JUNDT FUNDS INC, 497, 1996-12-24

JUNDT FUNDS INC
497, 1996-12-24

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PROSPECTUS OF
JUNDT OPPORTUNITY FUND
CLASSES B, C AND D
<PAGE>
JUNDT OPPORTUNITY FUND

1550 UTICA AVENUE SOUTH, SUITE 950

MINNEAPOLIS, MINNESOTA 55416

(800) 370-0612

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Jundt Opportunity Fund (the "Fund") is a professionally managed,
non-diversified series of Jundt Funds, Inc. (the "Company"), an open-end
management investment company (commonly known as a "mutual fund") that currently
offers its shares in two series. The Fund, in turn, currently offers its shares
in four classes, namely, Class A, Class B, Class C and Class D, each sold
pursuant to different sales arrangements and bearing different expenses (each, a
"Class" and, collectively, the "Classes.") This Prospectus relates only to the
Fund's Class B, Class C and Class D shares, the only Classes offered for sale to
the general public. See "Purchase Information."

The Fund's investment objective is to provide capital appreciation. In
pursuing its objective, the Fund employs an aggressive yet flexible investment
program emphasizing investments in domestic companies that are believed by the
Fund's investment adviser, Jundt Associates, Inc. (the "Investment Adviser"), to
have significant potential for capital appreciation. Income is not a
consideration in the selection of investments and is not an objective of the
Fund. The Fund may take positions that are different from those taken by most
other mutual funds. For example, the Fund may sell the stocks of some issuers
short, and may take positions in options and futures contracts in anticipation
of a market decline. The Fund may also borrow money to purchase portfolio
securities. Like all mutual funds, attainment of the Fund's investment objective
cannot be assured. See "Investment Objective and Policies."

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Please read this Prospectus
carefully before investing and retain it for future reference. A Statement of
Additional Information, dated December 23, 1996, containing more information
about the Fund (which is incorporated herein by reference), has been filed with
the Securities and Exchange Commission (the "SEC"), and is available upon
request and without charge by calling the Fund at the telephone number listed
above.

AN INVESTMENT IN THE FUND INVOLVES CERTAIN RISKS, AS DESCRIBED UNDER "RISK
FACTORS" AND "INVESTMENT OBJECTIVE AND POLICIES." FUND SHARES ARE NOT
OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANKING
INSTITUTION, ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION (THE "FDIC") OR ANY OTHER FEDERAL AGENCY AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

AS WITH ALL MUTUAL FUNDS, 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 ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------------------

PROSPECTUS DATED DECEMBER 23, 1996
<PAGE>
THE FUND

The Fund is a professionally managed, non-diversified series of the Company,
an open-end management investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). The Company was
incorporated under the laws of the State of Minnesota on October 26, 1995. Its
principal business address is 1550 Utica Avenue South, Suite 950, Minneapolis,
Minnesota 55416.

RISK FACTORS

An investment in the Fund is subject to certain risks, as detailed under
"Investment Objective and Policies." As with other mutual funds, there can be no
assurance that the Fund will achieve its investment objective, and an investment
in the Fund will fluctuate in value (corresponding to the value of the Fund's
underlying investments).

The Fund may from time to time invest a substantial portion of its assets in
securities issued by smaller companies. Investments in smaller companies may
involve greater price volatility and may have less market liquidity than equity
securities of larger companies. See "Investment Objective and Policies --
Investment Policies and Risk Considerations."

Under normal market conditions, the Fund may invest up to 35% of its total
assets in debt securities, and may temporarily invest greater than 35% of its
assets in such securities when the Investment Adviser believes that market
conditions warrant a defensive investment posture. The value of debt securities
typically varies inversely with changes in market interest rates. See
"Investment Objective and Policies -- Investment Policies and Risk
Considerations."

The Fund may invest up to 10% of its total assets in securities of foreign
issuers. Such investments involve risks not typically associated with
investments in securities of domestic companies, including unfavorable changes
in currency exchange rates, potential political and economic instability in such
countries, limited liquidity and price volatility. See "Investment Objective and
Policies -- Investment Policies and Risk Considerations."

The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques involves unique risks. See "Investment Objective and
Policies -- Investment Policies and Risk Considerations."

PURCHASE INFORMATION

The Fund offers investors the choice among three Classes of shares, namely,
Class B, Class C and Class D, which offer different sales charges and bear
different expenses. See "Fees and Expenses" below. These alternatives permit an
investor to choose the method of purchasing shares that is most beneficial,
given the amount of the purchase, the length of time the investor expects to
hold the shares and other circumstances. As more fully discussed below, Class A
shares are offered for sale exclusively to certain specified investors and are
not offered for sale to the general public.

Investors making investments that, based upon the amount of the investment,
would qualify for reduced Class D sales charges may wish to consider Class D
shares, as opposed to Class B or Class C shares, which bear higher Rule 12b-1
charges. Other investors may wish to consider Class B or Class C shares because
all of the purchase price is invested immediately. Orders for Class B shares for
$250,000 or more will be treated as orders for Class D shares or declined. Sales
personnel may receive different compensation depending on which Class of shares
they sell.

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Class A shares are available for investments only by: (a) directors,
officers, employees and consultants of the Fund (including partners and
employees of outside legal counsel to the Fund), the Investment Adviser and the
Fund's principal distributor, U.S. Growth Investments, Inc., members of their
immediate families, and their direct lineal ancestors and descendants; and (b)
accounts for the benefit of any of the foregoing.

FEES AND EXPENSES

The following fee and expense summary format was developed for use by all
mutual funds to assist investors in making investment decisions. Of course,
investors contemplating an investment in Fund shares should also consider other
relevant factors, including the Fund's investment objective and historical
performance.

<TABLE>
<CAPTION>
CLASS B(a) CLASS C CLASS D
---------- -------- --------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases....... NONE(b) NONE(b) 5.25%
Sales Charge Imposed on Dividend
Reinvestments.................................. NONE NONE NONE
Maximum Deferred Sales Load (as a percentage of
original purchase price or redemption proceeds,
whichever is lower) (c)........................ 4.00% 1.00% 1.00%(d)
Annual Fund Operating Expenses (as a percentage of
average net assets):
Investment Advisory Fees (e).................... 1.30% 1.30% 1.30%
12b-1 Fees:
Account Maintenance Fees...................... 0.25% 0.25% 0.25%
Distribution Fees............................. 0.75%(b) 0.75%(b) NONE
Other Expenses:
Administrative Fees........................... 0.20% 0.20% 0.20%
Shareholder Servicing Costs................... 0.33% 0.33% 0.30%
Other (f)..................................... 0.09% 0.09% 0.09%
---------- -------- --------
Total Fund Operating Expenses (f)................. 2.92% 2.92% 2.14%
---------- -------- --------
---------- -------- --------
</TABLE>

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(a) Class B shares will convert automatically into Class D shares on their
designated conversion date (the 15th day of each month or the next business
day if the 15th is not a business day) immediately following the eighth
anniversary of their sale. See "How to Buy Fund Shares."

(b) Class B and Class C shares are sold without a front-end sales charge;
however, their higher 12b-1 fees may cause long-term Class B and Class C
shareholders to pay more than the economic equivalent of the maximum
permitted front-end sales charges.

(c) In addition to any applicable deferred sales loads, service agents may
charge a nominal fee for effecting redemptions of Fund shares.

(d) A contingent deferred sales charge of 1% is imposed on certain redemptions
of Class D shares that were purchased without an initial sales charge as
part of an investment of $1 million or more. See "How to Buy Fund Shares --
Class D Shares."

(e) The fee paid by the Fund to the Investment Adviser is higher than the
advisory fee paid by most other investment companies.

(f) Net of voluntary expense reimbursements by the Investment Adviser.

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EXAMPLE:

Investors would pay the following expenses on a $1,000 investment, assuming
a 5% annual return and redemption at the end of each time period:

<TABLE>
<CAPTION>
CLASS B CLASS C CLASS D (1)
----------- ----------- -------------
<S> <C> <C> <C>
One year...................................................... $ 70 $ 40 $ 73
Three years................................................... 120 90 116
</TABLE>

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(1) Numbers do not reflect the 1% contingent deferred sales charge that may be
imposed on certain redemptions of Class D shares.

Investors in Class B and Class C shares would pay the following expenses on
the same investment, assuming no redemption at the end of each time period:

<TABLE>
<CAPTION>
CLASS B CLASS C
----------- -----------
<S> <C> <C>
One year................................................................... $ 30 $ 30
Three years................................................................ 90 90
</TABLE>

The purpose of the fee and expense information set forth above is to assist
investors in understanding the various costs and expenses that investors will
bear directly or indirectly in each Class of the Fund's shares. More detailed
information regarding these expenses is set forth under "Management of the
Fund." THE FOREGOING INFORMATION REPRESENTS MANAGEMENT'S GOOD FAITH ESTIMATE OF
FUND EXPENSES (NET OF VOLUNTARY EXPENSE REIMBURSEMENTS) DURING THE FIRST YEAR OF
THE FUND'S OPERATIONS AND SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The Investment Adviser has voluntarily agreed to pay certain Fund expenses
as indicated in the above table incurred during the first year of the Fund's
operations. Thereafter, such voluntary expense reimbursements may be
discontinued or modified in the Investment Adviser's sole discretion. Absent
such voluntary expense reimbursements, the Investment Adviser estimates that the
Fund's Class B, Class C and Class D shares would incur other expenses of
approximately 0.64%, 0.64% and 0.64%, respectively, and Total Fund Operating
Expenses of approximately 3.47 %, 3.47% and 2.69%, respectively.

4
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INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective and certain other specifically designated
investment policies and restrictions are deemed to be "fundamental" and, as
such, may not be changed except by a vote of shareholders owning a "majority of
the outstanding voting securities" of the Fund (as defined in the Investment
Company Act). Except for the Fund's investment objective and the policies and
restrictions that are specifically designated as "fundamental," each of the
Fund's investment policies and restrictions are "non-fundamental" and, as such,
may be changed or eliminated by the Company's Board of Directors without any
vote by Fund shareholders. If a percentage limitation set forth in any of the
following investment policies and restrictions is adhered to at the time a
transaction is effected, later changes in the percentage resulting from changes
in value or in the number of outstanding securities of the issuer will not be
considered a violation.

INVESTMENT OBJECTIVE

The Fund's investment objective is to provide capital appreciation. Income
is not a consideration in the selection of investments and is not an objective
of the Fund. Like all mutual funds, attainment of the Fund's investment
objective cannot be assured.

INVESTMENT POLICIES AND RISK CONSIDERATIONS

In pursuing its investment objective, the Fund employs an aggressive yet
flexible investment program. The Fund may invest in varying combinations of
stocks and bonds, and various other investments (described below), that the
Investment Adviser believes will best enable the Fund to achieve its objective
of capital appreciation. The Investment Adviser anticipates that, in normal
market conditions, at least 65% of the Fund's investment portfolio will be
comprised of common stocks of large and small domestic companies that are
believed by the Investment Adviser to have significant potential for capital
appreciation.

The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques, described below, involves unique risks. The Statement of
Additional Information contains more detailed information about these investment
techniques, including limitations designed to reduce these risks.

The net asset value of the Fund will fluctuate with changes in the value of
its portfolio securities. The Fund should be viewed as a long-term investment
suitable for investors seeking long-term capital appreciation. The Fund is not
intended to provide a trading vehicle for investors who wish to profit from
short-term swings in the stock market.

INVESTMENTS IN SMALLER COMPANIES. The Fund may from time to time invest a
substantial portion of its assets in securities issued by smaller companies.
Such companies may offer greater opportunities for capital appreciation than
larger companies, but investments in such companies may involve certain special
risks. Such companies may have limited product lines, markets, or financial
resources and may be dependent on a limited management group. While the markets
in securities of such companies have grown rapidly in recent years, such
securities may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and the Fund may experience some difficulty in establishing
or closing out positions in these securities at prevailing market prices. There
may be less publicly

5
<PAGE>
available information about the issuers of these securities or less market
interest in such securities than in the case of larger companies, and it may
take a longer period of time for the prices of such securities to reflect the
full value of their issuers' underlying earnings potential or assets.

SHORT SALES. When the Investment Adviser anticipates that the price of a
security will decline, it may sell the security short and borrow the same
security from a broker or other institution to complete the sale. The Fund may
make a profit or incur a loss depending upon whether the market price of the
security decreases or increases between the date of the short sale and the date
on which the Fund must replace the borrowed security. An increase in the value
of a security sold short by the Fund over the price at which it was sold short
will result in a loss to the Fund, and there can be no assurance that the Fund
will be able to close out the position at any particular time or at an
acceptable price.

All short sales must be fully collateralized, and the Fund may not sell
securities short if, immediately after and as a result of the sale, the value of
all securities sold short by the Fund exceeds 25% of the Fund's total assets. In
addition, the Fund limits short sales of any one issuer's securities to 5% of
the Fund's total assets and to 5% of any one class of the issuer's securities.

FOREIGN SECURITIES. The Fund may invest up to 10% of the value of its total
assets in securities of foreign issuers. The Fund may only purchase foreign
securities that are represented by American Depository Receipts listed on a
domestic securities exchange or included in the NASDAQ National Market System,
or foreign securities listed directly on a domestic securities exchange or
included in the NASDAQ National Market System. Interest or dividend payments on
such securities may be subject to foreign withholding taxes. The Fund's
investments in foreign securities involve considerations and risks not typically
associated with investments in securities of domestic companies, including
unfavorable changes in currency exchange rates, reduced and less reliable
information about issuers and markets, different accounting standards,
illiquidity of securities and markets, local economic or political instability
and greater market risk in general.

DEBT SECURITIES. The Fund may invest in "investment grade" debt securities
from time to time if the Investment Adviser believes investing in such
securities might assist the Fund in achieving its overall objective of long-term
capital appreciation. In normal market conditions, the Investment Adviser
anticipates that the Fund will invest no more than 35% of its assets in debt
securities. However, in abnormal market conditions when the Investment Adviser
believes a defensive investment posture is warranted, the Fund may temporarily
invest up to 100% of its assets in high grade debt securities, as described
below.

Debt securities are deemed to be "investment grade" if rated Baa or higher
by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by Standard &
Poor's Corporation ("S&P"), or if unrated that are judged by the Investment
Adviser to be of comparable quality. Securities rated Baa or BBB (and similar
unrated securities) lack outstanding investment characteristics, have
speculative characteristics, and are subject to greater credit and market risks
than higher-rated securities. The Fund will not necessarily dispose of a
security when its debt rating is reduced below its rating at the time of
purchase, although the Investment Adviser will monitor the investment to
determine whether continued investment in the security will assist in meeting
the Fund's investment objective.

DEFENSIVE STRATEGIES. At times, the Investment Adviser may judge that
market conditions make pursuing the Fund's basic investment strategy
inconsistent with the best interests of its shareholders. At such times, the
Investment Adviser may temporarily use defensive strategies primarily designed
to

6
<PAGE>
reduce fluctuations in the values of the Fund's assets. In implementing these
strategies, the Fund may temporarily invest up to 100% of its assets in U.S.
Government securities, other "high-quality" debt securities (securities rated A
or higher by Moody's and/or S&P or judged by the Investment Adviser to be of
comparable quality) and other securities the Investment Adviser believes to be
consistent with the Fund's best interests.

ZERO-COUPON BONDS. The Fund may at times invest in "zero-coupon" bonds.
Zero-coupon bonds are issued at a significant discount from face value and pay
interest only at maturity rather than at intervals during the life of the
security. The values of zero-coupon bonds are subject to greater fluctuation in
response to changes in market interest rates than bonds which pay interest
currently, and may involve greater credit risk than such bonds.

BORROWING AND LEVERAGE. The Fund may borrow money to invest in additional
portfolio securities. This practice, known as "leverage," increases the Fund's
market exposure and its risk. When the Fund has borrowed money for leverage and
its investments increase or decrease in value, the Fund's net asset value will
normally increase or decrease more than if it had not borrowed money. In
addition, the interest the Fund must pay on borrowed money will reduce the
amount of any potential gains or increase any losses. The extent to which the
Fund will borrow money, and the amount it may borrow, depend on market
conditions and interest rates. Successful use of leverage depends on the
Investment Adviser's ability to predict market movements correctly. The Fund may
at times borrow money by means of reverse repurchase agreements. Reverse
repurchase agreements generally involve the sale by the Fund of securities held
by it and an agreement to repurchase the securities at an agreed-upon price,
date, and interest payment. Reverse repurchase agreements will increase the
Fund's overall investment exposure and may result in losses. The amount of money
borrowed by the Fund for leverage may generally not exceed one-third of the
Fund's assets (including the amount borrowed).

OPTIONS AND FUTURES. The Fund may buy and sell call and put options to
hedge against changes in net asset value or to attempt to realize a greater
current return. In addition, through the purchase and sale of future contracts
and related options, the Fund may at times seek to hedge against fluctuations in
net asset value and to attempt to increase its investment return.

The Fund's ability to engage in options and futures strategies will depend
on the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that the Fund
will be able to utilize these instruments effectively for the purposes stated
above. Options and futures transactions involve certain risks which are
described below and in the Statement of Additional Information.

Transactions in options and futures contracts involve brokerage costs and
may require the Fund to segregate assets to cover its outstanding positions. For
more information, see the Statement of Additional Information.

INDEX FUTURES AND OPTIONS. The Fund may buy and sell index futures
contracts ("index futures") and options on index futures and on indices (or may
purchase investments whose values are based on the value from time to time of
one or more securities indices) for hedging purposes. An index future is a
contract to buy or sell units of a particular bond or stock index at an agreed
price on a specified future date. Depending on the change in value of the index
between the time when the Fund enters into and terminates an index futures or
option transaction, the Fund realizes a gain or loss. The Fund may also buy and
sell index futures and options to increase its investment return.

7
<PAGE>
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index or of the securities held by the Fund that are the subject of a hedge. The
successful use by the Fund of the strategies described above further depends on
the ability of the Investment Adviser to forecast market movements correctly.
Other risks arise from the Fund's potential inability to close out futures or
options positions. Although the Fund will enter into options or futures
transactions only if the Investment Adviser believes that a liquid secondary
market exists for such option or futures contracts, there can be no assurance
that the Fund will be able to effect closing transactions at any particular time
or at an acceptable price. In addition, certain provisions of the Internal
Revenue Code may limit the Fund's ability to engage in options and futures
transactions.

The Fund expects that its options and futures transactions generally will be
conducted on recognized exchanges. The Fund may in certain instances purchase
and sell options in the over-the-counter markets. The Fund's ability to
terminate options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. The Fund will, however, engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in the opinion of the Investment Adviser, the pricing
mechanism and liquidity of over-the-counter markets are satisfactory and the
participants are responsible parties likely to meet their obligations.

Consistent with the rules and regulations of the Commodity Futures Trading
Commission exempting the Fund from regulation as a "commodity pool," the Fund
will not purchase or sell futures contracts or related options if, as a result,
the sum of the initial margin deposit on the Fund's existing futures and related
options positions and premiums paid for options on futures contracts entered
into for other than bona fide hedging purposes would exceed 5% of the Fund's
assets. (For options that are "in-the-money" at the time of purchase, the amount
by which the option is "in-the-money" is excluded from this calculation.)

NON-DIVERSIFICATION AND SECTOR CONCENTRATION. As a "non-diversified" fund,
the Fund may invest its assets in a more limited number of issuers than may
other investment companies. Under the Internal Revenue Code, however, the Fund
may not invest more than 25% of its assets in obligations of any one issuer
other than U.S. Government obligations and, with respect to 50% of its total
assets, may not invest more than 5% of its total assets in the securities of any
one issuer (except U.S. Government securities). Thus, as a non-diversified fund,
the Fund may invest up to 25% of its total assets in the securities of each of
any two issuers. This practice involves an increased risk of loss to the Fund if
the market value of a security should decline or its issuer were otherwise not
to meet its obligations.

At times the Fund may invest more than 25% of its assets in securities of
issuers in one or more market sectors such as, for example, the technology
sector. A market sector may be made up of companies in a number of related
industries. The Fund would only concentrate its investments in a particular
market sector if the Investment Adviser were to believe the investment return
available from concentration in that sector justifies any additional risk
associated with concentration in that sector. When the Fund concentrates its
investments in a market sector, financial, economic, business, and other
developments affecting issuers in that sector will have a greater effect on the
Fund than if it had not concentrated its assets in that sector.

8
<PAGE>
SECURITIES LOANS AND REPURCHASE AGREEMENTS. The Fund may lend portfolio
securities to broker-dealers and may enter into repurchase agreements. These
transactions must be fully collateralized at all times, but involve some risk to
the Fund if the other party should default on its obligations and the Fund is
delayed or prevented from recovering the collateral.

PORTFOLIO TURNOVER. The length of time the Fund has held a particular
security is not generally a consideration in investment decisions. The Fund's
investment policies may lead to frequent changes in the Fund's investments,
particularly in periods of volatile market movements. A change in the
investments held by the Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. During the initial year of the Fund's
operations, the Fund's portfolio turnover is expected to exceed 100%.

INVESTMENT RESTRICTIONS

In addition to the investment policies set forth above, the Fund has adopted
certain fundamental investment restrictions (set forth in their entirety in the
Statement of Additional Information), which may not be amended without the vote
of a "majority of the outstanding voting securities" of the Fund (as defined in
the Investment Company Act). These restrictions prohibit the Fund, among other
matters, from: (a) investing more than 25% of its total assets in any one
industry (securities issued or guaranteed by the United States Government, its
agencies or instrumentalities are not considered to represent industries); or
(b) borrowing money, except from banks for temporary or emergency purposes or as
required in connection with otherwise permissible leverage activities and then
only in an amount not in excess of one-third of the value of the Fund's total
assets. Additionally, the Fund has adopted certain non-fundamental investment
restrictions (also set forth in their entirety in the Statement of Additional
Information), which may be changed by the Company's Board of Directors without
the approval of the Fund's shareholders. According to these restrictions, the
Fund, among other matters, may not invest more than 15% of its net assets in
illiquid securities.

BROKERAGE AND PORTFOLIO TRANSACTIONS

Subject to policies established by the Company's Board of Directors, the
Investment Adviser is responsible for investment decisions and for the execution
of the Fund's portfolio transactions. The Fund has no obligation to deal with
any particular broker or dealer in the execution of transactions in portfolio
securities. In executing such transactions, the Investment Adviser seeks to
obtain the best price and execution for its transactions. While the Investment
Adviser generally seeks reasonably competitive commission rates, the Fund does
not necessarily pay the lowest commission.

Where best price and execution may be obtained from more than one broker or
dealer, the Investment Adviser may, in its discretion, purchase and sell
securities through brokers or dealers who provide research, statistical and
other information to the Investment Adviser. Information so received will be in
addition to and not in lieu of the services required to be performed by the
Investment Adviser under its investment advisory agreement with the Fund and the
expenses of the Investment Adviser will not necessarily be reduced as a result
of the receipt of such supplemental information. Such information may be useful
to the Investment Adviser in providing services to clients other than the Fund.
Conversely, such information provided to the Investment Adviser by brokers and
dealers through whom other clients of the Investment Adviser effect securities
transactions may be useful to the Investment Adviser in providing services to
the Fund.

9
<PAGE>
Consistent with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD"), the Investment Adviser may also consider
distribution of Fund shares when allocating Fund portfolio transactions between
or among brokers and dealers that otherwise offer best price and execution.

The Fund will not purchase securities from, or sell securities to, the
Investment Adviser.

Certain other clients of the Investment Adviser have investment objectives
and policies similar to those of the Fund. The Investment Adviser may, from time
to time, make recommendations that result in the purchase or sale of a
particular investment by its other clients simultaneously with the Fund. If
transactions on behalf of more than one client during the same period increase
the demand for the investments being purchased or the supply of investments
being sold, there may be an adverse effect on price or quantity. In addition, it
is possible that the number of options or futures transactions that the Fund may
enter into may be affected by options or futures transactions entered into by
other investment advisory clients of the Investment Adviser. It is the policy of
the Investment Adviser to allocate advisory recommendations and the placing of
orders in a manner that is deemed equitable by the Investment Adviser to the
accounts involved, including the Fund. When two or more of the clients of the
Investment Adviser (including the Fund) are purchasing or selling the same
security on a given day from, to or through the same broker-dealer, such
transactions may be averaged as to price.

MANAGEMENT OF THE FUND

The Company's Board of Directors is responsible for the overall management
and operation of the Fund. The Fund's officers are responsible for the
day-to-day operations of the Fund under the supervision of the Company's Board
of Directors.

INVESTMENT ADVISER

Pursuant to an Investment Advisory Agreement with the Fund (the "Investment
Advisory Agreement"), the Investment Adviser serves as the Fund's investment
adviser and, as such, is responsible for the overall management of the Fund's
investment portfolio. The Investment Adviser was incorporated in December 1982.
As of November 30, 1996, the Investment Adviser managed approximately $2.0
billion of assets for The Jundt Growth Fund, Inc., Jundt U.S. Emerging Growth
Fund and 13 institutional clients.

The Investment Adviser is a growth-oriented manager. The Investment Adviser
believes that the U.S. economy, due to its heterogeneous nature and immense
size, provides investors with significant growth opportunities. In selecting
investments, the Investment Adviser emphasizes fundamental prospects of
individual companies rather than macroeconomic trends.

Under the Investment Advisory Agreement, the Fund pays the Investment
Adviser a monthly fee equal on an annual basis to 1.30% of the Fund's average
daily net assets. This fee is higher than the advisory fee paid by most other
investment companies.

James R. Jundt serves as director, Chairman of the Board, Chief Executive
Officer and Secretary of the Investment Adviser and beneficially owns 76% of the
Investment Adviser's capital stock. Mary Joann Jundt, wife of James R. Jundt, is
the trustee of a trust that beneficially owns 4% of the Investment Adviser's
capital stock. The current beneficiaries of the trust are the children of Mr.
and Mrs. Jundt (including Marcus E. Jundt, Vice Chairman of the Board and a
director of the Investment

10
<PAGE>
Adviser) and the issue of such children. Mrs. Jundt votes the shares owned by
the trust. The remaining 20% of the Investment Adviser's capital stock is
beneficially owned by Gail M. Knappenberger, formerly a director and officer of
the Investment Adviser.

PORTFOLIO MANAGERS

The Investment Adviser has no formal investment committee. All investment
decisions are made by one or more of the firm's four portfolio managers: James
R. Jundt, Donald M. Longlet, Thomas L. Press and Marcus E. Jundt. The Investment
Adviser places significant emphasis on the team approach in conducting its
portfolio management activities. The portfolio managers confer frequently
throughout the typical business day as to investment opportunities, and most
investment decisions are made after consultation with the other portfolio
managers.

James R. Jundt, CFA, began his investment career in 1964 with Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), New York, New York, as a
security analyst before joining Investors Diversified Services, Inc. (now known
as American Express Financial Advisers, Inc.) in Minneapolis, Minnesota in 1969,
where he served in analytical and portfolio management positions until 1979.
From 1979 to 1982, Mr. Jundt was a portfolio manager for St. Paul Advisers, Inc.
("St. Paul Advisers," subsequently known as AMEV Advisers, Inc. and now known as
Fortis Advisers, Inc.) in Minneapolis. In December 1982, Mr. Jundt left St. Paul
Advisers and founded the Investment Adviser. He has served as Chairman of the
Board, President and Chief Executive Officer and a portfolio manager of The
Jundt Growth Fund, Inc. since 1991 and of Jundt Funds, Inc. since 1995. Mr.
Jundt has approximately 32 years of investment experience.

Donald M. Longlet, CFA, began his investment career in 1968 with
Northwestern National Bank of Minneapolis (now known as Norwest Bank Minnesota,
National Association), where he served as a security analyst and portfolio
manager until 1982. Mr. Longlet worked as a portfolio manager for AMEV Advisers,
Inc. (now known as Fortis Advisers, Inc.) from 1983 until 1989, when he joined
the Investment Adviser as a portfolio manager. He has served as Vice President
and Treasurer and a portfolio manager of The Jundt Growth Fund, Inc. since 1991
and of Jundt Funds, Inc. since 1995. Mr. Longlet has approximately 28 years of
investment experience.

Thomas L. Press was a Senior Vice President of Investment Advisers, Inc. in
Minneapolis and Co-Manager of the IAI Emerging Growth Fund from 1992 until 1993,
when he joined the Investment Adviser as a portfolio manager. From 1987 to 1992,
Mr. Press was a Vice President, Institutional Sales in the Chicago office of
Morgan Stanley & Co., Inc., and prior thereto was an institutional salesman and
trader in the Chicago office of Salomon Brothers Inc. He has served as a
portfolio manager of The Jundt Growth Fund, Inc. since 1993 and of Jundt Funds,
Inc. since 1995. Mr. Press has approximately 11 years of investment experience.

Marcus E. Jundt has been a portfolio manager for the Investment Adviser
since 1992. Mr. Jundt was employed as a research analyst for Victoria Investors
in New York, New York from 1988 to 1992, and from 1987 to 1988 was employed by
Cargill Investor Services, Inc., where he worked on the floor of the Chicago
Mercantile Exchange. He has served as a portfolio manager of The Jundt Growth
Fund, Inc. since 1992 and of Jundt Funds, Inc. since 1995. Mr. Jundt has
approximately 9 years of investment and related experience.

ADMINISTRATOR

Under the terms of an Administration Agreement between Princeton
Administrators, L.P. (the "Administrator") and the Fund (the "Administration
Agreement"), the Administrator performs or

11
<PAGE>
arranges for the performance of certain administrative services (I.E., services
other than investment advice and related portfolio activities) necessary for the
operation of the Fund, including, but not limited to, maintaining certain of the
books and records of the Fund, preparing or reviewing certain reports and other
documents required by United States federal, state and other applicable laws and
regulations to maintain the registration of the Fund and its shares and
providing the Fund with administrative office facilities. For the services
rendered to the Fund and the facilities furnished, the Fund pays the
Administrator a monthly fee equal to the greater of: (a) $125,000 per annum; or
(b) an annual rate equal to .20% of the Fund's average daily net assets up to
$600 million and .175% of the Fund's average daily net assets in excess of $600
million. For the period through December 31, 1997, the Administrator has agreed
to waive the $125,000 minimum per annum fee set forth in clause (a). The
principal address of the Administrator is P.O. Box 9095, Princeton, New Jersey
08543. The Administrator is an affiliate of Merrill Lynch.

THE DISTRIBUTOR; RULE 12B-1 DISTRIBUTION PLANS

Pursuant to a Distribution Agreement by and between the Fund's principal
distributor, U.S. Growth Investments, Inc. (the "Distributor") and the Fund, the
Distributor serves as the principal underwriter of each Class of the Fund's
shares. Additionally, the Fund has adopted Distribution Plans pursuant to Rule
12b-1 under the Investment Company Act with respect to its Class B, Class C and
Class D shares, pursuant to which each such Class pays the Distributor certain
fees in connection with the distribution of shares of such Class and/or the
maintenance of shareholder accounts.

Under its Distribution Plan, each of Class B, Class C and Class D pays the
Distributor a Rule 12b-1 "account maintenance fee" equal on an annual basis to
.25% of the average daily net assets attributable to each such Class. This
account maintenance fee is designed to compensate the Distributor and certain
broker-dealers and financial institutions with which the Distributor has entered
into selling arrangements for the provision of certain services to the holders
of Fund shares, including, but not limited to, answering shareholder questions,
providing shareholders with reports and other information and providing various
other services relating to the maintenance of shareholder accounts.

The Distribution Plans of Class B and Class C provide for the additional
payment of a Rule 12b-1 "distribution fee" to the Distributor, equal on an
annual basis to .75% of the average daily net assets attributable to each such
Class. This fee is designed to compensate the Distributor for advertising,
marketing and distributing the Class B and Class C shares, including the
provision of initial and ongoing sales compensation to the Distributor's sales
representatives and to other broker-dealers and financial institutions with
which the Distributor has entered into selling arrangements.

TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN; SUBACCOUNTING AGENTS

Investors Fiduciary Trust Company (the "Transfer Agent"), 1004 Baltimore,
Kansas City, Missouri 64105, serves as the Fund's transfer agent and dividend
disbursing agent. Norwest Bank Minnesota, N.A., Norwest Center, 90 South Seventh
Street, Minneapolis, Minnesota 55402, serves as the Fund's custodian. In
addition, the Fund compensates certain broker-dealers that sell Fund shares for
performing various accounting and administrative services with respect to large
street-name accounts maintained by such broker-dealers.

12
<PAGE>
HOW TO BUY FUND SHARES

ALTERNATIVE PURCHASE ARRANGEMENTS

The Fund offers investors the choice among three Classes of shares, namely,
Class B, Class C and Class D, which offer different sales charges and bear
different expenses. The Fund's Class A shares are offered for sale exclusively
to certain specified investors and are not offered for sale to the general
public. These alternatives permit an investor to choose the method of purchasing
shares that is most beneficial given the amount of the purchase, the length of
time the investor expects to hold the shares and other circumstances.

As more fully set forth below, a broker-dealer or financial institution may
receive different levels of compensation depending upon which Class of shares is
sold. In addition, the Distributor from time to time may pay certain additional
cash incentives of up to $100 and/or non cash incentives to its investment
executives and other broker-dealers and financial institutions in consideration
of their sales of Fund shares. In some instances, other incentives may be made
available only to selected broker-dealers and financial institutions, based on
objective standards developed by the Distributor, to the exclusion of other
broker-dealers and financial institutions. The Distributor in its discretion may
from time to time, pursuant to objective criteria established by it, pay fees to
qualifying brokers, dealers or financial intermediaries for certain services or
activities which are primarily intended to result in sales of Fund shares.

GENERAL PURCHASE INFORMATION

The minimum initial investment is $1,000, and the minimum additional
investment is $50. The Fund may waive or reduce these minimums for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. The Fund's shares may be purchased at their public offering price (see
below) from the Distributor, from the Transfer Agent, from other broker-dealers
who are members of the NASD and who have selling agreements with the
Distributor, and from certain financial institutions that have selling
agreements with the Distributor.

When purchasing Fund shares, investors must specify which Class of shares is
being purchased. If no Class is specified, the order will be deemed an
investment in Class D shares.

Banks, acting as agents for their customers and not for the Fund or the
Distributor, from time to time may purchase Fund shares for the accounts of such
customers. Generally, the Glass-Steagall Act prohibits banks from engaging in
the business of underwriting, selling or distributing securities, but does
permit banks to purchase and sell securities without recourse solely upon the
order of and for customers. Should the activities of any bank, acting as agent
for its customers in connection with the purchase of the Fund's shares, be
deemed to violate the Glass-Steagall Act, management will take whatever action,
if any, is appropriate in order to provide efficient services for the Fund. Fund
management does not believe that a termination in the relationship with any bank
would result in any material adverse consequences to the Fund. In addition,
state securities laws on this issue may differ from federal law, and vary from
state to state, and banks and financial institutions may be required to register
as dealers pursuant to state law. Fund shares are not deposits or obligations
of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by
the U.S. Government, any federal agency or the FDIC.

13
<PAGE>
When orders are placed for shares of the Fund, the public offering price
used for the purchase will be the net asset value per share next determined,
plus the applicable sales charge, if any. If an order is placed with the
Distributor or other broker-dealer, the broker-dealer is responsible for
promptly transmitting the order to the Fund.

Shares of the Fund may be purchased by opening an account either by mail or
by phone. Shares are deemed to be purchased as of the time of determination of
the Fund's net asset value on the day the purchase order for the purchase of its
shares is received in good form and accepted by the Fund.

No share certificates will be issued by the Fund.

An investor who may be interested in having shares redeemed shortly after
purchase should consider making unconditional payment by certified check or
other means approved in advance by the Distributor. Payment of redemption
proceeds will be delayed as long as necessary to verify by expeditious means
that the purchase payment has been or will be collected. Such period of time
typically will not exceed 15 days.

AUTOMATIC INVESTMENT PLAN. Investors may make systematic investments in
fixed amounts automatically on a monthly basis through the Fund's Automatic
Investment Plan. Additional information is available from the Distributor.

PURCHASES BY MAIL. To open an account by mail, complete the general
authorization form attached to this Prospectus, and mail it, along with a check
payable to "Jundt Opportunity Fund" to:

c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168

You may not purchase shares with a third party check.

PURCHASES BY TELEPHONE. To open an account by telephone, call (800)
370-0612 to obtain an account number and instructions. Information concerning
the account will be taken over the phone. The investor must then request a
commercial bank with which he or she has an account and which is a member of the
Federal Reserve System to transmit Federal Funds by wire to the Fund as follows:

State Street Bank & Trust Company, ABA #011000028
For credit of: Jundt Opportunity Fund
Account No.: 9905-154-2
Account Number: (assigned by telephone)

Information on how to transmit Federal Funds by wire is available at any
national bank or any state bank that is a member of the Federal Reserve System.
The bank may charge the shareholder for the wire transfer. The investor will be
required to complete the general authorization form attached to this Prospectus
and mail it to the Fund after making the initial telephone purchase.

PURCHASES BY TAX-DEFERRED RETIREMENT PLANS. Individual investors may
establish an account in the Fund as an Individual Retirement Account ("IRA").
IRAs allow such investors to save for retirement and shelter their investment
income from current taxes. Investors should consult with their tax advisors to
determine if they qualify to deduct all or part of any IRA contribution for
purposes of federal and state income tax returns.

14
<PAGE>
Fund shares may also be purchased as an investment for other qualified
retirement plans in which investors participate, such as profit-sharing and
money purchase plans, 401(k) programs, 403(b) plans, Simplified Employer Pension
(SEP) Plans and others. Such investors should consult their employers or plan
administrators before investing.

CLASS B SHARES -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE

The public offering price of Class B shares of the Fund is the net asset
value of the Fund's shares. Class B shares are sold without a front-end sales
charge ("FESC") at the time of purchase so that the Fund receives the full
amount of the investor's purchase. However, a contingent deferred sales charge
("CDSC") of up to 4% will be imposed if shares are redeemed within six years of
purchase. For additional information, see "How to Redeem Fund Shares --
Contingent Deferred Sales Charge." In addition, Class B shares are subject to
higher Rule 12b-1 fees as described below. The CDSC will depend on the number of
years since the purchase was made, according to the following table, and will be
calculated on an amount equal to the lesser of the net asset value of the shares
at the time of purchase or their net asset value at the time of redemption.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE
(AS A PERCENTAGE OF AMOUNT SUBJECT TO
REDEMPTION DURING CHARGE)
- ---------------------------------------------------------------------- -------------------------------------------
<S> <C>
1st Year Since Purchase............................................... 4%
2nd Year Since Purchase............................................... 4%
3rd Year Since Purchase............................................... 3%
4th Year Since Purchase............................................... 3%
5th Year Since Purchase............................................... 2%
6th Year Since Purchase............................................... 1%
Thereafter............................................................ None
</TABLE>

Proceeds from the CDSC are paid to the Distributor and are used to defray
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of Class B shares, such as the payment
of compensation to selected broker-dealers, and for selling Class B shares. The
combination of the CDSC and the Rule 12b-1 fee enable the Fund to sell the Class
B shares without deduction of a FESC at the time of purchase. Although Class B
shares are sold without a FESC, the Distributor pays a sales commission equal to
4% of the amount invested to broker-dealers who sell Class B shares and an
annual fee of 0.25% of the amount invested that begins to accrue one year after
the shares are sold. Orders for Class B shares of $250,000 or more will be
treated as orders for Class D shares or declined.

RULE 12B-1 FEES. Class B shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class B shares and a Rule 12b-1 distribution
fee payable at an annual rate of .75% of the average daily net assets
attributable to Class B shares. The higher Rule 12b-1 fee will cause Class B
shares to have a higher expense ratio and to pay lower dividends than Class D
shares. For additional information about this fee, see "Management of the Fund
- -- The Distributor; Rule 12b-1 Distribution Plans."

CONVERSION FEATURE. On the "designated conversion date" (the 15th day of
each month, or the next business day if the 15th day is not a business day)
following the eighth anniversary of their sale, Class B shares (including a pro
rata portion of the shares of the Fund received in connection with dividend and
distribution reinvestments) will automatically convert to Class D shares and
will no longer be subject to the higher Rule 12b-1 fees attributable to Class B
shares. Such conversion will be on the basis of the relative net asset values of
the two Classes. Class D shares issued upon such

15
<PAGE>
conversion will not be subject to any FESC or CDSC. Class B shares acquired by
exercise of the "reinstatement privilege" will convert into Class D shares based
on the time of the original purchase of Class B shares. See "How to Redeem Fund
Shares -- Reinstatement Privilege." The conversion of Class B shares into Class
D shares is subject to the continuing availability of a ruling from the Internal
Revenue Service that payment of different dividends by each of the Classes of
shares does not result in the Fund's dividends or distributions constituting
"preferential dividends" under the Internal Revenue Code of 1986, as amended
(the "Code"), and that such conversions do not constitute taxable events for
federal tax purposes. There can be no assurance that such ruling will continue
to be available, and the conversion of Class B shares into Class D shares will
not occur if such ruling is not available at the time conversion is due. In such
event, Class B shares would continue to be subject to higher expenses than Class
D shares for an indefinite period.

CLASS C SHARES -- LEVEL LOAD ALTERNATIVE

The public offering price of Class C shares of the Fund is the net asset
value of the Fund's shares. Class C shares are sold without a FESC at the time
of purchase so that the Fund receives the full amount of the investor's
purchase. However, a CDSC of 1% will be imposed if shares are redeemed within
one year of purchase. For additional information, see "How to Redeem Fund Shares
- -- Contingent Deferred Sales Charge." In addition, Class C shares are subject to
higher Rule 12b-1 fees as described below.

Proceeds from the CDSC are paid to the Distributor and are used to defray
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of Class C shares, such as the payment
of compensation to selected broker-dealers, and for selling Class C shares. The
combination of the CDSC and the Rule 12b-1 fee enable the Fund to sell the Class
C shares without deduction of a FESC at the time of purchase. Although Class C
shares are sold without a FESC, the Distributor pays a sales commission equal to
1% of the amount invested to broker-dealers who sell Class C shares at the time
the shares are sold and an annual fee of 1% of the amount invested that begins
to accrue one year after the shares are sold.

RULE 12B-1 FEES. Class C shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class C shares and a Rule 12b-1 distribution
fee payable at an annual rate of .75% of the average daily net assets
attributable to Class C shares. The higher Rule 12b-1 fee will cause Class C
shares to have a higher expense ratio and to pay lower dividends than Class D
shares. For additional information about this fee, see "Management of the Fund
- -- The Distributor; Rule 12b-1 Distribution Plans."

As between Class B and Class C shares, an investor that anticipates an
investment in the Fund of longer than six years (the CDSC period applicable to
Class B shares) would conclude that Class B shares are preferable to Class C
shares because the Class B shares will automatically convert to Class D shares
(to which lower Rule 12b-1 fees apply) after eight years. However, an investor
with an anticipated investment time frame of less than six years (or with an
uncertain time frame) may choose Class C shares because of the larger and
longer-term CDSC applicable to Class B shares.

16
<PAGE>
CLASS D SHARES -- INITIAL SALES CHARGE ALTERNATIVE

The public offering price of Class D shares of the Fund is their next
determined net asset value plus the applicable FESC. The Fund receives the net
asset value. The FESC varies depending on the size of the purchase and is
allocated between the Distributor and other broker-dealers. The current FESC
schedule is as follows:

<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
-------------------------------
(AS A % OF DEALER REALLOWANCE
OFFERING (AS A % OF (AS A % OF
AMOUNT OF INVESTMENT PRICE) NET INVESTMENT) OFFERING PRICE)
- ------------------------------------------------------------- -------------- --------------- ------------------
<S> <C> <C> <C>
Less than $25,000............................................ 5.25% 5.54% 4.50%
$25,000 but less than $50,000................................ 4.75% 4.99% 4.25%
$50,000 but less than $100,000............................... 4.00% 4.17% 3.50%
$100,000 but less than $250,000.............................. 3.00% 3.09% 2.50%
$250,000 but less than $1,000,000............................ 2.00% 2.04% 1.75%
$1,000,000 and greater....................................... NONE* NONE* *
</TABLE>

- ------------------------

* On any sale of Class D shares to an investor in the amount of $1 million or
more, the Distributor will pay the dealer a commission equal to 1% of the
amount of that sale that is less than $2.5 million, .50% of the amount of
the sale that equals or exceeds $2.5 million but is less than $5 million and
.25% of the sale that equals or exceeds $5 million. Although such purchases
are not subject to a FESC, a CDSC of 1% will be imposed at the time of
redemption if redeemed within one year. See "How to Redeem Fund Shares --
Contingent Deferred Sales Charge."

In connection with the distribution of the Fund's Class D shares, the
Distributor receives all applicable sales charges. The Distributor, in turn,
pays other broker-dealers selling such shares the "dealer reallowance" set forth
above and an annual fee of 0.25% of the amount invested that begins to accrue
one year after the shares are sold. In the event that shares are purchased by a
financial institution acting as agent for its customers, the Distributor or the
broker-dealer with whom such order was placed may pay all or part of its dealer
reallowance to such financial institution in accordance with agreements between
such parties.

SPECIAL PURCHASE PLANS -- REDUCED SALES CHARGES. Certain investors (or
groups of investors) may qualify for reductions in, or waivers of, the sales
charges shown above. Investors should contact their broker-dealer or the Fund
for details about the Combined Purchase Privilege, Cumulative Quantity Discount
and Letter of Intention plans. Descriptions are also included in the
authorization form and in the Statement of Additional Information. These special
purchase plans may be amended or eliminated at any time by the Distributor
without notice to existing Fund shareholders.

RULE 12B-1 FEES. Class D shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class D shares. For additional information
about this fee, see "Management of the Fund -- The Distributor; Rule 12b-1
Distribution Plans."

WAIVER OF SALES CHARGES. Class D shares will be issued at net asset value,
and not subject to a FESC or CDSC, if the purchase of such shares is funded by
the proceeds from the redemption of shares of any unrelated open-end investment
company that charges a sales charge. In order to exercise this

17
<PAGE>
privilege, the purchase order must be received by the Fund within 60 days after
the redemption of shares of the unrelated investment company. Class D shares
also will be issued at their net asset value, and not subject to a FESC or CDSC,
to the following categories of investors:

- Investment executives and other employees of broker-dealers and financial
institutions that have entered into agreements with the Distributor for
the distribution of Fund shares, employees of contractual service
providers to the Fund, and parents and immediate family members of such
persons.

- Trust companies and bank trust departments for funds held in a fiduciary,
agency, advisory, custodial or similar capacity.

- States and their political subdivisions, and instrumentalities,
departments, authorities and agencies of states and their political
subdivisions.

- Registered investment advisers and their investment advisory clients.

- Employee benefit plans qualified under Section 401(a) of the Code (which
does not include Individual Retirement Accounts) and custodial accounts
under Section 403(b)(7) of the Code
(also known as tax-sheltered annuities).

HOW TO REDEEM FUND SHARES

The Fund will redeem its shares in cash at the net asset value per share
next determined after receipt of a shareholder's written request for redemption
in good order. If shares for which payment has been collected are redeemed,
payment will be made within three days. Shareholders that own more than one
Class of the Fund's shares should clearly specify the Class or Classes of shares
being redeemed.

The Fund imposes no charges (other than any applicable CDSC) when shares are
redeemed directly through the Transfer Agent. Service agents may charge a
nominal fee for effecting redemptions of Fund shares. It is the responsibility
of each service agent to transmit redemption orders to the Transfer Agent. The
value of shares redeemed may be more or less than their original cost depending
upon the then-current net asset value of the Class being redeemed.

The Fund may suspend this right of redemption and may postpone payment only
when the New York Stock Exchange is closed for other than customary weekends or
holidays, or if permitted by the rules of the SEC during periods when trading on
the New York Stock Exchange is restricted or during any emergency which makes it
impracticable for the Fund to dispose of its securities or to determine fairly
the value of its net assets or during any other period permitted by order of the
SEC for the protection of investors.

Although the Fund has no current intention of doing so, the Fund reserves
the right to redeem its shares in kind. However, the Fund will pay in cash all
redemption requests by any shareholder that, during any 90-day period, amount to
no more than the lesser of: (a) $250,000; or (b) 1% of the Fund's net asset
value at the beginning of such 90-day period. If a redemption were made in kind,
a shareholder would incur transaction costs in disposing of any securities
received.

The Fund expects to redeem all of the shares of any shareholder whose
account has remained below $1,000 as a result of redemptions for at least 60
days after the mailing to the shareholder of a notice of intention to redeem.

18
<PAGE>
SIGNATURE GUARANTEES

Certain requests must include a signature guarantee. Signature guarantees
are designed to protect shareholders and the Fund from fraud. A request to sell
shares must be made in writing and include a signature guarantee if any of the
following situations apply:

- A shareholder request in writing to redeem more than $50,000 worth of
shares,

- A shareholder's account registration or address has changed within the
last 30 days,

- The check is being mailed to a different address than the one on the
account (record address),

- The check is being made payable to someone other than the account owner,
or

- The redemption or exchange proceeds are being transferred to an account
with a different registration.

A shareholder should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency or savings association. The Fund
reserves the right to waive the requirement of a signature guarantee in certain
limited circumstances. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE GUARANTEE.

CONTINGENT DEFERRED SALES CHARGE

The CDSC will be calculated on an amount equal to the lesser of the net
asset value of the shares at the time of purchase or their net asset value at
the time of redemption. No CDSC will be imposed on any redeemed shares that have
been held for longer than the applicable CDSC period or to the extent the value
of any redeemed shares represents reinvestment of dividends or capital gains
distributions or capital appreciation of shares redeemed.

In determining whether a CDSC is applicable to any redemption, the
calculation will be determined in the manner that results in the lowest rate
being charged. Therefore, it will be assumed that a redemption of Class B or
Class C shares is made first of shares representing reinvestment of dividends
and capital gains distributions and then of remaining shares held by the
shareholder for the longest period of time. If a shareholder owns Class B and
Class D shares, then absent a shareholder choice to the contrary, Class B shares
not subject to a CDSC will be redeemed in full prior to any redemption of Class
D shares not subject to a CDSC.

The CDSC does not apply to: (a) redemption of shares when the Fund exercises
its right to liquidate accounts which are less than the minimum account size;
(b) redemptions in the event of the death or disability of the shareholder
within the meaning of Section 72(m)(7) of the Code; and (c) redemptions
representing a minimum required distribution from an individual retirement
account processed under a systematic withdrawal plan.

REINSTATEMENT PRIVILEGE

The Distributor, upon notification, intends to provide, out of its own
assets, a pro rata refund of any CDSC paid in connection with a redemption of
shares of the Fund (by crediting such refunded CDSC to such shareholder's
account) if, within 90 days of such redemption, all or any portion of the
redemption proceeds are reinvested in shares of the same Class of the Fund. Any
reinvestment within 90 days of a redemption with respect to which the CDSC was
paid will be made without the imposition

19
<PAGE>
of a FESC but will be subject to the same CDSC to which such amount was subject
prior to the redemption. The CDSC period will run from the original investment
date of the redeemed shares but will be extended by the number of days between
the redemption date and the reinvestment date.

EXCHANGE PRIVILEGE

Except as described below, shareholders may exchange some or all of their
Fund shares for shares of The Jundt Growth Fund, Inc. or Jundt U.S. Emerging
Growth Fund, provided that the shares to be acquired in the exchange are
eligible for sale in the shareholder's state of residence. Class B shareholders
may exchange their shares for Class B shares of The Jundt Growth Fund, Inc. or
Jundt U.S. Emerging Growth Fund, Class C shareholders may exchange their shares
for Class C shares of The Jundt Growth Fund, Inc. or Jundt U.S. Emerging Growth
Fund and Class D shareholders may exchange their shares for Class D shares (or
Class A shares, if the shareholder is eligible to purchase Class A shares) of
The Jundt Growth Fund, Inc. or for Class D shares of Jundt U.S. Emerging Growth
Fund.

The minimum amount which may be exchanged is $1,000. The Fund and The Jundt
Growth Fund, Inc. or Jundt U.S. Emerging Growth Fund, as the case may be, will
execute the exchange on the basis of the relative net asset values next
determined after receipt by the Fund. If a shareholder exchanges shares of the
Fund that are subject to a CDSC for shares of The Jundt Growth Fund, Inc. or
Jundt U.S. Emerging Growth Fund, the transaction will not be subject to a CDSC.
However, when shares acquired through the exchange are redeemed, the shareholder
will be treated as if no exchange took place for the purpose of determining the
CDSC. There is no specific time limit on exchange frequency; however, the Fund
is intended for long term investment and not as a trading vehicle. The
Investment Adviser reserves the right to prohibit excessive exchanges (more than
four per quarter). The Distributor reserves the right, upon 60 days' prior
notice, to restrict the frequency of, or otherwise modify, condition, terminate
or impose charges upon, exchanges. An exchange is considered a sale of shares on
which the investor may realize a capital gain or loss for income tax purposes. A
shareholder may place exchange requests directly with the Fund, through the
Distributor or through other broker-dealers. An investor considering an exchange
should obtain a prospectus of The Jundt Growth Fund, Inc. or Jundt U.S. Emerging
Growth Fund, as the case may be, and should read such prospectus carefully.
Contact the Fund, the Distributor or any of such other broker-dealers for
further information about the exchange privilege.

EXPEDITED REDEMPTIONS

The Fund offers several expedited redemption procedures, described below,
which allow a shareholder to redeem Fund shares at net asset value (less any
applicable CDSC) determined on the same day that the shareholder placed the
request for redemption of those shares. Pursuant to these expedited redemption
procedures, the Fund's shares will be redeemed at their net asset value (less
any applicable CDSC) next determined following the Fund's receipt of the
redemption request. The Fund reserves the right at any time to suspend or
terminate the expedited redemption procedures or to impose a fee for this
service. There is currently no additional charge to the shareholder for use of
the Fund's expedited redemption procedures.

20
<PAGE>
the shareholder's address of record or to the bank account designated on the
authorization form and requiring certain means of telephonic identification. If
the Fund fails to employ such procedures, it may be liable for any losses
suffered by shareholders as a result of fraudulent instructions. The proceeds of
the redemption will be paid by check mailed to the shareholder's address of
record or, if requested at the time of redemption, by wire to the bank
designated on the authorization form.

EXPEDITED REDEMPTIONS THROUGH CERTAIN BROKER-DEALERS. Certain
broker-dealers who have sales agreements with the Distributor may allow their
customers to effect an expedited redemption of shares of the Fund purchased
through such a broker-dealer by notifying the broker-dealer of the amount of
shares to be redeemed. The broker-dealer is then responsible for promptly
placing the redemption request with the Fund on the customer's behalf. Payment
will be made to the shareholder by check or wire sent to the broker-dealer.
Broker-dealers offering this service may impose a fee or additional requirements
for such redemptions.

MONTHLY CASH WITHDRAWAL PLAN

An investor who owns or buys shares of the Fund valued at $10,000 or more at
the current offering price may open a Withdrawal Plan and have a designated sum
of money paid monthly to the investor or another person. The applicable CDSC may
apply to monthly redemptions of Class B or Class C shares. However, the CDSC
will be waived for redemptions representing a minimum required distribution from
an Individual Retirement Account processed under a Withdrawal Plan. See "Monthly
Cash Withdrawal Plan" in the Statement of Additional Information.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Class of the Fund's shares is determined once
daily as of 15 minutes after the close of business on the New York Stock
Exchange (generally 4:00 p.m., New York time) on each day during which the New
York Stock Exchange is open for trading. Any assets or liabilities initially
expressed in terms of non-U.S. dollar currencies are translated into U.S.
dollars at the prevailing market rates as quoted by one or more banks or dealers
on the day of valuation. The net asset value is computed by dividing the market
value of the securities held by the Fund plus any cash or other assets
(including interest and dividends accrued but not yet received) minus all
liabilities (including accrued expenses) by the total number of shares
outstanding at such time. Expenses, including but not limited to the fees paid
to the Investment Adviser and the Administrator and any account maintenance
and/or distribution fees payable to the Distributor, are accrued daily.

NASDAQ National Market System for which there were no sales on the date of
valuation and securities traded on other over-the-counter markets, including
listed securities for which the primary market is believed to be
over-the-counter, are valued at the mean between the most recently quoted bid
and asked prices. Options are valued at market value or fair value if no market
exists. Futures contracts are valued in a like manner, except that open futures
contract sales are valued using the closing settlement price or, in the absence
of such a price, the most recent quoted asked price. Securities and assets for
which market quotations are not readily available are valued at fair value as
determined in good faith by the Company's Board of Directors or by the
Investment Adviser in accordance with policies and procedures established by the
Company's Board of Directors. Short-term investments that mature in 60 days or
less are valued at amortized cost, which approximates fair value.

21
<PAGE>
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES

DIVIDENDS AND OTHER DISTRIBUTIONS

Substantially all of the Fund's net investment income and net realized
gains, if any, will be paid to shareholders annually. Dividends and other
distributions may be taken in cash or automatically reinvested in additional
Fund shares (of the same Class of shares as the shares to which the dividends or
other distributions relate) at net asset value on the ex-distribution date.
Dividends and other distributions will be automatically reinvested in additional
Fund shares unless the shareholder has elected in writing to receive dividends
and other distributions in cash.

TAXES

The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Code. If so qualified, the Fund will not be subject to
federal income taxes to the extent its earnings are timely distributed. The Fund
also intends to make distributions as required by the Code to avoid the
imposition of the 4% federal excise taxes.

The Fund will distribute substantially all of its net investment income and
net capital gains, if any, to investors. Distributions to shareholders from the
Fund's income and short-term capital gains are taxed as dividends (as ordinary
income), and long-term capital gain distributions are taxed as long-term capital
gains. Distributions of long-term capital gains will be taxable to the investor
as long-term capital gains regardless of the length of time the shares have been
held. A portion of the Fund's dividends may qualify for the dividends received
deduction for corporations. The Fund's distributions are taxable when they are
paid, whether a shareholder takes them in cash or reinvests them in additional
Fund shares, except that dividends and other distributions declared in December
but paid in January are taxable as if paid on or before December 31. The federal
income tax status of all distributions will be reported to shareholders
annually. In addition to federal income taxes, dividends and other distributions
may also be subject to state or local taxes, and if the shareholder lives
outside the United States, the dividends and other distributions could also be
taxed by the country in which the shareholder resides.

"BUYING A DISTRIBUTION"

On the distribution date for a dividend or other distribution by the Fund,
its share price is reduced by the amount of the dividend or other distribution.
If an investor purchases shares of the Fund on or before the record date
("buying a distribution"), the investor will pay the full price for the shares
(which includes realized but undistributed earnings and capital gains of the
Fund that accumulate throughout the year), and then receive a portion of the
purchase price back in the form of a taxable distribution.

OTHER TAX INFORMATION

Under federal tax law, some shareholders may be subject to a 31% withholding
on reportable dividends, capital gains distributions and redemption payments
("backup withholding"). Generally, shareholders subject to backup withholding
will be those for whom a taxpayer identification number is not on file with the
Fund or any of its agents or who, to the Fund's or agent's knowledge, have
furnished an incorrect number. In order to avoid this withholding requirement,
investors must certify that the taxpayer identification number provided is
correct and that the investment is not otherwise subject to backup withholding,
or is exempt from backup withholding.

22
<PAGE>
THE FOREGOING TAX DISCUSSION IS GENERAL IN NATURE, AND EACH INVESTOR IS
ADVISED TO CONSULT HIS OR HER TAX ADVISER REGARDING SPECIFIC QUESTIONS AS TO
FEDERAL, STATE, LOCAL OR FOREIGN TAXATION.

PERFORMANCE INFORMATION

Advertisements and communications to shareholders may contain various
measures of the Fund's performance, including various expressions of total
return. Additionally, such advertisements and communications may occasionally
cite statistics to reflect the Fund's volatility or risk. Performance for each
Class of the Fund's shares may be calculated on the basis of average annual
total return and/or total return. These total return figures reflect changes in
the price of the shares and assume that any income dividends and other
distributions made by the Fund during the measuring period were reinvested in
shares of the same Class. The Fund presents performance information for each
Class of shares commencing with the Fund's inception. Class D average annual
total return figures reflect the maximum initial FESC (but do not reflect the
imposition of any CDSC upon redemption), and Class B and Class C average annual
total return figures reflect any applicable CDSC. Performance for each Class is
calculated separately.

Average annual total return is calculated pursuant to a standardized formula
which assumes that an investment was purchased with an initial payment of $1,000
and that the investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and other distributions
during the period. The return is expressed as a percentage rate which, if
applied on a compounded annual basis, would result in the redeemable value of
the investment at the end of the period. Advertisements of the Fund's
performance will cover, when available, one, five and ten-year periods, as well
as the time period since the inception of the Fund.

Total return is computed on a per share basis and assumes the reinvestment
of dividends and other distributions. Total return generally is expressed as a
percentage rate which is calculated by combining the income and principal
changes for a specified period and dividing by the maximum offering price per
share (in the case of Class D shares) or the net asset value per share (in the
case of Class B or Class C shares) at the beginning of the period.
Advertisements may include the percentage rate of total return or may include
the value of a hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total return also may be
calculated by using the net asset value per share at the beginning of the period
instead of the maximum offering price per share at the beginning of the period
for Class D shares, or without giving effect to any applicable CDSC at the end
of the period for Class B or Class C shares. Calculations based on the net asset
value per share do not reflect the deduction of the applicable FESC or CDSC
which, if reflected, would reduce the performance quoted.

In each case performance figures are based upon past performance. The
investment results of the Fund, like all others, will fluctuate over time; thus,
performance figures should not be considered to represent what an investment may
earn in the future or what the Fund's total return or average annual total
return may be in any period.

The Fund's performance from time to time in reports or promotional
literature may be compared to generally accepted indices or analyses such as
those published by Lipper Analytical Service, Inc., Standard & Poor's
Corporation, Dow Jones & Company, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc. and Investment Company Data Incorporated. Performance ratings
reported periodically in national financial publications also may be used.

23
<PAGE>
The Fund's Annual Reports will contain certain performance information
regarding the Fund and will be made available to any recipient of this
Prospectus upon request and without charge.

GENERAL INFORMATION

The Fund is a professionally managed, diversified series of the Company,
which was incorporated under the laws of the State of Minnesota on October 26,
1995. The Company is registered with the SEC under the Investment Company Act as
an open-end management investment company. This registration does not involve
supervision of management or investment policy by an agency of the federal
government.

The Company currently offers its shares in two Series: Series A, which
represent interests in the Jundt U.S. Emerging Growth Fund; and Series B,which
represent interests in the Fund. The Fund, in turn, currently offers its shares
in four Classes, namely, Class A, Class B, Class C and Class D, each sold
pursuant to different sales arrangements and bearing different expenses. The
Company's Board of Directors, without shareholder approval, is authorized to
designate additional Classes of shares in the future; however, the Board of
Directors has no present intention to do so. This Prospectus relates only to the
Fund's Class B, Class C and Class D shares, the only Classes offered for sale to
the general public. See "Purchase Information".

Shares of each Class represent interests in the assets of the Fund and have
identical voting, dividend, liquidation and other rights on the same terms and
conditions except that expenses related to the distribution of each Class are
borne solely by such Class and each Class of shares has exclusive voting rights
with respect to the Rule 12b-1 Distribution Plan applicable to such Class and
other matters for which separate Class voting is appropriate under applicable
law. Additionally, because Class B shares automatically convert into Class D
shares if held for the applicable time period, any proposed amendment to the
Class D Rule 12b-1 Distribution Plan that would increase the fees payable
thereunder must be approved by the Class D AND Class B shareholders (each voting
separately as a Class).

The Fund's shares are freely transferable, are entitled to dividends and
other distributions as declared by the Company's Board of Directors, and, upon
liquidation of the Fund, are entitled to receive the net assets of the Fund.

The Company's Articles of Incorporation permit the Company's Board of
Directors, without shareholder approval, to create additional Series of shares
and to subdivide any Series into various Classes of shares with such rights and
preferences as the Company's Board of Directors may designate. The Company's
Articles of Incorporation provide that each share of a Series has one vote
irrespective of the relative net asset values of the shares. On some issues,
such as the election of the Company's directors and the ratification of the
Company's independent auditors, all shares of the Company vote together as one
Series. On an issue affecting only a particular Series or Class, the shares of
the effected Series or Class vote as a separate Series or Class. An example of
such an issue would be a fundamental investment restriction pertaining to only
one Series.

24
<PAGE>
with a share of the general expenses of the Company. Any general expenses of the
Company not readily identifiable as belonging to a particular Series or Class
shall be allocated among the Series or Classes based upon the relative net
assets of the Series or Class at the time such expenses were accrued or such
other method as the Company's Board of Directors, or the Investment Adviser with
the supervision of the Company's Board of Directors, may determine.

The Company is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders, and does not intend to
hold such meetings. The Company's Board of Directors may convene shareholder
meetings when it deems appropriate and is required under Minnesota law to
schedule regular or special meetings in certain circumstances. Additionally,
under Section 16(c) of the Investment Company Act, the Company's Board of
Directors must promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the Company's outstanding shares.

Under Minnesota law, the Company's Board of Directors has overall
responsibility for managing the Company in good faith, in a manner reasonably
believed to be in the Company's best interests, and with the care an ordinarily
prudent person in a like position would exercise in similar circumstances. The
Company's Articles of Incorporation limit the liability of the Company's
officers and directors to the fullest extent permitted by law.

The Company and the Investment Adviser have adopted a Code of Ethics that
has been filed with the SEC as an exhibit to the Company's Registration
Statement (of which this Prospectus is a part). The Code of Ethics does not
permit any director, officer or employee of the Company, the Investment Adviser
or the Distributor, other than the Company's directors and officers who are not
interested persons of the Company, the Investment Adviser or the Distributor
(collectively, the "Disinterested Directors and Officers"), to purchase any
security in which the Fund is permitted to invest. If such person owns a
security in which, following its purchase by such person, the Fund becomes
permitted to invest, the person would not be permitted to acquire any additional
interest in such security and must observe strict limitations in connection with
any disposition of such security. Disinterested Directors and Officers are
permitted to purchase and sell securities in which the Fund may invest, but may
not effect any purchase or sale at any time during which the Fund has a pending
buy or sell order for the same security. Information about how the Code of
Ethics can be inspected or copied at the SEC's public reference rooms or
obtained at the SEC's headquarters is available through the SEC's toll-free
telephone number, (800) SEC-0330.

For a further discussion of the above matters, see "General Information" in
the Statement of Additional Information.

25
<PAGE>
JUNDT OPPORTUNITY FUND GENERAL AUTHORIZATION FORM

I wish to establish or revise my account in the Fund in accordance with these
instructions, the terms and conditions of this form and the current Prospectus
of the Fund, a copy of which I have received.

<TABLE>
<S> <C>
INSTRUCTIONS: 1) Please complete Sections A through J, as applicable. Be sure to sign the
certifications in Section J.
2) Please send this completed form and your check payable to the Fund to:
JUNDT OPPORTUNITY FUND, C/O NATIONAL FINANCIAL DATA SERVICES, P.O. BOX 419168, KANSAS
CITY, MO 64141-6168
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
A. ACCOUNT
REGISTRATION / / Individual ---------------------------------------------------------------------------------
First Name Middle Last Name Social Security #
1. NAME / / Joint Investor* ----------------------------------------------------------------------------
First Name Middle Last Name Social Security #

*The account will be registered "Joint tenants with rights of survivorship" unless otherwise
specified.

/ / Trust Account -----------------------------------------------------------------------------
Name of Trust Tax Identification #
----------------------------------------------------------------------------------------------
Date of Trust Trustee(s)

/ / Corporation, Partnership or Other Entity ----------------------------------------------------
Type of Entity Tax Identification #
----------------------------------------------------------------------------------------------
Name of Entity
</TABLE>

<TABLE>
<S> <C> <C>
/ / Transfer/Gift to Minors
-------------------------------------------------------------------------------------
Custodian's Name (one name only) Minor's State of Residence
-------------------------------------------------------------------------------------
Minor's Name Minor's Social Security #
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C>
2. ADDRESS ( )
------------------------------------------------- ---------------------------------------------------------
Address/Apt.
No. Area Code Business Telephone

( )
------------------------------------------------- ---------------------------------------------------------
City State Zip Code Area Code Home Telephone
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
B. INITIAL The minimum initial investment is $1,000. Class D shares (except for investments of
INVESTMENT $1 million or more) are subject to a front-end sales charge at the time of purchase.
Class B and Class C shares may be subject to a contingent deferred sales charge at
the time of redemption. If a Class is not selected, the purchase will be made in
Class D shares. Orders for Class B shares of $250,000 or more will be treated as
orders for Class D shares.
</TABLE>

<TABLE>
<S> <C>
$ ------------------------ Class B Shares Note: The Fund will not accept third party
$ ------------------------ Class C Shares checks.
$ ------------------------ Class D Shares
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
C. DEALER
INFORMATION ----------------------------------------------------------------------------------------------------
Name of Broker-Dealer Name of Representative Representative's Phone #
----------------------------------------------------------------------------------------------------
Branch Office Address Branch ID # Representative's ID #
</TABLE>

<PAGE>
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
D. DIVIDENDS NOTE: IF NO ELECTION IS MADE, DIVIDENDS AND OTHER DISTRIBUTIONS WILL AUTOMATICALLY BE REINVESTED.
AND OTHER
DISTRIBUTIONS / / Reinvested in additional shares or / / Receive dividends in cash*
*For "receive in cash", please choose a delivery option:
/ / Deposit directly into my bank account. ATTACHED IS A VOIDED CHECK, PHOTOCOPY OF A CHECK OR A
SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT WHERE I WOULD LIKE YOU TO DEPOSIT THE DISTRIBUTION.
/ / Savings / / Checking
/ / Mail check to my address listed in Section A.
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
E. AUTOMATIC / / Please arrange with my bank to invest $ ($50 minimum) per month in the Fund.
INVESTMENT Please charge my bank account on the 5th day (or next business day) of each month. ATTACHED IS A
PLAN VOIDED CHECK, PHOTOCOPY OF A CHECK OR A SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT ON WHICH THE
INVESTMENT IS GOING TO BE DRAWN.
/ / Savings / / Checking
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
F. LETTER OF / / I elect to take advantage of the Letter of Intention and agree to the escrow provisions herein
INTENTION and certify that I am entitled to reduced rates in accordance with the provisions herein. My initial
(CLASS D investment will be at least 5% of the Letter of Intention amount. I intend to purchase, although
ONLY) I am not obligated to do so, shares of the Fund, The Jundt Growth Fund, Inc. and Jundt U.S.
Emerging Growth Fund within a 13-month period, an aggregate amount of which will be at least:
/ / $25,000 / / $50,000 / / $100,000 / / $1,000,000
/ / This is a new Letter of Intention.
/ / This is a retroactive 90-day Letter of Intention, requiring adjustment of prior purchase(s).
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
G. COMBINED / / I elect to take advantage of the Combined Purchase Privilege. Below is a list of accounts of qualifying
PURCHASE individuals, organizations or other persons (see "Special Purchase Plans -- Combined Purchase Privilege" in the
PRIVILEGE Statement of Additional Information) with which I wish to combine my purchase for reduced sales charge purposes.
(CLASS D
ONLY)
1. 2.
-------------------------------------------------- --------------------------------------------------
Account Number Fund Name Account Number Fund Name
-------------------------------------------------- --------------------------------------------------
Owner(s) Name Owner(s) Name
-------------------------------------------------- --------------------------------------------------
Relationship Relationship
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
H. TELEPHONE / / I hereby authorize the Fund's transfer agent (the "Transfer Agent") to honor any telephone
REDEMPTION instructions from any of the registered shareholders or the registered representative of the
PRIVILEGE above account for redemptions of at least $1,000 and no more than $25,000. Redemptions greater
than $25,000 must be in writing and signature guaranteed. The Transfer Agent and the Fund will
employ reasonable procedures to confirm that telephone instructions are genuine, including
requiring that payment be made only to the address registered on the account or to the bank
account designated below and requiring certain means of telephone identification. If the
Transfer Agent and the Fund fail to employ such procedures, they may be liable for any losses
suffered as a result of unauthorized or fraudulent instructions. Provided the Transfer Agent and
the Fund employ such procedures, I will indemnify and hold harmless the Transfer Agent, the
Distributor and the Fund from and against all losses, claims, expenses and liabilities that may
arise out of, or be in any way connected with, a redemption of shares under this expedited
redemption procedure. Proceeds will be mailed as registered on the account or wired to the bank
account designated below.
/ / Savings / / Checking
ATTACHED IS A VOIDED CHECK, PHOTOCOPY OF A CHECK OR A SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT
TO WHICH PROCEEDS OF $1,000 OR MORE MAY BE WIRED IF REQUESTED.
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
I. MONTHLY / / Please send a check for $ on the 20th day (or preceding business day) of each month
WITHDRAWAL (minimum $100). This service is available only for accounts with balances of $10,000 or more. A
contingent deferred sales charge may apply to redemptions of shares. Refer to "How to Redeem
Fund Shares" in the Prospectus.
</TABLE>

2
<PAGE>
________________________________________________________________________________
J. SIGNATURE
AND
CERTIFICATION

Substitute Form W-9 JUNDT OPPORTUNITY FUND

<TABLE>
<S> <C> <C>
SIGNATURE CARD AND ----------------------------------------
TAXPAYER IDENTIFICATION NUMBER Account Number (to be completed by the
CERTIFICATION Fund)
</TABLE>

________________________________________________________________________________

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PART I
------------------------------------
Social Security Number
--------------------------------------------------
Name PLEASE PRINT
---------------------------------------------
REQUIRED --> or
---------------------------------------------
Tax Identification Number

---------------------------------------------
NOTE: If the account is in more than one name, give the
actual owner of the account or the first name
listed on the account and their Tax Identification NOTE: If UGMA/UTMA, provide minor's Social Security or Tax
Number. Identification Number.
Tax Residency: / /U.S. / / Other ---------------
(If you are not a U.S. tax resident,
please attach Form W-8 to this application.)
</TABLE>

________________________________________________________________________________

<TABLE>
<S> <C>
PART II Are you an organization that meets the Internal Revenue Service ("IRS") definition of an exempt payee
(I.E., corporations, the United States and its agencies, a state, etc., qualify as exempt but
individuals DO NOT qualify as exempt)?
Yes / / No / /
</TABLE>

________________________________________________________________________________
CERTIFICATION: UNDER PENALTIES OF PERJURY, I CERTIFY THAT:

(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER;
AND

(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN
NOTIFIED BY THE IRS THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS NOTIFIED ME THAT
I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
CERTIFICATION INSTRUCTIONS: You must cross out item (2) above if you have been
notified by IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
I hereby certify that I have received a current prospectus, agree to be bound by
its terms, and that I am empowered and duly authorized to execute and carry out
the terms of this General Authorization Form and to purchase and hold the shares
subscribed for thereby, and further certify that this General Authorization Form
has been duly and validly executed on behalf of the person or entity listed
above and constitutes a legal and binding obligation of such person or entity.
I hereby acknowledge that it is my obligation to notify my investment
representative (at the time of investment) about my eligibility for any of the
special purchase plans detailed in the Prospectus. Absent such notification,
none of such plans will automatically be applied to any investment in Fund
shares, and I have waived my eligibility for all applicable plans.
THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER
THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.

________________________________________________________________________________
PLEASE
REQUIRED
SIGN HERE
Signature--> Date-->
________________________________________________________________________________

JOINT
Signature--> Date-->
________________________________________
INVESTORS
PLEASE
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
Please be sure to have all joint shareholders sign this card.

________________________________________________________________________________
NOTE: THIS SIGNED PAGE MUST ACCOMPANY THE PREVIOUS PAGE OF GENERAL AUTHORIZATION
FORM

3
<PAGE>
LETTER OF INTENTION AND TERMS OF ESCROW
(CLASS D SHARES ONLY)

If you estimate that during the next 13 months you will make a series of
purchases totaling an amount which qualifies for a reduced sales charge, you may
elect to take advantage of a Letter of Intention. The total investment must
equal at least $25,000 in any class of shares of the Fund, The Jundt Growth
Fund, Inc. and Jundt U.S. Emerging Growth Fund. The Letter of Intention does not
obligate you to make purchases totaling a given amount, nor is any Fund making a
binding commitment to sell you the full amount of the shares indicated.

As soon as the Fund is informed that you have chosen to invest with a Letter of
Intention, each purchase in any Fund can receive the appropriate (lower) sales
charge. You or your dealer must inform the applicable Fund EACH TIME that a
purchase is made under a Letter of Intention. (Automatic Investment Plans are
not allowed for Letter of Intention purchasers.) Your first purchase must be at
least 5% of the Letter of Intention amount.

For example, if you choose a Letter of Intention at the $100,000 level, you are
telling the Funds that you expect your purchases over the next 13 months to
total at least $100,000. Your first purchase must be at least $5,000. Whenever
you make another purchase and tell the applicable Fund you have a Letter of
Intention for $100,000, you will be able to buy shares at the public offering
price associated with a single purchase of $100,000.

Reduced rates on large transactions are limited to the following: an individual
or a "company" as defined in Section 2(a)(8) of the Investment Company Act; an
individual, his or her spouse and their children under the age of 21 purchasing
securities for their own account; a trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account (including a
pension, profit sharing or other employee benefit trust created pursuant to a
plan qualified under Section 401 of the Code); tax-exempt organizations
enumerated in Section 501(c)(3) of the Code; and any organized group which has
been in existence for more than six months, provided that it is not organized
for the purpose of buying redeemable securities of a registered investment
company, and provided that the purchase is made through a central
administration, or through a single dealer, or by other means which result in
economy of sales effort or expense. Such rates are not allowable to a group of
individuals whose funds are combined, directly or indirectly, for the purchase
of securities or to the agent, custodian or other representative of such group.

Out of your initial purchase or purchases, 5% of the dollar amount specified in
the Letter of Intention shall be held in escrow by the Fund in the form of
shares computed at the applicable public offering price. For example, if the
amount a Letter of Intention is $100,000 and the offering price (at the time of
the initial transaction) is $10 a share, 500 shares ($5,000 worth) would be held
in escrow. All shares purchased, including those escrowed, will be registered in
your name and recorded in the same account, which will be credited fully with
all income dividends and capital gain distributions declared. If the total
purchases equal or exceed the amount specified by you as your expected aggregate
purchases, the escrowed shares will be delivered to you or credited to your
account. If total purchases are less than the amount specified, you will remit
to the Fund(s) an amount equal to the difference between the dollar amount of
sales charges actually paid and the amount of sales charges you would have paid
on your aggregate purchases if the total of such purchases had been made at a
single time. Neither dividends from investment income nor capital gain
distributions taken in shares will apply toward the completion of a Letter of
Intention. The contingent deferred sales charge (and not the front-end sales
charge) will apply to Letters of Intention for $1,000,000 or more. See "How to
Redeem Fund Shares -- Contingent Deferred Sales Charge" in the Prospectus.
However, if total purchases pursuant to such Letter of Intention are less than
$1,000,000 after a period of 13 months from the date of the first credited
investment, you will remit to the Fund(s) an amount equal to the front-end sales
charge that would have applied if the actual aggregate amount invested were
invested at one time, less any contingent deferred sales charge paid on any
investment pursuant to such Letter of Intention redeemed during such period. The
Fund(s) will prepare and mail a statement to you and your dealer or
representative, if any, who shall be responsible for notifying you of the
difference due. You may pay the difference due in cash or have it liquidated
from the escrowed shares. If a check has not been received by the Fund(s) within
21 days of notification, it will be assumed that the preferred method is
liquidation and a number of escrowed shares sufficient to realize the difference
due will be redeemed and the remainder will be released or delivered.

Each Fund is hereby irrevocably appointed your attorney to surrender for
redemption any or all escrowed shares under the conditions outlined above.

4
<PAGE>
INVESTOR'S CHECKLIST
QUESTIONS: CALL THE FUND AT (800) 370-0612

PURCHASE SHARES

BY MAIL: Send completed application, together with your check payable to the
Fund at:

Jundt Opportunity Fund
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168

BY WIRE/TELEPHONE: Call your investment dealer/adviser or the Fund at (800)
370-0612. The Fund will assign a new account number to you.
Then instruct your commercial bank to wire transfer "Federal
Funds" via the Federal Reserve System to:

State Street Bank & Trust Company, ABA #011000028
For Credit of: Jundt Opportunity Fund
Account No.: 9905-154-2
Account Number: (assigned by telephone)

SIGNATURES

All shareholders must sign the General Authorization Form exactly as their
names appear on the account form. Be sure all joint tenants sign. Only the
custodian for a minor must sign. Fiduciaries and officers of the corporations or
other organizations should indicate their capacity or title.

NOTE: See "How to Buy Fund Shares" in the Prospectus for order effectiveness and
further information.

5
<PAGE>
JUNDT OPPORTUNITY FUND
ELIGIBILITY CERTIFICATION STATEMENT

Name: ___________________________________________________________________

ELIGIBILITY TO PURCHASE CLASS D SHARES AT NET ASSET VALUE

The above-named purchaser is eligible to purchase Class D shares of the Fund
at net asset value because it falls into the following category of investors:

(CHECK ALL BOXES THAT APPLY)

/ / Investment executive or other employee of a broker-dealer
or financial institution that has entered into an agreement with U.S. Growth
Investments, Inc. for the distribution of Fund shares, an employee of a
contractual service provider to the Fund, or a parent or immediate family member
of any such person. Please give details, including name of person and
broker-dealer, financial institution or service provider:

_______________________________________________________________________________

/ / Trust company or bank trust department for funds held in
a fiduciary, agency, advisory, custodial or similar capacity.

/ / States and their political subdivisions or
instrumentalities, departments, authorities and agencies thereof.

/ / Registered investment advisers or their investment
advisory clients.

/ / Section 401(a) employee benefit plans.

/ / Section 403(b)(7) custodial accounts.

I hereby certify that the enclosed investment represents a purchase of
Fund shares for myself or a beneficial account. I also certify that, as
described in the Fund's current Prospectus, I am eligible to purchase Class D
shares at net asset value, and I will notify the Fund in the event I become
ineligible for net asset value purchases.

I understand that any intentional abuse of the net asset value purchase
privilege may result in the application of retroactive sales charges or other
penalties in the discretion of U.S. Growth Investments, Inc.

Signature: ______________________________

Date: _______________________________
<PAGE>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

JUNDT OPPORTUNITY FUND

------------------

PROSPECTUS
DECEMBER 23, 1996

------------------------

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Fund.............................. 2
Risk Factors.......................... 2
Purchase Information.................. 2
Fees and Expenses..................... 3
Investment Objective and Policies..... 5
Management of the Fund................ 10
How to Buy Fund Shares................ 13
How to Redeem Fund Shares............. 18
Determination of Net Asset Value...... 21
Dividends, Other Distributions and
Taxes................................ 22
Performance Information............... 23
General Information................... 24
</TABLE>

------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE INVESTMENT ADVISER OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER
TO BUY, SHARES OF THE FUND IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFERING
OR SOLICITATION MAY NOT LAWFULLY BE MADE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

INVESTMENT ADVISER
Jundt Associates, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416

DISTRIBUTOR
U.S. Growth Investments, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416

ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, New Jersey 08543

TRANSFER AGENT
Investors Fiduciary Trust Company
1004 Baltimore
Kansas City, Missouri 64105

CUSTODIAN
Norwest Bank Minnesota, N.A.
90 South Seventh Street
Minneapolis, Minnesota 55402

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
4200 Norwest Center
Minneapolis, Minnesota 55402

LEGAL COUNSEL
Faegre & Benson LLP
2200 Norwest Center
Minneapolis, Minnesota 55402

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<PAGE>
PROSPECTUS OF
JUNDT OPPORTUNITY FUND
CLASS A
<PAGE>
JUNDT OPPORTUNITY FUND

1550 UTICA AVENUE SOUTH, SUITE 950

MINNEAPOLIS, MINNESOTA 55416

(800) 370-0612

---------------------

Jundt Opportunity Fund (the "Fund") is a professionally managed,
non-diversified series of Jundt Funds, Inc. (the "Company"), an open-end
management investment company (commonly known as a "mutual fund") that currently
offers its shares in two series. The Fund, in turn, currently offers its shares
in four classes, namely, Class A, Class B, Class C and Class D, each sold
pursuant to different sales arrangements and bearing different expenses (each, a
"Class" and, collectively, the "Classes.") This Prospectus relates only to the
Fund's Class A shares. See "Purchase Information" and "General Information."

------------------------

PROSPECTUS DATED DECEMBER 23, 1996
<PAGE>
THE FUND

RISK FACTORS

PURCHASE INFORMATION

The Fund's Class A shares will not be distributed to the general public, but
will be offered for sale exclusively to directors, officers, employees and
consultants of the Fund (including partners and employees of outside legal
counsel to the Fund), the Fund's investment adviser, Jundt Associates, Inc. (the
"Investment Adviser"), and the Fund's principal distributor, U.S. Growth
Investments, Inc., members of their immediate families, and their direct lineal
ancestors and descendants, as well as accounts for the benefit of any of the
foregoing. This Prospectus relates exclusively to the Fund's Class A shares.

2
<PAGE>
FEES AND EXPENSES

Class A shares are not subject to any front-end sales charges, deferred
sales charges, redemption fees or Rule 12b-1 account maintenance or distribution
fees. The following fee and expense summary format was developed for use by all
mutual funds to assist investors in making investment decisions. Of course,
investors contemplating an investment in Fund shares should also consider other
relevant factors, including the Fund's investment objectives and historical
performance.

<TABLE>
<CAPTION>
CLASS A SHARES
--------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases....... NONE
Sales Charge Imposed on Dividend
Reinvestments.................................. NONE
Maximum Deferred Sales Load (a)................. NONE
Annual Fund Operating Expenses (as a percentage of
average net assets):
Investment Advisory Fees (b).................... 1.30%
12b-1 Fees...................................... NONE
Other Expenses:
Administrative Fees........................... .20%
Shareholder Servicing Costs................... .30%
Other (c)..................................... .09%
-------
Total Annual Fund Operating Expenses (c).......... 1.89%
-------
-------
</TABLE>

- ------------------------
(a) Service agents may charge a nominal fee for effecting redemptions of Fund
shares.
(b) The fee paid by the Fund to the Investment Adviser is higher than the
advisory fee paid by most other investment companies.
(c) Net of voluntary expense reimbursements by the Investment Adviser.

EXAMPLE:

Investors would pay the following expenses on a $1,000 investment, assuming
a 5% annual return and redemption at the end of each time period:

<TABLE>
<CAPTION>
CLASS A SHARES
-----------------
<S> <C>
One year...................................................................... $ 19
Three years................................................................... 59
</TABLE>

The purpose of the fee and expense information set forth above is to assist
investors in understanding the various costs and expenses the investors will
bear directly or indirectly in the Fund's Class A shares. More detailed
information regarding these expenses is set forth under "Management of the Fund"
in the Prospectus THE FOREGOING INFORMATION REPRESENTS MANAGEMENT'S GOOD FAITH
ESTIMATE OF FUND EXPENSES (NET OF VOLUNTARY EXPENSE REIMBURSEMENTS) DURING THE
FIRST YEAR OF THE FUND'S OPERATIONS, AND SHOULD NOT BE CONSIDERED
REPRESENTATIONS OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.

The Investment Adviser has voluntarily agreed to pay certain Fund expenses
as indicated in the above table incurred during the first year of the Fund's
operations. Thereafter, such voluntary expense reimbursements may be
discontinued or modified in the Investment Adviser's sole discretion. Absent
such voluntary expense reimbursements, the Investment Adviser estimates that the
Fund's Class A shares would incur other expenses of approximately 0.64% and
Total Fund Operating Expenses of approximately 2.44%.

3
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE

INVESTMENT POLICIES AND RISK CONSIDERATIONS

In pursuing its investment objective, the Fund employs an aggressive yet
flexible investment program. The Fund may invest in varying combinations of
stocks and bonds, and various other investments (described below), that the
Investment Adviser believes will best enable the Fund to achieve its objective
of long-term capital appreciation. The Investment Adviser anticipates that, in
normal market conditions, at least 65% of the Fund's investment portfolio will
be comprised of common stocks of large and small domestic companies that are
believed by the Investment Adviser to have significant potential for capital
appreciation.

The Fund may employ investment techniques that are different from those
employed by most other mutual funds (for example, selling securities short,
investing in options and futures contracts and the employment of leverage). Each
of these techniques, described below, involves unique risks. The Statement of
Additional Information contains more detailed information about these investment
techniques, including limitations designed to reduce these risks.

4
<PAGE>
available information about the issuers of these securities or less market
interest in such securities than in the case of larger companies, and it may
take a longer period of time for the prices of such securities to reflect the
full value of their issuers' underlying earnings potential or assets.

5
<PAGE>
reduce fluctuations in the values of the Fund's assets. In implementing these
strategies, the Fund may temporarily invest up to 100% of its assets in U.S.
Government securities, other "high-quality" debt securities (securities rated A
or higher by Moody's and/or S&P or judged by the Investment Adviser to be of
comparable quality) and other securities the Investment Adviser believes to be
consistent with the Fund's best interests.

ZERO-COUPON BONDS. The Fund may at times invest in "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from face value and pay interest only at maturity rather than at intervals
during the life of the security. The values of zero-coupon bonds are subject to
greater fluctuation in response to changes in market interest rates than bonds
which pay interest currently, and may involve greater credit risk than such
bonds.

6
<PAGE>
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index or of the securities held by the Fund that are the subject of a hedge. The
successful use by the Fund of the strategies described above further depends on
the ability of the Investment Adviser to forecast market movements correctly.
Other risks arise from the Fund's potential inability to close out futures or
options positions. Although the Fund will enter into options or futures
transactions only if the Investment Adviser believes that a liquid secondary
market exists for such option or futures contracts, there can be no assurance
that the Fund will be able to effect closing transactions at any particular time
or at an acceptable price. In addition, certain provisions of the Internal
Revenue Code may limit the Fund's ability to engage in options and futures
transactions.

7
<PAGE>
SECURITIES LOANS AND REPURCHASE AGREEMENTS. The Fund may lend portfolio
securities to broker-dealers and may enter into repurchase agreements. These
transactions must be fully collateralized at all times, but involve some risk to
the Fund if the other party should default on its obligations and the Fund is
delayed or prevented from recovering the collateral.

INVESTMENT RESTRICTIONS

BROKERAGE AND PORTFOLIO TRANSACTIONS

8
<PAGE>
Consistent with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD"), the Investment Adviser may also consider
distribution of Fund shares when allocating Fund portfolio transactions between
or among brokers and dealers that otherwise offer best price and execution.

The Fund will not purchase securities from, or sell securities to, the
Investment Adviser.

MANAGEMENT OF THE FUND

INVESTMENT ADVISER

9
<PAGE>
Adviser) and the issue of such children. Mrs. Jundt votes the shares owned by
the trust. The remaining 20% of the Investment Adviser's capital stock is
beneficially owned by Gail M. Knappenberger, formerly a director and officer of
the Investment Adviser.

PORTFOLIO MANAGERS

ADMINISTRATOR

Under the terms of an Administration Agreement between Princeton
Administrators, L.P. (the "Administrator") and the Fund (the "Administration
Agreement"), the Administrator performs or

10
<PAGE>
arranges for the performance of certain administrative services (I.E., services
other than investment advice and related portfolio activities) necessary for the
operation of the Fund, including, but not limited to, maintaining certain of the
books and records of the Fund, preparing or reviewing certain reports and other
documents required by United States federal, state and other applicable laws and
regulations to maintain the registration of the Fund and its shares and
providing the Fund with administrative office facilities. For the services
rendered to the Fund and the facilities furnished, the Fund pays the
Administrator a monthly fee equal to the greater of: (a) $125,000 per annum; or
(b) an annual rate equal to .20% of the Fund's average daily net assets up to
$600 million and .175% of the Fund's average daily net assets in excess of $600
million. For the period through December 31, 1997, the Administrator has agreed
to waive the $125,000 minimum per annum fee set forth in clause (a). The
principal address of the Administrator is P.O. Box 9095, Princeton, New Jersey
08543. The Administrator is an affiliate of Merrill Lynch.

THE DISTRIBUTOR

TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN; SUBACCOUNTING AGENTS

HOW TO BUY FUND SHARES

The Fund offers its shares in four separate Classes, namely, Class A, Class
B, Class C and Class D, which offer different sales charges and bear different
expenses. The Fund's Class A shares will not be distributed to the general
public, but will be offered for sale exclusively to directors, officers,
employees and consultants of the Fund (including partners and employees of
outside legal counsel to the Fund), the Investment Adviser, and the Distributor,
members of their immediate families, and their direct lineal ancestors and
descendants, as well as accounts for the benefit of any of the foregoing. This
Prospectus relates exclusively to the Fund's Class A Shares.

11
<PAGE>
When orders are placed for shares of the Fund, the public offering price
used for the purchase will be the net asset value per share next determined. If
an order is placed with the Distributor or other broker-dealer, the
broker-dealer is responsible for promptly transmitting the order to the Fund.

No share certificates will be issued by the Fund.

PURCHASES BY MAIL. To open an account by mail, complete the general
authorization form attached to this Prospectus, and mail it, along with a check
payable to "Jundt Opportunity Fund" to:

c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168

You may not purchase shares with a third party check.

State Street Bank & Trust Company, ABA #011000028
For credit of: Jundt Opportunity Fund
Account No.: 9905-154-2
Account Number: (assigned by telephone)

12
<PAGE>
Fund shares may also be purchased as an investment for other qualified
retirement plans in which investors participate, such as profit-sharing and
money purchase plans, 401(k) programs, 403(b) plans, Simplified Employer Pension
(SEP) Plans and others. Such investors should consult their employers or plan
administrators before investing.

HOW TO REDEEM FUND SHARES

The Fund imposes no charges when its Class A shares are redeemed directly
through the Transfer Agent. Service agents may charge a nominal fee for
effecting redemptions of Fund shares. It is the responsibility of each service
agent to transmit redemption orders to the Transfer Agent. The value of shares
redeemed may be more or less than their original cost depending upon the
then-current net asset value of the shares being redeemed.

SIGNATURE GUARANTEES

- A shareholder request in writing to redeem more than $50,000 worth of
shares,

- A shareholder's account registration or address has changed within the
last 30 days,

- The check is being mailed to a different address than the one on the
account (record address),

- The check is being made payable to someone other than the account owner,
or

- The redemption or exchange proceeds are being transferred to an account
with a different registration.

13
<PAGE>
A shareholder should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency or savings association. The Fund
reserves the right to waive the requirement of a signature guarantee in certain
limited circumstances. A NOTARY PUBLIC CANNOT PROVIDE A SIGNATURE GUARANTEE.

EXCHANGE PRIVILEGE

Except as described below, shareholders may exchange some or all of their
Class A Fund shares for Class A shares of The Jundt Growth Fund, Inc. or Jundt
U.S. Emerging Growth Fund, provided that the shares to be acquired in the
exchange are eligible for sale in the shareholder's state of residence.

The minimum amount which may be exchanged is $1,000. The Fund and The Jundt
Growth Fund, Inc. or Jundt U.S. Emerging Growth Fund, as the case may be, will
execute the exchange on the basis of the relative net asset values next
determined after receipt by the Fund. There is no specific time limit on
exchange frequency; however, the Fund is intended for long term investment and
not as a trading vehicle. The Investment Adviser reserves the right to prohibit
excessive exchanges (more than four per quarter). The Distributor reserves the
right, upon 60 days' prior notice, to restrict the frequency of, or otherwise
modify, condition, terminate or impose charges upon, exchanges. An exchange is
considered a sale of shares on which the investor may realize a capital gain or
loss for income tax purposes. A shareholder may place exchange requests directly
with the Fund, through the Distributor or through other broker-dealers. An
investor considering an exchange should obtain a prospectus of The Jundt Growth
Fund, Inc. or Jundt U.S. Emerging Growth Fund, as the case may be and should
read such prospectus carefully. Contact the Fund, the Distributor or any of such
other broker-dealers for further information about the exchange privilege.

EXPEDITED REDEMPTIONS

The Fund offers several expedited redemption procedures, described below,
which allow a shareholder to redeem Fund shares at net asset value determined on
the same day that the shareholder placed the request for redemption of those
shares. Pursuant to these expedited redemption procedures, the Fund's shares
will be redeemed at their net asset value next determined following the Fund's
receipt of the redemption request. The Fund reserves the right at any time to
suspend or terminate the expedited redemption procedures or to impose a fee for
this service. There is currently no additional charge to the shareholder for use
of the Fund's expedited redemption procedures.

EXPEDITED TELEPHONE REDEMPTION. Shareholders redeeming at least $1,000 and
no more than $25,000 of shares may redeem by telephoning the Fund directly at
(800) 370-0612. The applicable section of the authorization form must have been
completed by the shareholder and filed with the Fund before the telephone
request is received. The Fund will employ reasonable procedures to confirm that
telephone instructions are genuine, including requiring that payment be made
only to the shareholder's address of record or to the bank account designated on
the authorization form and requiring certain means of telephonic identification.
If the Fund fails to employ such procedures, it may be liable for any losses
suffered by shareholders as a result of fraudulent instructions. The proceeds of
the redemption will be paid by check mailed to the shareholder's address of
record or, if requested at the time of redemption, by wire to the bank
designated on the authorization form.

14
<PAGE>
amount of shares to be redeemed. The broker-dealer is then responsible for
promptly placing the redemption request with the Fund on the customer's behalf.
Payment will be made to the shareholder by check or wire sent to the
broker-dealer. Broker-dealers offering this service may impose a fee or
additional requirements for such redemptions.

MONTHLY CASH WITHDRAWAL PLAN

DETERMINATION OF NET ASSET VALUE

Portfolio securities which are traded on a national securities exchange or
on the NASDAQ National Market System are valued at the last sale price on such
exchange or market as of the close of business on the date of valuation.
Securities traded on a national securities exchange or on the NASDAQ National
Market System for which there were no sales on the date of valuation and
securities traded on other over-the-counter markets, including listed securities
for which the primary market is believed to be over-the-counter, are valued at
the mean between the most recently quoted bid and asked prices. Options are
valued at market value or fair value if no market exists. Futures contracts are
valued in a like manner, except that open futures contract sales are valued
using the closing settlement price or, in the absence of such a price, the most
recent quoted asked price. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by
the Company's Board of Directors or by the Investment Adviser in accordance with
policies and procedures established by the Company's Board of Directors.
Short-term investments that mature in 60 days or less are valued at amortized
cost, which approximates fair value.

DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES

DIVIDENDS AND OTHER DISTRIBUTIONS

15
<PAGE>
TAXES

"BUYING A DISTRIBUTION"

On the ex-distribution date for a dividend or other distribution by the
Fund, its share price is reduced by the amount of the dividend or other
distribution. If an investor purchases shares of the Fund on or before the
record date ("buying a distribution"), the investor will pay the full price for
the shares (which includes realized but undistributed earnings and capital gains
of the Fund that accumulate throughout the year), and then receive a portion of
the purchase price back in the form of a taxable distribution.

OTHER TAX INFORMATION

THE FOREGOING TAX DISCUSSION IS GENERAL IN NATURE, AND EACH INVESTOR IS
ADVISED TO CONSULT HIS OR HER TAX ADVISER REGARDING SPECIFIC QUESTIONS AS TO
FEDERAL, STATE, LOCAL OR FOREIGN TAXATION.

PERFORMANCE INFORMATION

16
<PAGE>
were reinvested in shares of the same Class. The Fund presents performance
information for each Class of shares commencing with the Fund's inception.
Performance for each Class is calculated separately.

The Fund's Annual Reports will contain certain performance information
regarding the Fund and will be made available to any recipient of this
Prospectus upon request and without charge.

GENERAL INFORMATION

The Company currently offers its shares in two Series: Series A, which
represent interests in the Jundt U.S. Emerging Growth Fund; and Series B, which
represent interests in The Fund. The Fund, in turn, currently offers its shares
in four Classes, namely, Class A, Class B, Class C and Class D, each sold
pursuant to different sales arrangements and bearing different expenses. The
Company's Board of Directors, without shareholder approval, is authorized to
designate additional Classes of shares in the future; however, the Board of
Directors has no present intention to do so. This Prospectus relates only to the
Fund's Class A shares. The Fund's Class B, Class C and Class D shares are
offered pursuant to a separate prospectus. See "Purchase Information".

17
<PAGE>
Shares of each Class represent interests in the assets of the Fund and have
identical voting, dividend, liquidation and other rights on the same terms and
conditions except that expenses related to the distribution of each Class are
borne solely by such Class and each Class of shares has exclusive voting rights
with respect to the Rule 12b-1 Distribution Plan applicable to such Class and
other matters for which separate Class voting is appropriate under applicable
law. Additionally, because Class B shares automatically convert into Class D
shares if held for the applicable time period, any proposed amendment to the
Class D Rule 12b-1 Distribution Plan that would increase the fees payable
thereunder must be approved by the Class D AND Class B shareholders (each voting
separately as a Class).

The assets received by the Company for the issue or sale of shares of each
Series or Class, and all income, earnings, profits and proceeds thereof, subject
only to the rights of creditors, are allocated to such Series, and in the case
of a Class, are allocated to such Class, and constitute the underlying assets of
such Series or Class. The underlying assets of each Series or Class are required
to be segregated on the books of account, and are to be charged with the
expenses with respect to such Series or Class, and with a share of the general
expenses of the Company. Any general expenses of the Company not readily
identifiable as belonging to a particular Series or Class shall be allocated
among the Series or Classes based upon the relative net assets of the Series or
Class at the time such expenses were accrued or such other method as the
Company's Board of Directors, or the Investment Adviser with the supervision of
the Company's Board of Directors, may determine.

Under Minnesota law, the Company's Board of Directors has overall
responsibility for managing the Company in good faith, in a manner reasonably
believed to be in the Company's best interests, and

18
<PAGE>
with the care an ordinarily prudent person in a like position would exercise in
similar circumstances. The Company's Articles of Incorporation limit the
liability of the Company's officers and directors to the fullest extent
permitted by law.

For a further discussion of the above matters, see "General Information" in
the Statement of Additional Information.

19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

JUNDT OPPORTUNITY FUND

------------------

PROSPECTUS
DECEMBER 23, 1996

------------------------

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Fund.............................. 2
Risk Factors.......................... 2
Purchase Information.................. 2
Fees and Expenses..................... 3
Investment Objective and Policies..... 4
Management of the Fund................ 9
How to Buy Fund Shares................ 11
How to Redeem Fund Shares............. 13
Determination of Net Asset Value...... 15
Dividends, Other Distributions and
Taxes................................ 15
Performance Information............... 16
General Information................... 17
</TABLE>

------------------------

INVESTMENT ADVISER
Jundt Associates, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416

DISTRIBUTOR
U.S. Growth Investments, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416

ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, New Jersey 08543

TRANSFER AGENT
Investors Fiduciary Trust Company
1004 Baltimore
Kansas City, Missouri 64105

CUSTODIAN
Norwest Bank Minnesota, N.A.
90 South Seventh Street
Minneapolis, Minnesota 55402

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
4200 Norwest Center
Minneapolis, Minnesota 55402

LEGAL COUNSEL
Faegre & Benson LLP
2200 Norwest Center
Minneapolis, Minnesota 55402

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<PAGE>
JUNDT FUNDS, INC.

REGISTRATION STATEMENT ON FORM N-1A

PART B

STATEMENTS OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF
JUNDT U.S. EMERGING GROWTH FUND

There is no change to the Statement of Additional
Information of Jundt U.S. Emerging Growth Fund and,
therefore, such Statement of Additional Information is not
included herewith.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
OF
JUNDT OPPORTUNITY FUND
<PAGE>
JUNDT OPPORTUNITY FUND

1550 UTICA AVENUE SOUTH, SUITE 950

MINNEAPOLIS, MINNESOTA 55416

(800) 370-0612

STATEMENT OF ADDITIONAL INFORMATION

DATED DECEMBER 23, 1996

Jundt Opportunity Fund (the "Fund") is a professionally managed,
non-diversified series of Jundt Funds, Inc. (the "Company"), an open-end
management investment company, commonly known as a "mutual fund". The Company
currently offers its shares in two series: Series A, which represent interests
in the Jundt U.S. Emerging Growth Fund; and Series B, which represent interests
in the Fund. The Fund, in turn, currently offers its shares in four classes,
namely, Class A, Class B, Class C and Class D, each sold pursuant to different
sales arrangements and bearing different expenses (each, a "Class" and,
collectively, the "Classes"). Class A shares are offered for sale exclusively to
certain specified investors and are not offered for sale to the general public.

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated December 23, 1996 (the
"Prospectus"), which has been filed with the Securities and Exchange Commission
(the "SEC"). To obtain a copy of the Prospectus, please call the Fund or your
investment executive.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objective, Policies and Restrictions....................... B-2
Taxes................................................................. B-11
Advisory, Administrative and Distribution Agreements.................. B-12
Special Purchase Plans................................................ B-16
Monthly Cash Withdrawal Plan.......................................... B-17
Determination of Net Asset Value...................................... B-18
Calculation of Performance Data....................................... B-18
Directors and Officers................................................ B-20
Counsel and Auditors.................................................. B-22
General Information................................................... B-22
Financial and Other Information....................................... B-23
</TABLE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS STATEMENT OF ADDITIONAL
INFORMATION OR IN THE PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE FUND'S INVESTMENT ADVISER OR PRINCIPAL UNDERWRITER. NEITHER THIS
STATEMENT OF ADDITIONAL INFORMATION NOR THE PROSPECTUS CONSTITUTES AN OFFER TO
SELL, OR THE SOLICITATION OF AN OFFER TO BUY, SHARES OF THE FUND IN ANY STATE OR
JURISDICTION IN WHICH SUCH OFFERING OR SOLICITATION MAY NOT LAWFULLY BE MADE.
NEITHER THE DELIVERY OF THIS STATEMENT OF ADDITIONAL INFORMATION NOR ANY SALE
MADE HEREUNDER (OR UNDER THE PROSPECTUS) SHALL CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

B-1
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS

The Fund's investment objective and policies are set forth in the
Prospectus. Certain additional investment information is set forth below.

OPTIONS

The Fund may purchase and sell put and call options on its portfolio
securities to enhance investment performance and to protect against changes in
market prices. There is no assurance that the use of put and call options will
achieve the desired objective and could result in losses.

COVERED CALL OPTIONS. The Fund may write call options on its securities to
realize a greater current return, through the receipt of premiums, than it would
realize on its securities alone. A call option gives the holder the right to
purchase, and obligates the writer to sell, a security at the exercise price at
any time before the expiration date. A call option is "covered" if the writer,
at all times while obligated as a writer, either owns the underlying securities
(or comparable securities satisfying the cover requirements of the securities
exchanges), or has the right to immediately acquire such securities.

In return for the premiums received when it writes a covered call option,
the Fund gives up some or all of the opportunity to profit from an increase in
the market price of the securities covering the call option during the life of
the option. The Fund retains the risk of loss should the price of such
securities decline. If the option expires unexercised, the Fund realizes a gain
equal to the premium, which may be offset by a decline in price of the
underlying security. If the option is exercised, the Fund realizes a gain or
loss equal to the difference between the Fund's cost for the underlying security
and the proceeds of sale (exercise price minus commission) plus the amount of
the premium.

The Fund may terminate a call option that it has written before it expires
by entering into a closing purchase transaction. The Fund may enter into closing
transactions in order to free itself to sell the underlying security or to write
another call option on the security, realize a profit on a previously written
call option, or protect a security from being called in an unexpected market
rise. Any profits from a closing purchase transaction may be offset by a decline
in the value of the underlying security. Conversely, 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 a closing purchase
transaction is likely to be offset in whole or in part by unrealized
appreciation of the underlying security owned by the Fund.

COVERED PUT OPTIONS. The Fund may write covered put options in order to
enhance its current return. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash and
high-grade short-term debt obligations or other permissible collateral equal to
the price to be paid if the option is exercised.

In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, the Fund also
receives interest on the cash and debt securities maintained to cover the
exercise price of the option. By writing a put option, the Fund assumes the risk
that it may be required to purchase the underlying security for an exercise
price higher than its then current market value, resulting in a potential
capital loss unless the security later appreciates in value.

B-2
<PAGE>
The Fund may terminate a put option that it has written before it expires by
a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.

PURCHASING PUT AND CALL OPTIONS. The Fund may also purchase put options to
protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Fund must
pay. These costs will reduce any profit the Fund might have realized had it sold
the underlying security instead of buying the put option.

The Fund may purchase call options to hedge against an increase in the price
of securities that the Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.

The Fund may also purchase put and call options to enhance its current
return.

RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve certain
risks, including the risks that the Investment Adviser will not forecast market
movements correctly, that the Fund may be unable at times to close out such
positions, or that hedging transactions may not accomplish their purpose because
of imperfect market correlations.

An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. There is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. If no secondary market were to
exist, it would be impossible to enter into a closing transaction to close out
an option position. As a result, the Fund may be forced to continue to hold, or
to purchase at a fixed price, a security on which it has sold an option at a
time when the Investment Adviser believes it is inadvisable to do so.

Higher than anticipated trading activity or order flow or other unforeseen
events might cause The Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict the Fund's use of
options. The exchanges have established limitations on the maximum number of
calls and puts of each class that may be held or written by an investor or group
of investors acting in concert. It is possible that the Fund and other clients
of the Investment Adviser may be considered such a group. These position limits
may restrict the Fund's ability to purchase or sell options on particular
securities.

Options which are not traded on national securities exchanges may be closed
out only with the other party to the option transaction. For that reason, it may
be more difficult to close out unlisted options than listed options.
Furthermore, unlisted options are not subject to the protection afforded
purchasers of listed options by The Options Clearing Corporation.

Government regulations, particularly the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code, may also
restrict the Fund's use of options.

B-3
<PAGE>
SPECIAL EXPIRATION PRICE OPTIONS

The Fund may purchase over-the-counter ("OTC") put and call options with
respect to specified securities ("special expiration price options") pursuant to
which the Fund in effect may create a custom index relating to a particular
industry or sector that the Investment Adviser believes will increase or
decrease in value generally as a group. In exchange for a premium, the
counterparty, whose performance is guaranteed by a broker-dealer, agrees to
purchase (or sell) a specified number of shares of a particular stock at a
specified price and further agrees to cancel the option at a specified price
that decreases straight line over the term of the option. Thus, the value of the
special expiration price option is comprised of the market value of the
applicable underlying security relative to the option exercise price and the
value of the remaining premium. However, if the value of the underlying security
increases (or decreases) by a pre-negotiated amount, the special expiration
price option is canceled and becomes worthless. A portion of the dividends
during the term of the option are applied to reduce the exercise price if the
options are exercised. Brokerage commissions and other transaction costs will
reduce the Fund's profits if the special expiration price options are exercised.
The Fund will not purchase special expiration price options with respect to more
than 25% of the value of its net assets, and will limit premiums paid for such
options in accordance with state securities laws.

FUTURE CONTRACTS

INDEX FUTURES CONTRACTS AND OPTIONS. The Fund may buy and sell index
futures contracts and related options for hedging purposes or to attempt to
increase investment return. A stock index futures contract is a contract to buy
or sell units of a stock index at a specified future date at a price agreed upon
when the contract is made. A unit is the current value of the stock index.

The following example illustrates generally the manner in which index
futures contracts operate. The Standard & Poor's 100 Stock Index (the "S&P 100
Index") is composed of 100 selected common stocks, most of which are listed on
the New York Stock Exchange. The S&P 100 Index assigns relative weightings to
the common stocks included in the Index, and the Index fluctuates with changes
in the market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if the Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).

Positions in index futures may be closed out only on an exchange or board of
trade which provides a secondary market for such futures.

In order to hedge its investments successfully using futures contracts and
related options, the Fund must invest in futures contracts with respect to
indexes or sub-indexes the movements of which will, in the Investment Adviser's
judgment, have a significant correlation with movements in the prices of the
Fund's securities.

B-4
<PAGE>
Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in a index future contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who fail
to exercise their options prior to the exercise date suffer a loss of the
premium paid.

As an alternative to purchasing and selling call and put options on index
futures contracts, the Fund may purchase and sell call and put options on the
underlying indexes themselves to the extent that such options are traded on
national securities exchanges. Index options are similar to options on
individual securities in that the purchaser of an index option acquires the
right to buy (in the case of a call) or sell (in the case of a put), and the
writer undertakes the obligation to sell or buy (as the case may be), units of
an index at a stated exercise price during the term of the option. Instead of
giving the right to take or make actual delivery of securities, the holder of an
index option has the right to receive a cash "exercise settlement amount." This
amount is equal to the amount by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of the exercise, multiplied by
a fixed "index multiplier."

The Fund may purchase or sell options on stock indices in order to close out
outstanding positions in options on stock indices which it has purchased. The
Fund may also allow such options to expire unexercised.

Compared to the purchase or sale of futures contracts, the purchase of call
or put options on an index involves less potential risk to the Fund because the
maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar to
those risks relating to the purchase or sale of index futures contracts.

MARGIN PAYMENTS. When the Fund purchases or sells a futures contract, it is
required to deposit with its custodian an amount of cash, U.S. Treasury bills,
or other permissible collateral equal to a small percentage of the amount of the
future contract. This amount is known as "initial margin." The nature of the
initial margin is different from that of margin in security transactions in that
it does not involve borrowing money to finance transactions. Rather, initial
margin is similar to a performance bond or good faith deposit that is returned
to the Fund upon termination of the contract, assuming the Fund satisfies its
contractual obligations.

Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when the Fund sells a futures contract and the price of the
underlying index rises above the delivery price, the Fund's position declines in
value. The Fund then pays the broker a variation margin payment equal to the
difference between the delivery price of the futures contract and the value of
the index underlying the futures contract. Conversely, if the price of the
underlying index falls below the delivery price of the contract, the Fund's
future

B-5
<PAGE>
position increases in value. The broker then must make a variation margin
payment equal to the difference between the delivery price of the futures
contract and the value of the index underlying the futures contract.

When the Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or a gain. Such closing transactions involve
additional commission costs.

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

LIQUIDITY RISKS. Positions in futures contracts may be closed out only on
an exchange or board of trade which provides a secondary market for such
futures. Although the Fund intends to purchase or sell futures only on exchanges
or boards of trade where there appears to be an active secondary market, there
is no assurance that a liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular time. If there is
not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time and, in the event of adverse price
movements, the Fund would continue to be required to make daily variation margin
payments. However, in the event financial futures are used to hedge portfolio
securities, such securities will not generally be sold until the financial
futures can be terminated. In such circumstances, an increase in the price of
the portfolio securities, if any, may partially or completely offset losses on
the financial futures.

The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
the Fund generally will purchase only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option or at any particular
time. In the event no such market exists for particular options, it might not be
possible to effect closing transaction in such options, with the result that the
Fund would have to exercise the options in order to realize any profit.

HEDGING RISKS. There are several risks in connection with the use by the
Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices of
the futures contracts and options and movements in the underlying securities or
index or movements in the prices of the Fund's securities which are the subject
of a hedge. The Investment Adviser will attempt to reduce the risk by purchasing
and selling, to the extent possible, futures contracts and related options on
securities and indexes the movements of which will, in its judgment, correlate
closely with movements in the prices of the underlying securities or index and
the Fund's portfolio securities sought to be hedged.

Successful use of futures contracts and options by the Fund for hedging
purposes is also subject to the Investment Adviser's ability to predict
correctly movements in the direction of the market. It is possible that, where
the Fund has purchased puts on futures contracts to hedge its portfolio against
a decline in the market, the securities or index on which the puts are purchased
may increase in value and the value of securities held in the portfolio may
decline. If this occurred, the Fund would lose money on the puts and also
experience a decline in value in its portfolio securities. In addition, the
prices of futures, for a number of reasons, may not correlate perfectly with
movements in the underlying securities or index due to certain market
distortions. All participants in the futures market are subject to margin
deposit requirements. Such requirements may cause investors to close futures
contracts through offsetting transactions which could distort the normal
relationship between the

B-6
<PAGE>
underlying security or index and futures markets. Further, the margin
requirements in the futures markets are less onerous than margin requirements in
the securities markets in general, and as a result the futures markets may
attract more speculators than the securities markets do. Increased participation
by speculators in the futures markets may also cause temporary price
distortions. Due to the possibility of price distortion, even a correct forecast
of general market trends by the Investment Adviser may not result in a
successful hedging transaction over a short time period.

OTHER RISKS. The Fund will incur brokerage fees in connection with its
futures and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain risks, those
transactions themselves entail certain other risks. Thus, while the Fund may
benefit from the use of futures and related options, unanticipated changes in
market movements may result in a poorer overall performance for the Fund than if
it had not entered into any futures contracts or options transactions. Moreover,
in the event of an imperfect correlation between the futures position and the
portfolio position which is intended to be protected, the desired protection may
not be obtained and the Fund may be exposed to risk of loss.

INDEXED SECURITIES

The Fund may purchase securities whose prices are indexed to the prices of
other securities, securities indices or other financial indicators. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic. The performance of indexed securities depends to a
great extent on the performance of the security or other instrument to which
they are indexed. At the same time, indexed securities are subject to the credit
risks associated with the issuer of the security, and their values may decline
substantially if the issuer' creditworthiness deteriorates. Recent issuers of
indexed securities have included banks, corporations, and certain U.S.
Government agencies.

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements. A repurchase agreement is a
contract under which the Fund acquires a security for a relatively short period
(usually not more than one week) subject to the obligation of the seller to
repurchase and the Fund to resell such security at a fixed time and price
(representing the Fund's cost plus interest). The Fund presently intends to
enter into repurchase agreements only with member banks of the Federal Reserve
System and securities dealers meeting certain criteria as to creditworthiness
and financial condition established by the Company's Board of Directors and only
with respect to obligations of the U.S. Government or its agencies or
instrumentalities or other high-quality, short-term debt obligations. Repurchase
agreements may also be viewed as loans made by the Fund which are collateralized
by the securities subject to repurchase. The Investment Adviser will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the total amount of the
repurchase obligation, including the interest factor. If the seller defaults,
the Fund could realize a loss on the sale of the underlying security to the
extent that the proceeds of sale including accrued interest are less than the
resale price provided in the agreement including interest. In addition, if the
seller should be involved in bankruptcy or insolvency proceedings, the Fund may
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Fund is treated as an unsecured creditor and
required to return the underlying collateral to the seller's estate.

B-7
<PAGE>
LEVERAGE

Leveraging the Fund creates an opportunity for increased net income but, at
the same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of the Fund's shares and in the yield
on the Fund's portfolio. Although the principal of such borrowings will be
fixed, the Fund's assets may change in value during the time the borrowing is
outstanding. Since any decline in value of the Fund's investments will be borne
entirely be the Fund's shareholders (and not by those persons providing the
leverage to the Fund), the effect of leverage in a declining market would be a
greater decrease in net asset value than if the Fund were not so leveraged.
Leveraging will create an interest expenses for the Fund, which can exceed the
investment return from the borrowed funds. To the extent the investment return
derived from securities purchased with borrowed funds exceeds the interest the
Fund will have to pay, the Fund's investment return will be greater than if
leveraging were not used. Conversely, if the investment return from the assets
retained with borrowed funds is not sufficient to cover the cost of leveraging,
the investment return of the Fund will be less than if leveraging were not used.

REVERSE REPURCHASE AGREEMENTS

In connection with its leveraging activities, the Fund may enter into
reverse repurchase agreements, in which the Fund sells securities and agrees to
repurchase them at a mutually agreed date and time. A reverse repurchase
agreement may be viewed as a borrowing by the Fund, secured by the security
which is the subject of the agreement. In addition to the general risks involved
in leveraging, reverse repurchase agreements involve the risk that, in the event
of the bankruptcy or insolvency of the Fund's counterparty, the Fund would be
unable to recover the security which is the subject of the agreement, that the
amount of cash or other property transferred by the counterparty to the Fund
under the agreement prior to such insolvency or bankruptcy is less than the
value of the security subject to the agreement, or that the Fund may be delayed
or prevented, due to such insolvency or bankruptcy, from using such cash or
property or may be required to return it to the counterparty or its trustee or
receiver.

SECURITIES LENDING

The Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. Government securities,
cash, or cash equivalents adjusted daily to have market value at least equal to
the current market value of the securities loaned; (2) the Fund may at any time
call the loan and regain the securities loaned; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities of the Fund loaned will not at any time exceed
one-third (or such other limit as the Company's Board of Directors may
establish) of the total assets of the Fund. In addition, it is anticipated that
the Fund may share with the borrower some of the income received on the
collateral for the loan or that it will be paid a premium for the loan.

Before the Fund enters into a loan, the Investment Adviser considers all
relevant facts and circumstances, including the creditworthiness of the
borrower. The risks in lending portfolio securities, as with other extensions of
credit, consist of possible delay in recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially. Although
voting rights or rights to consent with respect to the loaned securities pass to
the borrower, the Fund retains the right to call the loans at any time on
reasonable notice, and it will do so in order that the securities may be voted
by the Fund if holders of such securities are asked to vote upon or consent to
matters materially affecting the investment. The Fund will not lend portfolio
securities to borrowers affiliated with the Fund.

B-8
<PAGE>
SHORT SALES

The Fund may seek to hedge investments or realize additional gains through
short sales. Short sales are transactions in which the Fund sells a security it
does not own, in anticipation of a decline in the market value of that security.
To complete such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund then is obligated to replace the security
borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by the Fund. Until the security is replaced, the Fund is
required to repay the lender any dividends or interest that accrue during the
period of the loan. To borrow the security, the Fund also may be required to pay
a premium, which would increase the cost of the security sold. The net proceeds
of the short sale will be retained by the broker (or by the Fund's custodian in
a special custody account), to the extent necessary to meet margin requirements,
until the short position is closed out. The Fund also will incur transaction
costs in effecting short sales.

The Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which the
Fund replaces the borrowed security. The Fund will realize a gain if the
security declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses the Fund may be required to pay in connection
with a short sale. An increase in the value of a security sold short by the Fund
over the price at which it was sold short will result in a loss to the Fund, and
there can be no assurance that the Fund will be able to close out the position
at any particular time or at an acceptable price.

ZERO-COUPON DEBT SECURITIES

Zero-coupon securities in which the Fund may invest are debt obligations
which are generally issued at a discount and payable in full at maturity, and
which do not provide for current payments of interest prior to maturity.
Zero-coupon securities usually trade at a deep discount from their face or par
value and are subject to greater market value fluctuations from changing
interest rates than debt obligations of comparable maturities which make current
distributions of interest. As a result, the net asset value of shares of a
mutual fund investing in zero-coupon securities may fluctuate over a greater
range than shares of other mutual funds investing in securities making current
distributions of interest and having similar maturities.

When debt obligations have been stripped of their unmatured interest coupons
by the holder, the stripped coupons are sold separately. The principal is sold
at a deep discount because the buyer receives only the right to receive a future
fixed payment on the security and does not receive any rights to periodic cash
interest payments. Once stripped or separated, the principal and coupons may be
sold separately. Typically, the coupons are sold separately or grouped with
other coupons with like maturity dates and sold in such bundled form. Purchasers
of stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero-coupon securities issued directly by the
obligor.

Zero-coupon securities allow an issuer to avoid the need to generate cash to
meet current interest payments. Even though zero-coupon securities do not pay
current interest in cash, the Fund is nonetheless required to accrue interest
income on them and to distribute the amount of that interest at least annually
to shareholders. Thus, the Fund could be required at times to liquidate other
investments in order to satisfy its distribution requirements.

B-9
<PAGE>
INVESTMENT RESTRICTIONS

The Fund has adopted certain Fundamental Restrictions that may not be
changed except by a vote of shareholders owning a "majority of the outstanding
voting securities" of the Fund, as defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"). Under the Investment Company
Act, a "majority of the outstanding voting securities" means the affirmative
vote of the lesser of: (a) more than 50% of the outstanding shares of the Fund;
or (b) 67% or more of the shares present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy. As
fundamental policies, the Fund may not:

1. Invest more than 25% of its total asset in any one industry
(securities issued or guaranteed by the United States Government, its
agencies or instrumentalities are not considered to represent industries);

2. Borrow money, except from banks for temporary or emergency purposes
or as required in connection with otherwise permissible leverage activities
(as described elsewhere in the Fund's Prospectus and in this Statement of
Additional Information) and then only in an amount not in excess of
one-third of the value of the Fund's total assets;

3. Purchase or sell commodities or commodity contracts, except as
required in connection with otherwise permissible options, futures and
commodity activities (as described elsewhere in the Fund's Prospectus and in
this Statement of Additional Information);

4. Make loans of its assets to other parties, including loans of its
securities (although it may, subject to the other restrictions or policies
stated in the Fund's Prospectus and in this Statement of Additional
Information, purchase debt securities or enter into repurchase agreements
with banks or other institutions to the extent a repurchase agreement is
deemed to be a loan), in excess of one-third of its total assets;

5. Issue senior securities, as defined in the Investment Company Act,
except as required in connection with otherwise permissible options, futures
and leverage activities (as described elsewhere in the Fund's Prospectus and
in this Statement of Additional Information);

6. Purchase or sell real estate or any interest therein, including
interests in real estate limited partnerships, except securities issued by
companies (including real estate investment trusts) that invest in real
estate or interests therein;

7. Underwrite securities of other issuers, except insofar as it may be
deemed an underwriter under the Securities Act of 1933, as amended (the
"Securities Act") in selling certain of its portfolio securities;

In addition to the foregoing fundamental restrictions, the Fund has adopted
certain Non-Fundamental Restrictions, which may be changed by the Company's
Board of Directors without the approval of the Fund's shareholders. As
non-fundamental policies, the Fund may not:

1. Make short sales or purchases on margin, although it may obtain
short-term credit necessary for the clearance of purchases and sales of its
portfolio securities, and except as required in connection with otherwise
permissible options, futures, short selling and leverage activities (as
described elsewhere in the Fund's Prospectus and in this Statement of
Additional Information);

B-10
<PAGE>
2. Mortgage, hypothecate, or pledge any of its assets as security for
any of its obligations, except as required to secure otherwise permissible
borrowings (including reverse repurchase agreements), short sales, financial
options and other hedging activities;

3. Invest in securities issued by other investment companies in excess
of limitations imposed by applicable law;

4. Make investments for the purpose of exercising control or
management;

5. Invest more than 15% of its net assets in illiquid securities;

6. Purchase equity securities in private placements.

With respect to each of the foregoing fundamental and non-fundamental
investment restrictions involving a percentage of the Fund's assets, if a
percentage restriction or limitation is adhered to at the time of an investment
or sale (other than a maturity) of a security, a later increase or decrease in
such percentage resulting from a change of values or net assets will not be
considered a violation thereof.

TAXES

The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
so qualify, the Fund must, among other things: (a) derive in each taxable year
at least 90% of its gross income from dividends, interest, payments with respect
to securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, or other income derived with respect to its
business of investing in such stock, securities or currencies; (b) derive in
each taxable year less than 30% of its gross income from the sale or other
disposition of stock or securities, or options, futures, and certain forward
contracts or foreign currencies, held for less than three months; and (c)
satisfy certain diversification requirements at the close of each quarter of the
Fund's taxable year.

As a regulated investment company, the Fund will not be liable for federal
income taxes on the part of its taxable net investment income and net capital
gains, if any, that it distributes to shareholders, provided it distributes at
least 90% of its "investment company taxable income" (as that term is defined in
the Code) to Fund shareholders in each taxable year. However, if for any taxable
year the Fund does not satisfy the requirements of Subchapter M of the Code, all
of its taxable income will be subject to tax at regular corporate rates without
any deduction for distributions to shareholders, and such distributions will be
taxable to shareholders as ordinary income to the extent of the Fund's current
or accumulated earnings and profits.

The Fund will be liable for a nondeductible 4% excise tax on amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement. To avoid the tax, during each calendar year the Fund must
distribute: (a) at least 98% of its taxable ordinary income (not taking into
account any capital gains or losses) for the calendar year; (b) at least 98% of
its capital gain net income for the twelve month period ending on October 31 (or
December 31, if the Fund so elects); and (c) any portion (not taxed to the Fund)
of the respective balances from the prior year. To the extent possible, the Fund
intends to make sufficient distributions to avoid this 4% excise tax.

The Fund, or the shareholder's broker with respect to the Fund, is required
to withhold federal income tax at a rate of 31% of dividends, capital gains
distributions and proceeds of redemptions if a

B-11
<PAGE>
shareholder fails to furnish the Fund with a correct taxpayer identification
number ("TIN") or to certify that he is exempt from such withholding, or if the
Internal Revenue Service notifies the Fund or broker that the shareholder has
provided the Fund with an incorrect TIN or failed to properly report dividend or
interest income for federal income tax purposes. Any such withheld amount will
be fully creditable on the shareholder's federal income tax return. An
individual's TIN is his social security number.

The Fund may write, purchase or sell options or futures contracts.
Generally, options and futures contracts that are "Section 1256 contracts" will
be "marked to market" for federal income tax purposes at the end of each taxable
year, I.E., each option or futures contract will be treated as sold for its fair
market value on the last day of the taxable year. Gain or loss from transactions
in options and futures contracts that are subject to the "marked to market" rule
will be 60% long-term and 40% short-term capital gain or loss. However, the Fund
may be eligible to make a special election under which certain "Section 1256
contracts" would not be subject to the "marked to market" rule.

Code Section 1092, which applies to certain "straddles," may affect the
taxation of the Fund's transactions in options and futures contracts. Under
Section 1092, the Fund may be required to postpone recognition for tax purposes
of losses incurred in certain closing transactions in options and futures.

One of the requirements for qualification as a registered investment company
is that less than 30% of the Fund's gross income may be derived from gains from
the sale or other disposition of securities, including options, futures and
forward contracts, held for less than three months. Accordingly, the Fund may be
restricted in effecting closing transactions within three months after entering
into an option or futures contract.

ADVISORY, ADMINISTRATIVE AND DISTRIBUTION AGREEMENTS

INVESTMENT ADVISORY AGREEMENT

Jundt Associates, Inc. (the "Investment Adviser") has been retained as the
Fund's investment adviser pursuant to an investment advisory agreement entered
into by and between the Company and the Investment Adviser (the "Investment
Advisory Agreement"). Under the terms of the Investment Advisory Agreement, the
Investment Adviser furnishes continuing investment supervision to the Fund and
is responsible for the management of the Fund's portfolio. The responsibility
for making decisions to buy, sell or hold a particular security rests with the
Investment Adviser, subject to review by the Company's Board of Directors.

The Investment Adviser furnishes office space, equipment and personnel to
the Fund in connection with the performance of its investment management
responsibilities. In addition, the Investment Adviser pays the salaries and fees
of all officers and directors of the Fund who are affiliated persons of the
Investment Adviser.

The Fund pays all other expenses incurred in the operation of the Fund
including, but not limited to, brokerage and commission expenses; interest
charges; fees and expenses of legal counsel and independent auditors; the Fund's
organizational and offering expenses, whether or not advanced by the Investment
Adviser; taxes and governmental fees; expenses (including clerical expenses) of
issuance, sale or repurchase of the Fund's shares; membership fees in trade
associations; expenses of registering and qualifying shares of the Fund for sale
under federal and state securities laws; expenses of printing and distributing
reports, notices and proxy materials to existing shareholders; expenses of

B-12
<PAGE>
regular and special shareholders meetings; expenses of filing reports and other
documents with governmental agencies; charges and expenses of the Fund's
administrator, custodian and registrar, transfer agent and dividend disbursing
agent; expenses of disbursing dividends and distributions; compensation of the
Company's officers, directors and employees who are not affiliated with the
Investment Adviser; travel expenses of directors of the Company for attendance
at meetings of the Board of Directors; insurance expenses; indemnification and
other expenses not expressly provided for in the Investment Advisory Agreement;
and any extraordinary expenses of a non-recurring nature.

For its services, the Investment Adviser receives from the Fund a monthly
fee at an annual rate of 1.3% of the Fund's average daily net assets. These fees
exceed those paid by most other investment companies.

The Investment Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a majority of the Company's
directors, including a majority of the directors who are not "interested
persons" (as defined in the Investment Company Act) of the Company or the
Investment Adviser ("Independent Directors") at a meeting in person. The
Investment Advisory Agreement may be terminated by either party, by the
Independent Directors or by a vote of the holders of a majority of the
outstanding securities of the Company, at any time, without penalty, upon 60
days' written notice, and automatically terminates in the event of its
"assignment" (as defined in the Investment Company Act).

PORTFOLIO TRANSACTIONS, BROKERAGE COMMISSIONS AND PORTFOLIO TURNOVER RATE

ADMINISTRATION AGREEMENT

Under the terms of an administration agreement by and between Princeton
Administrators, L.P. (the "Administrator") and the Company (the "Administration
Agreement"), the Administrator performs or arranges for the performance of the
following administrative services: (a) maintenance and keeping of certain books
and records of the Fund; (b) preparation or review and, subject to the Company's
review, filing certain reports and other documents required by federal, state
and other applicable U.S. laws and regulations to maintain the Company's
registration as an open-end investment company; (c) coordination of tax related
matters; (d) response to inquiries from Fund shareholders; (e) calculation and
dissemination for publication of the net asset value of the Fund's shares; (f)
oversight and, as the Company's Board of Directors may request, preparation of
reports and recommendations to the Company's Board of Directors on the
performance of administrative and professional services rendered to the Fund by
others, including the Fund's custodian and any subcustodian, registrar, transfer
agency, and dividend disbursing agent, as well as accounting, auditing and other
services; (g) provision of competent personnel and administrative offices
necessary to perform its services under the Administration Agreement; (h)
arrangement for the payment of Fund expenses; (i) consultations with the
Company's officers and various service providers in establishing the accounting
policies of the Fund; (j) preparation of such financial information and reports
as may be required by any banks from which the Fund borrows funds; and (k)
provision of such assistance to the Investment Adviser, the custodian and any
subcustodian, and the Fund's counsel and auditors as

B-13
<PAGE>
generally may be required to carry on properly the business and operations of
the Fund. Under the Administration Agreement, the Company agrees to cause the
Fund's transfer agent to timely deliver to the Administrator such information as
may be necessary or appropriate for the Administrator's performance of its
duties and responsibilities to the Fund.

The Administrator is obligated, at its expense, to provide office space,
facilities, equipment and necessary personnel in connection with its provision
of services under the Administration Agreement; however, the Fund (in addition
to the fees payable to the Administrator under the Administration Agreement, as
described below) has agreed to pay reasonable travel expenses of persons who
perform administrative, clerical and bookkeeping functions on behalf of the
Fund. Additionally, the expenses of legal counsel and accounting experts
retained by the Administrator, after consulting with the Fund's counsel and
independent auditors, as may be necessary or appropriate in connection with the
Administrator's provision of services to the Fund, are deemed expenses of, and
shall be paid by, the Fund.

For the services rendered to the Fund and the facilities furnished, the Fund
is obliged to pay the Administrator, subject to an annual minimum fee of
$125,000, a monthly fee at an annual rate of .20% of the first $600 million of
the Fund's average daily net assets and .175% of the Fund's average daily net
assets in excess of $600 million. For the period ending December 31, 1997, the
Administrator has agreed to waive its $125,000 annual minimum fee.

The Administration Agreement will remain in effect unless and until
terminated in accordance with its terms. It may be terminated at any time,
without the payment of any penalty, by the Company on 60 days' written notice to
the Administrator and by the Administrator on 90 days' written notice to the
Company. The Administration Agreement terminates automatically in the event of
its assignment.

The principal address of the Administrator is P.O. Box 9095, Princeton, New
Jersey 08543.

THE DISTRIBUTOR

Pursuant to a Distribution Agreement by and between U.S. Growth Investments,
Inc. (the "Distributor") and the Company (the "Distribution Agreement"), the
Distributor serves as the principal underwriter of the Fund's shares. The Fund's
shares are offered continuously by and through the Distributor. As agent of the
Fund, the Distributor accepts orders for the purchase and redemption of Fund
shares. The Distributor may enter into selling agreements with other dealers and
financial institutions, pursuant to which such dealers and/or financial
institutions also may sell Fund shares.

RULE 12B-1 DISTRIBUTION PLANS

Rule 12b-1 under the Investment Company Act provides that any payments made
by the Fund (or any Class thereof) in connection with the distribution of its
shares must be pursuant to a written plan describing all material aspects of the
proposed financing of distribution and that any agreements entered into in
furtherance of the plan must likewise be in writing. In accordance with Rule
12b-1, the Fund adopted a separate Rule 12b-1 Distribution Plan for each of its
Class B, Class C and Class D shares. There is no Rule 12b-1 Distribution Plan
for the Fund's Class A shares.

Rule 12b-1 requires that the Distribution Plans (the "Plans") and the
Distribution Agreement be approved initially, and thereafter at least annually,
by a vote of the Company's Board of Directors including a majority of the
directors who are not interested persons of the Company and who have no

B-14
<PAGE>
direct or indirect interest in the operation of the Plans or in any agreement
relating to the Plans, cast in person at a meeting called for the purpose of
voting on the plan or agreement. Rule 12b-1 requires that the Distribution
Agreement and each Plan provide, in substance:

(a) that it shall continue in effect for a period of more than one year
from the date of its execution or adoption only so long as such continuance
is specifically approved at least annually in the manner described in the
preceding paragraph;

(b) that any person authorized to direct the disposition of moneys paid
or payable by the Fund pursuant to the Plan or any related agreement shall
provide to the Company's Board of Directors, and the directors shall review,
at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made; and

(c) in the case of a Plan, that it may be terminated at any time by a
vote of a majority of the members of the Company's Board of Directors who
are not interested persons of the Company and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
to the Plan or by a vote of a majority of the outstanding voting shares of
each affected Class or Classes of the Fund's shares.

Rule 12b-1 further requires that none of the Plans may be amended to
increase materially the amount to be spent for distribution without approval by
the shareholders of the affected Class or Classes and that all material
amendments of the Plan must be approved in the manner described in the paragraph
preceding clause (a) above.

Rule 12b-1 provides that the Fund may rely upon Rule 12b-1 only if the
selection and nomination of the Company's disinterested directors are committed
to the discretion of such disinterested directors. Rule 12b-1 provides that the
Fund may implement or continue the Plans only if the directors who vote to
approve such implementation or continuation conclude, in the exercise of
reasonable business judgment and in light of their fiduciary duties under state
law, and under Sections 36(a) and (b) of the Investment Company Act, that there
is a reasonable likelihood that each Plan will benefit the Fund and its
shareholders. The Company's Board of Directors has concluded that there is a
reasonable likelihood that the Distribution Plans will benefit the Fund and its
shareholders.

The Distribution Plans of Class B and Class C provide for the additional
payment of a Rule 12b-1 "distribution fee" to the Distributor, equal on an
annual basis to .75% of the average daily net assets attributable to such Class.
This fee is designed to compensate the Distributor for advertising, marketing,
and distributing the Class B and Class C shares, including the provision of
initial and ongoing sales compensation to the Distributor's sales
representatives and to other broker-dealers and financial institutions with
which the Distributor has entered into selling arrangements.

B-15
<PAGE>
SPECIAL PURCHASE PLANS

AUTOMATIC INVESTMENT PLAN. As a convenience to investors, shares may be
purchased through an automatic investment plan. Under such a plan, the investor
authorizes the Fund to withdraw a specific amount (minimum dollars $50 per
withdrawal) from the investor's bank account and to invest such amount in shares
of the Fund. Such purchases are normally made on the 5th day of each month, or
the next business day thereafter. Further information is available from the
Distributor.

COMBINED PURCHASE PRIVILEGE. The following persons (or groups of persons)
may qualify for reductions from the front-end sales charge ("FESC") schedule for
Class D shares set forth in the Prospectus by combining purchases of any Class
of Fund shares, if the combined purchase of all Fund shares totals at least
$25,000:

(i) an individual or a "company" as defined in Section 2(a)(8) of the
Investment Company Act;

(ii) an individual, his or her spouse and their children under
twenty-one, purchasing for his, her or their own account;

(iii) a trustee or other fiduciary purchasing for a single trust estate
or single fiduciary account (including a pension, profit-sharing or other
employee benefit trust) created pursuant to a plan qualified under Section
401 of the Code;

(iv) tax-exempt organizations enumerated in Section 501(c)(3) of the
Code;

(v) employee benefit plans of a single employer or of affiliated
employers;

(vi) any organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company, and provided that
the purchase is made through a central administration, or through a single
dealer, or by other means which result in economy of sales effort or
expense. An organized group does not include a group of individuals whose
sole organizational connection is participation as credit cardholders of a
company, policyholders of an insurance company, customers of either a bank
or broker-dealer, or clients of an investment adviser.

CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A purchase of Class D
shares may qualify for a Cumulative Quantity Discount. The applicable FESC will
then be based on the total of:

(i) the investor's current purchase; and

(ii) the net asset value (at the close of business on the previous day)
of Fund shares held by the investor; and

(iii) the net asset value of shares of any Class of Fund shares owned by
another shareholder eligible to participate with the investor in a "Combined
Purchase Privilege" (see above).

For example, if an investor owned shares worth $15,000 at the then current
net asset value and purchased an additional $10,000 of shares, the sales charge
for the $10,000 purchase would be at the rate applicable to a single $25,000
purchase.

To qualify for the Combined Purchase Privilege or to obtain the Cumulative
Quantity Discount on a purchase through a dealer, when each purchase is made the
investor or dealer must provide the Fund with sufficient information to verify
that the purchase qualifies for the privilege or discount.

B-16
<PAGE>
LETTER OF INTENTION. Investors wishing to purchase Class D shares may also
obtain the reduced FESC shown in the Prospectus by means of a written Letter of
Intention, which expresses the investor's intention to invest not less than
$25,000 (including certain "credits," as described below) within a period of 13
months in any Class of shares of the Fund, The Jundt Growth Fund, Inc. and Jundt
U.S. Emerging Growth Fund. Each purchase of shares under a Letter of Intention
will be made at the public offering price applicable at the time of such
purchase to a single transaction of the dollar amount indicated in the Letter of
Intention. A Letter of Intention may include purchases of shares made not more
than 90 days prior to the date that an investor signs a Letter of Intention;
however, the 13-month period during which the Letter of Intention is in effect
will begin on the date of the earliest purchase to be included. Investors
qualifying for the Combined Purchase Privilege described above may purchase
shares under a single Letter of Intention.

For example, assume that on the date an investor signs a Letter of Intention
to invest at least $25,000 as set forth above and the investor and the
investor's spouse and children under twenty-one have previously invested $10,000
in shares which are still held by such persons. It will only be necessary to
invest a total of $15,000 during the 13 months following the first date of
purchase of such shares in order to qualify for the sales charges applicable to
investments of $25,000.

The Letter of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Letter of Intention is 5% of such amount. Shares purchased with the first 5% of
such amount will be held in escrow to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount indicated is not
purchased. When the full amount indicated has been purchased, the escrow will be
released. To the extent that an investor purchases more than the dollar amount
indicated on the Letter of Intention and qualifies for further reduced sales
charges, the sales charges will be adjusted for the entire amount purchased at
the end of the 13-month period. The difference in sales charges will be used to
purchase additional shares at the then current offering price applicable to the
actual amount of the aggregate purchases.

Investors electing to take advantage of the Letter of Intention should
carefully review the appropriate provisions on the general authorization form
attached to the Prospectus.

MONTHLY CASH WITHDRAWAL PLAN

Any investor who owns or buys shares of the Fund valued at $10,000 or more
at the current offering price may open a Withdrawal Plan and have a designated
sum of money paid monthly to the investor or another person. Shares are
deposited in a Withdrawal Plan account and all distributions are reinvested in
additional shares of the Fund at net asset value. Shares in a Withdrawal Plan
account are then redeemed at net asset value to make each withdrawal payment.
Deferred sales charges may apply to monthly redemptions of shares. Redemptions
for the purpose of withdrawal are made on the 20th day of the month (or on the
preceding business day if the 20th day falls on a weekend or is a holiday) at
that day's closing net asset value, and checks are mailed on the next business
day. Payments will be made to the registered shareholder or to another party if
preauthorized by the registered shareholder. As withdrawal payments may include
a return on principal, they cannot be considered a guaranteed annuity or actual
yield of income to the investor. The redemption of shares in connection with a
Withdrawal Plan may result in a gain or loss for tax purposes. Continued
withdrawals in excess of income will reduce and possibly exhaust invested
principal, especially in the event of a market decline. The maintenance of a
Withdrawal Plan concurrently with purchases of additional shares of a Class
which imposes a FESC would normally be disadvantageous to the investor because
of

B-17
<PAGE>
the FESC payable on such purchases. For this reason, an investor may not
maintain an Automatic Investment Plan for the accumulation of shares of a Class
which imposes a FESC (other than through reinvestment of distributions) and a
Withdrawal Plan at the same time. The cost of administering Withdrawal Plans is
borne by the Fund as an expense of all shareholders. The Fund or the Distributor
may terminate or change the terms of the Withdrawal Plan at any time. The
Withdrawal Plan is fully voluntary and may be terminated by the shareholder at
any time without the imposition of any penalty.

Since the Withdrawal Plan may involve invasion of capital, investors should
consider carefully with their own financial advisers whether the Withdrawal Plan
and the specified amounts to be withdrawn are appropriate in their
circumstances. The Fund makes no recommendations or representations in this
regard.

DETERMINATION OF NET ASSET VALUE

The net asset value per share is calculated separately for each Class of
shares. The assets and liabilities attributable to each Class of shares is
determined in accordance with generally accepted accounting principles and
applicable SEC rules and regulations.

The portfolio securities in which the Fund invests fluctuate in value, and
hence the Fund's net asset value per share also fluctuates.

CALCULATION OF PERFORMANCE DATA

For purposes of quoting and comparing the performance of each Class of the
Fund's shares to that of other mutual funds and to other relevant market indices
in advertisements or in reports to shareholders, performance may be stated in
terms of "average annual total return" or "cumulative total return." These total
return quotations are and will be computed separately for each Class of shares.
Under the rules of the SEC, funds advertising performance must include average
annual total return quotations calculated according to the following formula:

P(1+T)(n) = ERV

Where: P = a hypothetical initial payment of $1,000;

T = average annual total return;

n = number of years; and

ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of such
period.

This calculation assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.

Cumulative total return is computed by finding the cumulative compounded
rate of return over the period indicated in the advertisement that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:

ERV - P
CTR = --------- x 100
P

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<PAGE>

Where: CTR = Cumulative total return;

ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of such
period; and

P = initial payment of $1,000.

This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.

Under each of the above formulas, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertisement for publication.

The average annual total return and cumulative total return figures
calculated in accordance with the foregoing formulas assume in the case of Class
D shares the maximum FESC has been deducted from the hypothetical initial
investment at the time of purchase, or in the case of Class B or Class C shares
the maximum applicable CDSC has been paid upon the hypothetical redemption of
the shares at the end of the period.

Past performance is not predictive of future performance. All advertisements
containing performance data of any kind will include a legend disclosing that
such performance data represents past performance and that 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.

Advertisements and communications may compare the performance of Fund shares
with that of other mutual funds, as reported by Lipper Analytical Services, Inc.
or similar independent services or financial publications, and may also contrast
the Fund's investment policies and portfolio flexibility with other mutual
funds. From time to time, advertisements and other Fund materials and
communications may cite statistics to reflect the performance over time of Fund
shares, utilizing generally accepted indices or analyses, including, but not
limited to, those published by Lipper Analytical Service, Inc., Standard &
Poor's Corporation, Dow Jones & Company, Inc., CDA Investment Technologies,
Inc., Morningstar, Inc. and Investment Company Data Incorporated. Performance
ratings reported periodically in national financial publications also may be
used. In addition, advertising materials may include the Investment Adviser's
analysis of, or outlook for, the economy or financial markets, compare the
Investment Adviser's analysis or outlook with the views of others in the
financial community and refer to the expertise of the Investment Adviser's
personnel and their reputation in the financial community.

B-19
<PAGE>
DIRECTORS AND OFFICERS

Directors and officers of the Company, together with information as to their
principal occupations during the past five years, are set forth below.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS POSITIONS WITH THE COMPANY PAST 5 YEARS AND OTHER AFFILIATIONS
- -------------------------------- ---------------------------- -------------------------------------------------
<S> <C> <C>
James R. Jundt (1)(2) Chairman of the Board, Chairman of the Board, Chief Executive Officer,
1550 Utica Avenue South President and Chief Secretary and portfolio manager of the
Suite 950 Executive Officer Investment Adviser since its inception in 1982.
Minneapolis, MN 55416 Chairman of the Board, President, Chief
Executive Officer and a portfolio manager of The
Jundt Growth Fund, Inc. since 1991 and the
Company since 1995. Also a trustee of Gonzaga
University and the Minneapolis Institute of Arts
and a director of three private companies.

John E. Clute Director Dean and Professor of Law, Gonzaga University
807 East Highland View Ct. School of Law, since 1991; previously Senior
Spokane, WA 99223-6210 Vice President -- Human Resources and General
Counsel, Boise Cascade Corporation (forest
products) for more than five years. Director of
The Jundt Growth Fund, Inc. since 1991 and the
Company since 1995. Also a director of Hecla
Mining Company (mining).

Floyd Hall Director Chairman, President and Chief Executive Officer
3100 West Big Beaver Road of K-Mart Corporation (retailing) since 1995.
Troy, MI 48084 Chairman and Chief Executive Officer of The
Museum Company (retailing) and Alva Replicas
Company (manufacturer of statuary and sculpture)
from 1989 to 1995; from 1984 to 1989, Chairman
and Chief Executive Officer of The Grand Union
Company (grocery store chain). Director of The
Jundt Growth Fund, Inc. since 1991 and the
Company since 1995. Also a director of Jamesway
Corp. (discount retailing) as well as a private
company.
</TABLE>

B-20
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS POSITIONS WITH THE COMPANY PAST 5 YEARS AND OTHER AFFILIATIONS
- -------------------------------- ---------------------------- -------------------------------------------------
<S> <C> <C>
Demetre M. Nicoloff Director Cardiac and thoracic surgeon, Cardiac Surgical
1492 Hunter Drive Associates, P.A., Minneapolis, Minnesota.
Wayzata, MN 55391 Director of The Jundt Growth Fund, Inc. since
1991 and the Company since 1995. Also a director
of Optical Sensors for Medicine, Inc. (patient
monitoring equipment); ATS Medical, Inc. (heart
valves), Micromedics, Inc. (instrument trays,
ENT specialty products and fibrin glue
applicators); Possis Medical Inc.
(cardiovascular surgical products); Applied
Biometrics, Inc. (cardiac output measuring
devices) and Sonometrics, Inc. (ultrasound
imaging equipment).

Darrell R. Wells Director Managing Director, Security Management Company
4350 Brownsboro Road, (asset management firm) in Louisville, Kentucky.
Suite 310 Director of The Jundt Growth Fund, Inc. since
Louisville, KY 40207 1991 and the Company since 1995. Also a director
of Churchill Downs Inc. (race track operator)
and Citizens Financial Inc. (insurance holding
company), as well as several private companies.

Donald M. Longlet Vice President and Treasurer Portfolio manager with the Investment Adviser
1550 Utica Avenue South since May 1989. Portfolio manager with AMEV
Suite 950 Advisers, Inc., St. Paul, Minnesota, from 1983
Minneapolis, MN 55416 to 1989. Vice President, Treasurer and a
portfolio manager of The Jundt Growth Fund, Inc.
since 1991 and the Company since 1995.

James E. Nicholson Secretary Partner with the law firm of Faegre & Benson LLP,
2200 Norwest Center Minneapolis, Minnesota, which has served as
Minneapolis, MN 55402 general counsel to the Investment Adviser since
its inception. Secretary of The Jundt Growth
Fund, Inc. since 1991 and the Company since
1995.
</TABLE>

- ------------------------

(1) Director who is an "interested person" of the Fund, as defined in the
Investment Company Act.

B-21
<PAGE>
(2) "Controlling person" of the Investment Adviser, as defined in the Investment
Company Act. Mr. Jundt beneficially owns 76% of the capital stock of the
Investment Adviser. Mr. Jundt also owns 100% of the capital stock of the
Distributor and is, therefore, a controlling person of the Distributor as
well.

The Company and The Jundt Growth Fund, Inc. (together, the "Fund Complex")
together have agreed to pay each director who is not an "interested person" of
either the Company or The Jundt Growth Fund, Inc. a fee of $13,000 per year plus
$1,300 for each meeting attended and to reimburse each such director for the
expenses of attendance at such meetings. No compensation is paid by the Company
or the Fund Complex to the Company's officers or directors who are "interested
persons" of either the Company or The Jundt Growth Fund, Inc.

The following table sets forth estimated compensation and benefits to be
paid to each director by the Fund Complex during the first full year of the
Fund's operations (the year ending December 31, 1997):

COMPENSATION TABLE

<TABLE>
<CAPTION>
ESTIMATED AGGREGATE COMPENSATION
FROM THE FUND COMPLEX
----------------------------------------
ESTIMATED
PENSIONS OR
RETIREMENT
TWELVE-MONTH BENEFITS ACCRUED
PERIOD ENDED AS PART OF COMPANY
NAME OF DIRECTOR DECEMBER 31, 1996 EXPENSES
- ---------------------------------------- ----------------- ---------------------
<S> <C> <C>
James R. Jundt.......................... None None
Demetre M. Nicoloff..................... $ 16,800 None
Darrell R. Wells........................ 16,800 None
John E. Clute........................... 16,800 None
Floyd Hall.............................. 15,600 None
</TABLE>

COUNSEL AND AUDITORS

Faegre & Benson LLP, 2200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402, serves as the Fund's general counsel. KPMG Peat
Marwick LLP, 4200 Norwest Center, 90 South Seventh Street, Minneapolis,
Minnesota 55402, has been selected as the independent auditors of the Company
for its fiscal years ending December 31, 1996 and 1997, respectively.

GENERAL INFORMATION

Under Minnesota law, each Company director owes certain fiduciary duties to
the Company and to its shareholders. Minnesota law provides that a director
"shall discharge the duties of the position of director in good faith, in a
manner the director reasonably believes to be in the best interest of the
corporation, and with the care an ordinary prudent person in a like position
would exercise under similar circumstances." Fiduciary duties of a director of a
Minnesota corporation include, therefore, both a duty of "loyalty" (to act in
good faith and act in a manner reasonably believed to be in the best interests
of the corporation) and a duty of "care" (to act with the care an ordinarily
prudent person in a like position would exercise under similar circumstances).
Minnesota law authorizes corporations to eliminate or limit the liability of
directors: (a) for any breach of the directors' duty of "loyalty" to the
corporation or its shareholders; (b) for acts or omissions not in good faith or
that involve intentional

B-22
<PAGE>
misconduct or a knowing violation of Minnesota law or for violation of certain
provisions of Minnesota securities laws; or (c) for any transaction from which
the directors derived an improper personal benefit. The Company's Articles of
Incorporation limit the liability of the Company's directors to the fullest
extent permitted by Minnesota statutes, except to the extent that such liability
cannot be limited as provided in the Investment Company Act (which prohibits any
provisions which purport to limit the liability of directors arising from such
directors' willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their role as directors).

Minnesota law does not eliminate the duty of "care" imposed upon a director.
It only authorizes a corporation to eliminate monetary liability for violations
of that duty. Minnesota law, further, does not permit elimination or limitation
of liability of "officers" to the corporation for breach of their duties as
officers (including the liability of directors who serve as officers for breach
of their duties as officer). Minnesota law does not permit elimination of the
availability of equitable relief, such as injunctive or rescissionary relief.
These remedies, however, may be ineffective in situations where shareholders
become aware of such a breach after a transaction has been consummated and
rescission has become impractical. Further, Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act or
the Securities Exchange Act of 1934, as amended, and it is uncertain whether and
to what extent the elimination of monetary liability would extend to violations
of duties imposed on directors by the Investment Company Act and the rules and
regulations thereunder.

The Company is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders. Regular and special
shareholder meetings are held only at such times and with such frequency as
required by law. Minnesota corporation law provides for the Board of Directors
to convene shareholder meetings when it deems appropriate. In addition, if a
regular meeting of shareholders has not been held during the immediately
preceding 15 months, a shareholder or shareholders holding three percent or more
of the voting shares of the Company may demand a regular meeting of shareholders
of the Company by written notice of demand given to the chief executive officer
or the chief financial officer of the Company. Within 90 days after receipt of
the demand, a regular meeting of shareholders must be held at the expense of the
Company. Irrespective of whether a regular meeting of shareholders has been held
during the immediately preceding 15 months, in accordance with Section 16(c)
under the Investment Company Act, the Company's Board of Directors shall
promptly call a meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares. Additionally, the
Investment Company Act requires shareholder votes for all amendments to
fundamental investment policies and restrictions and for all investment advisory
contracts and amendments thereto.

Upon issuance and sale in accordance with the terms of the Fund's Prospectus
and Statement of Additional Information, each Fund share will be fully paid and
non-assessable. Shares have no preemptive, subscription or conversion rights and
are redeemable as set forth under "How To Redeem Fund Shares" in the Prospectus.

FINANCIAL AND OTHER INFORMATION

The Fund's Prospectus and this Statement of Additional Information do not
contain all the information included in the Company's Registration Statement
filed with the SEC under the Securities Act and the Investment Company Act (the
"Registration Statement") with respect to the securities offered by the
Prospectus and this Statement of Additional Information. Certain portions of the

B-23
<PAGE>
Registration Statement have been omitted from the Prospectus and this Statement
of Additional Information pursuant to the rules and regulations of the SEC. The
Registration Statement including the exhibits filed therewith may be examined at
the office of the SEC in Washington, D.C.

Statements contained in the Fund's Prospectus or in this Statement of
Additional Information as to any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectus and this Statement of Additional Information
form a part, each such statement being qualified in all respects by such
reference.

B-24