Investment Company Act Reg. No. 811-09094
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
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/ / Pre-Effective Amendment No. | / / Post-Effective Amendment No. |
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| LEUTHOLD FUNDS, INC. |
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(Exact Name of Registrant as Specified in Charter) |
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| 33 South Sixth Street, Suite 4600, Minneapolis, Minnesota 55402 |
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(Address of Registrant’s Principal Executive Offices) |
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| (612) 332-9141 |
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(Registrant’s Telephone Number, Including Area Code) |
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Steven C. Leuthold | ||
Leuthold Weeden Capital Management, LLC | ||
33 South Sixth Street | ||
Suite 4600 | ||
| Minneapolis, Minnesota 55402 |
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(Name and Address of Agent for Service) |
Copies of all communications to:
Richard L. Teigen
Foley & Lardner LLP
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Approximate Date of Proposed Public Offering: As soon as practicable after this Registration Statement becomes effective.
It is proposed that this Registration Statement become effective on January 28, 2010 pursuant to Rule 488.
Title of Securities Being Registered: Shares of common stock, par value $0.0001 per share.
No filing fee is due because an indefinite number of shares have been registered in reliance on Section 24(f) under the Investment Company Act of 1940, as amended.
PRELIMINARY AND SUBJECT TO CHANGE,
DATED DECEMBER 29, 2009
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LEUTHOLD FUNDS, INC. |
33 South Sixth Street |
Suite 4600 |
Minneapolis, Minnesota 55402 |
January [•], 2010
Dear Leuthold Select Equities Shareholder:
We are sending this information to you because you are a shareholder of the Leuthold Select Equities Fund (the “Select Equities Fund”), a series of Leuthold Funds, Inc. (the “Company”). The Board of Directors (the “Directors”) of the Company is pleased to announce the acquisition of the assets and liabilities of the Select Equities Fund by the Leuthold Select Industries Fund (the “Select Industries Fund”), another series of the Company. We sometimes refer to each of the Select Equities Fund and the Select Industries Fund as a “Fund” and together, the “Funds”.
The acquisition, which is expected to become effective in February of 2010, is described in more detail in the attached Prospectus. You should review the Prospectus carefully and retain it for future reference. In connection with this acquisition, we are not asking you for a proxy and you are requested not to send a proxy.
The Select Equities Fund and the Select Industries Fund have identical investment objectives. While the Funds have differing investment strategies, as described below, essentially all of the investments of the Select Equities Fund are within the screens of the Select Industries Fund so that they are eligible investments. Indeed, approximately 25% of the portfolio of the Select Equities Fund is currently held by the Select Industries Fund.
We anticipate that the acquisition will result in benefits to the shareholders of the Select Equities Fund as discussed more fully in the Prospectus. As a general matter, we believe that the acquisition will provide a similar investment opportunity with a lower expense ratio for the Select Equities Fund shareholders. In recommending the acquisition, the Directors have considered, among other things, the investment objectives and investment policies of the Funds, the Select Equities Fund’s prospects for future sales, expense ratio reductions expected to result from the acquisition, the comparison of fees for the Funds and the pro forma combined Fund, the overlap of the securities held, or eligible to be held, by the Funds, the costs of the acquisition and the allocation thereof, and the tax-free nature of the acquisition, and the Directors have concluded that the acquisition is in the best interests of the Funds.
Upon the acquisition of the Select Equities Fund by the Select Industries Fund, shareholders of the Select Equities Fund will receive shares of the Select Industries Fund, which have an aggregate net asset value (“NAV”) equal to the aggregate NAV of the shareholder’s shares in the Select Equities Fund. The Select Equities Fund would then terminate. The shareholders of the Select Equities Fund will not be assessed any sales charges or other shareholder fees in connection with the acquisition.
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| Sincerely, |
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| Steven C. Leuthold |
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| President |
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| Leuthold Funds, Inc. |
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the acquisition described in the Prospectus or the securities to be issued pursuant to the acquisition under the Prospectus or determined if the Prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.
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The enclosed Prospectus is dated January [•], 2010 and is
first being mailed to shareholders on or about January [•], 2010.
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LEUTHOLD FUNDS, INC. |
33 South Sixth Street |
Suite 4600 |
Minneapolis, Minnesota 55402 |
QUESTIONS AND ANSWERS
Dated: January [•], 2010
Question 1: What is this document and why did we send this document to you?
Answer: The attached document is a Prospectus that provides you with information about the acquisition (the “Acquisition”) of the assets and liabilities of the Leuthold Select Equities Fund (the “Select Equities Fund”), a series of Leuthold Funds, Inc. (the “Company”), by the Leuthold Select Industries Fund (the “Select Industries Fund”), another series of the Company. (The Select Equities Fund and the Select Industries Fund are each a “Fund” and, collectively, the “Funds”.)
On December 4, 2009, the Board of Directors (the “Directors”) of the Company approved and declared advisable the Acquisition of the Select Equities Fund by the Select Industries Fund. The Acquisition does not require approval by shareholders of the Select Equities Fund. We are not asking you for a proxy and you are requested not to send a proxy.
Shareholders may contact the Company by writing to Leuthold Funds, Inc., 33 South Sixth Street, Suite 4600, Minneapolis, Minnesota 55402, Attention: Corporate Secretary, or by calling 1-800-273-6886.
Question 2: How will the Acquisition work?
Answer: The Plan of Acquisition and Liquidation dated as of January [•], 2010 (the “Plan”) provides for (1) the transfer of all the assets of the Select Equities Fund to the Select Industries Fund, (2) the assumption by the Select Industries Fund of all the liabilities of the Select Equities Fund, (3) the issuance to shareholders of the Select Equities Fund of shares of the Select Industries Fund, equal in aggregate net asset value (“NAV”) to the NAV of their former shares of the Select Equities Fund in redemption of their shares of the Select Equities Fund, and (4) the termination of the Select Equities Fund.
Shareholders of the Select Equities Fund will not be assessed any sales charges or other shareholder fees in connection with the Acquisition.
Question 3: Why is the Acquisition taking place?
Answer: After considering the recommendation of Leuthold Weeden Capital Management, LLC (the “Adviser”), the Directors concluded that participation by the Select Equities Fund in the Acquisition is in the best interests of the Select Equities Fund. In recommending the Acquisition, the Directors have considered, among other things, the investment objectives and investment policies of the Funds, the Select Equities Fund’s prospects for future sales, expense ratio reductions expected to result from the acquisition, the comparison of fees for the Funds and the pro forma combined Fund, the overlap of the securities held, or eligible to be held, by the Funds, the costs of the acquisition and the allocation thereof, and the tax-free nature of the Acquisition.
Question 4: When will the Acquisition take place?
Answer: The Acquisition is expected to take place in February 2010.
Question 5: Who will bear the expenses of the Acquisition?
Answer: The expenses of the Acquisition will be borne by the Adviser.
Question 6: Where can I find additional information about the Funds?
Answer: Additional information about the Funds is available in the Statement of Additional Information (“SAI”) dated January [•], 2010 that has been filed with the Securities and Exchange Commission (“SEC”) in connection with the Prospectus. The SAI and each Fund’s Annual Report dated September 30, 2009, which contains audited financial statements for the Funds’ fiscal year, are incorporated by reference into this Prospectus. In addition, the Prospectus and Statement of Additional Information for the Leuthold Funds dated January [•], 2010 (the “Additional Disclosure Documents”) are also incorporated by reference into the Prospectus.
The Additional Disclosure Documents and the Annual and Semi-Annual Reports of the Leuthold Funds are all available to shareholders without charge, simply by calling U.S. Bancorp Fund Services, LLC at 1-800-273-6886. The Funds also make available the Additional Disclosure Documents and the Annual and Semi-Annual Reports, free of charge, on their Internet website (http://www.leutholdfunds.com).
All of this information is also available in documents filed with the SEC. You may view or obtain these documents from the SEC:
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| • | In person: at the SEC’s Public Reference Room in Washington, D.C. |
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| • | By phone: 1-202-551-8090 (for information on the operations of the Public Reference Room only) |
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| • | By mail: Public Reference Section, Securities and Exchange Commission, Washington, D.C. 20549-0102 (duplicating fee required) |
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| • | By electronic mail: publicinfo@sec.gov (duplicating fee required) |
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| • | On the Internet: www.sec.gov |
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LEUTHOLD FUNDS, INC. | ||
33 South Sixth Street | ||
Suite 4600 | ||
Minneapolis, Minnesota 55402 | ||
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PROSPECTUS DATED JANUARY [•], 2010 | ||
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Acquisition of the Assets and Assumption of the Liabilities of | ||
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Leuthold Select Equities Fund | ||
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By, and in Exchange for Shares of, | ||
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Leuthold Select Industries Fund | ||
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We are sending this Prospectus to you because you are a shareholder of the Leuthold Select Equities Fund (the “Select Equities Fund”), a series of Leuthold Funds, Inc. (the “Company”). The Board of Directors (the “Directors”) of the Company is pleased to announce the acquisition of the assets and liabilities of the Select Equities Fund by the Leuthold Select Industries Fund (the “Select Industries Fund”), another series of the Company. We sometimes refer to each of the Select Equities Fund and the Select Industries Fund as a “Fund” and together, the “Funds”.
We are not asking you for a proxy and you are requested not to send a proxy.
Additional information about the Funds is available in the Statement of Additional Information (“SAI”) dated January [•], 2010 that has been filed with the Securities and Exchange Commission (“SEC”) in connection with this Prospectus. The SAI and the Funds’ Annual Report dated September 30, 2009, which contains audited financial statements for the Funds’ fiscal year, are incorporated by reference into this Prospectus. In addition, the Prospectus and Statement of Additional Information for the Leuthold Funds dated January [•], 2010 (the “Additional Disclosure Documents”) are also incorporated by reference into this Prospectus.
The Additional Disclosure Documents and the Annual and Semi-Annual Reports of the Funds are all available to shareholders without charge, simply by calling U.S. Bancorp Fund Services, LLC at 1-800-273-6886. The Funds also make available the Additional Disclosure Documents and the Annual and Semi-Annual Reports, free of charge, on their Internet website (http://www.leutholdfunds.com).
All of this information is also available in documents filed with the SEC. You may view or obtain these documents from the SEC:
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| • | In person: at the SEC’s Public Reference Room in Washington, D.C. |
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| • | By phone: 1-202-551-8090 (for information on the operations of the Public Reference Room only) |
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| • | By mail: Public Reference Section, Securities and Exchange Commission, Washington, D.C. 20549-0102 (duplicating fee required) |
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| • | By electronic mail: publicinfo@sec.gov (duplicating fee required) |
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| • | On the Internet: www.sec.gov |
This Prospectus sets forth concisely the information about the Select Equities Fund and the Select Industries Fund that you should know before considering the acquisition and it should be retained for future reference.
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the acquisition described in the Prospectus or the securities to be issued pursuant to the acquisition under the Prospectus or determined if the Prospectus is accurate or adequate. Any representation to the contrary is a criminal offense. |
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PROSPECTUS
TABLE OF CONTENTS
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I. | ||
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| A. |
The following summary highlights differences between the Select Equities Fund and the Select Industries Fund. This summary is not complete; for more complete information, please read this entire document.
The Select Equities Fund is a diversified open-end fund, with assets, as of September 30, 2009, of approximately $10,076,921, and seeks capital appreciation. The Fund utilizes a disciplined, unemotional, quantitative investment approach that is based on the belief that in all market conditions there will exist some companies who are poised to outperform the market (the “Select Equities Strategy”). The Fund will invest in companies of all sizes and industries as well as in “growth” stocks and “value” stocks.
The Select Industries Fund is a diversified open-end fund, with assets, as of September 30, 2009, of approximately $47,543,360, and seeks capital appreciation. The Fund utilizes a disciplined, unemotional, quantitative investment approach that is based on the belief investors can achieve superior investment performance through group selection (the “Select Industries Strategy”). The Fund will invest in companies of all sizes and industries as well as in “growth” stocks and “value” stocks.
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| B. |
The Funds’ investment adviser, Leuthold Weeden Capital Management, LLC (the “Adviser”), recommended that the Directors approve the proposed Plan of Acquisition and Liquidation dated as of January [ • ], 2010 (the “Plan”). The Directors considered the factors discussed below, among others, from the point of view of the interests of the Select Equities Fund and its shareholders. After careful consideration, the Directors (including all Directors who are not “interested persons” of the Funds, the Adviser or its affiliates) determined that the acquisition contemplated by the Plan (the “Acquisition”) would be in the best interests of the Select Equities Fund and that the interests of existing shareholders of the Funds would not be diluted as a result of the Acquisition. The Directors have unanimously approved the Plan and the Acquisition.
The Directors considered, among other things:
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| • | The Adviser discussed with the Directors that it believes that the Acquisition would benefit the Select Equities Fund and its shareholders by potentially resulting in a lower expense ratio; |
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| • | Potential shareholder benefits, including the fact that, based on September 30, 2009 expense numbers, the pro forma total expense ratio of the combined Fund is expected to be significantly lower than the current expense ratio of the Select Equities Fund; |
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| • | The current asset level of the Select Equities Fund and the combined pro forma asset level of the combined Fund; |
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| • | The historical performance of the Funds; |
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| • | The investment objective and principal investments of the Funds; |
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| • | The form of the Plan and the terms and conditions of the Acquisition; |
Also, the Directors approved the Plan on behalf of the Select Industries Fund.
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| C. | ||
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| 1. |
Select Equities Fund and Select Industries Fund
The investment objective of each Fund is capital appreciation. While the Funds have differing investment strategies, as described below, essentially all of the investments of the Select Equities Fund are within the screens of the Select Industries Fund so that they are eligible investments. Indeed, approximately 25% of the portfolio of the Select Equities Fund is currently held by the Select Industries Fund. Both Funds adjust their portfolios on a monthly basis, and it is expected that the Select Industries Fund portfolio will be adjusted shortly after the Acquisition in compliance with its regular practices.
Select Equities Fund
The Select Equities Fund utilizes a disciplined, unemotional, quantitative investment approach that is based on the belief that in all market conditions there will exist some companies who are poised to outperform the market. The Fund invests in companies of all sizes and industries as well as in “growth” stocks and “value” stocks.
Select Industries Fund
The Select Industries Fund utilizes a disciplined, unemotional, quantitative investment approach that is based on the belief investors can achieve superior investment performance through group selection. The Fund invests in companies of all sizes and industries as well as in “growth” stocks and “value” stocks.
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The Select Equities Fund and the Select Industries Fund pay advisory fees to the Adviser at the same annual rate of 1.00% of each Fund’s average daily net assets.
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Select Equities Fund
The Select Equities Fund has adopted a Service and Distribution Plan (the “12b-1 Plan”). The 12b-1 Plan was adopted in anticipation that the Select Equities Fund will benefit from the 12b-1 Plan through increased sales of shares, thereby reducing the Fund’s expense ratio and providing the Adviser with greater flexibility in management. The 12b-1 Plan authorizes payments by the Fund in connection with the distribution of its shares at an annual rate, as determined from time to time by the Directors, of up to 0.25% of the Fund’s average daily net assets. Amounts paid under the 12b-1 Plan by the Fund may be spent by the Fund on any activities or expenses primarily intended to result in the sale of shares of the Fund, including but not limited to, advertising, compensation for sales and marketing activities of financial institutions and others such as dealers and distributors, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders and the printing and mailing of sales literature. To the extent any activity is one which the Fund may finance without a plan pursuant to Rule 12b-1, the Fund may also make payments to finance such activity outside of the 12b-1 Plan and not subject to its limitations.
2
Select Industries Fund
The Select Industries Fund has adopted a service plan pursuant to which it may pay fees of up to 0.25% of its average daily net assets to broker-dealers, financial institutions or other service providers that provide services to investors in the Fund. Payments under this plan are authorized by the officers of the Company.
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| The purchase and redemption procedures for the Funds are the same. | ||
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| The exchange procedures for the Funds are the same. | ||
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The Funds have the same service providers, which will continue in their capacity after the Acquisition. | |||
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Each Fund is a series of the Company, which is organized as a Maryland corporation and is governed by its Charter, Bylaws and Maryland law. | |||
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No gain or loss will be recognized by the Select Equities Fund or its shareholders as a result of the Acquisition. The aggregate tax basis of the shares of the Select Industries Fund received by a shareholder of the Select Equities Fund (including any fractional shares to which the shareholder may be entitled) will be the same as the aggregate tax basis of the shareholder’s shares of the Select Equities Fund. The holding period of the shares of the Select Industries Fund received by a shareholder of the Select Equities Fund (including any fractional share to which the shareholder may be entitled) will include the holding period of the shares of the Select Equities Fund held by the shareholder, provided that such shares are held as capital assets by the shareholder of the Select Equities Fund at the time of the Acquisition. The holding period and tax basis of each asset of the Select Equities Fund in the hands of the Select Industries Fund as a result of the Acquisition will be the same as the holding period and tax basis of each such asset in the hands of the Select Equities Fund prior to the Acquisition. Provided that the Select Equities Fund shares surrendered constitute capital assets in the hands of the shareholder, such gain or loss realized by the shareholder will be capital gain or loss upon disposition of the shares. This tax information is based on the advice of Foley & Lardner LLP, counsel to each of the Funds. It is a condition to the closing of the Acquisition that such advice be confirmed in a written opinion of counsel. An opinion of counsel is not binding on the Internal Revenue Service (“IRS”).
As of September 30, 2009, the Select Equities Fund has a capital loss carryforward position of $11,880,723, and the Select Industries Fund has a capital loss carryforward position of $7,081,119. No distribution of capital gains to the Select Equities Fund shareholders prior to the closing of the Acquisition is anticipated. Prior to the closing of the Acquisition, the Company, if necessary, will declare a distribution to shareholders of the Select Equities Fund which, together with all previous distributions, will have the effect of distributing to the Select Equities Fund shareholders all of the Select Equities Fund’s investment company taxable income (computed without regard to the deduction for dividends paid) and net realized capital gains, if any, through the closing.
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A significant portion of the assets of the Select Equities Fund may be sold in connection with the Acquisition. The actual tax impact of such sales will depend on the difference between the price at which such portfolio assets are sold and the Select Equities Fund’s basis in such assets. Any capital gains recognized in these sales will be distributed to the Select Equities Fund’s shareholders as capital gain dividends (to the extent of the excess of net realized long-term capital gains over net realized short-term capital losses) and ordinary dividends (to the extent of net realized short-term capital gains) during or with respect to the year of sale, and such distributions will be taxable to shareholders.
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II. |
Each of the Funds is subject to the following principal risks:
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| • | Market Risk: The prices of the securities, particularly the common stocks, in which the Funds invest may decline for a number of reasons. The price declines of common stocks, in particular, may be steep, sudden and/or prolonged. |
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| • | Foreign Securities Risk: The securities of foreign issuers may be less liquid and more volatile than securities of comparable U.S. issuers. The costs associated with securities transactions are often higher in foreign countries than the U.S. The U.S. dollar value of foreign securities traded in foreign currencies (and any dividends and interest earned) held by the Funds or by mutual funds in which the Funds invest may be affected favorably or unfavorably by changes in foreign currency exchange rates. An increase in the U.S. dollar relative to these other currencies will adversely affect the Funds. Additionally, investments in foreign securities, even those publicly traded in the United States, may involve risks which are in addition to those inherent in domestic investments. Foreign companies may not be subject to the same regulatory requirements of U.S. companies, and as a consequence, there may be less publicly available information about such companies. Also foreign companies may not be subject to uniform accounting, auditing, and financial reporting standards and requirements comparable to those applicable to U.S. companies. Foreign governments and foreign economies often are less stable than the U.S. Government and the U.S. economy. |
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| • | High Portfolio Turnover Risk: The Funds’ annual portfolio turnover rate may exceed 100%. (Generally speaking, a turnover rate of 100% occurs when a Fund replaces securities valued at 100% of its average net assets within a one year period.) High portfolio turnover (100% or more) will result in a Fund incurring more transaction costs such as brokerage commissions or mark-ups or mark-downs. Payment of those transaction costs reduces total return. High portfolio turnover could result in the payment by a Fund’s shareholders of increased taxes on realized gains. Distributions to a Fund’s shareholders to the extent they are short-term capital gains, will be taxed at ordinary income rates for federal income tax purposes, rather than at lower capital gains rates. |
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| • | Quantitative Investment Approach Risk: The Funds utilize a quantitative investment approach. While the Adviser continuously reviews and refines, if necessary, its investment approach, there may be market conditions where the quantitative investment approach performs poorly. |
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COMPARISON FEE TABLE AND EXAMPLE | ||
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| Fee Table |
The Acquisition would result in a reduction in expense ratios for shareholders of the Select Equities Fund. The following table shows the Funds’ expense ratios and pro forma expense ratio of the combined Fund as of September 30, 2009.
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| Total Annual Expense Ratio |
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Leuthold Select Equities Fund | 1.89% |
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Leuthold Select Industries Fund | 1.39% |
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Combined Fund (pro forma) | 1.39% |
As the table indicates, the expense per share would be reduced for the Select Equities Fund by approximately 27% after the Acquisition.
The purpose of the table below is to assist an investor in understanding the various costs and expenses that a shareholder bears directly and indirectly from an investment in the Funds. The table allows you to compare the expenses of each Fund and estimates for the pro forma combined Fund in its first year following the Acquisition.
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| Select |
| Select |
| Combined |
Shareholder Fees |
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Maximum Sales Charge (Load) Imposed on Purchases |
| None |
| None |
| None |
Maximum Deferred Sales Charge (Load) |
| None |
| None |
| None |
Maximum Deferred Sales Charge (Load) Imposed on |
| None |
| None |
| None |
Redemption Fee |
| None 1 |
| None 1 |
| None 1 |
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Exchange Fee |
| None 2 |
| None 2 |
| None 2 |
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Annual Fund Operating Expenses |
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Management Fees |
| 1.00% |
| 1.00% |
| 1.00% |
Distribution (12b-1) Fees |
| 0.25% |
| None |
| None |
Other Expenses (3) |
| 0.64% |
| 0.39% |
| 0.39% |
Service Fees |
| None |
| 0.09% |
| 0.09% |
All Remaining Other Expenses |
| 0.64% |
| 0.30% |
| 0.30% |
Total Annual Fund Operating Expenses |
| 1.89% |
| 1.39% 4 |
| 1.39% |
Reimbursement from Adviser |
| 0.04%4 |
| None |
| None |
Net Expenses |
| 1.85% |
| 1.39% |
| 1.39% |
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(1) | Our transfer agent charges a fee of $15.00 for each wire redemption. |
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(2) | Our transfer agent charges a fee of $5.00 for each telephone exchange. |
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(3) | The Funds indirectly bear a pro rata share of the fees and expenses of each underlying fund in which they invest. Since Acquired Fund Fees and Expenses are not directly borne by a Fund, they are not reflected in the Fund’s financial statements, with the result that the information presented in the expense table may differ from that presented in the financial highlights. The Acquired Fund Fees and Expenses of each Fund were less than 0.01% and are reflected in the Other Expenses of the Fund. |
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(4) | The Fund’s investment adviser has agreed to waive its advisory fee to the extent necessary to insure the Net Expenses (excluding Acquired Fund Fees and Expenses) do not exceed 1.85% of average daily net assets. The investment adviser may recover waived fees in subsequent years. |
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The projected post-Acquisition pro forma Annual Fund Operating Expenses presented above are based upon numerous material assumptions. Although these projections represent good faith estimates, there can be no assurance that any particular level of expenses or expense reductions will be achieved, because expenses depend on a variety of factors, including the future level of Fund assets, many of which are beyond the control of the Funds and the Adviser.
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| Example |
The Examples are to help you compare the cost of investing in each Fund with the cost of investing in the combined Fund on a pro forma combined basis. They assume that you invest $10,000 in a Fund for the time periods indicated and then redeem all of your shares at the end of those periods. They also assume that your investment has a 5% return each year, that a Fund’s operating expenses stay the same and that all dividends and distributions are reinvested.
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| One Year |
| Three Years |
| Five Years |
| Ten Years |
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Leuthold Select Equities |
| $188 |
| $590 |
| $1,018 |
| $2,208 |
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Leuthold Select Industries |
| $142 |
| $440 |
| $ 761 |
| $1,669 |
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Combined Fund (Pro Forma) |
| $142 |
| $440 |
| $ 761 |
| $1,669 |
The projected Examples presented above are based upon numerous material assumptions. Although these projections represent good faith estimates, there can be no assurance that any particular level of expenses or expense reductions will be achieved, because expenses depend on a variety of factors, including the future level of Fund assets, many of which are beyond the control of the Funds and the Adviser.
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THE PROPOSED PLAN AND RESULTING REORGANIZATION | ||
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| Summary of the Proposed Reorganization |
The Plan provides for (1) the transfer of all the assets of the Select Equities Fund to the Select Industries Fund, (2) the assumption by the Select Industries Fund of all the liabilities of the Select Equities Fund, (3) the issuance to shareholders of the Select Equities Fund of shares of the Select Industries Fund, equal in aggregate net asset value (“NAV”) to the NAV of their former shares of the Select Equities Fund in redemption of their shares of the Select Equities Fund, and (4) the termination of the Select Equities Fund.
Shareholders of the Select Equities Fund will not be assessed any sales charges or other shareholder fees in connection with the Acquisition.
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| Terms of the Plan |
As provided in the Plan, the Select Industries Fund will acquire all the assets and assume all the liabilities, expenses and obligations of the Select Equities Fund at the effective time of the Acquisition (the “Effective Time”). In return, the Select Industries Fund will issue, and the Select Equities Fund will distribute to its shareholders, a number of full and fractional shares of the Select Industries Fund, determined by dividing the net value of all the assets of the Select Equities Fund by the NAV of one share of the Select Industries Fund. For this purpose, the Plan provides the times for and methods of determining the net value of the assets of each Fund. The Plan provides that shareholders of the Select Equities Fund will be credited with shares of the Select Industries Fund corresponding to the aggregate NAV of the Select Equities Fund shares that the shareholder holds of record at the Effective Time.
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Following the distribution of the Select Industries Fund shares in full liquidation of the Select Equities Fund, the Select Equities Fund will wind up its affairs and terminate as soon as is reasonably possible after the Acquisition.
The projected expenses of the Acquisition, largely those for legal, accounting and printing, are estimated to total approximately $35,000. The projected expenses will be borne by the Adviser.
Under applicable legal and regulatory requirements, none of the Select Equities Fund’s shareholders will be entitled to exercise objecting shareholders’ appraisal rights, namely, to demand the fair value of their shares in connection with the Acquisition. Therefore, shareholders will be bound by the terms of the Acquisition under the Plan. However, any shareholder of the Select Equities Fund may redeem shares of common stock prior to the Acquisition.
Completion of the Acquisition is subject to certain conditions set forth in the Plan. The Directors may terminate the Plan under certain circumstances. Among other circumstances, the Directors may terminate the Plan upon a determination that proceeding with the Plan is not in the best interests of a Fund or of its shareholders.
A copy of a form of the Plan for the Acquisition is attached as Exhibit A.
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| Description of the Select Industries Shares |
Under the Plan, the Select Industries Fund will issue additional shares of its common stock for distribution to shareholders of the Select Equities Fund. Under the Company’s Charter, the Select Industries Fund may issue up to 250,000,000 shares of common stock, par value $0.0001 per share.
When the Acquisition of the Select Equities Fund by the Select Industries Fund is consummated, shareholders of the Select Equities Fund will receive shares of the Select Industries Fund having an aggregate NAV equal to the aggregate NAV of the shareholder’s shares in the Select Equities Fund.
Each share of the Select Industries Fund represents an equal proportionate interest with other shares of the Fund. Each share has equal earnings, assets, and voting privileges, and is entitled to dividends and other distributions out of the income earned and gain realized on the assets belonging to the Select Industries Fund as authorized by the Directors. Shares of the Select Industries Fund entitle their holders to one vote per full share and fractional votes for fractional shares held.
Shares of the Select Industries Fund received by the Select Equities Fund in the Acquisition will be issued at NAV, without a sales charge, and will be fully paid and non-assessable.
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| Reasons for the Reorganization Considered by the Board |
The Adviser recommended that the Directors approve the proposed Plan and Acquisition. The Directors considered the factors discussed below from the point of view of the interests of the Select Equities Fund and its shareholders. After careful consideration, the Directors (including all Directors who are not “interested persons” of the Funds, the Adviser or its affiliates) determined that the Acquisition would be in the best interests of the Select Equities Fund and that the interests of existing shareholders of the Funds would not be diluted as a result of the Acquisition. The Directors have unanimously approved the Plan and the Acquisition.
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| The Directors considered, among other things: | |
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| • | The Adviser discussed with the Directors that it believes that the Acquisition would benefit the Select Equities Fund and its shareholders by resulting in a lower expense ratio; |
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| • | Potential shareholder benefits, including the fact that, based on September 30, 2009 expense numbers, the pro forma total expense ratio of the combined Fund is expected to be significantly lower than the current expense ratio of the Select Equities Fund; |
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| • | The current asset level of the Select Equities Fund and the combined pro forma asset level of the combined Fund; |
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| • | The historical performance of the Funds; |
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| • | The investment objective and principal investments of the Funds; |
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| • | The form of the Plan and the terms and conditions of the Acquisition; |
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| • | The fact that the Funds have the same advisory contract terms and pay the same advisory fee rates; |
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| • | Whether the Acquisition would result in the dilution of shareholders’ interests; |
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| • | The fact that no changes in service providers would result from the Acquisition; |
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| • | The benefits of the Acquisition to the Adviser, which will benefit from the elimination of separate monitoring and administration of the Select Equities Fund; |
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| • | The fact that the Select Industries Fund will assume all the liabilities, expenses and obligations of the Select Equities Fund; |
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| • | The expected federal income tax consequences of the Acquisition; and |
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| • | The expenses of the Acquisition, and the fact that these would be borne by the Adviser |
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| Also, the Directors approved the Plan on behalf of the Select Industries Fund. | |
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| Federal Income Tax Consequences |
Subject to certain stated assumptions contained therein, the Select Equities Fund will receive an opinion of Foley & Lardner LLP, its counsel, substantially to the following effect: (1) the Acquisition will constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, as amended (the “Code”), and that the Select Equities Fund and the Select Industries Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code; (2) a shareholder of the Select Equities Fund will recognize no gain or loss on the exchange of the shareholder’s shares of the Select Equities Fund; (3) neither the Select Equities Fund nor the Select Industries Fund will recognize any gain or loss upon the transfer of all of the assets of the Select Equities Fund to the Select Industries Fund in exchange for shares of the Select Industries Fund and the assumption by the Select Industries Fund of the liabilities of the Select Equities Fund pursuant to the Plan or upon the distribution of shares of the Select Industries Fund to shareholders of the Select Equities Fund in exchange for their respective shares of the Select Equities Fund; (4) the holding period and tax basis of the assets of the Select Equities Fund acquired by the Select Industries Fund will be the same as the holding period and tax basis that the Select Equities Fund had in such assets immediately prior to the Acquisition; (5) the aggregate tax basis of shares of the Select Industries Fund received in connection with the Acquisition by each shareholder of the Select Equities Fund (including any fractional share to which the shareholder may be entitled) will be the same as the aggregate tax basis of the shares of the Select Equities Fund surrendered in exchange therefor; (6) the holding period of shares of the Select Industries Fund received in connection with the Acquisition by each shareholder of the Select Equities Fund (including any fractional share to which the shareholder may be entitled) will include the holding period of the shares of the Select Equities Fund surrendered in exchange therefore, provided that such the Select Equities Fund shares constitute capital assets in the hands of the shareholder as of the Closing Date; and (7) the Select Industries Fund will succeed to the capital loss carryovers of the Select Equities Fund but the use of the Select Equities Fund’s existing capital loss carryovers (as well as the carryovers of the Select Industries Fund) may be subject to limitation under Section 383 of the Code after the Acquisition. This opinion of counsel will not be binding on the IRS or a court and there is no assurance that the IRS or a court will not take a view contrary to those expressed in the opinion.
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A significant portion of the assets of the Select Equities Fund may be sold in connection with the Acquisition. The actual tax impact of such sales will depend on the difference between the price at which such portfolio assets are sold and the Select Equities Fund’s basis in such assets. Any capital gains recognized in these sales will be distributed to the Select Equities Fund’s shareholders as capital gain dividends (to the extent of the excess of net realized long-term capital gains over net realized short-term capital losses) and ordinary dividends (to the extent of net realized short-term capital gains) during or with respect to the year of sale, and such distributions will be taxable to shareholders.
As of September 30, 2009, the Select Equities Fund has a capital loss carryforward position of $11,880,723, and the Select Industries Fund has a capital loss carryforward position of $7,081,119. No distribution of capital gains to the Select Equities Fund shareholders prior to the closing of the Acquisition is anticipated. Prior to the closing of the Acquisition, the Company, if necessary, will declare a distribution to shareholders of the Select Equities Fund which, together with all previous distributions, will have the effect of distributing to the Select Equities Fund shareholders all of the Select Equities Fund’s investment company taxable income (computed without regard to the deduction for dividends paid) and net realized capital gains, if any, through the closing.
Shareholders of the Select Equities Fund are encouraged to consult their tax advisers regarding the effect, if any, of the Acquisition in light of their individual circumstances. Because the foregoing discussion only relates to the federal income tax consequences of the Acquisition, those shareholders also should consult their tax advisers as to state and local tax consequences, if any, of the Acquisition.
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| Comparison of Shareholder Rights |
The Select Equities Fund and the Select Industries Fund are each a series of the Company, an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”) and organized as a Maryland corporation.
The Maryland General Corporation Law permits registered investment companies, such as the Company, to operate without an annual meeting of shareholders under specified circumstances if an annual meeting is not required by the 1940 Act. The Company has adopted the appropriate provisions in its Bylaws and may, at its discretion, not hold an annual meeting in any year in which the election of directors is not required to be acted on by shareholders under the 1940 Act.
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The Company’s Bylaws also contain procedures for the removal of directors by its shareholders. At any meeting of shareholders, duly called and at which a quorum is present, the shareholders may, by the affirmative vote of the holders of a majority of the votes entitled to be cast thereon, remove any director or directors from office and may elect a successor or successors to fill any resulting vacancies for the unexpired terms of removed directors.
Upon the written request of the holders of shares entitled to not less than ten percent (10%) of all the votes entitled to be cast at such meeting, the Secretary of the Company shall promptly call a special meeting of shareholders for the purpose of voting upon the question of removal of any director. Whenever ten or more shareholders of record who have been such for at least six months preceding the date of application, and who hold in the aggregate either shares having a net asset value of at least $25,000 or at least one percent (1%) of the total outstanding shares, whichever is less, shall apply to the Company’s Secretary in writing, stating that they wish to communicate with other shareholders with a view to obtaining signatures to a request for a meeting as described above and accompanied by a form of communication and request which they wish to transmit, the Secretary shall within five business days after such application either: (1) afford to such applicants access to a list of the names and addresses of all shareholders as recorded on the books of the Company; or (2) inform such applicants as to the approximate number of shareholders of record and the approximate cost of mailing to them the proposed communication and form of request.
If the Secretary elects to follow the course specified in clause (2) of the last sentence of the preceding paragraph, the Secretary, upon the written request of such applicants, accompanied by a tender of the material to be mailed and of the reasonable expenses of mailing, shall, with reasonable promptness, mail such material to all shareholders of record at their addresses as recorded on the books unless within five business days after such tender the Secretary shall mail to such applicants and file with the SEC, together with a copy of the material to be mailed, a written statement signed by at least a majority of the Directors to the effect that in their opinion either such material contains untrue statements of fact or omits to state facts necessary to make the statements contained therein not misleading, or would be in violation of applicable law, and specifying the basis of such opinion.
After opportunity for hearing upon the objections specified in the written statement so filed, the SEC may, and if demanded by the Directors or by such applicants shall, enter an order either sustaining one or more of such objections or refusing to sustain any of them. If the SEC shall enter an order refusing to sustain any of such objections, or if, after the entry of an order sustaining one or more of such objections, the SEC shall find, after notice and opportunity for hearing, that all objections so sustained have been met, and shall enter an order so declaring, the Secretary shall mail copies of such material to all shareholders with reasonable promptness after the entry of such order and the renewal of such tender.
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| Capitalization |
The capitalization of the Select Equities Fund and the Select Industries Fund as of September 30, 2009 and the combined Fund’s pro forma capitalization after giving effect to the Acquisition are set forth in the following table. The table does not show the actual combined aggregate net assets or number of shares of the Select Industries Fund to be issued in connection with the Acquisition, as this will depend upon the net asset value and number of shares outstanding of the Select Equities Fund at the Effective Time.
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| Select Equities Fund |
| Select Industries Fund |
| Pro Forma Combined |
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Aggregate Net Assets |
| $10,076,921 |
| $47,543,360 |
| $57,620,281 |
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Shares Outstanding |
| 1,492,264 |
| 3,708,364 |
| 4,494,395 |
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Net Asset Value Per Share |
| $6.75 |
| $12.82 |
| $12.82 |
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INFORMATION ABOUT THE FUNDS | ||
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| Investment Objective and Investment Strategies |
Select Equities Fund and Select Industries Fund
The investment objective of each Fund is capital appreciation. While the Funds have differing investment strategies, as described below, essentially all of the investments of the Select Equities Fund are within the screens of the Select Industries Fund so that they are eligible investments. Indeed, approximately 25% of the portfolio of the Select Equities Fund is currently held by the Select Industries Fund. Both funds adjust their portfolios on a monthly basis, and it is expected that the Select Industries Fund portfolio will be adjusted shortly after the Acquisition in compliance with its regular practices.
Select Equities Fund
The Select Equities Fund utilizes a disciplined, unemotional, quantitative investment approach that is based on the belief that in all market conditions there will exist some companies who are poised to outperform the market. The Fund invests in companies of all sizes and industries as well as in “growth” stocks and “value” stocks.
In determining which stocks to purchase under the Select Equities Strategy, the Adviser calculates a quantitative index for each security in the universe of stocks it follows that is designed to identify those securities that the Adviser expects are most likely to increase in price or outperform the market (the “Opportunity Index”). In calculating the Opportunity Index, the Adviser considers twelve or more components. Some of the components include fundamental factors (such as price/earnings ratios or growth rates), technical factors (such as price movements) and market factors (such as institutional trading activity or insider buying or selling and the performance of stocks within groups).
The Adviser continuously updates its investment discipline and adjusts the Select Equities Fund’s portfolio as necessary to keep the Select Equities Fund invested in stocks which the Adviser believes are the most attractive.
Select Industries Fund
The Select Industries Fund utilizes a disciplined, unemotional, quantitative investment approach that is based on the belief investors can achieve superior investment performance through group selection. The Fund invests in companies of all sizes and industries as well as in “growth” stocks and “value” stocks.
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Pursuant to the Select Industries Strategy, the Adviser believes that as shifts among industry groups in the equity market have become more dramatic, group selection has become as important as individual stock selection in determining investment performance. The Adviser considers a group to be a collection of stocks whose investment performance tends to be similarly influenced by a variety of factors. The Adviser currently monitors about 150 groups. The major types of groups the Adviser monitors are:
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| • | Traditional Broad Economic Sectors such as Information Technology, Health Care, or Financial Services. |
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| • | Thematic Broad Groups that may bridge a number of industries such as “Inflation Beneficiaries” or “Affluent Consumer”. |
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| • | Industry Specific Groups comprised of narrower themes. Examples include “Airlines,” “Healthcare Facilities” or “Semiconductors”. |
The Adviser continuously updates its investment discipline and adjusts the Fund’s portfolio as necessary to keep the Fund invested in stocks in those groups which the Adviser believes are the most attractive.
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| Advisory Agreements |
The Adviser is the successor to Leuthold & Anderson, Inc., which commenced operations in 1987, and Leuthold, Weeden & Associates, L.P., which commenced operations in 1991, and has been each Fund’s only investment adviser. As the investment adviser to the Funds, the Adviser manages the investment portfolio for each Fund. It makes the decisions as to which securities to buy and which securities to sell.
Pursuant to the investment advisory agreements entered into between the Company and the Adviser with respect to each Fund (the “Advisory Agreements”), the Adviser furnishes continuous investment advisory services to the Funds. The Adviser is controlled by Steven C. Leuthold who is the chief investment officer and the principal shareholder of the managing member of the Adviser. The Adviser supervises and manages the investment portfolio of each Fund and, subject to such policies as the Directors may determine, directs the purchase or sale of investment securities in the day-to-day management of each Fund’s investment portfolio.
Under the Advisory Agreements, the Adviser, at its own expense and without reimbursement from the Funds, furnishes office space and all necessary office facilities, equipment and executive personnel for managing the investments of the Funds and pays salaries and fees of all officers and directors of the Company (except the fees paid to directors who are not interested persons of the Adviser). Each Fund pays all of its expenses not assumed by the Adviser. The Adviser receives an investment advisory fee from each Fund based on such Fund’s average daily net assets at the annual rate of 1.00%.
Each Advisory Agreement continues in effect as long as its continuance is specifically approved at least annually (1) by the Directors or by the vote of a majority (as defined in the 1940 Act) of the outstanding shares of the applicable Fund, and (2) by the vote of a majority of the directors of the Company who are not parties to the Advisory Agreement or interested persons of the Adviser, cast in person at a meeting called for the purpose of voting on such approval. Each Advisory Agreement provides that it may be terminated at any time without the payment of any penalty, by the Directors or by vote of the majority of the applicable Fund’s shareholders on sixty (60) days’ written notice to the Adviser, and by the Adviser on the same notice to the Company, and that it shall be automatically terminated if it is assigned.
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Each Advisory Agreement provides that the Adviser shall not be liable to the Company or its shareholders for anything other than willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties. Each Advisory Agreement also provides that the Adviser and its officers, directors and employees may engage in other businesses, devote time and attention to any other business whether of a similar or dissimilar nature, and render services to others.
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| Performance |
For a discussion of the Select Equities Fund’s performance during the fiscal year ended September 30, 2009, see Exhibit B.
For a discussion of the Select Industries Fund’s performance during the fiscal year ended September 30, 2009, see Exhibit C.
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| Fund Management and Portfolio Managers |
The Directors direct the management of the business and affairs of the Funds. The Directors approve all significant agreements between the respective Fund and persons or companies furnishing services to it, including a Fund’s agreements with the Adviser and the Fund’s custodian, transfer and dividend disbursing agent. The day-to-day operations of a Fund are delegated to its officers and the Adviser, subject to the Fund’s investment objective and policies and to general supervision by the Directors.
Steven C. Leuthold and Matthew B. Paschke, CFA, are the portfolio managers of the Select Equities Fund. Mr. Leuthold is the chief investment officer and a managing member of the Adviser. Mr. Leuthold also has been Chairman and portfolio manager of Leuthold & Anderson, Inc. since its organization in August, 1987, a portfolio manager of Leuthold, Weeden & Associates, L.P. since January, 1991 and Chairman of The Leuthold Group since November, 1981. Mr. Paschke is a portfolio manager of the Adviser and has been a senior analyst of The Leuthold Group since 2000.
Steven C. Leuthold, Eric Bjorgen, CFA, and James E. Floyd, CFA, are the portfolio managers of the Select Industries Fund. Mr. Leuthold is the chief investment officer and a managing member of the Adviser. Mr. Leuthold also has been Chairman and portfolio manager of Leuthold & Anderson, Inc. since its organization in August, 1987, a portfolio manager of Leuthold, Weeden & Associates, L.P. since January, 1991 and Chairman of The Leuthold Group since November, 1981. Mr. Bjorgen is a portfolio manager of the Adviser and has been a senior analyst of The Leuthold Group since 1994. Mr. Floyd is a portfolio manager of the Adviser and has been a senior analyst of The Leuthold Group since November, 1981.
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| Net Asset Value |
The price at which investors purchase shares of a Fund and at which shareholders redeem shares of a Fund is called its net asset value. Each Fund normally calculates its net asset value as of the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on each day the New York Stock Exchange is open for trading. The New York Stock Exchange is closed on holidays and weekends. Each Fund calculates its net asset value based on the market prices of the securities (other than money market instruments) it holds. If market quotations are not available or reliable, each Fund will value securities at their fair value pursuant to procedures established by and under the supervision of the Directors.
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The fair value of a security is the amount which the applicable Fund might reasonably expect to receive upon a current sale. The fair value of a security may differ from the last quoted price and the applicable Fund may not be able to sell a security at the fair value. Market quotations may not be available, for example, if trading in particular securities was halted during the day and not resumed prior to the close of trading on the New York Stock Exchange. Market quotations of foreign securities may not be reliable if events or circumstances that may affect the value of portfolio securities occur between the time of the market quotation and the close of trading on the New York Stock Exchange. The Funds value most money market instruments they hold at their amortized cost. Each Fund processes purchase orders that it receives and accepts and redemption orders that it receives prior to the close of regular trading on a day in which the New York Stock Exchange is open at the net asset value determined later that day. They will process purchase orders that they receive and accept and redemption orders that they receive after the close of regular trading at the net asset value determined at the close of regular trading on the next day the New York Stock Exchange is open.
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| Shares |
For a discussion of the Funds’ shares, including how the shares may be purchased and redeemed, see the Prospectus of the Leuthold Funds, dated January [•], 2009, provided that shares of the Select Equities Fund may no longer be purchased.
The shares of each Fund are fully paid and non-assessable; have no preference as to conversion, exchange, dividends, retirement or other features; and have no preemptive rights. Such shares have non-cumulative voting rights, meaning that the holders of more than 50% of the shares voting for the election of Directors can elect 100% of the Directors if they so choose. Generally shares are voted in the aggregate and not by each Fund, except where class voting rights by Fund is required by Maryland law or the 1940 Act.
The shares of each Fund have the same preferences, limitations and rights, except that all consideration received from the sale of shares of a Fund, together with all income, earnings, profits and proceeds thereof, belong to that Fund and are charged with the liabilities in respect of that Fund and of that Fund’s share of the general liabilities of the Company in the proportion that the total net assets of the Fund bears to the total net assets of all of the Funds. However the Directors may, in their discretion direct that any one or more general liabilities of the Company be allocated among the Funds on a different basis. The net asset value per share of each Fund is based on the assets belonging to that Fund less the liabilities charged to that Fund, and dividends are paid on shares of each Fund only out of lawfully available assets belonging to that Fund. In the event of liquidation or dissolution of the Company, the shareholders of each Fund will be entitled, out of the assets of the Company available for distribution, to the assets belonging to such Fund.
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| Taxes, Dividends and Distributions |
The Funds’ distributions are taxable, and are taxed as ordinary income or capital gains, unless shareholders invest through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account.
The Funds distribute substantially all of their net investment income quarterly and substantially all of their capital gains annually. Shareholders have three distribution options:
Automatic Reinvestment Option — Both dividend and capital gains distributions are reinvested in additional shares of the Funds.
Cash Dividend Option — Dividends are paid in cash and capital gains are reinvested in additional shares of the Funds.
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All Cash Option — Both dividend and capital gains distributions are paid in cash.
Each Fund’s distributions, whether received in cash or additional shares, may be subject to federal and state income tax. These distributions may be taxed as ordinary income (although a portion of each Fund’s dividends may be taxable to investors at the lower rate applicable to dividend income) and capital gains (which may be taxed at different rates depending on the length of time the applicable Fund holds the assets generating the capital gains). The Funds expect that their distributions will consist primarily of long-term and short-term capital gains.
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| Financial Information |
For financial information about the Funds, see the Funds’ Annual Report dated September 30, 2009. The accounting survivor of the Acquisition will be the Select Industries Fund.
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| Distribution Arrangements |
Rafferty Capital Markets, LLC serves as the distributor for the Funds.
Select Equities Fund
The Select Equities Fund has adopted a Service and Distribution Plan (the “12b-1 Plan”). The 12b-1 Plan was adopted in anticipation that the Select Equities Fund will benefit from the 12b-1 Plan through increased sales of shares, thereby reducing the Fund’s expense ratio and providing the Adviser with greater flexibility in management. The 12b-1 Plan authorizes payments by the Fund in connection with the distribution of its shares at an annual rate, as determined from time to time by the Directors, of up to 0.25% of the Fund’s average daily net assets. Amounts paid under the 12b-1 Plan by the Fund may be spent by the Fund on any activities or expenses primarily intended to result in the sale of shares of the Fund, including but not limited to, advertising, compensation for sales and marketing activities of financial institutions and others such as dealers and distributors, shareholder account servicing, the printing and mailing of prospectuses to other than current shareholders and the printing and mailing of sales literature. To the extent any activity is one which the Fund may finance without a plan pursuant to Rule 12b-1, the Fund may also make payments to finance such activity outside of the 12b-1 Plan and not subject to its limitations.
The 12b-1 Plan may be terminated by the Select Equities Fund at any time by a vote of the directors of the Company who are not interested persons of the Company and who have no direct or indirect financial interest in the 12b-1 Plan or any agreement related thereto (the “Rule 12b-1 Directors”) or by a vote of a majority of the outstanding shares of the applicable Select Equities Fund. Any change in the 12b-1 Plan that would materially increase the distribution expenses of a Select Equities Fund provided for in the 12b-1 Plan requires approval of the Directors, including the Rule 12b-1 Directors, and a majority of the Fund’s shareholders.
Select Industries Fund
The Select Industries Fund has adopted a service plan pursuant to which it may pay fees of up to 0.25% of its average daily net assets to broker-dealers, financial institutions or other service providers that provide services to investors in the Fund. Payments under these plans are authorized by the officers of the Company.
The service plan may be terminated by the Select Industries Fund at any time upon a vote of the directors of the Company who are not interested persons of the Company and who have no direct or indirect financial interest in the plans, and will be terminated if its continuance is not approved at least annually by such directors.
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The Directors review quarterly the amount and purposes of expenditures pursuant to the service plans as reported to it by the officers of the Company.
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ADDITIONAL INFORMATION |
Additional information about the Funds is available in the SAI. The SAI and each Fund’s Annual Report dated September 30, 2009, which contains audited financial statements for the Funds’ fiscal year, are incorporated by reference into this Prospectus. In addition, the Additional Disclosure Documents are also incorporated by reference into the Prospectus.
The Additional Disclosure Documents and the Annual and Semi-Annual Reports of the Funds are all available to shareholders without charge, simply by calling U.S. Bancorp Fund Services, LLC at 1-800-273-6886. The Funds also make available the Additional Disclosure Documents and the Annual and Semi-Annual Reports, free of charge, on their Internet website (http://www.leutholdfunds.com).
All of this information is also available in documents filed with the SEC. You may view or obtain these documents from the SEC:
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| • | In person: at the SEC’s Public Reference Room in Washington, D.C. |
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| • | By phone: 1-202-551-8090 (for information on the operations of the Public Reference Room only) |
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| • | By mail: Public Reference Section, Securities and Exchange Commission, Washington, D.C. 20549-0102 (duplicating fee required) |
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| • | By electronic mail: publicinfo@sec.gov (duplicating fee required) |
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| • | On the Internet: www.sec.gov |
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MISCELLANEOUS INFORMATION | ||
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| Legal Matters |
The validity of the issuance of shares of the Select Industries Fund will be passed upon by Foley & Lardner LLP, Milwaukee, Wisconsin.
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| Experts |
The audited financial statements and financial highlights in the Prospectus and the SAI have been included in reliance on the report of Ernst & Young LLP, 220 South Sixth Street, Suite 1400, Minneapolis, Minnesota 55402, the independent registered public accounting firm for each of the Funds, given on their authority as experts in auditing and accounting.
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| Service Providers |
Administrator
The administrator to the Company is U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 (the “Administrator”). Pursuant to a Fund Administration Servicing Agreement entered into between the Company and the Administrator (the “Administration Agreement”), the Administrator prepares and maintains the books, accounts and other documents required by the 1940 Act, responds to shareholder inquiries, prepares each Fund’s financial statements and tax returns, prepares certain reports and filings with the SEC and with state blue sky authorities, furnishes statistical and research data, clerical, accounting and bookkeeping services and stationery and office supplies, keeps and maintains each Fund’s financial and accounting records and generally assists in all aspects of each Fund’s operations. The Administrator, at its own expense and without reimbursement from the Funds, furnishes office space and all necessary office facilities, equipment and executive personnel for performing the services required to be performed by it under the Administration Agreement. For the foregoing, the Administrator receives from the Funds a fee, paid monthly at an annual rate of 0.04% of the first $1,500,000,000 of the Funds’ average net assets, 0.03% of the next $1,500,000,000 of the Funds’ average net assets, 0.02% of the next $1,500,000,000 of the Funds’ average net assets and 0.015% of the Funds’ average net assets in excess of $4,500,000,000. Notwithstanding the foregoing, the minimum annual fee payable to the Administrator is $210,000.
The Administration Agreement will remain in effect until terminated by either party. The Administration Agreement may be terminated at any time, without the payment of any penalty, by the Directors upon the giving of ninety (90) days’ written notice to the Administrator, or by the Administrator upon the giving of ninety (90) days’ written notice to the Company.
Under the Administration Agreement, the Administrator is required to exercise reasonable care and is not liable for any error or judgment or mistake of law or for any loss suffered by the Company in connection with its performance under the Administration Agreement, except a loss resulting from willful misfeasance, bad faith or negligence on the part of the Administrator in the performance of its duties under the Administration Agreement.
Custodian
U.S. Bank, N.A., an affiliate of U.S. Bancorp Fund Services, LLC, serves as custodian of the Funds’ assets pursuant to Custody Agreement. Under the Custody Agreement, U.S. Bank, N.A. has agreed to (i) maintain a separate account in the name of each Fund, (ii) make receipts and disbursements of money on behalf of each Fund, (iii) collect and receive all income and other payments and distributions on account of each Fund’s portfolio investments, (iv) respond to correspondence from shareholders, security brokers and others relating to its duties, and (v) make periodic reports to each Fund concerning such Fund’s operations. U.S. Bank, N.A. does not exercise any supervisory function over the purchase and sale of securities. The Bank of New York Mellon, headquartered in New York, serves as a sub-custodian of the global assets of the Funds.
Transfer Agent
U.S. Bancorp Fund Services, LLC serves as transfer agent and dividend disbursing agent for the Funds under a Transfer Agent Servicing Agreement. As transfer and dividend disbursing agent, U.S. Bancorp Fund Services, LLC has agreed to (i) issue and redeem shares of each Fund, (ii) make dividend and other distributions to shareholders of each Fund, (iii) respond to correspondence by Fund shareholders and others relating to its duties, (iv) maintain shareholder accounts, and (v) make periodic reports to each Fund.
17
Fund Accounting Servicing Agent
In addition, the Company has entered into a Fund Accounting Servicing Agreement with U.S. Bancorp Fund Services, LLC pursuant to which U.S. Bancorp Fund Services, LLC has agreed to maintain the financial accounts and records of each Fund and provide other accounting services to the Funds. For its accounting services, U.S. Bancorp Fund Services, LLC is entitled to receive fees, payable monthly from the Funds at an annual rate of 0.015% for the first $1 billion of average net assets and .0005% of average net assets exceeding $1 billion. Notwithstanding the foregoing, the minimum annual fee payable for accounting services is $140,000. U.S. Bancorp Fund Services, LLC is also entitled to certain out of pocket expenses, including pricing expenses.
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| By Order of the Board of Directors of |
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January [•], 2010 |
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18
LEUTHOLD FUNDS, INC.
FORM OF PLAN OF ACQUISITION AND LIQUIDATION
This Plan of Acquisition and Liquidation (this “Plan”) has been adopted by the Board of Directors of Leuthold Funds, Inc., a Maryland corporation (the “Corporation”), as of this ____ day of January, 2010, to provide for the reorganization of the Leuthold Select Equities Fund (the “Acquired Portfolio”) into the Leuthold Select Industries Fund (the “Acquiring Portfolio”). The Acquired Portfolio and the Acquiring Portfolio (each a “Portfolio”, and, together, the “Portfolios”) are each separate series of the Corporation, an open-end management investment company registered with the Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Corporation’s Board of Directors (the “Board”) has determined that it is in the best interest of the stockholders of the Acquiring Portfolio and the Acquired Portfolio (“Stockholders”) that the Acquired Portfolio transfer all of the assets attributable to the shares of common stock held by its Stockholders in exchange for shares of common stock of equal net asset value of the Acquiring Portfolio (“Acquisition Shares”), to be distributed to the Acquired Portfolio’s Stockholders, and that the Corporation redeem the outstanding shares (the “Acquired Portfolio Shares”) of the Acquired Portfolio, all as provided for below (the “Acquisition”). In this Plan, any references to a Portfolio taking action shall mean and include all necessary actions of the Corporation on behalf of a Portfolio, unless the context of this Plan or the 1940 Act requires otherwise. The Corporation intends that the Acquisition qualify as a “reorganization” within the meaning of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”), and any successor provisions, and that with respect to the Acquisition, the Acquiring Portfolio and the Acquired Portfolio will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code.
1. Definitions. In addition to the terms elsewhere defined herein, each of the following terms shall have the meaning indicated for that term as follows:
“1933 Act” shall mean the Securities Act of 1933, as amended.
“Assets” shall mean all assets of any kind and all interests, rights, privileges and powers of or attributable to the Acquired Portfolio or its shares, as appropriate, whether or not determinable at the Effective Time (as defined herein) and wherever located, including, without limitation, all cash, cash equivalents, securities, claims (whether absolute or contingent, known or unknown, accrued or unaccrued or conditional or unmatured), contract rights and receivables (including dividend and interest receivables) owned by the Acquired Portfolio or attributable to its shares and any deferred or prepaid expense, other than unamortized organizational expenses, shown as an asset on the Acquired Portfolio’s books.
“Closing Date” shall mean such date as the officers of the Corporation shall designate.
“Effective Time” shall mean 5:00 p.m., Eastern Time, on the Closing Date, or such other time as the officers of the Corporation shall designate.
“Financial Statements” shall mean the audited financial statements of the relevant Portfolio for its most recently completed fiscal year and, if applicable, the unaudited financial statements of that Portfolio for its most recently completed semi-annual period.
A-1
“Liabilities” shall mean all liabilities, expenses and obligations of any kind whatsoever of the Acquired Portfolio, whether known or unknown, accrued or unaccrued, absolute or contingent or conditional or unmatured.
“N-14 Registration Statement” shall mean the Registration Statement of the Acquiring Portfolio on Form N-14 under the 1940 Act that will register the Acquisition Shares to be issued in the Acquisition.
“Valuation Time” shall mean the close of regular session trading on the New York Stock Exchange (“NYSE”) on the Closing Date, when for purposes of this Plan, the Corporation determines the net asset value per Acquisition Share of the Acquiring Portfolio and the net value of the assets of the Acquired Portfolio.
“NAV” shall mean a Portfolio’s net asset value, which is calculated by valuing and totaling assets and then subtracting liabilities and then dividing the balance by the number of shares that are outstanding.
2. Regulatory Filings. The Acquiring Portfolio shall promptly prepare and file the N-14 Registration Statement with the SEC, and the Acquiring Portfolio and the Acquired Portfolio also shall make any other required or appropriate filings with respect to the actions contemplated hereby.
3. Transfer of the Acquired Portfolio’s Assets. The Acquiring Portfolio and the Acquired Portfolio shall take the following steps with respect to the Acquisition, as applicable:
(a) On or prior to the Closing Date, the Acquired Portfolio shall pay or provide for the payment of all of the Liabilities, expenses, costs and charges of or attributable to the Acquired Portfolio that are known to the Acquired Portfolio and that are due and payable prior to or as of the Closing Date.
(b) Prior to the Effective Time, except to the extent prohibited by Rule 19b-1 under the 1940 Act, the Acquired Portfolio will declare to the Acquired Portfolio’s Stockholders of record a dividend or dividends which, together with all previous such dividends, shall have the effect of distributing (a) all the excess of (1) the Acquired Portfolio’s investment income excludable from gross income under Section 103(a) of the Code over (2) the Acquired Portfolio’s deductions disallowed under Sections 265 and 171(a)(2) of the Code, (b) all of the Acquired Portfolio’s investment company taxable income (as defined in Code Section 852), (computed in each case without regard to any deduction for dividends paid), and (c) all of the Acquired Portfolio’s net realized capital gain (as defined in Code Section 1222), if any (after reduction for any capital loss carryover), for the taxable year ending on September 30, 2009 and for the short taxable year beginning on October 1, 2009, and ending on the Closing Date. Such dividends will be declared and paid to ensure continued qualification of the Acquired Portfolio as a “regulated investment company” for tax purposes and to eliminate fund- level tax.
(c) At the Effective Time, the Acquired Portfolio shall assign, transfer, deliver and convey the Assets to the Acquiring Portfolio, subject to the Liabilities, and the Acquiring Portfolio shall then accept the Assets and assume the Liabilities such that at and after the Effective Time (1) the Assets shall become and be assets of the Acquiring Portfolio, and (2) the Liabilities shall attach to the Acquiring Portfolio, and shall be enforceable against the Acquiring Portfolio to the same extent as if initially incurred by the Acquiring Portfolio. The Corporation shall redeem the outstanding shares of the Acquired Portfolio by issuance of shares of the Acquiring Portfolio as described more fully below.
A-2
(d) Within a reasonable time prior to the Closing Date, the Acquired Portfolio shall provide, if requested, a list of the Assets to the Acquiring Portfolio. The Acquired Portfolio may sell any asset on such list prior to the Effective Time. After the Acquired Portfolio provides such list, the Acquired Portfolio will not acquire any additional securities or permit to exist any encumbrances, rights, restrictions or claims not reflected on such list, without the approval of the Acquiring Portfolio. Within a reasonable time after receipt of the list and prior to the Closing Date, the Acquiring Portfolio will advise the Acquired Portfolio in writing of any investments shown on the list that the Acquiring Portfolio has determined to be inconsistent with its investment objective, policies and restrictions. The Acquired Portfolio will dispose of any such securities prior to the Closing Date to the extent practicable and consistent with applicable legal requirements, including the Acquired Portfolio’s investment objectives, policies and restrictions. In addition, if the Acquiring Portfolio determines that, as a result of the Acquisition, the Acquiring Portfolio would own an aggregate amount of an investment that would exceed a percentage limitation applicable to the Acquiring Portfolio, the Acquiring Portfolio will advise the Acquired Portfolio in writing of any such limitation and the Acquired Portfolio shall dispose of a sufficient amount of such investment as may be necessary to avoid the limitation as of the Effective Time, to the extent practicable and consistent with applicable legal requirements, including the Acquired Portfolio’s investment objectives, policies and restrictions.
(e) The Acquired Portfolio shall assign, transfer, deliver and convey the Assets to the Acquiring Portfolio at the Effective Time on the following basis: (1) The value of the Assets less the Liabilities of the Acquired Portfolio attributable to shares of common stock held by its Stockholders, determined as of the Valuation Time, shall be divided by the then NAV of Acquisition Shares of common stock, as applicable, and, in exchange for the transfer of the Assets, the Acquiring Portfolio shall simultaneously issue and deliver to the Acquired Portfolio the number of Acquisition Shares of common stock (including fractional shares) so determined, rounded to the second decimal place or such other decimal place as the officers of the Corporation shall designate; (2) The NAV of Acquisition Shares of common stock to be delivered to the Acquired Portfolio shall be determined as of the Valuation Time in accordance with the Acquiring Portfolio’s then applicable valuation procedures, and the net value of the Assets to be conveyed to the Acquiring Portfolio shall be determined as of the Valuation Time in accordance with the then applicable valuation procedures of the Acquired Portfolio; and (3) the portfolio securities of the Acquired Portfolio shall be made available by the Acquired Portfolio to U.S. Bank National Association, as custodian for the Acquiring Portfolio (the “Custodian”), for examination no later than five business days preceding the Valuation Time. On the Closing Date, such portfolio securities and all the Acquired Portfolio’s cash shall be delivered by the Acquired Portfolio to the Custodian for the account of the Acquiring Portfolio, such portfolio securities to be duly endorsed in proper form for transfer in such manner and condition as to constitute good delivery thereof in accordance with the custom of brokers or, in the case of portfolio securities held in the U.S. Treasury Department’s book-entry system or by The Depository Trust Company, Participants Trust Company or other third party depositories, by transfer to the account of the Custodian in accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7, as the case may be, under the 1940 Act and accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. The cash delivered shall be in the form of currency or certified or official bank checks, payable to the order of the Custodian, or shall be wired to an account pursuant to instructions provided by the Acquiring Portfolio.
A-3
(f) Promptly after the Closing Date, the Acquired Portfolio will deliver to the Acquiring Portfolio a Statement of Assets and Liabilities of the Acquired Portfolio as of the Closing Date.
4. Termination of the Acquired Portfolio, Registration of Acquisition Shares and Access to Records. The Acquired Portfolio and the Acquiring Portfolio also shall take the following steps, as applicable:
(a) At or as soon as reasonably practical after the Effective Time, the Acquired Portfolio shall terminate by transferring pro rata to its Stockholders of record Acquisition Shares received by the Acquired Portfolio pursuant to Section 3(e)(1) of this Plan. The Acquiring Portfolio shall establish accounts on its share records and note on such accounts the names of the former Acquired Portfolio Stockholders and the types and amounts of the Acquisition Shares that former Acquired Portfolio Stockholders are due based on their respective holdings of the Acquired Portfolio Shares as of the close of business on the Closing Date. Fractional Acquisition Shares shall be carried to the second decimal place. The Acquiring Portfolio shall not issue certificates representing the Acquisition Shares in connection with such exchange. All issued and outstanding Acquired Portfolio Shares will be simultaneously redeemed and cancelled on the books of the Acquired Portfolio. Ownership of the Acquisition Shares will be shown on the books of the Acquiring Portfolio’s transfer agent. Following distribution by the Acquired Portfolio to its Stockholders of all Acquisition Shares delivered to the Acquired Portfolio, the Acquired Portfolio shall wind up its affairs and shall take all steps as are necessary and proper to terminate as soon as is reasonably possible after the Effective Time.
(b) At and after the Closing Date, the Acquired Portfolio shall provide the Acquiring Portfolio and its transfer agent with immediate access to: (1) all records containing the names, addresses and taxpayer identification numbers of all of the Acquired Portfolio’s Stockholders and the number and percentage ownership of the outstanding shares of the Acquired Portfolio owned by Stockholders as of the Effective Time, and (2) all original documentation (including all applicable Internal Revenue Service forms, certificates, certifications and correspondence) relating to the Acquired Portfolio Stockholders’ taxpayer identification numbers and their liability for or exemption from back-up withholding. The Acquired Portfolio shall preserve and maintain, or shall direct its service providers to preserve and maintain, records with respect to the Acquired Portfolio as required by Section 31 of, and Rules 31a-1 and 31a-2 under, the 1940 Act.
5. Conditions to Consummation of the Acquisition. The consummation of the Acquisition shall be subject to the following conditions precedent:
(a) There shall have been no material adverse change in the financial condition, results of operations, business, properties or assets of the Acquiring Portfolio or the Acquired Portfolio since the date of the most recent Financial Statements. Negative investment performance shall not be considered a material adverse change.
A-4
(b) The Corporation shall have received an opinion of Foley & Lardner LLP, substantially to the effect that for federal income tax purposes: (1) The Acquisition will constitute a “reorganization” within the meaning of Section 368(a) of the Code and that the Acquiring Portfolio and the Acquired Portfolio will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code; (2) A Stockholder of the Acquired Portfolio will recognize no gain or loss on the exchange of the Stockholder’s shares of the Acquired Portfolio solely for Acquisition Shares; (3) Neither the Acquired Portfolio nor the Acquiring Portfolio will recognize any gain or loss upon the transfer of all of the Assets to the Acquiring Portfolio in exchange for Acquisition Shares and the assumption by the Acquiring Portfolio of the Liabilities pursuant to this Plan or upon the distribution of Acquisition Shares to Stockholders of the Acquired Portfolio in exchange for their respective shares of the Acquired Portfolio; (4) The holding period and tax basis of the Assets acquired by the Acquiring Portfolio will be the same as the holding period and tax basis that the Acquired Portfolio had in such Assets immediately prior to the Acquisition; (5) The aggregate tax basis of Acquisition Shares received in connection with the Acquisition by each Stockholder of the Acquired Portfolio (including any fractional share to which the Stockholder may be entitled) will be the same as the aggregate tax basis of the shares of the Acquired Portfolio surrendered in exchange therefor, and increased by any gain recognized on the exchange; (6) The holding period of Acquisition Shares received in connection with the Acquisition by each Stockholder of the Acquired Portfolio (including any fractional share to which the stockholder may be entitled) will include the holding period of the shares of the Acquired Portfolio surrendered in exchange therefor, provided that such Acquired Portfolio Shares constitute capital assets in the hands of the Stockholder as of the Closing Date; and (7) The Acquiring Portfolio will succeed to the capital loss carryovers of the Acquired Portfolio but the use of the Acquiring Portfolio’s existing capital loss carryovers (as well as the carryovers of the Acquired Portfolio) may be subject to limitation under Section 383 of the Code after the Acquisition. The opinion will be based on certain factual certifications made by officers of the Portfolios and will also be based on customary assumptions and subject to certain qualifications. The opinion is not a guarantee that the tax consequences of the Acquisition will be as described above. Notwithstanding this subparagraph (b), Foley & Lardner LLP will express no view with respect to the effect of the Acquisition on any transferred asset as to which any unrealized gain or loss is required to be recognized at the end of a taxable year (or on the termination or transfer thereof) under federal income tax principles. Each Portfolio shall provide additional factual representations to Foley & Lardner LLP with respect to the Portfolios that are reasonably necessary to enable Foley & Lardner LLP to deliver the tax opinion. Notwithstanding anything in this Plan to the contrary, neither Portfolio may waive in any material respect the conditions set forth under this subparagraph (b).
(c) The N-14 Registration Statement shall have become effective under the 1933 Act as to the Acquisition Shares, and the SEC shall not have instituted and, to the knowledge of the Acquiring Portfolio, is not contemplating instituting any stop order suspending the effectiveness of the N-14 Registration Statement.
(d) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with the Acquisition.
(e) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Acquisition under Section 25(c) of the 1940 Act.
A-5
6. Closing.
(a) The Closing shall be held at the offices of the Corporation, 33 South Sixth Street, Suite 4600, Minneapolis, Minnesota 55402, or at such other place as the officers of the Corporation may designate.
(b) In the event that at the Valuation Time (i) the NYSE shall be closed to trading or trading thereon shall be restricted, or (ii) trading or the reporting of trading on said Exchange or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Acquired Portfolio or the Acquiring Portfolio is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored; provided that if trading shall not be fully resumed and reporting restored within three business days of the Valuation Time, this Plan may be terminated by the Board.
(c) The Acquiring Portfolio will provide to the Acquired Portfolio evidence satisfactory to the Acquired Portfolio that Acquisition Shares issuable pursuant to the Acquisition have been credited to the Acquired Portfolio’s account on the books of the Acquiring Portfolio. After the Closing Date, the Acquiring Portfolio will provide to the Acquired Portfolio evidence satisfactory to the Acquired Portfolio that such shares have been credited pro rata to open accounts in the names of the Acquired Portfolio Stockholders.
(d) At the Closing, each party shall deliver to the other such bills of sale, instruments of assumption of liabilities, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request in connection with the transfer of assets, assumption of liabilities and liquidation contemplated by this Plan.
7. Termination of Plan. A majority of the Board may terminate this Plan before the applicable Effective Time if: (i) any of the conditions precedent set forth herein are not satisfied; or (ii) the Board determines that the consummation of the Acquisition is not in the best interests of either Portfolio or its Stockholders.
8. Termination of the Acquired Portfolio. If the Acquisition is consummated, the Acquired Portfolio shall terminate its registration under the 1940 Act and the 1933 Act and will terminate.
9. Expenses. The Acquisition expenses shall be borne by Leuthold Weeden Capital Management.
A-6
LEUTHOLD SELECT EQUITIES FUND PERFORMANCE
The bar charts and tables that follow provide some indication of the risks of investing in the Leuthold Select Equities Fund by showing changes in its performance from year to year and how its average annual returns over various periods compare to the performance of various indices. Please remember that the Fund’s past performance (before and after taxes) is not necessarily an indication of its future performance. It may perform better or worse in the future.
Leuthold Select Equities Fund
Total Return
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(1) | The after-tax returns are calculated using the historical highest individual marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. The Fund’s return after taxes on distributions and sale of Fund shares may be higher than its return before taxes and after taxes on distributions because it may include a tax benefit resulting from the capital losses that would have been incurred. |
(2) | The S&P 500 (Standard & Poor’s Composite Index of 500 Stocks) is a widely recognized unmanaged capitalization-weighted index of stock prices. |
(3) | The Russell 2000 is an index comprised of 2,000 publicly traded small capitalization common stocks that are ranked in terms of capitalization below the large and mid-range capitalization sectors of the United States equity market. |
(4) | Reflects no deduction for fees, expenses or taxes. |
B-1
LEUTHOLD SELECT INDUSTRIES FUND PERFORMANCE
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The bar charts and tables that follow provide some indication of the risks of investing in the Leuthold Select Industries Fund by showing changes in its performance from year to year and how its average annual returns over various periods compare to the performance of various indices. Please remember that the Fund’s past performance (before and after taxes) is not necessarily an indication of its future performance. It may perform better or worse in the future. |
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Note: During the nine year period shown on the bar chart, the Fund’s highest total return for a quarter was _______% (quarter ended ______________) and the lowest total return for a quarter was _________% (quarter ended ______________). |
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(1) | The after-tax returns are calculated using the historical highest individual marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Fund’s return after taxes on distributions and sale of Fund shares may be higher than its return before taxes and after taxes on distributions because it may include a tax benefit resulting from the capital losses that would have resulted. | |
(2) | The S&P 500 (Standard & Poor’s Composite Index of 500 Stocks) is a widely recognized unmanaged capitalization-weighted index of stock prices. | |
(3) | The Russell 2000 is an index comprised of 2,000 publicly traded small capitalization common stocks that are ranked in terms of capitalization below the large and mid-range capitalization sectors of the United States equity market. | |
(4) | Reflects no deduction for fees, expenses or taxes. |
C-1
PRELIMINARY AND SUBJECT TO CHANGE,
DATED DECEMBER 29, 2009
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STATEMENT OF ADDITIONAL INFORMATION
January [•], 2010
Acquisition of the Assets and Assumption of the Liabilities of
Leuthold Select Equities Fund
By, and in Exchange for Shares of,
Leuthold Select Industries Fund
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This Statement of Additional Information is not a prospectus and should be read in conjunction with the Prospectus dated January [•], 2010 relating to the acquisition of the assets and liabilities of the Leuthold Select Equities Fund (the “Select Equities Fund”), a series of Leuthold Funds, Inc. (the “Company”), by the Leuthold Select Industries Fund (the “Select Industries Fund”), another series of the Company. The acquisition will be effected pursuant to that certain Plan of Acquisition and Liquidation dated as of January [•], 2010 (the “Plan”). The Plan provides for (1) the transfer of all the assets of the Select Equities Fund to the Select Industries Fund, (2) the assumption by the Select Industries Fund of all the liabilities of the Select Equities Fund, (3) the issuance to shareholders of the Select Equities Fund of shares of the Select Industries Fund, equal in aggregate net asset value (“NAV”) to the NAV of their former shares of the Select Equities Fund in redemption of their shares of the Select Equities Fund, and (4) the termination of the Select Equities Fund.
Copies of the Prospectus, which has been filed with the Securities and Exchange Commission (“SEC”), may be obtained, without charge, by writing to Leuthold Funds, Inc., 33 South Sixth Street, Suite 4600, Minneapolis, Minnesota 55402, Attention: Corporate Secretary, or by calling 1-800-273-6886.
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TABLE OF CONTENTS
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ADDITIONAL INFORMATION ABOUT THE FUNDS
The following documents have been filed with the SEC and are incorporated by reference into this Statement of Additional Information, which means that they are legally considered to be a part of this Statement of Additional Information:
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| • | The current Statement of Additional Information of the Leuthold Funds (filed January [•], 2010, Accession Number [•]). |
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| • | The current Annual Report of the Leuthold Funds, for the fiscal year ended September 30, 2009 (filed January [•], 2010, Accession Number [•]). |
B-3
PRO FORMA FINANCIAL INFORMATION
Introductory Note to Unaudited Pro Forma Financial Statements
The following unaudited pro forma information gives effect to the proposed transfer of the assets and liabilities of the Select Equities Fund to the Select Industries Fund, accounted for as if the acquisition had occurred as of and for the year ended September 30, 2009. Under generally accepted accounting principles, the Select Industries Fund will be the surviving entity for accounting purposes with its historical cost of investment securities and results of operations being carried forward.
The pro forma financial information should be read in conjunction with the historical financial statements and notes thereto of the Select Equities Fund and the Select Industries Fund incorporated by reference into this Statement of Additional Information.
The pro forma financial information has been adjusted to reflect the advisory fee arrangement for the surviving entity. Certain other operating costs have also been adjusted to reflect anticipated expenses of the combined entity. Other costs which may change as a result of the proposed acquisition are currently undeterminable.
B-4
Leuthold Select Industries Fund
Pro Forma
Schedule of Investments
September 30, 2009
(Unaudited)
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COMMON STOCKS |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMR Corp. (a) |
|
|
| - |
| $ | - |
|
| 212,257 |
| $ | 1,687,443 |
|
| 212,257 |
| $ | 1,687,443 |
|
Continental Airlines, Inc. (a) |
|
|
| - |
|
| - |
|
| 90,853 |
|
| 1,493,624 |
|
| 90,853 |
|
| 1,493,624 |
|
Delta Air Lines Inc. (a) |
|
|
| - |
|
| - |
|
| 146,742 |
|
| 1,314,808 |
|
| 146,742 |
|
| 1,314,808 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 4,495,875 |
|
|
|
|
| 4,495,875 |
|
Auto Components |
| 0.92 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exide Technologies (a) |
|
|
| - |
|
| - |
|
| 66,371 |
|
| 528,977 |
|
| 66,371 |
|
| 528,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverages |
| 0.37 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Coca-Cola Co. |
|
|
| 3,956 |
|
| 212,437 |
|
| - |
|
| - |
|
| 3,956 |
|
| 212,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biotechnology |
| 9.16 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acorda Therapeutics, Inc. (a) |
|
|
| - |
|
| - |
|
| 8,249 |
|
| 192,037 |
|
| 8,249 |
|
| 192,037 |
|
Alkermes, Inc. (a) |
|
|
| - |
|
| - |
|
| 35,950 |
|
| 330,380 |
|
| 35,950 |
|
| 330,380 |
|
Allos Therapeutics, Inc. (a) |
|
|
| - |
|
| - |
|
| 10,937 |
|
| 79,293 |
|
| 10,937 |
|
| 79,293 |
|
Arena Pharmaceuticals, Inc. (a) |
|
|
| - |
|
| - |
|
| 53,012 |
|
| 236,964 |
|
| 53,012 |
|
| 236,964 |
|
Ariad Pharmaceuticals, Inc. (a) |
|
|
| - |
|
| - |
|
| 7,879 |
|
| 17,491 |
|
| 7,879 |
|
| 17,491 |
|
Cubist Pharmaceuticals, Inc. (a) |
|
|
| - |
|
| - |
|
| 30,899 |
|
| 624,160 |
|
| 30,899 |
|
| 624,160 |
|
Dendreon Corp. (a) |
|
|
| - |
|
| - |
|
| 47,313 |
|
| 1,324,291 |
|
| 47,313 |
|
| 1,324,291 |
|
Dyax Corp. (a) |
|
|
| - |
|
| - |
|
| 44,517 |
|
| 159,816 |
|
| 44,517 |
|
| 159,816 |
|
Emergent Biosolutions, Inc. (a) |
|
|
| - |
|
| - |
|
| 7,088 |
|
| 125,174 |
|
| 7,088 |
|
| 125,174 |
|
Genomic Health, Inc. (a) |
|
|
| - |
|
| - |
|
| 2,652 |
|
| 57,973 |
|
| 2,652 |
|
| 57,973 |
|
Geron Corp. (a) |
|
|
| - |
|
| - |
|
| 45,807 |
|
| 300,494 |
|
| 45,807 |
|
| 300,494 |
|
GTX, Inc. (a) |
|
|
| - |
|
| - |
|
| 5,664 |
|
| 72,499 |
|
| 5,664 |
|
| 72,499 |
|
Halozyme Therapeutics, Inc. (a) |
|
|
| - |
|
| - |
|
| 16,699 |
|
| 118,730 |
|
| 16,699 |
|
| 118,730 |
|
Isis Pharmaceuticals, Inc. (a) |
|
|
| - |
|
| - |
|
| 17,242 |
|
| 251,216 |
|
| 17,242 |
|
| 251,216 |
|
Martek Biosciences Corp. |
|
|
| - |
|
| - |
|
| 10,692 |
|
| 241,532 |
|
| 10,692 |
|
| 241,532 |
|
Orexigen Therapeutics, Inc. (a) |
|
|
| - |
|
| - |
|
| 28,340 |
|
| 279,149 |
|
| 28,340 |
|
| 279,149 |
|
PDL BioPharma, Inc. |
|
|
| - |
|
| - |
|
| 19,386 |
|
| 152,762 |
|
| 19,386 |
|
| 152,762 |
|
Rigel Pharmaceuticals, Inc. (a) |
|
|
| - |
|
| - |
|
| 13,769 |
|
| 112,906 |
|
| 13,769 |
|
| 112,906 |
|
Seattle Genetics Inc. (a) |
|
|
| - |
|
| - |
|
| 15,527 |
|
| 217,844 |
|
| 15,527 |
|
| 217,844 |
|
Sinovac Biotech Ltd. (a)(c) |
|
|
| - |
|
| - |
|
| 46,008 |
|
| 381,406 |
|
| 46,008 |
|
| 381,406 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 5,276,117 |
|
|
|
|
| 5,276,117 |
|
Capital Markets |
| 3.09 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Suisse Group - ADR |
|
|
| - |
|
| - |
|
| 9,815 |
|
| 546,205 |
|
| 9,815 |
|
| 546,205 |
|
Deutsche Bank AG (c) |
|
|
| - |
|
| - |
|
| 16,066 |
|
| 1,233,387 |
|
| 16,066 |
|
| 1,233,387 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 1,779,592 |
|
|
|
|
| 1,779,592 |
|
Chemicals |
| 0.44 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NewMarket Corp. |
|
|
| 2,726 |
|
| 253,627 |
|
| - |
|
| - |
|
| 2,726 |
|
| 253,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks |
| 8.80 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco Santander Central Hispano SA - ADR |
|
|
| - |
|
| - |
|
| 34,928 |
|
| 564,087 |
|
| 34,928 |
|
| 564,087 |
|
Bank of Montreal Que (c) |
|
|
| - |
|
| - |
|
| 9,016 |
|
| 456,570 |
|
| 9,016 |
|
| 456,570 |
|
Barclays PLC - ADR (a) |
|
|
| - |
|
| - |
|
| 43,562 |
|
| 1,029,806 |
|
| 43,562 |
|
| 1,029,806 |
|
Canadian Imperial Bank of Commerce (c) |
|
|
| - |
|
| - |
|
| 14,443 |
|
| 881,168 |
|
| 14,443 |
|
| 881,168 |
|
HSBC Holdings PLC - ADR |
|
|
| - |
|
| - |
|
| 8,835 |
|
| 506,687 |
|
| 8,835 |
|
| 506,687 |
|
ICICI Bank Ltd. - ADR |
|
|
| - |
|
| - |
|
| 6,481 |
|
| 249,907 |
|
| 6,481 |
|
| 249,907 |
|
KB Financial Group, Inc. - ADR (a) |
|
|
| - |
|
| - |
|
| 7,867 |
|
| 404,915 |
|
| 7,867 |
|
| 404,915 |
|
PNC Financial Services Group, Inc. |
|
|
| - |
|
| - |
|
| 8,817 |
|
| 428,418 |
|
| 8,817 |
|
| 428,418 |
|
Shinhan Financial Group Co. Ltd. - ADR |
|
|
| - |
|
| - |
|
| 1,324 |
|
| 106,145 |
|
| 1,324 |
|
| 106,145 |
|
Wells Fargo & Co. |
|
|
| - |
|
| - |
|
| 15,749 |
|
| 443,807 |
|
| 15,749 |
|
| 443,807 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 5,071,510 |
|
|
|
|
| 5,071,510 |
|
Commercial Services & Supplies |
| 0.66 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Saic, Inc. (a) |
|
|
| - |
|
| - |
|
| 13,848 |
|
| 242,894 |
|
| 13,848 |
|
| 242,894 |
|
TeleTech Holdings, Inc. (a) |
|
|
| - |
|
| - |
|
| 8,078 |
|
| 137,811 |
|
| 8,078 |
|
| 137,811 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 380,705 |
|
|
|
|
| 380,705 |
|
Communications Equipment |
| 1.54 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cisco Systems, Inc. (a) |
|
|
| - |
|
| - |
|
| 29,346 |
|
| 690,805 |
|
| 29,346 |
|
| 690,805 |
|
Research In Motion Ltd. (a)(c) |
|
|
| 2,881 |
|
| 194,612 |
|
| - |
|
| - |
|
| 2,881 |
|
| 194,612 |
|
|
|
|
|
|
|
| 194,612 |
|
|
|
|
| 690,805 |
|
|
|
|
| 885,417 |
|
Computers & Peripherals |
| 2.64 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apple Computer, Inc. (a) |
|
|
| - |
|
| - |
|
| 2,184 |
|
| 404,848 |
|
| 2,184 |
|
| 404,848 |
|
Hewlett-Packard Co. |
|
|
| - |
|
| - |
|
| 18,408 |
|
| 869,042 |
|
| 18,408 |
|
| 869,042 |
|
International Business Machines Corp. |
|
|
| 1,603 |
|
| 191,735 |
|
| - |
|
| - |
|
| 1,603 |
|
| 191,735 |
|
Ness Technologies, Inc. (a) |
|
|
| - |
|
| - |
|
| 6,974 |
|
| 55,025 |
|
| 6,974 |
|
| 55,025 |
|
|
|
|
|
|
|
| 191,735 |
|
|
|
|
| 1,328,915 |
|
|
|
|
| 1,520,650 |
|
B-5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leuthold Select |
| Leuthold Select |
| Leuthold Select Industries Fund | ||||||||||||
|
|
|
| Shares |
| Fair Value |
| Shares |
| Fair Value |
| Shares |
| Fair Value | ||||||
Construction & Engineering |
| 1.03 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Abengoa SA (c) |
|
|
| - |
|
| - |
|
| 13,150 |
|
| 380,629 |
|
| 13,150 |
|
| 380,629 |
|
Chicago Bridge & Iron Co. NV (c) |
|
|
| 11,409 |
|
| 213,120 |
|
| - |
|
| - |
|
| 11,409 |
|
| 213,120 |
|
|
|
|
|
|
|
| 213,120 |
|
|
|
|
| 380,629 |
|
|
|
|
| 593,749 |
|
Containers & Packaging |
| 0.64 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Packaging Corp. of America |
|
|
| 4,551 |
|
| 92,841 |
|
| - |
|
| - |
|
| 4,551 |
|
| 92,841 |
|
Rock-Tenn Co. - Class A |
|
|
| 2,140 |
|
| 100,815 |
|
| - |
|
| - |
|
| 2,140 |
|
| 100,815 |
|
Temple-Inland, Inc. |
|
|
| 10,841 |
|
| 178,009 |
|
| - |
|
| - |
|
| 10,841 |
|
| 178,009 |
|
|
|
|
|
|
|
| 371,665 |
|
|
|
|
| - |
|
|
|
|
| 371,665 |
|
Diversified Financial Services |
| 1.90 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Citigroup, Inc. |
|
|
| - |
|
| - |
|
| 107,957 |
|
| 522,512 |
|
| 107,957 |
|
| 522,512 |
|
JPMorgan Chase & Co. |
|
|
| - |
|
| - |
|
| 13,060 |
|
| 572,289 |
|
| 13,060 |
|
| 572,289 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 1,094,801 |
|
|
|
|
| 1,094,801 |
|
Diversified Telecommunication Services |
| 4.46 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Telecom Corp. Ltd. - ADR |
|
|
| - |
|
| - |
|
| 5,880 |
|
| 278,124 |
|
| 5,880 |
|
| 278,124 |
|
China Unicom Hong Kong Ltd. - ADR |
|
|
| - |
|
| - |
|
| 36,763 |
|
| 523,505 |
|
| 36,763 |
|
| 523,505 |
|
Chunghwa Telecom Co. Ltd. - ADR |
|
|
| - |
|
| - |
|
| 17,320 |
|
| 312,453 |
|
| 17,320 |
|
| 312,453 |
|
KT Corp. - ADR |
|
|
| - |
|
| - |
|
| 10,199 |
|
| 177,258 |
|
| 10,199 |
|
| 177,258 |
|
Telecom Italia SpA - ADR |
|
|
| - |
|
| - |
|
| 4,211 |
|
| 73,819 |
|
| 4,211 |
|
| 73,819 |
|
Telefonica SA - ADR |
|
|
| - |
|
| - |
|
| 6,819 |
|
| 565,363 |
|
| 6,819 |
|
| 565,363 |
|
Telefonos de Mexico SA de CV - ADR |
|
|
| - |
|
| - |
|
| 27,122 |
|
| 473,008 |
|
| 27,122 |
|
| 473,008 |
|
Telekomunikasi Indonesia Tbk PT - ADR |
|
|
| - |
|
| - |
|
| 4,681 |
|
| 167,112 |
|
| 4,681 |
|
| 167,112 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 2,570,642 |
|
|
|
|
| 2,570,642 |
|
Electric Utilities |
| 0.31 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Empresa Nacional de Electricidad - ADR |
|
|
| - |
|
| - |
|
| 1,707 |
|
| 80,007 |
|
| 1,707 |
|
| 80,007 |
|
Enersis SA - ADR |
|
|
| 5,209 |
|
| 96,106 |
|
| - |
|
| - |
|
| 5,209 |
|
| 96,106 |
|
|
|
|
|
|
|
| 96,106 |
|
|
|
|
| 80,007 |
|
|
|
|
| 176,113 |
|
Electronic Equipment, Instruments & Components |
| 0.42 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech Data Corp. (a) |
|
|
| 5,772 |
|
| 240,173 |
|
| - |
|
| - |
|
| 5,772 |
|
| 240,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Equipment & Services |
| 3.92 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cal Dive International, Inc. (a) |
|
|
| 25,039 |
|
| 247,636 |
|
| - |
|
| - |
|
| 25,039 |
|
| 247,636 |
|
Dresser-Rand Group, Inc. (a) |
|
|
| 6,412 |
|
| 199,221 |
|
| - |
|
| - |
|
| 6,412 |
|
| 199,221 |
|
Huaneng Power International, Inc. - ADR |
|
|
| - |
|
| - |
|
| 2,780 |
|
| 74,059 |
|
| 2,780 |
|
| 74,059 |
|
NRG Energy, Inc. (a) |
|
|
| - |
|
| - |
|
| 40,936 |
|
| 1,153,986 |
|
| 40,936 |
|
| 1,153,986 |
|
Ormat Technologies, Inc. |
|
|
| - |
|
| - |
|
| 12,989 |
|
| 530,211 |
|
| 12,989 |
|
| 530,211 |
|
Seahawk Drilling, Inc. (a) |
|
|
| - |
|
| - |
|
| 1,745 |
|
| 54,252 |
|
| 1,745 |
|
| 54,252 |
|
|
|
|
|
|
|
| 446,857 |
|
|
|
|
| 1,812,508 |
|
|
|
|
| 2,259,365 |
|
Food Products |
| 0.52 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ConAgra Foods, Inc. |
|
|
| 9,737 |
|
| 211,098 |
|
| - |
|
| - |
|
| 9,737 |
|
| 211,098 |
|
Fresh Del Monte Produce, Inc. (a)(c) |
|
|
| 3,953 |
|
| 89,377 |
|
| - |
|
| - |
|
| 3,953 |
|
| 89,377 |
|
|
|
|
|
|
|
| 300,475 |
|
|
|
|
| - |
|
|
|
|
| 300,475 |
|
Health Care Providers & Services |
| 2.53 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corp. |
|
|
| 9,940 |
|
| 222,457 |
|
| - |
|
| - |
|
| 9,940 |
|
| 222,457 |
|
Chemed Corp. |
|
|
| 1,924 |
|
| 84,444 |
|
| - |
|
| - |
|
| 1,924 |
|
| 84,444 |
|
Cigna Corp. |
|
|
| 6,156 |
|
| 172,922 |
|
| - |
|
| - |
|
| 6,156 |
|
| 172,922 |
|
Emergency Medical Services Corp. - Class A (a) |
|
|
| 2,405 |
|
| 111,833 |
|
| - |
|
| - |
|
| 2,405 |
|
| 111,833 |
|
Humana, Inc. (a) |
|
|
| 5,611 |
|
| 209,290 |
|
| - |
|
| - |
|
| 5,611 |
|
| 209,290 |
|
Medco Health Solutions, Inc. (a) |
|
|
| 4,008 |
|
| 221,683 |
|
| - |
|
| - |
|
| 4,008 |
|
| 221,683 |
|
Mednax, Inc. (a) |
|
|
| 4,168 |
|
| 228,907 |
|
| - |
|
| - |
|
| 4,168 |
|
| 228,907 |
|
Universal Health Services, Inc. - Class B |
|
|
| 3,366 |
|
| 208,456 |
|
| - |
|
| - |
|
| 3,366 |
|
| 208,456 |
|
|
|
|
|
|
|
| 1,459,992 |
|
|
|
|
| - |
|
|
|
|
| 1,459,992 |
|
Health Care Technology |
| 0.37 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cerner Corp. (a) |
|
|
| 2,885 |
|
| 215,798 |
|
| - |
|
| - |
|
| 2,885 |
|
| 215,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure |
| 0.28 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jack in the Box, Inc. (a) |
|
|
| 7,855 |
|
| 160,949 |
|
| - |
|
| - |
|
| 7,855 |
|
| 160,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance - 1.51% |
| 0.26 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Validus Holdings Ltd. (c) |
|
|
| 5,898 |
|
| 152,168 |
|
| - |
|
| - |
|
| 5,898 |
|
| 152,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internet Software & Services |
| 0.60 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Google, Inc. - Class A (a) |
|
|
| - |
|
| - |
|
| 698 |
|
| 346,103 |
|
| 698 |
|
| 346,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT Services |
| 9.93 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadridge Financial Solutions, Inc. |
|
|
| 8,977 |
|
| 180,438 |
|
| 11,793 |
|
| 237,039 |
|
| 20,770 |
|
| 417,477 |
|
CACI International, Inc. - Class A (a) |
|
|
| - |
|
| - |
|
| 6,208 |
|
| 293,452 |
|
| 6,208 |
|
| 293,452 |
|
Cognizant Technology Solutions Corp. (a) |
|
|
| - |
|
| - |
|
| 12,326 |
|
| 476,523 |
|
| 12,326 |
|
| 476,523 |
|
Computer Sciences Corp. (a) |
|
|
| 3,848 |
|
| 202,828 |
|
| - |
|
| - |
|
| 3,848 |
|
| 202,828 |
|
Convergys Corp. (a) |
|
|
| - |
|
| - |
|
| 12,959 |
|
| 128,813 |
|
| 12,959 |
|
| 128,813 |
|
Fidelity National Information Services, Inc. |
|
|
| - |
|
| - |
|
| 21,559 |
|
| 549,970 |
|
| 21,559 |
|
| 549,970 |
|
Fiserv, Inc. (a) |
|
|
| 4,008 |
|
| 193,186 |
|
| - |
|
| - |
|
| 4,008 |
|
| 193,186 |
|
Gartner, Inc. (a) |
|
|
| - |
|
| - |
|
| 5,437 |
|
| 99,334 |
|
| 5,437 |
|
| 99,334 |
|
Genpact Limited (a)(c) |
|
|
| - |
|
| - |
|
| 7,991 |
|
| 98,289 |
|
| 7,991 |
|
| 98,289 |
|
Hewitt Associates, Inc. (a) |
|
|
| - |
|
| - |
|
| 6,813 |
|
| 248,198 |
|
| 6,813 |
|
| 248,198 |
|
Lender Processing Services, Inc. |
|
|
| - |
|
| - |
|
| 6,277 |
|
| 239,593 |
|
| 6,277 |
|
| 239,593 |
|
Mantech International Corp. - Class A (a) |
|
|
| - |
|
| - |
|
| 2,002 |
|
| 94,414 |
|
| 2,002 |
|
| 94,414 |
|
MAXIMUS, Inc. |
|
|
| - |
|
| - |
|
| 2,116 |
|
| 98,606 |
|
| 2,116 |
|
| 98,606 |
|
B-6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leuthold Select |
| Leuthold Select |
| Leuthold Select Industries Fund | ||||||||||||
|
|
|
| Shares |
| Fair Value |
| Shares |
| Fair Value |
| Shares |
| Fair Value | ||||||
Metavante Technologies, Inc. (a) |
|
|
| 6,732 |
|
| 232,119 |
|
| 7,269 |
|
| 250,635 |
|
| 14,001 |
|
| 482,754 |
|
Patni Computer Systems - ADR |
|
|
| - |
|
| - |
|
| 2,675 |
|
| 49,488 |
|
| 2,675 |
|
| 49,488 |
|
Sapient Corp. (a) |
|
|
| - |
|
| - |
|
| 29,057 |
|
| 233,618 |
|
| 29,057 |
|
| 233,618 |
|
Satyam Computer Services Ltd. - ADR |
|
|
| 31,268 |
|
| 205,743 |
|
| 37,925 |
|
| 249,547 |
|
| 69,193 |
|
| 455,290 |
|
SRA International, Inc. - Class A (a) |
|
|
| - |
|
| - |
|
| 22,543 |
|
| 486,703 |
|
| 22,543 |
|
| 486,703 |
|
Total System Services, Inc. |
|
|
| - |
|
| - |
|
| 33,176 |
|
| 534,465 |
|
| 33,176 |
|
| 534,465 |
|
Western Union Co. |
|
|
| 10,581 |
|
| 200,193 |
|
| - |
|
| - |
|
| 10,581 |
|
| 200,193 |
|
Wright Express Corp. (a) |
|
|
| 4,724 |
|
| 139,405 |
|
| - |
|
| - |
|
| 4,724 |
|
| 139,405 |
|
|
|
|
|
|
|
| 1,353,912 |
|
|
|
|
| 4,368,687 |
|
|
|
|
| 5,722,599 |
|
Life Sciences Tools & Services |
| 0.34 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medivation, Inc. (a) |
|
|
| - |
|
| - |
|
| 7,189 |
|
| 195,109 |
|
| 7,189 |
|
| 195,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery |
| 1.12 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bucyrus International, Inc. |
|
|
| 6,125 |
|
| 218,173 |
|
| - |
|
| - |
|
| 6,125 |
|
| 218,173 |
|
Flowserve Corp. |
|
|
| 2,026 |
|
| 199,642 |
|
| - |
|
| - |
|
| 2,026 |
|
| 199,642 |
|
Joy Global, Inc. |
|
|
| 4,616 |
|
| 225,907 |
|
| - |
|
| - |
|
| 4,616 |
|
| 225,907 |
|
|
|
|
|
|
|
| 643,722 |
|
|
|
|
| - |
|
|
|
|
| 643,722 |
|
Multi-Utilities |
| 2.24 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The AES Corp. (a) |
|
|
| - |
|
| - |
|
| 86,967 |
|
| 1,288,851 |
|
| 86,967 |
|
| 1,288,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paper & Forest Products |
| 5.17 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buckeye Technologies, Inc. (a) |
|
|
| - |
|
| - |
|
| 4,331 |
|
| 46,472 |
|
| 4,331 |
|
| 46,472 |
|
Domtar Corp. (a) |
|
|
| - |
|
| - |
|
| 11,352 |
|
| 399,817 |
|
| 11,352 |
|
| 399,817 |
|
P.H. Glatfelter Company |
|
|
| - |
|
| - |
|
| 4,395 |
|
| 50,455 |
|
| 4,395 |
|
| 50,455 |
|
International Paper Co. |
|
|
| - |
|
| - |
|
| 51,853 |
|
| 1,152,692 |
|
| 51,853 |
|
| 1,152,692 |
|
MeadWestvaco Corp. |
|
|
| - |
|
| - |
|
| 16,088 |
|
| 358,923 |
|
| 16,088 |
|
| 358,923 |
|
Neenah Paper, Inc. |
|
|
| - |
|
| - |
|
| 4,847 |
|
| 57,049 |
|
| 4,847 |
|
| 57,049 |
|
Schweitzer-Mauduit International, Inc. |
|
|
| - |
|
| - |
|
| 3,039 |
|
| 165,200 |
|
| 3,039 |
|
| 165,200 |
|
Votorantim Celulose E Papel SA - ADR (a) |
|
|
| - |
|
| - |
|
| 45,609 |
|
| 748,444 |
|
| 45,609 |
|
| 748,444 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 2,979,052 |
|
|
|
|
| 2,979,052 |
|
Personal Products |
| 0.34 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herbalife Ltd. (c) |
|
|
| 6,040 |
|
| 197,750 |
|
| - |
|
| - |
|
| 6,040 |
|
| 197,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals |
| 4.15 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AstraZeneca PLC - ADR |
|
|
| 4,489 |
|
| 201,781 |
|
| - |
|
| - |
|
| 4,489 |
|
| 201,781 |
|
Bristol-Myers Squibb Co. |
|
|
| 8,497 |
|
| 191,352 |
|
| - |
|
| - |
|
| 8,497 |
|
| 191,352 |
|
Cadence Pharmaceuticals, Inc. (a) |
|
|
| - |
|
| - |
|
| 8,798 |
|
| 97,306 |
|
| 8,798 |
|
| 97,306 |
|
Roche Holding AG - ADR |
|
|
| - |
|
| - |
|
| 33,000 |
|
| 1,331,735 |
|
| 33,000 |
|
| 1,331,735 |
|
Sanofi-Aventis SA - ADR |
|
|
| 6,253 |
|
| 231,048 |
|
| - |
|
| - |
|
| 6,253 |
|
| 231,048 |
|
Theravance, Inc. (a) |
|
|
| - |
|
| - |
|
| 8,675 |
|
| 127,002 |
|
| 8,675 |
|
| 127,002 |
|
Watson Pharmaceuticals, Inc. (a) |
|
|
| 5,772 |
|
| 211,486 |
|
| - |
|
| - |
|
| 5,772 |
|
| 211,486 |
|
|
|
|
|
|
|
| 835,667 |
|
|
|
|
| 1,556,043 |
|
|
|
|
| 2,391,710 |
|
Software |
| 12.38 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BMC Software, Inc. (a) |
|
|
| 5,611 |
|
| 210,581 |
|
| 19,336 |
|
| 725,680 |
|
| 24,947 |
|
| 936,261 |
|
CA, Inc. |
|
|
| - |
|
| - |
|
| 20,959 |
|
| 460,888 |
|
| 20,959 |
|
| 460,888 |
|
Check Point Software Technologies (a)(c) |
|
|
| 7,214 |
|
| 204,517 |
|
| 16,170 |
|
| 458,420 |
|
| 23,384 |
|
| 662,937 |
|
Micros Systems, Inc. (a) |
|
|
| - |
|
| - |
|
| 23,486 |
|
| 709,042 |
|
| 23,486 |
|
| 709,042 |
|
Microsoft Corp. |
|
|
| - |
|
| - |
|
| 31,836 |
|
| 824,234 |
|
| 31,836 |
|
| 824,234 |
|
Novell, Inc. (a) |
|
|
| - |
|
| - |
|
| 103,516 |
|
| 466,857 |
|
| 103,516 |
|
| 466,857 |
|
Perfect World - ADR (a) |
|
|
| 4,492 |
|
| 216,065 |
|
| - |
|
| - |
|
| 4,492 |
|
| 216,065 |
|
Quality Systems, Inc. |
|
|
| - |
|
| - |
|
| 10,402 |
|
| 640,451 |
|
| 10,402 |
|
| 640,451 |
|
Red Hat, Inc. (a) |
|
|
| - |
|
| - |
|
| 36,132 |
|
| 998,689 |
|
| 36,132 |
|
| 998,689 |
|
Rightnow Technologies, Inc. (a) |
|
|
| - |
|
| - |
|
| 3,789 |
|
| 54,713 |
|
| 3,789 |
|
| 54,713 |
|
SAP AG - ADR |
|
|
| - |
|
| - |
|
| 9,493 |
|
| 463,923 |
|
| 9,493 |
|
| 463,923 |
|
Sybase, Inc. (a) |
|
|
| - |
|
| - |
|
| 17,921 |
|
| 697,127 |
|
| 17,921 |
|
| 697,127 |
|
|
|
|
|
|
|
| 631,163 |
|
|
|
|
| 6,500,024 |
|
|
|
|
| 7,131,187 |
|
Specialty Retail |
| 4.20 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance Auto Parts, Inc. |
|
|
| - |
|
| - |
|
| 16,454 |
|
| 646,313 |
|
| 16,454 |
|
| 646,313 |
|
Aeropostale, Inc. (a) |
|
|
| 4,970 |
|
| 216,046 |
|
| - |
|
| - |
|
| 4,970 |
|
| 216,046 |
|
AutoNation, Inc. (a) |
|
|
| - |
|
| - |
|
| 41,728 |
|
| 754,443 |
|
| 41,728 |
|
| 754,443 |
|
Best Buy Co., Inc. |
|
|
| 4,649 |
|
| 174,431 |
|
| - |
|
| - |
|
| 4,649 |
|
| 174,431 |
|
Group 1 Automotive, Inc. |
|
|
| - |
|
| - |
|
| 15,772 |
|
| 423,478 |
|
| 15,772 |
|
| 423,478 |
|
Ross Stores, Inc. |
|
|
| 4,242 |
|
| 202,640 |
|
| - |
|
| - |
|
| 4,242 |
|
| 202,640 |
|
|
|
|
|
|
|
| 593,117 |
|
|
|
|
| 1,824,234 |
|
|
|
|
| 2,417,351 |
|
Textiles, Apparel & Luxury Goods |
| 0.70 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carter’s, Inc. (a) |
|
|
| 7,375 |
|
| 196,912 |
|
| - |
|
| - |
|
| 7,375 |
|
| 196,912 |
|
Warnaco Group, Inc. (a) |
|
|
| 4,644 |
|
| 203,686 |
|
| - |
|
| - |
|
| 4,644 |
|
| 203,686 |
|
|
|
|
|
|
|
| 400,598 |
|
|
|
|
| - |
|
|
|
|
| 400,598 |
|
Tobacco |
| 0.74 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lorillard, Inc. |
|
|
| 2,726 |
|
| 202,542 |
|
| - |
|
| - |
|
| 2,726 |
|
| 202,542 |
|
Philip Morris International, Inc. |
|
|
| 4,649 |
|
| 226,592 |
|
| - |
|
| - |
|
| 4,649 |
|
| 226,592 |
|
|
|
|
|
|
|
| 429,134 |
|
|
|
|
| - |
|
|
|
|
| 429,134 |
|
Water Utilities |
| 0.17 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cia de Saneamento Basico do Estado de Sao Paulo - ADR |
|
|
| 2,622 |
|
| 99,452 |
|
| - |
|
| - |
|
| 2,622 |
|
| 99,452 |
|
B-7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leuthold Select |
| Leuthold Select |
| Leuthold Select Industries Fund | ||||||||||||
|
|
|
| Shares |
| Fair Value |
| Shares |
| Fair Value |
| Shares |
| Fair Value | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services |
| 1.58 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
America Movil SAB de CV - ADR |
|
|
| 4,177 |
|
| 183,078 |
|
| - |
|
| - |
|
| 4,177 |
|
| 183,078 |
|
Atlantic Tele-Network, Inc. |
|
|
| - |
|
| - |
|
| 779 |
|
| 41,614 |
|
| 779 |
|
| 41,614 |
|
Vimpel-Communications - ADR (a) |
|
|
| - |
|
| - |
|
| 34,815 |
|
| 651,040 |
|
| 34,815 |
|
| 651,040 |
|
Telecom Corp of New Zealand Ltd. - ADR |
|
|
| - |
|
| - |
|
| 3,878 |
|
| 37,151 |
|
| 3,878 |
|
| 37,151 |
|
|
|
|
|
|
|
| 183,078 |
|
|
|
|
| 729,805 |
|
|
|
|
| 912,883 |
|
TOTAL COMMON STOCKS |
|
|
|
|
|
| 9,877,307 |
|
|
|
|
| 45,278,991 |
|
|
|
|
| 55,156,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENT COMPANIES |
| 1.64 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Traded Funds |
| 1.64 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iShares Russell 2000 Index Fund |
|
|
| - |
|
| - |
|
| 15,630 |
|
| 941,395 |
|
| 15,630 |
|
| 941,395 |
|
TOTAL INVESTMENT COMPANIES |
|
|
|
|
|
| - |
|
|
|
|
| 941,395 |
|
|
|
|
| 941,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED STOCKS |
| 1.53 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services |
| 0.46 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Itau Unibanco Banco Multiplo SA - ADR |
|
|
| - |
|
| - |
|
| 13,125 |
|
| 264,469 |
|
| 13,125 |
|
| 264,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services |
| 0.86 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brasil Telecom SA - ADR |
|
|
| - |
|
| - |
|
| 1,676 |
|
| 44,112 |
|
| 1,676 |
|
| 44,112 |
|
Tele Norte Leste Participacoes SA - ADR |
|
|
| - |
|
| - |
|
| 23,956 |
|
| 450,133 |
|
| 23,956 |
|
| 450,133 |
|
|
|
|
|
|
|
| - |
|
|
|
|
| 494,245 |
|
|
|
|
| 494,245 |
|
Paper & Forest Products |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aracruz Celulose SA - ADR (a) |
| 0.21 | % | - |
|
| - |
|
| 5,450 |
|
| 121,317 |
|
| 5,450 |
|
| 121,317 |
|
TOTAL PREFERRED STOCKS |
|
|
|
|
|
| - |
|
|
|
|
| 880,031 |
|
|
|
|
| 880,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHORT TERM INVESTMENTS |
| 1.10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market Funds |
| 1.10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Institutional Money Market Fund - Government Portfolio 0.100% (b) |
|
|
| 44,261 |
|
| 44,261 |
|
| 591,084 |
|
| 591,084 |
|
| 635,345 |
|
| 635,345 |
|
TOTAL SHORT TERM INVESTMENTS |
|
|
|
|
|
| 44,261 |
|
|
|
|
| 591,084 |
|
|
|
|
| 635,345 |
|
Total Investments |
| 99.99 | % |
|
|
| 9,921,568 |
|
|
|
|
| 47,691,501 |
|
|
|
|
| 57,613,069 |
|
Total Investments At Cost |
|
|
|
|
|
| 8,839,321 |
|
|
|
|
| 41,486,947 |
|
|
|
|
| 50,326,268 |
|
Other Assets and Liabilities, Net |
| 0.01 | % |
|
|
| 155,353 |
|
|
|
|
| (148,141 | ) |
|
|
|
| 7,212 |
|
TOTAL NET ASSETS |
| 100.00 | % |
|
| $ | 10,076,921 |
|
|
|
| $ | 47,543,360 |
|
|
|
| $ | 57,620,281 |
|
|
|
Percentages are stated as a percent of net assets. | |
ADR | American Depository Receipt |
(a) | Non-income producing security. |
(b) | Variable rate security. The rate shown is the rate in effect at September 30, 2009. |
(c) | Foreign issued security. |
See notes to the financial statements.
B-8
Leuthold Select Industries Fund
Pro Forma
Statements of Assets and Liabilities
September 30, 2009
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leuthold Select |
| Leuthold Select |
| Pro Forma |
| Leuthold | ||||||||
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At cost |
| $ | 8,839,321 |
| $ | 41,486,947 |
|
| - |
| $ | 50,326,268 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At fair value |
| $ | 9,921,568 |
|
|
| 47,691,501 |
|
|
|
|
|
|
| 57,613,069 |
|
Receivable for Fund shares sold |
|
| 20,225 |
|
|
| 213,230 |
|
|
|
|
|
|
| 233,455 |
|
Receivable for investments sold |
|
| 551,457 |
|
|
| 10,859 |
|
|
|
|
|
|
| 562,316 |
|
Interest receivable |
|
| 7 |
|
|
| 50 |
|
|
|
|
|
|
| 57 |
|
Dividends receivable |
|
| 20,282 |
|
|
| 29,018 |
|
|
|
|
|
|
| 49,300 |
|
Other assets |
|
| 9,680 |
|
| 9,167 |
|
|
|
|
| 18,847 |
| |||
Total Assets |
|
| 10,523,219 |
|
| 47,953,825 |
|
| - |
|
| 58,477,044 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable for investments purchased |
|
| 405,750 |
|
|
| 295,642 |
|
|
|
|
|
|
| 701,392 |
|
Payable for Fund shares redeemed |
|
| 104 |
|
|
| 26,187 |
|
|
|
|
|
|
| 26,291 |
|
Payable to Adviser |
|
| 8,597 |
|
|
| 37,971 |
|
|
|
|
|
|
| 46,568 |
|
Payable to Custodian |
|
| 875 |
|
|
| 6,688 |
|
|
|
|
|
|
| 7,563 |
|
Distribution fees payable (12b-1) |
|
| 6,493 |
|
|
| - |
|
|
|
|
|
|
| 6,493 |
|
Shareholder servicing fees payable |
|
| - |
|
|
| 7,936 |
|
|
|
|
|
|
| 7,936 |
|
Accrued expenses and other liabilities |
|
| 24,479 |
|
| 36,041 |
|
|
|
|
| 60,520 |
| |||
Total Liabilities |
|
| 446,298 |
|
| 410,465 |
|
| - |
|
| 856,763 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS |
| $ | 10,076,921 |
| $ | 47,543,360 |
|
| - |
| $ | 57,620,281 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS CONSIST OF: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock |
| $ | 20,875,610 |
|
| $ | 48,729,611 |
|
|
|
|
|
| $ | 69,605,221 |
|
Accumulated net investment income/(loss) |
|
| - |
|
|
| - |
|
|
|
|
|
|
| - |
|
Accumulated net realized loss on investments |
|
| (11,880,936 | ) |
|
| (7,390,850 | ) |
|
|
|
|
|
| (19,271,786 | ) |
Net unrealized appreciation on investments |
|
| 1,082,247 |
|
| 6,204,599 |
|
|
|
|
| 7,286,846 |
| |||
Total Net Assets |
| $ | 10,076,921 |
| $ | 47,543,360 |
|
| - |
| $ | 57,620,281 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Class Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
| $ | 10,076,921 |
|
| $ | 47,543,360 |
|
|
|
|
|
| $ | 57,620,281 |
|
Shares outstanding (1,000,000,000 shares of $0.0001 par value authorized) |
|
| 1,492,264 |
|
|
| 3,708,364 |
|
|
| 786,031 |
| (A) |
| 4,494,395 |
|
Net Asset Value, Redemption Price and Offering Price Per Share |
| $ | 6.75 |
| $ | 12.82 |
|
|
|
|
| $ | 12.82 |
|
(A) - Adjustment reflects shares issued in conversion.
See notes to the financial statements.
B-9
Leuthold Select Industries Fund
Pro Forma
Statements of Operations
For the Year Ended September 30, 2009
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leuthold Select |
| Leuthold Select |
| Pro Forma |
| Leuthold | ||||||||
INVESTMENT INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend income (A) |
| $ | 193,100 |
|
| $ | 338,749 |
|
| $ | - |
|
| $ | 531,849 |
|
Interest income |
|
| 2,103 |
|
| 6,636 |
|
| - |
|
| 8,739 |
| |||
Total investment income |
|
| 195,203 |
|
| 345,385 |
|
| - |
|
| 540,588 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory fees (Note 3) |
|
| 124,556 |
|
|
| 343,639 |
|
|
| - |
|
|
| 468,195 |
|
Administration fees |
|
| 4,520 |
|
|
| 12,339 |
|
|
| - |
|
|
| 16,859 |
|
Transfer agent fees |
|
| 20,237 |
|
|
| 12,051 |
|
|
| - |
|
|
| 32,288 |
|
Legal fees |
|
| 401 |
|
|
| 1,756 |
|
|
| - |
|
|
| 2,157 |
|
Audit fees |
|
| 15,997 |
|
|
| 23,215 |
|
|
| (15,997 | ) | (B) |
| 23,215 |
|
Fund accounting fees |
|
| 3,214 |
|
|
| 6,998 |
|
|
|
|
|
|
| 10,212 |
|
Custody fees |
|
| 2,467 |
|
|
| 11,807 |
|
|
|
|
|
|
| 14,274 |
|
Shareholder servicing fees - Retail Class |
|
| - |
|
|
| 30,164 |
|
|
| 10,933 |
| (C) |
| 41,097 |
|
Registration fees |
|
| 30,589 |
|
|
| 23,799 |
|
|
| (30,589 | ) | (B) |
| 23,799 |
|
Reports to shareholders |
|
| 1,321 |
|
|
| 4,936 |
|
|
|
|
|
|
| 6,257 |
|
Directors’ fees |
|
| 874 |
|
|
| 2,251 |
|
|
|
|
|
|
| 3,125 |
|
Distribution (Rule 12b-1) fees - Retail Class (Note 3) |
|
| 30,621 |
|
|
| - |
|
|
| (30,621 | ) | (D) |
| - |
|
Other |
|
| 581 |
|
| 1,310 |
|
|
|
|
| 1,891 |
| |||
| ||||||||||||||||
Total expenses |
|
| 235,378 |
|
|
| 474,265 |
|
|
| (66,274 | ) |
|
| 643,369 |
|
Reimbursement from Adviser |
|
| (4,950 | ) |
| - |
|
| 4,950 |
| (E) |
| - |
| ||
Recoupment by Adviser |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net expenses |
|
| 230,428 |
|
| 474,265 |
|
| (61,324 | ) |
| 643,369 |
| |||
NET INVESTMENT INCOME/(LOSS) |
| $ | (35,225 | ) | $ | (128,880 | ) | $ | 61,324 |
| $ | (102,781 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, INVESTMENT COMPANIES, FOREIGN CURRENCY AND FOREIGN CURRENCY TRANSLATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments |
| $ | (9,287,252 | ) |
| $ | (5,916,236 | ) |
| $ | - |
|
| $ | (15,203,488 | ) |
Investment companies |
|
| - |
|
|
| (471,370 | ) |
|
| - |
|
|
| (471,370 | ) |
Foreign currency and foreign currency translation |
|
| - |
|
|
| 62 |
|
|
| - |
|
|
| 62 |
|
Net unrealized appreciation (depreciation) during the year on: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments |
|
| 4,506,204 |
|
|
| 6,148,296 |
|
|
| - |
|
|
| 10,654,500 |
|
Investment companies |
|
| - |
|
|
| (20,005 | ) |
|
| - |
|
|
| (20,005 | ) |
Foreign currency and foreign currency translation |
|
| (3 | ) |
| 45 |
|
| - |
|
| 42 |
| |||
Net realized and unrealized gain (loss) on investments, investment companies, foreign currency and foreign currency translation |
|
| (4,781,051 | ) |
| (259,208 | ) |
| - |
|
| (5,040,259 | ) | |||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
| $ | (4,816,276 | ) | $ | (388,088 | ) | $ | 61,324 |
| $ | (5,143,040 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) - Net of foreign taxes withheld of: |
|
| 3,011 |
|
|
| 13,090 |
|
|
| - |
|
|
| 16,101 |
|
(B) - The adjustments to audit and registration fees reflect the elimination of duplicate costs or economies of scale. | ||||||||||||||||
(C) - The adjustment to shareholder servicing fees reflects the increase in total assets. | ||||||||||||||||
(D) - The surviving Fund will have no distribution (Rule 12b-1) fees. | ||||||||||||||||
(E) - True-up to reflect combined Fund expenses, average net assets, and expense limitation. |
See notes to the financial statements.
B-10
Leuthold Select Industries Fund
Pro Forma
Annual Fund Operating Expenses
For the Twelve Months Ended September 30, 2009
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
| Leuthold Select |
| Leuthold Select |
| Leuthold | |||
Investment advisory fees |
| 1.00 | % |
| 1.00 | % |
| 1.00 | % |
Distribution (Rule 12b-1) fees |
| 0.25 | % |
| 0.00 | % |
| 0.00 | % |
Shareholder servicing fees |
| 0.00 | % |
| 0.09 | % |
| 0.09 | % |
Other Expenses(1) |
| 0.64 | % |
| 0.30 | % |
| 0.30 | % |
Total Fund Operating Expenses |
| 1.89 | % |
| 1.39 | % |
| 1.39 | % |
Reimbursement from Adviser |
| -0.04 | %(2) |
| 0.00 | % |
| 0.00 | % |
Net Expenses |
| 1.85 | % |
| 1.39 | % |
| 1.39 | % |
|
|
|
|
|
|
|
|
|
|
Expense Limit |
| 1.85 | % |
| 1.60 | % |
| 1.60 | % |
|
|
(1) | The Funds indirectly bear a pro rata share of the fees and expenses of each underlying Fund in which they invest. Since Acquired Fund Fees and Expenses are not directly borne by a Fund, they are not reflected in the Fund’s financial statements, with the result that the information presented in the Fund’s expense table may differ from that presented in the financial highlights. The Acquired Fund Fees and Expenses of each Fund were less than 0.01% and are reflected in the Other Expenses of the Fund. |
|
|
(2) | The Fund’s investment adviser has agreed to waive its advisory fee to the extent necessary to insure the Net Expenses (excluding Acquired Fund Fees and Expenses) does not exceed 1.85% of average daily net assets. The investment adviser may recover waived fees in subsequent years. |
|
|
B-11
Leuthold Select Industries Fund
Notes to Pro Forma Combining Financial Statements
September 30, 2009 (Unaudited)
1. Description of the Funds and Basis of Combination
The Leuthold Select Equities Fund (the “Target Fund”) and the Leuthold Select Industries Fund (the “Acquiring Fund”) are each separate series of Leuthold Funds, Inc. (the “Company”). The Company was incorporated on August 30, 1995, as a Maryland Corporation and is registered with the Securities and Exchange Commission as an open-end management investment company under the Investment Company Act of 1940, as amended. The investment objective of the Target Fund is capital appreciation. The Target Fund commenced operations on May 24, 2006. The investment objective of the Acquiring Fund is also capital appreciation. The Acquiring Fund commenced operations on June 19, 2000.
The pro forma combined Statement of Assets and Liabilities, Statement of Operations, and Schedule of Investments reflect the accounts of the Target Fund and the Acquiring Fund as if the proposed reorganization occurred as of and for the year ended September 30, 2009. These statements have been derived from books and records utilized in calculating daily net asset value at September 30, 2009. The Acquiring Fund will be the accounting survivor of the reorganization.
The accompanying pro forma financial statements should be read in conjunction with the financial statements of Target Fund and Acquiring Fund included in the annual report dated September 30, 2009.
The reorganization involves the transfer of all of the assets and stated liabilities of the Target Fund to the Acquiring Fund in exchange for shares of common stock of the Acquiring Fund, and the pro rata distribution of such shares of the Acquiring Fund to the shareholders of the Target Fund, as provided in the Agreement and Plan of Reorganization. The reorganization is intended to qualify as a tax-free reorganization so that shareholders of the Target Fund will not recognize any gain or loss through the exchange of shares in the reorganization.
2. Significant Accounting Policies
The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements.
B-12
Investment Valuation – Securities listed on a national securities exchange are valued at the last sale price on the day the valuation is made, and securities that are traded on the NASDAQ Global Market, NASDAQ Global Select Market or the NASDAQ Capital Market are valued at the Nasdaq Official Closing Price. Price information on listed stocks is taken from the exchange where the security is primarily traded. Securities, including securities sold short, which are listed on an exchange but which are not traded on the valuation date are valued at the most recent bid prices. Unlisted securities for which market quotations are readily available are valued at the latest quoted bid price. Securities sold short which are not listed on an exchange but for which market quotations are readily available are valued at the average of the current bid and asked prices. Other investment assets, including certain investments in open-end investment companies, and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Board of Directors and the Funds’ Fair Value Pricing Committee. Short-term instruments (those with remaining maturities of 60 days or less) are valued at amortized cost, which approximates market value. Exchange traded options are valued at the last reported sale price on an exchange on which the option is traded. If no sales are reported on a particular day, the mean between the highest bid and lowest asked quotations at the close of the exchanges is used. Non-exchange traded options also will be valued at the mean between the last bid and asked quotations. For options where market quotations are not readily available, fair value shall be determined. The Funds may invest in foreign securities. Trading in foreign securities may be completed at times that vary from the closing of the New York Stock Exchange. The Funds’ policy is to value the foreign securities at the latest closing price on the exchange on which they are traded immediately prior to the closing of the New York Stock Exchange. 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 New York Stock Exchange. If these events materially affect the value of portfolio securities, then these securities may be valued at their value as determined in good faith by the Funds’ Board of Directors. Some of the factors which may be considered by the Board of Directors and the Funds’ Fair Value Pricing Committee in determining fair value are fundamental analytical data relating to the investment, the nature and duration of any restrictions on disposition, trading in similar securities of the same issuer or comparable companies, information from broker dealers, and an evaluation of the forces that influence the market in which the securities are purchased and sold. The use of fair value pricing by a Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. Each of the Funds may invest in metals such as aluminum, copper, zinc, lead, nickel, tin, silver, palladium and other industrial and precious metals. Metals traded on multiple exchanges will be valued at fair value as determined in good faith by the Board of Directors and the Funds’ Fair Value Pricing Committee. Metals not traded on an exchange are valued at the mid-point between the closing bid and asked prices as obtained from a commonly used reputable pricing source. The prices of such metals may be subject to substantial price fluctuations and may be affected by broad economic, financial, and political factors, including inflation, metal sales by governments or international agencies, speculation, changes in industrial and commercial demand, currency devaluations or revaluations, trade imbalances, and governmental prohibitions or restrictions. Further, investments in metals can present concerns such as delivery, storage and maintenance, possible illiquidity, and the unavailability of accurate market valuations. Investments in metals earn no investment income and may involve higher custody and transaction costs than investments in securities.
The Funds have adopted fair valuation accounting standards which establish a definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These inputs are summarized in the following three levels:
|
Level 1 - Quoted prices in active markets for identical securities. |
Level 2 - Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). |
Level 3 - Significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Funds’ net assets as of September 30, 2009:
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|
|
Target Fund |
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|
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|
|
|
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|
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Investments at Value |
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
| ||||
Common Stocks |
| $ | 9,877,307 |
| $ | - |
| $ | - |
| $ | 9,877,307 |
|
Money Market Funds |
|
| 44,261 |
|
| - |
|
| - |
|
| 44,261 |
|
Total Investments in Securities |
| $ | 9,921,568 |
| $ | - |
| $ | - |
| $ | 9,921,568 |
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|
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|
Acquiring Fund |
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|
|
|
|
|
|
|
Investments at Value |
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
| ||||
Common Stocks |
| $ | 45,278,991 |
| $ | - |
| $ | - |
| $ | 45,278,991 |
|
Preferred Stocks |
|
| 880,031 |
|
| - |
|
| - |
|
| 880,031 |
|
Exchange Traded Funds |
|
| 941,395 |
|
| - |
|
| - |
|
| 941,395 |
|
Money Market Funds |
|
| 591,084 |
|
| - |
|
| - |
|
| 591,084 |
|
Total Investments in Securities |
| $ | 47,691,501 |
| $ | - |
| $ | - |
| $ | 47,691,501 |
|
B-13
3. Fees
The Funds have entered into an Investment Advisory Agreement (“advisory agreement”) with Leuthold Weeden Capital Management (“Adviser”). Pursuant to its advisory agreement with the Funds, the Adviser is entitled to receive a fee, calculated daily and payable monthly, at annual rates of 1.00% for the Target and 1.00% for the Acquiring Fund, as applied to each Fund’s daily net assets.
The Adviser has agreed to waive its advisory fee and/or reimburse the Funds’ other expenses, including organization expenses, to the extent necessary to ensure that the Funds’ total operating expenses (exclusive of interest, taxes, brokerage commissions, dividends and interest on short positions, and other costs incurred in connection with the purchase or sale of portfolio securities, and extraordinary items) do not exceed the following rates, based on each Fund’s average daily net assets:
Target Fund – 1.85%
Acquiring Fund – 1.60%
Target Fund has adopted a distribution plan pursuant to Rule 12b-1 under the Investment Company Act, whereby Rafferty Capital Markets, LLC serves as distributor. This plan allows the Fund to use up to 0.25% of its average daily net assets to pay sales, distribution, and other fees for the sale of its shares and for services provided to investors. The Target Fund may pay all or a portion of this fee to any securities dealer, financial institution, or any other person who renders personal service to the Target Fund’s shareholders, assists in the maintenance of the Target Fund’s shareholder accounts, or who renders assistance in distributing or promoting the sale of shares of the Target Fund pursuant to a written agreement approved by the Board of Directors. To the extent such fee is not paid to such persons, the Target Fund may use the fee for its expenses of distribution of its shares, including, but not limited to, payment by the Target Fund of the cost of preparing, printing, and distributing Prospectuses and Statements of Additional Information to prospective investors and of implementing and operating the Plan.
The Acquiring Fund has not adopted a distribution plan pursuant to Rule 12b-1 under the Investment Company Act. The Acquiring Fund is subject to a shareholder servicing fee of up to 0.25%, as described in the Funds’ prospectus.
4. Capital Shares
The combined pro forma net asset values per share assume that the issuance of Acquiring Fund shares to the Target Fund shareholders would have occurred at September 30, 2009 in connection with the proposed reorganization. The pro forma number of shares outstanding, by class, for the combined fund consists of the following at September 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares of Acquiring |
| Additional Shares |
| Total Outstanding |
| ||||
| Class of Shares |
|
|
| Pre-Combination |
|
| in Reorganization |
| Post-Combination |
|
Retail Shares |
| 3,708,364 |
| 786,031 |
| 4,494,395 |
|
B-14
5. Federal Taxes
Federal Income Taxes: Provision for federal income taxes or excise taxes has not been made since the Funds have elected to be taxed as “regulated investment companies” and intend to distribute substantially all taxable income to shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Distributions from net realized gains for book purposes may include short-term capital gains which are included as ordinary income to shareholders for tax purposes. The Funds also designate as distributions of long-term gains, to the extent necessary to fully distribute such capital gains, earnings and profits distributed to shareholders on the redemption of shares.
B-15
|
LEUTHOLD FUNDS, INC.
Part C. Other Information
January [•], 2010
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|
Item 15. | Indemnification |
Pursuant to the authority of the Maryland General Corporation Law, particularly Section 2-418 thereof, Registrant’s Board of Directors has adopted the following bylaw which is in full force and effect and has not been modified or cancelled:
Article VII
GENERAL PROVISIONS
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|
Section 7. | Indemnification. |
A. The Corporation shall indemnify all of its corporate representatives against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with the defense of any action, suit or proceeding, or threat or claim of such action, suit or proceeding, whether civil, criminal, administrative, or legislative, no matter by whom brought, or in any appeal in which they or any of them are made parties or a party by reason of being or having been a corporate representative, if the corporate representative acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation and with respect to any criminal proceeding, if he had no reasonable cause to believe his conduct was unlawful provided that the corporation shall not indemnify corporate representatives in relation to matters as to which any such corporate representative shall be adjudged in such action, suit or proceeding to be liable for gross negligence, willful misfeasance, bad faith, reckless disregard of the duties and obligations involved in the conduct of his office, or when indemnification is otherwise not permitted by the Maryland General Corporation Law.
B. In the absence of an adjudication which expressly absolves the corporate representative, or in the event of a settlement, each corporate representative shall be indemnified hereunder only if there has been a reasonable determination based on a review of the facts that indemnification of the corporate representative is proper because he has met the applicable standard of conduct set forth in paragraph A. Such determination shall be made: (i) by the board of directors, by a majority vote of a quorum which consists of directors who were not parties to the action, suit or proceeding, or if such a quorum cannot be obtained, then by a majority vote of a committee of the board consisting solely of two or more directors, not, at the time, parties to the action, suit or proceeding and who were duly designated to act in the matter by the full board in which the designated directors who are parties to the action, suit or proceeding may participate; or (ii) by special legal counsel selected by the board of directors or a committee of the board by vote as set forth in (i) of this paragraph, or, if the requisite quorum of the full board cannot be obtained therefor and the committee cannot be established, by a majority vote of the full board in which directors who are parties to the action, suit or proceeding may participate.
C-1
C. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall create a rebuttable presumption that the person was guilty of willful misfeasance, bad faith, gross negligence or reckless disregard to the duties and obligations involved in the conduct of his or her office, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
D. Expenses, including attorneys’ fees, incurred in the preparation of and/or presentation of the defense of a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in Section 2-418(F) of the Maryland General Corporation Law upon receipt of: (i) an undertaking by or on behalf of the corporate representative to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the corporation as authorized in this bylaw; and (ii) a written affirmation by the corporate representative of the corporate representative’s good faith belief that the standard of conduct necessary for indemnification by the corporation has been met.
E. The indemnification provided by this bylaw shall not be deemed exclusive of any other rights to which those indemnified may be entitled under these bylaws, any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person subject to the limitations imposed from time to time by the Investment Company Act of 1940, as amended.
F. This corporation shall have power to purchase and maintain insurance on behalf of any corporate representative against any liability asserted against him or her and incurred by him or her in such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under this bylaw provided that no insurance may be purchased or maintained to protect any corporate representative against liability for gross negligence, willful misfeasance, bad faith or reckless disregard of the duties and obligations involved in the conduct of his or her office.
�� G. “Corporate Representative” means an individual who is or was a director, officer, agent or employee of the corporation or who serves or served another corporation, partnership, joint venture, trust or other enterprise in one of these capacities at the request of the corporation and who, by reason of his or her position, is, was, or is threatened to be made, a party to a proceeding described herein.
Insofar as indemnification for and with respect to liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director, officer or controlling person or Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
C-2
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ITEM 16. | EXHIBITS. | ||
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| 1. | (a) | Articles of Incorporation. (1) |
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| (b) | Articles Supplementary. (2) |
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| (c) | Articles Supplementary. (2) |
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| (d) | Articles Supplementary. (5) |
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| (e) | Articles Supplementary. (6) |
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| (f) | Articles Supplementary. (7) |
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| (g) | Articles Supplementary. (9) |
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| (h) | Articles Supplementary. (10) |
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| (i) | Articles Supplementary. (11) |
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| (j) | Articles Supplementary. (12) |
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| 2. | Bylaws. (1) | |
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| 3. | None. | |
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| 4. | Plan of Acquisition and Liquidation (filed herewith). | |
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| 5. | None. | |
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| 6. | (a) | Investment Advisory Agreement (Leuthold Core Investment Fund). (1) |
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| (b) | Investment Advisory Agreement (Leuthold Select Industries Fund). (4) |
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| (c) | Investment Advisory Agreement (Grizzly Short Fund). (2) |
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| (d) | Investment Advisory Agreement (Leuthold Asset Allocation Fund). (6) |
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| (e) | Investment Advisory Agreement (Leuthold Select Equities Fund). (6) |
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| (f) | Investment Advisory Agreement (Leuthold Undervalued and Unloved Fund). (7) |
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| (g) | Investment Advisory Agreement (Leuthold Global Fund). (10) |
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| (h) | Investment Advisory Agreement (Leuthold Global Clean Technology Fund). (12) |
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| (i) | Investment Advisory Agreement (Leuthold Hedged Equity Fund). (12) |
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| 7. | (a) | Service and Distribution Plan for Leuthold Asset Allocation Fund and Leuthold Select Equities Fund. (6) |
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| (b) | Service and Distribution Plan for Leuthold Undervalued and Unloved Fund. (7) |
C-3
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| (c) | Service and Distribution Plan for Leuthold Global Fund. (10) |
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| (d) | Service and Distribution Plan for Leuthold Global Clean Technology Fund. (12) |
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| (e) | Service and Distribution Plan for Leuthold Hedged Equity Fund. (12) |
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| 8. | None. | |
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| 9. | Custody Agreement with U.S. Bank National Association. (4) | |
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| 10. | Amended and Restated Rule 18f-3 Multi-Class Plan. (12) | |
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| 11. | Opinion of Foley & Lardner LLP regarding legality of issuance of shares (filed herewith). | |
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| 12. | Form of Opinion of Foley & Lardner LLP regarding tax matters (filed herewith). | |
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| 13. | (a) | Fund Administration Servicing Agreement with U.S. Bancorp Fund Services, LLC. (4) |
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| (b) | Transfer Agent Servicing Agreement with U.S. Bancorp Fund Services, LLC. (4) |
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| (c) | Fund Accounting Servicing Agreement with U.S. Bancorp Fund Services, LLC.(4) |
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| (d) | Service Plan for Leuthold Select Industries Fund and Grizzly Short Fund.(2) |
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| (e) | Service Plan for Leuthold Core Investment Fund. (3) |
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| 14. | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith). | |
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| 15. | None. | |
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| 16. | None. | |
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| 17. | Not Applicable. |
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| |
(1) | Previously filed as an exhibit to Post-Effective Amendment No. 3 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 3 was filed on January 23, 1998 and its accession number is 0000897069-98-000011. | |
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(2) | Previously filed as an exhibit to Post-Effective Amendment No. 6 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 6 was filed on March 31, 2000 and its accession number is 0000897069-00-000206. | |
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(3) | Previously filed as an exhibit to Post-Effective Amendment No. 9 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 9 was filed on January 31, 2002 and its accession number is 0000897069-02-000061. | |
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(4) | Previously filed as an exhibit to Post-Effective Amendment No. 12 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 12 was filed on February 19, 2004 and its accession number is 0000897069-04-000430. |
C-4
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(5) | Previously filed as an exhibit to Post-Effective Amendment No. 16 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 16 was filed on January 30, 2006 and its accession number is 0000897069-06-000222. |
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(6) | Previously filed as an exhibit to Post-Effective Amendment No. 18 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 18 was filed on May 19, 2006 and its accession number is 0000897069-06-001366. |
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(7) | Previously filed as an exhibit to Post-Effective Amendment No. 20 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 20 was filed on November 13, 2006 and its accession number is 0000897069-06-002390. |
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(9) | Previously filed as an exhibit to Post-Effective Amendment No. 22 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 22 was filed on January 30, 2007 and its accession number is 0000897069-07-000221. |
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(10) | Previously filed as an exhibit to Post-Effective Amendment No. 24 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 24 was filed on November 16, 2007 and its accession number is 0000897069-07-002059. |
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(11) | Previously filed as an exhibit to Post-Effective Amendment No. 25 to the Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 25 was filed on January 31, 2008 and its accession number is 0000897069-08-000193. |
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(12) | Previously filed as an exhibit to Post-Effective Amendment No. 28 to the Registrant’s Registration Statement and incorporated by reference thereto. Post-Effective Amendment No. 28 was filed on November 30, 2009 and its accession number is 0000897101-09-002462. |
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ITEM 17. | UNDERTAKINGS. |
(1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this Registration Statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them.
C-5
SIGNATURES
As required by the Securities Act of 1933, this registration statement has been signed on behalf of the Registrant, in the City of Minneapolis and State of Minnesota, on the 28th day of December, 2009.
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| LEUTHOLD FUNDS, INC. | |
| (Registrant) | |
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| By: | /s/ Steven C. Leuthold |
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| Steven C. Leuthold, President |
As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
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| Name |
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| Title |
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| Date |
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| ||||||
/s/ Steven C. Leuthold |
| President (Principal Executive |
| December 28, 2009 | ||||||
Steven C. Leuthold |
| Officer) and a Director |
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| ||||||
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| ||||||
/s/ Holly J. Weiss |
| Secretary and Treasurer |
| December 28, 2009 | ||||||
Holly J. Weiss |
| (Principal Financial and |
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| Accounting Officer) |
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/s/ Lawrence L. Horsch |
| Director |
| December 28, 2009 | ||||||
Lawrence L. Horsch |
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/s/ Paul M. Kelnberger |
| Director |
| December 28, 2009 | ||||||
Paul M. Kelnberger |
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| ||||||
/s/ John C. Mueller |
| Director |
| December 28, 2009 | ||||||
John C. Mueller |
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/s/ Addison L. Piper |
| Director |
| December 28, 2009 | ||||||
Addison L. Piper |
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Signature Page
EXHIBIT INDEX
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|
Exhibit No. |
|
| Exhibit |
| |
|
|
|
| ||
| 1. | (a) | Articles of Incorporation. * | ||
|
|
|
| ||
|
| (a) | Articles Supplementary. * | ||
|
|
|
| ||
|
| (b) | Articles Supplementary. * | ||
|
|
|
| ||
|
| (c) | Articles Supplementary. * | ||
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|
| ||
|
| (d) | Articles Supplementary. * | ||
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| ||
|
| (e) | Articles Supplementary. * | ||
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| ||
|
| (f) | Articles Supplementary. * | ||
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| ||
|
| (g) | Articles Supplementary. * | ||
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|
| ||
|
| (h) | Articles Supplementary. * | ||
|
|
|
| ||
|
| (i) | Articles Supplementary. * | ||
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|
|
| ||
| 2. | Bylaws. * | |||
|
|
| |||
| 3. | None. | |||
|
|
| |||
| 4. | Plan of Acquisition and Liquidation (filed herewith). | |||
|
|
| |||
| 5. | None. | |||
|
|
| |||
| 6. | (a) | Investment Advisory Agreement (Leuthold Core Investment Fund). * | ||
|
|
|
| ||
|
| (b) | Investment Advisory Agreement (Leuthold Select Industries Fund). * | ||
|
|
|
| ||
|
| (c) | Investment Advisory Agreement (Grizzly Short Fund). * | ||
|
|
|
| ||
|
| (d) | Investment Advisory Agreement (Leuthold Asset Allocation Fund). * | ||
|
|
|
| ||
|
| (e) | Investment Advisory Agreement (Leuthold Select Equities Fund). * | ||
|
|
|
| ||
|
| (f) | Investment Advisory Agreement (Leuthold Undervalued and Unloved Fund). * | ||
|
|
|
| ||
|
| (g) | Investment Advisory Agreement (Leuthold Global Fund). * | ||
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|
|
| ||
|
| (h) | Investment Advisory Agreement (Leuthold Global Clean Technology Fund). * | ||
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|
|
| ||
|
| (i) | Investment Advisory Agreement (Leuthold Hedged Equity Fund). * | ||
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|
|
| ||
| 7. | (a) | Service and Distribution Plan for Leuthold Asset Allocation Fund and Leuthold Select Equities Fund. * | ||
|
|
|
| ||
|
| (b) | Service and Distribution Plan for Leuthold Undervalued and Unloved Fund. * | ||
|
|
|
| ||
|
| (c) | Service and Distribution Plan for Leuthold Global Fund. * | ||
|
|
|
| ||
|
| (d) | Service and Distribution Plan for Leuthold Global Clean Technology Fund. * | ||
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|
| ||
|
| (e) | Service and Distribution Plan for Leuthold Hedged Equity Fund. * | ||
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|
| ||
| 8. | None. | |||
|
|
| |||
| 9. | Custody Agreement with U.S. Bank National Association. * | |||
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|
| |||
| 10. | Amended and Restated Rule 18f-3 Multi-Class Plan. * | |||
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|
| |||
| 11. | Opinion of Foley & Lardner LLP regarding legality of issuance of shares (filed herewith). |
Exhibit Index
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Exhibit No. |
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| Exhibit |
| |
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| 12. | Form of Opinion of Foley & Lardner LLP regarding tax matters (filed herewith). | |||
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| |||
| 13. | (a) | Fund Administration Servicing Agreement with U.S. Bancorp Fund Services, LLC. * | ||
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|
| ||
|
| (b) | Transfer Agent Servicing Agreement with U.S. Bancorp Fund Services, LLC. * | ||
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| ||
|
| (c) | Fund Accounting Servicing Agreement with U.S. Bancorp Fund Services, LLC. * | ||
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|
| ||
|
| (d) | Service Plan for Leuthold Select Industries Fund and Grizzly Short Fund. * | ||
|
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|
| ||
|
| (e) | Service Plan for Leuthold Core Investment Fund. * | ||
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| ||
| 14. | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith). | |||
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| ||
| 15. | None. | |||
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|
| |||
| 16. | None. | |||
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|
| |||
| 17. | Not Applicable. |
|
|
| |
| |
*Filed previously. |
Exhibit Index