Ameristock
ETF Trust
The
Ameristock ETF Trust (the “Trust”) consists of a number of separate investment
portfolios called “Funds.” Each Fund described in this Prospectus seeks
investment results, before fees and expenses, that correspond generally
to the
price and yield performance of a particular U.S. Treasury securities
index owned
and compiled by Ryan Holdings LLC and Ryan ALM, Inc. (collectively, the
“Index
Provider”). This Prospectus relates to the following five
Funds:
Ameristock/Ryan
1 Year Treasury ETF
Ameristock/Ryan
2 Year Treasury ETF
Ameristock/Ryan
5 Year Treasury ETF
Ameristock/Ryan
10 Year Treasury ETF
Ameristock/Ryan
20 Year Treasury ETF
The
Ameristock Corporation (the “Adviser”) is the investment adviser to each
Fund.
The
Trust
is a registered investment company. The shares of the Trust are listed
and
traded at market prices on the American Stock Exchange. Market prices for
a
Fund’s shares may be different from its net asset value per share. Each Fund
has
its own CUSIP number and exchange-trading symbol.
Each
Fund
issues and redeems shares at net asset value only in blocks of 100,000
shares or
multiples thereof (“Creation Units”). These transactions are usually in exchange
for a basket of securities and an amount of cash. As a practical matter,
only
institutions or large investors purchase or redeem Creation Units.
Except
when aggregated in Creation Units, shares of each Fund are not redeemable
securities.
The
Securities and Exchange Commission (“SEC”) has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation
to
the contrary is a criminal offense.
The
information in this Prospectus is not complete and may be changed. No
Fund may
sell its shares until the registration statement filed with the SEC is
effective. This Prospectus is not an offer to sell Fund shares and it
is not
soliciting an offer to buy Fund shares in any state where the offer or
sale is
not permitted.
Prospectus
dated ______ 2007
TABLE
OF
CONTENTS
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Page
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Overview
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4
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Introduction
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4
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Investment
Objective
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4
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Principal
Investment Strategies
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4
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Correlation
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5
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Principal
Risk Factors Common to All Funds
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5
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Portfolio
Holdings Information
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7
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Description
of the Ameristock/Ryan Treasury ETFs
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8
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Ameristock/Ryan
1 Year Treasury ETF
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9
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Ameristock/Ryan
2 Year Treasury ETF
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12
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Ameristock/Ryan
5 Year Treasury ETF
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15
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Ameristock/Ryan
10 Year Treasury ETF
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18
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Ameristock/Ryan
20 Year Treasury ETF
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21
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Portfolio
Turnover
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24
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Management
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24
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Investment
Adviser
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24
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Portfolio
Managers
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24
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Consulting
Agreement
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25
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Administrator,
Custodian and Transfer Agent
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25
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Shareholder
Information
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25
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Buying
and Selling Shares
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25
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Book
Entry
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26
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Share
Prices
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26
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Determination
of Net Asset Value
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27
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Dividends
and Distributions
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27
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Taxes
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27
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Taxes
on Distributions
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27
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Taxes
when Shares are Sold
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28
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Creations
and Redemptions
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28
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Transaction
Fees
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29
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Distribution
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29
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Index
Provider
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30
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Disclaimers
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30
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Overview
Introduction
This
Prospectus provides the information you need to make an informed decision
about
investing in the Trust. It contains important facts about the Trust as
a whole
and each Fund in particular.
Each
Fund
is an “index fund” that seeks investment results, before fees and expenses, that
correspond generally to the price and yield performance of a particular
index
(its “Underlying Index”). An index is a measure of securities price changes or
returns, with the securities in the index (and their weightings) selected
by an
index provider as representative of a market, market segment or specific
industry sector. The index provider publishes information regarding the
value of
and changes in the index.
The
Index
Provider does not provide advice regarding whether specific securities
or
instruments should be purchased by any Fund.
This
advice is provided by the Adviser. The Adviser is not affiliated with the
Index
Provider for the Funds.
The
Principal
Investment Strategies
and the
Principal
Risk Factors Common to All Funds
sections
discuss the principal strategies and risks applicable to the Funds generally,
while the Description
of the Ameristock/Ryan Treasury Funds
section
provides important information about each Fund, including a brief description
of
each Fund’s Underlying Index and principal risks specific to that
Fund.
The
shares of the Trust are listed and traded at market prices on the American
Stock
Exchange. Market prices for a Fund’s shares may be different from its net asset
value per share. Each Fund has its own CUSIP number and exchange-trading
symbol.
Each
Fund
issues and redeems shares at net asset value only in blocks of 100,000
shares or
multiples thereof (“Creation Units”). These transactions are usually in exchange
for a basket of securities and an amount of cash. As a practical matter,
only
institutions or large investors purchase or redeem Creation Units.
Investment
Objective
Each
Fund
seeks investment results, before fees and expenses, that correspond generally
to
the price and yield performance of its Underlying Index.
Principal
Investment Strategies
The
Adviser seeks to match the average dollar-weighted duration of each Fund
closely
to the duration of its Underlying Index (plus or minus a certain number
of
months, as described below). Each Fund generally will invest at least 90%
of its
total assets in debt securities issued by the U.S. Treasury and backed
by the
full faith and credit of the U.S. Government (“Treasury Securities”). The assets
of a Fund not invested in Treasury Securities (up to 10% of total assets)
will
be invested in futures contracts, options and other derivative
instruments, and cash and cash items, including repurchase
agreements.
Each
Fund
seeks investment results that correspond to those of its Underlying Index.
Unlike many investment companies, the Funds do not try to “beat” the markets
they track and do not seek temporary defensive positions when markets decline
or
appear overvalued. This indexing strategy may eliminate some of the risks
of
active management, such as poor security selection, and may involve lower
fees
and expenses than active management.
Each
Underlying Index is comprised of only one or two Treasury Securities at
a given
time. The components of the Underlying Indices change whenever there is
a new
public sale by the U.S. Government (referred to as an “auction”) of an Index's
underlying Treasury Security (or Securities). This periodic transition
to the
most-recently auctioned Treasury bill, note, or bond of a stated maturity,
which
is referred to as the “on-the-run” or “OTR” security of that maturity, occurs on
one day.
These
characteristics of the Underlying Indices make it impractical for each
Fund to
invest exclusively in the component securities of its Underlying Index.
First,
if a Fund were to invest only in the OTR Treasury Security (or Securities)
in
the Underlying Index, it would be required to sell all or a substantial
portion
of its portfolio securities and purchase new securities on each day that
the
component securities of the Underlying Index changed. These transactions
would
result in high transaction costs for the Funds. In addition, in light of
demand
for OTR Treasury Securities, the OTR Treasury tends to trade "special"
or at a
lower yield/higher price than off-the-run Treasury Securities of similar
maturities. Therefore, in addition to OTR Treasury Securities, the Fund
will
also invest in or hold off-the-run Treasury Securities that the Adviser
believes
will help the Fund track its Underlying Index. These off-the-run securities
will
include Treasury Securities that were on-the-run when purchased but are
now
off-the-run because of a subsequent auction, and Treasury Securities that
had
longer maturities when initially issued but whose remaining maturities
make them
appropriate for investment by a particular Fund.
Unlike
a
more typical index, the Underlying Indices are made up of one or two securities
at a given time, not a substantial number of securities. However, the price
of
the OTR Treasury Security of a given maturity serves as a commonly-used
indicator of changes in the U.S. Government securities market (and, to
a certain
degree, changes in the market for other fixed income securities). Therefore,
the
Adviser believes that attempting to track the performance of the Underlying
Indices is an appropriate strategy for investors wishing to gain exposure
to
U.S. Government securities of a given maturity range.
The
Funds
use “duration” rather than maturity as a measure of how much the Fund’s net
asset value is likely to change as a result of a change in interest rates,
and
the Adviser attempts to match the average weighted duration of a Fund closely
with that of its Underlying Index. Duration is generally superior to average
weighted maturity, which takes into account only the stated maturity dates
of
the Fund's holdings, as a measure of this volatility, because duration
takes
into account the timing of the cash flows ( i.e.
,
interest and principal payments) from the bonds held by a Fund.
Each
Fund
may invest in futures contracts, options and other derivatives instruments
only
in furtherance of the objective of seeking results, before fees and expenses,
that correspond generally to the total return of that Fund’s Underlying Index,
and not for speculative purposes. These instruments will be used primarily
as a
means to gain exposure to a Fund’s Underlying Index with respect to cash that
the Fund is otherwise unable to invest directly in Treasury Securities
on a
cost-effective basis ( e.g.
, cash
that remains after the Fund has acquired appropriate Treasury Securities
in the
principal amounts in which they are normally traded). In this way, the
Adviser
will attempt to minimize the amount of Fund assets held in cash or cash
items.
Derivative instruments may also be used to adjust the average duration
for a
Fund so that it more closely approximates the duration of its Underlying
Index,
to facilitate trading or to reduce transaction costs.
Correlation
An
index
is a theoretical financial calculation, while a Fund is an actual investment
portfolio. The performance of a Fund and its Underlying Index will vary
somewhat
due to transaction costs, market impact and timing variances.
The
Adviser expects that, over extended periods, the correlation between
each Fund’s
performance before fees and expenses and that of its Underlying Index
will be
95% or better. A correlation of 100% would indicate perfect correlation,
while a
correlation of 0% would indicate no relationship between the performance
of a
Fund and its Underlying Index. The Adviser also expects that the performance
of
each Fund will have an annual tracking error of less than 5% relative
to its
Underlying Index.
Because
each Fund does not invest exclusively in the securities making up its Underlying
Index, its correlation may be lower than and its tracking error may be
greater
than a fund that does invest exclusively in securities in its
index.
Principal
Risk Factors Common to All Funds
Each
Fund
is subject to the principal risks described below. Additional principal
risks
associated with a Fund are discussed under the description of that Fund
in the
Description
of the Ameristock/Ryan Treasury Funds
section.
Some or all of these risks may adversely affect a Fund’s net asset value,
trading price, yield, total return and/or its ability to meet its
objectives.
Market
Risk
Each
Fund’s net asset value and share price will react to movements in the Treasury
Securities market. You could lose money over short periods due to such
market
movements, and over longer periods during market downturns.
Asset
Class Risk
Treasury
Securities may underperform as compared to other bonds or to different
asset
classes, such as stocks. Different types of bonds tend to go through cycles
of
out-performance and underperformance in comparison to the general securities
markets. Because Treasury Securities generally involve less risk than other
bonds, they will generally pay lower interest rates than other bonds. The
amount
of this interest rate differential will vary over time.
Interest
Rate Risk
As
interest rates rise, the value of fixed income securities held by a Fund
are
likely to decrease. Securities with longer durations tend to be more sensitive
to interest rate changes, usually making them more volatile than securities
with
shorter durations. To the extent a Fund invests a substantial portion of
its
assets in Treasury Securities with longer-term durations, rising interest
rates
may cause the value of the Fund’s investments to decline
significantly.
Inflation
Risk
Interest
rates tend to rise, and the value of bonds held by a Fund will tend to
fall,
during periods of rising inflation. Furthermore, higher rates of inflation
may
result in the return on a Fund’s securities being lower than the inflation rate,
meaning that an investor in the Fund could lose purchasing power even if
the
nominal value of the Fund shares owned by the investor increases.
Credit
Risk
This
is
the chance that any of the Fund’s holdings will have their credit ratings
downgraded or will default (fail to make scheduled interest or principal
payments), potentially reducing a Fund’s income level and share price. Treasury
Securities have virtually no credit risk.
Passive
Investments
The
Funds
are not actively managed. As noted above, each Fund will be affected by
a
general decline in the Treasury Securities market. The Adviser does not
attempt
to outperform a Fund’s Underlying Index, and does not attempt to take defensive
positions when the Treasury Securities market is declining or when the
Adviser
expects it to decline.
Tracking
Error Risk
Imperfect
correlation between a Fund’s securities and those in its Underlying Index,
rounding of prices, changes to the Underlying Indices and regulatory policies
may cause tracking error, where a Fund’s performance does not match the
performance of its Underlying Index. Differences between the performance
of a
Fund and its Underlying Index may also result because the Fund incurs fees
and
expenses while its Underlying Index does not incur such expenses.
Management
Risk
Because
each Fund does not exactly replicate its Underlying Index and may hold
securities not included in its Underlying Index, a Fund is subject to management
risk. This is the risk that the Adviser’s investment strategy, the
implementation of which is subject to a number of constraints, may not
produce
the intended results. Because the Underlying Indices differ from more typical
securities indices in that they include only one or two securities at any
given
time, the managerial expertise and effort required of the Adviser in order
to
track each Fund’s Underlying Index differs from the expertise and effort
required of the managers of more typical ETFs and indexed mutual funds.
The
Funds’ portfolio managers do not have experience managing ETFs similar to the
Funds or in attempting to track the performance of the Underlying
Indices.
Market
Trading Risks
Absence
of Prior Active Market
Although
shares of the Funds described in this Prospectus are listed for trading
on a
national securities exchange, there can be no assurance that an active
trading
market for such shares will develop or be maintained. There can be no assurance
that the requirements necessary to maintain the listing of the shares of
any
Fund will continue to be met or will remain unchanged.
Lack
of Market Liquidity
Secondary
market trading in Fund shares may be halted by a national securities exchange
because of market conditions or for other reasons. In addition, trading
in Fund
shares is subject to trading halts caused by extraordinary market volatility
pursuant to “circuit breaker” rules.
Shares
of the Funds May Trade at Prices Other Than Net Asset Value
Shares
of
the Funds may trade at, above or below their net asset value or “NAV.” The per
share net asset value of each Fund will fluctuate with changes in the
market
value of such Fund’s holdings. The trading prices of a Fund’s shares will
reflect market supply and demand for such shares, and therefore may not
track
net asset value closely. However, given that shares can be created and
redeemed
at net asset value in large “Creation Unit” aggregations, the Adviser believes
that large discounts or premiums in the trading prices of the Fund’s shares as
compared to their net asset value should not occur (unlike shares of
many
closed-end funds, which frequently trade at appreciable discounts from,
and
sometimes at premiums to, their net asset values).
Lack
of
Governmental Insurance or Guarantee
An
investment in a Fund is not a bank deposit and it is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government
agency.
Portfolio
Holdings Information
A
description of the Funds’ policies and procedures with respect to the disclosure
of the Funds’ portfolio securities is available in the Funds’ Statement of
Additional Information (“SAI”).
Description
of the Ameristock/Ryan
Treasury ETFs
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Ameristock/Ryan
1 Year Treasury ETF
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n
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Ameristock/Ryan
2 Year Treasury ETF
|
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n
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Ameristock/Ryan
5 Year Treasury ETF
|
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n
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Ameristock/Ryan
10 Year Treasury ETF
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n
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Ameristock/Ryan
20 Year Treasury ETF
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Ameristock/Ryan
1 Year Treasury ETF
Cusip:
03077A
109
Trading
Symbol:
GKA
Underlying
Index: Ryan
Adjusted 1 Year Treasury Index.
Investment
Objective
The
Ameristock/Ryan 1 Year Treasury ETF seeks results, before fees and expense,
that
correspond generally to the price and yield performance of a particular
Treasury
Securities index called the Ryan Adjusted 1 Year Treasury Index (the
“Underlying
Index”).
Principal
Investment Strategy
The
Fund
will invest at least 90% of its total assets in Treasury Securities and
up to
10% in the aggregate in futures contracts, options and other derivative
instruments (based on the “notional” or face amount of such instruments). The
Adviser attempts to match the average dollar-weighted duration of the
Fund to
within one month of the duration of the Underlying Index.
The
Underlying Index is based on the return of a portfolio with a 2/3 weighting
in
the most recently auctioned 6 month U.S. Treasury bill and a 1/3 weighting
in
the most recently auctioned 2 year U.S. Treasury note. The Index Provider
determines the composition of the Index in accordance with its rules and
procedures (which may change from time to time), and publishes information
regarding the composition, investment characteristics and return of the
index.
Because
the Underlying Index is comprised of only two securities, and those securities
change each time an auction of the relevant Treasury Securities occurs,
it is
not practicable for the Fund to invest exclusively in the component securities
of the Underlying Index. Instead, the Fund invests in a limited number
of (fewer
than ten) Treasury Securities with an average duration similar to that
of the
securities in the Underlying Index. These Treasury Securities may include
the
OTR Treasury Securities that are the component securities of the Underlying
Index, off-the-run Treasury Securities that were on-the-run when purchased
by
the Fund but became off-the-run because of a subsequent auction, and
Treasury
Securities that, irrespective of their maturities when issued, have remaining
maturities that make them appropriate for investment by the
Fund.
The
Fund’s portfolio holdings can be found at www.Ameristock.com. Fund fact sheets
provide information regarding the Fund’s holdings and may be requested by
calling 1-866-821-5592.
Principal
Risks
Since
the
Fund generally will invest essentially all of its assets in Treasury Securities,
the risks associated with investing in Treasury Securities and bonds in
general
will affect the Fund and the value of its assets. As described above, some
of
the risks associated with investing in the Fund include:
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Prices
of bonds, including Treasury Securities, may fall because of
a rise in
interest rates, issuer quality considerations and other economic
considerations.
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n
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Prices
of bonds may fall in response to economic events or trends. The
longer a
bond’s duration, the greater the risk that its value may fall in response
to economic events or trends.
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n
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The
bonds in the Underlying Index may underperform equity investments,
bonds
issued by private entities, and U.S. government securities of
different
durations.
|
Because
the Fund generally invests in shorter-term Treasury Securities than the
other
Funds described in this Prospectus, it can be expected to be subject
to less
risk and share price fluctuation than such other Funds, although it may
also
generate lower returns. Assuming that the average duration of the Fund
exactly
matches the maximum duration of its Underlying Index, and that the values
of the
securities held by the Fund change only in response to interest rate
changes,
the Fund’s net asset value would be expected to decline by approximately 0.94%
when market interest rates increase by 1%, and to increase by approximately
0.96% when market interest rates decline by 1%.
Performance
Information
Performance
information is not available because the Fund is new.
Fees
and
Expenses
This
table describes the fees and expenses that you may pay if you buy and
hold
shares of the Fund. Most investors will buy and sell shares of the
Fund through
brokers, and will pay brokerage commissions to their broker when buying
or
selling shares. No such commissions are reflected in the table below,
although
the transactions fees paid by large investors when purchasing or redeeming
Creation Units are.
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Shareholder
Fees
(fees
paid directly from an investment)
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Creation
Transaction Fee1
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$1,000
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Redemption
Transaction Fee1
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$1,000
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Annual
Fund Operating Expenses
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(expenses
that are deducted from the Fund’s assets)2
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Management
Fees
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0.15%
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Distribution
and Service (12b-1) Fees
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None
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Other
Expenses3
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0.03%
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Total
Annual Fund Operating Expenses
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0.18%
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Fee
waiver and/or expense reimbursement4
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0.03%
|
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Net
Annual Fund Operating Expenses
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0.15%
|
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1
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Per
day on which Creation Units are purchased or redeemed, regardless
of the
number of creation units. See the Transaction Fees section
below.
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| |
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2
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Expressed
as a percentage of average net assets on an annual
basis.
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3
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Other
Expenses are based on estimated amounts for the Fund’s current fiscal
year. The Trust’s Investment Advisory Agreement provides that the Adviser
will pay all operating expenses of the Trust, except interest
expense and
taxes (both expected to be de
minimis ),
independent trustee fees and expenses, any brokerage expenses,
future
distribution fees or expenses and extraordinary
expenses.
|
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4
|
|
The
Adviser has agreed contractually to waive its management fees
and/or make
payments to limit Fund expenses in the amount of any independent
trustee
fees and expenses otherwise payable by the Fund, at least until
June 30,
2008. As a result of such agreement, the Fund’s net expenses are expected
to equal its management fee of
0.15%.
|
Examples
These
Examples are intended to help you compare the cost of investing in
shares of the
Fund with the cost of investing in other funds.
The
first
Example assumes that you invest $10,000 in the Fund for the time periods
indicated, while the second assumes a $2.5 million Creation Unit investment
for
the same time periods. Both examples assume that you sell all of your
shares at
the end of those periods. The Examples also assume that your investment
has a 5%
return each year and that the contractual waiver noted above remains
in effect
only until June 30, 2008, but that the Fund’s operating expenses otherwise
remain the same. Although your actual costs may be higher or lower, based
on the
assumptions, your costs would be:
|
$10,000
Investment
|
|
|
1
Year
|
|
3
Years
|
|
$15
|
|
$55
|
|
$2,500,000
Investment
|
|
|
1
Year
|
|
3
Years
|
|
$5,839
|
|
$15,732
|
Creation
Transaction Fees and Redemption Transaction Fees
The
Fund
issues and redeems shares at net asset value only in blocks of 100,000
shares or
multiples of 100,000 shares. As a practical matter, only institutions
or large
investors purchase or redeem these Creation Units. The value of a Creation
Unit
as of _____, 2007, the date the Fund commenced operations, was $2,500,000.
An
investor who holds Creation Units will pay the annual fund operating
expenses
described in the table above, and an investor who wishes to redeem Creation
Units at net asset value would also pay a standard transaction fee of
$1,000 on
the date of such redemption, regardless of the number of Creation Units
redeemed
that day. (See the Transaction
Fees
section
below.)
Ameristock/Ryan
2 Year Treasury ETF
Cusip:
03077A
208
Trading
Symbol:
GKB
Underlying
Index: Ryan
2
Year Treasury Index.
Investment
Objective
The
Ameristock/Ryan 2 Year Treasury ETF seeks results, before fees and expenses,
that correspond generally to the price and yield performance of a particular
Treasury Securities index called the Ryan 2 Year Treasury Index (the
“Index”).
Principal
Investment Strategy
The
Fund
will invest at least 90% of its total assets in Treasury Securities and
up to
10% in the aggregate in futures contracts, options and other derivative
instruments (based on the “notional” or face amount of such instruments). The
Adviser attempts to match the average dollar-weighted duration of the
Fund to
within two months of the duration of the Underlying Index.
The
Underlying Index is based on the return of the most recently auctioned
2-year
U.S. Treasury note. The Index Provider determines the composition of the
Index
in accordance with its rules and procedures (which may change from time
to
time), and publishes information regarding the composition, investment
characteristics and return of the index.
Because
the Underlying Index is comprised of only one security, and that security
changes each time an auction of such security occurs, it is not practicable
for
the Fund to invest exclusively in the component securities of the Underlying
Index. Instead, the Fund invests in a limited number of (fewer than ten)
Treasury Securities with an average duration similar to the duration
of the
security in the Underlying Index. These Treasury Securities may include
the OTR
Treasury Security that is the component security of the Underlying Index,
off-the-run Treasury Securities that were on-the-run when purchased by
the Fund
but became off-the-run because of a subsequent auction, and Treasury
Securities
that, irrespective of their maturities when issued, have remaining maturities
that make them appropriate for investment by the Fund.
The
Fund’s portfolio holdings can be found at www.Ameristock.com. Fund fact sheets
provide information regarding the Fund’s holdings and may be requested by
calling 1-866-821-5592.
Principal
Risks
Since
the
Fund generally will invest essentially all of its assets in Treasury Securities,
the risks associated with investing in Treasury Securities and bonds in
general
will affect the Fund and the value of its assets. As described above, some
of
the risks associated with investing in the Fund include:
|
n
|
|
Prices
of bonds, including Treasury Securities, may fall because of
a rise in
interest rates, issuer quality considerations and other economic
considerations.
|
|
n
|
|
Prices
of bonds may fall in response to economic events or trends. The
longer a
bond’s duration, the greater the risk that its value may fall in response
to economic events or trends.
|
|
n
|
|
The
bond in the Underlying Index may underperform equity investments,
bonds
issued by private entities, and U.S. government securities of
different
durations.
|
Because
the Fund invests in shorter-term Government Securities as compared to
the other
Funds described in this prospectus (except the Ameristock/Ryan 1-Year
Treasury
Fund), it can be expected to be subject to less risk and share price
fluctuation
than such other Funds, but it may also generate lower returns. Assuming
that the
average duration of the Fund exactly matches the maximum duration of
its
Underlying Index, and that the values of the securities held by the Fund
change
only in response to interest rate changes, the Fund’s net asset value would be
expected to decline by approximately 1.86% when market interest rates
increase
by 1%, and to increase by approximately 1.90% when market interest rates
decline
by 1%.
Performance
Information
Performance
information is not available because the Fund is new.
Fees
and
Expenses
This
table describes the fees and expenses that you may pay if you buy and
hold
shares of the Fund. Most investors will buy and sell shares of the Fund
through
brokers, and will pay brokerage commissions to their broker when buying
or
selling shares. No such commissions are reflected in the table below,
although
the transaction fees paid by large investors when purchasing or redeeming
Creation Units are.
|
Shareholder
Fees
(fees
paid directly from an investment)
|
|
|
|
Creation
Transaction Fee1
|
|
$1,000
|
|
Redemption
Transaction Fee1
|
|
$1,000
|
|
Annual
Fund Operating Expenses
|
|
|
|
(expenses
that are deducted from the Fund’s assets)2
|
|
|
|
Management
Fees
|
|
0.15%
|
|
Distribution
and Service (12b-1) Fees
|
|
None
|
|
Other
Expenses3
|
|
0.03%
|
|
Total
Annual Fund Operating Expenses
|
|
0.18%
|
|
Fee
waiver and/or expense reimbursement4
|
|
0.03%
|
|
Net
Annual Fund Operating Expenses
|
|
0.15%
|
|
|
1
|
|
Per
day on which Creation Units are purchased or redeemed, regardless
of the
number of creation units. See the Transaction Fees section
below.
|
| |
|
|
|
|
|
2
|
|
Expressed
as a percentage of average net assets on an annual
basis.
|
|
|
3
|
|
Other
Expenses are based on estimated amounts for the Fund’s current fiscal
year. The Trust’s Investment Advisory Agreement provides that the Adviser
will pay all operating expenses of the Trust, except interest
expense and
taxes (both expected to be de
minimis ),
independent trustee fees and expenses, any brokerage expenses,
future
distribution fees or expenses and extraordinary
expenses.
|
|
|
4
|
|
The
Adviser has agreed contractually to waive its management fees
and/or make
payments to limit Fund expenses in the amount of any independent
trustee
fees and expenses otherwise payable by the Fund, at least until
June 30,
2008. As a result of such agreement, the Fund’s net expenses are expected
to equal its management fee of
0.15%.
|
Examples
These
Examples are intended to help you compare the cost of investing in shares
of the
Fund with the cost of investing in other funds.
The
first
Example assumes that you invest $10,000 in the Fund for the time periods
indicated, while the second assumes a $2.5 million Creation Unit investment
for
the same time periods. Both examples assume that you sell all of your
shares at
the end of those periods. The Examples also assume that your investment
has a 5%
return each year and that the contractual waiver noted above remains
in effect
only until June 30, 2008, but that the Fund’s operating expenses otherwise
remain the same. Although your actual costs may be higher or lower, based
on the
assumptions, your costs would be:
|
$10,000
Investment
|
|
|
1
Year
|
|
3
Years
|
|
$15
|
|
$55
|
|
$2,500,000
Investment
|
|
|
1
Year
|
|
3
Years
|
|
$5,839
|
|
$15,732
|
Creation
Transaction Fees and Redemption Transaction Fees
The
Fund
issues and redeems shares at net asset value only in blocks of 100,000
shares or
multiples of 100,000 shares. As a practical matter, only institutions
or large
investors purchase or redeem these Creation Units. The value of a Creation
Unit
as of _____, 2007, the date the Fund commenced operations, was $2,500,000.
An
investor who holds Creation Units will pay the annual fund operating
expenses
described in the table above, and an investor who wishes to redeem Creation
Units at net asset value would also pay a standard transaction fee of
$1,000 on
the date of such redemption, regardless of the number of Creation Units
redeemed
that day.
Ameristock/Ryan
5 Year Treasury ETF
Cusip:
03077A
307
Trading
Symbol:
GKC
Underlying
Index: Ryan
5
Year Treasury Index.
Investment
Objective
The
Ameristock/Ryan 5 Year Treasury ETF seeks results, before fees and expenses,
that correspond generally to the price and yield performance of a particular
Treasury Securities index called the Ryan 5 Year Treasury Index (the
“Index”).
Principal
Investment Strategy
The
Fund
will invest at least 90% of its total assets in Treasury Securities and
up to
10% in the aggregate in futures contracts, options and other derivative
instruments (based on the “notional” or face amount of such instruments). The
Adviser attempts to match the average dollar-weighted duration of the
Fund to
within six months of the duration of the Underlying Index.
The
Underlying Index is based on the return of the most recently auctioned
5- year
U.S. Treasury note. The Index Provider determines the composition of the
Index
in accordance with its rules and procedures (which may change from time
to
time), and publishes information regarding the composition, investment
characteristics and return of the index.
Because
the Underlying Index is comprised of only one security, and that security
changes each time an auction of such security occurs, it is not practicable
for
the Fund to invest exclusively in the component securities of the Underlying
Index. Instead, the Fund invests in a limited number of (fewer than ten)
Treasury Securities with an average duration similar to the duration
of the
security in the Underlying Index. These Treasury Securities may include
the OTR
Treasury Security that is the component security of the Underlying Index,
off-the-run Treasury Securities that were on-the-run when purchased by
the Fund
but became off-the-run because of a subsequent auction, and Treasury
Securities
that, irrespective of their maturities when issued, have remaining maturities
that make them appropriate for investment by the Fund.
The
Fund’s top portfolio holdings can be found at www.Ameristock.com. Fund fact
sheets provide information regarding the Fund’s top holdings and may be
requested by calling 1-866-821-5592.
Principal
Risks
Since
the
Fund generally will invest essentially all of its assets in Treasury Securities,
the risks associated with investing in Treasury Securities and bonds in
general
will affect the Fund and the value of its assets. As described above, some
of
the risks associated with investing in the Fund include:
|
n
|
|
Prices
of bonds, including Treasury Securities, may fall because of
a rise in
interest rates, issuer quality considerations and other economic
considerations.
|
|
n
|
|
Prices
of bonds may fall in response to economic events or trends. The
longer a
bond’s duration, the greater the risk that its value may fall in response
to economic events or trends.
|
|
n
|
|
The
bond in the Underlying Index may underperform equity investments,
bonds
issued by private entities, and U.S. government securities of
different
durations.
|
The
Fund
invests in medium-term Treasury Securities as compared to the other Funds
described in this Prospectus, and can be expected to be subject to higher
risk
and share price fluctuation (and may generate higher returns) than those
Funds
investing in shorter-term securities, and lower risk and share price
fluctuation
(and may generate lower returns) than those Funds investing in longer-term
securities. Assuming that the average duration of the Fund exactly matches
the maximum duration of its Underlying Index, and that the values of
the
securities held by the Fund change only in response to interest rate
changes,
the Fund’s net asset value would be expected to decline by approximately 4.30%
when market interest rates increase by 1%, and to increase by approximately
4.53% when market interest rates decline by 1%.
Performance
Information
Performance
information is not available because the Fund is new.
Fees
and
Expenses
This
table describes the fees and expenses that you may pay if you buy and
hold
shares of the Fund. Most investors will buy and sell shares of the Fund
through
brokers, and will pay brokerage commissions to their broker when buying
or
selling shares. No such commissions are reflected in the table below,
although
the transaction fees paid by large investors when purchasing or redeeming
Creation Units are..
|
Shareholder
Fees
(fees
paid directly from an investment)
|
|
|
|
Creation
Transaction Fee1
|
|
$1,000
|
|
Redemption
Transaction Fee1
|
|
$1,000
|
|
Annual
Fund Operating Expenses
|
|
|
|
(expenses
that are deducted from the Fund’s assets)2
|
|
|
|
Management
Fees
|
|
0.15%
|
|
Distribution
and Service (12b-1) Fees
|
|
None
|
|
Other
Expenses3
|
|
0.03%
|
|
Total
Annual Fund Operating Expenses
|
|
0.18%
|
|
Fee
waiver and/or expense reimbursement4
|
|
0.03%
|
|
Net
Annual Fund Operating Expenses
|
|
0.15%
|
|
|
1
|
|
Per
day on which Creation Units are purchased or redeemed, regardless
of the
number of creation units. See the Transaction Fees section
below.
|
| |
|
|
|
|
|
2
|
|
Expressed
as a percentage of average net assets on an annual
basis.
|
|
|
3
|
|
Other
Expenses are based on estimated amounts for the Fund’s current fiscal
year. The Trust’s Investment Advisory Agreement provides that the Adviser
will pay all operating expenses of the Trust, except interest
expense and
taxes (both expected to be de
minimis ),
independent trustee fees and expenses, any brokerage expenses,
future
distribution fees or expenses and extr |
