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Spirit of America Investment Fund Inc, et al. – ‘485BPOS’ on 4/27/18

On:  Friday, 4/27/18, at 5:18pm ET   ·   Effective:  4/30/18   ·   Accession #:  1193125-18-139337   ·   File #s:  333-27925, 811-08231

Previous ‘485BPOS’:  ‘485BPOS’ on 4/20/18   ·   Next:  ‘485BPOS’ on 5/18/18   ·   Latest:  ‘485BPOS’ on 3/28/24   ·   9 References:   By:  Spirit of America Investment Fund Inc. – Latest ‘485BPOS’ on 3/28/24 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 4/28/23 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 3/30/23 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 1/27/23 By:  Spirit of America Investment Fund Inc. – ‘485APOS’ on 11/15/22 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 4/28/22 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 3/30/22 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 4/29/21 By:  Spirit of America Investment Fund Inc. – ‘485BPOS’ on 3/29/21 

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/27/18  Spirit of America Inv Fund Inc    485BPOS     4/30/18    6:2.1M                                   Donnelley … Solutions/FA
          → Spirit of America Income & Opportunity Fund ⇒ Class A (SOAOX) — Class C (SACOX)
          → Spirit of America Income Fund ⇒ Class A (SOAIX) — Class C (SACTX)
          → Spirit of America Large Cap Value Fund ⇒ Class A (SOAVX) — Class C (SACVX)
          → Spirit of America Municipal Tax Free Bond Fund ⇒ Class A Shares (SOAMX) — Class C (SACFX)
          → Spirit of America Real Estate Income & Growth Fund ⇒ Class A (SOAAX) — Class C (SACRX)

Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Spirit of America Investment Fund, Inc.             HTML    990K 
 2: EX-99.(H)(XVV)  Amendment to Mutual Fund Services Agreement     HTML     15K 
 3: EX-99.(H)(XVVI)  Amendment to Operating Expenses Agreement      HTML     10K 
                          Dated February 28, 2018                                
 4: EX-99.(J)   Consent of Independent Registered Public            HTML      6K 
                          Accounting Firm                                        
 5: EX-99.(P)(VII)  Code of Ethics of Spirit of America Investment  HTML     62K 
                          Fund, Inc. and David Lerner                            
 6: EX-99.(P)(VIII)  Code of Ethics of Spirit of America            HTML    106K 
                          Management Corp.                                       

Table of Contents

As filed on April 27, 2018

Securities Act File No. 333-27925

Investment Company Act File No. 811-08231

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT

UNDER

REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

SPIRIT OF AMERICA INVESTMENT FUND, INC.

(Exact name of Registrant as Specified in Charter)

477 Jericho Turnpike

P.O. Box 9006

Syosset, New York 11791-9006

(Address of Principal Executive Offices)

(516) 390-5555

(Registrant’s Telephone Number)

Mr. David Lerner

David Lerner Associates, Inc.

477 Jericho Turnpike

Syosset, New York 11791

(Name and address of Agent for service)

Copies to:

Thomas R. Westle, Esq.

Blank Rome LLP

405 Lexington Avenue

New York, NY 10174

It is proposed that this filing will become effective (check appropriate box).

If appropriate, check the following box:

Table of Contents

Spirit of America Real Estate

Income and Growth Fund

Class A Shares – TICKER: SOAAX

Class C Shares – TICKER: SACRX

Spirit of America Large Cap

Value Fund

Class A Shares – TICKER: SOAVX

Class C Shares – TICKER: SACVX

Spirit of America Municipal Tax Free Bond Fund

Class A Shares – TICKER: SOAMX

Class C Shares – TICKER: SACFX

Spirit of America

Income Fund

Class A Shares – TICKER: SOAIX

Class C Shares – TICKER: SACTX

Spirit of America Income & Opportunity Fund

Class A Shares – TICKER: SOAOX

Class C Shares – TICKER: SACOX

Prospectus

May 1, 2018

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Table of Contents

TABLE OF CONTENTS

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SPIRIT OF AMERICA REAL ESTATE INCOME AND GROWTH FUND

(the “Real Estate Fund”)

SUMMARY SECTION

Investment Objective:    The Real Estate Fund seeks to provide current income and growth of capital.

Fees and Expenses of the Real Estate Fund:    This table describes the fees and expenses that you may pay if you buy and hold shares of the Real Estate Fund. The sales charge you pay for Class A Shares of the Real Estate Fund depends upon the dollar amount invested. For purchases made until June 4, 2018, you may qualify for sales charge discounts if you invest at least $100,000 in the Funds comprising Spirit of America Investment Funds, Inc., which includes the Spirit of America Real Estate Income and Growth Fund, the Spirit of America Large Cap Value Fund, the Spirit of America Municipal Tax Free Bond Fund, the Spirit of America Income Fund and the Spirit of America Income & Opportunity Fund and the Spirit of America Energy Fund (which offers sales charge discounts if you invest at least $25,000 in the Spirit of America Energy Fund offered in a separate prospectus), collectively referred to as the “Spirit of America Investment Funds.” Effective June 5, 2018, you may qualify for sales charge discounts if you invest at least $250,000 in the Spirit of America Investment Funds offered in this Prospectus. More information about these and other discounts is available from your financial professional and in the sections titled “Additional Information About How to Purchase Shares” and “Distribution Arrangements—Sale of Class A Shares” of the Real Estate Fund’s prospectus and in the section titled “How to Purchase Shares” of the Real Estate Fund’s Statement of Additional Information (“SAI”).

Shareholder Fees

(fees paid directly from your investment)

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

Example:    This Example is intended to help you compare the cost of investing in the Real Estate Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Real Estate Fund for the time periods indicated and that you sell your shares at the end of those periods. The example also

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assumes that each year your investment has a 5% return and Fund operating expenses remain the same. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:

Portfolio Turnover:    The Real Estate Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Real Estate Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Real Estate Fund’s performance. During the most recent fiscal year ended December 31, 2017, the Real Estate Fund’s portfolio turnover rate was 8% of the average value of its portfolio.

Principal Investment Strategy:    The Real Estate Fund invests primarily in real estate investment trusts (“REITs”) with successful track records. REITs are pooled investment vehicles which invest primarily in income-producing real estate or real estate-related loans or interests.

A REIT is a company that derives at least 75% of its gross income from (a) rents from real property, (b) interests in real property or interest on obligations secured by mortgages, (c) the sale or other disposition of real property, (d) dividends, distributions or other gains from investments in other REITs, (e) abatements or tax refunds on real property, (f) income and gain derived from certain foreclosure property, (g) amounts received or accrued for entering into agreements to make loans secured by mortgages on real property or to purchase or lease property, and (h) certain other qualified temporary investment income. A REIT must also receive 95% of its gross income from (a) dividends, (b) interest, (c) rents from real property, (d) gain from the sale or other disposition of stock, securities, and real property, (e) abatements and refunds on taxes on real property, (f) income and gain from certain foreclosure property, (g) amounts received or accrued for entering into agreements to make loans secured by mortgages on real property or to purchase or lease property, and (h) mineral royalty income. REITs are pooled investment vehicles which invest primarily in income-producing real estate or real estate-related loans or interests. REITs generally are classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Mortgage REITs invest the majority of their assets in companies that own real estate mortgages and derive income from the collection of interest payments. REITs are not taxed on income distributed to shareholders provided they comply with several requirements of the Internal Revenue Code of 1986, as amended (the “Code”). The Real Estate Fund will indirectly bear its proportionate share of expenses incurred by REITs in which it invests, in addition to the expenses incurred directly by the Real Estate Fund.

The Real Estate Fund intends to invest, under normal circumstances, at least 80% of its total assets in equity REITs and the equity securities of real estate industry companies. The Real Estate Fund looks for stock where the price is low relative to the underlying value of the company and its real estate. The Real Estate Fund evaluates price/earnings ratios to attempt to identify those REITs which have strong underlying value; selects REITs paying high dividends in comparison to other REITs; evaluates earnings and dividend growth potential and continuously monitors interest rates, occupancies, rental income and new construction.

The Real Estate Fund may also invest in mortgage-backed securities, investment-grade taxable municipal obligations, master limited partnerships (“MLPs”) and short-term investments.

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Principal Risks of Investing in the Real Estate Fund:    An investment in the Real Estate Fund could lose money over short or long periods of time. You should expect and be able to bear the risk that the Real Estate Fund’s share price will fluctuate within a wide range. There is no assurance that the Real Estate Fund will achieve its investment objective. The Real Estate Fund’s performance could be adversely affected by the following principal risks (presented alphabetically):

Suitability:    An investment in the Real Estate Fund may be suitable for long-term investors who wish to invest a portion of their overall equity portfolio in a mutual fund that invests primarily in REITs. Investors should be willing to accept the potential volatility of such investments and the risks of a fund that concentrates in a single industry.

Performance Information:    The bar chart and performance table below illustrate the risks of investing in the Real Estate Fund by showing changes in the Real Estate Fund’s performance from year to year and by showing how the Real Estate Fund’s average annual total returns compare with those of a broad measure of market performance. The Real Estate Fund’s past performance (before and after taxes) does not necessarily indicate how the Real Estate Fund will perform in the future.

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The bar chart shows the changes in the annual total returns for each of the last ten calendar years for the Real Estate Fund’s Class A Shares. Sales loads and account fees are not reflected in the bar chart; if they were, returns would be less than those shown. Updated performance information, current through the most recent month end, is available by calling Ultimus Asset Services, LLC, the Fund’s transfer agent (the “Transfer Agent”), at 1-800-452-4892.

The performance information displayed in the bar chart is the performance of Class A Shares only, which will differ from Class C Shares to the extent the classes do not have the same expenses and inception dates.

Real Estate Fund’s Annual Returns (%)

Class A Shares

The performance table shows how the Real Estate Fund’s average annual returns compare with those of its benchmark, the MSCI US REIT Index.

PERFORMANCE TABLE

(Average annual total returns for the periods ended December 31, 2017)

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Investment Adviser:    Spirit of America Management Corp.

Portfolio Managers:     Douglas Revello serves as the Portfolio Manager and is primarily responsible for the day-to-day management of the Real Estate Fund. Mr. Revello became the Co-Portfolio Manager for the Real Estate Fund effective November 18, 2015 and transitioned to Portfolio Manager on July 1, 2016. Mr. Revello has been associated with the Adviser since May 18, 2009 as the Co-Portfolio Manager of the Municipal Tax Free Bond Fund through November 17, 2015, and was designated Portfolio Manager on November 18, 2015. William Mason serves as the Co-Portfolio Manager of the Real Estate Fund. Mr. Mason has been a Portfolio Manager of the Real Estate Fund since November 18, 2015. He has been overseeing the Real Estate Fund since January 30, 2008 as the Chief Investment Officer of the Adviser. Mr. Mason has also served as the Portfolio Manager of the Opportunity Fund since the Fund’s inception on July 8, 2013 and as the Portfolio Manager of the Energy Fund since November 18, 2015. He began overseeing management of the Energy Fund at its inception on July 10, 2014 in his role as the Chief Investment Officer of the Adviser. Mr. Mason began serving as the Co-Portfolio Manager of the Value Fund on April 30, 2018. Mr. Mason joined the Adviser on February 29, 2008. Previously, Mr. Mason served as the Portfolio Manager of the Municipal Tax Free Bond Fund, the Value Fund, and the Income Fund.

The SAI provides additional information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in the Real Estate Fund.

Purchasing, Selling and Exchanging Fund Shares:

You may redeem your shares of the Fund on any business day that the NYSE is open for business. Shares may be redeemed by written redemption request, telephone or wire transfer.

Taxes:    The Fund’s distributions may be taxable as ordinary income or capital gains, unless your investment is an IRA, 401(k) or other tax-advantaged investment plans, or when the distribution is derived from tax-exempt income.

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Payments to Broker-Dealers and Other Financial Intermediaries:    If you purchase shares of the Real Estate Fund through a broker-dealer or other financial intermediary (such as a bank), the Real Estate Fund and its related companies may pay the intermediary for the sale of the Real Estate Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Real Estate Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

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SPIRIT OF AMERICA LARGE CAP VALUE FUND

(the “Value Fund”)

SUMMARY SECTION

Investment Objective:    The Value Fund seeks to provide capital appreciation with a secondary objective of current income.

Fees and Expenses of the Value Fund:    This table describes the fees and expenses that you may pay if you buy and hold shares of the Value Fund. The sales charge you pay for Class A Shares of the Value Fund depends upon the dollar amount invested. For purchases made until June 4, 2018, you may qualify for sales charge discounts if you invest at least $100,000 in the Funds comprising Spirit of America Investment Funds, Inc., which includes the Spirit of America Real Estate Income and Growth Fund, the Spirit of America Large Cap Value Fund, the Spirit of America Municipal Tax Free Bond Fund, the Spirit of America Income Fund and the Spirit of America Income & Opportunity Fund and the Spirit of America Energy Fund (which offers sales charge discounts if you invest at least $25,000 in the Spirit of America Energy Fund offered in a separate prospectus), collectively referred to as the “Spirit of America Investment Funds.” Effective June 5, 2018, you may qualify for sales charge discounts if you invest at least $250,000 in the Spirit of America Investment Funds offered in this Prospectus. More information about these and other discounts is available from your financial professional and in the sections titled “Additional Information About How to Purchase Shares” and “Distribution Arrangements—Sale of Class A Shares” of the Value Fund’s prospectus and in the section titled “How to Purchase Shares” of the Value Fund’s Statement of Additional Information (“SAI”).

Shareholder Fees

(fees paid directly from your investment)

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

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Example:    This Example is intended to help you compare the cost of investing in the Value Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Value Fund for the time periods indicated and that you sell your shares at the end of those periods. The example also assumes that each year your investment has a 5% return and Fund operating expenses remain the same. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Value Fund would be:

Portfolio Turnover:    The Value Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Value Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Value Fund’s performance. During the most recent fiscal year ended December 31, 2017, the Value Fund’s portfolio turnover rate was 3% of the average value of its portfolio.

Principal Investment Strategy:    The Value Fund focuses on the large cap value segment of the U.S. equity market. The Value Fund invests at least 80% of its total assets in large cap equity securities of companies in the value segment of the market. The Value Fund considers a company to be a large cap company if it has a market capitalization of $5 billion or greater at the time of purchase. Using the “value” approach, the Adviser buys for the Value Fund those securities considered to be conservatively valued relative to the securities of comparable companies. To earn current income, the Value Fund will invest in the equity securities of companies that have a proven history of paying consistent dividends. The Value Fund may also invest in MLPs.

The Value Fund emphasizes stocks of companies that are believed to be fundamentally attractive based on certain valuation factors. Among the valuation factors used to evaluate these stocks are companies with lower debt ratios than their peer group and companies that are undervalued vs. the company’s intrinsic worth and future income potential. These stocks generally have growth prospects that are viewed as sub-par by the market. Reflecting these market expectations, the prices of value stocks typically are below-average relative to such factors as revenue, earnings, book value and dividends.

Principal Investment Risks of Investing in the Value Fund:    An investment in the Value Fund could lose money over short or long periods of time. You should expect and be able to bear the risk that the Value Fund’s share price will fluctuate within a wide range. There is no assurance that the Value Fund will achieve its investment objective. The Value Fund’s performance could be adversely affected by the following principal risks (presented alphabetically):

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Suitability:    An investment in the Value Fund may be suitable for long-term investors who seek appreciation of capital. Investors should be willing to accept the potential volatility of such investments.

Performance Information:    The bar chart and performance table below illustrate the risks of investing in the Value Fund by showing changes in the Value Fund’s performance from year to year and by showing how the Value Fund’s average annual total returns compare with those of a broad measure of market performance. The Value Fund’s past performance (before and after taxes) does not necessarily indicate how the Value Fund will perform in the future.

The bar chart shows the changes in annual total returns for each of the last ten calendar years for the Value Fund’s Class A Shares. Sales loads and account fees are not reflected in the bar chart; if they were, returns would be less than those shown. Updated performance information, current through the most recent month end, is available by calling Ultimus Asset Services, LLC, the Fund’s transfer agent (the “Transfer Agent”), at 1-800-452-4892.

The performance information displayed in the bar chart is the performance of Class A Shares only, which will differ from Class C Shares to the extent the classes do not have the same expenses and inception dates.

Value Fund’s Annual Returns (%)

Class A Shares

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The performance table shows how the Value Fund’s average annual returns compare with those of its benchmark, the S&P 500 Index.

PERFORMANCE TABLE

(Average annual total returns for the periods ended December 31, 2017)

Investment Adviser:    Spirit of America Management Corp.

Portfolio Managers:    Douglas Revello serves as the Portfolio Manager and is primarily responsible for the day-to-day management of the Value Fund. Mr.Revello has served as the Portfolio Manager of the Value Fund since January 10, 2018. Previously, Mr. Revello served as the Co-Portfolio Manager of the Value Fund from November 18, 2015 until January 9, 2018. Mr. Revello also serves as the Portfolio Manager of the Real Estate Fund. Mr. Revello also serves as Co-Portfolio Manager of both the Municipal Tax Free Bond Fund and the Income Fund. Mr. Revello has been associated with the Adviser since May 18, 2009. Mr.Revello served as Portfolio Manager of the Municipal Tax Free Bond Fund from November 17, 2015 until January 10, 2018 and prior to that he served as Co-Portfolio Manager of the Municipal Tax Free Bond Fund. William Mason began serving as the Co-Portfolio Manager of the Value Fund on April 30, 2018. Mr. Mason has also served as the Portfolio Manager of the Opportunity Fund since the Fund’s inception on July 8, 2013 and as the Portfolio Manager of the Energy Fund since November 18, 2015. He began overseeing management of the Energy Fund at its inception on July 10, 2014 in his role as the Chief Investment Officer of the Adviser. Mr. Mason also serves

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as the Co-Portfolio Manager of the Real Estate Fund. Mr. Mason joined the Adviser on February 29, 2008. Previously, Mr. Mason served as the Portfolio Manager of the Municipal Tax Free Bond Fund, the Value Fund, and the Income Fund.

The SAI provides additional information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in the Value Fund.

Purchasing, Selling and Exchanging Fund Shares:

You may redeem your shares of the Fund on any business day that the NYSE is open for business. Shares may be redeemed by written redemption request, telephone or wire transfer.

Taxes:    The Fund’s distributions may be taxable as ordinary income or capital gains, unless your investment is an IRA, 401(k) or other tax-advantaged investment plans, or when the distribution is derived from tax-exempt income.

Payments to Broker-Dealers and Other Financial Intermediaries:    If you purchase shares of the Value Fund through a broker-dealer or other financial intermediary (such as a bank), the Value Fund and its related companies may pay the intermediary for the sale of the Value Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Value Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

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SPIRIT OF AMERICA MUNICIPAL TAX FREE BOND FUND

(the “Municipal Tax Free Bond Fund”)

SUMMARY SECTION

Investment Objective:    The Municipal Tax Free Bond Fund seeks to provide high current income that is exempt from federal income tax, including alternative minimum tax.

Fees and Expenses of the Municipal Tax Free Bond Fund:    This table describes the fees and expenses that you may pay if you buy and hold shares of the Municipal Tax Free Bond Fund. The sales charge you pay for Class A Shares of the Municipal Tax Free Bond Fund depends upon the dollar amount invested. For purchases made until June 4, 2018, you may qualify for sales charge discounts if you invest at least $100,000 in the Funds comprising Spirit of America Investment Funds, Inc., which includes the Spirit of America Real Estate Income and Growth Fund, the Spirit of America Large Cap Value Fund, the Spirit of America Municipal Tax Free Bond Fund, the Spirit of America Income Fund and the Spirit of America Income & Opportunity Fund and the Spirit of America Energy Fund (which offers sales charge discounts if you invest at least $25,000 in the Spirit of America Energy Fund offered in a separate prospectus), collectively referred to as the “Spirit of America Investment Funds.” Effective June 5, 2018, you may qualify for sales charge discounts if you invest at least $250,000 in the Spirit of America Investment Funds offered in this Prospectus. More information about these and other discounts is available from your financial professional and in the sections titled “Additional Information About How to Purchase Shares” and “Distribution Arrangements—Sale of Class A Shares” of the Municipal Tax Free Bond Fund’s prospectus and in the section titled “How to Purchase Shares” of the Municipal Tax Free Bond Fund’s Statement of Additional Information (“SAI”).

Shareholder Fees

(fees paid directly from your investment)

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

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Example:    This Example is intended to help you compare the cost of investing in the Municipal Tax Free Bond Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Municipal Tax Free Bond Fund for the time periods indicated and that you sell your shares at the end of those periods. The example also assumes that each year your investment has a 5% return and Fund operating expenses remain the same. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Municipal Tax Free Bond Fund would be:

Portfolio Turnover:    The Municipal Tax Free Bond Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Municipal Tax Free Bond Fund’s performance. During the most recent fiscal year ended December 31, 2017, the Municipal Tax Free Bond Fund’s portfolio turnover rate was 5% of the average value of its portfolio.

Principal Investment Strategy:    The Municipal Tax Free Bond Fund seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its assets in municipal bonds that are exempt from federal income tax, including the alternative minimum tax (“AMT”). Typically, municipal bonds are issued by or on behalf of states and local governments and their agencies, authorities and/or other instrumentalities. The portfolio manager seeks out municipal bonds with the potential to offer high current income, generally focusing on municipal bonds that can provide consistently attractive current yields. Although the Municipal Tax Free Bond Fund tends to maintain a long-weighted average maturity, there are no maturity restrictions on the Municipal Tax Free Bond Fund or on individual securities.

The Municipal Tax Free Bond Fund intends to invest a substantial portion of its assets in high yield municipal bonds and “private activity” bonds that, at the time of purchase, are rated below investment grade by Standard and Poor’s, Moody’s or Fitch, or if unrated, determined by the Fund to be of comparable quality (i.e., “junk bonds”). The Municipal Tax Free Bond Fund may also invest, without limitation, in higher rated municipal bonds. The Municipal Tax Free Bond Fund may invest a portion of its total assets in “private activity” bonds whose interest is a tax-preference item for purposes of the AMT. For Municipal Tax Free Bond Fund investors subject to the AMT, distributions derived from “private activity” bonds must be included in their AMT calculations and, as such, a portion of the Municipal Tax Free Bond Fund’s distribution may be subject to federal income tax.

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The Municipal Tax Free Bond Fund may also invest a portion of its total assets in municipal bonds that finance projects such as those relating to utilities, transportation, health care, housing and education, and a portion of its total assets in industrial development bonds.

The Municipal Tax Free Bond Fund may invest in other debt obligations, including two types of municipal bonds known as tobacco settlement revenue bonds and tobacco bonds subject to a state’s appropriation pledge (“Tobacco Bonds”).

The Municipal Tax Free Bond Fund may invest in municipal lease agreements and certificates of participation. Municipal leases are used by state and local governments to obtain financing to acquire land, equipment or facilities. Certificates of participation represent a proportionate interest in payments made under municipal lease obligations.

The Municipal Tax Free Bond Fund may invest in other types of fixed income instruments including securities issues by entities, such as trusts, whose underlying assets are municipal bonds. The Municipal Tax Free Bond Fund may also invest in private placements. At times, the Municipal Tax Free Bond Fund’s holdings may be focused on a particular state or geographic region.

Principal Risks of Investing in the Municipal Tax Free Bond Fund:    An investment in the Municipal Tax Free Bond Fund could lose money over short or long periods of time. You should expect and be able to bear the risk that the Municipal Tax Free Bond Fund’s share price will fluctuate within a wide range. There is no assurance that the Municipal Tax Free Bond Fund will achieve its investment objective. The Municipal Tax Free Bond Fund’s performance could be adversely affected by the following principal risks (presented alphabetically):

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Suitability:    An investment in the Municipal Tax Free Bond Fund may be suitable for intermediate to long-term investors who seek high current income exempt from federal income tax. Investors should be willing to accept the risks and potential volatility of such investments.

Performance Information:    The bar chart and performance table below illustrate the risks of investing in the Municipal Tax Free Bond Fund by showing the Municipal Tax Free Bond Fund’s performance compared to that of a broad measure of market performance. The Municipal Tax Free Bond Fund’s past performance (before and after taxes) does not necessarily indicate how the Municipal Tax Free Bond Fund will perform in the future.

The bar chart shows the changes in annual total returns from inception for the Municipal Tax Free Bond Fund’s Class A Shares. Sales loads and account fees are not reflected in the bar chart; if they were, returns would be less than those shown. Updated performance information, current through the most recent month end, is available by calling Ultimus Asset Services, LLC, the Fund’s transfer agent (the “Transfer Agent”), at 1-800-452-4892.

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The performance information displayed in the bar chart is the performance of Class A Shares only, which will differ from Class C Shares to the extent the classes do not have the same expenses and inception dates.

Municipal Tax Free Bond Fund’s Annual Returns (%)

Class A Shares

The performance table shows how the Municipal Tax Free Bond Fund’s average annual return compares with that of its benchmark, the Bloomberg Barclays Capital Municipal Bond Index.

PERFORMANCE TABLE

(Average annual total returns for the periods ended December 31, 2017)

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Investment Adviser:    Spirit of America Management Corp.

Portfolio Managers:     Mark Reilly serves as the Portfolio Manager and is primarily responsible for the day-to-day management of the Municipal Tax Free Bond Fund. Mr.Reilly has been the Portfolio Manager of the Municipal Tax Free Bond Fund since January 10, 2018. Previously, Mr.Reilly served as Co-Portfolio Manager of the Municipal Tax Free Bond Fund from July 1, 2016 until January 9, 2018. Mr. Reilly also serves as Portfolio Manager of the Income Fund. Mr. Reilly joined the Adviser on November 18, 2015 and has over 20 years’ experience trading tax-free municipal bonds, taxable municipal bonds, and mortgage backed securities. Prior to joining the Adviser, Mr. Reilly served as head fixed income trader for David Lerner Associates, Inc.’s (“DLA”), the Funds’ principal underwriter and distributor, from November 2012 until November 17, 2015. Douglas Revello serves as Co-Portfolio Manager of the Municipal Tax Free Bond Fund. Mr. Revello served as Portfolio Manager of the Municipal Tax Free Bond Fund from November 17, 2015 until January 10, 2018 and prior to that he served as Co-Portfolio Manager of the Municipal Tax Free Bond Fund. Mr. Revello also serves as the Portfolio Manager of both the Real Estate Fund and the Value Fund. Mr. Revello also serves as the Co-Portfolio Manager of the Income Fund. Mr. Revello has been associated with the Adviser since May 18, 2009.

The SAI provides additional information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in the Municipal Tax Free Bond Fund.

Purchasing, Selling and Exchanging Fund Shares:

You may redeem your shares of the Municipal Tax Free Bond Fund on any business day that the NYSE is open for business. Shares may be redeemed by written redemption request, telephone or wire transfer.

Taxes:    The Municipal Tax Free Bond Fund attempts to invest primarily in tax-exempt obligations, however, to the extent that the Municipal Tax Free Bond Fund’s distributions are taxable, they will be taxed as ordinary income or capital gains, unless your investment is an IRA, 401(k) or other tax-advantaged investment plans, or when the distribution is derived from tax-exempt income.

Payments to Broker-Dealers and Other Financial Intermediaries:    If you purchase shares of the Municipal Tax Free Bond Fund through a broker-dealer or other financial intermediary (such as a bank), the Municipal Tax Free Bond Fund and its related companies may pay the intermediary for the sale of the Municipal Tax Free Bond Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Municipal Tax Free Bond Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

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SPIRIT OF AMERICA INCOME FUND

(the “Income Fund”)

SUMMARY SECTION

Investment Objective:    The Income Fund seeks to provide high current income.

Fees and Expenses of the Income Fund:    This table describes the fees and expenses that you may pay if you buy and hold shares of the Income Fund. The sales charge you pay for Class A Shares of the Income Fund depends upon the dollar amount invested. For purchases made until June 4, 2018, you may qualify for sales charge discounts if you invest at least $100,000 in the Funds comprising Spirit of America Investment Funds, Inc., which includes the Spirit of America Real Estate Income and Growth Fund, the Spirit of America Large Cap Value Fund, the Spirit of America Municipal Tax Free Bond Fund, the Spirit of America Income Fund and the Spirit of America Income & Opportunity Fund and the Spirit of America Energy Fund (which offers sales charge discounts if you invest at least $25,000 in the Spirit of America Energy Fund offered in a separate prospectus), collectively referred to as the “Spirit of America Investment Funds.” Effective June 5, 2018, you may qualify for sales charge discounts if you invest at least $250,000 in the Spirit of America Investment Funds offered in this Prospectus. More information about these and other discounts is available from your financial professional and in the sections titled “Additional Information About How to Purchase Shares” and “Distribution Arrangements—Sale of Class A Shares” of the Income Fund’s prospectus and in the section titled “How to Purchase Shares” of the Income Fund’s Statement of Additional Information (“SAI”).

Shareholder Fees

(fees paid directly from your investment)

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

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Example:    This Example is intended to help you compare the cost of investing in the Income Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Income Fund for the time periods indicated and that you sell your shares at the end of those periods. The example also assumes that each year your investment has a 5% return and Fund operating expenses remain the same. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Income Fund would be:

Portfolio Turnover:    The Income Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Income Fund Shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Income Fund’s performance. During the most recent fiscal year ended December 31, 2017, the Income Fund’s portfolio turnover rate was 0% of the average value of its portfolio.

Principal Investment Strategies:    The Income Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in a portfolio of taxable municipal bonds, income producing convertible securities, preferred stocks, high yield U.S. corporate bonds (i.e., “junk bonds”), and collateralized mortgage obligations (“CMOs”). A CMO is a mortgage-backed bond that separates mortgage pools into different maturity classes. Payments of principal and interest are passed through to each bond issue at varying schedules resulting in bonds with different coupons, effective maturities and sensitivities to interest rates. CMOs issued by U.S. government agencies are backed by agency mortgages, while privately issued CMOs may be backed by either government agency mortgages or private mortgages. The Income Fund may also invest in U.S. government agency securities issued or guaranteed by U.S. government-sponsored enterprises and federal agencies, including securities issued by the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”), and the Government National Mortgage Association (“GNMA”). Some of these securities are supported by the full faith and credit of the U.S. Treasury; the remainder are supported only by the credit of the instrumentality, which may or may not include the right of the issuer to borrow from the U.S. Treasury. These also include securities issued by eligible private depository institutions and guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) under its Temporary Liquidity Guarantee Program. High yield bonds are rated below investment grade (BB and lower). The Portfolio Manager seeks out high yield bonds with the potential to offer high current income, generally focusing on high yield bonds that can provide consistently attractive current yields. High yield bonds offer high income in an effort to compensate investors for the higher risk of default (failure to make required interest or principal payments). The Income Fund may also invest in higher rated (above BB) bonds. Although the Income Fund expects to maintain a long-weighted average maturity, there are no maturity restrictions on the Income Fund or on individual securities. Typically, the investments in the Income Fund will be subject to federal income taxation.

Consistent with its objective, the Income Fund may invest in other securities, including futures, options and swaps. The Income Fund may also invest in MLPs, equity securities of dividend paying companies and private placements.

Principal Risks of Investing in the Income Fund:    An investment in the Income Fund could lose money over short or long periods of time. You should expect and be able to bear the risk that the Income Fund’s share

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price will fluctuate within a wide range. There is no assurance that the Income Fund will achieve its investment objective. The Income Fund’s performance could be adversely affected by the following principal risks (presented alphabetically):

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Suitability:    An investment in the Income Fund may be suitable for intermediate to long-term investors who seek high current income. Investors should be willing to accept the risks and potential volatility of such investments.

Performance Information:    The bar chart and performance table below illustrate the risks of investing in the Income Fund by showing the Income Fund’s performance compared to that of a broad measure of market performance. The Income Fund’s past performance (before and after taxes) does not necessarily indicate how the Income Fund will perform in the future.

The bar chart shows the changes in annual total returns from inception for the Income Fund’s Class A Shares. Sales loads and account fees are not reflected in the bar chart; if they were, returns would be less than those shown. Updated performance information, current through the most recent month end, is available by calling Ultimus Asset Services, LLC, the Fund’s transfer agent (the “Transfer Agent”), at 1-800-452-4892.

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The performance information displayed in the bar chart is the performance of Class A Shares only, which will differ from Class C Shares to the extent the classes do not have the same expenses and inception dates.

Income Fund’s Annual Returns (%)

Class A Shares

The performance table shows how the Income Fund’s average annual return compares with that of its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index.

PERFORMANCE TABLE

(Average annual total returns for the periods ended December 31, 2017)

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Investment Adviser:    Spirit of America Management Corp.

Portfolio Managers:     Mark Reilly serves as Portfolio Manager and is primarily responsible for the day-to-day management of the Income Fund. Mr. Reilly became the Co-Portfolio Manager of the Income Fund effective November 18, 2015 and transitioned to Portfolio Manager on July 1, 2016. Mr. Reilly also serves as Portfolio Manager of the Municipal Tax Free Bond Fund. Mr. Reilly joined the Adviser on November 18, 2015 and has over 20 years’ experience trading tax-free municipal bonds, taxable municipal bonds, and mortgage backed securities. Prior to joining the Adviser, Mr. Reilly served as head fixed income trader for David Lerner Associates, Inc.’s (“DLA”), the Funds’ principal underwriter and distributor, from November 2012 until November 17, 2015. Douglas Revello serves as Co-Portfolio Manager of the Income Fund. Mr.Revello also serves as the Portfolio Manager of both the Real Estate Fund and the Value Fund. Mr.Revello also serves as the Co-Portfolio Manager of the Municipal Tax Free Bond Fund. Mr.Revello served as Portfolio Manager of the Municipal Tax Free Bond Fund from November 17, 2015 until January 10, 2018 and prior to that he served as Co-Portfolio Manager of the Municipal Tax Free Bond Fund. Mr. Revello has been associated with the Adviser since May 18, 2009.

The SAI provides additional information about each portfolio manager’s compensation, other accounts managed by each portfolio manager and each portfolio manager’s ownership of securities in the Income Fund.

Purchasing and Selling Fund Shares:

You may redeem your shares of the Income Fund on any business day that the NYSE is open for business. Shares may be redeemed by written redemption request, telephone or wire transfer.

Taxes:    The Income Fund’s distributions may be taxable as ordinary income or capital gains, unless your investment is an IRA, 401(k) or other tax-advantaged investment plans, or when the distribution is derived from tax-exempt income.

Payments to Broker-Dealers and Other Financial Intermediaries:    If you purchase shares of the Income Fund through a broker-dealer or other financial intermediary (such as a bank), the Income Fund and its related companies may pay the intermediary for the sale of the Income Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Income Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

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SPIRIT OF AMERICA INCOME & OPPORTUNITY FUND

(the “Opportunity Fund”)

SUMMARY SECTION

Investment Objective:    The Opportunity Fund seeks to provide current income and the potential for capital appreciation.

Fees and Expenses of the Opportunity Fund:    This table describes the fees and expenses that you may pay if you buy and hold shares of the Opportunity Fund. The sales charge you pay for Class A Shares of the Opportunity Fund depends upon the dollar amount invested. For purchases made until June 4, 2018, you may qualify for sales charge discounts if you invest at least $100,000 in the Funds comprising Spirit of America Investment Funds, Inc., which includes the Spirit of America Real Estate Income and Growth Fund, the Spirit of America Large Cap Value Fund, the Spirit of America Municipal Tax Free Bond Fund, the Spirit of America Income Fund and the Spirit of America Income & Opportunity Fund and the Spirit of America Energy Fund (which offers sales charge discounts if you invest at least $25,000 in the Spirit of America Energy Fund offered in a separate prospectus), collectively referred to as the “Spirit of America Investment Funds.” Effective June 5, 2018, you may qualify for sales charge discounts if you invest at least $250,000 in the Spirit of America Investment Funds offered in this Prospectus. America Energy Fund offered in a separate prospectus), collectively referred to as the “Spirit of America Investment Funds.” More information about these and other discounts is available from your financial professional and in the sections titled “Additional Information About How to Purchase Shares” and “Distribution Arrangements—Sale of Class A Shares” of the Opportunity Fund’s prospectus and in the section titled “How to Purchase Shares” of the Opportunity Fund’s Statement of Additional Information (“SAI”).

Shareholder Fees

(fees paid directly from your investment)

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

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Example:    This Example is intended to help you compare the cost of investing in the Opportunity Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Opportunity Fund for the time periods indicated and that you sell your shares at the end of those periods. The example also assumes that each year your investment has a 5% return and Fund operating expenses remain the same. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Opportunity Fund would be:

Portfolio Turnover:    The Opportunity Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when the Fund’s shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Opportunity Fund’s performance. During the most recent fiscal year ended December 31, 2017, the Opportunity Fund’s portfolio turnover rate was 6% of the average value of its portfolio.

Principal Investment Strategies:    The Opportunity Fund seeks to achieve its investment objective by investing a substantial percentage of its total assets in a combination of the following:

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As part of its investment process, the Adviser relies on the portfolio manager’s investment experience and research to identify investment opportunities in the equity and fixed income securities markets that will provide steady sources of income and some potential for capital appreciation without incurring unnecessary risks.

Principal Risks of Investing in the Opportunity Fund:    An investment in the Opportunity Fund could lose money over short or long periods of time. You should expect and be able to bear the risk that the Opportunity Fund’s share price may fluctuate within a wide range. There is no assurance that the Opportunity Fund will achieve its investment objective. The Opportunity Fund’s performance could be adversely affected by the following principal risks (presented alphabetically):

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Suitability:    An investment in the Opportunity Fund may be suitable for intermediate to long-term investors who seek high current income and the potential for some capital appreciation. Investors should be willing to accept the risks and potential volatility of such investments.

Performance Information:    The bar chart and performance table below illustrate the risks of investing in the Opportunity Fund by showing the Opportunity Fund’s performance compared to that of a broad measure of

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market performance. The Opportunity Fund’s past performance (before and after taxes) does not necessarily indicate how the Opportunity Fund will perform in the future.

The bar chart shows the changes in annual total returns from inception for the Opportunity Fund’s Class A Shares. Sales loads and account fees are not reflected in the bar chart; if they were, returns would be less than those shown. Updated performance information, current through the most recent month end, is available by calling Ultimus Asset Services, LLC, the Fund’s transfer agent (the “Transfer Agent”), at 1-800-452-4892.

The performance information displayed in the bar chart is the performance of Class A Shares only, which will differ from Class C Shares to the extent the classes do not have the same expenses and inception dates.

Opportunity Fund’s Annual Returns (%)

Class A Shares

The performance table shows how the Opportunity Fund’s average annual return compares with that of its benchmark, the Bloomberg Barclays U.S. Aggregate Index.

PERFORMANCE TABLE

(Average annual total returns for the periods ended December 31, 2017)

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Investment Adviser:    Spirit of America Management Corp., with an address at 477 Jericho Turnpike, P.O. Box 9006, Syosset, NY 11791-9006.

Portfolio Managers:    William Mason serves as the Portfolio Manager and is primarily responsible for the day-to-day management of the Opportunity Fund. Mr. Mason has been the Portfolio Manager of the Opportunity Fund since the Fund’s inception on July 8, 2013. Mr. Mason has also served as the Portfolio Manager of the Energy Fund since November 18, 2015. He began overseeing management of the Energy Fund at its inception on July 10, 2014 in his role as the Chief Investment Officer of the Adviser. Mr.Mason is also the Co-Portfolio Manager of the Real Estate Fund and the Value Fund. Mr. Mason joined the Adviser on February 29, 2008. Previously, Mr. Mason served as the Portfolio Manager of the Municipal Tax Free Bond Fund, the Value Fund, and the Income Fund.

The SAI provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager and the portfolio manager’s ownership of securities in the Opportunity Fund.

Purchasing and Selling Fund Shares:

You may redeem your shares of the Opportunity Fund on any business day that the NYSE is open for business. Shares may be redeemed by written redemption request, telephone or wire transfer.

Taxes:    The Opportunity Fund’s distributions may be taxable as ordinary income or capital gains, unless your investment is an IRA, 401(k) or other tax-advantaged investment plans, or when the distribution is derived from tax-exempt income.

Payments to Broker-Dealers and Other Financial Intermediaries:    If you purchase shares of the Opportunity Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of the Opportunity Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Opportunity Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.

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ADDITIONAL INFORMATION ABOUT THE

INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND

RELATED RISKS OF THE FUNDS

Investment Strategies of the Funds

Real Estate Fund

At least 80% of the Real Estate Fund’s total assets will be invested in equity REITs and the equity securities of real estate industry companies. A “real estate industry company” is a company that derives at least 50% of its gross revenues or net profits from either (a) the ownership, development, construction, financing, management or sale of commercial, industrial or residential real estate or (b) products or services related to the real estate industry, like building supplies or mortgage servicing.

When selecting equity securities for the Real Estate Fund, the Adviser focuses on whether the issuer can achieve sustainable growth in cash flow, which is a prerequisite to higher dividend paying capability. The Adviser looks for the economic viability of property markets in which the issuer operates, and the ability of management to add value through strategic focus and operating expertise. The Real Estate Fund purchases equity securities when, in the judgment of the Adviser, the market price for such securities does not adequately reflect its potential. In making this determination, the Adviser will take into account fundamental trends in underlying property markets as determined by site visits, price-earnings ratios for real estate companies, cash flow growth and stability, the relationship between asset value and market price of the securities, dividend payment history, and any other factor which may from time to time be relevant. The Adviser also monitors interest rates, occupancies, rental income and new construction.

The Real Estate Fund may also invest in mortgage-backed securities, investment grade taxable municipal obligations, master limited partnerships (“MLPs”) and short term investments.

The Adviser may sell a stock when they think the stock is approaching full valuation, changing circumstances affect the original reasons for its purchase or more attractive opportunities are identified.

REITs.     The Real Estate Fund may invest without limitation in shares of REITs. REITs are pooled investment vehicles which invest primarily in income-producing real estate or real estate-related loans or interests. REITs generally are classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Mortgage REITs invest the majority of their assets in companies that own real estate mortgages and derive income from the collection of interest payments. REITs are not taxed on income distributed to shareholders provided they comply with several requirements of the Internal Revenue Code of 1986, as amended (the “Code”). The Real Estate Fund will indirectly bear its proportionate share of expenses incurred by REITs in which it invests, in addition to the expenses incurred directly by the Real Estate Fund.

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Mortgage-Backed Securities.     The Real Estate Fund may invest in all types of mortgage-backed securities. The Real Estate Fund also may invest in guaranteed mortgage pass-through securities which represent participation interests in pools of residential mortgage loans and are issued by U.S. governmental or private agencies or instrumentalities, including but not limited to GNMA, FNMA and FHLMC. GNMA certificates are guaranteed by the full faith and credit of the U.S. Government for timely payment of principal and interest on the certificates. FNMA certificates are guaranteed by FNMA, a federally chartered and privately-owned corporation for full and timely payment of principal and interest on the certificates. FHLMC certificates are guaranteed by FHLMC, a corporate instrumentality of the U.S. Government, for timely payment of interest and the ultimate collection of all principal of the related mortgage loans.

Taxable Municipal Obligations.     The Real Estate Fund may invest in investment grade taxable municipal securities. These securities are debt obligations issued by municipalities and local agencies within the United States to obtain funds for various public purposes. In addition, public authorities issue taxable industrial development bonds to provide for the construction, equipment, repair or improvement of certain privately operated or local facilities. These obligations, including those which are guaranteed by state, local and municipal agencies or instrumentalities, may or may not be backed by the full faith and credits of the taxing authority of the agency or instrumentality issuing the obligation. Unlike tax-free municipal securities, the interest on taxable municipal securities generally will be included in gross income for U.S. federal income tax purposes and may be subject to income taxes imposed by any state or political subdivision.

Investment grade securities are within the four highest credit ratings of Moody’s Investors Service, Inc. (“Moody’s”), are rated A-1, AA or better by Standard & Poor’s Ratings Group (“S&P”), or are comparably rated by another nationally recognized statistical rating organization or, if unrated, determined by Spirit of America Management Corp. (the “Adviser”) to be of comparable quality. Although bonds and notes rated in the fourth credit rating category are commonly referred to as investment grade, they may have speculative characteristics. The Real Estate Fund generally will not retain securities that fall below investment grade.

Master Limited Partnerships.     The Real Estate Fund may invest in MLPs. MLPs are publicly traded partnerships typically engaged in the transport, storage, processing, refining, marketing, exploration, production and mining of minerals and natural resources. These activities are often referred to as “energy infrastructure.”

Short-Term Investments.     The short-term investments in which the Real Estate Fund may invest are: corporate commercial paper and other short-term commercial obligations, in each case rated or issued by companies with similar securities outstanding that are rated Prime-1, Aa or better by Moody’s or A-1, AA or better by S&P; obligations (including certificates of deposit, time deposits, demand deposits and bankers’ acceptances) of banks with securities outstanding that are rated Prime-1, Aa or better by Moody’s or A-1, AA or better by S&P; and obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities with remaining maturities not exceeding 18 months.

Convertible securities rank senior to common stocks in an issuer’s capital structure. They are consequently of higher quality and entail less risk than the issuer’s common stock, although the extent to which such risk is reduced depends in large measure upon the degree to which the convertible security sells above its value as a fixed income security.

Value Fund

The Value Fund invests at least 80% of its total assets in large cap equity securities of companies in the value segment of the market. In order to achieve current income, the Value Fund will invest in equity securities with a proven history of paying consistent dividends. The Value Fund may also invest in MLPs.

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The Value Fund invests in publicly registered companies which are generally listed on the New York Stock Exchange (“NYSE”), NYSE Amex or NASDAQ. The Value Fund defines large cap for purposes of the 80% test as companies having a market capitalization in excess of $5 billion. The Value Fund will focus on companies which may be established in their industry, but are deemed to be undervalued by the Value Fund’s Adviser. As part of the investment process, the Adviser also looks at the economic viability of a company and its market sector, as well as the ability of management to add significant value through strategic focus and operating expertise.

The Adviser may sell a stock when they think the stock is approaching full valuation, changing circumstances affect the original reasons for its purchase or more attractive opportunities are identified.

Non-Principal Investment Strategies of the Value Fund.    In addition to the investment assets discussed above, the Value Fund may seek to achieve its investment objective by investing its assets in shares of REITs. REITs are pooled investment vehicles which invest primarily in income-producing real estate or real estate-related loans or interests. REITs generally are classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Mortgage REITs invest the majority of their assets in companies that own real estate mortgages and derive income from the collection of interest payments. REITs are not taxed on income distributed to shareholders provided they comply with several requirements of the Code. The Value Fund will indirectly bear its proportionate share of expenses incurred by REITs in which it invests, in addition to the expenses incurred directly by the Value Fund.

Municipal Tax Free Bond Fund

The Municipal Tax Free Bond Fund seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its assets in municipal bonds that are exempt from federal income tax, including the AMT. The portfolio manager seeks out municipal bonds with the potential to offer high current income, generally focusing on municipal bonds that can provide consistently attractive current yields. Although the Municipal Tax Free Bond Fund tends to maintain a long-weighted average maturity, there are no maturity restrictions on the Municipal Tax Free Bond Fund or on individual securities.

The Municipal Tax Free Bond Fund intends to invest a substantial portion of its assets in high yield municipal bonds and “private activity” bonds that, at the time of purchase, are rated below investment grade by Standard and Poor’s, Moody’s or Fitch, or if unrated, determined by the Fund to be of comparable quality (frequently referred to as “junk bonds”). The Municipal Tax Free Bond Fund may also invest, without limitation, in higher rated municipal bonds. The Municipal Tax Free Bond Fund may invest a portion of its total assets in “private activity” bonds whose interest is a tax-preference item for purposes of the federal AMT. For Fund investors subject to the AMT, distributions derived from “private activity” bonds must be included in their AMT calculations and, as such, a portion of the Municipal Tax Free Bond Fund’s distribution may be subject to federal income tax.

The Municipal Tax Free Bond Fund may invest in other debt obligations, including two types of municipal bonds known as tobacco settlement revenue bonds and tobacco bonds subject to a state’s appropriation pledge.

The Municipal Tax Free Bond Fund may invest in municipal lease agreements and certificates of participation.

The Municipal Tax Free Bond Fund may invest in other types of fixed income instruments including securities issued by entities, such as trusts, whose underlying assets are municipal bonds. The Municipal Tax Free Bond Fund may also invest in private placements. At times, the Municipal Tax Free Bond Fund’s holdings may be focused on a particular state or geographic region.

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Non-Principal Investment Strategies of the Municipal Tax Free Bond Fund.    The Municipal Tax Free Bond Fund may also invest in insured municipal bonds, zero coupon bonds and zero coupon convertible bonds, and exchange traded funds (“ETFs”).

Income Fund

The Income Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in a portfolio of taxable municipal bonds, income producing convertible securities, high yield U.S. corporate bonds (frequently called “junk” bonds), preferred stocks, and CMOs. A CMO is a mortgage-backed bond that separates mortgage pools into different maturity classes. Payments of principal and interest are passed through to each bond issue at varying schedules resulting in bonds with different coupons, effective maturities and sensitivities to interest rates. CMOs issued by U.S. government agencies are backed by agency mortgages, while privately issued CMOs may be backed by either government agency mortgages or private mortgages. The Income Fund may also invest in U.S. government agency securities issued or guaranteed by U.S. government-sponsored enterprises and federal agencies, including securities issued by FNMA, FHLMC, and GNMA. Some of these securities are supported by the full faith and credit of the U.S. Treasury; the remainder are supported only by the credit of the instrumentality, which may or may not include the right of the issuer to borrow from the U.S. Treasury. These also include securities issued by eligible private depository institutions and guaranteed by the FDIC) under its Temporary Liquidity Guarantee Program. High yield bonds are rated below investment grade (BB and lower). The Portfolio Manager seeks out high yield bonds with the potential to offer high current income, generally focusing on high yield bonds that can provide consistently attractive current yields. High yield bonds offer high income in an effort to compensate investors for the higher risk of default (failure to make required interest or principal payments). The Income Fund may also invest in higher rated (above BB) bonds. Although the Income Fund expects to maintain a long-weighted average maturity, there are no maturity restrictions on the Income Fund or on individual securities. Typically, the investments in the Income Fund will be subject to federal income taxation.

Consistent with its objective, the Income Fund may invest in other securities, including futures, options and swaps. The Income Fund may also invest in MLPs, equity securities of dividend-paying companies and private placements.

Opportunity Fund

The Opportunity Fund seeks to achieve its investment objective by investing a substantial percentage of its total assets in a combination of the following:

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As part of its investment process, the Adviser relies on the portfolio manager’s investment experience and research to identify investment opportunities in the equity and fixed income securities markets that will provide steady sources of income and some potential for capital appreciation without incurring unnecessary risks.

Non-Principal Investment Strategies of the Opportunity Fund.    In addition to the investment assets discussed above, the Opportunity Fund seeks to achieve its investment objective by investing its assets in a combination of the following:

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Information Relevant to Each Fund

Temporary Investments.    From time to time, each Fund may take temporary defensive positions that is inconsistent with its respective principal investment strategies in attempting to respond to adverse market, economic, political or other conditions. The Funds will assume a temporary defensive position only when economic and other factors adversely affect the market and, in the Adviser’s opinion, present extraordinary risks in being invested primarily in securities in accordance with a Fund’s respective principal investment strategy. Each Fund may, as a temporary or defensive measure, invest all or a substantial portion of its assets in high quality, fixed income securities, money market instruments, or cash or cash equivalents, including investment grade short-term obligations. When a Fund maintains a temporary defensive position, it may not achieve its investment objectives.

Disclosure of Portfolio Holdings.    A description of the Funds’ policies and procedures relating to selective disclosure of portfolio holdings is available in the Funds’ SAI.

Commodity Exchange Act Exemption.    Each Fund has filed a notice of eligibility for exclusion from the definition of the term “commodity pool operator” with the National Futures Association. Therefore, the Funds are not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.

Principal Investment Risks of the Funds

Each Fund is designed for long-term investors and not as a trading vehicle. An investment in the Funds could lose money over short or long periods of time. You should expect and be able to bear the risk that a Fund’s share price will fluctuate within a wide range. There is no assurance that a Fund will achieve its investment objective. A Fund’s performance could be adversely affected by its principal risks as discussed below.

Real Estate Fund

Concentration of Investments.    The Real Estate Fund invests primarily in real estate related securities. This means the Real Estate Fund is concentrated in the real estate industry. A fund that concentrates its investments in one particular industry is subject to greater risk of loss than a fund that has a more diversified portfolio of investments.

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Risks.    Investments in real estate and real estate-related equity securities involve risks different from, and in certain cases greater than, the risks presented by equity securities generally. The main risks are those presented by direct ownership of real estate or real estate industry securities, including possible declines in the value of real estate, environmental problems and changes in interest rates. To the extent that assets underlying the Real Estate Fund’s investments are concentrated geographically, by property type or in certain other respects, the Real Estate Fund may be subject to these risks to a greater extent. The stocks purchased by the Real Estate Fund may not appreciate in value as the Adviser anticipates.

In addition, if the Real Estate Fund receives rental income or income from the disposition of real property acquired as a result of a default on securities the Real Estate Fund owns, its ability to retain its tax status as a regulated investment company may be adversely affected.

REITs are primarily invested in real estate, dependent upon management skills, subject to heavy cash flow dependency, and have a risk of default by borrowers and self-liquidation. REITs are also subject to the possibilities of failing to qualify for tax free pass-through of income under the Code. Due to the cyclical nature of the real estate industry, REITs may under-perform in comparison with other investment sectors.

Investing in REITs involves risks similar to those associated with investing in small capitalization companies. REITs may have limited financial resources, trade less frequently and in a limited volume and be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks included in the Standard & Poor’s 500 Index (“S&P 500 Index”). Rising interest rates may reduce the demand for REITs which may cause them to perform badly.

Investing in investment grade taxable municipal obligations involves the risk of default among one or more issuers of taxable municipal obligations which are held by the Real Estate Fund. Another risk may be the inability to readily find a buyer at or near the market price should the Real Estate Fund need to quickly dispose of one or more of its positions in taxable municipal obligations. Also, municipal securities rated investment grade at the time of purchase may be subsequently downgraded.

Municipal obligations and short-term securities are subject to interest rate risk. When interest rates decline, the value of an investment in fixed rate obligations can be expected to rise. Conversely, when interest rates rise, the value of an investment in fixed rate obligations can be expected to decline.

Investing in mortgage-backed securities involves risks such as the failure of a counterparty to meet its commitments and the effects of prepayments on mortgage cash flows. Prepayment rates are influenced by changes in current interest rates as well as a variety of other factors, and cannot be predicted with certainty. Both adjustable rate mortgage loans and fixed rate mortgage loans may be subject to a greater rate of principal prepayments in a declining interest rate environment, and to a lesser rate of principal prepayments in an increasing interest rate environment. Early payment associated with mortgage-backed securities causes these securities to experience significantly greater price and yield volatility than that experienced by traditional fixed-income securities. The Real Estate Fund may fail to recoup fully its investment in mortgage-backed securities due to the possibility of non-payment of the underlying mortgages, notwithstanding any direct or indirect governmental or agency guarantee. When the Real Estate Fund reinvests amounts representing payments and unscheduled prepayments of principal, it may receive a rate of interest that is lower than the rate on existing adjustable rate mortgage pass-through securities. Thus, mortgage-backed securities, and adjustable rate mortgage pass-through securities in particular, may be less effective than other types of U.S. Government securities as a means of locking in interest rates.

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Real Estate Fund, Value Fund, Income Fund and Opportunity Fund

The Real Estate Fund, Value Fund, Income Fund and Opportunity Fund are each subject to risks associated with investing in Master Limited Partnerships as described below.

Master Limited Partnerships.    Investing in MLPs, which are publicly traded partnerships typically engaged in the transport, storage, processing, refining, marketing, exploration, production and mining of minerals and natural resources, involve risks that differ from investments in common stock. These risks relate to limited control and limited rights to vote on matters affecting the MLP, potential conflicts of interest between the MLP and the MLP’s general partner, cash flow risks, dilution risks and risks related to the general partner’s limited call right. Moreover, energy infrastructure companies are subject to risks specific to the industry they serve including, but not limited to: i) fluctuations in commodity prices; ii) reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing; iii) new construction risks and acquisition risk which can limit growth potential; iv) a sustained reduced demand for crude oil, natural gas and refined petroleum products resulting from a recession or an increase in market price or higher taxes; v) depletion of the natural gas reserves or other commodities if not replaced; vi) changes in the regulatory environment; vii) extreme weather; viii) rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities; and ix) threats of attack by terrorists.

In addition, MLPs carry tax risk. MLPs do not pay U.S. federal income tax at the partnership level. Rather, each partner is allocated a share of the partnership’s income, gains, losses, deductions, credits and expenses. A change in current tax law, or a change in the underlying business mix of a given MLP, could result in an MLP being treated as a corporation for U.S. federal income tax purposes. This could result in such MLP being required to pay U.S. federal income tax on its taxable income. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP. Thus, if any of the MLPs owned by a Fund were treated as corporations for U.S. federal income tax purposes, it could result in a reduction of the value of your investment in that Fund and lower income.

Value Fund, Municipal Tax Free Bond Fund, Income Fund and Opportunity Fund

The Value Fund, Municipal Tax Free Bond Fund, Income Fund and Opportunity Fund are each subject to market risks associated with investing in equity securities as described below.

Stock Market Risks.    The market value of a Fund’s investments will fluctuate as the equity market fluctuates. Market risk may affect a single issuer, industry or sector of the economy or it may affect the market as a whole. Performance of a Fund can be affected by unexpected events (e.g., significant earnings shortfalls or gains, war, political events, etc.) that cause major price changes in individual securities or market sectors. The equity securities purchased by the Funds may not appreciate in value as the Adviser anticipates.

Value Fund

Large Capitalization Company Risk.    The Value Fund invests primarily in large cap companies. Larger, more established companies may be unable to respond quickly to new competitive challenges like changes in consumer tastes or innovative smaller competitors. Large cap companies also may be unable to attain the high growth rates reached by successful, smaller companies, especially during extended periods of economic expansion.

Value Investing.    The value approach to investing involves the risk that the stocks selected by the Adviser may remain undervalued. Value stocks as a group may be out of favor and under-perform the overall equity market for a long period of time, while the market concentrates on “growth” stocks. In addition, the Value Fund may need to forgo investments that show growth potential if they are inconsistent with its value investment strategy.

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Value funds often focus many of their investments in certain industries, and thus will be more susceptible to factors adversely affecting issuers within such industries than would a more diversified portfolio of securities.

Other risks include the risk associated with dividend-paying companies, such as the company’s inability to continue regular dividend payments.

Municipal Tax Free Bond Fund

The Municipal Tax Free Bond Fund is subject to the risks described below.

Call Risk.    Call risk is the possibility that during periods of falling interest rates, issuers of callable bonds may call (redeem) higher coupon rate bonds before their maturity dates. A Fund would then lose potential price appreciation and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund’s income. Call risk is typically higher for long-term bonds.

Credit Risk.    Credit risk is the possibility that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Credit risk should be moderate to high for the Municipal Tax Free Bond Fund, the Income Fund and the Opportunity Fund because each seeks to invest a portion of its assets in low-quality bonds. This risk may be greater for the Funds to the extent that each Fund may invest in junk bonds. Even if there is no actual default, it is probable that a bond will decline in price if its credit quality declines and its bond rating is downgraded to a lower category. The Income Fund attempts to reduce portfolio credit risk by diversifying its holdings and carefully researching issuer credit quality.

Credit Risks of Lower-Grade Securities.    Credit risks of lower-grade securities is the possibility that securities rated below investment grade, or unrated of similar quality (i.e., “junk bonds”), may be subject to greater price fluctuations and risks of loss of income and principal than investment grade securities. Securities that are (or that have fallen) below investment grade have a greater risk that the issuers may not meet their debt obligations. These types of securities are generally considered speculative in relation to the issuer’s ongoing ability to make principal and interest payments. During periods of rising interest rates or economic downturn, the trading market for these securities may not be active and may reduce a Fund’s ability to sell these securities at an acceptable price (see also “Liquidity Risk”). If the issuer of securities defaults on its payment of interest or principal, a Fund may lose its entire investment in those securities.

Interest Rate Risk.    Interest rate risk is the possibility that overall bond prices will decline because of rising interest rates. Even GNMAs and other agency securities (whose principal and interest payments are guaranteed) can decline in price if rates rise. Interest rate risk is expected to be high for the Municipal Tax Free Bond Fund, Income Fund and Opportunity Fund because each invests, without limitation, in long-term bonds, whose prices are much more sensitive to interest rate fluctuations than are the prices of short-term bonds.

Portfolio Management Risk.    Each Fund’s ability to achieve its investment objective is dependent on the Adviser’s ability to identify profitable investment opportunities for the Fund. The securities purchased by the Adviser may not perform as anticipated.

State Specific Risk.    State specific risk is the possibility that if the Municipal Tax Free Bond Fund invests in the municipal bonds of a particular state, the bonds of that state may be affected significantly by economic, political or regulatory developments affecting the ability of that state’s issuers to pay interest or principal on their obligations.

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Tobacco Bond Risk.    Tobacco bond risk is the possibility that payments of principal and interest, which are not generally backed by the full faith, credit or taxing power of the state or local government, may, with respect to “Tobacco Settlement Revenue Bonds,” be affected by fluctuations in the future revenue flow from tobacco companies used to secure these payments or, in the case of “Subject to Appropriation Tobacco Bonds,” by a state’s inability or failure to pass a specific periodic appropriation to pay interest and/or principal on the bonds as the payments come due.

Income Fund and Opportunity Fund

The Income Fund and Opportunity Fund are each subject to the risks described below, unless otherwise specified below.

Call Risk.    Call risk is the possibility that during periods of falling interest rates, issuers of callable bonds may call (redeem) higher coupon rate bonds before their maturity dates. A Fund would then lose potential price appreciation and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund’s income. Call risk is typically higher for long-term bonds.

Convertible Securities Risk (Opportunity Fund only).    Convertible securities risk is the risk that convertible securities generally offer lower interest or dividend yields than non-convertible securities of comparable quality.

Credit Risk.    Credit risk is the possibility that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Credit risk should be moderate to high for the Municipal Tax Free Bond Fund, the Income Fund and the Opportunity Fund because each seeks to invest a portion of its assets in low-quality bonds. This risk may be greater for the Funds to the extent that each Fund may invest in junk bonds. Even if there is no actual default, it is probable that a bond will decline in price if its credit quality declines and its bond rating is downgraded to a lower category. The Income Fund attempts to reduce portfolio credit risk by diversifying its holdings and carefully researching issuer credit quality.

Credit Risks of Lower-Grade Securities.    Credit risks of lower-grade securities is the possibility that securities rated below investment grade, or unrated of similar quality (i.e., “junk bonds”), may be subject to greater price fluctuations and risks of loss of income and principal than investment grade securities. Securities that are (or that have fallen) below investment grade have a greater risk that the issuers may not meet their debt obligations. These types of securities are generally considered speculative in relation to the issuer’s ongoing ability to make principal and interest payments. During periods of rising interest rates or economic downturn, the trading market for these securities may not be active and may reduce a Fund’s ability to sell these securities at an acceptable price (see also “Liquidity Risk”). If the issuer of securities defaults on its payment of interest or principal, a Fund may lose its entire investment in those securities.

Dividend Risk.    Dividend risk is the risk that there can be no assurance that a dividend-paying company will continue to make regular dividend payments.

Foreign Securities Risk (Opportunity Fund only).    The Opportunity Fund may invest in foreign securities, including direct investments in securities of foreign issuers and investments in depositary receipts (such as ADRs) that represent indirect interests in securities of foreign issuers. Investments in foreign securities involve certain risks not generally associated with investments in securities of U.S. issuers. Public information available concerning foreign issuers may be more limited than would be with respect to domestic issuers. Different accounting standards may be used by foreign issuers, and foreign trading markets may not be as liquid

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as U.S. markets. Foreign securities also involve such risks as currency fluctuation risk, delays in transaction settlements, possible imposition of withholding or confiscatory taxes, possible currency transfer restrictions, and the difficulty of enforcing obligations in other countries. With any investment in foreign securities, there exist certain economic, political and social risks, including the risk of adverse political developments, nationalization, confiscation without fair compensation and war.

Interest Rate Risk.    Interest rate risk is the possibility that overall bond prices will decline because of rising interest rates. Even GNMAs and other agency securities (whose principal and interest payments are guaranteed) can decline in price if rates rise. Interest rate risk is expected to be high for the Municipal Tax Free Bond Fund, Income Fund and Opportunity Fund because each invests, without limitation, in long-term bonds, whose prices are much more sensitive to interest rate fluctuations than are the prices of short-term bonds.

Portfolio Management Risk.    Each Fund’s ability to achieve its investment objective is dependent on the Adviser’s ability to identify profitable investment opportunities for the Fund. The securities purchased by the Adviser may not perform as anticipated.

REITs Risk (Opportunity Fund only).    REITs are dependent upon management skills, are primarily invested in real estate, are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs are also subject to the possibilities of failing to qualify for tax free pass-through of income under the Code. Due to the cyclical nature of the real estate industry, REITs may under-perform in comparison with other investment sectors. Investing in publicly traded REITs involves risks similar to those associated with investing in small capitalization companies. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks included in the Standard & Poor’s 500 Index. Rising interest rates may reduce the demand for REITs which may cause them to perform badly.

Risks of CMOs.    Risks of CMOs is the possibility that a Fund will be less likely to receive payments of principal and interest, and will be more likely to suffer a loss, if there are defaults on the mortgage loans underlying the CMOs. This risk may be increased to the extent that the underlying mortgages include sub-prime mortgages and in relation to the level of subordination of the category of the CMOs held by a Fund. In addition, CMOs may be less liquid or may exhibit greater price volatility than other types of mortgages or asset-backed securities. Some CMOs may be structured in a way that when interest rates change, the impact of changing prepayment rates on the effective maturities of certain issues of these securities is magnified. CMO risk also depends on the issuer. While CMO collateral is typically issued by GNMA, FNMA or FHLMC, the CMO itself may be issued by a private party, such as a brokerage firm, that is not covered by government guarantees. CMO collateral may also include different or specialized types of mortgage loans or mortgage loan pools, letters of credit, or other types of credit enhancements and these so-called “private label” CMOs are the sole obligation of their issuer.

Small Cap Company Risk (Opportunity Fund only).    Smaller companies may present greater opportunities for capital appreciation but may involve greater risk than larger, more mature issuers. Such smaller companies may have limited product lines, markets or financial resources, and their securities may trade less frequently and in more limited volume than those of larger, more mature companies. As a result, the prices of their securities may fluctuate more than those of larger issuers.

U.S. Government Securities Risk (Income Fund only).    Although U.S. Government securities are considered among the safest investments, they are not guaranteed against price movements due to changing

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interest rates. Obligations issued by some U.S. Government agencies are backed by the U.S. Treasury, while others are backed solely by the ability of the agency to borrow from the U.S. Treasury or by the agency’s own resources.

Non-Principal Investment Risks of the Funds

Value Fund

In addition to the principal risks previously discussed, the Value Fund is subject to risks associated with investing in REITS, as described below.

REITs Risk.    REITs are dependent upon management skills, are primarily invested in real estate, are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs are also subject to the possibilities of failing to qualify for tax free pass-through of income under the Code. Due to the cyclical nature of the real estate industry, REITs may under-perform in comparison with other investment sectors. Investing in publicly traded REITs involves risks similar to those associated with investing in small capitalization companies. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks included in the Standard & Poor’s 500 Index. Rising interest rates may reduce the demand for REITs which may cause them to perform badly.

Municipal Tax Free Bond Fund

In addition to the principal risks previously discussed, the Municipal Tax Free Bond fund is subject to the following risks:

Income Risk.    Income risk is the possibility that the Fund’s income will decline because of falling interest rates.

Investment Companies and ETFs Risk.    Investments in the securities of ETFs and other investment companies, including money market funds, may involve duplication of advisory fees and certain other expenses. By investing in an ETF or another investment company, the Fund becomes a shareholder of that ETF or other investment company. As a result, fund shareholders indirectly bear a Fund’s proportionate share of the fees and expenses paid by the ETF or other investment company, in addition to the fees and expenses fund shareholders directly bear in connection with the Fund’s own operations. As a shareholder, a Fund must rely on the ETF or other investment company to achieve its investment objective. If the ETF or other investment company fails to achieve its investment objective, the value of the Fund’s investment will decline, adversely affecting the Fund’s performance. In addition, because ETFs are listed on national stock exchanges and are traded like stocks listed on an exchange, ETF shares potentially may trade at a discount or a premium. Investments in ETFs are also subject to brokerage and other trading costs, which could result in greater expenses to a Fund. Additionally, despite the short maturities and high credit quality of a money market fund’s investments, increases in interest rates and deteriorations in the credit quality of the instruments a Fund has purchased may reduce the Fund’s yield and can cause the price of a money market security to decrease.

Liquidity Risk.    Liquidity risk is the possibility that particular investments are difficult to purchase or sell. A Fund’s investment in illiquid securities, including common units of MLPs, may reduce the returns of the Fund because it may be unable to sell the illiquid securities at an advantageous price or time. To the extent that a Fund invests in securities with substantial market and/or credit risk (i.e. “junk bonds”), the Fund will likely have

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greater exposure to liquidity risk. To the extent that a Fund invests in private placements which are generally illiquid, the Fund may be unable to sell those securities at an advantageous price or time.

Moreover, although common units of MLPs trade on the NYSE, the NASDAQ National Market, and AMEX, certain MLP securities may trade less frequently than those of larger companies due to their smaller capitalizations. In the event certain MLP securities experience limited trading volumes, the prices of such MLPs may display abrupt or erratic movements at times. Additionally, it may be more difficult for a Fund to buy and sell significant amounts of such securities without an unfavorable impact on prevailing market prices. As a result, these securities may be difficult to dispose of at a fair price at the times when the Adviser believes it is desirable to do so.

Municipal Lease Obligation Risk.    Municipal lease obligation risk is the risk that because most municipal leases, while secured by the leased property, are not general obligations of the issuing municipality. Frequently, the municipal leases contain “non-appropriation” clauses under which the municipal government has no obligation to make lease or installment payments in future years unless money is appropriated on a yearly basis. If the government stops making payments or transfers its payment obligations to a private entity, the obligation could lose value or become taxable. Although the obligation may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and expensive, and may result in a delay in recovering or the failure to fully recover the original investment. Some lease obligations may not have an active trading market, making it more difficult for the Municipal Tax Free Bond Fund to value and sell them quickly at an attractive price.

Municipal Project Specific Risk.    Municipal project specific risk is the risk that a Fund may be more sensitive to adverse economic, business or political developments if it invests a substantial portion of its assets in the bonds of similar projects (such as those relating to utilities, transportation, health care, housing, and education), industrial development bonds, or in bonds from issuers of a single state.

Taxability Risk.    Taxability risk is the risk that, subsequent to the Municipal Tax Free Bond Fund’s purchase of municipal securities whose interest is deemed to be exempt from federal income tax, the security may be determined to pay, or to have paid, taxable income. While the Municipal Tax Free Bond Fund will invest in municipal securities in reliance at the time of purchase on an opinion of bond counsel to the issuer that the interest paid on those securities will be excludable from gross income for federal income tax purposes, a subsequent change in the treatment of dividends paid or to be paid wherein those dividends are deemed taxable could subject the Municipal Tax Free Bond Fund’s shareholders to increased federal income tax liabilities.

On May 19, 2008, the Supreme Court of the United States (the “Court”) rendered its opinion in Department of Revenue v. Davis, 128 S. Ct. 1801 (2008) (“Davis”). At issue in Davis was a Kentucky statute that exempts from Kentucky personal income tax the interest derived from bonds issued by the Commonwealth of Kentucky or its subdivisions but does not exempt the interest derived from bonds issued by other states or their subdivisions. The Court held this differential tax scheme does not offend the Commerce Clause. The Court expressly set aside the issue of whether differential treatment of interest on private-activity bonds should be evaluated differently from the treatment of municipal bond interest generally because this argument was not considered by the lower courts.

Zero Coupon Securities Risk.    Zero coupon securities risk is the risk that during periods of interest rate fluctuation, these securities are subject to greater fluctuations in their values than securities that pay current income. A Fund may need to pay out the imputed income on zero-coupon securities without receiving actual cash payments currently.

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Income Fund and Opportunity Fund

In addition to the principal risks previously discussed, the Income Fund and Opportunity Fund are each subject to the following risks, unless otherwise specifically noted:

Convertible Securities Risk (Income Fund only).    Convertible securities risk is the risk that convertible securities generally offer lower interest or dividend yields than non-convertible securities of comparable quality.

Defaulted or Bankrupt Securities Risks.    Defaulted or bankrupt securities risk is the risk that to the extent that the Fund may invest in securities that are in default or bankruptcy, these securities will not pay principal and will typically be replaced by new securities issued in a financial restructuring or bankruptcy reorganization. There are risks in the timing and details of a restructuring or reorganization. Delays will result in lost income to the Fund, and the value and amount of new securities issued may be less than expected. There are also legal risks that proceedings may be lengthy and that bankruptcy laws may be interpreted in ways that are unfavorable to bondholders.

Income Risk.    Income risk is the possibility that the Fund’s income will decline because of falling interest rates.

Investment Companies and ETFs Risk.    Investments in the securities of ETFs and other investment companies, including money market funds, may involve duplication of advisory fees and certain other expenses. By investing in an ETF or another investment company, the Fund becomes a shareholder of that ETF or other investment company. As a result, fund shareholders indirectly bear a Fund’s proportionate share of the fees and expenses paid by the ETF or other investment company, in addition to the fees and expenses fund shareholders directly bear in connection with the Fund’s own operations. As a shareholder, a Fund must rely on the ETF or other investment company to achieve its investment objective. If the ETF or other investment company fails to achieve its investment objective, the value of the Fund’s investment will decline, adversely affecting the Fund’s performance. In addition, because ETFs are listed on national stock exchanges and are traded like stocks listed on an exchange, ETF shares potentially may trade at a discount or a premium. Investments in ETFs are also subject to brokerage and other trading costs, which could result in greater expenses to a Fund. Additionally, despite the short maturities and high credit quality of a money market fund’s investments, increases in interest rates and deteriorations in the credit quality of the instruments a Fund has purchased may reduce the Fund’s yield and can cause the price of a money market security to decrease.

Liquidity Risk.    Liquidity risk is the possibility that particular investments are difficult to purchase or sell. A Fund’s investment in illiquid securities, including common units of MLPs, may reduce the returns of the Fund because it may be unable to sell the illiquid securities at an advantageous price or time. To the extent that a Fund invests in securities with substantial market and/or credit risk (i.e. “junk bonds”), the Fund will likely have greater exposure to liquidity risk. To the extent that a Fund invests in private placements which are generally illiquid, the Fund may be unable to sell those securities at an advantageous price or time.

Moreover, although common units of MLPs trade on the NYSE, the NASDAQ National Market, and AMEX, certain MLP securities may trade less frequently than those of larger companies due to their smaller capitalizations. In the event certain MLP securities experience limited trading volumes, the prices of such MLPs may display abrupt or erratic movements at times. Additionally, it may be more difficult for a Fund to buy and sell significant amounts of such securities without an unfavorable impact on prevailing market prices. As a result, these securities may be difficult to dispose of at a fair price at the times when the Adviser believes it is desirable to do so.

Municipal Project Specific Risk.    Municipal project specific risk is the risk that a Fund may be more sensitive to adverse economic, business or political developments if it invests a substantial portion of its assets in

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the bonds of similar projects (such as those relating to utilities, transportation, health care, housing, and education), industrial development bonds, or in bonds from issuers of a single state.

Political and Domestic/International Crisis Risk.    Political and domestic/international crisis risk is the risk that major political or domestic and/or international crises may occur which could have a significant effect on economic conditions and financial markets. Such crises, depending on their severity, timing and scale, could severely impact the operations of a Fund.

Real Estate Investments Risk (Opportunity Fund only).    Investments in real estate and real estate-related equity securities involve risks different from, and in certain cases greater than, the risks presented by equity securities generally. The main risks are those presented by direct ownership of real estate or real estate industry securities, including possible declines in the value of real estate, environmental problems and changes in interest rates. To the extent that assets underlying the Opportunity Fund’s investments are concentrated geographically, by property type or in certain other respects, the Opportunity Fund may be subject to these risks to a greater extent. The stocks purchased by the Opportunity Fund may not appreciate in value as the Adviser anticipates. In addition, if the Opportunity Fund receives rental income or income from the disposition of real property acquired as a result of a default on securities the Opportunity Fund owns, its ability to retain its tax status as a regulated investment company may be adversely affected.

State Specific Risk.    State specific risk is the possibility that if a Fund invests in the municipal bonds of a particular state, the bonds of that state may be affected significantly by economic, political or regulatory developments affecting the ability of that state’s issuers to pay interest or principal on their obligations.

Zero Coupon Securities Risk.    Zero coupon securities risk is the risk that during periods of interest rate fluctuation, these securities are subject to greater fluctuations in their values than securities that pay current income. A Fund may need to pay out the imputed income on zero-coupon securities without receiving actual cash payments currently.

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MANAGEMENT OF THE FUNDS

Additional Information About the Investment Adviser

The Adviser is the investment adviser of the Real Estate Fund, the Value Fund, the Municipal Tax Free Bond Fund, the Income Fund and the Opportunity Fund (each a “Fund,” and collectively, the “Funds”). The Adviser was incorporated in 1997 and is a registered investment adviser under the Investment Advisers Act of 1940. The Adviser has managed the investments of the Funds since their inception and has no other assets under management.

The Adviser invests the Funds’ assets, manages the Funds’ business affairs and supervises the Funds’ day-to-day operations. The Adviser provides the Funds with advice on buying and selling securities in accordance with the Funds’ investment objectives, policies and limitations. The Adviser also furnishes office space and certain administrative and clerical services, and employs the personnel needed with respect to the Adviser’s responsibilities under its investment advisory contract with the Funds. The investment advisory agreement for the Funds was last approved by the Board of Directors (the “Board”), including the independent directors, on November 8, 2017. A discussion regarding the basis for the Board’s approval of the Funds’ investment advisory contract is available in the Funds’ annual report to shareholders for the period ended December 31, 2017.

The Real Estate and Value Funds each pay the Adviser a fee at the annual rate of 0.97% of the Funds’ average daily net assets. The Municipal Tax Free Bond Fund and the Income Fund pay the Adviser a fee at the annual rate of 0.60% of the respective Fund’s average daily net assets. The Opportunity Fund pays the Adviser a fee at the annual rate of 0.65% of the Fund’s average daily net assets. The fee is accrued daily and paid monthly. The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of the Municipal Tax Free Bond Fund under an Operating Expenses Agreement so that the total operating expenses will not exceed 0.90% and 1.75% of the Class A and Class C average daily net assets of the Fund, respectively, through April 30, 2019. The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of the Income Fund under an Operating Expenses Agreement so that the total operating expenses will not exceed 1.10% and 1.85% of the Class A and Class C average daily net assets of the Fund, respectively, through April 30, 2019. The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of the Opportunity Fund under an Operating Expenses Agreement so that the total operating expenses will not exceed 1.25% and 2.00% of the Class A and Class C average daily net assets of the Fund, respectively, through April 30, 2019. After fee waivers and expense reimbursements, the Adviser received a fee of 0.97% of the Real Estate Fund’s average daily net assets for the fiscal year ended December 31, 2017, a fee of 0.97% of the Value Fund’s average daily net assets for the fiscal year ended December 31, 2017, and a fee of 0.49% of the Municipal Tax Free Bond Fund’s average daily net assets for the fiscal year ended December 31, 2017. For the fiscal year ended December 31, 2017, the Adviser was paid a fee of 0.65% of the Income Fund’s average daily net assets, of which 0.05% represents fees recouped by the Adviser in the amount of $110,905. For the fiscal year ended December 31, 2017, the Adviser was paid a fee of 0.75% of the Opportunity Fund’s average daily net assets, of which 0.10% represents fees recouped by the Adviser in the amount of $58,708. David Lerner is the sole shareholder, a director and a controlling person of the Adviser.

Portfolio Managers

William Mason serves as the Portfolio Manager and is primarily responsible for the day-to-day operations of the Opportunity Fund which commenced operations on July 8, 2013. Mr. Mason also serves as Portfolio Manager of the Energy Fund and serves as Co-Portfolio Manager of the Real Estate Fund and the Value Fund. Previously, Mr. Mason served as the Portfolio Manager of the Municipal Tax Free Bond Fund, the Value Fund,

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and the Income Fund. Mr. Mason joined the Adviser on February 29, 2008. Mr. Mason’s career spans over thirty-five years in the municipal bond industry and includes over twenty years with DLA where he was the Executive Vice President of Fixed Income Trading. On behalf of DLA, he managed trading, underwriting, institutional sales and dealer sales covering products such as, municipal bonds, treasuries, collateralized mortgage obligations, corporate bonds and unit investment trusts. He also managed DLA’s proprietary fixed-income trading accounts. His career began at Merrill Lynch in 1980 in back office operations until he advanced to the trading department where he stayed until 1983. Mr. Mason then moved to Morgan Stanley where he was the Manager of Trading Operations from 1983 until 1985 when he became an Institutional Trader. In 1988 he left Morgan Stanley and started working at DLA where he became Head of the Trading Department. He is also a member of the Municipal Bond Club of New York. Mr. Mason holds a General Securities Principal (Series 24) license, Municipal Securities Principal (Series 53) license, General Securities Representative (Series 7) license, and Uniform Securities Agent State Law Examination (Series 63) license.

Douglas Revello serves as the Portfolio Manager and is primarily responsible for the day-to-day management of both the Real Estate Fund and the Value Fund. He also serves as Co-Portfolio Manager of the Municipal Tax Free Bond Fund and the Income Fund. Previously, Mr. Revello served as Portfolio Manager of the Municipal Tax Free Bond Fund from November 17, 2015 until January 10, 2018 and prior to that he served as Co-Portfolio Manager of the Municipal Tax Free Bond Fund. He joined the Adviser on May 18, 2009. Prior to joining the Adviser, Mr. Revello was a municipal bond underwriter at DLA, the Funds’ principal underwriter and distributor, for approximately 21 years. He was also previously employed by J.P. Morgan and Drexel, Burnham & Lambert. Mr. Revello received a Master of Business Administration from Dowling College. In addition, Mr. Revello holds a General Securities Representative (Series 7) license, and Uniform Securities Agent State Law Examination (Series 63) license.

Mark Reilly serves as the Portfolio Manager and is primarily responsible for the day-to-day operations of both the Municipal Tax Free Bond Fund and the Income Fund. Mr. Reilly was previously designated as a Co-Portfolio Manager of the Municipal Tax Free Bond Fund and the Income Fund. Mr. Reilly joined the Adviser on November 18, 2015. Prior to joining the Adviser, Mr. Reilly was the head fixed income trader at DLA, the Funds’ principal underwriter and distributor, from November 2012 until November 17, 2015. He has over 20 years’ experience trading tax-free municipal bonds, taxable municipal bonds, and mortgage backed securities. Mr. Reilly has a Bachelor’s degree in finance from Adelphi University School of Banking and Money Management and began his career in finance in 1993 with DLA. He is a member of Municipal Bond Club of New York and holds several industry registrations, including General Securities Representative (Series 7) license, Uniform Securities Agent State Law Examination (Series 63) license, and registered principal (Series 23) license.

The SAI provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the Funds.

Legal Proceedings

In June 2011, several class action complaints were filed against DLA, the Funds’ principal underwriter and distributor, in connection with its role as managing dealer of several unaffiliated Real Estate Investment Trust offerings (“Apple REITs”). The complaints asserted federal and state securities law claims and various state common law claims against DLA. On April 3, 2013, the class action complaints were dismissed, with prejudice, in their entirety. On April 12, 2013, plaintiffs filed a notice of appeal of the class action dismissal. On April 23, 2014, the United States Court of Appeals for the Second Circuit substantially affirmed the April 3, 2013 decision of United States District Judge, Kiyo A. Matsumoto, dismissing with prejudice the class action complaint in In Re Apple REITs Litigation. The Second Circuit held that Judge Matsumoto correctly found that there were no material misrepresentations or omissions in the offering materials for Apple REITs. The appeals court upheld

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dismissal of ten of the thirteen claims in the case, including all federal and state securities law claims, and also upheld Judge Matsumoto’s refusal to allow plaintiffs to amend their complaint. The appeals court remanded three state common law claims to the District Court for the Eastern District of New York for further proceedings. On March 25, 2015, the District Court dismissed the remaining state common law claims against DLA, with prejudice. Plaintiffs did not file an appeal. Neither the Adviser nor the Funds were parties to these class action litigations.

In October 2013, a class action litigation, titled Lewis v. Delaware Charter Guarantee & Trust Company, et al., (the “Litigation”) was commenced in federal court in Nevada against DLA, the Fund’s principal underwriter and distributor, along with other defendants, alleging, inter alia, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, negligence and misrepresentation. The plaintiffs, purportedly customers who maintained individual retirement accounts at DLA which contained non-traded Apple REIT securities, alleged, among other things, that the defendants failed to accurately provide annual fair market values for those REIT securities. The Litigation was transferred to the U.S. District Court for the Eastern District of New York. On March 30, 2015, the District Court dismissed all claims against DLA, with prejudice. Plaintiffs appealed the decision dismissing the claims. On April 14, 2016, the United States Court of Appeals for the Second Circuit unanimously affirmed judgement of the District Court dismissing the claims against DLA. Plaintiffs did not appeal that dismissal. Neither the Adviser nor the Funds were parties to this Litigation.

Choosing a Share Class

The Funds listed in this Prospectus offer two classes of Shares: Class A Shares and Class C Shares.

To choose the share class of the applicable Fund that is best suited to your needs and goals, consider the amount of money you want to invest, how long you expect to invest it and whether you plan to make additional investments. As shown below, a sales charge structure applies to Class A and Class C Shares. You should consider, for example, that it may be possible to reduce the front-end sales charges imposed on purchases of Class A Shares. Among other ways, Class A Shares have a series of “breakpoints,” which means that the front-end sales charges decrease (and can be eliminated entirely) as the amount invested increases. (The breakpoint schedule is set out below under “Sales Charges.”)

The following are some of the main differences between Class A Shares and Class C Shares of the Funds:

Class A Shares

Class C Shares

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PRICING FUND SHARES

Portfolio securities are valued, and net asset value (“NAV”) per share of the Funds is calculated, as of the close of regular trading on the NYSE, currently 4:00 p.m. (Eastern Time), on each day the NYSE is open for trading. The NYSE is closed on the following holidays or days on which the following holidays are observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

The NAV for each Fund is computed by adding the value of that Fund’s investments, cash and other assets, deducting liabilities and dividing the result by the number of shares of that Fund has outstanding. Redemptions will be effected at the NAV (subject to any applicable CDSC fees) next determined after receipt by the Transfer Agent.

Each Fund’s securities are valued based on the last reported sales price on the principal exchange on which the security trades, or if no sales price is reported, the mean of the latest bid and asked prices is used. Securities traded over-the-counter are priced at the mean of the latest bid and asked prices. Fund securities for which market quotations are not readily available, including private equity investments and other assets, are valued at their fair value as determined in good faith under procedures established by and under the supervision of the Board described below.

The Funds have established a valuation committee known as the Pricing Committee (the “Committee”). The Committee has responsibility for, among other things, determining and monitoring the value of each Fund’s assets. Fair value determinations are required for securities: (i) for which market quotations, in the judgment of the Adviser, are insufficient or not readily available; (ii) for which, in the judgment of the Adviser, the value does not represent a fair value of the security; or (iii) determined to be illiquid in accordance with the Funds’ Liquidity and Rule 144A Securities Guidelines. The Committee is comprised of the Portfolio Manager of Fund, the Chief Compliance Officer (“CCO”) of the Investment Adviser, the CCO of the Fund, the Chief Financial Officer of the Fund, at least one director who is not an “interested person,” and a representative of the Fund Administrator.

When the Adviser determines that a fair value determination is required for a security, the Adviser will call a Committee meeting to determine a fair value of the security. The Adviser may also notify one or more Directors, who are not members of the Committee, of the Committee meeting if the Adviser considers it advisable to do so.

At the Committee meeting, a representative of the Adviser familiar with the security will describe to the Committee the nature of the security, the circumstances requiring a fair value determination and the Adviser’s recommended fair value or methodology for determining a fair value of the security.

The Committee (including any Director participating in the meeting who is not a member of the Committee) will make a fair value determination for the security. For each security that has been valued by a fair value determination, the Adviser will monitor the continuing appropriateness of the value or valuation methodology used with respect to the security. In the event the Adviser believes that the value or valuation methodology no longer produces a fair value of the security, the Committee shall make a new fair value determination.