As filed with the Securities and Exchange Commission on February 25, 2000
Registration No. 333-00767
ICA No. 811-07531
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 6 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 7 [X]
(Check appropriate box or boxes)
AMERINDO FUNDS INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
c/o Amerindo Funds Inc.
399 Park Avenue, New York, New York 10022
------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 371-6360
DANA E. SMITH
Amerindo Funds Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
---------------------------------------
(Name and Address of Agent for Service)
Copy to: MICHAEL R. ROSELLA, Esq.
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective: (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on March 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
911624.1
<PAGE>
AMERINDO
TECHNOLOGY FUND
Prospectus 2000
Class A and C Shares
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
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AMERINDO FUNDS INC PROSPECTUS
CLASS A SHARES; CLASS C SHARES March 1, 2000
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AMERINDO TECHNOLOGY FUND
A mutual fund whose investment objective is to seek long-term capital
appreciation.
The Securities and Exchange Commission has not approved or
disapproved these Securities or passed upon the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense.
<TABLE>
<S> <C> <C> <C>
Risk/Return Summary.................... 2 How to Purchase Shares................. 11
Fee Table.............................. 4 For Class A Shareholders Only;
Reduction or Elimination of Sales
Investment Objectives, Principal Loads.................................. 14
Investment Strategies and Related
Risks.................................. 5 How to Redeem Shares................... 15
Additional Investment Information and Dividends and Distributions............ 17
Risk Factors........................... 6
Tax Consequences....................... 18
Management, Organization and Capital
Structure.............................. 8 Distribution Arrangements.............. 19
Pricing of Fund Shares................. 11 Financial Highlights Information....... 21
</TABLE>
1
<PAGE>
RISK/RETURN SUMMARY
The Fund is currently composed of one portfolio called the Amerindo Technology
Fund.
INVESTMENT OBJECTIVE
The Fund's investment objective is to seek long-term capital appreciation.
Current income is incidental to the Fund's investment objective. There is no
assurance that the Fund will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to achieve its investment objective by investing at least 65% of
its total assets (although the Fund intends, as a non-fundamental policy, to
invest at least 80% of its assets) in the common stocks of technology companies.
Technology companies are those companies with primary business operations in
either the technology or science areas. Industries likely to be represented in
the portfolio include computers, networking and internetworking software,
computer-aided design, telecommunications, media and information services,
medical devices and biotechnology. In addition to investing at least 65% of its
assets in technology companies, the Fund may also invest in the stocks of
companies that should benefit from the commercialization of technological
advances, although they may not be directly involved in research and
development.
PRINCIPAL RISKS
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by the Fund can
each decline in value.
o Investments in companies in the rapidly changing fields of technology and
science face special risks such as competitive pressures and
technological obsolescence and may be subject to greater governmental
regulation than many other industries.
o Investments in smaller capitalized companies may involve greater risks,
such as limited product lines, markets and financial or managerial
resources.
o As a non-diversified fund, compared to other mutual funds, this Fund may
invest a greater percentage of its assets in a particular issuer.
Therefore, investors should consider this greater risk versus the safety
that comes with a more diversified portfolio.
WHO MAY WANT TO INVEST IN THIS FUND
This Fund is designed for long-term investors who understand and are willing to
accept the risk of loss involved in investing in a fund seeking long-term
capital appreciation. Investors should consider their investment goals, their
time horizon for achieving them, and their tolerance for risks before investing
in the Fund. If you seek an aggressive approach to capital growth and can accept
the above average level of price fluctuations that this Fund is expected to
experience, this Fund could be an appropriate part of your overall investment
strategy. The Fund should not represent your complete investment program or be
used for short-term trading purposes.
The Board of Directors reserves the right at its discretion to close the Fund to
new investors at such time as it deems appropriate.
2
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RISK/RETURN BAR CHART AND TABLE
The following bar chart and table may assist in your decision to invest in the
Fund. The bar chart shows the average annual returns for Class A shares of the
Fund for the life of the Fund. The table shows how the Fund's Class A shares'
average annual returns for the one-year and since inception periods ended
December 31, 1999 compares with that of the Hambrecht & Quist Growth Index.*
Past performance is not included for Class C shares because, as of December 31,
1999, Class C shares had less than one year of operating history. While
analyzing this information, please note that the Fund's past performance is not
an indication of how the Fund will perform in the future.
Year-by-Year Total Return as of December 31(1)
(Class A Shares)
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts the
following points:
300.00%
250.60%
250.00%
200.00%
150.00%
100.00%
50.00%
0.00%
1999
BEST QUARTER 3/31/99: 67.92%(1) WORST QUARTER 9/30/99: (8.78%)(1)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING 12/31/99)(2)(3) PAST ONE YEAR SINCE INCEPTION(4)(5)
<S> <C> <C>
Amerindo Technology Fund - Class A Shares 230.42% 227.11%**
Hambrecht & Quist Growth Index* 180.12% 151.92%
</TABLE>
* The Hambrecht & Quist Growth Index is a multiple-sector growth stock
composite comprised of the publicly traded stocks of approximately 275
companies that have annual revenues of less than $300 million. The Index
includes companies in the technology, healthcare services, branded
consumer, and Internet sectors. You may not invest in The Hambrecht & Quist
Growth Index and unlike the Fund, it does not incur fees or charges.
** Not Annualized.
(1) Sales loads are not reflected in the year-by-year total return or in the
best and worst quarterly returns. If they were, returns would be less than
those shown.
(2) Reflects 5.75% sales load.
(3) Shareholder Organizations may charge a fee to investors for purchasing or
redeeming shares. The net return to such investors may be less than if they
had invested in the Fund directly.
(4) Performance information for Class C shares will differ from Class A shares
due to differences in their sales loads.
(5) The date of inception of the Class A shares was August 3, 1998.
(6) The year-to-date return for the Class A shares as of December 31, 1999 was
250.60%.
3
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FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
<TABLE>
<CAPTION>
CLASS A CLASS C
------- -------
<S> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases
(as a percentage of the offering price) 5.75% None
Maximum Deferred Sales Charge for shares held
less than 1 year
(as a percentage of the lesser of original
purchase price or redemption proceeds) None 1.00%
Redemption Fees for shares held less than 1
year
(as a percent of amount redeemed, if
applicable) 2.00% 2.00%
ANNUAL FUND OPERATING EXPENSES(1)
(expenses that are deducted from Fund assets)
Management Fees 1.50% 1.50%
Distribution and/or Service 12b-1 Fees 0.25% 1.00%
Other Expenses 0.54% 1.00%(2)
---- ----
Total Annual Fund Operating Expenses 2.29% 3.50%
Fee Waiver/Expense Reimbursement .04% .50%
---- ----
Net Total Annual Fund Operating Expenses 2.25% 3.00%
</TABLE>
(1) The Adviser reimbursed the Fund 0.04% of the Adviser's fee. After this
reimbursement, the "Management Fees" were 1.46% for the Class A shares. The
Adviser is contractually obligated to waive its fees and to reimburse any
expenses to the extent that the Total Annual Fund Operating Expenses exceed
2.25% for Class A Shares and 3.00% for Class C Shares. This Expense
Limitation Agreement will terminate on October 31, 2000. Additionally, for
the fiscal year ended October 31, 1999, Class A Shares Rule 12b-1 fees were
.50%. The fee table has been restated to reflect that, effective November 2,
1999, Class A Shares Rule 12b-1 fees were lowered to .25%. "Total Annual
Fund Operations Expenses" for the fiscal year ended October 31, 1999 were
2.54%.
(2) Estimated because there were no Class C shares issued during the fiscal year
ended October 31, 1999.
Example: This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund over the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the Fund's operating
expenses remain the same. The information would be the same if you redeemed your
shares. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
YEAR 1 YEAR 3 YEAR 5 YEAR 10
<S> <C> <C> <C> <C>
Class A $978 $1238 $1711 $3011
Class C $605 $ 927 -- --
</TABLE>
4
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS
INVESTMENT OBJECTIVE. The Fund's investment objective is to seek long-term
capital appreciation. There can be no assurance that the Fund's investment
objective will be achieved. The investment objective is fundamental to the Fund
and may not be changed without shareholder approval. Current income is
incidental to the Fund's investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund seeks to achieve its investment
objectives by investing at least 65% of its assets (although the Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. Technology companies are those companies with
primary business operations in either the technology or science areas.
Industries likely to be represented in the portfolio include the Internet,
computers, networking and internetworking software, computer aided design,
telecommunications, media and information services, medical devices and
biotechnology. In addition to investing at least 65% of its assets in technology
companies, the Fund may also invest in the stocks of companies that should
benefit from the commercialization of technological advances, although they may
not be directly involved in research and development.
The Adviser believes that because of rapid advances in the Internet, technology
and science, an investment in companies with business operations in these areas
will offer substantial opportunities for long-term capital appreciation. Of
course, prices of common stocks of even the best managed, most profitable
corporations are subject to market risk, which means their stock prices can
decline. In addition, swings in investor psychology or significant trading by
large institutional investors can result in price fluctuations.
The technology and science areas have exhibited and continue to demonstrate
rapid growth due to the mass adoption of the Internet through increasing demand
for existing products and services, and the broadening of the technology market.
In general, the stocks of large capitalized companies that are well established
in the technology market can be expected to grow with the market and will
frequently be found in the Fund's portfolio. The expansion of technology and
science areas, however, also provides a favorable environment for investment in
small to medium capitalized companies. The Fund's investment policy is not
limited to any minimum capitalization requirement and the Fund may hold
securities without regard to the capitalization of the issuer. The Adviser's
overall stock selection for the Fund is not based on the capitalization or size
of the company but rather on an assessment of the company's fundamental
prospects. The Fund will not purchase stocks of companies during their initial
public offering or during an additional public offering of the same security.
The Adviser anticipates, however, that a significant portion of the Fund's
holdings will be invested in newly-issued securities being sold in the secondary
market.
Although the Fund will primarily invest in common stocks issued by U.S.
companies, the Fund also may invest in other types of securities such as
convertible stocks, preferred stocks, bonds and warrants, when the investment in
such securities is considered consistent with the Fund's investment objective by
the Adviser.
The Fund will not invest more than 20% of its total assets in convertible
stocks, preferred stocks, bonds and warrants. The bonds in which the Fund may
invest are not required to be rated by a recognized rating agency. As a matter
of policy, however, the Fund will invest only in "investment grade" debt
securities (i.e., rated within the four highest ratings categories by a
nationally recognized statistical rating organization, e.g., BBB or higher by
Standard & Poor's Ratings Services, a division of the
5
<PAGE>
McGraw-Hill Companies, Inc. ("S&P"), Baa or higher by Moody's Investor Service,
Inc. ("Moody's"), BBB or higher by Fitch Investors Services, Inc. ("Fitch"), or
BBB or higher by Duff & Phelps Credit Rating Co. (such securities may have
speculative characteristics) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. In addition, the Fund will not necessarily
dispose of any securities that fall below investment grade based upon the
Adviser's determination as to whether retention of such a security is consistent
with the Fund's investment objective, provided, however, that such securities do
not exceed 5% of the Fund's total assets.
PORTFOLIO TURNOVER. Purchases and sales are made for the Fund whenever
necessary, in the Adviser's opinion, to meet the Fund's investment objective,
other investment policies, and the need to meet redemptions. The Fund will
minimize portfolio turnover because it will not seek to realize profits by
anticipating short-term market movements and intends to buy securities for
long-term capital appreciation under ordinary circumstances. The turnover rate
of the Fund for the fiscal year ended October 31, 1999 was 170%. The turnover
rate for the twelve months ending December 31, 1999 was 259%. Fund turnover may
involve the payment by the Fund of dealer spreads or underwriting commissions,
and other transaction costs, on the sale of securities, as well as on the
investment of the proceeds in other securities. The greater the portfolio
turnover, the greater the transaction costs to the Fund, which could have an
adverse effect on the Fund's total rate of return. A greater portfolio turnover
rate will also result in a greater rate of gain or loss recognition for tax
purposes, and can accelerate the time at which shareholders must pay tax on any
gains realized by the Fund.
BUY/SELL DECISIONS. The Fund's investment adviser considers the following
factors when buying and selling securities for the Fund: (i) the value of
individual securities relative to other investment alternatives, (ii) trends in
the determinants of corporate profits, (iii) corporate cash flow, (iv) balance
sheet changes, (v) management capability and practices and (vi) the economic and
political outlook.
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS
THE TECHNOLOGY AND SCIENCE AREAS. Companies in the rapidly changing fields of
technology and science face special risks. For example, their products or
services may not prove commercially successful or may become obsolete quickly.
The value of the Fund's shares may be susceptible to factors affecting the
technology and science areas and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities not
concentrated in any particular industry. As such, the Fund is not an appropriate
investment for individuals who are not long-term investors and who, as their
primary objective, require safety of principal or stable income from their
investments. The technology and science areas may be subject to greater
governmental regulation than many other areas and changes in governmental
policies and the need for regulatory approvals may have a material adverse
effect on these areas. Additionally, companies in these areas may be subject to
risks of developing technologies, competitive pressures and other factors and
are dependent upon consumer and business acceptance as new technologies evolve.
CONCENTRATION. The volatile nature of the technology and science areas could
cause price appreciation in a particular security or securities that results in
that investment increasing its concentration in the portfolio, in some cases,
well above the level at which it was originally purchased. For instance, even
though an investment may have been purchased at a time when it represented less
than 25% of the
6
<PAGE>
portfolio, appreciation may cause that concentration to be significantly greater
than 25% at various times in a rising market.
The Adviser reviews the positions of the Fund on a regular basis to ensure that
all tax and regulatory requirements are maintained. In instances where the value
of an investment has risen above 25%, the Adviser will evaluate the
appropriateness of that level of investment in light of the overall investment
strategy of the Fund and applicable regulatory and tax implications.
SMALLER CAPITALIZED COMPANIES. The Adviser believes that smaller capitalized
companies generally have greater earnings and sales growth potential than larger
capitalized companies. The level of risk will be increased to the extent that
the Fund has significant exposure to smaller capitalized or unseasoned companies
(those with less than a three-year operating history). Investments in smaller
capitalized companies may involve greater risks, such as limited product lines,
markets and financial or managerial resources. In addition, less
frequently-traded securities may be subject to more abrupt price movements than
securities of larger capitalized companies.
BORROWING. The Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes. Such borrowing will not exceed
an amount equal to one-third of the value of the Fund's total assets less its
liabilities and will be made at prevailing interest rates. The Fund may not,
however, purchase additional securities while borrowings exceed 5% of its total
assets.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities subject
to certain restrictions on their transfer) and other securities that are not
readily marketable, such as repurchase agreements maturing in more than one
week, provided, however, that any illiquid securities purchased by the Fund will
have been registered under the Securities Act of 1933 or be securities of a
class, or convertible into a class, which is already publicly traded and the
issuer of which is filing reports required by Section 13 or 15 of the Securities
Exchange Act of 1934.
TEMPORARY INVESTMENTS. When the Adviser believes that adverse business or
financial conditions warrant a temporary defensive position, the Fund may invest
up to 100% of its assets in short-term instruments such as commercial paper,
bank certificates of deposit, bankers' acceptances, variable rate demand
instruments or repurchase agreements for such securities and securities of the
U.S. Government and its agencies and instrumentalities, as well as cash and cash
equivalents denominated in foreign currencies. Investments in domestic bank
certificates of deposit and bankers' acceptances will be limited to banks that
have total assets in excess of $500 million and are subject to regulatory
supervision by the U.S. Government or state governments. While taking a
defensive position, the Fund may not achieve its investment objective.
REPURCHASE AGREEMENTS. The Fund's portfolio position in cash or cash
equivalents may include entering into repurchase agreements. A repurchase
agreement is an instrument under which an investor purchases a U.S. Government
security from a vendor, with an agreement by the vendor to repurchase the
security at the same price, plus interest at a specified rate. Repurchase
agreements may be entered into with member banks of the Federal Reserve System
or "primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. Government securities. Repurchase agreements usually have a short duration,
often less than one week. The Fund requires continual maintenance by the Fund's
custodian of the market value of underlying collateral in amounts equal to, or
in excess of, the value of the repurchase agreement including the agreed upon
interest. If the institution defaults on the repurchase agreement, the Fund will
retain possession of the underlying securities. In addition, if
7
<PAGE>
bankruptcy proceedings are commenced with respect to the seller, realization on
the collateral by the Fund may be delayed or limited and the Fund may incur
additional costs. In such case the Fund will be subject to risks associated with
changes in the market value of the collateral securities. The Fund intends to
limit repurchase agreements to transactions with institutions believed by the
Adviser to present minimal credit risk. Repurchase agreements may be considered
to be loans under the Investment Company Act of 1940, as amended.
NON-DIVERSIFIED STATUS. A "non-diversified" fund has the ability to take larger
positions in a smaller number of issuers. Because the appreciation or
depreciation of a single stock may have a greater impact on the net asset value
of a non-diversified fund, its share price can be expected to fluctuate more
than a comparable diversified fund. This fluctuation, if significant, may affect
the performance of the Fund.
MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
ADVISER. Amerindo Investment Advisors Inc. (the "Adviser" or "Amerindo"), a
registered investment adviser, is a California corporation with its principal
office located at One Embarcadero, Suite 2300, San Francisco, California 94111.
The Adviser, an emerging growth stock manager specializing in the technology and
healthcare sectors, had assets under management of approximately $5.8 billion as
of December 31, 1999. Alberto W. Vilar and Dr. Gary A. Tanaka are primarily
responsible for the day-to-day management of the Fund's portfolio. Their
biographies are as follows:
ALBERTO W. VILAR, 59, has been Chairman of the Board of Directors and Chief
Executive Officer of the Fund since its inception. He began his career with
Citibank N.A. in New York in 1964 and worked there as an International Credit
Officer until 1967. From 1967 to 1971, he served as Vice President, Portfolio
Manager and Manager of the Investment Management Division of Drexel Burnham
Lambert in New York. From 1971 to 1973, he served as Executive Vice President,
Portfolio Manager and Director of Equity Strategy at M.D. Sass Investor Services
in New York. In 1973, he became Vice President and Portfolio Manager of
Endowment Management & Research Corporation in Boston. From 1977 to 1979, he
served as Senior Vice President, Director of Research, Chief Investment
Strategist and Partnership Manager of the Boston Company in Boston. He founded
the predecessors of Amerindo Advisors (U.K.) Limited and Amerindo Investment
Advisors, Inc. (Panama) in 1979 and has served since then as a Principal
Portfolio Manager. He holds the degrees of B.A. in Economics from Washington &
Jefferson College and an M.B.A. from Iona College, and he completed the Doctoral
Studies Program in Economics at New York University. Mr. Vilar was awarded an
Honorary Doctorate of Humanities degree from Washington & Jefferson College. He
has been a Chartered Financial Analyst since 1975.
DR. GARY A. TANAKA, 56, has been a Director and President of the Fund since its
inception. He served as a Portfolio Manager for Crocker Bank in San Francisco
from 1971 to 1977, and as a Partnership Manager for Crocker Investment
Management Corp. in San Francisco from 1978 to 1980. From 1975 to 1980, he also
served as a Consultant to Andron Cechettini & Associates in San Francisco. In
1980, he joined the predecessors of Amerindo Advisors (U.K.) Limited and
Amerindo Investment Advisors, Inc. (Panama) as a Principal Portfolio Manager and
has served in this position since that time. Dr. Tanaka holds the degrees of
B.S. in Mathematics from Massachusetts Institute of Technology and Ph.D. in
Applied Mathematics from Imperial College, University of London.
Pursuant to the Investment Advisory Contract for the Fund, the Adviser manages
the Fund's portfolio of securities and makes the decisions with respect to the
purchase and sale of investments subject to the general control of the Board of
Directors of the Fund.
8
<PAGE>
ADVISER'S FEES. Pursuant to the terms of the Investment Advisory Agreement, the
Fund will pay an annual advisory fee paid monthly equal to 1.50% of the Fund's
average daily net assets. The advisory fee is higher than the fee paid by most
other mutual funds, however, the Board of Directors believes it to be reasonable
in light of the advisory services the Fund receives. Any portion of the advisory
fees received by the Adviser may be used by the Adviser to provide investor and
administrative services and for distribution of Fund shares. The Adviser may
also voluntarily waive a portion of its fee or assume certain expenses of the
Fund. The Adviser is contractually obligated to waive its fees and to reimburse
any expenses to the extent that the Total Annual Fund Operating Expenses exceed
2.25% for Class A and 3.00% for Class C. This Expense Limitation Agreement will
terminate on October 31, 2000 unless renewed. The contractual waiver and any
voluntary waivers or reimbursement have the effect of lowering the overall
expense ratio of the Fund and of increasing yield to investors in the Fund. See
"Expense Limitation" in Section V.A.2 of the Statement of Additional
Information.
PERFORMANCE OF THE ADVISER. In the early 1980s, Amerindo pioneered the
management of dedicated emerging technology portfolios of high technology and
healthcare stocks designed to service the financial needs of the institutional
investor. As reported in the Wall Street Journal's Money Manager Scorecard on
July 24, 1996, May 1, 1996 and January 18, 1996, Amerindo ranked first for its
one-year and five-year performance, respectively. Amerindo did not have a
ten-year performance number. Amerindo was not ranked by the Money Manager
Scorecard during 1997. Each Money Manager Scorecard represents a ranking at June
30, 1996, March 31, 1996 and December 31, 1995, respectively, of the estimated
stock-market performance of U.S. money managers with over $100 million under
management. The 1, 5 and 10-year performance rankings were compiled by Thompson
Investment Software, CDA Investment Technologies, utilizing data provided by
CDA/Spectrum, with respect to data on 754, 409, and 217 managers, respectively.
This performance information relates to Amerindo's management of institutional
accounts and should not be interpreted as indicative of future performance of
the Fund. The performance figures upon which these rankings were based do not
include a reduction for any charges or expenses with respect to such accounts.
Further, Amerindo has not independently verified the accuracy, completeness or
process underlying the performance figures upon which these rankings were based
and makes no representation as to the accuracy or completeness of this
performance information.
The performance of the Fund may be compared in various financial and news
publications to the performance of various indices and investments for which
reliable performance data is available. The performance of the Fund may be
compared in publications to averages, performance rankings, or other information
prepared by nationally recognized mutual fund ranking and statistical services.
As with other performance data, performance comparisons should not be considered
representative of the Fund's relative performance for any future period.
Amerindo's equity composite includes the portfolios managed in substantially
similar styles to that of the Fund of all clients which are institutions, such
as qualified retirement plans, charitable foundations and educational endowment
funds, for which investment income and realized capital gains are exempt from
Federal income tax, and for which Amerindo has full discretionary authority to
manage in accordance with the firm's equity strategy for separate accounts.
Amerindo has elected to comply with the American Association for Investment
Management and Research ("AIMR") presentation standards for the period
October 1, 1987 (inception of the composite) through December 31, 1999. An
independent accounting firm has conducted an examination with respect to
Amerindo for the period October 1, 1987 through December 31, 1998, and has
confirmed that Amerindo's performance presentation contained herein for such
period conforms with AIMR standards. The 1999 review is currently in progress.
The
9
<PAGE>
Independent Accountants' Report is available upon request. AIMR has not been
involved with the preparation or review of the Independent Accountants' Report.
The AIMR method of performance differs from that of the SEC and can contain
different results. The private accounts listed do not have to comply with the
Investment Company Act of 1940 or Subchapter M of the Internal Revenue Code. If
this compliance was necessary, the account's performance could be adversely
affected. The following Schedule represents the rates of return for the equity
composite for the annual investment periods from January 1, 1990 through
December 31, 1999. Accounts benchmarks are the Standard & Poor's 500 --
Composite Stock Index, Hambrecht & Quist Growth Index and the Russell 2000
Growth Index. The Independent Accountants' Report relates to their examination
of Amerindo's performance from the inception of the composite October 1, 1987
through December 31, 1998, which is in accordance with AIMR standards. The 1999
review is currently in progress.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the Fund's
performance nor is it indicative of future performance of the Fund.
<TABLE>
<CAPTION>
ASSET WEIGHTED ASSET WEIGHTED RUSSELL
COMPOSITE RATE COMPOSITE RATE H&Q 2000
OF RETURN NET OF OF RETURN GROSS S&P 500 GROWTH GROWTH
YEAR ADVISORY FEES OF ADVISORY FEES INDEX INDEX INDEX
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
1990 6.75% 8.49% -3.19% 3.89% -17.41%
1991 76.52% 78.39% 30.55% 94.49% 51.18%
1992 7.61% 8.73% 7.68% -3.57% 7.77%
1993 15.08% 16.42% 10.00% 7.81% 13.36%
1994 -2.66% -1.53% 1.33% 3.38% -2.43%
1995 87.51% 89.39% 37.50% 61.72% 31.04%
1996 8.04% 9.61% 23.22% 10.86% 11.26%
1997 -26.61% -26.05% 33.34% 2.39% 12.95%
1998 61.67% 64.14% 28.58% 45.04% 1.23%
1999 248.42% 251.31% 21.03% 180.08% 43.09%
</TABLE>
Annualized rates of return for the period January 1, 1990 to December 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C>
34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
Composite returns are shown both gross and net of investment
management fees. The composite is derived from all fully
discretionary, tax-free sheltered equity accounts in this style
with assets above $5,000,000. Past performance is no guarantee of
future results.
The Fund's total return with respect to Class A for the period August 3, 1998
(commencement of operations) through December 31, 1999 was 227.11%. The Fund's
total return with respect to Class A for the calendar year ended December 31,
1999 was 230.42%.
10
<PAGE>
PRICING OF FUND SHARES
Net asset value per share for each class is determined by subtracting from the
value of such Class's total assets the amount of its liabilities and dividing
the remainder by the number of its outstanding shares. The value of each
security for which readily available market quotations exist is based on a
decision as to the broadest and most representative market for the security. The
value is based either on the last sale price on a national securities exchange,
or, in the absence of recorded sales, at the readily available closing bid price
on such exchanges, or at the quoted bid price in the over-the-counter market.
Assets for which market quotations are not readily available are valued in
accordance with procedures established by the Fund's Board of Directors,
including use of an independent pricing service or services which use prices
based on yields or prices of comparable securities, indications as to values
from dealers and general market conditions.
The Fund computes the net asset value once daily on Monday through Friday, at
the regularly scheduled close of normal trading on the New York Stock Exchange,
which normally occurs at 4:00 p.m. Eastern time, except on New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
HOW TO PURCHASE SHARES
INITIAL INVESTMENTS BY WIRE. You may purchase shares of each class of the Fund
by wiring immediately available federal funds (subject to each class's minimum
investment) to Bankers Trust Company from your bank. Your bank may charge a fee
for doing so (see instructions below). The minimum initial investment in Class A
and Class C shares is $2,500 ($1,000 for IRA accounts), each of which may be
waived by the Fund.
If money is to be wired, you must call the Transfer Agent at 1-888-968-4964 to
set up your account and obtain an account number. You should be prepared at that
time to provide the information on the application. Then you should provide your
bank with the following information for purposes of wiring your investment:
Bankers Trust Company
New York, New York
ABA# 021001033
Account # 01-465-547
F/B/O Amerindo Technology Fund
Ref: (Class)
Fund Acct. No. _______________
Social Security or Tax Identification No. ______________
You are required to mail a signed application to the Transfer Agent at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase accepted by the Fund. Shareholders will
receive the next determined net asset value per share after receipt of such wire
and the acceptance of the purchase by the Fund. Any delays which may occur in
wiring money, including delays which may occur in processing by the banks, are
not the responsibility of the Fund or the Transfer Agent. There is presently no
fee for the receipt of wired funds, but the right to charge shareholders for
this service is reserved by the Fund.
11
<PAGE>
INITIAL INVESTMENTS BY MAIL. An account may be opened by completing and signing
an Account Application and mailing it to the Fund at the address noted below,
together with a check (subject to the minimum investment) payable to:
Amerindo Technology Fund
P.O. Box 446
Portland, ME 04112
Payment for the purchase of shares received by mail will be credited to a
shareholder's account at the net asset value per share of the particular Class
next determined after receipt. Such payment need not be converted into federal
funds (monies credited to the Fund's custodian bank by a Federal Reserve Bank)
before acceptance by the Fund's Distributor. In the event that there are
insufficient funds to cover a check, such prospective investor or investors will
be assessed a $15.00 charge.
ADDITIONAL INVESTMENTS. Additional investments may be made at any time (subject
to a minimum subsequent investment of $500) by purchasing shares at net asset
value, plus any applicable sales load, by mailing a check to the Fund at the
address noted under "Initial Investments by Mail" (payable to Amerindo
Technology Fund Class A/Class C) or by wiring monies to the clearing bank as
outlined above, or by telephone with payment by Automated Clearing House
("ACH"), electronically transferring funds from the investor's designated bank
account. In order to purchase shares by telephone and make payment by ACH, an
investor must complete the appropriate sections of the application. Shareholders
who have authorized telephone purchases may effect purchases by calling the
Transfer Agent at 1-888-968-4964.
SALES CHARGES. The purchase price paid for shares of each Class is the current
public offering price, that is, the next determined net asset value of the
shares after the order is placed plus any applicable sales charge. See "Pricing
of Funds Shares" herein.
Class A shares
The purchase price paid for the Class A shares is the current public offering
price, that is, the next determined net asset value of the shares after the
order is placed plus the applicable sales charge. See "Net Asset Value" herein.
The sales load, with respect to Class A shares, is a one-time charge paid at the
time of purchase of shares, most of which ordinarily goes to the investor's
broker-dealer as compensation for the services provided the investor. Class A
shares of the Fund are sold on a continuous basis with a maximum front-end sales
charge of 5.75% of the net asset value per share. Volume discounts are provided
for initial purchase, as well as for additional purchases of shares of the Fund.
See "Reduction or Elimination of Sales Loads" herein. The Fund reserves the
right to reject any subscription for shares.
Class C shares
The Fund sells Class C shares without an initial charge but if the shares are
held less than one year, investors will pay a contingent deferred sales charge
("CDSC") of 1%. The amount of the CDSC is determined as a percentage of the
lesser of the current market value of the cost of the shares being redeemed.
Thus, when a share that has appreciated in value is redeemed during the CDSC
period, a CDSC is assessed only on its initial purchase price. Shares acquired
by reinvestment of distributions are not subject to the CDSC. The Fund will also
waive the CDSC for: (i) redemptions made within one year after death of a
shareholder or registered joint owner, (ii) minimum required distributions made
12
<PAGE>
from an IRA or other individual retirement plan account after a shareholder
reaches age 70 1/2, or (iii) involuntary redemptions made by the Fund. Class C
shares provide the investor the benefit of putting all of the investor's dollars
to work from the time the investment is made rather than paying an upfront sales
charge.
Class C shares may have a higher expense ratio and pay lower dividends than
other classes of shares offered by the Fund because the Class C shares bear a
higher 12b-1 fee than other classes and because of other related expenses.
The Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under this method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the CDSC will be assessed. In determining
"one year" the Fund will use the anniversary date of a transaction. Thus, shares
purchased on March 2, 2000, for example, will be subject to the fee if they are
redeemed on or prior to March 1, 2001. If they are redeemed on or after March 2,
2001, the shares will not be subject to the CDSC. The CDSC will be applied on
redemptions of each investment made by a shareholder that does not remain in the
Fund for a one-year period from the date of purchase. In determining whether a
CDSC is payable on any redemption, shares not subject to any charge will be
redeemed first, followed by shares held longest during the CDSC period. The CDSC
ordinarily goes to the investor's broker-dealer as compensation for the services
provided the investor. In addition, Class C investors will be charged a
redemption fee of 2.00% for shares held less than 1 year. See "How to Redeem."
The Fund reserves the right to reject any subscription for shares.
OTHER PURCHASE INFORMATION. Investors may open accounts in the Fund only
through the exclusive Distributor for the Fund. SEI Investments Distribution
Co., for nominal consideration and as agent for the Fund, will solicit orders
for the purchase of Fund shares, provided that any subscriptions and orders will
not be binding on the Fund until accepted by the Fund as principal. See
"Distribution Arrangements".
The Fund reserves the right to redeem, after 60 days' written notice, shares in
accounts that fall below the minimum balance by reason of redemption and return
the proceeds to investors. The investors may restore and maintain a minimum
balance during the notice period.
The Fund must receive an order and payment by the close of business for the
purchase to be effective and dividends to be earned on the same day. If funds
are received after the close of business, the purchase will become effective and
dividends will be earned on the next business day. The Fund reserves the right
to reject any purchase order if it determines that accepting the order would
not be in the best interests of the Fund or its shareholders.
Shares of the Fund may be purchased in exchange for securities which are
permissible investments of the Fund, subject to the Adviser's determination that
the securities are acceptable. Securities accepted in exchange will be valued at
the mean between their bid and asked quotations. In addition, securities
accepted in exchange must be liquid securities that are not restricted as to
transfer and will have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on NASDAQ,
the American Stock Exchange or the New York Stock Exchange, or on the basis of
prices provided by a pricing service. The Fund and the Adviser reserve the right
to reject any such purchase order. Shareholders will bear any costs associated
with a purchase of Fund shares through such an exchange.
All purchases of the Fund's shares will be made in full and fractional shares of
the Fund calculated to three decimal places. The Fund does not intend to issue
certificates evidencing Fund shares.
13
<PAGE>
Shares of the Fund may also be sold to corporations or other institutions such
as trusts, foundations or broker-dealers purchasing for the accounts of others
("Shareholder Organizations"). Investors purchasing and redeeming shares of the
Fund through a Shareholder Organization may be charged a transaction-based fee
or other fee for the services of such organization. Each Shareholder
Organization is responsible for transmitting to its customers a schedule of any
such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Customers of Shareholder Organizations
should read this Prospectus in light of the terms governing accounts with their
organization. The Fund does not pay to or receive compensation from Shareholder
Organizations for the sale of the Fund's shares.
The Fund has available a form of Individual Retirement Account ("IRA") which may
be obtained from the Fund that permits the IRA to invest in either Class A or
Class C shares of the Fund. The minimum initial investment for all retirement
plans investing is $1,000 with a subsequent minimum investment of $500.
Investors desiring information regarding investments through IRAs should write
or telephone the Fund.
FOR CLASS A SHAREHOLDERS ONLY
REDUCTION OR ELIMINATION OF SALES LOADS
VOLUME DISCOUNTS. Volume discounts are provided if the total amount being
invested in Class A shares of the Fund reaches the levels indicated in the sales
load schedule provided below. The applicable volume discount available to
investors is determined by aggregating all Class A share purchases of the Fund.
Volume discounts are also available to investors making sufficient additional
purchases of Class A shares. The applicable sales charge may be determined by
adding to the total current value of Class A shares already owned in the Fund
the value of new purchases computed at the offering price on the day the
additional purchase is made. For example, if an investor previously purchased,
and still holds, Class A shares worth $40,000 at the current offering price and
purchases an additional $10,000 worth of Class A shares, the sales charge
applicable to the new purchase would be that applicable to the $50,000 to
$99,999 bracket in the sales load schedule provided below.
<TABLE>
<CAPTION>
AMOUNT OF SALES
CHARGE REALLOWED
TO DEALERS
SALES CHARGE AS A % OF AS A PERCENT
AMOUNT OF PURCHASE SALE CHARGE NET AMOUNT INVESTED OF OFFERING PRICE
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Less than $50,000 5.75% 6.10% 5.50%
$50,000 but less than $100,000 4.30% 4.71% 4.05%
$100,000 but less than $250,000 3.50% 3.63% 3.25%
$250,000 but less than $500,000 2.50% 2.56% 2.25%
$500,000 but less than
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None
</TABLE>
LETTER OF INTENT. Any investor in Class A shares may sign a Letter of Intent,
available from the Fund, stating an intention to make purchases of Class A
shares totaling a specified amount on an aggregate basis within a period of
thirteen months. Purchases within the thirteen-month period can be made at the
reduced sales load applicable to the total amount of the intended purchase noted
in the Letter of Intent. If a larger purchase is actually made during the
period, then a downward adjustment will be made to
14
<PAGE>
the sales charge based on the actual purchase size. Any shares purchased within
90 days preceding the actual signing of the Letter of Intent are eligible for
the reduced sales charge and the appropriate price adjustment will be made on
those share purchases. A number of shares equal to 5% of the dollar amount of
intended purchases specified in the Letter of Intent is held in escrow by the
Distributor until the purchases are completed. Dividends and distributions on
the escrowed Class A shares are paid to the investor. If the intended purchases
are not completed during the Letter of Intent period, the investor is required
to pay the Fund an amount equal to the difference between the regular sales load
applicable to a single purchase of the number of Class A shares actually
purchased and the sales load actually paid. If such payment is not made within
20 days after written request by the Fund, then the Fund has the right to redeem
a sufficient number of escrowed Class A shares to effect payment of the amount
due. Any remaining escrowed Class A shares are released to the investor's
account. Agreeing to a Letter of Intent does not obligate you to buy, or the
Fund to sell, the indicated amount of Class A shares. You should read the Letter
of Intent carefully before signing.
PURCHASES AT NET ASSET VALUE. There is no initial sales charge for "Qualified
Persons." Qualified Persons is defined to include persons who are active or
retired Trustees, Directors, officers, partners, employees, clients, independent
professional contractors, shareholders or registered representatives (including
their spouses and children) of the Investment Adviser, Distributor or any
affiliates or subsidiaries thereof (the Directors, officers or employees of
which shall also include their parents and siblings for all purchases of Fund
shares) or any Director, officer, partner, employee or registered representative
(including their spouses and children) of any Broker-Dealer who has executed a
valid and currently active selling agreement with the Distributor.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed by mail, or, if authorized, by telephone. The
value of shares redeemed may be more or less than the purchase price, depending
on the market value of the investment securities held by the Fund.
BY MAIL. The Fund will redeem its shares at the net asset value next determined
after the request is received in "good order." The net asset value per share of
the Fund is determined as of 4:00 p.m., New York time, on each day that the New
York Stock Exchange, Inc. (the "NYSE"), the Fund and the Distributor are open
for business. Requests should be addressed to Amerindo Technology Fund, P.O. Box
446, Portland, ME 04112.
Requests in "good order" must include the following documentation:
(a) a letter of instruction, if required, or a stock assignment specifying
the number of shares or dollar amount to be redeemed, signed by all
registered owners of the shares in the exact names in which they are
registered;
(b) any required signature guarantees (see "Signature Guarantees" below);
and
(c) other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and profit
sharing plans and other organizations.
SIGNATURE GUARANTEES. To protect shareholder accounts, the Fund and its
transfer agent from fraud, signature guarantees are required to enable the Fund
to verify the identity of the person who has authorized a redemption from an
account. Signature guarantees are required for (1) redemptions where
15
<PAGE>
the proceeds are to be sent to someone other than the registered shareholder(s)
and the registered address and (2) share transfer requests. Signature guarantees
may be obtained from certain eligible financial institutions, including but not
limited to, the following: banks, trust companies, credit unions, securities
brokers and dealers, savings and loan associations and participants in the
Securities Transfer Association Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") or the New York Stock Exchange Medallion Signature
Program ("MSP"). Shareholders may contact the Fund at 1-888-968-4964 for further
details.
BY TELEPHONE. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling the Fund at 1-888-968-4964 and
requesting that the redemption proceeds be mailed to the primary registration
address or wired per the authorized instructions. If the Telephone Redemption
Option is authorized, the Fund and its transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or its transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Fund or its transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by the Fund or its transfer agent to be
genuine. The Fund will employ reasonable procedures to confirm that instructions
communicated are genuine and, if it does not, it may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures employed by the
Fund in connection with transactions initiated by telephone may include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
OPTIONAL REDEMPTION BY THE FUND. Investors are required to maintain a minimum
account balance of at least $2,500. The Fund reserves the right to redeem, after
60 days' written notice, shares in accounts that fall below the minimum balance
by reason of redemption and return the proceeds to investors. The investors may
restore and maintain a minimum balance during the notice period.
FURTHER REDEMPTION INFORMATION. Redemption proceeds for shares of the Fund
recently purchased by check may not be distributed until payment for the
purchase has been collected, which may take up to fifteen business days from the
purchase date. Shareholders can avoid this delay by utilizing the wire purchase
option.
Other than as described above, payment of the redemption proceeds will be made
within seven days after receipt of an order for a redemption. The Fund may
suspend the right of redemption or postpone the date at times when the NYSE or
the bond market is closed or under any emergency circumstances as determined by
the United States Securities and Exchange Commission (the "SEC").
If the Fund determines that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make a payment wholly or partly in cash,
the Fund may pay the redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities held by a Fund in lieu of cash in
conformity with applicable rules of the SEC. Investors generally will incur
brokerage charges on the sale of portfolio securities so received in payment of
redemptions.
REDEMPTION FEE. The Fund is designed for long-term investors willing to accept
the risks associated with a long-term investment in the common stocks of
companies in the technology, technology-related and science industries. The Fund
is not designed for short-term traders whose frequent purchases and redemptions
can generate substantial cash flow. These cash flows can unnecessarily disrupt
the Fund's investment program. Short-term traders often redeem when the market
is most turbulent, thereby forcing the sale of underlying securities held by the
Fund at the worst possible time as far as long-term
16
<PAGE>
investors are concerned. Additionally, short-term trading drives up the Fund's
transaction costs measured by both commissions and bid/ask spreads which are
borne by the remaining long-term investors. For these reasons, the Fund assesses
a 2.00% fee on the redemption of shares held for less than one year. Redemption
fees will be paid to the Fund to help offset transaction costs. The fee does not
apply to any shares purchased through reinvested distributions (dividends and
capital gains). This fee also does not apply to separate account clients of the
Adviser and its affiliates that hold shares in IRA accounts or in retirement
plans (such as 401(k), 403(b), 457, Keogh, Profit Sharing Plans, and Money
Purchase Pension Plans).
The Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under this method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the redemption fee will be assessed. In
determining "one year" the Fund will use the anniversary date of a transaction.
Thus, shares purchased on March 2, 2000, for example, will be subject to the fee
if they are redeemed on or prior to March 1, 2001. If they are redeemed on or
after March 2, 2001, the shares will not be subject to the redemption fee. The
redemption fee will be applied on redemptions of each investment made by a
shareholder that does not remain in the Fund for a one-year period from the date
of purchase.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of each Class's net investment income will be declared as dividends
and paid annually. If an investor's shares are redeemed prior to the date on
which dividends are normally declared and paid, accrued but unpaid dividends
will be paid with the redemption proceeds. Substantially all the realized net
capital gains for each Class, if any, are declared and paid on an annual basis.
Dividends are payable to investors of record at the time of declaration. For a
discussion of the taxation of dividends or distributions, see "Taxes."
The net investment income of each Class for each business day is determined
immediately prior to the determination of net asset value. Net investment income
for other days is determined at the time net asset value is determined on the
prior business day. Shares of each Class earn dividends on the business day
their purchase is effective but not on the business day their redemption is
effective. See "Purchase of Shares" and "Redemption of Shares."
CHOOSING A DISTRIBUTION OPTION. Distribution of dividends from each Class may
be made in accordance with several options. A shareholder may select one of
three distribution options:
1. AUTOMATIC REINVESTMENT OPTION. Both dividends and capital gains
distributions will be automatically reinvested in additional shares of the Fund
unless the investor has elected one of the other two options.
2. CASH DIVIDEND OPTION. Dividends will be paid in cash, and capital gains, if
any, will be reinvested in additional shares.
3. ALL CASH OPTION. Both dividends and capital gains distributions will be paid
in cash.
17
<PAGE>
TAX CONSEQUENCES
The Fund has elected and intends to continue to qualify annually to be treated
as a regulated investment company under the Internal Revenue Code of 1986. The
Fund did so qualify for its previous taxable year. By qualifying, the Fund will
generally not be subject to Federal income tax on net ordinary income and net
realized capital gains paid out to its stockholders. The Fund can also avoid an
annual 4% excise tax if it distributes substantially all of its ordinary income
and short and long term capital gain each year. The Fund's policy is to
distribute as dividends each year 100% (and in no event less than 90%) of its
investment company taxable income (which includes interest, dividends and net
short term capital gains). The Fund has adopted a policy of declaring dividends
annually. Distributions of net ordinary income and net short-term capital gains
are taxable to stockholders as ordinary income. Although corporate stockholders
would generally be entitled to the dividends-received deduction to the extent
that the Fund's income is derived from qualifying dividends from domestic
corporations, the Fund does not believe that any of its distributions will
qualify for this deduction.
The excess of net long-term capital gains over net short-term capital losses
realized and distributed by the Fund as capital gains distributions is taxable
to stockholders as long-term capital gains, without regard to the length of time
the stockholder may have held its shares in the Fund. Long-term capital gains
distributions are not eligible for the dividends-received deduction referred to
above. Long-term capital gains on sales of securities are currently taxable at a
maximum rate of 20% for non-corporate shareholders. Capital gain dividends,
designated in a notice mailed to investors not later than 60 days after the Fund
taxable year closes, will be taxed as long-term capital gain without regard to
the length of time for which the investor has held its shares. In determining
the amount of capital gains to be distributed, any capital loss carry over from
prior years will be taken into account in determining the amount of net long
term capital gain. However, if an investor receives a capital gain dividend and
sells shares after holding them for six months or less (not including, for
purposes of determining the length of the holding period, periods during which
the investor holds an offsetting position), then any loss realized on the sale
will be treated as long-term capital loss to the extent of such capital gain
dividend.
Distributions are taxable to investors whether received in cash or reinvested in
additional shares of the Fund. Any dividend or distribution received by a
stockholder shortly after the purchase of shares will reduce the net asset value
of the shares by the amount of the dividend or distribution. Furthermore, such
dividend or distribution is subject to tax even though it is, in effect, a
return of capital.
The redemption of shares may result in the stockholder's receipt of more or less
than the stockholder paid for its shares and, thus, in a taxable gain or loss to
the stockholder. If the redeemed shares have been held for more than one year,
the stockholder will generally realize a long-term capital gain or loss.
The Fund is required, subject to certain exemptions, to withhold at a rate of
31% from dividends paid or credited to stockholders and from the proceeds from
the redemption of Fund shares, if a correct taxpayer identification number,
certified when required, is not on file with the Fund, or if the Fund or the
shareholder has been notified by the Internal Revenue Service that the
shareholder is subject to these backup withholding rates. Corporate stockholders
are not subject to this requirement.
If the Fund invests in securities of foreign issuers, it may be subject to
withholding and other similar income taxes imposed by a foreign country.
Dividends and distributions may be subject to state and local taxes.
Dividends paid or credited to accounts maintained by non-resident shareholders
may also be subject to U.S. non-resident withholding taxes. You should consult
your tax adviser regarding specific questions as to Federal, state and local
income withholding taxes.
18
<PAGE>
DISTRIBUTION ARRANGEMENTS
DISTRIBUTOR. SEI Investments Distribution Co. ("SIDCO"), an affiliate of the
Administrator, has entered into a distribution agreement with the Fund to serve
as the Fund's distributor. As agent for the Fund, the Distributor solicits
orders for the purchase of the Fund's shares, provided that any orders will not
be binding on the Fund until accepted by the Fund as principal. With respect to
the Class A shares, SIDCO will be entitled to receive a service fee equal to
0.25% of the Class A shares' average daily net assets under the terms of the
Plan and the Distribution Agreement. With respect to the Class C shares, SIDCO
will be entitled to receive a distribution fee equal to 0.75% pursuant to the
Distribution Agreement and a shareholder service fee equal to 0.25% of the Class
C shares' average daily net assets under the terms of the Plan and pursuant to
the Shareholders Servicing Agreement.
12B-1 PLAN. The Fund, on behalf of each class has adopted a distribution and
service plan, pursuant to Rule 12b-1 under the Investment Company Act (the
"Plan"). Rule 12b-1 provides that an investment company which bears any direct
or indirect expense of distributing its shares must do so only in accordance
with a plan permitted by this Rule. The Plan provides that the Distributor will
receive compensatory payments from the Fund for soliciting orders for the
purchase of Fund shares and for making payments to broker-dealer and other
financial institutions with which it has written agreements and whose clients
are Fund shareholders, for providing distribution assistance on behalf of the
Fund.
The total amounts payable under the Plan by the Class A and Class C shares of
the Fund may not exceed 0.25% and 1.00%, per annum, respectively. Fees paid
under the Plan may not be waived for individual shareholders.
Consistent with the Plan, under the Distribution Agreement the Distributor
receives from the Class C shares of the Fund a compensatory distribution fee
equal to 0.75% per annum of the Class C shares' average daily net assets. This
distribution fee is an asset-based sales charge. The Distributor use this fee to
make payments to broker-dealer and other financial institutions with which it
has written agreements and whose clients are Class C shareholders for providing
distribution assistance for sales of the Class C shares. The fees are accrued
daily and paid monthly.
The Plan also provides that with respect to Class C, the Fund will compensate
the Distributor for certain expenses and costs incurred in connection with
providing shareholder servicing and maintaining shareholder accounts and to
compensate parties with which it has written agreements and whose clients own
shares of Class C for providing servicing to their clients ("shareholder
servicing"). Because these fees are paid out of the Fund's asset on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.
Under the Shareholder Servicing Agreement, the Distributor receives a maximum
service fee of 0.25% per annum of the Class C's average daily net assets. The
fees are accrued daily and paid monthly. The Distributor uses this fee to
perform, or to arrange to have others perform, under the Distribution Agreement.
The shareholder servicing agents that the Distributor retains will perform the
following services: (i) answer customer inquiries regarding account status and
history, the manner in which purchases and redemptions of shares of the Fund may
be effected and certain other matters pertaining to the Fund; (ii) assist
shareholders in designating and changing dividend options, account designations
and addresses; (iii) provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; (iv) assist in processing purchase
and redemption transaction; (v) arrange for the wiring of funds; (vi) transmit
and receive funds in connection with customer orders to purchase or redeem
shares; (vii) verify and guarantee shareholder signatures in connection with
redemption orders
19
<PAGE>
and transfers and changes in shareholder designated accounts; (viii) furnish
(either separately or on an integrated basis with other reports sent to a
shareholder by the Fund) quarterly and year-end statements and confirmations in
a timely fashion after activity is generated in the account; (ix) transmit, on
behalf of the Fund, proxy statements, annual reports, updating prospectuses and
other communications from the Fund to shareholders; (x) receive, tabulate and
transmit to the Fund, proxies executed by shareholders with respect to meetings
of shareholders of the Fund; and (xi) provide such other related services as the
Fund or a shareholder may request.
In addition, the Plan provides that the Distributor and Advisor may make
payments from time to time from its own resources (which may include past
profits) for the following purposes: (i) to defray the costs of and to
compensate others, including financial intermediaries with whom the Distributor
has entered into written agreements, for performing shareholder servicing and
related administrative functions; (ii) to compensate certain financial
intermediaries for providing assistance in distributing each Class's shares;
(iii) to pay the costs of printing and distributing the Fund's prospectus to
prospective investors; and (iv) to defray the cost of the preparation and
printing of brochures and other promotional materials, mailings to prospective
shareholders, advertising, and other promotional activities, including the
salaries and/or commissions of sales personnel in connection with the
distribution of the Fund's shares. The Distributor, in its sole discretion, will
determine the amount of such payments made pursuant to the Plan with the
shareholder servicing agents and broker-dealers with whom they have contracted,
provided that such payments made pursuant to the Plan will not increase the
amount which the Fund is required to pay to the Distributor for any fiscal year
under the shareholder servicing agreements or otherwise. Any servicing fees paid
to the Distributor also may be used for purposes of (i) above and any asset
based sales charges paid to the Distributor also may be used for purposes of
(ii), (iii), or (iv) above.
Shareholder servicing agents and broker-dealers may charge investors a fee in
connection with their use of specialized purchase and redemption procedures
offered to investors by the shareholder servicing agents and broker-dealers. In
addition, shareholder servicing agents and broker-dealers offering purchase and
redemption procedures similar to those offered to shareholders who invest in the
Fund directly may impose charges, limitations, minimums and restrictions in
addition to or different from those applicable to shareholders who invest in the
Fund directly. Accordingly, the net yield to investors who invest through
shareholder servicing agents and broker-dealers may be less than by investing in
the Fund directly. An investor should read the Prospectus in conjunction with
the materials provided by the shareholder servicing agent and broker-dealer
describing the procedures under which Fund shares may be purchased and redeemed
through the shareholder servicing agent and broker-dealer.
20
<PAGE>
FINANCIAL HIGHLIGHTS INFORMATION
The following table is intended to help you understand the Fund's financial
performance since its inception. Certain information reflects financial results
for a single Fund share. The total returns in the table represent the rate that
an investor would have earned (or lost) on an investment in the Class A shares
(assuming reinvestment of all dividends and distributions). (Financial highlight
information is unavailable for Class C shares since there were no Class C shares
issued during the periods covered by this table.) This information has been
audited by Morrison, Brown, Argiz & Company whose report, along with the Fund's
financial statements, are included in the annual report, which is available upon
request. The table is part of the Fund's financial statements for the year ended
October 31, 1999, which are available to shareholders upon request.
CLASS A SHARES
<TABLE>
<CAPTION>
FOR THE PERIOD
AUGUST 3, 1998
(COMMENCEMENT OF
FOR THE FISCAL INVESTMENT OPERATIONS)
YEAR ENDED THROUGH
OCTOBER 31, 1999*** DECEMBER 31, 1998
------------------- ----------------------
<S> <C> <C>
Net asset value, beginning of period......... $ 13.59 $ 8.44
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss.......................... (0.08) (0.10)
Net realized and unrealized gain on
investments................................ 20.25 5.25
------- ------
Net increase in net assets from investment
operations................................. 20.17 5.15
------- ------
LESS DISTRIBUTIONS:
Net realized gains on investments............ (10.15) 0.00
------- ------
Total distributions.......................... (10.15) 0.00
------- ------
Net asset value, end of period............... $ 23.61 $13.59
======= ======
Total investment return**.................... 148.20% 61.02%
RATIOS/SUPPLEMENTAL DATA:
Net assets end of period (in 000's).......... $ 8,772 $ 803
Ratio of expenses to average net assets...... 2.54%* 2.86%*
Ratio of expenses to average net assets, net
of reimbursement........................... 2.50%* 2.50%*
Ratio of net investment loss to average net
assets..................................... (0.79)%* (2.76)%*
Ratio of net investment loss to average net
assets, net of reimbursement............... (0.75)%* (2.90)%*
Portfolio turnover rate...................... 170.00% 78.46%
</TABLE>
- ------------------
* Annualized
** Total investment return is calculated assuming an initial investment made at
the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges are not
reflected in the calculation of total investment return.
*** Subsequent to December 31, 1998, the Fund's management elected to change the
Fund's fiscal year end to October 31, 1999.
21
<PAGE>
[This Page Intentionally Left Blank]
22
<PAGE>
[This Page Intentionally Left Blank]
23
<PAGE>
Amerindo Technology Fund
Board of Directors
--------------------------
Alberto W. Vilar Amerindo Investment Advisors Inc.
Gary A. Tanaka Amerindo Investment Advisors Inc.
John Rutledge Rutledge Capital LLC
Jude T. Wanniski Polyconomics, Inc.
Officers of Fund
----------------
Alberto W. Vilar Chairman of the Board
Gary A. Tanaka President
Anthony Ciulla Vice President
Dana E. Smith Vice President
<PAGE>
Amerindo Technology Fund
March 1, 2000
Investment Advisor
Amerindo Investment Advisors Inc.
San Francisco, California
New York, New York
Administrator
SEI Investments Mutual Funds Services
Oaks, Pennsylvania
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania
Transfer and Dividend Agent
Forum Shareholder Services LLC
Portland, Maine
Custodian
The Northern Trust Company
Chicago, Illinois
Legal Counsel
Battle Fowler LLP
New York, New York
Independent Auditors
Morrison, Brown, Argiz & Company
Miami, Florida
1-888-968-4964
www.amerindo.com
811-07531
AME-F-006-01
A Statement of Additional Information (SAI), dated March 1, 2000, and the Fund's
Annual and Semi-Annual Reports include additional information about the Fund and
its investments and are incorporated by reference into this prospectus. In the
Fund's Annual Report is a discussion of the market and investment strategies
that significantly affected the Fund's performance during its last fiscal year.
You may obtain the SAI, the Annual and Semi-Annual Reports and material
incorporated by reference without charge by calling the Fund at 1-888-968-4964.
To request other information, please call your financial intermediary or the
Fund.
A Current SAI has been filed with the Securities and Exchange Commission. You
may visit the Securities and Exchange Commission's Internet website
(www.sec.gov) to view the SAI, material incorporated by reference and other
information. These materials can also be reviewed and copied at the Commission's
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling the Commission at
1-800-SEC-0330. In addition, copies of these materials may be obtained, upon
payment of a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, DC 20549-6009, or by electronic request at
[email protected]. Information on the operation of the Public Reference Room
may be obtained by calling the Commission at 1-202-942-8090.
<PAGE>
AMERINDO
TECHNOLOGY FUND
Prospectus 2000
Class D Shares
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
- --------------------------------------------------------------------------------
AMERINDO FUNDS INC PROSPECTUS
CLASS D SHARES March 1, 2000
- --------------------------------------------------------------------------------
AMERINDO TECHNOLOGY FUND
A mutual fund whose investment objective is to seek long-term capital
appreciation.
The Securities and Exchange Commission Has Not Approved or
Disapproved These Securities or Passed upon the Adequacy of this
Prospectus. Any Representation to the Contrary is a Criminal Offense.
<TABLE>
<S> <C> <C> <C>
Risk/Return Summary.................... 2 Pricing of Fund Shares................. 11
Fee Table.............................. 4 How to Purchase Shares................. 11
Investment Objectives, Principal How to Redeem Shares................... 15
Investment Strategies and Related
Risks.................................. 5 Dividends and Distributions............ 17
Additional Investment Information and Tax Consequences....................... 18
Risk Factors........................... 6
Distribution Arrangements.............. 19
Management, Organization and
Capital Structure...................... 8 Financial Highlights Information....... 21
</TABLE>
1
<PAGE>
RISK/RETURN SUMMARY
The Fund is currently composed of one portfolio called the Amerindo Technology
Fund.
INVESTMENT OBJECTIVE
The Fund's investment objective is to seek long-term capital appreciation.
Current income is incidental to the Fund's investment objective. There is no
assurance that the Fund will achieve its investment objective.
PRINCIPAL INVESTMENT STRATEGIES
The Fund seeks to achieve its investment objective by investing at least 65% of
its total assets (although the Fund intends, as a non-fundamental policy, to
invest at least 80% of its assets) in the common stocks of technology companies.
Technology companies are those companies with primary business operations in
either the technology or science areas. Industries likely to be represented in
the portfolio include computers, networking and internetworking software,
computer-aided design, telecommunications, media and information services,
medical devices and biotechnology. In addition to investing at least 65% of its
assets in technology companies, the Fund may also invest in the stocks of
companies that should benefit from the commercialization of technological
advances, although they may not be directly involved in research and
development.
PRINCIPAL RISKS
o The loss of money is a risk of investing in the Fund.
o The value of the Fund's shares and the securities held by the Fund can
each decline in value.
o Investments in companies in the rapidly changing fields of technology
and science face special risks such as competitive pressures and
technological obsolescence and may be subject to greater governmental
regulation than many other industries.
o Investments in smaller capitalized companies may involve greater risks,
such as limited product lines, markets and financial or managerial
resources.
o As a non-diversified fund, compared to other mutual funds, this Fund may
invest a greater percentage of its assets in a particular issuer.
Therefore, investors should consider this greater risk versus the safety
that comes with a more diversified portfolio.
WHO MAY WANT TO INVEST IN THIS FUND
This Fund is designed for long-term investors who understand and are willing to
accept the risk of loss involved in investing in a fund seeking long-term
capital appreciation. Investors should consider their investment goals, their
time horizon for achieving them, and their tolerance for risks before investing
in the Fund. If you seek an aggressive approach to capital growth and can accept
the above average level of price fluctuations that this Fund is expected to
experience, this Fund could be an appropriate part of your overall investment
strategy. The Fund should not represent your complete investment program or be
used for short-term trading purposes.
The Board of Directors reserves the right at its discretion to close the Fund to
new investors at such time as it deems appropriate.
2
<PAGE>
RISK/RETURN BAR CHART AND TABLE
The following bar chart and table may assist in your decision to invest in the
Fund. The bar chart shows the average annual returns of the Class D shares of
the Fund for the life of the Fund. The table shows how the Fund's Class D
shares' average annual returns for the one-year and since inception periods
compare with that of the Hambrecht & Quist Growth Index.* While analyzing this
information, please note that the Fund's past performance is not an indication
of how the Fund will perform in the future.
Year-by-Year Total Return as of December 31(1)
(Class D Shares)
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts the
following points:
300.00%
248.86%
250.00%
200.00%
150.00%
100.00%
84.67%
50.00%
0.00%
-18.11%
- -50.00%
1997 1998 1999
BEST QUARTER 3/31/99: 66.72% WORST QUARTER 3/31/97: (28.89)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIODS ENDING 12/31/99)(2) PAST ONE YEAR SINCE INCEPTION(3)
<S> <C> <C>
Amerindo Technology Fund - Class D Shares 248.86% 63.32%
Hambrecht & Quist Growth Index* 180.12% 51.63%
</TABLE>
* The Hambrecht & Quist Growth Index is a multiple-sector growth stock
composite comprised of the publicly traded stocks of approximately 275
companies that have annual revenues of less than $300 million. The Index
includes companies in the technology, healthcare services, branded
consumer, and Internet sectors. You may not invest in The Hambrecht & Quist
Growth Index and unlike the Fund, it does not incur fees or charges.
(1) Investors purchasing Class D shares are not charged a sales load,
therefore, a sales load is not reflected in the Bar Chart.
(2) Shareholder Organizations may charge a fee to investors for purchasing or
redeeming shares. The net return to such investors may be less than if they
had invested in the Fund directly.
(3) The date of inception of the Class D shares was October 28, 1996.
(4) The year-to-date return for the Class D shares as of December 31, 1999 was
248.86%
3
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
CLASS D
-------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases
(as a percentage of the offering price) None
Redemption Fees for shares held less than 1 year
(as a percent of amount redeemed, if applicable) 2.00%
ANNUAL FUND OPERATING EXPENSES(1)
(expenses that are deducted from Fund assets)
Management Fees 1.50%
Distribution and/or Service 12b-1 Fees 0.25%
Other Expenses 0.54%
----
Total Annual Fund Operating Expenses 2.29%
Fee Waiver/Expense Reimbursement 0.04%
----
Net Total Annual Fund Operating Expenses 2.25%
(1) The Adviser reimbursed the Fund 0.04% of the Adviser's fee. After this
reimbursement, the "Management Fees" and "Total Annual Fund Operating
Expenses" were 1.46% and 2.25%, for the Class D shares. The Adviser is
contractually obligated to waive its fees and to reimburse any expenses to
the extent that the Total Annual Fund Operating Expenses exceed 2.25%. This
Expense Limitation Agreement will terminate on October 31, 2000.
EXAMPLE: This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund over the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the Fund's operating
expenses remain the same. The information would be the same if you redeemed your
shares. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
YEAR 1 YEAR 3 YEAR 5 YEAR 10
<S> <C> <C> <C> <C>
Class D $428 $703 $1205 $2585
</TABLE>
4
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS
INVESTMENT OBJECTIVE. The Fund's investment objective is to seek long-term
capital appreciation. There can be no assurance that the Fund's investment
objective will be achieved. The investment objective is fundamental to the Fund
and may not be changed without shareholder approval. Current income is
incidental to the Fund's investment objective.
PRINCIPAL INVESTMENT STRATEGIES. The Fund seeks to achieve its investment
objectives by investing at least 65% of its assets (although the Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. Technology companies are those companies with
primary business operations in either the technology or science areas.
Industries likely to be represented in the portfolio include the Internet,
computers, networking and internetworking software, computer aided design,
telecommunications, media and information services, medical devices and
biotechnology. In addition to investing at least 65% of its assets in technology
companies, the Fund may also invest in the stocks of companies that should
benefit from the commercialization of technological advances, although they may
not be directly involved in research and development.
The Adviser believes that because of rapid advances in the Internet, technology
and science, an investment in companies with business operations in these areas
will offer substantial opportunities for long-term capital appreciation. Of
course, prices of common stocks of even the best managed, most profitable
corporations are subject to market risk, which means their stock prices can
decline. In addition, swings in investor psychology or significant trading by
large institutional investors can result in price fluctuations.
The technology and science areas have exhibited and continue to demonstrate
rapid growth due to the mass adoption of the Internet through increasing demand
for existing products and services, and the broadening of the technology market.
In general, the stocks of large capitalized companies that are well established
in the technology market can be expected to grow with the market and will
frequently be found in the Fund's portfolio. The expansion of technology and
science areas, however, also provides a favorable environment for investment in
small to medium capitalized companies. The Fund's investment policy is not
limited to any minimum capitalization requirement and the Fund may hold
securities without regard to the capitalization of the issuer. The Adviser's
overall stock selection for the Fund is not based on the capitalization or size
of the company but rather on an assessment of the company's fundamental
prospects. The Fund will not purchase stocks of companies during their initial
public offering or during an additional public offering of the same security.
The Adviser anticipates, however, that a significant portion of the Fund's
holdings will be invested in newly-issued securities being sold in the secondary
market.
Although the Fund will primarily invest in common stocks issued by U.S.
companies, the Fund also may invest in other types of securities such as
convertible stocks, preferred stocks, bonds and warrants, when the investment in
such securities is considered consistent with the Fund's investment objective by
the Adviser.
The Fund will not invest more than 20% of its total assets in convertible
stocks, preferred stocks, bonds and warrants. The bonds in which the Fund may
invest are not required to be rated by a recognized rating agency. As a matter
of policy, however, the Fund will invest only in "investment grade" debt
securities (i.e., rated within the four highest ratings categories by a
nationally recognized statistical rating organization, e.g., BBB or higher by
Standard & Poor's Ratings Services, a division of the
5
<PAGE>
McGraw-Hill Companies, Inc. ("S&P"), Baa or higher by Moody's Investor Service,
Inc. ("Moody's"), BBB or higher by Fitch Investors Services, Inc. ("Fitch"), or
BBB or higher by Duff & Phelps Credit Rating Co."such securities may have
speculative characteristics) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. In addition, the Fund will not necessarily
dispose of any securities that fall below investment grade based upon the
Adviser's determination as to whether retention of such a security is consistent
with the Fund's investment objective, provided, however, that such securities do
not exceed 5% of the Fund's total assets.
PORTFOLIO TURNOVER. Purchases and sales are made for the Fund whenever
necessary, in the Adviser's opinion, to meet the Fund's investment objective,
other investment policies, and the need to meet redemptions. The Fund will
minimize portfolio turnover because it will not seek to realize profits by
anticipating short-term market movements and intends to buy securities for
long-term capital appreciation under ordinary circumstances. The turnover rate
of the Fund for the fiscal year ended October 31, 1999 was 170%. The turnover
rate for the twelve months ending December 31, 1999 was 259%. Fund turnover may
involve the payment by the Fund of dealer spreads or underwriting commissions,
and other transaction costs, on the sale of securities, as well as on the
investment of the proceeds in other securities. The greater the portfolio
turnover, the greater the transaction costs to the Fund, which could have an
adverse effect on the Fund's total rate of return. A greater portfolio turnover
rate will also result in greater rate of gain or loss recognition for tax
purposes and can accelerate the time at which shareholders must pay tax on any
gains realized by the Fund.
BUY/SELL DECISIONS. The Fund's investment adviser considers the following
factors when buying and selling securities for the Fund: (i) the value of
individual securities relative to other investment alternatives, (ii) trends in
the determinants of corporate profits, (iii) corporate cash flow, (iv) balance
sheet changes, (v) management capability and practices and (vi) the economic and
political outlook.
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS
THE TECHNOLOGY AND SCIENCE AREAS. Companies in the rapidly changing fields of
technology and science face special risks. For example, their products or
services may not prove commercially successful or may become obsolete quickly.
The value of the Fund's shares may be susceptible to factors affecting the
technology and science areas and to greater risk and market fluctuation than an
investment in a fund that invests in a broader range of portfolio securities not
concentrated in any particular industry. As such, the Fund is not an appropriate
investment for individuals who are not long-term investors and who, as their
primary objective, require safety of principal or stable income from their
investments. The technology and science areas may be subject to greater
governmental regulation than many other areas and changes in governmental
policies and the need for regulatory approvals may have a material adverse
effect on these areas. Additionally, companies in these areas may be subject to
risks of developing technologies, competitive pressures and other factors and
are dependent upon consumer and business acceptance as new technologies evolve.
CONCENTRATION. The volatile nature of the technology and science areas could
cause price appreciation in a particular security or securities that results in
that investment increasing its concentration in the portfolio, in some cases,
well above the level at which it was originally purchased. For instance, even
though an investment may have been purchased at a time when it represented less
than 25% of the
6
<PAGE>
portfolio, appreciation may cause that concentration to be significantly greater
than 25% at various times in a rising market.
The Adviser reviews the positions of the Fund on a regular basis to ensure that
all tax and regulatory requirements are maintained. In instances where the value
of an investment has risen above 25%, the Adviser will evaluate the
appropriateness of that level of investment in light of the overall investment
strategy of the Fund and applicable regulatory and tax implications.
SMALLER CAPITALIZED COMPANIES. The Adviser believes that smaller capitalized
companies generally have greater earnings and sales growth potential than larger
capitalized companies. The level of risk will be increased to the extent that
the Fund has significant exposure to smaller capitalized or unseasoned companies
(those with less than a three-year operating history). Investments in smaller
capitalized companies may involve greater risks, such as limited product lines,
markets and financial or managerial resources. In addition, less
frequently-traded securities may be subject to more abrupt price movements than
securities of larger capitalized companies.
BORROWING. The Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes. Such borrowing will not exceed
an amount equal to one-third of the value of the Fund's total assets less its
liabilities and will be made at prevailing interest rates. The Fund may not,
however, purchase additional securities while borrowings exceed 5% of its total
assets.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities subject
to certain restrictions on their transfer) and other securities that are not
readily marketable, such as repurchase agreements maturing in more than one
week, provided, however, that any illiquid securities purchased by the Fund will
have been registered under the Securities Act of 1933 or be securities of a
class, or convertible into a class, which is already publicly traded and the
issuer of which is filing reports required by Section 13 or 15 of the Securities
Exchange Act of 1934.
TEMPORARY INVESTMENTS. When the Adviser believes that adverse business or
financial conditions warrant a temporary defensive position, the Fund may invest
up to 100% of its assets in short-term instruments such as commercial paper,
bank certificates of deposit, bankers' acceptances, variable rate demand
instruments or repurchase agreements for such securities and securities of the
U.S. Government and its agencies and instrumentalities, as well as cash and cash
equivalents denominated in foreign currencies. Investments in domestic bank
certificates of deposit and bankers' acceptances will be limited to banks that
have total assets in excess of $500 million and are subject to regulatory
supervision by the U.S. Government or state governments. While taking a
defensive position, the Fund may not achieve its investment objective.
REPURCHASE AGREEMENTS. The Fund's portfolio position in cash or cash
equivalents may include entering into repurchase agreements. A repurchase
agreement is an instrument under which an investor purchases a U.S. Government
security from a vendor, with an agreement by the vendor to repurchase the
security at the same price, plus interest at a specified rate. Repurchase
agreements may be entered into with member banks of the Federal Reserve System
or "primary dealers" (as designated by the Federal Reserve Bank of New York) in
U.S. Government securities. Repurchase agreements usually have a short duration,
often less than one week. The Fund requires continual maintenance by the Fund's
custodian of the market value of underlying collateral in amounts equal to, or
in excess of, the value of the repurchase agreement including the agreed upon
interest. If the institution defaults on the repurchase agreement, the Fund will
retain possession of the underlying securities. In addition, if
7
<PAGE>
bankruptcy proceedings are commenced with respect to the seller, realization on
the collateral by the Fund may be delayed or limited and the Fund may incur
additional costs. In such case the Fund will be subject to risks associated with
changes in the market value of the collateral securities. The Fund intends to
limit repurchase agreements to transactions with institutions believed by the
Adviser to present minimal credit risk. Repurchase agreements may be considered
to be loans under the Investment Company Act of 1940, as amended.
NON-DIVERSIFIED STATUS. A "non-diversified" fund has the ability to take larger
positions in a smaller number of issuers. Because the appreciation or
depreciation of a single stock may have a greater impact on the net asset value
of a non-diversified fund, its share price can be expected to fluctuate more
than a comparable diversified fund. This fluctuation, if significant, may affect
the performance of the Fund.
MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
ADVISER. Amerindo Investment Advisors Inc. (the "Adviser" or "Amerindo"), a
registered investment adviser, is a California corporation with its principal
office located at One Embarcadero, Suite 2300, San Francisco, California 94111.
The Adviser, an emerging growth stock manager specializing in the technology and
healthcare sectors, had assets under management of approximately $5.8 billion as
of December 31, 1999. Alberto W. Vilar and Dr. Gary A. Tanaka are primarily
responsible for the day-to-day management of the Fund's portfolio. Their
biographies are as follows:
ALBERTO W. VILAR, 59, has been Chairman of the Board of Directors and Chief
Executive Officer of the Fund since its inception. He began his career with
Citibank N.A. in New York in 1964 and worked there as an International Credit
Officer until 1967. From 1967 to 1971, he served as Vice President, Portfolio
Manager and Manager of the Investment Management Division of Drexel Burnham
Lambert in New York. From 1971 to 1973, he served as Executive Vice President,
Portfolio Manager and Director of Equity Strategy at M.D. Sass Investor Services
in New York. In 1973, he became Vice President and Portfolio Manager of
Endowment Management & Research Corporation in Boston. From 1977 to 1979, he
served as Senior Vice President, Director of Research, Chief Investment
Strategist and Partnership Manager of the Boston Company in Boston. He founded
the predecessors of Amerindo Advisors (U.K.) Limited and Amerindo Investment
Advisors, Inc. (Panama) in 1979 and has served since then as a Principal
Portfolio Manager. He holds the degrees of B.A. in Economics from Washington &
Jefferson College and an M.B.A. from Iona College, and he completed the Doctoral
Studies Program in Economics at New York University. Mr. Vilar was awarded an
Honorary Doctorate of Humanities degree from Washington & Jefferson College. He
has been a Chartered Financial Analyst since 1975.
DR. GARY A. TANAKA, 56, has been a Director and President of the Fund since its
inception. He served as a Portfolio Manager for Crocker Bank in San Francisco
from 1971 to 1977, and as a Partnership Manager for Crocker Investment
Management Corp. in San Francisco from 1978 to 1980. From 1975 to 1980, he also
served as a Consultant to Andron Cechettini & Associates in San Francisco. In
1980, he joined the predecessors of Amerindo Advisors (U.K.) Limited and
Amerindo Investment Advisors, Inc. (Panama) as a Principal Portfolio Manager and
has served in this position since that time. Dr. Tanaka holds the degrees of
B.S. in Mathematics from Massachusetts Institute of Technology and Ph.D. in
Applied Mathematics from Imperial College, University of London.
8
<PAGE>
Pursuant to the Investment Advisory Contract for the Fund, the Adviser manages
the Fund's portfolio of securities and makes the decisions with respect to the
purchase and sale of investments subject to the general control of the Board of
Directors of the Fund.
ADVISER'S FEES. Pursuant to the terms of the Investment Advisory Agreement, the
Fund will pay an annual advisory fee, paid monthly, equal to 1.50% of the Fund's
average daily net assets. The advisory fee is higher than the fee paid by most
other mutual funds, however, the Board of Directors believes it to be reasonable
in light of the advisory services the Fund receives. Any portion of the advisory
fees received by the Adviser may be used by the Adviser to provide investor and
administrative services and for distribution of Fund shares. The Adviser may
also voluntarily waive a portion of its fee or assume certain expenses of the
Fund. The Adviser is contractually obligated to waive its fees and to reimburse
any expenses to the extent that the Total Annual Fund Operating Expenses exceed
2.25%. This Expense Limitation Agreement will terminate on October 31, 2000. The
contractual waiver and any voluntary waivers or reimbursements have the effect
of lowering the overall expense ratio of the Fund and of increasing yield to
investors in the Fund. See "Expense Limitation" in Section V.A.2 of the
Statement of Additional Information. In addition, Adviser receives service fees
of 0.25% of the Class D shares' average daily net assets.
PERFORMANCE OF THE ADVISER. In the early 1980s, Amerindo pioneered the
management of dedicated emerging technology portfolios of high technology and
healthcare stocks designed to service the financial needs of the institutional
investor. As reported in the Wall Street Journal's Money Manager Scorecard on
July 24, 1996, May 1, 1996 and January 18, 1996, Amerindo ranked first for its
one-year and five-year performance, respectively. Amerindo did not have a
ten-year performance number. Amerindo was not ranked by the Money Manager
Scorecard during 1997. Each Money Manager Scorecard represents a ranking at June
30, 1996, March 31, 1996 and December 31, 1995, respectively, of the estimated
stock-market performance of U.S. money managers with over $100 million under
management. The 1, 5 and 10-year performance rankings were compiled by Thompson
Investment Software, CDA Investment Technologies, utilizing data provided by
CDA/Spectrum, with respect to data on 754, 409, and 217 managers, respectively.
This performance information relates to Amerindo's management of institutional
accounts and should not be interpreted as indicative of future performance of
the Fund. The performance figures upon which these rankings were based do not
include a reduction for any charges or expenses with respect to such accounts.
Further, Amerindo has not independently verified the accuracy, completeness or
process underlying the performance figures upon which these rankings were based
and makes no representation as to the accuracy or completeness of this
performance information.
The performance of the Fund may be compared in various financial and news
publications to the performance of various indices and investments for which
reliable performance data is available. The performance of the Fund may be
compared in publications to averages, performance rankings, or other information
prepared by nationally recognized mutual fund ranking and statistical services.
As with other performance data, performance comparisons should not be considered
representative of the Fund's relative performance for any future period.
Amerindo's equity composite includes the portfolios managed in substantially
similar styles to that of the Fund of all clients which are institutions, such
as qualified retirement plans, charitable foundations and educational endowment
funds, for which investment income and realized capital gains are exempt from
Federal income tax, and for which Amerindo has full discretionary authority to
manage in accordance with the firm's equity strategy for separate accounts.
Amerindo has elected to comply with
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<PAGE>
the American Association for Investment Management and Research presentation
standards for the period October 1, 1987 (inception of the composite) through
December 31, 1999. An independent accounting firm has conducted an examination
with respect to Amerindo for the period October 1, 1987 through December 31,
1998, and has confirmed that Amerindo's performance presentation contained
herein for such period conforms with AIMR standards. The 1999 review is
currently in progress. The Independent Accountants' Report is available upon
request. AIMR has not been involved with the preparation or review of the
Independent Accountants' Report. The AIMR method of performance differs from
that of the SEC and can contain different results. The private accounts listed
do not have to comply with the Investment Company Act of 1940 or Subchapter M of
the Internal Revenue Code. If this compliance was necessary, the account's
performance could be adversely affected.
The following Schedule represents the rates of return for the equity composite
for the annual investment periods from January 1, 1990 through December 31,
1999. Accounts benchmarks are the Standard & Poor's 500 -Composite Stock Index,
Hambrecht & Quist Growth Index and the Russell 2000 Growth Index. The
Independent Accountants' Report relates to their examination of Amerindo's
performance from the inception of the composite October 1, 1987 through December
31, 1998, which is in accordance with AIMR standards. The 1999 review is
currently in progress.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the Fund's
performance nor is it indicative of future performance of the Fund.
<TABLE>
<CAPTION>
ASSET WEIGHTED ASSET WEIGHTED RUSSELL
COMPOSITE RATE COMPOSITE RATE H&Q 2000
OF RETURN NET OF OF RETURN GROSS S&P 500 GROWTH GROWTH
YEAR ADVISORY FEES OF ADVISORY FEES INDEX INDEX INDEX
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
1990 6.75% 8.49% -3.19% 3.89% -17.41%
1991 76.52% 78.39% 30.55% 94.49% 51.18%
1992 7.61% 8.73% 7.68% -3.57% 7.77%
1993 15.08% 16.42% 10.00% 7.81% 13.36%
1994 -2.66% -1.53% 1.33% 3.38% -2.43%
1995 87.51% 89.39% 37.50% 61.72% 31.04%
1996 8.04% 9.61% 23.22% 10.86% 11.26%
1997 -26.61% -26.05% 33.34% 2.39% 12.95%
1998 61.67% 64.14% 28.58% 45.04% 1.23%
1999 248.42% 251.31% 21.03% 180.08% 43.09%
</TABLE>
Annualized rates of return for the period January 1, 1990 to December 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C>
34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
Composite returns are shown both gross and net of investment
management fees. The composite is derived from all fully
discretionary, tax-free sheltered equity accounts in this style
with assets above $5,000,000. Past performance is no guarantee of
future results.
The Fund's total return for the period October 28, 1996 (commencement of
operations) through December 31, 1999 was 227.11%. The Fund's total return for
the calendar year ended December 31, 1999 was 230.42%.
10
<PAGE>
PRICING OF FUND SHARES
Net asset value per share for the Class D shares is determined by subtracting
from the value of such Class's total assets the amount of its liabilities and
dividing the remainder by the number of its outstanding shares. The value of
each security for which readily available market quotations exist is based on a
decision as to the broadest and most representative market for the security. The
value is based either on the last sale price on a national securities exchange,
or, in the absence of recorded sales, at the readily available closing bid price
on such exchanges, or at the quoted bid price in the over-the-counter market.
Assets for which market quotations are not readily available are valued in
accordance with procedures established by the Fund's Board of Directors,
including use of an independent pricing service or services which use prices
based on yields or prices of comparable securities, indications as to values
from dealers and general market conditions.
The Fund computes the net asset value once daily on Monday through Friday, at
the regularly scheduled close of normal trading on the New York Stock Exchange,
which normally occurs at 4:00 p.m. Eastern time, except on New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
HOW TO PURCHASE SHARES
INITIAL INVESTMENTS BY WIRE. You may purchase Class D shares of the Fund by
wiring immediately available federal funds (subject to the minimum investment)
to Bankers Trust Company from your bank. Your bank may charge a fee for doing so
(see instructions below). The minimum initial investment in Class D shares is
$2,500 ($1,000 for IRA accounts), each of which may be waived by the Fund.
If money is to be wired, you must call the Transfer Agent at 1-888-832-4386 to
set up your account and obtain an account number. You should be prepared at that
time to provide the information on the application. Then you should provide your
bank with the following information for purposes of wiring your investment:
Bankers Trust Company
New York, New York
ABA# 021001033
Account # 01-465-547
F/B/O Amerindo Technology Fund
Class D
Fund Acct. No. _______________
Social Security or Tax Identification No. ________________
You are required to mail a signed application to the Transfer Agent at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase accepted by the Fund. Shareholders will
receive the next determined net asset value per share after receipt of such wire
and the acceptance of the purchase by the Fund. Any delays which may occur in
wiring money, including delays which may occur in processing by the banks, are
not the responsibility of the Fund or the Transfer Agent. There is presently
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<PAGE>
no fee for the receipt of wired funds, but the right to charge shareholders for
this service is reserved by the Fund.
INITIAL INVESTMENTS BY MAIL. An account may be opened by completing and signing
an Account Application and mailing it to the Fund at the address noted below,
together with a check (subject to the minimum investment) payable to:
Amerindo Technology Fund
P.O. Box 446
Portland, ME 04112
Payment for the purchase of shares received by mail will be credited to a
shareholder's account at the net asset value per share of the particular Class
next determined after receipt. Such payment need not be converted into federal
funds (monies credited to the Fund's custodian bank by a Federal Reserve Bank)
before acceptance by the Fund's Distributor. In the event that there are
insufficient funds to cover a check, such prospective investor or investors will
be assessed a $15.00 charge.
ADDITIONAL INVESTMENTS. Additional investments may be made at any time (subject
to a minimum subsequent investment of $500) by purchasing shares at net asset
value by mailing a check to the Fund at the address noted under "Initial
Investments by Mail" (payable to Amerindo Technology Fund Class D) or by wiring
monies to the clearing bank as outlined above, or by telephone with payment by
Automated Clearing House ("ACH"), electronically transferring funds from the
investor's designated bank account. In order to purchase shares by telephone and
make payment by ACH, an investor must complete the appropriate sections of the
application. Shareholders who have authorized telephone purchases may effect
purchases by calling the Transfer Agent at 1-888-832-4386.
OTHER PURCHASE INFORMATION. Investors may open accounts in the Fund only
through the exclusive Distributor for the Fund. SEI Investments Distribution
Co., for nominal consideration and as agent for the Fund, will solicit orders
for the purchase of Fund shares, provided that any subscriptions and orders will
not be binding on the Fund until accepted by the Fund as principal.
The Fund reserves the right to redeem, after 60 days' written notice, shares in
accounts that fall below the minimum balance by reason of redemption and return
the proceeds to investors. The investors may restore and maintain a minimum
balance during the notice period.
The purchase price paid for the Class D shares is the current public offering
price, that is, the next determined net asset value of the shares after the
order is placed. See "Pricing of Fund Shares' herein. Class D shares are sold
without a front-end sales load. The Fund reserves the right to reject any
purchase order if it determines that accepting the order would not be in the
best interests of the Fund or its shareholders.
The Fund must receive an order and payment by the close of business for the
purchase to be effective and dividends to be earned on the same day. If funds
are received after the close of business, the purchase will become effective and
dividends will be earned on the next business day.
Shares of the Fund may be purchased in exchange for securities which are
permissible investments of the Fund, subject to the Adviser's determination that
the securities are acceptable. Securities accepted in exchange will be valued at
the mean between their bid and asked quotations. In addition, securities
accepted in exchange must be liquid securities that are not restricted as to
transfer and will have a value that is readily ascertainable (and not
established only by evaluation procedures) as evidenced by a listing on NASDAQ,
the American Stock Exchange or the New York Stock Exchange, or on the basis
12
<PAGE>
of prices provided by a pricing service. The Fund and the Adviser reserve the
right to reject any such purchase order. Shareholders will bear any costs
associated with a purchase of Fund shares through such an exchange.
All purchases of the Fund's shares will be made in full and fractional shares of
the Fund calculated to three decimal places. The Fund does not intend to issue
certificates evidencing Fund shares.
Shares of the Fund may also be sold to corporations or other institutions such
as trusts, foundations or broker-dealers purchasing for the accounts of others
("Shareholder Organizations"). Investors purchasing and redeeming shares of the
Fund through a Shareholder Organization may be charged a transaction-based fee
or other fee for the services of such organization. Each Shareholder
Organization is responsible for transmitting to its customers a schedule of any
such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Customers of Shareholder Organizations
should read this Prospectus in light of the terms governing accounts with their
organization. The Fund does not pay to or receive compensation from Shareholder
Organizations for the sale of the Fund's shares.
Purchases of Class D shares at net asset value may be made by investment
advisors or financial planners who place trades for their own accounts or the
accounts of their clients and who charge a management, consulting or other fee
for their services and by clients of such investment advisors or financial
planners who place trades for their own accounts if the accounts are linked to
the master account of such investment advisor or financial planner on the books
and records of the investment advisor or financial planner.
The Fund has available a form of Individual Retirement Account ("IRA") which may
be obtained from the Fund that permits the IRA to invest in Class D shares of
the Fund. The minimum initial investment for all retirement plans is $1,000 with
a subsequent minimum investment of $500. Investors desiring information
regarding investments through IRAs should write or telephone the Fund.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed by mail, or, if authorized, by telephone. The
value of shares redeemed may be more or less than the purchase price, depending
on the market value of the investment securities held by the Fund.
BY MAIL. The Fund will redeem its shares at the net asset value next determined
after the request is received in "good order." The net asset value per share of
the Fund is determined as of 4:00 p.m., New York time, on each day that the New
York Stock Exchange, Inc. (the "NYSE"), the Fund and the Distributor are open
for business. Requests should be addressed to Amerindo Technology Fund, P.O. Box
446, Portland, ME 04112. Requests in "good order" must include the following
documentation:
(a) a letter of instruction, if required, or a stock assignment specifying
the number of shares or dollar amount to be redeemed, signed by all
registered owners of the shares in the exact names in which they are
registered;
(b) any required signature guarantees (see "Signature Guarantees" below);
and
(c) other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and profit
sharing plans and other organizations.
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<PAGE>
SIGNATURE GUARANTEES. To protect shareholder accounts, the Fund and its
transfer agent from fraud, signature guarantees are required to enable the Fund
to verify the identity of the person who has authorized a redemption from an
account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareholder(s) and
the registered address and (2) share transfer requests. Signature guarantees may
be obtained from certain eligible financial institutions, including but not
limited to, the following: banks, trust companies, credit unions, securities
brokers and dealers, savings and loan associations and participants in the
Securities Transfer Association Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") or the New York Stock Exchange Medallion Signature
Program ("MSP"). Shareholders may contact the Fund at 1-888-832-4386 for further
details.
BY TELEPHONE. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling the Fund at 1-888-832-4386 and
requesting that the redemption proceeds be mailed to the primary registration
address or wired per the authorized instructions. If the Telephone Redemption
Option is authorized, the Fund and its transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or its transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Fund or its transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by the Fund or its transfer agent to be
genuine. The Fund will employ reasonable procedures to confirm that instructions
communicated are genuine and, if it does not, it may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures employed by the
Fund in connection with transactions initiated by telephone may include tape
recording of telephone instructions and requiring some form of personal
identification prior to acting upon instructions received by telephone.
OPTIONAL REDEMPTION BY THE FUND. Investors are required to maintain a minimum
account balance of at least $2,500. The Fund reserves the right to redeem, after
60 days' written notice, shares in accounts that fall below the minimum balance
by reason of redemption and return the proceeds to investors. The investors may
restore and maintain a minimum balance during the notice period.
FURTHER REDEMPTION INFORMATION. Redemption proceeds for shares of the Fund
recently purchased by check may not be distributed until payment for the
purchase has been collected, which may take up to fifteen business days from the
purchase date. Shareholders can avoid this delay by utilizing the wire purchase
option.
Other than as described above, payment of the redemption proceeds will be made
within seven days after receipt of an order for a redemption. The Fund may
suspend the right of redemption or postpone the date at times when the NYSE or
the bond market is closed or under any emergency circumstances as determined by
the United States Securities and Exchange Commission (the "SEC").
If the Fund determines that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make a payment wholly or partly in cash,
the Fund may pay the redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities held by a Fund in lieu of cash in
conformity with applicable rules of the SEC. Investors generally will incur
brokerage charges on the sale of portfolio securities so received in payment of
redemptions.
REDEMPTION FEE. The Fund is designed for long-term investors willing to accept
the risks associated with a long- term investment in the common stocks of
companies in the technology, technology-related and science industries. The Fund
is not designed for short-term traders whose frequent purchases and
14
<PAGE>
redemptions can generate substantial cash flow. These cash flows can
unnecessarily disrupt the Fund's investment program. Short-term traders often
redeem when the market is most turbulent, thereby forcing the sale of underlying
securities held by the Fund at the worst possible time as far as long-term
investors are concerned. Additionally, short-term trading drives up the Fund's
transaction costs"measured by both commissions and bid/ask spreads"which are
borne by the remaining long-term investors. For these reasons, the Fund assesses
a 2.00% fee on the redemption of Class D shares held for less than one year.
Redemption fees will be paid to the Fund to help offset transaction costs. The
fee does not apply to any shares purchased through reinvested distributions
(dividends and capital gains). This fee also does not apply to separate account
clients of the Adviser and its affiliates that hold shares in IRA accounts or in
retirement plans (such as 401(k), 403(b), 457, Keogh, Profit Sharing Plans, and
Money Purchase Pension Plans).
The Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under this method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the redemption fee will be assessed. In
determining "one year" the Fund will use the anniversary date of a transaction.
Thus, shares purchased on March 2, 2000, for example, will be subject to the fee
if they are redeemed on or prior to March 1, 2001. If they are redeemed on or
after March 2, 2001, the shares will not be subject to the redemption fee. The
redemption fee will be applied on redemptions of each investment made by a
shareholder that does not remain in the Fund for a one-year period from the date
of purchase.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of Class D's net investment income will be declared as dividends
and paid annually. If an investor's shares are redeemed prior to the date on
which dividends are normally declared and paid, accrued but unpaid dividends
will be paid with the redemption proceeds. Substantially all the realized net
capital gains for the Class D shares, if any, are declared and paid on an annual
basis. Dividends are payable to investors of record at the time of declaration.
For a discussion of the taxation of dividends or distributions, see "Taxes."
The net investment income of Class D shares for each business day is determined
immediately prior to the determination of net asset value. Net investment income
for other days is determined at the time net asset value is determined on the
prior business day. Shares of Class D earn dividends on the business day their
purchase is effective but not on the business day their redemption is effective.
See "Purchase of Shares" and "Redemption of Shares."
CHOOSING A DISTRIBUTION OPTION. Distribution of dividends from Class D shares
may be made in accordance with several options. A shareholder may select one of
three distribution options:
1. AUTOMATIC REINVESTMENT OPTION. Both dividends and capital gains
distributions will be automatically reinvested in additional Class D shares of
the Fund unless the investor has elected one of the other two options.
2. CASH DIVIDEND OPTION. Dividends will be paid in cash, and capital gains, if
any, will be reinvested in additional shares.
3. ALL CASH OPTION. Both dividends and capital gains distributions will be paid
in cash.
15
<PAGE>
TAX CONSEQUENCES
The Fund has elected and intends to continue to qualify annually to be treated
as a regulated investment company under the Internal Revenue Code of 1986. The
Fund did so qualify for its previous taxable year. By qualifying, the Fund will
generally not be subject to Federal income tax on net ordinary income and net
realized capital gains paid out to its stockholders. The Fund can also avoid an
annual 4% excise tax if it distributes substantially all of its ordinary income
and short and long term capital gain each year. The Fund's policy is to
distribute as dividends each year 100% (and in no event less than 90%) of its
investment company taxable income (which includes interest, dividends and net
short term capital gains). The Fund has adopted a policy of declaring dividends
annually. Distributions of net ordinary income and net short-term capital gains
are taxable to stockholders as ordinary income. Although corporate stockholders
would generally be entitled to the dividends-received deduction to the extent
that the Fund's income is derived from qualifying dividends from domestic
corporations, the Fund does not believe that any of its distributions will
qualify for this deduction.
The excess of net long-term capital gains over net short-term capital losses
realized and distributed by the Fund as capital gains distributions is taxable
to stockholders as long-term capital gains, without regard to the length of time
the stockholder may have held its shares in the Fund. Long-term capital gains
distributions are not eligible for the dividends-received deduction referred to
above. Long-term capital gains on sales of securities are currently taxable at a
maximum rate of 20% for non-corporate shareholders. Capital gain dividends,
designated in a notice mailed to investors not later than 60 days after the Fund
taxable year closes, will be taxed as long-term capital gain without regard to
the length of time for which the investor has held its shares. In determining
the amount of capital gains to be distributed, any capital loss carry over from
prior years will be taken into account in determining the amount of net long
term capital gain. However, if an investor receives a capital gain dividend and
sells shares after holding them for six months or less (not including, for
purposes of determining the length of the holding period, periods during which
the investor holds an offsetting position), then any loss realized on the sale
will be treated as long-term capital loss to the extent of such capital gain
dividend.
Distributions are taxable to investors whether received in cash or reinvested in
additional shares of the Fund. Any dividend or distribution received by a
stockholder shortly after the purchase of shares will reduce the net asset value
of the shares by the amount of the dividend or distribution. Furthermore, such
dividend or distribution is subject to tax even though it is, in effect, a
return of capital.
The redemption of shares may result in the stockholder's receipt of more or less
than the stockholder paid for its shares and, thus, in a taxable gain or loss to
the stockholder. If the redeemed shares have been held for more than one year,
the stockholder will generally realize a long-term capital gain or loss.
The Fund is required, subject to certain exemptions, to withhold at a rate of
31% from dividends paid or credited to stockholders and from the proceeds from
the redemption of Fund shares, if a correct taxpayer identification number,
certified when required, is not on file with the Fund, or if the Fund or the
shareholder has been notified by the Internal Revenue Service that the
shareholder is subject to these backup withholding rates. Corporate stockholders
are not subject to this requirement.
If the Fund invests in securities of foreign issuers, it may be subject to
withholding and other similar income taxes imposed by a foreign country.
Dividends and distributions may be subject to state and local taxes.
16
<PAGE>
Dividends paid or credited to accounts maintained by non-resident shareholders
may also be subject to U.S. non-resident withholding taxes. You should consult
your tax adviser regarding specific questions as to Federal, state and local
income withholding taxes.
DISTRIBUTION ARRANGEMENTS
DISTRIBUTOR. SEI Investments Distribution Co. ("SIDCO"), an affiliate of the
Administrator, has entered into a Distribution Agreement with the Fund to serve
as the Fund's distributor. For nominal consideration and as agent for the Fund,
the Distributor solicits orders for the purchase of the Fund's shares provided
that any orders will not be binding on the Fund until accepted by the Fund as
principal. See "Management of Fund" in the Statement of Additional Information.
12B-1 PLAN. The Fund, on behalf of the Class D shares, has adopted a
distribution and service plan, pursuant to Rule 12b-1 under the Investment
Company Act (the "Plan"). Rule 12b-1 provides that an investment company which
bears any direct or indirect expense of distributing its shares must do so only
in accordance with a plan permitted by this Rule. Because any fees payable under
the Plan are paid out of the Fund's assets on an ongoing basis, over time these
fees will increase the cost of your investment and may cost you more than paying
other types of sales charges. The total amounts payable under the Plan by the
Class D shares of the Fund may not exceed 0.25% per annum. Fees paid under the
Plan may not be waived for individual shareholders.
In accordance with the Plan, the Shareholder Servicing Agreement provides that
the Class D shares will compensate the Adviser for certain expenses and costs
incurred in connection with providing shareholder servicing and maintaining
shareholder accounts and to compensate parties with which it has written
agreements and whose clients own shares of each Class for providing servicing to
their clients ("shareholder servicing" ), which is subject to a maximum service
fee of 0.25% per annum of the Class D shares' average daily net assets. The
shareholder servicing agents that the Adviser retains will perform the following
services: (i) answer customer inquiries regarding account status and history,
the manner in which purchases and redemptions of shares of the Fund may be
effected and certain other matters pertaining to the Fund; (ii) assist
shareholders in designating and changing dividend options, account designations
and addresses; (iii) provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; (iv) assist in processing purchase
and redemption transactions; (v) arrange for the wiring of funds; (vi) transmit
and receive funds in connection with customer orders to purchase or redeem
shares; (vii) verify and guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder designated accounts;
(viii) furnish (either separately or on an integrated basis with other reports
sent to a shareholder by the Fund) quarterly and year-end statements and
confirmations in a timely fashion after activity is generated in the account;
(ix) transmit, on behalf of the Fund, proxy statements, annual reports, updating
prospectuses and other communications from the Fund to shareholders; (x)
receive, tabulate and transmit to the Fund, proxies executed by shareholders
with respect to meetings of shareholders of the Fund; and (xi) provide such
other related services as the Fund or a shareholder may request.
The Plan provides that the Adviser and the Distributor may make payments from
time to time from their own resources which may include the advisory fee and
past profits for the following purposes: (i) to defray the costs of and to
compensate others, including financial intermediaries with whom the Distributor
or Adviser has entered into written agreements, for performing shareholder
servicing and related administrative functions; (ii) to compensate certain
financial intermediaries for providing
17
<PAGE>
assistance in distributing each Class's shares; (iii) to pay the costs of
printing and distributing the Fund's prospectus to prospective investors; and
(iv) to defray the cost of the preparation and printing of brochures and other
promotional materials, mailings to prospective shareholders, advertising, and
other promotional activities, including the salaries and/or commissions of sales
personnel in connection with the distribution of the Fund's shares. The
Distributor or the Adviser, as the case may be, in their sole discretion, will
determine the amount of such payments made pursuant to the Plan with the
shareholder servicing agents and broker-dealers they have contracted with,
provided that such payments made pursuant to the Plan will not increase the
amount which the Fund is required to pay to the Distributor or the Adviser for
any fiscal year under the shareholder servicing agreements or otherwise. Any
servicing fees paid to the Adviser also may be used for purposes of (i) above.
Shareholder servicing agents and broker-dealers may charge investors a fee in
connection with their use of specialized purchase and redemption procedures
offered to investors by the shareholder servicing agents and broker-dealers. In
addition, shareholder servicing agents and broker-dealers offering purchase and
redemption procedures similar to those offered to shareholders who invest in the
Fund directly may impose charges, limitations, minimums and restrictions in
addition to or different from those applicable to shareholders who invest in the
Fund directly. Accordingly, the net yield to investors who invest through
shareholder servicing agents and broker-dealers may be less than by investing in
the Fund directly. An investor should read the Prospectus in conjunction with
the materials provided by the shareholder servicing agent and broker-dealer
describing the procedures under which Fund shares may be purchased and redeemed
through the shareholder servicing agent and broker-dealer.
18
<PAGE>
FINANCIAL HIGHLIGHTS INFORMATION
The following table is intended to help you understand the Fund's financial
performance since its inception. Certain information reflects financial results
for a single Fund share. The total returns in the table represent the rate that
an investor would have earned (or lost) on an investment in the Class D shares
of the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Morrison, Brown, Argiz & Company, whose report,
along with the Fund's financial statements, are included in the annual report,
which is available upon request. The table is part of the Fund's financial
statements for the year ended October 31, 1999, which are available to
shareholders upon request.
CLASS D SHARES
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 28, 1996
FOR THE FOR THE YEAR ENDED (COMMENCEMENT OF
PERIOD ENDED DECEMBER 31, INVESTMENT OPERATIONS)
OCTOBER 31, ------------------- THROUGH
1999*** 1998 1997 DECEMBER 31, 1996
------------ -------- -------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 13.61 $ 7.37 $ 9.00 $ 10.00
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment loss................. (0.07) (0.20) (0.16) (0.04)
Net realized and unrealized gain
(loss) on investments............. 20.07 6.44 (1.47) (0.96)
-------- ------- ------- -------
Net increase (decrease) in net
assets from investment
operations........................ 20.00 6.24 (1.63) (1.00)
-------- ------- ------- -------
LESS DISTRIBUTIONS:
Net realized gains on investments... (10.15) 0.00 0.00 0.00
-------- ------- ------- -------
Total distributions................. (10.15) 0.00 0.00 0.00
-------- ------- ------- -------
Net asset value, end of period...... $ 23.46 $ 13.61 $ 7.37 $ 9.00
======== ======= ======= =======
Total investment return**........... 146.74% 84.67% (18.11)% (10.00)%
RATIOS/SUPPLEMENTAL DATA:
Net assets end of period (in
000's)............................ $272,205 $64,194 $40,191 $34,210
Ratio of expenses to average net
assets............................ 2.29%* 2.75% 2.83% 3.82%*
Ratio of expenses to average net
assets, net of reimbursement...... 2.25%* 2.25% 2.25% 2.25%*
Ratio of net investment loss to
average net assets................ (0.68)%* (2.72)% (2.83)% (3.82)%*
Ratio of net investment loss to
average net assets, net of
reimbursement..................... (0.64)%* (2.21)% (2.25)% (2.25)%*
Portfolio turnover rate............. 170.00% 78.46% 355.21% 0.00%
</TABLE>
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* Annualized
** Total investment return is calculated assuming an initial investment made at
the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
*** Subsequent to December 31, 1998, the Fund's management elected to change the
Fund's fiscal year end to October 31, 1999.
19
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[This Page Intentionally Left Blank]
20
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Amerindo Technology Fund
Board of Directors
------------------------
Alberto W. Vilar Amerindo Investment Advisors Inc.
Gary A. Tanaka Amerindo Investment Advisors Inc.
John Rutledge Rutledge Capital LLC
Jude T. Wanniski Polyconomics, Inc.
Officers of Fund
- --------------------------------------------------------------------------------
Alberto W. Vilar Chairman of the Board
Gary A. Tanaka President
Anthony Ciulla Vice President
Dana E. Smith Vice President
<PAGE>
Amerindo Technology Fund
March 1, 2000
Investment Advisor
Amerindo Investment Advisors Inc.
San Francisco, California
New York, New York
Administrator
SEI Investments Mutual Funds Services
Oaks, Pennsylvania
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania
Transfer and Dividend Agent
Forum Shareholder Services LLC
Portland, Maine
Custodian
The Northern Trust Company
Chicago, Illinois
Legal Counsel
Battle Fowler LLP
New York, New York
Independent Auditors
Morrison, Brown, Argiz & Company
Miami, Florida
1-888-968-4964
www.amerindo.com
811-07531
AME-F-008-01
A Statement of Additional Information (SAI), dated March 1, 2000, and the Fund's
Annual and Semi-Annual Reports include additional information about the Fund and
its investments and are incorporated by reference into this prospectus. In the
Fund's Annual Report is a discussion of the market and investment strategies
that significantly affected the Fund's performance during its last fiscal year.
You may obtain the SAI, the Annual and Semi-Annual Reports and material
incorporated by reference without charge by calling the Fund at 1-888-968-4964.
To request other information, please call your financial intermediary or the
Fund.
A Current SAI has been filed with the Securities and Exchange Commission. You
may visit the Securities and Exchange Commission's Internet website
(www.sec.gov) to view the SAI, material incorporated by reference and other
information. These materials can also be reviewed and copied at the Commission's
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling the Commission at
1-800-SEC-0330. In addition, copies of these materials may be obtained, upon
payment of a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, DC 20549-6009, or by electronic request at
[email protected]. Information on the operation of the Public Reference Room
may be obtained by calling the Commission at 1-202-942-8090.
<PAGE>
AMERINDO TECHNOLOGY FUND
-----------------------------------------------------------------
March 1, 2000
RELATING TO THE AMERINDO TECHNOLOGY FUND PROSPECTUSES FOR
THE CLASS A, C AND D SHARES
DATED MARCH 1, 2000
-----------------------------------------------------------------
This Statement of Additional Information ("SAI") sets forth information
which may be of interest to investors but which is not necessarily included in
each of the Fund's Prospectuses, dated March 1, 2000 (the "Prospectuses").
This SAI is not a prospectus and should be read in conjunction with
each of the Fund's Prospectuses, a copy of which may be obtained without charge
by writing to the Fund at 399 Park Avenue, 22nd Floor, New York, New York 10022.
This SAI is incorporated by reference into the Prospectus in its
entirety. The Financial Statements have been incorporated by reference into the
SAI from the Fund's Annual Report. The Annual Report is available upon request
by calling 1-888-832-4386.
TABLE OF CONTENTS
<TABLE>
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<S> <C> <C>
Fund History.................................................1 Capital Stock and Other Securities.................19
Description of the Fund and its Investments and Risks........1 Purchase, Redemption and Pricing of Shares........ 20
Management of the Fund .................................... 8 Taxation of the Fund.............................. 20
Control Persons and Principal Holders
of Securities..............................................11 Underwriters...................................... 22
Investment Advisory and Other
Services....................................................12 Calculation of Performance Data .................. 23
Brokerage Allocation and Other Practices....................17 Financial Statements.............................. 24
- -------------------------------------------------------------- -----------------------------------------------------
</TABLE>
<PAGE>
I. FUND HISTORY
Amerindo Funds Inc. (the "Company") was incorporated in Maryland on
February 6, 1996. This SAI relates to the Amerindo Technology Fund (the "Fund").
II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
A. INVESTMENT STRATEGIES AND RISKS
The Fund is a non-diversified, open-end, management investment
company. The Fund's investment objective is to seek long-term capital
appreciation by investing at least 65% of its assets (although the Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. Technology companies are those companies with
primary business operations in either the technology or science areas. Current
income is incidental to the Fund's investment objective. The investment
objective is fundamental to the Fund and may not be changed without shareholder
approval. There can be no assurance that the Fund's investment objective will be
achieved.
This Fund is designed for long-term investors who understand and are
willing to accept the risk of loss involved in investing in a mutual fund
seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations that
this Fund is expected to experience, this Fund could be an appropriate part of
your overall investment strategy. The Fund should not be used as a trading
vehicle.
B. DESCRIPTION OF THE FUND'S INVESTMENT SECURITIES AND DERIVATIVES
1. The Technology and Science Areas. The Adviser believes that because
of rapid advances in technology and science, an investment in companies with
business operations in these areas will offer substantial opportunities for
long-term capital appreciation. Of course, prices of common stocks of even the
best managed, most profitable corporations are subject to market risk, which
means their stock prices can decline. In addition, swings in investor psychology
or significant trading by large institutional investors can result in price
fluctuations. Industries likely to be represented in the portfolio include the
Internet, computers, networking and internetworking software, computer aided
design, telecommunications, media and information services, medical devices and
biotechnology. The Fund may also invest in the stocks of companies that should
benefit from the commercialization of technological advances, although they may
not be directly involved in research and development.
The technology and science areas have exhibited and continue to
exhibit rapid growth due to the mass adoption of the Internet, both through
increasing demand for existing products and services and the broadening of the
technology market. In general, the stocks of large capitalized companies that
are well established in the technology market can be expected to grow with the
market and will frequently be found in the Fund's portfolio. The expansion of
technology and its related industries, however, also provides a favorable
environment for investment in small to medium capitalized companies. The Fund's
investment policy is not limited to any minimum capitalization requirement and
the Fund may hold securities without regard to the capitalization of the issuer.
The Adviser's overall stock selection for the Fund is not based on the
capitalization or size of the company but rather on an assessment of the
company's fundamental prospects. The Fund will not purchase stocks of companies
during their initial public offering or during an additional public offering of
the same security. The Adviser anticipates, however, that a significant portion
of the Fund's holdings will be invested in newly-issued securities being sold in
the secondary market.
-1-
<PAGE>
Companies in the rapidly changing fields of technology and science
face special risks. For example, their products or services may not prove
commercially successful or may become obsolete quickly. The value of the Fund's
shares may be susceptible to factors affecting the technology and science areas
and to greater risk and market fluctuation than an investment in a fund that
invests in a broader range of portfolio securities not concentrated in any
particular industry. As such, the Fund is not an appropriate investment for
individuals who are not long-term investors and who, as their primary objective,
require safety of principal or stable income from their investments. The
technology and science areas may be subject to greater governmental regulation
than many other areas and changes in governmental policies and the need for
regulatory approvals may have a material adverse effect on these areas.
Additionally, companies in these areas may be subject to risks of developing
technologies, competitive pressures and other factors and are dependent upon
consumer and business acceptance as new technologies evolve.
2. Foreign Securities. The Fund may invest up to 20% of its assets in
foreign securities. It is, however, the present intention of the Fund to limit
the investment in foreign securities to no more than 5% of its assets. By
investing a portion of its assets in foreign securities, the Fund will attempt
to take advantage of differences among economic trends and the performance of
securities markets in various countries. To date, the market values of
securities of issuers located in different countries have moved relatively
independently of each other. During certain periods, the return on equity
investments in some countries has exceeded the return on similar investments in
the United States. The Adviser believes that, in comparison with investment
companies investing solely in domestic securities, it may be possible to obtain
significant appreciation from a portfolio of foreign investments and securities
from various markets that offer different investment opportunities and are
affected by different economic trends. International diversification reduces the
effect that events in any one country will have on the Fund's entire investment
portfolio. On the other hand, a decline in the value of the Fund's investments
in one country may offset potential gains from investments in another country.
Investment in obligations of foreign issuers and in direct obligations
of foreign nations involves somewhat different investment risks from those
affecting obligations of United States domestic issuers. There may be limited
publicly available information with respect to foreign issuers and foreign
issuers are not generally subject to uniform accounting, auditing and financial
standards and requirements comparable to those applicable to domestic companies.
There may also be less government supervision and regulation of foreign
securities exchanges, brokers and listed companies than in the United States.
Foreign securities settlements may in some instances be subject to delays and
related administrative uncertainties that could result in temporary periods when
assets of the Fund are uninvested and no return is earned thereon and may
involve a risk of loss to the Fund. Foreign securities markets have
substantially less volume than domestic securities exchanges and securities of
some foreign companies are less liquid and more volatile than securities of
comparable domestic companies. Brokerage commissions and other transaction costs
on foreign securities exchanges are generally higher than in the United States.
Dividends and interest paid by foreign issuers may be subject to withholding and
other foreign taxes, which may decrease the net return on foreign investments as
compared to dividends and interest paid to the Fund by domestic companies.
Additional risks include future political and economic developments, the
possibility that a foreign jurisdiction might impose or change withholding taxes
on income payable with respect to foreign securities, the possible seizure,
nationalization or expropriation of the foreign issuer or foreign deposits (in
which the Fund could lose its entire investment in a certain market) and the
possible adoption of foreign governmental restrictions such as exchange
controls. There can be no assurance that the Fund's foreign investments will
present less risk then a portfolio of domestic securities.
Foreign Currency. Investments in foreign securities will usually be
denominated in foreign currency, and the Fund may contemporarily hold funds in
foreign currencies. The value of the Fund's investments denominated in foreign
currencies may be affected, favorably or unfavorably, by the relative strength
of the U.S. dollar, changes in foreign currency and U.S. dollar exchange rates
and exchange control regulations. The Fund may incur costs in connection with
conversions between various currencies. The Fund's net asset value per share
will be affected by changes in currency exchange rates. Changes in foreign
currency exchange rates may also
-2-
<PAGE>
affect the value of dividends and interest earned, gains and losses realized on
the sale of securities and net investment income and gains, if any, to be
distributed to shareholders by the Fund. The rate of exchange between the U.S.
dollar and other currencies is determined by the forces of supply and demand in
the foreign exchange markets (which in turn are affected by interest rates,
trade flow and numerous other factors, including, in some countries, local
governmental intervention).
3. U.S. Government Obligations. U.S. Government obligations are
obligations that are backed by the full faith and credit of the United States,
by the credit of the issuing or guaranteeing agency or by the agency's right to
borrow from the U.S. Treasury. They include (i) U.S. Treasury obligations, which
differ only in their interest rates, maturities and times of issuance as
follows: U.S. Treasury bills (maturity of one year or less), U.S. Treasury notes
(maturity of one year or ten years), U.S. Treasury bonds (generally maturities
of more than ten years), and (ii) obligations issued or guaranteed by U.S.
Government agencies and instrumentalities that are supported by the full faith
and credit of the United States (such as securities issued by the Government
National Mortgage Association, the Federal Housing Administration, the
Department of Housing and Urban Development, the Export-Import Bank, the General
Services Administration and the Maritime Administration, and certain securities
issued by the Farmers' Home Administration and the Small Business
Administration, most of which are explained below under the section entitled
"Mortgage-Backed Securities"). The maturities of U.S. Government obligations
usually range from three months to thirty years.
4. Repurchase Agreements. When the Fund purchases securities, it may
enter into a repurchase agreement with the seller wherein the seller agrees, at
the time of sale, to repurchase the security at a mutually agreed upon time and
price. The Fund may enter into repurchase agreements with member banks of the
Federal Reserve System and with broker-dealers who are recognized as primary
dealers in United States Government securities by the Federal Reserve Bank of
New York. Although the securities subject to the repurchase agreement might bear
maturities exceeding one year, settlement for the repurchase would never be more
than 397 days after the Fund's acquisition of the securities and normally would
be within a shorter period of time. The resale price will be in excess of the
purchase price, reflecting an agreed upon market rate effective for the period
of time the Fund's money will be invested in the security, and will not be
related to the coupon rate of the purchased security. At the time the Fund
enters into a repurchase agreement the value of the underlying security,
including accrued interest, will be equal to or exceed the value of the
repurchase agreement, and, in the case of a repurchase agreement exceeding one
day, the seller will agree that the value of the underlying security, including
accrued interest, will at all times be equal to or exceed the value of the
repurchase agreement. The Fund may engage in a repurchase agreement with respect
to any security in which it is authorized to invest, even though the underlying
security may mature in more than one year. The collateral securing the seller's
obligation must be of a credit quality at least equal to the Fund's investment
criteria for securities in which it invests and will be held by the Custodian or
in the Federal Reserve Book Entry System.
For purposes of the Investment Company Act of 1940, as amended (the
"1940 Act"), a repurchase agreement is deemed to be a loan from the Fund to the
seller subject to the repurchase agreement and is therefore subject to the
Fund's investment restriction applicable to loans. It is not clear whether a
court would consider the securities purchased by the Fund subject to a
repurchase agreement as being owned by the Fund or as being collateral for a
loan by the Fund to the seller. In the event of the commencement of bankruptcy
or insolvency proceedings with respect to the seller of the securities before
repurchase of the security under a repurchase agreement, the Fund may encounter
a delay and incur costs before being able to sell the security. Delays may
involve loss of interest or decline in price of the security. If the court
characterized the transaction as a loan and the Fund has not perfected a
security interest in the security, the Fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the Fund would be at the risk of losing some
or all of the principal and income involved in the transaction. As with any
unsecured debt obligation purchased for the Fund, the Adviser seeks to minimize
the risk of loss through repurchase agreements by analyzing the creditworthiness
of the obligor, in this case the seller. Apart from the risk of bankruptcy or
insolvency proceedings, there is also the risk that the seller may fail to
repurchase the security, in which case the
-3-
<PAGE>
Fund may incur a loss if the proceeds of the sale to a third party are less than
the repurchase price. However, if the market value of the securities subject to
the repurchase agreement becomes less than the repurchase price (including
interest), the Fund involved will direct the seller of the security to deliver
additional securities so that the market value of all securities subject to the
repurchase agreement will equal or exceed the repurchase price. It is possible
that a Fund will be unsuccessful in seeking to impose on the seller a
contractual obligation to deliver additional securities.
5. Hedging Transactions. The Fund may, but does not currently intend
to, enter into hedging transactions. Hedging is a means of transferring risk
which an investor does not desire to assume during an uncertain market
environment. The Fund is permitted to enter into the transactions solely (a) to
hedge against changes in the market value of portfolio securities or (b) to
close out or offset existing positions. The transactions must be appropriate to
reduction of risk; they cannot be for speculation. In particular, the Fund may
write covered call options on securities or stock indices. By writing call
options, the Fund limits its profit to the amount of the premium received. By
writing a covered call option, the Fund assumes the risk that it may be required
to deliver the security having a market value higher than its market value at
the time the option was written. The Fund will not write options if immediately
after such sale the aggregate value of the obligations under the outstanding
options would exceed 25% of the Fund's net assets.
To the extent the Fund uses hedging instruments which do not involve
specific portfolio securities, offsetting price changes between the hedging
instruments and the securities being hedged will not always be possible, and
market value fluctuations of the Fund may not be completely eliminated. When
using hedging instruments that do not specifically correlate with securities in
the Fund, the Adviser will attempt to create a very closely correlated hedge.
Short Sales. The Fund may make short sales of securities
"against-the-box." A short sale "against-the-box" is a sale of a security that
the Fund either owns an equal amount of or has the immediate and unconditional
right to acquire at no additional cost. The Fund will make short sales
"against-the-box" as a form of hedging to offset potential declines in long
positions in the same or similar securities.
6. Options Transactions. The Fund may, but does not currently intend
to, enter into options transactions. The Fund may purchase call and put options
on securities and on stock indices in an attempt to hedge its portfolio and to
increase its total return. Call options may be purchased when it is believed
that the market price of the underlying security or index will increase above
the exercise price. Put options may be purchased when the market price of the
underlying security or index is expected to decrease below the exercise price.
The Fund may also purchase all options to provide a hedge against an increase in
the price of a security sold short by it. When the Fund purchases a call option,
it will pay a premium to the party writing the option and a commission to the
broker selling the option. If the option is exercised by the Fund, the amount of
the premium and the commission paid may be greater than the amount of the
brokerage commission that would be charged if the security were purchased
directly.
In addition, the Fund may write covered call options on securities or
stock indices. By writing options, the Fund limits its profits to the amount of
the premium received. By writing a call option, the Fund assumes the risk that
it may be required to deliver the security at a market value higher than its
market value at the time the option was written plus the difference between the
original purchase price of the stock and the strike price. By writing a put
option, the Fund assumes the risk that it may be required to purchase the
underlying security at a price in excess of its current market value.
7. Lending of Securities. The Fund may, but does not currently intend
to, lend its portfolio securities to qualified institutions as determined by the
Adviser. By lending its portfolio securities, the Fund attempts to increase its
income through the receipt of interest on the loan. Any gain or loss in the
market price of the securities loaned that may occur during the term of the loan
will be for the account of the Fund in such
-4-
<PAGE>
transaction. The Fund will not lend portfolio securities if, as a result, the
aggregate of such loans exceeds 33% of the value of its total assets (including
such loans). All relevant facts and circumstances, including the
creditworthiness of the qualified institution, will be monitored by the Adviser,
and will be considered in making decisions with respect to lending of
securities, subject to review by the Company's Board of Directors. The Fund may
pay reasonable negotiated fees in connection with loaned securities, so long as
such fees are set forth in a written contract and their reasonableness is
determined by the Company's Board of Directors.
8. Variable-Amount Master Demand Notes. The Fund may purchase
variable amount master demand notes ("VANs"). VANs are debt obligations that
provide for a periodic adjustment in the interest rate paid on the instrument
and permit the holder to demand payment of the unpaid principal balance plus
accrued interest at specified intervals upon a specified number of days' notice
either from the issuer or by drawing on a bank letter of credit, a guarantee,
insurance or other credit facility issued with respect to such instrument.
The VANs in which the Fund may invest are payable on not more than
seven calendar days' notice either on demand or at specified intervals not
exceeding one year depending upon the terms of the instrument. The terms of the
instruments provide that interest rates are adjustable at intervals ranging from
daily to up to one year and their adjustments are based upon the prime rate of a
bank or other appropriate interest rate adjustment index as provided in the
respective instruments. The Fund will decide which variable rate demand
instruments it will purchase in accordance with procedures prescribed by the
Company's Board of Directors to minimize credit risks.
The VANs that the Fund may invest in include participation
certificates purchased by the Fund from banks, insurance companies or other
financial institutions in fixed or variable rate, or taxable debt obligations
(VANs) owned by such institutions or affiliated organizations. A participation
certificate gives the Fund an undivided interest in the obligation in the
proportion that the Fund's participation interest bears to the total principal
amount of the obligation and provides the demand repurchase feature described
below. Where the institution issuing the participation does not meet the Fund's
high quality standards, the participation is backed by an irrevocable letter of
credit or guaranty of a bank (which may be a bank issuing a confirming letter of
credit, or a bank serving as agent of the issuing bank with respect to the
possible repurchase of the certificate of participation or a bank serving as
agent of the issuer with respect to the possible repurchase of the issue) or
insurance policy of an insurance company that the Board of Directors of the
Company has determined meets the prescribed quality standards for the Fund. The
Fund has the right to sell the participation certificate back to the institution
and, where applicable, draw on the letter of credit, guarantee or insurance
after no more than 30 days' notice either on demand or at specified intervals
not exceeding 397 days (depending on the terms of the participation), for all or
any part of the full principal amount of the Fund's participation interest in
the security, plus accrued interest. The Fund intends to exercise the demand
only (1) upon a default under the terms of the bond documents, (2) as needed to
provide liquidity to the Fund in order to make redemptions of the Fund's shares,
or (3) to maintain a high quality investment portfolio. The institutions issuing
the participation certificates will retain a service and letter of credit fee
(where applicable) and a fee for providing the demand repurchase feature, in an
amount equal to the excess of the interest paid on the instruments over the
negotiated yield at which the participations were purchased by the Fund. The
total fees generally range from 5% to 15% of the applicable prime rate* or other
interest rate index. With respect to insurance, the Fund will attempt to have
the issuer of the participation certificate bear the cost of the insurance,
although the Fund retains the option to purchase insurance if necessary, in
which case the cost of insurance will be an expense of the Fund subject to the
expense limitation on investment company expenses prescribed by any state in
which the Fund's shares are qualified for sale. The Adviser has been instructed
by the
- ---------
* The "prime rate" is generally the rate charged by a bank to its most
creditworthy customers for short term loans. The prime rate of a particular
bank may differ from other banks and will be the rate announced by each
bank on a particular day. Changes in the prime rate may occur with great
frequency and generally become effective on the date announced.
-5-
<PAGE>
Company's Board of Directors to continually monitor the pricing, quality and
liquidity of the variable rate demand instruments held by the Fund,
including the participation certificates, on the basis of published financial
information and reports of the rating agencies and other bank analytical
services to which the Fund may subscribe. Although these instruments may be sold
by the Fund, the Fund intends to hold them until maturity, except under the
circumstances stated above.
While the value of the underlying variable rate demand instruments may
change with changes in interest rates generally, the variable rate nature of the
underlying variable rate demand instruments should minimize changes in value of
the instruments. Accordingly, as interest rates decrease or increase, the
potential for capital appreciation and the risk of potential capital
depreciation is less than would be the case with a portfolio of fixed income
securities. The Fund may contain VANs on which stated minimum or maximum rates,
or maximum rates set by state law, limit the degree to which interest on such
VANs may fluctuate. To the extent that the Fund holds VANs with these limits,
increases or decreases in value may be somewhat greater than would be the case
without such limits. In the event that interest rates increased so that the
variable rate exceeded the fixed-rate on the obligations, the obligations could
no longer be valued at par and this may cause the Fund to take corrective
action, including the elimination of the instruments. Because the adjustment of
interest rates on the VANs is made in relation to movements of the applicable
banks' "prime rate," or other interest rate adjustment index, the VANs are not
comparable to long-term fixed-rate securities. Accordingly, interest rates on
the VANs may be higher or lower than current market rates for fixed-rate
obligations or obligations of comparable quality with similar maturities.
For purposes of determining whether a VAN held by a Fund matures
within 397 days from the date of its acquisition, the maturity of the instrument
will be deemed to be the longer of (1) the period required before the Fund is
entitled to receive payment of the principal amount of the instrument or (2) the
period remaining until the instrument's next interest rate adjustment. If a
variable rate demand instrument ceases to meet the investment criteria of the
Fund, it will be sold in the market or through exercise of the repurchase
demand.
C. FUND POLICIES - INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment restrictions
which may not be changed unless approved by a majority of the Fund's outstanding
shares. As used in this SAI, the term "majority of the outstanding shares" of
the Fund means, respectively, the vote of the lesser of (i) 67% or more of the
shares of the Fund present at the meeting, if more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the outstanding shares of the Fund.
The Fund may not:
(1) Make portfolio investments other than as described herein or
any other form of investment, where applicable, which meets
the Fund's investment criteria, as determined by the Adviser
and the Board of Directors, and which is consistent with the
Fund's objective and policies.
(2) Borrow money. This restriction shall not apply to borrowing
from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests that
might otherwise require the untimely disposition of
securities, in an amount up to one-third of the value of the
Fund's total assets (including the amount borrowed) valued at
market less liabilities (not including the amount borrowed) at
the time the borrowing was made. While borrowings exceed 5% of
the value of the Fund's total assets, the Fund will not
purchase additional securities. Interest paid on borrowings
will reduce net income. 300% asset coverage is maintained at
all times.
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<PAGE>
(3) Mortgage, pledge or hypothecate any assets except that the
Fund may pledge not more than one- third of its total assets
to secure borrowings made in accordance with paragraph (2)
above. However, although not a fundamental policy of the Fund,
as a matter of operating policy in order to comply with
certain state statutes, the Fund will not pledge its assets in
excess of an amount equal to 15% of net assets.
(4) Sell securities short, except short sales "against-the-box,"
or purchase securities on margin, or engage in the purchase
and sale of put, call, straddle or spread options or in
writing such options, except to the extent permitted in the
Prospectus or this SAI or, to the extent that securities
subject to a demand obligation and stand-by commitments may be
purchased as set forth under "Description of the Fund and Its
Investments and Risks."
(5) Underwrite the securities of other issuers, except insofar as
the Fund may be deemed an underwriter under the Securities Act
of 1933 in disposing of a portfolio security.
(6) Invest more than an aggregate of 15% of its net assets in
repurchase agreements maturing in more than seven days,
variable rate demand instruments exercisable in more than
seven days, securities that are not readily marketable or are
illiquid investments. Such Securities include foreign
securities and bank participation interests for which a
readily available market does not exist, except as described
in the Fund's Prospectus.
(7) Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas
interests, but this shall not prevent the Fund from investing
in Government obligations secured by real estate or interests
in real estate.
(8) Make loans to others, except through the purchase of portfolio
investments, including repurchase agreements, exceeding in the
aggregate one-third of the market value of the Fund's total
assets less liabilities other than obligations created by
these transactions as described under "Description of the Fund
and Its Investments and Risks."
(9) Invest more than 25% of its assets in the securities of
"issuers" in any single industry, except in the technology and
science areas as set forth under "Investment Objectives,
Principal Investment Strategies and Related Risks" in the
Prospectus, provided also that there shall be no limitation on
the Fund to purchase obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities.
When the assets and revenues of an agency, authority,
instrumentality or other political subdivision are separate
from those of the government creating the issuing entity and a
security is backed only by the assets and revenues of the
entity, the entity would be deemed to be the sole issuer of
the security. Similarly, in the case of an industrial revenue
bond, if that bond is backed only by the assets and revenues
of the non-governmental issuer, then such non-governmental
issuer would be deemed to be the sole issuer. If, however, in
either case, the creating government guarantees a security,
such a guarantee would be considered a separate security and
would be treated as an issue of such government.
(10) Invest in securities of other investment companies, except (i)
the Fund may purchase unit investment trust securities where
such unit investment trusts meet the investment objective of
the Fund and then only up to 5% of the Fund's net assets,
except as they may be acquired as part of a merger,
consolidation or acquisition of assets and (ii) as permitted
by Section 12(d) of the 1940 Act.
(11) Issue senior securities except insofar as the Fund may be
deemed to have issued a senior security in connection with any
permitted borrowing.
-7-
<PAGE>
The Fund will not be in violation of any maximum percentage limitation
when the change in the percentage of the Fund's held holdings is due to a change
in value of the Fund's securities. This qualification does not apply to the
restriction on the Fund's ability to purchase additional securities when
borrowings earn 5% of the value of the Fund's total assets. Investment
restrictions that involve a maximum percentage of securities or assets will be
violated, however, if an excess over the percentage occurs immediately after,
and is caused by, an acquisition of securities or assets of, or borrowings by,
the Fund.
D. TEMPORARY DEFENSIVE POSITIONS
When the Adviser believes that market conditions warrant a temporary
defensive position, the Fund may invest up to 100% of its assets in short-term
instruments such as commercial paper, bank certificates of deposit, bankers'
acceptances, variable rate demand instruments or repurchase agreements for such
securities and securities of the U.S. Government and its agencies and
instrumentalities, as well as cash and cash equivalents denominated in foreign
currencies. Investments in domestic bank certificates of deposit and bankers'
acceptances will be limited to banks that have total assets in excess of $500
million and are subject to regulatory supervision by the U.S. Government or
state governments. The Fund's investments in foreign short-term instruments will
be limited to those that, in the opinion of the Adviser, equate generally to the
standards established for U.S. short-term instruments.
E. PORTFOLIO TURNOVER
The Fund's portfolio turnover for the fiscal year ended December 31,
1998 was 78.46%. The Fund's portfolio turnover for the fiscal year ended October
31, 1999 was 170%. The portfolio turnover for the twelve months ended December
31, 1999 was 259%. The variation in the Fund's portfolio turnover was due to
increased trading by the Fund. In response to current market conditions the Fund
has employed more of an active trading strategy as opposed to a buy and hold
strategy which has increased the portfolio turnover rate over the last fiscal
year. This strategy is consistent with the Fund's investment objectives and
overall investment policies and strategies.
III. MANAGEMENT OF THE FUND
The Fund's Board of Directors is responsible for the overall
management and supervision of the Fund. Pursuant to the terms of an Investment
Advisory Agreement, Amerindo Investment Advisors, Inc. (the "Adviser" or
"Amerindo") serves as the investment adviser to the Fund. The Adviser supervises
all aspects of the Fund's operations and provides investment advice and
portfolio management services to the Fund. Subject to the Board's supervision,
the Adviser makes all of the day-to-day investment decisions, arranges for the
execution of portfolio transactions and generally manages the portfolio
investments.
The directors and officers of the Fund and their principal occupations
during the past five years are set forth below. Their titles may have varied
during this period. Asterisks indicate that those directors are "interested
persons" (as defined in the 1940 Act) of the Fund.
OFFICERS AND DIRECTORS OF THE FUND
ALBERTO W. VILAR * Mr. Vilar has been Chairman of the Board
Amerindo Investment Advisors Inc. of Directors and Chief Executive
One Embarcadero Officer of the Company since its
inception. He began his career with
Citibank N.A. in New
- --------
* "Interested person" of the Fund, as defined in the Investment Company Act.
-8-
<PAGE>
Suite 2300 York in 1964 and worked there as an
San Francisco, CA 94111 International Credit Officer until 1967.
399 Park Avenue From 1967 to 1971, he served as Vice
22nd Floor President, Portfolio Manager and
New York, NY 10022 Manager of the Investment Management
(59) Division of Drexel Burnham
Lambert in New York. From 1971 to
1973, he served as Executive Vice
President, Portfolio Manager and
Director of Equity Strategy at M.D. Sass
Investor Services in New York. In 1973,
he became Vice President and Portfolio
Manager of Endowment Management &
Research Corporation in Boston.
From 1977 to 1979, he served as Senior
Vice President, Director of Research,
Chief Investment Strategist and
Partnership Manager of the Boston
Company in Boston. He founded the
predecessors of Amerindo Advisors
(U.K.) Limited and Amerindo Investment
Advisors, Inc. (Panama) in 1979 and has
served since then as a Principal
Portfolio Manager. He holds the degrees
of B.A. in Economics from Washington &
Jefferson College and an M.B.A. from
Iona College, and he completed the
Doctoral Studies Program in Economics
at New York University. Mr. Vilar was
awarded an Honorary Doctorate of
Humanities Degree from Washington &
Jefferson College. He has been a
Chartered Financial Analyst since 1975.
DR. GARY A. TANAKA* Dr. Tanaka has been a Director and
Amerindo Investment Advisors Inc. President of the Company since its
43 Upper Grosvenor Street inception. He served as a Portfolio
London, England W1X9PG Manager for Crocker Bank in San
(56) Francisco from 1971 to 1977, and as a in
San Francisco from 1978 to 1980. From
1975 to 1980, he also served as a
Consultant to Andron Cechettini &
Associates in San Francisco. In 1980,
he joined the predecessors of Amerindo
Advisors (U.K.) Limited and Amerindo
Investment Advisors, Inc. (Panama) as a
Principal Portfolio Manager and has
served in this position since that time.
Dr. Tanaka holds the degrees of B.S. in
Mathematics from Massachusetts Institute
of Technology and Ph.D. in Applied
Mathematics from Imperial College,
University of London.
DR. JOHN RUTLEDGE Dr. Rutledge has been a Director of the
Rutledge & Company, Inc. Company since its inception. He also
One Greenwich Office Park has been Chairman of Rutledge & Company,
Greenwich, CT 06831 Inc., a merchant banking firm, since
(52) 1991 and serves as a director of Earle
M. Jorgensen Company, Lazard Freres
Funds, Fluidrive, Inc., General Medical
Corporation, Medical Specialties Group,
United Refrigerated Services, Inc. and
Utenduhl Capital Partners and is a
special advisor to Kelso & Companies,
Inc. He is the author of books and
investment publications, writes a
- --------
* "Interested person" of the Fund, as defined in the Investment Company Act.
-9-
<PAGE>
monthly column in Forbes Magazine and is
a frequent contributor to periodicals.
JUDE T. WANNISKI Mr. Wanniski has been a Director of the
Polyconomics, Inc. Company since its inception. He also
86 Maple Avenue has been president of Polyconomics,
Morristown, NJ 07960 Inc. since 1978 and serves as a director
(63) for Repap Enterprises Inc.
DANA E. SMITH Ms. Smith has been the Vice President of
Amerindo Investment Advisors Inc. and Treasurer to the Company since its
22nd Floor inception. She has been the Chief
399 Park Avenue Compliance Officer of Amerindo
New York, NY 10022 Investment Advisors Inc. since April
(40) 1993. From December 1991 to March 1993,
she was a Mutual Fund Marketing
Associate at Lazard Freres Asset
Management and an officer of The Lazard
Funds, Inc.
ANTHONY CIULLA Mr. Ciulla has been Vice President of
Amerindo Investment Advisors Inc. the Company since its inception. He has
One Embarcadero been the Senior Trader of Amerindo
Suite 2300 Investment Advisers Inc. since
San Francisco, CA 94111 October 1, 1990.
(67)
COMPENSATION TABLE
(For Fiscal Year Ended October 31, 1999)
<TABLE>
<CAPTION>
Aggregate Pension or Retirement
Name of Person and Compensation Benefits Accrued as Part Estimated Annual Benefit Total Compensation
Position with Fund From Fund of Fund Expenses Upon Retirement From the Fund
------------------- ------------ ------------------------ ------------------------ ------------------
<S> <C> <C> <C> <C>
Alberto W. Vilar $ 0 $ 0 $ 0 $ 0
Director
Dr. Gary A. Tanaka 0 0 0 0
Director
Dr. John Rutledge 30,000 0 0 30,000
Director
Jude T. Wanniski 30,000 0 0 30,000
Director
</TABLE>
Each Director who is not an interested person of the Fund receives a base annual
fee of $25,000 which is paid by the Fund, plus $1,250 for each meeting attended.
-10-
<PAGE>
IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On January 31, 2000, there were 717,205 Class A shares, 49,876 Class C
shares and 19,511,104 Class D shares of the Fund outstanding. As of this date,
the directors and officers of the Fund, as a group, owned less than 1% of each
Class.
<PAGE>
The following represents a list of persons who owned 5% or more of the
Fund's outstanding common stock as of January 31, 2000:
CLASS A SHARES NONE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS C SHARES Name & Address Percentage of Class Nature of Ownership
-------------- ------------------- -------------------
CIBC World Markets Corp. 14.79% Record
FBO 033-48035-17
P.O. Box 3483
Church Street Station
New York, NY 10008-3484
Heidi Tarver, Lisa Tarver 6.40% Beneficial
& Rebecca Tarver Ttees
Tarver Grandchild Trust
UA Dtd 2/10/95
1927 Parker Street
Berkeley, CA 94704-3206
CIBC World Markets Corp. 6.36% Record
FBO 324-15347-12
P.O. Box 3484
Church Street Station
New York, NY 10008-3484
CLASS D SHARES Name and Address Percentage of Class Nature of Ownership
---------------- ------------------- -------------------
Charles Schwab & Co. 25.13% Record
101 Montgomery Street
San Francisco, CA 94104
A/C WAIF8628832 MAC 8.74% Record
& Co.
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, PA 15230-3198
</TABLE>
V. INVESTMENT ADVISORY AND OTHER SERVICES
A. INVESTMENT ADVISER
1. General Information. Amerindo Investment Advisors Inc., a
registered investment adviser, is a California corporation, with its principal
office located at One Embarcadero, Suite 2300, San Francisco,
-11-
<PAGE>
California 94111. The Adviser serves as the investment adviser of the Fund
pursuant to an Investment Advisory Agreement entered into by the Fund on behalf
of each Class. The Adviser supervises all aspects of the Fund's operations and
provides investment advice and portfolio management services to the Fund.
Pursuant to the Advisory Agreement and subject to the supervision of the Fund's
Board of Directors, the Adviser makes the Fund's day-to-day investment
decisions, arranges for the execution of portfolio transactions and generally
manages the Fund's investments.
The Adviser provides persons satisfactory to the Board of Directors of
the Fund to serve as officers of the Fund. Such officers, as well as certain
other employees and directors of the Fund, may be directors, officers or
employees of the Adviser or its affiliates.
The Adviser may also provide the Fund with supervisory personnel who
will be responsible for supervising the performance of administrative services,
accounting and related services, net asset value and yield calculation, reports
to and filings with regulatory authorities, and services relating to such
functions. However, the Administrator will provide personnel who will be
responsible for performing the operational components of such services. The
personnel rendering such supervisory services may be employees of the Adviser,
of its affiliates or of other organizations.
The Advisory Agreement was approved on May 14, 1996 by the Board of
Directors, including a majority of the directors who are not interested persons
(as defined in the Investment Company Act of 1940, as amended) of the Fund or
the Adviser. On July 13, 1999, the Board voted to extend the term of the
Advisory Agreement to July 30, 2000. The Agreement, which currently extends to
July 30, 2000, may be continued in force thereafter for successive twelve-month
periods beginning each July 31, provided that such continuance is specifically
approved annually by majority vote of the Fund's outstanding voting securities
or by the Board of Directors, and in either case by a majority of the directors
who are not parties to the Advisory Agreement or interested persons of any such
party, by votes cast in person at a meeting called for the purpose of voting on
such matter.
The Advisory Agreement is terminable without penalty by the Fund on
sixty days' written notice when authorized either by majority vote of the
outstanding voting shares of the Fund or by a vote of a majority of the Fund's
Board of Directors, or by the Adviser on sixty days' written notice, and will
automatically terminate in the event of its assignment. The Advisory Agreement
provides that in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Adviser, or of reckless disregard of its
obligations thereunder, the Adviser shall not be liable for any action or
failure to act in accordance with its duties thereunder.
2. Adviser's Fees. Pursuant to the terms of the Advisory Agreement,
the Fund, on behalf of each Class, will pay an annual advisory fee paid monthly
equal to 1.50% of the Fund's average daily net assets. In addition, the Adviser
is contractually obligated to waive its fees and reimburse expenses to the
extent that the Total Annual Fund Operating Expenses exceed 2.25% for the Class
A and Class D shares and 3.00% for the Class C shares.
Fees Paid to the Adviser Under the Advisory Agreement
<TABLE>
<CAPTION>
Fiscal Year Ended,
1999* 1998 1997
------------------------ ------------------------------- -------------------------------
<S> <C> <C> <C>
Fees Paid $1,959,874 $674,525 $609,301
Reimbursements $ 53,171 $225,991 $234,645
- ------------------------------------- ------------------------- ------------------------------- -------------------------------
* Subsequent to December 31, 1998, the Fund's management elected to change
the Fund's fiscal year end to October 31, 1999.
</TABLE>
-12-
<PAGE>
This fee is higher than the fee paid by most other mutual funds;
however, the Board of Directors believes that this fee is reasonable in light of
the advisory services performed by the Adviser for the Fund. Any portion of the
advisory fees received by the Adviser may be used by the Adviser to provide
investor and administrative services and for distribution of Fund shares.
Expense Limitation. From time to time, the Adviser may voluntarily
assume certain expenses of the Fund. This would have the effect of lowering the
overall expense ratio and of increasing yield to investors. Subject to any such
voluntary assumption of certain expenses by the Adviser, the Fund has, under the
Advisory Agreement, confirmed its obligation for payment of all other expenses,
including without limitation: (i) fees payable to the Adviser, Administrator,
Custodian, Transfer Agent and Dividend Agent; (ii) brokerage and commission
expenses; (iii) Federal, state or local taxes, including issuance and transfer
taxes incurred by or levied on it; (iv) commitment fees, certain insurance
premiums and membership fees and dues in investment company organizations; (v)
interest charges on borrowings; (vi) telecommunications expenses; (vii)
recurring and non-recurring legal and accounting expenses; (viii) costs of
organizing and maintaining the Company's existence as a corporation; (ix)
compensation, including directors' fees, of any directors, officers or employees
who are not also officers of the Adviser or its affiliates and costs of other
personnel providing administrative and clerical services; (x) costs of
stockholders' services and costs of stockholders' reports, proxy solicitations,
and corporate meetings; (xi) fees and expenses of registering its shares under
the appropriate Federal securities laws and of qualifying its shares under
applicable state securities laws, including expenses attendant upon the initial
registration and qualification of these shares and attendant upon renewals of,
or amendments to, those registrations and qualifications; and (xii) expenses of
preparing, printing and delivering the Prospectus to existing shareholders and
of printing shareholder application forms for shareholder accounts.
The Fund may from time-to-time hire its own employees or contract to
have management services performed by third parties, and the management of the
Fund intends to do so whenever it appears advantageous to the Fund. The Fund's
expenses for employees and for such services are among the expenses subject to
the expense limitation described above.
B. THE DISTRIBUTION AND SERVICE PLAN
The Company, on behalf of each Class, has adopted a distribution and
service plan (the "Plan"), pursuant to Rule 12b-1 under the 1940 Act (the
"Rule"). The Rule provides that an investment company which bears any direct or
indirect expense of distributing its shares must do so only in accordance with a
plan permitted by the Rule. Pursuant to the Plan, the Company and the
Distributor have entered into a Distribution Agreement (with respect to all
classes), and the Company and the Adviser have entered into a Shareholder
Servicing Agreement (with respect to Class C Shares only).
The Plan provides that each Class of the Fund will compensate the
Distributor or the Adviser for certain expenses and costs incurred in connection
with providing shareholder servicing and maintaining shareholder accounts and to
compensate parties with which it has written agreements and whose clients own
shares of any Class of shares of the Fund for providing servicing to their
clients ("Shareholder Servicing Fee"). These fees are subject to a maximum of
0.25% per annum of each Class' average daily net assets. The Plan also provides
that the Distributor is paid a fee (an asset based sales charge) equal to 0.75%
of the Class C shares' average daily net assets on an annual basis to permit it
to make payments to broker-dealers and other financial institutions with which
it has written agreements and whose clients are Fund shareholders (each a
"broker-dealer") for providing distribution assistance and promotional support
to the Fund. Fees paid under the Plan may not be waived for individual
shareholders.
For the fiscal period ended October 31, 1999, the Fund paid
Shareholder Servicing Fees to the Adviser in an amount equal to $20,273 for
Class A Shares and $316,509 for Class D Shares. These fees were used to provide
shareholder servicing and maintain shareholder accounts.
-13-
<PAGE>
The Plan, the Shareholder Servicing Agreement and the Distribution
Agreement each provide that the Adviser and the Distributor may make payments
from time to time from their own resources which may include the advisory fee
and the asset based sales charges and past profits for the following purposes:
(i) to defray the costs of and to compensate others, including financial
intermediaries with whom the Distributor or the Adviser has entered into written
agreements, for performing shareholder servicing and related administrative
functions of each Class; to compensate certain financial intermediaries for
providing assistance in distributing Class shares; (ii) to pay the costs of
printing and distributing the Fund's Prospectus to prospective investors; and
(iii) to defray the cost of the preparation and printing of brochures and other
promotional materials, mailings to prospective shareholders, advertising, and
other promotional activities, including the salaries and/or commissions of sales
personnel in connection with the distribution of the Fund's shares. Further, the
Agreements provide that the Adviser may use its service fee for the purposes
enumerated in (i) above and any asset based sales charges paid to the
Distributor also may be used for purposes of (ii) or (iii) above. The
Distributor or the Adviser, as the case may be, in their sole discretion, will
determine the amount of such payments made pursuant to the Plan with the
shareholder servicing agents and broker-dealers with whom they have contracted,
provided that such payments made pursuant to the Plan will not increase the
amount which a Class is required to pay the Distributor or the Adviser for any
fiscal year under the shareholder servicing agreements or otherwise. For the
fiscal period ending October 31, 1999, the Adviser, under the Plan, made
payments of $794,122 in advertising and related costs. The excess of such
payments over the total payments the Adviser received from the Fund represents
distribution expenses funded by the Adviser from its own resources including the
Advisory fee.
Shareholder servicing agents and broker-dealers may charge investors a
fee in connection with their use of specialized purchase and redemption
procedures offered to investors by the shareholder servicing agents and
broker-dealers. In addition, shareholder servicing agents and broker-dealers
offering purchase and redemption procedures similar to those offered to
shareholders who invest in the fund directly may impose charges, limitations,
minimums and restrictions in addition to or different from those applicable to
shareholders who invest in the Fund directly. Accordingly, the net yield to
investors who invest through shareholder servicing agents and broker-dealers may
be less than realized by investing in the Fund directly. An investor should read
the Prospectus in conjunction with the materials provided by the shareholder
servicing agent and broker-dealer describing the procedures under which Fund
shares may be purchased and redeemed through the shareholder servicing agent and
broker-dealer.
Under the Plan, each shareholder servicing agent and broker-dealer
will, as agent for its customers, among other things: (i) answer customer
inquiries regarding account status and history, the manner in which purchases
and redemptions of shares of each Class of the Fund may be effected and certain
other matters pertaining to the Fund; (ii) assist shareholders in designating
and changing dividend options, account designations and addresses; (iii) provide
necessary personnel and facilities to establish and maintain shareholder
accounts and records; assist in processing purchase and redemption transactions;
(iv) arrange for the wiring of funds; (v) transmit and receive funds in
connection with customer orders to purchase or redeem shares; (vi) verify and
guarantee shareholder signatures in connection with redemption orders and
transfers and changes in shareholder designated accounts; (vii) furnish
quarterly and year-end statements and confirmations within five business days
after activity in the account; (viii) transmit to shareholders of each Class
proxy statements, annual reports, updated prospectuses and other communications;
(ix) receive, tabulate and transmit proxies executed by shareholders with
respect to meetings of shareholders of the Fund; and (x) provide such other
related services as the Fund or a shareholder may request.
In accordance with the Rule, the Plan provides that all written
agreements relating to the Plan entered into by the Company, on behalf of each
Class, the distributor or the Adviser, and the shareholder servicing agents,
broker-dealers, or other organizations, must be in a form satisfactory to the
Company's Board of Directors. In addition, the Plan requires the Fund and the
Distributor to prepare, at least quarterly, written reports setting forth all
amounts expended for distribution purposes by the Fund and the Distributor
pursuant to the Plan and identifying the distribution activities for which those
expenditures were made.
-14-
<PAGE>
C. ADMINISTRATOR
1. General Information. The Company and SEI Investment Mutual Funds
Services (the "Administrator") have entered into an
Administrative Agreement effective September 20, 1999.
The Administrator, a Delaware business trust, has its principal
business offices at One Freedom Valley Drive, Oaks, Pennsylvania 19456. SEI
Investment Management Corporation ("SIMC"), a wholly-owned subsidiary of SEI
Investment Company ("SEI Investments"), is the owner of all beneficial interests
in the Administrator. SEI Investments and its affiliates, including the
Administrator, are leading providers of funds evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers. The Administrator and
its affiliates also serve as administrator or sub-administrator to over 34
mutual funds.
Pursuant to an Administration Agreement with the Fund, the
Administrator provides all administrative services necessary for the Fund, other
than those provided by the Adviser, subject to the supervision of the Company's
Board of Directors. The Administrator will provide persons to serve as officers
of the Fund. Such officers may be directors, officers or employees of the
Administrator or its affiliates.
The Administration Agreement shall remain in effect for five years
commencing September 20, 1999 (the "Initial Term") and each renewal term of two
years each (each, a "Renewal Term"), unless terminated (a) by the mutual written
agreement of the Company and the Administrator; (b) by either the Company or the
Administrator on 90 days' written notice, as of the end of the Initial Term or
the end of any Renewal Term; (c) by either the Fund or the Administrator on such
date as is specified in written notice given by the terminating party, in the
event of a material breach of the Agreement by the other party, provided the
terminating party has notified the other party of such breach at least 45 days
prior to the specified date of termination and the breaching party has not
remedied such breach by the specified date; (d) effective upon the liquidation
of the Administrator; or (e) as to any Fund or the Company, effective upon the
liquidation of such Fund or the Company as the case may be. The Agreement shall
not be assignable by the Administrator, without the prior written consent of the
Company, except to an entity that is controlled by, or under common control,
with the Administrator. The Agreement also provides that the Administrator shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which the Administration
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the Administrator in the performance of its
duties or from reckless disregard by it of its duties and obligations
thereunder.
Under the Administration Agreement, the Administrator performs or
supervises the performance by others of other administrative services in
connection with the operations of the Fund, and, on behalf of the Fund,
investigates, assists in the selection of and conducts relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Fund's operations. The
Administrator provides the Directors of the Company with such reports regarding
investment performance as they may reasonably request but shall have no
responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities. The Administrator may appoint a
sub-administrator to perform certain of the services to be performed by the
Administrator hereunder.
The Administrator provides the Fund with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Directors' meetings) for handling
the affairs of the Fund and such other services as the Directors may, from time
to time, reasonably request and the Administrator shall, from time to time,
reasonably determine to be necessary to perform its obligations under the
Agreement. In addition, at the request of the Board of Directors, the
Administrator shall make reports to the Directors concerning the performance of
its obligations hereunder.
-15-
<PAGE>
2. Administrator's Fees. For the services rendered to the Fund by the
Administrator, the Fund pays the Administrator a monthly fee based on the Fund's
average net assets.
Calculation of Administrator's Monthly Fee
Fund's Net Assets Fee
Up to $250 million .125%
Next $250 million .09%
Next $500 million .07%
On assets over $1 Billion .05%
- -------------------------------------------------------------------------------
Fees Paid to the Administrator
<TABLE>
<CAPTION>
Fiscal Year Ended,
1999(1)(2) 1998(3) 1997(3)
- ------------------------------- ------------------------------ ------------------------------- -------------------------------
<S> <C> <C> <C>
Fees $173,516 $73,466 $66,170
- ------------------------------- ------------------------------ ------------------------------- -------------------------------
</TABLE>
D. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
The Northern Trust Company, 50 S. Lasalle Street, Chicago, Illinois
60675, serves as custodian for the Fund's cash and securities. Pursuant to a
Custodian Agreement with the Company, on behalf of the Fund, it is responsible
for maintaining the books and records of the Fund's portfolio securities and
cash. The Custodian does not assist in, and is not responsible for, investment
decisions involving assets of the Fund. Forum Shareholder Services LLC also acts
as the Fund's transfer and dividend agent. Forum Shareholder Services LLC has
its principal office at 2 Portland Square, Portland, Maine 04101.
E. COUNSEL AND INDEPENDENT AUDITORS
Legal matters in connection with the issuance of shares of common
stock of the Fund are passed upon by Battle Fowler LLP, 75 East 55th Street, New
York, NY 10022. Morrison, Brown, Argiz & Company, 1001 Brickel Bay Drive, 9th
Floor, Miami, Florida 33131, have been selected as auditors for the Fund.
VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
The Adviser makes the Fund's portfolio decisions. In the
over-the-counter market, where a majority of the portfolio securities are
expected to be traded, orders are placed with responsible primary
- --------
1 Of this amount, $136,197 was paid to American Data Services, Inc. and
$37,319 was paid to SEI Mutual Funds Services.
2 Subsequent to December 31, 1998, the Fund's management elected to change
the Fund's fiscal year end to October 31, 1999.
3 These fees were paid to American Data Services, Inc., the Fund's
Administrator prior to September 20, 1999.
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<PAGE>
market-makers unless a more favorable execution or price is believed to be
obtainable. Regarding exchange-traded securities, the Adviser determines the
broker to be used in each specific transaction with the objective of negotiating
a combination of the most favorable commission and the best price obtainable on
each transaction (generally defined as best execution). The Adviser will also
consider the reliability, integrity and financial condition of the
broker-dealer, the size of and difficulty in executing the order, the value of
the expected contribution of the broker-dealer to the investment performance of
the Fund on a continuing basis, as well as other factors such as the
broker-dealer's ability to engage in transactions in securities of issuers which
are thinly traded. The Adviser does not intend to employ a broker-dealer whose
commission rates fall outside of the prevailing ranges of execution costs
charged by other broker-dealers offering similar services. When consistent with
the objective of obtaining best execution, brokerage may be directed to persons
or firms supplying investment information to the Adviser, or portfolio
transactions may be effected by the Adviser. Neither the Fund nor the Adviser
has entered into agreements or understandings with any brokers regarding the
placement of securities transactions because of research services they provide.
To the extent that such persons or firms supply investment information to the
Adviser for use in rendering investment advice to the Fund, such information may
be supplied at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the Fund. While it
is impossible to place an actual dollar value on such investment information,
its receipt by the Adviser probably does not reduce the overall expenses of the
Adviser to any material extent. Consistent with the Conduct Rules of the NASD,
and subject to seeking best execution, the Adviser may consider sales of shares
of the Fund as a factor in the selection of brokers to execute portfolio
transactions for the Fund. For the fiscal years ended October 31, 1999 and
December 31, 1998 and 1997, the Fund paid brokerage commissions in the amount of
$35,930, $16,443 and $16,944, respectively.
The investment information provided to the Adviser is of the type
described in Section 28(e) of the Securities Exchange Act of 1934 and is
designed to augment the Adviser's own internal research and investment strategy
capabilities. Research services furnished by brokers through which the Fund
effects securities transactions are used by the Adviser in carrying out its
investment management responsibilities with respect to all its clients'
accounts. There may be occasions where the transaction cost charged by a broker
may be greater than that which another broker may charge if the Adviser
determines in good faith that the amount of such transaction cost is reasonable
in relation to the value of brokerage and research services provided by the
executing broker. The Adviser may consider the sale of shares of the Fund by
brokers including the Distributor as a factor in its selection of brokers of
Fund transactions.
A majority of the portfolio securities that the Fund purchases or
sells will be done as principal transactions. In addition, debt instruments are
normally purchased directly from the issuer, from banks and financial
institutions or from an underwriter or market maker for the securities.
Brokerage commissions are not usually paid for any such purchases. Any
transactions involving such securities for which the Fund pays a brokerage
commission will be effected at the best price and execution available. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers include the spread between the bid and asked price. The Fund may
purchase Government Obligations with a demand feature from banks or other
financial institutions at a negotiated yield to the Fund based on the applicable
interest rate adjustment index for the security. The interest received by the
Fund is net of a fee charged by the issuing institution for servicing the
underlying obligation and issuing the participation certificate, letter of
credit, guarantee or insurance and providing the demand repurchase feature.
Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser in its best judgment and in a manner deemed
in the best interest of shareholders of the Fund rather than by a formula. The
primary consideration is prompt execution of orders in an effective manner at
the most favorable price.
Investment decisions for the Fund will be made independently from
those for any other investment companies or accounts that may become managed by
the Adviser or its affiliates. If, however, the Fund and other investment
companies or accounts managed by the Adviser are simultaneously engaged in the
purchase
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<PAGE>
or sale of the same security, the transactions will be averaged as to price and
allocated equitably to each account. In some cases, this policy might adversely
affect the price paid or received by the Fund or the size of the position
obtainable for the Fund. In addition, when purchases or sales of the same
security for the Fund and for other investment companies managed by the Adviser
occur contemporaneously, the purchase or sale orders may be aggregated in order
to obtain any price advantage available to large denomination purchasers or
sellers.
In addition to managing the assets of the Fund, the Adviser manages
assets on a discretionary basis for other clients and, as a result, the Adviser
may effect transactions in such clients' accounts in securities in which the
Fund currently holds or, in the near future may hold, a position. The Adviser
makes the determination to purchase or sell a security based on numerous
factors, including those that may be particular to one or more of its clients.
Therefore, it is possible that the Adviser will effect transactions in certain
securities for select clients, which may or may not include the Fund, that it
may not deem, in its sole discretion, as being appropriate for other clients,
which may or may not include the Fund.
VII. CAPITAL STOCK AND OTHER SECURITIES
The authorized capital stock of the Company consists of one billion
shares of stock having a par value of one-tenth of one cent ($.001) per share.
The Company's Board of Directors is authorized to divide the unissued shares
into separate classes and series of stock, each series representing a separate,
additional investment portfolio. The Board currently has authorized the division
of the unissued shares into three Classes -- Class A, Class C and Class D.
Shares of any class or series will have identical voting rights, except where,
by law, certain matters must be approved by a majority of the shares of the
affected class or series. Each share of any class or series of shares when
issued has equal dividend, distribution, liquidation and voting rights within
the class or series for which it was issued, and each fractional share has those
rights in proportion to the percentage that the fractional share represents of a
whole share. Shares will be voted in the aggregate.
There are no conversion or preemptive rights in connection with any
shares of the Fund. All shares, when issued in accordance with the terms of the
offering, will be fully paid and non-assessable. Shares are redeemable at net
asset value, at the option of the investor.
The shares of the Fund have non-cumulative voting rights, which means
that the holders of more than 50% of the shares outstanding voting for the
election of directors can elect 100% of the directors if the holders choose to
do so, and, in that event, the holders of the remaining shares will not be able
to elect any person or persons to the Board of Directors. Unless specifically
requested by an investor who is an investor of record, the Fund does not issue
certificates evidencing Fund shares.
As a general matter, the Fund will not hold annual or other meetings
of the Fund's shareholders. This is because the By-laws of the Company provide
for annual meetings only (a) for the election of directors, (b) for approval of
revisions to the Fund's investment advisory agreement, (c) for approval of
revisions to the Fund's distribution agreement with respect to a particular
class or series of stock, and (d) upon the written request of holders of shares
entitled to cast not less than twenty-five percent of all the votes entitled to
be cast at such meeting. Annual and other meetings may be required with respect
to such additional matters relating to the Fund as may be required by the 1940
Act including the removal of Fund directors and communication among
shareholders, any registration of the Fund with the Securities and Exchange
Commission or any state, or as the Directors may consider necessary or
desirable. Each Director serves until the next meeting of shareholders called
for the purpose of considering the election or reelection of such Director or of
a successor to such Director, and until the election and qualification of his or
her successor, elected at such meeting, or until such Director sooner dies,
resigns, retires or is removed by the vote of the shareholders.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of the 1940 Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an investment
company such as the Company shall not be deemed to have been effectively acted
upon unless
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<PAGE>
approved by the holders of a majority of the outstanding shares of each class or
series affected by such matter, i.e., by a majority of the Fund's outstanding
shares. Rule 18f-2 further provides that a class or series shall be deemed to be
affected by a matter unless it is clear that the interests of each class or
series in the matter are substantially identical or that the matter does not
affect any interest of such class or series. However, the Rule exempts the
selection of independent public accountants, the approval of principal
distribution contracts and the election of directors from the separate voting
requirements of the Rule.
VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
The material relating to purchase, redemption and pricing of shares is
located in the Shareholder Information section of the Prospectus.
IX. TAXATION OF THE FUND
Prospective investors should consult their tax advisors with respect
to the tax consequences of an investment in the Fund.
The Fund has elected and intends to continue to qualify annually to be
treated as a regulated investment company under the Internal Revenue Code of
1986. The Fund did so qualify for its previous taxable year. To qualify as a
regulated investment company, the Fund must distribute to shareholders at least
90% of its investment company taxable income (which includes, among other items,
dividends, taxable interest and the excess of net short-term capital gains over
net long-term capital losses), and meet certain diversification of assets,
source of income, and other requirements discussed below. By meeting these
requirements, the Fund generally will not be subject to Federal income tax on
investment company taxable income, and on net capital gains (the excess of net
long-term capital gains over net short-term capital losses) designated by the
Fund as capital gain dividends, distributed to shareholders. In determining the
amount of net capital gains to be distributed, any capital loss carryover from
prior years will be applied against capital gains to reduce the amount of
distributions paid. If the Fund does not meet all of these requirements, it will
be taxed as an ordinary corporation and distributions will generally be taxed to
shareholders as ordinary income.
The Fund's policy is to declare dividends annually and distribute as
dividends each year 100% (and in no event less than 90%) of its investment
company taxable income. Amounts, other than tax-exempt interest, not distributed
on a timely basis may be subject to a nondeductible 4% excise tax. To prevent
imposition of the excise tax, the Fund must distribute for the calendar year an
amount equal to the sum of (1) at least 98% of its ordinary income (excluding
any capital gains or losses) for the calendar year, (2) at least 98% of the
excess of its capital gains over capital losses (adjusted for certain losses)
for the one-year period ending October 31 of such year, and (3) all ordinary
income and capital gain net income (adjusted for certain ordinary losses) for
previous years that were not distributed during such years.
Distributions of investment company taxable income, including net
short term capital gains, generally are taxable to shareholders as ordinary
income. Distributions of net capital gains, if any, designated by the Fund as
capital gain dividends are taxable to shareholders as long-term capital gains,
regardless of the length of time the shareholder has held its shares of the
Fund. Shareholders will be notified annually as to the Federal tax status of
distributions. Distributions are taxable to shareholders whether received in
cash or reinvested in additional shares of the Fund. Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the amount of the cash dividend that
otherwise would have been distributable (where the additional shares are
purchased in the open market), or the fair market value of the shares received,
determined as of the reinvestment date. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
federal income tax purposes in each share so received equal to the value
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<PAGE>
of a share on the reinvestment date. The Fund does not expect that any of its
distributions will qualify for the dividends-received deduction for
corporations.
In addition to satisfying the distribution requirement described
above, a regulated investment company must derive at least 90% of its gross
income from dividends, interest, certain payments with respect to securities
loans, gains from the sale or other disposition of stock or securities or
foreign currencies (to the extent such currency gains are directly related to
the regulated investment company's principal business of investing in stock or
securities) and other income (including but not limited to gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies.
The Fund must also satisfy an asset diversification test in order to
qualify as a regulated investment company. Under this test, at the close of each
quarter of the Fund's taxable year, at least 50% of the value of the Fund's
assets must consist of cash and cash items, U.S. Government securities,
securities of other regulated investment companies, and securities of other
issuers (as to which the Fund has not invested more than 5% of the value of the
Fund's total assets in securities of such issuer and as to which the Fund does
not hold more than 10% of the outstanding voting securities of such issuer), and
no more than 25% of the value of its total assets may be invested in the
securities of any one issuer (other than U.S. Government securities and
securities of other regulated investment companies), or in two or more issuers
which the Fund controls and which are engaged in the same or similar trades or
businesses. Generally, an option (call or put) with respect to a security is
treated as issued by the issuer of the security not the issuer of the option.
If for any taxable year the Fund did not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
would be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and any distributions would be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current or
accumulated earnings and profits. Such distributions generally would be eligible
for the dividends received deduction in the case of corporate shareholders.
Investors should carefully consider the tax implications of buying
shares prior to a distribution by the Fund. The price of shares purchased at
that time includes the amount of the forthcoming distributions. Distributions by
the Fund reduce the net asset value of the Fund's shares, and if a distribution
reduces the net asset value below a stockholder's cost basis, such distribution,
nevertheless, would be taxable to the shareholder as ordinary income or capital
gain as described above, even though, from an investment standpoint, it may
constitute a partial return of capital.
Dividends and interest paid by foreign issuers may be subject to
withholding and other foreign taxes, which may decrease the net return on
foreign investments as compared to dividends and interest paid by domestic
issuers. The Fund does not expect that it will qualify to elect to pass through
to its shareholders the right to take a foreign tax credit for foreign taxes
withheld from dividends and interest payments. Gains or losses attributable to
fluctuations in exchange rates that occur between the time the Fund accrues
interest or other receivables or accrues expenses or other liabilities
denominated in a foreign currency and the time the Fund actually collects such
receivables or pays such liabilities generally are treated as ordinary income or
ordinary loss. These gains or losses, may increase, decrease, or eliminate the
amount of the Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
Upon the taxable disposition (including a sale or redemption) of
shares of the Fund, a shareholder may realize a gain or loss depending upon its
basis in the shares. Such gain or loss will be treated as capital gain or loss
if the shares are capital assets in the shareholder's hands, and will be
long-term or short-term, generally depending upon the shareholder's holding
period for the shares. Non-corporate shareholders are subject to tax at a
maximum rate of 20% on capital gains resulting from the disposition of shares
held for more than 12 months (10% if the taxpayer is, and would be after
accounting for such gains, subject to the 15% tax bracket for ordinary income).
However, a loss realized by a shareholder on the disposition of Fund shares with
respect to which capital gains dividends have been paid will, to the extent of
such capital gain dividends, also be treated as
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<PAGE>
long-term capital loss if such shares have been held by the shareholder for six
months or less. Further, a loss realized on a disposition will be disallowed to
the extent the shares disposed of are replaced (whether by reinvestment of
distributions or otherwise) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss.
Shareholders receiving distributions in the form of additional shares will have
a cost basis for Federal income tax purposes in each share received equal to the
net asset value of a share of the Fund on the reinvestment date. Capital losses
in any year are deductible only to the extent of capital gains plus, in the case
of a noncorporate taxpayer, $3,000 of ordinary income ($1,500 for married
individuals filing separately).
If any net capital gains are retained by the Fund for reinvestment,
requiring federal income taxes thereon to be paid by it, the Fund can elect to
treat such capital gains as having been distributed to shareholders. In that
event, shareholders will report such capital gains as net capital gains, will be
able to claim their share of federal income taxes paid by the Fund on such gains
as a credit against their own federal income tax liability, and will be entitled
to increase the adjusted tax basis of their Fund shares by 65% of their share of
the undistributed gain.
The Fund will be required to report to the Internal Revenue Service
all distributions of taxable income and capital gains as well as gross proceeds
from the redemption or exchange of Fund shares, except in the case of exempt
shareholders, which include most corporations. Under the backup withholding
provisions, distributions of taxable income and capital gains and proceeds from
the redemption or exchange of the shares of a regulated investment company may
be subject to withholding of federal income tax at the rate of 31% in the case
of non-exempt shareholders who fail to furnish the investment company with their
taxpayer identification numbers and their required certifications regarding
their status under the federal income tax law. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld. Corporate shareholders should provide the Fund with their taxpayer
identification numbers and should certify their exempt status in order to avoid
possible erroneous application of backup withholding.
The foregoing discussion of U.S. federal income tax law relates solely
to the application of that law to U.S. persons, i.e., U.S. citizens and
residents and U.S. domestic corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and foreign tax
consequences of ownership of Fund shares, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or at a
lower rate under an applicable income tax treaty) on amounts received by such
person.
The Fund may be subject to state or local tax in jurisdictions in
which the Fund is organized or may be deemed to be doing business. However,
Maryland taxes regulated investment companies in a manner that is generally
similar to the federal income tax rules described herein.
Distributions may be subject to state and local income taxes. In
addition, the treatment of the Fund and its shareholders in those states that
have income tax laws might differ from their treatment under the federal income
tax laws.
X. UNDERWRITERS
The Fund sells and redeems its shares on a continuing basis at their
net asset value and imposes a sales charge. The Distributor receives an
underwriting commission of 0.25% on sales of Class A shares only. In effecting
sales of Fund shares under the Distribution Agreement, the Distributor, for
nominal consideration (i.e. $1.00) and as agent for the Fund, will solicit
orders for the purchase of the Fund's shares, provided that any subscriptions
and orders will not be binding on the Fund until accepted by the Fund as a
principal. In addition, as further described in "B. The Distribution and Service
Plan," the Distributor receives a fee equal to 0.25% of the Class A and Class D
shares' and 0.75% of the Class C shares' average daily net assets on an annual
basis to permit
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<PAGE>
it to make payments to broker-dealers and other financial institutions with
which it has written agreements and whose clients are Fund shareholders for
providing distribution assistance and shareholder support to the Fund.
The Glass-Steagall Act limits the ability of a depository institution
to become an underwriter or distributor of securities. It is the Fund's
position, however, that banks are not prohibited from acting in other capacities
for investment companies, such as providing administrative and shareholder
account maintenance services and receiving compensation from the distributor for
providing such services. This is an unsettled area of the law, however, and if a
determination contrary to the Fund's position concerning shareholder servicing
and administration payments to banks from the distributor is made by a bank
regulatory agency or court, any such payments will be terminated and any shares
registered in the banks' names, for their underlying customers, will be
re-registered in the names of the customers at no cost to each Class or its
shareholders. In addition, state securities laws on this issue may differ from
the interpretation of Federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
XI. CALCULATION OF PERFORMANCE DATA
The Fund, on behalf of each Class, may from time to time include
yield, effective yield and total return information in advertisements or reports
to investors or prospective investors. Currently, the Fund intends to provide
these reports to investors and prospective investors semi-annually, but may from
time to time, in its sole discretion, provide reports on a more frequent basis,
such as quarterly. The "yield" refers to income generated by an investment in a
particular Class of the Fund over a thirty-day period. This income is then
"annualized." That is, the amount of income generated by the investment during
that month is assumed to be generated each month over a 12-month period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the monthly income earned by an investment in a
particular Class of the Fund is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment. The "total return" of the Fund is required to be
included in any advertisement containing each Class's yield. Total return is the
average annual total return for the period which began at the inception of a
particular Class of the Fund and ended on the date of the most recent balance
sheet, and is computed by finding the average annual compound rates of return
over the period that would equate the initial amount invested to the ending
redeemable value. Yield, effective yield and total return may fluctuate daily
and do not provide a basis for determining future yields, effective yields or
total returns. For Class A shares, the annual total rate of return and yield
figures will assume payment of the maximum initial sales load at the time of
purchase. One-, five- and ten-year periods will be shown, unless the Class of
the Fund has been in existence for a shorter period.
The yields and the net asset values of each Class of shares of the
Fund will vary based on the current market value of the securities held by the
Fund and changes in such Class's expenses. The Adviser, the Administrator or the
Distributor may voluntarily waive a portion of their fees on a month-to-month
basis. These actions would have the effect of increasing the net income (and
therefore the yield and total rate of return) of a Class of shares of the Fund
during the period such waivers are in effect. These factors and possible
differences in the methods used to calculate the yields and total rates of
return should be considered when comparing the yields or total rates of return
of a Class of the Fund to yields and total rates of return published for other
investment companies and other investment vehicles.
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<PAGE>
The Fund computes yield based on a 30-day (or one month) period ended
on the date of the most recent balance sheet included in the registration
statement, computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of the
period, according to the following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding
during the period that were entitled to dividends.
d = the maximum offering price per share on the last day of
the period.
Actual future yields will depend on the type, quality, and maturities
of the investments held by the Fund, changes in interest rates on investments,
and the Fund's expenses during the period.
COMPUTATION OF TOTAL RETURN. The total return must be displayed in any
advertisement containing the Fund's yield. Total return is the average annual
total return for the 1-, 5- and 10-year period ended on the date of the most
recent balance sheet included in the SAI, computed by finding the average annual
compounded rates of return over 1-, 5- and 10-year periods that would equate the
initial amount invested to the ending redeemable value according to the
following formula:
P(1 + T)n = ERV
Where:
P = a hypothetical initial investment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1000 payment
made at the beginning of the 1-, 5- or 10-year periods
at the end of the 1-, 5-or 10-year periods (or fractions
thereof).
Because the Fund has not had a registration in effect for 5 or 10
years, the period during which the registration has been effective shall be
substituted.
Yield information may be useful for reviewing the performance of the
Fund and for providing a basis for comparison with other investment
alternatives. However, unlike bank deposits or other investments which pay a
fixed yield for a stated period of time, the Fund's yield does fluctuate, and
this should be considered when reviewing performance or making comparisons.
From time to time evaluations of performance of the Fund made by
independent sources may be used in advertisements. These sources may include
Lipper Analytical Services, Wiesenberger Investment Company Service, Donoghue's
Money Fund Report, Barron's, Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Personal Investor, Bank Rate Monitor, and The Wall
Street Journal. From time to time
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<PAGE>
evaluations of performance of the Adviser made by independent sources may be
used in advertisements of the Fund.
XII. FINANCIAL STATEMENTS
The financial statements for the year ended December 31, 1999 are
available, without charge, upon request. Shareholders will receive Semi-Annual
and Annual Reports from the Fund. The annual financial statements are audited by
the Fund's independent financial accountants. Copies are available, without
charge, upon request. The audited financial statements for the Fund dated
October 31, 1999 and the Report of Morrison, Brown, Argiz & Company thereon, are
incorporated herein by reference to the Annual Report to Shareholders dated
October 31, 1999.
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<PAGE>
PART C - OTHER INFORMATION
Item 23. EXHIBITS
(1) (a) Articles of Incorporation of the Registrant.
(1) (b) By-Laws of the Registrant.
(c) Not applicable.
(1) (d) Form of Investment Advisory Agreement.
(2) (e) Form of Distribution Agreement for all Classes.
(f) Not applicable.
(1) (g) Form of Custody Agreement.
(2) (h) Form of Administration Agreement.
(1) (h.1) Transfer Agency and Service Agreement.
(3) (h.2) Fund Accounting Service Agreement.
(2) (h.3) Form of Expense Limitation Agreement.
(1) (i) Opinion of Battle Fowler LLP as to the legality of the
securities being registered and consent.
(3) (i.1) Consent of Battle Fowler LLP.
(j) Consent of Morrison, Brown, Argiz & Company, certified
public accountants.
(4) (k) Audited Financial Statements, for fiscal year ended
October 31, 1999, including the Report of Independent
Accountants.
(1) (l) Subscription Letter.
(1) (m) Distribution and Service Plan for Class A and D shares.
(2) (m.1) Form of Distribution and Service Plan for Class C
shares.
(1) (m.2) Shareholder Servicing Agreement for Class A and D
shares.
(2) (m.3) Form of Shareholder Servicing Agreement for the Class C
shares.
(n) Not applicable.
(2) (o) Form of Amendment No. 1 to the Multi-Class Plan pursuant
to Rule 18f-3 under the 1940 Act.
(1) (p) Powers of Attorney.
- --------------------------
(1) Filed as an exhibit to Pre-Effective Amendment No. 1 to the Registrant's
Registration Statement, 333-00767, filed on May 23, 1996 and incorporated
herein by reference
(2) Filed as an exhibit to Post-Effective Amendment No. 5 to the Registrant's
Registration Statement, 333-00767, filed on October 15, 1999 and
incorporated herein by reference
(3) Filed as an exhibit to Post-Effective Amendment No. 1 to the Registrant's
Registration Statement, 333-00767, filed on May 6, 1997 and incorporated
herein by reference
(4) Filed with Annual Report in form N-30D on December 30, 1999 (accession
number 0000935069-99-000294) and incorporated herein by reference
911624.1
<PAGE>
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 25. INDEMNIFICATION
(a) In accordance with Section 2-418 of the General Corporation Law
of the State of Maryland, Article NINTH of the Registrant's
Articles of Incorporation provides as follows:
"NINTH: (1) The Corporation shall indemnify (i) its currently
acting and former directors and officers, whether serving the
Corporation or at its request any other entity, to the fullest
extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of
expenses under the procedures and to the fullest extent permitted
by law, and (ii) other employees and agents to such extent as shall
be authorized by the Board of Directors or the By-Laws and as
permitted by law. Nothing contained herein shall be construed to
protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights of
indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such by-laws, resolutions or
contracts implementing such provisions or such indemnification
arrangements as may be permitted by law. No amendment of the
charter of the Corporation or repeal of any of its provisions shall
limit or eliminate the right of indemnification provided hereunder
with respect to acts or omissions occurring prior to such amendment
or repeal.
(2) To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, and the Investment
Company Act of 1940, no director or officer of the Corporation
shall be personally liable to the Corporation or its stockholders
for money damages; provided, however, that nothing herein shall be
construed to protect any director or officer of the Corporation
against any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office. No amendment of
the charter of the Corporation or repeal of any of its provisions
shall limit or eliminate the limitation of liability provided to
directors and officers hereunder with respect to any act or
omission occurring prior to such amendment or repeal."
(b) In the proposed Distribution Agreement relating to the
securities being offered hereby, the Registrant agrees to indemnify
and hold harmless any person who controls the Fund's distributor,
SEI Investments Distribution Co., within the meaning of the
Securities Act of 1933, against certain types of civil liabilities
arising in connection with the Registration Statement or
Prospectus.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The description of the Registrant's adviser, Amerindo Investment
Advisors Inc., under the caption "Management, Organization and Capital
Structure" in the Prospectus and "Management of the Fund" in the Statement of
Additional Information constituting parts A and B, respectively, of the
Registration Statement are incorporated herein by reference.
Item 27. PRINCIPAL UNDERWRITERS
(a) SEI Investments Distribution Co., located at One Freedom Valley
Drive, Oaks, PA 19456, is the Registrant's Distributor.
SEI Investments Distribution Co. (the "Distributor"), acts as distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
STI Class Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds March 8, 1997
Armada Funds February 15, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Fund, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
CNI Charter Funds April 1, 1999
The Armada Advantage Fund May 1, 1999
Amerindo Funds, Inc. July 13, 1999
Huntington VA Funds October 15, 1999
Friends Ivory Funds December 16, 1999
911624.1
<PAGE>
(b) The following are the directors and officers of SEI Investments
Distribution Co. The principal business address of each of these persons is One
Freedom Valley Drive, Oaks, PA 19456:
<TABLE>
Name Positions and Offices Positions and Offices
- ---- With the Distributor With the Registrant
-------------------- -------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of Directors None
Richard B. Lieb Director, Executive Vice President None
Carmen V. Romeo Director None
Mark J. Held President & Chief Operating Officer None
Gilbert L. Beebower Executive Vice President None
Dennis J. McGonigle Executive Vice President None
Robert M. Silvestri Chief Financial Officer & Treasurer None
Leo J. Dolan, Jr. Senior Vice President None
Carl A. Guarino Senior Vice President None
Larry Hutchison Senior Vice President None
Jack May Senior Vice President None
Hartland J. McKeown Senior Vice President None
Kevin P. Robins Senior Vice President & General Counsel None
Patrick K. Walsh Senior Vice President None
Robert Aller Vice President None
Timothy D. Barto Vice President & Assistant Secretary None
Gordon W. Carpenter Vice President None
Todd Cipperman Vice President & Assistant Secretary None
S. Courtney E. Collier Vice President & Assistant Secretary None
Robert Crudup Vice President & Managing Director None
Richard A. Deak Vice President & Assistant Secretary None
Barbara Doyne Vice President None
Jeff Drennen Vice President None
James R. Foggo Vice President & Assistant Secretary None
Vic Galef Vice President & Managing Director None
Lydia A. Gavalis Vice President & Assistant Secretary None
Greg Gettinger Vice President & Assistant Secretary None
Kathy Heilig Vice President None
Jeff Jacobs Vice President None
Samuel King Vice President None
Kim Kirk Vice President & Managing Director None
John Krzeminski Vice President & Managing Director None
Christine M. McCullough Vice President & Assistant Secretary None
Carolyn McLaurin Vice President & Managing Director None
Mark Nagle Vice President None
Joanne Nelson Vice President None
Cynthia M. Parrish Vice President & Secretary None
Rob Redican Vice President None
Maria Rinehart Vice President None
Steve Smith Vice President None
Daniel Spaventa Vice President None
Kathryn L. Stanton Vice President None
Lynda J. Striegel Vice President & Assistant Secretary None
Lori L. White Vice President & Assistant Secretary None
Wayne M. Withrow Vice President & Managing Director None
</TABLE>
(c) There are no affiliated persons of the Underwriter who are not
affiliated with the Registrant.
911624.1
<PAGE>
Item 28. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder, in general, are maintained in the physical possession of Registrant
at Amerindo Funds Inc., 399 Park Avenue, New York, New York 10022; SEI
Investments Mutual Funds Services, One Freedom Valley Drive, Oaks, PA 19456, the
Registrant's transfer and accounting agent will maintain physical possession of
Registrant's shareholder and fund accounting records; and The Northern Trust
Company, the custodian will maintain physical possession of the Registrant's
custodial records.
Item 29. MANAGEMENT SERVICES
Not Applicable.
Item 30. UNDERTAKINGS
Not Applicable.
911624.1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement under Rule 485(b)
under the Securities Act and has duly caused this Post-Effective Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and the State of New York, on
the 24th day of February 2000.
AMERINDO FUNDS INC.
By: /s/ Alberto W. Vilar
----------------------
Alberto W. Vilar, Chairman,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to its Registration Statement has been signed below by
the following persons in the capacities indicated below on February 24, 2000.
<TABLE>
Signature Title Date
<S> <C> <C>
By: /s/ Alberto W. Vilar Chairman, February 24, 2000
--------------------------------- Chief Executive
Alberto W. Vilar Officer and Director
By: /s/ Dana E. Smith Vice President February 24, 2000
--------------------------------- and Treasurer
Dana E. Smith
John Rutledge Director February 24, 2000
Gary A. Tanaka Director
Jude T. Wanniski Director
By: /s/ Dana E. Smith
---------------------------------
Dana E. Smith*
</TABLE>
- -----------------------
* Pursuant to Powers of Attorney, filed as an exhibit with Pre-Effective
Amendment No. 1 to Registration Statement No. 333-00767, filed on May
23, 1996 and incorporated herewith
911624.1
<PAGE>
Morrison, Brown, Argiz & Company
INDEPENDENT AUDITOR'S CONSENT
-----------------------------
We consent to the use in this Post-Effective Amendment to the Registration
Statement of Amerindo Funds Inc. on Form N-1A of our report dated November 17,
1999, incorporated by reference in the Prospectus and Statement of Additional
Information, which are part of this Registration Statement.
We also consent to the reference to Morrison, Brown, Argiz & Company under the
headings "Financial Highlights Information" in the Prospectus and "Counsel and
Independent Auditors" in the Statement of Additional Information.
/s/Morrison, Brown, Argiz & Company
Certified Public Accountants
Miami, Florida
February 24, 2000
709782.1
<PAGE>
