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
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Pre-Effective Amendment No. ........................
Post-Effective Amendment No. 17 .......................... X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 18 ............................................. X
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FUNDMANAGER PORTFOLIOS
(Exact Name of Registrant as Specified in Charter)
One Beacon Street, Boston, Massachusetts 02108
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Victor R. Siclari, Esquire
Federated Investors Tower
1001 Liberty Avenue
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 31, 2000 pursuant to paragraph (b)(1)(iii)
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.
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
09/09/99
[FUNDMANAGER LOGO]
FUNDMANAGER PORTFOLIOS
- ----------------------
Selecting Leading Fund Managers for Investors Since 1984
AGGRESSIVE GROWTH PORTFOLIO
GROWTH PORTFOLIO
GROWTH WITH INCOME PORTFOLIO
INTERNATIONAL PORTFOLIO
MANAGED TOTAL RETURN PORTFOLIO
BOND PORTFOLIO (Class A Shares Only)
CLASS A SHARES
CLASS B SHARES
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Portfolio Goals, Strategies, Performance and Investment Risks ......... 1
Introduction .......................................................... 1
Portfolio Information ................................................. 1
- Aggressive Growth Portfolio ........................................ 2
- Growth Portfolio ................................................... 3
- Growth with Income Portfolio ....................................... 4
- International Portfolio ............................................ 5
- Managed Total Return Portfolio ..................................... 6
- Bond Portfolio ..................................................... 7
What are the Portfolios' Fees and Expenses? ........................... 8
Investment Approach and Main Risks of Investing in FundManager
Portfolios .......................................................... 10
How to Purchase, Redeem and Exchange Shares ........................... 14
Account and Share Information ......................................... 23
Who Manages the Trust? ................................................ 24
Distribution of Portfolio Shares ...................................... 25
Financial Information ................................................. 26
Financial Highlights .................................................. 26
- Aggressive Growth Portfolio ........................................ 27
- Growth Portfolio ................................................... 29
- Growth with Income Portfolio ....................................... 31
- Bond Portfolio ..................................................... 33
- Managed Total Return Portfolio ..................................... 34
- International Portfolio ............................................ 36
</TABLE>
An investment in the Portfolios is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Also, the Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this prospectus, and
any representation to the contrary is a criminal offense.
Prospectus
January 31, 2000
<PAGE>
PORTFOLIO GOALS, STRATEGIES, PERFORMANCE AND INVESTMENT RISKS
- --------------------------------------------------------------------------------
Introduction
- ------------
The FundManager Portfolios (the "Trust") offer investment opportunities to a
wide range of investors, from investors with shorter term goals to those with
long-term goals willing to bear the risks of the stock market for potentially
greater rewards.
Each FundManager Portfolio is a "fund-of-funds" -- meaning it invests in other
mutual funds rather than directly in portfolio securities like stocks, bonds,
and money market instruments. These underlying mutual funds will be open-end
funds and have similar investment goals as the Portfolios. Open-end mutual funds
continuously sell their shares to the public and will purchase (redeem) their
shares from shareholders. In addition, the Portfolios may also purchase
closed-end funds and unit investment trusts. Closed-end funds initially sell a
limited number of shares that are traded on the open market and do not redeem
their shares. Unit investment trusts are unmanaged investment vehicles that do
not have a board of directors, but issue redeemable securities.
The advantage of a fund-of-funds is that it relieves you of having to select
from the over 9,500 mutual fund investment choices in existence today. Each
FundManager Portfolio invests generally in 6 to 10 mutual funds whose styles and
objectives are consistent with the Portfolio's. Through careful research and
analysis, Freedom Capital Management Corporation (the "Adviser") selects
underlying mutual funds based upon a variety of criteria that provides you with
an investment in a broad array of portfolio management expertise and investment
styles. This approach provides you with a broader diversification of your
investment and is intended to minimize volatility over the long term.
Portfolio Information
- ---------------------
Following is a description of each Portfolio's goals (investment objectives),
the types of funds in which the Portfolios invest, and the principal investments
of the underlying funds. The underlying funds may invest in a wide variety of
securities, which are described in detail in the Portfolios' Statement of
Additional Information.
Also included on the following pages is performance information for Class A
Shares (formerly named Financial Adviser Class of shares) over a period of time.
Class A Shares of each Portfolio investment (except Bond Portfolio) are sold
subject to a sales charge (load). The impact of the sales charges on a Portfolio
(except Bond Portfolio) is reflected in the performance figures of the
Portfolios in the Average Annual Total Return tables on the following pages, but
is not reflected in the bar charts. If the bar charts reflected sales charges,
the returns for all the Portfolios, except Bond Portfolio, would be less than
those shown. For each Portfolio that also offers Class B Shares, the Securities
and Exchange Commission requires us to show Class A Shares because it has the
longest operating history.
1
<PAGE>
Aggressive Growth Portfolio
- --------------------------------------------------------------------------------
What is the Portfolio's goal?
Capital appreciation without regard to current income.
What types of funds does the Portfolio invest in?
The Portfolio offers long-term investors growth potential through a variety of
stock funds, including small-cap, mid-cap, sector, and capital appreciation
funds. These underlying funds will invest primarily in common stocks,
convertible securities, including convertible debentures and warrants. The
Portfolio may also invest in funds that invest primarily in long- or short-term
bonds and other debt securities whenever the Adviser believes that these funds
offer the potential for capital appreciation.
What are the risks of investing in the Portfolio?
As a stock fund, the Portfolio must contend with the volatility and
unpredictability of the stock markets. In addition, smaller stocks involve
special risks since those stocks have historically been more volatile than
stocks of larger companies.
Average Annual Total Returns (for the periods ended 12/31/99)
<TABLE>
<CAPTION>
Past Past Past
One Year 5 Years Ten Years
-------- ------- ---------
<S> <C> <C> <C>
Portfolio (after sales charge) 21.24% 18.35% 13.45%
Russell 2000 Index 21.26% 16.69% 13.40%
</TABLE>
[TABULAR REPRESENTATION OF BAR CHART]
<TABLE>
<S> <C>
1990 -7.43%
1991 38.02%
1992 5.50%
1993 14.08%
1994 -1.15%
1995 24.75%
1996 16.58%
1997 16.65%
1998 12.96%
1999 28.30%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 25.66% (quarter ended Dec. 31, 1998) and the lowest return for a
quarter was (19.00)% (quarter ended Sept. 30, 1998).
- --------------------------------------------------------------------------------
The bar chart and table shown above provide an indication of the risks of
investing in Class A Shares of the Aggressive Growth Portfolio by showing
changes in the Portfolio's performance from year to year over a 10-year period
and by showing how the Portfolio's average annual returns for one, five, and ten
years compare to those of a broad-based securities market index. The Russell
2000 Index is an unmanaged index consisting of approximately 2000 small
capitalization common stocks. This index is unmanaged; actual investments may
not be made in an index. Moreover, this index has not been adjusted to reflect
sales charges, expenses or other fees the SEC requires to be reflected in the
Portfolio's performance. While past performance does not necessarily predict
future performance, this information provides you with historical performance
information so that you can analyze whether the Portfolio's investment risks are
balanced by their potential rewards.
- --------------------------------------------------------------------------------
2
<PAGE>
Growth Portfolio
- --------------------------------------------------------------------------------
What is the Portfolio's goal?
Capital appreciation with current income a secondary consideration.
What types of funds does the Portfolio invest in?
The Portfolio offers long-term growth investors exposure to funds that invest in
large-cap, blue chip, mid-cap and style (such as value, growth, or
capitalization) index funds. These underlying funds will invest primarily in
common stocks, convertible securities, including convertible debentures and
warrants. The Portfolio may also invest in funds that invest primarily in long-
or short-term bonds and other debt securities whenever the Adviser believes that
these funds offer the potential for capital appreciation.
What are the risks of investing in the Portfolio?
As primarily a stock fund, the Portfolio must contend with the volatility and
unpredictability of the stock markets. In addition, smaller stocks involve
special risks since those stocks have historically been more volatile than
stocks of larger companies.
Average Annual Total Returns (for the periods ended 12/31/99)
<TABLE>
<CAPTION>
Past Past Past
One Year 5 Years Ten Years
-------- ------- ---------
<S> <C> <C> <C>
Portfolio (after sales charge) 10.15% 20.36% 14.04%
S & P 500 Index 21.04% 28.56% 18.21%
</TABLE>
[TABULAR REPRESENTATION OF BAR CHART]
<TABLE>
<S> <C>
1990 -6.22%
1991 28.83%
1992 8.87%
1993 12.52%
1994 -0.48%
1995 28.15%
1996 19.32%
1997 27.51%
1998 17.60%
1999 16.58%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 21.34% (quarter ended Dec. 31, 1998) and the lowest return for a
quarter was (12.78)% (quarter ended Sept. 30, 1990).
- --------------------------------------------------------------------------------
The bar chart and table shown above provide an indication of the risks of
investing in Class A Shares of the Growth Portfolio by showing changes in the
Portfolio's performance from year to year over a 10-year period and by showing
how the Portfolio's average annual returns for one, five, and ten years compare
to those of a broad-based securities market index. Standard & Poor's 500 Index
(S&P 500) is an unmanaged capitalization-weighted index of 500 stocks designed
to measure performance of the broad domestic economy through changes in the
aggregate market value of 500 stocks representing all major industries. This
index is unmanaged; actual investments may not be made in an index. Moreover,
this index has not been adjusted to reflect sales charges, expenses or other
fees the SEC requires to be reflected in the Portfolio's performance. While past
performance does not necessarily predict future performance, this information
provides you with historical performance information so that you can analyze
whether the Portfolio's investment risks are balanced by their potential
rewards.
- --------------------------------------------------------------------------------
3
<PAGE>
Growth with Income Portfolio
- --------------------------------------------------------------------------------
What is the Portfolio's goal?
A combination of capital appreciation and current income.
What types of funds does the Portfolio invest in?
The Portfolio offers investors the opportunity to participate in a diversified
portfolio of funds that invest in growth and income, equity income and balanced
funds. These underlying funds will invest primarily in common stocks, preferred
stocks, bonds and other debt securities including convertible preferred stock
and convertible debentures.
What are the risks of investing in the Portfolio?
Since the Portfolio will purchase stock funds, the Portfolio must contend with
the volatility and unpredictability of the stock markets. In addition, the
income and bond funds that the Portfolio may own invest in debt securities, the
price of which can be expected to decrease when interest rates increase. If an
underlying fund purchases mortgage-backed or asset-backed securities, the
Portfolio will also be subject to the risks of these investments.
Average Annual Total Returns (for the periods ended 12/31/99)
<TABLE>
<CAPTION>
Past Past Past
One Year 5 Years Ten Years
-------- ------- ---------
<S> <C> <C> <C>
Portfolio (after sales charge) 7.50% 18.44% 12.48%
S & P 500 Index 21.04% 28.56% 18.21%
</TABLE>
[TABULAR REPRESENTATION OF BAR CHART]
<TABLE>
<S> <C>
1990 -8.31%
1991 23.30%
1992 9.19%
1993 12.75%
1994 -0.12%
1995 32.55%
1996 15.59%
1997 25.24%
1998 13.01%
1999 13.74%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 15.22% (quarter ended December 31, 1998) and the lowest return for a
quarter was (13.14)% (quarter ended Sept. 30, 1990).
- --------------------------------------------------------------------------------
The bar chart and table shown above provide an indication of the risks of
investing in Class A Shares of the Growth with Income Portfolio by showing
changes in the Portfolio's performance from year to year over a 10-year period
and by showing how the Portfolio's average annual returns for one, five, and ten
years compare to those of a broad-based securities market index. The S&P 500 is
an unmanaged capitalization-weighted index of 500 stocks designed to measure
performance of the broad domestic economy through changes in the aggregate
market value of 500 stocks representing all major industries. This index is
unmanaged; actual investment cannot be made in an index. Moreover, the index is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Portfolio's performance. While past performance
does not necessarily predict future performance, this information provides you
with historical performance information so that you can analyze whether the
Portfolio's investment risks are balanced by their potential rewards.
- --------------------------------------------------------------------------------
4
<PAGE>
International Portfolio
- --------------------------------------------------------------------------------
What is the Portfolio's goal?
Long-term capital appreciation with current income a secondary consideration.
What types of funds does the Portfolio invest in?
The Portfolio offers investors the opportunity to invest in international,
global and emerging markets funds as a complement to investing solely in U.S.
domestic securities. The Portfolio will invest at least 65% of its total assets
in international equity funds. These underlying funds will invest primarily in
foreign common stocks, or foreign securities convertible into or exchangeable
for common stock.
What are the risks of investing in the Portfolio?
As a stock fund, the Portfolio must contend with the volatility and
unpredictability of the stock markets, both U.S. and foreign. Underlying funds
may experience additional uncertainty in foreign markets and with foreign
currency transactions.
Average Annual Total Returns (for the periods ended 12/31/99)
<TABLE>
<CAPTION>
Past Since
One Year Inception*
-------- ----------
<S> <C> <C>
Portfolio (after sales charge) 43.58% 22.35%
Morgan Stanley Capital International Europe 26.96% 7.95%
Australia Far East Index (MSCI)
</TABLE>
[TABULAR REPRESENTATION OF BAR CHART]
<TABLE>
<S> <C>
1999 51.99%
</TABLE>
During the period shown in the bar chart, the highest return for a quarter was
30.78% (quarter ended December 31, 1999) and the lowest return for a quarter was
(0.27)% (quarter ended September 30, 1999).
- --------------------------------------------------------------------------------
The bar chart and table shown above provide an indication of the risks of
investing in Class A Shares of the International Portfolio by showing changes in
the Portfolio's performance from year to year since inception and by showing how
the Portfolio's average annual returns for one year and since inception compared
to those of a broad-band securities market index. MSCI is a market
capitalization-weighted equity index comprising 20 of the 48 countries in the
MSCI Universe and representing the developed world outside of North America.
Each MSCI country index is created separately, then aggregated, without change,
into regional MSCI indices. EAFE performance data is calculated in U.S. dollars
and in local currency. This index is unmanaged; actual investments may not be
made in an index. Moreover, the index is not adjusted to reflect sales charges,
expenses or other fees that the SEC requires to be reflected in the Portfolio's
performance. While past performance does not necessarily predict future
performance, this information provides you with historical performance
information so that you can analyze whether the Portfolio's investment risks are
balanced by their potential rewards.
- --------------------------------------------------------------------------------
*June 6, 1998
5
<PAGE>
Managed Total Return Portfolio
- --------------------------------------------------------------------------------
What is the Portfolio's goal?
High total return (capital appreciation and current income).
What types of funds does the Portfolio invest in?
The Portfolio offers investors a convenient way to seek high total return
consistent with prudent risk by investing in mutual funds across all asset
classes (including bond funds, style funds (growth or value), growth and income,
equity and income, balanced funds and money market funds). These underlying
funds will invest primarily in common stocks, preferred stocks, convertible
securities (such as convertible preferred stock, convertible debentures and
warrants), long- or short-term bonds and other debt securities (such as
government and corporate securities), and high quality, short-term money market
instruments.
What are the risks of investing in the Portfolio?
Since the Portfolio invests in a broad array of underlying funds that may
purchase a variety of securities, the Portfolio is subject to the risks of both
stock market volatility and the risks of debt securities. In addition, the
income and bond funds that the Portfolio may own invest in debt securities, the
price of which can be expected to decrease when interest rates increase. These
funds may also purchase high yield/high risk securities of lower-rated companies
that are more likely to default on their payment obligations than higher-rated
companies. If an underlying fund purchases mortgage-backed or asset-backed
securities, the Portfolio will also be subject to the risks of these
investments.
Average Annual Total Returns (for the periods ended 12/31/99)
<TABLE>
<CAPTION>
Past Past Past
One Year 5 Years Ten Years
-------- ------- ---------
<S> <C> <C> <C>
Portfolio (after sales charge) (2.78%) 8.69% 7.54%
Lehman Gov't/CB Total Index (2.15%) 7.61% 7.65%
</TABLE>
[TABULAR REPRESENTATION OF BAR CHART]
<TABLE>
<S> <C>
1990 0.31%
1991 18.78%
1992 6.34%
1993 9.00%
1994 -1.15%
1995 19.26%
1996 8.25%
1997 13.50%
1998 6.44%
1999 2.86%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 8.02% (quarter ended March 31, 1991) and the lowest return for a
quarter was (6.44)% (quarter ended Sept. 30, 1990).
- --------------------------------------------------------------------------------
The bar chart and table shown above provide an indication of the risks of
investing in Class A Shares of the Managed Total Return Portfolio by showing
changes in the Portfolio's performance from year to year over a 10-year period
and by showing how the Portfolio's average annual returns for one, five and ten
years compared to those of a broad-based securities market index. Lehman
Brothers Government/Corporate Bond Total Index is comprised of approximately
5,000 issues which include non-convertible bonds publicly issued by the U.S.
government or its agencies; corporate bonds guaranteed by the U.S. government
and quasi-federal corporations; and publicly issued, fixed-rate, non-
convertible domestic bonds of companies in industry, public utilities and
finance. This index is unmanaged; actual investments may not be made in an
index. Moreover, the index is not adjusted to reflect sales charges, expenses
or other fees that the SEC requires to be reflected in the Portfolio's
performance. While past performance does not necessarily predict future
performance, this information provides you with historical performance
information so that you can analyze whether the Portfolio's investment risks are
balanced by their potential rewards.
- --------------------------------------------------------------------------------
6
<PAGE>
Bond Portfolio
- --------------------------------------------------------------------------------
What is the Portfolio's goal?
A high level of current income.
What types of funds does the Portfolio invest in?
The Portfolio offers income-oriented investors an opportunity to participate in
bond funds that invest in income-producing securities. These underlying funds
will invest primarily in corporate, U.S. government, and mortgage securities
with short-, intermediate- and long-term maturities. The Portfolio may also
invest without limitation in underlying funds that invest significantly in
corporate bonds rated below investment grade, commonly referred to as "junk
bonds."
What are the risks of investing in the Portfolio?
The income and bond funds that the Portfolio may own invest in debt securities,
the price of which can be expected to decrease when interest rates increase.
These funds may also purchase high yield/high risk securities of lower-rated
companies that are more likely to default on their payment obligations than
higher-rated companies. To the extent an underlying fund may purchase
mortgage-backed or asset-backed securities, the Portfolio will also be subject
to the risks of these investments.
Average Annual Total Returns (for the periods ended 12/31/99)
<TABLE>
<CAPTION>
Past Past Past
One Year 5 Years Ten Years
-------- ------- ---------
<S> <C> <C> <C>
Portfolio (2.51)% 5.78% 6.09%
Lehman Gov't/CB Total Index (2.15)% 7.61% 7.65%
</TABLE>
[TABULAR REPRESENTATION OF BAR CHART]
<TABLE>
<S> <C>
1990 4.81%
1991 14.81%
1992 7.14%
1993 10.57%
1994 -4.29%
1995 15.89%
1996 2.27%
1997 7.80%
1998 6.31%
1999 -2.51%
</TABLE>
During the 10-year period shown in the bar chart, the highest return for a
quarter was 5.48% (quarter ended Sept. 30, 1991) and the lowest return for a
quarter was (2.63)% (quarter ended Dec. 31, 1994).
- --------------------------------------------------------------------------------
The bar chart and table shown above provide an indication of the risks of
investing in Class A Shares of the Bond Portfolio by showing changes in the
Portfolios' performance from year to year over a 10-year period and by showing
how the Portfolio's average annual returns for one, five and ten years compared
to those of a broad-based securities market index. Lehman Brothers
Government/Corporate Bond Total Index is comprised of approximately 5,000 issues
which include non-convertible bonds publicly issued by the U.S. government or
its agencies; corporate bonds guaranteed by the U.S. government and
quasi-federal corporations; and publicly issued, fixed-rate, non- convertible
domestic bonds of companies in industry, public utilities and finance. This
index is unmanaged; actual investments may not be made in an index. Moreover,
the index is not adjusted to reflect sales charges, expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. While past
performance does not necessarily predict future performance, this information
provides you with historical performance information so that you can analyze
whether the Portfolio's investment risks are balanced by their potential
rewards.
- --------------------------------------------------------------------------------
7
<PAGE>
WHAT ARE THE PORTFOLIOS' FEES AND EXPENSES?
- --------------------------------------------------------------------------------
This table describes the fees and expenses that you may pay when you buy, hold,
and redeem shares of Class A or Class B Shares of each of the Portfolios.
SHAREHOLDER FEES (Fees Paid Directly By You)
<TABLE>
<CAPTION>
Class A Class B
------- -------
<S> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage
of offering price) ..................................................... 5.50%(1) None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price or redemption proceeds,
as applicable) ......................................................... 0.00% 5.00%(2)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and
other Distributions) (as a percentage of offering price) ............... None None
Redemption Fee (as a percentage of amount redeemed, if applicable) ....... None None
Exchange Fee ............................................................. None None
</TABLE>
ANNUAL OPERATING EXPENSES (Maximum Expenses that Could be Deducted from a
Portfolio's Assets)* -- CLASS A SHARES
<TABLE>
<CAPTION>
Growth Managed
Aggressive with Total
Growth Growth Income International Return Bond
---------- ------ ------ ------------- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Management Fee ..................... 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution (12b-1) and
Shareholder Service Expenses ..... 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses .................... 1.07% 1.25% 1.19% 2.09% 1.20% 2.05%
- ------------------------------------------------------------------------------------------------------------
Total Operating Expenses .......... 1.82% 2.00% 1.94% 2.84% 1.95% 2.80%
Fee Waiver and/or Expense
Reimbursements (3) ............. 0.22% 0.40% 0.34% 0.50% 0.04% 0.50%
- ------------------------------------------------------------------------------------------------------------
Net Expenses ...................... 1.60% 1.60% 1.60% 2.34% 1.91% 2.30%
</TABLE>
ANNUAL OPERATING EXPENSES (Maximum Expenses that Could be Deducted from a
Portfolio's Assets)* -- CLASS B SHARES
<TABLE>
<CAPTION>
Growth Managed
Aggressive with Total
Growth Growth Income International Return
---------- ------- ------ ------------- ------
<S> <C> <C> <C> <C> <C>
Management Fee ......................... 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution (12b-1) and
Shareholder Service Expenses ......... 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses ......................... 1.07% 1.25% 1.19% 2.09% 1.20%
- ---------------------------------------------------------------------------------------------------------------
Total Operating Expenses .............. 2.57% 2.75% 2.69% 3.59% 2.70%
Fee Waiver and/or Expense
Reimbursements (3) ................. 0.22% 0.40% 0.34% 0.50% 0.04%
- ---------------------------------------------------------------------------------------------------------------
Net Expenses .......................... 2.35% 2.35% 2.35% 3.09% 2.66%
</TABLE>
* Expenses are expressed as a percentage of each Portfolio's Class A and Class
B Shares.
(1) The Bond Portfolio does not currently impose a sales charge. (2) For
shareholders of Class B Shares, the maximum deferred sales charge
(load) is 5.00% in the first year declining to 1.00% in the seventh year and
0.00% thereafter. For a more complete description, see "Contingent Deferred
Sales Charge". Class B Shares convert to Class A Shares (which pay lower
ongoing expenses) approximately nine years after purchase.
(3) Freedom Capital Management Corporation has contractually agreed to waive
fees to limit the expenses of the Portfolios. This arrangement will
terminate on January 31, 2001.
8
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in a
Portfolio's Class A and B Shares with the cost of investing in other mutual
funds. The Example assumes that you invest $10,000 in the Portfolio's Class
A and B Shares for the time periods indicated and then redeem all of your shares
at the end of those periods. Expenses assuming no redemption are also shown. The
Example also assumes that your investment has a 5% return each year and that the
Portfolio's Class A and B Shares' operating expenses remain the same during the
period. Each of the examples assumes that the fee waivers and expense
reimbursements to the Portfolio's operating expenses are in effect for only the
first year of the 1, 3, 5 or 10-year periods. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
CLASS A SHARES
(Payment of the maximum sales charge/with or without redemption).
<TABLE>
<CAPTION>
Growth Managed
Aggressive with Total
Growth Growth Income Bond Return International
---------- ------ ------ ---- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Year ........... $ 704 $ 704 $ 704 $ 770 $ 733 $ 774
3 Years .......... $1,071 $1,106 $1,095 $1,326 $1,125 $1,337
5 Years .......... $1,462 $1,534 $1,510 $1,906 $1,541 $1,925
10 Years ......... $2,553 $2,719 $2,664 $3,472 $2,697 $3,508
</TABLE>
CLASS B SHARES
(Payment of the maximum sales charge/Expenses assuming redemption).
<TABLE>
<CAPTION>
Growth Managed
Aggressive with Total
Growth Growth Income Return International
---------- ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C>
1 Year ........... $ 738 $ 738 $ 738 $ 769 $ 812
3 Years .......... $1,199 $1,235 $1,223 $1,253 $1,467
5 Years .......... $1,566 $1,639 $1,615 $1,645 $2,030
10 Years ......... $2,889 $3,051 $2,997 $3,029 $3,821
</TABLE>
CLASS B SHARES
(Payment of the maximum sales charge/Expenses assuming no redemption).
<TABLE>
<CAPTION>
Growth Managed
Aggressive with Total
Growth Growth Income Return International
---------- ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C>
1 Year ........... $ 238 $ 238 $ 238 $ 269 $ 312
3 Years .......... $ 779 $ 815 $ 803 $ 835 $1,054
5 Years .......... $1,346 $1,419 $1,395 $1,426 $1,817
10 Years ......... $2,889 $3,051 $2,997 $3,029 $3,821
</TABLE>
9
<PAGE>
INVESTMENT APPROACH AND MAIN RISKS OF INVESTING IN FUNDMANAGER PORTFOLIOS
- --------------------------------------------------------------------------------
What is the investment approach of the Portfolios?
The Portfolios' fund-of-funds investment approach relieves you from having to
select from over 9,000 mutual fund investment choices in existence today. The
Adviser utilizes a disciplined research and investment selection process to
choose generally from 6 to 10 mutual funds for each Portfolio with complementary
investment styles. This provides you with a broader diversification than may be
available in one mutual fund. It also offers you a wider range of portfolio
management talent, investment styles, companies, industries and markets than may
be available through one mutual fund. Also, with the broader diversification of
a fund-of-funds investment approach, the Adviser seeks to minimize the
volatility associated with owning a single mutual fund. Plus, the Portfolios may
be able to invest in institutional funds that are unavailable to individual
investors and may qualify to invest in funds for lower or no sales charges.
However, there are duplicate expenses associated with a fund-of-funds structure
(such as advisory, custodian, administrative costs, etc.) which can affect your
return.
Before a fund is chosen for the Portfolios, it must meet the strict investment
criteria of the Adviser. These criteria include one or more of the following
factors:
- - the fund's investment style (Is it clearly defined and consistently applied?
Does it complement rather than duplicate the styles of other selected
funds?);
- - the depth of the portfolio manager's research capability (What kind of
internal research staff exists? How long is the portfolio manager's
tenure?);
- - overlap of the fund's portfolio securities with other selected funds;
- - the presence of a long-term, consistent performance history; and
- - direct access to the portfolio manager.
The Adviser will allocate each Portfolio's assets among the underlying funds in
which it invests in a manner that in the Adviser's judgment, will most likely
achieve a Portfolio's goals.
The Growth Portfolio, Managed Total Return Portfolio, and Bond Portfolio have
the following additional characteristics.
Growth Portfolio and Bond Portfolio utilize a core/non-core selection of funds.
The "core" component generally consists of unmanaged, index-like mutual funds
that maintain fairly consistent securities holdings and thereby are lower cost
investments with performance that tracks or models certain securities indices.
There is generally low turnover rates for these core mutual fund holdings. This
core component is supplemented by a "non-core" selection of mutual funds, which
are actively managed mutual funds employing various complementary investment
styles. The non-core component tends to have a correspondingly higher portfolio
turnover rate than the core holdings.
10
<PAGE>
Managed Total Return Portfolio utilizes an ongoing assessment of the relative
risk-reward of various classes of assets (such as stock, balanced, bond and
money market funds) deemed appropriate by the Adviser based on past experience
and analysis of current financial and economic conditions.
What are the main risks of investing in the Portfolios?
As a "fund-of-funds," the FundManager Portfolios invest primarily in other
mutual funds that invest in a wide variety of securities and use various
investment practices. The securities in which underlying funds invest and the
practices they utilize are subject to risks; therefore, a Portfolio will be
subject to the same risks as the underlying funds in which it invests.
General Risks. An investment in any of the FundManager Portfolios is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
The principal types of securities in which underlying funds invest generally
fall into two broad categories: equity securities (stocks) and debt securities
(bonds).
Equity Securities Risks. Equity securities are subject to fluctuations in the
stock market which has periods of increasing and decreasing values. Stocks have
greater volatility than debt securities. While greater volatility increases
risk, it offers the potential for greater reward.
Small/Mid-Cap Risks. Equity risk is also related to the size of the company
issuing stock. Companies may be categorized as having a small, medium, or large
capitalization (market value). The potential risks are higher with small
capitalization companies and lower with large capitalization companies.
Therefore, investors should expect underlying funds which invest primarily in
small-capitalization and medium-capitalization stocks, like the Aggressive
Growth Portfolio, to be more volatile than and to fluctuate independently of,
broad stock market indices such as the S&P 500.
Foreign Securities Risks. The International Portfolio will invest primarily in
international mutual funds that invest significantly in foreign securities.
Foreign securities pose additional risks over domestic securities because
foreign economic, governmental, and political systems may be less favorable than
those of the United States. Foreign governments may exercise greater control
over their economies, industries, and citizen's rights, which can have an
adverse impact on investments. Other risk factors related to foreign securities
include: rates of inflation, structure and regulation of financial markets,
liquidity and volatility of investments, taxation policies, currency exchange
rates, and accounting standards. In addition, a fund may incur higher costs and
expenses when making foreign investments, which could impact the fund's
performance. If an underlying fund invests primarily in a particular country or
region, it may be adversely affected by the above factors or events particular
to that country or region.
Foreign securities in which the underlying funds invest may be listed on foreign
stock exchanges and may trade on weekends and other days when the underlying
funds or the Portfolios do not price their shares. As a result, an underlying
fund's
11
<PAGE>
net asset value ("NAV") may be significantly affected by trading on days when
the Adviser does not have access to the portfolio and shareholders cannot
purchase or redeem shares.
Foreign securities may be denominated in foreign currencies. Therefore, the
value of an underlying fund's assets and income in U.S. dollars may be affected
by changes in exchange rates and regulations, since exchange rates for foreign
currencies change daily. The combination of currency risk and market risk tends
to make securities traded in foreign markets more volatile than securities
traded exclusively in the United States. Although underlying funds value their
assets daily in U.S. dollars, they generally do not convert their holding of
foreign currencies to U.S. dollars daily. Therefore, the underlying fund may be
exposed to currency risks over an extended period of time.
Debt Securities Risks. Prices of fixed-rate debt securities generally move in
the opposite direction of interest rates. The interest payments on fixed-rate
debt securities do not change when interest rates change. Therefore, the price
of these securities can be expected to decrease when interest rates increase and
the underlying fund's NAV may go down.
In addition, debt securities with longer maturities or durations will experience
greater price volatility than those with shorter maturities or durations, and an
underlying fund's NAV can be expected to fluctuate accordingly.
The credit quality of a debt security is based upon the ability of the issuer to
repay the security. Payments on a debt security may not be paid when due. If the
credit quality of securities declines, the underlying fund's NAV could go down.
If interest rates are declining, an issuer may repay a debt security held in
the underlying fund's portfolio prior to its maturity. If this occurs, the
adviser to this underlying fund may have to reinvest the proceeds in debt
securities paying lower interest rates resulting in lower yields to the
underlying fund. Prepayment/Call Risks. Certain types of debt securities,
such as asset-backed and mortgage-backed securities, are subject to risks of
prepayment which generally occur when interest rates fall. Prepayment risks on
mortgage-backed securities tend to increase during periods of declining mortgage
interest rates because many borrowers refinance their mortgages to take
advantage of the more favorable rates. Prepayments on mortgage-backed securities
are also affected by other factors, such as the frequency with which people sell
their homes or elect to make unscheduled payments on their mortgages.
Reinvesting these prepayments in a lower interest rate environment will reduce
an underlying fund's income. The risk of prepayment may also decrease the value
of mortgage-backed securities. Asset-backed securities may have a higher level
of default and recovery risk than mortgage-backed securities. However, both of
these types of securities may decline in value because of mortgage foreclosures
or defaults on the underlying obligations. The issuer of debt securities may
have the right to prepay principal earlier than scheduled, which is commonly
referred to as a "call." Issuers are more likely to exercise call features when
interest rates decrease. If a security owned by an underlying
12
<PAGE>
fund is called, the fund will have to reinvest the proceeds in lower-yielding
instruments. Call features may also negatively affect the value of a debt
security.
High Yield Securities Risks. Each of the Portfolios may invest in underlying
funds that invest in high-yield securities, also known as junk bonds. These
securities generally have greater risks than higher quality debt obligations
because, in comparison, their prices are more volatile, they have less favorable
credit ratings, and their trading market may be limited. High yield bonds are
also negatively impacted by economic downturns and declining equity valuations.
In return for their higher risks, they offer the potential for higher yields.
However, there is no guarantee that their total return will exceed that of
higher quality debt obligations.
Foreign Debt Securities. To the extent the International Portfolio or an
underlying fund invests in foreign debt securities, the same foreign securities
risks described above will apply.
Fund-of-Funds Risks. The Portfolios are subject to some risks that are unique to
a fund-of-funds structure. As noted above, there may be certain duplicate
expenses that are charged by both the Portfolio and an underlying fund, such as
advisory or custodial fees. There are also additional regulations imposed on a
fund-of-funds that may affect how much the Portfolios can invest in the
underlying fund and a Portfolio's ability to timely redeem its investment when
the Portfolio owns more than 1% of an underlying fund since an underlying fund
may have the right to restrict such redemptions. In such an event, a portion of
such investments may be treated as an illiquid investment and subject to the
Portfolios' 15% limit on illiquid investments.
Portfolio Turnover
The funds in which the Portfolios invest may actively trade their portfolios. A
higher portfolio turnover rate involves greater transaction expenses which are
borne directly by a fund (and thus, indirectly by its shareholders), and impact
fund performance. In addition, a high rate of portfolio turnover may result in
the realization of larger amounts of capital gains which, when distributed to
that fund's shareholders, are taxable to them.
Temporary Defensive Investments
The Portfolios may temporarily depart from their principal investment strategies
by investing up to 100% of their assets in cash and shorter-term debt securities
and similar obligations. They may do this to minimize potential losses and
maintain liquidity to meet shareholder redemptions during adverse market
conditions. This may cause the Portfolios to forego greater investment returns
for the safety of principal, that is, the original amount invested by
shareholders.
13
<PAGE>
HOW TO PURCHASE, REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------
What do Shares cost?
You can purchase, redeem, or exchange shares any day the New York Stock Exchange
(NYSE) is open. When the Trust receives your transaction request in proper form,
it is processed at the next determined public offering price.
The public offering price is the net asset value (NAV) plus any applicable sales
charge. NAV is determined at the end of regular trading (normally 4 p.m.
Eastern time) each day the NYSE is open.
The NAV and public offering price of the Portfolios are listed in your
newspaper's mutual fund quotations section under the heading "FUNDMANAGER
PORTFOLIOS."
The following table summarizes the minimum required investment amount and the
maximum sales charge, if any, that you will pay on an investment in a Portfolio.
Keep in mind that financial intermediaries may charge you fees for their
services in connection with your share transactions.
<TABLE>
<CAPTION>
Minimum Maximum
Initial/ Maximum Contingent
Subsequent Front-End Deferred
Investment Sales Sales
Amounts(1) Charge(2) Charge(3)
---------- --------- ---------
<S> <C> <C> <C>
Class A Shares ......... $1000/$100 5.50% None
Class B Shares ......... $1000/$100 None 5.00%
</TABLE>
(1) The minimum initial and subsequent investment amounts for retirement plans
are $250 and $100, respectively, except that there are no minimum initial
investment amounts for FundManager prototype defined contribution plans. The
minimum subsequent investment amounts for Automatic Investment Plans is $25.
Financial intermediaries may impose higher or lower minimum investment
requirements on their customers than those imposed by the Trust. Class B
Shares will convert to Class A Shares at NAV approximately nine years after
purchase.
(2) Front-End Sales Charge is expressed as a percentage of public offering
price. See "Sales Charge When You Purchase Class A Shares" below. There is
no sales charge imposed on purchases of the Bond Portfolio.
(3) See "Sales Charge When You Redeem Class B Shares" below.
Sales Charge When You Purchase Class A Shares*
<TABLE>
<CAPTION>
Sales Charge as Sales Charge
a Percentage as a
of Public Percentage
Purchase Amount Offering Price of NAV
- --------------- -------------- ------------
<S> <C> <C>
Less than $50,000 ......................... 5.50% 5.82%
$50,000 but less than $100,000 ............ 4.75% 4.99%
$100,000 but less than $250,000 ........... 3.75% 3.90%
$250,000 but less than $500,000 ........... 2.75% 2.83%
$500,000 but less than $1,000,000 ......... 2.00% 2.04%
$1 million or greater(1) .................. 0.00% 0.00%
</TABLE>
* There is no front-end sales charge imposed on purchases of the Bond
Portfolio.
(1) Purchases of $1 million or more of Class A Shares will be made at NAV with
no initial sales charge, but if the shares are redeemed within 24 months
after the end of the calendar month in which the purchase was made, then a
contingent deferred sales charge of 1.25% will be imposed on such
redemption. Freedom Distributors pays a one-time sales commission of 1.00%
to authorized dealers who initiate or are responsible for purchases of $1
million to $3 million of shares of the Portfolios, 0.50% on purchases from
$3 million to $5 million, and 0.25% on purchases over $5 million.
14
<PAGE>
In some situations, Class A Shares may be purchased without a sales charge.
There is no sales charge on Class A Shares purchased with reinvested dividends
and distributions. In addition, certain types of individuals may purchase shares
no-load:
- - Shareholders that owned Financial Adviser Class Shares (now renamed Class A
Shares) as of January 31, 1998;
- - Trustees, officers, and employees (including retired employees) of the Trust,
Freedom Capital Management, Edgewood Services, Inc., Freedom Distributors
Corporation, Tucker Anthony, Incorporated, and Sutro & Co., Inc. (the
"Distributors"), and their affiliates;
- - Investment advisory clients of the Adviser;
- - Employees or registered representatives of dealers and other financial
institutions that have a sales agreement with the Distributors; and
- - Immediate family members (spouses and children under the age of 21) of the
aforementioned persons.
In addition, no sales charge is imposed on:
- - Any trust company or bank trust department which exercises discretionary
investment authority and holds unallocated accounts in a fiduciary, agency,
custodial or similar capacity;
- - Trustees or other fiduciaries purchasing Class A Shares for employee benefit
plans of employers with ten or more employees;
- - Class A Shares purchased through the Adviser's FundManager Advisory Program,
"wrap accounts" or similar fee based programs sponsored by a registered
investment adviser or financial institution; or
- - Class A Shares purchased through investment professionals who elect not to
receive any sales charge or commission on such purchase.
No sales charge is imposed on shares acquired by investments through certain
dealers (including registered investment advisers and financial planners) which
have established certain operational arrangements with the Trust which include a
requirement that such shares be sold for the sole benefit of clients
participating in a mutual fund "supermarket" account or a similar program under
which such clients pay a fee to such dealer.
Investors may purchase Class A Shares of each of the Portfolios at net asset
value, without a sales charge, with the proceeds from either: (i) the redemption
of shares of a mutual fund which was sold with a sales charge or commission; or
(ii) fixed or variable rate annuities. The purchase must be made within 60 days
of the redemption, and the investor must notify his or her broker or financial
institution in writing at the time the purchase is made, and the investor must
present satisfactory evidence of the redemption. Redemptions of mutual fund
shares that are subject to a contingent deferred sales charge are not eligible
to purchase Portfolio Class A Shares under this method.
15
<PAGE>
The sales charge on Class A Shares may be reduced or eliminated by:
- - quantity purchases of shares;
- - combining concurrent purchases of:
* shares by you, your spouse, and your children under age 21; or
* shares of the same class of two or more FundManager Portfolios (other than
Bond Portfolio)
- - accumulating purchases (in calculating the sales charge on an additional
purchase, you may count the current value of previous Class A Share purchases
still invested in a Portfolio);
- - signing a letter of intent to purchase a specific dollar amount of Class A
Shares within 13 months (call the Trust for an application and more
information); or
- - using the reinvestment privilege.
If your investment qualifies for a reduction or elimination of the sales charge,
you or your investment professional must notify the Trust's Distributors at the
time of purchase. If you fail to notify a Distributor, you will receive the
reduced sales charge only on additional purchases, and not retroactively on your
previous purchases.
Quantity Discounts and Accumulated Purchases. As shown in the preceding sales
charge schedule, larger purchases reduce the sales charge you will pay. The
Trust will combine purchases of Class A Shares (other than Bond Portfolio since
no sales charges are assessed) made on the same day by the investor and
immediate family members when it calculates the sales charge. In addition, the
sales charge is reduced for purchases made at one time by a trustee or fiduciary
for a single trust estate or a single fiduciary account.
If you purchase additional Class A Shares, the Trust will consider the previous
purchases still invested in the same Portfolio. For example, if a shareholder
already owns Class A Shares having a current value at the public offering price
of $40,000 and the shareholder purchases $10,000 more at the current public
offering price, the sales charge on the additional purchase would be 4.75%, not
5.50%, according to the sales charge schedule for Class A Shares.
Concurrent Purchases. You may also combine concurrent purchases of Class A
Shares of more than one Portfolio (except the Bond Portfolio) to reduce the
sales charge. For example, if you purchase $30,000 of Class A Shares of one
Portfolio, and $20,000 in Class A Shares of another Portfolio, the sales charge
would be reduced to 4.75%, according to the sales charge schedule for Class A
Shares.
Letter of Intent. You may reduce the sales charge by signing a letter of intent
that states the total amount of Class A Shares of the Portfolios (except Bond
Portfolio) you intend to purchase over the next 13 months, which must be at
least $50,000. The Trust's custodian bank will hold up to 5.50% of the total
amount intended to be purchased in escrow (in Class A Shares) until such
purchase is completed. The sales charge you will pay will be adjusted depending
on the total amount you actually purchase over the 13-month period.
16
<PAGE>
The Class A Shares held in escrow will be released when you have purchased the
amount specified in the letter of intent or the end of the 13-month period,
whichever comes first. If the amount specified in the letter of intent is not
purchased, an appropriate number of Class A Shares in escrow may be redeemed in
order to realize the difference in the sales charge.
While this letter of intent will not obligate the shareholder to purchase Class
A Shares, each purchase during the period will be at the sales charge applicable
to the total amount intended to be purchased. When you sign the letter of
intent, you will receive a credit towards the fulfillment of the letter of
intent for your current FundManager Portfolio account balances, excluding Bond
Portfolio. However, prior trade prices will not be adjusted.
Reinvestment Privilege. If you redeem Class A Shares, you may reinvest the
redemption proceeds within 120 days without any sales charge at the current NAV.
The Distributors must be notified by the shareholder in writing or by the
shareholder's financial intermediary of the reinvestment in order to eliminate a
sales charge.
Sales Charge When You Redeem Class B Shares
When you redeem Class B Shares, you may pay a sales charge, commonly referred to
as a contingent deferred sales charge (CDSC), depending on how long ago you
purchased the shares.
<TABLE>
<CAPTION>
Shares Held Up To: CDSC
- -------------------------- ----------
<S> <C>
1 year ................... 5.00%
2 years .................. 4.00%
3 years .................. 4.00%
4 years .................. 3.00%
5 years .................. 2.00%
6 years .................. 2.00%
7 years .................. 1.00%
8 years or more .......... 0.00%
</TABLE>
You will not be charged a CDSC when redeeming Class B Shares:
- - purchased with reinvested dividends or capital gains;
- - that you exchange into Class B Shares of another FundManager Portfolio where
the original and exchanged shares were held in the aggregate for eight years
or more;
- - purchased through financial intermediaries that did not receive advanced
sales payments; or
- - following the complete disability of the shareholder, as defined by the IRS.
In addition, you will not be charged a CDSC:
- - when a Portfolio redeems your Class B Shares and closes your account for
failing to meet the minimum balance requirement;
- - if your redemption is a required retirement plan distribution;
17
<PAGE>
- - upon the death of the shareholder(s) of the account or the redemption of Class
B Shares by a designated beneficiary.
If your redemption qualifies, you or your investment professional must notify
the Distributor at the time of redemption to eliminate the CDSC.
To keep the sales charge as low as possible, the Trust sells your Class B Shares
in the following order:
- - Class B Shares that are not subject to a CDSC;
- - Class B Shares held the longest; and
- - then, the CDSC is based on the NAV at the time you purchased or redeemed those
Class B Shares, whichever is lower.
How To Purchase Shares
You may purchase shares through an investment professional, directly from the
Portfolios, or through an exchange from another FundManager Portfolio.
If you do not specify the Class choice on your form of payment, you will
automatically receive Class A Shares.
- - The Fund reserves the right to reject any request to purchase or exchange
shares.
Through an Investment Professional
- - Establish an account with your investment professional; and
- - Submit your purchase order to the investment professional before the end of
regular trading on the NYSE (normally 4 p.m. Eastern time). You will receive
that day's NAV if the investment professional forwards the order to the Trust
on the same day and the Trust receives payment within three business days. You
will become the owner of the shares and receive dividends when the Trust
receives your payment.
- - Financial intermediaries should send payments according to the instructions
in the sections "By Wire" or "By Check."
Directly from the Portfolios
- - Establish your account with the Trust by submitting a completed account
application; and
- - Send your payment to the Trust by Federal Reserve wire or check.
You will become a shareholder and your shares will be priced at the NAV on the
day the Trust receives your wire or your check.
An institution may establish an account and place an order by calling the Trust
and the shares will be priced at the NAV on the day the Trust receives the
order.
18
<PAGE>
By Wire. Send your wire to:
State Street Bank and Trust Company, Boston, MA
ABA Number 011000028
Attention: TRANSFER AGENT
Wire Order Number, Dealer Number,
or Group Number
Dollar Amount
For Credit to: FundManager Portfolios --
(Name of Portfolio, Name of Class,
Account Name and Number).
You cannot purchase shares by wire on holidays when wire transfers are
restricted.
By Check. Make your check payable to (Portfolio/Class Name), note your account
number on the check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8609, Boston, MA 02266-8609.
If you send your check by a private courier or overnight delivery service that
requires a street address, send it to:
Federated Shareholder Services Company
1099 Hingham Street, Rockland, MA 02370-3317.
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Trust will
not accept third-party checks (checks originally payable to someone other than
the Portfolio). If your check does not clear, your purchase will be canceled and
you could be liable for any losses or fees the Portfolio or its transfer agent
incurs.
Through an Exchange
You may purchase shares through an exchange from the same share Class of another
FundManager Portfolio. You must meet the minimum initial investment requirement
for purchasing shares and both accounts must have a common owner.
By Automatic Investment Plan
Once you have opened an account, you may automatically purchase additional
shares on a regular basis (at $25 minimum in monthly, quarterly, semiannual or
annual intervals) by completing the Automatic Investment Plan section of the
account application or contacting the Trust or your investment professional.
Retirement Investments
You may purchase shares as retirement investments (such as qualified plans and
IRAs). Application forms and further information about qualified retirement
plans, including applicable fees, are available from the Trust or a Distributor
upon request. To request this information or to ask a question about investing
for retirement, call the Trust or one of the Distributors. We suggest that you
discuss these retirement investments with your tax adviser. You may be charged
an IRA account fee.
19
<PAGE>
FundManager Advisory Program
The Adviser, through the FundManager Advisory Program (the "Program"), provides
discretionary advisory services in connection with investments among the
Portfolios. Under the Program, investment executives help investors identify
their financial objectives, preferences and risk tolerances. Based on this
evaluation of the investor's financial goals and circumstances, the Adviser
allocates the investor's assets among some or all of the Portfolios and either
Automated Cash Management Trust, California Municipal Cash Trust, or New York
Municipal Cash Trust money market funds. The Adviser will adjust each investor's
Program portfolio among these money market funds and the Portfolios from time to
time based on the Adviser's assessment of the economy, interest rates, the
financial markets and worldwide macro-economic events. Investors receive
periodic reports (at least quarterly) containing an analysis and evaluation of
the investor's portfolio. Investment executives may review the quarterly report
with the investor, monitor identified changes in the investor's financial
characteristics and communicate any changes to the Adviser.
How to Redeem and Exchange Shares
You should redeem or exchange shares:
- - through an investment professional if you purchased shares through an
investment professional or the Program; or
- - directly from the Trust if you purchased shares directly from the Trust.
Through an Investment Professional
Submit your redemption or exchange request to your investment professional by
the end of regular trading on the NYSE (normally 4 p.m. Eastern time). The
redemption amount you will receive is based upon the NAV on the day the Trust
receives the order from your investment professional.
Directly from the Portfolios
By Telephone. You may redeem or exchange shares by calling the Trust at
1-800-344-9033 once you have completed the appropriate authorization form for
telephone transactions. If you call before the end of regular trading on the
NYSE (normally 4 p.m. Eastern time) you will receive a redemption amount based
on that day's NAV.
By Mail. You may redeem or exchange shares by mailing a written request to the
Trust.
You will receive a redemption amount based on the NAV on the day your written
request is received by the Trust in proper form.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8609, Boston, MA 02266-8609.
20
<PAGE>
Send requests by private courier or overnight delivery service to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
- - Portfolio/Class Name, registered account name and number;
- - amount to be redeemed or exchanged;
- - signatures of all shareholders exactly as registered; and
- - if exchanging, the Portfolio/Class Name, registered account name and number
into which you are exchanging.
Signature Guarantees. Signatures must be guaranteed if:
- - your redemption is to be sent to an address other than the address of record;
- - your redemption is to be sent to an address of record that was changed within
the last thirty days; or
- - a redemption is payable to someone other than the shareholder(s) of record.
Your signature can be guaranteed by any federally insured financial institution
(such as a bank or credit union) or a broker/dealer that is a domestic stock
exchange member, but not by a notary public.
Payment Options
Your redemption proceeds will be mailed by check to your address of record.
However, the following payment options are available if you complete the
appropriate authorization form. These payment options require a signature
guarantee if they were not established prior to redeeming shares:
- - an electronic transfer to your depository account at a financial institution
that is an ACH member; or
- - wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
Limitations on Redemption Proceeds
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. However, payment may be delayed up to seven
days:
- - to allow your purchase payment to clear;
- - during periods of market volatility; or
- - when a shareholder's trade activity or amount adversely impacts a Portfolio's
ability to manage its assets.
21
<PAGE>
Exchange Privileges
You may exchange shares of a FundManager Portfolio into shares of the same Share
class of another FundManager Portfolio with common account owners, or shares of
Automated Cash Management Trust-Institutional Service Shares, New York Municipal
Cash Trust or California Municipal Cash Trust at net asset value. To do this,
you must:
- - meet any minimum initial investment requirements; and
- - receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction. You will be subject to a CDSC when exchanging Class B
Shares of the Portfolios to shares of Automated Cash Management Trust,
California Municipal Cash Trust or New York Municipal Cash Trust. Signatures
must be guaranteed if you request an exchange into another Portfolio with a
different shareholder registration.
Class B Shares of a Portfolio may be exchanged into Class B Shares of another
Portfolio without being assessed a CDSC. The time you held the original Class B
Shares will be credited to your exchanged shares for purposes of computing any
applicable CDSC when you redeem the exchanged shares.
The Trust may modify or terminate the exchange privilege at any time. The
Trust's management or Adviser may determine from the amount, frequency and
pattern of exchanges that a shareholder is engaged in excessive trading which is
detrimental to the Portfolios and other shareholders. If this occurs, the Trust
or management may terminate the availability of exchanges to that shareholder
and may bar that shareholder from purchasing shares of other Portfolios.
When exchanging into and out of Portfolios with a sales charge and Portfolios
without a sales charge, shareholders who have paid a sales charge once upon
purchasing shares of any Portfolio, including those shares acquired by the
reinvestment of dividends, will not have to pay a sales charge again on an
exchange. Class A Shares of the Bond Portfolio acquired by direct purchase may
be exchanged for Class A Shares of the other Portfolios with a sales charge at
NAV plus the applicable sales charge.
For further information on exchanging shares, you should contact the Trust or
their investment professional.
Systematic Withdrawal/Exchange Program
You may automatically redeem or exchange shares on a regular basis by completing
the appropriate form or contacting your investment professional or the Trust.
Your account value must meet the minimum initial investment amount at the time
the program is established. This program may reduce, and eventually deplete,
your account, and the payments should not be considered yield or income.
Generally, it is not advisable to continue to purchase shares subject to a sales
charge while redeeming shares using this program.
Systematic Withdrawal Program (SWP) On Class B Shares. You will not be charged
a CDSC on SWP redemptions if:
22
<PAGE>
- - you redeem 10% or less of your account value in a single year;
- - you reinvest all dividends and capital gains distributions;
- - your account has at least a $50,000 balance when you establish the SWP (you
cannot aggregate multiple Class B Share accounts to meet this minimum
balance); and
- - you withdraw a minimum of $500 per month.
You will be subject to a CDSC on redemption amounts that exceed the 10% annual
limit. In measuring the redemption percentage, your account is valued when you
establish the SWP and then annually at calendar year-end.
Additional Conditions
Telephone Transactions. The Trust will record your telephone instructions. If
the Trust does not follow reasonable procedures, it may be liable for losses due
to unauthorized or fraudulent telephone instructions. The Trust will notify you
if it changes telephone transaction privileges.
Share Certificates. The Portfolios do not issue share certificates.
Redemptions in-kind. Large cash redemptions may be detrimental to the best
interests of a Portfolio and its shareholders. A Portfolio may pay redemption
proceeds in whole or in part by a distribution of Portfolio securities (mutual
fund shares or money market instruments), 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.
ACCOUNT AND SHARE INFORMATION
- --------------------------------------------------------------------------------
Confirmations and Account Statements
You will receive confirmation of purchases, redemptions and exchanges (except
for systematic program transactions). In addition, you will receive periodic
statements reporting all account activity, including systematic transactions,
dividends and capital gains paid.
Dividends and Capital Gains
Dividends are paid to all shareholders invested in the Portfolios on the record
date. The frequency of these distributions is as follows:
<TABLE>
<CAPTION>
Portfolio Dividends Capital Gains (if any)
- ---------------------- --------------- -----------------------
<S> <C> <C>
Aggressive Growth Annually Annually
Growth Semi-Annually Annually
Growth with Income Quarterly Annually
International Annually Annually
Managed Total Return Quarterly Annually
Bond Monthly Annually
</TABLE>
Your dividends and capital gains distributions will be automatically reinvested
in additional shares without a sales charge, unless you elect cash payments. If
you elect cash payments and the payment is returned as undeliverable, your cash
pay-
23
<PAGE>
ment will be reinvested in shares and your distribution option will convert to
automatic reinvestment.
If you purchase shares just before a Portfolio declares a dividend or capital
gain distribution, you will pay the full price for the shares and then receive a
portion of the price back in the form of a distribution, whether or not you
reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before a Portfolio declares a dividend
or capital gain. Contact your investment professional or the Portfolios for
information concerning the date dividends and capital gains will be paid.
Accounts with Low Balances
Non-retirement accounts may be closed if redemptions or exchanges cause the
account balance to fall below $500 at the end of any month. Before an account is
closed, the shareholder will be notified and allowed 30 days to purchase
additional shares to meet the minimum.
Tax Information
You will receive an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Distributions of dividends
and capital gains are taxable to you whether paid in cash or reinvested in a
Portfolio. Capital gains distributions are taxable at different rates depending
upon the length of time the Portfolio holds its assets.
With respect to the Aggressive Growth Portfolio, Growth Portfolio and
International Portfolio, distributions are expected to be primarily capital
gains. Bond Portfolio's distributions are expected to primarily be dividends.
With respect to the Growth with Income Portfolio and Managed Total Return
Portfolio, distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales.
Please consult your tax adviser regarding your federal, state, and local tax
liability.
WHO MANAGES THE TRUST?
- --------------------------------------------------------------------------------
The Board of Trustees governs the Trust and each Portfolio. The Board selects
and oversees the Adviser, Freedom Capital Management Corporation. The Adviser
advises the Portfolios and manages the Portfolios' assets, including buying and
selling portfolio securities, through the FundManager Division of Freedom
Capital Management Corporation. The Adviser's address is One Beacon Street,
Boston, MA 02108.
Adviser's Background
Freedom Capital Management Corporation, founded in 1930, serves as the
investment adviser for each Portfolio. The Adviser provides a number of mutual
funds and other clients with investment research and portfolio management
services. Assets under the Adviser's supervision currently exceed $7 billion.
The Adviser is an indirect, wholly-owned subsidiary of Freedom Securities
Corporation, formerly known as JHFSC Acquisition Corp., a Delaware corporation.
Freedom Securities
24
<PAGE>
Corporation is located at One Beacon Street, Boston, Massachusetts 02108. In
addition to managing the Portfolios, the Adviser also manages the Freedom Group
of Money Market Funds.
The Portfolios have been managed by an investment committee since January, 1999.
Advisory Fees
The Adviser is entitled to receive an annual investment advisory fee equal to
0.50% of each Portfolio's average daily net assets up to $500 million and 0.40%
of each Portfolio's average daily net assets in excess of $500 million.
DISTRIBUTION OF PORTFOLIO SHARES
- --------------------------------------------------------------------------------
The Distributors
The Trustees have approved a Distribution Contract (the "Distribution Contract")
between the Trust and each of Edgewood Services, Inc., Freedom Distributors
Corporation, Tucker Anthony, Incorporated and Sutro & Co., Inc. pursuant to
which each will serve as a Distributor of the Trust and of the shares of each of
the Portfolios.
The Trust's Distributors market the Class A and Class B Shares to institutions
or individuals, directly, or through financial intermediaries. When the
Distributor receives sales charges and marketing fees, it may pay some or all of
them to financial intermediaries. The Distributor and its affiliates may pay out
of their assets other amounts (including items of material value) to financial
intermediaries for marketing and servicing shares.
Distribution Plan and Shareholder Servicing Arrangements
The Portfolios have adopted a Distribution Plan under Rule 12b-1 under the
Investment Company Act of 1940, which allows them to pay a distribution and
shareholder servicing fee of up to 0.25% of the Class A Shares assets and up to
1.00% of the Class B Shares assets. Payments under the Distribution Plan are
designed to compensate the Distributors for costs and expenses incurred by the
Distributors in connection with the sale, distribution and customer servicing of
the Portfolios' Class A Shares and Class B Shares. Because these shares pay
marketing fees on an ongoing basis, your investment cost may be higher over time
than shares with different sales charges and marketing fees.
25
<PAGE>
Financial Information
- --------------------------------------------------------------------------------
Financial Highlights
The financial highlights of Class A Shares and Class B Shares will help you
understand each Portfolio's financial performance for its past five fiscal
years. Some of the information is presented on a per share basis. Total returns
represent the rate an investor would have earned (or lost) on an investment in
the Portfolio, assuming reinvestment of all dividends and distributions.
This information has been audited by Ernst & Young LLP, independent auditors,
whose report, along with the Portfolios' audited financial statements, is
included in the Annual Report. The Annual Report is incorporated by reference
into and accompanies the Portfolio's Statement of Additional Information. It is
available upon request free of charge.
26
<PAGE>
Aggressive Growth Portfolio -- Class A Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Year Ended September 30,
- ------------------------------------------------------------------------
1999 1998 1997
1996 1995(a)
------- ------- -------
- ------- -------
<S> <C> <C> <C>
<C> <C>
Net Asset Value, beginning of period ......... $ 14.07 $ 18.44 $ 16.80 $
18.31 $ 15.57
------- ------- -------
- ------- -------
Income from investment operations
Net investment income (loss) ................ (0.30) 0.16 (0.12)(b)
0.12(b) (0.13)
Net realized and unrealized gain (loss)
on investments ............................ 4.65 (2.34) 3.75
1.64 3.70
------- ------- -------
- ------- -------
Total from investment operations ............. 4.35 (2.18) 3.63
1.76 3.57
------- ------- -------
- ------- -------
Less distributions
Distributions from net investment
income .................................... -- (0.38) (0.07)
(0.38) --
Distributions from net realized gain on
investments ............................... (1.95) (1.81) (1.92)
(2.89) (0.83)
------- ------- -------
- ------- -------
Total distributions .......................... (1.95) (2.19) (1.99)
(3.27) (0.83)
------- ------- -------
- ------- -------
Net Asset Value, end of period ............... $ 16.47 $ 14.07 $ 18.44 $
16.80 $ 18.31
======= ======= =======
======= =======
Total return(c) .............................. 31.58% (13.03)% 24.16%
12.10% 24.30%
Ratios/Supplemental data
Net assets, end of period (in 000's) ........ $16,884 $23,994 $36,200
$38,944 $33,668
Ratio of expenses to average net assets ..... 1.74% 1.78% 1.59%
1.67% 1.65%
Ratio of net investment income (loss) to
average net assets ........................ (1.11)% (0.74)% (0.70)%
0.74% (0.68)%
Ratio of expense waivers to average net
assets(d) ................................. 0.21% -- 0.03%
0.06% --
Portfolio turnover .......................... 63% 38% 56%
158% 50%
Paid from realized net short-term gain ....... -- -- $ 0.28 $
0.27 $ 0.04
- -----------------------------------------------------------------------------------------------------------------------------
</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 January 8, 1999, the Portfolio imposes a
maximum sales charge of 5.50%.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
27
<PAGE>
Aggressive Growth Portfolio -- Class B Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Period Ended
September 30,
1999(a)
-------------
<S> <C>
Net Asset Value, beginning of period ......................... $15.52
------
Income from investment operations
Net investment loss ......................................... (0.08)
Net realized and unrealized gain on investments ............. 0.96
------
Total from investment operations ............................. 0.88
------
Less distributions
Distributions from net investment income .................... --
Distributions from net realized gain on investments ......... --
------
Total distributions .......................................... --
------
Net Asset Value, end of period ............................... $16.40
======
Total return(b) .............................................. 5.67%(d)
Ratios/Supplemental data
Net assets, end of period (in 000's) ........................ $ 745
Ratio of expenses to average net assets ..................... 2.92%(e)
Ratio of net investment loss to average net assets .......... (2.46)%(e)
Ratio of expense waivers to average net assets(c) ........... 0.21%
Portfolio turnover .......................................... 63%
Paid from realized net short-term gain ....................... --
- ------------------------------------------------------------------------------
</TABLE>
(a) Class B Shares of the Portfolio commenced investment operations on February
22, 1999.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Total return for the period from commencement of operations through end of
period and is not annualized.
(e) Annualized.
28
<PAGE>
Growth Portfolio -- Class A Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Year Ended September 30,
- -------------------------------------------------------------------------
1999 1998 1997
1996 1995(a)
------- ------- -------
- ------- -------
<S> <C> <C> <C>
<C> <C>
Net Asset Value, beginning of period ......... $ 14.81 $ 17.81 $ 14.99 $
16.14 $ 14.09
------- ------- -------
- ------- -------
Income from investment operations
Net investment income (loss) ................ (0.10) 0.18 0.04(b)
0.01(b) (0.02)
Net realized and unrealized gain (loss)
on investments ............................ 3.73 (0.48) 4.91
1.85 2.99
------- ------- -------
- ------- -------
Total from investment operations ............. 3.63 (0.30) 4.95
1.86 2.97
------- ------- -------
- ------- -------
Less distributions
Distributions from net investment
income .................................... -- (0.26) (0.30)
(0.24) --
Distributions from net realized gain on
investments ............................... (1.83) (2.44) (1.83)
(2.77) (0.92)
------- ------- -------
- ------- -------
Total distributions .......................... (1.83) (2.70) (2.13)
(3.01) (0.92)
------- ------- -------
- ------- -------
Net Asset Value, end of period ............... $ 16.61 $ 14.81 $ 17.81 $
14.99 $ 16.14
======= ======= =======
======= =======
Total return(c) .............................. 24.91% (2.21)% 36.92%
13.46% 22.60%
Ratios/Supplemental data
Net assets, end of period (in 000's) ........ $17,400 $29,431 $32,835
$26,639 $26,022
Ratio of expenses to average net assets ..... 1.57% 1.70% 1.65%
1.61% 1.71%
Ratio of net investment income (loss) to
average net assets ........................ (0.58)% (0.32)% 0.23%
0.05% (0.11)%
Ratio of expense waivers to average net
assets(d) ................................. 0.15% -- 0.05%
0.06% --
Portfolio turnover .......................... 62% 33% 95%
93% 68%
Paid from realized net short-term gain ....... -- $ 0.28 $ 0.12 $
0.48 $ 0.10
- -----------------------------------------------------------------------------------------------------------------------------
</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 January 8, 1999, the Portfolio imposes a
maximum sales charge of 5.50%.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
29
<PAGE>
Growth Portfolio -- Class B Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Period Ended
September 30,
1999(a)
-------------
<S> <C>
Net Asset Value, beginning of period ......................... $16.16
------
Income from investment operations
Net investment loss ......................................... (0.08)
Net realized and unrealized gain on investments ............. 0.47
------
Total from investment operations ............................. 0.39
------
Less distributions
Distributions from net investment income .................... --
Distributions from net realized gain on investments ......... --
------
Total distributions .......................................... --
------
Net Asset Value, end of period ............................... $16.55
======
Total return(b) .............................................. 2.41%(d)
Ratios/Supplemental data
Net assets, end of period (in 000's) ........................ $ 576
Ratio of expenses to average net assets ..................... 2.53%(e)
Ratio of net investment loss to average net assets .......... (1.36)%(e)
Ratio of expense waivers to average net assets(c) ........... 0.15%
Portfolio turnover .......................................... 62%
Paid from realized net short-term gain ....................... --
- ------------------------------------------------------------------------------
</TABLE>
(a) Class B Shares of the Portfolio commenced investment operations on February
16, 1999.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Total return for the period from commencement of operations through end of
period and is not annualized.
(e) Annualized.
30
<PAGE>
Growth with Income Portfolio -- Class A Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Year Ended September 30,
- -----------------------------------------------------------------------
1999 1998 1997
1996 1995(a)
------- ------- -------
- ------- -------
<S> <C> <C> <C>
<C> <C>
Net Asset Value, beginning of period ......... $ 16.03 $ 18.97 $ 16.69 $
18.28 $ 15.99
------- ------- -------
- ------- -------
Income from investment operations
Net investment income (loss) ................ (0.20) 0.37 0.26(b)
0.60(b) 0.27
Net realized and unrealized gain (loss)
on investments ............................. 3.38 (0.62) 4.78
1.60 3.19
------- ------- -------
- ------- -------
Total from investment operations ............. 3.18 (0.25) 5.04
2.20 3.46
------- ------- -------
- ------- -------
Less distributions
Distributions from net investment
income .................................... (0.30) (0.34) (0.43)
(0.86) (0.33)
Distributions from net realized gain on
investments ............................... (1.73) (2.35) (2.33)
(2.93) (0.84)
------- ------- -------
- ------- -------
Total distributions .......................... (2.03) (2.69) (2.76)
(3.79) (1.17)
------- ------- -------
- ------- -------
Net Asset Value, end of period ............... $ 17.18 $ 16.03 $ 18.97 $
16.69 $ 18.28
======= ======= =======
======= =======
Total return(c) .............................. 20.40% (1.61)% 34.27%
13.73% 23.30%
Ratios/Supplemental data
Net assets, end of period (in 000's) ........ $19,878 $37,256 $37,274
$31,571 $35,643
Ratio of expenses to average net assets ..... 1.55% 1.61% 1.62%
1.77% 1.59%
Ratio of net investment income to
average net assets ........................ 0.09% 0.16% 1.49%
3.57% 1.72%
Ratio of waiver to average net assets(d) -- -- 0.05%
0.06% --
Portfolio turnover .......................... 16% 14% 61%
85% 12%
Paid from realized net short-term gain ....... -- $ 0.31 -- $
0.06 --
- ----------------------------------------------------------------------------------------------------------------------------
</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 January 8, 1999, the Portfolio imposes a
maximum sales charge of 5.50%.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
31
<PAGE>
Growth with Income Portfolio -- Class B Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Period Ended
September 30,
1999(a)
-------------
<S> <C>
Net Asset Value, beginning of period ......................... $16.62
------
Income from investment operations
Net investment loss ......................................... (0.07)
Net realized and unrealized gain on investments ............. 0.57
------
Total from investment operations ............................. 0.50
------
Less distributions
Distributions from net investment income .................... --
Distributions from net realized gain on investments ......... --
------
Total distributions .......................................... --
------
Net Asset Value, end of period ............................... $17.12
======
Total return(b) .............................................. 3.01%(d)
Ratios/Supplemental data
Net assets, end of period (in 000's) ........................ $ 282
Ratio of expenses to average net assets ..................... 2.89%(e)
Ratio of net investment loss to average net assets .......... (1.32)%(e)
Ratio of expense waivers to average net assets(c) ........... --
Portfolio turnover .......................................... 16%
Paid from realized net short-term gain ....................... --
- ------------------------------------------------------------------------------
</TABLE>
(a) Class B Shares of the Portfolio commenced investment operations on February
22, 1999.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Total return for the period from commencement of operations through end of
period and is not annualized.
(e) Annualized.
32
<PAGE>
Bond Portfolio -- Class A Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Year Ended September 30,
- ---------------------------------------------------------------------
1999 1998 1997 1996
1995(a)
------ ------- ------- -------
- -------
<S> <C> <C> <C> <C>
<C>
Net Asset Value, beginning of period ......... $10.53 $ 10.28 $ 10.00 $ 10.21
$ 9.66
------ ------- ------- -------
- -------
Income from investment operations
Net investment income ....................... 0.91 0.54 0.51(b)
0.52(b) 0.52
Net realized and unrealized gain (loss)
on investments ............................ (1.12) 0.32 0.31
(0.14) 0.49
------ ------- ------- -------
- -------
Total from investment operations ............. (0.21) 0.86 0.82
0.38 1.01
------ ------- ------- -------
- -------
Less distributions
Distributions from net investment
income .................................... (0.48) (0.61) (0.54)
(0.59) (0.46)
Distributions from net realized gain on
investments ............................... -- -- --
- -- --
------ ------- ------- -------
- -------
Total distributions .......................... (0.48) (0.61) (0.54)
(0.59) (0.46)
------ ------- ------- -------
- -------
Net Asset Value, end of period ............... $ 9.84 $ 10.53 $ 10.28 $ 10.00
$ 10.21
====== ======= ======= =======
=======
Total return(c) .............................. (2.01)% 8.69% 8.45%
3.78% 10.80%
Ratios/Supplemental data
Net assets, end of period (in 000's) ........ $9,512 $60,080 $63,557 $70,166
$77,419
Ratio of expenses to average net assets ..... 1.42% 1.47% 1.43%
1.47% 1.45%
Ratio of net investment income to
average net assets ........................ 4.70% 4.69% 5.03%
5.14% 5.38%
Ratio of expense waivers to average net
assets(d) ................................. -- -- 0.04%
0.05% --
Portfolio turnover .......................... 18% 33% 142%
93% 53%
- -------------------------------------------------------------------------------------------------------------------------
</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.
33
<PAGE>
Managed Total Return Portfolio -- Class A Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Year Ended September 30,
- ----------------------------------------------------------------------
1999 1998 1997 1996
1995(a)
------- ------ ------- -------
- -------
<S> <C> <C> <C> <C>
<C>
Net Asset Value, beginning of period ......... $ 10.81 $12.06 $ 11.45 $ 11.65
$ 11.24
------- ------ ------- -------
- -------
Income from investment operations
Net investment income ....................... 0.39 0.29 0.28(b)
0.42(b) 0.28
Net realized and unrealized gain (loss)
on investments ............................ 0.21 (0.08) 1.55
0.40 1.18
------- ------- ------- -------
- -------
Total from investment operations ............. 0.60 0.21 1.83
0.82 1.46
------- ------- ------- -------
- -------
Less distributions
Distributions from net investment
income .................................... (0.38) (0.31) (0.32)
(0.50) (0.30)
Distributions from net realized gain on
investments ............................... (1.43) (1.15) (0.90)
(0.52) (0.75)
------- ------- ------- -------
- -------
Total distributions .......................... (1.81) (1.46) (1.22)
(1.02) (1.05)
------- ------- ------- -------
- -------
Net Asset Value, end of period ............... $ 9.60 $10.81 $ 12.06 $ 11.45
$ 11.65
======= ======= ======= =======
=======
Total return(c) .............................. 5.56% 1.75% 17.42%
7.58% 14.30%
Ratios/Supplemental data
Net assets, end of period (in 000's) ........ $16,781 $ 9,762 $11,606 $12,123
$14,749
Ratio of expenses to average net assets ..... 2.24% 2.65% 2.08%
2.21% 2.09%
Ratio of net investment income to
average net assets ........................ 3.26% 1.40% 2.26%
3.68% 2.29%
Ratio of expense waivers to average net
assets(d) ................................. 0.40% -- 0.11%
0.06% --
Portfolio turnover .......................... 127% 98% 73%
159% 50%
Paid from realized net short-term gain ....... -- $ 0.11 -- $
0.01 --
- ---------------------------------------------------------------------------------------------------------------------------
</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 January 8, 1999, the Portfolio imposes a
maximum sales charge of 5.50%.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
34
<PAGE>
Managed Total Return Portfolio -- Class B Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Period Ended
September 30,
1999(a)
-------------
<S> <C>
Net Asset Value, beginning of period ......................... $ 9.74
------
Income from investment operations
Net investment income ....................................... 0.17
Net realized and unrealized loss on investments ............. (0.20)
------
Total from investment operations ............................. (0.03)
------
Less distributions
Distributions from net investment income .................... (0.11)
Distributions from net realized gain on investments ......... --
------
Total distributions .......................................... (0.11)
------
Net Asset Value, end of period ............................... $ 9.60
======
Total return(b) .............................................. (0.37)%(d)
Ratios/Supplemental data
Net assets, end of period (in 000's) ........................ $ 49
Ratio of expenses to average net assets ..................... 2.86%(e)
Ratio of net investment loss to average net assets .......... (2.76)%(e)
Ratio of expense waivers to average net assets(c) ........... 0.50%
Portfolio turnover .......................................... 127%
Paid from realized net short-term gain ....................... --
- ------------------------------------------------------------------------------
</TABLE>
(a) Class B Shares of the Portfolio commenced investment operations on February
22, 1999.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Total return for the period from commencement of operations through end of
period and is not annualized.
(e) Annualized.
35
<PAGE>
International Portfolio -- Class A Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Year Ended Period Ended
September 30, September 30,
1999 1998(a)
------------- -------------
<S> <C> <C>
Net Asset Value, beginning of period ............................ $ 8.27 $ 10.00
------ -------
Income from investment operations
Net investment loss ............................................ (0.18) (0.07)(b)
Net realized and unrealized gain (loss) on investments ......... 3.02 (1.66)
------ -------
Total from investment operations ................................ 2.84 (1.73)
------ -------
Less distributions
Distributions from net investment income ....................... -- --
Distributions from net realized gain on investments ............ -- --
------ -------
Total distributions ............................................. -- --
------ -------
Net Asset Value, end of period .................................. $11.11 $ 8.27
====== =======
Total return(c) ................................................. 34.34%(d) (17.30)%(d)
Ratios/Supplemental data
Net assets, end of period (in 000's) ........................... $5,543 $10,196
Ratio of expenses to average net assets ........................ 2.27% 2.72%(e)
Ratio of net investment loss to average net assets ............. (0.70)% (2.50)%(e)
Ratio of expense waivers to average net assets ................. 0.50 --
Portfolio turnover ............................................. 31% 18%
Paid from realized net short-term gain .......................... -- --
- ---------------------------------------------------------------------------------------------------
</TABLE>
(a) Portfolio commenced investment operations on June 6, 1998. (b) Per share
information is based on average shares outstanding. (c) Total Return for the
period from commencement of operations (June 6, 1998)
through September 30, 1998, based on net asset value, which does not reflect
the sales charge payable on purchases of shares. Effective January 8, 1999,
the Portfolio imposed a maximum sales charge of 5.50%.
(d) Not annualized.
(e) Annualized.
36
<PAGE>
International Portfolio -- Class B Shares
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout the:
<TABLE>
<CAPTION>
Period Ended
September 30,
1999(a)
-------------
<S> <C>
Net Asset Value, beginning of period ......................... $ 9.48
------
Income from investment operations
Net investment loss ......................................... (0.03)
Net realized and unrealized gain on investments ............. 1.63
------
Total from investment operations ............................. 1.60
------
Less distributions
Distributions from net investment income .................... --
Distributions from net realized gain on investments ......... --
------
Total distributions .......................................... --
------
Net Asset Value, end of period ............................... $11.08
======
Total return(b) .............................................. 16.88%(d)
Ratios/Supplemental data
Net assets, end of period (in 000's) ........................ $ 519
Ratio of expenses to average net assets ..................... 3.13%(e)
Ratio of net investment loss to average net assets .......... (1.36)%(e)
Ratio of expense waivers to average net assets(c) ........... 0.50%
Portfolio turnover .......................................... 31%
Paid from realized net short-term gain ....................... --
- ------------------------------------------------------------------------------
</TABLE>
(a) Class B Shares of the Portfolio commenced investment operations on February
22, 1999.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net (d)
Total return for the period from commencement of operations through end of
period and is not annualized.
(e) Annualized.
37
<PAGE>
[FUNDMANAGER LOGO]
FUNDMANAGER PORTFOLIOS
- ----------------------
Selecting Leading Fund Managers for Investors Since 1984
A Statement of Additional Information (SAI) dated January 31, 2000 is
incorporated by reference into this prospectus. Additional information about
each Portfolio's investments is available in the Portfolios' Annual and
Semi-Annual Reports to shareholders as they become available. The Annual Report
discusses market conditions and investment strategies that significantly
affected each Portfolio's performance during its last fiscal year. To obtain the
SAI, the Annual and Semi-Annual Reports, and other information without charge,
and make inquiries call your investment professional or the Trust at
1-800-344-9033.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.
Freedom Distributors Corp.
One Beacon Street
Boston, MA 02108
Edgewood Services, Inc. Distributor
Cusip No.:
360850101 360850853
360850200 360850846
360850309 360850838
360850408 360850812
360850507 360850796
360850879
SEC File No. 811-08992
G01966-02 (1/00)
[FUNDMANAGER LOGO]
FUNDMANAGER PORTFOLIOS
- ----------------------
Selecting Leading Fund Managers for Investors Since 1984
Prospectus
- - Aggressive Growth Portfolio
- - Growth Portfolio
- - Growth with Income Portfolio
- - International Portfolio
- - Managed Total Return Portfolio
- - Bond Portfolio (Class A Shares only)
Class A Shares
Class B Shares
January 31, 2000
Statement of Additional Information
FUNDMANAGER PORTFOLIOS
CLASS A SHARES
CLASS B SHARES (except Bond Portfolio)
Aggressive Growth Portfolio International Portfolio
Growth Portfolio Managed Total Return Portfolio
Growth with Income Portfolio Bond Portfolio
This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for FundManager Portfolios,
dated January 31, 2000 . This SAI incorporates by reference the
Portfolios' Annual Report. You may obtain the prospectus or the Annual
Report without charge by calling 1-800-344-9033.
Contents
How are the Portfolios Organized? 1
Securities in Which the Underlying Funds May Invest 1
Securities Descriptions, Techniques and Risks
2
Investment Policies and Limitations 11
Who Manages and Provides Services to the Portfolios? 15
What do Shares Cost? 25
How to Redeem Shares 26
Tax Information 26
How Do the Portfolios Measure Performance? 27
Financial Information 30
Investment Ratings
31
Addresses
January 31, 2000
Cusip Nos.
360850101
360850853
360850200
360850846
360850309
360850838
360850408
360850507
360850812
360850879
360850796
SEC File Number 811-08992
G01966-03 (1/00)
<PAGE>
22
HOW ARE THE PORTFOLIOS ORGANIZED?
FundManager Portfolios (the "Trust") is an open-end management investment
company that was established as a Delaware business trust on February 7, 1995.
The Portfolios are six separate diversified series of the Trust. The Trust may
offer additional series of shares. The shares in any one series may be offered
in separate classes. Prior to May 8, 1995, each of the Portfolios, except
International Portfolio, 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). This Statement uses the same terms as
defined in the prospectus.
SECURITIES IN WHICH THE UNDERLYING FUNDS MAY INVEST
As a fund of funds, the Portfolios principally hold shares of other open-end
mutual funds, although the Portfolios may also own closed-end funds and unit
investment trusts. Since a Portfolio's holdings of underlying funds may change
from time to time, and each underlying fund may have different acceptable
investments, it is difficult to fully describe all the variations in the
acceptability of such investments, or the underlying funds' investment emphasis
on each type of security. However, the following table (which is subject to
change) provides a list of the types of securities that are likely to be a:
o P = Principal investment of an underlying fund (shaded in chart); o A =
Acceptable (but not principal) investment of an underlying fund; or o N = Not an
acceptable investment of an underlying fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Securities Aggressive Growth Growth with Managed Total International Bond
Growth Portfolio Income Return Portfolio Portfolio
Portfolio Portfolio Portfolio
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
American Depositary Receipts A A A A A A
- ------------------------------------------ --------------- --------------- --------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Bank Obligations A A A P A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- -------------- ---------
Borrowing A A A A A A
- ------------------------------------------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Commercial Paper A A A A A P
- ------------------------------------------ --------------- --------------- --------------- ---------------- --------------
- ------------------------------------------ ---------
Common Stock P P P P P N
- ------------------------------------------ --------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- --------------
Convertible Securities A A P P A P
- ------------------------------------------ --------------- --------------- -------------- ---------
- ------------------------------------------ --------------- ----------------
Debt Obligations A A P P A P
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
European Depositary Receipts A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Foreign Currency Transactions A A A A A N
- ------------------------------------------ --------------- --------------- ---------------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Foreign Securities A A A A P N
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- ---------------
Forward Commitments, When-Issued and A A A A A A
Delayed Delivery Transactions
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Futures and Options Transactions A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Global Depositary Receipts A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
High-Yield Securities A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Illiquid Securities A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Lending of Portfolio Securities A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Master Demand Notes A A A A A A
- ------------------------------------------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Other Open-End Investment Companies A A A A A A
- ------------------------------------------ --------------- ----------------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Preferred Stocks A A P P A P
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Repurchase Agreements A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Reverse Repurchase Agreements A A A A A A
- ------------------------------------------ --------------- --------------- --------------- --------------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
U.S. Government Securities A A A P A P
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
Warrants A A A A A A
- ------------------------------------------ --------------- --------------- --------------- ---------------- -------------- ---------
</TABLE>
SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS
Temporary Defensive Investments. Although the Portfolios invest primarily in
shares of other mutual funds, they are also authorized to invest for temporary
investment purposes (or as necessary to accumulate cash for investments or to
meet anticipated redemptions) in a variety of short-term debt securities,
including U.S. government securities, commercial paper, bank instruments, and
repurchase agreements.
Bank Instruments. The Portfolios and underlying funds may invest in debt
instruments of U.S. banks (including certificates of deposit and bankers'
acceptances) that have total assets in excess of $1 billion at the time of
purchase and are members of the Federal Deposit Insurance Corporation (FDIC).
Bank instruments are unsecured interest bearing deposits with banks. A
certificate of deposit is a debt instrument issued by a bank against funds
deposited in the bank. A bankers' acceptance is a short-term draft drawn on a
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.
Borrowing. The funds may borrow money from banks or through reverse repurchase
agreements in amounts up to one-third of total assets, and pledge some assets as
collateral. A fund that borrows will pay interest on borrowed money and may
incur other transaction costs. These expenses could exceed the income received
or capital appreciation realized by a fund from any securities purchased with
borrowed money. With respect to borrowings, the funds are required to maintain
continuous asset coverage to 300% of the amount borrowed. If the coverage
declines to less than 300%, a fund must sell sufficient portfolio securities to
restore the coverage even if it must sell the securities at a loss.
Commercial Paper. The Portfolios and underlying funds may purchase commercial
paper which represents unsecured, short-term obligations with maturities of less
than nine months. Commercial paper is issued by banks, corporations and other
borrowers to investors with temporarily idle cash. Most issuers constantly
reissue their commercial paper and use the proceeds (or bank loans) to repay
maturing paper. Commercial paper may default if the issuer cannot continue to
obtain liquidity by repaying maturing paper in this manner. The short maturity
of commercial paper reduces both the market and credit risk as compared to other
debt securities of the same issuer.
The Portfolios may purchase commercial paper of domestic issuers which, at the
time of purchase, are:
(i) rated in the highest commercial paper rating category by a nationally
recognized statistical rating organization ("NRSRO"),
(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 unrated, are, in the opinion the Adviser, of an
investment quality comparable to rated commercial paper in which the funds may
invest.
Convertible Securities. The funds may invest in convertible securities which are
fixed income securities that an underlying fund has the option to exchange for
equity securities at a specified conversion price. The option allows the
underlying fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, an underlying fund may
hold fixed income securities convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares reached
$12, the underlying fund could realize an additional $2 per share by converting
its fixed income securities into the underlying common stock.
Convertible securities have lower yields than comparable fixed income securities
to compensate for the value of the conversion option. In addition, the
conversion price exceeds the market value of the underlying equity securities at
the time a convertible security is issued. Thus, convertible securities may
provide lower returns than non-convertible fixed income securities or equity
securities depending upon changes in the price of the underlying equity
securities. However, convertible securities permit the underlying fund to
realize some of the potential appreciation of the underlying equity securities
with less risk of losing its initial investment.
Depositary Receipts. American Depositary Receipts (ADRs) are receipts, issued by
a U.S. bank, that represent an interest in shares of a foreign-based
corporation. ADRs provide a way to buy shares of foreign-based companies in the
U.S. rather than in overseas markets. European Depositary Receipts (EDRs) and
Global Depositary Receipts (GDRs) are receipts, issued by foreign banks or trust
companies, or foreign branches of U.S. banks, that represent an interest in
shares of either a foreign or U.S. corporation. Depositary Receipts may not be
denominated in the same currency as the underlying securities into which they
may be converted, and are subject to currency risks. Depositary Receipts
involves many of the same risks of investing directly in foreign securities.
Equity Securities. Equity securities represent ownership in a company. They
represent a share of the issuer's earnings and assets, after the issuer pays its
liabilities. Generally, issuers have discretion as to the payment of any
dividends or distributions. As a result, investors cannot predict the income
they will receive from equity securities. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business. The
following describes the types of equity securities in which the funds may
invest.
Common Stocks are the most prevalent type of equity security. Common
stockholders receive the residual value of the issuer's earnings and assets
after the issuer pays its creditors and any preferred stockholders. As a
result, changes in an issuer's earnings directly influence the value of its
common stock.
Preferred Stocks have the right to receive specified dividends or
distributions before the payment of dividends or distributions on common
stock. Some preferred stocks also participate in dividends and
distributions paid on common stock. Preferred stocks may provide for the
issuer to redeem the stock on a specified date. An underlying fund may
treat such redeemable preferred stock as a fixed income security.
Warrants give an underlying fund the option to buy the issuer's stock or
other equity securities at a specified price. A fund may buy the designated
shares by paying the exercise price before the warrant expires. Warrants
may become worthless if the price of the stock does not rise above the
exercise price by the expiration date. Rights are the same as warrants,
except they are typically issued to existing stockholders.
Fixed Income Securities. Fixed income securities pay interest, dividends or
distributions at a specified rate. The rate may be fixed or adjusted
periodically. Generally, investors in fixed income securities are creditors of
the issuer. The issuer must repay the principal amount of the security, normally
within a specified time. Fixed income securities provide more regular income
than equity securities. However, the returns on fixed income securities are
limited and normally do not increase with the issuer's earnings. This limits the
potential appreciation of fixed income securities as compared to equity
securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. Securities with higher credit risks generally have
higher yields. A security's yield will increase or decrease depending upon
whether it costs less (a discount) or more (a premium) than the principal
amount. Under normal market conditions, securities with longer maturities will
also have higher yields. If the issuer may redeem the security before its
scheduled maturity, the price and yield on a discount or premium security may
change based upon the probability of an early redemption.
The following describes the types of fixed income securities in which an
underlying fund may invest.
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). Some
GSEs are supported by the full, faith and credit of the United States.
Other GSEs receive support through federal subsidies, loans or other
benefits. A few GSEs have no explicit financial support, but are regarded
as having implied support because the federal government sponsors their
activities. Investors regard agency securities as having low credit risk,
but not as low as Treasury securities.
The Portfolios and underlying funds may treat mortgage-backed securities
guaranteed by GSEs as agency securities. Although a GSE guarantee protects
against credit risk, it does not reduce the market and prepayment risks of
these mortgage backed securities.
Asset-Backed Securities are payable from pools of obligations other than
mortgages, such as car loans or credit card receivables. Almost any type of
fixed income asset (including other fixed income securities) may be used to
create an asset-backed security. However, most asset-backed securities
involve consumer or commercial debts with maturities of less than ten
years. Asset-backed securities may take the form of commercial paper or
notes, in addition to pass through certificates. Asset-backed securities
may also resemble some types of CMOs, such as Floaters, Inverse Floaters,
IOs and POs.
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types
of corporate debt security. The credit risks of corporate debt securities
vary widely among issuers. Some of the underlying funds may be prime rate
funds, which are generally organized as closed-end funds. These prime rate
funds buy portions of corporate loans from banks that pay interest that is
designed to approximate prime rate. These bank loans are generally senior
obligations and fully collateralized, but are subject to default. The funds
may have limited liquidity since their shares are not redeemable on a daily
basis and, if they trade on an exchange, may trade at more or less than
their net asset value.
Mortgage-backed securities represent interests in pools of mortgages. The
underlying mortgages normally have similar interest rates, maturities and
other terms. Mortgages may have fixed or adjustable interest rates.
Interests in pools of adjustable rate mortgages are know as ARMs.
Mortgage-backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage-backed securities are
"pass-through certificates." Holders of pass-through certificates receive a
pro rata share of the payments from the underlying mortgages. Holders also
receive a pro rata share of any prepayments, so they assume all the
prepayment risk of the underlying mortgages.
Collateralized mortgage obligations (CMOs), including interests in real
estate mortgage investment conduits (REMICs), allocate payments and
prepayments from an underlying pass-through certificate among holders of
different classes of mortgage-backed securities. This creates different
prepayment and market risks for each CMO class. For example, in a
sequential pay CMO, one class of CMOs receives all principal payments
(including prepayments). The next class of CMOs receives all principal
payments after the first class is paid off. This process repeats for each
sequential class of CMO. As a result, each class of sequential pay CMOs
reduces the prepayment risk of subsequent classes.
In addition, CMOs may allocate interest payments to one class (IOs) and
principal payments to another class (POs). POs increase in value when
prepayment rates increase. In contrast, IOs decrease in value when
prepayments increase, because the underlying mortgages generate less
interest payments. However, IOs prices tend to increase when interest rates
rise (and prepayments fall), making IOs a useful hedge against market risk.
Treasury securities are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest
credit risk.
Foreign Securities. Investments may be in securities of foreign issuers, whether
located in developed or emerging countries.
Investments in foreign securities where delivery of the securities takes place
outside the United States must be made in compliance with U.S. and foreign
currency restrictions and tax laws (including laws imposing withholding taxes on
any dividend or interest income) and laws limiting the amount and types of
foreign investments.
Foreign securities are considered to be liquid provided that: (i) the securities
are purchased and held with the intention of reselling them in the foreign
trading market, (ii) a fund believes it can readily sell the securities in the
foreign trading market or for cash in the United States, or (iii) foreign market
and current market quotations are readily available.
If a fund invests in foreign securities, its board or adviser must determine
that the foreign securities are maintained with foreign custodians who will
exercise reasonable care. The fund's board or adviser continually monitors the
appropriateness of foreign custody arrangements. However, a fund could lose
money if its board or adviser is incorrect in its expectations about the
performance of either the foreign securities or the foreign custodians chosen to
hold the securities.
Foreign Currency Transactions In order to hedge against foreign currency
exchange rate risks, the underlying funds may enter into forward foreign
currency exchange contracts and foreign currency futures contracts, as well as
purchase put or call options on foreign currencies, as described below. The
underlying funds may also conduct foreign currency exchange transactions on a
spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market.
Forward foreign currency exchange contracts (Forward Contracts) are
used to minimize the risks associated with changes in the relationship
between the U.S. dollar and foreign currencies. They are used to lock
in the U.S. dollar price of a foreign security. A Forward Contract is a
commitment to purchase or sell a specific currency for an agreed price
at a future date.
If the fund's adviser believes a foreign currency will decline against
the U.S. dollar, a Forward Contract may be used to sell an amount of
the foreign currency approximating the value of a fund's security that
is denominated in the foreign currency. The success of this hedging
strategy is highly uncertain due to the difficulties of predicting the
values of foreign currencies, of precisely matching Forward Contract
amounts, and because the constantly changing value of the securities
involved. Generally, a fund will not enter into Forward Contracts for
hedging purposes in a particular currency in an amount in excess of a
fund's assets denominated in that currency. Conversely, if the fund's
adviser believes that the U.S. dollar will decline against a foreign
currency, a Forward Contract may be used to buy that foreign currency
for a fixed dollar amount, otherwise known as cross-hedging.
In these transactions, a fund will segregate assets with a market value
equal to the amount of the foreign currency purchased. Therefore, a
fund will always have cash, cash equivalents or high quality debt
securities available to cover Forward Contracts or to minimize
potential risk. The segregated assets will be priced daily.
Forward Contracts may limit potential gain from a positive change in
the relationship between the U.S. dollar and foreign currencies.
Unanticipated changes in currency prices may result in poorer overall
performance for a fund than if it had not engaged in such contracts.
Purchasing and writing put and call options on foreign currencies are
used to protect a fund's investments against declines in the U.S.
dollar value of foreign portfolio securities and against increases in
the dollar cost of foreign securities to be acquired. Writing an option
on foreign currency constitutes only a partial hedge, up to the amount
of the premium received. A fund could lose money if it is required to
purchase or sell foreign currencies at disadvantageous exchange rates.
If exchange rate movements are adverse to a fund's position, a fund may
forfeit the entire amount of the premium plus related transaction
costs. These options are traded on U.S. and foreign exchanges or
over-the-counter.
Exchange-traded futures contracts are used for the purchase or sale of
foreign currencies (Foreign Currency Futures) and will be used to hedge
against anticipated changes in exchange rates that might adversely
affect the value of a fund's securities or the prices of securities
that a fund intends to purchase in the future. The successful use of
Foreign Currency Futures depends on the ability to forecast currency
exchange rate movements correctly. Should exchange rates move in an
unexpected manner, a fund may not achieve the anticipated benefits of
Foreign Currency Futures or may realize losses.
Futures and Options Transactions. As a means of reducing fluctuations
in its net asset value, a fund may buy and sell futures contracts and
options on futures contracts, and buy put and call options on portfolio
securities and securities indices to hedge its portfolio. A fund may
also write covered put and call options on portfolio securities to
attempt to increase its current income or to hedge its portfolio. There
is no assurance that a liquid secondary market will exist for any
particular futures contract or option at any particular time. A fund's
ability to establish and close out futures and options positions
depends on this secondary market.
Futures Contracts. A futures contract is a commitment by two parties
under which one party agrees to make delivery of an asset (seller) and
another party agrees to take delivery of the asset at a certain time in
the future. A futures contract may involve a variety of assets
including commodities (such as oil, wheat, or corn) or a financial
asset (such as a security). A fund may purchase and sell financial
futures contracts to hedge against anticipated changes in the value of
its portfolio without necessarily buying or selling the securities.
Although some financial futures contracts call for making or taking
delivery of the underlying securities, in most cases these obligations
are closed out before the settlement date. The closing of a futures
contract is accomplished by purchasing or selling an identical
offsetting futures contract. Other financial futures contracts call for
cash settlements.
A fund may purchase and sell stock index futures contracts to hedge
against anticipated price changes with respect to any stock index
traded on a recognized stock exchange or board of trade. A stock index
futures contract is an agreement in which two parties agree to take or
make delivery of an amount of cash equal to the difference between the
price of the original contract and the value of the index at the close
of the last trading day of the contract. No physical delivery of the
underlying securities in the index is made. Settlement is made in cash
upon termination of the contract.
Margin In Futures Transactions. Since a fund does not pay or receive
money upon the purchase or sale of a futures contract, it is required
to deposit an amount of initial margin in cash, U.S. government
securities or highly-liquid debt securities as a good faith deposit.
The margin is returned to a fund upon termination of the contract.
Initial margin in futures transactions does not involve borrowing to
finance the transactions.
As the value of the underlying futures contract changes daily, a fund
pays or receives cash, called variation margin, equal to the daily
change in value of the futures contract. This process is known as
marking-to-market. Variation margin does not represent a borrowing or
loan by a fund. It may be viewed as settlement between a fund and the
broker of the amount one would owe the other if the futures contract
expired. When a fund purchases futures contracts, an amount of cash
and/or cash equivalents, equal to the underlying commodity value of the
futures contracts (less any related margin deposits), will be deposited
in a segregated account with a fund's custodian to collateralize the
position and insure that the use of futures contracts is unleveraged.
The funds are also required to deposit and maintain margin when it
writes call options on futures contracts.
A fund will not enter into a futures contract or purchase an option
thereon for other than hedging purposes if immediately thereafter the
initial margin deposits for futures contracts held by it, plus premiums
paid by it for open options on futures contracts, would exceed 5% of
the market value of its net assets, after taking into account the
unrealized profits and losses on those contracts it has entered into.
However, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in computing such 5%.
Put Options on Financial and Stock Index Futures Contracts. A fund may
purchase listed put options on financial and stock index futures
contracts to protect portfolio securities against decreases in value.
Unlike entering directly into a futures contract, which requires the
purchaser to buy a financial instrument on a set date at a specified
price, the purchase of a put option on a futures contract entitles (but
does not obligate) its purchaser to decide on or before a future date
whether to assume a short position at the specified price.
Generally, if the hedged portfolio securities decrease in value during
the term of an option, the related futures contracts will also decrease
in value and the option will increase in value. In such an event, a
fund will normally close out its option by selling an identical option.
If the hedge is successful, the proceeds received by a fund upon the
sale of the second option will be large enough to offset both the
premium paid by a fund for the original option plus the decrease in
value of the hedged securities.
Alternatively, a fund may exercise its put option to close out the
position. To do so, it would simultaneously enter into a futures
contract of the type underlying the option (for a price less than the
strike price of the option) and exercise the option. The fund would
then deliver the futures contract in return for payment of the strike
price. If a fund neither closes out nor exercises an option, the option
will expire on the date provided in the option contract, and only the
premium paid for the contract will be lost.
A fund may also write (sell) listed put options on financial or stock
index futures contracts to hedge its portfolio against a decrease in
market interest rates or an increase in stock prices. A fund will use
these transactions to purchase portfolio securities in the future at
price levels existing at the time it enters into the transaction. When
a fund sells a put on a futures contract, it receives a cash premium in
exchange for granting to the buyer of the put the right to receive from
a fund, at the strike price, a short position in such futures contract.
This is so even though the strike price upon exercise of the option is
greater than the value of the futures position received by such holder.
As market interest rates decrease or stock prices increase, the market
price of the underlying futures contract normally increases. When the
underlying futures contract increases, the buyer of the put option has
less reason to exercise the put because the buyer can sell the same
futures contract at a higher price in the market. If the value of the
underlying futures position is not such that exercise of the option
would be profitable to the option holder, the option will generally
expire without being exercised. The premium received by a fund can then
be used to offset the higher prices of portfolio securities to be
purchased in the future.
In order to avoid the exercise of an option sold by it, generally a
fund will cancel its obligation under the option by entering into a
closing purchase transaction, unless it is determined to be in a fund's
interest to deliver the underlying futures position. A closing purchase
transaction consists of the purchase by a fund of an option having the
same term as the option sold by a fund, and has the effect of canceling
a fund's position as a seller. The premium which a fund will pay in
executing a closing purchase transaction may be higher than the premium
received when the option was sold, depending in large part upon the
relative price of the underlying futures position at the time of each
transaction. If the hedge is successful, the cost of buying the second
option will be less than the premium received by a fund for the initial
option.
Call Options on Financial and Stock Index Futures Contracts. A fund may
write (sell) listed and over-the-counter call options on financial and
stock index futures contracts to hedge its portfolio. When a fund
writes a call option on a futures contract, it undertakes to sell a
futures contract at the fixed price at any time during the life of the
option. As stock prices fall or market interest rates rise, causing the
prices of futures to go down, a fund's obligation to sell a futures
contract costs less to fulfill, causing the value of a fund's call
option position to increase. In other words, as the underlying futures
price goes down below the strike price, the buyer of the option has no
reason to exercise the call, so that a fund keeps the premium received
for the option. This premium can substantially offset the drop in value
of a fund's portfolio securities.
Prior to the expiration of a call written by a fund, or exercise of it
by the buyer, a fund may close out the option by buying an identical
option. If the hedge is successful, the cost of the second option will
be less than the premium received by a fund for the initial option. The
net premium income of a fund will then substantially offset the
decrease in value of the hedged securities.
A fund may buy a listed call option on a financial or stock index
futures contract to hedge against decreases in market interest rates or
increases in stock price. A fund will use these transactions to
purchase portfolio securities in the future at price levels determined
at the time it enters into the transaction. When a fund purchases a
call on a financial futures contract, it receives in exchange for the
payment of a cash premium the right, but not the obligation, to enter
into the underlying futures contract at a strike price determined at
the time the call was purchased, regardless of the comparative market
value of such futures position at the time the option is exercised. The
holder of a call option has the right to receive a long (or buyer's)
position in the underlying futures contract. As market interest rates
fall or stock prices increase, the value of the underlying futures
contract will normally increase, resulting in an increase in value of a
fund's option position. When the market price of the underlying futures
contract increases above the strike price plus premium paid, a fund
could exercise its option and buy the futures contract below market
price. Prior to the exercise or expiration of the call option, a fund
could sell an identical call option and close out its position. If the
premium received upon selling the offsetting call is greater than the
premium originally paid, a fund has completed a successful hedge.
Limitation on Open Futures Positions. A fund will not maintain open
positions in futures contracts it has sold or call options it has
written on futures contracts if together the value of the open
positions exceeds the current market value of a fund's portfolio plus
or minus the unrealized gain or loss on those open positions, adjusted
for the correlation of volatility between the hedged securities and the
futures contracts. If this limitation is exceeded at any time, a fund
will take prompt action to close out a sufficient number of open
contracts to bring its open futures and options positions within this
limitation.
Purchasing Put and Call Options on Securities. A fund may purchase put
options on portfolio securities to protect against price movements in a
fund's portfolio. A put option gives a fund, in return for a premium,
the right to sell the underlying security to the writer (seller) at a
specified price during the term of the option. A fund may purchase call
options on securities acceptable for purchase to protect against price
movements by locking in on a purchase price for the underlying
security. A call option gives a fund, in return for a premium, the
right to buy the underlying security from the seller at a specified
price during the term of the option.
Writing Covered Call and Put Options on Securities. A fund may write
covered call and put options to generate income and thereby protect
against price movements in a fund's portfolio securities. As writer of
a call option, a fund has the obligation, upon exercise of the option
during the option period, to deliver the underlying security upon
payment of the exercise price. The fund may only sell call options
either on securities held in its portfolio or on securities which it
has the right to obtain without payment of further consideration (or
has segregated cash or U.S. government securities in the amount of any
additional consideration). As a writer of a put option, a fund has the
obligation to purchase a security from the purchaser of the option upon
the exercise of the option. In the case of put options, a fund will
segregate cash or U.S. Treasury obligations with a value equal to or
greater than the exercise price of the underlying securities.
Stock Index Options. A fund may purchase or sell put or call options on
stock indices listed on national securities exchanges or traded in the
over-the-counter market. A stock index fluctuates with changes in the
market values of the stocks included in the index. Upon the exercise of
the option, the holder of a call option has the right to receive, and
the writer of a put option has the obligation to deliver, a cash
payment equal to the difference between the closing price of the index
and the exercise price of the option. The effectiveness of purchasing
stock index options will depend upon the extent to which price
movements in a fund's portfolio correlate with price movements of the
stock index selected. The value of an index option depends upon
movements in the level of the index rather than the price of a
particular stock. Accordingly, successful use by a fund of options on
stock indices will be subject to the adviser correctly predicting
movements in the directions of the stock market generally or of a
particular industry. This requires different skills and techniques than
predicting changes in the price of individual stocks.
Over-the-Counter Options. Over-the-counter options are two-party
contracts with price and terms negotiated between buyer and seller. In
contrast, exchange-traded options are third-party contracts with
standardized strike prices and expiration dates and are purchased from
a clearing corporation. Exchange-traded options have a continuous
liquid market while over-the-counter options may not. A fund may
generally purchase and write over-the-counter options on portfolio
securities or securities indices in negotiated transactions with the
buyers or writers of the options when options on a fund's portfolio
securities or securities indices are not traded on an exchange. The
fund purchases and writes options only with investment dealers and
other financial institutions deemed creditworthy by the adviser.
Risks. When a fund uses futures and options on futures as hedging
devices, there is a risk that the prices of the securities or foreign
currency subject to the futures contracts may not correlate perfectly
with the prices of the securities or currency in a fund's portfolio.
This may cause the futures contract and any related options to react
differently to market changes than the portfolio securities or foreign
currency. In addition, the adviser could be incorrect in its
expectations about the direction or extent of market factors such as
stock price movements or foreign currency exchange rate fluctuations.
In these events, a fund may lose money on the futures contract or
option.
When a fund purchases futures contracts, an amount of cash and cash
equivalents, equal to the underlying commodity value of the futures
contracts (less any related margin deposits), will be deposited in a
segregated account with a fund's custodian or the broker, to
collateralize the position and thereby insure that the use of such
futures contract is unleveraged. When a fund sells futures contracts,
it will either own or have the right to receive the underlying future
or security, or will make deposits to collateralize the position as
discussed above.
High Yield Securities. An underlying fund may invest in high yield, high risk
securities. Investing in these 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, high
risk 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.
Lending of Portfolio Securities. In order to generate additional income, a fund
may lend portfolio securities. When a fund lends its securities, it will receive
either cash or liquid securities as collateral from the borrower. A fund will
reinvest cash collateral in short-term liquid securities that qualify as an
otherwise acceptable investment for a fund. If the market value of the loaned
securities increases, the borrower must furnish additional collateral to a fund.
During the time portfolio securities are on loan, the borrower pays a fund any
dividends or interest paid on such securities. Loans are subject to termination
at the option of a fund or the borrower. The fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or equivalent collateral
to a securities lending agent or broker.
Repurchase Agreements. A repurchase agreement is a transaction in which a
Portfolio or underlying fund buys a security from a dealer or bank and agrees to
sell the security back 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 interest rate is unrelated to the interest rate on that security.
The adviser will continually monitor the value of the underlying security to
ensure that the value of the security always equals or exceeds the repurchase
price. In the event of default by the seller, a Portfolio or underlying fund 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.
Restricted and Illiquid Securities An open-end fund is not permitted to invest
more than 15% of the value of its net assets in illiquid securities including
certain restricted securities not determined to be liquid under criteria
established by the board of such fund. Closed-end funds are not subject to such
limits.
Reverse Repurchase Agreements. Reverse repurchase agreement transactions are
similar to borrowing cash. In a reverse repurchase agreement, a Portfolio or
underlying fund sells a portfolio security to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agrees that on a stipulated date in the
future a Portfolio or underlying fund will repurchase the portfolio at a price
equal to the original sale price plus interest. A Portfolio or underlying fund
may use reverse repurchase agreements for liquidity and may enable a Portfolio
or underlying fund to avoid selling portfolio instruments at a time when a sale
may be deemed to be disadvantageous. When effecting reverse repurchase
agreements, liquid assets of a Portfolio or underlying fund, in a dollar amount
sufficient to make payment for the obligations to be purchased, are segregated
at the trade date. These securities are marked to market daily and maintained
until the transaction is settled.
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 underlying 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 an underlying 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 underlying 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 underlying 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 underlying 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.
When-Issued and Delayed Delivery Transactions. These transactions are made to
secure what is considered to be an advantageous price or yield. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices. Other than
normal transaction costs, no fees or expenses are incurred. However, liquid
assets of a fund are segregated on a fund's records at the trade date in an
amount sufficient to make payment for the securities to be purchased. These
assets are marked to market daily and are maintained until the transaction has
been settled.
INVESTMENT POLICIES AND LIMITATIONS
FUNDAMENTAL LIMITATIONS
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.
The following fundamental restrictions may not be changed without the approval
of a majority of that Portfolio's shareholders.
1. A Portfolio will not purchase or otherwise acquire interests in real estate
or real estate mortgage loans, except that a Portfolio may purchase securities
issued by companies, including real estate investment trusts, which invest in
real estate or interests therein. Except for International Portfolio, the
Portfolios will not purchase or otherwise acquire interests in oil, gas, or
other mineral leases, as well as exploration or development programs.
2. With respect to securities comprising 75% of the value of its total assets,
the International Portfolio will not invest more than 5% in securities of any
one issuer (other than cash, cash items, securities of investment companies or
securities issued or guaranteed by the government of the United States or its
agencies or instrumentalities and repurchase agreements collateralized by such
securities) if, as a result, more than 5% of the value of its total assets would
be invested in the securities of that issuer, and will not acquire more than 10%
of the outstanding voting securities of any one issuer.
3. The International Portfolio will not invest 25% or more of the value of its
total assets in any one industry other than investment companies, except that
the Portfolio may invest in securities issued by the U.S. government, its
agencies or instrumentalities. No Portfolio (including International 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 multiple underlying
funds, a Portfolio indirectly may invest more than 25% of its assets in one
industry.
4. A Portfolio will not make loans, except that a Portfolio may purchase and
hold publicly distributed debt securities and it may enter into repurchase
agreements.
5. Except for International Portfolio, a Portfolio will not 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.
6. Except for International Portfolio, a Portfolio will not 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.
7. A Portfolio will not sell securities short or invest in puts, calls,
straddles, spreads or combinations thereof.
8. A Portfolio will not purchase securities on margin, except such short-term
credits as are necessary for the clearance of transactions. The deposit or
payment by the International Portfolio of initial or variation margin in
connection with financial futures contracts or options transactions is not
considered the purchase of a security on margin.
9. A Portfolio will not purchase or acquire commodities or commodity contracts
(except that the International Portfolio may engage in foreign currency
exchanges contracts and futures contracts).
10. Act as an underwriter of securities.
11. Except for International Portfolio, a Portfolio will not 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.
12. The International Portfolio will not issue senior securities, except that
the Portfolio may borrow money directly or through reverse repurchase agreements
in amounts up to one-third of the value of its total assets, including the
amount borrowed, and except to the extent that the Portfolio may enter into
futures contracts. A Portfolio will not borrow money or engage in reverse
repurchase agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of the portfolio
by enabling the Portfolio to meet redemption requests when the liquidation of
portfolio securities is deemed to be inconvenient or disadvantageous. A
Portfolio will not purchase any securities while any borrowings in excess of 5%
of its total assets are outstanding.
13. A Portfolio (other than International Portfolio) 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 not pledge more than 5% of its total assets to secure such
borrowings. A Portfolio (other than International Portfolio) will not make
additional investments at a time when it has outstanding borrowings.
14. Except for International Portfolio, a Portfolio will not 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.
Non-Fundamental Limitations
The following investment limitations are non-fundamental and, therefore may be
changed by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these limitations becomes effective.
1. A Portfolio will not invest in securities for the purpose of exercising
control over or management of the issuer, although the International Portfolio
may own more than 25% of the assets of another investment company.
2. A Portfolio will not invest more than 15% of the Portfolios' net assets
(taken at the greater of cost or market value) in Illiquid Securities (excluding
144A securities that have been determined to be "liquid" under procedures
established by the Trustees).
3. A Portfolio, except for International Portfolio, will not invest, with
respect to 75% of the Portfolio's total assets, purchase securities of any
issuer (other than U.S. government securities, cash, cash items, and securities
of other investment companies) if such purchase at the time thereof would cause
the Portfolio 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. In
addition, the International Portfolio may not purchase securities of any
investment company which is not registered in the United States.
4. A Portfolio may not purchase or otherwise acquire the securities of any
open-end investment company, and also any closed-end investment company or unit
investment trust (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.
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.
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.
A Portfolio, together with the other Portfolios and any "affiliated persons" (as
defined in the Investment Company Act of 1940 (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 investment company 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 investment company's
outstanding securities during any 30-day period. Shares held by a Portfolio in
excess of 1% of an underlying investment company's outstanding securities,
therefore, may be considered not readily marketable securities which together
with other such securities may not exceed 15% of that Portfolio's net assets.
Under certain circumstances, an underlying investment company 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 investment company until the Adviser determines
that it is appropriate to dispose of such securities.
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 attempt to 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) under rules of the National
Association of Securities Dealers ("NASD"). Nevertheless, when appropriate, a
Portfolio will purchase such shares pursuant to methods that will reduce the
sales charge (e.g., letters of intent). It is expected that, in most 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). Furthermore, under
conditions of an SEC exemption, each Portfolio must aggregate any sales charges
and distribution and shareholder service expenses it pays on underlying funds to
ensure that such aggregate amounts do not exceed the limits of the NASD rules
noted above.
Fund-of-funds 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 and also may indirectly bear expenses paid by an underlying
fund related to the distribution of its shares. See "Distribution Plan." 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.
WHO MANAGES AND PROVIDES SERVICES TO THE PORTFOLIOS?
OFFICERS AND TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes the following
data: name, address, age, present position(s) held with the Trust, principal
occupations for the past five years, total compensation received as a Trustee
from the Trust for its most recent fiscal year. The Trust is comprised of six
portfolios. The Trust and four other investment companies comprise the Freedom
Complex.
As of January 19, 2000, the Fund's Board and Officers as a group owned less than
1% of the Portfolios' outstanding Class A and Class B Shares.
An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.
Dexter A. Dodge*
One Beacon Street
Boston, MA 02108
Age: 65
Trustee, Chairman and Chief Executive Officer
Chairman of the Adviser since October 1994. Director of the Adviser since 1983.
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.
Compensation from Trust $0
Compensation from the Freedom Complex $0
Ernest T. Kendall
230 Beacon Street
Boston, MA 02116
Age: 67
Trustee
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.
Compensation from Trust $7,200
Compensation from the Freedom Complex $24,000
<PAGE>
John R. Haack
311 Commonwealth Avenue, #81
Boston, MA 02115
Age: 57
Trustee
Superintendent, Suffolk County House of Correction, Boston, Massachusetts, 1996
to present. Vice President of Operations, Reliable Transaction Processing, 1995
to 1996. Major General, Assistant to the Commander in Chief, U.S. Space Command
and Commander in Chief, North American Aerospace Command, 1993 to 1995. General
Manager, Unilect Industries, 1993 to 1994. Brigadier General, Commander of 102nd
Fighter Wing, 1986 to 1993.
Compensation from Trust $7,200
Compensation from the Freedom Complex $21,200
Richard B. Osterberg
84 State Street
Boston, MA 02109
Age: 55
Trustee
Member of the law firm of Weston, Patrick, Willard & Redding, Boston,
Massachusetts, since 1969. Trustee of Freedom Mutual Fund and Freedom Group of
Tax Exempt Funds since September 1993.
Compensation from Trust $6,600
Compensation from the Freedom Complex $27,400
John J. Danello (1)
One Beacon Street
Boston, MA 02108
Age: 44
President
Executive Vice President and Director of the Adviser since 1992. Clerk and
Counsel of the Adviser since 1986. Executive Vice President of Freedom
Distributors Corporation since 1988. President and Secretary of Freedom Mutual
Fund and Freedom Group of Tax Exempt Funds since 1992.
<PAGE>
Carey C. Cort
One Beacon Street
Boston, MA 02108
Age: 41
Executive Vice President
Executive Vice President and Director of Marketing of the FundManager Division.
Employed by Freedom Capital Management Corporation since July 1995. Formerly
Marketing Director of Key Accounts at John Hancock Funds from July 1992 to July
1995.
- ---------------------------------------------------------------
Martin S. Orgel
One Beacon Street
Boston, MA 02108
Age: 27
Vice President and Portfolio Manager
Vice President and Portfolio Manager of the FundManager Division of the Adviser.
Employed by Freedom Capital Management Corporation since 1995. Trading Assistant
with Swiss Bank Corporation from June 1994 to February 1995.
Victor R. Siclari (1)
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Age: 38
Secretary
Senior Corporate Counsel & Vice President, Federated Administrative Services
since 1992, and Associate of the law firm of Morrison & Foerster from 1990 to
1992.
<PAGE>
Judith J. Mackin (1)
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Age: 39
Treasurer
Vice President and Director of Administration for Mutual Fund Services Group of
Federated Investors, Inc.
Edward C. Gonzales (1)
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA
Age: 69
Executive Vice President
President, Executive Vice President and Treasurer of some of the Funds in the
Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Trustee,
Federated Administrative Services; formerly, Trustee or Director of some of the
Funds in the Federated Fund Complex; Vice President, Federated Financial
Services, Inc.; CEO and Chairman, Federated Administrative Services; Director,
Vice President, and Treasurer, Federated Investors Management Company, Federated
Investment Management Company, Federated Investment Counseling, Federated Global
Investment Management Corp. and Passport Research, Ltd.; Director and Executive
Vice President, Federated Securities Corp.; Director, Federated Services
Company; Trustee, Federated Shareholder Services Company.
(1) Mr. Danello is also an officer of certain other investment companies for
which the Adviser or an affiliate is the investment adviser. Messrs. Gonzales
and Siclari and Ms. Mackin are also directors, trustees and/or officers of
certain other investment companies for which Federated Investors, Inc. or its
subsidiaries serve as investment adviser, administrator and/or principal
underwriter.
VOTING RIGHTS
Each share of each Portfolio gives the shareholder one vote per share (with
proportional voting for fractional shares) in Trustee elections and other
matters submitted to shareholders for vote. All shares of the Trust have equal
voting rights, except that in matters affecting only a particular Portfolio or
class, only shares of that Portfolio or class are entitled to vote.
Holders of not less than two-thirds of the outstanding shares of the Trust may
remove a person serving as Trustee whether by declaration in writing or at a
meeting called for such purpose. A special meeting of shareholders will be
called by the Trustees upon the written request of shareholders who own at least
10% of the Trust's outstanding shares of all series entitled to vote.
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.
As of January 19, 2000, the following shareholders owned of record,
beneficially, or both, 5% or more of the outstanding Class A Shares and Class B
Shares of the Portfolios:
Aggressive Growth Portfolio
Class A - Turtle & Co., Boston, MA, owned 5.62%.
Class B - Wexford Clearing Services Corp. FBO Mary G. Markham Trustee,
Brantingham, NY owned 6.89%; Wexford Clearing Services Corp. FBO William J.
Young III, Canandaigua, NY owned 6.50%; and Wexford Clearing Services Corp. FBO
Johnson Trust, Watertown, NY owned 5.91%.
Growth Portfolio
Class A - Turtle & Co., Boston, MA owned 11.90%.
Class B - Pat Rowan, Simi Valley, CA owned 6.21%.
Growth with Income Portfolio
Class A - Andrei Dragomer Radiology, Inc., Munster, IN owned 11.58%; and Turtle
& Co., Boston, MA owned 9.91%.
Class B - David A. Zalewski, Utica, NY owned 9.69%; Wexford Clearing Services
Corp. FBO Margaret-Mary Rizer, Watertown, NY owned 9.60%; NFSC FEBO #DC9-904309,
Bayamon, PR owned 7.17%; Advanced Clearing FBO 6850222611, Omaha, NE owned
6.31%; Advanced Clearing FBO 6550051891, Omaha, NE owned 6.31%; Paine Webber
Incorporated, Weehawken, NJ owned 5.94%; and NFSC FEBO #A89-056472, Brooklyn, NY
owned 5.21%.
International Portfolio
Class A - None.
Class B - None.
Managed Total Return Portfolio
Class A - None.
Class B - Wexford Clearing Services Corp FBO James J. Spearman, Coventry, RI
owned 21.71%; Advanced Clearing FBO 6890070521, Omaha, NE owned 13.47%; NFSC
FEBO #A89-042480, White Plains, NY owned 12.79%; Donaldson Lufkin Jenrette,
Jersey City, NJ owned 12.07%; NFSC FEBO #A89-056464, Brooklyn, NY owned 9.51%;
NFSC FEBO #A89-052868, Brooklyn, NY owned 9.39%; and Janet R. Miko and Steven P.
Miko, Joint Tenants, Salisbury, NY owned 5.46%.
Bond Portfolio
Class A - Turtle & Co., Boston, MA owned 42.75%.
Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
INVESTMENT ADVISER
The Portfolios' investment adviser is Freedom Capital Management Corporation
which is an indirect, wholly-owned subsidiary of Freedom Securities Corporation
(formerly known as JHFSC Acquisition corporation). On April 2, 1998, 7,400,000
shares of common stock of Freedom Securities Corporation, formerly known as
JHFSC Acquisition Corporation, were sold to the public in an initial public
offering. As a consequence of this offering of stock, as well as other
transactions, the previous controlling shareholder of Freedom Securities
Corporation, Thomas H. Lee Equity Fund III, L.P. (and certain related equity
shareholders), own less than 25% of the common stock of Freedom Securities
Corporation. For each Portfolio, the Adviser conducts investment research, makes
investment decisions and places 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. 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.
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.
The Adviser shall not be liable to the Trust, the Portfolios, or any Portfolio
shareholder for any losses that may be sustained in the purchase, holding, or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the Trust.
OTHER SERVICES
ADMINISTRATIVE SERVICES
Federated Administrative Services, a subsidiary of Federated Investors, Inc.,
provides administrative personnel and services (including certain legal and
financial reporting services) to the Portfolios for a fee at an annual rate as
specified below:
Maximum Average Aggregate Daily Net
Administrative Fee Assets Of The Trust
.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. Federated
Administrative Services may choose voluntarily to reimburse a portion of its fee
at any time.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
AND SHAREHOLDER SERVICING AGENT
Federated Services Company, Pittsburgh, Pennsylvania, through its registered
transfer agent, Federated Shareholder Services Company, maintains all necessary
shareholder records. The Portfolios pay the transfer agent a fee based on the
size, type, and number of accounts and transactions made by shareholders.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Portfolios and provides fund accounting services.
INDEPENDENT AUDITORS
The independent auditor for the Portfolios, Ernst & Young LLP, plans and
performs its audit so that it may provide an opinion as to whether the Fund's
financial statements and financial highlights are free of material misstatement.
BROKERAGE AND PORTFOLIO TRANSACTIONS
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.
Edgewood and Freedom Distributors have received $0 of brokerage commissions on
underlying funds purchased during the fiscal year ended September 30, 1999.
Freedom Distributors and Edgewood may receive other compensation (up to a
maximum of 1% of the public offering price with respect to Freedom Distributors)
in connection with purchase of underlying funds, such as dealer reallowances,
and/or distribution payments, shareholder servicing fees or "trailer fees" from
the underlying mutual funds purchased by the Portfolios. For the fiscal year
ended September 30, 1999, Freedom Distributors received the following
compensation in connection with purchases of underlying funds by the following
portfolios: Aggressive Growth Portfolio - $7,164; Growth Portfolio - $14,019;
Growth with Income Portfolio - $68,355; International Portfolio - $4,508;
Managed Total Return Portfolio - $23,166; and Bond Portfolio- $22,869.
During the previous three fiscal years, no sales charges paid on the Portfolios'
investments in underlying funds were paid to Freedom Capital Management
Corporation or any other affiliate.
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN
The Trustees of the Trust have approved a Distribution Contract between the
Trust and each of Edgewood Services, Inc., Freedom Distributors Corporation,
Tucker Anthony, Incorporated and Sutro & Co., Inc. (the "Distributors"),
pursuant to which such Distributors provide shareholder servicing services
and/or distribute and market the shares of each of the Portfolios.
Under a Master Distribution Plan (the "Plan") adopted by the Portfolios on
behalf of each Class, each Portfolio may compensate the distributors monthly
(who may then pay investment professionals such as banks, broker/dealers, trust
departments of banks, and registered investment advisers) for marketing
activities (such as advertising, printing and distributing prospectuses, and
providing incentives to investment professionals) to promote sales of shares of
the Portfolios.
Fees under the Plan attributable to Class B Shares may be paid by Freedom to
third parties who have advanced commissions to investment professionals for
sales of Class B Shares.
Under the Plan, each Portfolio may pay Distributors an amount up to: (1) 0.25%
of a Portfolio's average daily net assets attributable to Class A Shares for
distribution-related and/or shareholder services; and (2) 1.00% of a Portfolio's
average daily net assets attributable to Class B Shares, 0.75% of which are for
distribution-related activities and 0.25% of which are for shareholder services.
The Portfolios do not participate in any joint distribution activities with
another investment company. In addition, certain interested persons of the
Portfolios that are officers may also be officers of Freedom or its affiliates.
The Plan provides that it may be amended in accordance with the provisions of
Rule 12b-1 under the 1940 Act. 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 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 Class A and Class B Shares of the
Portfolios and to reduce each Class' per share expense ratios and concluded that
there was a reasonable likelihood that the Plan will benefit each Class and
their shareholders. The Plan is terminable with respect to the either 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 the Class.
<PAGE>
During the fiscal year ended September 30, 1999, the Portfolios spent, pursuant
to their 12b-1 plans on behalf of the Class A Shares and Class B Shares, the
following amounts on:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------ ------------ ------------ ------------ --------------- ----------- ------------
Expense Aggressive Growth Growth International Managed Bond
Growth Portfolio with Portfolio Total Portfolio
Portfolio Income Return
Portfolio Portfolio
.................................... ............ ............ ............ ............... ........... ............
Advertising and Sales Activities:
Class A Shares $2,739 $4,340 $4,834 $10,554 $1,162 $7,070
Class B Shares $0 $0 $0 $0 $0 NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Compensation to broker-dealers:
Class A Shares $41,669 $41,782 $32,050 $7,674 $8,463 $34,519
Class B Shares $1,414 $1,971 $989 $923 $163 NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Fulfillment, printing and mailing:
Class A Shares $10,425 $15,659 $20,188 $2,068 $4,426 $32,313
Class B Shares $0 $0 $0 $0 $0 NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Other:
Class A Shares $19,900 $28,724 $54,899 $9,521 $22,856 $75,775
Class B Shares $0 $0 $0 $0 $0 NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Total:
Class A Shares $74,733 $90,505 $111,971 $29,817 $36,907 $149,677
Class B Shares $1,414 $1,971 $989 $923 $163 NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Total as a percentage of average
daily net assets accrued during
period:
Class A Shares 0.31% 0.31% 0.31% 0.31% 0.31% 0.31%
Class B Shares 1.00% 1.00% 1.00% 1.00% 1.00% NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Unreimbursed expenses (1998)
Class A Shares $0 $0 $0 $0 $0 $0
Class B Shares $0 $0 $0 $0 $0 NA
.................................... ............ ............ ............ ............... ........... ............
.................................... ............ ............ ............ ............... ........... ............
Accrual carryover (1998)
Class A Shares $0 $0 $0 $0 $0 $0
Class B Shares $0 $0 $0 $0 $0 NA
.................................... ............ ............ ............ ............... ........... ............
</TABLE>
SHAREHOLDER SERVICES
As noted above, under the Plans for Class A Shares and Class B Shares, each of
the Portfolios may pay the Distributors up to 0.25% of a Portfolio's average
daily net assets for providing shareholder services and maintaining shareholder
accounts. The Distributors may select others to perform these services and may
pay them fees.
FEES PAID BY THE PORTFOLIOS FOR SERVICES
For the fiscal year ended September 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
Fund Name Advisory Administrative 12b-1 12b-1 Fee/Shareholder
Fee/ Fee Fee/Shareholder Servicing Fee (Class
Fee Waived Servicing Fee (Class B
A Shares) Shares)
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
Aggressive Growth Portfolio $117,278/ $75,000 $74,733 $1,414
$49,499*
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
Growth Portfolio $140,782/ $75,000 $90,505 $1,971
$42,502*
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
Growth with Income Portfolio $174,103/ $75,000 $111,971 $989
$0
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
Bond Portfolio $224,041/ $82,093 $149,677 NA
$0
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
Managed Total Return $61,269/ $75,000 $36,907 $163
Portfolio $48,759*
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
International Portfolio $46,211/ $75,000 $29,817 $923
$46,211*
- ----------------------------- ------------- ------------------- ---------------------- ----------------------
</TABLE>
*With respect to the Aggressive Growth Portfolio, Growth Portfolio, Managed
Total Return Portfolio and International Portfolio, the Adviser has
contractually agreed to waive either a portion of or their entire advisory fee.
For the fiscal year ended September 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ----------------------------- ------------- ------------------- ----------------------
Fund Name Advisory Fee Administrative 12b-1
Fee/ Fee Waived Fee/Shareholder
Servicing Fee (Class
A Shares only)
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Aggressive Growth Portfolio $179,155 $95,063/$879 $170,157
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Growth Portfolio $189,945 $94,943/$809 $183,409
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Growth with Income Portfolio $209,030 $95,799/$883 $204,497
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Bond Portfolio $283,059 $103,110/$1381 $275,559
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Managed Total Return $54,131 $67,963/$260 $54,124
Portfolio
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
International Portfolio (1) $17,802 $24,041/$0 $17,798
- ----------------------------- ------------- ------------------- ----------------------
1. The International Portfolio commenced business on June 6, 1998.
For the fiscal year ended September 30, 1997
- ----------------------------- ------------- ------------------- ----------------------
Fund Name Advisory Fee Administrative 12b-1
Fee/ Fee Waived1 Fee/Shareholder
Servicing Fee (Class
A Shares only)
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Aggressive Growth Portfolio $200,484 $61,749/$11,217 $192,610
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Growth Portfolio $154,313 $47,373/$8,360 $126,586
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Growth with Income Portfolio $167,415 $51,488/$9,251 $137,741
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Bond Portfolio $340,908 $105,098/$19,270 $300,136
- ----------------------------- ------------- ------------------- ----------------------
- ----------------------------- ------------- ------------------- ----------------------
Managed Total Return $58,530 $18,433/$3,307 $41,056
Portfolio
- ----------------------------- ------------- ------------------- ----------------------
</TABLE>
1. Represents fees paid from October 1, 1996 through November 11, 1996 to
Signature Broker-Dealer Services, Inc., the former Administrator, and fees paid
from November 12, 1996 through September 30, 1997 to Federated Administrative
Services.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Portfolios' securities are determined as follows:
o for equity securities (including shares of closed-end funds), according to
the last sale price in the market in which they are primarily traded (either
a national securities exchange or the over-the-counter market), if available;
o in the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;
o for open-end investment companies, according to the most recent net asset
value;
o for bonds and other fixed income securities, at the last sale price on a
national securities exchange, if available, otherwise, as determined by an
independent pricing service;
o for short-term obligations, according to the mean between bid and asked
prices as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair value as determined in
good faith by the Board; and
o for all other securities, at fair value as determined in good faith by the
Board.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities.
The Portfolios value futures contracts and options at their market values
established by the exchanges on which they are traded at the close of trading on
such exchanges. Options traded in the over-the-counter market are valued
according to the mean between the last bid and the last asked price for the
option as provided by an investment dealer or other financial institution that
deals in the option. The Board may determine in good faith that another method
of valuing such investments is necessary to appraise their fair value.
Trading in Foreign Securities. Trading in foreign securities may be completed at
times which vary from the closing of the New York Stock Exchange (NYSE). In
computing its NAV, the Portfolios value foreign securities at the latest closing
price on the exchange on which they are traded immediately prior to the closing
of the NYSE. Certain foreign currency exchange rates may also be determined at
the latest rate prior to the closing of the NYSE. Foreign securities quoted in
foreign currencies are translated into U.S. dollars at current rates.
Occasionally, events that affect these values and exchange rates may occur
between the times at which they are determined and the closing of the NYSE. If
such events materially affect the value of portfolio securities, these
securities may be valued at their fair value as determined in good faith by the
Portfolios' Board, although the actual calculation may be done by others.
WHAT DO SHARES COST?
The Portfolios' NAV per share fluctuates and is based on the market value of all
securities and other assets of the Portfolios. The NAV 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 Class' outstanding shares. The NAV
for each class of shares may differ due to the variance in daily net income
realized by each class. Such variance will reflect only accrued net income to
which the shareholders of a particular class are entitled.
When the Portfolios' distributors receive sales charges and marketing fees, they
may pay some or all of them to Authorized Dealers. The distributors and their
affiliates may pay out of their own assets amounts (including items of material
value) to Authorized Dealers or other service providers for marketing and /or
servicing shareholders.
REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES
These reductions or eliminations are offered because no sales commissions have
been advanced to the selling financial intermediary, the shareholder has already
paid a Contingent Deferred Sales Charge (CDSC), or nominal sales efforts are
associated with the original purchase of shares.
Upon notification to the Distributor or the Portfolios' transfer agent, no CDSC
will be imposed on redemptions: o following the subsequent complete disability
or death, as defined in Section 72(m)(7) of the Internal Revenue
Code of 1986, of the last surviving shareholder;
o representing minimum required distributions from an Individual Retirement
Account or other retirement plan to a shareholder who has attained the age of
70-1/2;
o which are involuntary redemptions of shareholder accounts that do not
comply with the minimum balance requirements;
o which are qualifying redemptions of Class B Shares under a Systematic
Withdrawal Program (as described below); o of Shares held by the Trustees,
employees, and sales representatives of a Portfolio, the Adviser, the
Distributor and their affiliates; employees of any financial intermediary
that sells Class B Shares pursuant to a sales agreement with the Distributor;
and the immediate family members of the foregoing persons; and
o of shares originally purchased through a bank trust department, a registered
investment adviser or retirement plans where the third party administrator
has entered into certain arrangements with the Distributor or its affiliates,
or any other financial intermediary, to the extent that no payments were
advanced for purchases made through such entities.
HOW TO REDEEM SHARES
REDEMPTION IN KIND
Although the Portfolios intend to pay share redemptions in cash, they reserve
the right, as described below, to pay the redemption price in whole or in part
by a distribution of a Portfolio's securities.
Any share redemption payment greater than this amount will also be in cash
unless the Portfolios' Board determines that payment should be in kind. In such
a case, a Portfolio will pay all or a portion of the remainder of the redemption
in portfolio securities, valued in the same way as a Portfolio determines its
NAV. The portfolio securities will be selected in a manner that the Portfolios'
Board deems fair and equitable and, to the extent available, such securities
will be readily marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
TAX INFORMATION
FEDERAL INCOME TAX
The Portfolios will pay no federal income tax because they expect to meet
requirements of Subchapter M of the Internal Revenue Code (Code) applicable to
regulated investment companies and to receive the special tax treatment afforded
such companies.
A Portfolio will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by each
Portfolios will be separate .
FOREIGN INVESTMENTS
If a Portfolio purchases foreign securities, its investment income may be
subject to foreign withholding or other taxes that could reduce the return on
these securities. Tax treaties between the United States and foreign countries,
however, may reduce or eliminate the amount of foreign taxes to which a
Portfolio would be subject. The effective rate of foreign tax cannot be
predicted since the amount of Portfolio assets to be invested within various
countries is uncertain. However, a Portfolio intends to operate so as to qualify
for treaty-reduced tax rates when applicable.
Distributions from a Portfolio may be based on estimates of book income for the
year. Book income generally consists solely of the coupon income generated by a
Portfolio, whereas tax basis income includes gains or losses attributable to
currency fluctuation. Due to differences in the book and tax treatment of fixed
income securities denominated in foreign currencies, it is difficult to project
currency effects on an interim basis. Therefore, to the extent that currency
fluctuations cannot be anticipated, a portion of distributions to shareholders
could later be designated as a return of capital, rather than income, for income
tax purposes, which may be of particular concern to simple trusts.
If a Portfolio invests in the stock of certain foreign corporations, they may
constitute Passive Foreign Investment Companies (PFIC), and the Portfolio may be
subject to Federal income taxes upon disposition of PFIC investments.
If more than 50% of the value of a Portfolio's assets at the end of the tax year
is represented by stock or securities of foreign corporations, the Portfolio
intends to qualify for certain Code stipulations that would allow shareholders
to claim a foreign tax credit or deduction on their U.S. income tax returns. The
Code may limit a shareholder's ability to claim a foreign tax credit.
Shareholders who elect to deduct their portion of a Portfolio's foreign taxes
rather than take the foreign tax credit must itemize deductions on their income
tax returns.
The underlying funds' transactions in foreign currencies and hedging activities
may give rise to ordinary income or loss to the extent such income or loss
results from fluctuations in value of the foreign currency concerned. In
addition, such activities will likely produce a difference between book income
and taxable income. This difference may cause a portion of the underlying funds'
income distributions to constitute a return of capital for tax purposes or
require the underlying fund to make distributions exceeding book income to
qualify as a regulated investment company for tax purposes.
HOW DO THE PORTFOLIOS MEASURE PERFORMANCE?
The Portfolios may advertise share performance by using the Securities and
Exchange Commission's (SEC) standard method for calculating performance
applicable to all mutual funds. The SEC also permits this standard performance
information to be accompanied by non-standard performance information.
Unless otherwise stated, any quoted share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in a
Portfolio's or any class of shares' expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings and
offering price per share fluctuate daily. Both net earnings and offering price
per share are factors in the computation of yield and total return.
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of shares owned at the end of the period by
the NAV per share at the end of the period. The number of shares owned at the
end of the period is based on the number of shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional shares, assuming the annual reinvestment of all
dividends and distributions.
For the fiscal year ended September 30, 1999*
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ----------------------------- ----------------- -------------------- ---------------------
Fund Name 1 Year Total 5-Year Total 10-Year Total
Return Return (Average Return (Average
Annual) Annual)
- ----------------------------- ----------------- -------------------- ---------------------
- ----------------------------- ----------------- -------------------- ---------------------
Aggressive Growth Portfolio
Class A Shares 24.33% 13.33% 10.90%
Class B Shares** 0.64% N/A N/A
- ----------------------------- ----------------- -------------------- ---------------------
- ----------------------------- ----------------- -------------------- ---------------------
Growth Portfolio
Class A Shares 18.06% 17.06% 12.36%
Class B Shares*** (2.60)% N/A N/A
- ----------------------------- ----------------- -------------------- ---------------------
- ----------------------------- ----------------- -------------------- ---------------------
Growth with Income Portfolio
Class A Shares
Class B Shares** 13.80% 16.08% 11.50%
(1.99)% N/A N/A
- ----------------------------- ----------------- -------------------- ---------------------
- ----------------------------- ----------------- -------------------- ---------------------
Bond Portfolio
Class A Shares (2.01)% 5.76% 6.38%
- ----------------------------- ----------------- -------------------- ---------------------
- ----------------------------- ----------------- -------------------- ---------------------
Managed Total Return
Portfolio
Class A Shares (0.25)% 7.90% 7.28%
Class B Shares** (5.35)% N/A N/A
- ----------------------------- ----------------- -------------------- ---------------------
- ----------------------------- ----------------- -------------------- ---------------------
International Portfolio
Class A Shares 26.97% N/A N/A
Class B Shares** 11.92% N/A N/A
- ----------------------------- ----------------- -------------------- ---------------------
</TABLE>
* Except for the Bond Portfolio, which does not impose a sales charge, the
returns presented in the chart above for the other Portfolios were calculated
using the maximum sales load of 5.50% that was in effect as of September 30,
1999. Prior to January 8, 1999, the maximum sales charge was increased from
4.50% on Class A Shares of these other Portfolios.
** The Portfolio's Class B Shares started performance on February 22, 1999.
*** The Portfolio's Class B Shares started performance on February 16, 1999.
YIELD
The yield of shares is calculated by dividing: (i) the net investment income per
share earned by the shares over a thirty-day period; by (ii) the maximum
offering price per share on the last day of the period. This number is then
annualized using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each month
over a 12-month period and is reinvested every six months. The yield does not
necessarily reflect income actually earned by shares because of certain
adjustments required by the SEC and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.
To the extent investment professional and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares,
the share performance is lower for shareholders paying those fees.
The SEC yield for the Class A Shares of Bond Portfolio for the 30-day period
ended September 30, 1999 was 4.62%.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
o references to ratings, rankings, and financial publications and/or
performance comparisons of shares to certain indices;
o charts, graphs and illustrations using a Portfolio's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Portfolios; and
o information about the mutual fund industry from sources such as the Investment
Company Institute.
A Portfolio may compare its performance, or performance for the types of
securities in which it invests, to a variety of other investments, including
federally insured bank products such as bank savings accounts, certificates of
deposit, and Treasury bills.
A Portfolio may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Portfolios use in advertising may include:
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.
Lehman Brothers Government/Corporate Bond Total Index is comprised of
approximately 5,000 issues which include non-convertible bonds publicly issued
by the U.S. government or its agencies; corporate bonds guaranteed by the U.S.
government and quasi-federal corporations; and publicly issued, fixed-rate,
non-convertible domestic bonds of companies in industry, public utilities and
finance.
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.
Morgan Stanley Capital International Europe Australia Far East Index is a market
capitalization-weighted equity index comprising 20 of the 48 countries in the
MSCI universe and representing the developed world outside of North America.
Each MSCI country index is created separately, then aggregated, without change,
into regional MSCI indices. EAFE performance data is calculated in U.S. dollars
and in local currency.
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.
Russell 2000 Index is an index consisting of approximately 2,000 small
capitalization common stocks.
Standard & Poor's 500 Index is a capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes in
the aggregate market value of 500 stocks representing all major industries.
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.
FINANCIAL INFORMATION
The Financial Statements for the Portfolios for the fiscal year ended September
30, 1999 are incorporated herein by reference to the Annual Report to
Shareholders of FundManager Portfolios dated September 30, 1999. The Annual
Report must be accompanied or preceded by delivery of this SAI.
<PAGE>
INVESTMENT RATINGS
Standard and Poor's Long-Term Debt Rating Definitions
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.
A--Debt rated A has 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--Debt rated BBB is 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.
BB--Debt rated BB has less near-term, vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB-rating.
B--Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
CCC--Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
CC--The rating CC typically is applied to debt subordinated to senior debt that
is assigned an actual or implied CCC debt rating.
C--The rating C typically is applied to debt subordinated to senior debt which
is assigned an actual or implied CCC-debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
Moody's Investors Service, Inc. Long-Term Bond Rating Definitions
AAA--Bonds which are rated AAA are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as gilt
edged. Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA--Bonds which are rated AA are judged to be of high quality by all standards.
Together with the AAA group, they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in AAA securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in AAA securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
BAA--Bonds which are rated BAA are 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. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA--Bonds which are BA are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA--Bonds which are rated 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--Bonds which are rated CA represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Fitch IBCA, Inc. Long-Term Debt Rating Definitions
AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+.
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
BB--Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.
B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.
CCC--Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C--Bonds are imminent default in payment of interest or principal.
Moody's Investors Service, Inc. Commercial Paper Ratings
Prime-1--Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
o Leading market positions in well established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on debt and ample
asset protection.
o Broad margins in earning coverage of fixed financial charges and high internal
cash generation.
o Well established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers rated Prime-1 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
Standard and Poor's Commercial Paper Ratings
A-1--This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Fitch IBCA, Inc. Commercial Paper Rating Definitions
FITCH-1--(Highest Grade) Commercial paper assigned this rating is regarded as
having the strongest degree of assurance for timely payment.
FITCH-2--(Very Good Grade) Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than the strongest issues.
<PAGE>
ADDRESSES
FundManager Portfolios
Aggressive Growth Portfolio 5800 Corporate Drive
Growth Portfolio Pittsburgh, PA 15237-7010
Growth with Income Portfolio
Bond Portfolio
Managed Total Return Portfolio
International Portfolio
Investment Adviser
Freedom Capital Management Corporation One Beacon Street
Boston, MA 02108
Distributors
Freedom Distributors Corporation One Beacon Street
Boston, MA 02108
Edgewood Services, Inc. Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230-0897
Tucker Anthony, Incorporated 200 World Financial Center
New York, NY 10281
Sutro & Co., Inc. 201 California Street
San Francisco, CA 94111
Administrator
Federated Administrative Services Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3774
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company P.O. Box 8600
Boston, MA 02266-8600
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
Independent Auditors
Ernst & Young LLP 200 Clarendon Street
Boston, MA 02116
PART C OTHER INFORMATION
ITEM 23. EXHIBITS
(a) (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; (11)
(iv) Conformed copy of the Amendment No. 3 to Master Trust Agreement; (11)
(v) Form of Amendment No. 6 to Master Trust Agreement
(b) Copy of By-Laws of the Registrant; (4)
(c) Not Applicable
(d) (i) 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; (11)
(ii) Conformed copy of the Investment Advisory Contract
Supplement for the International Portfolio; (15)
(iii) Conformed copy of Master Investment Advisory Contract
and Supplements dated 5/20/98 between FundManager
Portfolios and Freedom Capital Management
Corporation;+
(iv) Conformed copy of Master Investment Advisory Contract Letter Agreement
dated January 1, 1999; + (v) Conformed copies of Master Investment Advisory
Contract Letter Agreements dated July 19, 1999; + (vi) Form of Master Investment
Advisory Contract Letter
Agreements dated November 30, 1999; +
(e) (i) Conformed copy of the Distributors Contract between
Edgewood Services Company and FundManager
Portfolios; (11)
(ii) Conformed copy of the Master Distributors Contract between Tucker
Anthony Incorporated and FundManager Portfolios; (11)
(iii) Conformed copy of the Master Distributors Contract between Sutro &
Co. Incorporated and FundManager Portfolios; (11)
(iv) Conformed copy of the Master Distributors Contract between Freedom
Distributors Corporation and FundManager Portfolios; (11)
(v) Form of Mutual Funds Sales and Service Agreement; (14)
(vi) Conformed copy of Exhibit B to the Distributor's
Contract between FundManager Portfolios and Edgewood
Services, Inc. with respect to the Financial Adviser
Class and the No-Load Class of the International
Portfolio; (15)
-----------------------------------
+ All exhibits have been filed electronically.
(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) Incorporated by reference to Post-Effective Amendment No.4 to the
Registrant's Registration Statement as filed with the Commission on January
23, 1997. (File Nos. 33-89754 and 811-8992)
(14) Incorporated by reference to Post-Effective Amendment No. 10 to the
Registrant's Registration Statement as filed with the Commission on
December 29, 1997. (File Nos. 33-89754 and 811-8992)
(15) Incorporated by reference to Post-Effective Amendment No.11 to the
Registrant's Registration Statement as filed with the Commission on January
28, 1998. (File Nos. 33-89754 and 811-8992)
<PAGE>
(vii) Conformed copy of the Distribution Contract Supplement
between FundManager Portfolios and Freedom Distributors with
respect to the International Portfolio; (15)
(viii) Conformed copy of Master Distribution Contract dated
5/20/98 between FundManager Portfolios and Freedom
Distributors Corporation; (16)
(ix) Conformed copy of Master Distribution Contract dated 5/20/98
between FundManager Portfolios and Tucker Anthony Incorporated; (16) (x)
Conformed copy of Master Distribution Contract dated 5/20/98 between FundManager
Portfolios and Sutro & Co. Incorporated; (16)
(xi) Conformed copy of Master Distribution Contract and Freedom Distributors
Corporation dated December 31, 1998;+
(xii) Conformed copy of Master Distribution Contract and Sutro & Co.
Incorporated dated December 31, 1998;+ (xiii) Conformed copy of Master
Distribution Contract and Tucker Anthony Incorporated dated December 31, 1998;+
(xiv) Conformed copy of Amended and Restated Exhibit A & B to the Distributor's
Contract dated December 31,
1998;+
(xv) Copy of Exhibit B-1 Fee schedule for Mutual Fund Sales and Services
Agreement; (17) (xvi) Copy of Exhibit B-2 Fee schedule for Mutual Fund Sales and
Services Agreement; (17)
(f) Not Applicable
(g) Conformed copy of Custodian Agreement between FundManager
Portfolios and
Investors Bank & Trust Company; (11)
(i) Domestic Custody and Accounting Fee Schedule; (12)
(ii) Conformed copy of Custodian Contract between
FundManager Portfolios and State Street Bank and
Trust Company; (13)
(iii) Conformed copy of Amendment No. 1 to Custodian
Contract; (16)
(h) (i) Conformed copy of the Administrative Services
Agreement between FundManager Portfolios and Federated
Administrative Services; (11)
(ii) Conformed copy of the Transfer Agency and Service
Agreement between FundManager Portfolios and Investors
Bank & Trust Company; (11)
(iii) Conformed copy of Agreement for Transfer Agency
Services between FundManager Portfolios and Federated
Shareholder Services Company; (13)
(iv) Conformed copy of Amendment #1 to Schedule A to Administrative
Services Agreement between FundManager Portfolios and
Federated Administrative Services; (15)
(v) Conformed copy of Addendum to Administrative Services Agreement;+ (vi)
Conformed copy of Amendment #2 to Schedule A to Administrative Services
Agreement;+
-----------------------------------
+ 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)
(11) Incorporated by reference to Post-Effective Amendment No.4 to the
Registrant's Registration Statement as filed with the Commission on January
23, 1997. (File Nos. 33-89754 and 811-8992)
(12) Incorporated by reference to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement as filed with the Commission on October
21, 1997. (File Nos. 33-89754 and 811-8992)
(13) Incorporated by reference to Post-Effective Amendment No.8 to the
Registrant's Registration Statement as filed with the Commission on
November 26, 1997. (File Nos. 33-89754 and 811-8992)
(15) Incorporated by reference to Post-Effective Amendment No.11 to the
Registrant's Registration Statement as filed with the Commission on January
28, 1998. (File Nos. 33-89754 and 811-8992)
(17) Incorporated by reference to Post-Effective Amendment No.16 to the
Registrant's Registration Statement as filed with the Commission on January
8, 1999. (File Nos. 33-89754 and 811-8992)
<PAGE>
(i) Opinion and Consent of counsel; (2)
(j) Conformed copy of Consent of Independent Auditors; +
(k) Not Applicable
(l) Not Applicable
(m) (i) Amended and Restated Master Distribution Plan and
Supplements for the Financial Adviser Class of
shares; (3)
(ii) Amended and Restated Master Distribution Plan and
Supplements for the Financial Adviser Class of
shares; (13)
(iii) Conformed copy of the Amended and Restated
Distribution Plan Supplement for the Financial
Adviser Class of International Portfolio; (15)
(iv) Conformed copy of Amended and Restated Master Distribution Plan
Class A Shares;+
(v) Conformed copy of Master Distribution Plan Class B Shares;+
(n) (i) Multiple Class Expense Allocation Plan; (3)
(ii) Amended Multiple Class Expense Allocation Plan; (13)
(iii) Addendum #1 to the Multiple Class Expense
Allocation Plan; (15)
(iv) Conformed copy of Multiple Class Expense Allocation
Plan;+
(o) Conformed copy of Power of Attorney of Trustees and
Officers of Registrant; +
ITEM 24. Persons Controlled by or Under Common Control with Registrant:
Not Applicable
ITEM 25. 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)
(11) Incorporated by reference to Post-Effective Amendment No.4 to the
Registrant's Registration Statement as filed with the Commission on January
23, 1997. (File Nos. 33-89754 and 811-8992)
(13) Incorporated by reference to Post-Effective Amendment No.8 to the
Registrant's Registration Statement as filed with the Commission on
November 26, 1997. (File Nos. 33-89754 and 811-8992)
(15) Incorporated by reference to Post-Effective Amendment No.11 to the
Registrant's Registration Statement as filed with the Commission on January
28, 1998. (File Nos. 33-89754 and 811-8992)
<PAGE>
ITEM 26. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment adviser, see
the section entitled "Who Manages The Trust" 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 President and Chief Executive Officer of
Freedom Securities Corporation; Chairman and Chief
Executive Officer of Tucker Anthony Incorporated;
Director of Freedom Capital
Dexter A. Dodge Chairman, C.E.O. and Director of Freedom Capital; Chairman
of the Board of Trustees of the FundManager Portfolios; Vice President of
Freedom Distributors ......... Corporation
John J. Danello Chief Operating Officer, Managing Director, Clerk and
General Counsel of Freedom Capital; Executive Vice President, President and
Director of Freedom .. Distributors Corporation; President of the FundManager
......... Portfolios
Michael M. Spencer Senior Vice President and Director of Freedom Capital;
Portfolio Manager at Shawmut Investment Advisers
<PAGE>
Item 27. Principal Underwriters:
(a) Edgewood Services, Inc. the Distributor for shares of
the Registrant, acts as principal underwriter for the
following open-end investment companies, including the
Registrant: Excelsior Funds, Excelsior Funds, Inc.,
(formerly, UST Master Funds, Inc.), Excelsior
Institutional Trust, Excelsior Tax-Exempt Funds, Inc.
(formerly, UST Master Tax-Exempt Funds, Inc.), FTI
Funds, FundManager Portfolios, Great Plains Funds, Old
Westbury Funds, Inc., The Riverfront Funds, Robertsons
Stephens Investment Trust, WesMark Funds, WCT Funds.
<TABLE>
<CAPTION>
<S> <C> <C>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Lawrence Caracciolo Director, President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Arthur L. Cherry Director, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
J. Christopher Donahue Director, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Christine Johnson Vice President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Ernest L. Linane Vice President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Thomas P. Sholes Vice President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Robert M. Rossi Assistant Vice President, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Thomas R. Donahue Treasurer,
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Dennis McAuley, III Assistant Treasurer, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Timothy S. Johnson Secretary, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
Victor R. Siclari Assistant Secretary, --
5800 Corporate Drive Edgewood Services, Inc.
Pittsburgh, PA 15237-7002
<PAGE>
(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.
Anthony Pacileo 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 Clerk Assistant
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 Center Officer and Director of
New York, NY 10281 Tucker Anthony Incorporated.
Robert H. Yevich President and Director of --
One World Financial Center Tucker Anthony Incorporated.
New York, NY 10281
Marc Menchel Executive Vice President, --
One World Financial Center Secretary and Clerk of
New York, NY 10281 Tucker Anthony Incorporated.
John Mullin Treasurer and Chief Financial --
One World Financial Center Officer of Tucker Anthony
New York, NY 10281 Incorporated.
<PAGE>
(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 Chairman of Sutro & Co. --
One Beacon Street Incorporated.
Boston, MA 02108
Thomas R. Weinberger Executive Vice President of --
11150 Santa Monica Blvd. Sutro & Co. Incorporated.
Suite 1500
Los Angeles, CA 90025
Ray Minehan Executive Vice President of
201 California Street Sutro & Co. Incorporated
San Francisco, CA 94111
Jerry Phillips Executive Vice President of
201 California Street Sutro & Co. Incorporated
San Francisco, CA 94111
(c) Not Applicable.
</TABLE>
<PAGE>
ITEM 28. 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
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Notices should be sent to the Agent for Service at above address.)
One Beacon Street
Boston, Massachusetts 02018
Freedom Capital Management Corporation One Beacon Street
("Adviser") Boston Massachusetts 02108.
Federated Administrative Services Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Federated Shareholder Services Company P.O. Box 8600
("Transfer Agent and Dividend Boston, Massachusetts 02266-8600
Disbursing Agent and Shareholder
Servicing Agent")
State Street Bank and Trust Company P.O. Box 8600
("Custodian and Portfolio Boston, Massachusetts 02266-8600
Accountant")
ITEM 29. Management Services:
Not applicable.
ITEM 30. Undertakings
Registrant hereby undertakes to comply with Section 16(c) of the 1940
Act with respect to the removal of Trustees and the calling of special
shareholder meetings by shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FUNDMANAGER PORTFOLIOS,
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 Commonwealth of Pennsylvania, on the
28th day of January, 2000.
FUNDMANAGER PORTFOLIOS
By: /s/ Victor R. Siclari
Victor R. Siclari, Secretary
January 28, 2000
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 28, 2000
Victor R. Siclari For the Persons
SECRETARY Listed Below
/s/Dexter A. Dodge* Chairman and Trustee
Dexter A. Dodge (Chief Executive Officer)
/s/John J. Danello* President
John J. Danello (Principal Executive Officer)
/s/Judith J. Mackin* Treasurer
Judith J. Mackin (Principal Financial and Accounting Officer)
/s/Ernest 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 (j) under Form N-1A
Exhibit 23 under Item 601/Reg SK
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" in the FundManager Portfolios combined Class A and Class B Shares
Prospectus and "Independent Auditors" and "Financial Information" in the
FundManager Portfolios combined Class A and Class B Shares Statement of
Additional Information in Post-Effective Amendment No. 17 to the Registration
Statement (Form N-1A, No. 33-89754) of FundManager Portfolios.
We also consent to the incorporation by reference therein of our report dated
November 12, 1999, with respect to the financial statements and financial
highlights of the FundManager Portfolios in this Form N-1A.
By: /s/ ERNST & YOUNG LLP
Boston, Massachusetts
January 26, 2000
Exhibit (d)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
November 30, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Aggressive Growth Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Aggressive Growth Portfolio so that total annual operating
expenses do not exceed 1.60% on the Class A Shares and 2.35% on the Class B
Shares through the period ending January 31, 2001.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Aggressive Growth Portfolio
By:
Title: President
<PAGE>
Exhibit (d)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
November 30, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Growth Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Growth Portfolio so that total operating expenses do not exceed
1.60% on the Class A Shares and 2.35% on the Class B Shares through the period
ending January 31, 2001.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Growth Portfolio
By:
Title: President
<PAGE>
Exhibit (d)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
November 30, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Managed Total Return Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Managed Total Return Portfolio so that total operating expenses
do not exceed 1.91% on the Class A Shares and 2.66% on the Class B Shares
through the period ending January 31, 2001.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Managed Total Return Portfolio
By:
Title: President
<PAGE>
Exhibit (d)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
November 30, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: International Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the International Portfolio so that total operating expenses do not
exceed 2.34% on the Class A Shares and 3.09% on the Class B Shares through the
period ending January 31, 2001.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of International Portfolio
By:
Title: President
<PAGE>
Exhibit (d)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
November 30, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Growth with Income Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Growth with Income Portfolio so that total operating expenses
do not exceed 1.60% on the Class A Shares and 2.35% on the Class B Shares
through the period ending January 31, 2001.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Growth with Income Portfolio
By:
Title: President
<PAGE>
Exhibit (d)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
November 30, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Bond Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Bond Portfolio so that total operating expenses do not exceed
2.30% on the Class A Shares through the period ending January 31, 2001.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Bond Portfolio
By:
Title: President
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
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 "Portfolios"). A
separate series of shares of beneficial interest in the Trust is offered to
investors with respect to each Portfolio. The Trust engages in the business of
investing and reinvesting the assets of each Portfolio 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
Portfolios 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 "1940 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
"Distributors"), the Trust has employed the Distributors to act as principal
underwriters for each Portfolio 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 Portfolios
the investment advisory services specified in this Contract and the Adviser
hereby accepts such appointment.
<PAGE>
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
custodian (including maintenance of books and accounts and calculation of the
net asset value of shares of the Portfolios), 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 "initial 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 to the Trust investment guidance and
policy direction in connection with the management of the portfolio of each
Portfolio, 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 Portfolio 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 Portfolio's
portfolio shall be invested in securities described by the policies of such
Portfolio 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
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 Portfolios, 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
Portfolios.
(c) As manager of the assets of each Portfolio, the Adviser
shall make investments for the account of each Portfolio 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 Portfolio 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.
(e) On occasions when the Adviser deems the purchase or sale
of a security to be in the best interest of a Portfolio 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 Portfolio 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 Portfolio 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 Portfolio during the
preceding month, at annual rates set forth in a Supplement to this Contract with
respect to each Portfolio. If the fees payable to the Adviser pursuant to this
paragraph 6 begin to accrue before the end of any month 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 Portfolio shall be computed in the manner specified in
the Prospectus for the computation of net asset value. For purposes of this
Contract, a "business 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 Portfolio 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 Portfolio 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 Portfolio 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 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
Portfolio, the monthly fees relating to that Portfolio 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 Portfolio 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 Portfolio on the date specified in such Supplement and shall
thereafter continue in effect with respect to that Portfolio 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 Portfolio (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 "interested 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 Portfolio at any time, without the payment of any penalty, by a
vote of a majority of the outstanding voting securities of that Portfolio (as
defined in the 1940 Act) or by a vote of a majority of the entire Board of
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
Portfolio hereunder.
13. The Master Trust Agreement establishing the Trust (the "Master
Trust Agreement") provides that the name "FundManager Portfolios" 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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
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 "Portfolio") 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 Portfolio
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
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 Portfolio 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 Portfolio during the preceding month at the following
annual rates:
Portion of Average Daily
Value of Net Assets of the Portfolio 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 Portfolio on May 20, 1998
and shall thereafter continue in effect with respect to the Portfolio 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 Portfolio (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 Portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
outstanding voting securities of the Portfolio (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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
July 19, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Aggressive Growth Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Aggressive Growth Portfolio so that total annual operating
expenses do not exceed 1.60% on the Class A Shares and 2.35% on the Class B
Shares through the period ending November 30, 1999.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ John J. Danello
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Aggressive Growth Portfolio
By: /s/ John J. Danello
Title: President
<PAGE>
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: Growth with 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. Growth with Income
Portfolio (the "Portfolio") 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 Portfolio
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
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 Portfolio 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 Portfolio during the preceding month at the following
annual rates:
Portion of Average Daily
Value of Net Assets of the Portfolio 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 Portfolio on May 20, 1998
and shall thereafter continue in effect with respect to the Portfolio 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 Portfolio (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 Portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
outstanding voting securities of the Portfolio (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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
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. Growth Portfolio (the
"Portfolio") 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 Portfolio
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
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 Portfolio 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 Portfolio during the preceding month at the following
annual rates:
Portion of Average Daily
Value of Net Assets of the Portfolio 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 Portfolio on May 20, 1998
and shall thereafter continue in effect with respect to the Portfolio 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 Portfolio (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 Portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
outstanding voting securities of the Portfolio (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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
July 19, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Growth Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Growth Portfolio so that total operating expenses do not exceed
1.50% on the Class A Shares and 2.25% on the Class B Shares through the period
ending November 30, 1999.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ John J. Danello
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Growth Portfolio
By: /s/ John J. Danello
Title: President
<PAGE>
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
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. Bond Portfolio (the
"Portfolio") 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 Portfolio
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
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 Portfolio 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 Portfolio during the preceding month at the following
annual rates:
Portion of Average Daily
Value of Net Assets of the Portfolio 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 Portfolio on May 20, 1998
and shall thereafter continue in effect with respect to the Portfolio 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 Portfolio (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 Portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
outstanding voting securities of the Portfolio (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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
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. Managed Total Return
Portfolio (the "Portfolio") 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 Portfolio
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
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 Portfolio 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 Portfolio during the preceding month at the following
annual rates:
Portion of Average Daily
Value of Net Assets of the Portfolio 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 Portfolio on May 20, 1998
and shall thereafter continue in effect with respect to the Portfolio 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 Portfolio (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 Portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
outstanding voting securities of the Portfolio (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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(iv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
January 1, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Managed Total Return Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee of 0.50% for
Managed Total Return Portfolio until the earlier of September 30, 1999 or the
date this Portfolio's assets exceed $20 million.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By:/s/ John Danello
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Managed Total Return Portfolio
By: /s/ John Danello
Title: President
<PAGE>
Exhibit (d)(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
July 19, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: Managed Total Return Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the Managed Total Return Portfolio so that total operating expenses
do not exceed 1.91% on the Class A Shares and 2.66% on the Class B Shares
through the period ending November 30, 1999.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ John J. Danello
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of Managed Total Return Portfolio
By: /s/ John J. Danello
Title: President
<PAGE>
Exhibit (d)(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
May 20, 1998
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
Dear Sirs:
Re: International 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. International Portfolio
(the "Portfolio") 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 Portfolio
and the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
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 Portfolio 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 Portfolio during the preceding month at the following
annual rates:
Portion of Average Daily
Value of Net Assets of the Portfolio Fee Rate
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement to the Master Advisory Contract (together, the
"Contract") shall become effective with respect to the Portfolio on May 20, 1998
and shall thereafter continue in effect with respect to the Portfolio 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 Portfolio (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 Portfolio at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
outstanding voting securities of the Portfolio (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 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 PORTFOLIOS
By: /s/ John Danello
Title: President
ACCEPTED:
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Dexter A. Dodge
Title: Chairman
<PAGE>
Exhibit (d)(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
MASTER INVESTMENT ADVISORY CONTRACT
LETTER AGREEMENT
Freedom Capital Management Corporation
One Beacon Street
Boston, Massachusetts 02108-3105
July 19, 1999
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
RE: International Portfolio
Dear Sirs:
Under the Master Investment Advisory Contract between Freedom Capital
Management Corporation (the "Adviser") and FundManager Portfolios (the "Trust"),
dated May 20, 1998, the Adviser agrees to waive its management fee and limit
expenses for the International Portfolio so that total operating expenses do not
exceed 2.34% on the Class A Shares and 3.09% on the Class B Shares through the
period ending November 30, 1999.
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,
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ John J. Danello
Title: Executive Vice President
ACCEPTED:
FUNDMANAGER PORTFOLIOS,
on behalf of International Portfolio
By: /s/ John J. Danello
Title: President
Exhibit (o) 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 PORTFOLIOS 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.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURES TITLE DATE
/s/ Dexter A. Dodge Chairman and Trustee September 8, 1998
- ---------------------------------
Dexter A. Dodge (Chief Executive Officer)
/s/ John J. Danello President September 8, 1998
- ---------------------------------
John J. Danello (Principal Executive Officer)
/s/ Judith J. Mackin Treasurer September 8, 1998
- -------------------------------------------------
Judith J. Mackin (Principal Financial and
Accounting Officer)
/s/ John R. Haack Trustee September 8, 1998
- -------------------------------------------------
John R. Haack
/s/ Ernest T. Kendall Trustee September 8, 1998
- -------------------------------------------------
Ernest T. Kendall
/s/ Richard B. Osterberg Trustee September 8, 1998
- -------------------------------------------------
Richard B. Osterberg
</TABLE>
Sworn to and subscribed before me this 8th day of September, 1998
/s/ Cheri S. Good
Notarial Seal
Cheri S. Good, Notary Public
Pittsburgh, Allegheny County
My Commission Expires Nov. 19, 2001
Member, Pennsylvania Association of Notaries
Exhibit (e)(xi) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION CONTRACT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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) ("Portfolios") 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
Portfolios 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
Portfolio 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") relating to the Trust and each Portfolio or Class
included in the Trust's registration statement on Form N-1A, as amended from
time to time (the "Registration 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 Portfolios.
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.
<PAGE>
3. The Trust shall sell Shares to the Distributor 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 Portfolio or Class in such manner not inconsistent with the
provisions hereof and the Trust's Prospectus with respect to that Portfolio 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 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 Portfolio'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 by dealers, banks
or others. Such services may include providing personal services to shareholders
and maintaining shareholder accounts.
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 in 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 the statements therein not 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, 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 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 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.
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 and 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 a change in either thereof in order to make the
statements therein not misleading; and
(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 1934 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 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 or
compensation as is provided for by a Plan, (ii) such other reimbursement or
compensation 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 Portfolio or Class on the date specified in its Supplement, and
shall continue in effect until such time as there shall remain no unsold balance
of Shares for such Portfolio or Class, as the case may be, registered under the
1933 Act, provided that this Contract shall continue in effect with respect to
such Portfolio 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 Portfolio 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 this 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 Portfolio 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.
20. The Master Trust Agreement establishing the Trust, dated February
7, 1995 (the "Trust Agreement") provides that the name "FundManager Portfolios"
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.]
<PAGE>
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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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 "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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 "Portfolio") is a separate
series of the Trust with two classes of shares of beneficial interest designated
as Class A (formerly, Financial Adviser Class) and Class B shares (individually
and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: Growth with 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 with Income Portfolio (the "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth with Income Portfolio. The term "Shares"
as used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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 "Portfolio") is a separate
series of the Trust with a class ("Class") of shares of beneficial interest
designated as Class A (formerly, 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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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
Portfolio.
<PAGE>
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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 "Portfolio") is
a separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02106
Re: International 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. International Portfolio (the "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individual and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" as used in the Contract shall, for purposes of
this Supplement, pertain to the International Portfolio. The term "Shares" as
used in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Freedom Distributors Corporation
By: /s/ Carey C. Cort
Name: Carey C. Cort
Title: President
Exhibit (e)(xii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION CONTRACT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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) ("Portfolios") 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
Portfolios 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
Portfolio 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") relating to the Trust and each Portfolio or Class
included in the Trust's registration statement on Form N-1A, as amended from
time to time (the "Registration 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 Portfolios.
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.
<PAGE>
3. The Trust shall sell Shares to the Distributor 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 Portfolio or Class in such manner not inconsistent with the
provisions hereof and the Trust's Prospectus with respect to that Portfolio 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 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 Portfolio'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 by dealers, banks
or others. Such services may include providing personal services to shareholders
and maintaining shareholder accounts.
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 in 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 the statements therein not 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, 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 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 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.
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 and 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 a change in either thereof in order to make the
statements therein not misleading; and
(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 1934 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 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 or
compensation as is provided for by a Plan, (ii) such other reimbursement or
compensation 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 Portfolio or Class on the date specified in its Supplement, and
shall continue in effect until such time as there shall remain no unsold balance
of Shares for such Portfolio or Class, as the case may be, registered under the
1933 Act, provided that this Contract shall continue in effect with respect to
such Portfolio 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 Portfolio 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 this 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 Portfolio 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.
20. The Master Trust Agreement establishing the Trust, dated February
7, 1995 (the "Trust Agreement") provides that the name "FundManager Portfolios"
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.]
<PAGE>
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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Sutro & Co. Incorporated
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 "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Sutro & Co. Incorporated
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 "Portfolio") is a separate
series of the Trust with two classes of shares of beneficial interest designated
as Class A (formerly, Financial Adviser Class) and Class B shares (individually
and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth with 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 with Income Portfolio (the "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth with Income Portfolio. The term "Shares"
as used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Sutro & Co. Incorporated
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 "Portfolio") is a separate
series of the Trust with a class ("Class") of shares of beneficial interest
designated as Class A (formerly, 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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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
Portfolio.
<PAGE>
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Sutro & Co. Incorporated
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 "Portfolio") is
a separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Sutro & Co. Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: International 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. International Portfolio (the "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individual and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" as used in the Contract shall, for purposes of
this Supplement, pertain to the International Portfolio. The term "Shares" as
used in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Sutro & Co. Incorporated
By: /s/ Mary Jane Delaney
Name: Mary Jane Delaney
Title: Executive Vice President,
General Counsel & Secretary
Exhibit (e)(xiii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION CONTRACT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
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) ("Portfolios") 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
Portfolios 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
Portfolio 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") relating to the Trust and each Portfolio or Class
included in the Trust's registration statement on Form N-1A, as amended from
time to time (the "Registration 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 Portfolios.
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.
<PAGE>
3. The Trust shall sell Shares to the Distributor 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 Portfolio or Class in such manner not inconsistent with the
provisions hereof and the Trust's Prospectus with respect to that Portfolio 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 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 Portfolio'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 by dealers, banks
or others. Such services may include providing personal services to shareholders
and maintaining shareholder accounts.
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 in 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 the statements therein not 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, 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 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 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.
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 and 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 a change in either thereof in order to make the
statements therein not misleading; and
(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 1934 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 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 or
compensation as is provided for by a Plan, (ii) such other reimbursement or
compensation 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 Portfolio or Class on the date specified in its Supplement, and
shall continue in effect until such time as there shall remain no unsold balance
of Shares for such Portfolio or Class, as the case may be, registered under the
1933 Act, provided that this Contract shall continue in effect with respect to
such Portfolio 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 Portfolio 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 this 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 Portfolio 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.
20. The Master Trust Agreement establishing the Trust, dated February
7, 1995 (the "Trust Agreement") provides that the name "FundManager Portfolios"
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.]
<PAGE>
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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Tucker Anthony Incorporated
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 "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Tucker Anthony Incorporated
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 "Portfolio") is a separate
series of the Trust with two classes of shares of beneficial interest designated
as Class A (formerly, Financial Adviser Class) and Class B shares (individually
and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: Growth with 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 with Income Portfolio (the "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" as used in the Contract shall, for purposes of
this Supplement, pertain to the Growth with Income Portfolio. The term "Shares"
as used in the Contract shall, for the purposes of this Supplement pertain to
the Shares of the Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Tucker Anthony Incorporated
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 "Portfolio") is a separate
series of the Trust with a class ("Class") of shares of beneficial interest
designated as Class A (formerly, 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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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
Portfolio.
<PAGE>
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Tucker Anthony Incorporated
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 "Portfolio") is
a separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individually and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" 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 Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
<PAGE>
DISTRIBUTION CONTRACT SUPPLEMENT
FundManager Portfolios
One Beacon Street
Boston, Massachusetts 02108
December 31, 1998
Tucker Anthony Incorporated
One Beacon Street
Boston, Massachusetts 02106
Re: International 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. International Portfolio (the "Portfolio") is a
separate series of the Trust with two classes of shares of beneficial interest
designated as Class A (formerly, Financial Adviser Class) and Class B shares
(individual and collectively, "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 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 Portfolio's Shares, and the Distributor hereby
acknowledges that the Contract shall pertain to the Shares of the Portfolio, 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 "Portfolio" as used in the Contract shall, for purposes of
this Supplement, pertain to the International Portfolio. The term "Shares" as
used in the Contract shall, for the purposes of this Supplement pertain to the
Shares of the Portfolio.
5. This Supplement and the Contract shall become effective with respect
to the Trust and the Shares of the Portfolio on December 31, 1998 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 Portfolio
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 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 PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
ACCEPTED:
Tucker Anthony Incorporated
By: /s/ Marc Menchel
Name: Marc Menchel
Title:
Exhibit (e)(xiv) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
Amended and Restated Exhibit A & B
to the
Distributor's Contract
with Edgewood Services, Inc.
Fundmanager PORTFOLIOS
Aggressive Growth Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
Growth with Income Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
Growth Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
Bond Portfolio
Class A Shares (formerly Financial Adviser Class)
Managed Total Return Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
International Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
The following provisions are hereby incorporated and made part of the
Distributor's Contract dated November 11, 1996, between FundManager Portfolios
(the "Trust") and Edgewood Services, Inc. ("Edgewood"), with respect to the
Classes 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 Classes ("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. 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 11, 1996 between the Trust and Edgewood, the Trust
executes and delivers this Exhibit on behalf of the Aggressive Growth Portfolio,
Growth with Income Portfolio, Growth Portfolio, Bond Portfolio, Managed Total
Return Portfolio, and International Portfolio, first set forth in this Exhibit.
Witness the due execution hereof this 31st day of December, 1998.
FUNDMANAGER PORTFOLIOS
By: /s/ John Danello
President
EDGEWOOD SERVICES, INC.
By: /s/ Lawrence Caracciolo
President
Exhibit (h)(v) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
Amendment #2 (dated December 31, 1998) to
SCHEDULE A
TO
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Services Agreement dated November 11, 1996 between
Federated Administrative Services and FundManager Portfolios includes the
following portfolios (and any classes thereof) effective as of the date set
forth above:
Aggressive Growth Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
Growth with Income Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
Growth Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
Bond Portfolio
Class A Shares (formerly Financial Adviser Class)
Managed Total Return Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
International Portfolio
Class A Shares (formerly Financial Adviser Class)
Class B Shares
FUNDMANAGER PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
FEDERATED ADMINISTRATIVE SERVICES
By: /s/ Victor R. Siclari
Name: Victor R. Siclari
Title: Vice President
<PAGE>
Exhibit (h)(vi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
ADDENDUM TO
ADMINISTRATIVE SERVICES AGREEMENT
This Addendum to the Administrative Services Agreement is made and
entered into as of December 15, 1998, by and between FundManager Portfolios (the
"Trust") and Federated Administrative Services ("FAS").
WHEREAS, the Trust and FAS entered into an Administrative Services
Agreement dated November 11, 1996 (the "Agreement"); and
WHEREAS, the Trust and FAS have agreed to amend the Agreement in certain
respects;
NOW THEREFORE, the parties intending to be legally bound agree as
follows:
1. Section 2, Services and Duties, is amended by adding the following
additional "Tax Services" as part of its Administrative Services:
(n) FAS will prepare all portfolio-related tax returns, and
perform the following excise, income and compliance-related
tax services:
(i) prepare and file federal income and excise, and state
and local tax reports;
(ii) actively monitor periodic income and asset tests;
(iii)review gain/loss activity for wash sales deferrals,
market discount reclass, and proper tax basis;
(iv) perform technical tax research relating to securities
new to the portfolios and ensure that tax accounting
policies and accounting systems are appropriate; and
(v) reply to income tax notices and inquiries from federal,
state and local taxing authorities.
<PAGE>
2. Section 5, Compensation is amended by adding the
following paragraph:
FAS will provide the Tax Services at its cost, which is a
current rate of $3,000 per portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this addendum to be
executed by their officers designated below as of the 15th day of December,
1998.
FUNDMANAGER PORTFOLIOS
By: /s/ John Danello
Name: John Danello
Title: President
FEDERATED ADMINISTRATIVE SERVICES
By: /s/ Victor R. Siclari
Name: Victor R. Siclari
Title: Vice President
Exhibit (m) (iv) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
AMENDED AND RESTATED MASTER DISTRIBUTION PLAN
CLASS A SHARES OF
FUNDMANAGER PORTFOLIOS
This Distribution Plan (the "Plan") was adopted by the Board of
Trustees for FundManager Portfolios (the "Trust") on March 14, 1995 and amended
and restated on June 13, 1995, November 11, 1996, May 20, 1997, and December 31,
1998.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment company Act of 1940 (the "Act") and is authorized
to issue shares of beneficial interest in separate series (or sub-trusts)
("Portfolios") which may be divided into one or more separate classes of shares
of beneficial interest (a "Class"); and
WHEREAS, the Trust employs Freedom Capital Management Corporation (the
"Adviser") to render investment management services with respect to the
Portfolios as the Trustees shall establish and designate from time to time; and
WHEREAS, the Trust employs Freedom Distributors Corp., Edgewood
Services, Inc., Tucker Anthony Incorporated and Sutro & Co. Incorporated (each a
"Distributor" and collectively, the "Distributors") to distribute the shares of
each Portfolio designated as Class A Shares (formerly, the Financial Adviser
Class of shares) (the "Shares"); and
WHEREAS, the Trust intends to compensate the Distributors for (1) their
distribution-related activities, such as advertising and marketing the Shares,
and (2) payments to broker-dealers, banks and other financial institutions, or
other intermediaries ("Service Organizations") for shareholder services and for
services rendered in the distribution of the Shares and for the provision of
certain shareholder services with respect to the Shares;
WHEREAS, the Board of Trustees determined on December 15, 1998, to
amend and restate this Plan to reflect the redesignation of the existing
Financial Adviser Class shares as Class A Shares and to make certain other
changes to the permissibility of payments under this Plan.
WHEREAS, the Board of Trustees of the Trust has determined to adopt
this Plan and has determined that there is a reasonable likelihood that the Plan
will benefit the Class A Shares shareholders; and
NOW THEREFORE, the Trust adopts the Plan on the following terms and
conditions:
1. The Plan shall pertain to Class A Shares of such Portfolios as shall
be designated from time to time by the Trustees of the Trust in any Supplement
to the Plan ("Supplement").
2. The Trust will compensate the Distributors for distributing and
marketing the Shares and for the provision of certain shareholder services. Such
distribution and shareholder servicing costs and expenses would include, but not
be limited to (i) advertising by radio, television, newspapers, magazines,
brochures, sales literature, direct mail or any other form of advertising, (ii)
expenses of sales employees or agents of the Distributors, including salary,
commissions, travel and related expense, (iii) payments to Service Organizations
for services in connection with the provision of personal services and
shareholder account maintenance services and the distribution of Shares,
including fees calculated with reference to the average daily net asset value of
Shares held by shareholders who have a brokerage or other service relationship
with the Service Organization receiving such fees, (iv) costs of printing
prospectuses and other materials to be given or sent to prospective investors
(including costs and fees incurred in qualifying the Shares in the states in
which it is to be sold) and (v) such other similar services as the Trustees
determine to be reasonably calculated to result in the sale of Shares.
The Distributors will be compensated on a monthly basis, subject to an
annual limit of the average daily net assets of the Shares of each Portfolio as
shall be set forth with respect to a Portfolio in any Supplement to the Plan.
Payments made out of or charged against the assets of the Shares of a Portfolio
must be for distribution services rendered for or on behalf of the Shares of the
Portfolio or for personal services or shareholder account maintenance services
rendered to the Portfolio's Class A Shares shareholders. The Distributors may
also receive and retain brokerage commissions or other remuneration or
compensation with respect to portfolio transactions for a Portfolio to the
extent not prohibited by the Portfolio's Prospectus or Statement of Additional
Information.
3. As consideration for providing (or causing to be provided) personal
services and shareholder account maintenance services, the Distributors may pay
Service Organizations a fee at an annual rate up to 0.25% of the average daily
net assets attributable to the Shares of a Portfolio for its then-current fiscal
year, and be compensated therefore under the terms of this Plan.
4. This Trust shall pay all costs and expenses in connection with
preparation, printing and distribution of the Trust's prospectuses to current
shareholders and the implementation and operation of the Plan.
5. The Plan shall not take effect with respect to Shares of a Portfolio
until it has been approved, together with any related Agreements and
Supplements, by votes of a majority of both (a) the Board of Trustees of the
Trust and (b) those Trustees of the Trust who are not "interested persons" of
the Trust (as defined in the Act) and have no direct or indirect financial
interest in the operation of the Plan or any agreements related to it (the "Plan
Trustees"), cast in person at a meeting (or meetings) called for the purpose of
voting on the Plan and such related agreement.
6. The Plan shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in paragraph 5.
7. Any person authorized to direct the disposition of monies paid or
payable by the Trust pursuant to the Plan or any related agreement shall provide
to the Trust's Board of Trustees, and the Board shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
8. Any agreement related to the Plan shall be in writing and shall
provide: (a) that such agreement may be terminated with respect to a Portfolio
at any time, without payment of any penalty, by vote of a majority of the Plan
Trustees or by vote of a majority of the outstanding voting securities of a
Portfolio, on not more than 60 days' written notice to any other party to the
agreement, and (b) that such agreement shall terminate automatically in the
event of its assignment.
9. The Plan may be terminated at any time, without payment of any
penalty, with respect to each Portfolio, by vote of a majority of the Plan
Trustees or by vote of a majority of the outstanding voting securities of that
Portfolio.
10. The Plan may be amended at any time in accordance with the
provisions of Rule 12b-1 under the Investment Company Act of 1940.
11. While the Plan is in effect, the selection and nomination of
Trustees who are not interested persons (as defined in the Act) of the Trust
shall be committed to the discretion of the Trustees who are not interested
persons of the Trust.
12. The Trust shall preserve copies of the Plan and any related
agreements and all reports made pursuant to paragraph 7 hereof for a period of
not less than six years from the date of the Plan, the agreements or such
report, as the case may be, the first two years of which shall be in an easily
accessible place.
FundManager Portfolios
By: /s/ John Danello
Name: John Danello
Title: President
<PAGE>
FUNDMANAGER PORTFOLIOS
Amended and Restated Distribution Plan Supplement
CLASS A SHARES
OF
AGGRESSIVE GROWTH PORTFOLIO
GROWTH PORTFOLIO
GROWTH WITH INCOME PORTFOLIO
BOND PORTFOLIO
MANAGED TOTAL RETURN PORTFOLIO
INTERNATIONAL PORTFOLIO
WHEREAS, FundManager Portfolios (the "Trust") is an open-end 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; and
WHEREAS, the Trust has adopted a Master Distribution Plan ("Plan")
which provides that the Plan shall pertain to the Class A Shares of such series
as shall be designated from time to time by the Trustees of the Trust in any
Supplement to the Plan; and
WHEREAS, Aggressive Growth Portfolio, Growth Portfolio, Growth with
Income Portfolio, Bond Portfolio, Managed Total Return Portfolio and
International Portfolio (each, a "Portfolio") is a separate series of the Trust
with a class of shares of beneficial interest designated as Class A Shares.
NOW, THEREFORE, the Trustees of the Trust hereby take the following
actions, subject to the conditions set forth:
1. As provided in paragraph 1 of the Plan, the Trust hereby
adopts the Plan on behalf the Class A Shares of each Portfolio, the terms and
conditions of such Plan being hereby incorporated herein by reference;
2. The term "Portfolio" as used in the Plan shall refer to each
Portfolio; and
3. As provided in paragraph 2 of the Plan, the Distributors
shall be compensated for distribution-related activities as set forth in the
Plan, subject to an annual limit with respect to each Portfolio of 0.25% of that
Portfolio's average daily net assets attributable to its Class A Shares.
As amended and restated on December 31, 1998.
FundManager Portfolios
By: /s/ John Danello
Name: John Danello
Title: President
Exhibit (m)(v) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
MASTER DISTRIBUTION PLAN
CLASS B SHARES OF
FUNDMANAGER PORTFOLIOS
This Distribution Plan (the "Plan") was adopted by the Board of
Trustees for FundManager Portfolios (the "Trust") on December 15, 1998, and
effective December 31, 1998.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "Act") and is authorized
to issue shares of beneficial interest in separate series (or sub-trusts)
("Portfolios") which may be divided into one or more separate classes of shares
of beneficial interest (a "Class"); and
WHEREAS, the Trust employs Freedom Capital Management Corporation (the
"Adviser") to render investment management services with respect to the
Portfolios as the Trustees shall establish and designate from time to time; and
WHEREAS, the Trust employs Freedom Distributors Corp., Edgewood
Services, Inc., Tucker Anthony Incorporated and Sutro & Co. Incorporated (each a
"Distributor" and collectively, the "Distributors") to distribute the shares of
each Portfolio designated as Class B Shares (the "Shares"); and
WHEREAS, the Trust intends to compensate the Distributors for (1) their
distribution-related activities, such as advertising and marketing the Shares
("Distribution Fee"), and (2) payments, either directly or through the
Distributors, to broker-dealers, banks and other financial institutions, or
other intermediaries ("Service Organizations") for distribution-related
activities (also a "Distribution Fee") and for the provision of certain
shareholder services ("Service Fee") with respect to the Shares;
WHEREAS, the Board of Trustees of the Trust, including those Trustees
who are not "interested persons" of the Trust (as defined in Section 2(a)(19) of
the Act) and which have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, has determined to
adopt this Plan and has determined that there is a reasonable likelihood that
the Plan will benefit the Class B Shares shareholders; and
NOW THEREFORE, the Trust adopts the Plan on the following terms and
conditions:
1. The Plan shall pertain to Class B Shares of such Portfolios as shall
be designated from time to time by the Trustees of the Trust in any Supplement
to the Plan ("Supplement").
2. (a) The Trust will compensate the Distributors and Service
Organizations for distributing and marketing the Shares and for the provision of
certain shareholder services. Such distribution and shareholder servicing costs
and expenses would include, but not be limited to (i) advertising by radio,
television, newspapers, magazines, brochures, sales literature, direct mail or
any other form of advertising, (ii) expenses of sales employees or agents of the
Distributors, including salary, commissions, travel and related expense, (iii)
payments to Service Organizations for services in connection with the provision
of personal services and shareholder account maintenance services and the
distribution of Shares, including fees calculated with reference to the average
daily net asset value of Shares held by shareholders who have a brokerage or
other service relationship with the Service Organization receiving such fees,
(iv) costs of printing prospectuses and other materials to be given or sent to
prospective investors (including costs and fees incurred in qualifying the
Shares in the states in which it is to be sold), advertising and public
relations, telemarketing, marketing-related overhead expenses and other
distribution costs, (v) commissions and other payments advanced to sales
personnel and third parties and related interest costs as permitted by the rules
of the National Association of Securities Dealer, Inc. ("NASD"), and (vi) such
other similar services as the Trustees determine to be reasonably calculated to
result in the sale of Shares. The Distribution Fee is in addition to any Service
Fee or any front-end or deferred sales charges the Distributors receive from a
Portfolio with respect to sales or redemption of Portfolio shares. Total fees
paid pursuant to the Plan, including the Distribution Fee described above, and
the Service Fee, shall not exceed applicable NASD limits.
(b) A Portfolio will pay each person which has acted as
principal distributor of its Class B shares its Allocable Portion (as such term
is defined in the Supplement pursuant to which such person acts or acted as
principal distributor of the Class B Shares) of the Distribution Fee in respect
of Class B Shares of a Portfolio as compensation for its services as principal
distributor of the Class B Shares of a Portfolio. Such person shall be paid its
Allocable Portion of such Distribution Fees notwithstanding such person's
termination as Distributor of the Class B Shares of the Portfolio, such payments
to be changed or terminated only as required by: (i) a change in applicable law
or a change in accounting policy adopted by the Investment Companies Committee
of the AICPA and approved by FASB that results in a determination by the
Portfolio's independent accountants that any sales charges in respect of such
Portfolio, which are not Contingent Deferred Sales Charges and which are not yet
due and payable, must be accounted for by such Portfolio as a liability in
accordance with GAAP, each after the effective date of this Master Distribution
Plan; (ii) if in the sole discretion of the Board of Trustees, after due
consideration of the relevant factors considered when adopting and/or amendment
this Plan including the transactions contemplated in that certain Purchase and
Sale Agreement entered into between a Portfolio's Distributor and the commission
financing entity, the Board of Trustees determines, subject to its fiduciary
duty, that this Plan and the payments thereunder must be changed or terminated,
notwithstanding the effect this action might have on the Portfolio's ability to
offer and sell Class B shares; or (iii) in connection with a complete
termination of this Plan, it being understood that for this purpose a complete
termination of this Plan occurs only if, as to a Portfolio, this Plan is
terminated and the Portfolio has discontinued the distribution of Class B Shares
or other back-end load or substantially similar classes of shares. The services
rendered by a Distributor for which that Distributor is entitled to receive its
Allocable Portion of the Distribution Fee shall be deemed to have been completed
at the time of the initial purchase of the commission shares taken into account
in computing that Distributor's Allocable Portion of the Distribution Fee.
The obligation of a Portfolio to pay the Distribution Fee shall
terminate upon the termination of this Plan as to such Portfolio in accordance
with the terms hereof. Except as provided in the preceding paragraph, a
Portfolio's obligation to pay the Distribution Fee to a Distributor of the Class
B Shares of the Portfolio shall be absolute and unconditional and shall not be
subject to any dispute, offset, counterclaim or defense whatsoever (it being
understood that nothing in this sentence shall be deemed a waiver by a Portfolio
of its right separately to pursue any claims it may have against such
Distributor and enforce such claims against any assets (other than its right to
be paid its Allocable Portion of the Distribution Fee and to be paid the
contingent deferred sales charges) of such Distributor).
The right of a Distributor to receive the Distribution Fee may be
transferred by that Distributor in order to raise funds which may be useful or
necessary to perform its duties as principal underwriter, and any such transfer
shall be effective upon written notice from that Distributor to the Portfolio.
In connection with the foregoing, each Portfolio is authorized to pay all or
part of the Distribution Fee directly to such transferee as directed by that
Distributor.
(c) The Distributors will be compensated on a monthly basis,
subject to an annual limit of the average daily net assets of the Shares of each
Portfolio as shall be set forth with respect to a Portfolio in any Supplement to
the Plan. Payments made out of or charged against the assets of the Shares of a
Portfolio must be for distribution services rendered for or on behalf of the
Shares of the Portfolio or for personal services or shareholder account
maintenance services rendered to the Portfolio's Class B Shares shareholders.
The Distributors may also receive and retain brokerage commissions or other
remuneration or compensation with respect to portfolio transactions for a
Portfolio to the extent not prohibited by the Portfolio's Prospectus or
Statement of Additional Information.
(d) Nothing in this Plan or any Supplement thereto shall
operate or be construed to limit the extent to which the Portfolio's Adviser or
any other person, other than the Portfolio, at its expense apart from the Plan,
may incur costs and pay expenses associated with the distribution of Portfolio
shares.
3. As consideration for providing (or causing to be provided) personal
services and shareholder account maintenance services ("Shareholder Services"),
the Distributors may pay Service Organizations a Services Fee at an annual rate
up to 0.25% of the average daily net assets attributable to the Shares of a
Portfolio for its then-current fiscal year, and be compensated therefore under
the terms of this Plan.
4. This Trust shall pay all costs and expenses in connection with
preparation, printing and distribution of the Trust's prospectuses to current
shareholders and the implementation and operation of the Plan.
5. The Plan and each Supplement thereto shall not take effect with
respect to Shares of a Portfolio until it has been approved, together with any
related Agreements and Supplements, by votes of a majority of both (a) the Board
of Trustees of the Trust and (b) those Trustees of the Trust who are not
"interested persons" of the Trust (as defined in the Act) and have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to it (the "Plan Trustees"), cast in person at a meeting (or meetings)
called for the purpose of voting on the Plan and such related agreement.
6. The Plan and each Supplement thereto shall continue in effect so
long as such continuance is specifically approved at least annually in the
manner provided for approval of the Plan in paragraph 5.
7. Any person authorized to direct the disposition of monies paid or
payable by the Trust pursuant to the Plan or any Supplement thereto or any
related agreement shall provide to the Trust's Board of Trustees, and the Board
shall review, at least quarterly, a written report of the amounts so expended
and the purposes for which such expenditures were made.
8. Any agreement related to the Plan or any Supplement thereto shall be
in writing and shall provide: (a) that such agreement may be terminated with
respect to a Portfolio at any time, without payment of any penalty, by vote of a
majority of the Plan Trustees or by vote of a majority of the outstanding voting
securities of a Portfolio, on not more than 60 days' written notice to any other
party to the agreement, and (b) that such agreement shall terminate
automatically in the event of its assignment.
9. The Plan or any Supplement thereto may be terminated at any time,
without payment of any penalty, with respect to each Portfolio, by vote of a
majority of the Plan Trustees or by vote of a majority of the outstanding voting
securities of that Portfolio.
10. The Plan and any Supplement thereto may be amended at any time in
accordance with the provisions of Rule 12b-1 under the Act.
11. While the Plan and each Supplement thereto are in effect, the
selection and nomination of Trustees who are not interested persons (as defined
in the Act) of the Trust shall be committed to the discretion of the Trustees
who are not interested persons of the Trust.
12. The Trust shall preserve copies of the Plan, each Supplement
thereto, and any related agreements and all reports made pursuant to paragraph 7
hereof for a period of not less than six years from the date of the Plan, the
agreements or such report, as the case may be, the first two years of which
shall be in an easily accessible place.
13. This Plan and each Supplement thereto shall not obligate the
Portfolio or any other party to enter into an agreement with any particular
person.
FundManager Portfolios
By: /s/ John Danello
Name: John Danello
Title: President
<PAGE>
FUNDMANAGER PORTFOLIOS
Distribution Plan Supplement
CLASS B SHARES
of
AGGRESSIVE GROWTH PORTFOLIO
GROWTH PORTFOLIO
GROWTH WITH INCOME PORTFOLIO
MANAGED TOTAL RETURN PORTFOLIO
INTERNATIONAL PORTFOLIO
WHEREAS, FundManager Portfolios (the "Trust") is an open-end 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; and
WHEREAS, the Trust has adopted a Master Distribution Plan ("Plan")
which provides that the Plan shall pertain to the Class B Shares of such series
as shall be designated from time to time by the Trustees of the Trust in any
Supplement to the Plan; and
WHEREAS, each of Aggressive Growth Portfolio, Growth Portfolio, Growth
with Income Portfolio, Managed Total Return Portfolio and International
Portfolio (each, a "Portfolio") is a separate series of the Trust with a class
of shares of beneficial interest designated as Class B Shares.
NOW, THEREFORE, the Trustees of the Trust hereby take the following
actions, subject to the conditions set forth:
1. As provided in paragraph 1 of the Plan, the Trust hereby
adopts the Plan on behalf the Class B Shares of each Portfolio, the terms and
conditions of such Plan being hereby incorporated herein by reference;
2. The term "Portfolio" as used in the Plan shall refer to each Portfolio of
the Trust designed in this Supplement; and
3. As provided in paragraph 2 of the Plan, Freedom
Distributors Corporation (the "Distributor") shall be paid a Distribution Fee as
compensation for distribution-related activities as set forth in the Plan,
subject to an annual limit of 0.75% of a Portfolio's average daily net assets
attributable to its Class B Shares, in addition to a 0.25% Services Fee provided
in paragraph 3 of the Plan.
(a) Class B Shares. In consideration of its services as distributor for the
Class B Shares of a Portfolio, each Portfolio shall pay to the Distributor (or
its designee or transferee) the Distributor's Allocable Portion of the
Distribution Fee in respect of the Class B Shares of a Portfolio. For purposes
of this Supplement, the Distributor's "Allocable Portion" of the Distribution
Fee shall be 100% of such Distribution Fee unless or until the Portfolio uses a
distributor other than the Distributor and thereafter the Allocable Portion
shall be a portion of the Distribution Fee attributable to (i) Class B Shares of
a Portfolio (each a "Subject Fund") sold by the Distributor ("Commission
Shares"), plus (ii) Class B Shares of the Portfolio issued in connection with
the exchange of Commission Shares of another Portfolio, plus (iii) Class B
Shares of the Portfolio issued in connection with the reinvestment of dividends
and capital gains.
The Distributor's Allocable Portion of the Distribution Fee and the
contingent deferred sales charges arising in respect of Class B Shares taken
into account in computing the Distributor's Allocable Portion shall be limited
under Rule 2830 of the Conduct Rules or other applicable regulations of the NASD
as if the Class B Shares taken into account in computing the Distributor's
Allocable Portion themselves constituted a separate class of shares of a
Portfolio.
The services rendered by the Distributor for which the Distributor is
entitled to receive the Distributor's Allocable Portion of the Distribution Fee
shall be deemed to have been completed at the time of the initial purchase of
the Commission Shares (whether of the Portfolio or another Portfolio in the
Trust) taken into account in computing the Distributor's Allocable Portion. The
payments made hereunder shall not be terminated except as provided in paragraph
2(b) of the Plan. Except as provided in the preceding sentence, a Portfolio's
obligation to pay the Distribution Fee to the Distributor shall be absolute and
unconditional and shall not be subject to any dispute, offset, counterclaim or
defense whatsoever, (it being understood that nothing in this sentence shall be
deemed a waiver by a Portfolio of its right separately to pursue any claims it
may have against the Distributor and to enforce such claims against any assets
(other than its rights to be paid its Allocable Portion of the Distribution Fee
and to be paid the contingent deferred sales charges) of the Distributor.
(b) Service Fees. As additional compensation for Class B Shares of each
Portfolio, applicable Portfolios shall pay the Distributor a Service Fee (as
that term is defined by the National Association of Securities Dealers, Inc.
("NASD")) as set forth above.
(c) Front-end Sales Charges. As additional compensation for the services
performed and the expenses assumed by the Distributor under this Supplement, the
Distributor may, in conformity with the terms and conditions set forth in the
then current Prospectus, impose and retain for its own account the amount of the
front-end sales charge, if any, and may reallow a portion of the front-end sales
charge to other broker-dealers, all in accordance with NASD rules.
(d) Contingent Deferred Sales Charge. Each Portfolio may pay to the
Distributor (or its designee or transferee) in addition to the fees set forth in
Section 3 hereof any contingent deferred sales charge imposed on redemptions of
Class B shares upon the terms and conditions set forth in the then current
Prospectus of each Portfolio. Notwithstanding anything to the contrary in this
Agreement, the Distributor shall be paid such contingent deferred sales charges
in respect of Class B Shares taken into account in computing the Distributor's
Allocable Portion of the Distribution Fee notwithstanding the Distributor's
termination as general distributor of the Class B Shares of a Portfolio or any
termination of this Supplement other than in connection with complete
termination of the Class B Plan as in effect on the date of execution of this
Supplement. Except as provided in the preceding sentence, a Portfolio's
obligation to remit such contingent deferred sales charges to the Distributor
shall not be subject to any dispute, offset, counterclaim or defense whatsoever,
it being understood that nothing in this sentence shall be deemed a waiver by a
Portfolio of its right separately to pursue any claims it may have against the
Distributor and to enforce such claims against any assets (other than its right
to be paid its Allocable Portion of the Distribution Fee and to be paid the
contingent deferred sales charges) of the Distributor. No Portfolio will waive
any contingent deferred sales charge except under the circumstances set forth in
the Portfolio's current Prospectus(es) without the consent of the Distributor
(or, if rights to payment have been transferred, the transferee).
4. Payments to Distributor's Transferees. The Distributor may
transfer the right to payment hereunder (but not its obligations hereunder) in
order to raise funds to cover distribution expenditures, and any such transfers
shall be effective upon written notice from the Distributor to the Portfolio. In
connection with the foregoing, the Portfolio is authorized to pay all or a part
of the Distribution Fee and/or contingent deferred sale charges in respect of
Class B Shares directly to such transferee as directed by the Distributor.
5. Changes in Computation of Fee, etc. As long as the Class B
Plan is in effect, a Portfolio may not change the manner in which the Class B
Distribution Fee is computed (except as may be required by a changed in
applicable law or a change in accounting policy adopted by the Investment
Companies Committee of the AICPA and approved by FASB that results in a
determination by a Portfolio's independent accountants that any of the sales
charges in respect of such Portfolio, which are not contingent deferred sales
charges and which are not yet due and payable, must be accounted for by such
Fund as a liability in accordance with GAAP).
Adopted December 15, 1998, and effective December 31, 1998.
FundManager Portfolios
By: /s/ John Danello
Name: John Danello
Title: President
Exhibit (n)(iv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
FUNDMANAGER PORTFOLIOS
(formerly FundManager Trust)
Multiple Class Expense Allocation Plan
Adopted Pursuant to Rule 18f-3
WHEREAS, FundManager Portfolios (formerly FundManager Trust), a
Delaware business trust (the "Trust"), engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Trust is authorized to (i) issue shares of beneficial
interest ("Shares") in separate series, with the Shares of each such series
representing the interests in a separate portfolio of securities and other
assets, and (ii) divide the Shares within each series into two or more classes;
and
WHEREAS, the Trust has established six portfolio series as the date
hereof: Aggressive Growth Portfolio (formerly Aggressive Growth Fund), Growth
Portfolio (formerly Growth Fund), Growth with Income Portfolio (formerly Growth
& Income Fund), Bond Portfolio (formerly Bond Fund), Managed Total Return
Portfolio (formerly Managed Total Return Bond Fund) and International Portfolio
(such portfolios being referred to collectively herein as the "Initial Series"
- -- such series, together with all series subsequently established by the Trust
and made subject to this Plan, being referred to herein individually as a
"Series" and collectively as the "Series"); and
WHEREAS, (i) Shares of each of the Aggressive Growth Portfolio, Growth
Portfolio, Growth with Income Portfolio, Managed Total Return Portfolio and
International Portfolio series of the Trust have been divided into two Classes,
such Classes established and designated as "Class A Shares" (formerly Financial
Adviser Class of shares) and "Class B Shares" and (ii) Shares of the Bond
Portfolio series of the Trust have been established and designated as "Class A
Shares" (formerly Financial Adviser Class of shares); and
WHEREAS, the Board of Trustees as a whole, and the Trustees who are not
interested persons of the Trust (as defined in the Act) (the "Qualified
Trustees"), having determined in the exercise of their reasonable business
judgment that this Plan is in the best interest of each class of each Initial
Series, each Initial Series as a whole, and the Trust as a whole, have
accordingly approved this Plan.
NOW, THEREFORE, the Trust hereby adopts this Plan in accordance with
Rule 18f-3 under the Act, on the following terms and conditions:
1. Class Differences. Each class of Shares of Initial Series shall
represent interests in the same portfolio of investments of such Initial Series
and shall be identical in all respects, except that each class shall differ with
respect to: (i) arrangements for shareholder services or the distribution of
Shares, or both, and the allocation of expenses, as provided for in Sections 2
and 3 of this Plan; (ii) the exclusive right of a class to vote on certain
matters relating to the Master Distribution Plan adopted by the Trust pursuant
to Rule 12b-1 under the Act with respect to such class, if any; (iii) such
differences relating to purchase minimums, sales charges, eligible investors,
conversion features and exchange privileges as may be set forth in the
prospectuses and statements of additional information of the Initial Series, as
the same may be amended or supplemented from time to time (the "Prospectuses"
and "SAIs," respectively); and (iv) the designation of each class of Shares.
2. Differences in Distribution and Related Services. The Class A Shares
and Class B Shares of each Initial Series shall have a different arrangement for
shareholder services or the distribution of Shares, or both, as follows:
Class A Shares shall be subject to an annual distribution and servicing
fee of up to 0.25% of the nets assets of the Initial Series allocable to such
Class A Shares. Of such amount, up to .25% of the net assets of the Initial
Series allocable to Class A Shares may be paid to broker-dealers or other
financial institutions who advise shareholders regarding the purchase, sale, or
retention of Class A Shares and who provide shareholders with personal services
and account maintenance services. The distribution and servicing fee may be used
to finance activities in accordance with Rule 12b-1 under the Act and the Master
Distribution Plan adopted by the Trust pursuant to Rule 12b-1.
Class B Shares shall be subject to a combined annual distribution and
servicing fee of up to 1.00% of the nets assets of the Initial Series allocable
to such Class A Shares. Of such amount, up to .25% of the net assets of the
Initial Series allocable to Class A Shares may be paid Service Organizations as
a Shareholder Services Fee, and up to 0.75% may be paid to the Distributors for
distribution-related activities in accordance with Rule 12b-1 under the Act and
the Master Distribution Plan adopted by the Trust pursuant to Rule 12b-1.
3. Allocation of Expenses.
(a) Class Expenses. Expenses relating to different
arrangements for shareholder services or the distribution of Shares, or both,
shall be allocated to and paid by that class. A class may pay a different share
of other expenses, not including advisory or custodial fees or other expenses
related to the management of a Series' assets, if such expenses are actually
incurred in a different amount by such class, or if the class receives services
of a different kind or to a different degree than other classes. For example,
expenses incurred in connection with any meeting of shareholders of a particular
class, and litigation expenses incurred with respect to matters affecting only a
particular class shall be allocated to that class.
(b) Other Allocations. All other expenses of a Series shall be
allocated to each class on the basis of the net asset value of that class in
relation to the net asset value of the Series, provided that a majority of the
Trustees, including a majority of the Qualified Trustees, select such other
methodology as contemplated and permitted under Rule 18f-3 under the Act based
on a determination that such method is fair to the shareholders of each Class
and that the annualized rate of return of each Class will generally differ from
that of the other Classes only by the expense differentials among the Classes.
Notwithstanding the foregoing, the distributor or adviser of a Series may waive
or reimburse the expenses of a specific class or classes to the extent permitted
under Rule 18f-3 under the Act.
4. Term and Termination.
(a) Initial Series. This Plan shall become effective with
respect to each Class of a Initial Series as of the later of (i) the date on
which a Registration Statement with respect to the Class A Shares and Class B
Shares of such Initial Series becomes effective under the Securities Act of
1933, as amended, or (ii) the date on which such class of the Initial Series
commences offering its Shares to the public, and shall continue in effect with
respect to such class of Shares (subject to Section 4(c) hereof) until
terminated in accordance with the provisions of Section 4(c) hereof.
(b) Additional Series or Classes. This Plan shall become
effective with respect to any class of an Initial Series other than the Class A
Shares and Class B Shares of the Initial Series, and respect to each additional
Series or class thereof established by the Trust after the date hereof and made
subject to this Plan, upon commencement of the initial public offering thereof,
provided that the Plan has previously been approved with respect to such
additional Series or class by votes of a majority of both (i) the Board of
Trustees of the Trust and (ii) the Qualified Trustees, and shall continue if
effect with respect to each such additional Series or class (subject to Section
4(c) hereof) until terminated in accordance with the provisions of Section 4(c)
hereof. An addendum hereto setting forth any specific and different terms of
such additional Series or classes shall be attached to this Plan.
(c) Termination. This Plan may be terminated at any time with
respect to the Trust or any Series or class thereof, as the case may be, by vote
of a majority of both the Trustees of the Trust and the Qualified Trustees. The
Plan may remain in effect with respect to a Series or class thereof even if it
has been terminated in accordance with the Section 4(c) with respect to one or
more other Series or classes of the Trust.
5. Amendments. Any material amendment to this Plan shall require the
affirmative vote of a majority of both the Trustees of the Trustees of the Trust
and the Qualified Trustees.
Dated: June 13, 1995, as amended January 24, 1997 (to reflect board action on
December 10, 1996) and on May 31, 1997 (to reflect board action on May 20, 1997,
and amended and restated on December 31, 1998 (to reflect board action on
December 15, 1998).
FundManager Portfolios
By: /s/ John Danello
Name: John Danello
Title: President
