Roxbury Mid-Cap Fund
Roxbury Small-Cap Growth Fund
Roxbury Micro-Cap Fund
of The Roxbury Funds
Institutional Shares
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PROSPECTUS DATED AUGUST 1, 2006
This prospectus contains important information about these
mutual funds, including information on their investment policies, risks and
fees. For your own benefit and protection, please read it before you invest, and
keep it on hand for future reference.
Like all mutual fund shares, these securities have not been
approved or disapproved by the Securities and Exchange Commission nor has the
Securities and Exchange Commission determined whether this prospectus is
accurate or complete. Anyone who tells you otherwise is committing a criminal
offense.
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TABLE OF CONTENTS
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FUND DESCRIPTIONS
A look at the goals, strategies, Summary .........................................................3
risks, expenses and financial history Performance Information .........................................5
of the Funds. Fees and Expenses ...............................................9
Example .........................................................10
Investment Objective ............................................11
Primary Investment Strategies ...................................11
Additional Risk Information .....................................15
Financial Highlights.............................................18
Details about the service providers. MANAGEMENT OF THE FUNDS
Investment Adviser ..............................................21
Fund Managers ...................................................21
Service Providers ...............................................25
Policies and instructions for opening, SHAREHOLDER INFORMATION
maintaining and closing an account in Pricing of Shares ...............................................26
the Funds. Purchase of Shares ..............................................26
Redemption of Shares ............................................27
Exchange of Shares ..............................................31
Distributions ...................................................31
Taxes ...........................................................32
Details on the Funds' share classes. DISTRIBUTION ARRANGEMENTS
Share Classes ...................................................34
GLOSSARY...............................................................35
FOR MORE INFORMATION...................................................36
For information about key terms and concepts, please refer to the "Glossary."
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Roxbury Mid-Cap Fund
Roxbury Small-Cap Growth Fund
Roxbury Micro-Cap Fund
Institutional Shares
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FUND DESCRIPTIONS
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SUMMARY
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Investment Objectives Each of the Roxbury Mid-Cap Fund (the
"Mid-Cap Fund"), Roxbury Small-Cap Growth
Fund (the "Small-Cap Fund") and Roxbury
Micro-Cap Fund (the "Micro-Cap Fund") seeks
superior long-term growth of capital.
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Investment Focus Equity (or related) securities
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Share Price Volatility High
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Principal Investment The Mid-Cap Fund invests, under normal
Strategies market conditions, at least 80% of its
assets in securities of companies with
market capitalizations, at the time of
purchase, consistent with the capitalization
ranges of the Russell Midcap and S&P MidCap
400 Indices.
The Small-Cap Fund invests, under normal
market conditions, at least 80% of its
assets in securities of companies with
market capitalizations, at the time of
purchase, consistent with the capitalization
ranges of the Russell 2000 and S&P SmallCap
600 Indices.
The Micro-Cap Fund invests, under normal
conditions, at least 80% of its assets in
securities of companies with market
capitalizations, at the time of purchase,
under $1 billion.
The Funds may invest in securities
(including preferred stock, warrants and
debentures) convertible into or exercisable
for common stock and certain option and
financial futures contracts ("derivatives").
The Funds may also invest in foreign
securities, including American Depositary
Receipts.
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Principal Risks An investment in a Fund is subject to the
risks summarized below, which are further
described under "Additional Risk
Information."
o It is possible to lose money by
investing in the Funds. There is no
guarantee that the stock market or the
securities that a Fund buys will
increase in value.
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o The Funds' share prices will fluctuate
in response to changes in market value
of the Funds' underlying investments.
Market value changes result from
business developments affecting an
issuer as well as general market and
economic conditions.
o The Funds are subject to greater
volatility than funds that invest in
large cap companies. Mid-cap, small-cap
and micro-cap companies may be more
vulnerable than large-cap companies to
adverse business or economic
developments, their securities may be
less liquid and more volatile than
securities of larger companies, and
they may suffer significant losses.
o Growth-oriented investments may be more
volatile than the rest of the U.S.
stock market as a whole.
o Investments in a foreign market are
subject to foreign security risk and
the risk of losses caused by changes in
foreign currency exchange rates.
o The use of derivatives may expose a
Fund to additional risks that it would
not be subject to if it invested
directly in securities underlying those
derivatives. These risks may cause a
Fund to experience higher losses than a
fund that does not use derivatives.
o The performance of the Funds will
depend on whether or not the investment
adviser is successful in pursuing the
Funds' investment strategies.
o The Funds are also subject to other
risks which are described under
"Additional Risk Information."
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Investor Profile Investors who want the value of their
investment to grow and who are willing to
accept more volatility for the possibility
of higher returns.
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PERFORMANCE INFORMATION
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Roxbury Mid-Cap Fund
The bar chart and performance table below illustrate the risks
and volatility of an investment in the Fund by showing changes in the Fund's
performance from calendar year to calendar year and by showing how the Fund's
average annual returns for one year, five years and since inception, both before
and after taxes, compared with those of the Russell Midcap Growth Index, which
is a broad measure of market performance. The performance shown is for the
Investor Shares of the Fund, as the Institutional Share Class did not have a
full year of performance as of December 31, 2005. This performance information
includes performance of Investor Shares of the Fund's predecessor, the Roxbury
Mid-Cap Fund (a series of WT Mutual Fund) (the "Predecessor Mid-Cap Fund") for
periods from December 14, 2000 through December 31, 2005. Returns of
Institutional Shares will differ to the extent that they have different
expenses. Specifically, Investor Shares are subject to a 0.25% shareholder
service fee. Total returns for Investor Shares would have been lower than shown
below had certain fees and expenses not been waived and/or reimbursed. The
Fund's past performance, both before and after taxes, does not necessarily
indicate how the Fund will perform in the future.
Annual Total Returns For The Calendar Years Since Inception
[Bar Chart]
2001 3.16%
2002 (31.29)%
2003 45.25%
2004 13.30%
2005 8.59%
Calendar Year-to-Date Total Return as of March 31, 2006: 12.90%
Best Quarter Worst Quarter
21.14% (21.76)%
(June 30, 2003) (September 30, 2004)
Investor Shares
Average Annual Total Returns as of Since Inception
December 31, 2005 1 Year 5 Years (December 14, 2000)
____________________________________________ ______________ ________________ ________________________________
Before Taxes 8.59% 4.84% 4.71%
____________________________________________ ______________ ________________ ________________________________
After Taxes on Distributions (1),(2) 7.65% 4.51% 4.39%
____________________________________________ ______________ ________________ ________________________________
After Taxes on Distributions and Sales of
Fund Shares (1),(2) 5.99% 4.00% 3.89%
____________________________________________ ______________ ________________ ________________________________
Russell Midcap Growth Index (reflects no
deduction for fees,
expenses or taxes)(3) 12.10% 1.38% 0.06%
____________________________________________ ______________ ________________ ________________________________
(1) These figures assume the reinvestment of dividends and capital gain
distributions.
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(2) After-tax returns are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on
your tax situation and may differ from those shown and are not relevant
if you hold your shares through tax-deferred arrangements, such as 401
(k) plans or individual retirement accounts.
(3) The Russell Midcap Growth Index measures the performance of those
companies in the Russell Midcap Index with higher price-to-book ratios
and higher forecasted growth values. The stocks are also included in
the Russell 1000 Growth Index. The Russell 1000 Growth Index measures
the performance of those companies included in the Russell 1000 Index
with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000 Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which represents approximately 92%
of the total market capitalization of the Russell 3000 Index.
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Roxbury Small-Cap Growth Fund
The bar chart and performance table below illustrate the risks
and volatility of an investment in the Fund by showing changes in the
performance of the Fund's Institutional Shares from calendar year to calendar
year and by showing how the Fund's average annual returns for one year and since
inception, both before and after taxes, compared with those of the Russell 2000
Growth Index, which is a broad measure of market performance. This performance
information includes performance of Institutional Shares of the Fund's
predecessor, the Roxbury Small-Cap Growth Fund (a series of WT Mutual Fund) (the
"Predecessor Small-Cap Fund") for periods from January 2, 2003 through December
31, 2005. Total return would have been lower had certain fees and expenses not
been waived and/or reimbursed. The Fund's past performance, both before and
after taxes, does not necessarily indicate how the Fund will perform in the
future.
Annual Total Return For The Calendar Years Since Inception
[Bar Chart]
2004 7.55%
2005 7.68%
Calendar Year-to-Date Total Return as of March 31, 2006: 15.97%
Best Quarter Worst Quarter
12.76% (7.58)%
(December 31, 2004) (September 30, 2004)
Institutional Shares Since Inception
Average Annual Total Returns as of December 31, 2005 1 Year (January 2, 2003)
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Before Taxes 7.68% 24.52%
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After Taxes on Distributions (1) 7.62% 23.83%
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After Taxes on Distributions and Sales of Fund Shares (1) 5.06% 21.02%
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Russell 2000 Growth Index (reflects no deduction for fees,
expenses or taxes) (2) 4.15% 20.93%
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(1) After-tax returns are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on
your tax situation and may differ from those shown and are not relevant
if you hold your shares through tax-deferred arrangements, such as 401
(k) plans or individual retirement accounts.
(2) The Russell 2000 Growth Index measures the performance of those
companies in the Russell 2000 Index with higher price-to-book ratios
and higher forecasted growth values. The Russell 2000 Index measures
the performance of the 2,000 smallest companies in the Russell 3000
Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index
measures the performance of the 3,000 largest U.S. companies based on
market capitalization, which represents approximately 98% of the
investable U.S. equity market.
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Roxbury Micro-Cap Fund
The bar chart and performance table below illustrate the risks
and volatility of an investment in the Fund for the past calendar year and show
how the Fund's average annual returns for one year and since inception, both
before and after taxes, compared with those of the Russell Microcap and Russell
2000 Growth Indices, which are broad measures of market performance. This
performance information includes performance of Institutional Shares of the
Fund's predecessor, the Roxbury Micro-Cap Fund (a series of WT Mutual Fund) (the
"Predecessor Micro-Cap Fund") for periods from December 29, 2004 through
December 31, 2005. Total return would have been lower had certain fees and
expenses not been waived and/or reimbursed. The Fund's past performance, both
before and after taxes, does not necessarily indicate how the Fund will perform
in the future.
Annual Total Return For The Past Calendar Year
[Bar Chart]
2005 0.50%
Calendar Year-to-Date Total Return as of March 31, 2006: 19.59%
Best Quarter Worst Quarter
5.77% (5.64)%
(June 30, 2005) (March 31, 2005)
Institutional Shares Since Inception
Average Annual Total Returns as of December 31, 2005 1 Year (December 29, 2004)
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Before Taxes 0.50% 1.59%
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After Taxes on Distributions (1) 0.50% 1.59%
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After Taxes on Distributions and Sales of Fund Shares (1) 0.32% 1.35%
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Russell Microcap Index (reflects no deduction for fees,
expenses or taxes) (2) 2.57% 2.62%
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Russell 2000 Growth Index (reflects no deduction for fees,
expenses or taxes) (3) 4.15% 3.80%
_____________________________________________________________________ __________________ _______________________
(1) After-tax returns are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on
your tax situation and may differ from those shown and are not relevant
if you hold your shares through tax-deferred arrangements, such as 401
(k) plans or individual retirement accounts.
(2) The Russell Microcap Index measures the performance of the microcap
segment, representing less than 3% of the U.S. equity market. The
Russell Microcap Index includes the smallest 1,000 securities in the
Russell 2000 Index plus the next 1,000 securities.
(3) The Russell 2000 Growth Index measures the performance of those
companies in the Russell 2000 Index with higher price-to-book ratios
and higher forecasted growth values. The Russell 2000 Index measures
the performance of the 2,000 smallest companies in the Russell 3000
Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index
measures the performance of the 3,000 largest U.S. companies based on
market capitalization, which represents approximately 98% of the
investable U.S. equity market.
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FEES AND EXPENSES
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The table below describes the fees and expenses that you may pay if you buy and
hold Institutional Shares of the Funds.
Shareholder Fees (fees paid directly from your investment):
Institutional Shares
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Mid-Cap Fund &
Small-Cap Fund Micro-Cap Fund
Maximum sales charge (load) imposed on purchases (as a
percentage of offering price) None None
Maximum deferred sales charge None None
Maximum sales charge imposed on reinvested dividends None None
(and other distributions)
Redemption fee 1.00%(a) 2.00%(b)
Exchange fee 1.00%(a) 2.00%(b)
(a) Institutional Shares of the Mid-Cap and Small-Cap Funds are subject to
a 1.00% redemption fee only if redeemed or exchanged within the first
60 days after purchase. See "Redemption of Shares" and "Exchange of
Shares" for additional information.
(b) Institutional Shares of the Micro-Cap Fund are subject to a 2.00%
redemption fee only if redeemed or exchanged within the first 60 days
after purchase. See "Redemption of Shares" and "Exchange of Shares" for
additional information.
Annual Fund Operating Expenses (expenses that are deducted from Fund assets):
Mid-Cap Fund Small-Cap Fund Micro-Cap Fund
____________________ ___________________ _____________________
Management fees (1) 0.75% 1.00% 1.50%
Distribution (12b-1) fees None None None
Other expenses (2) 1.13% 0.22% 25.47%
Total Annual Fund Operating Expenses 1.88% 1.22% 26.97%
Waivers/Reimbursements (3) (0.58)% (0.00)% (24.72)%
Total Net Expenses (3) 1.30% 1.22% 2.25%
(1) The Mid-Cap Fund pays Roxbury a monthly advisory fee at the annual rate
of 0.75% of the Fund's first $1 billion of average daily net assets;
0.70% of the next $1 billion of average daily net assets; and 0.65% of
average daily net assets in excess of $2 billion. The Small-Cap Fund
pays Roxbury a monthly advisory fee at the annual rate of 1.00% of the
Fund's first $1 billion of average daily net assets; 0.95% of the next
$1 billion of average daily net assets; and 0.90% of average daily net
assets in excess of $2 billion. The Micro-Cap Fund pays Roxbury a
monthly fee at the annual rate of 1.50% of the Fund's average daily net
assets.
(2) "Other expenses" have been restated to reflect estimated expenses
following the reorganization of the Predecessor Mid-Cap Fund,
Predecessor Small-Cap Fund and Predecessor Micro-Cap Fund into the
Mid-Cap Fund, Small-Cap Fund and Micro-Cap Fund, respectively.
(3) For Institutional Shares, the Adviser has a contractual obligation to
waive a portion of its fees and assume certain expenses of the Mid-Cap
Fund, Small-Cap Fund and Micro-Cap Fund to limit the total annual
operating expenses to 1.30%, 1.25% and 2.25%, respectively. The waivers
will remain in effect through December 31, 2020 for the Institutional
Shares of each Fund unless otherwise agreed to by the Board of
Trustees.
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EXAMPLE
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This example is intended to help you compare the cost of
investing in Institutional Shares of a Fund with the cost of investing in other
mutual funds. The example below shows what you would pay if you invested
$10,000 over the various time periods indicated. The example assumes that:
o you reinvested all dividends and other distributions;
o the average annual return was 5%;
o a Fund's total operating expenses (reflecting
contractual waivers and reimbursements) are charged
and remain the same over the time periods; and
o you redeemed all of your investment at the end of
each time period.
Although your actual cost may be higher or lower, based on
these assumptions, your costs would be:
Institutional
Shares 1 Year 3 Years 5 Years 10 Years
_____________________ _________ __________ __________ ___________
Mid-Cap Fund $132 $412 $713 $1,568
Small-Cap Fund $124 $387 $670 $1,477
Micro-Cap Fund $228 $703 $1,205 $2,585
The above example is for comparison purposes only and is not a representation of
a Fund's actual expenses and returns, either past or future.
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INVESTMENT OBJECTIVE
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Each of the Roxbury Mid-Cap Fund, Roxbury Small-Cap Growth
Fund and Roxbury Micro-Cap Fund seeks superior long-term growth of capital.
The investment objective of the Mid-Cap Fund and Small-Cap
Fund may not be changed without shareholder approval. The investment objective
of the Micro-Cap Fund may be changed without shareholder approval upon sixty
(60) days written notice to shareholders.
There is no guarantee that any Fund will achieve its
investment objective.
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PRIMARY INVESTMENT STRATEGIES
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The Roxbury Mid-Cap Fund, under normal market conditions,
invests at least 80% of its assets in the following equity (or equity-related)
securities:
o common stocks of corporations that are judged by the
investment adviser to have strong growth
characteristics and, with respect to at least 80% of
the Fund's assets, at the time of purchase, have a
market capitalization consistent with the
capitalization ranges of the Russell Midcap and S&P
MidCap 400 Indices ("mid-cap companies");
o securities convertible into common stock of mid-cap
companies; and
o options on common stock or stock indices.
The Fund invests in high quality, growing companies trading at
reasonable valuations. It looks for seasoned businesses that can continue to
grow in a variety of environments, experienced management teams, and emerging
new leaders in technology and other industries. Such companies generally have
favorable competitive positions, strong financials, and a commitment to
enhancing shareholder value. Other common characteristics of the Fund's
portfolio holdings include effective management teams, proprietary technologies,
free cash flow generation, low cost production, and high barriers to entry.
The investment process is designed to produce a portfolio of
relatively predictable companies with above-average and sustainable growth
rates, strong financial strength, high returns of equity and favorable valuation
metrics.
All holdings are monitored closely. Holdings may be sold when
companies become overvalued, more attractive investments are identified, poor
relative performance persists, and/or the fundamentals have weakened.
Mid-cap companies are those whose capitalization is consistent
with the capitalization range of the Russell Midcap and S&P MidCap 400 Indices
at the time of a Fund's investment. As of March 31, 2006 the range of market
capitalizations of companies that are in
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the Russell Midcap and S&P 400 Indices ("Indices") was between $453 million and
$22 billion. As market conditions change, so will the capitalizations of the
companies that make up the Indices. The investment adviser looks for quality,
sustainable growth stocks within the mid-cap portion of the market. At the time
of initial purchase, an investment's market capitalization will fall within the
capitalization range of the Indices. Due to market price adjustments or other
events after the time of purchase, it is possible that an investment's market
capitalization may drift above or below this range. Nevertheless, companies
whose capitalization no longer meets this definition after purchase continue to
be considered to have a mid-cap market capitalization for purposes of the 80%
policy. The Fund is not limited to only mid-cap companies and, under normal
market conditions, may invest up to 20% of its assets in stocks of companies
within larger or smaller capitalizations.
The Roxbury Small-Cap Growth Fund, under normal market
conditions, invests at least 80% of its assets in the following equity
(or equity-related) securities:
o common stocks of U.S. corporations that are judged by
the investment adviser to have strong growth
characteristics or to be undervalued in the
marketplace relative to underlying profitability and
have a market capitalization which, at the time of
purchase, is consistent with the capitalization
ranges of the S&P SmallCap 600 and Russell 2000
Indices ("small-cap companies");
o options on, or securities convertible (such as
convertible preferred stock, convertible bonds,
warrants and debentures ) into, the common stock of
small-cap companies;
o options on indices of the common stock of small-cap
companies; and
o contracts for either the future delivery, or payment
in respect of the future market value, of certain
indices of common stock of small-cap companies, and
options upon such futures contracts.
The research process for this Fund begins by screening a
universe of stocks with market capitalizations of less than $2 billion and
expected future earnings growth of greater than 15%. The managers then perform
fundamental analysis to identify companies with the following characteristics:
growing revenues; stable or expanding margins; low debt levels; solid cash
flows; and high or potentially high returns on capital. Additional research is
applied to the most promising candidates to uncover those companies with solid
management that has executed well over time, strengthening competitive
positions, and positive business and market trends. A valuation analysis is then
performed to see whether the stock is attractively priced relative to its
industry, historical range and the overall market.
A stock becomes a purchase candidate only if the portfolio
managers believe there is a catalyst in place to provide for at least 15% stock
price appreciation over the next 12 months.
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The Fund maintains a portfolio of approximately 60-90 stocks,
which is constructed with the overall goal of mitigating risk. Stock positions
are limited to a maximum 5% weighting and sector concentrations are +/- 15% of
the sector weightings of the benchmark index (Russell 2000 Growth Index).
Stocks are sold for undervaluation, when the fundamentals
weaken or if poor relative price performance persists.
Small-cap companies are those whose capitalizations are
consistent with the market capitalizations of companies in the S&P SmallCap 600
and Russell 2000 Indices at the time of a Fund's investment. As of March 31,
2006, the range of market capitalizations represented by companies in the these
indices was between $23 million and $5 billion. Due to market price adjustments
or other events after the time of purchase, it is possible that an investment's
market capitalization may drift above or below this range. Nevertheless, a
company whose capitalization no longer meets this definition after purchase
continues to be considered to have a small market capitalization for purposes of
the 80% policy. The Fund is not limited to only small-cap companies and, under
normal market conditions, may invest up to 20% of its assets in stocks of
companies in other capitalization ranges.
The Roxbury Micro-Cap Fund, under normal market conditions,
will invest at least 80% of its assets in the following equity (or
equity-related) securities:
o common stocks of companies that have a market
capitalization which, at the time of purchase, is
under $1 billion ("micro-cap companies");
o options on, or securities convertible (such as
convertible preferred stock, convertible bonds,
warrants and debentures) into, the common stock of
micro-cap companies;
o options on indices of the common stock of micro-cap
companies; and
o contracts for either the future delivery, or payment
in respect of the future market value, of certain
indices of the common stock of micro-cap companies,
and options upon such futures contracts.
There are typically two types of companies that populate the
micro-cap space. The first are new, young businesses in dynamic industries that
have developed a new product or are leading a new industry from which there is
the expectation for significant growth over a multi-year period. Second are
special situations, which are usually more established companies that have faced
difficulties in the past for which the Fund's manager has identified a catalyst
that may lead to a restructuring. While the majority of the Fund is invested in
the former category, approximately 20-25% is placed in these fallen angels,
which often offer unique opportunities.
Research ideas are generated through a variety of channels,
including industry and analyst contacts, trade publications, past experience
through years of managing money in this space, and being alert to trends. The
ideas are then combined with an assessment of the business
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through scrutinizing the company's balance sheet strength, financial ratios, and
trends. A stock becomes a purchase candidate only if the Fund's manager believes
it has the potential to appreciate by at least 50% over the next 24 months.
Company management, competition, and the industry is then further evaluated to
make a final decision.
The micro-cap market, by definition, is highly inefficient.
The Fund attempts to take advantage of this by buying stocks that others have
abandoned or that have otherwise gone unnoticed.
Stocks are sold if they become overvalued, if the fundamentals
of the business deteriorate, or if a better investment opportunity emerges.
Positions are also trimmed if the size or sector weighting grows beyond
acceptable limits.
Micro-cap companies are those whose capitalization is under $1
billion at the time of the Fund's investment. Due to market price adjustments or
other events after the time of purchase, it is possible that an investment's
market capitalization may drift above this range. Nevertheless, a company whose
capitalization no longer meets this definition after purchase continues to be
considered to have a micro market capitalization for purposes of the 80% policy.
The Fund is not limited to only micro-cap companies and, under normal market
conditions, may invest up to 20% of its assets in stocks of companies in higher
capitalization ranges.
The 80% policy of each Fund may be changed upon sixty (60)
days written notice to shareholders.
All Funds. The investment adviser selects securities that it
believes exhibit strong growth characteristics. The investment adviser uses a
bottom up approach to identify new investment opportunities and to evaluate
existing investments on an ongoing basis to determine continued suitability. All
investments undergo a valuation analysis to estimate their risk/reward
characteristics.
The Funds may also invest in certain option and financial
futures contracts ("derivatives") as well as foreign securities, including
American Depositary Receipts ("ADRs"). ADRs are negotiable certificates held in
a U.S. bank representing a specific number of shares of a foreign stock traded
on a U.S. stock exchange. ADRs make it easier for U.S. citizens to invest in
foreign companies, due to the widespread availability of dollar-denominated
price information, lower transaction costs, and timely dividend distributions.
An American Depositary Share or ADS is the share issued under an American
Depositary Receipt agreement which is actually traded.
At the time of purchase, individual stock holdings may
represent up to 5% of a Fund's value. However, due to market price fluctuations,
individual stock holdings may exceed 5% of a Fund's value. The Funds may
overweight or underweight certain industries and sectors based on the investment
adviser's opinion of the relative attractiveness of companies within those
industries and sectors. The Funds may not invest in more than 10% of the
outstanding voting shares of a company.
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In order to respond to adverse market, economic, political or
other conditions, the Funds may assume a temporary defensive position and invest
without limit in commercial paper and other money market instruments that are
rated investment grade by a nationally recognized statistical rating
organization, or determined by the investment adviser to be of comparable
quality. The result of this action may be that a Fund will be unable to achieve
its investment objective.
The frequency of fund transactions and a Fund's turnover rate
will vary from year to year depending on the market. A higher turnover rate
increases transaction costs (i.e., brokerage commissions) and may create adverse
tax consequences for a Fund's shareholders. With frequent trading activity, a
greater proportion of any dividends paid out by a Fund will be characterized as
ordinary income, which is taxed at higher rates than long-term capital gains.
Such factors may have the effect of lowering overall fund performance.
A description of the Funds' policies and procedures with
respect to disclosure of the Funds' portfolio securities is available in the
Funds' Statement of Additional Information ("SAI"). The Funds also may use other
strategies and engage in other investment practices, which are more fully
described in the SAI.
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ADDITIONAL RISK INFORMATION
________________________________________________________________________________
The following is a list of certain risks that may apply to
your investment in a Fund. Further information about investment risks is
available in the Funds' SAI.
o Small Company Risk: Companies in which the Funds
invest may be more vulnerable than larger companies
to adverse business or economic developments.
Micro-cap, small-cap and mid-cap companies may also
have limited product lines, markets or financial
resources, may be dependent on relatively small or
inexperienced management groups and may operate in
industries characterized by rapid technological
obsolescence. Securities of such companies may be
less liquid and more volatile than securities of
larger companies and therefore may involve greater
risk than investing in larger companies.
o Micro-Cap Risk: Investments by the Micro-Cap Fund in
small, new or unseasoned companies which may be in
their early stages of development, or small companies
positioned in new and emerging industries where the
opportunity for rapid growth is expected to be above
average are subject to additional risks. Micro-cap
companies may have relatively small revenues, limited
or very focused product lines, and small shares of
the market for their products or services or very
large shares of an emerging market. These companies
may lack depth of management, they may be unable to
internally generate the funds necessary for growth or
potential development or to generate such funds
through external financing on favorable terms, or
they may be developing or marketing new products or
services for which markets are not yet established
and may never become
- 15 -
well established. Due to these and other factors,
such companies may suffer significant losses and
investments in such companies will be volatile and
are therefore speculative. Historically, micro-cap
stocks have been more volatile in price than larger
capitalization stocks. Among the reasons for the
greater price volatility of these securities are the
lower degree of liquidity in the markets for such
stocks, and the potentially greater sensitivity of
such small companies to changes in or failure of
management and in many other changes in competitive,
business, industry and economic conditions, including
risks associated with limited product lines, markets,
management depth, or financial resources. Besides
exhibiting greater volatility, micro-cap and
small-cap stocks may, to a degree, fluctuate
independently of larger company stocks. Micro-cap
and small-cap stocks may decline in price as large
company stocks rise, or rise in price as large
company stocks decline. Investors should therefore
expect that the price of the Micro-Cap Fund's shares
will be more volatile than the shares of a fund that
invests in larger capitalization stocks.
o Growth Investing Risk: The risk that an investment
in a growth-oriented fund may be more volatile than
the rest of the U.S. market as a whole.
o Derivatives Risk: Some of a Fund's investments may be
referred to as "derivatives" because their value
depends on, or is derived from, the value of an
underlying asset, reference rate or index. These
investments include options, futures contracts and
similar investments that may be used in hedging, risk
management, or other fund management purposes
consistent with a Fund's investment objective. The
market value of derivative instruments and securities
is sometimes more volatile than that of other
investments, and each type of derivative may pose its
own special risks. As a fundamental policy, no more
than 15% of a Fund's total assets may at any time be
committed or exposed to derivative strategies.
o Foreign Security Risk: Foreign investments involve
risks relating to political, economic, regulatory or
social instability, military action or unrest, or
diplomatic developments and may be affected by
actions of foreign governments adverse to the
interest of U.S. investors.
o Currency Risk: The risk related to investments
denominated in foreign currencies. Foreign securities
are usually denominated in foreign currency;
therefore, changes in foreign currency exchange rates
affect the net asset value of the Funds.
o IPO Risk: The Funds may purchase securities of
companies engaged in their initial public offerings
("IPOs"). The price of securities purchased in IPOs
can be very volatile. The effect of IPO investments
on a Fund's performance depends on a variety of
factors, including the number of IPOs a Fund invests
in relative to the size of a Fund, and whether and to
what
- 16 -
extent a security purchased in an IPO appreciates or
depreciates in value. As a Fund's asset base
increases, IPOs often have a diminished effect on
fund performance.
o Liquidity Risk: The risk that certain securities may
be difficult or impossible to sell at the time and
the price that the seller would like. While the
markets in securities of small companies have grown
rapidly in recent years, such securities may trade
less frequently and in smaller volumes than more
widely held securities. The values of these
securities may fluctuate more sharply than those of
other securities, and a Fund may experience some
difficulty in establishing or closing out positions
in these securities at prevailing market prices.
There may be less publicly available information
about the issuers of these securities or less market
interest in such securities than in the case of
larger companies, and it may take a longer period of
time for the prices of such securities to reflect the
full value of their issuers' underlying earnings
potential or assets. Forced liquidations of a Fund
could result in adverse price fluctuations in
securities held and in a Fund's overall value.
o Market Risk: The risk that the market value of a
security may fluctuate, sometimes rapidly and
unpredictably. The prices of equity securities change
in response to many factors including the historical
and prospective earnings of the issuer, the value of
its assets, general economic conditions, interest
rates, investor perceptions and market liquidity.
o Valuation Risk: The risk that a Fund has incorrectly
valued certain of its securities.
- 17 -
________________________________________________________________________________
FINANCIAL HIGHLIGHTS
________________________________________________________________________________
The financial highlights tables are intended to help you
understand a Fund's financial performance since its inception. Certain
information reflects financial results for a single Institutional Share of a
Fund. The total returns in the tables represent the rate that you would have
earned (or lost) on an investment in a Fund assuming reinvestment of all
dividends and other distributions. Financial highlights for the periods through
June 30, 2005 have been audited by Ernst & Young LLP, whose reports, along with
each Fund's financial statements, are included in the Funds' Annual Reports,
which are available, without charge, upon request. Financial highlights for the
six-month period ended December 31, 2005 have not been audited. The financial
highlights shown represent the performance of the Predecessor Mid-Cap Fund,
Predecessor Small-Cap Fund and Predecessor Micro-Cap Fund.
For the
Six-Month For the
Period Period
Ended January 2,
Small-Cap Growth Fund (1) - December 2003(2)
Institutional Shares 31, 2005 For the Fiscal Years Ended June 30, through
(Unaudited) 2005 2004 June 30, 2003
_____________ __________________ ___________________ ______________
Net Asset Value - Beginning of Period.. $16.66 $16.75 $12.76 $10.00
_____________ __________________ ___________________ ______________
Investment Operations:
Net investment loss(3) .......... (0.07) (0.17) (0.25) (0.09)
Net realized and unrealized gain
on investments................... 1.82 0.43 4.64 2.85
Total from investment _____________ __________________ ___________________ ______________
operations.................... 1.75 0.26 4.39 2.76
_____________ __________________ ___________________ ______________
Distributions:
From net realized gains.......... (0.06) (0.35) (0.40) -
_____________ __________________ ___________________ ______________
Net Asset Value - End of Period..... $18.35 $16.66 $16.75 $12.76
============= ================== =================== ==============
Total Return........................ 10.52% ** 1.53% 34.67% 27.60% **
Ratios (to average net
assets)/Supplemental
Data: (4)
Expenses:
Including waivers/reimbursements. 1.24% * 1.36% 1.69% 1.75% *
Excluding waivers/reimbursements. 1.24% * 1.37% 1.79% 9.13% *
Net investment loss................. (0.78)% * (1.04%) (1.53)% (1.45)% *
Portfolio turnover rate............. 71% ** 161% 172% 86% **
Net assets at end of period (000
omitted)............................ $175,772 $147,907 $50,317 $8,835
____________________________________
* Annualized.
** Not annualized.
(1) Effective May 4, 2004, the Wilmington Small Cap Growth Portfolio
changed its name to the Roxbury Small-Cap Growth Fund.
(2) Commencement of operations.
(3) The net investment loss per share was calculated using the average
shares outstanding method.
(4) For the periods prior to July 1, 2005, the Predecessor Small-Cap Fund
operated as a feeder fund in a master-feeder structure. The expense and
net investment loss ratios include expenses allocated from the master
fund, WT Investment Trust I - Small Cap Growth Series (the "Series"),
and the portfolio turnover rate reflects the investment activity of the
Series. Effective July 1, 2005, the Fund no longer operates in a
master-feeder structure.
- 18 -
For the
Period
For the Six-Month Period Ended February 8, 2005(1)
December 31, 2005 through
Mid-Cap Fund - Institutional Shares (Unaudited) June 30, 2005
_________________________________ __________________________
Net Asset Value - Beginning of Period... $5.84 $5.75
________________ ________________
Investment Operations:
Net investment loss (2) ............. (0.02) (0.02)
Net realized and unrealized
gain on investments................ 0.38 0.11
________________ ________________
Total from investment operations... 0.36 0.09
________________ ________________
Distributions:
From net realized gains.............. (0.22) --
________________ ________________
Net Asset Value - End of Period......... $5.98 $5.84
================ ================
Total Return............................ 6.16% ** 1.57% **
Ratios (to average net assets)/Supplemental
Data: (3)
Expenses:
Including waivers/reimbursements..... 1.30% * 1.30% *
Excluding waivers/reimbursements..... 2.19% * 3.50%
Net investment loss..................... (0.61)% * (0.86)% *
Portfolio turnover rate................. 59% ** 110% **
Net assets at end of period (000 omitted) $1,050 $1,079
____________________________________
* Annualized.
** Not annualized.
(1) Commencement of operations.
(2) The net investment loss per share was calculated using the average
shares outstanding method.
(3) For the period prior to July 1, 2005, the Predecessor Mid-Cap Fund
operated as a feeder fund in a master-feeder structure. The expense and
net investment loss ratios include expenses allocated from the master
fund, WT Investment Trust I -- Mid Cap Series (the "Series"), and the
portfolio turnover rate reflects the investment activity of the Series.
Effective July 1, 2005, the Fund no longer operates in a master-feeder
structure.
- 19 -
For the Period
For the Six-Month Period December 29, 2004(1)
Micro-Cap Fund - Institutional Shares Ended December 31, 2005 Through
(Unaudited) June 30, 2005
_____________________________ __________________________
Net Asset Value - Beginning of Period ............... $10.09 $10.00
____________ ____________
Investment Operations:
Net investment loss (2)........................... (0.10) (0.09)
Net realized and unrealized gain on investments... 0.17 0.18
____________ ____________
Total from investment operations .............. 0.07 0.09
____________ ____________
Net Asset Value - End of Period ..................... $10.16 $10.09
============= ============
Total Return ........................................ 0.69% ** 0.90% **
Ratios (to average net assets)/Supplemental Data:
Expenses:
Including waivers/reimbursements ................. 2.25% * 2.25% *
Excluding waivers/reimbursements ................. 26.46% * 90.75% *
Net investment loss ................................. (1.96)% * (1.98)% *
Portfolio turnover rate ............................. 77% ** 77% **
Net assets at end of period (000 omitted)............ $329 $134
____________________________________
* Annualized.
** Not annualized.
(1) Commencement of operations.
(2) The net investment loss per share was calculated using the average
shares outstanding method.
- 20 -
MANAGEMENT OF THE FUNDS
The Board of Trustees of The Roxbury Funds (the "Trust")
supervises the management, activities and affairs of the Funds and has approved
contracts with various organizations to provide, among other services, the
day-to-day management required by a Fund and its shareholders.
________________________________________________________________________________
INVESTMENT ADVISER
________________________________________________________________________________
Roxbury Capital Management, LLC ("Roxbury"), 100 Wilshire
Boulevard, Suite 1000, Santa Monica, California 90401, serves as the investment
adviser to the Funds. As the Funds' investment adviser, Roxbury has overall
responsibility for directing the Funds' investments. Roxbury provides investment
advisory services to mutual funds and other institutional accounts, including
corporations, union and pension accounts, foundations, and endowments, as well
as to individuals. As of March 31, 2006, Roxbury had assets under management of
approximately $4 billion.
For the fiscal year ended June 30, 2005, Roxbury received,
after waivers and reimbursements, an advisory fee of 0.04%, 1.00% and 0.00% of
the average daily net assets of the Predecessor Mid-Cap Fund, Predecessor
Small-Cap Fund and Predecessor Micro-Cap Fund, respectively. A discussion
regarding the basis for the Board of Trustees' approval of the investment
advisory agreement for the Mid-Cap Fund, Small-Cap Fund and Micro-Cap Fund will
be available in the Funds' semi-annual report to shareholders dated December 31,
2006. Roxbury may make payments to dealers, financial intermediaries or service
providers out of its own resources, including revenue from the advisory fees
received from a Fund. These payments may be made to compensate the recipient for
marketing support services and shareholder service activities.
________________________________________________________________________________
FUND MANAGERS
________________________________________________________________________________
Each Fund manager's business experience and educational
background is provided below. The Funds' SAI provides additional information
about the Fund managers' compensation, other accounts managed by the Fund
managers and the managers' ownership of securities in the Funds.
Roxbury Mid-Cap Fund
Alfred J. Lockwood, CPA, CFA is the portfolio manager of the
Mid-Cap Fund and is also responsible for general research on small- to mid-cap
companies. Mr. Lockwood's participation in Roxbury's Investment Committee
provides additional access to research and investment ideas. Mr. Lockwood joined
Roxbury in 1992 and is the manager of Roxbury's small- to mid-cap strategies. He
is Co-Chief Investment Officer and a member of Roxbury's Investment Committee.
Mr. Lockwood's CPA background complements his securities analysis in researching
mid-size growth companies. His previous experience as an Audit Manager for Ernst
& Young exposed him to many company managements, primarily in the small- to
mid-cap areas and across a diverse range of industries, including distribution,
healthcare, technology and
- 21 -
others. Mr. Lockwood has particular skill in assessing a company's complete
business context relative to its competitors and the marketplace. A skilled
numbers man, he likes to look beyond the numbers for undervalued or
misunderstood investment opportunities. Mr. Lockwood received a B.S. from
California State University, Northridge.
Roxbury Small-Cap Growth Fund
The day-to-day management of the Fund is the responsibility of
Roxbury's Small-Cap Growth Investment Team, which includes the individuals
listed below. The Investment Team meets regularly to make investment decisions
for the Fund.
Steve Marshman, CFA joined Roxbury in July of 2002 and has
thirteen years of investment management experience. From 1995 to July 2002, Mr.
Marshman was with Columbia Management Group ("Columbia") where he was a Fund
Manager on the Small/Mid Cap Investment Team as well as an Equity Analyst
focusing on small/mid-cap securities. His responsibilities at Columbia also
included management of Columbia's Technology Fund. Prior to joining Columbia,
Mr. Marshman was a fighter pilot in the U.S. Air Force. He has a B.S. from the
U.S. Air Force Academy and an M.B.A. from Golden Gate University.
Robert Marvin, CFA, CPA joined Roxbury in July 2002 and has
thirteen years of investment management experience. From 1998 to July 2002, Mr.
Marvin was with Columbia where he was a Fund Manager on the Small/Mid Cap
Investment Team as well as an Equity Analyst focusing on small/mid-cap
securities. Prior to joining Columbia, he was Vice President and Consumer
Analyst for The Seidler Companies, a Los Angeles based boutique research and
brokerage firm. Mr. Marvin began his career at Deloitte & Touche where he earned
his CPA and became a Senior Consultant. He has a B.S. from the University of
California, Berkeley and an M.B.A. from UCLA.
Brian Smoluch, CFA joined Roxbury in July 2002 and has nine
years of investment management experience. From 1998 to July 2002, Mr. Smoluch
was with Columbia where he was a Fund Manager on the Small/Mid-Cap Investment
Team as well as an Equity Analyst focusing on small/mid-cap securities. From
July 1994 to June 1996, he was a Financial Analyst at Salomon Brothers
Investment Banking in New York City. He has a B.S. from the University of
Virginia and an M.B.A. from Harvard University.
Roxbury Micro-Cap Fund
Laurie Burstein, PhD, CFA is responsible for the day-to-day
management of the Micro-Cap Fund. Ms. Burstein joined Roxbury in April 2004 to
lead the micro-cap equity strategy bringing fourteen years of investment
management and research experience. She founded Oakwood Capital Management, Inc.
("Oakwood") in 1996 and began managing client assets in the micro-cap equity
strategy in January 1997. Prior to founding Oakwood, Ms. Burstein was a
portfolio manager at Logan Capital Group where she managed a small
capitalization growth stock portfolio. She also served as the firm's Director of
Research. Ms. Burstein started her investment management career at Provident
Mutual Management Company where she managed a balanced mutual fund, served as an
assistant portfolio manager for the
- 22 -
company's Growth Fund and provided research analysis to all funds in eight
consumer industry groups. She has a B.S. from the University of Pennsylvania, a
Ph.D. in Psychology from Temple University, and an M.B.A. from the Wharton
School of Business.
Micro-Cap Fund Manager's Prior Performance
__________________________________________
Shown below is performance information for a composite of
separate accounts (the "Composite") managed by the Micro-Cap Fund's portfolio
manager, Ms. Burstein, since January 1997 using a micro-cap strategy with
substantially similar investment objective, policies and strategies as the
Micro-Cap Fund. For the periods for which performance information is provided,
no other person played a significant role in managing the Composite. At December
31, 2005, the Composite consisted of 17 accounts and $4.7 million in assets. The
results presented are not intended to predict or suggest the return to be
experienced by the Micro-Cap Fund or the return you might achieve by investing
in that Fund.
You should not rely on the following performance data as an
indication of future performance of the adviser or of the Micro-Cap Fund.
Among other reasons, the Micro-Cap Fund's results may be
different because of differences in fees and expenses, and the accounts in the
Composite are not subject to the same type of expenses to which the Micro-Cap
Fund is subject, nor to the diversification requirements, specific tax
restrictions and investment limitations imposed on the Micro-Cap Fund by the
Investment Company Act of 1940 or the Internal Revenue Code of 1986. The
performance of the accounts in the Composite may have been adversely affected
had they been subject to the same expenses, restrictions and limitations.
TOTAL RETURN OF COMPOSITE OF
SIMILARLY MANAGED MICRO-CAP ACCOUNTS
________________________________________________________________________________
Composite Composite Russell Microcap Russell 2000
Gross of Fees Net of Fees Index Growth Index
________________________________________________________________________________
1 year to 12/31/05 2.82% 1.41% 2.57% 4.15%
________________________________________________________________________________
3 years to 12/31/05 33.21% 31.50% 24.88% 20.93%
________________________________________________________________________________
5 years to 12/31/05 19.29% 17.60% 13.95% 2.28%
________________________________________________________________________________
8 years to 12/31/05 14.16% 12.60% N/A 3.15%
________________________________________________________________________________
Please read the following important notes concerning the Composite:
1. The results shown above (1) represent a composite of all discretionary,
fee paying, separate accounts managed using the micro-cap strategy for
at least one month, (2) reflect the reinvestment of any dividends or
capital gains, and (3) are shown after the deduction of advisory,
brokerage or other expenses (excluding fees such as custody fees which
are paid separately by the investor).
2. All returns are based in U.S. dollars and are computed using a
time-weighted total rate of return.
3. If the Micro-Cap Fund's expenses were reflected in the performance of
the Composite, such performance would be lower than shown. The
composite's results were calculated in accordance with the CFA
Institute
- 23 -
(formerly the Association for Investment Management and Research
("AIMR")) mutual fund performance calculation methodology but
not in accordance with SEC-mandated mutual fund performance calculation
methodology. The CFA Institute has not been involved in the preparation
or review of this information. Results may have been different if the
SEC methodology had been used instead of the AIMR methodology. Past
performance is not an indication of future results.
4. The Russell Microcap Index measures the performance of the microcap
segment, representing less than 3% of the U.S. equity market. The
Russell Microcap Index includes the smallest 1,000 securities in the
Russell 2000 Index plus the next 1,000 securities. The Russell 2000
Index measures the performance of the 2,000 smallest companies in the
Russell 3000 Index, which represents approximately 8% of the total
market capitalization of the Russell 3000 Index. The Russell 3000
Index measures the performance of the 3,000 largest U.S. companies
based on market capitalization, which represents approximately 98% of
the investable U.S. equity market. The Russell Microcap Index
encompassed only five years of historical performance data as of
December 31, 2005. The Russell 2000 Growth Index measures the
performance of those companies in the Russell 2000 Index with higher
price-to-book ratios and higher forecasted growth values. The indices
reflect the reinvestment of dividends but do not reflect fees,
brokerage commissions or other expenses of investing. You cannot
invest in an index.
- 24 -
________________________________________________________________________________
SERVICE PROVIDERS
________________________________________________________________________________
The chart below provides information on the primary service providers.
Asset
Management
Investment Adviser
Roxbury Capital Management LLC
100 Wilshire Boulevard, Suite 1000
Santa Monica, CA 90401
Manages the Funds' business and
investment activities.
Fund
Operations
Administrator and
Accounting Agent
PFPC Inc.
301 Bellevue Parkway
Wilmington, DE 19809
Provides facilities, equipment and personnel
to carry out administrative services related to
the Funds and calculates the Funds' NAV
and distributions.
THE ROXBURY FUNDS
Roxbury Mid-Cap Fund
Roxbury Small-Cap Growth Fund
Roxbury Micro-Cap Fund
Distribution
Distributor
Professional Funds Distributor, LLC
760 Moore Road
King of Prussia, PA 19406
Distributes the Funds' shares.
Shareholder
Services
Transfer Agent
PFPC Inc.
760 Moore Road
King of Prussia, PA 19406
Handles shareholder services, including
recordkeeping and statements, payment
of distribution and processing of buy
and sell requests.
Asset
Safe Keeping
Custodian
PFPC Trust Company
8800 Tinicum Boulevard
Philadelphia, PA 19153
Holds the Fund's assets, settles all Fund
trades and collects most of the valuation
data required for calculating the Funds'
NAV per share.
- 25 -
SHAREHOLDER INFORMATION
________________________________________________________________________________
PRICING OF SHARES
________________________________________________________________________________
The price of each Fund's shares is based on its net asset
value ("NAV"). Each Fund values its assets based on current market values when
such values are available. These prices normally are supplied by an independent
pricing service. Any assets held by a Fund that are denominated in foreign
currencies are valued daily in U.S. dollars at the foreign currency exchange
rates that are prevailing at the time that PFPC Inc. ("PFPC") determines the
daily NAV per share. To determine the value of those securities, PFPC may use a
pricing service that takes into account not only developments related to
specific securities, but also transactions in comparable securities.
Securities that do not have a readily available current market
value are valued in good faith using procedures adopted by the Board of
Trustees. When a Fund uses fair value pricing to determine NAV, securities will
not be priced on the basis of quotations from the primary market in which they
are traded, but rather may be priced by another method that the Board of
Trustees believes accurately reflects fair value. The Funds' policy is intended
to result in a calculation of a Fund's NAV that fairly reflects security values
as of the time of pricing. However, fair values determined pursuant to the
Funds' procedures may not accurately reflect the price that a Fund could obtain
for a security if it were to dispose of that security as of the time of pricing.
PFPC determines the NAV per share of the Funds as of the close
of regular trading on the New York Stock Exchange ("Exchange") (normally 4:00
p.m. Eastern time) on each day that the Exchange and the transfer agent are open
for business (each, a "Business Day"). The NAV is calculated by adding the value
of all securities and other assets in a Fund, deducting its liabilities and
dividing the balance by the number of outstanding shares in a Fund. The price at
which a purchase, redemption or exchange is effected is based on the next
calculation of NAV after the order is received by an authorized financial
institution or the transfer agent and, under no circumstances will any order be
accepted for purchase, redemption or exchange after the NAV calculation. Shares
will only be priced on Business Days. In addition, foreign securities held by a
Fund may trade on weekends or other days when the Fund does not calculate NAV.
As a result, the market value of these investments may change on days when
shares of the Funds cannot be bought or sold.
________________________________________________________________________________
PURCHASE OF SHARES
________________________________________________________________________________
Fund shares are offered on a continuous basis and are sold
without any sales charges. The minimum initial investment in the Funds'
Institutional Shares is $100,000. Additional investments may be made in any
amount. You may purchase shares as specified below.
Investors may purchase shares of a Fund through financial
intermediaries such as financial consultants, securities brokers, dealers or
benefit plan administrators. Investors should contact their financial
intermediary directly for appropriate instructions, as well as for
- 26 -
information pertaining to account and any servicing or transaction fees that may
be charged. Some financial intermediaries may appoint subagents.
The Funds reserve the right to change the criteria for
eligible investors and investment minimums.
By Mail: You may purchase shares by sending a check drawn on a
U.S. bank payable to Roxbury Funds, indicating the name and class of the Fund,
along with a completed application (included at the end of this prospectus). If
a subsequent investment is being made, the check should also indicate your Fund
account number. When you make purchases by check, the Funds may withhold payment
on redemptions until it is reasonably satisfied that the funds are collected
(which can take up to 10 days). If you purchase shares with a check that does
not clear, your purchase will be canceled and you will be responsible for any
losses or fees incurred in that transaction. Send the check and application to:
Regular mail: Overnight mail:
_____________ _______________
Roxbury Funds Roxbury Funds
c/o PFPC Inc. c/o PFPC Inc.
P.O. Box 9828 101 Sabin Street
Providence, RI 02940 Pawtucket, RI 02860-1427
By Wire: You may purchase shares by wiring federal funds
readily available. Please call PFPC at (800) 497-2960 for instructions and to
make specific arrangements before making a purchase by wire, and if making an
initial purchase, to also obtain an account number.
Additional Information Regarding Purchases: Purchase orders
received by the transfer agent before the close of regular trading on the
Exchange on any Business Day will be priced at the NAV that is determined as of
the close of trading. Purchase orders received after the close of regular
trading on the Exchange will be priced as of the close of regular trading on the
following Business Day.
Any purchase order may be rejected if a Fund determines that
accepting the order would not be in the best interest of the Fund or its
shareholders.
It is the responsibility of the financial intermediary to
transmit orders for the purchase of shares by its customers to the transfer
agent and to deliver required funds on a timely basis, in accordance with the
procedures stated above.
For information on other ways to purchase shares, including
through an individual retirement account (IRA), an Automatic Investment Plan or
a Payroll Investment Plan, please refer to the Funds' SAI.
________________________________________________________________________________
REDEMPTION OF SHARES
________________________________________________________________________________
You may sell (redeem) your shares on any Business Day.
Redemptions are effected at the NAV next determined after the transfer agent has
received your redemption
- 27 -
request. If held for more than 60 days, there is no fee when Fund shares are
redeemed. If shares are redeemed within 60 days of purchase, a redemption fee of
1.00% for the Mid-Cap and Small-Cap Funds and 2.00% for the Micro-Cap Fund on
the redemption amount may be charged. (See "Redemption Fees" below.) It is the
responsibility of the financial intermediary to transmit redemption orders and
credit their customers' accounts with redemption proceeds on a timely basis.
Redemption checks normally are mailed on the next Business Day following receipt
by the transfer agent of redemption instructions, but never later than 7 days
following such receipt. Amounts redeemed by wire normally are wired on the date
of receipt of redemption instructions (if received by the transfer agent before
4:00 p.m. Eastern time) or the next Business Day (if received after 4:00 p.m.
Eastern time or on a non-Business Day), but never later than 7 days following
such receipt. If you purchased your shares through a financial intermediary you
should contact the financial intermediary for information relating to
redemptions. The Fund's name and your account number should accompany any
redemption requests.
In-Kind Redemptions: Each Fund reserves the right to honor
redemption requests by making payment in whole or in part with readily
marketable securities chosen by the Fund and valued in the same way as they
would be valued for purposes of calculating the net asset value of the Fund.
Redemption Fees: A redemption fee of 1.00% in the case of the
Mid-Cap and Small-Cap Funds and 2.00% in the case of the Micro-Cap Fund of the
total redemption amount (calculated at market value) may be imposed if you sell
your shares within 60 days (the "Holding Period") of your purchase of such
shares. This fee will apply to redemptions processed for the purpose of
receiving redemption proceeds or processing an exchange between the Roxbury
Funds (a list of which is shown under the heading "Exchange of Shares" below).
This fee is paid directly to the respective Fund and is designed to offset
brokerage commissions, market impact and other costs associated with short-term
trading. For purposes of determining whether this fee applies, the shares that
you have held the longest will be redeemed or exchanged first, however, shares
purchased through the reinvestment of dividends or capital gain distributions or
shares purchased with retirement plan contributions (e.g., payroll
contributions) will not be matched with redemptions or exchanges for purposes of
calculating the Holding Period. This fee will not apply in certain
circumstances, including: (i) shares redeemed (A) via a systematic withdrawal
plan approved by the adviser, (B) through an automatic, nondiscretionary
rebalancing or asset reallocation program approved by the adviser, (C) as part
of a retirement plan participant-directed distribution, including but not
limited to, death distributions, hardship withdrawals, loan withdrawals, and
qualified domestic relations orders, (D) as part of a retirement plan
termination or restructuring, (E) to effect a transfer from one retirement plan
to another retirement plan in the same Fund, or (F) by a Fund to cover various
fees; or (ii) shares converted from one share class to another in the same Fund.
See "Exchange of Shares" for additional information regarding the exchange of
shares of a Roxbury Fund.
Frequent Purchases and Redemptions: The Funds are intended to
be long-term investment vehicles and are not designed to provide investors with
a means of speculating on short-term market movements (market timing). Frequent
purchases and redemptions of Fund shares can disrupt the management of a Fund,
negatively affect a Fund's performance, and increase expenses for all of a
Fund's shareholders. In particular, frequent trading can: (i) force a
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Fund's portfolio managers to hold larger cash positions than desired instead of
fully investing the Fund, which can result in lost investment opportunities;
(ii) cause unplanned and inopportune portfolio turnover in order to meet
redemption requests; (iii) increase broker-dealer commissions and other
transaction costs as well as administrative costs for a Fund; and (iv) trigger
taxable gains for other shareholders. Also, some frequent traders engage in
arbitrage strategies, by which these traders seek to exploit pricing anomalies
that can occur when a Fund invests in securities that are thinly traded (for
example some small capitalization stocks) or are traded primarily in markets
outside of the United States. Frequent traders using arbitrage strategies can
dilute a Fund's NAV for long-term shareholders.
If you intend to trade frequently or use market timing
investment strategies, you should not purchase shares of the Funds.
The Board of Trustees has adopted policies and procedures with
respect to frequent purchases and redemptions of Fund shares. The Funds' policy
is intended to discourage excessive trading in a Fund's shares that may harm
long-term investors and to make reasonable efforts to detect and deter excessive
trading. The Funds reserve the right to reject any purchase order or exchange
request at any time and for any reason, without prior written notice. The Funds
may, in certain circumstances, reverse a transaction determined to be abusive.
The Funds will generally monitor trading activity within a
90-day period. The Funds may consider trading activity over a longer period than
90 days and may take into account market conditions, the number of trades and
the amount of the trades in making such determinations. In applying these
policies, the Funds consider the information available to it at the time and may
consider trading activity in multiple accounts under common ownership, control
or influence.
When excessive or short-term trading is detected, the party
involved may be banned from future trading in a Fund. Judgments related to the
rejection of purchase and the banning of future trades are inherently subjective
and involve some selectivity in their application. Roxbury will seek to make
judgments and applications that are consistent with the interests of the
affected Fund's shareholders.
The Funds' policies for deterring excessive trading in Fund
shares are intended to be applied uniformly to all Fund shareholders to the
extent practicable. Some intermediaries, however, maintain omnibus accounts in
which they aggregate orders of multiple investors and forward the aggregated
orders to the Fund. Because the Funds receive these orders on an aggregated
basis and because these omnibus accounts may trade with numerous fund families
with differing market timing policies, a Fund is substantially limited in its
ability to identify or deter excessive traders or other abusive traders. The
transfer agent for the Funds will use its best efforts to obtain the cooperation
of intermediaries to identify excessive traders and to prevent or limit abusive
trading activity, to the extent practicable. Nonetheless, a Fund's ability to
identify and deter frequent purchases and redemptions of a Fund's shares through
omnibus accounts is limited. A Fund's success in accomplishing the objectives of
the policies concerning excessive trading in Fund shares in this context depends
significantly upon the cooperation of the
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intermediaries, which may have adopted their own policies regarding excessive
trading which are different than those of the Funds.
By Mail: If you redeem your shares by mail, you should submit
written instructions with a "signature guarantee." A signature guarantee
verifies the authenticity of your signature. You can obtain one from most
banking institutions or securities brokers, but not from a notary public. You
must indicate the Fund name and class, your account number and your name. The
written instructions and signature guarantee should be mailed to:
Regular mail: Overnight mail:
_____________ _______________
Roxbury Funds Roxbury Funds
c/o PFPC Inc. c/o PFPC Inc.
P.O. Box 9828 101 Sabin Street
Providence, RI 02940 Pawtucket, RI 02860-1427
By Telephone: If you prefer to redeem your shares by telephone
you may elect to do so. However there are risks. The Funds have safeguards and
procedures to confirm the identity of callers and to confirm that the
instructions communicated are genuine. If such procedures are followed, you
will bear the risk of any losses.
Additional Information Regarding Redemptions: Redemption
proceeds may be wired to your predesignated bank account in any commercial bank
in the United States if the amount is $1,000 or more. The receiving bank may
charge a fee for this service. For amounts exceeding $10,000, proceeds may be
mailed to your bank.
In order to authorize the transfer agent to mail redemption
proceeds to your account address of record, complete the appropriate section of
the Application for Telephone Redemptions or include your account address of
record when you submit written instructions. You may change the account that you
have designated to receive amounts redeemed at any time. Any request to change
the account designated to receive redemption proceeds should be accompanied by a
signature guarantee. A signature and a signature guarantee are required for each
person in whose name the account is registered. Further documentation will be
required to change the designated account when a corporation, other
organization, trust, fiduciary or other institutional investor holds the Fund
shares.
If shares to be redeemed represent a recent investment made by
check, the Funds reserve the right to withhold the redemption proceeds available
until they believe that the check has been collected (which could take up to 10
days).
Small Accounts: If the value of your account falls below the
investment minimum, the Funds may ask you to increase your balance. If the
account value is still below the investment minimum after 60 days, the Funds may
close your account and send you the proceeds. The Funds will not close your
account if it falls below the investment minimum solely as a result of a
reduction in your account's market value.
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For additional information on other ways to redeem shares,
please refer to the Funds' SAI.
________________________________________________________________________________
EXCHANGE OF SHARES
________________________________________________________________________________
You may exchange all or a portion of your shares in a Fund for
Institutional Shares of the following funds ("Roxbury Funds"):
Roxbury Mid-Cap Fund
Roxbury Small-Cap Growth Fund
Roxbury Micro-Cap Fund
Redemption of shares through an exchange will be effected at
the NAV per share next determined after the transfer agent receives your
request. A purchase of shares through an exchange will be effected at the NAV
determined at that time or as next determined thereafter. See "Taxes" for a
discussion of the tax effect on an exchange of shares.
Exchange transactions will be subject to the minimum initial
investment and other requirements of a Fund into which the exchange is made. An
exchange may not be made if the exchange would leave a balance in a
shareholder's account of less than $100,000.
Fees on Exchanges: If held for more than 60 days, there is no
fee when Fund shares are redeemed to process an exchange for your account. If
shares are redeemed within 60 days of purchase, a redemption fee of 1.00% for
the Mid-Cap and Small-Cap Funds and 2.00% for the Micro-Cap Fund on the
redemption amount necessary for the exchange may be charged. See "Redemption of
Shares" for additional information regarding redemptions and this fee.
To obtain prospectuses of the Roxbury Funds, you may call
(800) 497-2960. To obtain more information about exchanges, or to place exchange
orders, contact the transfer agent, or, if your shares are held in an account
with a financial intermediary, contact the financial intermediary. The Funds may
terminate or modify the exchange offer described here and will give you 60 days'
notice of such termination or modification. This exchange offer is valid only in
those jurisdictions where the sale of the Fund's shares to be acquired through
such exchange may be legally made.
________________________________________________________________________________
DISTRIBUTIONS
________________________________________________________________________________
Distributions from the net investment income, if any, of a
Fund are declared and paid annually to you. Any net capital gain realized by a
Fund will be distributed annually.
Distributions are payable to the shareholders of record at the
time the distributions are declared (including holders of shares being redeemed,
but excluding holders of shares being purchased). All distributions are
reinvested in additional shares, unless you elect to receive the distributions
in cash. Shares become entitled to receive distributions on the day after the
shares are issued.
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________________________________________________________________________________
TAXES
________________________________________________________________________________
The following is a summary of certain tax considerations that
may be relevant to an investor in a Fund. Except where otherwise indicated, the
discussion relates to investors who are individual United States citizens or
residents and is based on current tax law. You should consult your tax adviser
for further information regarding federal, state, local and/or foreign tax
consequences relevant to your specific situation.
Distributions: Each Fund intends to qualify as a regulated
investment company for federal tax purposes and to distribute to shareholders
substantially all of its net investment income and net capital gain each year.
Except as otherwise noted below, you will generally be subject to federal income
tax on a Fund's distributions to you, regardless of whether they are paid in
cash or reinvested in Fund shares. For federal income tax purposes, Fund
distributions attributable to short-term capital gains and net investment income
are taxable to you as ordinary income. Distributions attributable to net capital
gain (the excess of net long-term capital gains over net short-term capital
losses) of a Fund generally are taxable to you as long-term capital gains. This
is true no matter how long you own your shares. The maximum long-term capital
gain rate applicable to individuals, estates and trusts is currently 15%. You
will be notified annually of the tax status of distributions to you.
Distributions of "qualifying dividends" will also generally be
taxable to you at long-term capital gain rates, as long as certain requirements
are met. In general, if 95% or more of the gross income of a Fund (other than
net capital gain) consists of dividends received from domestic corporations or
"qualified" foreign corporations ("qualifying dividends"), then all
distributions paid by the Fund to individual shareholders will be taxed at
long-term capital gains rates. But if less than 95% of the gross income of a
Fund (other than net capital gain) consists of qualifying dividends, then
distributions paid by the Fund to individual shareholders will be qualifying
dividends only to the extent they are derived from qualifying dividends earned
by the Fund. For the lower rates to apply, you must have owned your Fund shares
for at least 61 days during the 121-day period beginning on the date that is 60
days before the Fund's ex-dividend date (and the Fund will need to have met a
similar holding period requirement with respect to the shares of the corporation
paying the qualifying dividend). The amount of a Fund's distributions that
qualify for this favorable treatment may be reduced as a result of the Fund's
securities lending activities (if any), a high portfolio turnover rate or
investments in debt securities or "non-qualified" foreign corporations.
A portion of distributions paid by a Fund to shareholders who
are corporations will also qualify for the dividends-received deduction for
corporations, subject to certain holding period requirements and debt financing
limitations. The amount of the dividends qualifying for this deduction may,
however, be reduced as a result of a Fund's securities lending activities, by a
high portfolio turnover rate or by investments in debt securities or foreign
corporations.
Distributions from each Fund will generally be taxable to you
in the year in which they are paid, with one exception. Dividends and
distributions declared by a Fund in October, November or December and paid in
January are taxed as though they were paid on December 31.
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You should note that if you buy shares of a Fund shortly
before it makes a distribution, the distribution will be fully taxable to you
even though, as an economic matter, it simply represents a return of a portion
of your investment. This is known as "buying into a dividend."
Sales and Exchanges: The sale of Fund shares is a taxable
event on which a gain or loss may be recognized. For federal income tax
purposes, an exchange of shares of one Fund for shares of another Fund is
considered the same as a sale. The amount of gain or loss is based on the
difference between your tax basis in the Fund shares and the amount you receive
for them upon disposition. Generally, you will recognize long-term capital gain
or loss if you have held your Fund shares for over twelve months at the time you
sell or exchange them. Gains and losses on shares held for twelve months or less
will generally constitute short-term capital gains, except that a loss on shares
held six months or less will be recharacterized as a long-term capital loss to
the extent of any capital gains distributions that you have received on the
shares. A loss realized on a sale or exchange of Fund shares may be disallowed
under the so-called "wash sale" rules to the extent the shares disposed of are
replaced with other shares of that same Fund within a period of 61 days
beginning 30 days before and ending 30 days after the shares are disposed of,
such as pursuant to a dividend reinvestment in shares of the Fund. If
disallowed, the loss will be reflected in an adjustment to the basis of the
shares acquired.
IRAs and Other Tax-Qualified Plans: The one major exception
to the preceding tax principles is that distributions on, and sales, exchanges
and redemptions of, shares held in an IRA or other tax-qualified plan will not
be currently taxable.
Backup Withholding: The Funds may be required in certain
cases to withhold and remit to the Internal Revenue Service a percentage of
taxable dividends or gross proceeds realized upon sale payable to shareholders
who have failed to provide a correct tax identification number in the manner
required, or who are subject to withholding by the Internal Revenue Service for
failure to properly include on their return payments of taxable interest or
dividends, or who have failed to certify to a Fund when required to do so that
they are not subject to backup withholding or that they are "exempt recipients."
The withholding rate is currently 28%.
U.S. Tax Treatment of Foreign Shareholders: A foreign
shareholder generally will not be subject to U.S. withholding tax in respect of
proceeds from, or gain on, the redemption of shares or in respect of capital
gain dividends (i.e., dividends attributable to long-term capital gains of a
Fund) unless, in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the United States for 183 days or more
during the taxable year and certain other conditions are met. For distributions
attributable to a Fund's taxable year beginning before January 1, 2005 or after
December 31, 2007, foreign shareholders generally will be subject to U.S.
withholding tax at a rate of 30% (or a lower treaty rate, if applicable) on
distributions by a Fund of net investment income, other ordinary income, and the
excess, if any, of net short-term capital gain over net long-term capital loss
for the year, unless the distributions are effectively connected with a U.S.
trade or business of the shareholder. For distributions attributable to a Fund's
taxable year beginning after December 31, 2004 and before January 1, 2008,
however, foreign shareholders will generally not be subject to withholding tax
on
- 33 -
distributions attributable to U.S.-source "portfolio interest" or short-term
capital gains unless, with respect to short-term capital gains, the shareholder
is a nonresident alien individual who is present in the United States for 183
days or more during the taxable year and certain other conditions are met.
Foreign shareholders should consult their tax advisers regarding the U.S. and
foreign tax consequences of investing in a Fund.
State and Local Taxes: You may also be subject to state and
local taxes on income and gain attributable to your ownership of Fund shares.
State income taxes may not apply, however, to the portions of a Fund's
distributions, if any, that are attributable to interest earned by the Fund on
U.S. government securities. You should consult your tax adviser regarding the
tax status of distributions in your state and locality.
Sunset of Tax Provisions: Some of the tax provisions
described above are subject to sunset provisions. Specifically, a sunset
provision provides that the 15% long-term capital gain rate will increase to 20%
and the taxation of dividends at the long-term capital gain rate will change for
taxable years beginning after December 31, 2010.
Your investment in the Funds could have additional tax
consequences. This short summary is not intended as a substitute for careful tax
planning. You should consult your tax professional for information regarding all
tax consequences applicable to your investments in a Fund. More tax information
relating to the Funds is also provided in the SAI.
DISTRIBUTION ARRANGEMENTS
Professional Funds Distributor, LLC manages the Funds'
distribution efforts and provides assistance and expertise in developing
marketing plans and materials, enters into dealer agreements with broker-dealers
to sell shares and provide shareholder support services, directly or through
affiliates. The Institutional Shares of the Funds do not charge any sales loads,
deferred sales loads or other fees in connection with the purchase of shares.
Roxbury may pay brokers, financial intermediaries or service providers an amount
calculated as a percentage of assets held by customers of the recipient. Please
contact your broker, financial intermediary or service provider for details
about payments it may receive.
________________________________________________________________________________
SHARE CLASSES
________________________________________________________________________________
Each Fund issues Investor Shares and Institutional Shares.
Each class of shares bears a pro rata portion of a Fund's common expenses in
addition to expenses directly attributable to that class. Institutional Shares
are offered to retirement plans and other institutional investors. Any investor
may purchase Investor Shares.
- 34 -
GLOSSARY
GROWTH FUNDS:
Growth funds invest in the common stock of growth-oriented companies. Generally,
growth-oriented companies have high relative rates of growth and tend to
reinvest more of their profits into the company and pay out less to shareholders
in the form of dividends. As a result, investors in growth funds tend to receive
most of their return in the form of capital appreciation.
INVESTMENT ADVISER:
The investment adviser makes investment decisions for a mutual fund and
continuously reviews, supervises and administers the fund's investment program.
The Board of Trustees supervises the investment adviser and establishes policies
that the investment adviser must follow in its management activities.
MUTUAL FUND:
A mutual fund pools shareholders' money and, using a professional investment
manager, invests it in securities like stocks and bonds. Each of the Funds is a
separate mutual fund.
MUTUAL FUND EXPENSES:
Unlike an index, every mutual fund has operating expenses to pay for
professional advisory, shareholder distribution, administration and custody
services.
NET ASSET VALUE or "NAV":
NAV = Assets-Liabilities
__________________
Outstanding Shares
NET INVESTMENT INCOME:
Net investment income consists of interest and dividends earned by a fund on its
investments less accrued expenses.
- 35 -
FOR MORE INFORMATION
FOR INVESTORS WHO WANT MORE INFORMATION ON THE FUNDS, THE FOLLOWING
DOCUMENTS ARE AVAILABLE FREE UPON REQUEST:
Annual/Semi-Annual Reports: These reports contain performance data and
information on the Funds' holdings, operating results and a discussion of the
market conditions and investment strategies that significantly affected the
Fund's performance for the most recently completed fiscal year or half-year.
Statement of Additional Information ("SAI"): The SAI provides
additional technical and legal descriptions of the Funds' policies, investment
restrictions, risks, and business structure, including a description of the
Funds' policies and procedures with respect to the disclosure of the Funds'
portfolio security holdings. The information in the SAI is incorporated into
this prospectus by reference.
Copies of these documents and answers to questions about the Funds may
be obtained without charge by contacting:
The Roxbury Funds
c/o PFPC Inc.
101 Sabin Street
Pawtucket, RI 02860-1427
(800) 497-2960
9:00 a.m. to 5:00 p.m. Eastern time
The Funds' SAI and annual and semi-annual reports are also available,
free of charge, at http://www.RoxburyFunds.com. Information about the Funds,
including the SAI can be reviewed and copied at the Public Reference Room of the
Securities and Exchange Commission in Washington, DC. Copies of this information
may be obtained, upon payment of a duplicating fee, by electronic request at the
following e-mail address: publicinfo@sec.gov, or by writing the Public Reference
Room of the SEC, Washington, DC, 20549-0102. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at (202) 942-8090.
Reports and other information about the Funds may be viewed or downloaded from
the EDGAR database on the SEC's Internet site at http://www.sec.gov.
FOR MORE INFORMATION ON OPENING A NEW ACCOUNT, MAKING CHANGES TO
EXISTING ACCOUNTS, PURCHASING, EXCHANGING OR REDEEMING SHARES, OR OTHER INVESTOR
SERVICES, PLEASE CALL (800) 497-2960.
The investment company registration number is 811-21897.
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