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108
GENERAL INFORMATION: (800) 344-9033 (TOLL FREE)
FundManager Portfolios (the "Trust") is an open-end management investment
company consisting of five separate diversified series with different
investment objectives. This Prospectus describes four diversified series
(individually and collectively referred to as "Portfolio" or "Portfolios,"
as the context requires) of the Trust. Each Portfolio offers two classes of
shares. The shares offered by this Prospectus are the No-Load class (the
"Class") of shares ("Shares"). The Portfolios seek to achieve their
objectives by investing in shares of other open-end investment companies
commonly called mutual funds. This policy involves certain expenses in
addition to those applicable to direct investment in mutual funds. See
"Risks and Other Considerations -- Expenses." The M.D. Hirsch Division of
Freedom Capital Management Corporation ("Freedom Capital Management" or the
"Adviser") continuously manages each Portfolio's investment portfolio.
AGGRESSIVE GROWTH PORTFOLIO (FORMERLY, AGGRESSIVE GROWTH FUND) SEEKS CAPITAL
APPRECIATION WITHOUT REGARD TO CURRENT INCOME.
GROWTH PORTFOLIO (FORMERLY, GROWTH FUND) PRIMARILY SEEKS LONG-TERM CAPITAL
APPRECIATION. CURRENT INCOME IS A SECONDARY CONSIDERATION.
GROWTH WITH INCOME PORTFOLIO (FORMERLY, GROWTH & INCOME FUND) SEEKS A
COMBINATION OF CAPITAL APPRECIATION AND CURRENT INCOME.
BOND PORTFOLIO (FORMERLY, BOND FUND, AND BEFORE THAT, INCOME FUND) SEEKS A
HIGH LEVEL OF CURRENT INCOME.
Shares of the Portfolios are only offered for sale at net asset value by
Tucker Anthony Incorporated ("Tucker Anthony") and Sutro & Co. Incorporated
("Sutro")(collectively, the "Distributors") to participants in the
FundManager Advisory Program (the "Program"). In addition to Tucker Anthony
and Sutro, Freedom Distributors Corporation ("Freedom Distributors") and
Edgewood Services, Inc. ("Edgewood") serve as co-distributors for the
Portfolios. The Program is an investment advisory service that directly
provides to investors asset allocation recommendations with respect to the
Portfolios based on an evaluation of an investor's investment objectives and
risk tolerances. See "Purchase of Shares." In addition, the Portfolios may
invest in shares of mutual funds which charge sales loads and/or pay their
own distribution expenses.
INVESTMENTS IN THE PORTFOLIOS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE PORTFOLIOS IS
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED.
This prospectus sets forth concisely the information a prospective investor
should know before investing in the Portfolios. A Statement of Additional
Information (the "SAI") dated January 24, 1997, and as supplemented from
time to time containing additional and more detailed information about the
Portfolios has been filed with the Securities and Exchange Commission
("SEC") and is hereby incorporated by reference into this prospectus. You
may request a copy of the SAI, or a paper copy of this prospectus, if you
have received your prospectus electronically, free of charge by writing or
calling the Trust at the address and information number printed above. The
SAI, material incorporated by reference into this document, and other
information regarding the Portfolios is maintained electronically with the
SEC at internet web site (http://www.sec.gov).
This Prospectus should be read and retained for information about the
Portfolios.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JANUARY 24, 1997.
TABLE OF CONTENTS
HIGHLIGHTS 1
PORTFOLIO EXPENSES 3
Financial Highlights 4
FUNDMANAGER PORTFOLIOS 7
INVESTMENT OBJECTIVES 7
Investments of and Investment Techniques Employed by Mutual Funds in
which the Portfolios May Invest
10
Derivatives 13
Investment Policies and Restrictions 15
RISKS AND OTHER CONSIDERATIONS 16
Expenses 17
MANAGEMENT OF FUNDMANAGER PORTFOLIOS 18
The Adviser 18
The Administrator 19
The Distributors 19
Custodian and Transfer Agent 19
Other Expenses 19
Portfolio Transactions 20
Determination of Net Asset Value 20
PURCHASE OF SHARES 21
Purchases by Clients of the Distributors
or Authorized Securities Dealers 21
FundManager Advisory Program 22
REDEMPTION OF SHARES 22
Redemption of Shares Purchased
Through a Distributor 22
Direct Redemption 22
DIVIDENDS, DISTRIBUTIONS AND TAXES 23
Other Information 25
Other Classes of Shares 26
Shareholder Inquiries 26
Description of Bond Ratings 26
HIGHLIGHTS
FUNDMANAGER PORTFOLIOS PAGE 7
Aggressive Growth Portfolio, Growth Portfolio, Growth with Income Portfolio
and Bond Portfolio are series of the Trust, a Delaware business trust. Each
Portfolio seeks to achieve its investment objective by investing in mutual
funds registered with the SEC.
INVESTMENT OBJECTIVES PAGE 7
Each Portfolio has distinct investment objectives. Aggressive Growth
Portfolio seeks capital appreciation without regard to current income.
Growth Portfolio primarily seeks capital appreciation with current income a
secondary consideration. Growth with Income Portfolio seeks a combination of
capital appreciation and current income. Bond Portfolio seeks a high level
of current income. The mutual funds in which the Portfolios invest may
invest in securities which entail certain risks. These risks are described
in "Investments of and Investment Techniques employed by Mutual Funds in
Which the Portfolios May Invest."
RISKS AND OTHER CONSIDERATIONS PAGE 16
Investing through a Portfolio in an underlying portfolio of mutual funds
involves certain additional expenses and certain tax results which would not
be present in a direct investment in mutual funds. See "Expenses" and
"Dividends, Distributions and Taxes." In addition, Federal law imposes
certain limits on the purchases of mutual fund shares by the Portfolios.
MANAGEMENT OF FUNDMANAGER PORTFOLIOS PAGE 18
The Trust has retained Freedom Capital Management to act as its investment
adviser. For its services, the Adviser receives from each Portfolio a fee at
the annual rate of 0.50% of the Portfolio's average daily net assets up to
$500 million and 0.40% of its average daily net assets in excess of $500
million. See "The Adviser."
The Trust has retained Federated Administrative Services ("FAS") to provide
certain management and administrative services to the Portfolios. For these
services, each Portfolio pays FAS a fee at the annual rate of 0.150% of the
first $250 million of that Portfolio's average daily net assets, 0.125% of
the next $250 million of such assets, 0.100% of the next $250 million of
such assets, and 0.075% of such assets in excess of $750 million. See "The
Administrator." In addition, Freedom Distributors and Edgewood may receive
additional compensation in connection with the Portfolios' purchases of
mutual funds. See "Portfolio Transactions."
PURCHASE OF SHARES PAGE 21
Purchases of shares of the Trust by participants in the Program must be
through a brokerage account maintained with the Distributors. The minimum
investment by participants in the Program is $50,000. The minimum initial
investment for other qualified investors of each Portfolio is $1,000, and
the minimum subsequent investment is $100, except that the minimum initial
investment for an Individual Retirement Account ("IRA") is $250.
REDEMPTION OF SHARES PAGE 22
Shares may be redeemed at their next determined net asset value. See
"Determination of Net Asset Value." Redemptions may be made by letter or
wire. The Trust reserves the right to redeem, upon not less than 30 days'
notice, all shares of a Portfolio in an account (other than an IRA) which
has a value below $50.
DIVIDENDS, DISTRIBUTIONS AND TAXES PAGE 23
Aggressive Growth Portfolio will distribute net investment income annually;
Growth Portfolio will distribute net investment income semiannually; Growth
with Income Portfolio will distribute net investment income quarterly; and
Bond Portfolio will distribute its net investment income monthly. Each
Portfolio will distribute any net realized capital gains at least annually.
All dividends and distributions generally will be reinvested automatically
at net asset value in additional shares of the Portfolio making the
distribution.
PORTFOLIO EXPENSES
THE FOLLOWING TABLE ILLUSTRATES THE EXPENSES AND FEES THAT A SHAREHOLDER OF
EACH PORTFOLIO WILL INCUR.
ANNUAL NO-LOAD CLASS OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<CAPTION>
GROWTH
AGGRESSIVE WITH
GROWTH GROWTH INCOME BOND
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
PORTFOLIO
Management Fees 0.50% 0.50% 0.50% 0.50%
Distribution and shareholder service expenses None None None None
Other Expenses 0.50% 0.65% 0.65% 0.40%
Total Portfolio Operating Expenses 1.00% 1.15% 1.15% 0.90%
</TABLE>
Total Portfolio Operating Expenses in the table above are based on expenses
expected during the fiscal year ending September 30, 1997. The total
portfolio operating expenses were 1.15%, 1.30%, 1.28%, and 0.99% for the
Aggressive Growth Portfolio, Growth Portfolio, Growth with Income Portfolio
and Bond Portfolio, respectively, for the fiscal year ended September 30,
1996. The total portfolio operating expenses would have been 1.21%, 1.36%,
1.34% and 1.04% for the Aggressive Growth Portfolio, Growth Portfolio,
Growth with Income Portfolio and Bond Portfolio, respectively, for the
fiscal year ended September 30, 1996, absent the voluntary waiver of a
portion of the administrative fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder will bear, either directly or
indirectly. For more complete descriptions of the various costs and
expenses, see "Management of FundManager Portfolios." Wire-transferred
redemptions may be subject to an additional fee.
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. The
Portfolio charges no redemption fees.
<TABLE>
<CAPTION>
GROWTH
AGGRESSIVE WITH
GROWTH GROWTH INCOME BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
1 year $ 10 $ 12 $ 12 $ 9
3 years $ 32 $ 37 $ 37 $ 29
5 years $ 55 $ 63 $ 63 $ 50
10 years $122 $140 $140 $111
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Currently, the Portfolios, offer by a separate prospectus, another class of
shares which are sold at net asset value by Edgewood, Freedom Distributors,
Tucker Anthony and Sutro, and which pay expenses related to the distribution
of such shares. Because the expenses vary between the classes, performance
will vary with respect to each class. Additional information and a
prospectus concerning the Portfolios' other class of shares may be obtained
by calling toll-free (800) 344-9033.
FINANCIAL HIGHLIGHTS
The Portfolios' financial data through September 30, 1996, shown below is to
assist investors in evaluating the performance of each Portfolio. The
following tables have been audited by Ernst & Young LLP, the Portfolios'
Independent Auditors. Their report, dated November 21, 1996, on the Portfolios'
financial statements for the year then ended September 30, 1996, and the
following tables for the period presented, is included in the Annual Report,
which is incorporated by reference. These tables should be read in conjunction
with the Portfolios' financial statements and notes thereto, which are
contained in the Annual Report. Further information about the Portfolios'
performance also is contained in the Portfolios' Annual Report, dated
September 30, 1996, which can be obtained free of charge.
AGGRESSIVE GROWTH PORTFOLIO -- NO-LOAD CLASS
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: YEAR ENDED
SEPTEMBER 30, 1996
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) 0.04
Net realized and unrealized gain on investments 1.83
Total from investment operations 1.87
LESS DISTRIBUTIONS
Distributions from net investment income (0.38)
Distributions from net realized gain on investments+ (2.89)
Total distributions (3.27)
NET ASSET VALUE, END OF PERIOD $16.91
Total return(b) 12.77%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 1,432
Ratio of expenses to average net assets 1.15%
Ratio of net investment income to average net assets 0.24%
Ratio of waiver to average net assets(c) 0.06%
Portfolio turnover 158%
</TABLE>
+ Paid from realized net short-term gain $ 0.27
GROWTH PORTFOLIO -- NO-LOAD CLASS
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: YEAR ENDED
SEPTEMBER 30, 1996
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.14
INCOME FROM INVESTMENT OPERATIONS
Net operating loss(a) (0.06)
Net realized and unrealized gain on investments 2.02
Total from investment operations 1.96
LESS DISTRIBUTIONS
Distributions from net investment income (0.29)
Distributions from net realized gain on investments (2.77)
Total distributions (3.06)
NET ASSET VALUE, END OF PERIOD $15.04
Total return(b) 14.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 877
Ratio of expenses to average net assets 1.30%
Ratio of net investment income to average net assets (0.39%)
Ratio of waiver to average net assets(c) 0.06%
Portfolio turnover 98%
</TABLE>
(a) Per share information is based on average shares outstanding.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
GROWTH WITH INCOME PORTFOLIO -- NO-LOAD CLASS
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: YEAR ENDED
SEPTEMBER 30, 1996
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $18.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) 0.39
Net realized and unrealized gain on investments 1.86
Total from investment operations 2.25
LESS DISTRIBUTIONS
Distributions from net investment income (0.89)
Distributions from net realized gain on investments+ (2.93)
Total distributions (3.82)
NET ASSET VALUE, END OF PERIOD $16.71
Total return(b) 14.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $ 621
Ratio of expenses to average net assets 1.28%
Ratio of net investment income to average net assets 2.42%
Ratio of waiver to average net assets(c) 0.06%
Portfolio turnover 85%
+Paid from realized net short-term gain $0.06
</TABLE>
BOND PORTFOLIO -- NO-LOAD CLASS
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: YEAR ENDED
SEPTEMBER 30, 1996
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.21
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) 0.55
Net realized and unrealized loss on investments (0.16)
Total from investment operations 0.39
LESS DISTRIBUTIONS
Distributions from net investment income (0.56)
Distributions from net realized gain on investments --
Total distributions (0.56)
NET ASSET VALUE, END OF PERIOD $10.04
Total return(b) 3.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $1,988
Ratio of expenses to average net assets 0.99%
Ratio of net investment income to average net assets 5.57%
Ratio of waiver to average net assets(c) 0.05%
Portfolio turnover 93%
</TABLE>
(a) Per share information is based on average shares outstanding.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
FUNDMANAGER PORTFOLIOS
The Trust was organized as a Delaware business trust on February 7, 1995,
and is an open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act") consisting of five diversified
separate series -- Aggressive Growth Portfolio, Growth Portfolio, Growth
with Income Portfolio, Income Portfolio and Managed Total Return Portfolio.
This prospectus relates only to the No-Load Class of Shares of Aggressive
Growth Portfolio, Growth Portfolio, Growth with Income Portfolio and Bond
Portfolio. Investment in shares of one or more of the Portfolios involves
risks and there can be no assurance that the Portfolios' investment
objectives will be achieved.
INVESTMENT OBJECTIVES
Each Portfolio seeks to achieve its investment objective by investing in a
portfolio of approximately ten to fifteen mutual funds (the "underlying
funds") although it may invest up to 25% of its total assets in any one
underlying fund. At times, for temporary defensive purposes when warranted
by general economic and financial conditions, a Portfolio may invest in
money market mutual funds or invest directly in (or enter into repurchase
agreements (maturing in seven days or less) with banks and broker-dealers
with respect to) short-term debt securities, including U.S. Treasury bills
and other short-term U.S. government securities, commercial paper,
certificates of deposit and bankers' acceptances. However, except when a
Portfolio is in a temporary defensive investment position or as may be
considered necessary to accumulate cash in order to satisfy minimum purchase
requirements of the underlying funds or to meet anticipated redemptions, a
Portfolio normally will maintain its assets invested in underlying funds.
Although all of the Portfolios may invest in shares of the same underlying
fund, the percentage of each Portfolio's assets so invested may vary and the
Adviser will determine that such investments are consistent with the
investment objectives and policies of each particular Portfolio. A Portfolio
may not purchase shares of any closed-end investment company or of any
investment company which is not registered with the SEC. Each Portfolio's
investment objectives and certain of its related policies and activities are
fundamental and may not be changed by the Board of Trustees (the "Trustees")
of the Trust, on behalf of a particular Portfolio, without approval of the
shareholders of that Portfolio.
AGGRESSIVE GROWTH PORTFOLIO
The investment objective of Aggressive Growth Portfolio is capital
appreciation without regard to current income. The underlying funds in which
it invests will consist of funds which seek capital growth or appreciation
by investing primarily in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock,
convertible debentures or warrants). For temporary defensive purposes, these
funds also may invest in (or enter into repurchase agreements with banks and
broker-dealers with respect to) corporate bonds, U.S. government securities,
commercial paper, certificates of deposit or other money market securities.
The Portfolio also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities
issued or guaranteed or insured by the U.S. government, its agencies or
instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures) whenever the Adviser believes that these
funds offer a potential for capital appreciation. These underlying funds may
invest in investment grade bonds or in bonds which are not considered
investment grade (commonly referred to as "junk bonds"). The Portfolio will
limit its direct and indirect investment in junk bonds to less than 5% of
its assets. See "Bond Portfolio" and "Description of Bond Ratings."
The underlying funds in which Aggressive Growth Portfolio invests may incur
more risk than those in which Growth Portfolio and Growth with Income
Portfolio invest. For example, they may trade their portfolios more actively
(which results in higher brokerage commissions and increased realization of
taxable capital gains) and/or invest in companies whose securities are
subject to more erratic market movements. The underlying funds also may
invest up to 100% of their assets in securities of foreign issuers and
engage in foreign currency transactions with respect to these investments;
invest up to 15% of their assets in illiquid securities (excluding Rule 144A
securities which are deemed liquid by the Trustees) ("Illiquid Securities");
invest their assets in warrants; lend their portfolio securities; sell
securities short; borrow money in amounts up to one-third of their assets
for investment purposes (i.e., leverage their portfolios); write (sell) or
purchase call or put options on securities or on stock indexes; concentrate
more than 25% of their assets in one industry; invest up to 100% of their
assets in master demand notes; and enter into futures contracts and options
on futures contracts. The risks associated with these investments are
described in the "Investments of and Investment Techniques Employed by
Mutual Funds in Which the Portfolios May Invest."
As a result, an investment in Aggressive Growth Portfolio can be expected to
involve greater risk than an investment in any of the other Portfolios.
GROWTH PORTFOLIO
The primary investment objective of Growth Portfolio is long-term capital
appreciation. Current income is of secondary importance. The underlying
funds in which it invests will consist of funds which invest primarily in
common stock or securities convertible into or exchangeable for common stock
(such as convertible preferred stock, convertible debentures or warrants)
and which seek long-term capital growth or appreciation with current income
typically of secondary importance. For temporary defensive purposes, these
funds also may invest in (or enter into repurchase agreements with banks and
broker-dealers with respect to) corporate bonds, U.S. government securities,
commercial paper, certificates of deposit or other money market instruments.
The Portfolio also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities
issued or guaranteed or insured by the U.S. government, its agencies or
instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures) whenever the Adviser believes that these
funds offer a potential for capital appreciation. These underlying funds may
invest in investment grade bonds or in bonds which are not considered
investment grade (commonly referred to as "junk bonds"). The Portfolio will
limit its direct and indirect investment in junk bonds to less than 5% of
its assets. See "Bond Portfolio" and "Description of Bond Ratings."
The underlying funds in which the Growth Portfolio invests may be authorized
to invest up to 100% of their assets in the securities of foreign issuers
and engage in foreign currency transactions with respect to these
investments; invest up to 15% of their assets in Illiquid Securities; invest
their assets in warrants; lend their portfolio securities; sell securities
short; borrow money in amounts up to one-third of their assets for
investment purposes; write or purchase call or put options on securities or
stock indexes; concentrate more than 25% of their assets in one industry;
invest up to 100% of their assets in master demand notes; and enter into
futures contracts and options on futures contracts. The risks associated
with these investments are described in "Investments of and Investment
Techniques Employed by Mutual Funds in Which the Portfolios May Invest."
GROWTH WITH INCOME PORTFOLIO
The investment objective of Growth with Income Portfolio is realization of a
combination of capital appreciation and current income. The underlying funds
in which it invests will consist of funds which seek long-term capital
appreciation and/or funds which seek (i) income from dividends, (ii) income
from interest, or (iii) growth of income (or any combination of (i)-(iii)).
These underlying funds invest in common stocks, preferred stocks, bonds and
other fixed-income securities (including convertible preferred stock and
convertible debentures). The underlying funds also may, for temporary
defensive purposes, invest in (or enter into repurchase agreements with
banks and broker-dealers with respect to) U.S. government securities,
commercial paper, certificates of deposit or other money market securities.
The Portfolio also may invest in funds which invest primarily in long- or
short-term bonds and other fixed income securities (such as securities
issued or guaranteed or insured by the U.S. government, its agencies or
instrumentalities, commercial paper, preferred stock, convertible preferred
stock or convertible debentures) whenever the Adviser believes that these
funds offer a potential for capital appreciation. These underlying funds may
invest in investment grade bonds or in bonds which are not considered
investment grade (commonly referred to as "junk bonds"). The Portfolio will
limit its direct and indirect investment in junk bonds to less than 5% of
its assets. See "Bond Portfolio" and "Description of Bond Ratings."
These underlying funds may invest up to 100% of their assets in the
securities of foreign issuers and engage in foreign currency transactions
with respect to these investments; invest up to 15% of their assets in
Illiquid Securities; invest their assets in warrants; lend their portfolio
securities; sell securities short; borrow money in amounts up to one-third
of their assets for investment purposes; write or purchase call or put
options on securities or on stock indexes; concentrate more than 25% of
their assets in any one industry; invest up to 100% of their assets in
master demand notes; invest in long or short-term corporate bonds (see "Bond
Portfolio ") and other fixed income securities (such as U.S. government
securities, commercial paper, preferred stock, convertible preferred stock
and convertible debentures); and enter into futures contracts and options on
futures contracts. The risks associated with these investments are described
below.
BOND PORTFOLIO
The investment objective of Bond Portfolio is a high level of current
income. The underlying funds in which it invests will include funds which
seek high current income by investing in long or short-term bonds and other
fixed income securities (such as securities issued or guaranteed or insured
by the U.S. government, its agencies or instrumentalities, commercial paper,
preferred stock, convertible preferred stock or convertible debentures). The
underlying funds also may lend their portfolio securities; sell securities
short; borrow money in amounts up to one-third of their assets for
investment purposes; write or purchase call or put options on securities or
on stock indexes; invest up to 100% of their assets in master demand notes;
and enter into futures contracts and options on futures contracts.
The Portfolio will invest in underlying funds which limit their corporate
bond investments to investment grade bonds which generally are considered to
be bonds rated within one of the four highest quality grades assigned by a
nationally recognized statistical rating organization ("NRSRO"), such as
Standard & Poor's Ratings Group ("S&P") or Moody's Investor Services, Inc.
("Moody's"), or which are unrated but are deemed by an underlying fund's
investment adviser to be of comparable quality. These include bonds rated
AAA, AA, A and BBB by S&P and bonds rated Aaa, Aa, A and Baa by Moody's.
Bonds rated BBB by S&P or Baa by Moody's normally indicate a greater degree
of investment risk than bonds with higher ratings.
The Portfolio also will invest (without limitation) in underlying funds
which themselves may invest in corporate bonds which are not considered
investment grade bonds (commonly referred to as "junk bonds") by an NRSRO,
such as Moody's or S&P, or which are unrated, and thus may carry a greater
degree of risk than bonds considered investment grade. These
include bonds rated BB, B, CCC and CC by S&P, and Ba, B, Caa, Ca and C by
Moody's. These ratings may indicate that the bonds are predominantly
speculative with respect to the issuer's ability to pay interest and repay
principal and may indicate that the issuer soon may be or currently is in
default. The risks associated with these investments are described in
"Description of Bond Ratings." The Portfolio will limit its direct and
indirect investment in junk bonds to less than 35% of its net assets.
As a general matter, the current value of bonds varies inversely with
changes in prevailing interest rates. If interest rates increase after a
bond is purchased, the value of that security will normally decline.
Conversely, should prevailing interest rates decrease after a bond is
purchased, its market price will normally rise.
INVESTMENTS OF AND INVESTMENT TECHNIQUES EMPLOYED BY MUTUAL FUNDS
IN WHICH THE PORTFOLIOS MAY INVEST
ILLIQUID SECURITIES. An underlying fund may invest not more than 15% of its
total assets in securities for which there is no readily available market
("Illiquid Securities") which would include certain restricted securities
the disposition of which would be subject to legal restrictions and
repurchase agreements having more than seven days to maturity. A
considerable period of time may elapse between an underlying fund's decision
to dispose of such securities and the time when the fund is able to dispose
of them, during which time the value of the securities (and therefore the
value of the underlying fund's shares held by a Portfolio) could decline.
FOREIGN SECURITIES. An underlying fund may invest up to 100% of its assets
in securities of foreign issuers. There may be less publicly available
information about these issuers than is available about companies in the
U.S. and foreign auditing requirements may not be comparable to those in the
U.S. In addition, the value of the fund's foreign securities may be
adversely affected by fluctuations in the exchange rates between foreign
currencies and the U.S. dollar, as well as other political and economic
developments, including the possibility of expropriation, confiscatory
taxation, exchange controls or other foreign governmental restrictions. In
addition, income received by an underlying fund from sources within foreign
countries, such as dividends and interest payable on foreign securities, may
be subject to foreign taxes, including taxes withheld from payments on those
securities. Moreover, the underlying funds will generally calculate their
net asset values and complete orders to purchase, exchange or redeem shares
only on a Monday-Friday basis (excluding holidays on which the New York
Stock Exchange ("NYSE") is closed). Foreign securities in which the
underlying funds may invest may be listed primarily on foreign stock
exchanges which may trade on other days (such as Saturday or NYSE holidays).
As a result, the net asset value of an underlying fund's portfolio may be
significantly affected by such trading on days when the Adviser does not
have access to the underlying funds and shareholders of the Trust do not
have access to their respective Portfolios. Under the 1940 Act, an
underlying fund may maintain its foreign securities in custody of non-U.S.
banks and securities depositories.
INDUSTRY CONCENTRATION. An underlying fund may concentrate its investments
within one industry. Because the scope of investment alternatives within an
industry is limited, the value of the shares of such an underlying fund may
be subject to greater market fluctuation than an investment in a fund which
invests in a broader range of securities.
MASTER DEMAND NOTES. Although the Portfolios themselves will not do so,
underlying funds (particularly money market mutual funds) may invest up to
100% of their assets in master demand notes. Master demand notes are
unsecured obligations of U.S. corporations redeemable upon notice that
permit investment by a fund of fluctuating amounts at varying rates of
interest pursuant to direct arrangements between the fund and the issuing
corporation. Because they are direct arrangements between the fund and the
issuing corporation, there is no secondary market for the notes. However,
they are redeemable at face value, plus accrued interest, at any time.
REPURCHASE AGREEMENTS. Underlying funds, particularly money market funds,
may enter into repurchase agreements with banks and broker-dealers under
which they acquire securities subject to an agreement with the seller to
repurchase the securities at an agreed upon time and price. The Portfolios
also may enter into repurchase agreements. These agreements are considered
under the 1940 Act to be loans by the purchaser collateralized by the
underlying securities. If the seller should default on its obligation to
repurchase the securities, the underlying fund may experience delay or
difficulties in exercising its rights to realize upon the securities held as
collateral and might incur a loss if the value of the securities should
decline. For a more complete discussion of repurchase agreements, see
"Investment Policies" in the SAI.
LOANS OF PORTFOLIO SECURITIES. An underlying fund may lend its portfolio
securities provided it complies with the following general requirements: (1)
the loan is secured continuously by collateral consisting of U.S. government
securities or cash or cash equivalents maintained on a daily mark-to-market
basis in an amount at least equal to the current market value of the
securities loaned; (2) the fund may at any time call the loan and obtain the
return of the securities loaned; (3) the fund will receive any interest or
dividends paid on the loaned securities; and (4) the aggregate market value
of securities loaned will not at any time exceed one-third of the total
assets of the fund. Loans of securities involve a risk that the borrower may
fail to return the securities or may fail to provide additional collateral.
SHORT SALES. An underlying fund may sell securities short. In a short sale,
the fund sells stock which it does not own, making delivery with securities
"borrowed" from a broker. The fund is then obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement.
This price may or may not be less than the price at which the security was
sold by the fund. Until the security is replaced, the fund is required to
pay to the lender any dividends or interest which accrue during the period
of the loan. In order to borrow the security, the fund may also have to pay
a premium which would increase the cost of the security sold. The proceeds
of the short sale will be retained by the broker, to the extent necessary to
meet margin requirements, until the short position is closed out.
The fund also must deposit in a segregated account (or earmark) an amount of
cash or U.S. government securities equal to the difference between (a) the
market value of the securities sold short at the time they were sold short
and (b) the value of the collateral deposited with the broker in connection
with the short sale (not including the proceeds from the short sale). While
the short position is open, the fund must maintain daily the segregated
account at such a level that (1) the amount deposited in it plus the amount
deposited with the broker as collateral equals the current market value of
the securities sold short and (2) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the market value of
the securities at the time they were sold short. Depending upon market
conditions, up to 80% of the value of a fund's net assets may be deposited as
collateral for the obligation to replace securities borrowed to effect short
sales and allocated to a segregated account in connection with short sales.
The fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which
the fund replaces the borrowed security. The fund will realize a gain if the
security declines in price between those dates. The amount of any gain will
be decreased and the amount of any loss increased by the amount of any
premium, dividends or interest the fund may be required to pay in connection
with a short sale.
A short sale is "against the box" if at all times when the short position is
open the fund owns an equal amount of the securities or securities
convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities sold short. Such a
transaction serves to defer a gain or loss for Federal income tax purposes.
FOREIGN CURRENCY TRANSACTIONS. In connection with its portfolio transactions
in securities traded in a foreign currency, an underlying fund may enter
into forward contracts to purchase or sell an agreed upon amount of a
specific currency at a future date which may be any fixed number of days
from the date of the contract agreed upon by the parties at a price set at
the time of the contract. Under such an arrangement, concurrently with the
entry into a contract to acquire a foreign security for a specified amount
of currency, the fund would purchase with U.S. dollars the required amount
of foreign currency for delivery at the settlement date of the purchase; the
fund would enter into similar forward currency transactions in connection
with the sale of foreign securities. The effect of such transactions would
be to fix a U.S. dollar price for the security to protect against a possible
loss resulting from an adverse change in the relationship between the U.S.
dollar and the subject foreign currency during the period between the date
the security is purchased or sold and the date on which payment is made or
received, the normal range of which is three to 14 days. These contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement and no commissions are charged at any
stage for trades. Although such contracts tend to minimize the risk of loss
due to a decline in the value of the subject currency, they tend to limit
commensurately any potential gain which might result should the value of
such currency increase during the contract period.
LEVERAGE THROUGH BORROWING. An underlying fund may borrow up to one-third of
the value of its net assets on an unsecured basis from banks to increase its
holdings of portfolio securities. Under the 1940 Act, the fund is required
to maintain continuous asset coverage of 300% with respect to such
borrowings and to sell (within three days) sufficient portfolio holdings to
restore such coverage if it should decline to less than 300% due to market
fluctuations or otherwise, even if disadvantageous from an investment
standpoint. Leveraging will exaggerate the effect of any increase or
decrease in the value of portfolio securities on the fund's net asset value,
and money borrowed will be subject to interest costs (which may include
commitment fees and/or the cost of maintaining minimum average balances)
which may or may not exceed the interest and option premiums received from
the securities purchased with borrowed funds.
WARRANTS. An underlying fund may invest in warrants, which are options to
purchase equity securities at specific prices valid for a specific period of
time. The prices do not necessarily move parallel to the prices of the
underlying securities. Warrants have no voting rights, receive no dividends
and have no rights with respect to the assets of the issuer. If a warrant is
not exercised within the specified time period, it will become worthless and
the fund will lose the purchase price and the right to purchase the
underlying security.
HIGH YIELD SECURITIES. An underlying fund may invest in high yield, high
risk securities. Investing in high yield, high risk securities (also called
"junk bonds") involves special risks in addition to the risks associated
with investments in higher rated debt securities. High yield, high risk
securities may be regarded as predominantly speculative with respect to the
issuer's continuing ability to meet principal and interest payments.
High yield, high risk securities may be more susceptible to real or
perceived adverse economic and competitive industry conditions than higher
grade securities. The prices of high yield, high risk securities have been
found to be less sensitive to interest rate changes than more highly rated
investments, but more sensitive to adverse economic downturns or individual
corporate developments. A projection of an economic downturn or of a period
of rising interest rates, for example, could cause a decline in high yield,
high risk security prices because the advent of a recession could lessen the
ability of a highly leveraged company to make principal and interest
payments on its debt securities. If the issuer of high yield, high risk
securities defaults, a fund may incur additional expenses to seek recovery.
In the case of high yield securities structured as zero coupon or
payment-in-kind securities, the market prices of such securities are
affected to a greater extent by interest rate changes, and therefore tend to
be more volatile than securities which pay interest periodically and in
cash.
The secondary markets on which high yield, high risk securities are traded
may be less liquid than the market for higher grade securities. Less
liquidity in the secondary trading markets could adversely affect and cause
large fluctuations in the daily net asset value of a fund's shares. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of high yield, high risk
securities, especially in a thinly traded market.
There may be special tax considerations associated with investing in high
yield, high risk securities structured as zero coupon or payment-in-kind
securities. A fund records the interest on these securities as income even
though it receives no cash interest until the security's maturity or payment
date. A fund will be required to distribute all or substantially all such
amounts annually and may have to obtain the cash to do so by selling
securities which otherwise would continue to be held. Shareholders will be
taxed on these distributions.
The use of credit ratings as the sole method of evaluating high yield, high
risk securities can involve certain risks. For example, credit ratings
evaluate the safety of principal and interest payments, not the market value
risk of high yield, high risk securities. Also, credit rating agencies may
fail to change credit ratings in a timely fashion to reflect events since
the security was last rated.
DERIVATIVES
An underlying fund may invest in the following instruments that are commonly
known as derivatives. Generally, a derivative is a financial arrangement,
the value of which is based on, or "derived" from, a traditional security,
asset, or market index.
OPTIONS ACTIVITIES. An underlying fund may write (i.e., sell) listed call
options ("calls") if the calls are "covered" throughout the life of the
option. A call is "covered" if the fund owns the optioned securities. When a
fund writes a call, it receives a premium and gives the purchaser the right
to buy the underlying security at any time during the call period (usually
not more than nine months in the case of common stock) at a fixed exercise
price regardless of market price changes during the call period. If the call
is exercised, the fund will forgo any gain from an increase in the market
price of the underlying security over the exercise price.
A fund may purchase a call on securities only to effect a "closing purchase
transaction" which is the purchase of a call covering the same underlying
security and having the same exercise price and expiration date as a call
previously written by the fund on which it wishes to terminate its
obligation. If the fund is unable to effect a closing purchase transaction,
it will not be able to sell the underlying security until the call
previously written by the fund expires (or until the call is exercised and
the fund delivers the underlying security).
An underlying fund also may write and purchase put options ("puts"). When a
fund writes a put, it receives a premium and gives the purchaser of the put
the right to sell the underlying security to the fund at the exercise price
at any time during the option period. When a fund purchases a put, it pays a
premium in return for the right to sell the underlying security at the
exercise price at any time during the option period. An underlying fund also
may purchase stock index puts which differ from puts on individual
securities in that they are settled in cash based on the values of the
securities in the underlying index rather than by delivery of the underlying
securities. Purchase of a stock index put is designed to protect against a
decline in the value of the portfolio generally rather than an individual
security in the portfolio. If any put is not exercised or sold, it will
become worthless on its expiration date.
A fund's option positions may be closed out only on an exchange which
provides a secondary market for options of the same series, but there can be
no assurance that a liquid secondary market will exist at a given time for
any particular option. In this regard, trading in options on certain
securities (such as U.S. government securities) is relatively new so that it
is impossible to predict to what extent liquid markets will develop or
continue.
The underlying fund's custodian, or a securities depository acting for it,
generally acts as escrow agent as to the securities on which the fund has
written puts or calls, or as to other securities acceptable for such escrow
so that no margin deposit is required of the fund. Until the underlying
securities are released from escrow, they cannot be sold by the fund.
In the event of a shortage of the underlying securities deliverable on
exercise of an option, the Options Clearing Corporation ("OCC") has the
authority to permit other, generally comparable securities to be delivered
in fulfillment of option exercise obligations. If the OCC exercises its
discretionary authority to allow such other securities to be delivered, it
may also adjust the exercise prices of the affected options by setting
different prices at which otherwise ineligible securities may be delivered.
As an alternative to permitting such substitute deliveries, the OCC may
impose special exercise settlement procedures.
FUTURES CONTRACTS. An underlying fund may enter into futures contracts for
the purchase or sale of debt securities and stock indexes. A futures
contract is an agreement between two parties to buy and sell a security or
an index for a set price on a future date. Futures contracts are traded on
designated "contract markets" which, through their clearing corporations,
guarantee performance of the contracts.
Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for
the sale of securities has an effect similar to the actual sale of
securities, although sale of the futures contract might be accomplished more
easily and quickly. For example, if a fund holds long-term U.S. government
securities and it anticipates a rise in long-term interest rates, it could,
in lieu of disposing of its portfolio securities, enter into futures
contracts for the sale of similar long-term securities. If rates increased
and the value of the fund's portfolio securities declined, the value of the
fund's futures contracts would increase, thereby protecting the fund by
preventing the net asset value from declining as much as it otherwise would
have. Similarly, entering into futures contracts for the purchase of
securities has an effect similar to the actual purchase of the underlying
securities, but permits the continued holding of securities other than the
underlying securities. For example, if the fund expects long-term interest
rates to decline, it might enter into futures contracts for the purchase of
long-term securities so that it could gain rapid market exposure that may
offset anticipated increases in the cost of securities it intends to
purchase while continuing to hold higher-yield short-term securities or
waiting for the long-term market to stabilize.
A stock index futures contract may be used to hedge an underlying fund's
portfolio with regard to market risk as distinguished from risk relating to
a specific security. A stock index futures contract does not require the
physical delivery of securities, but merely provides for profits and losses
resulting from changes in the market value of the contract to be credited or
debited at the close of each trading day to the respective accounts of the
parties to the contract. On the contract's expiration date, a final cash
settlement occurs. Changes in the market value of a particular stock index
futures contract reflect changes in the specified index of equity securities
on which the future is based.
There are several risks in connection with the use of futures contracts. In
the event of an imperfect correlation between the futures contract and the
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. Further,
unanticipated changes in interest rates or stock price movements may result
in a poorer overall performance for the fund than if it had not entered into
futures contracts on debt securities or stock indexes.
In addition, the market prices of futures contracts may be affected by
certain factors. First, all participants in the futures market are subject
to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close futures
contracts through offsetting transactions which could distort the normal
relationship between the securities and futures markets. Second, from the
point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities market.
Therefore, increased participation by speculators in the futures market may
also cause temporary price distortions.
Finally, positions in futures contracts may be closed out only on an
exchange or board of trade which provides a secondary market for such
futures. There is no assurance that a liquid secondary market on an exchange
or board of trade will exist for any particular contract or at any
particular time.
OPTIONS ON FUTURES CONTRACTS. A fund also may purchase and sell listed put
and call options on futures contracts. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call and
a short position if the option is a put), at a specified exercise price at
any time during the option period. When an option on a futures contract is
exercised, delivery of the futures position is accompanied by cash
representing the difference between the current market price of the futures
contract and the exercise price of the option. The fund may purchase put
options on futures contracts in lieu of, and for the same purpose as, a sale
of a futures contract. It also may purchase such put options in order to
hedge a long position in the underlying futures contract in the same manner
as it purchases "protective puts" on securities.
As with options on securities, the holder of an option may terminate his
position by selling an option of the same series. There is no guarantee that
such closing transactions can be effected. The fund is required to deposit
initial margin and maintenance margin with respect to put and call options
on futures contracts written by it pursuant to brokers' requirements similar
to those applicable to futures contracts described above and, in addition,
net option premiums received will be included as initial margin deposits.
In addition to the risks which apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain
that this market will develop. Compared to the use of futures contracts, the
purchase of options on futures contracts involves less potential risk to the
fund because the maximum amount at risk is the premium paid for the options
(plus transaction costs). However, there may be circumstances when the use
of an option on a futures contract would result in a loss to the fund when
the use of futures contract would not, such as when there is no movement in
the prices of the underlying securities. Writing an option on a futures
contract involves risks similar to those arising in the sale of futures
contracts, as described above.
HEDGING. An underlying fund may employ many of the investment techniques
described in this section not only for investment purposes which may be
considered speculative, but also for hedging purposes. For example, an
underlying fund may purchase or sell put and call options on common stocks
to hedge against movements in individual common stock prices, or purchase
and sell stock index futures and related options to hedge against marketwide
movements in common stock prices. Although such hedging techniques generally
tend to minimize the risk of loss that is hedged against, they also may
limit commensurately the potential gain that might have resulted had the
hedging transaction not occurred. Also, the desired protection generally
resulting from hedging transactions may not always be achieved.
INVESTMENT POLICIES AND RESTRICTIONS
The Portfolios have adopted certain fundamental investment policies (i.e.,
policies which may not be changed as to a Portfolio without the vote of a
majority of that Portfolio's outstanding shares, as defined under "Other
Information -- Voting") as well as certain investment policies which are not
fundamental and therefore may be changed by the Trustees without shareholder
approval. These policies reflect self-imposed standards or the requirements
of Federal law.
The Trust may, in the future, seek to achieve each Portfolio's investment
objective by investing all of the Portfolio's assets in a no-load,
diversified, open-end management investment company having substantially the
same investment objective as the Portfolio. Each Portfolio's investment
policies permit such an investment. Shareholders will receive prior written
notice with respect to any such investment.
Under each Portfolio's fundamental investment policies, no Portfolio may
invest more than 25% of its total assets in the securities of underlying
funds which themselves concentrate (i.e., invest more than 25% of their
assets) in any one industry. Nevertheless, through its investment in
underlying funds, a Portfolio indirectly may invest more than 25% of its
assets in one industry. The Portfolio also may not borrow money, except that
a Portfolio may, as a temporary measure for extraordinary or emergency
purposes, borrow from a bank in an amount not in excess of 5% of the
Portfolio's total assets, or pledge or hypothecate its assets, except that
the Portfolio may pledge not more than 5% of its total assets to secure such
borrowings. A Portfolio will not make additional investments at any time
during which it has outstanding borrowings.
Under each Portfolio's policies which are not fundamental, no Portfolio may
(i) invest more than 25% of its assets in the shares of any one open-end
investment company; (ii) purchase or otherwise acquire the securities of any
open-end investment company (except in connection with a merger,
consolidation, acquisition of substantially all of the assets or
reorganization of another investment company) if, as a result, a Portfolio
and all of its affiliates including the other Portfolios would own more than
3% of the total outstanding stock of that company, or (iii) purchase a
security which is not readily marketable if, as a result, more than 10% of
that Portfolio's assets would consist of such securities. For this purpose,
securities which are not readily marketable include repurchase agreements
having more than seven days to maturity (see "Investments of and Investment
Techniques Employed by Mutual Funds in Which the Portfolios May Invest") and
shares of an open-end investment company owned by the Portfolios in an
amount exceeding 1% of the issuer's total outstanding securities. See "Risks
and Other Considerations."
In addition, no Portfolio will invest more than 5% of its total assets in
the securities of an underlying fund which itself invests more than 5% of
its total assets in (i) the securities of any one issuer (excluding U.S.
government securities), (ii) securities of issuers which have been in
operation for less than three years and equity securities of issuers which
are not readily marketable or (iii) puts, calls, straddles, spreads, and
combinations thereof, and futures contracts.
Each Portfolio may invest up to 5% of its net assets in repurchase
agreements with banks and broker-dealers. This and other investment policies
and restrictions are discussed in the SAI under the heading "Investment
Policies."
The underlying funds in which a Portfolio invests may, but need not, have
the same investment policies as the Portfolio. For example, although
Aggressive Growth Portfolio will not borrow money for investment purposes,
it may invest up to 25% of its total assets in an underlying fund which
borrows money for investment purposes (i.e., engages in leveraging). The
investments which may be made by underlying funds in which the Portfolios
invest and the risks associated with those investments are described under
"Investment Objectives," "Investment Policies and Restrictions" and
"Investments of and Investment Techniques Employed by Mutual Funds in Which
the Portfolios May Invest."
RISKS AND OTHER CONSIDERATIONS
Any investment in a mutual fund involves risk and, although the Portfolios
invest in a number of underlying funds, this practice does not eliminate
investment risk. Moreover, investing through the Portfolios in an underlying
portfolio of mutual funds involves certain additional expenses and certain
tax results which would not be present in a direct investment in the
underlying funds. See "Expenses" and "Dividends, Distributions and Taxes."
A Portfolio, together with the other Portfolios and any "affiliated persons"
(as defined in the 1940 Act) may purchase only up to 3% of the total
outstanding securities of any underlying fund. For this purpose, shares of
underlying funds held by private discretionary investment advisory accounts
managed by the Adviser will be aggregated with those held by the Portfolios.
Accordingly, when affiliated persons and other accounts managed by the
Adviser hold shares of any of the underlying funds, each Portfolio's ability
to invest fully in shares of those funds is restricted, and the Adviser must
then, in some instances, select alternative investments that would not have
been its first preference.
The 1940 Act also provides that an underlying fund whose shares are
purchased by a Portfolio will be obligated to redeem shares held by the
Portfolio only in an amount up to 1% of the underlying fund's outstanding
securities during any period of less than 30 days. Shares held by a
Portfolio in excess of 1% of an underlying fund's outstanding securities,
therefore, will be considered not readily marketable securities which
together with other such securities may not exceed 10% of that Portfolio's
assets. See "Investment Policies and Restrictions." These limitations are
not fundamental investment policies and may be changed by the Trustees
without shareholder approval.
Under certain circumstances, an underlying fund may determine to make
payment of a redemption by a Portfolio wholly or partly by a distribution in
kind of securities from its portfolio, in lieu of cash, in conformity with
the rules of the SEC. In such cases, the Portfolios may hold securities
distributed by an underlying fund until the Adviser determines that it is
appropriate to dispose of such securities.
Investment decisions by the investment advisers of the underlying funds are
made independently of the Trust and its Adviser. Therefore, the investment
adviser of one underlying fund may be purchasing shares of the same issuer
whose shares are being sold by the investment adviser of another such fund.
The result of this would be an indirect expense to a Portfolio without
accomplishing any investment purpose.
Each Portfolio may purchase shares of both load and no-load underlying
funds. To the extent an underlying fund offers multiple classes of shares,
the Portfolios will purchase the share class available to it with the lowest
sales charges. However, the Portfolios will not invest in shares of
underlying funds which are sold with a contingent deferred sales charge.
Under the 1940 Act, a mutual fund must sell its shares at the price
(including sales load, if any) described in its prospectus, and current
rules under the 1940 Act do not permit negotiation of sales charges.
Therefore, a Portfolio currently is not able to negotiate the level of the
sales charges at which it will purchase shares of load funds, which may be
as great as 8.5% of the public offering price (or 9.29% of the net amount
invested). Nevertheless, when appropriate, a Portfolio will purchase such
shares pursuant to (i) letters of intent, permitting it to obtain reduced
sales charges by aggregating its intended purchases over time (generally 13
months from the initial purchase under the letter); (ii) rights of
accumulation, permitting it to obtain reduced sales charges as it purchases
additional shares of an underlying fund; and (iii) the right to obtain
reduced sales charges by aggregating its purchases of several funds within a
family of mutual funds. Based upon these privileges, it is expected that, in
the majority of cases, the sales charges paid by a Portfolio on a load fund
purchase will not exceed 1% of the public offering price (1.01% of the net
amount invested). See "Portfolio Transactions."
Under certain circumstances, a sales charge incurred by a Portfolio in
acquiring shares of an underlying fund may not be taken into account in
determining the gain or loss for federal income tax purposes on the
disposition of the shares acquired. If shares are disposed of within 90 days
from the date they were purchased and if shares of a new underlying fund are
subsequently acquired without imposition of a sales charge or imposition of
a reduced sales charge pursuant to a right granted to the Portfolio to
acquire shares without payment of a sales charge or with the payment of a
reduced charge, then the sales charge paid upon the purchase of the initial
shares will be treated as paid in connection with the acquisition of the new
underlying fund's shares rather than the initial shares.
EXPENSES
As an investor in the Portfolios, you should recognize that you may invest
directly in mutual funds and that, by investing in mutual funds indirectly
through the Portfolios, you will bear not only your proportionate share of
the expenses of the Portfolios (including operating costs and investment
advisory and administrative fees) but also, indirectly, similar expenses of
the underlying funds. If you are an investor in the Portfolios through the
Program offered by the Distributors you should recognize that the combined
expenses of the Program and of the Portfolios (including their indirect
expenses) may involve greater fees and expenses than present in other types
of investments without the benefit of professional asset allocation
recommendations, and you may indirectly bear expenses paid by an underlying
fund related to the distribution of its shares. As a Portfolio shareholder,
you also will bear your proportionate share of any sales charges incurred by
the Portfolio related to the purchase of shares of the underlying funds.
Finally, as an investor, you should recognize that, as a result of the
Portfolios' policies of investing in other mutual funds, you may receive
taxable capital gains distributions to a greater extent than would be the
case if you invested directly in the underlying funds. See "Dividends,
Distributions and Taxes."
MANAGEMENT OF FUNDMANAGER PORTFOLIOS
The business and affairs of the Trust are managed under the direction of the
Trustees. Additional information about the Trustees, as well as the Trust's
executive officers, may be found in the SAI under the heading "Management
Trustees and Officers."
THE ADVISER
Freedom Capital Management has its principal office at One Beacon Street,
Boston, Massachusetts. The Adviser advises the Trust through the M.D. Hirsch
Division of Freedom Capital Management. Michael D. Hirsch, Chairman of the
M.D. Hirsch Division of Freedom Capital Management, has provided
discretionary investment advisory services relating to investments in mutual
funds to individual accounts since 1975.
Freedom Capital Management is an indirect, wholly-owned subsidiary of JHFSC
Acquisition Corp. whose stock is held by the following companies in the
approximate percentages: Thomas H. Lee Equity Fund III, L.P. (49%), a
Massachusetts limited partnership; SCP Private Equity Partners, L.P. (13%),
a Delaware limited partnership; John Hancock Subsidiaries, Inc. (4.9%), a
wholly-owned subsidiary of John Hancock Mutual Life Insurance Company; and
certain members of management and employees of John Hancock Freedom
Securities Corporation (the direct parent of the Adviser and a subsidiary of
JHFSC Acquisition Corp.) and its subsidiaries, including the Adviser (32%).
Prior to November 29, 1996, Freedom Capital Management was an indirect,
wholly-owned subsidiary of John Hancock Mutual Life Insurance Company ("John
Hancock"). John Hancock is a major mutual life insurance company based in
Boston, Massachusetts.
Pursuant to an Investment Advisory Contract, the Adviser is responsible for
the investment management of each Portfolio's assets, including the
responsibility for making investment decisions and placing orders for the
purchase and sale of the Portfolio's investments directly with the issuers
or with brokers or dealers, selected by it in its discretion, including
Freedom Distributors and Edgewood. See "Portfolio Transactions." The Adviser
also furnishes to the Trustees, which have overall responsibility for the
business and affairs of the Trust, periodic reports on the investment
performance of the Trust. For these services, the Adviser receives from each
Portfolio a fee, payable monthly, at the annual rate of 0.50% of that
Portfolio's average daily net assets up to $500 million and 0.40% of its
average daily net assets in excess of $500 million.
Michael Hirsch is the Portfolio Manager of the Portfolios and is responsible
for the day to day management of the Portfolios. Currently, Mr. Hirsch is
Chairman of the M.D. Hirsch Division of Freedom Capital Management. Prior to
February 21, 1995, Mr. Hirsch was the Vice Chairman and Managing Director of
the M.D. Hirsch Division of Republic Asset Management. Mr. Hirsch served as
President of M.D. Hirsch Investment Management, Inc. ("Hirsch") from
February, 1991 until June, 1993 and Chief Investment Officer of Republic
National Bank of New York ("Republic") from 1981 until February, 1991. Mr.
Hirsch pioneered the concept of investing his clients' assets in a portfolio
of mutual funds in 1975. Mr. Hirsch is now a noted authority on mutual funds
and has authored two books, "Multifund Investing" in 1987 and "The Mutual
Fund Wealth Builder" in 1991.
THE ADMINISTRATOR
FAS, a wholly-owned subsidiary of Federated Investors with its principal
business offices at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the
Portfolios. FAS provides these at an annual rate which relates to the
average aggregate daily net assets of the Portfolios as specified below:
MAXIMUM
ADMINISTRATIVE AVERAGE AGGREGATE
FEE DAILY NET ASSETS
.150% on the first $250 million
.125% on the next $250 million
100% on the next $250 million
075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000 per Portfolio and $35,000 per each additional class of shares. FAS
may choose voluntarily to waive a portion of its fee or minimums from time
to time in its sole discretion.
THE DISTRIBUTORS
The Trustees of the Trust have approved a Distribution Contract (the
"Distribution Contract") between the Trust and each of Edgewood, Freedom
Distributors, Tucker Anthony and Sutro pursuant to which each will serve as
a distributor of the Trust and of the Shares of each of the Portfolios.
The distributors may provide promotional incentives to investment executives
who support the sale of shares of the Portfolios. In some instances, these
incentives may be offered only to certain investment executives which
provide services in connection with the sale or expected sale of significant
amounts of shares.
Edgewood, a registered broker/dealer, is a wholly-owned subsidiary of
Federated Investors with principal business offices at Clearing Operations,
P.O. Box 897, Pittsburgh, Pennsylvania 15230-0897. Freedom Distributors is a
registered broker/dealer with principal business offices at One Beacon Street,
Boston, Massachusetts 02108. Tucker Anthony is a brokerage firm which is a
member of the New York Stock Exchange continuing an investment banking and
brokerage business established in 1892. The principal business address of
Tucker Anthony is One Beacon Street, Boston, Massachusetts 02108. Sutro is
brokerage firm and a member of the New York Stock Exchange. The principal
business address of Sutro is 201 California Street, San Francisco, California
94111. Freedom Distributors, Tucker Anthony, and Sutro are subsidiaries of
John Hancock Freedom Securities Corporation. See description of "The
Adviser" above.
CUSTODIAN AND TRANSFER AGENT
The Trustees of the Trust have also approved a Custodian Agreement and a
Transfer Agency and Service Agreement (the "IBT Contracts") between the
Trust and Investors Bank & Trust Company ("IBT") pursuant to which IBT
provides custodial, portfolio accounting, transfer agency, dividend
disbursing and shareholder servicing services to the Trust and each of the
Portfolios. The principal business address of IBT is 89 South Street,
Boston, Massachusetts 02111.
OTHER EXPENSES
The Trust bears all costs of its operations other than expenses specifically
assumed by the Administrator, Distributors or the Adviser. See "Management"
in the SAI. Expenses directly attributable to a Portfolio or class are
charged to that Portfolio or class; other expenses are allocated
proportionately among the Portfolios or classes, as the case may be, in
relation to the net assets of each Portfolio or class. The Trust has
contracted with IBT to provide Portfolio accounting services at a rate not
intended to exceed the cost of such services.
PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Contract, the Adviser places orders for
the purchase and sale of portfolio investments for a Portfolio's accounts
with brokers or dealers, selected by it in its discretion, including Freedom
Distributors and Edgewood. With respect to purchases of certain money market
instruments, purchase orders are placed directly with the issuer or its
agent.With respect to purchases of shares of underlying funds, the Portfolio
may pay a sales charge. Sales charges of the underlying funds generally
consist of two parts, the "dealer reallowance" (which typically comprises at
least 80% of the amount of the charge and is paid to the broker
participating in the sale of the underlying fund shares) and the
underwriter's retention. To the extent permissible by law, Freedom
Distributors and Edgewood will be designated as the participating brokers
entitled to receive the dealer reallowance portion of the sales charge on
purchases of load fund shares by the Portfolios. However, Freedom
Distributors will not retain any dealer reallowance in excess of 1% of the
public offering price on any transaction nor will it be designated as the
broker entitled to receive the dealer reallowance portion of the sales
charge where such reallowance would exceed 1% of the public offering price.
With respect to purchases of underlying fund shares, the Adviser directs
substantially all of the Portfolios' orders to either Freedom Distributors
or Edgewood, which may, in its discretion, direct the order to other
broker-dealers in consideration of sales of that Portfolio's shares, except
where the direction to another broker-dealer would increase the dealer
reallowance paid by a fund to Freedom Distributors above 1% of the public
offering price.
Freedom Distributors and Edgewood may also assist in the execution of a
Portfolio's purchase of underlying fund shares and they may receive
additional compensation (such as distribution payments, shareholder
servicing fees, and/or trailer fees) from the underlying funds or their
underwriters. In providing execution assistance, Freedom Distributors and
Edgewood receive orders from the Adviser; place them with the underlying
fund's distributor, transfer agent or other person, as appropriate; confirm
the trade, price and number of shares purchased; and assure prompt payment
by the Portfolio and proper completion of the order. Payment of sales
charges or other forms of compensation to Freedom Distributors or Edgewood
is not a factor that the Adviser considers when selecting an underlying fund
for purchase.
Each Portfolio is actively managed and has no restrictions upon portfolio
turnover, although its annual turnover rate is not expected to exceed 100%.
A 100% annual portfolio turnover rate would be achieved if each security in
each Portfolio's portfolio (other than securities with less than one year
remaining to maturity) were replaced once during the year. To the extent
each Portfolio is purchasing shares of load funds, a higher turnover rate
would result in correspondingly higher sales loads paid by that Portfolio.
Trading also may result in realization of net short-term capital gains which
would not otherwise be realized, and shareholders are taxed on such gains
when distributed from that Portfolio at ordinary income tax rates. See
"Dividends, Distributions and Taxes." There is no limit on the portfolio
turnover rates of the underlying funds in which the Portfolio may invest.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Portfolio is determined as of the
close of trading (normally 4:00 p.m., Eastern time) on the NYSE, Monday
through Friday, except on: (i) days on which there are not sufficient
changes in the value of a Portfolio's portfolio securities that its net
asset value might be materially affected; (ii) days during which no shares
are tendered for redemption and no orders to purchase shares are received;
and (iii) the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. Net asset value per share is calculated by dividing the
aggregate value of a Portfolio's assets allocable to the Class less all
liabilities by the number of that Portfolio's outstanding shares.
The assets of each Portfolio consist primarily of the underlying funds,
which are valued at their respective net asset values under the 1940 Act.
The underlying funds value securities in their portfolios for which market
quotations are readily available at their current market value (generally
the last reported sale price) and all other securities and assets at fair
value pursuant to methods established in good faith by the boards of
directors or trustees of the underlying fund. Money market mutual funds may
use the amortized cost or penny-rounding methods to value their securities.
Securities having 60 days or less remaining to maturity generally are valued
at their amortized cost which approximates market value.
Other assets of each Portfolio are valued at their current market value if
market quotations are readily available and, if market quotations are not
available, they are valued at fair value pursuant to methods established in
good faith by the Trustees. Debt instruments having 60 days or less
remaining to maturity are valued at their amortized cost.
PURCHASE OF SHARES
Shares of the Portfolios are offered by the Distributors as an investment
vehicle for individuals, institutions, corporations and fiduciaries in the
Program offered by the Distributors. The participants in the Program
receive, for a fee at a maximum annual rate based upon a percentage of
assets invested, certain services, including asset allocation
recommendations with respect to the Portfolios based on an evaluation of
their investment objectives and risk tolerances. Shares of the Portfolios
are offered for sale at net asset value by the Distributors to participants
in the Program. Shares of the Portfolios may also be offered to employees
through tax-deferred retirement plans of the Distributors and the Adviser.
Each Portfolio may invest in underlying funds which are sold with a sales
charge. Prospectuses, sales material and applications relating to the
Portfolios can be obtained from the Distributors.
Purchases of shares of the Trust by participants in the Program must be
through a brokerage account maintained with the Distributors. The minimum
investment by participants in the Program is $50,000. The minimum initial
investment for other qualified investors is $1,000, except that the minimum
initial investment for an IRA is $250. The minimum subsequent investment is
$100. The minimum initial investment is waived for purchases by Trustees,
officers and employees of the Trust, the Adviser or a Distributor, including
their immediate families and certain accounts. Each Portfolio also reserves
the right to vary the initial and subsequent investment minimums. All
purchase payments are invested in full and fractional shares. The Trust and
each Distributor are authorized to reject any purchase order.
For each shareholder of record, the Trust, as the shareholder's agent,
establishes an open account to which all shares purchased are credited
together with any dividends and capital gains distributions which are paid
in additional shares. See "Dividends, Distributions and Taxes."
PURCHASES BY CLIENTS OF THE DISTRIBUTORS OR AUTHORIZED SECURITIES DEALERS
If you have a Program account with a Distributor, you may purchase any
Portfolio's Shares through your investment executive. Your investment
executive has the responsibility of submitting your purchase order to IBT on
such day in order to obtain that day's applicable purchase price. Purchase
orders received by IBT after the time of determining that day's purchase
price (generally 4:00 p.m., New York time), are priced according to the net
asset value per Share of the Portfolio next determined on the following
business day. Payment for purchase orders must be made to such Distributor
within three business days of the purchase order.
The Distributors will receive statements and dividends directly from the
Portfolios and will in turn provide you with account statements reflecting
the Portfolios' purchases, redemptions and dividend payments. If you wish
additional information concerning your investment in the Program made
through a Distributor, please call your investment executive.
FUNDMANAGER ADVISORY PROGRAM
The Adviser, through the Program, provides discretionary advisory services
in connection with investments among the Portfolios. Under the Program,
investment executives of the Distributors provide services to an investor by
assisting the investor in identifying his or her financial objectives,
preferences and risk tolerances through evaluation of a confidential
questionnaire-Client Information Guide. Based on its evaluation of the
investor's financial goals and circumstances, the Adviser allocates the
investor's assets among a money market fund in the Freedom Group of Money
Funds and some or all of the Portfolios. The Adviser will adjust each
investor's Program portfolio among the money fund and the Portfolios from
time to time based on its assessment of the economy, interest rates, the
financial markets and macro-economic events worldwide. The Program is a
continuing investment advisory program. Once a Program is active, the
investor receives, at least quarterly, a report containing an analysis and
evaluation of the investor's portfolio. Investment executives of the
Distributors may review the quarterly report with the investor, monitor
identified changes in the investor's financial characteristics and
communicate any changes to the Adviser.
The Distributors are paid a quarterly fee for the services comprising the
Program at the maximum annual rate of 1.35% of assets held in a Program
account. Where the investor is a qualified retirement plan, a different fee
schedule may apply. Investment executives of the Distributors will receive,
and the Adviser may receive, a portion of any fee paid by Program clients.
The Adviser also receives advisory fees from the Portfolios and from each of
the money market funds in the Freedom Group of Money Funds. The Program fees
may be subject to negotiation based on a number of factors including, but
not limited to, the size of the Program account. The operating expenses of
the money market fund and the Portfolios, when combined with the Program
fee, may involve greater fees and expenses than other mutual funds whose
shares are purchased without the benefit of asset allocation recommendations
rendered by investment advisers such as the Adviser.
For participants in the Program, shares of the Portfolios may be purchased
directly through the Distributors only after the completion and processing
of the investor's Client Information Guide and applicable documents. The
offering price is the net asset value per share next determined following
receipt of an order by the Distributors.
REDEMPTION OF SHARES
Upon receipt by the Trust of a redemption request in proper form, Shares of
a Portfolio will be redeemed at the next determined net asset value. See
"Determination of Net Asset Value." For the shareholder's convenience, the
Trust has established several different direct redemption procedures.
REDEMPTION OF SHARES PURCHASED THROUGH A DISTRIBUTOR
In order to redeem your shares purchased through a Distributor in the
Program, you should advise your investment executive, by telephone or mail,
to execute the redemption. Redemption requests received by the close of the
NYSE (generally 4:00 p.m., New York time), are effective that day. Your
investment executive has the responsibility of submitting your redemption
request to IBT on such day in order to obtain that day's applicable
redemption price. There is no redemption charge. Redemption proceeds will be
held in your brokerage account unless you give instructions to your
investment executive to remit the proceeds to you.
DIRECT REDEMPTION
Direct redemptions are not available for shares purchased through a
Distributor's brokerage account. Any such redemption requests received will
be forwarded to your investment executive who will process them as described
above.
The Trust may suspend the right of redemption during any period when (i)
trading on the NYSE is restricted or the NYSE is closed, other than
customary weekend and holiday closings, (ii) the SEC has by order permitted
such suspension or (iii) an emergency, as defined by rules of the SEC,
exists making disposal of portfolio investments or determination of the
value of the net assets of the Portfolios not reasonably practicable.
If the Trustees should determine that it would be detrimental to the best
interests of the remaining shareholders of a Portfolio to make payment
wholly or partly in cash, that Portfolio may pay the redemption price in
whole or in part by a distribution in kind of readily marketable securities
(mutual fund shares or money market instruments) from the portfolio of that
Portfolio, in lieu of cash, in conformity with applicable rules of the SEC.
The Trust will, however, redeem shares solely in cash up to the lesser of
$250,000 or 1% of its net assets during any 90-day period for any one
shareholder.
The proceeds of redemption may be more or less than the amount invested and,
therefore, a redemption may result in a gain or loss for Federal income tax
purposes.
Because the Portfolios incur fixed costs in maintaining shareholder
accounts, the Portfolios reserve the right to redeem your account if its
total value falls below $500 at the end of any month, unless the decrease is
solely the result of a reduction in net asset value per share. If a
Portfolio elects to redeem your account, it will notify you of its intention
to do so and will provide you with an opportunity to increase your account
by investing a sufficient amount to bring the account up to $500 or more
within 30 days of the notice.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio intends to continue to qualify as a regulated investment
company under Subchapter M of the Code. In any year in which a Portfolio
qualifies as a regulated investment company and distributes substantially
all of its investment company taxable income (which includes, among other
items, the excess of net short-term capital gains over net long-term capital
losses) and its net capital gains (the excess of net long-term capital gains
over net short-term capital losses), the Portfolio will not be subject to
Federal income tax to the extent it distributes to shareholders such income and
capital gains in the manner required under the Code. Amounts not distributed
on a timely basis in accordance with a calendar year distribution
requirement are subject to a nondeductible 4% excise tax. To prevent
imposition of the excise tax, each Portfolio must distribute for each
calendar year an amount equal to the sum of (1) at least 98% of its net
ordinary income (excluding any capital gains or losses) for the calendar year,
(2) at least 98% of the excess of its capital gains over capital losses
(adjusted for certain ordinary losses) realized during the one-year period
ending October 31 of such year, and (3) all ordinary income and capital gains
for previous years that were not distributed during such years. A distribution
will be treated as paid on December 31 of the calendar year if it is declared
by the Portfolio in October, November or December of that year with a record
date in such a month and paid by the Portfolio during January of the following
calendar year. Such distributions will be taxable to shareholders in the
calendar year in which the distributions are declared, rather than the calendar
year in which the distributions are received. The Portfolio intends to
distribute its income in accordance with this requirement to prevent
application of the excise tax.
Each year the Trust will notify shareholders of the tax status of dividends
and distributions.
Income received by a Portfolio from a mutual fund in that Portfolio's
portfolio (including dividends and distributions of short-term capital
gains), as well as interest received on money market instruments and net
short-term capital gains received by the Portfolio on the sale of mutual
fund shares, will be distributed by the Portfolio (after deductions for
expenses) and will be taxable to shareholders as ordinary income. Because
the Portfolios are actively managed and can realize taxable net short-term
capital gains by selling shares of an underlying fund with unrealized
portfolio appreciation, investing in the Portfolio rather than directly in
the underlying funds may result in increased tax liability to the
shareholder, since the Portfolio must distribute its gain in accordance with
the rules in the Code. The Portfolio's ability to dispose of shares of
mutual funds held less than three months may be limited by requirements
relating to a Portfolio's qualification as a regulated investment company
for federal income tax purposes.
Distributions of net capital gains (the excess of net long-term capital
gains over net short-term capital losses) received by a Portfolio from
mutual funds, as well as net long-term capital gains realized by a Portfolio
from the purchase and sale (or redemption) of mutual fund shares or other
securities held (generally) by a Portfolio for more than one year, will be
distributed by the Portfolio and will be taxable to shareholders as
long-term capital gains (even if the shareholder has held the shares for
less than one year). However, if you receive a capital gains distribution
and suffer a loss on the sale of your shares not more than six months after
purchase, the loss will be treated as a long-term capital loss to the extent
of the capital gains distribution received. The long-term capital gains,
including distributions of net capital gains are currently subject to a
maximum federal tax rate of 28% which is less than the maximum rate imposed
on other types of taxable income. Furthermore, capital gains may be
advantageous because, unlike ordinary income, they may be offset by capital
losses.
For purposes of determining the character of income received by the
Portfolio when an underlying fund distributes net capital gains to the
Portfolio, the Portfolio will treat the distribution as a long-term capital
gain, even if it has held shares of the mutual fund for less than one year.
However, any loss incurred by the Portfolio on the sale of that underlying
fund's shares held for six months or less will be treated as a long-term
capital loss to the extent of the gain distribution.
The tax treatment of distributions from a Portfolio is the same whether the
distributions are received in additional shares or in cash. Shareholders
receiving distributions in the form of additional Shares will have a cost
basis for Federal income tax purposes in each share received equal to the
net asset value of a share of the Portfolio on the reinvestment date.
A Portfolio may invest in underlying funds with capital loss carry-forwards.
If such an underlying fund realizes capital gains, it will be able to offset
the gains to the extent of its loss carry-forwards in determining the amount
of capital gains which must be distributed to its shareholders. To the
extent that gains are offset in this manner, the Portfolio will not realize
gains on the related fund until such time as the underlying fund is sold.
Depending on the residence of the shareholder for tax purposes,
distributions also may be subject to state and local taxes, including
withholding taxes. Shareholders should consult their own tax advisers as to
the tax consequences of ownership of shares of the Portfolios in their
particular circumstances.
The Portfolios generally will be required to withhold Federal income tax at
a rate of 31% ("backup withholding") from dividends paid to shareholders if
(a) the payee fails to furnish the Trust with and to certify the payee's
correct taxpayer identification number or social security number, (b) the
Internal Revenue Service (the "IRS") notifies the Trust that the payee has
failed to report properly certain interest and dividend income to the IRS
and to respond to notices to that effect or (c) the payee fails to certify
that he or she is not subject to backup withholding.
Aggressive Growth Portfolio will distribute investment company taxable
income annually; Growth Portfolio will distribute investment company taxable
income semi-annually; Growth with Income Portfolio and Bond Portfolio will
distribute investment company taxable income monthly. Each Portfolio will
distribute any net realized capital gains at least annually. All dividends
and distributions will be reinvested automatically at net asset value in
additional shares of the Portfolio making the distribution, unless you have
notified the Portfolio in writing of your election to receive distributions
in cash.
OTHER INFORMATION
Capitalization
The Trust (initially named FundManager Trust, and since renamed FundManager
Portfolios) was organized as a Delaware business trust on February 7, 1995
as a successor, with respect to the Portfolios, to Republic Funds (formerly,
FundTrust) a Massachusetts business trust (organized on April 22, 1987).
Republic Funds succeeded two previously existing Massachusetts business
trusts, FundTrust Tax-Free Trust (organized on July 30, 1986) and FundVest
(organized on July 17, 1984 and since renamed Fund Source). The Trust
currently consists of five separately-managed portfolios each offering two
classes of shares of beneficial interest, the Financial Adviser Class and
the No-Load Class (except for Managed Total Return, which only offers
Financial Adviser Class). The Trustees may establish additional portfolios
and divide shares in each portfolio into classes in the future. The
capitalization of the Trust consists solely of an unlimited number of shares
of beneficial interest with a par value of $0.001 each. When issued, shares
of the Portfolios are fully paid, non-assessable and freely transferable.
Voting
Shareholders have the right to vote in the election of Trustees and on any
and all matters on which by law or the provisions of the Master Trust
Agreement they may be entitled to vote. When matters are submitted for
shareholder vote, shareholders will have one vote for each full share held
and proportionate, fractional votes for fractional shares held. A separate
vote of a Portfolio or class is required on any matter affecting that
Portfolio or class on which shareholders are entitled to vote. Shareholders
of a Portfolio or class are not entitled to vote on Trust matters that do
not affect the Portfolio or class and do not require a separate vote of the
Portfolio or class. The Trust is not required to hold regular annual
meetings of its shareholders and does not intend to do so. See "Other
Information -- Voting Rights" in the SAI. As of January 8, 1997, Turtle &
Co. FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA
02209, was the owner of record of 25.72% of the voting securities of the
Growth Portfolio, and therefore, may, for certain purposes be deemed to
control the Portfolio and be able to affect the outcome of certain matters
presented for a vote of shareholders. As of January 8, 1997, Turtle & Co.
FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA
02209, was the owner of record of 25.66% of the voting securities of the
Growth with Income Portfolio, and therefore, may, for certain purposes be
deemed to control the Portfolio and be able to affect the outcome of certain
matters presented for a vote of shareholders. As of January 8, 1997, Turtle
& Co. FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston,
MA 02209, was the owner of record of 73.98% of the voting securities of the
Bond Portfolio, therefore, may, for certain purposes be deemed to control
the Portfolio and be able to affect the outcome of certain matters presented
for a vote of shareholders.
The Master Trust Agreement provides that the holders of not less than
three-fourths of the outstanding shares of the Trust may remove a person
serving as Trustee either by declaration in writing or at a meeting called
for such purpose. The Trustees are required to call a meeting for the
purpose of considering the removal of a person serving as Trustee if
requested in writing to do so by the holders of not less than 10% of the
outstanding shares of the Trust.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote
of a majority of the outstanding shares" of the Trust, Portfolio or Class
means the vote of the lesser of: (i) 67% of the shares of the Trust,
Portfolio or Class present at a meeting if the holders of more than 50% of
the outstanding shares of the Trust, Portfolio or Class are present in
person or by proxy or (ii) more than 50% of the outstanding shares of the
Trust, Portfolio or Class.
In compliance with applicable provisions of the 1940 Act, shares of the
underlying funds owned by the Portfolios will be voted in the same
proportion as the vote of all other holders of those shares.
Performance Information
The Trust may, from time to time, include quotations of the Portfolios'
yield and total return in advertisements or reports to shareholders or
prospective investors. Quotations of yield will be based on the investment
income per share earned during a particular 30-day period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income
by the maximum public offering price per share on the last day of the
period. Quotations of total return will be expressed in terms of the average
annual compounded rate of return of a hypothetical investment in the
Portfolio over periods of 1, 5 and 10 years (up to the life of such
Portfolio). All total return figures will reflect a proportional share of
Portfolio expenses on an annual basis, and will assume that all dividends
and distributions are reinvested when paid. Quotations of yield or total
return reflect only the performance of a hypothetical investment in the
Portfolio during the particular time period on which the calculations are
based. Yield and total return for a Portfolio will vary based on changes in
market conditions and the level of such Portfolio's expenses, and no
reported performance figure should be considered an indication of
performance which may be expected in the future.
Consistent with applicable regulatory guidance, for the period prior to its
establishment, the Class will adopt the performance of the Portfolios and
the predecessor Portfolios. The performance for this period will reflect the
deduction of expenses set forth in the Portfolio Expense Table. See
"Portfolio Expenses."
In connection with communicating the Portfolios' yield and total return to
current or prospective shareholders, the Trust also may compare these
figures to the performance of other mutual funds tracked by mutual fund
rating services or to other unmanaged indexes which may assume reinvestment
of dividends but generally do not reflect deductions for administrative and
management costs and expenses.
For a more detailed description of the methods used to calculate each
Portfolio's yield and total return, see the SAI.
OTHER CLASSES OF SHARES
The Portfolios also offer another class of shares called Financial Adviser
Class shares. Financial Adviser Class shares are sold at net asset value as
an investment vehicle for individuals, institutions, corporations and
fiduciaries. The minimum initial investment for Financial Adviser Class
shares of each Portfolio is $1,000, and the minimum subsequent investment is
$100, except that the minimum initial investment for an Individual
Retirement Account ("IRA") is $250.
Both classes are subject to certain of the same expenses. However, Financial
Adviser Class shares are distributed with 12b-1 fees.
Expense differences between classes may affect the performance of each
class.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to your investment executive or
financial adviser or call (800) 344-9033 (Toll Free).
DESCRIPTION OF BOND RATINGS
Excerpts from Moody's description of its bond ratings: Aaa -- judged to be
the best quality. They carry the smallest degree of investment risk; Aa --
judged to be of high quality by all standards. Together with the Aaa group
they comprise what are generally known as high grade bonds; A -- possess
many favorable investment attributes and are to be considered as "upper
medium grade obligations"; Baa -- considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time; Ba -- judged to have speculative elements,
their future cannot be considered as well assured; B -- generally lack
characteristics of the desirable investment; Caa -- are of poor standing.
Such issues may be in default or there may be present elements of danger
with respect to principal or interest; Ca -- speculative in a high degree;
often in default; C -- lowest rated class of bonds; regarded as having
extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to rating categories.
The modifier 1 indicates that the security is in the higher end of its
rating category; the modifier 2 indicates a mid-range ranking; and 3
indicates a ranking toward the lower end of the category.
Excerpts from S&P's description of its bond ratings: AAA -- highest grade
obligations. Capacity to pay interest and repay principal is extremely
strong;
AA -- also qualify as high grade obligations. A very strong capacity to pay
interest and repay principal and differs from AAA issues only in a small
degree;
A -- regarded as upper medium grade. They have a strong capacity to pay
interest and repay principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
debt in higher rated categories; BBB -- regarded as having an adequate
capacity to pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated
categories. This group is the lowest which qualifies for commercial bank
investment. BB, B, CCC,
CC -- predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with terms of the obligations; BB indicates
the lowest degree of speculation and CC the highest.
S&P applies indicators "+", no character, and "-" to its rating categories.
The indicators show relative standing within the major rating categories.
FUNDMANAGER PORTFOLIOS
(FORMERLY, FUNDMANAGER TRUST)
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
INFORMATION: (800) 344-9033 (TOLL FREE)
STATEMENT OF ADDITIONAL INFORMATION
No-Load Class of Shares
Financial Adviser Class of Shares
FundManager Portfolios (the "Trust") is an open-end management investment
company consisting of five separate series (the "Portfolios"). The
Portfolios seek to achieve their objectives by investing in shares of other
open-end investment companies -- commonly called mutual funds.
AGGRESSIVE GROWTH PORTFOLIO (formerly, Aggressive Growth Fund) seeks capital
appreciation without regard to current income.
GROWTH PORTFOLIO (formerly, Growth Fund) primarily seeks long-term capital
appreciation; current income is a secondary consideration.
GROWTH WITH INCOME PORTFOLIO (formerly, Growth & Income Fund) seeks a
combination of capital appreciation and current income.
BOND PORTFOLIO (formerly, Bond Fund, and previously, Income Fund) seeks a
high level of current income.
MANAGED TOTAL RETURN PORTFOLIO (formerly, Managed Total Return Fund) seeks
high total return (capital appreciation and current income).
Two classes of shares, the No-Load Class and the Financial Adviser Class
(each a "Class" and collectively the "Classes"), of the Aggressive Growth
Portfolio, Growth Portfolio, Growth with Income Portfolio and Bond Portfolio
are offered for sale. The Managed Total Return Portfolio offers only one
Class of shares, the Financial Adviser Class. The No-Load Class is offered
for sale at net asset value by Tucker Anthony Incorporated ("Tucker
Anthony") and Sutro & Co. Incorporated ("Sutro") to participants in the
FundManager Advisory Program, and the Financial Adviser Class is offered for
sale at net asset value by Tucker Anthony, Sutro, Edgewood Services, Inc.
("Edgewood") and Freedom Distributors Corporation ("Freedom Distributors")
(collectively, the "Distributors") as an investment vehicle for individuals,
institutions, corporations and fiduciaries. The Financial Adviser Class pays
a distribution fee in connection with the distribution of its shares
pursuant to a Distribution Plan. Prior to May 8, 1995, the Portfolios were a
diversified series of the Republic Funds (the "Predecessor Funds"), also an
open-end, management investment company.
This Statement of Additional Information is not a prospectus and is only
authorized for distribution when preceded or accompanied by the applicable
Prospectus for the No-Load Class or Financial Adviser Class, each dated
January 24, 1997 (each a "Prospectus"). This Statement of Additional
Information contains additional and more detailed information than that set
forth in each Prospectus and should be read in conjunction with such
Prospectus. You may request additional copies of a Prospectus or a paper
copy of this Statement of Additional Information, if you have received it
electronically, without charge by writing or calling the Trust at the
address and information number printed above.
This Statement of Additional Information is dated January 24, 1997.
Table of Contents
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Investment Policies 1
U.S. Government Securities 1
Bank Obligations 1
Commercial Paper 1
Repurchase Agreements 1
Investment Restrictions 2
Management 3
Trustees and Officers 3
Trustees' Compensation 4
Investment Adviser 5
Administrator 6
Distributors 6
Service Organizations 8
FundManager Advisory Program 8
Portfolio Transactions 9
Other Information 10
Capitalization 10
Voting Rights 10
Performance Information 10
Independent Auditors 12
Counsel 12
Registration Statement 13
Financial Statements 13
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INVESTMENT POLICIES
Although the Portfolios invest primarily in the shares of other mutual
funds, they also are authorized to invest for temporary defensive purposes
or as may be considered necessary to accumulate cash for investments or to
meet anticipated redemptions in a variety of short-term debt securities,
including U.S. Treasury bills and other U.S. government securities,
commercial paper, certificates of deposit, bankers' acceptances and
repurchase agreements with respect to such securities. The following
information supplements the discussion of the investment objectives and
policies of the Portfolios found under "Investment Objectives" in the
Prospectus.
U.S. GOVERNMENT SECURITIES
The Portfolios may invest in obligations issued or guaranteed by the United
States government or its agencies or instrumentalities which have remaining
maturities not exceeding one year. The U.S. government securities in which
the Portfolios invest are either issued or guaranteed by the U.S.
government, its agencies or instrumentalities. The U.S. government
securities in which the Portfolios invest include, but are not limited to:
* direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds;
* notes, bonds, and discount notes issued or guaranteed by U.S. government
agencies and instrumentalities supported by the full faith and credit of the
United States;
* notes, bonds, and discount notes of U.S. government agencies or
instrumentalities which receive or have access to federal funding; and
* notes, bonds, and discount notes of other U.S. government
instrumentalities supported only by the credit of the instrumentalities.
BANK OBLIGATIONS
The Portfolios may invest in obligations of U.S. banks (including
certificates of deposit and bankers' acceptances) having total assets at the
time of purchase in excess of $1 billion. Such banks shall be members of the
Federal Deposit Insurance Corporation.
A certificate of deposit is an interest-bearing negotiable certificate
issued by a bank against funds deposited in the bank. A bankers' acceptance
is a short-term draft drawn on a commercial bank by a borrower, usually in
connection with an international commercial transaction. Although the
borrower is liable for payment of the draft, the bank unconditionally
guarantees to pay the draft at its face value on the maturity date.
COMMERCIAL PAPER
Commercial paper represents short-term unsecured promissory notes issued in
bearer form by bank holding companies, corporations and finance companies.
The commercial paper purchased by the Portfolios consists of direct
obligations of domestic issuers which, at the time of investment, are: (i)
rated in the highest commercial paper rating category by a nationally
recognized statistical rating organization ("NRSRO"), such as "P-1" by
Moody's Investors Service, Inc. ("Moody's") or "A-1" or better by Standard &
Poor's Ratings Group ("Standard & Poor's"); (ii) issued or guaranteed as to
principal and interest by issuers or guarantors having an existing debt
security rating of "Aa" or better by Moody's or "AA" or better by Standard &
Poor's or a similar high grade rating by another NRSRO; or (iii) securities
which, if not rated, are, in the opinion of Freedom Capital Management
Corporation, the Portfolios' investment adviser ("Freedom Capital
Management" or the "Adviser"), of an investment quality comparable to rated
commercial paper in which the Funds may invest.
The rating "P-1" is the highest commercial paper rating assigned by Moody's
and the ratings "A-1" and "A-1+" are the highest commercial paper ratings
assigned by Standard & Poor's. Debts rated "Aa" or better by Moody's or "AA"
or better by Standard & Poor's are generally regarded as high-grade
obligations and such ratings indicate that the ability to pay principal and
interest is very strong.
REPURCHASE AGREEMENTS
The Portfolios may invest in securities subject to repurchase agreements
with banks or broker-dealers. A repurchase agreement is a transaction in
which the seller of a security commits itself at the time of the sale to
repurchase that security from the buyer at a mutually agreed upon time and
price. The repurchase price exceeds the sale price, reflecting an agreed
upon interest rate effective for the period the buyer owns the security
subject to repurchase. The agreed upon rate is unrelated to the interest
rate on that security. The Adviser will monitor the value of the underlying
security at the time the transaction is entered into and at all times during
the term of the repurchase agreement to insure that the value of the
security always equals or exceeds the repurchase price. In the event of
default by the seller under the repurchase agreement, a Portfolio may have
problems in exercising its rights to the underlying securities and may incur
costs and experience time delays in connection with the disposition of such
securities. Repurchase agreements are considered to be loans under the
Investment Company Act of 1940 (the "1940 Act") collateralized by the
underlying securities.
INVESTMENT RESTRICTIONS
The following investment restrictions are in addition to those described
under "Investment Objectives" and "Investment Policies and Restrictions" in
the Prospectus. The following restrictions may not be changed with respect
to a Portfolio without the approval of the holders of a majority of that
Portfolio's outstanding securities. Except that a Portfolio may invest all
of its investable assets in an open-end investment company with
substantially the same investment policies and restrictions as the
Portfolio, a Portfolio will not:
1. Purchase or otherwise acquire interests in real estate, real estate
mortgage loans or interests in oil, gas or other mineral leases, as well as
exploration or development programs, except that a Portfolio may purchase
securities issued by companies, including real estate investment trusts,
which invest in real estate or interests therein.
2. Make loans, except that a Portfolio may purchase and hold publicly
distributed debt securities and it may enter into repurchase agreements.
3. Invest in securities of any issuer which, together with any predecessor,
has been in operation for less than three years if, as a result, more than
5% of the total assets of the Portfolio would then be invested in such
securities.
4. Purchase the securities of an issuer if, to a Portfolio's knowledge, one
or more of the Trustees or Officers of the Trust individually owns more than
one half of 1% of the outstanding securities of such issuer and together
beneficially own more than 5% of such securities.
5. Sell securities short or invest in puts, calls, straddles, spreads or
combinations thereof.
6. Purchase securities on margin, except such short-term credits as are
necessary for the clearance of transactions.
7. Purchase or acquire commodities or commodity contracts.
8. Act as an underwriter of securities.
9. Issue senior securities, except insofar as a Portfolio may be deemed to
have issued a senior security in connection with any repurchase agreement or
any permitted borrowing.
10. Purchase warrants, valued at the lower of cost or market, in excess of
10% of the value of a Portfolio's net assets. Included within that amount,
but not to exceed 2% of the value of the Portfolio's net assets, may be
warrants that are not listed on the New York or American Stock Exchanges or
an exchange with comparable listing requirements. Warrants attached to
securities are not subject to this limitation.
In addition, as non-fundamental policies, a Portfolio will not: (i) invest
in securities for the purpose of exercising control over or management of
the issuer; (ii) purchase or otherwise acquire interests in real estate
limited partnerships; (iii) participate in a joint or a joint-and-several
basis in any trading account in securities; (iv) purchase securities of any
closed-end investment company or any investment company which is not
registered in the United States; (v) invest in commodity futures contracts;
(vi) invest more than 10% of the Funds' total assets (taken at the greater
of cost or market value) in securities (excluding 144A securities) that are
restricted as to resale under the Securities Act of 1933, as amended ("1933
Act"); (vi) purchase warrants valued at the lower of cost or market, in
excess of 5% of the value of a Fund's net assets; (vii) with respect to 75%
of the Fund's total assets, purchase securities of any issuer if such
purchase at the time thereof would cause the Fund to hold more than 10% of
any class of securities of such issuer, for which purposes all indebtedness
of an issuer shall be deemed a single class and all preferred stock of an
issuer shall be deemed a single class, except that futures or option
contracts shall not be subject to this restriction; (ix) invest more than
15% of the Fund's total assets (taken at the greater of cost or market
value) in (a) securities (including Rule 144A securities) that are
restricted as to resale under the 1933 Act, and (b) securities that are
issued by issuers which (including predecessors) have been in operation less
than three years (other than U.S. government securities), provided, however,
that no more than 5% of the Portfolio's (Portfolio's) total assets are
invested in securities issued by issuers which (including predecessors) have
been in operation less than three years. These additional policies may be
changed as to a Portfolio by the Board of Trustees (the "Trustees") without
shareholder approval.
The underlying funds in which a Portfolio invests may, but need not, have
the same investment policies as a Portfolio. Although all of the Portfolios
may, from time to time, invest in shares of the same underlying fund, the
percentage of each Portfolio's Fund's assets so invested may vary, and the
Adviser will determine that such investments are consistent with the
investment objectives and policies of each particular Portfolio.
MANAGEMENT
TRUSTEES AND OFFICERS
The principal occupations of the Trustees and executive officers of the
Trust for the past five years and their ages are listed below. The address
of each, unless otherwise indicated, is One Beacon Street, Boston,
Massachusetts 02108.
DEXTER A. DODGE* (62), TRUSTEE, CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
Chairman of the Adviser since October 1994. President and Managing Director
of the Adviser since 1992. Vice President of Freedom Distributors
Corporation since 1989. Chairman of the Boards and Chief Executive Officer
of Freedom Mutual Fund and Freedom Group of Tax Exempt Funds since July
1992.
ERNEST T. KENDALL (64), TRUSTEE, 230 Beacon Street, Boston, Massachusetts
02116. President, Commonwealth Research Group, Inc., Boston, Massachusetts,
a consulting firm specializing in microeconomics, regulatory economics and
labor economics, since 1978. Trustee of Freedom Mutual Fund and Freedom
Group of Tax Exempt Funds since September 1993.
JOHN R. HAACK (54), TRUSTEE since December 16, 1996, 311 Commonwealth
Avenue, #81, Boston, Massachusetts 02115. Vice President of Operations,
Reliable Transaction Processing, 1995 to present. Major General, Assistant
to the Commander in Chief, U.S. Space Command, 1993 to 1995. General
Manager, Unilect Industries, which is an electrical component manufacturer,
1993 to 1994. Brigadier General, Commander of 102nd Fighter Interceptor
Wing, U.S. Air Force and Air National Guard, 1986 to 1993.
RICHARD B. OSTERBERG (52), TRUSTEE, 84 State Street, Boston, Massachusetts
02109. Member of the law firm of Weston, Patrick, Willard & Redding, Boston,
Massachusetts,since 1978. Trustee of Freedom Mutual Fund and Freedom Group
of Tax Exempt Funds since September 1993.
CHARLES B. LIPSON (50), PRESIDENT AND PRINCIPAL EXECUTIVE OFFICER, 200
Liberty Street, New York, New York 10281. President and founding partner of
the M.D. Hirsch Division of Freedom Capital since January 1995. President
and Chief Operating Officer of the M.D. Hirsch Division of Republic Asset
Management Corporation from February 1991 to December 1994. Senior Vice
President and Chief Operating Officer of Home Capital Services, Inc. prior
to February 1991.
JOHN J. DANELLO (41), EXECUTIVE VICE PRESIDENT. President, Chief Operating
Officer and Secretary of the Adviser since October 1994. Vice
President-Managing Director, Clerk and General Counsel of the Adviser from
November 1986 to October 1994. President and Director since February 1989
and Clerk since February 1987 of Freedom Distributors Corporation. President
and Secretary of Freedom Mutual Fund and Freedom Group of Tax Exempt Funds
since July 1992.
MICHAEL D. HIRSCH (51), EXECUTIVE VICE PRESIDENT AND PORTFOLIO MANAGER, 200
Liberty Street, New York, New York 10281. Chairman, M.D. Hirsch Division of
the Adviser since February 1995. Vice Chairman and Managing Director, M.D.
Hirsch Division of Republic Asset Management Corporation from June 1993 to
February 1994. President M.D. Hirsch Investment Management, Inc. from
February 1991 to June 1993. Chief Investment Officer, Republic National Bank
of New York prior to February 1991.
VICTOR R. SICLARI (35), SECRETARY, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. Vice President and Corporate Counsel, Federated
Administrative Services since 1992; Associate of Morrison & Foerster, a law
firm, from 1990 to 1992.
JUDITH J. MACKIN (36), TREASURER, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. Assistant Vice President and Director of the Client
Management and Services Group of Federated Administrative Services.
EDWARD C. GONZALES (66), EXECUTIVE VICE PRESIDENT, Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779. Vice Chairman, Treasurer, and
Trustee, Federated Investors; Vice President, Federated Advisers, Federated
Management, Federated Research, Federated Research Corp., Federated Global
Research Corp. and Passport Research, Ltd.; Executive Vice President and
Director, Federated Securities Corp.; Trustee, Federated Shareholder
Services Company; Chairman, Treasurer, and Trustee, Federated Administrative
Services.
RONALD M. PETNUCH (36), EXECUTIVE VICE PRESIDENT, Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. Vice President and Director of the
Client Management and Services Group of Federated Administrative Services.
* Trustee may be deemed to be an "interested person" of the Trust as defined
by the 1940 Act.
Mr. Danello is also an officer of certain other investment companies for
which the Adviser or an affiliate is the investment adviser. Messrs.
Gonzales, Petnuch, Siclari and Ms. Mackin are also directors, trustees
and/or officers of certain other investment companies for which Federated
Investors or its subsidiaries serve as investment adviser, administrator
and/or principal underwriter.
TRUSTEES' COMPENSATION
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<S> <C> <C>
NAME, AGGREGATE COMPENSATION TOTAL COMPENSATION PAID
POSITION WITH TRUST FROM TRUST*# FROM TRUST AND FREEDOM COMPLEX+**
Dexter A. Dodge $0 for the Trust and
Trustee $ 0 4 other investment companies in the Freedom Complex
Ernest T. Kendall $6,600 $20,400 for the Trust and
Trustee 4 other investment companies in the Freedom Complex
John R. Haack $0 for the Trust and
Trustee $ 0 4 other investment companies in the Freedom Complex
Richard B. Osterberg $6,600 $20,400 for the Trust and
Trustee 4 other investment companies in the Freedom Complex
</TABLE>
* Information is furnished for the fiscal year ended September 30, 1996.
* Freedom Complex refers to both Freedom Mutual Fund and Freedom Group of
Tax Exempt Funds.
# The aggregate compensation is provided for the Trust which is comprised of
5 Portfolios.
+ The information is provided for the last fiscal year.
Trustees who are not interested persons of the Trust receive an annual
retainer of $3,600 and a fee of $600 for each meeting of the Trustees or
committee thereof attended. The chairperson of each of the Audit and
Contracts Committee receives an additional fee per annum of $600. Mr.
Kendall serves as chairperson of the Audit Committee and Mr. Osterberg
serves as chairperson of the Contracts Committee. Interested persons of the
Trust who serve as Trustee receive no fees from the Trust. All Trustees of
the Trust are reimbursed for expenses for attendance at meetings. The Trust
has no bonus, profit sharing, pension or retirement plans. For the fiscal
year ended September 30, 1996, the Trust paid $12,893 in Trustee fees and
expenses.
The Trustees of the Trust have two committees, an Audit Committee and a
Contracts Committee. The Audit Committee assists the Board in fulfilling its
duties relating to accounting and financial reporting practices and serves
as a direct line of communication between the Board and the independent
auditors. The Audit Committee is responsible for recommending the engagement
or retention of the independent accountants, reviewing with the independent
accountants the plan and the results of the auditing engagement, approving
professional services provided by the independent accountants prior to the
performance of such services, considering the range of audit and non-audit
fees, reviewing the independence of the independent auditors, reviewing the
scope and results of procedures for internal auditing, and reviewing the
system of internal accounting control.
The function of the Contracts Committee is to assist the Board in fulfilling
its duties with respect to the review and approval of contracts between the
Trust, on behalf of the Portfolios, and other entities, including entering
into new contracts and the renewal of existing contracts. The Contracts
Committee considers investment advisory, distribution, transfer agency,
administrative service and custodial contracts and such other contracts as
the Board deems necessary or appropriate for the continuation of operations
of the Portfolios or the Trust. The Contracts Committee will also be
responsible for the selection and nomination of Trustees who are not
"interested persons" within the meaning of the 1940 Act of the Trust.
Except for Mr. Haack, all of the Trustees who are not "interested persons"
within the meaning of the 1940 Act of the Trust currently serve on the Audit
and Contracts Committees.
As of January 8, 1997, the Trustees and Officers of the Trust, as a group,
owned less than 1% of the outstanding shares of each Portfolio. As of the
same date, the following persons owned of record, or beneficially owned, 5%
or more of a the outstanding shares of the Portfolios (percentage is
percentage of outstanding shares of a Portfolio owned by the shareholder):
AGGRESSIVE GROWTH PORTFOLIO -- Charles Schwab & Co., Inc., Special Custody
Account for the exclusive benefit of customers, Attn: Mutual Funds, 101
Montgomery Street, San Francisco, CA 94104 owned 24.86%; Turtle & Co.
FC1202, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA
02209, owned 14.81%; and Turtle & Co. F00001, c/o State Street Bank & Trust
Company, P.O. Box 9242, Boston, MA 02209, owned 10.16% of the Portfolio's
Financial Adviser Class shares.
Prudential Securities, Inc., Special Custody Account, Exclusive Benefit
Customer, One New York Plaza, New York, NY 10292-0001, owned 99.14% of the
Portfolio's No-Load Class shares.
GROWTH PORTFOLIO -- Turtle & Co. FC1202, c/o State Street Bank & Trust
Company, P.O. Box 9242, Boston, MA 02209, owned 26.71%; Turtle & Co. F00001,
c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA 02209,
owned 18.51%; and Charles Schwab & Co., Inc., Special Custody Account for
the exclusive benefit of customers, Attn: Mutual Funds, 101 Montgomery
Street, San Francisco, CA 94104, owned 10.63% of the Portfolio's Financial
Adviser Class shares.
Prudential Securities, Inc., Special Custody Account, Exclusive Benefit
Customer, One New York Plaza, New York, NY 10292-0001, owned 99.27% of the
Portfolio's No-Load Class shares.
GROWTH WITH INCOME PORTFOLIO -- Turtle & Co. FC1202, c/o State Street Bank &
Trust Company, P.O. Box 9242, Boston, MA 02209, owned 26.27%; Turtle & Co.
F00001, c/o State Street Bank & Trust Company, P.O. Box 9242, Boston, MA
02209, owned 21.08%; Charles Schwab & Co., Inc., Special Custody Account for
the exclusive benefit of customers, Attn: Mutual Funds, 101 Montgomery
Street, San Francisco, CA 94104, owned 5.34%; and Andrei Dragomer MD.,
Radiology Inc. Profit Sharing Plan Tr, 1230 Franklin Parkway, Munster, IN
46321-3704, owned 5.21% of the Portfolio's Financial Adviser Class shares.
Prudential Securities, Inc., Special Custody Account, Exclusive Benefit
Customer, One New York Plaza, New York, NY 10292-0001, owned 97.11% of the
Portfolio's No-Load Class shares.
BOND PORTFOLIO -- Turtle & Co. FC1202, c/o State Street Bank & Trust
Company, P.O. Box 9242, Boston, MA 02209, owned 76.32%; and Charles Schwab &
Co., Inc., Special Custody Account for the exclusive benefit of customers,
Attn: Mutual Funds, 101 Montgomery Street, San Francisco, CA 94104, owned
9.89% of the Portfolio's Financial Adviser Class shares.
Prudential Securities, Inc., Special Custody Account, Exclusive Benefit
Customer, One New York Plaza, New York, NY 10292-0001, owned 99.26% of the
Portfolio's No-Load Class shares.
MANAGED TOTAL RETURN PORTFOLIO -- Cates Sheet Metal Industries Inc., Profit
Sharing Plan, U/A DTD 7-1-91, Michael E. Coughlin Tr, 5828 Reeds Rd,
Mission, KS 66202-0000, owned 5.39% of the Portfolio's Financial Adviser
Class shares.
The Trust's Master Trust Agreement provides that it 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 or its
shareholders, it is finally adjudicated that they engaged in wilful
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 or
in a written opinion of independent counsel, that such officers or Trustees
have not engaged in wilful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.
INVESTMENT ADVISER
Pursuant to an Investment Advisory Contract, Freedom Capital Management is
responsible for the investment management of each Portfolio's assets,
including the responsibility for making investment decisions and placing
orders for the purchase and sale of each Portfolio's investments directly
with the issuers or with brokers or dealers selected by it in its
discretion, including Freedom Distributors and Edgewood. See "Portfolio
Transactions." The Adviser also furnishes to the Trustees, which have
overall responsibility for the business and affairs of the Trust, periodic
reports on the investment performance of the Portfolios. The Adviser is a
registered investment advisory firm which maintains a large securities
research department, the efforts of which will be made available to the
Portfolios.
Thomas H. Lee Equity Fund III, L.P. is Massachusetts limited partnership.
The general partner of Thomas H. Lee Equity Fund III, L.P. is THL Equity
Advisors III Limited Partnership, a Massachusetts limited partnership. The
general partner of THL Equity Advisors III Limited Partnership is THL Equity
Trust III, a Massachusetts business trust. The sole beneficial owner of THL
Equity Trust III is Thomas H. Lee. The address of Thomas H. Lee Equity Fund
III, L.P., THL Equity Advisors III Limited Partnership and THL Equity Trust
III is 75 State Street, Boston, Massachusetts 02109.
SCP Private Equity Partners, L.P. is a Delaware limited partnership. The
general partner of SCP Private Equity Partners, L.P. is SCP Private Equity
Management, L.P., a Delaware limited partnership. The interests of SCP
Private Equity Management, L.P. are divided equally among its three general
partners: Safeguard Capital Management, Inc. (which is a wholly owned
subsidiary of Safeguard Scientifics, Inc., a publicly held company), Winston
J. Churchill and Samuel A. Plum. The address of SCP Private Equity Partners,
L.P., SCP Private Equity Management, L.P., Safeguard Capital Management,
Inc., Winston J. Churchill and Samuel A. Plum is 435 Devon Park Drive,
Wayne, Pennsylvania 19087.
For a more complete description of the Adviser see "Management of
FundManager Portfolios--The Adviser" in your Prospectus.
The investment advisory services of the Adviser to the Portfolios are not
exclusive under the terms of the Investment Advisory Contract. The Adviser
is free to render investment advisory services to others.
For its services as investment adviser, the Adviser receives from each
Portfolio a fee, payable monthly, at the annual rate of 0.50% of each
Portfolio's average daily net assets up to $500 million and 0.40% of its
average daily net assets in excess of $500 million. M.D. Hirsch Investment
Management, Inc. ("Hirsch") served as investment adviser to the Predecessor
Funds from the period October 1, 1992 through August 30, 1993, at which time
Republic Asset Management Corporation became investment adviser to the
Predecessor Funds.
For the period from October 1, 1993 through September 30, 1994, Republic
Asset Management Corporation received advisory fees equal to $185,146,
$151,169, $255,691, $367,423 and $111,391, respectively, from the
Predecessor Funds of Aggressive Growth Portfolio, Growth Portfolio, Growth
with Income Portfolio, Bond Portfolio and Managed Total Return Portfolio.
Republic Asset Management Corporation served as investment adviser to the
Predecessor Funds until February 20, 1995, at which time Freedom Capital
Management became investment adviser to the Predecessor Funds. For the
period from October 1, 1994 through February 20, 1995, Aggressive Growth
Portfolio, Growth Portfolio, Growth with Income Portfolio, Bond Portfolio
and Managed Total Return Portfolio paid advisory fees before reimbursements
of $74,692, $66,712, $99,675, $151,276 and $32,185, respectively to Republic
Asset Management Corporation. For the period from February 21, 1995 through
September 30, 1995, Aggressive Growth Portfolio, Growth Portfolio, Growth
with Income Portfolio, Bond Portfolio and Managed Total Return Portfolio
paid advisory fees of $109,055, $89,497, $130,491, $216,909 and $44,931,
respectively, to Freedom Capital Management. For the period from October 1,
1995 through September 30, 1996, Aggressive Growth Portfolio, Growth
Portfolio, Growth with Income Portfolio, Bond Portfolio and Managed Total
Return Portfolio paid advisory fees before reimbursements of $183,337,
$132,472, $167,996, $367,138 and $67,171, respectively, to the Adviser. The
Investment Advisory Contract will continue in effect from year to year
provided such continuance is approved annually (i) by the holders of a
majority of the outstanding voting securities of a Portfolio or by the
Trustees and (ii) by a majority of the Trustees who are not parties to such
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. The Contract may be terminated with respect to a Portfolio on 60
days' written notice by either party to the Contract and will terminate
automatically if assigned.
Mr. Osterberg, a Trustee of the Trust, is a member of the law firm of
Weston, Patrick, Willard & Redding, which has retained the Adviser from time
to time to provide investment advisory consulting services for clients of
such firm.
ADMINISTRATOR
The Trustees of the Trust have approved an Administrative Services Contract
between the Trust and Federated Administrative Services ("FAS") (effective
November 11, 1996) pursuant to which FAS replaced Signature Broker-Dealer
Services, Inc. ("Signature") as Administrator of the Trust and each Class of
shares of each of the Portfolios. In this capacity, FAS will provide certain
administrative and personnel services to the Portfolios for a fee as
described in the Prospectus.
The administrative and personnel services necessary for the operation of the
Trust provided by the Administrator include among other things: (i)
preparation of shareholder reports and communications; (ii) regulatory
compliance, such as reports to and filings with the Securities and Exchange
Commission ("SEC") and state securities commissions; and (iii) general
supervision of the operation of the Trust, including coordination of the
services performed by the Trust's investment adviser, transfer agent,
custodian, independent auditors, legal counsel and others. In addition, the
Administrator furnishes office space and facilities required for conducting
the business of the Trust and pays the compensation of the Trust's officers,
employees and Trustees (if any) affiliated with the Administrator.
For the period from October 1, 1993 through September 30, 1994, Signature
(the former Administrator) received $92,971, $74,730, $125,890, $175,110 and
$55,845, respectively, from the Predecessor Funds of Aggressive Growth
Portfolio, Growth Portfolio, Growth with Income Portfolio, Bond Portfolio
and Managed Total Return Portfolio. For the period from
October 1, 1994 through September 30, 1995, Signature received $91,873,
$78,104, $115,086, $172,206 and $38,540, respectively, from Aggressive
Growth Portfolio, Growth Portfolio, Growth with Income Portfolio, Bond
Portfolio and Managed Total Return Portfolio. For the period from October 1,
1995 through September 30, 1996, Signature received $91,669, $66,236,
$83,998, $171,868 and $33,586, respectively, from Aggressive Growth
Portfolio, Growth Portfolio, Growth with Income Portfolio, Bond Portfolio
and Managed Total Return Portfolio, of which $22,675, $14,995, $19,270,
$37,200 and $7,522, respectively, was waived.
DISTRIBUTORS
The Trustees of the Trust have approved a Distribution Contract between the
Trust and the Distributors, pursuant to which such Distributors provide
shareholder servicing services and/or distribute the Financial Adviser Class
of shares of each of the Portfolios. The Trustees of the Trust has also
approved a Distribution Contract between the Trust and each of Tucker
Anthony and Sutro pursuant to which such distributors provide shareholder
servicing services and distribute the No-Load Class of shares of each of the
Aggressive Growth Portfolio, Growth Portfolio, Growth with Income Portfolio
and Bond Portfolio.
The Distributors are not obligated to sell any specific amount of shares.
Under a Distribution Plan (the "Plan") adopted by the Financial Adviser
Class of the Aggressive Growth Portfolio, Growth Portfolio, Growth with
Income Portfolio, Bond Portfolio and Managed Total Return Portfolio, each
such Portfolio may reimburse the distributors monthly (subject to a limit of
0.50% per annum of the Portfolio's average daily net assets attributable to
the Financial Adviser Class) for the sum of (a) direct costs and expenses
incurred by the Distributors in connection with advertising and marketing of
the Financial Adviser Class of shares and (b) payment of fees to one or more
broker-dealers or other organizations (other than banks) for services
rendered in the distribution of the Financial Adviser Class of shares and
for the provision of personal services and account maintenance services with
respect to Portfolio shareholders, including payments in amounts based on
the average daily value of Portfolio shares owned by shareholders in respect
of which the broker-dealer or organization has a relationship. The fees and
reimbursements paid by a Portfolio to the Distributors may equal up to 0.50%
of the Portfolio's average daily net assets attributable to the Financial
Adviser Class of shares, of which up to 0.25% of a Portfolio's average daily
net assets attributable to the Financial Adviser Class may be paid for
shareholder servicing expenses. Any payment by a Distributor or
reimbursement of a Distributor by a Portfolio made pursuant to the Plan is
contingent upon Trustees' approval. A report of the amounts expended
pursuant to the Plan, and the purposes for which such expenditures were
incurred, must be made to the Trustees for their review at least quarterly.
The Plan permits, among other things, payment by the Portfolios of the costs
of preparing, printing and distributing prospectuses and of implementing and
operating the Plan. The Plan also permits the distributors to receive and
retain brokerage commissions with respect to portfolio transactions for
mutual funds in the Portfolios' portfolios, including funds which have a
policy of considering sales of their shares in selecting broker-dealers for
the execution of their portfolio transactions. In addition, Freedom
Distributors and Edgewood may receive dealer reallowances (up to a maximum
of 1% of the public offering price with respect to Freedom Distributors)
and/or distribution payments, shareholder servicing fees or "trailer fees"
from the underlying mutual funds purchased by the Portfolios.
The Plan provides that it may not be amended to increase materially the
costs which a Portfolio may bear pursuant to the Plan without shareholder
approval and that other material amendments of the Plan must be approved by
the Board of Trustees, and by the Trustees who are neither "interested
persons" (as defined in the 1940 Act) of the Trust nor have any direct or
indirect financial interest in the operation of the Plan or in any related
agreement, by vote cast in person at a meeting called for the purpose of
considering such amendments. While the Plan is in effect, the selection and
nomination of the Trustees of the Trust has been committed to the discretion
of the Trustees who are not "interested persons" of the Trust. The Plan has
been approved, and is subject to annual approval, by the Board of Trustees
and by the Trustees who are neither "interested persons" nor have any direct
or indirect financial interest in the operation of the Plan, by vote cast in
person at a meeting called for the purpose of voting on the Plan. The
Trustees considered alternative methods to distribute the Financial Adviser
Class of shares of the Portfolios and to reduce the Financial Adviser Class'
per share expense ratios and concluded that there was a reasonable
likelihood that the Plan will benefit the Class and its shareholders. The
Plan is terminable with respect to the Financial Adviser Class or a
Portfolio at any time by a vote of 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 Plan or by vote of the holders of
a majority of the shares of that Portfolio or Class.
During the fiscal year ended September 30, 1996, the Portfolios spent,
pursuant to their 12b-1 plans on behalf of the Financial Adviser Class, the
following amounts on:
<TABLE>
<CAPTION>
MANAGED
AGGRESSIVE GROWTH WITH TOTAL
GROWTH GROWTH INCOME BOND RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Advertising, Printing and mailing of prospectuses $28,302 $18,934 $30,072 $ 98,379 $0
to other than current shareholder
Compensation to broker-dealers 150,322 112,166 141,719 265,319 67,171
Total $178,624 $131,100 $171,791 $363,698 $67,171
Total as a percentage of average daily net assets
during period 0.50% 0.50% 0.50% 0.50% 0.50%
</TABLE>
Sutro, John Hancock, Edgewood, Freedom Distributors and their affiliates
currently provide administration and/or distribution services for other
registered investment companies. The Portfolios will not invest in any fund
which may be affiliated with the Distributors or any of their affiliates
unless otherwise permitted under the 1940 Act.
SERVICE ORGANIZATIONS
Pursuant to the Plan, the Trust also contracts with banks, trust companies,
broker-dealers (other than the Distributors) or other financial
organizations ("Service Organizations") to provide certain administrative
services for each Portfolio's Financial Adviser Class of shares. Services
provided by service organizations may include, among other things, providing
necessary personnel and facilities to establish and maintain certain
shareholder accounts and records; assisting in processing purchase and
redemption transactions; arranging for the wiring of funds; transmitting and
receiving funds in connection with client orders to purchase or redeem
shares; verifying and guaranteeing client signatures in connection with
redemption orders, transfers among and changes in client-designated
accounts; providing periodic statements showing a client's account balances
and, to the extent practicable, integrating such information with other
client transactions; furnishing periodic and annual statements and
confirmations of all purchases and redemptions of shares in a client's
account; transmitting proxy statements, annual reports, and updating
prospectuses and other communications from the trust to clients; and such
other services as the trust or a client reasonably may request, to the
extent permitted by applicable statute, rule or regulation. The Distributors
and the Adviser will not be service organizations or receive fees for
servicing.
FUNDMANAGER ADVISORY PROGRAM
Shares of the No-load Class of shares will be offered to participants in the
FundManager Advisory Program who receive, for an advisory fee at a maximum
annual rate based upon a percentage of assets invested, certain services,
including asset allocation recommendations with respect to the funds based
on an evaluation of their investment objectives and risk tolerances.
PORTFOLIO TRANSACTIONS
As part of its obligations under the investment advisory contract, the
Adviser places all orders for the purchase and sale of portfolio investments
for the Portfolios' accounts with brokers or dealers selected by it in its
discretion, including Freedom Distributors or Edgewood. In selecting a
broker, the Adviser considers a number of factors including the research and
other investment information provided by the broker.
The following is the sales charges paid on underlying fund investments.
SALES CHARGES PAID BY PREDECESSOR FUNDS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
GROSS SALES PAID TO PERCENT OF
CHARGES SIGNATURE TOTAL
<S> <C> <C> <C>
Aggressive Growth Portfolio $22,000 $17,403 76.92%
Growth Portfolio 0 0 N/A
Growth with Income Portfolio 0 0 N/A
Bond Portfolio 0 0 N/A
Managed Total Return Portfolio 300 225 75.00%
</TABLE>
Total sales charges and total dollar amount of transactions on which sales
charges were paid during the fiscal year ended September 30, 1994, were
$22,925 and $2,635,000, respectively, of which Signature received 76.89%.
SALES CHARGES PAID BY PORTFOLIOS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
SALES CHARGES
GROSS SALES PAID TO PERCENT OF
CHARGES SIGNATURE TOTAL
<S> <C> <C> <C>
Aggressive Growth Portfolio $2,000 $1,500 75.00%
Growth Portfolio 150 135 90.00%
Growth with Income Portfolio 0 0 N/A
Bond Portfolio 0 0 N/A
Managed Total Return Portfolio 0 0 N/A
</TABLE>
Total sales charges and total dollar amount of transactions on which sales
charges were paid during the fiscal year ended September 30, 1995, were
$2,150 and $230,000, respectively, of which Signature received 76.05%. As of
September 30, 1995, the Funds' shares have not been divided into classes.
SALES CHARGES PAID BY PORTFOLIOS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SALES CHARGES
GROSS SALES PAID TO PERCENT OF
CHARGES SIGNATURE TOTAL
<S> <C> <C> <C>
Aggressive Growth Portfolio $0 $0 N/A
Growth Portfolio 0 0 N/A
Growth with Income Portfolio 0 0 N/A
Bond Portfolio 0 0 N/A
Managed Total Return Portfolio 0 0 N/A
</TABLE>
Total sales charges and total dollar amount of transactions on which sales
charges were paid during the fiscal year ended September 30, 1996, were $0
and $0, respectively.
OTHER INFORMATION
CAPITALIZATION
FundManager Portfolios (formerly named FundManager Trust) is a Delaware
business trust established under a Master Trust Agreement dated February 7,
1995. Prior to May 8, 1995, the Portfolios were series of the Republic Funds
(formerly FundTrust), a Massachusetts business trust (organized April 22,
1987). Republic Funds was a successor to two previously-existing
Massachusetts business trusts, FundTrust Tax-Free Trust (organized on July
30, 1986) and FundVest (organized on July 17, 1984, and since renamed Fund
Source). The Trust currently consists of five separately managed portfolios
each offering two classes of shares of beneficial interest (except Managed
Total Return Portfolio, which only offers a Financial Advisers Class). The
capitalization of the Trust consists solely of an unlimited number of shares
of beneficial interest with a par value of $0.001 each. The Trustees may
establish additional series (with different investment objectives and
fundamental policies) and additional classes of shares at any time in the
future. Establishment and offering of additional series and classes will not
alter the rights of the Trust's shareholders. When issued, shares are fully
paid, nonassessable, redeemable and freely transferable. Shares do not have
preemptive rights or subscription rights. In liquidation of a Portfolio,
each shareholder is entitled to receive his pro rata share of the net assets
of that Portfolio.
VOTING RIGHTS
Under the Master Trust Agreement, the Trust is not required to hold annual
meetings to elect Trustees or for other purposes. It is not anticipated that
the Trust will hold shareholders' meetings unless required by law or the
Master Trust Agreement provides that the holders of not less than two thirds
of the outstanding shares of the Trust may remove persons serving as Trustee
either by declaration in writing or at a meeting called for such purpose.
The Trustees are required to call a meeting for the purpose of considering
the removal of persons serving as Trustee if requested in writing to do so
by the holders of not less than 10% of the outstanding shares of the Trust.
PERFORMANCE INFORMATION
The Trust may, from time to time, include quotations of the Portfolios'
yield and average annual total return in advertisements or reports to
shareholders or prospective investors.
Quotations of yield will be based on a Portfolio's investment income per
share earned during a particular 30-day period, less expenses accrued during
the period ("net investment income") and will be computed by dividing net
investment income by the maximum offering price per share on the last day of
the period, according to the following formula:
YIELD = 2[(A cdB + 1)6-1]
(where a = dividends and interest earned during the period, b = expenses
accrued for the period (net of any reimbursements), c = the average daily
number of shares outstanding during the period that were entitled to receive
dividends and d = the maximum offering price per share on the last day of
the period).
For the 30-day period ending September 30, 1996, the yields for the Bond
Portfolio's Financial Adviser Class and No-Load Class were 5.05% and 5.57%,
respectively.
Quotations of a Portfolio's average annual total return will be expressed in
terms of the average annual compounded rate of return of a hypothetical
investment in such Portfolio over periods of 1, 5 and 10 years (up to the
life of the Portfolio), calculated pursuant to the following formula:
P (1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and
ERV = the ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the period). All total return figures will reflect the
deduction of Portfolio expenses on an annual basis and will assume that all
dividends and distributions are reinvested when paid.
For the period prior to its establishment, each Class of shares of each
Portfolio will adopt the performance of the Portfolios and their
predecessors. The performance for this period will reflect the deduction of
the Class's charges and expenses.
The total returns for the Financial Adviser Class Portfolios for the periods
ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
1 YEAR 5-YEAR 10-YEAR
TOTAL TOTAL RETURN TOTAL RETURN
RETURN (AVERAGE ANNUAL) (AVERAGE ANNUAL)
<S> <C> <C> <C>
Aggressive Growth Portfolio 12.1% 12.9% 11.7%
Growth Portfolio 13.5% 13.0% 11.3%
Growth with Income Portfolio 13.7% 12.9% 10.8%
Bond Portfolio 3.8% 6.4% 6.5%
Managed Total Return Portfolio 7.6% 8.2% 8.8%*
</TABLE>
* Total return from commencement of operations August 4, 1988.
The total returns for the No-Load Class Portfolios for the period ended
September 30, 1996 were as follows:
<TABLE>
<CAPTION>
1 YEAR
TOTAL
RETURN
<S> <C>
Aggressive Growth Portfolio 12.8%
Growth Portfolio 14.2%
Growth with Income Portfolio 14.1%
Bond Portfolio 3.9%
</TABLE>
Quotations of yield and total return will reflect only the performance of a
hypothetical investment in a Portfolio during the particular time period
shown. Yield and total return for a Portfolio will vary based on changes in
market conditions and the level of such Portfolio's expenses, and no
reported performance figure should be considered an indication of
performance which may be expected in the future.
In connection with communicating its performance to current or prospective
shareholders, the Portfolios also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or
to unmanaged indices which may assume reinvestment of dividends but
generally do not reflect deductions for administrative and management costs.
Evaluations of the Portfolios'performance made by independent sources may
also be used in advertisements concerning the Portfolios. Sources for the
Portfolios' performance information could include the following:
Barron's, a Dow Jones and Company, Inc. business and financial weekly that
periodically reviews mutual fund performance data.
Bottom Line, a bi-weekly newsletter which periodically reviews mutual funds
and interviews their portfolio managers.
Business Week, a national business weekly that periodically reports the
performance rankings and ratings of a variety of mutual funds investing
abroad.
Changing Times, THE KIPLINGER MAGAZINE, a monthly investment advisory
publication that periodically features the performance of a variety of
securities.
CNBC, a cable financial news television station which periodically reviews
mutual funds and interviews portfolio managers.
Consumer Digest, a monthly business/financial magazine that includes a
"money watch" section featuring financial news.
Forbes, a national business publication that from time to time reports the
performance of specific investment companies in the mutual fund industry.
Fortune, a national business publication that periodically rates the
performance of a variety of mutual funds.
Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis, a
weekly publication of industry-wide mutual fund averages by type of fund.
Money, a monthly magazine that from time to time features both specific
funds and the mutual fund industry as a whole.
Morningstar, Inc., a publisher of financial information and mutual fund
research.
Mutual Funds Magazine, a magazine for the mutual fund investor which
frequently reviews and ranks mutual funds and interviews their portfolio
managers.
New York Times, a nationally distributed newspaper which regularly covers
financial news.
Personal Investing News, a monthly news publication that often reports on
investment opportunities and market conditions.
Personal Investor, a monthly investment advisory publication that includes a
"mutual funds outlook" section reporting on mutual fund performance
measures, yields, indices and portfolio holdings.
Success, a monthly magazine targeted to the world of entrepreneurs and
growing business, often featuring mutual fund performance data.
U.S. News and World Report, a national business weekly that periodically
reports mutual fund performance data.
Value Line, a bi-weekly publication that reports on the largest 15,000
mutual funds.
Wall Street Journal, a Dow Jones and Company, Inc. newspaper which regularly
covers financial news.
Weisenberger Investment Companies Services, an annual compendium of
information about mutual funds and other investment companies, including
comparative data on funds' backgrounds, management policies, salient
features, management results, income and dividend records, and price ranges.
Worth Magazine, a monthly magazine for the individual investor which
frequently reviews and ranks mutual funds and interviews their portfolio
managers.
In addition, the Trust may also provide in its communications to current or
prospective shareholders a listing of those open-end investment companies
and mutual fund complexes or the respective funds included in the
Portfolios' portfolio holdings. These may include, but are not limited to,
the following:
FUND COMPLEXES -- The AIM Family of Funds; The American Funds Group; Dodge &
Cox Investment Managers; Fidelity Investment; First Pacific Advisors, Inc.;
Franklin Custodian Funds, Inc.; Franklin Templeton Group; Friess Associates,
Inc.; The Gabelli Funds; Guardian Investor Services Corporation; Harbor
Capital Advisors, Inc.; Harris Associates, L.P.; Hotchkis & Wiley Funds; IDS
Management; Lord Abbett Family of Funds; Massachusetts Financial Services
Company; Miller Anderson & Sherrerd, LLP; MJ Whitman, Inc.; Mutual Series
Fund, Inc.; Neuberger & Berman Management Inc.; Pacific Financial Research;
Pacific Investment Management Company; Pioneer Funds Distributor; Putnam
Funds; The Royce Funds; Sanford C. Bernstein & Co., Inc.; Socie'te
Ge'ne'rale Asset Management Corp.; T. Rowe Price Associates, Inc.; The
Vanguard Family of Funds; Venture Advisors, L.P.; Waddell & Reed Asset
Management Company; Yacktman Asset Management.
FUNDS -- AIM Charter Fund; Bond Fund of America; New Perspective Fund;
Washington Mutual Fund; Dodge & Cox Stock; Fidelity Advisor Equity Income;
Fidelity Fund; FPA Capital; FPA Paramount; Franklin U.S. Government Fund;
Templeton Growth Fund; Brandywine; Gabelli Asset; Guardian Park Avenue Fund;
Harbor Capital Appreciation; Oakmark Fund; Hotchkis & Wiley Equity Income;
IDS Selective; Affiliated Fund; Massachusetts Financial Fund; MAS Equity;
Third Avenue Value Fund; Mutual Beacon Fund; Neuberger Guardian; Clipper
Fund; Pimco Low Duration; Pimco Total Return; Pioneer Three; Putnam Income
Fund; Royce Premier; Bernstein Short Duration; Bernstein Intermediate
Duration SoGen International; T. Rowe Price Equity Income; Vanguard Equity
Income; Vanguard Fixed-Income Treasury; Vanguard Wellington Fund; Davis New
York Venture; United Bond Fund; Yacktman Fund.
Investors who purchase and redeem Financial Adviser Class shares of the
Portfolios through a customer account maintained at a service organization
may be charged one or more of the following types of fees as agreed upon by
the Service Organization and the investor, with respect to the customer
services provided by the service organization: account fees (a fixed amount
per month or per year); transaction fees (a fixed amount per transaction
processed); compensating balance requirements (a minimum dollar amount a
customer must maintain in order to obtain the services offered); or account
maintenance fees (a periodic charge based upon a percentage of the assets in
the account or of the dividends paid on those assets). Such fees will have
the effect of reducing the yield and effective yield of the Portfolio for
those investors. Investors who maintain accounts with the Trust as transfer
agent will not pay these fees.
INDEPENDENT AUDITORS
Ernst & Young LLP serves as the independent auditors for the Trust and
served as the independent auditors for the Predecessor Portfolios since
October 1, 1991. Ernst & Young LLP audits the Portfolios' financial
statements, prepares the Portfolios' tax return and assists in filings with
the SEC. Ernst & Young LLP's address is 200 Clarendon Street, Boston, MA
02116. The financial statements for the Portfolios for each of the five
years in the period ended September 30, 1996, were audited by Ernst & Young
LLP who have expressed an unqualified opinion on those financial statements.
COUNSEL
Goodwin, Procter & Hoar, Exchange Place, Boston, Massachusetts 02109, passes
upon certain legal matters in connection with the shares offered by the
Trust and also acts as counsel to the Trust.
REGISTRATION STATEMENT
The Prospectuses and Statement of Additional Information do not contain all
the information included in the Trust's registration statement filed with
the SEC under the 1933 Act with respect to the securities offered hereby,
certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The registration statement, including the exhibits
filed therewith, may be examined at the office of the SEC in Washington,
D.C.
Statements contained in the Prospectuses and Statement of Additional
Information as to the contents of any contract or other documents referred
to are not necessarily complete, and, in each instance, reference is made to
the copy of such contract or other documents filed as an exhibit to the
registration statement, each such statement being qualified in all respects
by such reference.
FINANCIAL STATEMENTS
The Portfolios' current reports to shareholders as filed with the SEC
pursuant to Section 30(b) of the 1940 Act and Rule 30b2-1 thereunder are
hereby incorporated herein by reference to the Trust's Annual Report dated
September 30, 1996 (File Nos. 33-62103 and 811-7347). A copy of each such
report will be provided without charge to each person receiving this
Statement of Additional Information.
G01966-03 (1/97)
PART C OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Incorporated by reference to the Annual Report of the FundManager
Portfolios dated September 30, 1996 (File Nos. 33-89754 and 811-
8992).
(b) Exhibits:
(l) (i) Conformed copy of the Master Trust Agreement of the
Registrant; (4)
(ii) Conformed copy of the Amendment No. 1 to Master Trust
Agreement; (4)
(iii) Conformed copy of the Amendment No. 2 to Master Trust
Agreement; +
(iv) Conformed copy of the Amendment No. 3 to Master Trust
Agreement; +
(2) Copy of By-Laws of the Registrant; (4)
(3) Not Applicable
(4) Not Applicable
(5) Conformed copy of the new Master Investment Advisory
Contract and Investment Advisory Contract Supplement
for Aggressive Growth Portfolio, Growth Portfolio,
Growth with Income Portfolio, Bond Portfolio, Managed Total
Return Portfolio; +
(6) (i) Conformed copy of the Distributors Contract between
Edgewood Services Company and FundManager
Portfolios; +
(ii) Conformed copy of the Master Distributors Contract
between Tucker Anthony Incorporated and FundManager
Portfolios; +
(iii) Conformed copy of the Master Distributors Contract
between Sutro & Co. Incorporated and FundManager
Portfolios; +
(iv) Conformed copy of the Master Distributors Contract
between Freedom Distributors Corporation and
FundManager Portfolios; +
(7) Not Applicable
(8) Conformed copy of Custodian Agreement between FundManager
Portfolios and Investors Bank & Trust Company; +
(9) (i) Conformed copy of the Administrative Services
Agreement between FundManager Portfolios and Federated
Administrative Services; +
(ii) Conformed copy of the Transfer Agency and Service
Agreement between FundManager Portfolios and Investors
Bank & Trust Company; +
(10) Opinion and Consent of counsel; (2)
+ All exhibits have been filed electronically.
(2) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement as filed with the Commission on May 3,
1995. (File Nos. 33-89754 and 811-8992)
(4) Incorporated by reference to Post-Effective Amendment No.2 to the
Registrant's Registration Statement as filed with the Commission
on January 30, 1996. (File Nos. 33-89754 and 811-8992)
(11) Conformed copy of Consent of Independent Auditors; +
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Amended and Restated Master Distribution Plan and
Supplements for the Financial Adviser Class of shares; (3)
(16) Copy of Performance Data Calculations: Aggressive Growth
Portfolio, Growth Portfolio, Growth with Income Portfolio,
Bond Portfolio, Managed Total Return Portfolio; (2)
(17) Copy of Financial Data Schedules; +
(18) Multiple Class Expense Allocation Plan; (3)
(19) Conformed copy Powers of Attorney of Trustees and Officers
of Registrant; +
ITEM 25. Persons Controlled by or Under Common Control with Registrant:
Not Applicable
ITEM 26. Number of Holders of Securities.
Title of Class Number of Record Holders
as of January 8, 1997
Aggressive Growth Portfolio
Financial Adviser Class 777
No-Load Class 9
Growth Portfolio
Financial Adviser Class 504
No-Load Class 5
Growth with Income Portfolio
Financial Adviser Class 549
No-Load Class 10
Bond Portfolio
Financial Adviser Class 140
No-Load Class 6
Managed Total Return Portfolio
Financial Adviser Class 453
ITEM 27. Indemnification; (4)
+ All exhibits have been filed electronically.
(2) Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement as filed with the Commission on May 3,
1995. (File Nos. 33-89754 and 811-8992)
(3) Incorporated by reference to Post-Effective Amendment No.1 to the
Registrant's Registration Statement as filed with the Commission
on July 28, 1995. (File Nos. 33-89754 and 811-8992)
(4) Incorporated by reference to Post-Effective Amendment No.2 to the
Registrant's Registration Statement as filed with the Commission
on January 30, 1996. (File Nos. 33-89754 and 811-8992)
ITEM 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment adviser, see
the section entitled "Management of FundManager Portfolios-The
Adviser" in Part A.
The names and principal occupations of each director and executive
officer of Freedom Capital Management Corporation are set forth below:
NAME BUSINESS AND OTHER CONNECTIONS
John H. Goldsmith Chairman and Chief Executive Officer, John
Hancock
Freedom Securities, Inc.; Chairman and Chief
Executive Officer of Tucker Anthony
Incorporated;
Chairman of the Board of Freedom Capital
Dexter A. Dodge Chairman, President and Managing Director of
Freedom Capital;
Vice President of Freedom Distributors
Corporation
Lawrence G. Kirshbaum Chief Financial Officer of John Hancock Freedom
Securities, Inc.; Director of Tucker Anthony
Incorporated, Sutro & Co. Incorporated and
John
Hancock Clearing Corporation; Managing
Director of
Freedom Capital; Registered Principal of
Tucker Anthony Incorporated; Former Chief
Executive Officer of Kirshbaum & Co. and of
Prescott, Ball & Turben
John J. Danello President, Chief Operating Officer and
Secretary
of Freedom Capital; President and Director of
Freedom Distributors Corporation
Thomas H. Urmston, Jr. Managing Director and Vice President of Freedom
Capital
David L. Richardson, Jr. Managing Director of Freedom Capital
Edward W. Weld Managing Director of Freedom Capital;
Registered
Representative of Tucker Anthony Incorporated
Richard V. Howe Managing Director of Freedom Capital
Michael G. Ferry Vice President and Chief Financial Officer of
Freedom Capital
Arthur E. McCarthy Managing Director of Tucker Anthony
Incorporated
ITEM 29. Principal Underwriters
(a) Edgewood Services, Inc., a Distributor for shares of the
Registrant, also acts as principal underwriter for the following open-end
investment companies: FTI Funds, Excelsior Institutional Trust (formerly,
UST Master Funds, Inc.), Excelsior Tax-Exempt Funds, Inc. (formerly, UST
Master Tax-Exempt Funds, Inc.), Excelsior Institutional Trust, Marketvest
Funds, Marketvest Funds, Inc., Old Westbury Funds, BT Advisor Funds, BT
Investment Funds, and BT Pyramid Mutual Funds.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Douglas L. Hein Trustee, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Newton Heston, III Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas J. Ward Assistant Secretary, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Kenneth W. Pegher, Jr. Treasurer, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
(ai) Freedom Distributors Corp., a Distributor for shares of the
Registrant, also acts as principal underwriter for the following open-end
investment companies: Freedom Mutual Fund and Freedom Group of Tax Exempt
Funds.
(bi)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
John J. Danello President and Director Executive Vice
One Beacon Street of Freedom Distributors President of the
Boston, MA 02108 Corp. Registrant.
Michael G. Ferry Treasurer of Freedom --
One Beacon Street Distributors Corp.
Boston, MA 02108
Dexter A. Dodge Director of Freedom Trustee, Chairman
One Beacon Street Distributors Corp. and Chief
Boston, MA 02108 Executive Officer
of the Registrant.
Maureen M. Renzi Vice President and ClerkAssistant
One Beacon Street of Freedom Distributors Secretary of the
Boston, MA 02108 Corp. Registrant.
(aii) Tucker Anthony Incorporated, a Distributor for shares of the
Registrant, also acts as principal underwriter for the following open-end
investment companies: Freedom Mutual Fund and Freedom Group of Tax Exempt
Funds.
(bii)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
John H. Goldsmith Chairman, Chief Executive --
One World Financial CenterOfficer and Director of
New York, NY 10281 Tucker Anthony Incorporated.
Robert H. Yevich President and Director of --
One World Financial CenterTucker Anthony Incorporated.
New York, NY 10281
Thomas A. Pasquale Executive Vice President --
One World Financial Centerand Director of Tucker
New York, NY 10281 Anthony Incorporated.
Marc Menchel Executive Vice President, --
One World Financial CenterSecretary and Clerk of
New York, NY 10281 Tucker Anthony Incorporated.
Thomas E Gilligan Treasurer and Chief Executive, --
One World Financial CenterOfficer of Tucker Anthony
New York, NY 10281 Incorporated.
(aiii) Sutro & Co. Incorporated, a Distributor for shares of the
Registrant, also acts as principal underwriter for the following open-end
investment companies: Freedom Mutual Fund and Freedom Group of Tax Exempt
Funds.
(biii)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
John F. Luikart President and Chief Executive --
201 California Street Officer of Sutro & Co.
San Francisco, CA 94111 Incorporated.
Mary Jane Delaney Executive Vice President --
201 California Street and General Counsel of
San Francisco, CA 94111 Sutro & Co. Incorporated.
John H. Goldsmith Director of Sutro & Co. --
One World Financial CenterIncorporated.
New York, NY 10281
Fergus J. Henehan Executive Vice President of --
201 California Street Sutro & Co. Incorporated.
San Francisco, CA 94111
John W. Eisle Executive Vice President of --
201 California Street Sutro & Co. Incorporated.
San Francisco, CA 94111
Thomas R. Weinberger Executive Vice President of --
201 California Street Sutro & Co. Incorporated.
San Francisco, CA 94111
(c) Not Applicable.
ITEM 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules 31a-1 through 31a-3
promulgated thereunder will be maintained at one of the following
locations:
Registrant Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Freedom Capital Management Corporation One Beacon Street
(`Adviser'') Boston Massachusetts 02108.
Federated Administrative Services Federated Investors Tower
(`Administrator'') Pittsburgh, Pennsylvania 15222-3779
Investors Bank & Trust Company 89 South Street
(`Custodian and Transfer Agent'') Boston, Massachusetts 02111
ITEM 31. Management Services:
Not applicable.
ITEM 32. Undertakings
Registrant hereby undertakes to comply with Section 16(c) of the
1940 Act as though such provisions of the Act were applicable to
the Registrant except that the request referred to in the third full
paragraph thereof may only be made by shareholders who hold in the
aggregate at least 10% of the outstanding shares of the Registrant,
regardless of the net asset value or values of shares held by such
requesting shareholders.
Registrant hereby undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual
report to shareholders upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, the Registrant,
FUNDMANAGER PORTFOLIOS (formerly, FundManager Trust), certifies that it
meets all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities act of
1933, and has duly caused this Amendment to its Registration Statement to
be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Pittsburgh and the Commonwealth of Pennsylvania on the 23rd day of
January, 1997.
FUNDMANAGER PORTFOLIOS
(formerly, FUNDMANAGER PORTFOLIOS)
By: /s/ Victor R. Siclari
Victor R. Siclari, Secretary
January 23, 1997
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/ Victor R. Siclari Attorney in Fact January 23, 1997
Victor R. Siclari For the Persons
SECRETARY Listed Below
/s/Dexter A. Dodge* Chairman and Trustee
Dexter A. Dodge (Chief Executive Officer)
/S/Charles B. Lipson* President
Charles B. Lipson (Principal Executive Officer)
/S/Judith J. Mackin* Treasurer
Judith J. Mackin (Principal Financial and
Accounting Officer)
/S/Ernst T. Kendall* Trustee
Ernst T. Kendall
/S/Richard B. Osterberg* Trustee
Richard B. Osterberg
/S/John R. Haack* Trustee
John R. Haack
* By Power of Attorney
Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg. S-K
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to out firm under the captions
`Financial Highlights'' in the FundManager Portfolios formerly FundManager
Trust) Financial Adviser Class and
No-Load Class Prospectuses and `Independent Auditors'' in
the FundManager Portfolios (formerly FundManager Trust)
combined Financial Adviser Class and No-Load Class Statement
of Additional Information in Post-Effective Amendment No. 4
to the Registration Statment (Form N-1A, No. 811-8992) dated
January 24, 1997.
We also consent to the incorpation by reference therein of
our report dated November 21, 1996, with respect to the
financial statments and financial highlights of the
FundManager Portfolios (formerly FundManager Trust) in this
Form N-1A.
/s/ERNST & YOUNG LLP
ERNST & YOUNG LLP
Boston, Massachusetts
January 20, 1997
Exhibit 1(iii) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FUNDMANAGER TRUST
AMENDMENT NO. 2
TO
MASTER TRUST AGREEMENT
AMENDMENT NO. 2 to the Master Trust Agreement of FundManager Trust
(the `Trust'') dated February 7, 1995 (the ``Agreement''), made as of the
3rd day of October, 1996.
WITNESSTH:
WHEREAS, on October 3, 1996 a majority of the Trustees voted to
authorize a change in the name of each of the `Aggressive Growth Fund'',
`Growth and Income Fund'', ``Growth Fund'', `Bond Fund'' and ``Managed
Total Return Fund', Sub-Trusts of the Trusts, to ``Aggressive Growth
Portfolio', ``Growth and Income Portfolio'', and ``Growth Portfolio',
`Bond Portfolio'' and ``Managed Total Return Portfolio'', respectively; and
WHEREAS, the undersigned has been duly authorized by the Trustees to
execute and file this Amendment No. 2 to the Agreement.
The undersigned hereby certifies that the Amendment set forth above
has been duly adopted in accordance with the provisions of the Agreement.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
the day and year first written above.
FUNDMANAGER TRUST
/s/ John J. Danello
John J. Danello
Executive Vice President
FM069
Exhibit 1(iv) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FUNDMANAGER TRUST
Amendment No. 3
to
MASTER TRUST AGREEMENT
February 7, 1995
THIS Master Trust Agreement is amended as follows:
A. Strike Section 1.1 of Article I from the Master Trust Agreement and
substitute in its place the following:
`Section 1.1 Name and Principal Office.
This Trust shall be known as FUNDMANAGER PORTFOLIOS, and the
Trustees may conduct the business of the Trust under that name or
any other name as they may determine from time to time.''
B. Strike the first paragraph of Section 4.2 of Article IV from the
Master Trust Agreement and substitute in its place the following:
`Section 4.2 Establishment and Designation of Sub-Trusts and
Classes.
Without limiting the authority of the Trustees set forth in
Section 4.1 to establish and designate any further Sub-
Trusts, the Trustees hereby establish and designate five Sub-Trusts:
``Aggressive Growth Portfolio'', `Growth Portfolio'', ``Growth
with Income Portfolio'', ``Bond Portfolio', and ``Managed
Total Return Portfolio.'' Each of the Aggressive Growth Portfolio,
Growth Portfolio, Growth with Income Portfolio and Bond
Portfolio shall consist of two classes designated as the
``Financial Adviser Class'' and the `No-Load Class.'' The
Managed Total Return Portfolio shall consist of one class
designated as the ``Financial Adviser Class.'' The Shares of
such Sub-Trusts and any Shares of any further Sub-Trust or class
thereof that may from time to time be established and
designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Sub-Trust at the time
of establishing and designating the same) have the following
relative rights and preferences:''
The undersigned Secretary of FundManager Trust hereby certifies that
the above-stated Amendment is a true and correct Amendment to the Master
Trust Agreement, as adopted by the Board of Trustees on the 10th day of
December, 1996.
WITNESS the due execution hereof this 23rd day of January, 1997.
/s/ Victor R. Siclari
Victor R. Siclari
Secretary
Exhibit 5 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and Freedom Capital Management Corporation (the ``Adviser'') as
follows:
1. The Trust is an open-end investment company organized as a
Delaware business trust and consists of one or more separate investment
portfolios as may be established and designated by the Trust's Board of
Trustees (the `Board of Trustees'') from time to time. This Contract
shall pertain only to such portfolios of the Trust as shall be designated
in Supplements to this Contract as further agreed between the Trust and the
Adviser (the `Funds''). A separate series of shares of beneficial
interest in the Trust is offered to investors with respect to each Fund.
The Trust engages in the business of investing and reinvesting the assets
of each Fund in the manner and in accordance with the investment objectives
and restrictions specified in the currently effective prospectus (the
`Prospectus'') relating to the Trust and the Funds included in the
company's Registration Statement, as amended from time to time, filed by
the Trust under the Investment Company Act of 1940, as amended (the ``940
Act'' and the Securities Act of 1933. Copies of the documents referred to
in the preceding sentence have been furnished to the Adviser. Any
amendments to those documents shall be furnished to the Adviser promptly.
Pursuant to Master Distribution Contracts and Supplements thereto between
the Trust and each of Tucker Anthony Incorporated, Sutro & Co.,
Incorporated, Freedom Distributors Corporation and Edgewood Services, Inc.
(the ``istributors''), the Trust has employed the Distributors to act as
principal underwriters for each Fund pursuant to a Master Administrative
Services Contract and Supplements thereto between the Trust and Federated
Administrative Services (the `Administrator''). The Trust has employed
the Administrator to provide to the Trust management and other services.
2. The Trust hereby appoints the Adviser to provide to the Funds the
investment advisory services specified in this Contract and the Adviser
hereby accepts such appointment.
3. (a) The Adviser shall, at its expense, (i) employ or associate
with itself such persons as it believes appropriate to assist it in
performing its obligations under this Contract and (ii) provide all
services, equipment and facilities necessary to perform its obligations
under this Contract.
(b) The Trust shall be responsible for all of their expenses and
liabilities, including compensation of Trustees who are not affiliated with
the Distributors or any of their affiliates; taxes and governmental fees;
interest charges; fees and expenses of the Trust's independent auditors and
legal counsel; trade association membership dues; fees and expenses of any
2
custodian (including maintenance of books and accounts and calculation of
the net asset value of shares of the Funds), transfer agent, registrar and
dividend disbursing agent of the Trust; expenses of issuing, selling,
redeeming, registering and qualifying for Sale shares of beneficial
interest in the Trust; expenses of preparing and printing share
certificates, and preparing, printing and mailing prospectuses and reports
to shareholders, notices, proxy statements (other than the proxy statement
prepared for the shareholders meeting convened to consider this agreement
(the ``nitial meeting'') and reports to regulatory agencies; and cost of
office supplies, including stationery; travel expenses of all officers,
Trustees and employees; insurance premiums; brokerage and other expenses of
executing portfolio transactions; expenses of shareholders' meetings, other
than the initial meeting; organization expenses; and extraordinary
expenses.
4. (a) The Adviser shall provide the Trust investment guidance and
policy direction in connection with the management of the portfolio of each
Fund, including oral and written research, analysis, advice, statistical
and economic data and information and judgments of both a macroeconomic and
microeconomic character.
The Adviser will determine the securities to be purchased or sold by
each Fund and will place orders pursuant to its determinations either
directly with the issuer or with any broker or dealer who deals in such
securities. The Adviser will determine what portion of each Fund's
portfolio shall be invested in securities described by the policies of such
Fund and what portion, if any, should be invested otherwise or held
uninvested.
The Trust will have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
3
consideration of long-range investment policy generally available to
investment advisory customers of the Adviser. It is understood that the
Adviser will not use any non-public information pertinent to investment
decisions undertaken in connection with this Contract that may be in its
possession or in the possession of any of its affiliates nor will the
Adviser seek to obtain any such information.
(b) The Adviser also shall provide to the Trust's officers
administrative assistance in connection with the operation of the Trust and
each of the Funds, which shall include (i) compliance with all reasonable
requests of the Trust for information, including information required in
connection with the Trust's filings with the Securities and Exchange
Commission and state securities commissions and (ii) such other services as
the Advisers shall from time to time determine, upon consultation with the
Administrator, to be necessary to useful to the administration of the Trust
and each of the Funds.
(c) As manager of the assets of each Fund, the Adviser shall make
investments for the account of each Fund in accordance with the Adviser's
best judgment and within the investment objectives and restrictions set
forth in the Prospectus, the 1940 Act and the provisions of the Internal
Revenue Code of 1986 relating to regulated investment companies subject to
policy decisions adopted by the Board of Trustees.
(d) The Adviser shall furnish to the Board periodic reports on the
investment performance of each Fund and on the performance of its
obligations under this Contract and shall supply such additional reports
and information as the Trust's officers or Board of Trustees shall
reasonably request.
4
(e) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Fund as well as other customers,
the Adviser, to the extent permitted by applicable law, may aggregate the
securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. The Adviser may also on occasions
purchase or sell a particular security for one or more customers in
different amounts. On either occasion, and to the extent permitted by
applicable law and regulations, allocation of the securities so purchased
or sold, as well as the expenses incurred in the, will be made by the
Adviser in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to that Fund and to such other customers.
5. The Adviser shall give the Trust the benefit of the Adviser's
best judgment and efforts in rendering services under this Contract. As an
inducement to the Adviser's undertaking to render these services, the Trust
agrees that the Adviser shall not be liable under this Contract for any
mistake in judgment or in any other event whatsoever provided that nothing
in this Contract shall be deemed to protect or purport to protect the
Adviser against any liability to the Trust or its shareholders to which the
adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Adviser's duties under
this contract or by reason of the Adviser's reckless disregard of its
obligations and duties hereunder.
6. In consideration of the services to be rendered by the Adviser
under this Contract, each Fund shall pay the Adviser a monthly fee on the
first business day of each month based upon the average daily value (as
determined on each business day at the time set forth in the prospectus for
determining the net asset value per share) of the net assets of each Fund
during the preceding month, at annual rates set forth in a Supplement to
this Contract with respect to each Fund. If the fees payable to the
5
Adviser pursuant to this paragraph 6 begin to accrue before the end of any
or if this Contract terminates before the end of any month, the fees for
the period from that date to the end of that month or from the beginning of
that month to the date of termination, as the case may be, shall be
prorated according to the proportion which the period bears to the full
month in which the effectiveness or termination occurs. For purposes of
calculating the monthly fees, the value of the net assets of each Fund
shall be computed in the manner specified in the Prospectus for the
computation of net asset value. For purposes of this Contract, a
``usiness day'' is any day the New York Stock Exchange is open for
trading.
7. If the aggregate expenses of every character incurred by, or
allocated to, each Fund in any fiscal year, other than interest, taxes,
expenses under the Master Distribution Plan, brokerage commissions and
other portfolio transaction expenses, other expenditures which are
capitalized in accordance with generally accepted accounting principles and
any extraordinary expense (including, without limitation, litigation and
indemnification expense), but including the fees payable under this
Contract and the fees payable to the Distributors under the Master
Distribution Plan (`includible expenses''), shall exceed the expense
limitations applicable to that Fund imposed by state securities law or
regulations thereunder, as these limitations may be raised or lowered from
time to time, the Adviser shall pay that Fund an amount equal to 50% of
that excess. With respect to portions of a fiscal year in which this
contract shall be in effect, the foregoing limitations shall be prorated
according to the proportion which that portion of the fiscal year bears to
the full fiscal year. At the end of each month of the Trust's fiscal year,
the Distributors will review the includible expenses accrued during that
fiscal year to the end of the period and shall estimate the contemplated
includible expenses for the balance of that fiscal year. If, as a result
6
of the review and estimation, it appears likely that the includible
expenses will exceed the limitations referred to in this paragraph 7 for a
fiscal year with respect to a Fund, the monthly fees relating to that Fund
payable to the Adviser under this contract for such month shall be reduced,
subject to a later reimbursement to reflect actual expenses, by an amount
equal to 50% of a pro rata portion (prorated on the basis of the remaining
months of the fiscal year, including the month just ended) of the amount by
which the includible expenses for the fiscal year (less an amount equal to
the aggregate of actual reductions made pursuant to this provision with
respect to prior months of the fiscal year) are expected to exceed the
limitations provided in this paragraph 7. For purposes of the foregoing,
the value of the net assets of each Fund shall be computed in the manner
specified in paragraph 6, and any payments required to be made by the
Adviser shall be made once a year promptly after the end of the Trust's
fiscal year.
8. This Contract and any Supplement hereto shall become effective
with respect to a Fund on the date specified in such Supplement and shall
thereafter continue in effect with respect to that Fund for a period of
more than two years from such date only so long as the continuance is
specifically approved at least annually (i) by the vote of a majority of
the outstanding voting securities of the Fund (as defined in the 1940 Act)
or by the Board of Trustees and (ii) by the vote, cast in person at a
meeting called for that purpose, of a majority of the members of the Board
of Trustees who are not parties to this Contract or ``nterested persons''
(as defined in the 1940 Act) of any such party.
9. (a) This Contract and any Supplement hereto may be terminated
with respect to a Fund at any time, without the payment of any penalty, by
a vote of a majority of the outstanding voting securities of that Fund (as
defined in the 1940 Act) or by a vote of a majority of the entire Board of
7
Trustees on 60 days' written notice to the Adviser or by the Adviser on 60
days' written notice to the Trust. This Contract shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
(b) Except to the extent necessary to perform the Adviser's
obligations under this Contract, nothing herein shall be deemed to limit or
restrict the right of the Adviser, or any affiliate of the Adviser, or any
employee of the Adviser, to engage in any other business or to devote time
and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any
kind to any other corporation, firm, individual or association.
10. The investment management services of the Adviser to the Trust
under this Contract are not to be deemed exclusive as to the Adviser and
the Adviser will be free to render similar services to others.
11. This Contract shall be construed in accordance with the laws of
the State of Delaware provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act.
12. In the event that the Board of Trustees shall establish one or
more additional investment portfolios, it shall so notify the Adviser in
writing. If the Adviser wishes to render investment advisory services to
such portfolio, it shall so notify the Trust in writing, whereupon such
portfolio shall become a Fund hereunder.
13. The Master Trust Agreement establishing the Trust (the `Master
Trust Agreement'' provides that the name ``FundManager Trust'' refers to
the Trustees under the Master Trust Agreement collectively as Trustees and
not as individuals or personally, and that no shareholder, Trustee,
officer, employee or agent of the Trust shall be subject to claims against
8
or obligations of the Trust to any extent whatsoever, but that the Trust
estate only shall be liable.
If the foregoing correctly sets forth the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours
FUNDMANAGER TRUST
By:/s/John Danello
John Danello
Title
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/John Danello
John Danello
Title:
9
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: Aggressive Growth Portfolio
This will confirm the agreement between the undersigned (the
`Trust'') and Freedom Capital Management Corporation (the ``Adviser'') as
follows:
1. The Trust is an open-end management investment company organized
as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust
from time to time. A separate class of shares of beneficial interest of
the Trust is offered to investors with respect to each investment
portfolio. Aggressive Growth Portfolio (the `Fund'') is a separate
investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract (`Master Advisory Contract'') pursuant to which the
Trust has employed the Adviser to provide investment advisory and other
services specified in the Master Advisory Contract and the Adviser has
accepted such employment. Terms used but not otherwise defined herein
shall have the same meanings assigned to them by the Master Advisory
Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the
Trust hereby adopts the Master Advisory Contract with respect to the Fund
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Fund, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term `Fund'' as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Master Advisory Contract and
subject to further conditions as set forth therein, the Trust shall with
respect to the Fund pay the Adviser a monthly fee on the first business day
of each month based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net
asset value per share) of the net assets of the Fund during the preceding
month at the following annual rates:
Portion of Average Daily
Value of Net Assets of the Fund Fee Rate
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
`Contract'') shall become effective with respect to the Fund on November
29, 1996 and shall thereafter continue in effect with respect to the Fund
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by the board of Trustees and (b) by
the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to
this Contract or `interested persons'' (as defined in the 1940 Act) of any
such party. This Contract may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) or by a vote of a majority of the members of
the board of Trustees on 60 days' written notice to the Trust. This
Contract shall terminate automatically in the event of its assignment as
defined in the 1940 Act.
If the foregoing correctly sets for the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours
FUNDMANAGER TRUST
By:/s/John Danello
John Danello
Title:
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/John Danello
John Danello
Title:
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: Growth and Income Portfolio
This will confirm the agreement between the undersigned (the
`Trust'') and Freedom Capital Management Corporation (the ``Adviser'') as
follows:
1. The Trust is an open-end management investment company organized
as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust
from time to time. A separate class of shares of beneficial interest of
the Trust is offered to investors with respect to each investment
portfolio. Aggressive Growth Portfolio (the `Fund'') is a separate
investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract (`Master Advisory Contract'') pursuant to which the
Trust has employed the Adviser to provide investment advisory and other
services specified in the Master Advisory Contract and the Adviser has
accepted such employment. Terms used but not otherwise defined herein
shall have the same meanings assigned to them by the Master Advisory
Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the
Trust hereby adopts the Master Advisory Contract with respect to the Fund
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Fund, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term `Fund'' as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Master Advisory Contract and
subject to further conditions as set forth therein, the Trust shall with
respect to the Fund pay the Adviser a monthly fee on the first business day
of each month based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net
asset value per share) of the net assets of the Fund during the preceding
month at the following annual rates:
Portion of Average Daily
Value of Net Assets of the Fund Fee Rate
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
`Contract'') shall become effective with respect to the Fund on November
29, 1996 and shall thereafter continue in effect with respect to the Fund
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by the board of Trustees and (b) by
the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to
this Contract or `interested persons'' (as defined in the 1940 Act) of any
such party. This Contract may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) or by a vote of a majority of the members of
the board of Trustees on 60 days' written notice to the Trust. This
Contract shall terminate automatically in the event of its assignment as
defined in the 1940 Act.
If the foregoing correctly sets for the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours
FUNDMANAGER TRUST
By:/s/John Danello
John Danello
Title:
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/John Danello
John Danello
Title:
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: Growth Portfolio
This will confirm the agreement between the undersigned (the
`Trust'') and Freedom Capital Management Corporation (the ``Adviser'') as
follows:
1. The Trust is an open-end management investment company organized
as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust
from time to time. A separate class of shares of beneficial interest of
the Trust is offered to investors with respect to each investment
portfolio. Aggressive Growth Portfolio (the `Fund'') is a separate
investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract (`Master Advisory Contract'') pursuant to which the
Trust has employed the Adviser to provide investment advisory and other
services specified in the Master Advisory Contract and the Adviser has
accepted such employment. Terms used but not otherwise defined herein
shall have the same meanings assigned to them by the Master Advisory
Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the
Trust hereby adopts the Master Advisory Contract with respect to the Fund
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Fund, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term `Fund'' as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Master Advisory Contract and
subject to further conditions as set forth therein, the Trust shall with
respect to the Fund pay the Adviser a monthly fee on the first business day
of each month based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net
asset value per share) of the net assets of the Fund during the preceding
month at the following annual rates:
Portion of Average Daily
Value of Net Assets of the Fund Fee Rate
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
`Contract'') shall become effective with respect to the Fund on November
29, 1996 and shall thereafter continue in effect with respect to the Fund
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by the board of Trustees and (b) by
the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to
this Contract or `interested persons'' (as defined in the 1940 Act) of any
such party. This Contract may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) or by a vote of a majority of the members of
the board of Trustees on 60 days' written notice to the Trust. This
Contract shall terminate automatically in the event of its assignment as
defined in the 1940 Act.
If the foregoing correctly sets for the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours
FUNDMANAGER TRUST
By:/s/John Danello
John Danello
Title:
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/John Danello
John Danello
Title:
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: Bond Portfolio
This will confirm the agreement between the undersigned (the
`Trust'') and Freedom Capital Management Corporation (the ``Adviser'') as
follows:
1. The Trust is an open-end management investment company organized
as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust
from time to time. A separate class of shares of beneficial interest of
the Trust is offered to investors with respect to each investment
portfolio. Aggressive Growth Portfolio (the `Fund'') is a separate
investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract (`Master Advisory Contract'') pursuant to which the
Trust has employed the Adviser to provide investment advisory and other
services specified in the Master Advisory Contract and the Adviser has
accepted such employment. Terms used but not otherwise defined herein
shall have the same meanings assigned to them by the Master Advisory
Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the
Trust hereby adopts the Master Advisory Contract with respect to the Fund
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Fund, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term `Fund'' as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Master Advisory Contract and
subject to further conditions as set forth therein, the Trust shall with
respect to the Fund pay the Adviser a monthly fee on the first business day
of each month based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net
asset value per share) of the net assets of the Fund during the preceding
month at the following annual rates:
Portion of Average Daily
Value of Net Assets of the Fund Fee Rate
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
`Contract'') shall become effective with respect to the Fund on November
29, 1996 and shall thereafter continue in effect with respect to the Fund
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by the board of Trustees and (b) by
the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to
this Contract or `interested persons'' (as defined in the 1940 Act) of any
such party. This Contract may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) or by a vote of a majority of the members of
the board of Trustees on 60 days' written notice to the Trust. This
Contract shall terminate automatically in the event of its assignment as
defined in the 1940 Act.
If the foregoing correctly sets for the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours
FUNDMANAGER TRUST
By:/s/John Danello
John Danello
Title:
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/John Danello
John Danello
Title:
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: Managed Total Return Portfolio
This will confirm the agreement between the undersigned (the
`Trust'') and Freedom Capital Management Corporation (the ``Adviser'') as
follows:
1. The Trust is an open-end management investment company organized
as a Delaware business trust and consists of such separate investment
portfolios as have been or may be established by the Trustees of the Trust
from time to time. A separate class of shares of beneficial interest of
the Trust is offered to investors with respect to each investment
portfolio. Aggressive Growth Portfolio (the `Fund'') is a separate
investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract (`Master Advisory Contract'') pursuant to which the
Trust has employed the Adviser to provide investment advisory and other
services specified in the Master Advisory Contract and the Adviser has
accepted such employment. Terms used but not otherwise defined herein
shall have the same meanings assigned to them by the Master Advisory
Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the
Trust hereby adopts the Master Advisory Contract with respect to the Fund
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Fund, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term `Fund'' as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Fund.
5. As provided in paragraph 6 of the Master Advisory Contract and
subject to further conditions as set forth therein, the Trust shall with
respect to the Fund pay the Adviser a monthly fee on the first business day
of each month based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net
asset value per share) of the net assets of the Fund during the preceding
month at the following annual rates:
Portion of Average Daily
Value of Net Assets of the Fund Fee Rate
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
`Contract'') shall become effective with respect to the Fund on November
29, 1996 and shall thereafter continue in effect with respect to the Fund
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act) or by the board of Trustees and (b) by
the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to
this Contract or `interested persons'' (as defined in the 1940 Act) of any
such party. This Contract may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or
by a vote of a majority of the outstanding voting securities of the Fund
(as defined in the 1940 Act) or by a vote of a majority of the members of
the board of Trustees on 60 days' written notice to the Trust. This
Contract shall terminate automatically in the event of its assignment as
defined in the 1940 Act.
If the foregoing correctly sets for the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours
FUNDMANAGER TRUST
By:/s/John Danello
John Danello
Title:
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/John Danello
John Danello
Title:
Exhibit 6(i) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
FundManager Trust
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 11th day of November, 1996, by and between
FUNDMANAGER TRUST (the "Trust"), a Delaware business trust, and
EDGEWOOD SERVICES, INC. (`Edgewood''), a New York corporation.
In consideration of the mutual covenants hereinafter contained, it
is hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints Edgewood as its agent to sell and
distribute shares of the Trust which may be offered in one or more
series (the "Trusts") consisting of one or more classes (the
"Classes") of shares (the "Shares"), as described and set forth on
one or more exhibits to this Agreement, at the current offering
price thereof as described and set forth in the current Prospectuses
of the Trust. Edgewood hereby accepts such appointment and agrees
to provide such other services for the Trust, if any, and accept
such compensation from the Trust, if any, as set forth in the
applicable exhibits to this Agreement.
2. The sale of any Shares may be suspended without prior notice
whenever in the judgment of the Trust it is in its best interest to
do so.
3. Neither Edgewood nor any other person is authorized by the Trust to
give any information or to make any representation relative to any
Shares other than those contained in the Registration Statement,
Prospectuses, or Statements of Additional Information ("SAIs") filed
with the Securities and Exchange Commission, as the same may be
amended from time to time, or in any supplemental information to
said Prospectuses or SAIs approved by the Trust. Edgewood agrees
that any other information or representations other than those
specified above which it or any dealer or other person who purchases
Shares through Edgewood may make in connection with the offer or
sale of Shares, shall be made entirely without liability on the part
of the Trust. No person or dealer, other than Edgewood, Freedom
Distributors Corporation, Tucker Anthony Incorporated, and Sutro &
Co. Incorporated, is authorized to act as agent for the Trust for
any purpose. Edgewood agrees that in offering or selling Shares as
agent of the Trust, it will, in all respects, duly conform to all
applicable state and federal laws and the rules and regulations of
the National Association of Securities Dealers, Inc., including its
Rules of Fair Practice. Edgewood will submit to the Trust copies of
all sales literature before using the same and will not use such
sales literature if disapproved by the Trust.
4. This Agreement is effective with respect to each Class as of the
date of execution of the applicable exhibit and shall continue in
effect with respect to each Class presently set forth on an exhibit
and any subsequent Classes added pursuant to an exhibit during the
initial term of this Agreement for one year from the date set forth
above, and thereafter for successive periods of one year if such
continuance is approved at least annually by the Trustees of the
Trust, including a majority of the members of the Board of Trustees
of the Trust who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation of any
Distribution Plan relating to the Trust or in any related documents
to such Plan ("Disinterested Trustees"), cast in person at a meeting
called for that purpose. If a Class is added after the first annual
approval by the Trustees as described above, this Agreement will be
effective as to that Class upon execution of the applicable exhibit
and will continue in effect until the next annual approval of this
Agreement by the Trustees and thereafter for successive periods of
one year, subject to approval as described above.
5. This Agreement may be terminated with regard to a particular Trust
or Class at any time, without the payment of any penalty, by the
vote of a majority of the Disinterested Trustees or by a majority of
the outstanding voting securities of the particular Trust or Class
on not more than sixty (60) days' written notice to any other party
to this Agreement. This Agreement may be terminated with regard to a
particular Trust or Class by Edgewood on sixty (60) days' written
notice to the Trust.
6. This Agreement may not be assigned by Edgewood and shall
automatically terminate in the event of an assignment by Edgewood as
defined in the Investment Company Act of 1940, as amended, provided,
however, that Edgewood may employ such other person, persons,
corporation or corporations as it shall determine in order to assist
it in carrying out its duties under this Agreement.
7. Edgewood shall not be liable to the Trust for anything done or
omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of
the duties imposed by this Agreement.
8. This Agreement may be amended at any time by mutual agreement in
writing of all the parties hereto, provided that such amendment is
approved by the Trustees of the Trust, including a majority of the
Disinterested Trustees of the Trust, cast in person at a meeting
called for that purpose.
9. This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the Trust agrees to
indemnify and hold harmless Edgewood and each person, if any,
who controls Edgewood within the meaning of Section 15 of the
Securities Act of 1933 and Section 20 of the Securities Act of
1934, as amended, against any and all loss, liability, claim,
damage and expense whatsoever (including but not limited to any
and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) arising out
of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration
Statement, any Prospectuses or SAIs (as from time to time
amended and supplemented) or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless
such statement or omission was made in reliance upon and in
conformity with written information furnished to the Trust
about Edgewood by or on behalf of Edgewood expressly for use in
the Registration Statement, any Prospectuses and SAIs or any
amendment or supplement thereof.
If any action is brought against Edgewood or any controlling
person thereof with respect to which indemnity may be sought
against the Trust pursuant to the foregoing paragraph, Edgewood
shall promptly notify the Trust in writing of the institution
of such action and the Trust shall assume the defense of such
action, including the employment of counsel selected by the
Trust and payment of expenses. Edgewood or any such controlling
person thereof shall have the right to employ separate counsel
in any such case, but the fees and expenses of such counsel
shall be at the expense of Edgewood or such controlling person
unless the employment of such counsel shall have been
authorized in writing by the Trust in connection with the
defense of such action or the Trust shall not have employed
counsel to have charge of the defense of such action, in any of
which events such fees and expenses shall be borne by the
Trust. Anything in this paragraph to the contrary
notwithstanding, the Trust shall not be liable for any
settlement of any such claim of action effected without its
written consent. The Trust agrees promptly to notify Edgewood
of the commencement of any litigation or proceedings against
the Trust or any of its officers or Trustees or controlling
persons in connection with the issue and sale of Shares or in
connection with the Registration Statement, Prospectuses, or
SAIs.
(b) Edgewood agrees to indemnify and hold harmless the Trust, each
of its Directors, each of its officers who have signed the
Registration Statement and each other person, if any, who
controls the Trust within the meaning of Section 15 of the
Securities Act of 1933, but only with respect to statements or
omissions, if any, made in the Registration Statement or any
Prospectus, SAI, or any amendment or supplement thereof in
reliance upon, and in conformity with, information furnished to
the Trust about Edgewood by or on behalf of Edgewood expressly
for use in the Registration Statement or any Prospectus, SAI,
or any amendment or supplement thereof. In case any action
shall be brought against the Trust or any other person so
indemnified based on the Registration Statement or any
Prospectus, SAI, or any amendment or supplement thereof, and
with respect to which indemnity may be sought against Edgewood,
Edgewood shall have the rights and duties given to the Trust,
and the Trust and each other person so indemnified shall have
the rights and duties given to Edgewood by the provisions of
subsection (a) above.
(c) Nothing herein contained shall be deemed to protect any person
against liability to the Trust or its shareholders to which
such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance
of the duties of such person or by reason of the reckless
disregard by such person of the obligations and duties of such
person under this Agreement.
(d) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940,
as amended, for Directors, officers, Edgewood and controlling
persons of the Trust by the Trustees pursuant to this
Agreement, the Trust is aware of the position of the Securities
and Exchange Commission as set forth in the Investment Company
Act Release No. IC-11330. Therefore, the Trust undertakes that
in addition to complying with the applicable provisions of this
Agreement, in the absence of a final decision on the merits by
a court or other body before which the proceeding was brought,
that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based
upon factual review has been made (i) by a majority vote of a
quorum of non-party Disinterested Directors, or (ii) by
independent legal counsel in a written opinion that the
indemnitee was not liable for an act of willful misfeasance,
bad faith, gross negligence or reckless disregard of duties.
The Trust further undertakes that advancement of expenses
incurred in the defense of a proceeding (upon undertaking for
repayment unless it is ultimately determined that
indemnification is appropriate) against an officer, Directors,
Edgewood or controlling person of the Trust will not be made
absent the fulfillment of at least one of the following
conditions: (i) the indemnitee provides security for his
undertaking; (ii) the Trust is insured against losses arising
by reason of any lawful advances; or (iii) a majority of a
quorum of non-party Disinterested Trustees or independent legal
counsel in a written opinion makes a factual determination that
there is reason to believe the indemnitee will be entitled to
indemnification.
11. Edgewood is hereby expressly put on notice of the limitation of
liability as set forth in the Trust's Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this
Agreement shall be limited in any case to the Trust and its assets
and Edgewood shall not seek satisfaction of any such obligation from
the shareholders of the Trust, the Trustees, officers, employees or
agents of the Trust, or any of them.
12. If at any time the Shares of any Trust are offered in two or more
Classes, Edgewood agrees to assist in adopting a written plan
pursuant to Rule 18f-3 under the Investment Company Act of 1940.
13. This Agreement will become binding on the parties hereto upon the
execution of the attached exhibits to the Agreement.
Exhibit A
to the
Distributor's Contract
FUNDMANAGER TRUST
AGGRESSIVE GROWTH PORTFOLIO
Financial Adviser Class
No-Load Class
GROWTH & INCOME PORTFOLIO
Financial Adviser Class
No-Load Class
GROWTH PORTFOLIO
Financial Adviser Class
No-Load Class
BOND PORTFOLIO
Financial Adviser Class
No-Load Class
MANAGED TOTAL RETURN PORTFOLIO
Financial Adviser Class
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated November 11, 1996, between FundManager Trust
and Edgewood Services, Inc. (`Edgewood''), with respect to the Class of
shares set forth above.
1. The Trust hereby appoints Edgewood to engage in activities
principally intended to result in the sale of shares of the above-
listed Class ("Shares"). Pursuant to this appointment, Edgewood is
authorized to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price thereof
as described and set forth in the respective prospectuses of the
Trust.
2. During the term of this Agreement, the Trust may pay Edgewood for
services pursuant to this Agreement, a monthly fee under the Trust's
Rule 12b-1 Plan computed at the annual rate of the average aggregate
net asset value of the Shares held during the month. For the month
in which this Agreement becomes effective or terminates, there shall
be an appropriate proration of any fee payable on the basis of the
number of days that the Agreement is in effect during the month.
3. Edgewood may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class'
expenses exceed such lower expense limitation as Edgewood may, by
notice to the Trust, voluntarily declare to be effective.
4. Edgewood or its affiliate will prepare reports to the Board of
Trustees of the Trust on a quarterly basis showing amounts expended
hereunder including amounts paid to Financial Institutions and the
purpose for such expenditures.
5. Edgewood or its affiliate will review and file all sales literature
(advertisements, brochures and shareholder communications) for the
Trust in accordance with rules and regulations of the National
Association of Securities Dealers, Inc.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated November , 1996 between FundManager Trust
and Edgewood, FundManager Trust executes and delivers this Exhibit on
behalf of the Aggressive Growth Portfolio, Growth & Income Portfolio,
Growth Portfolio, Bond Portfolio, Managed Total Return Portfolio, thereof,
first set forth in this Exhibit.
Witness the due execution hereof this 11th day of November, 1996.
ATTEST: FUNDMANAGER TRUST
/s/ Maureen M. Renzi By: /s/ Charles B. Lipson
Assistant Secretary President
(SEAL)
ATTEST: EDGEWOOD SERVICES, INC.
/S/ S. Elliott Cohan By: /s/R. Jeffrey Niss
S. Elliott Cohan R. Jeffrey Niss
Secretary SeniorVice President
(SEAL)
Exhibit 6(ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION CONTRACT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, MA 02106
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1. The Trust is an open-end investment company organized as a
Delaware business trust and is authorized to issue shares of beneficial
interest (`Shares'') in separate series (or sub-trusts) (``Funds'') which
may be divided into one or more separate classes of shares of beneficial
interest (a `Class'') as may be established and designated by the Trustees
from time to time. This Master Distribution Contract (this `Contract'')
shall pertain to the Funds and Classes designated in supplements to this
Contract (`Supplements''), as further agreed between the Trust and the
Distributor. The Trust engages in the business of investing and
reinvesting the assets of each Fund or Class, as the case may be, in the
manner and in accordance with the investment objective and restrictions
specified in the currently effective Prospectus (the `Prospectus'')
Tucker Anthony Incorporated
November 29, 1996
Page 2
relating to the Trust and each Fund or Class included in the Trust's
registration statement on Form N-1A, as amended from time to time (the
`Registered Statement''), filed by the Trust under the Investment Company
Act of 1940 (the `1940 Act'') and the Securities Act of 1933 (the ``1933
Act'). Copies of the documents referred to in the preceding sentence have
been furnished to the Distributor. Any amendments to those documents shall
be furnished to the Distributor promptly. The Trust also has adopted a
Master Distribution Plan (and Supplements thereto) (the `Plan'') pursuant
to Rule 12b-1 under the 1940 Act with respect to certain Classes of certain
Funds.
2. The Distributor shall be the Trust's distributor for the unsold
portion of the Shares which may from time to time be registered under the
1933 Act and will provide (or cause to be provided) certain shareholder
services.
3. The Trust shall sell Shares to the Distributors for resale,
directly or through dealers, to the eligible investors as described in the
Prospectus. All orders through the Distributor shall be subject to
acceptance and confirmation by the Trust. The Trust shall have the right,
at its election, to deliver either Shares issued upon original issue or
treasury Shares.
4. As the Trust's distributor, the Distributor may sell and
distribute Shares of a Fund or Class in such manner not inconsistent with
the provisions hereof and the Trust's Prospectus with respect to that Fund
or Class as it may determine from time to time. In this connection, the
Distributor shall comply with all laws, rules and regulations applicable to
it, including, without limiting the generality of the foregoing, all
Tucker Anthony Incorporated
November 29, 1996
Page 3
applicable rules or regulations under the 1940 Act and of any securities
association registered under the Securities Exchange Act of 1934 (the
`1934 Act'').
5. The Trust reserves the right to sell Shares to purchasers to the
extent that it or the transfer agent for its Shares receives purchase
requests therefor.
6. All Shares offered for sale and sold by the Distributor shall be
offered for sale and sold by the Distributor to designated investors at the
public offering price per Share specified and determined as provided in the
Prospectus (the `offering price''). The Trust shall determine and
promptly furnish to the Distributor a statement of the offering price at
least once on each day on which the New York Stock Exchange is open for
trading and on each additional day on which each Fund's or Class' net asset
value might be materially affected by changes in the value of its portfolio
securities. Each offering price shall become effective at the time and
shall remain in effect during the period specified in the statement. Each
such statement shall show the basis of its computation. The difference
between the offering price and net asset value (which amount shall not be
in excess of that set forth in the Prospectus) may be retained by the
Distributor, or all or any part thereof may be paid to a purchaser's
investment dealer, in accordance with the Prospectus.
7. The Distributor may provide shareholder services or, as agent for
the Trust, arrange for the provision of shareholder services be dealers,
banks or others. Such services may include providing personal services to
shareholders and maintaining shareholder accounts.
Tucker Anthony Incorporated
November 29, 1996
Page 4
8. The Trust shall furnish the Distributor from time to time, for use
in connection with the sale of Shares, such written information with
respect to the Trust as the Distributor may reasonably request. In each
case such written information shall be signed by an authorized officer of
the Trust. The Trust represents and warrants that such information, when
signed by one of its officers, shall be true and correct. The Trust also
shall furnish to the Distributor copies of its reports to its shareholders
and such additional information regarding the Trust's financial condition
as the Distributor may reasonably request from time to time.
9. The Registration Statement and the Prospectus have been or will
be, as the case may be, prepared in conformity with the 1933 Act, the 1940
Act and the rules and regulations of the Securities and Exchange Commission
(the `SEC''). The Trust represents and warrants to the Distributor that
the Registration Statement and the Prospectus contain or will contain all
statements required to be stated therein accordance with the 1933 Act, the
1940 Act and the rules and regulations thereunder, that all statements of
fact contained or to be contained therein are or will be true and correct
at the time indicated or the effective date, as the case may be, and that
neither the Registration Statement nor the Prospectus, when it shall become
effective under the 1933 Act or be authorized for use, shall include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of Shares. The Trust shall from time to time
file such amendment or amendments to the Registration Statement and the
Prospectus as, in the light of future developments, shall, in the opinion
of the Trust's counsel, be necessary in order to have the Registration
Statement and the Prospectus at all times contain all material facts
required to be stated therein or necessary to make statements therein not
Tucker Anthony Incorporated
November 29, 1996
Page 5
misleading to a purchaser of Shares. If the Trust shall not file such
amendment or amendments within 15 days after receipt by the Trust of a
written request from the Distributor to do so, the Distributor may, at its
option, terminate this Contract immediately. The Trust shall not file any
amendment to the Registration Statement or the Prospectus without giving
the Distributor reasonable notice thereof in advance, provided that nothing
in this Contract shall in any way limit the Trust's right to file at any
time such amendments to the Registration Statement or the Prospectus as the
Trust may deem advisable. The Trust represents and warrants to the
Distributor that any amendment to the Registration Statement or the
Prospectus filed hereafter by the Trust will, when it becomes effective
under the 1933 Act, contain all statements required to be stated therein in
accordance with the 1933 Act, the 1940 Act and the rules and regulations
thereunder, that all statements of fact contained therein will, when the
same shall become effective, be true and correct, and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of Shares.
10.The Trust shall prepare and furnish to the Distributor from time
to time such number of copies of the most recent form of the Prospectus
filed with the SEC as the Distributor may reasonably request. The Trust
authorizes the Distributor to use the Prospectus, in the form furnished to
it from time to time, in connection with the sale of Shares. The Trust
shall indemnify, defend and hold harmless the Distributor, its officers and
Trustees and any person who controls the Distributor within the meaning of
the 1933 Act, from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
Tucker Anthony Incorporated
November 29, 1996
Page 6
demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers and Trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common
law or otherwise, arising out of or based upon any alleged untrue statement
of a material fact contained in the Registration Statement or the
Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either or necessary to make the
statements therein either not misleading. This Contract shall not be
construed to protect the Distributor against any liability to the Trust or
its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Contract. This indemnity agreement is
expressly conditioned upon the Trust being notified of any action brought
against the Distributor, its officers or Trustees or any such controlling
person, which notification shall be given by letter or by telegram
addressed to the Trust at its principal office and sent to the Trust by the
person against whom such action is brought within 10 days after the summons
or other first legal process shall have been served. The failure to notify
the Trust of any such action shall not relieve the Trust from any liability
which it may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission otherwise than on
account of the indemnity agreement contained in this paragraph. The Trust
shall be entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, but, in such case, the defense shall be
conducted by counsel chosen by the Trust and approved by the Distributor.
If the Trust elects to assume the defense of any such suit and retain
counsel approved by the Distributor, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by
Tucker Anthony Incorporated
November 29, 1996
Page 7
any of them, but in case the Trust does not elect to assume the defense of
any such suit, or in case the Distributor does not approve of counsel
chosen by the Trust, the Trust will reimburse the Distributor, its officers
and Trustees or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained
by the Distributor or them. In addition, the Distributor shall have the
right to employ counsel to represent it, its officers and Trustees and any
such controlling person who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Distributor
against the Trust hereunder if in the reasonable judgment of the
Distributor it is advisable for the Distributor, its officers and Trustees
or such controlling person to be represented by separate counsel, in which
event the fees and expenses of such separate counsel shall be borne by the
Trust. This indemnity agreement and the Trust's representations and
warranties in this Contract shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the
Distributor, its officers and Trustees or any such controlling person.
This indemnity agreement shall inure exclusively to the benefit of the
Distributor and its successors, its officers and directors and their
respective estates and any such controlling persons and their successors
and estates. The Trust shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it in connection with
the issue and sale of any Shares.
11.The Distributor agrees to indemnify, defend and hold harmless the
Trust, its officers and Trustees and any person who controls the Trust
within the meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred
Tucker Anthony Incorporated
November 29, 1996
Page 8
in connection therewith) which the Trust, its officers or Trustees or any
such controlling person, may incur under the 1933 Act, the 1940 Act, common
law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust specifically for use
in the Registration Statement or the Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading. This
indemnity agreement is expressly conditioned upon the Distributor being
notified of any action brought against the Trust, its officers or Trustees
or any such controlling person, which notification shall be given by letter
or telegram addressed to the Distributor at its principal office and sent
to the Distributor by the person against whom such action is brought,
within 10 days after the summons or other first legal process shall have
been served. The failure to notify the Distributor of any such action
shall not relieve the Distributor from any liability which it may have to
the Trust, its officers or Trustees or such controlling person by reason of
any such alleged misstatement or omission on the Distributor's part
otherwise than on account of the indemnity agreement contained in this
paragraph. The Distributor shall have a right to control the defense of
such action with counsel of its own choosing and approved by the Trust if
such action is based solely upon such alleged misstatement or omission on
the Distributor's part, and in any other event the Trust, its officers and
Trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action
at their own expense.
Tucker Anthony Incorporated
November 29, 1996
Page 9
12.No Shares shall be sold to the Distributor or by the Trust under
this Contract and no orders for the purchase of Shares shall be confirmed
or accepted by the Trust if an so long as the effectiveness of the
Registration Statement shall be suspended under any of the provisions of
the 1933 Act. Nothing contained in this paragraph shall in any way
restrict, limit or have any application to or bearing upon the Trust's
obligation to redeem Shares from any shareholder in accordance with the
provisions of its Declaration of Trust. The Trust will use its best
efforts at all times to have Shares effectively registered under the 1933
Act.
13.The Trust agrees to advise the Distributor immediately:
(a) of any request by the SEC for amendments to the Registration
Statement or the Prospectus or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
Prospectus under the 1933 Act or the initiation of any proceedings for that
purpose;
(c) of the happening of any material event which makes untrue
any statement made in the Registration Statement or the Prospectus or which
requires the making of the change in either thereof in order to make the
statements therein not misleading; and
Tucker Anthony Incorporated
November 29, 1996
Page 10
(d) of all action of the SEC with respect to any amendments to
the Registration Statement or the Prospectus which may from time to time be
filed with the SEC under the 1933 Act or the 1940 Act.
14.Insofar as they concern the Trust, the Trust shall comply with all
applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules or regulations made or adopted
pursuant to the 1933 Act, the 1940 Act or by any securities association
registered under the 1933 Act.
15.The Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its
obligations under this Contract, but no such appointment or employment
shall relieve the Distributor of any of its responsibilities or obligations
to the Trust under this Contract.
16.(a) The Distributor shall from time to time employ or associate
with it such persons as it believes necessary to assist it in carrying out
its obligations under this Contract.
(b) The Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under Federal or
state law.
(c) The Trust shall pay all expenses incurred in connection with
(i) the preparation, printing and distribution to shareholders of the
Prospectus and reports and other communications to shareholders, (ii)
future registrations of Shares under the 1933 Act and the 1940 Act, (iii)
amendments of the Registration Statement subsequent to the initial public
Tucker Anthony Incorporated
November 29, 1996
Page 11
offering of Shares, (iv) qualification of Shares for sale in jurisdictions
designated by the Distributor, (v) qualification of the Trust as a dealer
or broker under the laws of jurisdictions designated by the Distributor,
(vi) qualification of the Trust as a foreign corporation authorized to do
business in any jurisdiction if the Distributor determines that such
qualification is necessary or desirable for the purpose of facilitating
sales of Shares, (vii) maintaining facilities for the issue and transfer of
Shares and (viii) supplying information, prices and other data to be
furnished by the Trust under this Contract.
(d) The Trust shall pay any original issue taxes or transfer
taxes applicable to the sale or delivery of Shares or certificates
therefor.
(e) The Trust shall execute all documents and furnish any
information which may be reasonably necessary in connection with the
qualification of Shares of the Trust for sale in jurisdictions designated
by the Distributor.
17.The Distributor will render all services hereunder without
compensation or reimbursement, except that the Distributor shall receive
such compensation or reimbursement in the form of (i) any reimbursement as
is provided for by a plan, (ii) such other reimbursement as is expressly
permitted under this Contract, and (iii) applicable dealer reallowances
described in the Prospectus.
18.This Contract, and any Supplement, shall become effective with
respect to a Fund or Class on the date specified in its Supplement, and
shall continue in effect until such time as there shall remain no unsold
Tucker Anthony Incorporated
November 29, 1996
Page 12
balance of Shares for such Fund or Class, as the case may be, registered
under the 1933 Act, provided that this Contract shall continue in effect
with respect to such Fund or Class for a period of more than two years from
such date specified in its Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of
Trustees or by the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund or Class, as the case may be, and
(b) the vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trust's Trustees who are not parties
to the Contract or `interested persons'' (as defined in the 1940 Act) of
any such party. This Contract, and all of its Supplements, shall terminate
automatically in the event of assignment (as defined in the 1940 Act).
This Contract, and/or any and all Supplements, may, in any event, be
terminated at any time, without the payment of any penalty, by vote of a
majority of the Trust's Trustees who are not parties to this Contract or
`interested persons'' (as defined in the 1940 Act) and who have no direct
or indirect financial interest in the operation of this Contract or by vote
of a majority of the appropriate outstanding voting securities (as defined
in the 1940 Act) of the Fund or Class, upon 60 days' written notice to the
Distributor and by the Distributor upon 60 days' written notice to the
Trust.
19.Except to the extent necessary to perform the Distributor's
obligations under this Contract, nothing herein shall be deemed to limit or
restrict the right of the Distributor, or any affiliate of the Distributor,
or any employee of the Distributor to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services
of any kind to any other corporation, firm, individual or association.
Tucker Anthony Incorporated
November 29, 1996
Page 13
20.The Master Trust Agreement establishing the Trust, dated February
7, 1995 (the `Trust Agreement'') provides that the name ``FundManager
Trust''refers to the Trustees under the Trust Agreement collectively as
trustees and not as individuals or personally, and that no shareholder,
Trustee, officer, employee or agent of the Trust shall be subject to claims
against or obligations of the Trust to any extent whatsoever, but that the
Trust estate only shall be liable.
21.This Contract shall be construed and its provisions interpreted,
in accordance with the laws of the State of Delaware.
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Name: Charles B. Lipson
Title: President
ACCEPTED:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 14
By:
Name:
Title:
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
FUNDMANAGER TRUST
By:
Name:
Title:
ACCEPTED:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 15
By:
Name:
Title:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Aggressive Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Aggressive Growth Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Aggressive Growth Fund. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth Fund (the `Fund'') is
a separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth Fund. The term `Shares'' as used
in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth & Income Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth & Income Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth & Income Fund. The term `Shares''
as used in the Contract shall, for the purposes of this Supplement pertain
to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Bond Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Bond Fund (the `Fund'') is a
separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Bond Fund. The term `Shares'' as used in
the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Managed Total Return Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Managed Total Return Fund
(the `Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Managed Total Return Fund. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Aggressive Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Aggressive Growth Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Aggressive Growth Fund. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth Fund (the `Fund'') is
a separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as No-Load Class shares (`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
has agreed to be the distributor of the shares of beneficial interest of
Tucker Anthony Incorporated
November 29, 1996
Page 2
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth Fund. The term `Shares'' as used
in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
Tucker Anthony Incorporated
November 29, 1996
Page 2
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
By:
Tucker Anthony Incorporated
November 29, 1996
Page 2
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Tucker Anthony Incorporated
November 29, 1996
Page 2
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth & Income Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth & Income Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Tucker Anthony Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth & Income Fund. The term `Shares''
as used in the Contract shall, for the purposes of this Supplement pertain
to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Tucker Anthony Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
Tucker Anthony Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Tucker Anthony Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Bond Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Bond Fund (the `Fund'') is a
separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as No-Load Class shares (`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
has agreed to be the distributor of the shares of beneficial interest of
Tucker Anthony Incorporated
November 29, 1996
Page 2
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Bond Fund. The term `Shares'' as used in
the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
Tucker Anthony Incorporated
November 29, 1996
Page 2
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
TUCKER ANTHONY INCORPORATED
By:
Tucker Anthony Incorporated
November 29, 1996
Page 2
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Tucker Anthony Incorporated
November 29, 1996
Page 2
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
TUCKER ANTHONY INCORPORATED
Exhibit 6(iii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION CONTRACT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, MA 02106
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1. The Trust is an open-end investment company organized as a
Delaware business trust and is authorized to issue shares of beneficial
interest (`Shares'') in separate series (or sub-trusts) (``Funds'') which
may be divided into one or more separate classes of shares of beneficial
interest (a `Class'') as may be established and designated by the Trustees
from time to time. This Master Distribution Contract (this `Contract'')
shall pertain to the Funds and Classes designated in supplements to this
Contract (`Supplements''), as further agreed between the Trust and the
Distributor. The Trust engages in the business of investing and
reinvesting the assets of each Fund or Class, as the case may be, in the
manner and in accordance with the investment objective and restrictions
specified in the currently effective Prospectus (the `Prospectus'')
Sutro & Co. Incorporated
November 29, 1996
Page 2
relating to the Trust and each Fund or Class included in the Trust's
registration statement on Form N-1A, as amended from time to time (the
`Registered Statement''), filed by the Trust under the Investment Company
Act of 1940 (the `1940 Act'') and the Securities Act of 1933 (the ``1933
Act'). Copies of the documents referred to in the preceding sentence have
been furnished to the Distributor. Any amendments to those documents shall
be furnished to the Distributor promptly. The Trust also has adopted a
Master Distribution Plan (and Supplements thereto) (the `Plan'') pursuant
to Rule 12b-1 under the 1940 Act with respect to certain Classes of certain
Funds.
2. The Distributor shall be the Trust's distributor for the unsold
portion of the Shares which may from time to time be registered under the
1933 Act and will provide (or cause to be provided) certain shareholder
services.
3. The Trust shall sell Shares to the Distributors for resale,
directly or through dealers, to the eligible investors as described in the
Prospectus. All orders through the Distributor shall be subject to
acceptance and confirmation by the Trust. The Trust shall have the right,
at its election, to deliver either Shares issued upon original issue or
treasury Shares.
4. As the Trust's distributor, the Distributor may sell and
distribute Shares of a Fund or Class in such manner not inconsistent with
the provisions hereof and the Trust's Prospectus with respect to that Fund
or Class as it may determine from time to time. In this connection, the
Distributor shall comply with all laws, rules and regulations applicable to
it, including, without limiting the generality of the foregoing, all
Sutro & Co. Incorporated
November 29, 1996
Page 3
applicable rules or regulations under the 1940 Act and of any securities
association registered under the Securities Exchange Act of 1934 (the
`1934 Act'').
5. The Trust reserves the right to sell Shares to purchasers to the
extent that it or the transfer agent for its Shares receives purchase
requests therefor.
6. All Shares offered for sale and sold by the Distributor shall be
offered for sale and sold by the Distributor to designated investors at the
public offering price per Share specified and determined as provided in the
Prospectus (the `offering price''). The Trust shall determine and
promptly furnish to the Distributor a statement of the offering price at
least once on each day on which the New York Stock Exchange is open for
trading and on each additional day on which each Fund's or Class' net asset
value might be materially affected by changes in the value of its portfolio
securities. Each offering price shall become effective at the time and
shall remain in effect during the period specified in the statement. Each
such statement shall show the basis of its computation. The difference
between the offering price and net asset value (which amount shall not be
in excess of that set forth in the Prospectus) may be retained by the
Distributor, or all or any part thereof may be paid to a purchaser's
investment dealer, in accordance with the Prospectus.
7. The Distributor may provide shareholder services or, as agent for
the Trust, arrange for the provision of shareholder services be dealers,
banks or others. Such services may include providing personal services to
shareholders and maintaining shareholder accounts.
Sutro & Co. Incorporated
November 29, 1996
Page 4
8. The Trust shall furnish the Distributor from time to time, for use
in connection with the sale of Shares, such written information with
respect to the Trust as the Distributor may reasonably request. In each
case such written information shall be signed by an authorized officer of
the Trust. The Trust represents and warrants that such information, when
signed by one of its officers, shall be true and correct. The Trust also
shall furnish to the Distributor copies of its reports to its shareholders
and such additional information regarding the Trust's financial condition
as the Distributor may reasonably request from time to time.
9. The Registration Statement and the Prospectus have been or will
be, as the case may be, prepared in conformity with the 1933 Act, the 1940
Act and the rules and regulations of the Securities and Exchange Commission
(the `SEC''). The Trust represents and warrants to the Distributor that
the Registration Statement and the Prospectus contain or will contain all
statements required to be stated therein accordance with the 1933 Act, the
1940 Act and the rules and regulations thereunder, that all statements of
fact contained or to be contained therein are or will be true and correct
at the time indicated or the effective date, as the case may be, and that
neither the Registration Statement nor the Prospectus, when it shall become
effective under the 1933 Act or be authorized for use, shall include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of Shares. The Trust shall from time to time
file such amendment or amendments to the Registration Statement and the
Prospectus as, in the light of future developments, shall, in the opinion
of the Trust's counsel, be necessary in order to have the Registration
Statement and the Prospectus at all times contain all material facts
required to be stated therein or necessary to make statements therein not
Sutro & Co. Incorporated
November 29, 1996
Page 5
misleading to a purchaser of Shares. If the Trust shall not file such
amendment or amendments within 15 days after receipt by the Trust of a
written request from the Distributor to do so, the Distributor may, at its
option, terminate this Contract immediately. The Trust shall not file any
amendment to the Registration Statement or the Prospectus without giving
the Distributor reasonable notice thereof in advance, provided that nothing
in this Contract shall in any way limit the Trust's right to file at any
time such amendments to the Registration Statement or the Prospectus as the
Trust may deem advisable. The Trust represents and warrants to the
Distributor that any amendment to the Registration Statement or the
Prospectus filed hereafter by the Trust will, when it becomes effective
under the 1933 Act, contain all statements required to be stated therein in
accordance with the 1933 Act, the 1940 Act and the rules and regulations
thereunder, that all statements of fact contained therein will, when the
same shall become effective, be true and correct, and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of Shares.
10.The Trust shall prepare and furnish to the Distributor from time
to time such number of copies of the most recent form of the Prospectus
filed with the SEC as the Distributor may reasonably request. The Trust
authorizes the Distributor to use the Prospectus, in the form furnished to
it from time to time, in connection with the sale of Shares. The Trust
shall indemnify, defend and hold harmless the Distributor, its officers and
Trustees and any person who controls the Distributor within the meaning of
the 1933 Act, from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
Sutro & Co. Incorporated
November 29, 1996
Page 6
demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers and Trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common
law or otherwise, arising out of or based upon any alleged untrue statement
of a material fact contained in the Registration Statement or the
Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either or necessary to make the
statements therein either not misleading. This Contract shall not be
construed to protect the Distributor against any liability to the Trust or
its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Contract. This indemnity agreement is
expressly conditioned upon the Trust being notified of any action brought
against the Distributor, its officers or Trustees or any such controlling
person, which notification shall be given by letter or by telegram
addressed to the Trust at its principal office and sent to the Trust by the
person against whom such action is brought within 10 days after the summons
or other first legal process shall have been served. The failure to notify
the Trust of any such action shall not relieve the Trust from any liability
which it may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission otherwise than on
account of the indemnity agreement contained in this paragraph. The Trust
shall be entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, but, in such case, the defense shall be
conducted by counsel chosen by the Trust and approved by the Distributor.
If the Trust elects to assume the defense of any such suit and retain
counsel approved by the Distributor, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by
Sutro & Co. Incorporated
November 29, 1996
Page 7
any of them, but in case the Trust does not elect to assume the defense of
any such suit, or in case the Distributor does not approve of counsel
chosen by the Trust, the Trust will reimburse the Distributor, its officers
and Trustees or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained
by the Distributor or them. In addition, the Distributor shall have the
right to employ counsel to represent it, its officers and Trustees and any
such controlling person who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Distributor
against the Trust hereunder if in the reasonable judgment of the
Distributor it is advisable for the Distributor, its officers and Trustees
or such controlling person to be represented by separate counsel, in which
event the fees and expenses of such separate counsel shall be borne by the
Trust. This indemnity agreement and the Trust's representations and
warranties in this Contract shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the
Distributor, its officers and Trustees or any such controlling person.
This indemnity agreement shall inure exclusively to the benefit of the
Distributor and its successors, its officers and directors and their
respective estates and any such controlling persons and their successors
and estates. The Trust shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it in connection with
the issue and sale of any Shares.
11.The Distributor agrees to indemnify, defend and hold harmless the
Trust, its officers and Trustees and any person who controls the Trust
within the meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred
Sutro & Co. Incorporated
November 29, 1996
Page 8
in connection therewith) which the Trust, its officers or Trustees or any
such controlling person, may incur under the 1933 Act, the 1940 Act, common
law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust specifically for use
in the Registration Statement or the Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading. This
indemnity agreement is expressly conditioned upon the Distributor being
notified of any action brought against the Trust, its officers or Trustees
or any such controlling person, which notification shall be given by letter
or telegram addressed to the Distributor at its principal office and sent
to the Distributor by the person against whom such action is brought,
within 10 days after the summons or other first legal process shall have
been served. The failure to notify the Distributor of any such action
shall not relieve the Distributor from any liability which it may have to
the Trust, its officers or Trustees or such controlling person by reason of
any such alleged misstatement or omission on the Distributor's part
otherwise than on account of the indemnity agreement contained in this
paragraph. The Distributor shall have a right to control the defense of
such action with counsel of its own choosing and approved by the Trust if
such action is based solely upon such alleged misstatement or omission on
the Distributor's part, and in any other event the Trust, its officers and
Trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action
at their own expense.
Sutro & Co. Incorporated
November 29, 1996
Page 9
12.No Shares shall be sold to the Distributor or by the Trust under
this Contract and no orders for the purchase of Shares shall be confirmed
or accepted by the Trust if an so long as the effectiveness of the
Registration Statement shall be suspended under any of the provisions of
the 1933 Act. Nothing contained in this paragraph shall in any way
restrict, limit or have any application to or bearing upon the Trust's
obligation to redeem Shares from any shareholder in accordance with the
provisions of its Declaration of Trust. The Trust will use its best
efforts at all times to have Shares effectively registered under the 1933
Act.
13.The Trust agrees to advise the Distributor immediately:
(a) of any request by the SEC for amendments to the Registration
Statement or the Prospectus or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
Prospectus under the 1933 Act or the initiation of any proceedings for that
purpose;
(c) of the happening of any material event which makes untrue
any statement made in the Registration Statement or the Prospectus or which
requires the making of the change in either thereof in order to make the
statements therein not misleading; and
Sutro & Co. Incorporated
November 29, 1996
Page 10
(d) of all action of the SEC with respect to any amendments to
the Registration Statement or the Prospectus which may from time to time be
filed with the SEC under the 1933 Act or the 1940 Act.
14.Insofar as they concern the Trust, the Trust shall comply with all
applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules or regulations made or adopted
pursuant to the 1933 Act, the 1940 Act or by any securities association
registered under the 1933 Act.
15.The Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its
obligations under this Contract, but no such appointment or employment
shall relieve the Distributor of any of its responsibilities or obligations
to the Trust under this Contract.
16.(a) The Distributor shall from time to time employ or associate
with it such persons as it believes necessary to assist it in carrying out
its obligations under this Contract.
(b) The Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under Federal or
state law.
(c) The Trust shall pay all expenses incurred in connection with
(i) the preparation, printing and distribution to shareholders of the
Prospectus and reports and other communications to shareholders, (ii)
future registrations of Shares under the 1933 Act and the 1940 Act, (iii)
amendments of the Registration Statement subsequent to the initial public
Sutro & Co. Incorporated
November 29, 1996
Page 11
offering of Shares, (iv) qualification of Shares for sale in jurisdictions
designated by the Distributor, (v) qualification of the Trust as a dealer
or broker under the laws of jurisdictions designated by the Distributor,
(vi) qualification of the Trust as a foreign corporation authorized to do
business in any jurisdiction if the Distributor determines that such
qualification is necessary or desirable for the purpose of facilitating
sales of Shares, (vii) maintaining facilities for the issue and transfer of
Shares and (viii) supplying information, prices and other data to be
furnished by the Trust under this Contract.
(d) The Trust shall pay any original issue taxes or transfer
taxes applicable to the sale or delivery of Shares or certificates
therefor.
(e) The Trust shall execute all documents and furnish any
information which may be reasonably necessary in connection with the
qualification of Shares of the Trust for sale in jurisdictions designated
by the Distributor.
17.The Distributor will render all services hereunder without
compensation or reimbursement, except that the Distributor shall receive
such compensation or reimbursement in the form of (i) any reimbursement as
is provided for by a plan, (ii) such other reimbursement as is expressly
permitted under this Contract, and (iii) applicable dealer reallowances
described in the Prospectus.
18.This Contract, and any Supplement, shall become effective with
respect to a Fund or Class on the date specified in its Supplement, and
shall continue in effect until such time as there shall remain no unsold
Sutro & Co. Incorporated
November 29, 1996
Page 12
balance of Shares for such Fund or Class, as the case may be, registered
under the 1933 Act, provided that this Contract shall continue in effect
with respect to such Fund or Class for a period of more than two years from
such date specified in its Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of
Trustees or by the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund or Class, as the case may be, and
(b) the vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trust's Trustees who are not parties
to the Contract or `interested persons'' (as defined in the 1940 Act) of
any such party. This Contract, and all of its Supplements, shall terminate
automatically in the event of assignment (as defined in the 1940 Act).
This Contract, and/or any and all Supplements, may, in any event, be
terminated at any time, without the payment of any penalty, by vote of a
majority of the Trust's Trustees who are not parties to this Contract or
`interested persons'' (as defined in the 1940 Act) and who have no direct
or indirect financial interest in the operation of this Contract or by vote
of a majority of the appropriate outstanding voting securities (as defined
in the 1940 Act) of the Fund or Class, upon 60 days' written notice to the
Distributor and by the Distributor upon 60 days' written notice to the
Trust.
19.Except to the extent necessary to perform the Distributor's
obligations under this Contract, nothing herein shall be deemed to limit or
restrict the right of the Distributor, or any affiliate of the Distributor,
or any employee of the Distributor to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services
of any kind to any other corporation, firm, individual or association.
Sutro & Co. Incorporated
November 29, 1996
Page 13
20.The Master Trust Agreement establishing the Trust, dated February
7, 1995 (the `Trust Agreement'') provides that the name ``FundManager
Trust''refers to the Trustees under the Trust Agreement collectively as
trustees and not as individuals or personally, and that no shareholder,
Trustee, officer, employee or agent of the Trust shall be subject to claims
against or obligations of the Trust to any extent whatsoever, but that the
Trust estate only shall be liable.
21.This Contract shall be construed and its provisions interpreted,
in accordance with the laws of the State of Delaware.
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Name: Charles B. Lipson
Title: President
Sutro & Co. Incorporated
November 29, 1996
Page 14
ACCEPTED:
Sutro & Co. Incorporated
By:
Name:
Title:
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
FUNDMANAGER TRUST
By:
Name:
Title:
ACCEPTED:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 15
By:
Name:
Title:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Aggressive Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Aggressive Growth Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Aggressive Growth Fund. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth Fund (the `Fund'') is
a separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth Fund. The term `Shares'' as used
in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth & Income Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth & Income Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth & Income Fund. The term `Shares''
as used in the Contract shall, for the purposes of this Supplement pertain
to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Bond Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Bond Fund (the `Fund'') is a
separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Bond Fund. The term `Shares'' as used in
the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Managed Total Return Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Managed Total Return Fund
(the `Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Managed Total Return Fund. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Aggressive Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Aggressive Growth Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Aggressive Growth Fund. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth Fund (the `Fund'') is
a separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as No-Load Class shares (`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
has agreed to be the distributor of the shares of beneficial interest of
Sutro & Co. Incorporated
November 29, 1996
Page 2
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth Fund. The term `Shares'' as used
in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
Sutro & Co. Incorporated
November 29, 1996
Page 2
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
By:
Sutro & Co. Incorporated
November 29, 1996
Page 2
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Sutro & Co. Incorporated
November 29, 1996
Page 2
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth & Income Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth & Income Fund (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Sutro & Co. Incorporated
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth & Income Fund. The term `Shares''
as used in the Contract shall, for the purposes of this Supplement pertain
to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Sutro & Co. Incorporated
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
Sutro & Co. Incorporated
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Sutro & Co. Incorporated
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
By:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Bond Fund
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Bond Fund (the `Fund'') is a
separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as No-Load Class shares (`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
has agreed to be the distributor of the shares of beneficial interest of
Sutro & Co. Incorporated
November 29, 1996
Page 2
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Bond Fund. The term `Shares'' as used in
the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
Sutro & Co. Incorporated
November 29, 1996
Page 2
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Sutro & Co. Incorporated
By:
Sutro & Co. Incorporated
November 29, 1996
Page 2
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Sutro & Co. Incorporated
November 29, 1996
Page 2
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Sutro & Co. Incorporated
Exhibit 6(iv) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION CONTRACT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, MA 02106
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1. The Trust is an open-end investment company organized as a
Delaware business trust and is authorized to issue shares of beneficial
interest (`Shares'') in separate series (or sub-trusts) (``Funds'') which
may be divided into one or more separate classes of shares of beneficial
interest (a `Class'') as may be established and designated by the Trustees
from time to time. This Master Distribution Contract (this `Contract'')
shall pertain to the Funds and Classes designated in supplements to this
Contract (`Supplements''), as further agreed between the Trust and the
Distributor. The Trust engages in the business of investing and
reinvesting the assets of each Fund or Class, as the case may be, in the
manner and in accordance with the investment objective and restrictions
specified in the currently effective Prospectus (the `Prospectus'')
Freedom Distributor Corporation
November 29, 1996
Page 2
relating to the Trust and each Fund or Class included in the Trust's
registration statement on Form N-1A, as amended from time to time (the
`Registered Statement''), filed by the Trust under the Investment Company
Act of 1940 (the `1940 Act'') and the Securities Act of 1933 (the ``1933
Act'). Copies of the documents referred to in the preceding sentence have
been furnished to the Distributor. Any amendments to those documents shall
be furnished to the Distributor promptly. The Trust also has adopted a
Master Distribution Plan (and Supplements thereto) (the `Plan'') pursuant
to Rule 12b-1 under the 1940 Act with respect to certain Classes of certain
Funds.
2. The Distributor shall be the Trust's distributor for the unsold
portion of the Shares which may from time to time be registered under the
1933 Act and will provide (or cause to be provided) certain shareholder
services.
3. The Trust shall sell Shares to the Distributors for resale,
directly or through dealers, to the eligible investors as described in the
Prospectus. All orders through the Distributor shall be subject to
acceptance and confirmation by the Trust. The Trust shall have the right,
at its election, to deliver either Shares issued upon original issue or
treasury Shares.
4. As the Trust's distributor, the Distributor may sell and
distribute Shares of a Fund or Class in such manner not inconsistent with
the provisions hereof and the Trust's Prospectus with respect to that Fund
or Class as it may determine from time to time. In this connection, the
Distributor shall comply with all laws, rules and regulations applicable to
it, including, without limiting the generality of the foregoing, all
Freedom Distributor Corporation
November 29, 1996
Page 3
applicable rules or regulations under the 1940 Act and of any securities
association registered under the Securities Exchange Act of 1934 (the
`1934 Act'').
5. The Trust reserves the right to sell Shares to purchasers to the
extent that it or the transfer agent for its Shares receives purchase
requests therefor.
6. All Shares offered for sale and sold by the Distributor shall be
offered for sale and sold by the Distributor to designated investors at the
public offering price per Share specified and determined as provided in the
Prospectus (the `offering price''). The Trust shall determine and
promptly furnish to the Distributor a statement of the offering price at
least once on each day on which the New York Stock Exchange is open for
trading and on each additional day on which each Fund's or Class' net asset
value might be materially affected by changes in the value of its portfolio
securities. Each offering price shall become effective at the time and
shall remain in effect during the period specified in the statement. Each
such statement shall show the basis of its computation. The difference
between the offering price and net asset value (which amount shall not be
in excess of that set forth in the Prospectus) may be retained by the
Distributor, or all or any part thereof may be paid to a purchaser's
investment dealer, in accordance with the Prospectus.
7. The Distributor may provide shareholder services or, as agent for
the Trust, arrange for the provision of shareholder services be dealers,
banks or others. Such services may include providing personal services to
shareholders and maintaining shareholder accounts.
Freedom Distributor Corporation
November 29, 1996
Page 4
8. The Trust shall furnish the Distributor from time to time, for use
in connection with the sale of Shares, such written information with
respect to the Trust as the Distributor may reasonably request. In each
case such written information shall be signed by an authorized officer of
the Trust. The Trust represents and warrants that such information, when
signed by one of its officers, shall be true and correct. The Trust also
shall furnish to the Distributor copies of its reports to its shareholders
and such additional information regarding the Trust's financial condition
as the Distributor may reasonably request from time to time.
9. The Registration Statement and the Prospectus have been or will
be, as the case may be, prepared in conformity with the 1933 Act, the 1940
Act and the rules and regulations of the Securities and Exchange Commission
(the `SEC''). The Trust represents and warrants to the Distributor that
the Registration Statement and the Prospectus contain or will contain all
statements required to be stated therein accordance with the 1933 Act, the
1940 Act and the rules and regulations thereunder, that all statements of
fact contained or to be contained therein are or will be true and correct
at the time indicated or the effective date, as the case may be, and that
neither the Registration Statement nor the Prospectus, when it shall become
effective under the 1933 Act or be authorized for use, shall include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of Shares. The Trust shall from time to time
file such amendment or amendments to the Registration Statement and the
Prospectus as, in the light of future developments, shall, in the opinion
of the Trust's counsel, be necessary in order to have the Registration
Statement and the Prospectus at all times contain all material facts
required to be stated therein or necessary to make statements therein not
Freedom Distributor Corporation
November 29, 1996
Page 5
misleading to a purchaser of Shares. If the Trust shall not file such
amendment or amendments within 15 days after receipt by the Trust of a
written request from the Distributor to do so, the Distributor may, at its
option, terminate this Contract immediately. The Trust shall not file any
amendment to the Registration Statement or the Prospectus without giving
the Distributor reasonable notice thereof in advance, provided that nothing
in this Contract shall in any way limit the Trust's right to file at any
time such amendments to the Registration Statement or the Prospectus as the
Trust may deem advisable. The Trust represents and warrants to the
Distributor that any amendment to the Registration Statement or the
Prospectus filed hereafter by the Trust will, when it becomes effective
under the 1933 Act, contain all statements required to be stated therein in
accordance with the 1933 Act, the 1940 Act and the rules and regulations
thereunder, that all statements of fact contained therein will, when the
same shall become effective, be true and correct, and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of Shares.
10.The Trust shall prepare and furnish to the Distributor from time
to time such number of copies of the most recent form of the Prospectus
filed with the SEC as the Distributor may reasonably request. The Trust
authorizes the Distributor to use the Prospectus, in the form furnished to
it from time to time, in connection with the sale of Shares. The Trust
shall indemnify, defend and hold harmless the Distributor, its officers and
Trustees and any person who controls the Distributor within the meaning of
the 1933 Act, from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
Freedom Distributor Corporation
November 29, 1996
Page 6
demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers and Trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common
law or otherwise, arising out of or based upon any alleged untrue statement
of a material fact contained in the Registration Statement or the
Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either or necessary to make the
statements therein either not misleading. This Contract shall not be
construed to protect the Distributor against any liability to the Trust or
its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Contract. This indemnity agreement is
expressly conditioned upon the Trust being notified of any action brought
against the Distributor, its officers or Trustees or any such controlling
person, which notification shall be given by letter or by telegram
addressed to the Trust at its principal office and sent to the Trust by the
person against whom such action is brought within 10 days after the summons
or other first legal process shall have been served. The failure to notify
the Trust of any such action shall not relieve the Trust from any liability
which it may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission otherwise than on
account of the indemnity agreement contained in this paragraph. The Trust
shall be entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, but, in such case, the defense shall be
conducted by counsel chosen by the Trust and approved by the Distributor.
If the Trust elects to assume the defense of any such suit and retain
counsel approved by the Distributor, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by
Freedom Distributor Corporation
November 29, 1996
Page 7
any of them, but in case the Trust does not elect to assume the defense of
any such suit, or in case the Distributor does not approve of counsel
chosen by the Trust, the Trust will reimburse the Distributor, its officers
and Trustees or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained
by the Distributor or them. In addition, the Distributor shall have the
right to employ counsel to represent it, its officers and Trustees and any
such controlling person who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Distributor
against the Trust hereunder if in the reasonable judgment of the
Distributor it is advisable for the Distributor, its officers and Trustees
or such controlling person to be represented by separate counsel, in which
event the fees and expenses of such separate counsel shall be borne by the
Trust. This indemnity agreement and the Trust's representations and
warranties in this Contract shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the
Distributor, its officers and Trustees or any such controlling person.
This indemnity agreement shall inure exclusively to the benefit of the
Distributor and its successors, its officers and directors and their
respective estates and any such controlling persons and their successors
and estates. The Trust shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it in connection with
the issue and sale of any Shares.
11.The Distributor agrees to indemnify, defend and hold harmless the
Trust, its officers and Trustees and any person who controls the Trust
within the meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred
Freedom Distributor Corporation
November 29, 1996
Page 8
in connection therewith) which the Trust, its officers or Trustees or any
such controlling person, may incur under the 1933 Act, the 1940 Act, common
law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust specifically for use
in the Registration Statement or the Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading. This
indemnity agreement is expressly conditioned upon the Distributor being
notified of any action brought against the Trust, its officers or Trustees
or any such controlling person, which notification shall be given by letter
or telegram addressed to the Distributor at its principal office and sent
to the Distributor by the person against whom such action is brought,
within 10 days after the summons or other first legal process shall have
been served. The failure to notify the Distributor of any such action
shall not relieve the Distributor from any liability which it may have to
the Trust, its officers or Trustees or such controlling person by reason of
any such alleged misstatement or omission on the Distributor's part
otherwise than on account of the indemnity agreement contained in this
paragraph. The Distributor shall have a right to control the defense of
such action with counsel of its own choosing and approved by the Trust if
such action is based solely upon such alleged misstatement or omission on
the Distributor's part, and in any other event the Trust, its officers and
Trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action
at their own expense.
Freedom Distributor Corporation
November 29, 1996
Page 9
12.No Shares shall be sold to the Distributor or by the Trust under
this Contract and no orders for the purchase of Shares shall be confirmed
or accepted by the Trust if an so long as the effectiveness of the
Registration Statement shall be suspended under any of the provisions of
the 1933 Act. Nothing contained in this paragraph shall in any way
restrict, limit or have any application to or bearing upon the Trust's
obligation to redeem Shares from any shareholder in accordance with the
provisions of its Declaration of Trust. The Trust will use its best
efforts at all times to have Shares effectively registered under the 1933
Act.
13.The Trust agrees to advise the Distributor immediately:
(a) of any request by the SEC for amendments to the Registration
Statement or the Prospectus or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
Prospectus under the 1933 Act or the initiation of any proceedings for that
purpose;
(c) of the happening of any material event which makes untrue
any statement made in the Registration Statement or the Prospectus or which
requires the making of the change in either thereof in order to make the
statements therein not misleading; and
Freedom Distributor Corporation
November 29, 1996
Page 10
(d) of all action of the SEC with respect to any amendments to
the Registration Statement or the Prospectus which may from time to time be
filed with the SEC under the 1933 Act or the 1940 Act.
14.Insofar as they concern the Trust, the Trust shall comply with all
applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules or regulations made or adopted
pursuant to the 1933 Act, the 1940 Act or by any securities association
registered under the 1933 Act.
15.The Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its
obligations under this Contract, but no such appointment or employment
shall relieve the Distributor of any of its responsibilities or obligations
to the Trust under this Contract.
16.(a) The Distributor shall from time to time employ or associate
with it such persons as it believes necessary to assist it in carrying out
its obligations under this Contract.
(b) The Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under Federal or
state law.
(c) The Trust shall pay all expenses incurred in connection with
(i) the preparation, printing and distribution to shareholders of the
Prospectus and reports and other communications to shareholders, (ii)
future registrations of Shares under the 1933 Act and the 1940 Act, (iii)
amendments of the Registration Statement subsequent to the initial public
Freedom Distributor Corporation
November 29, 1996
Page 11
offering of Shares, (iv) qualification of Shares for sale in jurisdictions
designated by the Distributor, (v) qualification of the Trust as a dealer
or broker under the laws of jurisdictions designated by the Distributor,
(vi) qualification of the Trust as a foreign corporation authorized to do
business in any jurisdiction if the Distributor determines that such
qualification is necessary or desirable for the purpose of facilitating
sales of Shares, (vii) maintaining facilities for the issue and transfer of
Shares and (viii) supplying information, prices and other data to be
furnished by the Trust under this Contract.
(d) The Trust shall pay any original issue taxes or transfer
taxes applicable to the sale or delivery of Shares or certificates
therefor.
(e) The Trust shall execute all documents and furnish any
information which may be reasonably necessary in connection with the
qualification of Shares of the Trust for sale in jurisdictions designated
by the Distributor.
17.The Distributor will render all services hereunder without
compensation or reimbursement, except that the Distributor shall receive
such compensation or reimbursement in the form of (i) any reimbursement as
is provided for by a plan, (ii) such other reimbursement as is expressly
permitted under this Contract, and (iii) applicable dealer reallowances
described in the Prospectus.
18.This Contract, and any Supplement, shall become effective with
respect to a Fund or Class on the date specified in its Supplement, and
shall continue in effect until such time as there shall remain no unsold
Freedom Distributor Corporation
November 29, 1996
Page 12
balance of Shares for such Fund or Class, as the case may be, registered
under the 1933 Act, provided that this Contract shall continue in effect
with respect to such Fund or Class for a period of more than two years from
such date specified in its Supplement only so long as such continuance is
specifically approved at least annually by (a) the Trust's Board of
Trustees or by the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Fund or Class, as the case may be, and
(b) the vote, cast in person at a meeting called for the purpose of voting
on such approval, of a majority of the Trust's Trustees who are not parties
to the Contract or `interested persons'' (as defined in the 1940 Act) of
any such party. This Contract, and all of its Supplements, shall terminate
automatically in the event of assignment (as defined in the 1940 Act).
This Contract, and/or any and all Supplements, may, in any event, be
terminated at any time, without the payment of any penalty, by vote of a
majority of the Trust's Trustees who are not parties to this Contract or
`interested persons'' (as defined in the 1940 Act) and who have no direct
or indirect financial interest in the operation of this Contract or by vote
of a majority of the appropriate outstanding voting securities (as defined
in the 1940 Act) of the Fund or Class, upon 60 days' written notice to the
Distributor and by the Distributor upon 60 days' written notice to the
Trust.
19.Except to the extent necessary to perform the Distributor's
obligations under this Contract, nothing herein shall be deemed to limit or
restrict the right of the Distributor, or any affiliate of the Distributor,
or any employee of the Distributor to engage in any other business or to
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services
of any kind to any other corporation, firm, individual or association.
Freedom Distributor Corporation
November 29, 1996
Page 13
20.The Master Trust Agreement establishing the Trust, dated February
7, 1995 (the `Trust Agreement'') provides that the name ``FundManager
Trust''refers to the Trustees under the Trust Agreement collectively as
trustees and not as individuals or personally, and that no shareholder,
Trustee, officer, employee or agent of the Trust shall be subject to claims
against or obligations of the Trust to any extent whatsoever, but that the
Trust estate only shall be liable.
21.This Contract shall be construed and its provisions interpreted,
in accordance with the laws of the State of Delaware.
[Remainder of the page intentionally left blank.]
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Name: Charles B. Lipson
Title: President
Freedom Distributor Corporation
November 29, 1996
Page 14
ACCEPTED:
Freedom Distributors Corporation
By:
Name:
Title:
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof.
Very truly yours,
FUNDMANAGER TRUST
By:
Name:
Title:
ACCEPTED:
Freedom Distributor Corporation
November 29, 1996
Page 15
Freedom Distributors Corporation
By:/s/John Danello
Name:
Title:
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Aggressive Growth Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Aggressive Growth Portfolio
(the `Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Aggressive Growth Portfolio. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Growth Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth Portfolio (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth Portfolio. The term `Shares'' as
used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Growth & Income Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth & Income Portfolio
(the `Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth & Income Portfolio. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Bond Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Bond Portfolio (the `Fund'')
is a separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as Financial Adviser Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Bond Portfolio. The term `Shares'' as
used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Managed Total Return Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Managed Total Return
Portfolio (the `Fund'') is a separate series of the Trust with a class
(`Class'') of shares of beneficial interest designated as Financial
Adviser Class shares (`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Managed Total Return Portfolio. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Aggressive Growth Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Aggressive Growth Portfolio
(the `Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Aggressive Growth Portfolio. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Growth Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth Portfolio (the
`Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth Portfolio. The term `Shares'' as
used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Growth & Income Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Growth & Income Portfolio
(the `Fund'') is a separate series of the Trust with a class (``Class'') of
shares of beneficial interest designated as No-Load Class shares
(`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
Freedom Distributors Corporation
November 29, 1996
Page 2
has agreed to be the distributor of the shares of beneficial interest of
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth & Income Portfolio. The term
`Shares'' as used in the Contract shall, for the purposes of this
Supplement pertain to the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
Freedom Distributors Corporation
November 29, 1996
Page 2
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
Freedom Distributors Corporation
November 29, 1996
Page 2
By:
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
Freedom Distributors Corporation
November 29, 1996
Page 2
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Trust
One Beacon Street
Boston, Massachusetts 02108
November 29, 1996
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Bond Portfolio
Dear Sirs:
This will confirm the agreement between the undersigned (the
`Trust'') and you (the ``Distributor'') as follows:
1.The Trust is an open-end management investment company organized as
a Delaware business trust which consists of separate series (or sub-trusts)
of shares of beneficial interest which may be divided into one or more
classes of shares of beneficial interest as may be established and
designated by the Trustees from time to time. Bond Portfolio (the `Fund'')
is a separate series of the Trust with a class (`Class'') of shares of
beneficial interest designated as No-Load Class shares (`Shares'').
2.The Trust and the Distributor have entered into a Master
Distribution Contract (the `Contract'') pursuant to which the Distributor
has agreed to be the distributor of the shares of beneficial interest of
Freedom Distributors Corporation
November 29, 1996
Page 2
such series and classes as shall be designated from time to time by the
Trustees of the Trust in any Supplement to the Contract.
3.As provided in paragraph 1 of the Contract, the Trust hereby adopts
the Contract with respect to the Fund's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Fund, the
terms and conditions of such Contract being hereby incorporated herein by
reference. All terms defined in the Contract and not defined in this
Supplement shall have the same meaning herein as therein.
4.The term ``Fund'' as used in the Contract shall, for purposes of
this Supplement, pertain to the Bond Portfolio. The term `Shares'' as
used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Fund.
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
Freedom Distributors Corporation
November 29, 1996
Page 2
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Very truly yours,
FUNDMANAGER TRUST
By:/s/Charles B. Lipson
Accepted:
Freedom Distributors Corporation
By:
Freedom Distributors Corporation
November 29, 1996
Page 2
5.This Supplement and the Contract shall become effective with
respect to the Trust and the Shares of the Fund on November 29, 1996 and
shall continue in effect until such time as there shall remain no unsold
balance of Shares registered under the 1933 Act, provided that the Contract
and this Supplement shall continue in effect with respect to the Shares of
the Fund for a period of more than two years from the effective date of
this Supplement only so long as such continuance is specifically approved
at least annually by (a) the Trust's Board of Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class, and (b) the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trust's Trustees
who are not parties to the Contract or `interested persons'' (as defined
in the 1940 Act) of any such party. The Contract and this Supplement shall
terminate automatically in the event of assignment (as defined in the 1940
Act). The Contract and this Supplement may, in any event, be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Trust's Trustees who are not parties to this Contract or `interested
persons''(as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of this Contract or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of the Class upon 60 days' written notice to the Distributor and by the
Distributor upon 60 days' written notice to the Trust.
If the foregoing correctly set forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the
Trust the enclosed copy hereof
Freedom Distributors Corporation
November 29, 1996
Page 2
Very truly yours,
FUNDMANAGER TRUST
By:
Accepted:
Freedom Distributors Corporation
By:/s/John Danello
Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
CUSTODIAN AGREEMENT
BETWEEN
FundManager Trust
AND
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
Page
1. Bank Appointed Custodian ........... 1
2. Definitions......................... 1
2.1 Authorized Person............. 1
2.2 Security...................... 1
2.3 Portfolio Security............ 1
2.4 Officers' Certificate......... 1
2.5 Book-Entry System............. 1
2.6 Depository.................... 1
2.7 Proper Instructions........... 2
3. Separate Accounts................... 2
4. Certification as to Authorized Persons 2
5. Custody of Cash..................... 2
5.1 Purchase of Securities........ 3
5.2 Redemptions................... 3
5.3 Distributions and Express of Fund 3
5.4 Payment in Respect of Securities 3
5.5 Repayment of Loans............ 3
5.6 Repayment of Cash............. 3
5.7 Foreign Exchange Transactions. 3
5.8 Other Authorized Payments..... 3
5.9 Termination................... 4
6. Securities.......................... 4
6.1 Segregation and Registration.. 4
6.2 Voting and Proxies............ 4
6.3 Book-Entry System............. 4
6.4 Use of a Depository........... 5
6.5 Use of Book-Entry System for Commercial Paper 6
6.6 Use of immobilization Programs 7
6.7 Eurodollar CDs................ 7
6.8 Options and Futures Transactions 7
(a) Puts and Calls Traded on Securities Exchanges,
NASDAQ or Over-the-Counter. 7
(b) Puts, Calls, and Futures Traded
on Commodities Exchanges 8
6.9 Segregated Account......... 8
6.10 Interest Bearing Call or Time Deposits 9
6.11 Transfer of Securities...... 9
7. Redemptions........................ 11
8. Merger, Dissolution, etc. of Fund.. 11
9. Actions of Bank Without Prior Authorization 11
10. Collections and Defaults........... 12
11. Maintenance of Records and Accounting Services 12
12. Fund Evaluation.................... 12
13. Concerning the Bank................ 13
13.1 Performance of Duties,
Standard of Care....... 13
13.2 Agents and Subcustodians with Respect to Property
of the Fund Held in the United States 14
13.3 Duties of the Bank with Respect to Property
Held Outside of the United States 14
13.4 Insurance.................... 17
13.5 Fees and Expenses of Bank.... 17
13.6 Advances by Bank............. 17
14. Termination........................ 17
15. Confidentiality.................... 18
16. Notices............................ 18
17. Amendments......................... 18
18. Parties............................ 19
19. Governing Law...................... 19
20. Counterparts....................... 19
CUSTODIAN AGREEMENT
AGREEMENT made as of the 5th day of November., 1996, between
FundMangaer Trust a corporation (the `Fund'') and INVESTORS BANK & TRUST
COMPANY (the `Bank'').
The Fund, an open-end management investment company, desires to place
and maintain all of its portfolio securities and cash in the custody of the
Bank. The Bank has at least the minimum qualifications required by Section
17(f)(1) of the Investment Act of 1940 (the `1940 Act'') to act as
custodian of the portfolio securities and cash of the Fund, and has
indicated its willingness to so act, subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
custodian of the Fund's portfolio securities and cash delivered to the Bank
as hereinafter described and the Bank agrees to act as such upon the terms
and conditions hereinafter set forth.
2. Definitions. Whenever used herein, the terms listed below will
have the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the
persons duly authorized to give Proper Instructions or otherwise act of
behalf of the Fund by appropriate resolution of its Board of Directors of
the Board of Trustees (`the Board''), and set forth in a certificate as
required by Section 4 hereof.
2.2 Security. The term security as used herein will have the
same meaning as when such term is used in the Securities Act of 1933, as
amended, including, without limitation, any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit sharing agreement, collateral-trust
certificate, preorganization certificate or subscription, transferable
share, investment contract, voting-trust certificate, certificate of
deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or privilege on any
security, certificate of deposit, or group or index of securities
(including any interests therein or based on the value thereof), or any
put, call, straddle, option, or privilege entered into on a national
securities exchange relating to a foreign currency, or, in general, any
interest or instrument commonly known as a `security'', or any certificate
of interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to, or option
contract to purchase or sell any of the foregoing, and futures, forward
contracts and options thereon.
2.3 Portfolio Security. Portfolio Security will mean any security
owned by the Fund.
2.4 Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification
in writing signed by any two Authorized Persons of the Fund.
2.5 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank,
its successor or successors and its nominee or nominees.
2.6 Depository. Depository shall mean The Depository Trust Company
(`DTC''), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934
(`Exchange Act''), its successor or successors and its nominee or
nominees. The term `Depository'' shall further mean and include any other
person authorized to act as a depository under the 1940 Act, its successor
or successors and its nominee or nominees, specifically identified in a
certified copy of a resolution of the Board.
2.7 Proper Instructions. Proper Instructions shall mean (i)
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized
Person as shall have been designated in an Officers' Certificate, such
instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time. and (ii) instructions (which may be
continuing instructions) regarding other matters singed or initialed by
such two or more persons from time to time designated in an officers'
Certificate as having been authorized by the Board. Oral instructions will
be considered Proper Instructions if the Bank reasonably believes them to
have been given by a person authorized to give such instructions with
respect to the transaction involved. the Fund shall cause all oral
instructions to be promptly confirmed in writing. The Bank shall act upon
and comply with any subsequent Proper Instruction which modifies a prior
instruction and the sole obligation of the Bank with respect to any follow-
up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such
confirmation and to report such discrepancy to the Fund. The Fund shall be
responsible, at the Fund's expense, for taking any action, including any
reprocessing, necessary to correct any such discrepancy or error, and to
the extent such action requires the Bank to act the Fund shall give the
Bank specific Proper Instructions as to the action required. Upon receipt
of an Officers' Certificate as to the authorization by the Board
accompanied by a detailed description of procedures approved by the Fund,
Proper instructions may include communication effected directly between
electro-mechanical or electronic devices provided that the Board and the
Bank are satisfied that such procedures afford adequate safeguards for the
Fund's assets.
3. Separate Accounts. If the Fund has more than one series or
portfolio, the Bank will segregate the assets of each series or portfolio
to which this Agreement relates into a separate account for each such
series or portfolio containing the assets of such series or portfolio (and
all investment earnings thereon).
4. Certification as to Authorized Persons. The Secretary or
Assistance Secretary of the Fund will at all times maintain on file with
the Bank his or her certification to the Bank, in such form as may be
acceptable to the Bank, of (I) the names and signatures of the Authorized
Persons and (ii) the names of the Board, it being understood that upon the
occurrence of any change in the information set forth in the most recent
certification on file (including without limitation any person named in the
most recent certification who is no longer an Authorized Person as
designated therein), the Secretary or Assistant Secretary of the Fund, will
sign a new or amended certification setting forth the change and the new,
additional or omitted names or signatures. The Bank will be entitled to
rely and act upon any officers' Certificate given to it by the fund which
has been signed by Authorized Persons named in the most recent
certification.
5. Custody of Cash. As custodian for the Fund, the Bank will open
and maintain a separate account or accounts in the name of the Fund or in
the name of the Bank, as Custodian of the Fund, and will deposit to the
account of the Fund all of the cash of the Fund, except for cash held by a
subcustodian appointed pursuant to Section 13.2 hereof, including borrowed
funds, delivered to the Bank, subject only to draft or order by the Bank
acting pursuant to the terms of this Agreement. Upon receipt by the Bank
of Proper Instruction (which may be continuing instructions) or in the case
of payments for redemptions and repurchases of outstanding shares of common
stock of the Fund, notification from the fund's transfer agent as provided
in Section 7, requesting such payment, designating the payee or the account
or accounts to which the Bank will release funds for deposit, and stating
that it is for a purpose permitted under the terms of the Section 5,
specifying the applicable subsection, the Bank will make payments of cash
held for the accounts of the Fund, insofar as funds are available for that
purpose, only as permitted in subsection 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for
the Fund, against contemporaneous receipt of such securities by the Bank
or, against delivery of such securities to the Bank in accordance with
generally accepted settlement practices and customs in the jurisdiction or
market in which the transaction occurs, registered in the name of the Fund
or in the name of, properly endorsed and in form for transfer to, the Bank,
or a nominee of the Bank, or receipt for the account of the Bank pursuant
to the provision of Section 6 below, each such payment to be made at the
purchase of the securities received by the Bank before such payment is
made, as confirmed in the Proper Instructions received by the Bank before
such payment is made.
5.2 Redemptions. In such amount as may be necessary for the
repurchase or redemption of common shares of the Fund offered for
repurchase or redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Fund. For the payment on the
account of the Fund of dividends or other distributions to shareholders as
may from time to time be declared by the Board, interest, taxes,
management or supervisory fees, distribution fees, fees of the Bank for its
services hereunder and reimbursement of the expense and liabilities of the
Bank as provided hereunder, fees of any transfer agent, fees for legal,
accounting, and auditing services, or other operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payment in connection
with the conversion, exchange or surrender of Portfolio Securities or
securities subscribed to by the Fund held by or to be delivered to the
Bank.
5.5 Repayment of Loans. To repay loans of money made to the
Fund, but, in the case of final payment, only upon redelivery to the Bank
of any Portfolio Securities pledge or hypothecated therefor and upon
surrender of documents evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund
for the purpose of collateralizing the obligation to return to the Fund
certificates borrowed from the Fund Representing Portfolio Securities, but
only upon redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions. For payments in connection
with foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery which may be entered into by the
Bank on behalf of the Fund upon the receipt of Proper Instructions, such
Proper Instructions to specify the currency broker or banking institution
(which may be the Bank, or any other subcustodian or agent hereunder,
acting as principal) with which the contract or option is made, and the
Bank shall have no duty with respect to the selection of such currency
brokers or banking institutions with which the Fund deals or for their
failure to comply with the terms of any contract or option.
5.8 Other Authorized Payments. For other authorized
transactions of the Fund, or other obligations of the Fund incurred for
proper Fund purposes; provided that before making any such Person (other
than the Person certifying such resolution) and certified by its Secretary
or Assistant Secretary, naming the person or persons to whom such payment
is to be made, and either describing the transaction for which payment is
to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made,
setting forth the purpose for which such obligation was incurred and
declaring such purpose to be a proper corporate purpose.
5.9 Termination: upon the termination of this Agreement as
hereinafter set forth pursuant to Section 8 and Section 14 of this
Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided
herein, and except for securities to be delivered to any subcustodian
appointed pursuant to Section 13.2 hereof, the Bank as custodian, will
receive and hold pursuant to the provisions hereof, in a separate account
or accounts and physically segregated at all times from those to other
persons, and all Portfolio Securities which may now or hereafter be
delivered to it by or for the account of the Fund. All such Portfolio
Securities will be held or disposed of by the Bank for, and subject at all
times to, the instructions of the Fund pursuant to the terms of this
Agreement. Subject to the specific provisions herein relating to Portfolio
Securities that are not physically held by the Bank, the Bank will register
all Portfolio Securities (unless otherwise directed by Proper Instructions
or an Officers' Certificate), in the name of a registered nominee of the
Bank as defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, and will execute and deliver all
such certificates in connection therewith as may be required by such laws
or regulations or under the laws of any state.
The Fund will from time to time furnish to the Bank appropriate instruments
to enable it to hold or deliver in proper form for transfer, or to register
in the name of its registered nominee, any Portfolio Securities which may
from time to time be registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the
Bank will vote any of the Portfolio Securities held hereunder, except in
accordance with Proper instructions or an Officers' Certificate. The Bank
will execute and deliver, or cause to be executed and delivered, to the
Fund all notices, proxies and prosy soliciting materials will respect to
such Securities, such proxies to be executed by the registered holder of
such Securities (if registered otherwise than in the name of the Fund), but
without indicating the manner in which such proxies are to be voted.
6.3 Book-Entry System. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits
of Funds assets in the Book-Entry System, and (ii) for any subsequent
changes to such arrangements following such approval, the Board has
reviewed and approved the arrangement and has not delivered an Officer's
Certificate to the Bank indicating that the Board has withdrawn its
approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry
System provided that such Portfolio Securities are represented in an
account (`Account'') of the Bank (or its agent) in such System which shall
not be include any assets of the Bank (or such agent) other than assets
held as a fiduciary, custodian, or otherwise for customers;
(b) The record of the Bank (and any such agent) with respect
to the Fund's participation in the Book-Entry System through the Bank (or
any such agent) will identify by book entry Portfolio Securities which are
included with other securities deposited in the Account and shall at all
times during the regular business hours of the Bank (or such agent) be open
for inspection by duly account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a quantity of securities in
fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal
Reserve Bank;
(c) The Bank (or its agent) shall pay for securities
purchased for the account of the Fund or shall pay cash collateral against
the return of Portfolio Securities loaned by Fund upon (i) receipt of
advice from the Book-Entry System that such Securities have been
transferred to the Account, and (ii) the making of an entry on the records
of the Bank (or its agent) to reflect such payment and transfer for the
account of the Fund. The Bank (or its agent) shall transfer securities
sold or loaned for the account of the Fund upon
(i) receipt of advice from the book-Entry System that
payment for securities sold or payment of the initial cash collateral
against the delivery of securities loaned by the Fund has been transferred
to the Account; and
(ii) the making of an entry on the records of the Bank (or
its agent) to reflect such transfer and payment for the account of the
Fund. Copies of all advises from the Book-Entry System of transfer of
securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Bank and shall be provided to the fund at
its request. The Bank shall send the Fund a confirmation, as defined by
Rule 17f-4 of the 1940 Act, of any transfer to or from the account of the
Fund;
(d) The Bank will promptly provide the Fund with any report
obtained by the Bank or its agent on the Book-Entry System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Book-Entry System. The Bank will provide the
Fund and cause any such agent to provide, at such times as the fund may
reasonably require, with procedures for safeguarding securities, including
Securities deposited in the Book-Entry System, relating to the services
provided by the Bank or such agent under the Agreement;
(e) The Bank shall be liable to the Fund for any loss or
damage to the Fund resulting from use of the Book-entry System by reason of
any gross negligence, willful misfeasance or bad faith of the Bank or any
of its agents to of any of its or their employees or from any reckless have
against the Book-Entry System; at the election of the Fund, it shall be
entitled to be surrogated for the Bank in any claim against the Book-Entry
System or any other person which the Bank or its agent may have as a
consequence of any loss of damage if and to the extent that the Fund has
not been made whole for any loss or damage;
6.4 Use of a Depository. Provided (i) the Bank has received a
certified copy of a resolution of the board specifically approving deposits
in DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved
the arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive,
exchange, release, lend, deliver and otherwise deal with Portfolio
Securities including stock dividends, rights and other items of like
nature, and to receive and remit to the Bank on behalf of the Fund all
income and other payments thereon and to take all steps necessary and
proper in connection with the collection thereof;
(b) Registration of Portfolio Securities may be made in the
name of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made
through the clearing medium employed by such Depository for transactions of
participants acting through it. Upon any purchase of Portfolio Securities,
payment will be made only delivery of the securities to or for the amount
of the Fund and the Bank shall pay cash collateral from the account of the
Fund against the return of Portfolio Securities loaned by the Fund only
upon delivery of the Securities to or for the account of the Fund; and upon
any sale of Portfolio Securities, delivery of the Securities will be made
only against payment thereof or, in the event Portfolio Securities are
loaned, delivery of Securities will be made only against receipt of the
initial cash collateral to or for the account of the Fund; and
(d) The Bank shall be subject to the same liability and duty
to the Fund and its shareholders with respect to all securities of the
Fund, and all cash, stock dividends, rights and items of like nature to
which the Fund is entitled, held or received by a central securities system
as a agent for the Bank, pursuant to the foregoing authorization, as if the
same were held or received by the Bank at its own offices. In this
connection, with respect to the use of the Depository by the Bank but
without limiting the foregoing duty or liability, the Bank, without cost to
the Fund, shall ensure that:
(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to
the Bank upon its request;
(ii) Any proxy materials received by a Depository with
respect to Portfolio Securities deposited with such Depository are
forwarded immediately to the Bank for prompt transmittal to the Fund;
(iii) Such Depository immediately forwards to the Bank
confirmation of any purchases or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to the Fund's account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and
duties hereunder as may be necessary for the Fund to comply with the
recordkeeping requirements of Section 31 (a) of the 1940 Act and Rule 31(a)
thereunder; and
(v) Such Depository delivers to the Bank and the Fund all
internal accounting control reports, whether or not audited by an
independent public accountant, as well as such other reports as the Fund
may reasonably request in order to verify the Portfolio Securities held by
such Depository.
6.5 Use of Book-Entry System for Commercial Paper. Provided (i)
the Bank has received a certified copy of a resolution of the Board
specifically approving participation in a system maintained by the bank for
holding of commercial paper in book-entry form (`Book-Entry Paper'') and
(ii) for each year following such approval the Board has received and
approved the arrangements, upon receipt of Proper Instructions and upon
receipt of confirmation from an Issuer (as defined below) that the Fund has
purchased such Issuer's Book-entry Paper, the Bank shall issue and hold in
book-entry form, on behalf of the Fund, commercial paper issued by issuers
with whom the Bank has entered into a book-entry agreement (the
`Issuers''). In maintaining its Book-entry Paper System, the Bank agrees
that:
(a) the Bank will maintain all Book-Entry Paper held by the
Fund in an account of the Bank that includes only assets held by it for
customers;
(b) the records of the Bank will respect to the Fund's
purchase of Book-entry Paper through the Bank will identify, by book-entry,
Commercial Paper belonging to the Fund which is included in the Book-entry
Paper System and shall at all time during the regular business hours of the
Bank be open for inspection by duly authorized officers, employees or
agents of the Fund;
(c) the Bank shall pay for Book-Entry Paper purchased for
the account of the Fund upon contemporaneous (i) receipt of advise from the
Issuer that such sale of Book-Entry Paper has been effected, and (ii) the
making of an entry on the records of the Bank to reflect such payment and
transfer for the account of the Fund;
(d) the Bank shall cancel such Book-entry Paper obligation
upon the maturity thereof upon contemporaneous (i) receipt of advice that
payment for such Book-Entry Paper has been transferred to the Fund, and
(ii) the making of an entry on the records of the Bank to reflect such
payment for the account of the Fund;
(e) the Bank shall transmit to the Fund a transaction
journal confirming each transaction in Book-Entry Paper for the account of
the Fund on the next business day following the transaction; and
(f) the Bank will send to the Fund such reports on its
system of internal accounting control with respect to the Book-Entry Paper
System as the Fund may reasonably request from time to time.
6.6 Use of Immobilization Programs. Provided (i) the bank has
received a certified copy of a resolution of the Board specifically
approving the maintenance of Portfolio Securities in an immobilization
program operated by a bank which meets the requirements of the 1940 Act,
and (ii) for each year following such approval the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Board has withdrawn its approval, the Bank
shall enter into such immobilization program with such bank acting as a
subcustodian hereunder.
6.7 Eurodollar Cds. Any Portfolio Securities which are Eurodollar
Cds may be physically held by the European branch of the U.S. banking
institution that is the issuer of such Eurodollar CD (a `European
Branch'), provided that such Securities are identified on the books of the
Bank as belonging to the Fund and that the books of the Bank identify the
European Branch holding such Securities. Notwithstanding any other
provision of this Agreement to the contrary, except as stated in the first
sentence of this subsection 6.7, the Bank shall be under no other duty with
respect to such Eurodollar Cds belonging to the Fund, and shall have not
liability to the Fund or its shareholders with respect to the actions,
inactions, whether negligent or otherwise of such European Branch in
connection with such Eurodollar Cds, except for any loss or damage to the
Fund resulting from the Bank's own gross negligence, willful misfeasance or
bad faith in the performance of its duties hereunder.
6.8 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
1. Upon receipt of Proper Instructions the Bank shall take
action as to put options (`puts'') and call options (``calls'') purchased
or sold (written) by the Fund regarding escrow or other arrangements (i) in
accordance with the provision of any agreement entered into between the
Bank, any broker-dealer registered under the Exchange Act and a member of
the National Association of Securities Dealers, Inc. (the `NASD''), and,
if necessary, the Fund relating to the compliance with the rules of the
Options Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations.
2. Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has deposited or
is maintaining adequate margin, if required, with any broker in connection
with any option, nor shall the Bank be under duty or obligation to present
such option to the broker for exercise unless it receives Proper
Instructions form the Fund. The Bank shall have no responsibility for the
legality of any put or call purchased or sold on behalf of the Fund, the
propriety of any such purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited to or
withdrawn from a Segregated Account (as defined in subsection 6.9 below).
The Bank specifically, but not by way of limitation, shall not be under any
duty or obligation to: (i) periodically check or notify the Fund that the
amount of such collateral held by a broker or held in a Segregated Account
is sufficient to protect such broker of the Fund against any loss; (ii)
effect the return of any collateral delivered to a broker; or (iii) advise
the Fund that any option it holds, has or is about to expire. Such duties
or obligations shall be the sold responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
1. Upon receipt of Proper Instructions, the Bank shall take
action as to puts, calls and futures contracts (`Futures'') purchased or
sold the Fund in accordance with the provisions of any agreement among the
Fund, the Bank and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market, or similar
organization or organizations, regarding account deposits in connection
with transactions by the Fund.
2. The responsibilities and liabilities of the Bank as to
futures, puts and calls traded on commodities exchanges, any Futures
Commission Merchant account and the Segregated Account shall be limited as
set forth in subparagraph 9a)(2) of this Section 6.8 as if such
subparagraph referred to Futures Commission Merchants rather than brokers,
and Futures and puts and calls thereon instead of options.
6.9 Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for
and on behalf of the Fund, into which Account or Accounts may be
transferred upon receipt of Proper Instructions cash and/or Portfolio
Securities:
(a) in accordance with the provisions of any agreement among
the Fund, the Bank and a broker-dealer registered under the Exchange Act
and a member of the NASD or any Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange or the Commodity Futures Trading Commission or any registered
Contract Market, or of any similar organizations regarding escrow of other
arrangements in connection with transactions by the Fund;
(b) for the purpose of segregating cash or securities in
connection with options purchased or written by the Fun or commodity
futures purchased or written by the Fund,
(c) for the deposit of liquid assets, such as cash, U.S.
Government securities or other high grade debt obligations, having a market
value (marked to market on a daily basis) at all times equal to not less
than the aggregate purchase price due on the settlement dates of all the
Fund's then outstanding forward commitment or `when-issued'' agreements
relating to the purchase of Portfolio Securities and all the Fund's then
outstanding commitments under reverse repurchase agreements entered into
with broker-dealer firms;
(d) for the deposit of any Portfolio Securities which the
Fund has agreed to sell on a forward commitment basis, and;
(e) for other proper corporate purposes, but only in the
case of this clause (f), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board, or of the
Executive Committee signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, setting forth the purpose or purposes
of such Segregated Account and declaring such purposes to be proper
corporate purpose.
(f) Segregated accounts established and maintained hereunder
shall comply with the procedures required by Investment Company Act,
including Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
Segregated Accounts by registered investment companies;
(g) Assets may be withdrawn from the Segregated Account
pursuant to Proper Instructions only
(i) in accordance with the provisions of any agreements
referenced in (a) or (b) above;
(ii) for sale or delivery to meet the Fund's obligations
under outstanding firm commitment or when-issued agreements for the
purchase of Portfolio Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding forward
commitment or when-issued agreements for the purchase of portfolio
securities or reverse repurchase agreements are sold to other parties or
the Fund's obligations thereunder are not met from assets of the Fund other
than those in the Segregated Account; or
(v) for delivery upon settlement of a forward commitment
agreement for the sale of Portfolio Securities.
6.10 Interest Bearing Call or Time Deposits. The Bank shall,
upon receipt of Proper Instructions relating to the purchase by the Fund of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated
in such Proper Instructions. The Bank shall include in its records with
respect to the assets of the Fund appropriate notation as to the amount of
each such deposit, the banking institution with which such deposit is made
(the `Deposit Bank'') , and shall retain such forms of advice or receipt
evidencing the deposit, if any, as may be forwarded to the Bank by the
Deposit Bank. Such deposits shall be deemed Portfolio Securities of the
Fund and the responsibility in respect of other Portfolio Securities of the
Fund.
6.11 Transfer of Securities. The Bank will transfer, exchange,
deliver or release Portfolio Securities held by it hereunder, insofar as
such Securities are available for such purpose, provided that before making
any transfer, exchange, deliver or release under this Section the Bank will
receive Proper Instructions requesting such transfer, exchange or delivery
stating that it is for a purpose permitted under the terms of this Section
6.11, specifying the applicable subsection, or describing the purpose of
the transaction with sufficient particularity to permit the Bank to
ascertain the applicable subsection, only
(a) upon sales of Portfolio Securities for the account of
the Fund, against contemporaneous receipt by the Bank of payment therefor
in full, against payment to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs, each such payment to be in the amount of the sale price
shown in a broker's confirmation of sale of the Portfolio Securities
received by the Bank before such payment is made, as confirmed in the
Proper Instructions received by the Bank before such payment is made;
(b) in exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of
subscription, purchase or sale or other similar rights represented by such
Portfolio Securities, or for the purpose of tendering shares in the event
of a tender offer therefor, provided however that in the event of an offer
of exchange, tender offer, or other exercise of rights requiring the
physical tender or delivery of Portfolio Securities, the Bank shall have no
liability for failure to so tender in a timely manner unless such Proper
Instructions are received by the Bank at least two business days prior to
the date required for tender, and unless the Bank (or its agent or
subcustodian hereunder) has actual possession of such Security at least two
business days prior to the date of tender;
(c) upon conversion of Portfolio Securities pursuant to
their terms into other securities;
(d) for the purpose of redeeming in kind shares of the Fund
upon authorization from the Fund;
(e) in the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
(f) when such Portfolio Securities are called, redeemed or
retired or other wise become payable;
(g) for the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to the
Fund by any bank, including the Bank; provided, however, that such
Portfolio Securities will be released only upon payment to the Bank for the
account of borrowing already made, and such fact is made to appear in the
Proper Instructions, further Portfolio Securities may be released for that
purpose without any such payment. In the event that any such ledge
Portfolio Securities are held by the Bank, they will be so held for the
account of the lender, and after notice to the Fund from the lender in
accordance with the normal procedures of the lender, that an event of
deficiency or default on the loan has occurred, the Bank may deliver such
pledged Portfolio Securities to or for the account of the lender;
(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of the
fair market value of such security, as set forth in the Proper Instructions
received by the Bank before such payment is made;
(i) for the purpose of delivery portfolio securities lent by
the Fund to a bank or broker dealer, but only against receipt in accordance
with street delivery custom as set forth in Proper Instructions and subject
to as may be otherwise provided herein, of adequate collateral as agreed
upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such
portfolio securities entered into by the Fund;
(j) for other authorized transactions of the Fund or for
other proper corporate purposes; provided that before making such transfer,
the Bank will also receive a certified copy of resolutions of the Board,
signed by an authorized officer of the Fund (other than the officer
certifying such resolution) and certified by its Secretary or Assistant
Secretary, specifying the Portfolio Securities to be delivered, setting
forth the transaction in or purpose for which such delivery is to be made,
declaring such transaction to be an authorized transaction of the Fund or
such purpose to be a proper corporate purpose, and naming the person or
persons to whom delivery of such portfolio securities shall be made; and
(k) upon termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 14 of this Agreement.
As to any deliveries made by the Bank pursuant to subsection (a), (b), (c),
(e), (f), (g), (h) and (i)
securities or cash receivable in exchange therefore shall be delivered to
the bank.
7. Redemptions. In the case of payment of assets of the Fund held
by the Bank in connection with redemption and repurchases by the Fund of
its outstanding common shares, the Bank will rely on notification by the
Fund's transfer agent of receipt of a request for redemption and
certificates, if issued, in proper form for redemption before such payment
is made. Payment shall be made in accordance with the Articles and By-laws
of the Fund, from assets available for said purpose.
8. Merger. Dissolution. etc. of Fund. In the case of the
following transactions, not in the ordinary course of business, namely, the
merger of the Fund into or the consolidation of the Fund with another
investment company where the Fund is not the surviving entity, the sale by
the Fund of all, or substantially all, of its assets to another investment
company, or the liquidation or desolation of the Fund and distribution of
its assets, the Bank will deliver the Portfolio Securities held by it under
this Agreement and disburse cash only upon the order of the Fund set forth
in an Officers' Certificate, accompanied by a certified copy of a
resolution of the Board authorizing any of the foregoing transactions.
Upon completion of such delivery and disbursement and the payment of the
fees, disbursements and expenses of the Bank, this Agreement will
terminate.
9. Actions of Bank Without Prior Authorization. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an
Officers' Certificate to the contrary, it will without prior authorization
on instruction of the Fund or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in
the name of the Fund all checks, drafts, or other negotiable or
transferable instruments or other orders for the payment of money received
by it for the account of the Fund and hold for the account of the Fund all
income, dividends, interest and other payments or distribution of cash with
respect to the Portfolio Securities held thereunder;
9.2 Present for payment all coupons and other income items
held by it for the account of the Fund which call for payment upon
presentation and hold the cash received by it upon such payment for the
account of the Fund;
9.3 Receive and hold for the account of the Fund all
securities received as a distribution on Portfolio Securities as a result
of a stock dividend, share split-up, reorganization, recapitalization,
merger, consolidation, readjustment, distribution of rights and similar
securities issued with respect to any Portfolio Securities held by it
hereunder.
9.4 Execute as agent on behalf of the Fund all necessary
ownership and other certificates and affidavits required by the Internal
Revenue Code or the regulations of the Treasury Department issued
thereunder, or by the laws of any state, now or hereafter in effect,
inserting the Fund's name on such certificates as the owner of the
securities covered thereby, to the extent it may lawfully do so and as may
be required to obtain payment is respect thereof The Bank will execute and
deliver such certificates in connection with Portfolio Securities delivered
to it or by it under this Agreement as may be required under the provisions
of the Internal Revenue Code and any Regulations of the Treasury Department
issued thereunder, or under the laws of any state;
9.5 Present for payment all Portfolio Securities which are
called, redeemed, retired or otherwise become payable, and hold cash
received by it upon payment for the account of the Fund; and
10. Collections and Defaults. The Bank will use all reasonable
efforts to collect any funds which may to its knowledge become collectible
arising from Portfolio Securities, including dividends, interest and other
income, and to transmit to the Fund notice actually received by it of any
call for redemption, offer of exchange, right of subscription,
reorganization or other proceedings affecting such after due demand or
presentation, the Bank will notify the Fund in writing of any default or
payment is refused after due demand or presentation, the Bank will notify
the Fund in writing of any default or refusal. In additions, the Bank will
send the Fund a written report once each month showing any income on any
Portfolio Security held by it which is more than ten days overdue on the
date of such report and which has not previously been reported.
11. Maintenance of Records and Accounting Services. The Bank will
maintain records with respect to transactions for which the Bank is
responsible pursuant to the terms and conditions of this Agreement, and in
compliance with the applicable rules and regulations of the 1940 Act and
will furnish every month, and at the close of each quarter of the Fund's
fiscal year, a list of the Portfolio Securities and its actions under this
Agreement and reports by the Bank or its independent accountants concerning
its accounting system, procedures for safeguarding securities and internal
accounting controls will be open to inspection and audit at reasonable
times by officers of or auditors employed by the Fund and will be preserved
by the Bank in the manner and in accordance with the applicable rules and
regulations under the 1940 Act.
The Bank shall keep the books of account and render statements or copies
from to time as reasonably requested by the Treasurer or any executives
officer of the Fund.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters
of like nature.
12. Fund Evaluation. The Bank shall compute and, unless
otherwise directed by the Board, determine as of the close of business on
the New York Stock Exchange on each day on which said Exchange is open for
unrestricted trading and as of such other hours, if any, as may be
authorized by the Board the net asset value and the public offering price
of a share of capital stock of the Fund, such determination to be made in
accordance with the provisions of the Articles and By-laws of the Fund and
prospectus and Statement of Additional Information relating to the Fund, as
they may from time to time be amended, and any applicable resolutions of
the Board at the time in force and applicable; and promptly to notify the
Fund, the proper exchange and the NASD or such other persons as the Fund
may request of the results of such computation and determination. The Bank
shall use reasonable care in computing the net asset value hereunder, and
the Bank shall be liable and shall hold the fund harmless for any losses to
the Fund occasioned by the Bank's own gross negligence in the performance
of its duties under this paragraph, provided however that the Bank may rely
in good faith upon information furnished to it by any authorized Person in
respect of (i) the manner of accrual of the liabilities of the Fund and in
respect of liabilities of the Fund not appearing on its books of account
kept by the Bank, (ii) reserves, if any, authorized by the Board of
Directors or that no such reserves have been authorized, (iii) the source
of the quotations to be used in computing the net asset value, (iv) the
value to be assigned to any security for which no price quotation are
available, and (v) the method of computation of the public offering price
on the basis of the net asset value of the shares, and the Bank shall not
be responsible for any loss occasioned by such reliance or for any good
faith reliance on any source pursuant to (iii) above, provided the Bank has
timely supplied the Fund with such variance reports as are specifically set
forth on Schedule B annexed hereto.
13. Concerning the Bank.
13.1 Performance of Duties and Standard of Care. In
performing its duties hereunder and any other duties listed on any Schedule
hereto, if any, the Bank will be entitled to receive and act upon the
advice of independent counsel of its own selection, which may be counsel
for the Fund, and will be without liability for any action taken or thing
done or omitted to be done in accordance with this Agreement in good faith
in conformity with such advice. Except as otherwise expressly provided in
Section 12, in the performance of its duties hereunder, the Bank will be
protected and not liable, and will be indemnified and held harmless for any
action taken or omitted to be taken by it in good faith reliance upon the
terms of this Agreement, any Officers' Certificate, Proper Instructions,
resolution of the Board, telegram, notice, request, certificate or other
instrument reasonably believed by the Bank to be genuine and for any other
loss to the Fund except in the case of its gross negligence, willful
misfeasance
or
bad faith in the performance of its duties or reckless disregard of its
obligations and duties hereunder.
The Bank will be under no duty or obligation to inquire into and will not
be liable for:
(a) the validity of the issue of any Portfolio Securities
purchased by or for the Fund, the legality of the purchases thereof or the
propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by
or for the Fund or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares of
the Fund or the sufficiency of the amount to be received therefor except to
the extent provided in Section 12;
(d) the legality of the repurchase of any common shares of
the Fund or legality of the distribution of any Portfolio Securities as
payment in kind of dividend; and
(f) any property or moneys of the Fund unless and until
received by it, and any such property or moneys delivered or paid by it
pursuant to the terms hereof.
Moreover, the Bank will not be under any duty of obligation to ascertain
whether any Portfolio Securities at any time delivered to or held by it for
the account of the Fund are such as may properly be held by the Fund under
the provisions of its Articles, By-laws, and federal or state statutes or
any rule or regulation of any governmental agency.
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Bank be liable hereunder or to any third party:
(a) for any losses or damages of any kind resulting from
acts of God, earthquakes, fires, floods, storms or other disturbances of
nature, epidemics, strikes, riots, nationalization, expropriation, currency
restrictions, acts of civil war or terrorism, insurrection, nuclear fusion,
fission or radiation, the interruption, loss or malfunction of utilities,
transportation, the unavailability of energy sources and other similar
happenings or events as results from the Bank's own gross negligence; or
(b) for special, punitive or consequential damages arising
from the provision of services hereunder, even if the Bank has been advised
of the possibility of such damages.
13.2 Agents and Subcustodians with Respect to Property of the
Fund Held in the United States. The Bank may employ agents in the
performance of its duties hereunder and shall be responsible for the acts
and omissions of such agents as if performed by the Bank hereunder.
Upon receipt of Proper Instructions, the Bank may employ Subcustodians,
provided that any such subcustodian meets at least the minimum
qualifications required by Section 17(f)(1) of the 1940 Act to act as a
custodian of the Fund's assets with respect to property of the Fund held in
the United States. The Bank shall have no liability to the Fund or any
other person by reason of any act or omission of any such subcustodian and
the Fund shall indemnify the Bank and hold it harmless from and against any
and all actions, suits and claims, arising directly or indirectly out of
the performance of any such subcustodian. Upon request of the Bank, the
Fund shall assume the entire defense of any action, suit, or claim subject
to the foregoing indemnity. The Fund shall pay all fees and expenses of
any subcustodian.
13.3 Duties of the Bank with Respect to Property of the Fund Held
Outside of the United States.
(a) Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Bank to employ as sub-custodians for the
Fund's Portfolio Securities and other assets maintained outside the United
States the foreign banking institutions and foreign securities depositories
designated on the Schedule attached hereto (each, a `Selected Foreign Sub-
Custodian'). Upon receipt of Proper Instructions, together with a
certified resolution of the Fund's Board of Trustees, the Bank and the Fund
may agree to designate additional foreign banking institutions and foreign
securities depositories to act as Selected Foreign Sub-Custodians
hereunder. Upon receipt of Proper Instructions, the Fund may instruct the
Bank to cease the employment of any one or more such Selected Foreign Sub-
Custodians for maintaining custody of the Fund's assets, and the Bank shall
no cease to employ such sub-custodian as soon as alternate custodial
arrangements have been implemented.
(b) Foreign Securities Depositories. Except as may otherwise
be agreed upon in writing by the Bank and the Fund, assets of the Fund
shall be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
Selected Foreign Sub-Custodians pursuant to the terms hereof. where
possible, such arrangements shall include entry into agreements containing
the provisions set forth in subparagraph (d) hereof. Notwithstanding the
foregoing, except as may otherwise be agreed upon in writing by the Bank
and the Fund, the Fund authorizes the deposit in Euroclear, the securities
clearance and depository facilities operated by Morgan Guaranty Trust
Company of New York in Brussels, Belgium, of Foreign Portfolio Securities
eligible for deposit therein and to utilize such securities depository in
connection with settlements of purchases and sales of securities and
deliveries and returns of securities, until notified to the contrary
pursuant to subparagraph (a) hereunder.
(c) Segregation of Securities. The Bank shall identify on
its books as belonging to the Fund for Foreign Portfolio Securities held by
each Selected Foreign Sub-Custodian. Each agreement pursuant to which the
Bank employs a foreign banking institution shall require that such
institution establish a custody account for the Bank and hold in that
account, Foreign Portfolio Securities in a foreign securities depository,
that it shall identify on its books as belonging to the Bank the securities
so deposited.
(d) Agreements with Foreign Banking Institutions. Each of
the agreements pursuant to which a foreign banking institution holds assets
of the Fund (each, a `Foreign Sub-Custodian Agreement'') shall be
substantially in the form previously made available to the Fund and shall
provide that: (a) the Fund's assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
foreign banking institution or its creditors or agent, except a claim of
payment for their safe custody or administration (including, without
limitation, any fees or taxes payable upon transfers or reregistration of
securities); (b) beneficial ownership of the fund's assets will be freely
transferable without the payment of money or value other than for custody
or administration (including, without limitation, any fees or taxes
payable upon transfer or reregistration of securities); (c) adequate
records will be maintained identifying the assets as belonging to Bank; (d)
officers of or auditors employed by, or other representatives of the Bank,
including to the extent permitted under applicable law, the independent
public accountants for the Fund, will be give access to the books and
records of the foreign banking institution relating to its actions under
its agreement with the Bank; and (e) assets of the Fund held by the
Selected Foreign Sub-Custodian will be subject only to the instructions of
the Bank or its agents.
(e) Access of Independent Accountants of the Fund. Upon
request of the Fund, the Bank will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a Selected Foreign
Sub-Custodian inso far as such books and records relate to the performance
of such foreign banking institution under its Foreign Sub-Custodian
Agreement.
(f) Reports by Bank. The Bank will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Fund held by Selected Foreign Sub-
Custodians, including but not limited to an identification of entities
having possession of the Foreign Portfolio Securities and other assets of
the Fund.
(g) Transactions in Foreign Custody Account. Transactions
with respect to the assets of the Fund held by a Selected Foreign Sub-
Custodian shall be effected pursuant to Proper Instructions form the Fund
to the Bank and shall be effected in accordance with the applicable Foreign
of the nominee of the Selected foreign Sub-Custodian, the Fund agrees to
hold any such nominee harmless from any liability by reason of the
registration of such securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the contrary, settlement
and payment for Foreign Portfolio Securities received for the account of
the Fund and delivery of Foreign Portfolio Securities received for the
account of the Fund and delivery of Foreign Portfolio Securities maintained
for the account of the Fund may be effected in accordance with the
customary established securities trading or securities processing practices
and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser
or dealer) against a receipt with the expectation of receiving later
payment for such securities form such purchaser or dealer.
In connection with any action to be taken with respect to the Foreign
Portfolio Securities held hereunder, including, without limitation, the
exercise of any voting rights, subscription rights, redemption rights,
interest or privilege with respect to such Securities (collectively, the
`Rights''), the Bank shall promptly transmit to the Fund such information
in connection therewith as is made available to the Bank by the Foreign
Sub-Custodian, and shall promptly forward to the applicable Foreign Sub-
Custodian any instructions, forms or certifications with respect to such
Rights, and any instruction relating to the actions to be taken in
connection therewith, as the Bank shall receive from the Fund pursuant to
Proper Instruction. Notwithstanding the foregoing, the Bank shall have no
further duty or obligation with respect to such Rights, including, without
limitation, the determination of whether the Fund is entitled to
participate in such Rights under applicable U.S. and foreign laws, or the
determination of whether any action proposed to be taken with respect to
such Rights by the Fund or by the applicable Foreign Sub-Custodian will
comply with all applicable terms and conditions of any such Rights or any
applicable laws or regulations, or market practices within the marker in
which such action is to be taken or omitted.
(h) Liability of Selected Foreign Sub-Custodians. Each
Foreign Sub-Custodian Agreement with a foreign banking institution shall
require the institution to exercise reasonable care in the performance of
its duties and to indemnify, and hold harmless, the Bank and each Fund form
and against certain losses, damages, costs, expenses, liabilities or claims
arising out of or in connection with the institution's performance of such
obligations, all as set forth in the applicable Foreign Sub-Custodian
Agreement. The Fund acknowledges that the Bank, as a participant in
Euroclear, is subject to the Terms and Conditions governing the Euroclear
System, a copy of which has been made available to the Fund. The Fund
acknowledges that pursuant to such Terms and Conditions, Morgan Guaranty
Brussels shall have the sole right to exercise or assert any and all rights
or claims in respect of actions or omissions of, or the bankruptcy or
insolvency of, any other depository, clearance systems or custodian
utilized by Euroclear in connection with the Fund's securities and other
assets.
(i) Liability of Bank. The Bank shall have no more or less
responsibility or liability on account of the acts or omissions of any
Selected Foreign Sub-Custodian employed hereunder than any such Selected
Foreign Sub-Custodian has to the Bank and, without limiting the foreign,
the Bank shall not be liable for any loss, damage, cost, expense, liability
or claim resulting form nationalization, expropriation, currency
restrictions, or acts or war or terrorism, political risk (including, other
losses due to Acts of God, nuclear indigent or any loss where the Selected
Foreign Sub-Custodian has otherwise exercised reasonable care.
(j) Monitoring Responsibilities. The Bank shall furnish
annually to be Fund, information concerning the Selected Foreign Sub-
Custodians employed hereunder for use by the Fund in evaluation such
Selected Foreign Sub-Custodians to ensure compliance with the requirements
of Rule 17f-5 of the Act. In addition, the Bank will promptly inform the
Fund in the event that the Bank is notified by a Selected Foreign Sub-
Custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in case computed in accordance with generally accepted U.S.
accounting principles) or any other capital adequacy test applicable to it
by exemptive order, or if the Bank has actual knowledge of any material
loss of the assets of the Fund held by Foreign Sub-Custodian.
(k) Tax Law. The Bank shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the
Bank as custodian of the Fund by the tax laws of any jurisdiction, and its
shall be the responsibility of the Fund to notify the Bank of the
obligations imposed on the Fund or the Bank as the custodian of the Fund by
the tax law of any non-U.S. jurisdiction, including responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sold responsibility of the
Custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the
tax law of jurisdictions for which the Fund has provided such information.
13.4 Insurance. The Bank shall use the same care with
respect tot he safekeeping of Portfolio Securities and cash of the Fund
held by it as it uses in respect of its own similar property and will
maintain insurance in accordance with industry practice but it need not
maintain any special insurance for the benefit of the Fund.
13.5 Fees and Expenses of Bank. The Fund will pay or
reimburse the Bank from time to time for any transfer taxes payable upon
transfer of Portfolio Securities made hereunder, and for all necessary
proper disbursements, expenses and charges made or incurred by the Bank in
the performance of this Agreement (including any duties listed on any
Schedule hereto, if any) including any indemnities for any loss,
liabilities or expenses to the Bank as provided above. For the services
rendered by the Bank hereunder, the Fund will pay to the Bank such
compensation or fees at such rate and at such times as shall be agreed upon
in writing by the parties from time to time. The Bank will also be
entitled to reimbursement by the Fund for all reasonable out of pocket
expenses incurred in conjunction with termination of this Agreement by the
Fund.
13.6 Advances by Bank. The Bank may, in its sole
discretion, advance funds on behalf of the Fund to make any payment
permitted by this Agreement upon receipt of any Proper Authorization for
such payments by the Fund. Should such a payment or payments, with
advanced funds, result in an overdraft (due to insufficiencies of the
Fund's account with the Bank, or for any other reason) this Agreement deems
any such overdraft or related indebtedness, a loan made by the Bank to the
Fund payable on demand and bearing interest at the current rate charged by
the Bank for such loans unless the Fund shall provide the Bank with agreed
upon compensating balances. The Fund agrees that the Bank shall have a
continuing lien and security interest to the extent of any overdraft or
indebtedness, in and to any property at any time held by it for the Fund's
benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third
party acting on the Bank's behalf). The Fund authorizes the Bank, in its
sole discretion, at any time to charge any overdraft or indebtedness,
together with interest due thereon against any balance of account standing
to the credit of the Fund on the Bank's books.
14. Termination.
14.1 This Agreement may be terminated at any time without
penalty upon sixty days written notice delivered by either party to the
other by means of registered mail, and upon the expiration of such sixty
days this Agreement will terminate; provided, however, that the effective
date of notice (i) by the Bank I order to prepare for the transfer by the
Bank of all of the assets of the Fund held hereunder, and (ii) by the Fund
in order to give the Fund an opportunity to make suitable arrangements for
a successor custodian. At any time after the termination of this
Agreement, the Fund will, at its request, have access to the records of the
Bank relating to the performance of its duties as custodian.
14.2 In the event of the termination of this Agreement, the
Bank will immediately upon receipt or transmittal, as the case may be, of
notice of termination, commence and prosecute diligently to completion the
transfer of all cash and the delivery of all Portfolio Securities duly
endorsed and all records maintained under Section 11 to the successor
custodian when appointed by the Fund. The obligation of the Bank to
deliver and transfer over the assets of the Fund held by it directly to
such successor custodian will commence as soon as such successor is
appointed and will continue until completed as aforesaid. If the Fund does
not select a successor custodian within ninety (90) days from the date of
delivery of notice of termination the Bank may, subject to the provisions
of subsection (14.3), deliver the Portfolio Securities and cash of the Fund
held by the Bank to a bank or trust company of its deliver the Portfolio
Securities and cash of the Fund held by the Bank to a bank or trust company
of its own selection which meets the requirements of Section 17(f)(1) of
the 1940 Act and has a reported capital, surplus and undivided profits
aggregating not less than 42,000,000, to be held as the property of the
Fund under terms similar to those on which they were held by the Bank,
whereupon such bank or trust company so selected by the Bank will become
the successor custodian of such assets of the Fund with the same effect as
though selected by the Board.
14.3 Prior to the expiration of ninety (90) days after
notice of termination has been given, the Fund may furnish the Bank with an
order of the Fund advising that a successor custodian cannot be found
willing and able to act upon reasonable and customary terms and that there
has been submitted to the shareholders of the Fund the question of whether
the Fund will be liquidated or will function without a custodian for the
assets of the Fund held by the Bank. In that event the Bank will deliver
the Portfolio Securities and cash of the Fund held by it, subject as
aforesaid, in accordance with one of such alternatives which may be
approved by the requisite vote of shareholders, upon receipt by the Bank of
a copy of the minutes of the meeting of shareholders at which action was
taken, certified by the Fund's Secretary and an opinion of counsel to the
Fund in form and content satisfactory to the Bank.
15. Confidentiality. Both parties hereto agree than any non-
public information obtained hereunder concerning the other party is
confidential and may not be disclosed to any other person without the
consent of the other party, except as may be required by applicable law or
at the request of a governmental agency. The parties further agree that a
breach of this provision would irreparably damage the other party and
accordingly agree that each of them is entitled, without bond or other
security, to an injunction or injunctions to prevent breaches of this
provision.
16. Notices. Any notice or other instrument in writing
authorized or required by this Agreement to be given to either party hereto
will be sufficiently given if addressed to such party and mailed or
delivered to it at its office at the address set forth below; namely:
(a) In the case of notices sent to the Fund to:
FundManager Trust
c/o Mr. Charles Lipson
MD Hisrch Division
Freedom Capital Management
200 Liberty Street
New York, NY 10281
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Attention: Tim Murphy
or at such other place at such party may from time to time designate in
writing.
17. Amendments. This Agreement may not be altered or amended,
except by an instrument in writing, executed by both parities, and in the
case of the Fund, such alteration or amendment will be authorized and
approved by its Board.
18. Parties. This Agreement will be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement will not be assignable by
the Fund without the written consent of the Bank or by the Bank without the
written consent of the Fund, authorized and approved by the Board; and
provided further that termination proceedings pursuant to Section 14 hereof
will not be deemed to be an assignment within the meaning of this
provision.
19. Governing Law. This Agreement and all performance hereunder
will be governed by the laws of the Commonwealth of Massachusetts.
20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
11/5, 1996
FundManager Trust
By: /s/ John Danello
John Danello
ATTEST:
/S/Maureen M Renzi
Maureen M Renzi
Investors Bank & Trust Company
By: By: /S/ Robert D. Mancuso
Robert D. Mancuso
Managing Director
ATTEST:
Signature unidentifiable
DATE: 11/5/96
FUNDMANAGER TRUST
Annual Fee Schedule
For Five Funds
November 5, 1996
THIS FEE SCHEDULE COVERS THE FOLLOWING SERVICES: FUND ACCOUNTING (INCLUDING
CALCULATION OF N.A.V.), DOMESTIC CUSTODY AND MUTUAL FUND ADMINISTRATION.
A. FUND ACCOUNTING AND CALCULATION OF NAV
The Annual Fee for each FundManager Fund will be $40,000 billed in
monthly installments of ($3,333.33). This fee is exclusive Transaction
Costs, Custody Fees and Out-of-Pocket Expenses.
B. ASSET CUSTODY
Asset custody charges for each portfolio are as follows:
ANNUAL ASSET FEE
First $50 Million of net assets 4 Basis Points
Next $50 Million of net assets 3 Basis Points
Next $100 Million of net assets 2 Basis Points
Next assets in excess of $200 Million 1 Basis Point
C. TRANSACTION COST PER TRANSACTION
DTC/Fed Book Entry $12.00
Purchase or sale of mutual fund shares 12.00
Non-DTC, New York Settlements 35.00
Maturities, New York Settlements 10.00
There is no charge for the maturity of items with Boston Settlement.
D. OUT OF POCKET EXPENSES
These charges consist of:
- Pricing and Verification Services - Forms & Supplies
- Telephone - Support Equipment Rental
- Micro Rental - Third Party Audit
- Legal Fees for substantial changes to - Ad Hoc Reports
Custody and Transfer Agency contracts
will be paid by the MD Hirsch Division
of Freedom Capital
All services will be billed monthly and fees will be automatically deducted
from the funds 30 days after billing.
Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
FUNDMANAGER TRUST
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this 11th day
of November, 1996, between FundManager Trust, a Delaware business
trust (herein called the `Trust''), and Federated Administrative
Services, a Delaware business trust (herein called `FAS'').
WHEREAS, the Trust is a Delaware business trust consisting of one or
more portfolios, which operates as an open-end management investment
company and will so register under the Investment Company Act of 1940;
and
WHEREAS, the Trust desires to retain FAS as its Administrator to
provide it with Administrative Services (as herein defined) for the
portfolios identified on Schedule A, and FAS is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Trust hereby appoints FAS as
Administrator of the Trust on the terms and conditions set forth in
this Agreement; and FAS hereby accepts such appointment and agrees to
perform the services and duties set forth in Section 2 of this
Agreement in consideration of the compensation provided for in
Section 5 hereof.
2. Services and Duties. As Administrator, and subject to the
supervision and control of the Trust's Board of Trustees, FAS will
provide facilities, equipment, and personnel to carry out the
following administrative services for operation of the business and
affairs of the Trust and each of its portfolios:
(a) prepare, file, maintain, and coordinate the distribution of the
Trust's governing documents and any amendments thereto,
including the Articles of Incorporation (which has already been
prepared and filed), the By-laws, and the agendas, materials and
minutes of meetings of Trustees and shareholders;
(b) prepare and file with the Securities and Exchange Commission and
the appropriate state securities authorities the registration
statements for the Trust and the Trust's shares and all
amendments thereto, reports to regulatory authorities and
shareholders, prospectuses, proxy statements, and such other
documents all as may be necessary to enable the Trust to make a
continuous offering of its shares;
(c) prepare, negotiate, and administer contracts on behalf of the
Trust with, among others, the Trust's investment adviser,
distributor, custodian, portfolio accountant and transfer agent;
(d) supervise the Trust's custodian in the maintenance of the
Trust's general ledger and in the preparation of the Trust's
financial statements, including oversight of expense accruals
and payments, of the determination of the net asset value of the
Trust and of the declaration and payment of dividends and other
distributions to shareholders;
(e) review and coordinate the calculation of performance data of the
Trust for dissemination to information services covering the
investment company industry;
(f) review the Trust's tax returns;
(g) examine and review the operations of the Trust's custodian and
transfer agent;
(h) coordinate the layout and printing of publicly disseminated
prospectuses and reports;
(i) perform internal audit examinations in accordance with a charter
to be adopted by FAS and the Trust, and coordinate and
facilitate external audits by the Trust's independent auditors
and regulatory examinations of the Trust;
(j) assist with the design, development, and operation of the Trust;
(k) provide individuals reasonably acceptable to the Trust's Board
of Trustees for nomination, appointment, or election as officers
of the Trust, who will be responsible for the management of
certain of the Trust's affairs as determined by the Trust's
Board of Trustees;
(l) consult with the Trust and its Board of Trustees on matters
concerning the Trust and its affairs; and
(m) administer the processing of Rule 12b-1 payments and marketing
expenses at the direction of the Trust and its distributor(s)
and, in connection therewith, prepare quarterly reports to the
Board of Trustees pursuant to Rule 12b-1.
The foregoing, along with any additional services that FAS shall
agree in writing to perform for the Trust hereunder, shall hereafter
be referred to as "Administrative Services." Administrative Services
shall not include any duties, functions, or services to be performed
for the Trust by the Trust's investment adviser, distributor,
custodian, portfolio accountant, or transfer agent pursuant to their
respective agreements with the Trust.
3. Records. FAS shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and
regulations, including but not limited to records required by Section
31(a) of the Investment Company Act of 1940 and the rules thereunder
(``1940 Act'), as the same may be amended from time to time,
pertaining to the Administrative Services performed by it and not
otherwise created and maintained by another party pursuant to
contract with the Trust. Where applicable, such records shall be
maintained by FAS for the periods and in the places required by Rule
31a-2 under the 1940 Act. The books and records pertaining to the
Trust which are in the possession of FAS shall be the property of the
Trust. The Trust, or the Trust's authorized representatives, shall
have access to such books and records at all times during FAS's
normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be provided promptly by
FAS to the Trust or the Trust's authorized representatives.
4. Expenses. FAS shall be responsible for expenses incurred in
providing office space, equipment, and personnel as may be necessary
or convenient to provide the Administrative Services to the Trust,
including the compensation of FAS employees who serve as Trustees or
officers of the Trust. The Trust shall be responsible for all other
expenses incurred by FAS on behalf of the Trust, including without
limitation postage and courier expenses, printing expenses, travel
expenses, registration fees, filing fees, fees of outside counsel and
independent auditors, insurance premiums, fees payable to Trustees
who are not FAS employees, and trade association dues.
5. Compensation. For the Administrative Services provided, the Trust
hereby agrees to pay and FAS hereby agrees to accept as full
compensation for its services rendered hereunder an administrative
fee at an annual rate per portfolio of the Trust's shares, payable
daily, as specified below:
Max. Admin. Average Daily Net Assets
Fee of the Trust
.15% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
However, in no event shall the administrative fee received during any
year of this Agreement be less than, or be paid at a rate less than
would aggregate, $75,000 per portfolio and $35,000 per additional
class of shares. FAS may voluntarily waive this fee and the minimums
in whole or part from time to time in its sole discretion.
6. Responsibility of Administrator.
(a) FAS shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Trust in connection with the
matters to which this Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. FAS
shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Trust) on all matters, and shall be
without liability for any action reasonably taken or omitted
pursuant to such advice. Any person, even though also an
officer, trustee, partner, employee or agent of FAS, who may be
or become an officer, Director, employee or agent of the Trust,
shall be deemed, when rendering services to the Trust or acting
on any business of the Trust (other than services or business in
connection with the duties of FAS hereunder) to be rendering
such services to or acting solely for the Trust and not as an
officer, trustee, partner, employee or agent or one under the
control or direction of FAS even though paid by FAS.
(b) FAS shall be kept indemnified by the Trust and be without
liability for any action taken or thing done by it in performing
the Administrative Services in accordance with the above
standards. In order that the indemnification provisions
contained in this Section 6 shall apply, however, it is
understood that if in any case the Trust may be asked to
indemnify or save FAS harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation
in question, and it is further understood that FAS will use all
reasonable care to identify and notify the Trust promptly
concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification
against the Trust. The Trust shall have the option to defend
FAS against any claim which may be the subject of this
indemnification. In the event that the Trust so elects, it will
so notify FAS and thereupon the Trust shall take over complete
defense of the claim, and FAS shall in such situation initiate
no further legal or other expenses for which it shall seek
indemnification under this Section. FAS shall in no case
confess any claim or make any compromise in any case in which
the Trust will be asked to indemnify FAS except with the Trust's
written consent.
7. Duration and Termination.
(a) The initial term of this Agreement shall commence on the date
hereof, and extend for a period of three years.
(b) During any term of this Agreement, each time the Trust adds a
new portfolio or class of shares not identified on Schedule A,
the Trust has the option of (i) including the new portfolio or
share class under the Agreement by extending the Agreement for
an additional three years commencing on the first date upon
which the new portfolio or share class has sufficient average
daily net assets such that FAS will begin to earn a sum not less
than its minimum ("annualized") administrative fee pursuant to
Section 5 of this Agreement ("Additional Term");
(ii) reimbursing FAS for its reasonable costs and expenses in
establishing the new portfolio or share class; or (iii)
negotiating with FAS mutually agreeable terms and fees for
adding a new portfolio or class.
(c) Upon the expiration of any term, this Agreement shall be
automatically renewed each year for an additional term of one
year, unless notice of termination has been delivered by either
party to the other no less than one year before the beginning of
any such additional term.
8. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which an enforcement of the change,
waiver, discharge or termination is sought.
9. Limitations of Liability of Trustees and Shareholders of FAS. The
execution and delivery of this Agreement have been authorized by the
Trustees of FAS and signed by an authorized officer of FAS, acting as
such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not
binding upon any of the Trustees or shareholders of FAS, but bind
only the trust property of FAS as provided in the Declaration of
Trust of FAS.
10. Limitations of Liability of Trustees or Officers, Employees, Agents
and Shareholders of the Trust. FAS is expressly put on notice of the
limitation of liability as set forth in the Trust's Declaration of
Trust and agrees that the obligations assumed by the Trust pursuant
to this Agreement shall be limited in any case to the Trust and its
assets and that FAS shall not seek satisfaction of any such
obligations from the shareholders of the Trust, the Trustees,
Officers, Employees or Agents of the Trust, or any of them.
11. Notices. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given
if delivered to the Trust, to its investment adviser and to FAS at
the following addresses: FundManager Trust (Trust), c/o Freedom
Capital Management Corporation, One Beacon Street, Boston, MA 02108,
Attention: Charles B. Lipson, President; FundManager Trust Adviser
(Adviser), Freedom Capital Management Corporation, M.D. Hirsch
Division, One Beacon Street, Boston, MA 02108, Attention: Charles B.
Lipson, President; and Federated Administrative Services, Federated
Investors Tower, Pittsburgh, PA 15222-3779, Attention: Secretary.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made
invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby. Subject to the provisions of Section 6, hereof, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed
by Pennsylvania law; provided, however, that nothing herein shall be
construed in a manner inconsistent with the Investment Company Act of
1940 or any rule or regulation promulgated by the Securities and
Exchange Commission thereunder.
13. Counterparts. This Agreement may be executed by different parties
on separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and
year first above written.
FUNDMANAGER TRUST
By: /s/ Charles B. Lipson
President
Attest: /s/ Maureen M. Renzi
Assistant Secretary
FEDERATED ADMINISTRATIVE SERVICES
By: /s/ S. Elliott Cohan
-
S. Elliott Cohan
Senior Vice President
Attest: /s/ Thoma sJ. Ward
-
Thomas J. Ward
Secretary
SCHEDULE A
TO
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement dated November 11, 1996 BETWEEN
FEDERATED ADMINISTRATIVE SERVICES and FUNDMANAGER TRUST includes the
following portfolios (and any classes thereof) effective as of the
date set forth above:
AGGRESSIVE GROWTH PORTFOLIO
Financial Adviser Class
No-Load Class
GROWTH & INCOME PORTFOLIO
Financial Adviser Class
No-Load Class
GROWTH PORTFOLIO
Financial Adviser Class
No-Load Class
BOND PORTFOLIO
Financial Adviser Class
No-Load Class
MANAGED TOTAL RETURN PORTFOLIO
Financial Adviser Class
Exhibit 9(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT effective as of November 5, 1996 by and between FundManager
Trust, (the `Company''), and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company (the `Bank'').
WITNESSETH:
WHEREAS, the Company desires to appoint the Bank as its transfer
agent, dividend disbursing agent and agent in connection with certain other
activities, and the Bank desires to accept such appointment;
WHEREAS, the Bank is duly registered as a transfer agent as provided
in Section 17A(c) of the Securities Exchange Act of 1934, as amended, (the
`1934 Act'');
WHEREAS, the Company is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets:
WHEREAS, the Company offers shares in five series, the FundManager
Aggressive Growth Fund, the FundManager Growth Fund, the FundManager Growth
& Income Fund, the FundManager Bond Fund and the FundManager Managed Total
Return Fund (such series, together with all other series subsequently
established by the Company and made subject to this Agreement in accordance
with Article 17, being herein referred to as the `Fund'');
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Company and the Bank agree as follows:
ARTICLE 1. Terms of Appointment: Duties of the Bank
1.01 Subject to the terms and conditions set forth in this Agreement,
the Company on behalf of the Funds, hereby employs and appoints the Bank to
act as, and the Bank agrees to act as, transfer agent for each of the Fund'
authorized and issued shares of beneficial interest (`Shares''), dividend
disbursing agent and agent in connection with any accumulation, open-
account or similar plans provided to the shareholders of the Company
(``hareholder'') and set out in the currently effective prospectus and
statement of additional information, as each may be amended from time to
time, (the ``rospectus'') of the Company, including without limitation any
periodic investment plan or periodic withdrawal program.
1.02 The Bank agrees that it will perform the following services:
(a) In connection with procedures established from time to time by
agreement between the Company and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefor to the
custodian of the Company appointed by the Board of Trustees of the Company
(the ``ustodian'');
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iii) Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation therefor to the
Custodian;
2
(iv) At the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemptions, pay over or cause to be
paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and distributions
declared by the Company on behalf of a Fund; and
(vii) Create and maintain all necessary records including those
specified in Article 10 hereof, in accordance with all applicable laws,
rules and regulations, including but not limited to records required by
Section 31(a) of the Investment Company Act of 1940, as amended (the `1940
Act'', and those records pertaining to the various functions performed by
it hereunder. All records shall be available for inspection and use by the
Company. Where applicable, such records shall be maintained by the Bank
for the periods and in the places required by Rule 31 a-2 under the 1940
Act.
(viii) Make available during regular business hours all records and
other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by the Company, or any person retained by the Company.
Upon reasonable notice by the Company, the Bank shall make available during
regular business hours its facilities and premises employed in connection
with its performance of this Agreement for reasonable visitation by the
Company, or any person retained by the Company.
(ix) Record the issuance of Shares of the Company and maintain,
pursuant to Rule 17Ad-IO(e) under the 1934 Act, a record of the total
3
number of Shares of the Company which are authorized, based upon data
provided to it by the Company, and issued and outstanding. The Bank shall
also provide the Company on a regular basis with the total number of Shares
which are authorized and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to monitor the issuance
of such Shares or to take cognizance of any laws relating to the issue or
sale of such Shares, which functions shall be the sole responsibility of
the Company.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a) or in any Schedule hereto, the Bank shall (I) perform
all of the customary services of a transfer agent, dividend disbursing
agent and, as relevant, agent in connection with accumulation, open-account
or similar plans (including without limitation any periodic investment plan
or periodic withdrawal program); including but not limited to; maintaining
all Shareholder accounts, preparing Shareholder meeting lists, mailing
proxies, receiving and tabulating proxies, mailing Shareholder reports and
prospectuses to current Shareholders, withholding taxes on all accounts,
including nonresident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other
comfirmable transactions in Shareholder accounts, responding to Shareholder
telephone calls and Shareholder correspondence, preparing and mailing
activity statements for Shareholders, and providing Shareholder account
information; and (ii) provide a system which will enable the Company to
monitor the total number of shares sold in each State. The Company shall
(i) identify to the Bank in writing those transactions and assets to be
treated as exempt from blue sky reporting for each State and (ii) verify
the establishment of transactions for each State on the system prior to
4
activation and thereafter monitor the daily activity for each State. The
responsibility of the Bank for a Fund's blue sky state registration status
is solely limited to the initial establishment of transactions subject to
blue sky compliance by such Fund and the reporting of such transactions to
the Fund as provided above.
(c) Additionally, the Bank shall utilize a system to identify all
share transactions which involve purchase and redemption orders that are
processed at a time other than the time of the computation of net asset
value per share next computed after receipt of such orders, and shall
compute the net effect upon the Fund of such transactions so identified on
a daily and cumulative basis.
ARTICLE 2. Sale of Company Shares
2.01 Whenever the Company shall sell or cause to be sold any Shares of
a Fund, the Company shall deliver or cause to be delivered to the Bank a
document duly specifying: (i) the name of the Fund whose Shares were sold;
(ii) the number of Shares sold, trade date, and price; (iii) the amount of
money to be delivered to the Custodian for the sale of such Shares and
specifically allocated to such Fund; and (iv) in the case of a new account,
a new account application or sufficient information to establish an
account.
2.02 The Bank will, upon receipt by it of a check or other payment
identified by it as an investment in Shares of one of the Funds and drawn
or endorsed to the Bank as agent for, or identified as being for the
account of one of the Funds, promptly deposit such check or other payment
to the appropriate account postings necessary to reflect the investment.
5
The Bank will notify the Company, or its designee, and the Custodian of all
purchases and related account adjustments.
2.03 Under procedures as established by mutual agreement between the
Company and the Bank, the Bank shall issue to the purchaser or his
authorized agent such Shares, computed to the nearest three decimal points,
as he is entitled to receive, based on the appropriate net asset value of
the Fund Shares, determined in accordance with the prospectus and
applicable Federal law or regulation. In issuing Shares to a purchaser or
his authorized agent, the Bank shall be entitled to rely upon the latest
directions, if any, previously received by the Bank from the purchaser or
his authorized agent concerning the delivery of such Shares.
2.04 The Bank shall not be required to issue any Shares of the Company
where it has received a written instruction from the Company or written
notification from any appropriate Federal or State authority that the sale
of the Shares of the Fund in question has been suspended or discontinued,
and the Bank shall be entitled to rely upon such written instructions or
written notification.
2.05 Upon the issuance of any Shares of any Fund in accordance with
foregoing provisions of this Section, the Bank shall not be responsible for
the payment of any original issue or other taxes, if any, required to be
paid by the Company in connection with such issuance.
2.06 The Bank may establish such additional rules and regulations
governing the transfer or registration of Shares as it may deem advisable
and consistent with such rules and regulations generally adopted by
transfer agents, or with the written consent of the Company, any other
rules and regulations.
6
ARTICLE 3. Returned Checks
3.01 In the event that any check or other order for the transfer of
money is returned unpaid for any reason, the Bank will take such steps as
the Bank may, in its discretion, deem appropriate to protect the Company
from financial loss or as the Company or its designee may instruct.
Provided that the standard procedures, as agreed upon from time to time,
between the Company and the Bank, regarding purchases and redemptions of
Shares, are adhered to by the Bank, the Bank shall not be liable for any
loss suffered by a Fund as a result of returned or unpaid purchase or
redemption transactions. Legal or other expenses incurred to collect
amounts owed to a Fund as a consequence of returned or unpaid purchase or
redemption transactions shall be an expense of that Fund.
ARTICLE 4. Redemptions
4.01 Shares of any Fund may be redeemed in accordance with the
procedures set forth in the Prospectus of the Company and the Bank will
duly process all redemption requests.
ARTICLE 5. Transfers and Exchanges
5.01 The Bank is authorized to review and process transfers of Shares
of each Fund, exchanges between Funds on the records of the Funds
maintained by the Bank, and exchanges between the Company and any other
entity as may be permitted by the Prospectus of the Company. The Bank
will, upon an order to transfer shares by or on behalf of the registered
holder thereof in proper form, credit the same to the transferee on its
books. If Shares are to be exchanged for Shares of another Fund, the Bank
will process such exchange in the same manner as a redemption and sale of
7
Shares, except that it may in its discretion waive requirements for
information and documentation.
ARTICLE 6. Right to Seek Assurances
6.01 The Bank reserves the right to refuse to transfer or redeem
Shares until it is satisfied that the requested transfer or redemption is
legally authorized, and it shall incur no liability for the refusal, in
good faith, to make transfers or redemptions which the Bank, in its
judgment, deems improper or unauthorized, or until it is satisfied that
there is no basis for any claims adverse to such transfer or redemption.
The Bank may, in effecting transfers, rely upon the provisions of the
Uniform Act for the Simplification of Fiduciary Security Transfers or the
Uniform Commercial Code, as the same may be amended from time to time,
which in the opinion of legal counsel for the Company or of its own legal
counsel protect it in not requiring certain documents in connection with
the transfer or redemption of Shares of any Fund, and the Company shall
indemnify the Bank for any act done or omitted by it in reliance upon such
laws or opinions of counsel of the Company or of its own counsel.
ARTICLE 7. Distributions
7.01 The Company will promptly notify the Bank of the declaration of
any dividend or distribution. The Company shall furnish to the Bank a
resolution of the Board of Trustees of the Company certified by the
Secretary (a `Certificate''): (i) authorizing the declaration of dividends
on a specified periodic basis and authorizing the bank to rely on oral
instructions or a Certificate specifying the date of the declaration of
such dividend or distribution, the date of payment thereof, the record date
as of which Shareholders entitled to payment shall be determined and the
amount payable per share to Shareholders of record as of the date and the
8
total amount payable to the Bank on the payment date; or (ii) setting forth
the date of the declaration of any dividend or distribution by a Fund, the
date of payment thereof, the record date as of which Shareholders entitled
to payment shall be determined, and the amount payable per share to the
Shareholders of record as of that date and the total amount payable to the
Bank on the payment date.
7.02 The Bank, on behalf of the Company, shall instruct the Custodian
to place in a dividend disbursing account funds equal to the cash amount of
any dividend or distribution to be paid out. The Bank will calculate the
dividend or distribution according to the certificate, prepare and mail
checks to (at the address as it appears on the records of the Bank), or
(where appropriate) credit such dividend or distribution to the account of,
Fund Shareholders, and maintain and safeguard all underlying records.
7.03 The Bank will replace lost checks at its discretion and in
conformity with regular business practices.
7.04 The Bank will maintain all records necessary to reflect the
crediting of dividends which are reinvested in Shares of the Company,
including without limitation daily dividends.
7.05 The Bank shall not be liable for any improper payments made in
accordance with a resolution of the Board of Trustees of the Company.
7.06 If the Bank shall not receive from the Custodian sufficient cash
to make payment to all Shareholders of the Company as of the record date,
the Bank shall, upon notifying the Company, withhold payment to all
Shareholders of record as of the record date until such sufficient cash is
provided to the Bank.
9
ARTICLE 8. Other Duties
8.01 In addition to the duties expressly provided for herein, the Bank
shall perform such other duties and functions and shall be paid such
amounts therefor as may from time to time be agreed to in writing.
ARTICLE 9. Taxes
9.01 It is understood that the Bank shall file such appropriate
information returns concerning the payment of dividends and capital gain
distributions and tax withholding with the proper Federal, State and local
authorities as are required by law to be filed by the Company and shall
withhold such sums as are required to be withheld by applicable law.
ARTICLE 10. Books and Records
10.01 The Bank shall maintain confidential records showing for each
Shareholder's account the following: (i) names, addresses and tax
identification numbers; (ii) numbers of Shares held; (iii) historical
information (as available from prior transfer agents) regarding the account
of each Shareholder, including dividends paid and date and price of all
transactions on a Shareholder's account; (iv) any stop or restraining order
placed against a Shareholder's account; (v) information with respect to
withholdings; (vi) any capital gain or dividend reinvestment order, plan
application, dividend address and correspondence relating to the current
maintenance of a Shareholder's account; (vii) any information required in
order for the Bank to perform the calculations contemplated or required by
this Agreement; and (ix) such other information and data as may be required
by applicable law.
10
10.02 Any records required to be maintained by Rule 31a-1 under the
1940 Act will be preserved for the periods prescribed in Rule 31a-2 under
the 1940 Act. Such records may be inspected by the Company at reasonable
times. The Bank, may, at its option at any time, and shall forthwith upon
the Company's demand, turn over to the Company and cease to retain in the
Bank's files, records and documents created and maintained by the Bank in
performance of its service or for its protection. At the end of the six-
year retention period, such periods and documents will either be turned
over to the Company, or destroyed in accordance with the Company's
authorization.
10.03 Procedures applicable to the services to be performed hereunder
may be established from time to time by agreement between the Fund and the
Bank. The Bank shall have the right to utilize any shareholder accounting
and recordkeeping system which, in its opinion, qualifies to perform any
services to be performed hereunder and is acceptable to the Company
provided that such acceptance shall not be unreasonably withheld. The Bank
shall keep records relating to the services performed hereunder, in the
form and manner as it may deem advisable.
ARTICLE 11. Fees and Expenses
11.01 For performance by the Bank pursuant to this Agreement, the Fund
agree to pay the Bank an annual maintenance fee for each Shareholder
account as set out in the initial fee schedule attached hereto. Such fees
and out-of-pocket expenses and advances identified under Section 11.02
below may be changed from time to time subject to mutual written agreement
between the Fund and the Bank.
11.02 In addition to the fee paid under Section 11.01 above, the Fund
agree to reimburse the Bank for out-of-pocket expenses or advances incurred
11
by the Bank for the items set out in the fee schedule attached hereto. In
addition, any other expenses incurred by the Bank at the request or with
the consent of the Fund including, without limitation, any equipment or
supplies specifically ordered by the Company or required to be purchased by
the Company, will be reimbursed by the Fund.
11.03 The Fund agree to pay all fees and reimbursable expenses within
thirty days following the mailing of the respective billing notice.
Postage for mailing of dividends, proxies, Fund reports and other mailings
to all shareholder accounts shall be advanced to the Bank by the Fund at
least seven (7) days prior to the mailing date of such material.
ARTICLE 12. Representations and Warranties of the Bank
The Bank represents and warrants to the Company that:
12.01 It is a trust company duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
12.02 It is empowered under applicable laws and by its by-laws to
enter into and perform this Agreement.
12.03 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
12.04 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
ARTICLE 13. Representations and Warranties of the Company
12
The Company represents and warrants to the Bank that:
13.01 It is a business trust duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts as set forth
in the preamble hereto.
13.02 It is empowered under applicable laws and by its Agreement and
Declaration of Trust dated August 1, 1994 (the `Declaration'') and by-laws
to enter into and perform this Agreement.
13.03 All proceedings required by said Declaration and by-laws have
been taken to authorize it to enter into and perform this Agreement.
13.04 It is an open-end investment company registered under the 1940
Act.
13.05 A registration statement on Form N-1A (including a prospectus
and statement of additional information) under the Securities Act of 1933
and the 1940 Act is currently effective and will remain effective, and
appropriate state securities law filings have been made and will continue
to be made, with respect to all Shares of the Company being offered for
sale.
13.06 When Shares are hereafter issued in accordance with the terms of
the Prospectus, such Shares shall be validly issued, fully paid and
nonassessable by the Fund.
ARTICLE 14. Indemnification
14.01 Except as set forth in subparagraph (f) hereof, the Bank shall
not be responsible for, and the Company shall indemnify and hold the Bank
13
harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions taken or omitted to be taken by the Bank or its agent
or subcontractors in good faith in reliance on or use by the Bank or its
agents or subcontractors of information, records and documents which (i)
are received by the Bank or its agents or subcontractors and furnished to
it by or on behalf of the Fund, and (ii) have been prepared and/or
maintained by the Fund or any other person or firm on behalf of the Fund.
(b) Any action taken or omitted to be taken by the Bank in connection
with its appointment in good faith in reliance upon any law, act,
regulation or interpretation of the same even though the same may
thereafter have been altered, changed, amended or repealed.
(c) The Fund' refusal or failure to comply with the terms of this
Agreement, or which arise out of the Funds' lack of good faith, negligence
or willful misconduct or which arise out of the breach of any
representation or warranty of the Fund hereunder.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests, whether written or oral, of
the Fund.
(e) The offer or sale of Shares by the Company in violation of any
requirement under the federal securities laws or regulations of any State
that such Shares be registered in such State or in violation of any stop
order or other determination or ruling by any federal agency or any State
with respect to the offer or sale of such Shares in such state.
14
(f) In addition to any other limitation provided herein, or by law,
indemnification under this Agreement shall not apply to actions or
omissions of the Bank or its trustees, officers, employees, agents or
subcontractors in cases of its own gross negligence, willful misconduct,
bad faith, reckless disregard of its duties or their own duties hereunder,
knowing violation of law or fraud.
14.02 The Bank shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributed to any action
or failure or omission to act by the Bank as a result of the Bank's lack of
good faith, negligence, willful misconduct, knowing violation of law or
fraud.
14.03 At any time the Bank may apply to any officer of the Company for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under
this Agreement, and the Bank and its agents or subcontractors shall not be
liable and shall be indemnified by the Company for any action taken or
omitted by it in reliance upon such instructions or upon the opinion of
such counsel except for a knowing violation of law. The Bank, its agents
and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably
believed to be genuine and to have been signed by the proper person or
persons, or subcontractors by machine readable input, telex, CRT data entry
or other similar means authorized by the Fund, and shall not be held to be
have notice of any change of authority of any person, until receipt of
written notice thereof from the Fund.
14.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes,
15
interruptions of electrical power or other utilities, equipment or
transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable to the
other for any damages resulting from such failure to perform or otherwise
from such causes.
14.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or
for any act or failure to act hereunder as contemplated by this Agreement.
14.06 In order that the indemnification provision contained in this
Article 14 shall apply, however, it is understood that if any case the Fund
may be asked to indemnify or save the Bank harmless, the Fund shall be
fully and promptly advised of all pertinent facts concerning the situation
in question, and it is further understood that the Bank will use all
reasonable care to identify and notify the Fund promptly concerning any
situation which presents or appears likely to present the probability of
such claim for indemnification. The Fund shall have the option to defend
the Bank against any claim which may be the subject of this
indemnification, and in the event that the Fund so elects it will so notify
the Bank and thereupon the Fund shall take over the complete defense of the
claim, and the Bank shall in such situations incur no further legal or
other expenses in connection with such claim, provided however, if the
defendants in any such action include both the Fund and the Bank, and the
Bank shall have reasonably concluded that there may be legal defenses
available to it which are different from or additional to those available
to the Fund, the Bank shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of
such action on behalf of the Bank with such cost to be borne by the party
hereto ultimately liable with respect to such claim. The Bank shall in no
case confess any claim or make any compromise in any case in which the Fund
16
will be asked to indemnify the Bank except with prior written consent of
the Fund, which consent shall not be unreasonably withheld. The Fund shall
not settle any claim without the Bank's prior written consent, provided
however that the Bank shall not unreasonably withhold its consent.
ARTICLE 15. Covenants of the Company and the Bank
15.01 The Company shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Trustees of the Company
authorizing the appointment of the Bank and the execution and delivery of
this Agreement.
(b) A copy of the Declaration and by-laws of the Company and all
amendments thereto.
(c) Copies of each vote of the Trustees designating authorized persons
to give instructions to the Bank, and a Certificate providing specimen
signatures for such authorized persons.
(d) Certificates as to any change in any officer or Trustee of the
Company.
(e) All account application forms and other documents relating to
shareholder accounts or relating to any plan, program or service offered by
the Company.
(f) A list of all Shareholders of the Fund with the name, address and
tax identification number of each Shareholder, and the number of Shares of
the Fund held by each, certificate numbers and denominations (if any
certificates have been issued), lists of any account against which stops
17
have been placed, together with the reasons for said stops, and the number
of Shares redeemed by the Fund.
(g) An opinion of counsel for the Company with respect to the validity
of the Shares and the status of such Shares under the Securities Act of
1933 which may be copies of a previously issued opinion.
(h) Copies of the Fund registration statement on Form N-1A as amended
and declared effective by the Securities and Exchange Commission and all
post-effective amendments thereto.
(i) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Bank in the proper performance of
its duties.
15.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Company for safekeeping of check
forms and facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of such forms and devices.
15.03 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the 1940 Act and the Rules thereunder,
the Bank agrees that all such records prepared or maintained by the Bank
relating to the services to be performed by the Bank hereunder are the
confidential property of the Company and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered to the Company on and in accordance with its request.
15.04 The Bank and the Company agree that all books, records,
information and data pertaining to the business of the other party which
18
are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
15.05 In case of any requests or demands for the inspection of the
Shareholder records of the Company, the Bank will endeavor to notify the
Company and to secure instructions from an authorized officer of the
Company as to such instruction. The Bank reserves the right, however, to
exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person.
ARTICLE 16. Term of Agreement
16.01 This Agreement shall become effective on the date hereof (the
`Effective Date'') and shall continue in effect for twelve months from the
Effective Date (the ``nitial Term'') and from year to year thereafter with
respect to each Fund, provided that subsequent to the Initial Term, this
Agreement may be terminated by either party at any time without payment of
any penalty upon ninety (90) days written notice to the other. In the
event such notice is given by the Company, it shall be accompanied by a
resolution of the Board of Trustees, certified by the Secretary, electing
to terminate this Agreement and designating a successor transfer agent.
16.02 Should the Company exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and material will
be borne by the Company. Additionally, the Bank reserves the right to
charge for any other reasonable expenses associated with such termination.
ARTICLE 17. Additional Funds
19
17.01 In the event that the Company establishes one or more series of
Shares in addition to the initial series with respect to which it desires
to have the Bank render services as transfer agent under the terms hereof,
it shall so notify the Bank in writing, and if the Bank agrees in writing
to provide such services, such series of Shares shall become a Fund
hereunder.
ARTICLE 18. Assignment
18.01 Except as provided in Section 18.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
18.02 This Agreement shall inure to the benefit of and be binding upon
the parties and the irrespective permitted successors and assigns.
18.03 The Bank, may subcontract for the performance of any of the
services to be provided hereunder to third parties, including any affiliate
of the Bank, provided that the Bank shall remain liable hereunder for any
act or omissions of any subcontractor as if performed by the Bank. The
Bank will obtain the consent of the Company for the use of subcontractors
provided that the Company will not unreasonably withhold its consent.
ARTICLE 19. Amendment
19.01 This Agreement may be amended or modified by a written agreement
executed by both parties.
ARTICLE 20. Massachusetts Law to Apply
20
20.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
ARTICLE 21. Merger of Agreement and Severability
21.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
21.02 In the event any provision of this Agreement shall be held
unenforceable or invalid for any reason, the remainder of the Agreement
shall remain in full force and effect.
21.03 This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original; but such counterparts
shall together, constitute only one instrument.
ARTICLE 22. Notices
22.01 Any notice or other instrument in writing authorized or required
by this Agreement to be given to either party hereto will be sufficiently
given if addressed to such party and mailed or delivered to it at its
office at the address set forth below:
For the Fund: FundManager Trust
c/o Mr. Charles Lipson
MD Hisrch Division
Freedom Capital Management
21
200 Liberty Street
New York, NY 10281
For the Bank: Investors Bank & Trust Company
P.O.Box 1537
Boston, Massachusetts 02205-1537
Attention: Tim Murphy
ARTICLE 23. Limitation of Liability
23.01 The term The FundManager means and refers to the Trustees from
time to time serving under the Declaration, as the same may subsequently
thereto have been, or subsequently hereto be, amended. It is expressly
agreed that the obligations of the Fund hereunder shall not be binding upon
any of the Trustees, shareholders, nominees, officers, agents or employees
of the Fund, personally, but shall bind only the property of the Fund as
provided in the Declaration. The execution and delivery of this agreement
have been authorized by the Trustees of the fund and this Agreement has
been signed by an authorized officer of the Fund, acting as such, and
neither such authorization by such Trustees nor such execution and delivery
by such officer shall be deemed to have been made by any of them, but shall
bind only the property of the Fund as provided in the Declaration.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and
through their duly authorized officers, as of the day and the year first
above written.
FundManager Trust
22
By:/s/ John Danello
John Danello
ATTEST:
/S/Maureen M Renzi
Maureen M Renzi
Investors Bank & Trust Company
By:/S/ Robert D. Mancuso
Robert D. Mancuso
Managing Director
ATTEST:
Signature unidentifiable
DATE:11/5/95
Exhibit 19 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FUNDMANAGER TRUST and the
Deputy General Counsel of Federated Services Company, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, by means of the Securities and Exchange Commission's electronic
disclosure system known as EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
Chairman and Trustee
Dexter A. Dodge (Chief Executive Officer)
President
Charles B. Lipson (Principal Executive Officer)
/s/Judith J. Mackin Treasurer January 20, 1997
Judith J. Mackin (Principal Financial and
Accounting Officer)
/s/Ernst T. Kendall Trustee January 20, 1997
Ernst T. Kendall
Trustee
Richard B. Osterberg
Trustee
John R. Haack
Sworn to and subscribed before me this 20th day of January, 1997
/s/Marie M. Hamm
Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Oct. 9, 2000
Member, Pennsylvania Association
of Notaries
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FUNDMANAGER TRUST and the
Deputy General Counsel of Federated Services Company, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, by means of the Securities and Exchange Commission's electronic
disclosure system known as EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
Chairman and Trustee
Dexter A. Dodge (Chief Executive Officer)
/s/Charles B. Lipson President January 20, 1997
Charles B. Lipson (Principal Executive Officer)
/s/Judith J. Mackin Treasurer January 20, 1997
Judith J. Mackin (Principal Financial and
Accounting Officer)
Trustee
Ernst T. Kendall
Trustee
Richard B. Osterberg
Trustee
John R. Haack
Sworn to and subscribed before me this 20th day of January, 1997
/s/Marie M. Hamm
Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Oct. 9, 2000
Member, Pennsylvania Association
of Notaries
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FUNDMANAGER TRUST and the
Deputy General Counsel of Federated Services Company, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, by means of the Securities and Exchange Commission's electronic
disclosure system known as EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/Dexter A. Dodge Chairman and TrusteeJanuary 20, 1997
Dexter A. Dodge (Chief Executive Officer)
President
Charles B. Lipson (Principal Executive Officer)
/s/Judith J. Mackin Treasurer January 20, 1997
Judith J. Mackin (Principal Financial and
Accounting Officer)
Trustee
Ernst T. Kendall
Trustee
Richard B. Osterberg
Trustee
John R. Haack
Sworn to and subscribed before me this 20th day of January, 1997
/s/Marie M. Hamm
Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Oct. 9, 2000
Member, Pennsylvania Association
of Notaries
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FUNDMANAGER TRUST and the
Deputy General Counsel of Federated Services Company, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, by means of the Securities and Exchange Commission's electronic
disclosure system known as EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
Chairman and Trustee
Dexter A. Dodge (Chief Executive Officer)
President
Charles B. Lipson (Principal Executive Officer)
/s/Judith J. Mackin Treasurer January 20, 1997
Judith J. Mackin (Principal Financial and
Accounting Officer)
Trustee
Ernst T. Kendall
Trustee
Richard B. Osterberg
/s/John R. Haack Trustee January 20, 1997
John R. Haack
Sworn to and subscribed before me this 20th day of January, 1997
/s/Marie M. Hamm
Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Oct. 9, 2000
Member, Pennsylvania Association
of Notaries
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of FUNDMANAGER TRUST and the
Deputy General Counsel of Federated Services Company, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed
with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, by means of the Securities and Exchange Commission's electronic
disclosure system known as EDGAR; and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
Chairman and Trustee
Dexter A. Dodge (Chief Executive Officer)
President
Charles B. Lipson (Principal Executive Officer)
/s/Judith J. Mackin Treasurer January 16, 1997
Judith J. Mackin (Principal Financial and
Accounting Officer)
Trustee
Ernst T. Kendall
/s/Richard B. Osterberg Trustee January 16, 1997
Richard B. Osterberg
Trustee
John R. Haack
Sworn to and subscribed before me this 16th day of January, 1997
/s/Nancy McGee
Nancy McGee
Notarial Seal
Nancy McGee, Notary Public
My Commission Expires May 6, 1999
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Aggressive Growth Portfolio
Financial Adviser
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 36,558,386
<INVESTMENTS-AT-VALUE> 40,313,655
<RECEIVABLES> 123,566
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,437,221
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 60,781
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,808,555
<SHARES-COMMON-STOCK> 2,318,177
<SHARES-COMMON-PRIOR> 1,838,433
<ACCUMULATED-NII-CURRENT> (535,671)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,348,787
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,754,769
<NET-ASSETS> 38,944,018
<DIVIDEND-INCOME> 870,754
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 603,846
<NET-INVESTMENT-INCOME> 266,908
<REALIZED-GAINS-CURRENT> 5,623,017
<APPREC-INCREASE-CURRENT> (1,522,338)
<NET-CHANGE-FROM-OPS> 4,367,587
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 824,279
<DISTRIBUTIONS-OF-GAINS> 5,432,040
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 717,174
<NUMBER-OF-SHARES-REDEEMED> 547,710
<SHARES-REINVESTED> 310,280
<NET-CHANGE-IN-ASSETS> 6,708,778
<ACCUMULATED-NII-PRIOR> 24,146
<ACCUMULATED-GAINS-PRIOR> 5,173,306
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 183,337
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 603,846
<AVERAGE-NET-ASSETS> 36,250,078
<PER-SHARE-NAV-BEGIN> 18.310
<PER-SHARE-NII> 0.120
<PER-SHARE-GAIN-APPREC> 1.640
<PER-SHARE-DIVIDEND> 0.380
<PER-SHARE-DISTRIBUTIONS> 2.890
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.800
<EXPENSE-RATIO> 1.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> FundManager Portfolios
Aggressive Growth Portfolio
No Load
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 36,558,386
<INVESTMENTS-AT-VALUE> 40,313,655
<RECEIVABLES> 123,566
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,437,221
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 60,781
<TOTAL-LIABILITIES> 60,781
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,808,555
<SHARES-COMMON-STOCK> 84,732
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (535,671)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5,348,787
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,754,769
<NET-ASSETS> 1,432,422
<DIVIDEND-INCOME> 870,754
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 603,846
<NET-INVESTMENT-INCOME> 266,908
<REALIZED-GAINS-CURRENT> 5,623,017
<APPREC-INCREASE-CURRENT> (1,522,338)
<NET-CHANGE-FROM-OPS> 4,367,587
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,446
<DISTRIBUTIONS-OF-GAINS> 15,496
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 88,427
<NUMBER-OF-SHARES-REDEEMED> 4,881
<SHARES-REINVESTED> 1,186
<NET-CHANGE-IN-ASSETS> 6,708,778
<ACCUMULATED-NII-PRIOR> 24,146
<ACCUMULATED-GAINS-PRIOR> 5,173,306
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 183,337
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 603,846
<AVERAGE-NET-ASSETS> 36,250,078
<PER-SHARE-NAV-BEGIN> 18.310
<PER-SHARE-NII> 0.040
<PER-SHARE-GAIN-APPREC> 1.830
<PER-SHARE-DIVIDEND> 0.380
<PER-SHARE-DISTRIBUTIONS> 2.890
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.910
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> FundManager Portfolios
Growth Portfolio
Financial Adviser
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 24,122,382
<INVESTMENTS-AT-VALUE> 27,515,291
<RECEIVABLES> 79,893
<ASSETS-OTHER> 18,963
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,614,147
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 97,315
<TOTAL-LIABILITIES> 97,315
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,610,282
<SHARES-COMMON-STOCK> 1,776,631
<SHARES-COMMON-PRIOR> 1,612,567
<ACCUMULATED-NII-CURRENT> 136,071
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,377,570
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,392,909
<NET-ASSETS> 26,639,355
<DIVIDEND-INCOME> 490,248
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 479,488
<NET-INVESTMENT-INCOME> 10,760
<REALIZED-GAINS-CURRENT> 3,731,601
<APPREC-INCREASE-CURRENT> (308,815)
<NET-CHANGE-FROM-OPS> 3,433,546
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 411,153
<DISTRIBUTIONS-OF-GAINS> 4,398,651
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 504,686
<NUMBER-OF-SHARES-REDEEMED> 567,773
<SHARES-REINVESTED> 227,151
<NET-CHANGE-IN-ASSETS> 1,494,891
<ACCUMULATED-NII-PRIOR> 63,122
<ACCUMULATED-GAINS-PRIOR> 4,541,801
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 132,472
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 494,483
<AVERAGE-NET-ASSETS> 26,550,891
<PER-SHARE-NAV-BEGIN> 16.140
<PER-SHARE-NII> 0.010
<PER-SHARE-GAIN-APPREC> 1.850
<PER-SHARE-DIVIDEND> 0.240
<PER-SHARE-DISTRIBUTIONS> 2.770
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 14.990
<EXPENSE-RATIO> 1.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> FundManager Portfolios
Growth Portfolio
No-Load Class
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 24,122,382
<INVESTMENTS-AT-VALUE> 27,515,291
<RECEIVABLES> 79,893
<ASSETS-OTHER> 18,963
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,614,147
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 97,315
<TOTAL-LIABILITIES> 97,315
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,610,282
<SHARES-COMMON-STOCK> 58,324
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 136,071
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,377,570
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,392,909
<NET-ASSETS> 877,477
<DIVIDEND-INCOME> 490,248
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 479,488
<NET-INVESTMENT-INCOME> 10,760
<REALIZED-GAINS-CURRENT> 3,731,601
<APPREC-INCREASE-CURRENT> (308,815)
<NET-CHANGE-FROM-OPS> 3,433,546
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 11,296
<DISTRIBUTIONS-OF-GAINS> 12,543
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 61,018
<NUMBER-OF-SHARES-REDEEMED> 3,627
<SHARES-REINVESTED> 933
<NET-CHANGE-IN-ASSETS> 1,494,891
<ACCUMULATED-NII-PRIOR> 63,122
<ACCUMULATED-GAINS-PRIOR> 4,541,801
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 132,472
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 494,483
<AVERAGE-NET-ASSETS> 26,550,891
<PER-SHARE-NAV-BEGIN> 16.140
<PER-SHARE-NII> (0.060)
<PER-SHARE-GAIN-APPREC> 2.020
<PER-SHARE-DIVIDEND> 0.290
<PER-SHARE-DISTRIBUTIONS> 2.770
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 15.040
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> FundManager Portfolios
Growth & Income Portfolio
Financial Adviser Class
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 27,170,462
<INVESTMENTS-AT-VALUE> 32,248,919
<RECEIVABLES> 41,887
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32,290,806
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 98,042
<TOTAL-LIABILITIES> 98,042
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,816,955
<SHARES-COMMON-STOCK> 1,891,259
<SHARES-COMMON-PRIOR> 1,949,419
<ACCUMULATED-NII-CURRENT> 54,611
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,242,741
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,078,457
<NET-ASSETS> 31,571,487
<DIVIDEND-INCOME> 1,778,580
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 589,726
<NET-INVESTMENT-INCOME> 1,188,854
<REALIZED-GAINS-CURRENT> 4,021,879
<APPREC-INCREASE-CURRENT> (745,572)
<NET-CHANGE-FROM-OPS> 4,465,161
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,768,401
<DISTRIBUTIONS-OF-GAINS> 5,595,638
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 287,591
<NUMBER-OF-SHARES-REDEEMED> 626,351
<SHARES-REINVESTED> 280,600
<NET-CHANGE-IN-ASSETS> (3,450,660)
<ACCUMULATED-NII-PRIOR> 506,232
<ACCUMULATED-GAINS-PRIOR> 5,981,578
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 167,996
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 608,996
<AVERAGE-NET-ASSETS> 33,419,402
<PER-SHARE-NAV-BEGIN> 18.280
<PER-SHARE-NII> 0.600
<PER-SHARE-GAIN-APPREC> 1.600
<PER-SHARE-DIVIDEND> 0.860
<PER-SHARE-DISTRIBUTIONS> 2.930
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.690
<EXPENSE-RATIO> 1.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 032
<NAME> FundManager Portfolios
Growth & Income Portfolio
No-Load Class
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 27,170,462
<INVESTMENTS-AT-VALUE> 32,248,919
<RECEIVABLES> 41,887
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 32,290,806
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 98,042
<TOTAL-LIABILITIES> 98,042
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22,816,955
<SHARES-COMMON-STOCK> 37,188
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 54,611
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,242,741
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,078,457
<NET-ASSETS> 621,277
<DIVIDEND-INCOME> 1,778,580
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 589,726
<NET-INVESTMENT-INCOME> 1,188,854
<REALIZED-GAINS-CURRENT> 4,021,879
<APPREC-INCREASE-CURRENT> (745,572)
<NET-CHANGE-FROM-OPS> 4,465,161
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 15,005
<DISTRIBUTIONS-OF-GAINS> 22,147
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 41,141
<NUMBER-OF-SHARES-REDEEMED> 5,808
<SHARES-REINVESTED> 1,855
<NET-CHANGE-IN-ASSETS> (3,450,660)
<ACCUMULATED-NII-PRIOR> 506,232
<ACCUMULATED-GAINS-PRIOR> 5,981,578
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 167,996
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 608,996
<AVERAGE-NET-ASSETS> 33,419,402
<PER-SHARE-NAV-BEGIN> 18.280
<PER-SHARE-NII> 0.390
<PER-SHARE-GAIN-APPREC> 1.860
<PER-SHARE-DIVIDEND> 0.890
<PER-SHARE-DISTRIBUTIONS> 2.930
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.710
<EXPENSE-RATIO> 1.28
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 041
<NAME> FundManager Portfolios
Bond Portfolio
Financial Adviser Class
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 72,359,044
<INVESTMENTS-AT-VALUE> 72,082,094
<RECEIVABLES> 248,507
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 72,330,601
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 176,380
<TOTAL-LIABILITIES> 176,380
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 75,366,090
<SHARES-COMMON-STOCK> 7,015,708
<SHARES-COMMON-PRIOR> 4,074,856
<ACCUMULATED-NII-CURRENT> 608,814
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,543,733)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (282,297)
<NET-ASSETS> 70,166,430
<DIVIDEND-INCOME> 4,897,963
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,086,195
<NET-INVESTMENT-INCOME> 3,811,768
<REALIZED-GAINS-CURRENT> (282,397)
<APPREC-INCREASE-CURRENT> (544,860)
<NET-CHANGE-FROM-OPS> 2,984,611
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,260,538
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 689,245
<NUMBER-OF-SHARES-REDEEMED> 1,496,607
<SHARES-REINVESTED> 239,118
<NET-CHANGE-IN-ASSETS> (5,264,395)
<ACCUMULATED-NII-PRIOR> 869,167
<ACCUMULATED-GAINS-PRIOR> (3,030,226)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 367,138
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,123,395
<AVERAGE-NET-ASSETS> 73,433,898
<PER-SHARE-NAV-BEGIN> 10.210
<PER-SHARE-NII> 0.520
<PER-SHARE-GAIN-APPREC> (0.120)
<PER-SHARE-DIVIDEND> 0.590
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.000
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 042
<NAME> FundManager Portfolios
Bond Portfolio
No-Load Class
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 72,359,044
<INVESTMENTS-AT-VALUE> 72,082,094
<RECEIVABLES> 248,507
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 72,330,601
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 176,380
<TOTAL-LIABILITIES> 176,380
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 75,366,090
<SHARES-COMMON-STOCK> 198,015
<SHARES-COMMON-PRIOR> 3,508,420
<ACCUMULATED-NII-CURRENT> 608,814
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (3,543,733)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (276,950)
<NET-ASSETS> 1,987,791
<DIVIDEND-INCOME> 4,897,963
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,086,195
<NET-INVESTMENT-INCOME> 3,811,768
<REALIZED-GAINS-CURRENT> (282,297)
<APPREC-INCREASE-CURRENT> (544,860)
<NET-CHANGE-FROM-OPS> 2,984,611
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 42,793
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 208,277
<NUMBER-OF-SHARES-REDEEMED> 11,365
<SHARES-REINVESTED> 1,103
<NET-CHANGE-IN-ASSETS> (5,264,395)
<ACCUMULATED-NII-PRIOR> 869,167
<ACCUMULATED-GAINS-PRIOR> (3,030,226)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 367,138
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,123,395
<AVERAGE-NET-ASSETS> 73,433,898
<PER-SHARE-NAV-BEGIN> 10.210
<PER-SHARE-NII> 0.550
<PER-SHARE-GAIN-APPREC> (0.160)
<PER-SHARE-DIVIDEND> 0.560
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.040
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> FundManager Portfolios
Managed Total Return Fund
Financial Adviser Class
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Sep-30-1996
<PERIOD-END> Sep-30-1996
<INVESTMENTS-AT-COST> 11,562,772
<INVESTMENTS-AT-VALUE> 12,304,759
<RECEIVABLES> 35,212
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,339,971
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 217,418
<TOTAL-LIABILITIES> 217,418
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,467,340
<SHARES-COMMON-STOCK> 1,058,564
<SHARES-COMMON-PRIOR> 1,266,151
<ACCUMULATED-NII-CURRENT> 99,297
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 813,929
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 741,987
<NET-ASSETS> 12,122,553
<DIVIDEND-INCOME> 778,427
<INTEREST-INCOME> 13,686
<OTHER-INCOME> 0
<EXPENSES-NET> 297,402
<NET-INVESTMENT-INCOME> 494,711
<REALIZED-GAINS-CURRENT> 948,274
<APPREC-INCREASE-CURRENT> (468,365)
<NET-CHANGE-FROM-OPS> 974,620
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 614,026
<DISTRIBUTIONS-OF-GAINS> 636,120
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 94,665
<NUMBER-OF-SHARES-REDEEMED> 410,396
<SHARES-REINVESTED> 108,144
<NET-CHANGE-IN-ASSETS> (2,626,774)
<ACCUMULATED-NII-PRIOR> 135,353
<ACCUMULATED-GAINS-PRIOR> 585,034
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 67,171
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 304,924
<AVERAGE-NET-ASSETS> 13,431,785
<PER-SHARE-NAV-BEGIN> 11.650
<PER-SHARE-NII> 0.420
<PER-SHARE-GAIN-APPREC> 0.400
<PER-SHARE-DIVIDEND> 0.500
<PER-SHARE-DISTRIBUTIONS> 0.520
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.450
<EXPENSE-RATIO> 2.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
