ThZeal - The Zeal

CORRESP 1 filename1.txt Shareholder Accounts Corporate Offices c/o Ultimus Fund Solutions, LLC 3707 W. Maple Road, Suite 100 P.O. Box 46707 Bloomfield Hills, MI 48301 Cincinnati, OH 45246 (248) 644-8500 1-888-726-0753 Fax (248) 644-4250 SCHWARTZ INVESTMENT TRUST April 24, 2006 FILED VIA EDGAR --------------- U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Re: Schwartz Investment Trust (the "Trust") File Nos. 811-07148; 33-51626 Response to Commission's Comments on Post-Effective Amendment No. 19 on Form N-1A Ladies and Gentlemen: Mr. Dominic Minore of the Commission's staff recently contacted us to provide comments on Post-Effective Amendment No. 19 to the Trust's registration statement on Form N-1A. The following are the comments provided and the Trust's response to each: AVE MARIA FUNDS PROSPECTUS -------------------------- 1. Will the Ave Maria Rising Dividend Fund, the Ave Maria Small Cap Fund, or any other fund of the Trust that may invest in foreign securities, invest in foreign securities in emerging markets? If so, please revise the prospectus to state this fact. What is the percentage threshold for investing in foreign securities / foreign securities in emerging markets? If it is 20% or more for foreign securities and 10% or more with relation to foreign securities in emerging markets, please include appropriate risk disclosure with respect to the applicable Fund(s). RESPONSE: None of the Funds intend to invest in foreign securities in emerging markets. All of the Funds invest primarily in U.S. securities, however no formal limitations have been adopted with respect to investments in foreign securities. As of December 31, 2005, none of the Funds held any foreign securities. If a Fund were to invest a significant amount of its assets in foreign securities, or in foreign securities in emerging markets, the Prospectus would be revised to include appropriate risk disclosures. 2. The Commission's staff believes the range used to define small-cap companies by the Ave Maria Small Cap Fund is too broad, that as written it includes both micro-cap companies and large-cap companies. The staff further believes the Russell 2000 Index is not necessarily an index comprised exclusively of small cap securities. Clarify whether 80% of the Fund's assets could be invested in securities of issuers with capitalizations as low as $26 million and/or as high as $4.4 billion. If the Fund does not truly intend to invest to these two extremes, indicate the median market capitalization of companies in the Russell 2000 Index and give an indication of the range within which the Fund intends to primarily invest. If the Fund does intend to invest to these two extremes, include appropriate risk disclosure relating to investing in micro-cap companies, and risk disclosure relating to investing in large-cap securities, to the extent the Fund believes it is appropriate. RESPONSE: We will revise the disclosure to indicate that the median market capitalization of companies included in the Russell 2000 Index is currently $662 million and that, for purposes of the 80% limitation, the Adviser defines small-cap companies as those whose market capitalization, at the time of purchase, is between $200 million and $4 billion, and that the Fund may invest in securities at both ends of the spectrum. We do not believe risk disclosure relating to micro-cap companies or large-cap companies is appropriate. 3. In the Expense Information Section, the Example should be presented immediately after the Annual Fund Operating Expenses table and any footnotes should be presented after the Example. RESPONSE: The footnotes will be moved to follow the Example. 4. In footnote number 4 on page 19, add the following sentence to the end of the footnote: "The Adviser will have no claim against a Fund and the Fund will not pay for any unpaid amounts if its expense limitation agreement expires or is terminated." The staff notes that without this clarification, the fee reductions and/or expense reimbursements eligible for repayment by the Funds should be booked as a loan. RESPONSE: We will add the requested language. AVE MARIA STATEMENT OF ADDITIONAL INFORMATION --------------------------------------------- 5. Either expand investment limitation #4 on page 16, or provide a separate non-fundamental investment limitation that states: "Neither Fund will mortgage, pledge or hypothecate more than one third of its total assets." RESPONSE: We will add this language as a non-fundamental limitation. 6. On page 17, in the paragraph immediately after non-fundamental investment limitation number 5, clarify that the Funds must strictly adhere to the percentage limitation with respect to investments in illiquid securities. RESPONSE: We will clarify that the Funds must strictly adhere to the percentage limitation with respect to investments in illiquid securities. 7. Include the following language at the end of the first sentence in the third bullet point under Portfolio Holdings Disclosure Policy: "and is subject to a confidentiality agreement including a prohibition on trading based upon non-public information." RESPONSE: We respectfully decline to add this language. Each of the rating and ranking organizations approved for the Trust approximately one year ago were contacted at that time in an attempt to obtain confidentiality agreements with such organizations. Each rating and ranking organization indicated that it would not sign a confidentiality agreement with the Trust. Management informed the Board of Trustees of this fact and the Trustees approved the elimination of this requirement, determining that the Trust's policies and procedures are reasonable and sufficient to prevent any harm to the Funds and their shareholders. Therefore, we have revised the third bullet point to read as follows: o Information regarding portfolio securities as of the end of the most recent month or as of the end of the most recent calendar quarter, and other information regarding the investment activities of the Funds during such month or quarter, may be disclosed on at least a 30-day lag to rating and ranking organizations for use in connection with their rating or ranking of the Funds, but only if such disclosure has been approved by the Chief Compliance Officer of the Trust (the "CCO") as being in the best interests of shareholders and serving a legitimate business interest of the Funds. Below is a table listing the organizations that have been approved by the CCO to receive non-public portfolio information along with the types of information received, conditions or restrictions on use, timing of disclosure and any compensation received for providing portfolio information. These organizations have not signed confidentiality agreements. However, the Trust's CCO and Board of Trustees have determined that each such organization is bound by a duty of confidentiality and that the Trust's policies and procedures with respect to the disclosure of portfolio information are reasonable and sufficient to prevent any harm to the Funds and their shareholders.

SIGNATURE PAGE -------------- 8. The signature page should be executed by the Trust's chief financial officer and the principal accounting officer or controller. If Timothy Schwartz is the principal accounting officer, please designate such additional title next to his name. RESPONSE: Mr. Timothy Schwartz, as Treasurer, is both the chief financial officer and principal accounting officer. The Trust has no controller. The signature page to Post-Effective Amendment No. 20 (which will incorporate our responses to these comments) will be revised to indicate Mr. Timothy Schwartz's status as chief financial officer and principal accounting officer. We acknowledge that: o the Trust is responsible for the adequacy and accuracy of the disclosure in Trust filings; o 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 such filings; and o the Trust 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. Thank you for your comments. Please contact Cassandra Borchers at 513/587-3451 if you have any questions. Very truly yours, /s/John F. Splain John F. Splain Assistant Secretary