-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ChRe2trs95eoUnIFhHlq1gu0man1L8/gd1CADWtiw6EwKhxOIe+3AriWmoHq6wYP /wvbWWOkRSQq6GKC8c7dRg== 0000893220-05-000474.txt : 20050307 0000893220-05-000474.hdr.sgml : 20050307 20050307113401 ACCESSION NUMBER: 0000893220-05-000474 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050307 DATE AS OF CHANGE: 20050307 EFFECTIVENESS DATE: 20050307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEISS FUND CENTRAL INDEX KEY: 0000949328 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-09084 FILM NUMBER: 05663098 BUSINESS ADDRESS: STREET 1: 4176 BURNS RD CITY: PALM BEACH GARDENS STATE: FL ZIP: 33410 BUSINESS PHONE: 4076273300 MAIL ADDRESS: STREET 1: 4176 BURNS ROAD CITY: PALM BEACH GARDENS STATE: FL ZIP: 33410 FORMER COMPANY: FORMER CONFORMED NAME: WEISS TREASURY FUND DATE OF NAME CHANGE: 19950814 N-CSR 1 w04794nvcsr.txt THE WEISS FUND ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-09084 The Weiss Fund --------------------------------------------------------- (Exact name of registrant as specified in charter) 7111 Fairway Drive, Suite 102 Palm Beach Gardens, FL 33418 ----------------------------------------------- (Address of principal executive offices) (Zip code) Jeffrey B. Wilson, Esq. 7111 Fairway Drive, Suite 102 Palm Beach Gardens, FL 33418 ----------------------------------------------- (Name and address of agent for service) registrant's telephone number, including area code: 561-515-8558 Date of fiscal year end: December 31 Date of reporting period: December 31, 2004 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. THE WEISS FUND A LETTER FROM THE PRESIDENT December 31, 2004 Dear Shareholder, Let me take this opportunity to thank you for your confidence in Weiss and for entrusting us with your investment. It is with pleasure that I present the Annual Report for the twelve months ended December 31, 2004 for The Weiss Treasury Only Money Market Fund. The trend of solid domestic growth, healthy retail sales, and higher corporate earnings that began in 2003 spilled over into 2004 as we expected. These factors appeared to give investors more confidence, witnessed by two year highs in the Conference Board's Consumer Sentiment Index(1). Indeed, the broad equity markets managed to produce double-digit returns(2), thanks to a surge late in the year, as inflation fears subsided and the U.S. presidential election went off without incident. Fixed-income markets had a surprisingly positive year despite five Federal Reserve Board short-term interest rate hikes since June 30, 2004. As we mentioned in our semi-annual report to you in July, bond prices tumbled in the second quarter as strong labor market data helped fuel inflation expectations. However, the spike in long-term interest rates proved to be short-lived, as slower than expected GDP growth and moderating employment figures in the second half of the year led investors to reassess the degree of expected inflation. In fact, despite five Fed tightenings, surging commodity prices and a falling U.S. dollar in 2004, the yield on the U.S. 10-year Treasury bond stood at 4.22% on December 31, 2004, three basis points LOWER than where it was on December 31, 2003(3). After a year of inaction, the Federal Reserve was back in play in 2004. In order to combat future inflation as the economy gained traction, the Fed raised short-term interest rates a total of five times, all coming in the latter part of the year. The Fed Funds rate ended 2004 at 2.25%, up from a multi-decade low of 1.00% in 2003. Indeed, we had been concerned for some time that the Fed was possibly behind the curve by keeping short-term rates so low, especially as economic data was showing improved upward momentum by the summer of 2003. Our concern over rising short-term rates led to our conservative management of your Treasury Only Money Market Fund. Based on our expectations of rising short-term rates, we managed the Fund by keeping the average weighted maturity of the portfolio low, in fact, rarely did the average maturity of the Fund exceed 45 days(4) over the course of the year. This conservative investment policy benefited the Fund, especially in the latter part of the 2004, as short-term rates began moving rapidly higher. As the year came to an end, the Fund's 7-day yield stood at 1.25%, up significantly from the 7-day yield of 0.29% on December 31, 2003. - --------------- (1) The index rose above 100 for the first time in two years in 2004, with a month-end reading of 102.30 on December 31, 2004. (2) The S&P 1500 Supercomposite Index -- comprised of the 1,500 US companies found in the S&P 400, 500, and 600 -- was up 11.79% in 2004. Source: Bloomberg. (3) The yield on the 10-year Treasury was 4.25% on December 31, 2003. (4) The Fund must, at all times, maintain an average weighted maturity of 90 days or less. As we head into 2005, we expect the Federal Reserve will continue to raise short-term interest rates. Indeed, the minutes of their December 14, 2004 policy meeting indicated concern about the current low level of short-term interest rates relative to where they would most likely need to be in order to keep inflation under control. Higher short-term interest rates are a positive for the Fund, as we attempt to take advantage of a rising rate environment by rolling funds into Treasuries with higher yields, thereby increasing the yield of the Fund. The goal of the Weiss Treasury Money Market Fund will remain unchanged: To seek maximum current income consistent with preservation of capital. We seek to achieve this goal each day by investing exclusively in U.S. Treasury securities, which are direct obligations of the U.S. Treasury, repurchase agreements secured by such obligations, and other funds that invest primarily in Treasuries. As always, we look forward to continuing to serve your interests in the future. Should you have any questions about the Weiss Fund, please call upon a Fund representative at 800-430-9617. Sincerely, /s/ Dana Nicholas Dana Nicholas President The Weiss Fund AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND. THE WEISS FUND WEISS TREASURY ONLY MONEY MARKET FUND STATEMENT OF NET ASSETS, DECEMBER 31, 2004
DESCRIPTION AND PERCENTAGE OF PORTFOLIO PAR (000) VALUE - --------------------------------------- --------- ------------ U.S. TREASURY BILLS -- 66.0% 1.680%, 01/06/2005........................................ $ 5,000 $ 4,998,833 1.757%, 01/13/2005........................................ 5,000 4,997,071 1.740%, 01/20/2005........................................ 15,000 14,986,225 1.755%, 01/27/2005........................................ 5,000 4,993,716 1.810%, 02/03/2005........................................ 5,000 4,991,704 1.780%, 02/10/2005........................................ 5,000 4,990,111 1.850%, 02/17/2005........................................ 5,000 4,987,924 2.160%, 02/24/2005........................................ 5,000 4,983,800 2.090%, 03/03/2005........................................ 5,000 4,982,293 2.095%, 03/10/2005........................................ 5,000 4,980,214 2.110%, 03/17/2005........................................ 5,000 4,978,021 2.165%, 03/24/2005........................................ 5,000 4,975,343 2.205%, 03/31/2005........................................ 5,000 4,972,744 ------------ Total U.S. Treasury Bills (Cost $74,817,999).............. 74,817,999 ------------ REPURCHASE AGREEMENTS -- 32.3% Morgan Stanley Repurchase Agreement 1.80%, due 01/03/05 (dated 12/30/04; proceeds $21,604,320, collateralized by $15,340,000 U.S. Treasury Bonds, 12.50% due 08/15/14, valued at $22,037,335) (Cost $21,600,000)............... 21,600 21,600,000 Wachovia Repurchase Agreement 1.80%, due 01/03/05 (dated 12/30/04; proceeds $15,003,000, collateralized by $29,209,000 U.S. Treasury Strips, 4.93% due 05/15/18, valued at $15,224,987) (Cost $15,000,000)............... 15,000 15,000,000 ------------ Total Repurchase Agreements (Cost $36,600,000)............ 36,600,000 ------------
See accompanying notes to financial statements. 1 THE WEISS FUND WEISS TREASURY ONLY MONEY MARKET FUND STATEMENT OF NET ASSETS, DECEMBER 31, 2004 (CONCLUDED)
SHARES (000) VALUE --------- ------------ SHORT-TERM INVESTMENT -- 1.7% BlackRock Provident Institutional Funds -- T-Fund (Cost $1,965,371)............................................. 1,965 $ 1,965,371 ------------ TOTAL INVESTMENTS -- 100.0% (COST $113,383,370*)............ 113,383,370 LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.0%) Dividend Payable.......................................... (3,388) Accrued Administrative Expense............................ (11,993) Accrued Custody Expense................................... (3,691) Accrued Transfer Agent Expense............................ (11,040) Other Liabilities......................................... (30,058) Other Assets.............................................. 16,769 ------------ (43,401) ------------ NET ASSETS -- 100.0% (Equivalent to $1.00 per share based on 113,340,367 shares of capital stock outstanding).......... $113,339,969 ============ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ($113,339,969/113,340,367 shares outstanding)............. $ 1.00 ============
- ------------ * Aggregate cost for federal income tax purposes is substantially the same. See accompanying notes to financial statements. 2 THE WEISS FUND WEISS TREASURY ONLY MONEY MARKET FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004 INVESTMENT INCOME: Interest.................................................. $1,557,261 ---------- EXPENSES: Investment advisory fees.................................. 631,614 Administration fees....................................... 124,305 Transfer agent fees....................................... 162,118 Registration and filing fees.............................. 25,679 Legal fees................................................ 128,979 Custodian fees............................................ 21,934 Printing fees............................................. 18,160 Trustees' fees............................................ 16,500 Insurance fees............................................ 14,074 Audit fees................................................ 8,800 Miscellaneous expense..................................... 1,399 ---------- 1,153,562 Less: expenses waived and reimbursed...................... (294,476) ---------- Total expenses.......................................... 859,086 ---------- Net investment income................................... 698,175 ---------- Net increase in net assets resulting from operations........ $ 698,175 ==========
See accompanying notes to financial statements. 3 THE WEISS FUND STATEMENT OF CHANGES IN NET ASSETS
WEISS TREASURY ONLY MONEY MARKET FUND -------------------------------- FOR THE YEAR ENDED DECEMBER 31, -------------------------------- 2004 2003 -------------- -------------- INCREASE (DECREASE) IN NET ASSETS FROM: Operations: Net investment income.................... $ 698,175 $ 1,135,187 Net realized gain on investment securities............................. -- 250 ------------ ------------ Net increase in net assets resulting from operations............................. 698,175 1,135,437 Distributions: From net investment income ($0.01 and $0.00* per share, respectively)........ (698,175) (1,135,187) Capital share transactions: Net decrease from capital share transactions........................... (47,798,043) (21,421,575) ------------ ------------ Total decrease in net assets............. (47,798,043) (21,421,325) NET ASSETS Beginning of year........................... 161,138,012 182,559,337 ------------ ------------ End of year................................. $113,339,969 $161,138,012 ============ ============
- ------------ * Distributions are less than a penny per share. See accompanying notes to financial statements. 4 THE WEISS FUND FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
WEISS TREASURY ONLY MONEY MARKET FUND -------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, -------------------------------------------------------- 2004 2003 2002 2001 2000 -------- -------- -------- -------- -------- NET ASSET VALUE, BEGINNING OF YEAR:... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS: Net investment income............. 0.01 0.00 0.01 0.03 0.06 -------- -------- -------- -------- -------- LESS DISTRIBUTIONS: From net investment income............. (0.01) (0.00)* (0.01) (0.03) (0.06) -------- -------- -------- -------- -------- NET ASSET VALUE, END OF YEAR:................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== TOTAL RETURN........... 0.59% 0.44% 1.14% 3.54% 5.65% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000)................ $113,340 $161,138 $182,559 $137,136 $130,053 Ratio of expenses to average net assets(1)............ 0.68% 0.65% 0.60% 0.59% 0.50% Ratio of net investment income to average net assets(2)............ 0.55% 0.46% 1.11% 3.48% 5.51%
- ------------ (1) Expense ratios before waivers and reimbursement of expenses for the years ended December 31, 2004, 2003, 2002, 2001 and 2000 would have been 0.91%, 0.75%, 0.82%, 0.87%, and 0.90%, respectively. (2) Net investment income ratios before waivers and reimbursement of expenses for the years ended December 31, 2004, 2003, 2002, 2001, and 2000 would have been 0.32%, 0.36%, 0.89%, 3.20%, and 5.11%, respectively. * Distributions are less than a penny per share. See accompanying notes to financial statements. 5 THE WEISS FUND NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2004 1. FUND ORGANIZATION The Weiss Fund (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. The Trust was organized as a Massachusetts business trust on August 10, 1995 as Weiss Treasury Fund. The Trust is a series fund that is authorized to issue shares of beneficial interest in the Weiss Treasury Only Money Market Fund (the "Fund"). The Fund commenced operations on June 28, 1996. The Board of Trustees of the Trust oversees the business affairs of the Trust and is responsible for significant decisions relating to the Fund's investment objectives and policies. The Trustees delegate the day-to-day management of the Fund to the officers of the Trust. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Portfolio Valuation: The Fund's securities are valued at amortized cost. Amortized cost valuation involves valuing an instrument at its cost initially and, thereafter, assuming a constant amortization to maturity of any applicable discount or premium. Security Transactions and Investment Income: Security transactions are recorded on the trade date. Realized gains and losses on investments sold are recorded on the identified cost basis. Interest income, including the accretion of discount and amortization of premium, is accrued daily. The Fund's expenses are also accrued daily. Net investment income for the Fund consists of all interest income accrued on the Fund's assets, less accrued expenses. Dividends and Distributions to Shareholders: Dividends from the Fund's net investment income are declared daily and paid monthly. The Fund intends to pay accrued dividends on the last business day of each month. The Fund may make an additional distribution of income and gains if necessary to satisfy a calendar year excise tax distribution requirement. The tax character of all distributions paid during 2004 and 2003 was ordinary income. Federal Income Taxes: The Fund is classified as a separate taxable entity for Federal income tax purposes. The Fund intends to qualify as a "regulated investment company" under the Internal Revenue Code and make the requisite distributions to its shareholders that will be sufficient to relieve it from Federal income tax and Federal excise tax. Therefore, no Federal tax provision is required. Net investment income and short-term capital gains, if any, are taxed as ordinary income. Income and capital gains of the Fund are determined in accordance with both tax regulations and accounting principles generally accepted in the United States of America. Such determinations may result in temporary and permanent differences between tax basis earnings and earnings reported for financial state- 6 THE WEISS FUND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) ment purposes. These reclassifications, which have no impact on the net asset value of the Fund, are primarily attributable to certain differences in computation of distributable income and capital gains. Repurchase Agreements: The Fund may agree to purchase money market instruments subject to the seller's agreement to repurchase them at an agreed upon date and price. The seller, under a repurchase agreement, will be required on a daily basis to maintain the value of the securities subject to the agreement at no less than the repurchase price. In connection therewith, the Trust's Custodian receives and holds collateral of not less than 100.5% of the repurchase price plus accrued interest. If the value of the collateral falls below this amount, the Trust will require the seller to deposit additional collateral. 3. INVESTMENT MANAGER, DISTRIBUTOR, ADMINISTRATOR, AND OTHER RELATED PARTY TRANSACTIONS Weiss Money Management, Inc. (the "Manager") serves as the Investment Manager to the Fund. Under an investment advisory agreement with the Trust, on behalf of the Fund, the Manager provides continuous advice and recommendations concerning the Fund's investments. To compensate the Manager for its services, the Fund agreed to pay monthly a fee at the annual rate of 0.50% of average daily net assets. The Manager may from time to time waive all or a portion of its fees payable by the Fund. Certain officers of the Manager serve as President, Vice President, Secretary, Treasurer and Trustee to the Trust. Weiss Funds, Inc. (the "Distributor"), a registered broker-dealer and wholly owned subsidiary of the Manager, serves as the Trust's Distributor. PFPC, Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, serves as the Trust's Administrator and, in that capacity, performs various administrative and accounting services for the Fund. PFPC also serves as the Trust's Transfer Agent, dividend disbursing agent and registrar. PFPC Trust Company serves as the Custodian for the Fund's portfolio securities and cash. An officer of PFPC serves as Assistant Treasurer of the Trust. For the period year ended December 31, 2004, the Manager contractually agreed to limit the Fund's expense ratio to 0.68% (exclusive of extraordinary and certain other expenses). In order to maintain this ratio, the Manager has waived a portion of its fees, which amounted to $294,476. Dechert LLP serves as legal counsel to the Trust. Each non-interested Trustee receives an annual fee of $1,500, $500 for each Board meeting attended, $250 for each Audit Committee or other meeting attended, plus reimbursement of out-of-pocket expenses for serving in that capacity. No person who is an officer, trustee, or employee of the Manager, Distributor, Administrator, or of any parent or subsidiary thereof, who serves as officer, Trustee, or employee of the Trust receives any compensation from the Trust. 7 THE WEISS FUND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 4. NET ASSETS At December 31, 2004, the Fund's net assets consisted of: Paid in Capital............................................. $113,340,367 Accumulated net realized loss on investments................ (398) ------------ $113,339,969 ============
As of December 31, 2004, the components of distributable earnings on a tax basis were the same as above. 5. SHARES OF BENEFICIAL INTEREST The Trust's Declaration of Trust authorizes the Board of Trustees to issue an unlimited number of shares of beneficial interest each having $0.01 par value. The Manager, in its capacity as Investment Adviser to its clients' discretionary assets, may use the Fund as an investment vehicle for its clients' cash assets. As such, there may be large fluctuations in the size of the Fund's assets based on the Manager's investment decisions. These fluctuations do not affect Fund performance. Transactions in capital shares for the year ended December 31, 2004 and the year ended December 31, 2003, respectively, are summarized below.
YEAR ENDED DECEMBER 31, 2004 YEAR ENDED DECEMBER 31, 2003 ----------------------------- ------------------------------- SHARES VALUE SHARES VALUE ------------- -------------- -------------- --------------- Shares Sold......... 300,661,340 $ 300,661,340 1,697,118,229 $ 1,697,118,229 Shares Reinvested... 675,818 675,818 1,112,898 1,112,898 Shares Repurchased....... (349,135,201) (349,135,201) (1,719,652,702) (1,719,652,702) ------------ ------------- -------------- --------------- Net Decrease........ (47,798,043) $ (47,798,043) (21,421,575) $ (21,421,575) ============ ============= ============== ===============
6. CAPITAL LOSS CARRYOVER The Fund has a capital loss carryover of $398 that expires in 2006. 8 THE WEISS FUND SUPPLEMENTAL INFORMATION -- FUND MANAGEMENT (UNAUDITED) Information pertaining to the Trustees and officers* of the Trust is set forth below. The statement of additional information (SAI) includes additional information about the Trustees and is available without charge, upon request, by calling (800) 430-9617.
- ---------------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS OTHER IN FUND TRUSTEESHIPS/ TERM OF OFFICE COMPLEX DIRECTORSHIPS NAME, (AGE), ADDRESS AND AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY POSITION(S) WITH TRUST TIME SERVED(1) DURING PAST 5 YEARS BY TRUSTEE TRUSTEE - ------------------------ -------------- ----------------------- ---------- ------------------- - ---------------------------------------------------------------------------------------------------------------------------------- DISINTERESTED TRUSTEES - ---------------------------------------------------------------------------------------------------------------------------------- Ester S. Gordon, 62, Trustee since President, Esther's Natural, Inc. (November 1999 - 1 None 7111 Fairway Drive November 30, 1995 present) (vitamin and supplements distributor); Suite 102 Office Manager, Nutrition S'Mart (February Palm Beach Gardens, FL 2001 - present) (natural food market). 33418 Trustee - ---------------------------------------------------------------------------------------------------------------------------------- Robert Z. Lehrer, 70, Trustee since President, Wyndmoor Sales Co. Inc. 1 None 7111 Fairway Drive November 30, 1995 (1985 - present) (textiles). Suite 102 Palm Beach Gardens, FL 33418 Trustee - ---------------------------------------------------------------------------------------------------------------------------------- Donald Wilk, 66, Trustee since President, Donald Wilk Corporation 1 None 7111 Fairway Drive November 30, 1995 (1990 - present) (computer sales and credit card Suite 102 processing). Palm Beach Gardens, FL 33418 Trustee - ---------------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEES(2) - ---------------------------------------------------------------------------------------------------------------------------------- Dana Nicholas, 45(3) President since Vice President, Weiss Group, Inc. (November 1994 - 1 None 7111 Fairway Drive April 30, 2004; present); President, the Manager (October Suite 102 Trustee since 2001 - May 2004); Vice President, Weiss Research, Palm Beach Gardens, FL April 18, 2002; Inc. (November 1994 - October 2001; June 33418 Secretary from 2004 - present). President and Trustee April 18, 2002 to April 30, 2004 - ---------------------------------------------------------------------------------------------------------------------------------- Martin D. Weiss, 58 Trustee since Editor of "Safe Money Report"; President, Weiss 1 Director, 7111 Fairway Drive November 30, 1995 Group, Inc. (1971 - present); Director, Weiss Weiss Research, Suite 102 Group, Inc. (1971 - March 2004); Sole Director, Inc. Palm Beach Gardens, FL the Manager (November 1980 - present). 33418 Trustee - ----------------------------------------------------------------------------------------------------------------------------------
9
- ---------------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS OTHER IN FUND TRUSTEESHIPS/ TERM OF OFFICE COMPLEX DIRECTORSHIPS NAME, (AGE), ADDRESS AND AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY POSITION(S) WITH TRUST TIME SERVED(1) DURING PAST 5 YEARS BY TRUSTEE TRUSTEE - ------------------------ -------------- ----------------------- ---------- ------------------- - ---------------------------------------------------------------------------------------------------------------------------------- OFFICER(S) WHO ARE NOT TRUSTEES - ---------------------------------------------------------------------------------------------------------------------------------- John D. Leavitt, 47(4) Treasurer since Controller and Corporate Treasurer, the Manager 1 N/A 7111 Fairway Drive April 28, 2003, (January 2001 - present); Director of Accounting, Suite 102 Secretary since OutSource International (November 1998 - December Palm Beach Gardens, FL May 19, 2004 2000). 33418 Secretary and Treasurer - ---------------------------------------------------------------------------------------------------------------------------------- Charles D. Curtis, Jr., Assistant Vice President and Director of Accounting, PFPC 1 N/A 49 Treasurer since Inc. (1991 - present). 103 Bellevue Parkway December 31, 2002 Wilmington, DE 19809 Assistant Treasurer - ----------------------------------------------------------------------------------------------------------------------------------
* The term "officer" means the president, vice president, secretary, treasurer, controller or any other officer who performs a policy making function. (1) Each Trustee and officer serves for an indefinite term, until his/her successor is duly elected and qualified. (2) Ms. Nicholas and Mr. Weiss are deemed to be "interested persons" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act by virtue of their employment by the Manager. (3) Effective February 10, 2005, Sharon A. Parker Daniels will assume the position of President of the Fund. (4) Effective February 10, 2005, Jeffrey S. Rano will assume the position of Treasurer and Secretary of the Fund. 10 THE WEISS FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Trustees of The Weiss Fund Palm Beach Gardens, Florida We have audited the accompanying statement of net assets of Weiss Treasury Only Money Market Fund, a series of The Weiss Fund, as of December 31, 2004, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2004 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Weiss Treasury Only Money Market Fund as of December 31, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. Tait, Weller & Baker Philadelphia, Pennsylvania January 12, 2005 This page intentionally left blank. THE WEISS FUND (LOGO) WEISS TREASURY ONLY MONEY MARKET FUND ANNUAL REPORT TO SHAREHOLDERS DECEMBER 31,2004 Board of Trustees Esther S. Gordon Robert Z. Lehrer Dana Nicholas Martin D. Weiss Donald Wilk Officers Dana Nicholas, President John D. Leavitt, Treasurer and Secretary Charles D. Curtis, Jr., Assistant Treasurer Investment Manager Weiss Money Management, Inc. 7111 Fairway Drive Suite 102 Palm Beach Gardens, FL 33418 Administrator and Transfer Agent PFPC Inc. 301 Bellevue Pkwy. Wilmington, DE 19809 Distributor Weiss Funds, Inc. 7111 Fairway Drive Suite 102 Palm Beach Gardens, FL 33418 Counsel Dechert LLP 200 Clarendon Street, 27th Floor Boston, MA 02116 Independent Registered Public Accounting Firm Tait, Weller & Baker 1818 Market Street Suite 2400 Philadelphia, PA 19103-2108 This report and the financial statements contained herein are submitted for the general information of shareholders. This report is not authorized for distribution to prospective investors unless pre- ceded or accompanied by an effective prospectus. WES0205 [WEISS FUND LOGO] ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Registrant's Board of Trustees has determined that it does not have an "audit committee financial expert" serving on its audit committee. While Registrant believes that each of the members of its audit committee has sufficient knowledge of accounting principles and financial statements to serve on the audit committee, none has the requisite experience to qualify as an "audit committee financial expert"; as such term is defined by the Securities and Exchange Commission. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $11,500 for 2004 and $10,500 for 2003. Audit-Related Fees (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 for 2004 and $0 for 2003. Tax Fees (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $0 for 2004 and $0 for 2003. All Other Fees (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2004 and $0 for 2003. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. Before any accountant, including the Accountants, is engaged by the Investment Company to render either audit or non-audit services, such engagement must be approved by the Committee, with the exception of any de minimus engagement meeting applicable requirements. In addition, the Committee must also pre-approve the engagement of any accountant, including the Accountants, by the Investment Company's investment adviser (not including a subadviser whose role is primarily portfolio management and is subcontracted or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser, if the engagement relates directly to the operations and financial reporting of the Investment Company, with the exception of any de minimus engagement meeting applicable requirements. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) N/A (c) N/A (d) N/A (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0% (zero). (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2004 and $0 for 2003. (h) Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) The Weiss Fund -------------------------------------------------------------------- By (Signature and Title)* /s/ Sharon A. Parker-Daniels ------------------------------------------------------- Sharon A. Parker-Daniels, President (principal executive officer) Date February 25, 2005 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Sharon A. Parker-Daniels ------------------------------------------------ Sharon A. Parker-Daniels, President (principal executive officer) Date February 25, 2005 --------------------------------------------------------------------- By (Signature and Title)* /s/ Jeffrey S. Rano ------------------------------------------------ Jeffrey S. Rano, Treasurer (principal financial officer) Date February 24, 2005 --------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 w04794exv99wcert.txt CERTIFICATIONS PURSUANT TO SECTION 302 CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Sharon A. Parker-Daniels, certify that: 1. I have reviewed this report on Form N-CSR of The Weiss Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 24, 2005 /s/ Sharon A. Parker-Daniels ------------------------------------------ Sharon A. Parker-Daniels, President (principal executive officer) CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Jeffrey S. Rano, certify that: 1. I have reviewed this report on Form N-CSR of The Weiss Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 24, 2005 /s/ Jeffrey S. Rano ------------------------------------------ Jeffrey S. Rano, Treasurer (principal financial officer) EX-99.906CERT 3 w04794exv99w906cert.txt CERTIFICATION PURSUANT TO SECTION 906 CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Sharon A. Parker-Daniels, President of The Weiss Fund (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: February 25, 2005 /s/ Sharon A. Parker-Daniels ---------------------- ------------------------------------------ Sharon A. Parker-Daniels, President (principal executive officer) I, Jeffrey S. Rano, Treasurer of The Weiss Fund (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: February 22, 2005 /s/ Jeffrey S. Rano ---------------------- ------------------------------------------ Jeffrey S. Rano, Treasurer (principal financial officer) EX-99.CODE ETH 4 w04794exv99wcodeeth.txt CODE OF ETHICS EX-99.CODE ETH THE WEISS FUND CODE OF ETHICS UNDER THE SARBANES-OXLEY ACT (Adopted as of September 30, 2004) I. INTRODUCTION The Board of Trustees of The Weiss Fund (the "Investment Company") has established this Code of Ethics (the "Code") in accordance with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. This Code does not supersede or otherwise affect the separate codes of ethics that the Investment Company and its investment adviser have adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended (the "1940 Act"). This Code is designed to deter wrongdoing and promote: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that the Investment Company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Investment Company; (iii) compliance with applicable governmental laws, rules, and regulations; (iv) the prompt internal reporting of violations of the Code to an appropriate person or persons; and (v) accountability for adherence to the Code. The Code applies to the Investment Company's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Investment Company or a third party (collectively, "Covered Officers," each of whom is set forth in Exhibit A). For the purposes of this Code, the Review Officer is Leslie-Anne Moore. II. PRINCIPLES OF HONEST AND ETHICAL CONDUCT A. General Objectives The Investment Company expects its Covered Officers to adhere to the highest possible standards of honest and ethical conduct. All Covered Officers are expected to handle actual or apparent conflicts of interest between personal and professional relationships in a manner that is above reproach, and to place the interests of the Investment Company above their own personal interests. B. Conflicts of Interest All Covered Officers should be scrupulous in avoiding a conflict of interest with regard to the Investment Company's interests. A conflict of interest occurs when an individual's private interest interferes in any way -- or even appears to interfere -- with the interests of the Investment Company. A conflict situation can arise when a Covered Officer takes actions or has interests that may make it difficult to perform his or her work for the Investment Company objectively and effectively. Conflicts of interest also arise when a Covered Officer, or a member of his or her family, receives improper benefits as a result of his or her position with the Investment Company, whether such benefits are received from the Investment Company or a third party. ANY CONFLICT OF INTEREST THAT ARISES IN A SPECIFIC SITUATION OR TRANSACTION MUST BE DISCLOSED BY THE COVERED OFFICER TO THE REVIEW OFFICER AND RESOLVED BEFORE TAKING ANY ACTION. Conflicts of interest may not always be evident, and Covered Officers should consult with the Review Officer or the Investment Company's legal counsel if they are uncertain about any situation. Examples of possible conflicts of interest include: 1. Outside Employment or Activities Covered Officers may not engage in any outside employment or activity that interferes with their performance or responsibilities to the Investment Company or is otherwise in conflict with or prejudicial to the Investment Company. A Covered Officer must disclose to the Review Officer any outside employment or activity that may constitute a conflict of interest and obtain the Review Officer's approval before engaging in any such employment or activity. 2. Gifts Covered Officers may not accept gifts or other items of more than de minimis value from any person or entity that does business with or on behalf of the Investment Company. 3. Other Situations Because other conflicts of interest may arise, it would be impractical to attempt to list all possible situations in this Code. If a proposed transaction or situation raises any questions or doubts, a Covered Officer should consult with the Review Officer or Investment Company counsel before engaging in the transaction or activity. C. Corporate Opportunities Covered Officers may not exploit for their own personal gain, or for the personal gain of their family members or relatives, opportunities that are discovered through the use of Investment Company property, information, or position, unless the opportunity is first disclosed fully in writing to the Board of Trustees and the Board of Trustees declines to pursue such opportunity. -2- III. FULL, FAIR, ACCURATE, TIMELY, AND UNDERSTANDABLE DISCLOSURE IN INVESTMENT COMPANY DISCLOSURE AND REPORTING DOCUMENTS As a registered investment company, it is of critical importance that the Investment Company's public communications, reports, and SEC filings contain full, fair, accurate, timely, and understandable disclosure. Accordingly, the Investment Company's Covered Officers are expected to consider it central to their roles as officers of the Investment Company to promote full, fair, accurate, timely, and understandable disclosure in the Investment Company's public communications and reports, and in the documents that the Investment Company files with, or submits to, the SEC. Depending on his or her position with the Investment Company, a Covered Officer may be called upon to provide necessary information to make the Investment Company's public reports, communications, and SEC filings and submissions complete, fair, and understandable. The Investment Company expects its Covered Officers to take this responsibility very seriously and to provide prompt and accurate answers to inquiries related to the Investment Company's public disclosure requirements. Covered Officers may be asked to certify the accuracy of all responses and information provided for inclusion in the Investment Company's public reports, communications, and SEC filings and submissions. IV. COMPLIANCE WITH APPLICABLE GOVERNMENTAL RULES AND REGULATIONS As a registered investment company, the Investment Company is subject to regulation by the SEC and must comply with Federal securities laws and regulations, as well as other applicable laws. The Investment Company insists on strict compliance with the spirit and the letter of these laws and regulations. Each Covered Officer shall cooperate with Investment Company counsel, the Investment Company's independent accountants, and the Investment Company's other service providers with the goal of maintaining the Investment Company's material compliance with applicable governmental rules and regulations. The Investment Company expects its Covered Officers to comply with all laws, rules, and regulations applicable to the Investment Company's operations and business. Covered Officers should seek guidance whenever they are in doubt as to the applicability of any law, rule, or regulation, or regarding any contemplated course of action. Covered Officers should also make use of the various guidelines which the Investment Company and its service providers have prepared on specific laws and regulations. IF IN DOUBT ON A COURSE OF ACTION, A GOOD GUIDELINE IS "ALWAYS ASK FIRST, ACT LATER" -- IF YOU ARE UNSURE OF WHAT TO DO IN ANY SITUATION, SEEK GUIDANCE BEFORE YOU ACT. Upon obtaining knowledge of any material violation of any applicable law, rule, or regulation by the Investment Company or a person acting with or on behalf of the Investment Company, a Covered Officer shall report such violation to the Review Officer, Investment Company counsel, or both. (See Section VI of the Code for a discussion of reporting Code violations.) Each Covered Officer shall cooperate or take such steps as may be necessary or appropriate to remedy any such material violation. -3- V. CONFIDENTIALITY The Investment Company's Covered Officers must maintain the confidentiality of information entrusted to them by the Investment Company, except when disclosure is authorized by Investment Company counsel or required by laws or regulations. Whenever possible, Covered Officers should consult with Investment Company counsel if they believe they have a legal obligation to disclose confidential information. Confidential information includes all non-public information that might be of use to competitors or harmful to the Investment Company or its shareholders if disclosed. The obligation to preserve confidential information continues even after employment as a Covered Officer ends. VI. PROMPT INTERNAL REPORTING OF VIOLATIONS OF THE CODE; EVALUATION OF POSSIBLE VIOLATIONS; DETERMINATION OF SANCTIONS A. Reporting to Review Officer. The Investment Company's Covered Officers shall promptly report knowledge of, or information concerning, any material violation of this Code to the Review Officer. Any such report shall be in writing, and shall describe in reasonable detail the conduct that such Covered Officer believes to have violated this Code. The Review Officer shall also have the authority to draft a report of a suspected material violation of the Code, if no written report is made by a Covered Officer. B. Evaluation of Reports. The Review Officer shall then consult with Investment Company counsel to the extent necessary to determine whether the reported conduct actually violates the Code. If it is determined that there has been a violation of the Code, the Review Officer will determine (in consultation with Investment Company counsel) whether the violation has had or may have, in the reasonable judgment of the Review Officer, a material adverse impact upon the Investment Company. 1. No Material Adverse Impact on the Investment Company. If the Review Officer determines that the violation has not caused a material adverse impact upon the Investment Company, the Review Officer shall determine what sanctions, if any, may be appropriate for the violation. (See Section VIII of the Code for a discussion of possible sanctions.) 2. Material Adverse Impact on the Investment Company. If the Review Officer determines that the violation has caused a material adverse impact upon the Investment Company, the Review Officer shall promptly notify the Board of such violation. The Board shall be entitled to consult with independent legal counsel to determine whether the violation actually has had a material adverse impact upon the Investment Company; to formulate sanctions, if any, appropriate for the violation; or for any other purpose that the Board, in its business judgment, determines to be necessary or advisable. (See Section VIII of the Code for a discussion of possible sanctions.) -4- C. Periodic Reports by Review Officer to Board of Trustees. The Review Officer shall report to the Board at each regularly scheduled Board meeting all violations of this Code with respect to the Investment Company (whether or not they caused a material adverse impact upon the Investment Company) and all sanctions imposed. VII. WAIVERS OF PROVISIONS OF THE CODE A. A Covered Officer may request a waiver of a provision of this Code if there is a reasonable likelihood that a contemplated action would be a material departure from a provision of the Code. Waivers will not be granted except under extraordinary or special circumstances. The process of requesting a waiver shall consist of the following steps: a. The Covered Officer shall set forth a request for waiver in writing and submit such request to the Review Officer. The request shall describe the conduct, activity, or transaction for which the Covered Officer seeks a waiver, and shall briefly explain the reason for engaging in the conduct, activity, or transaction. b. The determination with respect to the waiver shall be made in a timely fashion by the Review Officer, in consultation with Investment Company counsel, and submitted to the Board for ratification. c. The decision with respect to the waiver request shall be documented and kept in the Investment Company's records for the appropriate period mandated by applicable law or regulation. B. Disclosure of Waivers. To the extent required by applicable law, waivers (including "implicit waivers") shall be publicly disclosed on a timely basis. An "implicit waiver" is defined as the Investment Company's failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an "executive officer" of the Investment Company. For this purpose, an "executive officer" is the Investment Company's President or Chief Executive Officer, Vice President (who is in charge of a principal policymaking function), or any other person who performs similar policymaking functions for the Investment Company. For the purpose of determining whether an "implicit waiver" has occurred, if a material departure from a provision of the Code is known only by the Covered Officer who has caused the material departure, the material departure will not be considered to have been made known to an executive officer of the Investment Company. VIII. ACCOUNTABILITY FOR ADHERENCE TO THE CODE The matters covered in this Code are of the utmost importance to the Investment Company and its shareholders, and are essential to the Investment Company's ability to conduct -5- its business in accordance with its stated values. The Investment Company's Covered Officers are expected to adhere to these rules in carrying out their duties for the Investment Company. The Investment Company will, if appropriate, take action against any of its Covered Officers whose actions are found to violate this Code. Sanctions for violations of the Code may include, among other things, a requirement that the violator undergo training related to the violation, a letter of sanction, the imposition of a monetary penalty, and/or suspension or termination of the employment of the violator. Where the Investment Company has suffered a loss because of violations of this Code or applicable laws, regulations, or rules, it may pursue its remedies against the individuals or entities responsible. IX. RECORDKEEPING A. General. The Investment Company requires accurate recording and reporting of information in order to make responsible business decisions. The Investment Company's books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Investment Company's transactions, and must conform both to applicable legal requirements and to the Investment Company's system of internal controls. B. Code of Ethics Records. A copy of this Code, any amendments hereto, and any reports or other records created in relation to waivers of or amendments to provisions of this Code shall be kept as records of the Investment Company for six years from the end of the fiscal year in which such document was created. Such records shall be furnished to the SEC or its staff upon request. X. AMENDMENTS TO THE CODE The Covered Officers and the Review Officer are encouraged to recommend improvements to this Code to the Board of Trustees. The Investment Company's Board may amend the Code in its discretion with respect to the Investment Company. In connection with any amendment to the Code, the Review Officer shall prepare a brief description of the amendment, in order that this description may be disclosed in accordance with applicable law and regulations. -6- -----END PRIVACY-ENHANCED MESSAGE-----