The Steadman Group of Funds, in an effort to shake its reputation for miserable performance and ungainly expenses, has changed its name.

The three no-load Steadman funds with about $6 million under management, which have struggled for survival for much of their lives, were renamed the Ameritor funds last month. The funds' advisor, the Steadman Security Corp., has also been renamed Ameritor Financial Corp. Further, early in 1999, for the first time in six years, shares of one of the funds, the Security Trust fund, will be available for sale to investors, said Max Katcher, the fund's portfolio manager and president of the funds' advisory firm. Katcher said the firm hopes to attract assets based on Security Trust's recent strong performance.

Security Trust ranked first among equity income funds for the one-year period ending Oct. 29, according to Lipper Analytical Services. However, it ranked last among 38 funds in that category over 10 years and has a one-star rating from Morningstar. The fund had $3.7 million in assets as of Sept. 30, according to Lipper.

"We're not expecting anything great" but the hope is that the newly-opened fund will attract new assets, Katcher said. The name change arises from a change in the adviser's ownership, says Katcher. The adviser's former president, Charles Steadman, died in December. Katcher said the firm now is owned by Steadman's two children, who decided to make the name change.

The Steadman funds have suffered poor performance and adverse publicity for years. William Allen Steadman & Co., the predecessor to the Steadman Security Corp., was founded in 1932 . It introduced its first fund, the Security Trust fund, in 1939. The other two surviving funds are the Industry Fund, formed in 1958 and the Investment Fund, formed in 1956. Both of these have 10-year rankings which place them last in their peer groups, according to Lipper. Both have one-star ratings from Morningstar. They will remain closed for now, Katcher said.

Not only have the Steadman Funds' performance been poor, but their expenses have also far exceeded peer group averages. The Industry fund, for example, has an expense ratio of 22.57 percent versus a peer group average of 1.72 percent, according to Lipper. For the Investment fund, the expense ratio is 14.54 percent versus an average of 1.44 percent.

The Securities and Exchange Commission ordered Steadman to close its funds in 1988 after the regulator questioned the accuracy of the funds' net asset value. Although the dispute was settled a few years later, Steadman did not reopen the funds because of their poor performance, according to Katcher. The Security Trust fund was briefly reopened and then closed again in 1994.

About 3,500 of Steadman's 17,000 shareholders could not be found as of the beginning of this year, says Katcher. The number of shareholders has since been reduced to about 10,000.

The adviser does not have enough money to publicize its name change with a conventional advertising campaign but it will start a website, says Katcher.

Security Trust's one-year track record and the name change cannot negate the consistent long-term performance of the Steadman funds, said Louis P. Stanasolovich, a registered investment adviser in Pittsburgh.

"Overall, I wouldn't touch it with a 10-foot pole," Stanasolovich said of the renewed offering of Security Trust. "If they would get a brand new manager, then maybe I would consider it."

But, he said that poor historical performance could make funds tax efficient for investors because past losses can be used to offset future gains and so reduce taxes on those gains. Indeed, Security Trust said in its annual report for the year ending June 30 that it had approximately $5.6 million in losses.

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