April 18, 2006
VIA FEDERAL EXPRESS
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Valerie J. Lithotomos
Senior Counsel
Division of Investment Management
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: GIANT 5 FUNDS ("FUNDS" OR "REGISTRANT") FILE NUMBERS 333-129930; 811-21836
Dear Ms. Lithotomos:
Our response to your comments regarding the Giant 5 Funds' N-1A/A filing on
March 9, 2006 and subsequent filing on March 29, 2006 are as follows:
PROSPECTUS
1. COMMENT: Add language stating that the Giant 5 Total Index System
intends to comply with Rule 35d-1.
RESPONSE: At the end of the second paragraph in the "Principal
Investment Strategies" section, the following language has been added, "Under
normal circumstances, we invest at least 80% of the Fund's assets in Underlying
Funds that invest at least 80% of their assets in a manner intended to replicate
the performance of a specific index."
2. COMMENT: Please disclose that there will be layering of duplicative
fees from the fund of funds strategy, thus, the costs to shareholders will
be higher.
RESPONSE: The Adviser believes that the expenses incurred for investing
in the Funds is in addition to, and not duplicative of, fees incurred to invest
in the Underlying Funds. The Adviser allocates assets among the Underlying Funds
and monitors their performance. Shareholders would not receive these services if
they invested directly in the Underlying Funds. To clarify this point, the
following paragraph has been added to the end of the "Investment Objectives,
Policies and Strategy" section for each Fund:
Each Fund, as a shareholder of Underlying Funds, indirectly bears its
proportionate share of any investment management fees and other
expenses of the Underlying Funds. The Manager believes, and the Board
of Trustees of the Trust has determined, that the management and other
fees paid by the Funds are for services that are in addition to, not
duplicative of, the services provided to the
Underlying Funds. These services include the asset allocation, fund
selection, rebalancing, and ongoing monitoring functions provided by
the Manager.
3. COMMENT: In the second to last sentence of the third to last paragraph
in the "Investment Objectives, Policies and Strategy" section please clarify
that when you write that "an Underlying Fund will be liquidated," in fact, the
Underlying Fund will not be liquidated, but the position in the Underlying Fund
will be liquidated.
RESPONSE: That sentence for each Fund has been revised to read, "If
material leveraged fund positions are discovered within an Underlying Fund, the
investment in that Underlying Fund will be liquidated in a timely manner at the
investment adviser's discretion."
4. COMMENT: In the second to last paragraph in the "Investment Objectives,
Policies and Strategy" section please clarify who will incur the 12b-1
distribution fees from the Underlying Funds.
RESPONSE: The following sentence has been added to the end of the
paragraph, "In general, those fees will be incurred by the Underlying Fund and
passed on to shareholders of the Fund."
5. COMMENT: Supplementally inform the staff why an investor may receive
more taxable capital gains distribution than if investing directly in the
underlying funds.
RESPONSE: The last sentence in the "Underlying Fund Risks" section
which reads, "Because the Funds may invest in open-end funds, you may receive
more taxable capital gains distribution that would be the case if invested
directly in the Underlying Fund" has been deleted
6. COMMENT: Please provide additional information about Blue Giant Energy,
the Colorado non-profit to which the Adviser intends to donate a portion of
profits and disclose whether the Board of Trustees considered these donations
of the adviser's profits.
RESPONSE: All Trustees were informed of the Advisors intent to donate a
portion of its profits to Blue Giant Energy and considered this when approving
the investment advisory contract.
The description of Blue Giant Energy in the last paragraph of "The
Investment Adviser" section has been replaced with the following:
The Adviser intends to donate 20% of the profits from its management
fee from Giant 5 Funds to Blue Giant Energy, a Colorado non-profit
founded by Michael Willis, that is committed to America's energy
independence and the entrepreneurial research and development of
alternative energy sources. Other non-profits with matching objectives
may also be considered. These donations will be made from the Advisor's
profits only, and so will not add to the expenses of the Funds.
Blue Giant Energy is committed to seeing America reach two historic
milestones: Energy Independence by the year 2020 (a date by which
Americans would consume only what energy is produced in America or
North America), and Oil Independence by the year 2030 (a date by which
the next generation of energy sources will be commercially and
competitively available throughout
America). Blue Giant Energy was founded on the premise that the energy
issue is one of the most important issues facing America today. Blue
Giant Energy has chosen to focus primarily on the private sector
(entrepreneurs, inventors, and the people of America) to resolve this
issue. When these two historic milestones are reached, significant
improvements in Economic, Political, Human, Environmental, and National
Security will not just benefit the country but the world.
7. COMMENT: Please explain the conflicting statements that a new account
can be opened with identifying information but additional purchases cannot be
made until an identity is "verified."
RESPONSE: This language provides the Trust the flexibility to request
additional information from a shareholder when additional purchases are being
made, but questions about shareholder information initially provided arise. The
transfer agent for the Trust, BISYS Fund Services, believes that having this
flexibility to confirm a shareholder's identity is an essential component of an
effective customer identification program and has inserted this disclosure into
the prospectuses of most clients. Thus, we wish to keep the current disclosure
unchanged.
8. COMMENT: Do not capitalize the disclosure which states that and
investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation.
RESPONSE: That disclosure is not capitalized, but is bolded. When it is
Edgarized it appears to be capitalized. We intend to keep the disclosure in bold
print.
9. COMMENT: Please clarify why in the "Systematic Withdrawal Plan"
section, the disclosure states that the Funds "may" instead of "will" charge
a $20 annual fee.
RESPONSE: The disclosure in the "Systematic Withdrawal Plan" section
has been amended to read that, "In addition, if your account falls below
$10,000, you will be charged a $20 annual fee."
10. COMMENT: Please clarify who will be responsible for any fees associated
with distribution.
RESPONSE: The second sentence in the "Distribution Fees" section has
been amended to read, "Distribution Plan fees are paid from Fund assets on an
ongoing basis and, thus, are borne by the shareholders.
These fees will decrease the return on your investment."
Giant 5 Funds will not assert the affirmative action by the SEC to declare its
registration statement effective as a defense in any securities related
litigation or any subsequent action under the federal securities laws brought by
the SEC or any other party. Should you have any questions or comments regarding
the above, please phone me at (617) 824-1312.
Sincerely,
Patrick J. Keniston
Counsel
BISYS Fund Services
cc: Michael Willis
Thomas Westle