SEC Company Response from MUNDER SERIES TRUST (CIK 0001214511) — Jan 14, 2005
MUNDER SERIES TRUST (CIK 0001214511)
Date: Jan. 14, 2005 · CIK: 0001214511 · Accession: 0000950124-05-000220
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File numbers found in text: 333-102943
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DECHERT LLP
1775 I STREET, NW
WASHINGTON, DC 20006
VIA EDGAR CORRESPONDENCE
January 14, 2005
Christian Sandoe
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Munder Series Trust, on behalf of the Munder Small Company Growth Fund,
Proxy Statement/Prospectus on Form N-14 SEC File No. 333-102943
Dear Mr. Sandoe:
We are writing on behalf of the Munder Series Trust ("Registrant") in
response to comments you provided telephonically to Erin Wagner of this office
on Wednesday, January 12, 2004, with respect to a proxy statement/prospectus
filed on Form N-14 for the Registrant ("Proxy Statement"). The Proxy Statement
relates to the proposed reorganization of the Munder Small Company Growth Fund
("Small Company Fund") with and into the Munder Micro-Cap Equity Fund
("Micro-Cap Fund"), each a series of the Registrant.
Summaries of the comments, and our responses thereto, are provided
below.
1. COMMENT: In reliance on Item 14 of Form N-14, Registrant has not
provided pro forma financial statements. Please revise the
capitalization table in the Proxy Statement as of a date within 30 days
of the filing date of the Proxy Statement with the Securities and
Exchange Commission ("SEC") that indicates the asset levels of the
Funds satisfy the conditions of Item 14.
RESPONSE: The capitalization table in the proxy Statement has been
revised in accordance with this comment.
2. COMMENT: On pp. 12-13 of the Proxy Statement, Registrant refers to
"we." Please clarify to whom this refers.
RESPONSE: Registrant has revised the language to clarify that "we"
refers to the management of the Funds.
3. COMMENT: On page 13 of the Proxy Statement, Registrant references the
"better absolute performance" of the Micro-Cap Fund. Please define what
this terms means.
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RESPONSE: The disclosure in the Proxy Statement has been revised to
clarify what "better absolute performance" means.
4. COMMENT: On page 14 of the Proxy Statement, Registrant states that if
shareholders of the Small Company Fund do not approve the
reorganization, the Fund will be liquidated. Please confirm
supplementally that no separate shareholder approval is required in
order to liquidate the Fund.
RESPONSE: Pursuant to the Registrant's Declaration of Trust and
By-Laws, shareholder approval is not required to liquidate the Small
Company Fund provided that the Board of Trustees of the Trust approves
the liquidation of the Fund.
5. COMMENT: On page 23 of the Proxy Statement, Registrant states that the
pro forma fee and expense numbers of the combined Micro-Cap Fund have
been estimated in good faith. Please delete reference to "in good
faith."
RESPONSE: The disclosure has been revised to comply with the comment.
6. COMMENT: Please revise the fee and expense tables, and corresponding
introductory language to the fee and expense tables, so that all
information in the fee and expense tables is as of the same date,
June 30, 2004.
RESPONSE: The disclosure has been revised to comply with this comment.
As we discussed, the information in the fee and expense table has been
revised so that the fees and expenses in all three columns are as of
June 30, 2004, restated to reflect certain adjustments in the Funds'
fees and expenses due to contractual changes in the administration and
transfer agency fees, and, in the case of the columns for the Small
Company Fund and the combined Funds, the asset levels as of October 31,
2004. In addition, in the case of the pro forma column for the combined
Fund, the information in the fee and expense table also reflects any
expected savings that may occur as a result of the Reorganization.
7. COMMENT: On page 30 of the Proxy Statement, please add disclosure under
the section entitled "Purchase and Redemption Procedures" stating that
the minimum investment requirements of the Small Company Fund are the
same as those of the Micro-Cap Fund.
RESPONSE: The disclosure has been revised to comply with the comment.
8. COMMENT: On page 31 of the Proxy Statement, please add disclosure under
the section entitled "Risk Factors" that indicates that the Micro-Cap
Fund is more susceptible to the small company risk described in that
paragraph than the Small Company Fund.
RESPONSE: The disclosure has been revised to comply with the comment.
9. COMMENT: Please add the disclosure required by Item 6(e) of Form N-1A
regarding frequent purchases and redemptions (i.e., market timing) of
Fund shares.
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RESPONSE: The disclosure has been revised to comply with the comment.
10. COMMENT: On page 76 of the Proxy Statement, in order for the disclosure
to be consistent with Section 22(e) of the Investment Company Act of
1940, please delete the reference to "business" in the parenthetical
regarding payment of redemption proceeds.
RESPONSE: The disclosure has been revised to comply with the comment.
* * *
You requested that the Registrant make certain representations concerning the
Proxy Statement and the response being made to the comments received. These
representations are included as an exhibit to this letter.
We hope that the foregoing is responsive to each of the matters discussed with
Erin Wagner on January 12, 2005. Please do not hesitate to contact the
undersigned at (202) 261-3302 or Erin Wagner at (202) 261-3317 if you have any
questions concerning the foregoing.
Sincerely,
/s/ Jane A. Kanter
Jane A. Kanter
cc: Stephen J. Shenkenberg, Esq.
Thomas Lemke, Esq.
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EXHIBIT
[MUNDER FUNDS LETTERHEAD]
VIA EDGAR CORRESPONDENCE
January 14, 2005
Christian Sandoe
Division of Investment Management
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Munder Series Trust, on behalf of the Munder Small Company Growth
Fund, Proxy Statement/Prospectus on Form N-14 SEC File No. 333-102943
Dear Mr. Sandoe:
In connection with a response being made on behalf of the Munder Series Trust
("Registrant") to comments you provided with respect to a proxy
statement/prospectus filed on Form N-14 for the Registrant on December 12, 2004
("Proxy Statement"), the Registrant hereby acknowledges that:
- the Registrant is responsible for the adequacy and the accuracy of the
disclosure in the Proxy Statement;
- comments of the staff of the Securities and Exchange Commission ("SEC
Staff") or changes to disclosure in response to SEC Staff comments in
Proxy Statement reviewed by the staff do not foreclose the Securities
and Exchange Commission from taking any action with respect to the
Proxy Statement; and
- the Registrant may not assert SEC Staff comments as a defense in any
proceeding initiated by the Securities and Exchange Commission or any
person under the federal securities laws.
We hope that the foregoing is responsive to your request made on January 12,
2005. Please do not hesitate to contact the undersigned at (248) 647-9201 if you
have any questions concerning the foregoing.
Sincerely,
/s/ Stephen J. Shenkenberg
Stephen J. Shenkenberg
cc: Jane A. Kanter, Esq.
Thomas Lemke, Esq.
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PROPOSAL NO. 1
APPROVAL OF THE AGREEMENT AND
PLAN OF REORGANIZATION
COMMON QUESTIONS AND ANSWERS
ABOUT THE PROPOSED REORGANIZATION
Q. HOW WILL THE REORGANIZATION AFFECT ME?
A. The assets of the Small Company Fund will be combined with those of the
Micro-Cap Fund and you will become a shareholder of the Micro-Cap Fund.
Following the Reorganization, you will receive shares of the Micro-Cap Fund
that are equal in value to the shares of the Small Company Fund that you
held immediately prior to the closing of the Reorganization. (Shareholders
of Class A shares, Class B shares, Class C shares, Class K shares and Class
Y shares of the Small Company Fund will receive Class A shares, Class B
shares, Class C shares, Class K shares and Class Y shares, respectively, of
the Micro-Cap Fund.) The Reorganization has been structured as a tax-free
reorganization for federal income tax purposes so shareholders will not
recognize any taxable gain or loss as a result of the Reorganization.
Q. WHY IS THE REORGANIZATION BEING RECOMMENDED?
A. The primary purposes of the proposed Reorganization are to seek potential
economies of scale and to eliminate certain costs associated with operating
the Small Company Fund and the Micro-Cap Fund separately. We believe the
Reorganization will benefit shareholders of the both the Small Company Fund
and the Micro-Cap Fund.
As a result of declining assets of the Small Company Fund, expense ratios
for the Small Company Fund have been increasing. Moreover, since a new
transfer agency fee arrangement that went into effect on January 1, 2002
subjects the Small Company Fund to a fixed minimum annual expense, the per
share expenses of the Fund have increased significantly as a direct result
of the Fund's small asset size. Without significant asset growth from sales
of shares of the Small Company Fund, the Small Company Fund's expenses are
expected to increase even further.
MCM also believes that the Small Company Fund and the Micro-Cap Fund have
compatible investment objectives, policies and strategies, as described in
detail below. The Reorganization will result in combining the assets of
these two Funds and consolidating their operations.
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MCM believes that, given the Small Company Fund's steadily increasing expense
ratios and the alternative of a very similar fund with better performance
(without regard to each Fund's benchmark) available in the form of the Micro-Cap
Fund, shareholders of the Small Company Fund will benefit from the
Reorganization.
Combining the assets of the Funds is intended to provide various benefits to
shareholders of the Small Company Fund who become shareholders of the
Micro-Cap Fund (as well as to existing and future investors of the Micro-Cap
Fund). For example, the proposed Reorganization will enable shareholders of
the Small Company Fund to enjoy the benefits of investing in a fund that has
higher asset levels, which will result in the fixed and relatively fixed
costs associated with operating the Small Company Fund (e.g., transfer
agency, accounting and printing expenses) being spread over a larger asset
base, thereby reducing per share expenses paid by shareholders of the Small
Company Fund. In addition, it is anticipated that the current shareholders
of the Micro-Cap Fund will benefit from the Reorganization because the
additional assets from the Small Company Fund that will be aggregated with
those of Micro-Cap Fund will help the Micro-Cap Fund achieve certain
additional economies of scale. (See also the next question regarding
operating expenses of the Funds.)
Q. HOW DO THE FEES PAID BY THE MICRO-CAP FUND COMPARE TO THOSE PAYABLE BY THE
SMALL COMPANY FUND?
A. Although historically, the total per share operating expenses of the
Micro-Cap Fund have been higher than those of the Small Company Fund, the
current total per share operating expenses of the Micro-Cap Fund are lower
than those of the Small Company Fund. Pro forma fee, expense and financial
information are included for your reference in this Proxy
Statement/Prospectus.
Q. WILL I HAVE TO PAY ANY SALES LOAD, COMMISSION OR OTHER TRANSACTIONAL FEE IN
CONNECTION WITH THE REORGANIZATION?
A. No. The full value of your shares of the Small Company Fund will be
exchanged for shares of the same class of the Micro-Cap Fund without any
sales load, commission or other transactional fee being imposed. MCM will
bear all of the expenses of both Funds in connection with the
Reorganization, except for brokerage fees and brokerage expenses associated
with the Reorganization.
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SUMMARY COMPARISON OF FEES AND EXPENSES
The following tables compare the fees and expenses of each class of the
Small Company Fund and the Micro-Cap Fund and show the estimated fees and
expenses for each class on a pro forma basis, giving effect to the proposed
Reorganization. We have estimated these pro forma numbers based on information
contained in the Annual Reports to Shareholders for the previous fiscal year for
each class of shares for each Fund, with certain adjustments.
The fee and expense information shown in the table below is organized as
follows:
- Column 1 reflects the fees and expenses of each class of the Small
Company Fund as of June 30, 2004, restated to reflect (1) certain
adjustments in the Fund's fees and expenses due to contractual changes in
the administration and transfer agency fees, and (2) a decline in the
level of assets of the Fund as of October 31, 2004.
- Column 2 reflects the fees and expenses of each class of the Micro-Cap
Fund as of June 30, 2004, restated to reflect certain adjustments in the
Fund's fees and expenses due to contractual changes in the administration
and transfer agency fees. No adjustment has been made to the fees and
expenses of the Micro-Cap Fund to reflect the increase in the current
level of assets of the Fund.
- Column 3 reflects the pro forma fees and expenses as if the
Reorganization had occurred as of June 30, 2004. This Column reflects the
pro forma fees and expenses of each class of the combined Fund as of June
30, 2004, restated to reflect (1) certain adjustments in the Funds' fees
and expenses due to contractual changes in the administration and
transfer agency fees, (2) the asset level of the combined Micro-Cap Fund
and Small Company Fund as of October 31, 2004, and (3) any other expected
savings that may occur as a result of the Micro-Cap Fund and the Small
Company Fund being combined in the Reorganization.
Additional information regarding the performance of each of the Funds is
contained in "Management's Discussion of Fund Performance and Financial
Highlights" in this Proxy Statement/Prospectus.
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SMALL PRO FORMA
COMPANY MICRO-CAP FOLLOWING THE
FUND FUND REORGANIZATION
CLASS A SHARES