THE RAM FUNDS
December 12, 2008
FILED VIA EDGAR
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U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: The RAM Funds (the "Trust")
File Nos. 811-22162 and 333-148517
Ladies and Gentlemen:
On November 24, 2008, Ms. Patricia P. Williams of the staff of the
Securities and Exchange Commission (the "Commission") provided us with comments
on the Trust's registration statement on Form N-1A for two new series, the RAM
Small/Mid Cap Value Fund and the RAM Small Cap Value Fund (each a "Fund" or
collectively the "Funds"). The following are the comments provided and the
Trust's response to each:
PROSPECTUS
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Page 3. Risk/Return Summary: RAM Small/Mid Cap Value Fund (the "SMID Fund")
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1. Disclosure in the third paragraph of page 3 of the Prospectus defines small
and mid cap companies as companies with market capitalizations between $100
million and $8 billion at the time of purchase. Please justify supplementally
that the high end of the capitalization range should not be lower than $8
billion or reduce the capitalization range within the definition.
RESPONSE: The primary benchmark of the SMID Fund is the Russell 2500 Value
Index, which is defined by Russell Investments as an index that "measures the
performance of the small to mid-cap value segment of the U.S. equity universe."
The market capitalization of the largest company in the Russell 2500 Value Index
was $6.6 billion as of October 31, 2008. Prior to the recent downturn in the
equity markets, the largest company in the Index has consistently had a market
capitalization of closer to $10 billion. As a result, the SMID Fund's investment
adviser believes it is appropriate to define companies with market
capitalizations of up to as high as $8 billion as mid capitalization.
Ultimus Fund Distributors, LLC
225 Pictoria Drive Suite 450
Cincinnati, OH 45246
Page 3. Risk/Return Summary: Both Funds
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2. Given that the investment objective of each Fund is to seek to maximize total
return, define "total return" and clarify how the Funds' principal investment
strategies are intended to produce the components of total return.
RESPONSE: In order to better clarify its goal, each Fund's investment objective
has been changed to "Each Fund seeks to achieve long-term capital appreciation;
current income is a secondary consideration."
Page 4. Risk/Return Summary: Both Funds
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3. Disclosure in the first paragraph of page 4 for the RAM Small/Mid Cap Value
Fund and the last paragraph of page 4 for the RAM Small Cap Value Fund states
that the Funds may also invest, to a lesser extent, in foreign securities and in
money market instruments. If this is not a principal investment strategy, this
language should be moved to another section. If this is a principal investment
strategy, add risk disclosure for these types of investments in the principal
investment strategy section.
RESPONSE: This disclosure has been moved to the "Other Investment Strategies and
Risks" section of the prospectus.
Page 5. Risk/Return Summary: Both Funds
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4. Disclosure in the second paragraph of page 5 for each Fund describes the
risks of investing in small and medium capitalization companies. This disclosure
should be revised in order to describe the risks of small cap companies and the
risks of medium cap companies separately.
RESPONSE: The second paragraph under "What are the Principal Risks of Investing
in the Funds" on page 5 has been revised as follows:
MID CAP COMPANY RISK
Investing in mid cap companies involves greater risk than is customarily
associated with larger, more established companies. Mid cap companies frequently
have less management depth and experience, narrower market penetrations, less
diverse product lines, less competitive strengths and fewer resources than
larger companies. Due to these and other factors, stocks of mid cap companies
may be more susceptible to market downturns and other events, and their prices
may be more volatile than larger capitalization companies. In addition, in many
instances, the securities of mid cap companies typically are traded only
over-the-counter or on a regional securities exchange, and the frequency and
volume of their trading is substantially less than is typical of larger
companies. Therefore, the securities of mid cap companies may be subject to
greater price fluctuations. Mid cap companies also may not be widely followed by
investors, which can lower the demand for their stock.
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SMALL CAP COMPANY RISK
The risks described above with respect to investing in mid cap companies are
more pronounced for securities of companies with smaller market capitalizations.
Investing in small cap companies involves greater risk than is customarily
associated with mid cap or larger, more established companies. Small cap
companies may have a shorter period of operations and may not be able to raise
additional capital as effectively as medium and larger sized companies. Small
cap companies frequently have less management depth and experience, narrower
market penetrations, less diverse product lines, less competitive strengths and
fewer resources than mid cap or larger companies. Due to these and other
factors, stocks of small cap companies may be more susceptible to market
downturns and other events, and their prices may be more volatile. In addition,
in many instances, the securities of small cap companies typically are traded
only over-the-counter or on a regional securities exchange, and the frequency
and volume of their trading is substantially less than is typical of larger
companies. Therefore, the securities of small cap companies may be subject to
greater price fluctuations. Small cap companies also may not be widely followed
by investors, which can lower the demand for their stock.
Page 18. Frequent Trading Policies: Both Funds
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9. Disclosure in the first paragraph of this section states that a Fund uses a
subjective approach that permits it to reject any purchase orders that it
believes may be indicative of market timing or disruptive trading. Please revise
the disclosure to clarify whether this policy will be applied uniformly among
all shareholders in accordance with Item 6(e) (4) (iii) of the Form N-1A
Instructions.
RESPONSE:
The first paragraph of the "Frequent Trading Policies" section has been revised
as follows:
The Board of Trustees has adopted policies and procedures in an effort to detect
and prevent market timing in the Funds. The Funds, through their service
providers, monitor shareholder trading activity to ensure it complies with the
Funds' policies. The Funds prepare reports illustrating purchase and redemption
activity to detect market timing activity. When monitoring shareholder purchases
and redemptions, a Fund does not apply a quantitative definition to frequent
trading. Instead the Fund uses a subjective approach that permits it to reject
any purchase or exchange orders that it believes may be indicative of market
timing or disruptive trading. The right to reject a purchase order applies to
any purchase order, including a purchase order placed by financial
intermediaries. The Funds may also modify any terms or conditions of purchase of
Fund shares or withdraw all or any part of the offering made by the Prospectus.
The Funds' policies and procedures to prevent market timing are applied
uniformly to all shareholders. These actions, in the Board's opinion, should
help reduce the risk of abusive trading in the Funds.
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* * * * *
We acknowledge that:
o the Trust is responsible for the adequacy and accuracy of the disclosure
in Trust filings;
o staff comments or changes to disclosure in response to staff comments in
the filings reviewed by the staff do not foreclose the Commission from
taking any action with respect to such filings; and
o 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.
Thank you for your comments. Please contact the undersigned at
513-587-3418 if you have any questions.
Very truly yours,
/s/ Tina H. Bloom
Tina H. Bloom
Assistant Secretary
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