November 19, 2010
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549
Re: | The GKM Funds (the “Trust”) |
File Nos. 811-10529 and 333-71402 |
Response to Commission’s Comments on Post-Effective Amendment No. 9 on Form N-1A |
Ladies and Gentlemen:
Mr. Edward Bartz of the Commission staff contacted us to provide comments on Post-Effective Amendment No. 9 to the Trust’s registration statement on Form N-1A, which was filed with the Commission on September 29, 2010. The following are the comments provided by the Commission staff and the Trust’s response to each:
PROSPECTUS
1. | Comment: In the Fund Summary, modify the “Annual Fund Operating Expenses” table to list “Borrowing Costs” as a subcaption to “Other Expenses” or include as a parenthetical to “Other Expenses”. |
Response: The GKM Growth Fund’s (the “Fund”) expenses related to its borrowing activities have been included in “Other Expenses”. In addition, a parenthetical has been added explaining that.
2. | Comment: In the Fund Summary, add disclosure, if applicable, to the “Principal Risks” section that states that an investment in the fund is not a deposit of a bank and is not FDIC insured. |
Response: The Adviser is affiliated with a bank and as a result, the following disclosure has been added to the “Market Risk” disclosure:
An investment in the Fund is not a deposit of the bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
3. | Comment: In the “Tax Information” section of the Fund Summary, disclose that shareholders investing through tax-deferred arrangements might be taxed later upon withdrawal of monies from those accounts. |
Response: Disclosure has been added to the “Tax Information” section of the Fund Summary stating “If you are investing through a tax-deferred arrangement, you may be taxed later upon withdrawal of monies from those accounts.”
4. | Comment: On the back cover of the prospectus confirm that the disclosure of the Fund’s Investment Company Act number is in type size smaller than that generally used in the prospectus. |
Response: The Investment Company Act number is in a type size smaller than that generally used in the prospectus.
STATEMENT OF ADDITIONAL INFORMATION
5. | Comment: In the section Trustees and Officers, revise the column heading of the fourth column to state “Principal Occupation(s) During the Past 5 Years and Directorships of Public Companies Within the Past 5 Years” (new text underlined) and confirm that other directorships held by each Trustee during that time are disclosed. |
Response: The requested change has been made and the Trust has confirmed that the current disclosure is accurate.
The Trust has authorized me to acknowledge to you that: |
(a) | The Trust is responsible for the adequacy and accuracy of the disclosure in the filings reviewed by the staff of the Securities and Exchange Commission (the “Staff”); |
(b) | Staff comments or changes to disclosure in response to Staff comments in a filing reviewed by the Staff do not foreclose the Commission from taking any action with respect to the filing; and |
(c) | The Trust may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
If you have any further questions or additional comments, please contact the undersigned at 513-587-3406.
Sincerely,
/s/ Wade R. Bridge
Wade R. Bridge
Assistant Secretary