July
18 ,
2008
VIA
EDGAR TRANSMISSION
Christina
DiAngelo
Senior
Staff Accountant
U.S.
Securities and Exchange Commission
Division
of Investment Management
Office
of
Disclosure and Review
100
F
Street, NE
Washington,
DC, 20549-4720
Dear
Ms.
DiAngelo,
Pursuant
to our telephone conversation during which you provided comments based on the
staff’s review of various recent filings made by the Giant 5 Funds (the
“Funds”), this letter is the Funds’ response to address the staff’s comments and
findings.
COMMENT
#1 - Missing Item 4(e) through (h) of N-CSR -
Please
file an amended Form N-CSR for 3/31/08 to include Items 4(e) through
4(h).
RESPONSE
- Upon conversion of the filing to Edgar format the referenced items were
inadvertently deleted and their deletion was not discovered during the final
review of the filing. Form N-CSR will be re-filed to include Items 4(e) through
4(h).
COMMENT
#2 - Graphical Representation of Holdings
- Item
22(d)(2) of Form N-CSR requires the Funds to provide a graphical representation
of holdings.
RESPONSE
- The Funds acknowledge such graphical representation of holdings (the “Graphs”)
was omitted in the most recent N-CSR filing. The Funds will include such Graphs
for all relevant filings going forward.
COMMENT
#3 - Discussion of factors that materially affected the Funds
performance
- Item
22(b)(7)(i) requires the discussion of factors that materially affected the
Funds’ performance during the most recently completed fiscal year, including the
relevant market conditions and the investment strategies and techniques used
by
the Funds’ investment adviser. The Funds investment adviser did not adequately
discuss those factors that added or subtracted from performance.
RESPONSE
- The fourth paragraph in the report of the Adviser contained in the Annual
Report was intended to explain why each Fund outperformed its benchmark. In
the
future, the Adviser will endeavor to make this point clearer in order to comply
with the requirements of Item 22(b)(7)(i).
COMMENT
#4 - Gross Expense Ratios in Letter to Shareholders
- The
gross expense ratios provided as a disclosure statement to the management letter
filed in Form N-CSR do not tie to the most recently filed 485(b).
RESPONSE
- The Funds acknowledge that the Gross Expense Ratios included in the management
letter of the Form N-CSR filing were incorrectly stated and therefore do not
tie
to the expense ratios provided in the 485(b) filing filed July 7, 2007. The
Funds will correct this error in the amended N-CSR filing referenced in the
response to Comment #1.
COMMENT
#5 - “Net Fund Operating Expenses” presented on “The Funds” page of the Giant 5
Funds website.
Web page
continues to display net expenses despite the expiration of the expense
limitation agreement between the Funds and the adviser.
RESPONSE
- The web page has been corrected and the Funds have instituted a procedure
to
ensure that the Website is reviewed on a quarterly basis to avoid future
discrepancies of this nature.
COMMENT
#6 - Reference of Redemption Fees in Expense Example
- Please
remove from future filings the reference to redemption fees as a cost to
shareholders in the Expense Example.
RESPONSE
- Future filings will not include a reference to redemption fees as a cost
to
shareholders.
COMMENT
#7 - The Expense Ratio in the Expense Example does not match the Financial
Highlights -
Why do
the expense ratio’s for each of the Funds in the Expense Example, 0.96% and
1.05% for the Giant 5 Total Investment System (“Investment Fund”) and Giant 5
Total Index System (“Index Fund”), respectively, not match the annualized
expense ratio in the financial highlights of 1.37% and 1.42%,
respectively?
RESPONSE
-The discrepancy occurred for two reasons:
| |
1.
|
The
Funds’ expenses were being over accrued in the first half of the fiscal
year by the Funds’ prior administration and accounting services provider.
The over-accrual was identified by the new administration and accounting
services provider at the end of the first half of the fiscal year.
The
Funds then adjusted these accruals by under-accruing expenses for
the
remainder of the fiscal year to arrive at the correct expense ratio
that
was disclosed in the financial highlights.
|
| |
2.
|
There
were approximately $18,000 in expenses being accrued by the Funds
from the
Funds’ prior administration and accounting services provider that the
Adviser was disputing. These expenses were not waived by the prior
administration and accounting services provider until the second
half of
the fiscal year and the expenses were accrued for and subsequently
reversed out.
|
COMMENT
#8 - Form N-PX does not disclose how the Fund voted on their Proxies.
-
Why did
the N-PX filed August 21, 2007 not disclose the actual vote “For or Against
Management”?
RESPONSE
-As a Fund of Funds, the Funds’ proxy policy requires the Funds to vote proxies
in proportion to all other non-affiliated shareholders submitted
for voting.
Therefore, the Funds did not list actual votes which could give the appearance
that the Funds voted to influence the proxy.
COMMENT
#9 -Notification to shareholders of the reclassification of the
distribution
The
Financial Highlights in the N-CSR filing disclose a Return of Capital in the
Investment Fund. Per Rule 19a-1 of the 1940Act, was notification of the
reclassification of the distribution in the Investment Fund sent to
shareholders?
RESPONSE
-
The
Funds did not provide notification to shareholders of the reclassification
of the distribution as required by Rule 19a-1. The Fund will adopt a procedure
to ensure compliance with Rule 19a-1 for all future distributions where such
notice is appropriate.
Please
contact the undersigned at (719) 884-7500 if you have any questions regarding
the responses.
Giant
5
Funds acknowledges that:
· the
Funds
are responsible for the adequacy and accuracy of the disclosure in the
filings;
· staff
comments or changes to disclosure in response to staff comments in the filings
reviewed by the staff do not foreclose the Commission from taking any action
with respect to the filing; and
· the
Funds
may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.
Sincerely,
Michael
G. Willis
President
Giant
5
Funds