<PAGE>
As filed with the Securities and Exchange Commission on October 30, 1996
1933 Act File No. 033-63493
1940 Act File No. 811-07367
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 1 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 2 /X/
(Check appropriate box or boxes)
BERGER INSTITUTIONAL PRODUCTS TRUST
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
-----------------------------
Gerard M. Lavin, 210 University Boulevard, Suite 900, Denver, CO 80206
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective: (check appropriate box)
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of beneficial interest
under the Securities Act of 1933 pursuant to Rule 24f-2(a) and intends to file
its Rule 24f-2 Notice on or about February 14, 1997, for the fiscal year ended
December 31, 1996.
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRST
SHARES OF BENEFICIAL INTEREST
($.01 Par Value)
Cross-Reference Sheet Pursuant to Rule 481
<TABLE>
<CAPTION>
ITEM NO. AND CAPTION IN FORM N-1A NUMBER OF SECTION
<S> <C> <C>
A. PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Section 1
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Sections 2, 3, 4 and 10
5. Management of the Fund Sections 5 and 6
5A. Management's Discussion of Fund Performance Not Applicable
6. Capital Stock and Other Securities Sections 9, 10 and 11
7. Purchase of Securities Being Offered Sections 7 and 8
8. Redemption or Repurchase Section 7
9. Pending Legal Proceedings Not Applicable
B. STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Section 12
13. Investment Objectives and Policies Sections 1 and 2
14. Management of the Funds Section 3
15. Control Persons and Principal Holders of Securities Sections 3 and 12
16. Investment Advisory and Other Services Sections 3, 4, 5 and 12
17. Brokerage Allocation and Other Practices Sections 1 and 6
18. Capital Stock and Other Securities Section 12
19. Purchase, Redemption and Pricing of Securities Sections 7, 8 and 9
Being Offered
20. Tax Status Section 10
21. Underwriters Not Applicable
22. Calculations of Performance Data Section 11
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
BERGER IPT - 100 FUND
BERGER IPT - GROWTH AND INCOME FUND
BERGER IPT - SMALL COMPANY GROWTH FUND
SUPPLEMENT DATED OCTOBER 30, 1996 TO PROSPECTUS DATED MAY 1, 1996
The Prospectus dated May 1, 1996, for the Berger IPT - 100 Fund, the Berger
IPT - Growth and Income Fund and the Berger IPT - Small Company Growth Fund is
amended by changing the date of the Statement of Additional Information referred
to on the cover thereof to October 30, 1996, and by including as a part of the
Prospectus the following new Section 2 preceding the section entitled
"Introduction". Capitalized terms used below have the same meanings as in the
Prospectus.
2. CONDENSED FINANCIAL INFORMATION
Following is a table setting forth certain financial highlights of the
Funds for the period May 1, 1996 (date operations commenced) to September 30,
1996. The information contained in the table is unaudited. Additional
performance information is contained in the Funds' most recent Semi-Annual
Report dated June 30, 1996, which may be obtained upon request and without
charge by calling the Funds at 1-800-706-0539 or by calling a Participating
Insurance Company.
BERGER IPT - 100 FUND
BERGER IPT - GROWTH AND INCOME FUND
BERGER IPT - SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
MAY 1, 1996 (DATE OPERATIONS COMMENCED) TO SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Berger IPT - Berger IPT - Berger IPT -
100 Fund Growth and Small
Income Company
Fund Growth
Fund
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $10.00 $10.00 $10.00
----- ----- -----
Income From Investment Operations:
Net Investment Income or (Loss) .04 .08 .04
Net Realized and Unrealized Gains
or (Losses) on Securities .04 .32 .68
--- --- ---
Total From Investment Operations .08 .40 .72
--- --- ---
Less Distributions:
Dividends (from net investment income) .00 .00 .00
Distributions (from capital gains) .00 .00 .00
--- --- ---
Total Distributions .00 .00 .00
--- --- ---
Net Asset Value, End of Period $10.08 $10.40 $10.72
----- ----- -----
----- ----- -----
Total Return 0.80% 4.00% 7.20%
---- ---- -----
---- ---- -----
Ratios/Supplemental Data:
Net Assets, End of Period $286,517 $267,237 $274,969
Ratio of Expenses to Average Net Assets*# 1.96% 2.04% 2.69%
Ratio of Net Income or (Loss) to Average Net Assets* .93% 1.86% .87%
Portfolio Turnover Rate 14% 30% 41%
Average Commission Rate $.0600 $.0600 $.0534
*Annualized
#Ratio reflects total expenses, including fees offset by earnings credits and investment advisory fee waivers, but does not
include the deduction of any charges or expenses attributable to any particular variable insurance contract.
</TABLE>
<PAGE>
PROSPECTUS
Berger Institutional Products Trust (the "Trust") is an open-end
management investment company. The Trust currently consists of three
diversified series or portfolios (individually referred to as a "Fund"), known
as the Berger IPT - 100 Fund, the Berger IPT - Growth and Income Fund and the
Berger IPT - Small Company Growth Fund. Each Fund has its own investment
objective and policies. The Funds are recently organized and have no operating
history, but their investment advisor, Berger Associates, Inc. ("Berger
Associates") has been in the investment advisory business for over 20 years.
Shares of the Funds are not offered directly to the public, but are sold only in
connection with investment in and payments under variable annuity contracts and
variable life insurance contracts (collectively "variable insurance contracts")
issued by life insurance companies ("Participating Insurance Companies"), as
well as to certain qualified retirement plans.
BERGER IPT - 100 FUND
The investment objective of the Berger IPT - 100 Fund is long-term
capital appreciation. The Berger IPT - 100 Fund seeks to achieve this objective
by investing primarily in common stocks of established companies which the
Fund's advisor believes offer favorable growth prospects. Current income is not
an investment objective of the Berger IPT - 100 Fund, and any income produced
will be a by-product of the effort to achieve the Fund's objective.
BERGER IPT - GROWTH AND INCOME FUND
The primary investment objective of the Berger IPT - Growth and Income
Fund is capital appreciation. A secondary objective is to provide a moderate
level of current income. The Berger IPT - Growth and Income Fund seeks to
achieve these objectives by investing primarily in common stocks and other
securities, such as convertible securities or preferred stocks, which the Fund's
advisor believes offer favorable growth prospects and are expected to also
provide current income.
BERGER IPT - SMALL COMPANY GROWTH FUND
The investment objective of the Berger IPT - Small Company Growth Fund
is capital appreciation. The Berger IPT - Small Company Growth Fund seeks to
achieve this objective by investing primarily in equity securities (including
common and preferred stocks, convertible debt securities and other securities
having equity features) of small growth companies with market capitalization of
less than $1 billion at the time of initial purchase.
This Prospectus sets forth concise information about each of the Funds
that a prospective purchaser of a variable insurance contract or plan
participant should consider before purchasing a variable contract, allocating
contract values to one or more of the Funds or selecting one of the Funds as an
investment option under a qualified plan. It should be read carefully in
conjunction with any separate account prospectus of the specific insurance
product or qualified plan documents that accompany this Prospectus and retained
for future reference. Additional information about the Funds has been filed
with the Securities and Exchange Commission. A copy of the Statement of
Additional Information, which is incorporated in its entirety by this reference
into the Prospectus, is available upon request without charge by writing the
Berger Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or
call 1-303-329-0200 or 1-800-706-0539 or by writing or calling a Participating
Insurance Company.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR
<PAGE>
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus and the Statement of Additional
Information referred to above is MAY 1, 1996.
<PAGE>
Table of Contents
Section Page
- ------- ----
1. Fee Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Investment Objectives and Policies and Risk Factors. . . . . . . . . . . 2
4. Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. Management and Investment Advice . . . . . . . . . . . . . . . . . . . . 9
6. Expenses of the Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 11
7. How to Purchase and Redeem Shares in the Funds . . . . . . . . . . . . . 12
8. How the Net Asset Value Is Determined. . . . . . . . . . . . . . . . . . 13
9. Income Dividends, Capital Gains Distributions and Tax Treatment. . . . . 13
10. Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . 14
11. Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Shareholder Inquiries . . . . . . . . . . . . . . . . . . . . . . . . . 17
<PAGE>
1. FEE TABLES
SHAREHOLDER TRANSACTION EXPENSES (APPLICABLE TO ALL THREE FUNDS)
Maximum Sales Load Imposed on Purchases 0%
Maximum Sales Load Imposed on Reinvested Dividends 0%
Deferred Sales Load 0%
Redemption Fees 0%
Exchange Fee 0%
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
Management Other Expenses* Total Fund
Fee Operating
Expenses*
<S> <C> <C> <C>
Berger IPT - 100 Fund .75% .22% .97%
Berger IPT - Growth and Income Fund .75% .22% .97%
Berger IPT - Small Company Growth Fund .90% .22% 1.12%
</TABLE>
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming 5%
annual return, and assuming redemption at the end of each time period:
1 Year* 3 Years*
Berger IPT - 100 Fund $10 $31
Berger IPT - Growth and Income Fund $10 $31
Berger IPT - Small Company Growth Fund $11 $35
* Based on estimated expenses for the Funds' first year of operations.
THE EXPENSES SET FORTH IN THE PRECEDING TABLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD
NOT BE
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<PAGE>
CONSIDERED A REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE
GREATER OR LESS THAN THE ASSUMED AMOUNT.
The purpose of the preceding tables is to assist the investor in
understanding the various costs and expenses that an investor in any of the
Funds will bear directly or indirectly. In the fee table, "Other Expenses" and
"Total Fund Operating Expenses" are based on estimated amounts for the Funds'
first year of operation. The Funds' investment advisor has agreed to waive its
advisory fee to the extent that normal operating expenses in any fiscal year,
including the management fee but excluding brokerage commissions, interest,
taxes and extraordinary expenses, of each of the Berger IPT - 100 Fund and the
Berger IPT - Growth and Income Fund exceed 1.00%, and the normal operating
expenses in any fiscal year of the Berger IPT - Small Company Growth Fund exceed
1.15%, of the respective Fund's average daily net assets. The Funds' expenses
are described in greater detail under "Management and Investment Advice" and
"Expenses of the Funds".
2. INTRODUCTION
The Berger IPT - 100 Fund, the Berger IPT - Growth and Income Fund and the
Berger IPT - Small Company Growth Fund are all diversified portfolios or series
of the Berger Institutional Products Trust, a management investment company.
The Funds sell and redeem their shares at net asset value without any sales
charges, commissions or redemption fees. Sales charges for variable insurance
contracts are described in the accompanying separate account prospectuses
relating to those contracts ("Separate Account Prospectuses"). Each variable
insurance contract involves fees and expenses not described in this Prospectus.
Certain Funds may not be available in connection with a particular contract and
certain contracts may limit allocations among the Funds. See the Separate
Account Prospectuses for information regarding contract fees and expenses and
any restrictions on purchases or allocations.
This Prospectus describes the securities offered by each of the Funds.
Because the Funds have the same investment advisor, officers and trustees and
have similar investment restrictions and investment privileges, the Funds
believe you will find this combined Prospectus useful and informative in
understanding the important features of the Funds and their similarities and
differences.
3. INVESTMENT OBJECTIVES AND POLICIES AND RISK FACTORS
The Berger IPT - 100 Fund, the Berger IPT - Growth and Income Fund and the
Berger IPT - Small Company Growth Fund are each separate Funds of the Berger
Institutional Products Trust, each with its own portfolio of securities selected
to achieve its particular investment objective. Since the shares of the Funds
primarily represent an investment in common stocks, the net asset value of each
Fund will reflect changes in the market value of the securities held in that
Fund's portfolio, and the value of a Fund share will therefore go up and down.
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<PAGE>
Although the Funds are newly-organized, they have the same investment
objectives and follow substantially the same investment strategies and
policies as those of certain publicly-offered investment companies managed by
Berger Associates (the "Berger retail funds"). The Berger IPT - 100 Fund
corresonds to the Berger 100 Fund-Registered Trademark-. The Berger IPT -
Growth and Income Fund corresponds to the Berger Growth and Income Fund. The
Berger IPT - Small Company Growth Fund corresponds to the Berger Small
Company Growth Fund-Registered Trademark-. As described below under
"Management and Investment Advice," the same persons who serve as portfolio
managers of the Funds also serve as portfolio managers of the corresponding
Berger retail funds.
Although it is anticipated that each Fund and its corresponding retail fund
will hold similar securities selections, their investment results are expected
to differ. In particular, differences in asset size and in cash flow resulting
from purchases and redemption of Fund shares may result in different security
selections, differences in the relative weightings of securities or differences
in the prices paid for particular portfolio holdings. Expenses and expense
limitations of each Fund and its corresponding retail fund are expected to
differ. The variable insurance contract owner will also bear various insurance
related costs at the insurance company level and should refer to the
accompanying Separate Account Prospectus for a summary of contract fees and
expenses.
BERGER IPT - 100 FUND. The investment objective of the Berger IPT - 100
Fund is long-term capital appreciation. Current income is not an investment
objective of the Berger IPT - 100 Fund, and any income produced will be a by-
product of the effort to achieve the Fund's objective.
In selecting its portfolio securities, the Berger IPT - 100 Fund places
primary emphasis on established companies which it believes to have favorable
growth prospects, regardless of the company's size. Common stocks usually
constitute all or most of the Fund's investment portfolio, but the Fund remains
free to invest in securities other than common stocks, and may do so when deemed
appropriate by the investment advisor to achieve the objective of the Fund. The
Fund may, from time to time, take substantial positions in securities
convertible into common stocks, and it may also purchase government securities,
preferred stocks and other senior securities if its advisor believes these are
likely to be the best suited at that time to achieve the Fund's objective. The
Fund's policy of investing in securities believed to have a potential for
capital growth means that a Fund share may be subject to greater fluctuations in
value than if the Fund invested in other securities.
BERGER IPT - GROWTH AND INCOME FUND. The primary investment objective of
the Berger IPT - Growth and Income Fund is capital appreciation. A secondary
objective is to provide a moderate level of current income. However, neither
capital appreciation nor a fixed or moderate rate of current income can be
assured, and in periods of low interest rates and yields on securities, the
income available for distribution to the Fund shareholders will likely be
substantially reduced or eliminated.
In selecting its portfolio securities, the Berger IPT - Growth and Income
Fund places primary emphasis on securities which it believes offer favorable
growth prospects and are expected to also provide current income. Common stocks
of companies with mid-sized to large market capitalizations usually constitute
the majority of the Fund's investment portfolio. Market
-3-
<PAGE>
capitalization is defined as total current market value of a company's
outstanding common stock. The Fund also invests in senior securities such as
convertible securities, preferred stocks, government securities and corporate
bonds, as seems appropriate from time to time. Attention is given to the
anticipated reliability of income as well as to its indicated current level.
BERGER IPT - SMALL COMPANY GROWTH FUND. The investment objective of the
Berger IPT - Small Company Growth Fund is capital appreciation. The Fund seeks
to achieve its investment objective by investing its assets principally in a
diversified group of equity securities of small growth companies with market
capitalization of less than $1 billion at the time of initial purchase. Market
capitalization is defined as total current market value of a company's
outstanding common stock. Under normal circumstances, the Berger IPT - Small
Company Growth Fund will invest at least 65% of its assets in equity securities
of such companies, consisting of common and preferred stock and other securities
having equity features such as convertible bonds, warrants and rights (subject
to certain restrictions). The balance of the Fund may be invested in equity
securities of companies with market capitalization in excess of $1 billion,
government securities, short-term investments or other securities as described
on the following pages. Because income is not an objective of the Berger IPT -
Small Company Growth Fund, any income produced will be a by-product of the
effort to achieve the Fund's objective of capital appreciation.
In selecting its portfolio securities, the Berger IPT - Small Company
Growth Fund places primary emphasis on companies which it believes have
favorable growth prospects. The Fund seeks to identify small growth companies
that either occupy a dominant position in an emerging industry or a growing
market share in larger fragmented industries. While these companies may present
above average risk, management believes they may have the potential to achieve
long-term earnings growth rates substantially in excess of the growth of
earnings of other companies.
Investments in small growth companies may involve greater risks and
volatility than more traditional equity investments due to some of these
companies potentially having limited product lines, reduced market liquidity for
the trading of their shares and less depth in management than more established
companies. For this reason, the Berger IPT - Small Company Growth Fund is not
intended as a complete investment vehicle but rather as an investment for
persons who are in a financial position to assume above average risk and share
price volatility over time. Realizing the full potential of small growth
companies frequently takes time. As a result, the Berger IPT - Small Company
Growth Fund should be considered as a long-term investment vehicle.
* * *
In general, investment decisions for the Funds are based on an approach
which seeks out successful companies because they are believed to be more apt to
become profitable investments. To evaluate a prospective investment, the
investment advisor analyzes information from various sources, including industry
economic trends, earnings expectations and fundamental securities valuation
factors to identify companies which in management's opinion are more likely to
have predictable, above average earnings growth, regardless of the company's
geographic
-4-
<PAGE>
location. The advisor also takes into account a company's management
and its innovations in products and services in evaluating its prospects for
continued or future earnings growth.
The investment objective of the Berger IPT - 100 Fund, the primary
investment objective of the Berger IPT - Growth and Income Fund and the
investment objective of the Berger IPT - Small Company Growth Fund are
considered fundamental, meaning that they cannot be changed without a
shareholders' vote. The secondary investment objective of the Berger IPT -
Growth and Income Fund is not considered fundamental, and therefore may be
changed in the future by action of the directors without shareholder vote.
However, the Berger IPT - Growth and Income Fund will not change its secondary
investment objective without giving its shareholders such notice as may be
required by law. If the Berger IPT - Growth and Income Fund changes its
secondary investment objective, shareholders should consider whether the Fund
remains an appropriate investment in light of their then current financial
position and needs. There can be no assurance that any of the Funds' investment
objectives will be realized.
Any of the Funds may increase their investment in government securities and
other short-term interest-bearing securities without limit when the advisor
believes market conditions warrant a temporary defensive position, during which
period it may be more difficult for a Fund to achieve its investment objective.
Following is additional information about some of the other specific types of
securities in which the Funds may invest.
FOREIGN SECURITIES. Each Fund may invest in both domestic and foreign
securities. Investments in foreign securities involve some risks that are
different from the risks of investing in securities of U.S. issuers, such as the
risk of fluctuations in the value of the currencies in which they are
denominated, the risk of adverse political and economic developments and, with
respect to certain countries, the possibility of expropriation, confiscatory
taxation or limitations on the removal of funds or other assets of the Funds.
Securities of some foreign companies, particularly those of developing
countries, are less liquid and more volatile than securities of comparable
domestic companies. A developing country generally is considered to be in the
initial stages of its industrialization cycle. Investing in the securities of
developing countries may involve exposure to economic structures that are less
diverse and mature, and to political systems that can be expected to have less
stability than developed countries. There also may be less publicly available
information about foreign issuers than domestic issuers, and foreign issuers
generally are not subject to the uniform accounting, auditing and financial
reporting standards and practices applicable to domestic issuers. Delays may be
encountered in settling certain foreign securities transactions and the Funds
will incur costs in converting foreign currencies into U.S. dollars. The Funds
will consider the political and economic conditions in a country, the prospect
for changes in the value of its currency and the liquidity of an investment in
that country's securities markets in selecting investments in foreign
securities.
CONVERTIBLE SECURITIES. Each Fund may purchase securities which are
convertible into common stock when management of the Funds believes they offer
the potential for a higher total return than nonconvertible securities. While
fixed income securities generally have a priority claim on a corporation's
assets over that of common stock, some of the convertible securities which the
Funds may hold are high-yield/high-risk securities that are subject to special
risks, including the risk of default in interest or principal payments which
could result in a loss of income to the Funds or a decline in the market value
of the securities. Convertible securities
-5-
<PAGE>
often display a degree of market price volatility that is comparable to
common stocks. The credit risk associated with convertible securities
generally is reflected by their being rated below investment grade by
organizations such as Moody's Investors Service, Inc., and Standard & Poor's
Corporation. The Funds have no pre-established minimum quality standards for
convertible securities and may invest in convertible securities of any
quality, including lower rated or unrated securities. However, under normal
circumstances, none of the Funds will invest in any security in default at
the time of purchase or in any nonconvertible debt securities rated below
investment grade, and each Fund will invest less than 20% of the market value
of its assets at the time of purchase in convertible securities rated below
investment grade. For a further discussion of debt security ratings, see
Appendix A to the Statement of Additional Information.
ZEROS/STRIPS. The Berger IPT - 100 Fund and the Berger IPT - Growth and
Income Fund may each invest in zero coupon bonds or in "strips". Zero coupon
bonds do not make regular interest payments; rather, they are sold at a discount
from face value. Principal and accreted discount (representing interest accrued
but not paid) are paid at maturity. "Strips" are debt securities that are
stripped of their interest coupon after the securities are issued, but otherwise
are comparable to zero coupon bonds. The market values of "strips" and zero
coupon bonds generally fluctuate in response to changes in interest rates to a
greater degree than do interest-paying securities of comparable term and
quality. None of the Funds will invest in mortgage-backed or other asset-backed
securities.
REPURCHASE AGREEMENTS. Each Fund is authorized to invest in repurchase
agreements. A repurchase agreement is a means of investing cash for a short
period. In a repurchase agreement, a seller (typically a U.S. commercial bank
or recognized U.S. securities dealer) sells securities to the Fund and agrees to
repurchase the securities at the Fund's cost plus interest within a specified
period (normally one day). In these transactions, the securities purchased by
the Fund will have a total value equal to, or in excess of, the value of the
repurchase agreement, and will be held by the Fund's custodian bank until
repurchased. These transactions must be fully collateralized at all times by
debt securities (generally a security issued or guaranteed by the U.S.
Government or an agency thereof, a banker's acceptance or a certificate of
deposit), but involve some credit risk to the Fund if the other party defaults
on its obligation and the Fund is delayed or prevented from liquidating the
collateral. Repurchase agreements maturing in more than seven days will be
considered illiquid for purposes of the restriction on each Fund's investment in
illiquid and restricted securities.
LENDING PORTFOLIO SECURITIES. Each Fund may lend its portfolio securities
to qualified institutional investors such as brokers, dealers or other financial
organizations. This practice permits a Fund to earn income, which, in turn, can
be invested in additional securities to pursue the Fund's investment objective.
Loans of securities by a Fund will be collateralized by cash, letters of credit,
or securities issued or guaranteed by the U.S. Government or its agencies. The
collateral will equal at least 100% of the current market value of the loaned
securities, marked-to-market on a daily basis. A Fund bears a risk of loss in
the event that the other party to a securities lending transaction defaults on
its obligations and the Fund is delayed in or prevented from exercising its
rights to dispose of the collateral, including the risk of a possible decline in
the value of the collateral securities during the period in which the Fund seeks
to assert these rights, the risk of incurring expenses associated with asserting
these rights,
-6-
<PAGE>
and the risk of losing all or a part of the income from the transaction. None
of the Funds will lend any security if, as a result of such loan, the aggregate
value of securities then on loan would exceed 33-1/3% of the market value of
the Fund's total assets.
FINANCIAL FUTURES, FORWARDS AND OPTIONS. Each Fund is authorized to make
limited investments in certain types of futures, forwards and options, but only
for the purpose of hedging, that is, protecting against the risk of market
movements that may adversely affect the value of a Fund's securities or the
price of securities that a Fund is considering purchasing. Although a hedging
transaction may, for example, partially protect a Fund from a decline in the
value of a particular security or its portfolio generally, the cost of the
transaction will reduce the potential return on the security or the portfolio.
Following is a summary of the futures, forwards and options in which the Funds
may invest, provided that no more than 5% of a Fund's net assets at the time of
purchase may be invested in initial margins for financial futures transactions
and premiums for options.
Financial futures and forwards are contracts on financial instruments (such
as securities, securities indices and foreign currencies) that obligate the
holder to take or make future delivery of a specified quantity of the underlying
financial instrument. Futures are generally exchange traded and settled with
cash, while forwards are privately negotiated and contemplate actual delivery of
the underlying financial instrument (usually a foreign currency). An option
gives the holder the right, but not the obligation, to purchase or sell
something (such as a security) at a specified price at any time until the
expiration date. An option on a securities index is similar, except that upon
exercise, settlement is made in cash rather than in specific securities. Each
Fund may only write call options (that is, issue options that obligate the Fund
to deliver if the option is exercised by the holder) that are "covered" and only
up to 25% of a Fund's total assets. A call option is considered "covered" if a
Fund already owns the security on which the option is written or, in the case of
an option written on a securities index, if a Fund owns a portfolio of
securities believed likely to substantially replicate movement of the index.
Investments in futures and forwards by a Fund involve the potential for a
loss that may exceed the amount of initial margin the Fund would be permitted to
invest in the contracts under its investment limitations, or in the case of a
call option written by a Fund, may exceed the premium received for the option.
However, each Fund will be permitted to make such investments for hedging
purposes only, and only if the aggregate amount of its obligations under these
investments does not exceed the total market value of the assets the Fund is
attempting to hedge, such as a portion or all of its exposure to equity
securities or its holding in a specific foreign currency. To ensure that each
Fund will be able to meet its obligations under its futures and forward
contracts and its obligations under options written by that Fund, each Fund will
be required to place high-grade liquid assets in a segregated account with its
custodian bank or to set aside portfolio securities to "cover" its position in
these investments. Assets segregated or set aside generally may not be disposed
of so long as the Fund maintains the positions requiring segregation or cover,
which could diminish the Fund's return due to the opportunity losses of
foregoing other potential investments with such assets.
The principal risks of the Funds investing in futures transactions, forward
contracts and options are: (a) losses resulting from market movements not
anticipated by the
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<PAGE>
Funds; (b) possible imperfect correlation between movements in the prices of
futures, forwards and options and movements in the prices of the securities
or currencies hedged or used to cover such positions; (c) lack of assurance
that a liquid secondary market will exist for any particular futures,
forwards or options at any particular time, and possible exchange-imposed
price fluctuation limits, either of which may make it difficult or impossible
to close a position when so desired; (d) the need for additional information
and skills beyond those required for the management of a portfolio of
traditional securities; and (e) possible need to defer closing out certain
futures or options contracts in order to continue to qualify for beneficial
tax treatment afforded "regulated investment companies" under the Internal
Revenue Code of 1986, as amended. In addition, when a Fund enters into an
over-the-counter contract with a counterparty, the Fund will assume
counterparty credit risk, that is, the risk that the counterparty will fail
to perform its obligations, in which case the Fund could be worse off than if
the contract had not been entered into. Additional detail concerning the
Funds' investment in futures, forwards and options and the risks of such
investments can be found in the Statement of Additional Information.
ILLIQUID SECURITIES. Each Fund is authorized to invest in securities which
are illiquid because they are subject to restrictions on their resale
("restricted securities") or because, based upon their nature or the market for
such securities, they are not readily marketable. However, none of the Funds
may purchase any security, the purchase of which would cause the Fund to invest
more than 15% of its net assets, measured at the time of purchase, in illiquid
securities. Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Certain restricted
securities, such as Rule 144A securities, may be treated as liquid under this
restriction if a determination is made that such securities are readily
marketable. Investments in illiquid securities involve certain risks to the
extent that a Fund may be unable to dispose of such a security at the time
desired or at a reasonable price or, in some cases, may be unable to dispose of
it at all. In addition, in order to resell a restricted security, a Fund might
have to incur the potentially substantial expense and delay associated with
effecting registration.
INVESTMENT RESTRICTIONS
In addition to its investment objective, each Fund has adopted a number of
restrictions on its investments and other activities that may not be changed
without shareholder approval. For example, neither the Berger IPT - 100 Fund
nor the Berger IPT - Growth and Income Fund may purchase securities of any
issuer (except U.S. Government securities) if, immediately after and as a result
of such purchase, the value of such Fund's holdings in the securities of that
issuer exceeds 5% of the value of its total assets or it owns more than 10% of
the outstanding voting securities or of any class of securities of such issuer.
The Berger IPT - Small Company Growth Fund is similarly restricted with respect
to 75% of its total assets.
Further, neither the Berger IPT - 100 Fund nor the Berger IPT - Growth and
Income Fund may borrow in excess of 5% of its assets or pledge assets taken at
market value to an extent greater than 10% of its total assets taken at cost
(and no borrowing may be undertaken except from banks as a temporary measure for
extraordinary or emergency purposes), subject to certain exclusions, and neither
may make loans (except that each Fund may enter into repurchase agreements in
accordance with the Fund's investment policies). The
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<PAGE>
Berger IPT - Small Company Growth Fund may not borrow money, except borrowing
undertaken from banks for temporary or emergency purposes in amounts not to
exceed 25% of the market value of its assets (including the amount borrowed)
and may not make loans (except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies). None of the Funds may invest in any one industry more
than 25% of the value of its assets at the time of investment, nor invest in
commodities, except, only for the purpose of hedging, in certain futures,
forwards and options as specified in greater detail above and in the Statement
of Additional Information.
Also, none of the Funds currently intends to make short sales of
securities, except short sales of securities which the Fund owns or has the
right to acquire at no additional cost (i.e., short sales "against the box"),
and does not intend to purchase or sell securities on a when-issued or delayed
delivery basis if as a result, more than 5% of its assets are invested in such
securities, although these restrictions may be changed without shareholder
approval. For more detail about the Funds' investment restrictions, see the
Statement of Additional Information.
4. PORTFOLIO TURNOVER
In pursuit of each Fund's investment objective, management continuously
reviews its investments and makes portfolio changes whenever changes in the
market, industry trends or the outlook for the growth of any portfolio security
indicate to management that the objective could be better achieved by investment
in another security, regardless of portfolio turnover. In addition, portfolio
turnover may increase as a result of large amounts of purchases and redemptions
of shares of a Fund due to economic, market or other factors that are not within
the control of management. The annual portfolio turnover rates of the Funds may
at times exceed 100%. An annual turnover rate of 100% or more would be higher
than that of most other funds. Increased portfolio turnover would necessarily
result in correspondingly higher brokerage costs for the Funds and may result in
the acceleration of net taxable gains.
5. MANAGEMENT AND INVESTMENT ADVICE
The trustees of the Trust are responsible for major decisions relating to
each Fund's policies and objectives. They also oversee the operation of each
Fund by its officers and review the investment performance of the Funds on a
regular basis.
The investment advisor to each of the Funds is Berger Associates,
210 University Boulevard, Suite 900, Denver, CO 80206. Berger Associates
furnishes continuous advice and recommendations to each Fund regarding
securities to be purchased and sold by the Fund. Berger Associates, therefore,
formulates a continuing program for management of the assets of each Fund
consistent with the investment objectives and policies established by the
trustees of the Trust. Berger Associates also provides office space for each
Fund and pays the salaries, fees and expenses of all Fund officers and trustees
of the Funds who are interested persons of Berger Associates. Berger Associates
serves as investment advisor to mutual funds, pension and profit-sharing plans,
and institutional and private investors.
Rodney L. Linafelter, Vice President and Chief Investment Officer of Berger
Associates, is the President and portfolio manager of the Berger IPT - 100 Fund
and the Berger
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<PAGE>
IPT - Growth and Income Fund and as such is responsible for the investments
of both of these Funds, including the day-to-day investment decisions for the
Funds. Mr. Linafelter is also a trustee of the Trust and a director or
trustee of each of the Berger retail funds. As Chief Investment Officer of
Berger Associates, Mr. Linafelter has management responsibilities with
respect to all investment activities of the Trust.
Mr. Linafelter joined Berger Associates in January 1990, where he has
served as a portfolio manager for the Berger 100 Fund and the Berger Growth and
Income Fund, as well as for retirement plans and institutional and private
investors. From April 1986 to December 1989, Mr. Linafelter was employed as a
Financial Consultant (registered representative) with Merrill Lynch, Pierce,
Fenner & Smith, Inc., providing investment advice to institutions and
individuals.
William R. Keithler is the President and portfolio manager of the Berger
IPT - Small Company Growth Fund and is primarily responsible for the investments
of the Fund, including the day-to-day investment decisions for the Fund. Mr.
Keithler also serves as President and portfolio manager for the Berger Small
Company Growth Fund and the Berger New Generation Fund.
Mr. Keithler joined Berger Associates as Vice President-Investment
Management in December 1993. Previously, he was employed by INVESCO Trust
Company, Denver, Colorado, as Senior Vice President (January 1993 to December
1993), Vice President (January 1991 to January 1993) and Portfolio Manager
(January 1988 to January 1991). During his seven years with INVESCO,
Mr. Keithler was portfolio manager of several mutual funds, most recently
INVESCO Dynamics Fund and INVESCO Emerging Growth Fund. From 1982 to 1986,
Mr. Keithler was Vice President and portfolio manager with First Trust St. Paul,
in St. Paul, Minnesota.
William M.B. Berger is a director (Chairman of the Board) of Berger
Associates, a trustee of the Trust and a director or trustee of each of the
Berger retail funds. Although he is no longer involved in making investment
decisions for the Berger Funds, he was founder of Berger Associates and its
President from 1973 until 1994, and he was a principal shareholder and executive
officer of predecessor investment advisory firms which served as investment
advisors to mutual funds and other investors from 1960. From 1950 to 1960, he
was an investment officer in the trust department of The Colorado National Bank
of Denver in charge of common stock investments.
Gerard M. Lavin, President and a director of Berger Associates, is also
President and a trustee of the Trust. In those capacities, Mr. Lavin serves as
the chief executive officer for Berger Associates and the Trust, but does not
participate in making investment decisions for any of the Funds. In addition to
his positions with Berger Associates and the Trust, Mr. Lavin also serves as a
Vice President of DST Systems, Inc. Formerly, Mr. Lavin was President and Chief
Executive Officer of Investors Fiduciary Trust Company (February 1992 to March
1995) and Chief Operating Officer of SUNAMERICA Asset Management Co. (January
1990 to February 1992).
-10-
<PAGE>
Under their Investment Advisory Agreements, the Berger IPT - 100 Fund and
the Berger IPT - Growth and Income Fund each have agreed to compensate Berger
Associates for its investment advisory services to the Fund by the payment of a
fee at the annual rate of .75 of 1% (0.75%) of the average daily net assets of
the Fund. Under the Investment Advisory Agreement for the Berger IPT - Small
Company Growth Fund, Berger Associates is compensated for its investment
advisory services to that Fund by the payment of a fee at the annual rate of .9
of 1% (0.90%) of the average daily net assets of the Fund. The management fees
are higher than those paid by most other mutual funds.
From time to time, Berger Associates may compensate Participating Insurance
Companies or their affiliates whose customers hold shares of the Funds for
providing a variety of administrative services (such as recordkeeping and
accounting) and investor support services (such as responding to inquiries and
preparing mailings to shareholders). This compensation, which may be paid as a
per account fee or as a percentage of the average daily net assets invested in
the Funds by the compensated Participating Insurance Company, depending on the
nature, extent and quality of the services provided, will be paid from Berger
Associates' own resources and not from the assets of the Funds.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of
the outstanding shares of Berger Associates. KCSI is a publicly traded holding
company whose primary subsidiaries are engaged in transportation services and
financial asset management. KCSI also owns approximately 41% of the outstanding
shares of DST Systems, Inc. ("DST"), a publicly traded information and
transaction processing company which also acts as the Funds' sub-transfer agent.
6. EXPENSES OF THE FUNDS
Each of the Funds has appointed Investors Fiduciary Trust Company ("IFTC")
as its recordkeeping and pricing agent to calculate the daily net asset value of
such Fund and to perform certain accounting and recordkeeping functions required
by the Fund. In addition, IFTC also serves as the Funds' custodian, transfer
agent and dividend disbursing agent. IFTC has engaged DST as sub-agent to
provide transfer agency and dividend disbursing services for the Funds. As
noted above, approximately 41% of the outstanding shares of DST are owned by
KCSI.
For custodian, recordkeeping and pricing services, each Fund pays fees to
IFTC based on a percentage of its assets, subject to certain minimums. Each
Fund also pays a monthly fee based primarily on the number of accounts
maintained on behalf of the Fund for transfer agency and dividend disbursing
services, which fees are paid by the Funds to IFTC and in turn passed through to
DST as sub-agent. In addition, the Funds reimburse IFTC and DST for certain
out-of-pocket expenses.
The trustees of each of the Funds have authorized Berger Associates to
place portfolio transactions on an agency basis through DST Securities, Inc., a
wholly-owned broker-dealer subsidiary of DST ("DSTS"). When transactions for a
Fund are effected through DSTS, the portion of the commissions received by it is
credited against, and thereby reduces, certain
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<PAGE>
operating expenses that the Fund would otherwise be obligated to pay. No
portion of the commissions is retained by DSTS.
In addition, under a separate Administrative Services Agreement with each
Fund, Berger Associates performs certain administrative and recordkeeping
services not otherwise performed by IFTC, including the preparation of financial
statements and reports to be filed with regulatory authorities. Each Fund pays
Berger Associates a fee at the annual rate of one-hundredth of one percent
(0.01%) of its average daily net assets for such services. The Funds also incur
other expenses, including accounting, administrative and legal expenses.
Berger Associates has agreed to waive its advisory fee to the extent that
normal operating expenses in any fiscal year, including the management fee but
excluding brokerage commissions, interest, taxes and extraordinary expenses, of
each of the Berger IPT - 100 Fund and the Berger IPT - Growth and Income Fund
exceed 1.00%, and the normal operating expenses in any fiscal year of the Berger
IPT - Small Company Growth Fund exceed 1.15%, of the respective Fund's average
daily net assets.
7. HOW TO PURCHASE AND REDEEM SHARES IN THE FUNDS
Shares of the Funds are sold by the Funds on a continuous basis to separate
accounts of Participating Insurance Companies or to qualified plans. Investors
may not purchase or redeem shares of the Funds directly, but only through
variable insurance contracts offered through the separate accounts of
Participating Insurance Companies or through qualified retirement plans. You
should refer to the applicable Separate Account Prospectus or your plan
documents for information on how to purchase or surrender a contract, make
partial withdrawals of contract values, allocate contract values to one or more
of the Funds, change existing allocation among investment alternatives,
including the Funds, or select specific Funds as investment options for a
qualified plan. No sales charge is imposed upon the purchase or redemption of
shares of the Funds. Sales charges for the variable insurance contracts or
qualified plans are described in the relevant Separate Account Prospectuses or
plan documents.
Fund shares are purchased or redeemed at the net asset value per share next
computed after receipt of a purchase or redemption order by a Fund, its agent or
its delegatee. Payment for redeemed shares generally will be made within three
business days following the date of the request for redemption. However,
payment may be postponed under unusual circumstances, such as when normal
trading is not taking place on the New York Stock Exchange, an emergency as
defined by the Securities and Exchange Commission exists, or as permitted by the
Securities and Exchange Commission.
8. HOW THE NET ASSET VALUE IS DETERMINED
The price of each Fund's shares is based on the net asset value of that
Fund, which is determined at the close of the regular trading session of the New
York Stock Exchange (normally 4:00 p.m., New York time) each day that the
Exchange is open.
The per share net asset value of each Fund is determined by dividing the
total value of its securities and other assets, less liabilities, by the total
number of shares outstanding.
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<PAGE>
In determining net asset value, securities are valued at market value or, if
market quotations are not readily available, at their fair value determined
in good faith pursuant to consistently applied procedures established by the
trustees. Money market instruments maturing within 60 days are valued at
amortized cost, which approximates market value.
Since none of the Funds imposes any front end sales load or redemption fee,
both the purchase price and the redemption price of a Fund share are the same
and will be equal to the next calculated net asset value of a share of that
Fund.
9. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT
Each of the Funds intends to declare dividends representing the Fund's net
investment income annually, normally in December. It is also the present policy
of each Fund to distribute annually all of its net realized capital gains.
All dividends or capital gains distributions paid by a Fund will be
automatically reinvested in shares of that Fund at the net asset value on the
ex-dividend date unless an election is made on behalf of a separate account or
qualified plan to receive distributions in cash.
Each of the Funds intends to qualify to be treated as a separate regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). If they so qualify and meet certain minimum distribution
requirements, the Funds will not be liable for Federal income tax on the amount
of their earnings that are distributed. If a Fund distributes annually less
than 98% of its income and gain, it will be subject to a nondeductible excise
tax equal to 4% of the shortfall. In addition, each Fund intends to qualify
under the diversification requirements of Code Section 817(h) relating to
insurance company separate accounts. By meeting these and other requirements,
the Participating Insurance Companies, rather than the owners of the variable
insurance contracts, should be subject to tax on distributions received with
respect to Fund shares. The tax treatment of distributions made to a
Participating Insurance Company will depend on the Participating Insurance
Company's tax status. Participating Insurance Companies should consult their
own tax advisors concerning whether such distributions are subject to Federal
income tax if retained as part of contract reserves. For further information
concerning Federal income tax consequences for the owners of variable insurance
contracts and qualified plan participants, consult the appropriate Separate
Account Prospectus or plan documents.
Dividends and interest received by the Funds on foreign securities may give
rise to withholding and other taxes imposed by foreign countries. It is
expected that foreign taxes paid by the Funds will be treated as expenses of the
Funds. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
10. ADDITIONAL INFORMATION
The Funds are each separate series or portfolios established under the
Trust, a Delaware business trust organized on October 17, 1995. The Trust is
authorized to issue an
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unlimited number of shares of beneficial interest in series or portfolios.
Currently, the series comprising the Berger IPT - 100 Fund, the Berger IPT -
Growth and Income Fund and the Berger IPT - Small Company Growth Fund are the
only portfolios established under the Trust, although others may be added in
the future. Shares of each Fund are fully paid and nonassessable when
issued. Each share has a par value of $.01. All shares issued by a Fund
participate equally in dividends and other distributions by the Fund, and in
the residual assets of the Fund in the event of its liquidation.
The separate accounts of the Participating Insurance Companies and the
trustees of the qualified plans invested in the Funds, rather than individual
contract owners or plan participants, are the shareholders of the Funds.
However, each Participating Insurance Company or qualified plan will vote such
shares as required by law and interpretations thereof, as amended or changed
from time to time. Under current law, a Participating Insurance Company is
required to request voting instructions from its contract owners and must vote
Fund shares held by each of its separate accounts in proportion to the voting
instructions received. Additional information about voting procedures is
contained in the applicable Separate Account Prospectuses.
Shareholders of each Fund generally vote separately on matters relating to
that Fund, although they will vote together with the holders of all other series
of the Trust in the election of trustees of the Trust and on all matters
relating to the Trust as a whole. Each full share of each Fund has one vote.
Shares of each Fund have noncumulative voting rights, which means that the
holders of more than 50% of the shares voting for the election of trustees can
elect 100% of the trustees if they choose to do so and, in such event, the
holders of the remaining less than 50% of the shares voting for the election of
trustees will not be able to elect any person or persons as trustees. None of
the Funds is required to hold annual shareholder meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by the
trustees.
If shareholders owning at least 10% of the outstanding shares of the Trust
so request, a special shareholders' meeting will be held for the purpose of
considering the removal of a trustee of the Trust. Special meetings will be
held for other purposes if the holders of at least 25% of the outstanding shares
of the Trust so request. Subject to certain limitations, the Funds will
facilitate appropriate communications by shareholders desiring to call a special
meeting for the purpose of considering the removal of a trustee.
Each Fund sells its shares only to certain qualified retirement plans and
to variable annuity and variable life insurance separate accounts of insurance
companies that are unaffiliated with Berger Associates and that may be
unaffiliated with one another. The Funds currently do not foresee any
disadvantages to policyowners arising out of the fact that each Fund offers its
shares to such entities. Nevertheless, the trustees intend to monitor events in
order to identify any material irreconcilable conflicts that may arise and to
determine what action, if any, should be taken in response to such conflicts.
If a conflict occurs, the trustees may require one or more insurance company
separate accounts or plans to withdraw its investments in one or more of the
Funds and to substitute shares of another Fund. As a result, a Fund may be
forced to sell securities at disadvantageous prices. In addition, the trustees
may refuse to sell shares of any Fund to any separate account or qualified plan
or may suspend or terminate the offering of
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<PAGE>
shares of any Fund if such action is required by law or regulatory authority
or is deemed by the Fund to be in the best interests of the shareholders of
the Fund.
The Funds' transfer agent and dividend disbursing agent is Investors
Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas City, MO 64105.
IFTC has engaged DST Systems, Inc. ("DST"), P.O. Box 419958, Kansas City, MO
64141, as sub-agent to provide transfer agency and dividend disbursing services
for the Funds.
Owners of variable insurance contracts and qualified plan administrators
will receive annual and semiannual reports including the financial statements of
the Funds in which contract values or qualified plan assets are invested. Each
report will show the investments owned by each Fund and the market values
thereof, as well as other information about the Funds and their operations.
11. PERFORMANCE
From time to time in advertisements, the Funds may discuss their
performance ratings as published by recognized mutual fund statistical services,
such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., or
Morningstar, Inc., or by publications of general interest such as THE WALL
STREET JOURNAL, INVESTOR'S BUSINESS DAILY, BARRON'S, FINANCIAL WORLD or
KIPLINGER'S PERSONAL FINANCE MAGAZINE. In addition, the Funds may compare their
performance to that of recognized broad-based securities market indices,
including the Standard & Poor's 500 Stock Index, the Dow Jones Industrial
Average, the Russell 2000 Stock Index, the Standard & Poor's 600 Small Cap Index
or the Nasdaq Composite Index, or more narrowly-based indices which reflect the
market sectors in which that Fund invests.
The total return of each Fund is calculated for any specified period of
time by assuming the purchase of shares of the Fund at the net asset value at
the beginning of the period. Each dividend or other distribution paid by the
Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.
Each Fund's total return reflects the Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same total return if the
Fund's performance had been constant over the entire period. Total return
figures are based on the overall change in value of a hypothetical investment in
each Fund. Because average annual total returns for more than one year tend to
smooth out variations in a Fund's return, investors should recognize that such
figures are not the same as actual year-by-year results.
A Fund's total return includes the effect of deducting that Fund's
expenses, but does not include any charges and expenses attributable to a
particular variable insurance contract or qualified plan. Because shares of the
Funds can be purchased only through a variable insurance contract or qualified
plan, the Funds' total return data should be reviewed along with the description
of charges and expenses contained in the applicable Separate Account Prospectus
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or plan documents. Total return for a Fund must always be accompanied by, and
reviewed with, comparable total return data for an associated separate account,
or data that would permit evaluation of the magnitude of charges and expenses
attributable to the contract or plan that are not reflected in the Fund's total
return.
Any performance figures for the Funds are based upon historical results and
do not assure future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
Although the Trust is newly-organized and the Funds do not yet have their
own performance records, each Fund has the same investment objective and follows
substantially the same investment strategies as a corresponding Berger retail
fund. The Berger retail funds have the same investment advisor as the
corresponding Funds offered under this Prospectus. As described under
"Management and Investment Advice," the same persons who serve as portfolio
managers of the Funds also serve as portfolio managers of the corresponding
Berger retail funds.
Set forth in the table below is total return information for each of the
Berger retail funds, calculated as described above. Investors should not
consider this performance data as an indication of the future performance of the
Funds offered under this Prospectus. The performance figures below reflect the
deduction of the historical fees and expenses paid by the Berger retail funds,
and not those to be paid by these Funds. The figures also do not reflect the
deduction of charges or expenses attributable to variable annuity or variable
life insurance contracts. As discussed above, investors should refer to the
applicable Separate Account Prospectus for information pertaining to such
contract charges and expenses. Moreover, although it is anticipated that each
Fund and its corresponding retail fund will hold similar securities selections,
their investment results are expected to differ. In particular, differences in
asset size and in cash flow resulting from purchases and redemption of Fund
shares may result in different security selections, differences in the relative
weightings of securities or differences in the prices paid for particular
portfolio holdings.
The following table shows, where applicable, the average annualized total
returns for the Berger retail funds for the one-, five- and ten-year periods
ended September 30, 1995, and, for the period from inception (or immediately
prior to Berger Associates assuming the duties as the investment advisor)
through September 30, 1995:
<TABLE>
<CAPTION>
SINCE
BERGER RETAIL FUND 1-YEAR 5-YEAR 10-YEAR INCEPTION*
<S> <C> <C> <C> <C>
Berger 100 Fund 18.4% 25.8% 20.4%** 15.3%**
Berger Growth and Income Fund 14.1% 20.5% 13.3%** 13.7%**
Berger Small Company
Growth Fund 31.9% NA NA 23.4%
</TABLE>
* Since Inception performance for the Berger 100 Fund and the Berger Growth and
Income Fund is shown for the period from September 30, 1974, immediately prior
to Berger Associates assuming the duties as the investment advisor for those
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Funds, through September 30, 1995. Since Inception performance for the Berger
Small Company Growth Fund is shown for the period from December 30, 1993 (date
operations commenced) through September 30, 1995.
** Since the 12b-1 fees applicable to the Berger 100 Fund and the Berger Growth
and Income Fund did not take effect until June 19, 1990, the performance figures
do not reflect the deduction of the 12b-1 fees for the full length of the ten-
year and longer periods shown.
12. SHAREHOLDER INQUIRIES
Shareholders with questions should write to the Berger Funds, c/o Berger
Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call 1-303-329-0200 or
1-800-706-0539, or contact a Participating Insurance Company.
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STATEMENT OF ADDITIONAL INFORMATION
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust (the "Trust") is an open-end management
investment company. The Trust currently consists of three diversified series or
portfolios (individually referred to as a "Fund"), known as the Berger IPT - 100
Fund, the Berger IPT - Growth and Income Fund and the Berger IPT - Small Company
Growth Fund. Each Fund has its own investment objective and policies. Shares
of the Funds are not offered directly to the public, but are sold only in
connection with investment in and payments under variable annuity contracts and
variable life insurance contracts (collectively "variable insurance contracts")
issued by life insurance companies ("Participating Insurance Companies"), as
well as to certain qualified retirement plans.
BERGER IPT - 100 FUND
The Berger IPT - 100 Fund's investment objective is long-term capital
appreciation. The Berger IPT - 100 Fund seeks to achieve this objective by
investing primarily in common stocks of established companies which the Fund
believes offer favorable growth prospects. Current income is not an investment
objective of the Berger IPT - 100 Fund, and any income produced will be a by-
product of the efforts to achieve the Fund's objective.
BERGER IPT - GROWTH AND INCOME FUND
The primary investment objective of the Berger IPT - Growth and Income Fund
is capital appreciation. A secondary objective is to provide a moderate level
of current income. The Fund seeks to achieve these objectives by investing
primarily in common stocks and other securities, such as convertible securities
or preferred stocks, which the Fund believes offer favorable growth prospects
and are expected to also provide current income.
BERGER IPT - SMALL COMPANY GROWTH FUND
The investment objective of the Berger IPT - Small Company Growth Fund is
capital appreciation. The Fund seeks to achieve this objective by investing
primarily in equity securities (including common and preferred stocks,
convertible debt securities and other securities having equity features) of
small growth companies with market capitalization of less than $1 billion at the
time of initial purchase.
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus describing the Funds, dated May 1, 1996,
as supplemented on October 30, 1996, which may be obtained by writing the Funds
at P.O. Box 5005, Denver, Colorado 80217, calling 1-800-706-0539, or by
contacting a Participating Insurance Company.
October 30, 1996
<PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
Cross-References to
Related Disclosures
Table of Contents in Prospectus
----------------- -------------------
Introduction Section 2
1. Portfolio Policies of the Funds Section 2, 3, 4
2. Investment Restrictions Section 3
3. Management of the Funds Section 5
4. Investment Advisor Section 5
5. Expenses of the Funds Section 6
6. Brokerage Policy Section 6
7. How to Purchase and Redeem Shares in Section 7
the Funds
8. Suspension of Redemption Rights Section 7
9. How the Net Asset Value is Section 8
Determined
10. Income Dividends, Capital Gains Section 9
Distributions and Tax Treatment
11. Performance Information Section 11
12. Additional Information Section 10
Financial Statements
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INTRODUCTION
The Berger IPT - 100 Fund, the Berger IPT - Growth and Income Fund and
the Berger IPT - Small Company Growth Fund are diversified portfolios or
series of the Berger Institutional Products Trust, a management investment
company. The Berger IPT - 100 Fund's investment objective is long-term
capital appreciation. The primary investment objective of the Berger IPT
- - Growth and Income Fund is capital appreciation, and its secondary objective
is to provide a moderate level of current income. The Berger IPT - Small
Company Growth Fund's investment objective is capital appreciation.
1. PORTFOLIO POLICIES OF THE FUNDS
The Prospectus discusses the investment objective of each of the Funds
and the policies to be employed to achieve that objective. This section
contains supplemental information concerning the types of securities and
other instruments in which the Funds may invest, the investment policies and
portfolio strategies that the Funds may utilize and certain risks attendant
to those investments, policies and strategies.
ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds is authorized to
invest in securities which are illiquid because they are subject to
restrictions on their resale ("restricted securities") or because, based upon
their nature or the market for such securities, they are not readily
marketable. However, none of the Funds will purchase any such security, the
purchase of which would cause the Fund to invest more than 15% of its net
assets, measured at the time of purchase, in illiquid securities. Repurchase
agreements maturing in more than seven days will be considered as illiquid
for purposes of this restriction. Pursuant to authority delegated from the
trustees, the Funds' advisor will determine whether securities issued in
offerings made pursuant to SEC Rule 144A under the Securities Act of 1933
should be treated as illiquid investments considering, among other things,
the following factors: (1) the frequency of trades and quotes for the
security; (2) the number of dealers wanting to purchase or sell the security
and the number of other potential purchasers; (3) dealer undertakings to make
a market in the security; and (4) the nature of the security and the
marketplace trades (e.g., the time needed to dispose of the security, the
method of soliciting offers, and the mechanics of the transfer). Investments
in illiquid securities involve certain risks to the extent that the Fund may
be unable to dispose of such a security at the time desired or at a
reasonable price or, in some cases, may be unable to dispose of it at all.
In addition, in order to resell a restricted security, a Fund might have to
incur the potentially substantial expense and delay associated with effecting
registration.
REPURCHASE AGREEMENTS. As discussed in the Prospectus, each Fund may
invest in repurchase agreements with various financial organizations,
including commercial banks, registered
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broker-dealers and registered government securities dealers. A repurchase
agreement is an agreement under which a Fund acquires a debt security
(generally a security issued or guaranteed by the U.S. government or an
agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an
agreed upon price and date (normally, the next business day). A repurchase
agreement may be considered a loan collateralized by securities. The resale
price reflects an agreed upon interest rate effective for the period the
instrument is held by a Fund and is unrelated to the interest rate on the
underlying instrument. In these transactions, the securities acquired by a
Fund (including accrued interest earned thereon) must have a total value
equal to or in excess of the value of the repurchase agreement and are held
by the Fund's custodian bank until repurchased. In addition, the trustees
will establish guidelines and standards for review by the investment advisor
of the creditworthiness of any bank, broker or dealer party to a repurchase
agreement with a Fund. None of the Funds will enter into a repurchase
agreement maturing in more than seven days if as a result more than 15% of
the Fund's total assets would be invested in such repurchase agreements and
other illiquid securities.
The use of repurchase agreements involves certain risks. For example, if
the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, a
Fund may incur a loss upon disposition of the security. If the other party
to the agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws, a court may determine
that the underlying security is collateral for a loan by a Fund not within
the control of the Fund and therefore the realization by the Fund on such
collateral may automatically be stayed. Finally, it is possible that a Fund
may not be able to substantiate its interest in the underlying security and
may be deemed an unsecured creditor of the other party to the agreement.
While management of the Funds acknowledges these risks, it is expected that
they can be controlled through careful monitoring procedures.
WHEN-ISSUED AND DELAYED DELIVERED SECURITIES. Each Fund may purchase
and sell securities on a when-issued or delayed delivery basis. However, none
of the Funds currently intends to purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its
total assets taken at market value at the time of purchase would be invested
in such securities. When-issued or delayed delivery transactions arise when
securities (normally, equity obligations of issuers eligible for investment
by a Fund) are purchased or sold by the Fund with payment and delivery taking
place in the future in order to secure what is considered to be an
advantageous price or yield. However, the yield on a comparable security
available when delivery takes place may vary from the yield on the security
at the time that the when-issued or delayed delivery transaction was entered
into. Any failure to consummate a when-issued or delayed delivery
transaction may result in a Fund missing the opportunity of obtaining a price
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or yield considered to be advantageous. When-issued and delayed delivery
transactions may generally be expected to settle within one month from the
date the transactions are entered into, but in no event later than 90 days.
However, no payment or delivery is made by a Fund until it receives delivery
or payment from the other party to the transaction.
When a Fund purchases securities on a when-issued basis, it will
maintain in a segregated account with its custodian cash, U.S. government
securities or other high-grade debt obligations readily convertible into cash
having an aggregate value equal to the amount of such purchase commitments,
until payment is made. If necessary, additional assets will be placed in the
account daily so that the value of the account will equal or exceed the
amount of the Fund's purchase commitments.
LENDING OF SECURITIES. As discussed in the Prospectus, each Fund may
lend its securities to qualified institutional investors who need to borrow
securities in order to complete certain transactions, such as covering short
sales, avoiding failures to deliver securities, or completing arbitrage
operations. By lending its securities, a Fund will be attempting to generate
income through the receipt of interest on the loan which, in turn, can be
invested in additional securities to pursue the Fund's investment objective.
Any gain or loss in the market price of the securities loaned that might
occur during the term of the loan would be for the account of a Fund. A Fund
may lend its portfolio securities to qualified brokers, dealers, banks or
other financial institutions, so long as the terms, the structure and the
aggregate amount of such loans are not inconsistent with the Investment
Company Act of 1940, or the Rules and Regulations or interpretations of the
Securities and Exchange Commission (the "Commission") thereunder, which
currently require that (a) the borrower pledge and maintain with the Fund
collateral consisting of cash, an irrevocable letter of credit or securities
issued or guaranteed by the United States government having a value at all
times not less than 100% of the value of the securities loaned, (b) the
borrower add to such collateral whenever the price of the securities loaned
rises (i.e., the borrower "marks to the market" on a daily basis), (c) the
loan be made subject to termination by the Fund at any time and (d) the Fund
receive reasonable interest on the loan, which interest may include the
Fund's investing cash collateral in interest bearing short-term investments,
and (e) the Fund receive all dividends and distributions on the loaned
securities and any increase in the market value of the loaned securities.
A Fund bears a risk of loss in the event that the other party to a
securities lending transaction defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the
collateral, including the risk of a possible decline in the value of the
collateral securities during the period in which the Fund seeks to assert
these rights, the risk of incurring expenses associated with asserting these
rights and
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the risk of losing all or a part of the income from the transaction. None of
the Funds will lend its portfolio securities if, as a result, the aggregate
value of such loans would exceed 33-1/3% of the value of the Fund's total
assets. Loan arrangements made by a Fund will comply with all other
applicable regulatory requirements, including the rules of the New York Stock
Exchange, which rules presently require the borrower, after notice, to
redeliver the securities within the normal settlement time of three business
days. All relevant facts and circumstances, including creditworthiness of
the broker, dealer or institution, will be considered in making decisions
with respect to the lending of securities, subject to review by the Fund's
trustees.
SHORT SALES. Each Fund currently only intends to engage in short sales
if, at the time of the short sale, the Fund owns or has the right to acquire
an equivalent kind and amount of the security being sold short at no
additional cost (i.e., short sales "against the box").
In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. To make delivery to the purchaser, the executing broker borrows the
securities being sold short on behalf of the seller. While the short
position is maintained, the seller collateralizes its obligation to deliver
the securities sold short in an amount equal to the proceeds of the short
sale plus an additional margin amount established by the Board of Governors
of the Federal Reserve. If a Fund engages in a short sale, the collateral
account will be maintained by the Fund's custodian. While the short sale is
open, the Fund will maintain in a segregated custodial account an amount of
securities convertible into or exchangeable for such equivalent securities at
no additional cost. These securities would constitute the Fund's long
position.
A Fund may make a short sale, as described above, when it wants to sell
the security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for federal income tax purposes and for purposes
of satisfying certain tests applicable to regulated investment companies
under the Internal Revenue Code. In such a case, any future losses in the
Fund's long position should be reduced by a gain in the short position. The
extent to which such gains or losses are reduced would depend upon the amount
of the security sold short relative to the amount the Fund owns. There will
be certain additional transaction costs associated with short sales, but the
Fund will endeavor to offset these costs with income from the investment of
the cash proceeds of short sales.
FINANCIAL FUTURES, FORWARDS AND OPTIONS. As described in the
Prospectus, each Fund is authorized to make limited investment in certain
types of futures, forwards and options, but only for the purpose of hedging,
that is, protecting against market risk due to market movements that may
adversely affect the value of a Fund's
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securities or the price of securities that a Fund is considering purchasing.
The utilization of futures, forwards and options is also subject to policies
and procedures which may be established by the trustees from time to time. A
hedging transaction may partially protect a Fund from a decline in the value
of a particular security or its portfolio generally, although the cost of the
transaction will reduce the potential return on the security or the
portfolio. Following is additional information concerning the futures,
forwards and options in which the Funds may invest, provided that no more
than 5% of the Fund's net assets at the time of purchase may be invested in
initial margins for financial futures transactions and premiums for options.
In addition, a Fund may only write call options that are covered and only up
to 25% of the Fund's total assets. The following information should be read
in conjunction with the information concerning the Funds' investment in
futures, forwards and options and the risks of such investments contained in
the Prospectus.
FUTURES CONTRACTS. Financial futures contracts are contracts on
financial instruments (such as securities and foreign currencies) and
securities indices that obligate the long or short holder, if the contract is
held to its specified delivery date, to take or make delivery of a specified
quantity of the underlying financial instrument, or the cash value of a
securities index. Although futures contracts by their terms call for the
delivery or acquisition of the underlying instruments or a cash payment based
on the value of the underlying instruments, in most cases the contractual
obligation is offset before the delivery date by buying (in the case of an
obligation to sell) or selling (in the case of an obligation to buy) an
identical futures contract. Such a transaction cancels the original
obligation to make or take delivery of the instruments.
Each Fund may enter into contracts for the purchase or sale for future
delivery of financial instruments, such as securities and foreign currencies,
or contracts based on financial indices including indices of U.S. Government
securities, foreign government securities or equity securities. U.S. futures
contracts are traded on exchanges which have been designated "contract
markets" by the Commodity Futures Trading Commission ("CFTC") and must be
executed through a futures commission merchant (an "FCM"), or brokerage firm,
which is a member of the relevant contract market. Through their clearing
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange.
Both the buyer and seller are required to deposit "initial margin" for
the benefit of the FCM when a futures contract is entered into. Initial
margin deposits are equal to a percentage of the contract's value, as set by
the exchange on which the contract is traded, and may be maintained in cash
or certain high-grade liquid assets. If the value of either party's position
declines, that party will be required to make additional "variation margin"
payments to the other party to settle the change in value
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on a daily basis. Initial and variation margin payments are similar to good
faith deposits or performance bonds or party-to-party payments resulting from
daily changes in the value of the contract, unlike margin extended by a
securities broker, and would be returned or credited to the Funds upon
termination of the futures contract, assuming all contractual obligations
have been satisfied. Unlike margin extended by a securities broker, initial
and variation margin payments do not constitute purchasing securities on
margin for purposes of each Fund's investment limitations. The Funds will
incur brokerage fees when they buy or sell futures contracts.
In the event of the bankruptcy of the FCM that holds margin on behalf of
a Fund, the Fund may be entitled to return of margin owed to the Fund only in
proportion to the amount received by the FCM's other customers. Each Fund
will attempt to minimize the risk by careful monitoring of the
creditworthiness of the FCMs with which the Fund does business and by
depositing margin payments in a segregated account with the Fund's custodian
for the benefit of the FCM when practical or otherwise required by law.
Each Fund intends to comply with guidelines of eligibility for exclusion
from the definition of the term "commodity pool operator" with the CFTC and
the National Futures Association, which regulate trading in the futures
markets. Accordingly, the Fund will not enter into any futures contract or
option on a futures contract if, as a result, the aggregate initial margin
and premiums required to establish such positions would exceed 5% of the
Fund's net assets.
Although each Fund would hold cash and liquid assets in a segregated
account with a value sufficient to cover the Fund's open futures obligations,
the segregated assets would be available to the Fund immediately upon closing
out the futures position, while settlement of securities transactions could
take several days. However, because the Fund's cash that may otherwise be
invested would be held uninvested or invested in high-grade liquid assets so
long as the futures position remains open, the Fund's return could be
diminished due to the opportunity losses of foregoing other potential
investments.
The acquisition or sale of a futures contract may occur, for example,
when a Fund is considering purchasing or holds equity securities and seeks to
protect itself from fluctuations in prices without buying or selling those
securities. For example, if prices were expected to decrease, the Fund might
sell equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the portfolio by a corresponding
increase in the value of the futures contract position held by the Fund and
thereby preventing the Fund's net asset value from declining as much as it
otherwise would have. A Fund also could protect against potential price
declines by selling portfolio securities and investing in money market
instruments. However, the use of futures contracts as an investment
technique allows the
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Funds to maintain a defensive position without having to sell portfolio
securities.
Similarly, when prices of equity securities are expected to increase,
futures contracts may be bought to attempt to hedge against the possibility
of having to buy equity securities at higher prices. This technique is
sometimes known as an anticipatory hedge. Since the fluctuations in the
value of futures contracts should be similar to those of equity securities, a
Fund could take advantage of the potential rise in the value of equity
securities without buying them until the market has stabilized. At that
time, the futures contracts could be liquidated and the Fund could buy equity
securities on the cash market.
To the extent a Fund enters into futures contracts for this purpose, the
assets in the segregated asset account maintained to cover the Fund's
obligations with respect to the futures contracts will consist of high-grade
liquid assets from its portfolio in an amount equal to the difference between
the amount of the Fund's obligation under the contract and the aggregate
value of the initial and variation margin payments made by the Fund with
respect to the futures contracts.
The ordinary spreads between prices in the cash and futures markets, due
to differences in the nature of those markets, are subject to distortions.
First, all participants in the futures market are subject to initial margin
and variation margin requirements. Rather than meeting additional variation
margin requirements, investors may close out futures contracts through
offsetting transactions which could distort the normal price relationship
between the cash and futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting transactions rather
than making or taking delivery. To the extent participants decide to make or
take delivery, liquidity in the futures market could be reduced and prices in
the futures market distorted. Third, from the point of view of speculators,
the margin deposit requirements in the futures market are less than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may cause temporary price distortions. Due
to the possibility of the foregoing distortions, a correct forecast of
general price trends by the Funds still may not result in a successful use of
futures.
Futures contracts entail risks. Although each Fund believes that use of
such contracts will benefit the Fund, if the Fund's investment judgment is
incorrect, the Fund's overall performance could be worse than if the Fund had
not entered into futures contracts. For example, if the Fund has hedged
against the effects of a possible decrease in prices of securities held in
the Fund's portfolio and prices increase instead, the Fund will lose part or
all of the benefit of the increased value of these securities because of
offsetting losses in the Fund's futures positions. In addition, if the Fund
has insufficient cash, it may
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have to sell securities from its portfolio to meet daily variation margin
requirements. Those sales may be, but will not necessarily be, at increased
prices which reflect the rising market and may occur at a time when the sales
are disadvantageous to the Fund. Although the buyer of an option cannot lose
more than the amount of the premium plus related transaction costs, a buyer
or seller of futures contracts could lose amounts substantially in excess of
any initial margin deposits made, due to the potential for adverse price
movements resulting in additional variation margin being required by such
positions. However, each Fund intends to monitor its investments closely and
will attempt to close its positions when the risk of loss to the Fund becomes
unacceptably high.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of
futures contracts, it is possible that the standardized futures contracts
available to a Fund will not match exactly the Fund's current or potential
investments. A Fund may buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it
typically invests -- for example, by hedging investments in portfolio
securities with a futures contract based on a broad index of securities --
which involves a risk that the futures position will not correlate precisely
with the performance of the Fund's investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with a
Fund's investments. Futures prices are affected by such factors as current
and anticipated short-term interest rates, changes in volatility of the
underlying instruments and the time remaining until expiration of the
contract. Those factors may affect securities prices differently from futures
prices. Imperfect correlations between a Fund's investments and its futures
positions may also result from differing levels of demand in the futures
markets and the securities markets, from structural differences in how
futures and securities are traded, and from imposition of daily price
fluctuation limits for futures contracts. A Fund may buy or sell futures
contracts with a greater or lesser value than the securities it wishes to
hedge or is considering purchasing in order to attempt to compensate for
differences in historical volatility between the futures contract and the
securities, although this may not be successful in all cases. If price
changes in a Fund's futures positions are poorly correlated with its other
investments, its futures positions may fail to produce desired gains or
result in losses that are not offset by the gains in the Fund's other
investments.
Because futures contracts are generally settled within a day from the
date they are closed out, compared with a longer settlement period for most
types of securities, the futures markets can provide superior liquidity to
the securities markets. Nevertheless, there is no assurance a liquid
secondary market will exist for any particular futures contract at any
particular time.
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In addition, futures exchanges may establish daily price fluctuation limits
for futures contracts and may halt trading if a contract's price moves upward
or downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached, it may be impossible for a Fund
to enter into new positions or close out existing positions. If the
secondary market for a futures contract is not liquid because of price
fluctuation limits or otherwise, a Fund may not be able to promptly liquidate
unfavorable futures positions and potentially could be required to continue
to hold a futures position until the delivery date, regardless of changes in
its value. As a result, a Fund's access to other assets held to cover its
futures positions also could be impaired.
OPTIONS ON FUTURES CONTRACTS. Each Fund may buy and write options on
futures contracts for hedging purposes. An option on a futures contract
gives the Funds the right (but not the obligation) to buy or sell a futures
contract at a specified price on or before a specified date. The purchase of
a call option on a futures contract is similar in some respects to the
purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures contract
upon which it is based or the price of the underlying instrument, ownership
of the option may or may not be less risky than ownership of the futures
contract or the underlying instrument. As with the purchase of futures
contracts, a Fund may buy a call option on a futures contract to hedge
against a market advance, and a Fund might buy a put option on a futures
contract to hedge against a market decline.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the call option is below the exercise
price, a Fund will retain the full amount of the option premium which
provides a partial hedge against any decline that may have occurred in the
Fund's portfolio holdings. If a call option a Fund has written is exercised,
the Fund will incur a loss which will be reduced by the amount of the premium
it received. Depending on the degree of correlation between change in the
value of its portfolio securities and changes in the value of the futures
positions, a Fund's losses from existing options on futures may to some
extent be reduced or increased by changes in the value of portfolio
securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities.
For example, a Fund may buy a put option on a futures contract to hedge the
Fund's portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus
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related transaction costs. In addition to the correlation risks discussed
above, the purchase of an option also entails the risk that changes in the
value of the underlying futures contract will not be fully reflected in the
value of the options bought.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward contract is an
agreement between two parties in which one party is obligated to deliver a
stated amount of a stated asset at a specified time in the future and the
other party is obligated to pay a specified invoice amount for the assets at
the time of delivery. The Funds currently intend that the only forward
contracts or commitments that they might enter into for hedging purposes are
forward foreign currency exchange contracts, although the Funds may enter
into additional forms of forward contracts or commitments in the future if
they become available and advisable in light of the Funds' objectives and
investment policies. Forward contracts generally are negotiated in an
interbank market conducted directly between traders (usually large commercial
banks) and their customers. Unlike futures contracts, which are standardized
contracts, forward contracts can be specifically drawn to meet the needs of
the parties that enter into them. The parties to a forward contract may
agree to offset or terminate the contract before its maturity, or may hold
the contract to maturity and complete the contemplated exchange.
The following discussion summarizes the Funds' principal uses of forward
foreign currency exchange contracts ("forward currency contracts"). A Fund
may enter into forward currency contracts with stated contract values of up
to the value of the Fund's assets. A forward currency contract is an
obligation to buy or sell an amount of a specified currency for an agreed
price (which may be in U.S. dollars or a foreign currency). A Fund will
exchange foreign currencies for U.S. dollars and for other foreign currencies
in the normal course of business and may buy and sell currencies through
forward currency contracts in order to fix a price for securities it has
agreed to buy or sell ("transaction hedge"). A Fund also may hedge some or
all of its investments denominated in foreign currency against a decline in
the value of that currency relative to the U.S. dollar by entering into
forward currency contracts to sell an amount of that currency approximating
the value of some or all of its portfolio securities denominated in that
currency ("position hedge") or by participating in futures contracts (or
options on such futures) with respect to the currency. A Fund also may enter
into a forward currency contract with respect to a currency where the Fund is
considering the purchase or sale of investments denominated in that currency
but has not yet selected the specific investments ("anticipatory hedge"). In
any of these circumstances a Fund may, alternatively, enter into a forward
currency contract to purchase or sell one foreign currency for a second
currency that is expected to perform more favorably relative to the U.S.
dollar if the portfolio manager believes there is a reasonable degree of
correlation between movements in the two currencies ("cross-hedge").
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These types of hedging minimize the effect of currency appreciation as
well as depreciation, but do not eliminate fluctuations in the underlying
U.S. dollar equivalent value of the proceeds of or rates of return on a
Fund's foreign currency denominated portfolio securities. The matching of
the increase in value of a forward contract and the decline in the U.S.
dollar equivalent value of the foreign currency denominated asset that is the
subject of the hedge generally will not be precise. Shifting a Fund's
currency exposure from one foreign currency to another limits that Fund's
opportunity to profit from increases in the value of the original currency
and involves a risk of increased losses to such Fund if its portfolio
manager's projection of future exchange rates is inaccurate. Cross-hedges
may result in losses if the currency used to hedge does not perform similarly
to the currency in which hedged securities are denominated. Unforeseen
changes in currency prices may result in poorer overall performance for a
Fund than if it had not entered into such contracts. Also, with regard to a
Fund's use of cross-hedges, there can be no assurance that historical
correlations between the movement of certain foreign currencies relative to
the U.S. dollar will continue. Thus, at any time poor correlation may exist
between movements in the exchange rates of the foreign currencies underlying
a Fund's cross-hedges and the movements in the exchange rates of the foreign
currencies in which the Fund's assets that are the subject of such
cross-hedges are denominated.
The Funds will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency
underlying the forward contract or the currency being hedged. To the extent
that a Fund is not able to cover its forward currency positions with
underlying portfolio securities, the Funds' custodian will segregate cash or
high-grade liquid assets having a value equal to the aggregate amount of such
Fund's commitments under forward contracts entered into. If the value of the
securities used to cover a position or the value of segregated assets
declines, the Fund must find alternative cover or segregate additional cash
or high-grade liquid assets on a daily basis so that the value of the covered
and segregated assets will be equal to the amount of a Fund's commitments
with respect to such contracts.
While forward contracts are not currently regulated by the CFTC, the
CFTC may in the future assert authority to regulate forward contracts. In
such event, the Funds' ability to utilize forward contracts may be
restricted. A Fund may not always be able to enter into forward contracts at
attractive prices and may be limited in its ability to use these contracts to
hedge Fund assets. In addition, when a Fund enters into a privately
negotiated forward contract with a counterparty, the Fund assumes
counterparty credit risk, that is, the risk that the counterparty will fail
to perform its obligations, in which case the Fund could be worse off than if
the contract had not been entered into. Unlike many exchange-traded futures
contracts and options on futures, there are no daily price fluctuation limits
with respect to forward contracts and
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other negotiated or over-the-counter instruments, and with respect to those
contracts, adverse market movements could therefore continue to an unlimited
extent over a period of time. However, each Fund intends to monitor its
investments closely and will attempt to renegotiate or close its positions
when the risk of loss to the Fund becomes unacceptably high.
OPTIONS ON SECURITIES AND SECURITIES INDICES. A Fund may buy or sell
put or call options and write covered call options on securities that are
traded on United States or foreign securities exchanges or over-the-counter.
Buying an option involves the risk that, during the option period, the price
of the underlying security will not increase (in the case of a call) to above
the exercise price, or will not decrease (in the case of a put) to below the
exercise price, in which case the option will expire without being exercised
and the holder would lose the amount of the premium. Writing a call option
involves the risk of an increase in the market value of the underlying
security, in which case the option could be exercised and the underlying
security would then be sold by a Fund to the option holder at a lower price
than its current market value and the Fund's potential for capital
appreciation on the security would be limited to the exercise price.
Moreover, when a Fund writes a call option on a securities index, the Fund
bears the risk of loss resulting from imperfect correlation between movements
in the price of the index and the price of the securities set aside to cover
such position. Although they entitle the holder to buy equity securities,
call options to purchase equity securities do not entitle the holder to
dividends or voting rights with respect to the underlying securities, nor do
they represent any rights in the assets of the issuer of those securities.
A call option written by a Fund is "covered" if the Fund owns the
underlying security covered by the call or has an absolute and immediate
right to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A
call option is also deemed to be covered if a Fund holds a call on the same
security and in the same principal amount as the call written and the
exercise price of the call held (i) is equal to or less than the exercise
price of the call written or (ii) is greater than the exercise price of the
call written if the difference is maintained by the Fund in cash and
high-grade liquid assets in a segregated account with its custodian.
The writer of a call option may have no control when the underlying
securities must be sold. Whether or not an option expires unexercised, the
writer retains the amount of the premium. This amount, of course, may, in
the case of a covered call option, be offset by a decline in the market value
of the underlying security during the option period.
-12-
<PAGE>
The writer of an exchange-traded call option that wishes to terminate
its obligation may effect a "closing purchase transaction." This is
accomplished by buying an option of the same series as the option previously
written. The effect of the purchase is that the writer's position will be
cancelled by the clearing corporation. If a Fund desires to sell a
particular security from the Fund's portfolio on which the Fund has written a
call option, the Fund will effect a closing transaction prior to or
concurrent with the sale of the security. However, a writer may not effect a
closing purchase transaction after being notified of the exercise of an
option. An investor who is the holder of an exchange-traded option may
liquidate its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option previously
bought. There is no guarantee that either a closing purchase or a closing
sale transaction can be effected.
A Fund will realize a profit from a closing transaction if the price of
the purchase transaction is less than the premium received from writing the
option or the price received from a sale transaction is more than the premium
paid to buy the option; the Fund will realize a loss from a closing
transaction if the price of the purchase transaction is more than the premium
received from writing the option or the price received from a sale
transaction is less than the premium paid to buy the option. Because
increases in the market price of a call option will generally reflect
increases in the market price of the underlying security, any loss resulting
from the repurchase of a call option is likely to be offset in whole or in
part by appreciation of the underlying security owned by the Fund.
An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not
exist, it might not be possible to effect closing transactions in particular
options with the result that a Fund would have to exercise the options in
order to realize any profit. If a Fund is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or the Fund delivers the
underlying security upon exercise. Reasons for the absence of a liquid
secondary market may include the following: (i) there may be insufficient
trading interest in certain options, (ii) restrictions may be imposed by a
national securities exchange on which the option is traded ("Exchange") on
opening or closing transactions or both, (iii) trading halts, suspensions or
other restrictions may be imposed with respect to particular classes or
series of options or underlying securities, (iv) unusual or unforeseen
circumstances may interrupt normal operations on an Exchange, (v) the
facilities of an Exchange or of the Options Clearing Corporation ("OCC") may
not at all times be adequate to handle current trading volume, or (vi) one or
more Exchanges could, for economic or other reasons, decide or be compelled
at some future date to discontinue the trading of options (or a particular
class or series of options), in which event the secondary market on
-13-
<PAGE>
that Exchange (or in that class or series of options) would cease to exist,
although outstanding options on that Exchange that had been issued by the OCC
as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.
In addition, when a Fund enters into an over-the-counter option contract
with a counterparty, the Fund assumes counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in which
case the Fund could be worse off than if the contract had not been entered
into.
An option on a securities index is similar to an option on a security
except that, rather than the right to take or make delivery of a security at
a specified price, an option on a securities index gives the holder the right
to receive, on exercise of the option, an amount of cash if the closing level
of the securities index on which the option is based is greater than, in the
case of a call, or less than, in the case of a put, the exercise price of the
option.
A Fund may buy call options on securities or securities indices to hedge
against an increase in the price of a security or securities that the Fund
may buy in the future. The premium paid for the call option plus any
transaction costs will reduce the benefit, if any, realized by a Fund upon
exercise of the option, and, unless the price of the underlying security or
index rises sufficiently, the option may expire and become worthless to the
Fund. A Fund may buy put options to hedge against a decline in the value of
a security or its portfolio. The premium paid for the put option plus any
transaction costs will reduce the benefit, if any, realized by a Fund upon
exercise of the option, and, unless the price of the underlying security or
index declines sufficiently, the option may expire and become worthless to
the Fund.
An example of a hedging transaction using an index option would be if a
Fund were to purchase a put on a stock index, in order to protect the Fund
against a decline in the value of all securities held by it to the extent
that the stock index moves in a similar pattern to the prices of the
securities held. While the correlation between stock indices and price
movements of the stocks in which the Funds will generally invest may be
imperfect, the Funds expect, nonetheless, that the use of put options that
relate to such indices will, in certain circumstances, protect against
declines in values of specific portfolio securities or a Fund's portfolio
generally. Although the purchase of a put option may partially protect a Fund
from a decline in the value of a particular security or its portfolio
generally, the cost of a put will reduce the potential return on the security
or the portfolio.
PORTFOLIO TURNOVER. In pursuit of each Fund's investment objective,
management continuously reviews its investments and makes portfolio changes
whenever changes in the market, industry trends or the outlook for the growth
of any portfolio security indicate to management that the objective could be
better achieved
-14-
<PAGE>
by investment in another security, regardless of portfolio turnover. In
addition, portfolio turnover may increase as a result of large amounts of
purchases and redemptions of shares of a Fund due to economic, market or
other factors that are not within the control of management. The annual
portfolio turnover rates of the Funds may at times exceed 100%. A 100%
annual turnover rate results, for example, if the equivalent of all of the
securities in a Fund's portfolio are replaced in a period of one year. An
annual turnover rate of 100% or more would be higher than that of most other
mutual funds.
Increased portfolio turnover would necessarily result in correspondingly
higher brokerage costs for the Funds. The existence of a high portfolio
turnover rate has no direct relationship to the tax liability of a Fund,
although sales of certain stocks will lead to realization of gains, and,
possibly, increased taxable distributions. The Funds' brokerage policy is
discussed further under Section 6 Brokerage Policy, and additional
information concerning income taxes is located under Section 10 Income
Dividends, Capital Gains Distributions and Tax Treatment.
2. INVESTMENT RESTRICTIONS
Each Fund has adopted certain fundamental restrictions on its
investments and other activities, and none of these restrictions may be
changed without the approval of (i) 67% or more of the voting securities of
the Fund present at a meeting of shareholders thereof if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (ii) more than 50% of the outstanding voting securities of the
Fund.
BERGER IPT - 100 FUND AND BERGER IPT - GROWTH AND INCOME FUND
The following fundamental restrictions apply to each of the Berger IPT -
100 Fund and the Berger IPT - Growth and Income Fund. A Fund may not:
1. Purchase the securities of any one issuer (except U.S. Government
securities) if immediately after and as a result of such purchase (a) the
value of the holdings of the Fund in the securities of such issuer exceeds 5%
of the value of the Fund's total assets or (b) the Fund owns more than 10% of
the outstanding voting securities or of any class of securities of such
issuer.
2. Purchase securities of any company with a record of less than three
years' continuous operation (including that of predecessors) if such purchase
would cause the Fund's investments in all such companies taken at cost to
exceed 5% of the value of the Fund's total assets.
3. Invest in any one industry more than 25% of the value of its total
assets at the time of such investment.
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<PAGE>
4. Make loans, except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies. The Fund does not, for this purpose, consider the
purchase of all or a portion of an issue of publicly distributed bonds, bank
loan participation agreements, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities, to be the making of a loan.
5. Borrow in excess of 5% of the value of its total assets, or pledge,
mortgage, or hypothecate its assets taken at market value to an extent
greater than 10% of the Fund's total assets taken at cost (and no borrowing
may be undertaken except from banks as a temporary measure for extraordinary
or emergency purposes). This limitation shall not prohibit or restrict short
sales or deposits of assets to margin or guarantee positions in futures,
options or forward contracts, or the segregation of assets in connection with
any of such transactions.
6. Purchase or retain the securities of any issuer if those officers
and trustees of the Fund or its investment advisor owning individually more
than 1/2 of 1% of the securities of such issuer together own more than 5% of
the securities of such issuer.
7. Purchase the securities of any other investment company, except by
purchase in the open market involving no commission or profit to a sponsor or
dealer (other than the customary broker's commission).
8. Act as a securities underwriter (except to the extent the Fund may
be deemed an underwriter under the Securities Act of 1933 in disposing of a
security) or invest in real estate (although it may purchase shares of a real
estate investment trust), or invest in commodities or commodity contracts
except, only for the purpose of hedging, (i) financial futures transactions,
including futures contracts on securities, securities indices and foreign
currencies, and options on any such futures, (ii) forward foreign currency
exchange contracts and other forward commitments and (iii) securities index
put or call options.
9. Participate on a joint or joint and several basis in any securities
trading account.
10. Invest in companies for the purposes of exercising control of
management.
In applying the industry concentration investment restriction (no. 3
above), the Funds use the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated. Further, in
implementing that restriction, each Fund intends not to invest in any one
industry 25% or more of the value of its total assets at the time of such
investment.
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<PAGE>
The trustees have adopted additional non-fundamental investment
restrictions for each of the Berger IPT - 100 Fund and the Berger IPT -
Growth and Income Fund. These limitations may be changed by the trustees
without a shareholder vote. The non-fundamental investment restrictions
include the following:
1. Only for the purpose of hedging, the Fund may purchase and sell
financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's total net assets at the time
of purchase may be invested in initial margins for financial futures
transactions and premiums for options. The Fund may only write call options
that are covered and only up to 25% of the Fund's total assets.
2. The Fund may not purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken
at market value at the time of purchase would be invested in such securities.
3. The Fund may not purchase or sell any interest in an oil, gas or
mineral development or exploration program, including investments in oil, gas
or other mineral leases, rights or royalty contracts (except that the Fund
may invest in the securities of issuers engaged in the foregoing activities).
4. The Fund may not purchase any security, including any repurchase
agreement maturing in more than seven days, which is not readily marketable,
if more than 15% of the net assets of the Fund, taken at market value at the
time of purchase would be invested in such securities.
5. The Fund may not purchase securities on margin from a broker or
dealer, except that the Fund may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short
sales "against the box"). This limitation shall not prohibit or restrict the
Fund from entering into futures, forwards and options contracts or from
making margin payments and other deposits in connection therewith.
6. The Fund's investments in warrants valued at the lower of cost or
market, may not exceed 5% of the value of the Fund's net assets. Included
within that amount, but not to exceed 2% of the value of the Fund's net
assets, may be warrants that are not listed on the New York Stock Exchange or
American Stock Exchange. Warrants acquired by the Fund in units or attached
to securities are not subject to these limits.
-17-
<PAGE>
BERGER IPT - SMALL COMPANY GROWTH FUND
The following fundamental restrictions apply to the Berger IPT - Small
Company Growth Fund. The Fund may not:
1. With respect to 75% of the Fund's total assets, purchase the
securities of any one issuer (except U.S. government securities) if
immediately after and as a result of such purchase (a) the value of the
holdings of the Fund in the securities of such issuer exceeds 5% of the value
of the Fund's total assets or (b) the Fund owns more than 10% of the
outstanding voting securities of such issuer.
2. Invest in any one industry (other than U.S. government securities)
more than 25% of the value of its total assets at the time of such investment.
3. Borrow money, except from banks for temporary or emergency purposes
in amounts not to exceed 25% of the Fund's total assets (including the amount
borrowed) taken at market value, nor pledge, mortgage or hypothecate its
assets, except to secure permitted indebtedness and then only if such
pledging, mortgaging or hypothecating does not exceed 25% of the Fund's total
assets taken at market value. When borrowings exceed 5% of the Fund's total
assets, the Fund will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the Fund may
be deemed an underwriter under the Securities Act of 1933 in disposing of a
security), issue senior securities (except to the extent permitted under the
Investment Company Act of 1940), invest in real estate (although it may
purchase shares of a real estate investment trust), or invest in commodities
or commodity contracts except financial futures transactions, futures
contracts on securities and securities indices and options on such futures,
forward foreign currency exchange contracts, forward commitments or
securities index put or call options.
5. Make loans, except that the Fund may enter into repurchase
agreements and may lend portfolio securities in accordance with the Fund's
investment policies. The Fund does not, for this purpose, consider the
purchase of all or a portion of an issue of publicly distributed bonds, bank
loan participation agreements, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is
made upon the original issuance of the securities, to be the making of a loan.
In applying the industry concentration investment restriction (no. 2
above), the Fund uses the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated. Further, in
implementing that restriction, the Fund intends not to invest in any one
industry 25% or more of the value of its total assets at the time of such
investment.
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<PAGE>
The trustees have adopted additional non-fundamental investment
restrictions for the Fund. These limitations may be changed by the trustees
without a shareholder vote. The non-fundamental investment restrictions
include the following:
1. The Fund may not purchase securities of any company which,
including its predecessors and parents, has a record of less than three
years' continuous operation, if such purchase would cause the Fund's
investments in all such companies taken at cost to exceed 10% of the value of
the Fund's total assets.
2. The Fund may not purchase securities on margin from a broker or
dealer, except that the Fund may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short
sales "against the box"). This limitation shall not prohibit or restrict the
Fund from entering into futures, forwards and options contracts or from
making margin payments and other deposits in connection therewith.
3. The Fund may not purchase the securities of any other investment
company, except by purchase in the open market involving no commission or
profit to a sponsor or dealer (other than the customary broker's commission).
4. The Fund may not invest in companies for the purposes of exercising
control of management.
5. The Fund may not purchase any security, including any repurchase
agreement maturing in more than seven days, which is not readily marketable,
if more than 15% of the net assets of the Fund, taken at market value at the
time of purchase would be invested in such securities.
6. Only for the purpose of hedging, the Fund may purchase and sell
financial futures, forward foreign currency exchange contracts and put and
call options, but no more than 5% of the Fund's total net assets at the time
of purchase may be invested in initial margins for financial futures
transactions and premiums for options. The Fund may only write call options
that are covered and only up to 25% of the Fund's total assets.
7. The Fund may not purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken
at market value at the time of purchase would be invested in such securities.
8. The Fund may not purchase or sell any interest in an oil, gas or
mineral development or exploration program, including investments in oil, gas
or other mineral leases, rights or royalty contracts (except that the Fund
may invest in the securities of issuers engaged in the foregoing activities).
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<PAGE>
9. The Fund's investments in warrants valued at the lower of cost or
market may not exceed 5% of the value of the Fund's net assets. Included
within that amount, but not to exceed 2% of the value of the Fund's net
assets, may be warrants that are not listed on the New York Stock Exchange or
American Stock Exchange. Warrants acquired by the Fund in units or attached
to securities are not subject to these limits.
3. MANAGEMENT OF THE FUNDS
The same trustees and most of the same executive officers serve each of
the Funds. They are listed below, together with information which includes
their principal occupations during the past five years and other principal
business affiliations.
* GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO
80206, age 53. President and a Trustee of Berger Institutional
Products Trust since its inception in October 1995. President and a
director since April 1995 of Berger Associates. A Vice President of
DST Systems, Inc. (data processing) since July 1995. Director of
First of Michigan Capital Corp. (holding company) and First of
Michigan Corp. (broker-dealer) since March 1995. Formerly President
and Chief Executive Officer of Investors Fiduciary Trust Company
(banking) from February 1992 to March 1995 and Chief Operating
Officer of SunAmerica Asset Management Co. (money management) from
January 1990 to February 1992.
* RODNEY L. LINAFELTER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 36. President and Portfolio Manager of Berger IPT - 100
Fund and Berger IPT - Growth and Income Fund and a Trustee of Berger
Institutional Products Trust since its inception in October 1995.
President since November 1994 (formerly, Vice President from October
1990 to November 1994), a Portfolio Manager since October 1990 and a
Director since October 1994 of Berger 100 Fund and Berger Growth and
Income Fund. President and a Trustee of Berger Investment Portfolio
Trust since its inception in August 1993. Vice President (since
December 1990) and Chief Investment Officer (since October 1994),
Director (since January 1992) and, formerly, Portfolio Manager
(January 1990 to December 1990), with Berger Associates. Formerly
(April 1986 to December 1989), Financial Consultant (registered
representative) with Merrill Lynch, Pierce, Fenner & Smith, Inc.
* WILLIAM R. KEITHLER, 210 University Boulevard, Suite 900, Denver,
CO 80206, age 43. President and Portfolio Manager of the Berger IPT
- Small Company Growth Fund since its inception in October 1995.
President since November 1994 (formerly, Vice President from December
1993 to November 1994) and Portfolio Manager since its inception in
December 1993 of the Berger Small Company Growth Fund. President and
Portfolio Manager of the Berger New Generation Fund since its
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<PAGE>
inception in December 1995. Since December 1993, Vice
President-Investment Management of Berger Associates. Formerly,
Senior Vice President (January 1993 to December 1993), Vice President
(January 1991 to January 1993) and Portfolio Manager (January 1988 to
January 1991) of INVESCO Trust Company (investment management).
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, age
67. President, Baldwin Financial Counseling. Formerly (1978-1990),
Vice President and Denver Office Manager of Merrill Lynch Capital
Markets. Trustee of Berger Institutional Products Trust and Berger
Investment Portfolio Trust. Director of Berger 100 Fund and Berger
Growth and Income Fund.
* WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 70. Trustee of Berger Institutional Products Trust since
its inception in October 1995. Director and, formerly, President
(1974-1994) of Berger 100 Fund and Berger Growth and Income Fund.
Trustee of Berger Investment Portfolio Trust since its inception in
August 1993 (Chairman of the Trustees through November 1994).
Chairman (since 1994) and a Director (since 1973) and, formerly,
President (1973-1994) of Berger Associates. From 1960 to 1973,
principal shareholder and executive officer of predecessor investment
advisory firms which served as investment advisors to mutual funds
and other investors, and from 1950 to 1960, investment officer in the
trust department of The Colorado National Bank of Denver in charge of
common stock investments.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 70.
President, Climate Engineering, Inc. (building environmental
systems). Trustee of Berger Institutional Products Trust and Berger
Investment Portfolio Trust. Director of Berger 100 Fund and Berger
Growth and Income Fund.
KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age 50.
Managing Principal, Sovereign Financial Services, L.L.C. (investment
consulting firm). Formerly (1981-1988), Executive Vice President,
Captiva Corporation, Denver, Colorado (private investment management
firm). Ph.D. in Finance (Arizona State University); Chartered Financial
Analyst (CFA). Trustee of Berger Institutional Products Trust and Berger
Investment Portfolio Trust. Director of Berger 100 Fund and Berger
Growth and Income Fund.
LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age 68.
Associate, University College, University of Denver. Formerly,
President of the Colorado State Board of Land Commissioners
(1989-1995), and Vice President and Economist (1983-1988) and
Consulting Economist (1989) for First Interstate Bank of Denver.
Ph.D. in Economics (Harvard University). Trustee of Berger
Institutional Products Trust
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<PAGE>
and Berger Investment Portfolio Trust. Director of Berger 100 Fund and
Berger Growth and Income Fund.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL 60602,
age 50. Since 1991, Director, Chairman, President and Chief
Executive Officer of Catalyst Institute (international public policy
research organization focused primarily on financial markets and
institutions) and Catalyst Consulting (international financial
institutions business consulting firm). Formerly (1988-1991),
Director, President and Chief Executive Officer of Kessler Asher
Group (brokerage, clearing and trading firm). Trustee of Berger
Institutional Products Trust and Berger Investment Portfolio Trust.
Director of Berger 100 Fund and Berger Growth and Income Fund.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202,
age 62. Self-employed as a private investor. Formerly (1981-1988),
Senior Vice President, Rocky Mountain Region, of Dain Bosworth
Incorporated and member of that firm's Management Committee. Trustee
of Berger Institutional Products Trust and Berger Investment
Portfolio Trust. Director of Berger 100 Fund and Berger Growth and
Income Fund.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT
59717, age 58. Since 1994, Dean, and from 1989 to 1994, a member of
the Finance faculty, of the College of Business, Montana State
University. Self-employed as a financial and management consultant,
and in real estate development. Formerly (1976-1989), Chairman and
Chief Executive Officer of Royal Gold, Inc. (mining). Chairman of the
Trustees of Berger Institutional Products Trust and Berger Investment
Portfolio Trust. Chairman of the Board of Berger 100 Fund and Berger
Growth and Income Fund.
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, age
67. President, Sinclaire Cattle Co., and private investor. Trustee
of Berger Institutional Products Trust and Berger Investment
Portfolio Trust. Director of Berger 100 Fund and Berger Growth and
Income Fund.
* KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206,
age 40. Vice President, Secretary and Treasurer of Berger
Institutional Products Trust since its inception in October 1995, of
Berger 100 Fund and Berger Growth and Income Fund since October 1991
and of Berger Investment Portfolio Trust since its inception in
August 1993. Also, Vice President-Finance and Administration,
Secretary and Treasurer of Berger Associates since September 1991.
Formerly, Financial Consultant (registered representative) with
Neidiger Tucker Bruner, Inc. (broker-dealer) (October 1989 to
September 1991)and Financial Consultant with Merrill Lynch, Pierce,
Fenner & Smith, Inc. (October 1985 to October 1989).
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<PAGE>
________________
* Interested person (as defined in the Investment Company Act of 1940) of each
Fund and of Berger Associates.
TRUSTEE COMPENSATION
The officers of the Funds receive no compensation from the Funds.
However, trustees of the Funds who are not interested persons of Berger
Associates are compensated for their services according to a fee schedule,
allocated among the Funds, which includes an annual fee component and a per
meeting fee component. Neither the officers of the Funds nor the trustees
receive any form of pension or retirement benefit compensation from the Funds.
Set forth below is information regarding compensation paid or accrued
during the twelve-month period ended September 30, 1995, for each trustee of the
Trust, for their service as a director or trustee of the Berger retail funds.
Since the Berger Institutional Products Trust (currently consisting of three
Funds) has only been recently organized, the trustees did not receive any
compensation from the Trust during the twelve months ended September 30, 1995.
The Trust, unlike the Berger retail funds, has a fiscal year ending on December
31.
NAME AND POSITION WITH
BERGER FUNDS AGGREGATE COMPENSATION FROM
---------------------- --------------------------------
BERGER
INSTITUTIONAL BERGER
PRODUCTS RETAIL
TRUST(1) FUNDS(2)
------------- ---------
Dennis E. Baldwin(3) $-0- $46,617
William M.B. Berger(3),(4) -0- -0-
Louis R. Bindner(3) -0- 39,687
Katherine A. Cattanach(3) -0- 45,000
Lucy Black Creighton(3) -0- 38,132
Paul R. Knapp(3) -0- 50,976
Gerard M. Lavin(4),(5) -0- -0-
Harry T. Lewis(3) -0- 43,500
Rodney L. Linafelter(3),(4),(6) -0- -0-
Michael Owen(3) -0- 57,544
William Sinclaire(3) -0- 38,247
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<PAGE>
(1) The trustees are not expected to receive any compensation from the Trust
for the period from the Trust's inception through the end of the Trust's first
fiscal year on December 31, 1995. Berger Associates will pay organizational
costs of the Trust, including trustee fees in connection with the Trust's
organizational meetings.
(2) The fees from the Berger retail funds are for their last fiscal year, which
ended September 30, 1995.
(3) Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust and Berger Institutional Products Trust.
(4) Interested person of Berger Associates.
(5) President and a trustee of Berger Institutional Products Trust.
(6) President of Berger 100 Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger IPT - 100 Fund and Berger IPT - Growth and
Income Fund.
Trustees may elect to defer receipt of all or a portion of their fees
pursuant to a fee deferral plan adopted by the Berger Institutional Products
Trust. Under the plan, deferred fees are credited to an account and adjusted
thereafter to reflect the investment experience of whichever of the Berger Funds
(or approved money market funds) is designated by the trustees for this purpose.
Pursuant to an SEC exemptive order, the Trust is permitted to purchase shares of
the designated funds in order to offset its obligation to the trustees
participating in the plan. Purchases made pursuant to the plan are excepted
from any otherwise applicable investment restriction limiting the purchase of
securities of any other investment company. The Trust's obligation to make
payments of deferred fees under the plan is a general obligation of the Trust.
As of the date of this Statement of Additional Information, the officers
and trustees of the Trust as a group did not own of record or beneficially any
shares of any of the Funds of the Berger Institutional Products Trust.
4. INVESTMENT ADVISOR
Berger Associates is the investment advisor to each Fund. Gerard M. Lavin,
President and a director of Berger Associates, is also President and a trustee
of the Trust. Rodney L. Linafelter, Vice President and Chief Investment Officer
and a director of Berger Associates, is also a trustee of the Trust and
President and portfolio manager of the Berger IPT - 100 Fund and the Berger
IPT - Growth and Income Fund. Mr. Linafelter also serves as President,
portfolio manager and a director of both the Berger 100 Fund and the Berger
Growth and Income Fund, and President and a trustee of the Berger Investment
Portfolio Trust. William R. Keithler, Vice President-Investment Management of
Berger Associates, is President and portfolio manager of the Berger IPT - Small
Company Growth Fund. Mr. Keithler also serves as President and portfolio
manager of the Berger Small Company Growth Fund, the retail fund that parallels
the Berger IPT - Small Company Growth Fund, and the Berger New Generation Fund,
another retail Berger Fund. Kevin R.
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Fay, Vice President-Finance and Administration, Secretary and Treasurer of
Berger Associates, also serves as Vice President, Secretary and Treasurer of
all the Berger Funds.
Berger Associates serves as investment advisor to other mutual funds,
pension and profit-sharing plans, and other institutional and private investors.
At times, Berger Associates may recommend purchases and sales of the same
investment securities for a Fund, other Berger Funds, and for one or more other
investment accounts. In such cases, it will be the practice of Berger
Associates to allocate the purchase and sale transactions among the
participating Berger Funds and the accounts in such manner as it deems
equitable. In making such allocation, the main factors to be considered are the
respective investment objectives of the Berger Funds and the accounts, the
relative size of portfolio holdings of the same or comparable securities, the
current availability of cash for investment by each of the Berger Funds and each
account, the size of investment commitments generally held by each Berger Fund
and each account, and the opinions of the persons responsible for recommending
investments to the Berger Funds and the accounts.
The officers of Berger Associates are Gerard M. Lavin, President; Rodney L.
Linafelter, Vice President and Chief Investment Officer; William R. Keithler,
Vice President-Investment Management; Craig D. Cloyed, Vice President and Chief
Marketing Officer; and Kevin R. Fay, Vice President-Finance and Administration,
Secretary and Treasurer. The directors of Berger Associates are Mr. Lavin, Mr.
Linafelter and William M.B. Berger (all of whom also serve as trustees of the
Trust) and Landon H. Rowland, 114 West 11th Street, Kansas City, MO 64105.
Berger Associates permits its directors, officers and employees to purchase
and sell securities for their own accounts in accordance with a Berger
Associates policy regarding personal investing. The policy requires all
directors, officers and employees of Berger Associates to conduct their personal
securities transactions in a manner which does not operate adversely to the
interests of the Funds or Berger Associates' other advisory clients. Directors
and officers of Berger Associates (including those who also serve as directors
or trustees of the Berger Funds), investment personnel and other designated
persons deemed to have access to current trading information ("access persons")
are required to pre-clear all transactions in securities not otherwise exempt
under the policy. Requests for authority to trade will be denied pre-clearance
when, among other reasons, the proposed personal transaction would be contrary
to the provisions of the policy or would be deemed to adversely affect any
transaction then known to be under consideration for or currently being effected
on behalf of any client account, including the Funds.
In addition to the pre-clearance requirements described above, the policy
subjects directors and officers of Berger Associates (including those who also
serve as directors or trustees
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of the Berger Funds), investment personnel and other access persons to
various trading restrictions and reporting obligations. All reportable
transactions are reviewed for compliance with Berger Associates' policy.
Those persons also may be required under certain circumstances to forfeit
their profits made from personal trading. The policy is administered by
Berger Associates and the provisions of the policy are subject to
interpretation by and exceptions authorized by its board of directors.
Each Fund's current Investment Advisory Agreement with Berger Associates
came into effect on or shortly before May 1, 1996, and will continue in effect
until the last day of April, 1997, and thereafter from year to year if such
continuation is specifically approved at least annually by the trustees or by
vote of a majority of the outstanding shares of the Fund and in either case by
vote of a majority of the trustees who are not "interested persons" (as that
term is defined in the 1940 Act) of the Fund or Berger Associates. Each
Agreement is subject to termination by the Fund or Berger Associates on 60 days'
written notice, and terminates automatically in the event of its assignment.
From time to time, Berger Associates may compensate Participating Insurance
Companies or their affiliates whose customers hold shares of the Funds for
providing a variety of administrative services (such as recordkeeping and
accounting) and investor support services (such as responding to inquiries and
preparing mailings to shareholders). This compensation, which may be paid as a
per account fee or as a percentage of the average daily net assets invested in
the Funds by the compensated Participating Insurance Company, depending on the
nature, extent and quality of the services provided, will be paid from Berger
Associates' own resources and not from the assets of the Funds.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of
the outstanding shares of Berger Associates. KCSI is a publicly traded holding
company whose primary subsidiaries are engaged in transportation services and
financial asset management. KCSI also owns approximately 41% of the outstanding
shares of DST Systems, Inc. ("DST"), a publicly traded information and
transaction processing company which also acts as the Funds' sub-transfer agent.
5. EXPENSES OF THE FUNDS
Under their Investment Advisory Agreements, the Berger IPT - 100 Fund and
the Berger IPT - Growth and Income Fund have each agreed to compensate Berger
Associates for its investment advisory services to the Fund by the payment of a
fee at the annual rate of .75 of 1% (0.75%) of the average daily net assets of
the Fund. The fee is accrued daily and payable monthly. This fee may be higher
than that paid by most other mutual funds.
Under the Investment Advisory Agreement for the Berger IPT - Small Company
Growth Fund, Berger Associates is compensated
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for its investment advisory services to the Fund by the payment of a fee at
the annual rate of .9 of 1% (0.90%) of the average daily net assets of the
Berger IPT - Small Company Growth Fund. The fee is accrued daily and payable
monthly. This fee is higher than that paid by most other mutual funds.
Each Fund pays all of its expenses not assumed by Berger Associates,
including, but not limited to, investment advisor fees, custodian and transfer
agent fees, legal and accounting expenses, administrative and record keeping
expenses, interest charges, federal and state taxes, costs of share
certificates, expenses of shareholders' meetings, compensation of trustees who
are not interested persons of Berger Associates, expenses of printing and
distributing reports to shareholders and federal and state administrative
agencies, and all expenses incurred in connection with the execution of its
portfolio transactions, including brokerage commissions on purchases and sales
of portfolio securities, which are considered a cost of securities of each Fund.
Each Fund also pays all expenses incurred in complying with all federal and
state laws and the laws of any foreign country applicable to the issue, offer or
sale of shares of the Fund, including, but not limited to, all costs involved in
preparing and printing prospectuses of the Fund.
Each of the Funds has appointed Investors Fiduciary Trust Company ("IFTC")
as its recordkeeping and pricing agent. In addition, IFTC also serves as the
Funds' custodian, transfer agent and dividend disbursing agent. IFTC has
engaged DST as sub-agent to provide transfer agency and dividend disbursing
services for the Funds. As noted in the previous section, approximately 41% of
the outstanding shares of DST are owned by KCSI. The addresses and telephone
numbers for DST set forth in the Prospectus and this Statement of Additional
Information should be used for correspondence with the transfer agent.
As recordkeeping and pricing agent, IFTC calculates the daily net asset
value of each of the Funds and performs certain accounting and recordkeeping
functions required by the Funds. Each Fund pays IFTC a monthly base fee of
$500, plus an asset-based fee at an annual rate of $.10 per $1,000 of the Fund's
assets (minimum monthly asset fee of $750 per Fund), plus an additional $.10 per
$1,000 of the Fund's assets invested in foreign securities. IFTC is also
reimbursed for certain out-of-pocket expenses.
IFTC, as custodian, and its subcustodians have custody and provide for the
safekeeping of the Funds' securities and cash, and receive and remit the income
thereon as directed by the management of the Funds. The custodian and
subcustodians do not perform any managerial or policy-making functions for the
Funds. For its services as custodian, IFTC receives a fee, payable monthly, at
an annual rate ranging from $.05 to $.10 per $1,000 of assets under custody
invested in domestic securities, based on the assets of all funds in the Berger
Funds complex, and $.50 to $4.50 per $1,000 of Fund assets under custody
invested in foreign
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securities. IFTC also receives certain transaction fees and is reimbursed for
out-of-pocket expenses.
As transfer agent and dividend disbursing agent, IFTC (through DST, as sub-
agent) maintains all shareholder accounts of record; assists in mailing all
reports, proxies and other information to the Funds' shareholders; calculates
the amount of, and delivers to the Funds' shareholders, proceeds representing
all dividends and distributions; and performs other related services. For these
services, IFTC receives a base fee of $600 per month and an annual fee of $15.05
per open Fund shareholder account, subject to scheduled increases, plus certain
transaction fees and fees for closed accounts, and is reimbursed for out-of-
pocket expenses, which fees in turn are passed through to DST as sub-agent. All
of IFTC's fees are subject to reduction pursuant to an agreed formula for
certain earnings credits on the cash balances of the Funds maintained by IFTC as
custodian.
The trustees of each of the Funds have authorized Berger Associates to
place portfolio transactions on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions for
a Fund are effected through DSTS, the portion of the commissions received by it
is credited against, and thereby reduces, certain operating expenses that the
Fund would otherwise be obligated to pay. No portion of the commissions is
retained by DSTS.
In addition, under a separate Administrative Services Agreement with each
Fund, Berger Associates performs certain administrative and recordkeeping
services not otherwise performed by IFTC, including the preparation of financial
statements and reports to be filed with regulatory authorities. Each Fund pays
Berger Associates a fee at the annual rate of one-hundredth of one percent
(0.01%) of its average daily net assets for such services. These fees are in
addition to the fees paid under the Investment Advisory Agreement. The
administrative services fees may be changed by the trustees without shareholder
approval.
Berger Associates has agreed to waive its advisory fee to the extent that
normal operating expenses in any fiscal year, including the management fee but
excluding brokerage commissions, interest, taxes and extraordinary expenses, of
each of the Berger IPT - 100 Fund and the Berger IPT - Growth and Income Fund
exceed 1.00%, and the normal operating expenses in any fiscal year of the Berger
IPT - Small Company Growth Fund exceed 1.15%, of the respective Fund's average
daily net assets.
6. BROKERAGE POLICY
Although each Fund retains full control over its own investment policies,
under the terms of its Investment Advisory Agreement, Berger Associates is
directed to place the portfolio transactions of the Fund. Berger Associates is
required to report on the placement of brokerage business to the trustees of
each Fund
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every quarter, indicating the brokers with whom Fund portfolio business was
placed and the basis for such placement.
The Investment Advisory Agreement that each Fund has with Berger Associates
authorizes and directs Berger Associates to place portfolio transactions for the
Fund only with brokers and dealers who render satisfactory service in the
execution of orders at the most favorable prices and at reasonable commission
rates. However, each Agreement specifically authorizes Berger Associates to
place such transactions with a broker with whom it has negotiated a commission
that is in excess of the commission another broker or dealer would have charged
for effecting that transaction if Berger Associates determines in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker viewed in terms of
either that particular transaction or the overall responsibilities of Berger
Associates.
In accordance with this provision of the Agreement, Berger Associates
places portfolio brokerage business of each Fund with brokers who provide useful
research services to Berger Associates. Such research services typically
consist of studies made by investment analysts or economists relating either to
the past record of and future outlook for companies and the industries in which
they operate, or to national and worldwide economic conditions, monetary
conditions and trends in investors' sentiment, and the relationship of these
factors to the securities market. In addition, such analysts may be available
for regular consultation so that Berger Associates may be apprised of current
developments in the above-mentioned factors.
The research services received from brokers are often helpful to Berger
Associates in performing its investment advisory responsibilities to the Funds,
but they are not essential, and the availability of such services from brokers
does not reduce the responsibility of Berger Associates' advisory personnel to
analyze and evaluate the securities in which the Funds invest. The research
services obtained as a result of the Funds' brokerage business also will be
useful to Berger Associates in making investment decisions for its other
advisory accounts, and, conversely, information obtained by reason of placement
of brokerage business of such other accounts may be used by Berger Associates in
rendering investment advice to the Funds. Although such research services may
be deemed to be of value to Berger Associates, they are not expected to decrease
the expenses that Berger Associates would otherwise incur in performing its
investment advisory services for the Funds nor will the advisory fees that are
received by Berger Associates from the Funds be reduced as a result of the
availability of such research services from brokers.
The trustees of each of the Funds have authorized Berger Associates to
place portfolio transactions on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer
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subsidiary of DST. When transactions for a Fund are effected through DSTS,
the portion of the commissions received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Fund would otherwise be
obligated to pay. No portion of the commissions is retained by DSTS.
The trustees of each Fund have authorized Berger Associates to consider
sales by a broker-dealer of variable insurance contracts that permit allocation
of contract values to one or more of the Funds as a factor in the selection of
broker-dealers to execute portfolio transactions for the Funds. In placing
portfolio business with such broker-dealers, Berger Associates will seek the
best execution of each transaction, and all such brokerage placement must be
consistent with the Rules of Fair Practice of the NASD.
Although investment decisions for each of the Funds are made independently
from those for other investment advisory clients of Berger Associates, the same
investment decision may be made for both a Fund and one or more other advisory
clients, including other mutual funds advised by Berger Associates. If any of
the Funds and other clients of Berger Associates should purchase or sell the
same class of securities on the same day, the orders for such transactions may
be combined in order to seek the best combination of net price and execution for
each. In such event, the amount and net price of the transactions would be
allocated in a manner considered equitable to the Fund and each such other
client.
7. HOW TO PURCHASE AND REDEEM SHARES IN THE FUNDS
Shares of the Funds are sold by the Funds on a continuous basis to separate
accounts of Participating Insurance Companies or to qualified plans. Investors
may not purchase or redeem shares of the Funds directly, but only through
variable insurance contracts offered through the separate accounts of
Participating Insurance Companies or through qualified retirement plans. You
should refer to the applicable Separate Account Prospectus or your plan
documents for information on how to purchase or surrender a contract, make
partial withdrawals of contract values, allocate contract values to one or more
of the Funds, change existing allocation among investment alternatives,
including the Funds, or select specific Funds as investment options for a
qualified plan. No sales charge is imposed upon the purchase or redemption of
shares of the Funds. Sales charges for the variable insurance contracts or
qualified plans are described in the relevant Separate Account Prospectuses or
plan documents.
Fund shares are purchased or redeemed at the net asset value per share next
computed after receipt of a purchase or redemption order by a Fund, its agent or
its delegatee. Payment for redeemed shares generally will be made within three
business days following the date of the request for redemption. However,
payment may be postponed under unusual circumstances, such as when normal
trading is not taking place on the New York Stock Exchange,
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an emergency as defined by the Securities and Exchange Commission exists, or
as permitted by the Securities and Exchange Commission.
8. SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended for any period during which the
New York Stock Exchange is closed or the Securities and Exchange Commission
determines that trading on the Exchange is restricted, or when there is an
emergency as determined by the Securities and Exchange Commission as a result of
which it is not reasonably practicable for a Fund to dispose of securities owned
by it or to determine the value of its net assets, or for such other period as
the Securities and Exchange Commission may by order permit for the protection of
shareholders of a Fund.
Each Fund intends to redeem its shares only for cash, although it retains
the right to redeem its shares in kind under unusual circumstances, in order to
protect the interests of the remaining shareholders, by the delivery of
securities selected from its assets at its discretion. If shares are redeemed
in kind, the redeeming shareholder might incur brokerage costs in converting the
assets to cash. The method of valuing securities used to make redemption in
kind will be the same as the method of valuing portfolio securities described
below.
9. HOW THE NET ASSET VALUE IS DETERMINED
The net asset value of each Fund is determined once daily, at the close of
the regular trading session of the New York Stock Exchange ("NYSE") (normally
4:00 p.m., New York time, Monday through Friday) each day that the NYSE is open.
The NYSE is closed and the net asset value of the Funds is not determined on
weekends and on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day each year. The
per share net asset value of each Fund is determined by dividing the total value
of its securities and other assets, less liabilities, by the total number of
shares outstanding.
In determining net asset value, securities listed or traded primarily on
national exchanges, The Nasdaq Stock Market and foreign exchanges are valued at
the last sale price on such markets, or, if such a price is lacking for the
trading period immediately preceding the time of determination, such securities
are valued at the mean of their current bid and asked prices. Securities that
are traded in the over-the-counter market are valued at the mean between their
current bid and asked prices. Foreign securities and currencies are converted
to U.S. dollars using the exchange rate in effect shortly before the close of
the NYSE. The market value of individual securities held by each Fund will be
determined by using prices provided by pricing services which provide market
prices to other mutual funds or, as needed, by obtaining market quotations from
independent broker/dealers. Short-term money market securities maturing within
60 days are
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valued on the amortized cost basis, which approximates market value.
Securities and assets for which quotations are not readily available are
valued at fair values determined in good faith pursuant to consistently
applied procedures established by the trustees.
10. INCOME DIVIDENDS, CAPITAL GAINS
DISTRIBUTIONS AND TAX TREATMENT
Each of the Funds intends to qualify to be treated as a separate regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). If they so qualify and meet certain minimum distribution
requirements, the Funds will not be liable for Federal income tax on the amount
of their earnings that are distributed. If a Fund distributes annually less
than 98% of its income and gain, it will be subject to a non-deductible 4%
excise tax. In addition, each Fund intends to qualify under the diversification
requirements of Code Section 817(h) relating to insurance company separate
accounts. By meeting these and other requirements, the Participating Insurance
Companies, rather than the owners of the variable insurance contracts, should be
subject to tax on distributions received with respect to Fund shares. The tax
treatment of distributions made to a Participating Insurance Company will depend
on the Participating Insurance Company's tax status. Participating Insurance
Companies should consult their own tax advisors concerning whether such
distributions are subject to federal income tax if retained as part of contract
reserves. For further information concerning federal income tax consequences
for the owners of variable insurance contracts and qualified plan participants,
consult the appropriate Separate Account Prospectus or plan documents.
All dividends or capital gains distributions paid by a Fund will be
automatically reinvested in shares of that Fund at the net asset value on the
ex-dividend date, unless an election is made on behalf of a separate account or
qualified plan to receive distributions in cash.
Dividends and interest received by the Funds on foreign securities may give
rise to withholding and other taxes imposed by foreign countries. It is
expected that foreign taxes paid by the Funds will be treated as expenses of the
Funds. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
11. PERFORMANCE INFORMATION
The Prospectus contains a brief description of how total return is
calculated.
Quotations of average annual total return for the Funds will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in the Fund over periods of 1, 5 and 10 years (or the life of the
Fund, if shorter). These are
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the rates of return that would equate the initial amount invested to the
ending redeemable value. These rates of return are calculated pursuant to
the following formula: P(1 + T) to the nth power = ERV (where P = a
hypothetical initial payment of $1,000, T = the average annual total return,
n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Fund expenses
on an annual basis, and assume that all dividends and distributions are
reinvested when paid.
In conjunction with performance reports, comparative data between a
Fund's performance for a given period and other types of investment vehicles
may be provided. A Fund's performance is based upon amounts available for
investment under variable insurance contracts of Participating Insurance
Companies or available for allocation to a qualified plan account, rather
than upon premiums paid or contributions by contract owners or plan
participants. Consequently the Fund's total return data does not reflect the
impact of sales loads (whether front-load or deferred) or other contract or
plan charges deducted from premiums or from the assets of the separate
accounts or qualified plans that invest in the Fund. Such sales loads and
charges may be substantial and may vary widely among Participating Insurance
Companies and qualified plans. Accordingly, the total return data for the
Funds is most useful for comparison with comparable data for other investment
options under the same variable insurance contract or qualified plan.
Comparisons of the Funds' total returns to those of other investment
vehicles are useful in evaluating the historical portfolio management
performance of the Funds' investment advisor. However, such comparisons
should not be mistaken for comparisons of the returns from the purchase of a
variable insurance contract of a Participating Insurance Company, or
investment in a qualified plan, to the purchase of another investment
vehicle. The Funds' total return data should be reviewed along with
comparable total return data for an associated separate account or in
conjunction with data (such as the data contained in personalized,
hypothetical illustrations of variable life insurance contracts) that would
permit evaluation of the magnitude of charges and expenses attributable to
the contract or plan that are not reflected in the Fund's total return data.
12. ADDITIONAL INFORMATION
The Berger IPT - 100 Fund, the Berger IPT - Growth and Income Fund and
the Berger IPT - Small Company Growth Fund are separate portfolios or series
established under the Berger Institutional Products Trust, a Delaware
business trust organized under the Delaware Business Trust Act on October 17,
1995. Under Delaware law, shareholders of the Trust will enjoy the same
limitations on personal liability as extended to stockholders of a Delaware
corporation. Further, the Trust Instrument of the Trust
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provides that no shareholder shall be personally liable for the debts,
liabilities, obligations and expenses incurred by, contracted for or
otherwise existing with respect to, the Trust or any particular series (fund)
of the Trust. However, the principles of law governing the limitations of
liability of beneficiaries of a business trust have not been authoritatively
established as to business trusts organized under the laws of one
jurisdiction but operating or owning property in other jurisdictions. In
states that have adopted legislation containing provisions comparable to the
Delaware Business Trust Act, it is believed that the limitation of liability
of beneficial owners provided by Delaware law should be respected. In those
jurisdictions that have not adopted similar legislative provisions, it is
possible that a court might hold that the shareholders of the Trust are not
entitled to the limitations of liability set forth in Delaware law or the
Trust Instrument and, accordingly, that they may be personally liable for the
obligations of the Trust.
In order to protect shareholders from such potential liability, the
Trust Instrument requires that every written obligation of the Trust or any
series thereof contain a statement to the effect that such obligation may
only be enforced against the assets of the Trust or such series. The Trust
Instrument also provides for indemnification from the assets of the relevant
series for all losses and expenses incurred by any shareholder by reason of
being or having been a shareholder, and that the Trust shall, upon request,
assume the defense of any such claim made against such shareholder for any
act or obligation of the relevant series and satisfy any judgment thereon
from the assets of that series.
As a result, the risk of a shareholder of any Fund incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations. The Trust believes
that, in view of the above, the risk of personal liability to shareholders of
any of the Funds is remote. The trustees intend to conduct the operations of
the Trust and the Funds so as to avoid, to the extent possible, liability of
shareholders for liabilities of the Trust or the Funds.
Shares of the Funds have no preemptive rights, and since each Fund has
only one class of securities there are no sinking funds or arrearage
provisions which may affect the rights of the Fund shares. Fund shares have
no conversion or subscription rights. Shares of the Funds may be transferred
by endorsement, or other customary methods, but none of the Funds is bound to
recognize any transfer until it is recorded on its books.
The separate accounts of the Participating Insurance Companies and the
trustees of the qualified plans invested in the Funds, rather than individual
contract owners or plan participants, are the shareholders of the Funds.
However, each Participating Insurance Company or qualified plan will vote
such shares as required by law and interpretations thereof, as amended or
changed
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from time to time. Under current law, a Participating Insurance Company is
required to request voting instructions from its contract owners and must
vote Fund shares held by each of its separate accounts in proportion to the
voting instructions received. Additional information about voting procedures
is contained in the applicable Separate Account Prospectuses.
Shareholders of each Fund generally vote separately on matters relating
to that Fund, although they will vote together with the holders of all other
series of the Trust in the election of trustees of the Trust and on all
matters relating to the Trust as a whole. Each full share of each Fund has
one vote. Shares of each Fund have noncumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
trustees can elect 100% of the trustees if they choose to do so and, in such
event, the holders of the remaining shares voting for the election of
trustees will not be able to elect any trustees. None of the Funds is
required to hold annual shareholder meetings unless required by the
Investment Company Act of 1940 or other applicable law or unless called by
the trustees.
As of October 30, 1996, 97% of the outstanding shares of the Berger IPT
- - Growth and Income Fund and the Berger IPT - Small Company Growth Fund, and
88% of the outstanding shares of the Berger IPT - 100 Fund, were held by
Berger Associates, a Delaware corporation, the Funds' investment advisor,
which provided the initial capital necessary to establish the Funds. As a
result of its share ownership, Berger Associates may be deemed to control
each of the Funds.
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado,
has passed on legal matters relating to this offering as counsel for the
Trust.
Price Waterhouse LLP, 950 Seventeenth Street, Denver, Colorado, has been
appointed to act as independent accountants for the Trust and each of its
Funds for the fiscal year ended December 31, 1996.
The Trust has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933,
as amended, with respect to the securities of the Berger IPT - 100 Fund, the
Berger IPT - Growth and Income Fund and the Berger IPT - Small Company Growth
Fund, of which this Statement of Additional Information is a part. If
further information is desired with respect to any of the Funds or such
securities, reference is made to the Registration Statements and the exhibits
filed as a part thereof.
FINANCIAL STATEMENTS
The following financial statements are attached at the end of this
Statement of Additional Information for the Berger IPT
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- - 100 Fund, the Berger IPT - Growth and Income Fund and the Berger IPT -
Small Company Growth Fund:
Report of Independent Accountants, dated April 16, 1996
Statements of Assets and Liabilities as of April 16, 1996
Notes to Statements of Assets and Liabilities, April 16, 1996
Schedules of Investments as of September 30, 1996
Statements of Assets and Liabilities as of September 30, 1996 (Unaudited)
Statements of Operations for the Period May 1, 1996 (Date Operations Commenced)
to September 30, 1996 (Unaudited)
Statements of Changes in Net Assets for the Period May 1, 1996 (Date Operations
Commenced) to September 30, 1996 (Unaudited)
Notes to Financial Statements, September 30, 1996
Financial Highlights for the Period May 1, 1996 (Date Operations Commenced) to
September 30, 1996 (Unaudited)
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APPENDIX A
HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS
The Funds may purchase securities which are convertible into common stock
when the Funds' management believes they offer the potential for a higher total
return than nonconvertible securities. While fixed income securities generally
have a priority claim on a corporation's assets over that of common stock, some
of the convertible securities which the Funds may hold are high-yield/high-risk
securities that are subject to special risks, including the risk of default in
interest or principal payments which could result in a loss of income to a Fund
or a decline in the market value of the securities. Convertible securities
often display a degree of market price volatility that is comparable to common
stocks.
Specifically, corporate debt securities which are below investment grade
(securities rated Ba or lower by Moody's or BB or lower by Standard & Poor's)
and unrated securities which a Fund may purchase and hold are subject to a
higher risk of non-payment of principal or interest, or both, than higher grade
debt securities. Generally speaking, the lower the quality of a debt security
(which may be reflected in its Moody's and/or Standard & Poor's ratings), the
higher the yield it will provide, but the greater the risk that interest or
principal payments will not be made when due. Thus, the lower the grade of a
security, the more speculative characteristics it generally has. Information
about the ratings of Moody's and Standard & Poor's, and the investment risks
associated with the various ratings, is set forth below.
The market prices of these lower grade convertible securities are generally
less sensitive to interest rate changes than higher-rated investments, but more
sensitive to economic changes or individual corporate developments. Periods of
economic uncertainty and change can be expected to result in volatility of
prices of these securities. Lower rated securities also may have less liquid
markets than higher rated securities, and their liquidity as well as their value
may be adversely affected by poor economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a negative
impact on the market for high-yield/high-risk bonds.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard & Poor's are
a generally accepted measurement of credit risk. However, they are subject to
certain limitations. Ratings are generally based upon historical events and do
not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.
-40-
<PAGE>
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A-Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during good and bad times over the future. Uncertainty of position
characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca-Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
-41-
<PAGE>
C-Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic
category.
KEY TO STANDARD & POOR'S CORPORATE RATINGS
AAA-Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A-Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC AND C-Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are out-weighed by the large uncertainties or major risk
exposures to adverse conditions.
C1-The rating C1 is reserved for income bonds on which no interest is being
paid.
D-Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
-42-
<PAGE>
950 Seventeenth Street
Suite 2500
Denver, CO 80202
PRICE WATERHOUSE LLP [LOGO]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholder
of Berger Institutional Products Trust
In our opinion, the accompanying statements of assets and liabilities present
fairly, in all material respects, the financial position of Berger IPT - 100
Fund, Berger IPT - Growth and Income Fund and Berger IPT - Small Company Growth
Fund (constituting the Berger Institutional Products Trust, hereafter referred
to as the "Fund"), at April 16, 1996, in conformity with generally accepted
accounting principles. This financial statement is the responsibility of the
Fund's management; our responsibility is to express an opinion on this financial
statement based on our audit. We conducted our audit of this financial
statement in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
PRICE WATERHOUSE LLP
Denver, Colorado
April 16, 1996
F-1
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
April 16, 1996 Berger IPT- Berger IPT-
Berger IPT- Growth and Small Company
100 Fund Income Fund Growth Fund
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Cash $250,000 $250,000 $250,000
- --------------------------------------------------------------------------------------------------------------------
Total Assets 250,000 250,000 250,000
- --------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 0 0 0
- --------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Shares Outstanding $250,000 $250,000 $250,000
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Capital Shares:
Authorized (Par Value $0.01) unlimited unlimited unlimited
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Shares Outstanding 25,000 25,000 25,000
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to statements of assets and liabilities.
F-2
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
NOTES TO STATEMENTS OF ASSETS AND LIABILITIES
APRIL 16, 1996
NOTE 1 - ORGANIZATION AND REGISTRATION
Berger Institutional Products Trust (the "Trust"), a Delaware business
trust, was established on October 17, 1995 as a diversified open-end management
investment company. The Trust consists of three separate portfolios: Berger
IPT-100 Fund, Berger IPT-Growth and Income Fund, and Berger IPT-Small Company
Growth Fund. The Trust has been inactive since inception except for matters
relating to its organization and registration as an investment company under the
Investment Company Act of 1940 and the Securities Act of 1933. The Trust's
shares are not offered directly to the public, but are sold exclusively to
insurance companies (the "Participating Insurance Companies") as a pooled
funding vehicle for variable annuity and variable life insurance contracts
issued by separate accounts of Participating Insurance Companies and to
qualified plans.
On April 15, 1996 Berger Associates, Inc. ("Berger"), the Trust's
investment advisor purchased 25,000 shares of each portfolio at a net asset
value of $10.00 per share.
All costs incurred in organizing the Trust were paid by Berger, the
investment advisor of the Trust.
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS
Berger serves as the Trust's investment advisor. As compensation for its
services to the Trust, Berger receives an investment advisory fee which is
accrued daily at the applicable rate and paid monthly. The fee is based on an
annual rate of each portfolio's average net assets as follows: Berger IPT-100
Fund and Berger IPT-Growth and Income Fund at .75 of 1% of average daily net
assets; Berger IPT-Small Company Growth Fund at .90 of 1% of average daily net
assets.
In accordance with a recordkeeping and pricing agreement, the Trust pays
Investors Fiduciary Trust Company ("IFTC"), a monthly base rate plus an
additional annual fee which is computed using average net assets. The fee is
calculated daily and paid monthly.
IFTC has also been appointed as the custodian, transfer agent, and dividend
disbursing agent for the Trust..
The Trust has entered into an administrative services agreement with Berger
with respect to each portfolio. The administrative services agreement provides
for an annual fee of .01 of 1% of the average daily net assets of the portfolio,
computed daily and paid monthly.
Certain officers and directors of Berger are also officers and trustees of
the Trust.
F-3
<PAGE>
INTERIM FINANCIAL REPORT
SEPTEMBER 30, 1996
BERGER INSTITUTIONAL PRODUCTS TRUST
BERGER IPT-100 FUND
BERGER IPT-GROWTH AND INCOME FUND
BERGER IPT-SMALL COMPANY GROWTH FUND
BERGER IPT - 100 FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) / SEPTEMBER 30, 1996
Shares, Units or
PRINCIPAL AMOUNT MARKET VALUE
COMMON STOCK - 91.0%
AEROSPACE/DEFENSE - 1.6%
50 Boeing Co. $ 4,725
---------------
AUTO/TRUCK - ORIGINAL EQUIPMENT - 1.2%
100 Lear Corp.* 3,300
---------------
BANKS - MONEY CENTER - 1.7%
55 Citicorp 4,984
---------------
CHEMICALS - SPECIALTY - 1.4%
90 Praxair Inc. 3,870
---------------
COMMERCIAL SERVICES - MISC. - 2.6%
125 AccuStaff Inc.* 3,234
80 APAC TeleServices Inc.* 4,100
---------------
7,334
---------------
COMPUTER - INTEGRATED SYSTEMS - 1.5%
100 Oracle Corp.* 4,256
---------------
COMPUTER - LOCAL NETWORKS - 1.4%
65 Cisco Systems Inc.* 4,034
---------------
COMPUTER - MEMORY DEVICES - 1.0%
125 EMC Corp.* 2,828
---------------
COMPUTER - PERIPHERAL EQUIPMENT - 1.3%
60 Adaptec Inc.* 3,600
---------------
COMPUTER - SERVICES - 2.9%
50 Electronic Data Systems Corp. 3,069
80 HBO & Co. 5,340
---------------
8,409
---------------
COMPUTER - SOFTWARE - 6.8%
50 BMC Software Inc.* 3,975
80 Computer Associates International Inc. 4,780
150 Informix Corp.* 4,181
50 Microsoft Corp.* 6,594
---------------
19,530
---------------
ELECTRONIC - MILITARY SYSTEMS - 1.0%
50 General Motors Corp. Cl H 2,887
---------------
ELECTRONIC - MISC. COMPONENTS - 1.7%
100 Solectron Corp.* 4,900
---------------
ELECTRONIC - SCIENTIFIC INSTRUMENTS - 2.2%
90 Input/Output Inc.* 2,678
90 Thermo Electron Corp.* 3,645
---------------
6,323
---------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING - 7.3%
90 Altera Corp.* 4,556
200 Atmel Corp.* 6,175
50 Intel Corp. 4,772
60 MEMC Electronic Materials Inc.* 1,388
100 Sanmina Corp.* 4,025
---------------
20,916
---------------
F-4
<PAGE>
FINANCE - MORTGAGE & RELATED SERVICES - 5.0%
50 Federal Home Loan Mortgage Corp. $ 4,894
150 Federal National Mortgage Assn. 5,231
110 Green Tree Financial Corp. 4,318
---------------
14,443
---------------
FINANCIAL SERVICES - MISC. - 1.4%
50 First Data Corp. 4,081
---------------
LEISURE - GAMING - 2.2%
160 Mirage Resorts Inc.* 4,100
100 Trump Hotels & Casino Resorts Inc.* 2,325
---------------
6,425
---------------
LEISURE - HOTELS & MOTELS - 1.8%
75 HFS Inc.* 5,016
---------------
MEDIA - RADIO/TV - 1.4%
120 Jacor Communications Inc.* 4,140
---------------
MEDICAL - BIOMEDICS/GENETICS - 1.9%
70 Biogen Inc.* 5,320
---------------
MEDICAL - ETHICAL DRUGS - 6.1%
60 Elan Corp. PLC ADR* (Ireland) 1,792
85 Eli Lilly & Co. 5,483
75 Pfizer, Inc. 5,934
100 Pharmacia & Upjohn Inc. (Sweden) 4,125
---------------
17,334
---------------
MEDICAL - INSTRUMENTS - 1.1%
70 IDEXX Laboratories Inc.* 3,167
---------------
MEDICAL - PRODUCTS - 2.0%
50 Boston Scientific Corp.* 2,875
50 Guidant Corp. 2,763
---------------
5,638
---------------
MEDICAL - WHOLESALE DRUG/SUNDRIES - 2.7%
100 Amerisource Health Corp.* 4,450
40 Cardinal Health Inc. 3,305
---------------
7,755
---------------
OIL & GAS - DRILLING - 3.1%
120 Reading & Bates Corp.* 3,255
90 Transocean Offshore Inc. 5,513
---------------
8,768
---------------
OIL & GAS - FIELD SERVICES - 6.8%
100 BJ Services Co.* 3,625
110 Petroleum Geo-Services A/S ADR* (Norway) 2,998
60 Schlumberger Ltd. 5,070
110 Tidewater Inc. 4,111
60 Western Atlas Inc.* 3,735
---------------
19,539
---------------
OIL & GAS - MACHINERY/EQUIPMENT - 2.1%
100 Baker Hughes Inc. 3,038
100 Dresser Industries Inc. 2,975
---------------
6,013
---------------
RETAIL - APPAREL/SHOE - 3.6%
110 Gap Inc. 3,176
100 Gucci Group N.V.* (Netherlands) 7,250
---------------
10,426
---------------
RETAIL - DEPARTMENT STORES - 1.2%
100 Federated Department Stores Inc.* 3,350
---------------
RETAIL - MAIL ORDER & DIRECT - 1.7%
125 CUC International Inc.* 4,984
---------------
RETAIL/WHOLESALE - BUILDING PRODUCTS - 1.4%
70 Home Depot Inc. 3,981
---------------
SHOES & RELATED APPAREL - 1.4%
75 Nine West Group Inc.* 4,069
---------------
F-5
<PAGE>
TELECOMMUNICATIONS - EQUIPMENT - 2.3%
110 Cable Design Technologies Corp.* $ 4,400
100 ECI Telecom Ltd. (Israel) 2,100
---------------
6,500
---------------
TELECOMMUNICATIONS - SERVICES - 3.4%
125 ICG Communications Inc.* (Canada) 2,625
100 PanAmSat Corp.* 2,781
200 WorldCom Inc.* 4,275
---------------
9,681
---------------
TEXTILE - APPAREL MANUFACTURING - 1.3%
60 Jones Apparel Group Inc. 3,825
---------------
TRANSPORT - AIR FREIGHT - 1.5%
100 Atlas Air Inc.* 4,275
---------------
TOTAL COMMON STOCK (Cost $252,286) 260,626
---------------
U.S. GOVERNMENT OBLIGATIONS - 8.7%
$ 25,000 U.S. Treasury Bills due 10/03/96 24,993
---------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (Amortized Cost
$24,993) 24,993
---------------
TOTAL INVESTMENTS (Cost $277,279+) - 99.7% 285,619
OTHER ASSETS, LESS LIABILITIES - 0.3% 898
---------------
NET ASSETS - 100% $ 286,517
---------------
---------------
* NON-INCOME PRODUCING SECURITY.
+ ALSO REPRESENTS COST FOR TAX PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS.
F-6
<PAGE>
BERGER IPT - GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)/ SEPTEMBER 30, 1996
Shares, Units or
Principal Amount Market Value
COMMON STOCK - 78.4%
AEROSPACE/DEFENSE - 2.5%
70 Boeing Co. $ 6,615
---------------
AUTO MANUFACTURERS - DOMESTIC - 2.1%
200 Chrysler Corp. 5,725
---------------
BANKS - MONEY CENTER - 2.0%
60 Citicorp 5,437
---------------
BEVERAGES - ALCOHOLIC - 2.0%
140 Anheuser-Busch Cos. Inc. 5,267
---------------
BUILDING - HAND TOOLS - 1.7%
110 Black & Decker Corp. 4,565
---------------
BUILDING - HEAVY CONSTRUCTION - 1.8%
80 Fluor Corp. 4,920
---------------
CHEMICALS - BASIC - 2.4%
175 Monsanto Co. 6,387
---------------
COMMERCIAL SERVICES - SECURITY/SAFETY - 2.7%
125 Diebold Inc. 7,297
---------------
COMPUTER - MAINFRAMES - 2.3%
50 International Business Machines Corp. 6,225
---------------
COMPUTER - MINI/MICRO - 1.5%
80 Hewlett-Packard Co. 3,900
---------------
COMPUTER - PERIPHERAL EQUIPMENT - 2.2%
100 Adaptec Inc.* 6,000
---------------
COMPUTER - SERVICES - 4.0%
60 Computer Sciences Corp.* 4,613
100 Electronic Data Systems Corp. 6,137
---------------
10,750
---------------
CONSUMER PRODUCTS - MISC. - 2.4%
100 Duracell International Inc. 6,413
---------------
DIVERSIFIED OPERATIONS - 4.2%
110 Alco Standard Corp. 5,486
150 Corning Inc. 5,850
---------------
11,336
---------------
ELECTRONIC - MILITARY SYSTEMS - 2.2%
100 General Motors Corp. Cl H 5,775
---------------
FINANCE - EQUITY REIT - 7.3%
150 Crescent Real Estate Equities Inc. 6,169
175 Patriot American Hospitality Inc. 5,884
175 Starwood Lodging Trust 7,328
---------------
19,381
---------------
FOOD - CANNED - 2.4%
150 Dole Food Company Inc. 6,300
---------------
HOUSEHOLD - HOUSEWARES - 2.2%
250 Sunbeam Corp. 5,781
---------------
MEDICAL - DRUG/DIVERSIFIED - 4.5%
100 American Home Products Corp. 6,375
110 Johnson & Johnson 5,638
---------------
12,013
---------------
MEDICAL - ETHICAL DRUGS - 5.6%
155 Eli Lilly & Co. 9,998
120 Pharmacia & Upjohn Inc. (Sweden) 4,950
---------------
14,948
---------------
OFFICE SUPPLIES MANUFACTURING - 2.1%
150 Deluxe Corp. 5,663
---------------
OIL & GAS - FIELD SERVICES - 2.2%
F-7
<PAGE>
70 Schlumberger Ltd. $ 5,915
---------------
OIL & GAS - MACHINERY/EQUIPMENT - 4.5%
200 Baker Hughes Inc. 6,075
200 Dresser Industries Inc. 5,950
---------------
12,025
---------------
OIL & GAS - PRODUCTION/PIPELINE - 2.3%
150 Enron Corp. 6,113
---------------
SHOES & RELATED APPAREL - 3.2%
70 Nike Inc. Cl B 8,505
---------------
TELECOMMUNICATIONS - EQUIPMENT - 2.0%
250 ECI Telecom Ltd. (Israel) 5,250
---------------
TELECOMMUNICATIONS - SERVICES - 2.1%
262 WorldCom Inc. 5,600
---------------
UTILITY - TELEPHONE - 2.0%
200 Frontier Corp. 5,325
---------------
TOTAL COMMON STOCK (Cost $198,559) 209,431
---------------
CONVERTIBLE PREFERRED STOCK - 3.2%
COMPUTER - SOFTWARE - 0.9%
50 Wang Laboratories Inc. 144A 6.5% Cv Pfd Series B** 2,425
---------------
FUNERAL SERVICES & RELATED - 2.3%
60 SCI Finance LLC $3.125 Cv Pfd Series A 6,150
---------------
TOTAL CONVERTIBLE PREFERRED STOCK (Cost $8,101)
8,575
---------------
CONVERTIBLE DEBENTURES - 9.3%
COMPUTER - LOCAL NETWORKS - 2.8%
$ 4,000 3Com Corp. 144A - 10.25% due 11/01/01** 7,495
---------------
COMPUTER - SERVICES - 2.2%
3,000 First Financial Management Corp. - 5% due 12/15/99 5,798
---------------
ELECTRONIC - SCIENTIFIC INSTRUMENTS - 2.2%
3,000 Thermo Electron Corp. 144A - 5% due 04/15/01** 5,865
---------------
RETAIL - DEPARTMENT STORES - 2.1%
5,000 Federated Department Stores Inc. - 5% due 10/01/03 5,675
---------------
TOTAL CONVERTIBLE DEBENTURES (Cost $23,593) 24,833
---------------
U.S. GOVERNMENT OBLIGATIONS - 6.3%
$ 17,000 U.S. Treasury Bills due 10/03/96 16,995
---------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (Amortized Cost $16,995)
16,995
---------------
TOTAL INVESTMENTS (Cost $247,248+) - 97.2% 259,834
OTHER ASSETS, LESS LIABILITIES - 2.8% 7,403
---------------
NET ASSETS - 100% $ 267,237
---------------
---------------
* NON-INCOME PRODUCING SECURITY.
** PURSUANT TO RULE 144A, RESALE IS RESTRICTED TO QUALIFIED INSTITUTIONAL
BUYERS.
+ ALSO REPRESENTS COST FOR TAX PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS.
F-8
<PAGE>
BERGER IPT - SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS (UNAUDITED)/ SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Shares, Units or
Principal Amount Market Value
---------------- ------------
COMMON STOCK - 96.9%
<S> <C> <C>
COMMERCIAL SERVICES - MISC. - 3.3%
50 ABR Information Services Inc.* $ 3,600
55 AccuStaff Inc.* 1,423
75 Career Horizons Inc.* 2,915
50 Mail Boxes Etc.* 1,131
--------------
9,069
--------------
COMMERCIAL SERVICES - SECURITY/SAFETY - 2.7%
100 Checkpoint Systems Inc.* 2,650
80 Corrections Corp. of America* 2,500
100 Wackenhut Corrections Corp.* 2,225
--------------
7,375
--------------
COMPUTER - GRAPHICS - 0.3%
200 Chyron Corp.* 900
--------------
COMPUTER - LOCAL NETWORKS - 2.5%
105 Ascend Communications Inc.* 6,943
--------------
COMPUTER - MEMORY DEVICES - 0.5%
40 Microchip Technology Inc.* 1,495
--------------
COMPUTER - SERVICES - 7.0%
100 American Management Systems Inc.* 2,800
100 Envoy Corp.* 3,875
75 Gartner Group Inc. Cl A* 2,550
60 HBO & Co. 4,005
50 QuickResponse Services Inc.* 1,862
120 Technology Solutions Co.* 4,185
--------------
19,277
--------------
COMPUTER - SOFTWARE - 14.5%
100 Baan Co. N.V.* (Netherlands) 3,337
110 Broderbund Software Inc.* 3,190
90 Cambridge Technology Partners Inc.* 2,722
60 CBT Group PLC ADR* (Ireland) 2,820
25 INSO Corp.* 1,356
80 Macromedia Inc.* 1,660
90 MDL Information Systems Inc.* 2,846
107 Pure Atria Corp.* 4,039
40 Remedy Corp.* 3,200
50 Seibel Systems Inc.* 2,081
40 Sterling Software Inc.* 3,055
85 Systemsoft Corp.* 2,911
160 VIASOFT Inc.* 6,720
--------------
39,937
--------------
DIVERSIFIED OPERATIONS - 0.6%
40 Pittway Corp. Cl A 1,785
--------------
ELECTRONIC - PARTS DISTRIBUTORS - 0.8%
100 Kent Electronics Corp.* 2,162
--------------
ELECTRONIC - SEMICONDUCTOR MANUFACTURING - 1.3%
200 Cypress Semiconductor Corp.* 2,500
30 Maxim Integrated Products Inc.* 1,061
--------------
3,561
--------------
FINANCE - MORTGAGE & RELATED SERVICES - 1.1%
60 Aames Financial Corp. 3,022
--------------
FINANCE - SBIC & COMMERCIAL - 2.1%
70 Safeguard Scientifics Inc.* 2,791
100 Sirrom Capital Corp. 3,025
--------------
F-9
<PAGE>
$ 5,816
--------------
FINANCIAL SERVICES - MISC. - 1.6%
150 PMT Services Inc.* 3,037
100 Pre-Paid Legal Services Inc.* 1,288
--------------
4,325
--------------
FUNERAL SERVICES & RELATED - 0.7%
60 Stewart Enterprises Inc. Cl A 2,025
--------------
HOUSEHOLD/OFFICE FURNITURE - 1.0%
65 Miller Herman Inc. 2,632
--------------
LEISURE - TOYS/GAMES/HOBBY - 1.1%
100 Lewis Galoob Toys Inc.* 2,925
--------------
MEDIA - RADIO/TV - 6.4%
50 American Radio Systems Corp. Cl A* 1,863
40 Clear Channel Communications Inc.* 3,540
60 Emmis Broadcasting Corp. Cl A* 2,775
90 Evergreen Media Corp. Cl A* 2,813
70 Jacor Communications Inc. Cl A* 2,415
70 Renaissance Communications Corp.* 2,468
40 Sinclair Broadcast Group* 1,595
--------------
17,469
--------------
MEDICAL - BIOMEDICS/GENETICS - 1.9%
50 Agouron Pharmaceuticals Inc.* 2,181
75 BioChem Pharma Inc.* (Canada) 3,009
--------------
5,190
--------------
MEDICAL - HEALTH MAINTENANCE ORGANIZATIONS - 0.7%
50 CompDent Corp.* 1,888
--------------
MEDICAL - HOSPITALS - 0.4%
50 Veterinary Centers of America Inc.* 1,097
--------------
MEDICAL - INSTRUMENTS - 1.5%
80 ESC Medical Systems Ltd.* (Israel) 2,560
50 Sofamor/Danek Group Inc.* 1,544
--------------
4,104
--------------
MEDICAL - OUTPATIENT/HOME CARE - 6.2%
75 American HomePatient Inc.* 1,669
70 HEALTHSOUTH Corp.* 2,686
75 PhyCor Inc.* 2,855
120 Physician Reliance Network Inc.* 1,830
50 Renal Care Group Inc.* 1,850
150 RoTech Medical Corp.* 2,475
90 Total Renal Care Holdings Inc.* 3,578
--------------
16,943
--------------
MEDICAL - PRODUCTS - 2.1%
100 Cytyc Corp.* 1,500
60 PAREXEL International Corp.* 3,780
60 TheraTech Inc.* 615
--------------
5,895
--------------
MEDICAL - WHOLESALE DRUG/SUNDRIES - 0.7%
90 Grupo Casa Autrey S.A. de C.V. ADR (Mexico) 2,014
--------------
MEDICAL/DENTAL - SUPPLIES - 3.7%
100 Omnicare Inc. 3,050
200 Orthodontic Centers of America Inc.* 4,075
70 Target Therapeutics Inc.* 2,993
--------------
10,118
--------------
OIL & GAS - DRILLING - 3.4%
70 ENSCO International Inc.* 2,275
250 Global Marine Inc.* 3,938
330 Marine Drilling Companies Inc.* 3,176
--------------
9,389
--------------
OIL & GAS - FIELD SERVICES - 1.5%
50 BJ Services Co.* 1,813
F-10
<PAGE>
60 Tidewater Inc. $ 2,243
--------------
4,056
--------------
OIL & GAS - U.S. EXPLORATION & PRODUCTION - 1.0%
80 Barrett Resources Corp.* 2,820
--------------
POLLUTION CONTROL - SERVICES - 0.8%
87 Tetra Tech Inc.* 2,066
--------------
RETAIL - APPAREL/SHOE - 4.6%
65 Finish Line Inc. Cl A* 3,088
70 Gymboree Corp.* 2,126
120 Men's Wearhouse Inc.* 3,000
120 Wet Seal Inc. Cl A 4,320
12,534
--------------
--------------
RETAIL - DEPARTMENT STORES - 0.4%
30 Proffitt's Inc.* 1,185
--------------
RETAIL - HOME FURNISHINGS - 0.8%
110 Alrenco Inc.* 2,310
--------------
RETAIL - MISC./DIVERSIFIED - 2.5%
155 Hollywood Entertainment Corp* 3,178
70 Petco Animal Supplies Inc.* 1,908
80 Urban Outfitters Inc.* 1,860
--------------
6,946
--------------
RETAIL - RESTAURANTS - 1.0%
120 Apple South Inc. 1,605
20 Papa John's International Inc.* 1,050
--------------
2,655
--------------
RETAIL/WHOLESALE - BUILDING PRODUCTS - 1.5%
150 Eagle Hardware & Garden Inc.* 4,050
--------------
RETAIL/WHOLESALE - JEWELRY - 1.2%
150 Claire's Stores Inc. 3,206
--------------
TELECOMMUNICATIONS - CELLULAR - 0.4%
50 InterCel Inc.* 1,050
--------------
TELECOMMUNICATIONS - EQUIPMENT - 6.9%
50 Comverse Technology Inc.* 1,944
60 Glenayre Technologies Inc.* 1,380
80 P-COM Inc.* 1,980
60 Westell Technologies Inc. Cl A* 2,655
60 Cascade Communications Corp.* 4,890
80 PairGain Technologies Inc.* 6,250
--------------
19,099
--------------
TELECOMMUNICATIONS - SERVICES - 4.9%
150 ACC Corp.* 7,088
70 ICG Communications Inc.* (Canada) 1,470
85 Intermedia Communications Inc.* 2,486
80 LCI International Inc.* 2,520
--------------
13,564
--------------
TEXTILE - APPAREL MANUFACTURING - 0.9%
80 Nautica Enterprises Inc.* 2,580
--------------
TRANSPORTATION - AIRLINE - 0.4%
130 Reno Air Inc.* 1,089
--------------
TOTAL COMMON STOCK (Cost $236,761) 266,566
--------------
TOTAL INVESTMENTS (Cost $236,761+) - 96.9% 266,566
OTHER ASSETS, LESS LIABILITIES - 3.1% 8,403
--------------
NET ASSETS - 100% $ 274,969
--------------
--------------
* NON-INCOME PRODUCING SECURITY.
+ ALSO REPRESENTS COST FOR TAX PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
F-11
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
Berger IPT- Berger IPT- Berger IPT-
September 30, 1996 (unaudited) 100 Fund Growth and Small Company
Income Fund Growth Fund
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments at cost $277,279 $247,248 $236,761
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Investments at value $285,619 $259,834 $266,566
Cash 605 6,597 16,085
Receivables:
Investment securities sold 0 0 1,757
Fund shares sold 11 0 0
Due from management company 452 447 556
Dividends and interest 27 539 5
-------------------------------------------------------------------------------------------
Total Assets 286,714 267,417 284,969
-------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Investment securities purchased 0 0 9,789
Accrued investment advisory fees 171 156 194
Other accrued expenses 26 24 17
-------------------------------------------------------------------------------------------
Total Liabilities 197 180 10,000
-------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $286,517 $267,237 $274,969
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Capital Shares:
Authorized (Par Value $0.01) unlimited unlimited unlimited
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Shares Outstanding 28,413 25,703 25,657
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE $10.08 $10.40 $10.72
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
F-12
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Berger IPT- Berger IPT- Berger IPT-
For the period May 1, 1996 (date operations 100 Fund Growth and Small Company
commenced) to September 30, 1996 (unaudited) Income Fund Growth Fund
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends $414 $1,616 $1,614
Interest 1,578 1,308 294
-------------------------------------------------------------------------------------------
Total Income 1,992 2,924 1,908
-------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees (Note 2) 806 783 840
Transfer agent fees 313 313 313
Postage, printing & reports 63 53 80
Custodian fees 828 886 1,566
Registration fees 78 78 78
Legal fees 3 3 3
Accounting fees 8 8 9
Administrative services (Note 2) 10 10 10
-------------------------------------------------------------------------------------------
Total Expenses 2,109 2,134 2,899
Less expenses reimbursed by adviser (Note 2) (1,036) (1,090) (1,660)
Less earnings credits (Note 2) (79) (65) (269)
-------------------------------------------------------------------------------------------
Expenses - Net 994 979 970
-------------------------------------------------------------------------------------------
Net Investment Income (Loss) 998 1,945 938
-------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on securities and foreign
currency transactions (5,179) (4,511) (12,565)
Net change in unrealized appreciation
(depreciation) on securities and foreign currency
transactions 8,340 12,586 29,805
-------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments
and Foreign Currency Transactions 3,161 8,075 17,240
-------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations $4,159 $10,020 $18,178
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
F-13
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Berger IPT- Berger IPT- Berger IPT-
For the period May 1, 1996 (date operations 100 Fund Growth and Small Company
commenced) to September 30, 1996 (unaudited) Income Fund Growth Fund
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $998 $1,945 $938
Net realized gain (loss) on securities and
foreign currency transactions (5,179) (4,511) (12,565)
Net change in unrealized appreciation
(depreciation) on securities and foreign
currency transactions 8,340 12,586 29,805
-------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Operations 4,159 10,020 18,178
-------------------------------------------------------------------------------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income dividend 0 0 0
Net realized gains on investments dividend 0 0 0
-------------------------------------------------------------------------------------------
Net Decrease in Net Assets from Distributions to
Shareholders 0 0 0
-------------------------------------------------------------------------------------------
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 282,363 257,217 256,794
Net asset value of shares issued in reinvestment
of dividends 0 0 0
-------------------------------------------------------------------------------------------
Total 282,363 257,217 256,794
Payments for shares redeemed (5) 0 (3)
-------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
From Fund Share Transactions 282,358 257,217 256,791
-------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS 286,517 267,237 274,969
Net Assets:
Beginning of period 0 0 0
-------------------------------------------------------------------------------------------
End of period $286,517 $267,237 $274,969
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Undistributed net investment income (loss)
included in the above $998 $1,945 $938
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS:
Capital (par value and paid in surplus) $282,358 $257,217 $256,791
Undistributed net investment income (loss) 998 1,945 938
Undistributed net realized gain (loss ) from
investments (5,179) (4,511) (12,565)
Unrealized appreciation (depreciation) on
investments 8,340 12,586 29,805
-------------------------------------------------------------------------------------------
Total $286,517 $267,237 $274,969
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
TRANSACTIONS IN FUND SHARES:
Shares sold 28,414 25,703 25,657
Shares issued to shareholders in reinvestment of
dividends 0 0 0
-------------------------------------------------------------------------------------------
Total 28,414 25,703 25,657
Shares repurchased (1) 0 0
-------------------------------------------------------------------------------------------
Net increase (decrease) in shares 28,413 25,703 25,657
Shares outstanding, beginning of period 0 0 0
-------------------------------------------------------------------------------------------
Shares outstanding, end of period 28,413 25,703 25,657
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
F-14
<PAGE>
BERGER INSTITUTIONAL PRODUCTS TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Berger Institutional Products Trust (the "Trust"), a Delaware business
trust, was established on October 17, 1995 as a diversified open-end management
investment company. The Trust is authorized to issue an unlimited number of
shares of beneficial interest in series or portfolios. Currently, the series
comprising Berger IPT-100 Fund ("IPT-100"), Berger IPT-Growth and Income Fund
("IPT-G&I"), and Berger IPT-Small Company Growth Fund ("IPT-SCG"), (individually
the "Fund" and collectively the "Funds"), which commenced operations on May 1,
1996, are the only portfolios established under the Trust, although others may
be added in the future.
The Trust is registered under the Investment Company Act of 1940 and the
Securities Act of 1933 (the "Acts"). Each Fund is diversified as defined in the
Acts. Shares of each Fund are fully paid and non-assessable when issued. All
shares issued by a particular Fund participate equally in dividends and other
distributions by that Fund. The Trust's shares are not offered directly to the
public, but are sold exclusively to insurance companies ("Participating
Insurance Companies") as a pooled funding vehicle for variable annuity and
variable life insurance contracts issued by separate accounts of Participating
Insurance Companies and to qualified plans.
On April 15, 1996 Berger Associates, Inc. ("Berger"), the Trust's
investment advisor purchased 25,000 shares of each portfolio at a net asset
value of $10.00 per share. All costs incurred in organizing the Trust were paid
by Berger.
At September 30, 1996, substantially all of the outstanding shares of the
Funds were owned by Berger Associates, Inc. as a result of the initial
capitalization of the Funds.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
Securities are valued at the close of the regular trading session of the
New York Stock Exchange (the "Exchange") on each day that the Exchange is open.
Securities listed on national exchanges, the NASDAQ Stock Market and foreign
exchanges are valued at the last sale price on such markets, or, if no last sale
price is available, they are valued using the mean between their current bid and
asked prices. Securities that are traded on the over-the-counter market are
valued at the mean between their current bid and asked prices. Short-term
obligations maturing within sixty days are valued at original cost plus
amortized discount or accrued interest from the date of acquisition, which
approximates market value. Foreign securities are converted to U.S. Dollars
using exchange rates at the close of the Exchange. Securities for which
quotations are not readily available are valued at fair values determined in
good faith pursuant to consistently applied procedures established by the
trustees.
FEDERAL INCOME TAXES
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of their taxable income to shareholders. Therefore, no income tax provision is
required.
SECURITY GAINS AND LOSSES
Gains and losses are computed on the identified cost basis for both
financial statement and Federal income tax purposes for all securities.
Currency gain and loss is calculated on payables and receivables that are
denominated in foreign currencies. The payables and receivables are generally
related to security transactions and income.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the date investments are
purchased or sold. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of discounts.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
2. AGREEMENTS
Berger serves as the Trust's investment advisor. As compensation for its
services to the Trust, Berger receives an investment advisory fee which is
accrued daily at the applicable rate and paid monthly. The fee is based on an
annual rate of each portfolio's average net assets as follows: IPT-100 and IPT-
G&I at .75 of 1% of average daily net assets; IPT-SCG at .90 of 1% of average
daily net assets. Berger has agreed to waive its advisory fee to the extent
the Funds' normal operating
F-15
<PAGE>
expenses in any fiscal year, including the management fee but excluding
brokerage commissions, interest, taxes and extraordinary expenses, of each of
the IPT-100 and the IPT-G&I exceed 1.00%, and normal operating expenses in
any fiscal year of the IPT-SCG exceed 1.15% of the Funds' average daily net
assets.
The Trust has entered into an administrative services agreement with
Berger. The administrative services agreement provides for an annual fee of .01
of 1% of the average daily net assets of each Fund, computed daily and payable
monthly.
The Trust has also entered into a recordkeeping and pricing agreement with
Investors Fiduciary Trust Company ("IFTC"), who also serves as each Fund's
custodian and transfer agent. The recordkeeping and pricing agreement provides
for the monthly payment of a base fee per Fund plus a fee computed as a
percentage of average daily net assets on a total relationship basis. IFTC's
fees for custody, recordkeeping and pricing, or transfer agency services are
subject to reduction by credits earned by each Fund, based on the cash balances
of the Fund held by IFTC as custodian or by credits received from directed
brokerage transactions. For the period May 1, 1996 (date operations commenced)
to September 30, 1996, the IPT-100, IPT-G&I and the IPT-SCG Funds received $79,
$65 and $269, respectively, in earnings and brokerage credits and paid IFTC fees
(after earnings and brokerage credits) of $1,070, $1,142 and $1,619,
respectively, for services rendered.
Certain officers and directors of Berger are also officers and trustees of
the Trust. Trustees who are not affiliated with Berger did not receive
trustees' fees from the IPT-100, IPT-G&I and IPT-SCG Funds for the period ended
September 30, 1996.
3. INVESTMENT TRANSACTIONS
A. Purchases and Sales
Purchases and sales of investment securities from May 1, 1996 (date operations
commenced) to September 30, 1996 were as follows:
Berger IPT- Berger IPT- Berger IPT-
100 Fund Growth and Small Company
Income Fund Growth Fund
- -------------------------------------------------------------------------------
Purchases of investment securities
(excluding short-term securities) $283,200 $298,848 $347,887
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Sales of investment securities
(excluding short-term securities) $25,752 $64,101 $98,566
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
There were no purchases or sales of long-term U.S. Government securities
during the period.
At September 30, 1996, the composition of unrealized appreciation (the excess
of value over tax cost) and unrealized depreciation (the excess of tax cost
over value) for securities was as follows:
Berger IPT- Berger IPT- Berger IPT-
100 Fund Growth and Small Company
Income Fund Growth Fund
- -------------------------------------------------------------------------------
Appreciation $16,326 $18,483 $42,715
Depreciation (7,986) (5,897) (12,910
- -------------------------------------------------------------------------------
Net $8,340 $12,586 $29,805
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
B. Federal Income Tax Status
Dividends paid by the Funds from net investment income and distributions of
net realized short-term capital gains are, for Federal income tax purposes,
taxable as ordinary income to shareholders.
The Funds distribute net realized capital gains, if any, to their shareholders
at least annually, if not offset by capital loss carryovers. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to the differing treatments
for net operating losses and expiring capital loss carryforwards. Accordingly,
these permanent differences in the character of income and distributions between
financial statements and tax basis will be reclassified to paid-in-capital.
F-16
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS / SEPTEMBER 30, 1996
For a Share Outstanding Throughout the Period May 1, Berger IPT- Berger IPT- Berger IPT-
1996 (date operations commenced) to September 30, 100 Fund Growth and Small
1996 (unaudited) Income Fund Company
Growth Fund
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00 $10.00 $10.00
- -----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .04 .08 .04
Net realized and unrealized gains on securities .04 .32 .68
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations .08 .40 .72
- -----------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net investment income) .00 .00 .00
Distributions (from capital gains) .00 .00 .00
- -----------------------------------------------------------------------------------------------------------------
Total distributions .00 .00 .00
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.08 $10.40 $10.72
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Total return 0.80% 4.00% 7.20%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratios:
Net assets, end of period 286,517 267,237 274,969
Ratio of expenses to average net assets*+ 1.96% 2.04% 2.69%
Ratio of net income to average net assets* .93% 1.86% .87%
Portfolio turnover rate 14% 30% 41%
Average commission rate $.0600 $.0600 $.0534
</TABLE>
* ANNUALIZED
+ RATIO REFLECTS TOTAL EXPENSES, INCLUDING FEES OFFSET BY EARNINGS CREDITS AND
MANAGEMENT FEE WAIVERS, BUT DOES NOT INCLUDE THE DEDUCTION OF ANY CHARGES OR
EXPENSES ATTRIBUTABLE TO ANY PARTICULAR VARIABLE INSURANCE CONTRACT.
F-17
<PAGE>
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) FINANCIAL STATEMENTS.
In Part A of the Registration Statement (Prospectus):
1. Financial Highlights for the Period May 1, 1996 (Date Operations
Commenced) to September 30, 1996 (Unaudited)
Included in Part B of this amendment to the Registration Statement
(Statement of Additional Information) for the Berger IPT - 100 Fund,
Berger IPT - Growth and Income Fund and Berger IPT - Small Company
Growth Fund:
1. Report of Independent Accountants, dated April 16, 1996
2. Statements of Assets and Liabilities as of April 16, 1996
3. Notes to Statements of Assets and Liabilities, April 16, 1996
4. Schedules of Investments as of September 30, 1996
5. Statements of Assets and Liabilities as of September 30, 1996
(Unaudited)
6. Statements of Operations for the Period May 1, 1996 (Date
Operations Commenced) to September 30, 1996 (Unaudited)
7. Statements of Changes in Net Assets for the Period May 1, 1996
(Date Operations Commenced) to September 30, 1996 (Unaudited)
8. Notes to Financial Statements, September 30, 1996
9. Financial Highlights for the Period May 1, 1996 (Date Operations
Commenced) to September 30, 1996 (Unaudited)
In Part C of the Registration Statement:
None.
(b) EXHIBITS.
The Exhibit Index following the signature pages below is incorporated
herein by reference.
C-1
<PAGE>
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
On the date that this Registration Statement is declared effective, Berger
Associates, Inc., a Delaware corporation, will own a majority of the outstanding
shares of the Registrant, having provided all the initial seed capital to
establish the Registrant. Consequently, Berger Associates will be a control
person of the Registrant. Berger Associates will continue to be a control
person of the Registrant so long as it holds more than 25% of the Registrant's
outstanding shares, as the term "control" is defined in the Investment Company
Act of 1940. So long as the Registrant is controlled by Berger Associates, it
will be under common control with the other companies controlled by Berger
Associates' corporate parent, Kansas City Southern Industries, Inc. ("KCSI").
See "Management and Investment Advice" in the Prospectus and "Investment
Advisor" in the Statement of Additional Information for more information on KCSI
and its affiliates.
Item 26. NUMBER OF HOLDERS OF SECURITIES
The number of record holders of shares of beneficial interest in the series
of Registrant's shares outstanding as of October 30, 1996, was as follows:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SERIES OR FUND NUMBER OF HOLDERS
OF SHARES
- --------------------------------------------------------------------------------
Berger IPT - 100 Fund 2
- --------------------------------------------------------------------------------
Berger IPT - Growth and Income Fund 2
- --------------------------------------------------------------------------------
Berger IPT - Small Company Growth Fund 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Item 27. INDEMNIFICATION
Article IX, Section 2 of the Trust Instrument for Berger Institutional
Products Trust (the "Trust"), provides for indemnification of certain persons
acting on behalf of the Trust to the fullest extent permitted by the law. In
general, trustees, officers, employees, managers and agents will be indemnified
against liability and against all expenses incurred by them in connection with
any claim, action, suit or proceeding (or settlement thereof) in which they
become involved by virtue of their Trust office, unless their conduct is
determined to constitute willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties, or unless it has been determined that they
have not acted in good faith in the reasonable belief that their actions were in
or not opposed to the best interests of the Trust. The Trust also may advance
money for these expenses, provided that the trustees, officers, employees,
managers or agents undertake to repay the Trust if their conduct is later
determined to preclude indemnification. The Trust has the power to
C-2
<PAGE>
purchase insurance on behalf of its trustees, officers, employees, managers and
agents, whether or not it would be permitted or required to indemnify them for
any such liability under the Trust Instrument or applicable law, and the Trust
has purchased and maintains an insurance policy covering such persons against
certain liabilities incurred in their official capacities.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR
The business of Berger Associates, Inc., the investment advisor of the
Registrant, is described in the Prospectus in Section 5 and in the Statement of
Additional Information in Section 4 which are included in this Registration
Statement.
William M.B. Berger, Rodney L. Linafelter, William R. Keithler and Kevin R.
Fay have no business, profession, vocation or employment of a substantial nature
other than their positions with the investment advisor, and have had no prior
business, profession, vocation or employment of a substantial nature within the
preceding two years other than as shown in Section 3 of the Statement of
Additional Information.
Gerard M. Lavin, President and a director of Berger Associates and
President and a trustee of the Trust, also serves as a Vice President of DST
Systems, Inc., 1055 Broadway, 9th Floor, Kansas City, MO 64105 (provider of
information and transaction processing and recordkeeping services for various
mutual funds), and as a director of First of Michigan Capital Corp. (holding
company) and First of Michigan Corp. (broker-dealer), 100 Renaissance Center,
Detroit, MI 48243. From February 1992 to March 1995, Mr. Lavin served as
President and CEO of Investors Fiduciary Trust Company.
Craig D. Cloyed, Vice President and Chief Marketing Officer of Berger
Associates, was formerly (September 1989 to August 1995) Senior Vice President
of INVESCO Funds Group (mutual funds).
Landon H. Rowland, a director of Berger Associates, also serves as
President, Chief Executive Officer and a director of Kansas City Southern
Industries, Inc., 114 W. 11th Street, Kansas City, MO 64105 (a publicly traded
holding company whose primary subsidiaries are engaged in transportation and
financial asset management, and which owns approximately 41% of the outstanding
shares of DST Systems, Inc., a publicly traded information and transaction
processing company). Mr. Rowland also serves as Chairman of the Board and a
director of The Kansas City Southern Railway Company, and until September 1995,
served as Chairman of the Board and a director of DST Systems, Inc.
Item 29. PRINCIPAL UNDERWRITERS
Not applicable.
C-3
<PAGE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's sub-transfer
agent, DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141;
(b) Accounting records relating to cash and other money balances; asset,
liability, reserve, capital, income and expense accounts; portfolio
securities; purchases and sales; and brokerage commissions are
maintained by the Registrant's Recordkeeping and Pricing Agent,
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105. Other records of the Registrant relating
to purchases and sales; the Trust Instrument, minute books and other
trust records; brokerage orders; performance information and other
records are maintained at the offices of the Registrant at
210 University Boulevard, Suite 900, Denver, Colorado 80206.
Item 31. MANAGEMENT SERVICES
The Registrant has no management-related service contract which is not
discussed in Parts A and B of this form. See Section 6 of the Prospectus and
Section 5 of the Statement of Additional Information for a discussion of the
Recordkeeping and Pricing Agent Agreement entered into between the Registrant
and IFTC and the Administrative Services Agreement entered into between the
Registrant and Berger Associates, Inc., investment advisor to the Registrant.
Item 32. UNDERTAKINGS
(1) Registrant undertakes to comply with the following policy with respect
to calling meetings of shareholders for the purpose of voting upon the removal
of any trustee of the Registrant and facilitating shareholder communications
related to such meetings:
1. The trustees will promptly call a meeting of shareholders for the
purpose of voting upon the removal of any trustee of the Registrant when
requested in writing to do so by the record holders of at least 10% of the
outstanding shares of the Registrant.
2. Whenever ten or more shareholders of record who have been shareholders
of the Registrant for at least six months, and who hold in the aggregate either
shares having a net asset value of at least $25,000 or at least 1% of the
outstanding shares
C-4
<PAGE>
of the Registrant, whichever is less, apply to the trustees in writing stating
that they wish to communicate with other shareholders with a view to obtaining
signatures to request such a meeting, and deliver to the trustees a form of
communication and request which they wish to transmit, the trustees within 5
business days after receipt of such application either will (i) give such
applicants access to a list of the names and addresses of all shareholders of
record of the Registrant, or (ii) inform such applicants of the approximate
number of shareholders of record and the approximate cost of mailing the
proposed communication and form of request.
3. If the trustees elect to follow the course specified in clause (ii),
above, the trustees, upon the written request of such applicants accompanied by
tender of the material to be mailed and the reasonable expenses of the mailing,
will, with reasonable promptness, mail such material to all shareholders of
record, unless within 5 business days after such tender the trustees shall mail
to such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material requested to be mailed, a
written statement signed by at least a majority of the trustees to the effect
that in their opinion either such material contains untrue statements of fact or
omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion.
4. If the Commission enters an order either refusing to sustain any of
the trustees' objections or declaring that any objections previously sustained
by the Commission have been resolved by the applicants, the trustees will cause
the Registrant to mail copies of such material to all shareholders of record
with reasonable promptness after the entry of such order and the renewal of such
tender.
(2) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders, upon request and without charge.
C-5
43
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of Denver, and State of
Colorado, on the 30th day of October, 1996.
BERGER INSTITUTIONAL PRODUCTS TRUST
-----------------------------------
(Registrant)
By /s/ Gerard M. Lavin
--------------------------------
Name: Gerard M. Lavin
----------------------------
Title: President
----------------------------
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Gerard M. Lavin
- ------------------------------ President (Principal October 30, 1996
Gerard M. Lavin Executive Officer)
and Trustee
/s/Rodney L. Linafelter*
- ------------------------------ President of October 30, 1996
Rodney L. Linafelter Berger IPT - 100
Fund and Berger
IPT - Growth and
Income Fund and Trustee
/s/ Kevin R. Fay
- ------------------------------ Vice President, October 30, 1996
Kevin R. Fay Secretary and
Treasurer (Principal
Financial and
Accounting Officer)
/s/Dennis E. Baldwin*
- ------------------------------ Trustee October 30, 1996
Dennis E. Baldwin
/s/William M.B. Berger*
- ------------------------------ Trustee October 30, 1996
William M.B. Berger
/s/Louis R. Bindner*
- ------------------------------ Trustee October 30, 1996
Louis R. Bindner
C-6
<PAGE>
/s/Katherine A. Cattanach*
- ------------------------------ Trustee October 30, 1996
Katherine A. Cattanach
/s/Lucy Black Creighton*
- ------------------------------ Trustee October 30, 1996
Lucy Black Creighton
/s/Paul R. Knapp*
- ------------------------------ Trustee October 30, 1996
Paul R. Knapp
/s/Harry T. Lewis, Jr.*
- ------------------------------ Trustee October 30, 1996
Harry T. Lewis, Jr.
/s/Michael Owen*
- ------------------------------ Trustee October 30, 1996
Michael Owen
/s/William Sinclaire*
- ------------------------------ Trustee October 30, 1996
William Sinclaire
/s/ Gerard M. Lavin
- ------------------------------
*By: Gerard M. Lavin,
Attorney-in-fact
C-7
<PAGE>
EXHIBIT INDEX
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- --------------- ---------- ---------------
+ Exhibit 1 Trust Instrument
+ Exhibit 2 Bylaws
Exhibit 3 Not Applicable
Exhibit 4 Not Applicable
+ Exhibit 5.1 Form of Investment Advisory
Agreement for Berger IPT - 100 Fund
+ Exhibit 5.2 Form of Investment Advisory
Agreement for Berger IPT - Growth
and Income Fund
+ Exhibit 5.3 Form of Investment Advisory
Agreement for Berger IPT - Small
Company Growth Fund
Exhibit 6 Not Applicable
Exhibit 7 Not Applicable
+ Exhibit 8 Form of Custody Agreement
+ Exhibit 9.1.1 Form of Administrative Services
Agreement for Berger IPT - 100 Fund
+ Exhibit 9.1.2 Form of Administrative Services
Agreement for Berger IPT - Growth
and Income Fund
+ Exhibit 9.1.3 Form of Administrative Services
Agreement for Berger IPT - Small
Company Growth Fund
+ Exhibit 9.2 Form of Recordkeeping and Pricing
Agent Agreement
+ Exhibit 9.3 Form of Agency Agreement
+ Exhibit 9.4 Form of Participation Agreement
between Berger Institutional
Products Trust, Berger Associates,
Inc. and Great American Reserve
Insurance Company
+ Exhibit 10 Opinion and consent of Davis,
Graham & Stubbs LLP
* Exhibit 11 EX-99.B11 Consent of Price Waterhouse LLP
Exhibit 12 Not Applicable
+ Exhibit 13 Investment Letter from Initial
Stockholder
Exhibit 14 Not Applicable
Exhibit 15 Not Applicable
+ Exhibit 16 Schedule for Computation of
Performance Data
* Exhibit 17.1 EX-99.B27.1 Financial Data Schedule for Berger
IPT - 100 Fund
<PAGE>
* Exhibit 17.2 EX-99.B27.2 Financial Data Schedule for Berger
IPT - Growth and Income Fund
* Exhibit 17.3 EX-99.B27.3 Financial Data Schedule for Berger
IPT - Small Company Growth Fund
Exhibit 18 Not Applicable
- -----------------------
* Filed herewith.
+ Previously filed on April 18, 1996, with Pre-Effective Amendment No. 1 to
the Registrant's Registration Statement on Form N-1A and incorporated
herein by reference.
<PAGE>
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 1 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
April 16, 1996, relating to the statements of assets and liabilities of
Berger Institutional Products Trust which appears in such Statement of
Additional Information and to the incorporation by reference of our report
into the Prospectus which constitutes part of this Registration Statement.
We also consent to the reference to us under the heading "Additional
Information" in such Statement of Additional Information.
PRICE WATERHOUSE LLP
Denver, Colorado
October 29, 1996
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