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The
Trust acknowledges that in connection with the comments made by the
Staff
of the SEC, the Staff has not passed on the accuracy or adequacy of
the
disclosure made herein, and the Trust and its management are solely
responsible for the content of such
disclosure;
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The
Trust acknowledges that the Staff’s comments and changes in disclosure in
response to the Staff’s comments does not foreclose the SEC or other
regulatory body from the opportunity to seek enforcement or take other
action with respect to the disclosure made herein;
and
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The
Trust represents that neither the Trust nor its management will assert
the
Staff’s comments or changes in disclosure in response to the Staff’s
comments as a defense in any action or proceeding by the SEC or any
person.
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1.
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With
respect to the comparison of the Acquired and Acquiring Funds’ investment
strategies, we note that the Acquired Fund may invest up to 100%
in high
yield bonds, while the Acquiring Fund is limited to investing only
30% in
high yield bonds. Please highlight any variations in each Fund’s risks and
investment results that may occur as a result of this difference
in
investment strategies.
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The
Trust responds by stating supplementally that while the Acquired
Fund’s
investment strategy allows the Fund to invest up to 100% of its assets
in
high-yield bonds, in practice the Acquired Fund’s investment advisor has
limited the Acquired Fund’s investments in this type of security to 30%.
The Trust has added the following disclosure to the first paragraph
in
this section:
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2.
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Please
expand the discussion comparing the Acquired and Acquiring Funds’ risks to
highlight any differences in risks that are implied by the statement
“the
Acquiring Fund is subject to nearly identical risks as investment
in the
Fund,” specifically addressing any differences in risks that result from
each Fund’s investment strategy with respect to high yield
bonds.
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The
Trust responds by referring to the Trust’s response to Comment #1, and by
adding the following disclosure to this
section:
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“The
Fund may invest up to 100% of its assets in high yield bonds, while
the
Acquiring Fund may invest only 30% of its assets in high yield bonds.
Under these investment strategies the Fund would have the potential
for
higher rates of return and would be subject to increased risks related
to
investments in high yield bonds (as described in “High Yield Bond Risk”
below) than the Acquired Fund. However, as noted previously, in practice
the Advisor has limited the Fund’s investments in high yield bonds to 30%
of the Fund’s assets using a strategy that is substantially similar to
that of the Acquiring Fund. Therefore, the Advisor believes that
the
investment risks and results of investing in the Acquiring Fund would
be
substantially similar to those of investing in the
Fund.”
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3.
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Please
include a summary comparison of the Acquired and Acquiring Funds
distribution, purchase and redemption procedures in the “Overview” section
of the Proxy Statement.
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The
Trust responds by adding the following to this
section:
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Acquired
Fund Sales Charge as a percentage of:
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Offering
Price
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Net
Amount Invested
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Dealer
Re-allowance as a percentage of Public Offering Price
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Less
than $100,000
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3.50%
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3.62%
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3.00%
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$100,000
but less than $250, 000
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2.50%
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2.56%
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2.00%
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$250,000
but less than $500,000
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1.50%
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1.52%
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1.00%
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$500,000
or more
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0.00%
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0.00%
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0.00%
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Acquiring
Fund Sales Charge* as a percentage of:
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Offering
Price
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Net
Amount Invested
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Dealer
Re-allowance as a percentage of Public Offering Price
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Less
than $100,000
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3.50%
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3.62%
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3.00%
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$100,000
but less than $250, 000
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1.00%
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1.52%
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1.00%
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$250,000
or more
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0.00%
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0.00%
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0.00%
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4.
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With
respect to the Comparison Fee Table, we note that the Other Expenses
of
the Acquiring Fund are significantly lower than the Other Expenses
of the
Acquired Fund. Please provide a supplemental explanation of why these
expenses are lower for the Acquiring
Fund.
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The
Trust responds by stating supplementally that the Operating Expenses
for
the Acquiring Fund are lower because they are based on estimates
calculated using asset projections for the Acquiring Fund for the
fiscal
year ended February 28, 2008. Additionally, as a series of the Trust,
the
Acquiring Fund will be subject to some economies of scale that may
result
in lower fees included in the Other Expenses
calculation.
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Please
confirm whether the three-year costs for each Fund in the Expense Example
have been calculated correctly to reflect the expiration of each Fund’s
total operating expense cap on June 30, 2007 (as discussed in the Fees
and
Expenses Table)
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One
Year
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Three
Years
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Five
Years
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Ten
Years
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Acquired
Fund
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$720
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$1,473
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$2,244
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$4,253
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Acquiring
Fund (Proforma)
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$552
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$973
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-
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-
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6.
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With
respect to the statement that the Acquiring Fund’s investment policies and
strategies will be substantially similar to those of the Acquiring
Fund,
please expand this discussion to highlight any differences in investment
policies and strategies that may exist.
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The
Trust responds by referring to the Trust’s response to Comment #1 and by
adding the follow disclosure to this
section:
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“The
investment strategies of the Fund and the Acquired Fund with respect
to
high yield bonds differ in that the Fund may invest up to 100% of
its
assets in high yield bonds, while the Acquiring Fund may invest only
up to
30% of its assets in high yield bonds. However, in practice the Advisor
has limited the Fund’s investments in high-yield bonds to 30% of its net
assets using a strategy that is substantially similar to that described
for the Acquiring Fund in this Proxy Statement. As a result of this
practice, the Advisor believes that the investment risks and results
of
investing in the Acquiring Fund will be substantially similar to
those
related to investing in the Fund.”
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7.
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We
note that the first paragraph in this section states that the investment
policies of each Fund are “substantially similar,” while the first bullet
point in this section states that the investment policies and strategies
are “similar.” Please review this section and clarify any inconsistencies
if appropriate.
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The
Trust responds by revising the first bullet point to state that the
investment objectives, policies and restrictions of the Fund are
“substantially
similar” to those of the Acquiring
Fund.
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8.
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With
respect to the disclosure that there could be potential limits placed
on
the Acquired Fund’s capital loss carryforward as a result of the
Reorganization, please expand this discussion to explain what the
potential limits are, if
any.
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9.
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With
respect to the discussion of Shareholder Liability in this section,
please
discuss any material differences between the rights of the shareholders
of
the Acquired Fund and Acquiring Fund, if
any.
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The
Trust responds by stating supplementally that there are no material
differences between the rights of the shareholders of the Acquired
Fund
and Acquiring Fund.
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10.
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With
respect to Comment #1, please make conforming changes, as applicable,
to
this section of the Proxy
Statement.
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11.
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Please
disclose any Control Persons of the Acquired Fund and Acquiring Fund
in
this section.
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Principal
Shareholders
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Name
and Address
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No.
of Shares Owned
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%
of Shares
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Type
of Ownership
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Chapman
Family Trust
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104,805.09
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5.11%
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Beneficial
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23730
SW Stafford Hill Road
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West
Linn, OR 97068
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Control
Persons
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Name
and Address
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No.
of Shares Owned
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%
of Shares
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Type
of Ownership
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Richard
Chapman IRA
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524,230.56
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25.56%
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Record
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23730
SW Stafford Hill Road
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West
Linn, OR 97068
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