PROSPECTUS
November 1, 1995
THE OAK VALUE FUND
A NO-LOAD FUND
The investment objective of the OAK VALUE FUND is to seek capital appreciation
primarily through investments in equity securities, consisting of common and
preferred stocks and securities convertible into common stocks. Current income
will be of secondary importance. While there is no assurance that the Fund will
achieve its investment objective, it endeavors to do so by following the
investment policies described in this Prospectus.
INVESTMENT ADVISOR
Oak Value Capital Management, Inc.
Durham, North Carolina
The Oak Value Fund (the "Fund") is a NO-LOAD, diversified series of The
Tuscarora Investment Trust, a registered open-end management investment company.
The Fund's ticker symbol is OAKVX. This Prospectus provides you with the basic
information you should know before investing in the Fund. You should read it and
keep it for future reference.
A Statement of Additional Information dated November 1, 1995, containing
additional information about the Fund, has been filed with the Securities and
Exchange Commission and is incorporated by reference in this Prospectus in its
entirety. The Fund's address is P.O. Box 5354, Cincinnati, Ohio 45201-5354, and
its telephone number is 1-800-622-2474. A copy of the Statement of Additional
Information may be obtained at no charge by calling or writing the Fund.
FOR INFORMATION OR ASSISTANCE IN OPENING AN ACCOUNT, PLEASE CALL:
Nationwide (Toll-Free).......................................800-622-2474
FOR 24-HOUR NET ASSET VALUE AND INVESTMENT INFORMATION, PLEASE CALL:
Nationwide (Toll-Free).......................................800-680-4199
TABLE OF CONTENTS
PROSPECTUS SUMMARY............................................................2
SYNOPSIS OF COSTS AND EXPENSES................................................3
FINANCIAL HIGHLIGHTS..........................................................4
PERFORMANCE INFORMATION.......................................................5
INVESTMENT OBJECTIVE, INVESTMENT POLICIES
AND RISK CONSIDERATIONS.....................................................6
HOW TO PURCHASE SHARES.......................................................13
HOW TO REDEEM SHARES.........................................................16
HOW NET ASSET VALUE IS DETERMINED............................................18
MANAGEMENT OF THE FUND.......................................................19
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION........................22
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PROSPECTUS SUMMARY
THE FUND. The OAK VALUE FUND (the "Fund") is a NO-LOAD, diversified series of
The Tuscarora Investment Trust, a registered open-end management investment
company commonly known as a "mutual fund." The Fund's investment objective is to
seek capital appreciation primarily through investments in equity securities,
consisting of common and preferred stocks and securities convertible into common
stocks. Current income will be of secondary importance. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the investment policies described in this Prospectus.
HISTORY OF THE FUND. Pursuant to an Agreement and Plan of Reorganization dated
March 31, 1995, the Fund, on May 22, 1995, succeeded to the assets and
liabilities of another mutual fund of the same name (the "Predecessor Fund"),
which was an investment series of Albemarle Investment Trust. The investment
objective, policies and restrictions of the Fund and the Predecessor Fund are
substantially identical and the financial data and information in this
Prospectus for periods prior to May 22, 1995 relates to the Predecessor Fund.
INVESTMENT APPROACH. The percentage of the Fund's assets that is invested in
equity securities may vary according to the Advisor's judgment of market and
economic conditions. In most instances, particularly when the Advisor believes
that capital appreciation can be achieved without excessive levels of market
risk, the Fund will be invested predominantly in equity securities. The Fund's
net asset value will be subject to market fluctuation. The Fund may invest a
portion of its assets in fixed-income securities, consisting of corporate debt
obligations and U.S. Government securities. (See "Investment Objective,
Investment Policies and Risk Considerations.")
INVESTMENT ADVISOR. Oak Value Capital Management, Inc. (the "Advisor") serves as
investment advisor to the Fund and was investment advisor to the Predecessor
Fund. For its services, the Advisor receives compensation of 0.90% of the
average daily net assets of the Fund. The fee payable by the Fund is higher than
that paid by most investment companies. (See "Management of the Fund.") The
Advisor currently serves as investment advisor to approximately $240 million in
assets, the vast majority of which are managed using an investment style and
approach similar to that of the Fund.
PURCHASE OF SHARES. Shares are offered "No-Load," which means
they may be purchased directly from the Fund without the imposi-
tion of any sales or 12b-1 charges. The minimum initial purchase
for the Fund is $2,500 ($1,000 for IRA or Keogh accounts).
Subsequent investments must be $100 or more. Shares may be
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purchased by individuals, trusts or organizations and may be
appropriate for use in Tax Sheltered Retirement Plans and
Systematic Withdrawal Plans. (See "How to Purchase Shares.")
REDEMPTION OF SHARES. There is currently no charge for
redemptions. Shares may be redeemed at any time the Fund is open
for business at the net asset value next determined after receipt
of a redemption request by the Fund. (See "How to Redeem -
Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income and net
capital gains, if any, are distributed annually. Shareholders
may elect to receive dividends and distributions in cash or the
dividends and distributions may be reinvested in additional Fund
shares. (See "Dividends, Distributions, Taxes and Other
Information.")
MANAGEMENT. The Fund is a series of The Tuscarora Investment
Trust (the "Trust"), the Board of Trustees of which is
responsible for overall management of the Trust and the Fund.
The Trust has employed MGF Service Corp. (the "Administrator") to
provide administration, accounting and transfer agent services.
(See "Management of the Fund.")
SYNOPSIS OF COSTS AND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES: None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of average daily net assets)
Investment Advisory Fees (after expense reimbursements) .41%
Administrator's Fees .20%
Other Expenses 1.28%
-----
Total Fund Operating Expense 1.89%
=====
EXAMPLE: You would pay the following expenses on a $1,000
investment, whether or not you redeem at the end of the period,
assuming 5% annual return:
1 year 3 years 5 years 10 years
- ------ ------- ------- --------
$19 $59 $102 $221
The purpose of the foregoing table is to assist investors in the Fund in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Fund" for more information about the fees and
costs of operating the Fund. The Annual Fund Operating Expenses shown above are
based upon actual operating history for the fiscal period ended June 30, 1995,
restated to reflect fees paid under a new agreement with the Administrator.
Absent the expense reimbursements by the Advisor, the Fund's investment advisory
fees would have been 0.90% of average daily net assets and total fund operating
expenses would have been 2.38% of average daily net assets. THE EXAMPLE SHOWN
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL
EXPENSES IN THE FUTURE MAY BE GREATER OR LESS THAN THOSE SHOWN.
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FINANCIAL HIGHLIGHTS
The following audited financial information for the fiscal period ended June 30,
1995 has been audited by Arthur Andersen LLP, independent accountants, whose
report covering such period is contained in the Statement of Additional
Information. The following audited financial information for the fiscal periods
ended prior to June 30, 1995 was audited by other independent accountants. This
information should be read in conjunction with the Fund's latest audited annual
financial statements and notes thereto, which are also contained in the
Statement of Additional Information, a copy of which may be obtained at no
charge by calling the Fund.
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SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<C> <C> <C> <C>
For the Period
Ten Months Year January 18,
Ended Ended 1993(a) to
June 30, August 31, August 31,
1995 1994 1993
Net asset value at beginning of period................. $12.50 $10.96 $10.00
------ ------ ------
Income from investment operations:
Net investment loss................................. (0.05) (0.02) (0.03)
Net realized and unrealized gains on investments.... 0.55 1.78 0.99
---- ---- ----
Total from investment operations......................... 0.50 1.76 0.96
---- ---- ----
Less distributions:
Distributions from net realized gains.............. (0.81) (0.22) --
------ ------ ----
Net asset value at end of period......................... $12.19 $12.50 $10.96
====== ====== ======
Total return............................................ 5.78%(c) 16.07% 16.11%(c)
===== ====== ======
Net assets at end of period (000's)..................... $10,250 $8,769 $1,890
======= ======= ======
Ratio of expenses to average net assets(b).............. 1.89%(c) 1.89% 2.19%(c)
Ratio of net investment loss to average net assets....... (0.53%)(c) (0.58%) (0.81%)(c)
Portfolio turnover rate................................... 103%(c) 91% 43%(c)
(a) Commencement of operations.
(b) Ratio of expenses to average net assets assuming no waiver of fees or
reimbursement of expenses by the Advisor was 2.38%(c), 2.80%, and 6.29%(c)
for the periods ended June 30, 1995, August 31, 1994 and August 31, 1993,
respectively.
(c) Annualized.
</TABLE>
Further information about the performance of the Fund is contained in the Annual
Report, a copy of which may be obtained at no charge by calling the Fund.
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PERFORMANCE INFORMATION
The following table is a representation of the graphic material contained in
the Prospectus:
Comparison of Change in Value of $10,000 Invested in the Oak Value Fund,
Lipper Growth Fund Index and Standard & Poor's 500 Index
DATE OAK VALUE FUND S&P 500 INDEX LIPPER GROWTH FUND
INDEX
January 1993 10,000 10,000 10,000
March 1993 10,353 10,393 10,130
June 1993 10,357 10,439 10,282
September 1993 11,442 10,708 10,776
December 1993 12,204 10,957 11,024
March 1994 11,611 10,541 10,693
June 1994 11,818 10,586 10,458
September 1994 12,472 11,102 10,981
December 1994 12,015 11,100 10,860
March 1995 13,157 12,181 11,642
June 1995 13,334 13,344 12,888
Past performance is not predictive of future performance.
Oak Value Fund Average Annual Total Returns
As of June 30, 1995
1 Year Since Inception*
12.82% 12.46%
Non-Standardized Total Returns
<TABLE>
<C> <C> <C> <C> <C>
1995 Year Since
To Date Inception*
1993* 1994 (as of 9/30/95) (as of 9-30-95)
Oak Value Fund 22.05% -1.51% 22.02% 46.68%
Lipper Growth Fund Index 10.13% -1.57% 29.49% 40.36%
S&P 500 Index 9.70% 1.32% 29.77% 44.23%
*Inception date of the Oak Value Fund was January 18, 1993.
</TABLE>
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INVESTMENT OBJECTIVE, INVESTMENT POLICIES AND RISK CONSIDERATIONS
The Fund's investment objective is capital appreciation. The Fund will seek to
achieve its objective by investing primarily in equity securities, consisting of
common and preferred stocks and securities convertible into common stocks.
Current income will be of secondary importance. Any investment involves risk,
and there can be no assurance that the Fund will achieve its investment
objective. The Fund's investment objective may not be altered without the prior
approval of a majority (as defined by the Investment Company Act of 1940) of the
Fund's shares.
The Fund is governed by an investment concept commonly known as value investing.
While many investment advisors often cite a "value approach to investing" to
describe a wide array of investment techniques and philosophies, the Advisor
seeks to follow a very specific form of "value investing."
The value philosophy that the Advisor seeks to follow rests on the principle
that the market is not always priced efficiently. Value investing is predicated
on the ability to find undervalued securities. The Advisor views growth and
value as two sides of the same coin. In this context, value investing is simply
buying growth at a discount. The value side of the coin represents the price
that an investor is willing to pay for a particular security. That price should
be at a sufficient discount to provide a margin of safety and thereby have a
high probability of capital preservation. The concept of a margin of safety is
pivotal to the successful implementation of value investing. The entire premise
of value investing rests on the manager's ability to exercise judgment with
discipline regarding the purchase price of a security. A margin of safety refers
to the difference between the investor's calculation of value and the price at
which the security is trading in the market. There is a given margin of safety
at one price level and a diminished margin of safety at a higher price level. In
other words, as the price of a security approaches the investor's calculation of
value, the margin of safety declines. Many managers can identify a good
business, but the successful value manager can analyze the price at which that
security falls into the purchase category. The concept of a margin of safety is
applicable to the purchase of common stocks, preferred stock or fixed-income
instruments. The other side of the coin is the growth aspect of that particular
security. A company that possesses the potential to grow through business
expansion over time represents the ability to buy a future stream of income that
will be reflected in its future stock price. Paying a reasonable price, with a
sufficient margin of safety, in an enterprise that can grow is essential to
long-term value investing.
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Fundamental research is the foundation on which value investing rests. Most
value proponents use a bottom-up approach (focusing on specific companies rather
than the overall market level or industry sectors) to find the companies meeting
their criteria. Integrity of analytical approach is important to the value
investor because it provides demonstrated evidence of the value of a company
relative to its current stock price. No matter how good the story or how great
the management, the value of a company lies solely with the future cash flow
available after capital spending and taxes. An important requirement for most
value investors is that they understand the business they are trying to value.
The preference for simple businesses, without undue complication and
technological change, allows the investor to develop a complete understanding of
the future prospects of the company. Since the value investor begins with the
premise that the current market price is no indication of the true worth of a
business, the value investor analyzes the company's reports and other public
information to develop his own opinion of intrinsic value. The purchase decision
rests on the ability to buy that security with a great enough margin of safety
to ensure safety of principal and an adequate return. The second premise of the
value investor is that the stock prices will fluctuate over time but that, over
the long term, market price will move towards intrinsic value.
The margin of safety should expand as the intrinsic value of the business
increases. If you buy a growth business at a sufficient discount, you should be
rewarded as the intrinsic value increases. In a growing enterprise you are not
forced to wait for a catalyst to unlock the hidden value (takeovers, mergers,
liquidation, etc.). A good business will exhibit strong cash flow generation,
significant barriers to competition, and moderate or low requirements for
capital reinvestment. If one is fortunate enough to identify such a holding at a
reasonable price, the rewards can be significant.
EQUITY SELECTION. The Fund's portfolio will be comprised primarily of common
stocks, convertible preferred stocks and preferred stocks traded on domestic and
foreign securities exchanges or on the over-the-counter markets. Securities
selected are those securities that, in the opinion of the Advisor, are priced at
a discount to intrinsic value.
The Advisor will select securities based upon the Advisor's view of the
intrinsic value of the issuer and its equity securities relative to the market
price. A few of the characteristics that may indicate unrecognized intrinsic
value are that the shares: (1) sell at a relatively low multiple of their free
cash flow (defined as average net income plus non-cash charges such as
depreciation and amortization less those capital expenditures necessary to
maintain the competitiveness of the enterprise); (2) sell at a substantial
discount from a price at which the
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securities of comparable businesses have been sold in arms' length transactions
between parties judged to be competent businesspersons; (3) sell at a
substantial discount to the value of the business determined by cash flow
analysis and qualitative characteristics; or (4) sell at a substantial discount
from asset value, which is based on the sum of the company's parts, including
consideration for its hidden assets, such as overfunded pension plans,
understated value of inventories, appreciated real estate, brand names and
franchises, less the present value of its liabilities.
Other factors considered desirable by the Advisor in selecting potential
investments include the following:
1) INDICATIONS OF A SHAREHOLDER-ORIENTED MANAGEMENT. The
Advisor believes that if management has a vested ownership
interest in the company's success, it is more likely that
the interests of shareholders and management will coincide,
and the company will therefore be managed for the benefit of
all shareholders. Ownership of a substantial equity
position could be evidence of a shareholder-oriented
management.
2) EVIDENCE OF FINANCIAL STRENGTH. The most attractive companies have solid
financial foundations, such as a consistent generation of free cash flow, a
strong balance sheet, and a high return on capital.
3) ATTRACTIVE FUTURE PROSPECTS. After analysis of a company's fundamentals,
the company should be deemed capable of a meaningful improvement in
earnings within the term of the then-current business cycle.
4) CASH FLOW GENERATION. The company should exhibit a sufficient cash flow to
fund its internal needs for capital replacement and expansion, without
excessive need for debt or new equity offerings.
5) PRICING FLEXIBILITY. The company should have the ability to
raise prices independent of competitive forces.
6) DOMINANT POSITION IN THE MARKET. The company should exhibit
a real ability to control its own destiny.
7) FRANCHISE POSITION. The company should have a strong market
share, or significant niche in its market.
8) COMPARATIVE BARRIERS TO ENTRY. The company should be in an industry which
does now allow easy competition, to ensure against wide swings in earnings
as a result of unexpected competitors.
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<PAGE>
9) REINVESTMENT ABILITY. The company has the ability to
reinvest its earnings at a high rate of return.
While portfolio securities are generally acquired for the long term, they may be
sold under some of the following circumstances when the Advisor believes that:
(a) the anticipated price appreciation has been achieved or is no longer
probable; (b) alternate investments offer superior total return prospects; (c)
the risk of decline in market value is increased; or (d) a fundamental change
has occurred in the company or its market.
FACTORS TO CONSIDER. The Fund is not intended to be a complete
investment program and there can be no assurance that the Fund
will achieve its investment objective. The Fund's net asset
value will be subject to market fluctuation. The Fund may borrow
using its assets as collateral, but only under certain limited
conditions. Borrowing, if done, would tend to exaggerate the
effects of market fluctuations on the Fund's net asset value
until repaid. (See "Borrowing.")
OPTIONS. When the Advisor believes that individual portfolio securities are
approaching the top of the Advisor's growth and price expectations, covered call
options (calls) may be written (sold) against such securities in a disciplined
approach to selling portfolio securities.
If the Fund writes a call, it receives a premium and agrees to sell the
underlying security to a purchaser of a corresponding call at a specified price
("strike price") by a future date ("exercise date"). To terminate its obligation
on a call the Fund has written, it may purchase a corresponding call in a
"closing purchase transaction". A profit or loss will be realized, depending
upon whether the price of the closing purchase transaction is more or less than
the premium (net of transaction costs) previously received on the call written.
The Fund may also realize a profit if the call it has written lapses
unexercised, in which case the Fund keeps the premium and retains the underlying
security as well. If a call written by the Fund is exercised, the Fund forgoes
any possible profit from an increase in the market price of the underlying
security over the exercise price plus the premium received. The Fund writes
options only for hedging purposes and not for speculation where the aggregate
value of the underlying obligations will not exceed 25% of the Fund's net
assets. If the Advisor is incorrect in its expectations and the market price of
a stock subject to a call option rises above the exercise price of the option,
the Fund will lose the opportunity for further appreciation of that security.
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Profits on closing purchase transactions and premiums on lapsed calls written
are considered capital gains for financial reporting purposes and are short term
gains for federal income tax purposes. When short term gains are distributed to
shareholders, they are taxed as ordinary income. If the Fund desires to enter
into a closing purchase transaction, but there is no market when it desires to
do so, it would have to hold the securities underlying the call until the call
lapses or until the call is exercised.
The Fund will only write options which are issued by the Options Clearing
Corporation and listed on a national securities exchange. Call writing affects
the Fund's portfolio turnover rate and the brokerage commissions paid
Commissions for options, which are normally higher than for general securities
transactions, are payable when writing calls and when purchasing closing
purchase transactions. The Statement of Additional Information contains
additional information about covered call options.
FOREIGN SECURITIES. Foreign securities investment presents special
considerations not typically associated with investments in domestic securities.
Foreign taxes may reduce income. Currency exchange rates and regulations may
cause fluctuations in the value of foreign securities. Foreign securities are
subject to different regulatory environments than in the United States and,
compared to the United States, there may be a lack of uniform accounting,
auditing and financial reporting standards, less volume and liquidity and more
volatility, less public information and less regulation of foreign issuers.
Countries have been known to expropriate or nationalize assets, and foreign
investments may be subject to political, financial or social instability or
adverse diplomatic developments. There may be difficulties in obtaining service
of process on foreign issuers and difficulties in enforcing judgments with
respect to claims under the U.S. securities laws against such issuers. Favorable
or unfavorable differences between U.S. and foreign economies could affect
foreign securities values. The U.S. Government has, in the past, discouraged
foreign investments by U.S. investors through taxation or other restrictions and
it is possible that such restrictions could be imposed again.
The Fund may invest in foreign issuers directly or through the purchase of
American Depository Receipts (ADRs). ADRs are receipts issued by a U.S. bank or
trust company evidencing ownership of securities of a foreign issuer. ADRs may
be listed on a national securities exchange or may trade in the over-the-counter
market. The prices of ADRs are denominated in U.S. dollars while the underlying
security may be denominated in a foreign currency. Direct investments in foreign
securities will generally be limited to foreign securities traded on foreign
securities exchanges.
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Although the Fund is not limited in the amount of foreign securities it may
acquire, it is presently expected that the Fund will not invest in excess of 10%
of its assets (measured at the time of purchase) in foreign securities that are
not publicly traded in the United States.
MONEY MARKET INSTRUMENTS. Money market instruments may be purchased for
temporary defensive purposes, in an amount up to 100% of the Fund's assets, when
the Advisor believes the prospect for capital appreciation in the equity
securities markets is not attractive. Money market instruments will typically
represent a portion of the Fund's portfolio, as funds awaiting investment, to
accumulate cash for anticipated purchases of portfolio securities and to provide
for shareholder redemptions and operational expenses of the Fund. Money market
instruments mature in thirteen months or less from the date of purchase and may
include U.S. Government Securities (defined below) and corporate debt securities
(including those subject to repurchase agreements), bankers' acceptances and
certificates of deposit of domestic branches of U.S. banks, and commercial paper
(including variable amount demand master notes). See the Statement of Additional
Information for a further description of money market instruments.
U.S. GOVERNMENT SECURITIES. The Fund may invest a portion of the portfolio in
U.S. Government Securities, which include direct obligations of the U.S.
Treasury, securities guaranteed as to interest and principal by the U.S.
Government such as Government National Mortgage Association, as well as
securities issued or guaranteed as to interest and principal by U.S. Government
authorities, agencies and instrumentalities such as Federal National Mortgage
Association, Federal Home Loan Mortgage Corporation, Federal Home
Administration, Federal Farm Credit Bank, Federal Home Loan Bank, Student Loan
Marketing Association, Resolution Trust Corporation, and The Tennessee Valley
Authority. U.S. Government Securities may be acquired subject to repurchase
agreements. While obligations of some U.S. Government sponsored entities are
supported by the full faith and credit of the U.S. Government, several are
supported by the right of the issuer to borrow from the U.S. Government, and
still others are supported only by the credit of the issuer itself. The
guarantee of the U.S. Government does not extend to the yield or value of the
U.S. Government Securities held by the Fund or to the Fund's shares.
BORROWING. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 33.3% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If, while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to
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liquidate portfolio securities when it is disadvantageous to do so. The Fund
would incur interest and other transaction costs in connection with such
borrowing. The Fund will not make any additional investments while its
borrowings are outstanding.
ILLIQUID INVESTMENTS. The Fund may invest up to 10% of its net assets in
illiquid securities. Illiquid securities are those that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price at which they are valued. Under the supervision of the
Board of Trustees, the Advisor determines the liquidity of the Fund's
investments.
FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. The Fund may purchase
when-issued securities and commit to purchase securities for a fixed price at a
future date beyond customary settlement time. The Fund is required to hold and
maintain in a segregated account until the settlement date, cash, U.S.
Government Securities or high-grade debt obligations in an amount sufficient to
meet the purchase price. Purchasing securities on a when- issued or forward
commitment basis involves a risk of loss if the value of the security to be
purchased declines prior to the settlement date, which risk is in addition to
the risk of decline in value of the Fund's other assets. Although the Fund would
generally purchase securities on a when-issued or forward commitment basis with
the intention of acquiring securities for its portfolio, the Fund may dispose of
a when-issued security or forward commitment prior to settlement if the Advisor
deems it appropriate to do so. The Fund may realize short-term gains or losses
upon such sales.
PORTFOLIO TURNOVER. The Fund sells portfolio securities, without regard to the
length of time they have been held, in order to take advantage of new investment
opportunities or changes in business fundamentals, or if price targets have been
met. By utilizing the approach to investing described herein, portfolio turnover
is expected to average approximately 70% and will generally not exceed 100% per
year. The degree of portfolio activity affects the brokerage costs of the Fund
and may have an impact on the amount of taxable distributions to shareholders.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities or other
high-grade debt securities subject to repurchase agreements. A repurchase
agreement transaction occurs when the Fund acquires a security and
simultaneously agrees to resell it to the vendor (normally a member bank of the
Federal Reserve or a registered Government Securities dealer) for delivery on an
agreed upon future date. The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate earned by the Fund
effective for the period of time during which the repurchase agreement is in
effect. Delivery pursuant to the resale typically will occur within one to five
days of the purchase. The Fund's risk with
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respect to repurchase agreements is limited to the ability of the vendor to pay
the agreed upon sum upon the delivery date; in the event of bankruptcy or other
default by the vendor, there may be possible delays and expenses in liquidating
the instrument purchased, decline in its value and loss of interest. Under
guidelines issued by the Trustees, the Advisor will carefully consider the
creditworthiness of a vendor during the term of the repurchase agreement. For
purposes of the Investment Company Act of 1940 (the "1940 Act"), a repurchase
agreement is considered to be a loan collateralized by the securities subject to
the repurchase agreement. The Fund will not enter into a repurchase agreement
which will cause more than 10% of its assets to be invested in repurchase
agreements which extend beyond seven days and other illiquid securities.
INVESTMENT LIMITATIONS. For the purpose of limiting the Fund's exposure to risk,
the Fund has adopted certain limitations which, together with its investment
objective, are considered fundamental policies which may not be changed without
shareholder approval. The Fund will not: (1) issue senior securities, borrow
money or pledge its assets, except that it may borrow from banks as a temporary
measure (a) for extraordinary or emergency purposes, in amounts not exceeding 5%
of the Fund's total assets, or (b) in order to meet redemption requests which
might otherwise require untimely disposition of portfolio securities if,
immediately after such borrowing, the value of the Fund's assets, including all
borrowings then outstanding, less its liabilities (excluding all borrowings), is
equal to at least 300% of the aggregate amount of borrowings then outstanding,
and may pledge its assets to secure all such borrowings; (2) make loans of money
or securities, except that the Fund may invest in repurchase agreements (but
repurchase agreements having a maturity of longer than seven days, together with
other securities which are not readily marketable, are limited to 10% of the
Fund's net assets); (3) write, purchase or sell commodities, commodities
contracts, futures contracts or related options; or (4) invest in securities of
issuers which have a record of less than three years' continuous operation
(including predecessors and, in the case of bonds, guarantors). Other
fundamental investment limitations are listed in the Statement of Additional
Information.
HOW TO PURCHASE SHARES
There are NO SALES COMMISSIONS CHARGED TO INVESTORS. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-622-2474, or by
writing to the Fund at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell shares
of the Fund. Such broker-dealer may charge you a fee for its services. Payment
for shares purchased may be made through your account with the broker-dealer
processing your application and order to purchase. Your investment will purchase
shares at the
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Fund's net asset value next determined after your order is received by the Fund
in proper order as indicated herein. The minimum initial investment in the Fund,
unless stated otherwise herein, is $2,500. The minimum for an Individual
Retirement Account ("IRA") or self-employed retirement plan ("Keogh Plan") is
generally $1,000. The Fund may, in the Advisor's sole discretion, accept certain
accounts with less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank
and payable in U.S. dollars. All orders received by the
Administrator, whether by mail, bank wire or facsimile order from
a qualified broker-dealer, prior to 4:00 p.m. Eastern time will
purchase shares at the net asset value next determined on that
business day. If your order is not received by 4:00 p.m. Eastern
time, your order will purchase shares as of the net asset value
determined on the next business day. (See "How Net Asset Value
is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Fund is required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Fund within 60 days.
Investors should be aware that the Fund's Account Application contains
provisions in favor of the Fund, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating to
the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the
Fund or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and mail it with your check, made payable to the
Oak Value Fund, to:
The Oak Value Fund
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
BANK WIRE ORDERS. Investments can be made directly by bank wire.
To establish a new account or add to an existing account by wire,
please call the Fund, at 1-800-622-2474, before wiring funds, to
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advise the Fund of the investment, the dollar amount and the account
registration. This will ensure prompt and accurate handling of your investment.
Please have your bank use the following wiring instructions to purchase by wire:
Star Bank, N.A.
ABA# 042000013 The Tuscarora Investment Trust
For credit to Oak Value Fund #483616975
(Shareholder name and account number
or tax identification number)
It is important that the wire contain all the information and that the Fund
receive prior telephone notification to ensure proper credit. Once your wire is
sent you should, as soon as possible thereafter, complete and mail your Account
Application to the Fund as described under "Regular Mail Orders," above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $100) at any time by purchasing shares at the then
current net asset value as aforementioned. The Fund may, in the Advisor's sole
discretion, accept certain additional investments of less than the stated
minimum amount. Before making additional investments by bank wire, please call
the Fund at 1-800-622-2474 to alert the Fund that your wire is to be sent.
Follow the wire instructions above to send your wire. When calling for any
reason, please have your account number ready, if known. Mail orders should
include, when possible, the "Invest by Mail" stub which is attached to your Fund
confirmation statement. Otherwise, be sure to identify your account in your
letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly investments in shares through automatic charges to their
checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
net asset value on or about the date indicated on the Account Application. The
shareholder may change the amount of the investment or discontinue the plan at
any time by writing to the Administrator.
EMPLOYEES AND AFFILIATES OF THE FUND. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Fund or certain
parties related thereto. See the Statement of Additional Information for further
details.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
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<PAGE>
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed on each day that the Fund is open for
business. The Fund is open for business on each day the New York Stock Exchange
(the "Exchange") is open for business. Any redemption may be for more or less
than the purchase price of your shares depending on the market value of the
Fund's portfolio securities. All redemption orders received in proper form, as
indicated herein, by the Administrator prior to 4:00 p.m. Eastern time will
redeem shares at the net asset value determined as of that business day's close
of trading. Otherwise, your order will redeem shares at the net asset value
determined on the next business day. You may also redeem your shares through a
broker-dealer which may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions or transfers,
and not due to market action) upon 60 days' written notice. If the shareholder
brings his account value up to $1,000 or more during the notice period, the
account will not be redeemed. Redemptions from retirement plans may be subject
to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Fund, at 1-800-622-2474, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to
the Oak Value Fund, P.O. Box 5354, Cincinnati, Ohio 45201-5354.
Your request for redemption must include:
1) your letter of instruction or a stock assignment specifying
the account number, and the number of shares or dollar
amount to be redeemed. This request must be signed by all
registered shareholders in the exact names in which they are
registered;
2) any required signature guarantees (see "Signature
Guarantees"); and
3) other supporting legal documents, if required in the case of
estates, trusts, guardianships, custodianships,
corporations, partnerships, and other organizations.
Your redemption proceeds will be mailed to you within three business days after
receipt of your redemption request. However, the Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. Such delay (which may take up to 15 days) may
be reduced or avoided if the purchase is made by certified check, government
check or wire transfer. In such cases, the net asset value next determined after
receipt of the request for redemption
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<PAGE>
will be used in processing the redemption and your redemption proceeds will be
mailed to you upon clearance of your check to purchase shares. The Fund may
suspend redemption privileges or postpone the date of payment (i) during any
period that the Exchange is closed, or trading on the Exchange is restricted as
determined by the Securities and Exchange Commission (the "Commission"), (ii)
during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the Fund to
dispose of securities owned by it, or to fairly determine the value of its
assets, and (iii) for such other periods as the Commission may permit.
TELEPHONE AND BANK WIRE REDEMPTIONS. The Fund offers shareholders the option of
redeeming shares by telephone under certain limited conditions. You may redeem
shares, subject to the procedures outlined below, by calling the Fund at
1-800-622-2474. The Fund will redeem shares when requested by telephone if, and
only if, the shareholder confirms redemption instructions in writing. The Fund
may rely upon confirmation of redemption requests transmitted via facsimile (FAX
# 513-629- 2041). The confirmation instructions must include:
1) Shareholder name and account number;
2) Number of shares or dollar amount to be redeemed;
3) Instructions for transmittal of redemption funds to the
shareholder;
4) Shareholder signature as it appears on the application
then on file with the Fund; and
5) Any required signature guarantees (see "Signature
Guarantees").
In such cases, the net asset value used in processing the redemption will be the
net asset value next determined after the telephone request is received.
Redemption proceeds will not be remitted until written confirmation of the
redemption request is received. You can choose to have redemption proceeds
mailed to you at your address of record, your bank, or to any other authorized
person, or you can have the proceeds sent by bank wire to your bank ($5,000
minimum). Shares of the Fund may not be redeemed by wire on days in which your
bank is not open for business. Redemption proceeds will only be sent to the bank
account or person named in your Account Application currently on file with the
Fund. You can change your redemption instructions anytime you wish by filing a
letter including your new redemption instructions with the Fund. (See "Signature
Guarantees.")
The Fund reserves the right to restrict or cancel telephone redemption
privileges for any shareholder or all shareholders, without notice, if the
Trustees believe it to be in the best interest of the shareholders to do so.
During drastic economic and market changes, telephone redemption privileges may
be difficult to implement.
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<PAGE>
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Fund from fraud, signature
guarantees are required to be sure that you are the person who has authorized a
redemption in an amount over $25,000, or a change in registration or standing
instructions for your account. Signature guarantees are required for (1)
requests to redeem shares having a value of greater than $25,000, (2) change of
registration requests, and (3) requests to establish or change redemption
services other than through your initial account application. Signature
guarantees are acceptable from a member bank of the Federal Reserve System, a
savings and loan institution, credit union, registered broker-dealer or a member
firm of a U.S. Stock Exchange, and must appear on the written request for
redemption, or change of registration.
SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of the Fund valued at
$10,000 or more at the current offering price may establish a Systematic
Withdrawal Plan to receive a monthly, quarterly or annual check in a stated
amount not less than $100. Each month, quarter or year, as specified, the Fund
will automatically redeem sufficient shares from your account to meet the
specified withdrawal amount. The shareholder may establish this service whether
dividends and distributions are reinvested or paid in cash. Systematic
withdrawals may be deposited directly to the shareholder's bank account by
completing the applicable section on the Account Application form accompanying
this Prospectus, or by calling or writing the Fund. See the Statement of
Additional Information for further details.
HOW NET ASSET VALUE IS DETERMINED
The net asset value of the Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
Information on the Fund's last reported net asset value is available through
NASDAQ using the ticker symbol OAKVX. See the Statement of Additional
Information for further details.
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<PAGE>
Securities which are traded over-the-counter are priced at the last sale price,
if available, otherwise, at the last quoted bid price. Securities traded on a
national stock exchange will be valued based upon the closing price on the
valuation date on the principal exchange where the security is traded.
Fixed-income securities will ordinarily be traded in the over-the-counter market
and common stocks will ordinarily be traded on a national securities exchange,
but may also be traded in the over-the-counter market. When market quotations
are not readily available, fixed-income securities may be valued on the basis of
prices provided by an independent pricing service. The prices provided by the
pricing service are determined with consideration given to institutional bid and
last sale prices and take into account securities prices, yields, maturities,
call features, ratings, institutional trading in similar groups of securities
and developments related to specific securities. The Trustees will satisfy
themselves that such pricing services consider all appropriate factors relevant
to the value of such securities in determining their fair value. Calls written
by the Fund are valued at the then current market quotation, using the ask
price, as of the close of each day on the principal exchanges on which they are
traded. Securities and other assets for which no quotations are readily
available will be valued in good faith at fair value using methods determined by
the Board of Trustees.
MANAGEMENT OF THE FUND
The Fund is a diversified series of The Tuscarora Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
March 1995. The Board of Trustees has overall responsibility for management of
the Fund under the laws of Massachusetts governing the responsibilities of
trustees of business trusts. The Statement of Additional Information identifies
the Trustees and executive officers of the Trust and provides information about
them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Oak Value
Capital Management, Inc. (the "Advisor") provides the Fund with a continuous
program of supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities, pursuant to an
Investment Advisory Agreement with the Trust. The Advisor is also responsible
for the selection of broker-dealers through which the Fund executes portfolio
transactions, subject to brokerage policies established by the Trustees, and
provides certain executive personnel to the Fund.
The Advisor, organized as a North Carolina corporation in 1992,
is controlled by George W. Brumley III and David R. Carr, Jr. In
addition to acting as Advisor to the Fund, the Advisor also
provides investment advice to accounts with assets of
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approximately $240 million, the vast majority of which are managed using an
investment style and approach similar to that of the Fund.
David R. Carr, Jr. is primarily responsible for managing the portfolio of the
Fund and also acted in this capacity for the Predecessor Fund. He is chief
investment officer and president of the Advisor. Mr. Carr has been employed by
the Advisor, and its predecessor firm, since its inception in May 1986. He is a
graduate of the University of North Carolina with a degree in Business
Administration and a concentration in Accounting, as well as a Juris Doctor
degree from the Law School at the University of North Carolina. He has studied
and applied value investing techniques for the past thirteen years. As the chief
investment officer of the Advisor, Mr. Carr uses the same value- oriented
philosophy to manage the Fund as he uses to manage the Advisor's other accounts.
Compensation of the Advisor is at the annual rate of 0.90% of the Fund's average
daily net assets. Although the fee payable to the Advisor is higher than that
paid by most other investment companies, the Board of Trustees believes the fee
to be comparable to advisory fees paid by many funds having similar objectives
and policies.
The Advisor currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of the Fund to 1.90% per
annum of its average daily net assets. However, there is no assurance that any
voluntary fee waivers will continue in the current or future fiscal years, and
expenses of the Fund may therefore exceed 1.90% of its average daily net assets.
The Advisor's address is 3100 Tower Boulevard, Suite 800, Durham, North Carolina
27707 and its telephone number is 1-800-680-4199.
ADMINISTRATOR. The Fund has retained MGF Service Corp., P.O. Box 5354,
Cincinnati, Ohio 45201, to serve as its transfer agent, dividend paying agent
and shareholder service agent. The Administrator is a subsidiary of Leshner
Financial, Inc., of which Robert H. Leshner is the controlling shareholder.
In addition, the Administrator has been retained to provide administrative
services to the Fund. In this capacity, the Administrator supplies executive,
administrative and regulatory services, supervises the preparation of tax
returns, and coordinates the preparation of reports to shareholders and reports
to and filings with the Securities and Exchange Commission and state securities
authorities. The Fund pays the Administrator a fee for these administrative
services at the annual rate of .20% of the average value of its daily net assets
up to $25 million, .175% of the next $25 million of such assets and .15% of such
assets in excess of $50 million.
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<PAGE>
The Administrator also provides accounting and pricing services to the Fund. The
Administrator receives a monthly fee of $2,000 for calculating daily net asset
value per share and maintaining such books and records as are necessary to
enable it to perform its duties. The Administrator also charges the Fund for
certain costs involved with the daily valuation of investment securities and is
reimbursed for out-of-pocket expenses.
CUSTODIAN. The Custodian of the Fund's assets is Star Bank, N.A.
(the "Custodian"). The Custodian's mailing address is 425 Walnut
Street, P.O. Box 1118, Cincinnati, Ohio 45201. The Advisor,
Administrator or interested persons thereof may have banking
relationships with the Custodian.
OTHER FUND COSTS. The Fund pays all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and expenses,
if any, of the Trustees and officers who are not "affiliated persons" of the
Advisor, fees of the Fund's custodian, interest expense, taxes, brokerage fees
and commissions, fees and expenses of the Fund's shareholder servicing
operations, fees and expenses of qualifying and registering the Fund's shares
under federal and state securities laws, expenses of preparing, printing and
distributing prospectuses and reports to existing shareholders, auditing and
legal expenses, insurance expenses, association dues, and the expense of
shareholders' meetings and proxy solicitations. The Fund is also liable for any
nonrecurring expenses as may arise such as litigation to which the Fund may be a
party. The Fund may be obligated to indemnify the Trustees and officers with
respect to such litigation. All expenses of the Fund are accrued daily on the
books of the Fund at a rate which, to the best of its belief, is equal to the
actual expenses expected to be incurred by the Fund in accordance with generally
accepted accounting practices. For the fiscal period ended June 30, 1995, the
annualized expense ratio of the Fund was 1.89% of its average daily net assets
after expense reimbursements.
BROKERAGE. The Fund has adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the Advisor
and/or the Fund. In all cases, the primary consideration for selection of
broker-dealers through which to execute brokerage transactions will be to obtain
the most favorable price and execution for the Fund. Research services obtained
through the Fund's brokerage transactions may be used by the Advisor for its
other clients; conversely, the Fund may benefit from research services obtained
through the brokerage transactions of the Advisor's other clients. The Statement
of Additional Information contains more information about the management and
brokerage practices of the Fund.
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<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND OTHER INFORMATION
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Fund in general and,
particularly, with respect to dividends and distributions and other matters.
Shareholders should be aware that dividends from the Fund which are derived in
whole or in part from interest on U.S. Government Securities may not be taxable
for state income tax purposes. Other state income tax implications are not
covered, nor is this discussion exhaustive on the subject of federal income
taxation. Consequently, investors should seek qualified tax advice.
The Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Fund but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed to
them. The Fund intends to declare dividends and capital gains distributions
annually, payable in December on a date selected by the Trustees. The Fund may
make a supplemental distribution of capital gains at the end of its fiscal year.
The nature and amount of all dividends and distributions will be identified
separately when tax information is distributed by the Fund at the end of each
year. The Fund intends to withhold 30% on taxable dividends and any other
payments that are subject to such withholding and are made to persons who are
neither citizens nor residents of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the payment
of any dividends or the realization of any gains. All dividends and capital
gains distributions are reinvested in additional shares of the Fund unless the
shareholder requests in writing to receive dividends and/or capital gains
distributions in cash. That request must be received by the Fund prior to the
record date to be effective as to the next dividend. Tax consequences to
shareholders of dividends and distributions are the same if received in cash or
if received in additional shares of the Fund.
TAX STATUS OF THE FUND. If the Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to qualify.
For a more detailed discussion of the tax status of the Fund, see "Additional
Tax Information" in the Statement of Additional Information.
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<PAGE>
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of The
Tuscarora Investment Trust currently provides for the issuance of shares of the
Fund as sole series of the Trust. The Trustees are permitted to create
additional series, or funds, at any time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust or
a particular Fund of the Trust, holders of the outstanding shares of the Fund
being liquidated shall be entitled to receive, in proportion to the number of
shares of the Fund held by them, the excess of that Fund's assets over its
liabilities. Each outstanding share is entitled to one vote for each full share
and a fractional vote for each fractional share, on all matters which concern
the Trust as a whole. On any matter submitted to a vote of shareholders, all
shares of the Trust then issued and outstanding and entitled to vote,
irrespective of the Fund, shall be voted in the aggregate and not by Fund,
except (i) when required by the 1940 Act, shares shall be voted by individual
Fund; and (ii) when the matter does not affect any interest of a particular
Fund, then only shareholders of the affected Fund or Funds shall be entitled to
vote thereon. Examples of matters which affect only a particular Fund could be a
proposed change in the fundamental investment objectives or policies of that
Fund or a proposed change in the investment advisory agreement for a particular
Fund. The shares of the Fund will have noncumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
Trustees can elect all of the Trustees if they so choose.
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by shareholders
holding not less than two-thirds of the outstanding shares of the Trust and
filed with the Trust's custodian. In case a vacancy or an anticipated vacancy
shall for any reason exist, the vacancy shall be filled by the affirmative vote
of a majority of the remaining Trustees, subject to the provisions of Section
16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more information.
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<PAGE>
Shareholder inquiries may be made in writing, addressed to the Fund at the
address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional Information
for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time the Fund may advertise its
total return. The Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate future
performance.
The "total return" of the Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of all
dividends and distributions, includes all recurring fees that are charged to all
shareholder accounts and deducts all nonrecurring charges at the end of each
period. If the Fund has been operating less than 1, 5 or 10 years, the time
period during which the Fund has been operating is substituted.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same or
different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of the Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum public offering price per share on the last day of
the period (using the average number of shares entitled to receive dividends).
The yield formula assumes that net investment income is earned and reinvested at
a constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses of
the Fund all recurring fees that are charged to all shareholder accounts and any
nonrecurring charges for the period stated.
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<PAGE>
OAK VALUE FUND
INVESTMENT ADVISOR
Oak Value Capital Management, Inc.
University Tower
3100 Tower Boulevard, Suite 800
Durham, North Carolina 27707
1-800-680-4199
ADMINISTRATOR
MGF Service Corp.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-622-2474
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Arthur Andersen LLP
425 Walnut Street
Cincinnati, Ohio 45202
BOARD OF TRUSTEES
George W. Brumley III
C. Russell Bryan
David R. Carr, Jr.
John M. Day
Joseph T. Jordan, Jr.
OFFICERS
George W. Brumley III, President
David R. Carr, Jr., Vice President and Treasurer
John F. Splain, Secretary
No person has been authorized to give any information
or to make any representations, other than those
contained in this
Prospectus, in connection with the offering contained in this
Prospectus, and if given or made, such information or
representations must not be relied upon as being authorized by
the Fund. This Prospectus does not constitute an offer by the
Fund to sell shares in any State to any person to whom it is
unlawful for the Fund to make such offer in such State.
<PAGE>
July 15, 1996
THE TUSCARORA INVESTMENT TRUST
OAK VALUE FUND
Supplement to Prospectus
Dated November 1, 1995
From time to time the Advisor may
engage third parties as "finders" for
the purpose of soliciting potential
investors. Such parties may be
compensated by the Advisor to do so.
<PAGE>
