As filed with the Securities and Exchange Commission on May 26, 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. 8 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 9 [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.
399 Park Avenue, 22nd Floor
New York, NY 10022
---------------------
(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 May 30, 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.
955627.1
<PAGE>
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AMERINDO FUNDS INC. PROSPECTUS
Class A Shares; Class C Shares May 30, 2000
================================================================================
AMERINDO TECHNOLOGY FUND
AMERINDO INTERNET B2B FUND
AMERINDO HEALTH & BIOTECHNOLOGY FUND
Each Fund's 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>
<CAPTION>
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<S> <C>
Risk/Return Summary: Investments, Risks and How to Purchase Shares.........................13
Performance......................................2
How to Redeem Shares...........................17
Fee Table........................................6
Exchanging Fund Shares.........................18
Investment Objectives, Principal Investment
Strategies and Related Risks.....................8
Dividends and Distributions....................18
Additional Investment Information and
Risk Factors.....................................9 Tax Consequences...............................19
Management, Organization and Capital Distribution Arrangements......................19
Structure.......................................10
Financial Highlights Information...............22
Pricing of Fund Shares..........................13
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</TABLE>
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<PAGE>
Amerindo Funds Inc. (the "Company") is currently composed of four portfolios.
This prospectus pertains to the Amerindo Technology Fund, the Amerindo Internet
B2B Fund and the Amerindo Health & Biotechnology Fund portfolios only.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
AMERINDO TECHNOLOGY FUND
Investment Objective
The Amerindo Technology 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 Amerindo Technology 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
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.
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 The Fund may involve significantly greater risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the technology and science
sectors.
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. In addition, certain companies in these
fields may never be profitable.
o Investments in smaller capitalized companies 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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Technology Fund
The Amerindo Technology 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
2
<PAGE>
The Board of Directors reserves the right at its discretion to close this Fund
to new investors at such time as it deems appropriate.
Risk/Return Bar Chart and Table
The following bar chart and table may assist in your decision to invest in the
Amerindo Technology Fund. The bar chart shows the average annual returns of
Class A shares of the Fund for the life of the Class. The table shows how the
Fund's Class A shares' average annual returns for the one-year and since
inceptions periods compare with that of the Hambrecht & Quist Growth Index. (1)
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. Technology
stocks during this period experienced stronger gains than the stock market as a
whole. [Such strength may not exist in the future.] While analyzing this
information, please note that the Amerindo Technology Fund's past performance is
not an indication of how Class A shares of the Fund will perform in the future.
Year-by-Year Total Return as of December 31(2) (3)
(Class A Shares)
1999 - 250.60%
Best Quarter 3/31/99: 67.92% Worst Quarter 9/30/99: (8.78%)
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods Past One Year Since Inception (7)
ending 12/31/99) (4)(5)(6)
<S> <C> <C>
Amerindo Technology Fund - Class A Shares 230.42% 227.11%
Hambrecht & Quist Growth Index(1) 180.12% 231.94%(8)
</TABLE>
(1) 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.
(2) 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.
(3) The year-to-date return for the Class A shares as of March 31, 2000
was (0.72)%.
(4) Reflects 5.75% sales load
(5) 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.
(6) Performance information for Class C shares will differ from Class A
shares due to differences in their sales loads and fees.
(7) The date of inception of the Class A shares was August 3, 1998.
(8) Since August 31, 1998.
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AMERINDO INTERNET B2B FUND
Investment Objective
The Amerindo Internet B2B 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 Amerindo Internet B2B 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 in the Internet business to business ("B2B")
sector. B2B companies are those companies with primary business operations
enabling or managing through services, software or components, business to
business operations over the Internet. Investment strategy will focus on three
primary areas that are driving the growth of the Internet: infrastructure
software, telecommunications companies supporting B2B and pure B2B e-commerce
companies. 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 The Fund may involve significantly greater risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the Internet sector.
o Investments in companies in the rapidly changing field of
technology face special risks such as competitive pressures
and technological obsolescence and may be subject to greater
governmental regulation than many other industries. In
addition, certain companies in this industry may never be
profitable.
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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Internet B2B Fund
The Amerindo Internet B2B 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
4
<PAGE>
AMERINDO HEALTH & BIOTECHNOLOGY FUND
Investment Objective
The Amerindo Health & Biotechnology 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 Amerindo Health & Biotechnology 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 companies in the health and biotechnology fields which, in
the opinion of the Adviser, have the potential for capital appreciation. The
health and biotechnology fields include technology (i.e. software) for
healthcare management, pharmaceuticals and healthcare services or devices.
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 The Fund may involve significantly higher risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the health and biotechnology
fields.
o The healthcare industry is subject to government regulations
and governmental approval of products and services. This
governmental involvement can have a significant effect on
price and availability of products and services. The
healthcare industry is also greatly affected by rapid
obsolescence. In addition, certain companies in this
industry may never be profitable.
o The biotechnology industry can be significantly affected by
patent considerations, intense competition, rapid
technological change and obsolescence. This industry can
also be greatly affected by governmental regulation. In
addition, certain companies in this industry may never be
profitable.
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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Health & Biotechnology Fund
The Amerindo Health & Biotechnology 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
5
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund.
<TABLE>
<CAPTION>
Technology Fund Internet B2B Fund Health & Biotechnology Fund
--------------- ----------------- ---------------------------
Class A Class C Class A Class C Class A Class C
------- ------- ------- ------- ------- -------
Shareholder Fees
(fees paid directly from
your investment)
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge (Load) 5.75% None 5.75% None 5.75% None
Imposed on Purchases (as a
percentage of the offering
price)
Maximum Deferred Sales None(1) 1.00% None(1) 1.00% None(1) 1.00%
Charge (Load) for shares
held less than 1 year (as a
percentage of the lesser of
original purchase price or
redemption proceeds)
Redemption Fees for shares 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
held less than 1 year (as a
percent of amount redeemed)
Exchange Fees None None None None None None
Annual Fund Operating
Expenses(2)
(expenses that are deducted
from Fund assets)
Management Fees 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
Distribution and/or
Service (12b-1) Fees 0.25% 1.00% 0.25% 1.00% 0.25% 1.00%
Other Expenses 0.54% 1.00% 0.34%(3) 0.34%(3) 1.71%(3) 1.71%(3)
----- ----- ----- ----- ----- -----
Total Annual Fund
Operating Expenses 2.29% 3.50% 2.09% 2.84% 3.46% 4.21%
Fee Waiver/Expense .04% .50% 1.21% 1.21%
---- ---- ----- -----
Reimbursement
Net Total Annual Fund
Operating Expenses 2.25% 3.00% 2.25% 3.00%
</TABLE>
(1) Class A share purchases of $1 million or more may be subject to a
contingent deferred sales charge. See "For Class A Shareholders Only -
Reduction or Elimination of Sales Loads."
(2) 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. With
6
<PAGE>
respect to the Amerindo Technology Fund Class A shares, 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.
Additionally, with respect to the Amerindo Technology Fund, the fee
table has been restated to reflect that, effective November 2, 1999,
Class A shares Rule 12b-1 fees were lowered to .25%. For the fiscal year
ended October 31, 1999, the Amerindo Technology Fund's Class A shares
Rule 12b-1 fees were .50% and the "Total Fund Operating Expenses" were
2.54%.
(3) Other Expenses are based on estimated amounts for the current fiscal
year.
Example: This example is intended to help you compare the cost of investing
in the Funds with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in a 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 a Fund's operating expenses remain the
same. The information would be the same if you did not redeem 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>
Technology Fund
Class A $790 $1,238 $1,711 $3,011
Class C $303 $ 927 -- --
Internet B2B Fund
Class A $775 $1,192 -- --
Class C $287 $ 880 -- --
Health & Biotechnology Fund
Class A $790 $1,238 -- --
Class C $303 $ 927 -- --
</TABLE>
7
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS
Investment Objective. Each Fund's investment objective is to seek long-term
capital appreciation. There can be no assurance that a Fund's investment
objective will be achieved. The investment objective is fundamental to a Fund
and may not be changed without shareholder approval. Current income is
incidental to a Fund's investment objective.
The following information applies to the Amerindo Technology Fund and the
Amerindo Internet B2B Fund:
Principal Investment Strategies. Each Fund seeks to achieve its investment
objective by investing at least 65% of its assets (although each Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. With respect to the Amerindo Technology Fund,
technology companies are those companies with 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.
With respect to the Amerindo Internet B2B Fund, such technology companies will
be in the Internet business to business ("B2B") sector. B2B companies are those
companies with primary business operations enabling or managing through
services, software or components business to business operations over the
Internet.
In addition to investing at least 65% of its assets in technology companies,
each 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 following information applies to the Amerindo Health & Biotechnology Fund:
Principal Investment Strategies. The Amerindo Health & Biotechnology 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 companies in the health and biotechnology
fields which, in the opinion of the Adviser, have the potential for capital
appreciation. The health and biotechnology fields include technology (i.e.
software) for healthcare management, pharmaceuticals and healthcare services or
devices.
The following information applies to each of the Funds:
The Adviser believes that because of rapid advances in technology, science,
healthcare and biotechnology, 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, science, healthcare and biotechnology areas have exhibited and
continue to demonstrate rapid growth due to the mass adoption of the Internet,
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 portfolio of each Fund. The expansion
of technology, science, healthcare and biotechnology areas, however, also
provides a favorable environment for investment in small to medium capitalized
companies. A Fund's investment policy is not limited to any minimum
capitalization requirement and each Fund may hold securities without regard to
the capitalization of the issuer. The Adviser's overall stock selection for each
Fund is not based on the capitalization or size of the company but rather on an
assessment of the company's fundamental prospects. The Funds 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 each Fund's holdings will be invested in newly-issued
securities being sold in the secondary market.
Although each Fund will primarily invest in common stocks issued by U.S.
companies, each Fund also may invest in other types of securities such as
convertible stocks, preferred stocks, bonds and warrants, when the
8
<PAGE>
investment in such securities is considered consistent with each Fund's
investment objective by the Adviser.
A Fund will not invest more than 20% of its total assets in convertible stocks,
preferred stocks, bonds and warrants. The bonds in which the Funds may invest
are not required to be rated by a recognized rating agency. As a matter of
policy, however, the Funds 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 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.) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. Such securities may have speculative
characteristics. In addition, the Funds 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 a Fund's total assets.
Buy/Sell Decisions. The Funds' investment adviser considers the following
factors when buying and selling securities for each Fund: (i) the value of
individual securities relative to other investment alternatives, (ii) trends in
the variables that determine corporate profits, (iii) corporate cash flow, (iv)
balance sheet changes, (v) management capability and practices and (vi) the
economic and political outlook.
Portfolio Turnover. Purchases and sales are made for each Fund whenever
necessary, in the Adviser's opinion, to meet each Fund's investment objective,
other investment policies, and the need to meet redemptions. Each 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
for the fiscal year ended October 31, 1999 was 170%. The turnover rate for the
twelve months ended December 31, 1999 was 125%. Portfolio turnover may involve
the payment by a 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 a Fund which could have an adverse effect on a 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.
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 a 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, a 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.
The Healthcare and Biotechnology Areas. The healthcare industry is subject to
government regulation and government approval of products and services, which
could have a significant effect on price and availability. Furthermore, the
types of products or services produced or provided by healthcare companies can
quickly become obsolete. The biotechnology industry can be significantly
affected by patent consideration, intense competition, rapid technological
change and obsolescence, and government regulation. Biotechnology companies may
have persistent losses during a new product's transition from development to
production, and revenue patterns may be erratic.
Concentration. The volatile nature of the technology, science, healthcare and
biotechnology 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
9
<PAGE>
instance, even though an investment may have been purchased at a time when it
represented less than 25% of a 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 each 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 a 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 a
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. Each 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 a Fund's total assets less its
liabilities and will be made at prevailing interest rates. A Fund may not,
however, purchase additional securities while borrowings exceed 5% of its total
assets.
Illiquid Securities. Each 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 a 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, a 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, a Fund may not achieve its investment objective.
Repurchase Agreements. A 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. Each Fund requires continual maintenance by the Funds' 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, a Fund will retain possession
of the underlying securities. In addition, if bankruptcy proceedings are
commenced with respect to the seller, realization on the collateral by a Fund
may be delayed or limited and a 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. Each 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 a 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
10
<PAGE>
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 Company since its inception in 1996. 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 Company 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 Agreements for the Funds, the Adviser
manages each 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 Company.
Adviser's Fees. Pursuant to the terms of the Investment Advisory Agreements,
each Fund will pay an annual advisory fee, paid monthly, equal to 1.50% of each
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 each 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 a 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 shares and 3.00% for Class C shares. 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 a Fund and of increasing yield to investors in the
Fund. See "Expense Limitation" in Section V.A.2 of the Statement of Additional
Information.
The following information relates to the Amerindo Technology Fund II only:
Prior 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. Amerindo was ranked the number one manager, based on one-year
annualized return, out of 647 and 667 equity managers, respectively, by Money
Manager Review for calendar years 1998 and 1999, respectively. Equity money
managers participating in the survey had at least $30 million under management
and at least 5 years of history. This performance information relates to
Amerindo's management of institutional accounts and should not be interpreted as
indicative of future performance of the Funds. 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, the performance of other equity
managers or its ranking among them, and makes no representation as to the
accuracy or completeness of this performance information.
Amerindo's equity composite includes the portfolios, with assets above
$5,000,000, managed in substantially similar styles to that of the Amerindo
Technology Fund of all clients which are institutions,
11
<PAGE>
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, 1999, and has
confirmed that Amerindo's performance presentation contained herein for such
period conforms with AIMR standards. 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. In addition, to the extent
that Fund expenses are higher than account expenses, if Fund expenses had been
applied, performance of the accounts in the composite would have been lower. 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, 1999, which is in accordance with AIMR standards.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the performance
of the Amerindo Technology Fund or of any other Fund nor is it indicative of
future performance of the Amerindo Technology Fund or of any other Fund.
<TABLE>
<CAPTION>
Asset Weighted Asset Weighted
Composite Rate of Composite Rate of Russell
Return Net of Return Gross of H&Q Growth 2000 Growth
Year Advisory Fees(1) Advisory Fees(1) S&P 500 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%
- -------------------------------------------------------------------------------------------------------------
1 Year 248.42% 251.31% 21.03% 180.08% 43.09%
- -------------------------------------------------------------------------------------------------------------
5 Years 52.97% 54.67% 28.59% 49.46% 18.99%
- -------------------------------------------------------------------------------------------------------------
10 Years 34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
12
<PAGE>
Annualized rates of return for the period January 1, 1990 to
December 31, 1999
34.25% 35.82% 18.22% 32.11% 13.51%
(1) 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 Amerindo Technology Fund's annualized total return with respect to Class A
shares for the period August 3, 1998 (commencement of operations) through
December 31, 1999 was 227.11%. The Amerindo Technology Fund's total return for
the calendar year ended December 31, 1999 was 230.42%.
The following information relates to each Fund:
The performance of a 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 a 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 a Fund's relative performance for any future period.
PRICING OF FUND SHARES
Net asset values per share for each class of each Fund 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 Company'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.
Each 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
("NYSE"), 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 shares of
the Funds 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 a 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 [name of Fund]
Class [A/C]
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 Funds 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,
13
<PAGE>
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 Funds.
Initial Investments by Mail. An account may be opened by completing and signing
an Account Application and mailing it to a Fund at the address noted below,
together with a check (subject to the minimum investment) payable to:
Amerindo Funds Inc.
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 Internet
B2B Fund Class A or Class C, Amerindo Health & Biotechnology Fund Class A or
Class C or Amerindo Technology Fund Class A or 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 Fund 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. 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 Funds 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. Certain purchases of
Class A shares of $1 million or more may be subject to a contingent deferred
sales charge. See "Reduction or Elimination of Sales Loads" herein.
Class C shares
The Funds sell 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 or 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 Funds 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
from an IRA or other individual retirement plan account after a shareholder
reaches age 70 1/2 or (iii) involuntary redemptions made by the Funds. 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 Funds will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under the 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 Funds 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
14
<PAGE>
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 Shares."
Other Purchase Information. Investors may open accounts in the Funds only
through the exclusive Distributor for the Fund. SEI Investments Distribution
Co., for nominal consideration and as agent for each Fund, will solicit orders
for the purchase of Fund shares, provided that any subscriptions and orders will
not be binding on a Fund until accepted by the Fund as principal. See
"Distribution Agreements."
Each 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. Each 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 a 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 NYSE, or on the basis of prices provided by a
pricing service. Each 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 a Fund's shares will be made in full and fractional shares of a
Fund calculated to three decimal places. The Funds do not intend to issue
certificates evidencing Fund shares.
Shares of each 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 a
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 Funds do not pay to or receive compensation from Shareholder
Organizations for the sale of Fund shares.
Each 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 Funds. 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 Funds.
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 a 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 a 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 a 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.
15
<PAGE>
<TABLE>
<CAPTION>
Amount of Sales
Sales Charge as a % Charge Reallowed to
of Net Amount Dealers as a Percent
Amount of Purchase Sales Charge 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>
For Investments of Over $1 Million
There is no initial sales charge on Class A share purchases of $1 million or
more. However, your broker-dealer may receive a commission of up to 1% on your
purchase from the Adviser or the Distributor. If such a commission is paid, you
will be assessed a contingent deferred sales charge (CDSC) of 1% on shares held
less than one year from the date of your purchase. To find out whether you will
be assessed a CDSC, ask your broker-dealer. The Fund's Adviser or the
Distributor receives any CDSC imposed when you sell your Class A shares. The
CDSC is determined as a percentage of the lesser of the current market value or
the cost of 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 Funds will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under the 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 Funds 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 A
investors will be charged a redemption fee of 2.00% for shares held less than 1
year. See "How to Redeem Shares."
Letter of Intent. Any investor in Class A shares may sign a Letter of Intent,
available from a 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 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. Purchases of
Class A shares at net asset value may be made by investment advisors or
financial planners who place trades for their own accounts or
16
<PAGE>
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. In addition, Class A
shares may be purchased at net asset value without imposition of a front-end
sales charge by investors participating in asset allocation "wrap" accounts or
similar programs offered by qualified broker-dealers, investment advisors, or
financial planners who charge a management fee for their services and place
trades for their own account or accounts of clients. No commission is paid in
connection with net asset value purchases of Class A shares made pursuant to
this paragraph, nor is any CDSC imposed upon the redemption of such shares.
HOW TO REDEEM SHARES
Shares of a 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 a Fund.
By Mail. Each 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
each Fund is determined as of 4:00 p.m., New York time, on each day that the
NYSE, the Funds and the Distributor are open for business. Requests should be
addressed to Amerindo Funds Inc., 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, each Fund and the
transfer agent from fraud, signature guarantees are required to enable a 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 1-888-968-4964 for further
details.
By Telephone. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling a 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 Funds and the transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or the transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Funds or the transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by a Fund or the transfer agent to be genuine.
Each 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
Funds 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 Funds. Investors are required to maintain a minimum
account balance of at least $2,500. Each 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 a 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. Each Fund may
suspend the right of redemption or postpone the date at times when the
17
<PAGE>
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 a 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,
such Fund may pay the redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities held by the 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 Funds are 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, science, healthcare and
biotechnology industries. The Funds are not designed for short-term traders
whose frequent purchases and redemptions can generate substantial cash flow.
These cash flows can unnecessarily disrupt a Fund's investment program.
Short-term traders often redeem when the market is most turbulent, thereby
forcing the sale of underlying securities held by a Fund at the worst possible
time as far as long-term investors are concerned. Additionally, short-term
trading drives up a Fund's transaction costs--measured by both commissions and
bid/ask spreads--which are borne by the remaining long-term investors. For these
reasons, each Fund assesses a 2.00% fee on the redemption of Class A and Class C
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 employer-sponsored retirement plans (such as 401(k), 403(b),
457, Keogh, Profit Sharing Plans, and Money Purchase Pension Plans).
Each 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" a Fund will use the anniversary date of a transaction.
Thus, shares purchased on April 5, 2000, for example, will be subject to the fee
if they are redeemed on or prior to April 4, 2001. If they are redeemed on or
after April 5, 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 a Fund for a one-year period from the date
of purchase.
EXCHANGING FUND SHARES
You may exchange some or all of your shares in a Fund with any other Fund
identified in this prospectus or with the Amerindo Technology Fund, which is
offered through a separate prospectus. Exchanges from one Fund into another must
be for the same class of shares.
When you exchange shares, you are really selling shares of one Fund and buying
shares of another Fund. So, your sale price and purchase price will be based on
the NAV next calculated after we receive your exchange request. Please note that
an exchange may have tax consequences for you. You may exchange your shares on
any Business Day by contacting us directly by mail or telephone. You may also
exchange shares through your financial institution by mail or telephone. If you
establish a new account by exchange, the exchanged shares must have a minimum
value of $2,500 ($1,000 for IRAs). All subsequent exchanges must have a minimum
value of $250 per Fund. If you recently purchased shares by check or through
ACH, you may not be able to exchange your shares until your check has cleared
(which may take up to 15 days from the date of purchase). Each Fund assesses the
2.00% redemption fee on the exchange of shares held less than one year (see "How
To Redeem Shares--Redemption Fee" above).
There is currently no fee for exchanges, however, the Fund may change or
terminate this privilege on 60 days notice. Broker-dealers may charge you a fee
for handling exchanges. Please note that exchanges may be made only two (2)
times in any twelve (12) month period. The exchange privilege is not intended as
a vehicle for short-term or excessive trading. The Funds do not permit excessive
trading or market timing. Excessive purchases, redemption, or exchanges of Fund
shares disrupt portfolio management and drive Fund expenses higher.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of net investment income of each Class of each Fund 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 of each Fund, 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 of each Fund 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
18
<PAGE>
determined on the prior business day. Shares of each Class of each Fund 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 of
each Fund 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 a 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.
TAX CONSEQUENCES
Each Fund intends to qualify annually and to elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986 effective for its
taxable year beginning November 1, 2000. By qualifying, a Fund will generally
not be subject to Federal income tax on net ordinary income and net realized
capital gains paid out to its stockholders. A 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. Each 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). Each 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 a Fund's income is derived from qualifying dividends from domestic
corporations, each 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 a 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 his or her 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 his or her
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 a 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 his or her 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.
Each 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 a 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.
DISTRIBUTION ARRANGEMENTS
Distributor. SEI Investments Distribution Co. ("SIDCO"), an affiliate of the
Administrator, has entered into a Distribution Agreement with each Fund to serve
as the Funds' distributor (the "Distributor"). As agent for the
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<PAGE>
Funds, the Distributor solicits orders for the purchase of a Fund's shares,
provided that any orders will not be binding on a Fund until accepted by the
Fund as principal. With respect to the Class A shares, SIDCO will be entitled to
receive a service and/or distribution fee equal to 0.25% of the Class A shares'
average daily net assets under the terms of the Fund's 12b-1 distribution and
service plan (the "Plan"). With respect to the Class C shares, SIDCO will be
entitled to receive a distribution fee equal to 0.75% and a shareholder service
fee equal to 0.25% of the Class C shares' average daily net assets under the
terms of the Plan.
12b-1 Plan. Each Fund, on behalf of each class of shares, has adopted a
distribution and service plan, pursuant to Rule 12b-1 under the Investment
Company Act. 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 a Fund for soliciting orders
for the purchase of Fund shares and for making payments to broker-dealers 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 Funds may not exceed 0.25% and 1.00%, per annum, respectively. Fees paid
under the Plan may not be waived for individual shareholders. Because these fees
are paid out of a 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.
Consistent with the Plan, the Distributor receives from the Class C shares of
the Funds 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 uses 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 Funds 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").
Pursuant to the Plan, 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, services pursuant to the Plan. 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 a Fund may be effected and certain
other matters pertaining to a 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 a Fund) quarterly and year-end statements and confirmations in a
timely fashion after activity is generated in the account; (ix) transmit, on
behalf of each Fund, proxy statements, annual reports, updating prospectuses and
other communications from a Fund to shareholders; (x) receive, tabulate and
transmit to a Fund, proxies executed by shareholders with respect to meetings of
shareholders of a Fund; and (xi) provide such other related services as a 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 assistance in distributing each Class's
shares; (iii) to pay the costs of printing and distributing the Funds'
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 Funds' 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 a Fund is required to
pay to the Distributor or the Adviser for any fiscal year under the Plan. Any
20
<PAGE>
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 a
Fund directly may impose charges, limitations, minimums and restrictions in
addition to or different from those applicable to shareholders who invest in a
Fund directly. Accordingly, the net yield to investors who invest through
shareholder servicing agents and broker-dealers may be less than by investing in
a 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.
21
<PAGE>
FINANCIAL HIGHLIGHTS INFORMATION
AMERINDO TECHNOLOGY FUND CLASS A SHARES
The following table is intended to help you understand the Amerindo Technology
Fund's Class A shares' 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 of the Amerindo Technology Fund
(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, is included in the annual report, which is available upon
request. The table is part of the Amerindo Technology Fund's financial
statements for the year ended October 31, 1999, which are available to
shareholders upon request.
<TABLE>
<CAPTION>
AMERINDO TECHNOLOGY FUND - CLASS A SHARES
For the period
August 3, 1998
(commencement of
For the fiscal year investment operations
ended October 31, through
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.
22
<PAGE>
Amerindo Funds Inc.
<TABLE>
<CAPTION>
Board of Directors
- ------------------
<S> <C>
Alberto W. Vilar, Director and Chairman of the Board..............Amerindo Investment Advisors Inc.
Gary A. Tanaka, Director and President............................Amerindo Investment Advisors Inc.
John Rutledge, Director...........................................Rutledge Capital LLC
Jude T. Wanniski, Director........................................Polyconomics, Inc.
</TABLE>
23
<PAGE>
AMERINDO FUNDS INC.
May 30, 2000
Investment Adviser
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
1-888-968-4964
www.amerindo.com
A Statement of Additional Information (SAI), dated May 30, 2000 includes
additional information about each Fund and its investments and is incorporated
by reference into this prospectus. The Amerindo Technology Fund's Annual and
Semi-Annual Reports include additional information about the Amerindo Technology
Fund and its investments and are also 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 Amerindo Technology 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 Funds at 1-888-968-4964. To request other information about the
Funds and to make shareholder inquiries, please call your financial intermediary
or the Funds.
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 20549-0102 or by electronic request at public
[email protected].
SEC File Number: 811-07531
24
<PAGE>
================================================================================
AMERINDO FUNDS INC. PROSPECTUS
Class D Shares May 30, 2000
================================================================================
AMERINDO TECHNOLOGY FUND
AMERINDO INTERNET B2B FUND
AMERINDO HEALTH & BIOTECHNOLOGY FUND
Each Fund's 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>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Risk/Return Summary: Investments, Risks and How to Purchase Shares.........................13
Performance......................................2
How to Redeem Shares...........................17
Fee Table........................................6
Exchanging Fund Shares.........................18
Investment Objectives, Principal Investment
Strategies and Related Risks.....................8
Dividends and Distributions....................18
Additional Investment Information and
Risk Factors.....................................9 Tax Consequences...............................19
Management, Organization and Capital Distribution Arrangements......................19
Structure.......................................10
Financial Highlights Information...............22
Pricing of Fund Shares..........................13
- -------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
Amerindo Funds Inc. (the "Company") is currently composed of four portfolios.
This prospectus pertains to the Amerindo Technology Fund, the Amerindo Internet
B2B Fund and the Amerindo Health & Biotechnology Fund portfolios only.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
AMERINDO TECHNOLOGY FUND
Investment Objective
The Amerindo Technology 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 Amerindo Technology 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
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.
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 The Fund may involve significantly greater risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the technology and science
sectors.
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. In addition, certain companies in these
fields may never be profitable.
o Investments in smaller capitalized companies 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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Technology Fund
The Amerindo Technology 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
2
<PAGE>
The Board of Directors reserves the right at its discretion to close this Fund
to new investors at such time as it deems appropriate.
Risk/Return Bar Chart and Table
The following bar chart and table may assist in your decision to invest in the
Amerindo Technology Fund. The bar chart shows the average annual returns of
Class D shares of the Fund for the life of the Class. The table shows how the
Fund's Class D shares' average annual returns for the one-year and since
inceptions periods compare with that of the Hambrecht & Quist Growth Index. (1)
Technology stocks during this period experienced stronger gains than the stock
market as a whole. [Such strength may not exist in the future.] While analyzing
this information, please note that the Amerindo Technology Fund's past
performance is not an indication of how Class D shares of the Fund will perform
in the future.
Year-by-Year Total Return as of December 31(2)
(Class D Shares)
1997 - (18.11)% 1998 - 84.67% 1999 - 248.86%
Best Quarter 3/31/99: 66.72% Worst Quarter 3/31/97 (28.89)%
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods Past One Year Since Inception (4)
ending 12/31/99) (3)
<S> <C> <C>
Amerindo Technology Fund - Class D Shares 248.86% 63.32%
Hambrecht & Quist Growth Index(1) 180.12% 231.94%(5)
</TABLE>
(1) 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.
(2) The year-to-date return for the Class D shares as of March 31, 2000
was (0.72)%.
(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) The date of inception of the Class D shares was October 28, 1996.
(5) Since October 31, 1996.
3
<PAGE>
AMERINDO INTERNET B2B FUND
Investment Objective
The Amerindo Internet B2B 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 Internet B2B 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 in the Internet business to business ("B2B") sector. B2B companies are
those companies with primary business operations enabling or managing through
services, software or components, business to business operations over the
Internet. Investment strategy will focus on three primary areas that are driving
the growth of the Internet: infrastructure software, telecommunications
companies supporting B2B and pure B2B e-commerce companies. 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 The Fund may involve significantly greater risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the Internet sector.
o Investments in companies in the rapidly changing field of
technology face special risks such as competitive pressures
and technological obsolescence and may be subject to greater
governmental regulation than many other industries. In
addition, certain companies in this industry may never be
profitable.
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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Internet B2B Fund
The Amerindo Internet B2B 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
4
<PAGE>
AMERINDO HEALTH & BIOTECHNOLOGY FUND
Investment Objective
The Amerindo Health & Biotechnology 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 Amerindo Health & Biotechnology 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 companies in the health and biotechnology fields which, in
the opinion of the Adviser, have the potential for capital appreciation. The
health and biotechnology fields include technology (i.e., software) for
healthcare management, pharmaceuticals and healthcare services or devices.
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 The Fund may involve significantly higher risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the health and biotechnology
fields.
o The healthcare industry is subject to government regulations
and governmental approval of products and services. This
governmental involvement can have a significant effect on
price and availability of products and services. The
healthcare industry is also greatly affected by rapid
obsolescence. In addition, certain companies in this
industry may never be profitable.
o The biotechnology industry can be significantly affected by
patent considerations, intense competition, rapid
technological change and obsolescence. This industry can
also be greatly affected by governmental regulation. In
addition, certain companies in this industry may never be
profitable.
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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Health & Biotechnology Fund
The Amerindo Health & Biotechnology 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
5
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund.
<TABLE>
<CAPTION>
Technology Fund Internet B2B Fund Health & Biotechnology Fund
--------------- ----------------- ---------------------------
Class D Class D Class D
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees
(fees paid directly from
your investment)
Maximum Sales Charge (Load) None None None
Imposed on Purchases (as a
percentage of the offering
price)
Redemption Fees for shares 2.00% 2.00% 2.00%
held less than 1 year (as a
percent of amount redeemed)
Exchange Fees None None None
Annual Fund Operating
Expenses(1)
(expenses that are deducted
from Fund assets)
Management Fees 1.50% 1.50% 1.50%
Distribution and/or
Service (12b-1) Fees 0.25% 0.25% 0.25%
Other Expenses 0.54% 0.34%(2) 1.71%(2)
----- ----- -----
Total Annual Fund
Operating Expenses 2.29% 2.09% 3.46%
Fee Waiver/Expense 0.04% 1.21%
----- -----
Reimbursement
Net Total Annual Fund
Operating Expenses 2.25% 2.25%
</TABLE>
(1) 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. With respect to the Amerindo Technology
Fund, the Adviser reimbursed the Fund 0.04% of the Adviser's fee. After
this reimbursement, the "Management Fees" were 1.46% and "Total Fund
Operating Expenses" were 2.25%
(2) Other Expenses are based on estimated amounts for the current fiscal
year.
Example: This example is intended to help you compare the cost of investing
in the Funds with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in a 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 a Fund's operating expenses remain the
same. The information would be the same if you did not
6
<PAGE>
redeem 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>
Technology Fund
Class D $228 $703 $1,205 $2,585
Internet B2B Fund
Class D $212 $655 -- --
Health & Biotechnology Fund
Class D
$228 $703 -- --
</TABLE>
7
<PAGE>
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RELATED RISKS
Investment Objective. Each Fund's investment objective is to seek long-term
capital appreciation. There can be no assurance that a Fund's investment
objective will be achieved. The investment objective is fundamental to a Fund
and may not be changed without shareholder approval. Current income is
incidental to a Fund's investment objective.
The following information applies to the Amerindo Technology Fund and the
Amerindo Internet B2B Fund:
Principal Investment Strategies. Each Fund seeks to achieve its investment
objective by investing at least 65% of its assets (although each Fund intends,
as a non-fundamental policy, to invest at least 80% of its assets) in the common
stocks of technology companies. With respect to the Amerindo Technology Fund,
technology companies are those companies with 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.
With respect to the Amerindo Internet B2B Fund, such technology companies will
be in the Internet business to business ("B2B") sector. B2B companies are those
companies with primary business operations enabling or managing through
services, software or components business to business operations over the
Internet.
In addition to investing at least 65% of its assets in technology companies,
each 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 following information applies to the Amerindo Health & Biotechnology Fund:
Principal Investment Strategies. The Amerindo Health & Biotechnology 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 companies in the health and biotechnology
fields which, in the opinion of the Adviser, have the potential for capital
appreciation. The health and biotechnology fields include technology (i.e.,
software) for healthcare management, pharmaceuticals and healthcare services or
devices.
The following information applies to each of the Funds:
The Adviser believes that because of rapid advances in technology, science,
healthcare and biotechnology, 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, science, healthcare and biotechnology areas have exhibited and
continue to demonstrate rapid growth due to the mass adoption of the Internet,
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 portfolio of each Fund. The expansion
of technology, science, healthcare and biotechnology areas, however, also
provides a favorable environment for investment in small to medium capitalized
companies. A Fund's investment policy is not limited to any minimum
capitalization requirement and each Fund may hold securities without regard to
the capitalization of the issuer. The Adviser's overall stock selection for each
Fund is not based on the capitalization or size of the company but rather on an
assessment of the company's fundamental prospects. The Funds 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 each Fund's holdings will be invested in newly-issued
securities being sold in the secondary market.
Although each Fund will primarily invest in common stocks issued by U.S.
companies, each Fund also may invest in other types of securities such as
convertible stocks, preferred stocks, bonds and warrants, when the
8
<PAGE>
investment in such securities is considered consistent with each Fund's
investment objective by the Adviser.
A Fund will not invest more than 20% of its total assets in convertible stocks,
preferred stocks, bonds and warrants. The bonds in which the Funds may invest
are not required to be rated by a recognized rating agency. As a matter of
policy, however, the Funds 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 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.) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. Such securities may have speculative
characteristics. In addition, the Funds 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 a Fund's total assets.
Buy/Sell Decisions. The Funds' investment adviser considers the following
factors when buying and selling securities for each Fund: (i) the value of
individual securities relative to other investment alternatives, (ii) trends in
the variables that determine corporate profits, (iii) corporate cash flow, (iv)
balance sheet changes, (v) management capability and practices and (vi) the
economic and political outlook.
Portfolio Turnover. Purchases and sales are made for each Fund whenever
necessary, in the Adviser's opinion, to meet each Fund's investment objective,
other investment policies, and the need to meet redemptions. Each 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
for the fiscal year ended October 31, 1999 was 170%. The turnover rate for the
twelve months ended December 31, 1999 was 125%. Portfolio turnover may involve
the payment by a 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 a Fund which could have an adverse effect on a 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.
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 a 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, a 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.
The Healthcare and Biotechnology Areas. The healthcare industry is subject to
government regulation and government approval of products and services, which
could have a significant effect on price and availability. Furthermore, the
types of products or services produced or provided by healthcare companies can
quickly become obsolete. The biotechnology industry can be significantly
affected by patent consideration, intense competition, rapid technological
change and obsolescence, and government regulation. Biotechnology companies may
have persistent losses during a new product's transition from development to
production, and revenue patterns may be erratic.
Concentration. The volatile nature of the technology, science, healthcare and
biotechnology 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
9
<PAGE>
instance, even though an investment may have been purchased at a
time when it represented less than 25% of a 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 each 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 a 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 a
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. Each 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 a Fund's total assets less its
liabilities and will be made at prevailing interest rates. A Fund may not,
however, purchase additional securities while borrowings exceed 5% of its total
assets.
Illiquid Securities. Each 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 a 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, a 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, a Fund may not achieve its investment objective.
Repurchase Agreements. A 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. Each Fund requires continual maintenance by the Funds' 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, a Fund will retain possession
of the underlying securities. In addition, if bankruptcy proceedings are
commenced with respect to the seller, realization on the collateral by a Fund
may be delayed or limited and a 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. Each 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 a 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
10
<PAGE>
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 Company since its inception in 1996. 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 Company 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 Agreements for the Funds, the Adviser
manages each 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 Company.
Adviser's Fees. Pursuant to the terms of the Investment Advisory Agreements,
each Fund will pay an annual advisory fee, paid monthly, equal to 1.50% of each
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 each 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 a 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 a 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, the
Adviser receives service fees of 0.25% of the Class D shares' average daily net
assets.
The following information relates to the Amerindo Technology Fund only:
Prior 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. Amerindo was ranked the number one manager, based on one-year
annualized return, out of 647 and 667 equity managers, respectively, by Money
Manager Review for calendar years 1998 and 1999, respectively. Equity money
managers participating in the survey had at least $30 million under management
and at least 5 years of history. This performance information relates to
Amerindo's management of institutional accounts and should not be interpreted as
indicative of future performance of the Funds. 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, the performance of other equity
managers or its ranking among them, and makes no representation as to the
accuracy or completeness of this performance information.
11
<PAGE>
Amerindo's equity composite includes the portfolios, with assets above
$5,000,000, managed in substantially similar styles to that of the Amerindo
Technology 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, 1999, and has confirmed that
Amerindo's performance presentation contained herein for such period conforms
with AIMR standards. 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. In addition, to the extent that Fund
expenses are higher than account expenses, if Fund expenses had been applied,
performance of the accounts in the composite would have been lower. 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, 1999, which is in accordance with AIMR standards.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the performance
of the Amerindo Technology Fund or of any other Fund nor is it indicative of
future performance of the Amerindo Technology Fund or of any other Fund.
<TABLE>
<CAPTION>
Asset Weighted Asset Weighted
Composite Rate of Composite Rate of Russell
Return Net of Return Gross of H&Q Growth 2000 Growth
Year Advisory Fees(1) Advisory Fees(1) S&P 500 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%
- -------------------------------------------------------------------------------------------------------------
1 Year 248.42% 251.31% 21.03% 180.08% 43.09%
- -------------------------------------------------------------------------------------------------------------
5 Years 52.97% 54.67% 28.59% 49.46% 18.99%
- -------------------------------------------------------------------------------------------------------------
10 Years 34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
12
<PAGE>
Annualized rates of return for the period January 1, 1990 to December 31, 1999
34.25% 35.82% 18.22% 32.11% 13.51%
(1) 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 Amerindo Technology Fund's annualized total return with respect to Class D
shares for the period August 3, 1998 (commencement of operations) through
December 31, 1999 was 63.34%. The Amerindo Technology Fund's total return for
the calendar year ended December 31, 1999 was 248.86%.
The following information relates to each Fund:
The performance of a 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 a 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 a Fund's relative performance for any future period.
PRICING OF FUND SHARES
Net asset values per share for Class D shares of each Fund 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 Company'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.
Each 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
("NYSE"), 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 Funds 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 a 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 [name of 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 Funds 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,
13
<PAGE>
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 Funds.
Initial Investments by Mail. An account may be opened by completing and signing
an Account Application and mailing it to a Fund at the address noted below,
together with a check (subject to the minimum investment) payable to:
Amerindo Funds Inc.
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 Fund 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 Internet
B2B Fund Class D, Amerindo Health & Biotechnology Fund Class D or 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 1-888-968-4964.
Other Purchase Information. Investors may open accounts in the Funds only
through the exclusive Distributor for the Fund. SEI Investments Distribution
Co., for nominal consideration and as agent for each Fund, will solicit orders
for the purchase of Fund shares, provided that any subscriptions and orders will
not be binding on a Fund until accepted by the Fund as principal. See
"Distribution Agreements."
Each 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 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. Each 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 a 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 NYSE, or on the basis of prices provided by a
pricing service. Each 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 a Fund's shares will be made in full and fractional shares of a
Fund calculated to three decimal places. The Funds do not intend to issue
certificates evidencing Fund shares.
Shares of each 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 a
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
14
<PAGE>
accounts with their organization. The Funds do not pay to or receive
compensation from Shareholder Organizations for the sale of Fund shares.
Each 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 Funds. 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 Funds.
HOW TO REDEEM SHARES
Shares of a 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 a Fund.
By Mail. Each 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
each Fund is determined as of 4:00 p.m., New York time, on each day that the
NYSE, the Funds and the Distributor are open for business. Requests should be
addressed to Amerindo Funds Inc., 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, each Fund and the
transfer agent from fraud, signature guarantees are required to enable a 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 1-888-968-4964 for further
details.
By Telephone. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling a 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 Funds and the transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or the transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Funds or the transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by a Fund or the transfer agent to be genuine.
Each 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
Funds 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 Funds. Investors are required to maintain a minimum
account balance of at least $2,500. Each 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 a 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. Each 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").
15
<PAGE>
If a 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,
such Fund may pay the redemption proceeds in whole or in part by a distribution
in-kind of readily marketable securities held by the 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 Funds are 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, science, healthcare and
biotechnology industries. The Funds are not designed for short-term traders
whose frequent purchases and redemptions can generate substantial cash flow.
These cash flows can unnecessarily disrupt a Fund's investment program.
Short-term traders often redeem when the market is most turbulent, thereby
forcing the sale of underlying securities held by a Fund at the worst possible
time as far as long-term investors are concerned. Additionally, short-term
trading drives up a Fund's transaction costs--measured by both commissions and
bid/ask spreads--which are borne by the remaining long-term investors. For these
reasons, each 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 employer-sponsored retirement plans (such as 401(k), 403(b), 457,
Keogh, Profit Sharing Plans, and Money Purchase Pension Plans).
Each 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" a Fund will use the anniversary date of a transaction.
Thus, shares purchased on April 5, 2000, for example, will be subject to the fee
if they are redeemed on or prior to April 4, 2001. If they are redeemed on or
after April 5, 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 a Fund for a one-year period from the date
of purchase.
EXCHANGING FUND SHARES
You may exchange some or all of your shares in a Fund with any other Fund
identified in this prospectus. Exchanges from one Fund into another must be for
the same class of shares.
When you exchange shares, you are really selling shares of one Fund and buying
shares of another Fund. So, your sale price and purchase price will be based on
the NAV next calculated after we receive your exchange request. Please note that
an exchange may have tax consequences for you. You may exchange your shares on
any Business Day by contacting us directly by mail or telephone. You may also
exchange shares through your financial institution by mail or telephone. If you
establish a new account by exchange, the exchanged shares must have a minimum
value of $2,500 ($1,000 for IRAs). All subsequent exchanges must have a minimum
value of $250 per Fund. If you recently purchased shares by check or through
ACH, you may not be able to exchange your shares until your check has cleared
(which may take up to 15 days from the date of purchase). Each Fund assesses the
2.00% redemption fee on the exchange of shares held less than one year (see "How
To Redeem Shares--Redemption Fee" above).
There is currently no fee for exchanges, however, the Fund may change or
terminate this privilege on 60 days notice. Broker-dealers may charge you a fee
for handling exchanges. Please note that exchanges may be made only two (2)
times in any twelve (12) month period. The exchange privilege is not intended as
a vehicle for short-term or excessive trading. The Funds do not permit excessive
trading or market timing. Excessive purchases, redemption, or exchanges of Fund
shares disrupt portfolio management and drive Fund expenses higher.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of net investment income of Class D of each Fund 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 of each Fund, 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 of each Fund 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. Class D shares of each Fund 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."
16
<PAGE>
Choosing a Distribution Option. Distribution of dividends from Class D of each
Fund 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 a 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.
TAX CONSEQUENCES
The Amerindo Technology Fund has elected and intends to continue to qualify
annually (and the Amerindo Internet B2B Fund and the Amerindo Health &
Biotechnology Fund each intends to qualify annually and to elect) to be treated
as a regulated investment company under the Internal Revenue Code of 1986
effective for its taxable year beginning November 1, 2000. The Amerindo
Technology Fund did so qualify for its previous taxable year. By qualifying, a
Fund will generally not be subject to Federal income tax on net ordinary income
and net realized capital gains paid out to its stockholders. A 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. Each 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). Each 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 a Fund's income is derived from
qualifying dividends from domestic corporations, each 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 a 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 his or her 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 his or her
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 a 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 his or her 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.
Each 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 a 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.
DISTRIBUTION ARRANGEMENTS
Distributor. SEI Investments Distribution Co. ("SIDCO"), an affiliate of the
Administrator, has entered into a Distribution Agreement with each Fund to serve
as the Funds' distributor ("the Distributor"). For nominal consideration and as
agent for each Fund, the Distributor solicits orders for the purchase of Fund
shares provided
17
<PAGE>
that any orders will not be binding on a Fund until accepted by
the Fund as principal. See "Management of Fund" in the Statement of Additional
Information.
12b-1 Plan. Each Fund, on behalf of 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. The total amounts payable under the Plan by
the Class D shares of a 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, 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 Class D shares for
providing servicing to their clients ("shareholder servicing"). Each Fund 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 a Fund may be effected and certain other matters
pertaining to a 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 a Fund)
quarterly and year-end statements and confirmations in a timely fashion after
activity is generated in the account; (ix) transmit, on behalf of each Fund,
proxy statements, annual reports, updating prospectuses and other communications
from a Fund to shareholders; (x) receive, tabulate and transmit to a Fund,
proxies executed by shareholders with respect to meetings of shareholders of a
Fund; and (xi) provide such other related services as a 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 assistance in distributing Class D
shares; (iii) to pay the costs of printing and distributing the Funds'
prospectuses 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 Funds' 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 a Fund is required to
pay to the Distributor or the Adviser for any fiscal year under the Plan 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 a
Fund directly may impose charges, limitations, minimums and restrictions in
addition to or different from those applicable to shareholders who invest in a
Fund directly. Accordingly, the net yield to investors who invest through
shareholder servicing agents and broker-dealers may be less than by investing in
a 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
AMERINDO TECHNOLOGY FUND CLASS D SHARES
The following table is intended to help you understand the Amerindo Technology
Fund's Class D shares' 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 Amerindo Technology 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, is included in the annual report, which is
available upon request. The table is part of the Amerindo Technology Fund's
financial statements for the year ended October 31, 1999, which are available to
shareholders upon request.
AMERINDO TECHNOLOGY FUND - CLASS D SHARES
<TABLE>
<CAPTION>
For the period
October 28,
1996
(commencement
of investment
For the period operations)
ended through
October 31, For the year ended December 31, December 31,
-------------------------------
1999*** 1998 1997 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>
* 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
<PAGE>
Amerindo Funds Inc.
<TABLE>
<CAPTION>
Board of Directors
- ------------------
<S> <C>
Alberto W. Vilar, Director and Chairman of the Board..............Amerindo Investment Advisors Inc.
Gary A. Tanaka, Director and President............................Amerindo Investment Advisors Inc.
John Rutledge, Director...........................................Rutledge Capital LLC
Jude T. Wanniski, Director........................................Polyconomics, Inc.
</TABLE>
20
<PAGE>
AMERINDO FUNDS INC.
May 30, 2000
Investment Adviser
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
1-888-968-4964
www.amerindo.com
A Statement of Additional Information (SAI), dated May 30, 2000 includes
additional information about each Fund and its investments and is incorporated
by reference into this prospectus. The Amerindo Technology Fund's Annual and
Semi-Annual Reports include additional information about the Amerindo Technology
Fund and its investments and are also 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 Amerindo Technology 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 Funds at 1-888-968-4964. To request other information about the
Funds and to make shareholder inquiries, please call your financial intermediary
or the Funds.
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 20549-0102 or by electronic request at public
[email protected].
SEC File Number: 811-07531
21
<PAGE>
================================================================================
AMERINDO FUNDS INC. PROSPECTUS
Class A Shares; Class C Shares May 30, 2000
================================================================================
AMERINDO TECHNOLOGY FUND II
The Fund's 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>
Risk/Return Summary: Investments, Risks and How to Purchase Shares.........................10
Performance......................................2
How to Redeem Shares...........................14
Fee Table........................................3
Exchanging Fund Shares.........................16
Investment Objectives, Principal Investment
Strategies and Related Risks.....................5
Dividends and Distributions....................16
Additional Investment Information and
Risk Factors.....................................6 Tax Consequences...............................16
Management, Organization and Capital Distribution Arrangements......................17
Structure........................................7
Pricing of Fund Shares..........................10
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
Amerindo Funds Inc. (the "Company") is currently composed of four portfolios.
This prospectus pertains to the Amerindo Technology Fund II portfolio only.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
AMERINDO TECHNOLOGY FUND II
Investment Objective
The Amerindo Technology Fund II'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 Amerindo Technology Fund II 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
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.
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 The Fund may involve significantly greater risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the technology and science
sectors.
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. In addition, certain companies in these
fields may never be profitable.
o Investments in smaller capitalized companies 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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Technology Fund II
The Amerindo Technology Fund II 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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 this Fund
to new investors at such time as it deems appropriate.
2
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Technology Fund II
------------------
Class A Class C
------- -------
Shareholder Fees
(fees paid directly from
your investment)
Maximum Sales Charge (Load) 5.75% None
Imposed on Purchases (as a
percentage of the offering
price)
Maximum Deferred Sales None(1) 1.00%
Charge (Load) for shares
held less than 1 year (as a
percentage of the lesser of
original purchase price or
redemption proceeds)
Redemption Fees for shares 2.00% 2.00%
held less than 1 year (as a
percent of amount redeemed)
Exchange Fees None None
Annual Fund Operating
Expenses(2)
(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(3) 0.45% 0.45%
----- -----
Total Annual Fund
Operating Expenses 2.20% 2.95%
(1) Class A share purchases of $1 million or more may be subject to a
contingent deferred sales charge. See "For Class A Shareholders Only -
Reduction or Elimination of Sales Loads."
(2) 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.
(3) Other Expenses are based on estimated amounts for the current fiscal
year.
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
3
<PAGE>
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 did not redeem your
shares. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
Year 1 Year 3
Technology Fund II
Class A $785 $1,224
Class C $298 $ 913
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
objective 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 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 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, 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 portfolio of the Fund. 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 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.) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. Such securities may have speculative
characteristics. 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.
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 variables that determine corporate profits, (iii) corporate cash flow, (iv)
balance sheet changes, (v) management capability and practices and (vi) the
economic and political outlook.
5
<PAGE>
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. Portfolio 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.
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 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
6
<PAGE>
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 its 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 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 Company since its inception in 1996. 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 Company 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 Company.
7
<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 its
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 shares and 3.00% for Class C shares. 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.
Risk/Return Bar Chart and Table - Amerindo Technology Fund
The following bar chart and table may assist in your decision to invest in the
Amerindo Technology Fund II. The bar chart shows the average annual returns of
Class A shares of the Amerindo Technology Fund (a mutual fund advised by the
same adviser with identical objectives and policies as the Amerindo Technology
Fund II), which is not offered in this prospectus. The table shows how the
Amerindo Technology Fund's Class A shares' average annual returns for the
one-year and since inceptions periods compare with that of the Hambrecht & Quist
Growth Index. (1) Technology stocks during this period experienced stronger
gains than the stock market as a whole. [Such strength may not exist in the
future.] While analyzing this information, please note that the Amerindo
Technology Fund's past performance is not an indication of how the Amerindo
Technology Fund II will perform in the future. It is also important to note that
the Amerindo Technology Fund II will not necessarily invest in the same
securities or issuers in which the Amerindo Technology Fund has invested or will
invest.
Year-by-Year Total Return as of December 31(2) (3)
(Class A Shares)
1999 - 250.60%
Best Quarter 3/31/99: 67.92% Worst Quarter 9/30/99: (8.78%)
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods Past One Year Since Inception (7)
ending 12/31/99) (4)(5)(6)
<S> <C> <C>
Amerindo Technology Fund - Class A Shares 230.42% 227.11%
Hambrecht & Quist Growth Index(1) 180.12% 231.94%(8)
</TABLE>
(1) 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.
(2) 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.
(3) The year-to-date return for the Class A shares as of March 31, 2000 was
(0.72)%.
(4) Reflects 5.75% sales load.
(5) 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.
(6) Performance information for Class C shares will differ from Class A
shares due to differences in their sales loads and fees.
(7) The date of inception of the Amerindo Technology Fund Class A shares
was August 3, 1998.
(8) Since August 31, 1998.
Prior 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. Amerindo was ranked the number one manager, based on one-year
annualized return, out of 647 and 667 equity managers, respectively, by Money
Manager Review for calendar years 1998 and 1999, respectively. Equity money
managers participating in the survey had at least
8
<PAGE>
$30 million under management and at least 5 years of history. 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, the
performance of other equity managers or its ranking among them, and makes no
representation as to the accuracy or completeness of this performance
information.
Amerindo's equity composite includes the portfolios, with assets above
$5,000,000, managed in substantially similar styles to that of the Amerindo
Technology Fund and the Amerindo Technology Fund II 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,
1999, and has confirmed that Amerindo's performance presentation contained
herein for such period conforms with AIMR standards. 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.
In addition, to the extent that Fund expenses are higher than account expenses,
if Fund expenses had been applied, performance of the accounts in the composite
would have been lower. 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, 1999, which is in accordance with AIMR standards.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the performance
of the Amerindo Technology II Fund nor is it indicative of future performance of
the Amerindo Technology II Fund.
<TABLE>
<CAPTION>
Asset Weighted Asset Weighted
Composite Rate of Composite Rate of Russell
Return Net of Return Gross of H&Q Growth 2000 Growth
Year Advisory Fees(1) Advisory Fees(1) S&P 500 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%
- -------------------------------------------------------------------------------------------------------------
1 Year 248.42% 251.31% 21.03% 180.08% 43.09%
- -------------------------------------------------------------------------------------------------------------
5 Years 52.97% 54.67% 28.59% 49.46% 18.99%
- -------------------------------------------------------------------------------------------------------------
10 Years 34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
9
<PAGE>
Annualized rates of return for the period January 1, 1990 to
December 31, 1999
34.25% 35.82% 18.22% 32.11% 13.51%
(1) 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 Amerindo Technology Fund's (a mutual fund advised by the same adviser with
identical objectives and policies as the Amerindo Technology Fund II) annualized
total return with respect to Class A shares for the period August 3, 1998
(commencement of operations) through December 31, 1999 was 227.11%. The Amerindo
Technology Fund's Class A shares total return for the calendar year ended
December 31, 1999 was 230.42%.
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.
PRICING OF FUND SHARES
Net asset values per share for each class of the Fund 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 Company'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
("NYSE"), 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 shares 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:
10
<PAGE>
Bankers Trust Company
New York, New York
ABA# 021001033
Account # 01-465-547
F/B/O Amerindo Technology Fund II
Class [A/C]
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.
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 Funds Inc.
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 II Class A or 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 Fund 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. 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. Certain purchases of Class A
shares of $1 million or more may be subject to a contingent deferred sales
charge. See "Reduction or Elimination of Sales Loads" herein.
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 or 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
from an IRA or
11
<PAGE>
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 the 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
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 each 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
Agreements."
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 NYSE, 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.
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 Fund 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 is $1,000 with a subsequent minimum investment of $500. Investors desiring
information regarding investments through IRAs should write or telephone the
Fund.
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<PAGE>
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
Sales Charge as a % Charge Reallowed to
of Net Amount Dealers as a Percent
Amount of Purchase Sales Charge 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>
For Investments of Over $1 Million
There is no initial sales charge on Class A share purchases of $1 million or
more. However, your broker-dealer may receive a commission of up to 1% on your
purchase from the Adviser or the Distributor. If such a commission is paid, you
will be assessed a contingent deferred sales charge (CDSC) of 1% on shares held
less than one year from the date of your purchase. To find out whether you will
be assessed a CDSC, ask your broker-dealer. The Fund's Adviser or the
Distributor receives any CDSC imposed when you sell your Class A shares. The
CDSC is determined as a percentage of the lesser of the current market value or
the cost of 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 use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under the 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 A investors will be charged a
redemption fee of 2.00% for shares held less than 1 year. See "How to Redeem
Shares."
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<PAGE>
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 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. Purchases of
Class A 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. In addition, Class A shares may
be purchased at net asset value without imposition of a front-end sales charge
by investors participating in asset allocation "wrap" accounts or similar
programs offered by qualified broker-dealers, investment advisors, or financial
planners who charge a management fee for their services and place trades for
their own account or accounts of clients. No commission is paid in connection
with net asset value purchases of Class A shares made pursuant to this
paragraph, nor is any CDSC imposed upon the redemption of such shares.
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
NYSE, the Fund and the Distributor are open for business. Requests should be
addressed to Amerindo Funds Inc., 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 the transfer
agent from fraud, signature guarantees are required to enable the Fund to verify
the identity of the person who has authorized
14
<PAGE>
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 1-888-968-4964 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 the transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or the transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Fund or the transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by the Fund or the 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 the 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 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 A and Class C 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
employer-sponsored 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 April 5,
15
<PAGE>
2000, for example, will be subject to the fee if they are redeemed on or prior
to April 4, 2001. If they are redeemed on or after April 5, 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.
EXCHANGING FUND SHARES
You may exchange some or all of your shares in the Fund with the Amerindo
Internet B2B Fund and the Amerindo Health & Biotechnology Fund, which are
offered through a separate prospectus. Exchanges from one Fund into another must
be for the same class of shares.
When you exchange shares, you are really selling shares of one Fund and buying
shares of another Fund. So, your sale price and purchase price will be based on
the NAV next calculated after we receive your exchange request. Please note that
an exchange may have tax consequences for you. You may exchange your shares on
any Business Day by contacting us directly by mail or telephone. You may also
exchange shares through your financial institution by mail or telephone. If you
establish a new account by exchange, the exchanged shares must have a minimum
value of $2,500 ($1,000 for IRAs). All subsequent exchanges must have a minimum
value of $250. If you recently purchased shares by check or through ACH, you may
not be able to exchange your shares until your check has cleared (which may take
up to 15 days from the date of purchase). The Fund assesses the 2.00% redemption
fee on the exchange of shares held less than one year (see "How To Redeem
Shares--Redemption Fee" above).
There is currently no fee for exchanges, however, the Fund may change or
terminate this privilege on 60 days notice. Broker-dealers may charge you a fee
for handling exchanges. Please note that exchanges may be made only two (2)
times in any twelve (12) month period. The exchange privilege is not intended as
a vehicle for short-term or excessive trading. The Fund does not permit
excessive trading or market timing. Excessive purchases, redemption, or
exchanges of Fund shares disrupt portfolio management and drive Fund expenses
higher.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of net investment income of the Class of the Fund 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 of the Fund, 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 of the Fund 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 of the Fund 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 of the
Fund 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.
TAX CONSEQUENCES
The Fund intends to qualify annually and to elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986 effective for its
taxable year beginning November 1, 2000. 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
16
<PAGE>
entitled to the dividends-received deduction to the extent that the Fund's
income is derived from qualifying dividends from domestic corporations, each
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 his or her 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 his or her
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 his or her 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.
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 (the "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 and/or distribution fee equal to 0.25% of the Class A shares' average
daily net assets under the terms of the Fund's 12b-1 distribution and service
plan (the "Plan"). With respect to the Class C shares, SIDCO will be entitled to
receive a distribution fee equal to 0.75% and a shareholder service fee equal to
0.25% of the Class C shares' average daily net assets under the terms of the
Plan.
12b-1 Plan. The Fund, on behalf of each class of shares, has adopted a
distribution and service plan, pursuant to Rule 12b-1 under the Investment
Company Act. 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-dealers
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. Because these fees
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.
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<PAGE>
Consistent with the Plan, 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 uses 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").
Pursuant to the Plan, 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, services pursuant to the Plan. 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 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 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 Plan. 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.
18
<PAGE>
Amerindo Funds Inc.
<TABLE>
<CAPTION>
Board of Directors
- ------------------
<S> <C>
Alberto W. Vilar, Director and Chairman of the Board..............Amerindo Investment Advisors Inc.
Gary A. Tanaka, Director and President............................Amerindo Investment Advisors Inc.
John Rutledge, Director...........................................Rutledge Capital LLC
Jude T. Wanniski, Director........................................Polyconomics, Inc.
</TABLE>
19
<PAGE>
AMERINDO FUNDS INC.
May 30, 2000
Investment Adviser
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
1-888-968-4964
www.amerindo.com
A Statement of Additional Information (SAI), dated May 30, 2000 includes
additional information about each Fund and its investments and is incorporated
by reference into this prospectus. You may obtain the SAI and material
incorporated by reference without charge by calling the Funds at 1-888-968-4964.
To request other information about the Funds and to make shareholder inquiries,
please call your financial intermediary or the Funds.
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 20549-0102 or by electronic request at public
[email protected].
SEC File Number: 811-07531
20
<PAGE>
<PAGE>
================================================================================
AMERINDO FUNDS INC. PROSPECTUS
Class D Shares May 30, 2000
================================================================================
AMERINDO TECHNOLOGY FUND II
The Fund's 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>
<CAPTION>
<S> <C>
Risk/Return Summary: Investments, Risks and How to Purchase Shares.........................10
Performance......................................2
How to Redeem Shares...........................12
Fee Table........................................3
Exchanging Fund Shares.........................13
Investment Objectives, Principal Investment
Strategies and Related Risks.....................5
Dividends and Distributions....................13
Additional Investment Information and
Risk Factors.....................................6 Tax Consequences...............................14
Management, Organization and Capital Distribution Arrangements......................15
Structure........................................7
Pricing of Fund Shares..........................10
</TABLE>
- --------------------------------------------------------------------------------
1
<PAGE>
Amerindo Funds Inc. (the "Company") is currently composed of four portfolios.
This prospectus pertains to the Amerindo Technology Fund II portfolio only.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE
AMERINDO TECHNOLOGY FUND II
Investment Objective
The Amerindo Technology Fund II'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 Amerindo Technology Fund II 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
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.
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 The Fund may involve significantly greater risks and
therefore may experience greater volatility than a fund that
does not primarily invest in the technology and science
sectors.
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. In addition, certain companies in these
fields may never be profitable.
o Investments in smaller capitalized companies 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. 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. Therefore, investors should consider this greater risk
versus the safety that comes with a more diversified
portfolio.
Who May Want to Invest in the Amerindo Technology Fund II
The Amerindo Technology Fund II 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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 this Fund
to new investors at such time as it deems appropriate.
2
<PAGE>
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Technology Fund II
Class D
Shareholder Fees
(fees paid directly from
your investment)
Maximum Sales Charge (Load) None
Imposed on Purchases (as a
percentage of the offering
price)
Redemption Fees for shares 2.00%
held less than 1 year (as a
percent of amount redeemed)
Exchange Fees None
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(2) 0.45%
Total Annual Fund
Operating Expenses 2.20%
(1) 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.
(2) Other Expenses are based on estimated amounts for the current fiscal
year.
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 did not redeem
your shares. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
3
<PAGE>
Year 1 Year 3
Technology Fund II
Class D $223 $688
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
objective 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 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 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, 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 portfolio of the Fund. 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 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.) or, in the case of unrated securities, debt
securities that are, in the opinion of the Adviser, of equivalent quality to
"investment grade" securities. Such securities may have speculative
characteristics. 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.
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 variables that determine corporate profits, (iii) corporate cash flow, (iv)
balance sheet changes, (v) management capability and practices and (vi) the
economic and political outlook.
5
<PAGE>
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. Portfolio 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.
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 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
6
<PAGE>
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 its 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 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 Company since its inception in 1996. 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 Company 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 Company.
7
<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 its
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 D shares. 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, the
Adviser receives service fees of 0.25% of the Class D shares' average daily net
assets.
Risk/Return Bar Chart and Table - Amerindo Technology Fund
The following bar chart and table may assist in your decision to invest in the
Amerindo Technology Fund II. The bar chart shows the average annual returns of
Class D shares of the Amerindo Technology Fund (a mutual fund advised by the
same adviser with identical objectives and policies as the Amerindo Technology
Fund II), which is not offered in this prospectus. The table shows how the
Amerindo Technology Fund's Class D shares' average annual returns for the
one-year and since inceptions periods compare with that of the Hambrecht & Quist
Growth Index. (1) Technology stocks during this period experienced stronger
gains than the stock market as a whole. [Such strength may not exist in the
future.] While analyzing this information, please note that the Amerindo
Technology Fund's past performance is not an indication of how the Amerindo
Technology Fund II will perform in the future. It is also important to note that
the Amerindo Technology Fund II will not necessarily invest in the same
securities or issuers in which the Amerindo Technology Fund has invested or will
invest.
Year-by-Year Total Return as of December 31(2)
(Class D Shares)
1999 - 250.60%
Best Quarter 3/31/99: 67.92% Worst Quarter 9/30/99: (8.78%)
<TABLE>
<CAPTION>
Average Annual Total Returns (for the periods Past One Year Since Inception (4)
ending 12/31/99) (3)
<S> <C> <C>
Amerindo Technology Fund - Class D Shares 230.42% 227.11%
Hambrecht & Quist Growth Index(1) 180.12% 231.94%(5)
</TABLE>
(1) 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.
(2) The year-to-date return for the Class D shares as of March 31, 2000
was (0.72)%.
(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) The date of inception of the Amerindo Technology Fund Class D shares
was October 28, 1996.
(5) Since October 31, 1996.
Prior 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. Amerindo was ranked the number one manager, based on one-year
annualized return, out of 647 and 667 equity managers, respectively, by Money
Manager Review for calendar years 1998 and 1999, respectively. Equity money
managers participating in the survey had at least $30 million under management
and at least 5 years of history. This performance information relates to
Amerindo's management of institutional accounts and should not be interpreted as
indicative of future
8
<PAGE>
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, the performance of other equity managers or its
ranking among them, and makes no representation as to the accuracy or
completeness of this performance information.
Amerindo's equity composite includes the portfolios, with assets above
$5,000,000, managed in substantially similar styles to that of the Amerindo
Technology Fund and the Amerindo Technology Fund II 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,
1999, and has confirmed that Amerindo's performance presentation contained
herein for such period conforms with AIMR standards. 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.
In addition, to the extent that Fund expenses are higher than account expenses,
if Fund expenses had been applied, performance of the accounts in the composite
would have been lower. 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, 1999, which is in accordance with AIMR standards.
The following performance information relates to Amerindo's management of
institutional accounts. This data should not be interpreted as the performance
of the Amerindo Technology II Fund nor is it indicative of future performance of
the Amerindo Technology II Fund.
<TABLE>
<CAPTION>
Asset Weighted Asset Weighted
Composite Rate of Composite Rate of Russell
Return Net of Return Gross of H&Q Growth 2000 Growth
Year Advisory Fees(1) Advisory Fees(1) S&P 500 Index Index Index
- -------------------------------------------------------------------------------------------------------------
<S> <C> <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%
- -------------------------------------------------------------------------------------------------------------
1 Year 248.42% 251.31% 21.03% 180.08% 43.09%
- -------------------------------------------------------------------------------------------------------------
5 Years 52.97% 54.67% 28.59% 49.46% 18.99%
- -------------------------------------------------------------------------------------------------------------
10 Years 34.25% 35.82% 18.22% 32.11% 13.51%
Annualized rates of return for the period January 1, 1990 to December 31, 1999
34.25% 35.82% 18.22% 32.11% 13.51%
</TABLE>
9
<PAGE>
(1) 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 Amerindo Technology Fund's (a mutual fund advised by the same adviser with
identical objectives and policies as the Amerindo Technology Fund II) annualized
total return with respect to Class D shares for the period August 3, 1998
(commencement of operations) through December 31, 1999 was 63.34%. The Amerindo
Technology Fund's Class D shares total return for the calendar year ended
December 31, 1999 was 248.86%.
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.
PRICING OF FUND SHARES
Net asset values per share for Class D shares of the Fund 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 Company'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
("NYSE"), 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 1-888-968-4964 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 II
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
10
<PAGE>
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.
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 Funds Inc.
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 Fund 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 II 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 1-888-968-4964.
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 each 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
Agreements."
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 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 NYSE, 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.
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 Fund shares.
11
<PAGE>
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
NYSE, the Fund and the Distributor are open for business. Requests should be
addressed to Amerindo Funds Inc., 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 the 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 1-888-968-4964 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 the transfer agent may act on telephone
instructions from any person representing himself or herself to be a shareholder
and believed by the Fund or the transfer agent to be genuine. The transfer
agent's records of such instructions are binding and shareholders, and not the
Fund or the transfer agent, bear the risk of loss in the event of unauthorized
instructions reasonably believed by the Fund or the 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
12
<PAGE>
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 the 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 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 employer-sponsored 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 April 5, 2000, for example, will be subject to the fee
if they are redeemed on or prior to April 4, 2001. If they are redeemed on or
after April 5, 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.
EXCHANGING FUND SHARES
You may exchange some or all of your shares in the Fund with the Amerindo
Internet B2B Fund and the Amerindo Health & Biotechnology Fund, which are
offered through a separate prospectus. Exchanges from one Fund into another must
be for the same class of shares.
When you exchange shares, you are really selling shares of one Fund and buying
shares of another Fund. So, your sale price and purchase price will be based on
the NAV next calculated after we receive your exchange request. Please note that
an exchange may have tax consequences for you. You may exchange your shares on
any Business Day by contacting us directly by mail or telephone. You may also
exchange shares through your financial institution by mail or telephone. If you
establish a new account by exchange, the exchanged shares must have a minimum
value of $2,500 ($1,000 for IRAs). All subsequent exchanges must have a minimum
value of $250. If you recently purchased shares by check or through ACH, you may
not be able to exchange your shares until your check has cleared (which may take
up to 15 days from the date of purchase). The Fund assesses the 2.00% redemption
fee on the exchange of shares held less than one year (see "How To Redeem
Shares--Redemption Fee" above).
There is currently no fee for exchanges, however, the Fund may change or
terminate this privilege on 60 days notice. Broker-dealers may charge you a fee
for handling exchanges. Please note that exchanges may be made only two (2)
times in any twelve (12) month period. The exchange privilege is not intended as
a vehicle for short-term or excessive trading. The Fund does not permit
excessive trading or market timing. Excessive purchases, redemption, or
exchanges of Fund shares disrupt portfolio management and drive Fund expenses
higher.
DIVIDENDS AND DISTRIBUTIONS
At least 90% of net investment income of Class D of the Fund 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 of the Fund, if any, are
declared and paid on an annual
13
<PAGE>
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 of the Fund 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. Class D shares of the Fund 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 of the
Fund 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.
TAX CONSEQUENCES
The Fund intends to qualify annually and to elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986 effective for its
taxable year beginning November 1, 2000. 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, each 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 his or her 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 his or her
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 his or her 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.
14
<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 its distributor ("the Distributor"). For nominal consideration and as agent
for the Fund, the Distributor solicits orders for the purchase of Fund 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 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. 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, 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 Class D shares for
providing servicing to their clients ("shareholder servicing"). The Fund 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 assistance in distributing Class D
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 Plan 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
15
<PAGE>
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.
16
<PAGE>
Amerindo Funds Inc.
<TABLE>
<CAPTION>
Board of Directors
<S> <C>
Alberto W. Vilar, Director and Chairman of the Board..............Amerindo Investment Advisors Inc.
Gary A. Tanaka, Director and President............................Amerindo Investment Advisors Inc.
John Rutledge, Director...........................................Rutledge Capital LLC
Jude T. Wanniski, Director........................................Polyconomics, Inc.
</TABLE>
17
<PAGE>
AMERINDO FUNDS INC.
May 30, 2000
Investment Adviser
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
1-888-968-4964
www.amerindo.com
A Statement of Additional Information (SAI), dated May 30, 2000 includes
additional information about each Fund and its investments and is incorporated
by reference into this prospectus. You may obtain the SAI and material
incorporated by reference without charge by calling the Funds at 1-888-968-4964.
To request other information about the Funds and to make shareholder inquiries,
please call your financial intermediary or the Funds.
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 20549-0102 or by electronic request at public
[email protected].
SEC File Number: 811-07531
18
<PAGE>
AMERINDO FUNDS INC.
Amerindo Technology Fund
Amerindo Technology Fund II
Amerindo Internet B2B Fund
Amerindo Health & Biotechnology Fund
-----------------------------------------------------------------
MAY 30, 2000
RELATING TO THE
AMERINDO TECHNOLOGY FUND
AMERINDO TECHNOLOGY FUND II
AMERINDO INTERNET B2B FUND
AMERINDO HEALTH & BIOTECHNOLOGY FUND,
PROSPECTUS FOR CLASS A AND C SHARES
AND THE PROSPECTUS FOR THE CLASS D SHARES
DATED MAY 30, 2000
-----------------------------------------------------------------
This Statement of Additional Information ("SAI") sets forth information
which may be of interest to investors but which is not necessarily included in
the Funds' prospectuses, dated May 30, 2000 (the "Prospectuses").
This SAI is not a prospectus and should be read in conjunction with the
Funds' Prospectuses, copies of which may be obtained without charge by writing
to the Funds at 399 Park Avenue, 22nd Floor, New York, New York 10022.
This SAI is incorporated by reference into the Prospectuses in its
entirety.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Fund History.................................................1 Capital Stock and Other Securities.................20
Description of the Fund and its Investments and Risks........1 Purchase, Redemption and Pricing of Shares........ 21
Management of the Fund .................................... 9 Taxation of the Fund.............................. 21
Control Persons and Principal Holders
of Securities..............................................12 Underwriters...................................... 23
Investment Advisory and Other
Services....................................................13 Calculation of Performance Data .................. 24
Brokerage Allocation and Other Practices....................18 Financial Statements ..............................25
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I. FUND HISTORY
Amerindo Funds Inc. (the "Company") was incorporated in
Maryland on February 6, 1996. This SAI relates to the Amerindo Technology Fund,
Amerindo Technology Fund II, Amerindo Internet B2B Fund, and Amerindo Health &
Biotechnology Fund (each, a "Fund", and collectively, the "Funds"). At this
time, the Amerindo Technology Fund II has not yet been activated by the Adviser.
II. DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
A. INVESTMENT STRATEGIES AND RISKS
Amerindo Technology Fund and Amerindo Technology Fund II
--------------------------------------------------------
The Amerindo Technology Fund and the Amerindo Technology Fund
II are non-diversified, open-end, management investment companies. Each Fund's
investment objective is to seek long-term capital appreciation. Each Fund seeks
to achieve its objective by investing at least 65% of its assets (although each
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 business operations in either the technology or science areas.
Current income is incidental to each Fund's investment objective. The investment
objective is fundamental to the Funds and may not be changed without shareholder
approval. There can be no assurance that each Fund's investment objective will
be achieved.
These Funds are 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 risk before investing in the Funds. If you seek an aggressive
approach to capital growth and can accept the greater than average level of
price fluctuations that these Funds are expected to experience, these Funds
could be an appropriate part of your overall investment strategy. The Funds
should not be used as a trading vehicle.
Amerindo Internet B2B Fund
--------------------------
The Amerindo Internet B2B Fund is a non-diversified, open-end,
management investment company. This Fund's investment objective is to seek
long-term capital appreciation. The Fund seeks to achieve its objective 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 in the Internet business to business ("B2B")
Sector. B2B companies are those companies with primary business operations
enabling or managing through services, software or components business to
business operations over the Internet. 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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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.
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Amerindo Health & Biotechnology Fund
------------------------------------
The Amerindo Health & Biotechnology Fund is a non-diversified,
open-end, management investment company. This Fund's investment objective is to
seek long-term capital appreciation. The Fund seeks to achieve its objective 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 companies in the health and biotechnology fields which, in the opinion
of the Adviser, have the potential for capital appreciation. The health and
biotechnology fields include technology (i.e., software) for health care
management technology, pharmaceuticals and healthcare services or devices.
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
risk before investing in the Fund. If you seek an aggressive approach to capital
growth and can accept the greater than 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 FUNDS' INVESTMENT SECURITIES AND DERIVATIVES
1. The Technology and Science Areas. The Adviser believes that
because of rapid advances in technology, science, health and biotechnology, 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 Funds 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, science, health and biotechnology 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 each of the
Fund's portfolios. The expansion of technology and its related industries,
however, also provides a favorable environment for investment in small to medium
capitalized companies. The Funds' investment policies are not limited to any
minimum capitalization requirement and the Funds may hold securities without
regard to the capitalization of the issuer. The Adviser's overall stock
selection for the Funds is not based on the capitalization or size of the
company but rather on an assessment of the company's fundamental prospects. The
Funds 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 each Fund's holdings will be
invested in newly-issued securities being sold in the secondary market.
Companies in the rapidly changing fields of technology,
science, healthcare and biotechnology face special risks. For example, their
products or services may not prove commercially successful or may become
obsolete quickly. The value of a 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
Funds are not an appropriate investment for individuals who are not long-term
investors and who, as their primary objective, require safety of
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principal or stable income from their investments. The technology, science,
healthcare and biotechnology 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. The Health and Biotechnology Areas. The health care
industry is subject to government regulation and government approval of products
and services, which could have a significant effect on price and availability.
Furthermore, the types of products or services produced or provided by health
care companies can quickly become obsolete. The biotechnology industry can be
significantly affected by patent considerations, intense competition, rapid
technological change and obsolescence, and governmental regulation.
Biotechnology companies may have persistent losses during a new products'
transition from development to production, an revenue may be erratic.
3. Foreign Securities. Each Fund may invest up to 20% of its
assets in foreign securities. It is, however, the present intention of each 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, a 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 a 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 a Fund are uninvested and no return is earned thereon and
may involve a risk of loss to that 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 a 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 a 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 a 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 a Fund may contemporarily hold
funds in foreign currencies. The value of a 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. A Fund may
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incur costs in connection with conversions between various currencies. A Fund's
net asset value per share will be affected by changes in currency exchange
rates. Changes in foreign currency exchange rates may also 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 a 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).
4. 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.
5. Repurchase Agreements. When a 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. A 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 a 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. A 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 a 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 a 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 a 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, a 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,
a 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
a Fund, the Adviser seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of
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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 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.
6. Hedging Transactions. The Funds may, but do 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 Funds are 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 Funds may
write covered call options on securities or stock indices. By writing call
options, a Fund limits its profit to the amount of the premium received. By
writing a covered call option, a 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 Funds will not write options if immediately
after such sale the aggregate value of the obligations under the outstanding
options would exceed 25% of a Fund's net assets.
To the extent the Funds use 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
a Fund, the Adviser will attempt to create a very closely correlated hedge.
Short Sales. The Funds may make short sales of securities
"against-the-box." A short sale "against-the-box" is a sale of a security that a
Fund either owns an equal amount of or has the immediate and unconditional right
to acquire at no additional cost. The Funds 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.
7. Options Transactions. The Funds may, but do not currently
intend to, enter into options transactions. The Funds 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 Funds may also purchase all options to provide a hedge against an
increase in the price of a security sold short by it. When a 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 a
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 Funds may write covered call options on
securities or stock indices. By writing options, the Funds limit their profits
to the amount of the premium received. By writing a call option, a 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, a Fund assumes the risk that it may be required
to purchase the underlying security at a price in excess of its current market
value.
8. Lending of Securities. The Funds may, but do not currently
intend to, lend their portfolio securities to qualified institutions as
determined by the Adviser. By lending its portfolio securities, a 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 transaction.
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A 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 Funds 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.
9. Variable-Amount Master Demand Notes. The Funds 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 Funds 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. Each 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 Funds may invest in include participation
certificates purchased by a 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 a 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 a 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. A
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 Funds intend to exercise the demand
only (1) upon a default under the terms of the bond documents, (2) as needed to
provide liquidity to a Fund in order to make redemptions of a 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 a 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 Funds will attempt to have
the issuer of the participation certificate bear the cost of the insurance,
although the Funds retain the option to purchase insurance if necessary, in
which case the cost of insurance will be an expense of the Funds subject to the
expense limitation on investment company expenses prescribed by any state in
which a Fund's shares are qualified for sale. The Adviser has been instructed by
the Company's Board of Directors to continually monitor the pricing,
- ----------------------
* 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.
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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 Funds, the Funds intend 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 Funds 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 a 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 a 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 a
Fund, it will be sold in the market or through exercise of the repurchase
demand.
C. FUND POLICIES - INVESTMENT RESTRICTIONS
Each Fund has adopted the following fundamental investment
restrictions which may not be changed unless approved by a majority of a Fund's
outstanding shares. As used in this SAI, the term "majority of the outstanding
shares" of a 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.
Each 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.
(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
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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 Funds and
Their 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
Funds and Their Investments and Risks."
(9) Invest more than 25% of its assets in the securities of
"issuers" in any single industry, except, with respect to the
Amerindo Internet B2B Fund, the Amerindo Technology Fund and
the Amerindo Technology Fund II, in the technology and science
areas and, with respect to the Amerindo Health & Biotechnology
Fund, in the health and biotechnology areas as set forth under
"Investment Objectives, Principal Investment Strategies and
Related Risks" in the Prospectuses, 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.
915866.6
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<PAGE>
A 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 a 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, a
Fund.
D. TEMPORARY DEFENSIVE POSITIONS
When the Adviser believes that market conditions warrant a
temporary defensive position, each 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. A 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 portfolio turnover for the Amerindo Technology Fund for
the fiscal year ended December 31, 1998 was 78.46%. The Fund's portfolio
turnover for the fiscal period ended October 31, 1999 was 170%. The portfolio
turnover for the twelve months ended December 31, 1999 was 125%. The variation
in the Fund's portfolio turnover was due to increased trading by the Fund. In
response to current market conditions the Amerindo Technology 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 FUNDS
The Company's Board of Directors is responsible for the
overall management and supervision of the Funds. Pursuant to the terms of an
Investment Advisory Agreement, Amerindo Investment Advisors, Inc. (the "Adviser"
or "Amerindo") serves as the investment adviser to the Funds. The Adviser
supervises all aspects of the Funds' operations and provides investment advice
and portfolio management services to the Funds. 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 Company 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 Company.
OFFICERS AND DIRECTORS OF THE COMPANY
<TABLE>
<S> <C>
ALBERTO W. VILAR* Mr. Vilar has been Chairman of the Board of Directors and
Amerindo Investment Advisors Inc. Chief Executive Officer of the Company since its inception.
One Embarcadero He began his career with Citibank N.A. in New York in
</TABLE>
- --------
* "Interested person" of the Fund, as defined in the 1940 Act.
915866.6
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<PAGE>
<TABLE>
<S> <C>
Suite 2300 1964 and worked there as an International Credit Officer
San Francisco, CA 94111 until 1967. From 1967 to 1971, he served as Vice
399 Park Avenue President, Portfolio Manager and Manager of the
22nd Floor Investment Management Division of Drexel Burnham
New York, NY 10022 Lambert in New York. From 1971 to 1973, he served as
(59) 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 President of the
Amerindo Investment Advisors Inc. Company since its inception. He served as a Portfolio
43 Upper Grosvenor Street Manager for Crocker Bank in San Francisco from 1971 to
London, England W1X9PG 1977, and as a Partnership Manager for Crocker Investment
(56) 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.
DR. JOHN RUTLEDGE Dr. Rutledge has been a Director of the Company since its
Rutledge & Company, Inc. inception. He also has been Chairman of Rutledge &
One Greenwich Office Park Company, Inc., a merchant banking firm, since 1991 and
Greenwich, CT 06831 serves as a director of Earle M. Jorgensen Company,
(52) 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. ( a
private equity investment firm). He is the author of books
</TABLE>
- --------
* "Interested person" of the Company, as defined in the 1940 Act.
915866.6
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<PAGE>
<TABLE>
<S> <C>
and investment
publications, writes a
monthly column in Forbes
Magazine and is a frequent
contributor to
periodicals.
JUDE T. WANNISKI Mr. Wanniski has been a Director of the Company since its
Polyconomics, Inc. inception. He also has been president of Polyconomics,
86 Maple Avenue Inc. (a research and advisory firm) since 1978.
Morristown, NJ 07960
(63)
DANA E. SMITH Ms. Smith has been the Vice President of and Treasurer to
Amerindo Investment Advisors Inc. the Company since its inception. She has been the Chief
22nd Floor Compliance Officer of Amerindo Investment Advisors Inc.
399 Park Avenue since April 1993. From December 1991 to March 1993,
New York, NY 10022 she was a Mutual Fund Marketing Associate at Lazard
(40) Freres Asset Management and an officer of The Lazard
Funds, Inc.
ANTHONY CIULLA Mr. Ciulla has been Vice President of the Company since
Amerindo Investment Advisors Inc. its inception. He has been the Senior Trader of Amerindo
One Embarcadero Investment Advisers Inc. since October 1, 1990.
Suite 2300
San Francisco, CA 94111
(67)
</TABLE>
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 Company From Company of Company Expenses Upon Retirement From the Company
---------------------- ------------ ------------------- --------------- ----------------
<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 Company receives a base
annual fee of $25,000 which is paid by the Company, plus $1,250 for each meeting
attended.
Code of Ethics
The Company and the Adviser have each adopted a Code of Ethics
under Rule 17j-1 of the 1940 Act. The Code of Ethics for the Company and the
Adviser (the "Code") restricts the personal investing activities of certain
Access Persons and others, as defined in the Code. The primary purpose of the
Code is to ensure that these
915866.6
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<PAGE>
investing activities do not disadvantage the Funds. Such Access Persons are
generally required to preclear security transactions with the Company's
Compliance Officer or his designee and to report all transactions on a regular
basis. The Compliance Officer or designee has the responsibility for
interpreting the provisions of the Code, for adopting and implementing
Procedures for the enforcement of the provisions of the Code, and for
determining whether a violation has occurred. In the event of a finding that a
violation has occurred, the Compliance Officer or designee shall take
appropriate action. The Company and the Adviser have developed procedures for
administration of the Code.
IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On April 30, 2000, there were 934,558 Class A shares, 172,801
Class C shares and 20,022,517 Class D shares of the Amerindo Technology Fund
outstanding. As of this date, the directors and officers of the Amerindo
Technology Fund, as a group, owned less than 1% of each Class. There were no
shares of the Amerindo Technology Fund II, Amerindo Internet B2B Fund, and
Amerindo Health & Biotechnology Fund outstanding as of April 30, 2000.
The following represents a list of persons who owned 5% or
more of the Amerindo Technology Fund's outstanding common stock as of April 30,
2000:
<TABLE>
<CAPTION>
CLASS A SHARES NONE
CLASS C SHARES NONE
CLASS D SHARES Name and Address Percentage of Class Nature of Ownership
---------------- ------------------- -------------------
<S> <C> <C>
Charles Schwab & Co. 23.58% Record
101 Montgomery Street
San Francisco, CA 94104
A/C WAIF8628832 MAC 9.60% 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, California 94111.
The Adviser serves as the investment adviser of the Funds pursuant to an
Investment Advisory Agreement entered into by each Fund on behalf of each Class.
The Adviser supervises all aspects of the Funds' operations and provides
investment advice and portfolio management services to the Funds. Pursuant to
the Advisory Agreement and subject to the supervision of the Company's Board of
Directors, the Adviser makes each Fund's day-to-day investment decisions,
arranges for the execution of portfolio transactions and generally manages the
Funds' investments.
915866.6
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<PAGE>
The Adviser provides persons satisfactory to the Board of
Directors of the Company to serve as officers of the Company. Such officers, as
well as certain other employees and directors of the Company, may be directors,
officers or employees of the Adviser or its affiliates.
The Adviser may also provide the Funds 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 for the Amerindo Technology Fund 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 1940 Act) of the
Company 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 for the Amerindo Technology Fund II,
the Amerindo Internet B2B Fund, and the Amerindo Health & Biotechnology Fund was
approved on May 4, 2000 by the Board of Directors, including a majority of the
directors who are not interested persons (as defined in the 1940 Act) of the
Company or the Adviser. The Agreement, which currently extends to May 28, 2002,
may be continued in force thereafter for successive twelve-month periods
beginning each May 31st, provided that such continuance is specifically approved
annually by majority vote of each 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 Agreements are terminable without penalty by a
Fund on sixty days' written notice when authorized either by majority vote of
the outstanding voting shares of a Fund or by a vote of a majority of the
Company'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
Agreements provide 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
Agreements, the Funds, on behalf of each Class, will pay an annual advisory fee
paid monthly equal to 1.50% of each 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.
915866.6
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<PAGE>
Fees Paid to the Adviser Under the Advisory Agreement (for the Amerindo
Technology Fund)
Fiscal Year Ended,
1999* 1998 1997
Fees Paid $1,959,874 $674,525 $609,301
Reimbursements $ 53,171 $225,991 $234,645
- ------------------- -------------- ---------------------- ----------------
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 Funds. 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 a Fund's
shares.
Expense Limitation. From time to time, the Adviser may
voluntarily assume certain expenses of a 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 Funds
have, under the Advisory Agreements, confirmed their 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 Funds may from time-to-time hire their own employees or
contract to have management services performed by third parties, and the
management of the Funds intends to do so whenever it appears advantageous to the
Funds. A 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 of each Fund, has adopted
a distribution and service plan for the Class A and D shares (the "Class A and
Class D Plan") and a distribution and service plan for the Class C shares (the
"Class C Plan") (collectively, the "Plans"), 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.
- --------
* Subsequent to December 31, 1998, the Company's management elected to
change its fiscal year end to October 31.
915866.6
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<PAGE>
The Class A and Class D Plan 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 Class D shares of the Funds for providing servicing to their
clients. These fees are subject to a maximum of 0.25% per annum of the Class D
shares' average daily net assets. With respect to Class A shares, the
Distributor receives a shareholder servicing and/or distribution fee equal to a
maximum of 0.25% of the Class A shares' average daily net assets.
The Class C Plan provides that the Distributor is paid a
compensatory distribution fee 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 Funds. This fee
is an asset-based sales charge. The Distributor also receives a shareholder
servicing fee equal to a maximum of 0.25% per annum of the Class C shares
average daily net assets. Fees paid under the Plans may not be waived for
individual shareholders.
For the fiscal period ended October 31, 1999, the Amerindo
Technology Fund paid distribution fees equal to $20,273 for the Class A shares
and $316,509 for the Class D Shares. For the fiscal period ended October 31,
1999, the Amerindo Technology 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.
The Plans 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; (ii) to compensate certain
financial intermediaries for providing assistance in distributing Class shares;
(iii) to pay the costs of printing and distributing the Funds' Prospectuses 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 Funds' 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 Plans 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
Plans, made payments of $794,122 in advertising and related costs in connection
with the Amerindo Technology Fund. 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.
Under the Plans, 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) 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
a Fund) quarterly and year-end statements and
915866.6
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<PAGE>
confirmations in a timely basis after activity in the account; (ix) transmit to
shareholders of each Class proxy statements, annual reports, updated
prospectuses and other communications; (x) receive, tabulate and transmit
proxies executed by shareholders with respect to meetings of shareholders of the
Fund; and (xi) provide such other related services as the Funds or a shareholder
may request.
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 Funds directly may impose charges, limitations,
minimums and restrictions in addition to or different from those applicable to
shareholders who invest in the Funds 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 Funds 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.
In accordance with the Rule, the Plans provide that all
written agreements relating to the Plans 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 Plans require the Funds
and the Distributor to prepare, at least quarterly, written reports setting
forth all amounts expended for distribution purposes by the Funds and the
Distributor pursuant to the Plans and identifying the distribution activities
for which those expenditures were made.
C. DISTRIBUTOR
The Company, on behalf of each Fund, and SEI Investments
Distribution Co. (the "Distributor") have entered into a Distribution Agreement
effective July 13, 1999. Pursuant to the Agreement, the Company grants to the
Distributor the exclusive right to sell shares of the Funds at the net asset
value per share plus any applicable sales charge in accordance with the current
prospectus. The Distributor agrees to use all reasonable efforts, consistent
with its other business, in connection with the distribution of shares of the
Funds.
The Distribution Agreement was most recently approved on July
13, 1999 for the Amerindo Technology Fund and on May 4, 2000 for the Amerindo
Technology Fund II, the Amerindo Internet B2B Fund, and the Amerindo Health &
Biotechnology Fund, 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 Company or the Adviser.
D. ADMINISTRATOR
1. General Information. The Company and SEI Investment Mutual
Funds Services (the "Administrator") have entered into an Administrative
Agreement effective September 20, 1999. This Agreement was initially entered
into on behalf of the Amerindo Technology Fund on September 20, 1999 and was
subsequently approved by the Board of Directors on May 4, 2000 on behalf of the
Amerindo Technology Fund II, the Amerindo Internet B2B Fund, and the Amerindo
Health & Biotechnology Fund.
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,
915866.6
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<PAGE>
institutional investors, and money managers. The Administrator and its
affiliates also serve as administrator or sub- administrator to over 34 mutual
funds.
Pursuant to the Administration Agreement, the Administrator
provides all administrative services necessary for the Funds, 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
Company. 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 Company 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 a 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 Funds, and, on behalf of the Funds,
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 Funds' 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 Funds 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 Funds 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.
2. Administrator's Fees. For the services rendered to the
Funds by the Administrator, the Fund pays the Administrator a monthly fee based
on each Fund's average net assets.
915866.6
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<PAGE>
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 (for the Amerindo Technology Fund)
Fiscal Year Ended,
1999 1,2 1998 3 1997 3
Fees $173,516 $73,466 $66,170
E. CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT
The Northern Trust Company, 50 S. Lasalle Street, Chicago,
Illinois 60675, serves as custodian for the Funds' cash and securities. Pursuant
to a Custodian Agreement with the Company, on behalf of the Funds, it is
responsible for maintaining the books and records of each Fund's portfolio
securities and cash. The Custodian does not assist in, and is not responsible
for, investment decisions involving assets of the Funds. Forum Shareholder
Services LLC also acts as the Funds' transfer and dividend agent. Forum
Shareholder Services LLC has its principal office at 2 Portland Square,
Portland, Maine 04101.
F. COUNSEL AND INDEPENDENT AUDITORS
Legal matters in connection with the issuance of shares of
common stock of the Company 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
Funds.
VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
- --------
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.
915866.6
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The Adviser makes the Funds' 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 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 Funds 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 Funds 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 Funds, 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 Funds. 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 a 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 Amerindo Technology 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 Funds
effect 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 a 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 Funds purchase
or sell 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 Funds pay 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 Funds 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
Funds 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 Funds rather than by a
formula. The primary consideration is prompt execution of orders in an effective
manner at the most favorable price.
915866.6
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Investment decisions for the Funds 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 Funds and other
investment companies or accounts managed by the Adviser are simultaneously
engaged in the purchase 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 a Fund or the
size of the position obtainable for a Fund. In addition, when purchases or sales
of the same security for a 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 Funds, 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
a 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 four series (Amerindo Technology Fund,
Amerindo Technology Fund II, Amerindo Internet B2B Fund, and Amerindo Health &
Biotechnology Fund) and 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 Funds. 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 Funds 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 Funds do
not issue certificates evidencing Fund shares.
As a general matter, the Funds will not hold annual or other
meetings of their 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 a Fund's investment advisory agreement, (c) for
approval of revisions to a 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 Funds as may be required
by the 1940 Act including the removal of Fund directors and communication among
shareholders, any registration of the Funds 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
915866.6
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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 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 a 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 Prospectuses.
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 Funds (other than the Amerindo Technology Fund) intend to
qualify annually and elect to be treated as a regulated investment company under
the Internal Revenue Code of 1986 ("Code"). The Amerindo Technology Fund has
already elected and intends to continue to qualify annually as a regulated
investment company under the Code. To qualify as a regulated investment company,
a Fund must distribute to its 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, a 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.
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 Funds must distribute for the calendar year an
amount equal to the sum of (1) at least 98% of their ordinary income (excluding
any capital gains or losses) for the calendar year, (2) at least 98% of the
excess of their capital gains over capital losses (adjusted for certain losses)
from the one-year period ending October 31 of such year, and (3) any
deficiencies from distributions in such prior years.
Each 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. 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 Funds 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 a 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
915866.6
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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 of a share on the reinvestment date. The Funds do not expect
that any of their 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 Funds 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 a Fund's taxable year, at least 50% of the value of
that 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 that 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 a Fund did not qualify as a
regulated investment company, all of its taxable income 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 Funds. The price of shares
purchased at that time includes the amount of the forthcoming distributions.
Distributions by a 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 Funds do not expect that they 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
Funds accrue interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Funds actually
collect 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 a 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 a 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
915866.6
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<PAGE>
(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 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 Funds for
reinvestment, requiring federal income taxes thereon to be paid by it, the Funds
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
a 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
an amount equal to the difference between the amount of undistributed capital
gains included in their gross income and the tax deemed paid.
The Funds 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 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 Funds 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 consult their tax
advisor regarding 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 Funds may be subject to state or local tax in
jurisdictions in which a 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.
915866.6
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X. UNDERWRITERS
Each 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 Funds, will solicit
orders for the purchase of a Fund's shares, provided that any subscriptions and
orders will not be binding on that 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 shares' and
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 for
providing distribution assistance and shareholder support to that Fund.
The Glass-Steagall Act limits the ability of a depository
institution to become an underwriter or distributor of securities. It is the
Funds' 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 a 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. On November 16, 1999, President Clinton signed
the Gramm-Leach-Bliley Act, repealing certain provisions of the Glass-Steagall
Act which have restricted affiliation between banks and securities firms and
amending the Bank Holding Company Act thereby removing restrictions on banks and
insurance companies. The new legislation grants banks new authority to conduct
certain authorized activity through financial subsidiaries. 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 Funds, 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 Funds intend 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 a 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 a 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 that Fund has been in existence for a shorter period.
The yields and the net asset values of each Class of shares of
the Funds will vary based on the current market value of the securities held by
the Funds 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
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Class of shares of a 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 Funds to yields and total rates of return
published for other investment companies and other investment vehicles.
The Funds compute 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 Funds, changes in interest rates
on investments, and a 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 Funds have not had a registration in effect
for 1, 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 Funds 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.
915866.6
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From time to time evaluations of performance of the Funds
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 evaluations of performance of the Adviser
made by independent sources may be used in advertisements of the Funds.
XII. FINANCIAL STATEMENTS
The financial statements for the period ended October 31,
1999 are available, without charge, upon request. The annual financial
statements are audited by the Fund's independent financial accountants. 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.
Shareholders will receive Semi-Annual and Annual Reports from the Fund.
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PART C - OTHER INFORMATION
Item 23. EXHIBITS
(1) (a) Articles of Incorporation of the Registrant.
(a.1) Articles Supplementary of the Registrant.
(1) (b) By-Laws of the Registrant.
(c) Not applicable.
(2) (d) Investment Advisory Agreement: Amerindo Technology Fund
(2) (d.1) Form of Investment Advisory Agreement: Amerindo
Technology Fund II, Amerindo Internet B2B Fund and
Amerindo Health & Biotechnology Fund.
(2) (e) Distribution Agreement for all Classes.
(f) Not applicable.
(1) (g) Form of Custody Agreement.
(2) (h) Administration Agreement.
(h.1) Transfer Agency and Service Agreement.
(3) (h.2) Form of Expense Limitation Agreement.
(1) (i) Opinion of Battle Fowler LLP as to the legality of the
securities being registered and consent.
(4) (i.1) Consent of Battle Fowler LLP.
(j) Consent of Morrison, Brown, Argiz & Company, certified
public accountants.
(5) (k) Audited Financial Statements, for fiscal year ended
December 31, 1999, including the Report of Independent
Accountants.
(1) (l) Subscription Letter.
(m) Amended and Restated Distribution and Service Plan for
Class A and D shares.
(m.1) Amended and Restated Distribution and Service Plan for
Class C shares.
(n) Amendment No. 2 to the Multi-Class Plan pursuant to Rule
18f-3 under the 1940 Act.
(o) Reserved.
(p) Code of Ethics - Amerindo Technology Fund / Amerindo
Investment Advisors Inc.
(2) (p.1) Code of Ethics - SEI Investments Distribution Co.
- --------------------------
(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. 7 to the Registrant's
Registration Statement, 333-00767, filed on March 13, 2000 and
incorporated herein by reference
(3) 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
(4) 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
(5) Filed with Annual Report in form N-30D on December 30, 2000 (accession
number 0000935069-99-000294) and incorporated herein by reference
955627.1
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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.
955627.1
<PAGE>
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 18, 1999
Huntington VA Funds October 15, 1999
Friends Ivory Funds December 16, 1999
955627.1
<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>
<CAPTION>
Positions and Offices Positions and Offices
Name 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
Kim Rainey Vice President 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.
955627.1
<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.
955627.1
<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 of
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 25th day of May, 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 May 25, 2000.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
By: /s/ Alberto W. Vilar Chairman, May 25, 2000
---------------------------- Chief Executive
Alberto W. Vilar Officer and Director
By: /s/ Dana E. Smith Vice President May 25, 2000
---------------------------- and Treasurer
Dana E. Smith
John Rutledge Director May 25, 2000
Gary A. Tanaka Director
Jude T. Wanniski Director
</TABLE>
By: /s/ Dana E. Smith
----------------------------
Dana E. Smith*
- --------
* Pursuant to Powers of Attorney, filed as an exhibit with Pre-Effective
Amendment No. 1 to to Registration Statement No. 333-00767, filed on May
23, 1996 and incorporated herewith
955627.1
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Description
- ------- -----------
(a.1) Articles Supplementary of the Registrant
(h.1) Transfer Agency and Service Agreement
(j) Consent of Morrison, Brown, Argiz & Company,
certified public accountants
(m) Amended and Restated Distribution and Service Plan for
Class A and D Shares
(m.1) Amended and Restated Distribution and Service Plan for
Class C Shares
(n) Amendment No. 2 to the Multi-Class Plan pursuant to
Rule 18f-3 under the 1940 Act
(p) Code of Ethics - Amerindo Technology Fund / Amerindo Investment
Advisors Inc.
955627.1
ARTICLES SUPPLEMENTARY
OF
AMERINDO FUNDS INC.
Amerindo Funds Inc., a Maryland Corporation having its principal office
in the State of Maryland in the City of Baltimore (hereinafter called the
"Corporation" or the "Fund"), certifies to the Department of Assessments and
Taxation of Maryland that:
(1) The following is a description of the stock, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, as set and changed by the board of directors:
The Fund's stock is reclassified into the following series and
classes: (i) an additional 20,000,000 shares of authorized but
unissued stock will be allocated to the Amerindo Technology
Fund for a total of 120,000,000 shares (of these 120,000,000
shares, Class A, Class C and Class D shares will be allocated
40,000,000 shares each); (ii) 120,000,000 shares of authorized
but unissued stock will be allocated to the Amerindo Internet
B2B Fund (of these 120,000,000 shares, Class A, Class C and
Class D shares will be allocated 40,000,000 shares each);
(iii) 120,000,000 shares of authorized but unissued stock will
be allocated to the Amerindo Health & Biotechnology Fund (of
these 120,000,000 shares, Class A, Class C and Class D shares
will be allocated 40,000,000 shares each); and (iv)
120,000,000 shares of authorized but unissued stock are
allocated to the Amerindo Technology Fund II (of these
120,000,000 shares, Class A, Class C and Class D shares will
be allocated 40,000,000 shares each).
Each share, regardless of class, will represent an interest in
the same portfolio of investments and will have identical
voting (unless by law certain matters must be approved by the
affected class), dividend, liquidation and other rights,
preferences, powers, restrictions, limitations and terms and
conditions as set forth in the Corporation's Articles of
Incorporation, as amended, except that (i) Class A, Class C
and Class D shares will have different designations; (ii)
under the Rule 12b-1 Distribution and Service Plan and related
agreements, the Class A and Class D shares are assessed a
service fee of 0.25% of the respective Class's average daily
net assets and the Class C shares are assessed a service fee
of 0.25% and a distribution fee of 0.75% of the Class's
average daily net assets; and (iii) the exchange privilege
will permit stockholders to exchange their shares only for
shares of the same class of designated funds listed in an
exchange fund.
(2) The Corporation's stock has been reclassified by the Corporation's
board of directors under the authority contained in Article Sixth of the
Corporation's Articles of Incorporation, as amended.
935796.3
<PAGE>
IN WITNESS WHEREOF, Amerindo Funds Inc. has caused these presents to be
signed in its name and on its behalf by its President or one of its Vice
Presidents and attested by its Secretary or one of its Assistant Secretaries, on
May ___, 2000.
AMERINDO FUNDS INC.
By: /s/ Dana Smith
-------------------------
Name: Dana Smith
Title: Vice President
ATTEST:
- ------------------------------
Name: Anthony Ciulla
Title: Vice President and Secretary
935796.3
-2-
<PAGE>
THE UNDERSIGNED, Vice President of AMERINDO FUNDS INC., who executed on
behalf of said Corporation the foregoing Articles Supplementary, of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Articles Supplementary to be the corporate act
of said Corporation and further certifies that, to the best of his knowledge,
information, and in all material respects, under the penalties of perjury.
AMERINDO FUNDS INC.
By: /s/ Dana Smith
-------------------------
Name: Dana Smith
Title: Vice President
935796.3
-3-
AMERINDO FUNDS, INC.
TRANSFER AGENCY AND SERVICES AGREEMENT
AGREEMENT made as of the 20TH day of September, 1999, by and between
Amerindo Funds, Inc., a Maryland corporation , with its principal office and
place of business at One Freedom Valley Drive, Oaks, Pennsylvania 19456 (the
"Corporation"), and Forum Shareholder Services, LLC, a Delaware limited
liability company with its principal office and place of business at Two
Portland Square, Portland, Maine 04101 ("Forum").
WHEREAS, the Corporation is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and is authorized to divide those series into
separate classes; and
WHEREAS, the Corporation offers shares in various series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Corporation and made subject to this Agreement in accordance
with Section 13, being herein referred to as a "Fund," and collectively as the
"Funds") and the Corporation offers shares of various classes of each Fund as
listed in Appendix A hereto (each such class together with all other classes
subsequently established by the Corporation in a Fund being herein referred to
as a "Class," and collectively as the "Classes"); and
WHEREAS, the Corporation on behalf of the Funds desires to appoint Forum as
its transfer agent and dividend disbursing agent and Forum desires to accept
such appointment;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Corporation and Forum hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) Appointment. The Corporation, on behalf of the Funds, hereby appoints
Forum to act as, and Forum agrees to act as, (i) transfer agent for the
authorized and issued shares of beneficial interest of the Corporation
representing interests in each of the respective Funds and Classes thereof
("Shares"), (ii) dividend disbursing agent and (iii) agent in connection with
any accumulation, open-account or similar plans provided to the registered
owners of shares of any of the Funds ("Shareholders") and set out in the
currently effective prospectuses and statements of additional information
(collectively "prospectus") of the applicable Fund, including, without
limitation, any periodic investment plan or periodic withdrawal program.
(b) Document Delivery. The Corporation has delivered to Forum copies of (i)
the Corporation's Articles of Incorporation and Bylaws (collectively, as amended
from time to time, "Organic Documents"), (ii) the Corporation's Registration
Statement and all amendments thereto filed with the U.S. Securities and Exchange
Commission ("SEC") pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), or the Investment Company Act of 1940, as amended ("1940
Act")(the "Registration Statement"), (iii) the Corporation's current Prospectus
and Statement of Additional Information of each Fund (collectively, as currently
in effect and as
<PAGE>
amended or supplemented, the "Prospectus"), (iv) each current plan of
distribution or similar document adopted by the Corporation under Rule 12b-1
under the 1940 Act ("Plan") and each current shareholder service plan or similar
document adopted by the Corporation ("Service Plan"), and (v) all procedures
adopted by the Corporation with respect to the Funds (i.e., repurchase agreement
procedures), and shall promptly furnish Forum with all amendments of or
supplements to the foregoing. The Corporation shall deliver to Forum a certified
copy of the resolution of the Board of Corporationees of the Corporation (the
"Board") appointing Forum and authorizing the execution and delivery of this
Agreement.
SECTION 2. DUTIES OF FORUM
(a) Services. Forum agrees that in accordance with procedures established
from time to time by agreement between the Corporation on behalf of each of the
Funds, as applicable, and Forum, Forum will perform the following services:
(i) provide the services of a transfer agent, dividend disbursing agent
and, as relevant, agent in connection with accumulation, open-account or
similar plans (including without limitation any periodic investment plan or
periodic withdrawal program) that are customary for open-end management
investment companies including: (A) maintaining all Shareholder accounts,
(B) preparing Shareholder meeting lists, (C) mailing proxies to
Shareholders, (D) mailing Shareholder reports and prospectuses to current
Shareholders, (E) withholding taxes on U.S. resident and non-resident alien
accounts, (F) preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required by federal authorities with respect to
distributions for Shareholders, (G) preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in Shareholder
accounts, (H) preparing and mailing activity statements for Shareholders,
and (I) providing Shareholder account information;
(ii) receive for acceptance orders for the purchase of Shares and promptly
deliver payment and appropriate documentation therefor to the custodian of
the applicable Fund (the "Custodian") or, in the case of Fund's operating
in a master-feeder or fund of funds structure, to the transfer agent or
interestholder recordkeeper for the master portfolios in which the Fund
invests;
(iii) pursuant to purchase orders, issue the appropriate number of Shares
and hold such Shares in the appropriate Shareholder account;
(iv) receive for acceptance redemption requests and deliver the appropriate
documentation therefor to the Custodian or, in the case of Fund's operating
in a master-feeder or fund of funds structure, to the transfer agent or
interestholder recordkeeper for the master portfolios in which the Fund
invests;
(v) as and when it receives monies paid to it by the Custodian with respect
to any redemption, pay the redemption proceeds as required by the
prospectus pursuant to which the redeemed Shares were offered and as
instructed by the redeeming Shareholders;
-2-
952684.1
<PAGE>
(vi) effect transfers of Shares upon receipt of appropriate instructions
from Shareholders;
(vii) prepare and transmit to Shareholders (or credit the appropriate
Shareholder accounts) payments for all distributions declared by the
Corporation with respect to Shares;
(viii) issue share certificates and replacement share certificates for
those share certificates alleged to have been lost, stolen, or destroyed
upon receipt by Forum of indemnification satisfactory to Forum and
protecting Forum and the Corporation and, at the option of Forum, issue
replacement certificates in place of mutilated share certificates upon
presentation thereof without requiring indemnification;
(ix) receive from Shareholders or debit Shareholder accounts for sales
commissions, including contingent deferred, deferred and other sales
charges, and service fees (i.e., wire redemption charges) and prepare and
transmit payments to underwriters, selected dealers and others for
commissions and service fees received;
(x) track shareholder accounts by financial intermediary source and
otherwise as requested by the Corporation and provide periodic reporting to
the Corporation or its administrator or other agent;
(xi) maintain records of account for and provide reports and statements to
the Corporation and Shareholders as to the foregoing;
(xii) record the issuance of Shares of the Corporation and maintain
pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as
amended ("1934 Act") a record of the total number of Shares of the
Corporation, each Fund and each Class thereof, that are authorized, based
upon data provided to it by the Corporation, and are issued and outstanding
and provide the Corporation on a regular basis a report of the total number
of Shares that are authorized and the total number of Shares that are
issued and outstanding; and
(xiii) provide a system which will enable the Corporation to calculate the
total number of Shares of each Fund and Class thereof sold in each State.
(b) Other Services. Forum shall provide the following additional services
on behalf of the Corporation and such other services agreed to in writing by the
Corporation and Forum:
(i) monitor and make appropriate filings with respect to the escheatment
laws of the various states and territories of the United States; and
(ii) receive and tabulate proxy votes/oversee the activities of proxy
solicitation firms and coordinate the tabulation of proxy and shareholder
meeting votes.
-3-
952684.1
<PAGE>
(c) Blue Sky Matters. The Corporation or its administrator or other agent
(i) shall identify to Forum in writing those transactions and assets to be
treated as exempt from reporting for each state and territory of the United
States and for each foreign jurisdiction (collectively "States") and (ii) shall
monitor the sales activity with respect to Shareholders domiciled or resident in
each State. The responsibility of Forum for the Corporation's State registration
status is solely limited to the reporting of transactions to the Corporation,
and Forum shall have no obligation, when recording the issuance of Shares, to
monitor the issuance of such Shares or to take cognizance of any laws relating
to the issue or sale of such Shares, which functions shall be the sole
responsibility of the Corporation or its administrator or other agent.
(d) Safekeeping. Forum shall establish and maintain facilities and
procedures reasonably acceptable to the Corporation for the safekeeping,
control, preparation and use of share certificates, check forms, and facsimile
signature imprinting devices. Forum shall establish and maintain facilities and
procedures reasonably acceptable to the Corporation for safekeeping of all
records maintained by Forum pursuant to this Agreement.
(e) Cooperation With Accountants. Forum shall cooperate with each Fund's
independent public accountants and shall take reasonable action to make all
necessary information available to the accountants for the performance of the
accountants' duties.
(f) Responsibility for Compliance With Law. Except with respect to Forum's
duties as set forth in this Section 2 and except as otherwise specifically
provided herein, the Corporation assumes all responsibility for ensuring that
the Corporation complies with all applicable requirements of the Securities Act,
the 1940 Act and any laws, rules and regulations of governmental authorities
with jurisdiction over the Corporation. All references to any law in this
Agreement shall be deemed to include reference to the applicable rules and
regulations promulgated under authority of the law and all official
interpretations of such law or rules or regulations.
SECTION 3. RECORDKEEPING
(a) Predecessor Records. Prior to the commencement of Forum's
responsibilities under this Agreement, if applicable, the Corporation shall
deliver or cause to be delivered over to Forum (i) an accurate list of
Shareholders of the Corporation, showing each Shareholder's address of record,
number of Shares owned and whether such Shares are represented by outstanding
share certificates and (ii) all Shareholder records, files, and other materials
necessary or appropriate for proper performance of the functions assumed by
Forum under this Agreement (collectively referred to as the "Materials"). The
Corporation shall on behalf of each applicable Fund or Class indemnify and hold
Forum harmless from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liability arising out of or attributable to
any error, omission, inaccuracy or other deficiency of the Materials, or out of
the failure of the Corporation to provide any portion of the Materials or to
provide any information in the Corporation's possession or control reasonably
needed by Forum to perform the services described in this Agreement.
-4-
952684.1
<PAGE>
(b) Recordkeeping. Forum shall keep records relating to the services to be
performed under this Agreement, in the form and manner as it may deem advisable
and as required by applicable law. To the extent required by Section 31 of the
1940 Act, and the rules thereunder, Forum agrees that all such records prepared
or maintained by Forum relating to the services to be performed by Forum under
this Agreement are the property of the Corporation and will be preserved,
maintained and made available in accordance with Section 31 of the 1940 Act and
the rules thereunder, and will be surrendered promptly to the Corporation on and
in accordance with the Corporation's request. The Corporation and the
Corporation's authorized representatives shall have access to Forum's records
relating to the services to be performed under this Agreement at all times
during Forum's normal business hours. Upon the reasonable request of the
Corporation, copies of any such records shall be provided promptly by Forum to
the Corporation or the Corporation's authorized representatives.
(c) Confidentiality of Records. Forum and the Corporation agree that all
books, records, information, and data pertaining to the business of the other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except as may be required by law.
(d) Inspection of Records by Others. In case of any requests or demands for
the inspection of the Shareholder records of the Corporation, Forum will
endeavor to notify the Corporation and to secure instructions from an authorized
officer of the Corporation as to such inspection. Forum shall abide by the
Corporation's instructions for granting or denying the inspection; provided,
however, that Forum may grant the inspection without instructions if Forum is
advised by counsel to Forum that failure to do so will result in liability to
Forum.
SECTION 4. ISSUANCE AND TRANSFER OF SHARES
(a) Issuance of Shares. Forum shall make original issues of Shares of each
Fund and Class thereof in accordance with the Corporation's then current
prospectus only upon receipt of (i) instructions requesting the issuance, (ii) a
certified copy of a resolution of the Board authorizing the issuance, (iii)
necessary funds for the payment of any original issue tax applicable to such
Shares, and (iv) an opinion of the Corporation's counsel as to the legality and
validity of the issuance, which opinion may provide that it is contingent upon
the filing by the Corporation of an appropriate notice with the SEC, as required
by Section 24 of the 1940 Act or the rules thereunder. If the opinion described
in (iv) above is contingent upon a filing under Section 24 of the 1940 Act, the
Corporation shall indemnify Forum for any liability arising from the failure of
the Corporation to comply with that section or the rules thereunder.
(b) Transfer of Shares. Transfers of Shares of each Fund and Class thereof
shall be registered on the Shareholder records maintained by Forum. In
registering transfers of Shares, Forum may rely upon the Uniform Commercial Code
as in effect in the State of Delaware or any other statutes that, in the opinion
of Forum's counsel, protect Forum and the Corporation from liability arising
from (i) not requiring complete documentation, (ii) registering a transfer
without an adverse claim inquiry, (iii) delaying registration for purposes of
such inquiry or (iv) refusing registration whenever an adverse claim requires
such refusal. As Transfer Agent, Forum will be
-5-
952684.1
<PAGE>
responsible for delivery to the transferor and transferee of such documentation
as is required by the Uniform Commercial Code.
SECTION 5. SHARE CERTIFICATES
(a) Certificates. The Corporation shall furnish to Forum a supply of blank
share certificates of each Fund and Class thereof and, from time to time, will
renew such supply upon Forum's request. Blank share certificates shall be signed
manually or by facsimile signatures of officers of the Corporation authorized to
sign by the Organic Documents of the Corporation and, if required by the Organic
Documents, shall bear the Corporation's seal or a facsimile thereof. Unless
otherwise directed by the Corporation, Forum may issue or register Share
certificates reflecting the manual or facsimile signature of an officer who has
died, resigned or been removed by the Corporation.
(b) Endorsement; Transportation. New Share certificates shall be issued by
Forum upon surrender of outstanding Share certificates in the form deemed by
Forum to be properly endorsed for transfer and satisfactory evidence of
compliance with all applicable laws relating to the payment or collection of
taxes. Forum shall forward Share certificates in "non-negotiable" form by
first-class or registered mail, or by whatever means Forum deems equally
reliable and expeditious. Forum shall not mail Share certificates in
"negotiable" form unless requested in writing by the Corporation and fully
indemnified by the Corporation to Forum's satisfaction.
(c) Non-Issuance of Certificates. In the event that the Corporation informs
Forum that any Fund or Class thereof does not issue share certificates, Forum
shall not issue any such share certificates and the provisions of this Agreement
relating to share certificates shall not be applicable with respect to those
Funds or Classes thereof.
SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS
(a) Purchase Orders. Shares shall be issued in accordance with the terms of
a Fund's or Class' prospectus after Forum or its agent receives either:
(i) (A) an instruction directing investment in a Fund or Class, (B) a check
(other than a third party check) or a wire or other electronic payment in
the amount designated in the instruction and (C), in the case of an initial
purchase, a completed account application; or
(ii) the information required for purchases pursuant to a selected dealer
agreement, processing organization agreement, or a similar contract with a
financial intermediary.
(b) Distribution Eligibility. Shares issued in a Fund after receipt of a
completed purchase order shall be eligible to receive distributions of the Fund
at the time specified in the prospectus pursuant to which the Shares are
offered.
-6-
952684.1
<PAGE>
(c) Determination of Federal Funds. Shareholder payments shall be
considered Federal Funds no later than on the day indicated below unless other
times are noted in the prospectus of the applicable Class or Fund:
(i) for a wire received, at the time of the receipt of the wire;
(ii) for a check drawn on a member bank of the Federal Reserve System, on
the second Fund Business Day following receipt of the check; and
(iv) for a check drawn on an institution that is not a member of the
Federal Reserve System, at such time as Forum is credited with Federal
Funds with respect to that check.
SECTION 7. FEES AND EXPENSES
(a) Fees. For the services provided by Forum pursuant to this Agreement,
the Corporation, on behalf of each Fund, agrees to pay Forum the fees set forth
in Clauses (i) and (ii) of Appendix B hereto. Fees will begin to accrue for each
Fund on the latter of the date of this Agreement or the date of commencement of
operations of the Fund. If fees begin to accrue in the middle of a month or if
this Agreement terminates before the end of any month, all fees for the period
from that date to the end of that month or from the beginning of that month to
the date of termination, as the case may be, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness or
termination occurs. Upon the termination of this Agreement with respect to a
Fund, the Corporation shall pay to Forum such compensation as shall be payable
prior to the effective date of termination.
(b) Expenses. In connection with the services provided by Forum pursuant to
this Agreement, the Corporation, on behalf of each Fund, agrees to reimburse
Forum for the expenses set forth in Appendix B hereto. In addition, the
Corporation, on behalf of the applicable Fund, shall reimburse Forum for all
expenses and employee time (at 150% of salary) attributable to any review of the
Corporation's accounts and records by the Corporation's independent accountants
or any regulatory body outside of routine and normal periodic reviews. Should
the Corporation exercise its right to terminate this Agreement, the Corporation,
on behalf of the applicable Fund, shall reimburse Forum for all out-of-pocket
expenses and employee time (at 150% of salary) associated with the copying and
movement of records and material to any successor person and providing
assistance to any successor person in the establishment of the accounts and
records necessary to carry out the successor's responsibilities.
(c) Payment. All fees and reimbursements are payable in arrears on a
monthly basis and the Corporation, on behalf of the applicable Fund, agrees to
pay all fees and reimbursable expenses within five (5) business days following
receipt` of the respective billing notice.
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<PAGE>
SECTION 8. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties of Forum. Forum represents and warrants
to the Corporation that:
(i) It is a limited liability company duly organized and existing and in
good standing under the laws of the State of Delaware.
(ii) It is duly qualified to carry on its business in the State of Maine.
(iii) It is empowered under applicable laws and by its Operating Agreement
to enter into this Agreement and perform its duties under this Agreement.
(iv) All requisite corporate proceedings have been taken to authorize it to
enter into this Agreement and perform its duties under this Agreement.
(v) It has access to the necessary facilities, equipment, and personnel to
perform its duties and obligations under this Agreement.
(vi) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of Forum, enforceable against Forum in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured parties.
(vii) It is registered as a transfer agent under Section 17A of the 1934
Act.
(viii) Its information technology systems will be Year 2000 compliant in
accordance with the Year 2000 compliance requirements of the SEC and the
National Association of Securities Dealers ("NASD"). Forum shall notify
Corporation if there is a material adverse change in the status of its
informational technology systems or upon having a reasonable basis for
believing that its informational technology systems will not be Year 2000
Compliant. "Year 2000 Compliant" or "Year 2000 Compliance" shall mean that
the systems or software in question shall be able to accurately process
date or date-related data, without creating any logical or mathematical
inconsistencies, from, into and between the twentieth and twenty-first
centuries, when used in accordance with the specifications set forth for
such systems or software; provided, however, that Forum shall not be
responsible for any failure of its systems or software to be Year 2000
Compliant which is caused by or related to the interaction or interface of
such systems or software with the systems or software of a third party
which are not Year 2000 Compliant.
(b) Representations and Warranties of the Corporation. The Corporation
represents and warrants to Forum that:
(i) It is a corporation duly organized and existing and in good standing
under the laws of Maryland.
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<PAGE>
(ii) It is empowered under applicable laws and by its Organic Documents to
enter into this Agreement and perform its duties under this Agreement.
(iii) All requisite corporate proceedings have been taken to authorize it
to enter into this Agreement and perform its duties under this Agreement.
(iv) It is an open-end management investment company registered under the
1940 Act.
(v) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Corporation, enforceable against the
Corporation in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties.
(vi) A registration statement under the Securities Act is currently
effective and will remain effective, and appropriate State securities law
filings have been made and will continue to be made, with respect to all
Shares of the Funds and Classes of the Corporation being offered for sale.
SECTION 9. PROPRIETARY INFORMATION
(a) Proprietary Information of Forum. The Corporation acknowledges that the
databases, computer programs, screen formats, report formats, interactive design
techniques, and documentation manuals maintained by Forum on databases under the
control and ownership of Forum or a third party constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to Forum or the third party. The Corporation
agrees to treat all Proprietary Information as proprietary to Forum and further
agrees that it shall not divulge any Proprietary Information to any person or
organization except as may be provided under this Agreement.
(b) Proprietary Information of the Corporation. Forum acknowledges that the
Shareholder list and all information related to Shareholders furnished to Forum
by the Corporation or by a Shareholder in connection with this Agreement
(collectively, "Customer Data") constitute proprietary information of
substantial value to the Corporation. In no event shall Proprietary Information
be deemed Customer Data. Forum agrees to treat all Customer Data as proprietary
to the Corporation and further agrees that it shall not divulge any Customer
Data to any person or organization except as may be provided under this
Agreement or as may be directed by the Corporation.
SECTION 10. INDEMNIFICATION
(a) Indemnification of Forum. Forum shall not be responsible for, and the
Corporation shall on behalf of each applicable Fund or Class thereof indemnify
and hold Forum harmless from and against, any and all losses, damages, costs,
charges, reasonable counsel fees, payments, expenses and liability arising out
of or attributable to:
-9-
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<PAGE>
(i) all actions of Forum or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in
good faith and without gross negligence or willful misconduct;
(ii) the Corporation's lack of good faith or the Corporation's gross
negligence or willful misconduct;
(iii) the reliance on or use by Forum or its agents or subcontractors of
information, records, documents or services which have been prepared,
maintained or performed by the Corporation or any other person or firm on
behalf of the Corporation, including but not limited to any previous
transfer agent or registrar;
(iv) the reasonable reliance on, or the carrying out by Forum or its agents
or subcontractors of, any instructions or requests of the Corporation on
behalf of the applicable Fund; and
(v) the offer or sale of Shares in violation of any requirement under the
Federal securities laws or regulations or the securities laws or
regulations of any State that such Shares be registered in such State or in
violation of any stop order or other determination or ruling by any federal
agency or any State with respect to the offer or sale of such Shares in
such State.
(b) Indemnification of Corporation. Forum shall indemnify and hold the
Corporation and each Fund or Class thereof harmless from and against any and all
losses, damages, costs, charges, reasonable counsel fees, payments, expenses and
liability arising out of or attributed to any action or failure or omission to
act by Forum as a result of Forum's lack of good faith, gross negligence or
willful misconduct with respect to the services performed under or in connection
with this Agreement.
(c) Reliance. At any time Forum may apply to any officer of the Corporation
for instructions, and may consult with legal counsel to the Corporation or to
Forum with respect to any matter arising in connection with the services to be
performed by Forum under this Agreement, and Forum and its agents or
subcontractors shall not be liable and shall be indemnified by the Corporation
on behalf of the applicable Fund for any action taken or omitted by it in
reasonable reliance upon such instructions or upon the advice of such counsel.
Forum, its agents and subcontractors shall be protected and indemnified in
acting upon (i) any paper or document furnished by or on behalf of the
Corporation, reasonably believed by Forum to be genuine and to have been signed
by the proper person or persons, (ii) any instruction, information, data,
records or documents provided Forum or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by the
Corporation, and (iii) any authorization, instruction, approval, item or set of
data, or information of any kind transmitted to Forum in person or by telephone,
vocal telegram or other electronic means, reasonably believed by Forum to be
genuine and to have been given by the proper person or persons. Forum shall not
be held to have notice of any change of authority of any person, until receipt
of written notice thereof from the Corporation. Forum, its agents and
subcontractors shall also be protected and indemnified in recognizing share
certificates which are reasonably
-10-
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<PAGE>
believed to bear the proper manual or facsimile signatures of the officers of
the Corporation, and the proper countersignature of any former transfer agent or
former registrar or of a co-transfer agent or co-registrar of the Corporation.
(d) Reliance on Electronic Instructions. If the Corporation has the ability
to originate electronic instructions to Forum in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event Forum shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with security
procedures established by Forum from time to time.
(e) Use of Fund/SERV and Networking. The Corporation has authorized or in
the future may authorize Forum to act as a "Mutual Fund Services Member" for the
Corporation or various Funds. Fund/SERV and Networking are services sponsored by
the National Securities Clearing Corporation ("NSCC") and as used herein have
the meanings as set forth in the then current edition of NSCC Rules and
Procedures published by NSCC or such other similar publication as may exist from
time to time. The Corporation shall indemnify and hold Forum harmless from and
against any and all losses, damages, costs, charges, reasonable counsel fees,
payments, expenses and liability arising directly or indirectly out of or
attributed to any action or failure or omission to act by NSCC.
(f) Notification of Claims. In order that the indemnification provisions
contained in this Section shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion, and
shall keep the other party advised with respect to all developments concerning
such claim. The party who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the defense of such claim
or to defend against said claim in its own name or in the name of the other
party. The party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION
(a) Effectiveness. This Agreement shall become effective with respect to
each Fund or Class on ____________. Upon effectiveness of this Agreement, it
shall supersede all previous agreements between the parties hereto covering the
subject matter hereof insofar as such Agreement may have been deemed to relate
to the Funds.
(b) Duration. This Agreement shall continue in effect with respect to a
Fund until terminated; provided, that continuance is specifically approved at
least annually (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Fund and (ii) by a vote of a majority of Corporationees
of the Corporation who are not parties to this Agreement or interested persons
of any such party (other than as Corporationees of the Corporation).
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952684.1
<PAGE>
(c) Termination. This Agreement may be terminated with respect to a Fund at
any time, without the payment of any penalty (i) by the Board on 60 days'
written notice to Forum or (ii) by Forum on 60 days' written notice to the
Corporation. Any termination shall be effective as of the date specified in the
notice. Upon notice of termination of this Agreement by either party, Forum
shall promptly transfer to the successor transfer agent the original or copies
of all books and records maintained by Forum under this Agreement including, in
the case of records maintained on computer systems, copies of such records in
machine-readable form, and shall cooperate with, and provide reasonable
assistance to, the successor transfer agent in the establishment of the books
and records necessary to carry out the successor transfer agent's
responsibilities.
(d) Survival. The obligations of Sections 7, 9 and 10 shall survive any
termination of this Agreement.
SECTION 12. ADDITIONAL FUNDS AND CLASSES. In the event that the Corporation
establishes one or more series of Shares or one or more classes of Shares after
the effectiveness of this Agreement, such series of Shares or classes of Shares,
as the case may be, shall become Funds and Classes under this Agreement. Forum
or the Corporation may elect not to make and such series or classes subject to
this Agreement.
SECTION 13. ASSIGNMENT. Except as otherwise provided in this Agreement,
neither this Agreement nor any rights or obligations under this Agreement may be
assigned by either party without the written consent of the other party. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective permitted successors and assigns. Forum may, without further
consent on the part of the Corporation, subcontract for the performance hereof
with any entity, including affiliated persons of Forum; provided however, that
Forum shall be as fully responsible to the Corporation for the acts and
omissions of any subcontractor as Forum is for its own acts and omissions.
SECTION 14. FORCE MAJEURE. Forum shall not be responsible or liable for any
failure or delay in performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances beyond its reasonable
control including, without limitation, acts of civil or military authority,
national emergencies, labor difficulties, fire, mechanical breakdowns, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails or
any transportation medium, communication system or power supply.
SECTION 15. LIMITATIONS OF LIABILITY OF THE DIRECTORS AND SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS. The directors of the Corporation and the
shareholders of each Fund shall not be liable for any obligations of the
Corporation or of the Funds under this Agreement, and Forum agrees that, in
asserting any rights or claims under this Agreement, it shall look only to the
assets and property of the Corporation or the Fund to which Forum's rights or
claims relate in settlement of such rights or claims, and not to the directors
of the Corporation or the shareholders of the Funds.
SECTION 16. TAXES. Forum shall not be liable for any taxes, assessments or
governmental charges that may be levied or assessed on any basis whatsoever in
connection with
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952684.1
<PAGE>
the Corporation or any Shareholder or any purchase of Shares, excluding taxes
assessed against Forum for compensation received by it under this Agreement.
SECTION 17. MISCELLANEOUS
(a) No Consequential Damages. Neither party to this Agreement shall be
liable to the other party for consequential damages under any provision of this
Agreement.
(b) Amendments. No provisions of this Agreement may be amended or modified
in any manner except by a written agreement properly authorized and executed by
both parties hereto.
(c) Choice of Law. This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of
Maryland.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.
(e) Counterparts. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of the counterparts taken together shall be
deemed to constitute one and the same instrument.
(f) Severability. If any part, term or provision of this Agreement is held
to be illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected, and the
rights and obligations of the parties shall be construed and enforced as if the
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(g) Headings. Section and paragraph headings in this Agreement are included
for convenience only and are not to be used to construe or interpret this
Agreement.
(h) Notices. Notices, requests, instructions and communications received by
the parties at their respective principal addresses, or at such other address as
a party may have designated in writing, shall be deemed to have been properly
given.
(i) Business Days. Nothing contained in this Agreement is intended to or
shall require Forum, in any capacity hereunder, to perform any functions or
duties on any day other than a Fund Business Day. Functions or duties normally
scheduled to be performed on any day which is not a Fund Business Day shall be
performed on, and as of, the next Fund Business Day, unless otherwise required
by law.
(j) Distinction of Funds. Notwithstanding any other provision of this
Agreement, the parties agree that the assets and liabilities of each Fund of the
Corporation are separate and distinct from the assets and liabilities of each
other Fund and that no Fund shall be liable or shall
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952684.1
<PAGE>
be charged for any debt, obligation or liability of any other Fund, whether
arising under this Agreement or otherwise.
(k) Nonliability of Affiliates. No affiliated person (as that term is
defined in the 1940 Act), employee, agent, director, officer or manager of Forum
shall be liable at law or in equity for Forum's obligations under this
Agreement.
(l) Representation of Signatories. Each of the undersigned expressly
warrants and represents that they have full power and authority to sign this
Agreement on behalf of the party indicated and that their signature will bind
the party indicated to the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
persons, as of the day and year first above written.
AMERINDO FUNDS, INC.
By:
------------------------
Name:
Title:
FORUM SHAREHOLDER SERVICES, LLC
By:
------------------------
Lisa J. Weymouth
Director
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<PAGE>
AMERINDO FUNDS, INC.
TRANSFER AGENCY AND SERVICE AGREEMENT
Appendix A
Funds and Classes
as of ____________:
Fund:
Amerindo Technology Fund
Classes:
Class A
Class D
-A1-
952684.1
<PAGE>
AMERINDO FUNDS, INC.
TRANSFER AGENCY AND SERVICE AGREEMENT
Appendix B
Fees and Expenses
(i) Base Fee:
Fees per Fund with
one Class..........................$18,000
Fees per Fund with
more than one Class................$18,000 plus $12,000 per each class
above one
The rates set forth above shall remain fixed through December 31, 1999. On
January 1, 2000, and on each successive January 1, the rates may be
adjusted automatically by Forum without action of the Corporation to
reflect changes in the Consumer Price Index for the preceding calendar
year, as published by the U.S. Department of Labor, Bureau of Labor
Statistics. Forum shall notify the Corporation each year of the new rates,
if applicable.
(ii) Shareholder Account Fees:
$18 per Shareholder account per year up to 10,000 accounts; $15 per
Shareholder account per year thereafter.
Shareholder account fees are based upon the number of Shareholder accounts
as of the last Fund Business Day of the prior month.
(iii) Out-Of-Pocket and Related Expenses
The Corporation, on behalf of the applicable Fund, shall reimburse Forum
for all out-of-pocket and ancillary expenses in providing the services
described in this Agreement, including but not limited to the cost of (or
appropriate share of the cost of): (i) statement, confirmation, envelope
and stationary stock, (ii) share certificates, (iii) printing of checks and
drafts, (iv) postage, (v) telecommunications, (vi) banking services (DDA
account, wire and ACH, check and draft clearing and lock box fees and
charges), (vii) NSCC Mutual Fund Service Member fees and expenses, (viii)
outside proxy solicitors and tabulators, (ix) proxy solicitation fees and
(x) microfilm and microfiche. In addition, any other expenses incurred by
Forum at the request or with the consent of the Corporation, will be
reimbursed by the Corporation on behalf of the applicable Fund.
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952684.1
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
May 25, 2000
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN FOR
CLASS A SHARES AND CLASS D SHARES
AMERINDO FUNDS INC.
WHEREAS, AMERINDO FUNDS INC. (the "Fund") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Fund and the principal underwriter of the Fund's Class A
shares and Class D shares (the "Distributor") have entered into a distribution
agreement, in a form satisfactory to the Fund's Board of Directors, to provide
distribution and distribution-related services; and
WHEREAS, the Board of Directors of the Fund has approved a distribution
and service plan for Class A shares and Class D shares of the Fund (the "Current
Plan"); and
WHEREAS, it is considered desirable to make certain amendments to and
to restate the Current Plan; and
WHEREAS, the Board of Directors of the Fund has determined that there
is a reasonable likelihood that this Amended and Restated Distribution and
Service Plan for Class A Shares and Class D Shares (the "Plan") will benefit the
Fund and the holders of Class A shares and Class D shares (collectively,
"Shares") of the Fund's common stock ("Shareholders");
NOW, THEREFORE, the Board of Directors of the Fund hereby adopts this
Plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. Pursuant to this Plan, the Fund may directly or indirectly
bear expenses relating to distribution and Shareholder servicing with respect to
Shares of the portfolios of the Fund, as now in existence or hereinafter created
from time to time (each, a "Portfolio").
Section 2.
(a) Each Portfolio is authorized to pay the Distributor a total
fee in connection with the servicing of Shareholder accounts
and in connection with distribution-related activities with
respect to the Class A shares of such Portfolio, calculated
and payable monthly, at the annual rate of 0.25% of the value
of the average daily net assets of the respective Class A
shares of such Portfolio (the "Class A Fee").
(b) Each Portfolio is authorized to pay the Amerindo Investment
Advisors Inc. (the
<PAGE>
"Adviser") a total fee 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 Class D shares for providing servicing to
their clients ("shareholder servicing") with respect to the
Class D shares of such Portfolio, calculated and payable
monthly, at the annual rate of 0.25% of the value of the
average daily net assets of the respective Class D shares of
such Portfolio (the "Class D Fee").
Section 3.
(a) In its discretion, the Distributor may use any or all of the
Class A Fee to provide compensation for ongoing servicing
and/or maintenance of Shareholder accounts with respect to
Class A Shares of the applicable Portfolios. Compensation may
be paid by the Distributor to persons, including employees of
the Distributor, and financial institutions with which it has
written agreements and whose clients are Class A shareholders
who respond to inquiries of Shareholders regarding their
ownership of Shares or their accounts with the Fund or who
provide other administrative or accounting services not
otherwise required to be provided by the Fund's investment
adviser, transfer agent or other agent of the Fund.
(b) In its discretion, the Distributor may use any or all of the
Class A Fee to provide initial and ongoing sales compensation
to its investment executives and to other broker-dealers and
financial institutions with which it has written agreements
and whose clients are Class A shareholders and to pay for
other advertising and promotional expenses in connection with
the distribution of such Shares. Such advertising and
promotional expenses may include, by way of example but not by
way of limitation, costs of printing and mailing prospectuses,
statements of additional information and shareholder reports
to prospective investors; preparation and distribution of
sales literature; advertising of any type; an allocation of
overhead and other expenses of the Distributor related to the
distribution of Shares; and payments to, and expenses of,
officers, employees or representatives of the Distributor, of
other broker-dealers, banks or other financial institutions,
and of any other persons who provide support services in
connection with the distribution of Shares, including travel,
entertainment, and telephone expenses, to the extent permitted
by applicable law.
(c) In its discretion, the Adviser may use any and all of the
Class D Fee to provide compensation for ongoing servicing
and/or maintenance of Shareholder accounts with respect to
Class D Shares of the applicable Portfolios. Compensation may
be paid by the Adviser to persons, including employees of the
Adviser, and financial institutions with which it has written
agreements and whose clients are Class D shareholders who
respond to inquiries of Shareholders regarding their ownership
of Shares or their accounts with the Fund or who provide other
administrative or accounting services not otherwise required
to be provided by the Fund's transfer
<PAGE>
agent or other agent of the Fund.
(d) The shareholder servicing agents that the Adviser and the
Distributor retain will perform the following services,
including but not limited to: (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 addressees; (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. Shareholder Servicing Agents may
waive all or a portion of their Shareholder Servicing Fees.
(e) Payments under this Plan are not limited to the expenses for
Shareholder servicing and distribution-related activities
actually incurred by the Distributor, so that such payments
may exceed expenses actually incurred by the Distributor;
provided, however, that such payments will not increase the
amount which the Fund is required to pay the Distributor. The
Fund's Board of Directors will evaluate the appropriateness of
this Plan and its payment terms on a periodic basis and in
doing so will consider all relevant factors, including
expenses borne by the Distributor and amounts it receives
under this Plan.
(f) Payments under this Plan are not limited to the expenses for
Shareholder servicing and distribution-related activities
actually incurred by the Adviser, so that such payments may
exceed expenses actually incurred by the Adviser; provided,
however, that such payments will not increase the amount which
the Fund is required to pay the Adviser. The Fund's Board of
Directors will evaluate the appropriateness of this Plan and
its payment terms on a periodic basis and in doing so will
consider all relevant factors, including expenses borne by the
Adviser and amounts it receives under this Plan.
(g) The Fund's investment adviser and the Distributor may, at
their option and in their sole discretion, make payments from
their own resources (which may include the
<PAGE>
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 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 Fund's shares.
(h) 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
(g)(i) above and any asset based sales charges paid to the
Distributor also may be used for purposes of (g)(ii),
(g)(iii), or (g)(iv) above.
Section 4. This Plan shall become effective with respect to a class of
Shares of a new Portfolio upon approval (a) by a vote of a majority of the
respective class of outstanding voting Shares of such Portfolio; and (b) by a
majority of both (i) the Board Directors of the Fund and (ii) the Directors who
are not interested persons of the Fund who have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
"Qualified Directors"), cast in person at a meeting of the Board of Directors
called for the purpose of voting on this Plan or any such agreement.
Section 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in clause (b) of
Section 4 herein for the approval of the Plan.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Board of Directors of the Fund, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
Section 7. This Plan may be terminated at any time with respect to a
class of Shares of any Portfolio by the vote of a majority of the Qualified
Directors or by vote of a majority of the respective class of such Portfolio's
outstanding voting Shares.
Section 8. All agreements with any person relating to implementation of
this Plan shall
<PAGE>
be in writing, and any agreement related to this Plan shall provide (a) that
such agreement may be terminated at any time with respect to any class of any
Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of Shareholders holding a majority of the
respective class of such Portfolio's outstanding voting Shares, on not more than
60 days' written notice to any other party to the agreement; and (b) that such
agreement shall terminate automatically in the event of its assignment.
Section 9. This Plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 2 hereof without
the approval of Shareholders holding a majority of the respective class of
outstanding voting Shares of the applicable Portfolio, and all material
amendments to this Plan shall be approved in the manner provided in clause (b)
of Section 4 herein for the approval of this Plan.
Section 10. As used in this Plan, the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 11. While this Plan is in effect, the selection and nomination
of those Directors who are not interested persons of the Fund within the meaning
of Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
Section 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
Approved: May 4, 2000
AMENDED AND RESTATED
DISTRIBUTION AND SERVICE PLAN
FOR CLASS C SHARES
AMERINDO FUNDS INC.
WHEREAS, AMERINDO FUNDS INC. (the "Fund") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Fund and the prinicipal underwriter of the Fund's Class C
shares (the "Distributor") have entered into a distribution agreement, in a form
satisfactory to the Fund's Board of Directors, to provide distribution and
distribution-related services; and
WHEREAS, the Board of Directors of the Fund has approved a distribution
and service plan for Class C shares of the Fund (the "Current Plan") ; and
WHEREAS, it is considered desirable to make certain amendments to and
to restate the Current Plans; and
WHEREAS, the Board of Directors of the Fund has determined that there
is a reasonable likelihood that this Amended and Restated Distribution and
Service Plan for Class C Shares (the "Plan") will benefit the Fund and the
holders of Class C shares ("Shares") of the Fund's common stock
("Shareholders");
NOW, THEREFORE, the Board of Directors of the Fund hereby adopts this
Plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. Pursuant to this Plan, the Fund may directly or indirectly
bear expenses relating to distribution and Shareholder servicing with respect to
Shares of the portfolios of the Fund, as now in existence or hereinafter created
from time to time (each, a "Portfolio").
Section 2.
(a) Each Portfolio is authorized to pay the Distributor a fee in
connection with distribution-related activities with respect
to the Shares of such Portfolio, calculated and payable
monthly, at the annual rate of 0.75% of the value of the
average daily net assets of such Portfolio's Shares
("Distribution Fee").
(b) Each Portfolio is authorized to pay the Distributor a fee in
connection with the servicing of Shareholder accounts with
respect to the Shares of such Portfolio, calculated and
payable monthly, at the annual rate of 0.25% of the value of
the
<PAGE>
average daily net assets of such Portfolio's Shares
("Shareholder Servicing Fee").
Section 3.
(a) In its discretion, the Distributor may use any or all of the
Distribution Fee to provide initial and ongoing sales
compensation to its investment executives and to other
broker-dealers and financial institutions with which it has
written agreements and whose clients are Shareholders and to
pay for other advertising and promotional expenses in
connection with the distribution of such Shares. Such
advertising and promotional expenses may include, by way of
example but not by way of limitation, costs of printing and
mailing prospectuses, statements of additional information and
shareholder reports to prospective investors; preparation and
distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor
related to the distribution of Shares; and payments to, and
expenses of, officers, employees or representatives of the
Distributor, of other broker-dealers, banks or other financial
institutions, and of any other persons who provide support
services in connection with the distribution of Shares,
including travel, entertainment, and telephone expenses, to
the extent permitted by applicable law
(b) In its discretion, the Distributor may use any or all of the
Shareholder Servicing Fee to provide compensation for ongoing
servicing and/or maintenance of Shareholder accounts with
respect to Shares of the applicable Portfolios. Compensation
may be paid by the Distributor and financial institutions with
which it has written agreements and whose clients are
Shareholders who respond to inquiries of Shareholders
regarding their ownership of Shares or their accounts with the
Fund or who provide other administrative or accounting
services not otherwise required to be provided by the Fund's
investment adviser, transfer agent or other agent of the Fund.
(c) The shareholder servicing agents that the Adviser and the
Distributor retain will perform the following services,
including but not limited to: (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 addressees; (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
2
<PAGE>
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. Shareholder Servicing Agents may
waive all or a portion of their Shareholder Servicing Fees.
(d) Payments under this Plan are not limited to the expenses for
Shareholder servicing and distribution-related activities
actually incurred by the Distributor, so that such payments
may exceed expenses actually incurred by the Distributor;
provided, however, that such payments will not increase the
amount which the Fund is required to pay the Distributor. The
Fund's Board of Directors will evaluate the appropriateness of
this Plan and its payment terms on a periodic basis and in
doing so will consider all relevant factors, including
expenses borne by the Distributor and amounts it receives
under this Plan.
(e) The Fund's investment adviser and the Distributor may, at
their option and in their sole discretion, make payments 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
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 Fund's shares.
(f) 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
3
<PAGE>
servicing agreements or otherwise. Any servicing fees paid to
the Adviser also may be used for purposes of (e)(i) above and
any asset based sales charges paid to the Distributor also may
be used for purposes of (e)(ii), (e)(iii), or (e)(iv) above.
Section 4. This Plan shall become effective with respect to Shares of a
new Portfolio upon approval (a) by a vote of a majority of the outstanding
voting Shares of such Portfolio; and (b) by a majority of both (i) the Board
Directors of the Fund and (ii) the Directors who are not interested persons of
the Fund who have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it (the "Qualified Directors"), cast in
person at a meeting of the Board of Directors called for the purpose of voting
on this Plan or any such agreement.
Section 5. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in clause (b) of
Section 4 herein for the approval of the Plan.
Section 6. Any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to this Plan or any related agreement shall
provide to the Board of Directors of the Fund, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
Section 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Directors or by vote of a
majority of such Portfolio's outstanding voting Shares.
Section 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Directors or by the vote of Shareholders holding a majority of such
Portfolio's outstanding voting Shares, on not more than 60 days' written notice
to any other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
Section 9. This Plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 2 hereof without
the approval of Shareholders holding a majority of the outstanding voting Shares
of the applicable Portfolio, and all material amendments to this Plan shall be
approved in the manner provided in clause (b) of Section 4 herein for the
approval of this Plan.
Section 10. As used in this Plan, the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
4
<PAGE>
Section 11. While this Plan is in effect, the selection and nomination
of those Directors who are not interested persons of the Fund within the meaning
of Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Directors then in office who are not interested persons of the Fund.
Section 12. This Plan shall not obligate the Fund or any other party to
enter into an agreement with any particular person.
5
Approved: May 4, 2000
AMERINDO FUNDS INC.
AMENDMENT NO. 2 TO RULE 18f-3 MULTI-CLASS PLAN
----------------------------------------------
May 4, 2000
I. Introduction.
------------
Pursuant to Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), the following sets forth the method for
allocating fees and expenses between the Class A, Class C and Class D shares of
each of the series of Amerindo Funds Inc. (the "Company") listed on Schedule A
(each a "Fund" and, collectively, the "Funds"). In addition, this Rule 18f-3
Multi-Class Plan (the "Plan") sets forth the shareholder servicing and
distribution arrangements between the Class A, Class C and Class D shares of the
Funds.
The Company is a non-diversified, open-end, management
investment company registered under the 1940 Act and the shares of which are
registered on Form N-1A under the Securities Act of 1933, as amended and the
1940 Act. Upon the initial effective date of this Plan, the Fund had elected to
offer multiple classes of shares pursuant to the provisions of Rule 18f-3 and
this Plan. This Amendment No. 2 serves to (i) amend the class arrangements with
respect to Class A shares and (ii) create three additional series of shares that
will be offered by the Company - Amerindo Internet B2B Fund, Amerindo Health &
Biotechnology Fund and Amerindo Technology Fund II. These new series of shares
are being offered in addition to the series of shares already offered pursuant
to the provisions of Rule 18f-3 and this Plan.
II. Allocation of Expenses.
----------------------
Pursuant to Rule 18f-3 under the 1940 Act, each Fund shall
allocate to each of the Class A, Class C and Class D shares of such Fund (i) any
fees and expenses incurred by the Fund in connection with the distribution of
each class of shares under a distribution and service plan adopted for such
class of shares pursuant to Rule 12b-1, and (ii) any fees and expenses incurred
by the Fund under a shareholder servicing plan in connection with the provision
of shareholder services to the holders of each class of shares. In addition,
pursuant to Rule 18f-3, the Fund may allocate the following fees and expenses to
a particular class of shares:
(i) transfer agent fees identified by the
transfer agent as being attributable to such
class of shares;
(ii) printing and postage expenses related to
preparing and distributing materials such as
shareholder reports, prospectuses, reports,
and proxies to current shareholders of such
class of shares or to regulatory agencies
with respect to such class of shares;
940992.1
<PAGE>
(iii) blue sky registration or qualification fees
incurred by such class of shares;
(iv) Securities and Exchange Commission
registration fees incurred by such class of
shares;
(v) the expense of administrative personnel and
services (including, but not limited to,
those of a fund accountant, [custodian]1 or
divided paying agent charged with
calculating net asset values or determining
or paying dividends) as required to support
the shareholders of such class of shares;
(vi) litigation or other legal expenses relating
solely to such class of shares;
(vii) fees of the Company's Directors incurred as
a result of issues relating to such class of
shares; and
(viii) independent accountants' fees relating
solely to such class of shares.
The initial determination of the class expenses that will be
allocated by a Fund to a particular class of shares and any subsequent changes
thereto will be reviewed by the Board of Directors and approved by a vote of the
Directors of the Company, including a majority of the Directors who are not
interested persons of the Company.
Income, realized and unrealized capital gains and losses, and
any expenses of the Fund not allocated to a particular class pursuant to this
Plan shall be allocated to each class of the Fund on the basis of the net assets
of that class in relation to the total net assets of the Fund.
III. Class Arrangements.
------------------
The following summarizes the Rule 12b-1 distribution and
shareholder servicing fees applicable to each class of shares of a Fund.
Additional details regarding such fees and services, as well as any other
services offered to shareholders, are set forth in the Funds' current
Prospectuses and Statement of Additional Information.
- --------
1. Rule 18f-3 requires that services related to the management of the
portfolio's assets, such as custodial fees, be borne by the fund and not
by class.
940992.1
-2-
<PAGE>
A. Class A Shares -
1. Initial Maximum Sales Load: 5.75%.
2. Contingent Deferred Sales Charge: 1.00% on
redemptions of shares purchased at net asset
value, where a commission has been paid and
the shares are held less than one year.
3. Redemption Fee: 2.00% for shares held less
than one year.
4. Rule 12b-1 Distribution Fees: None.
5. Rule 12b-1 Shareholder Servicing Fees: 0.25%
per annum of the average daily net assets of
the Class to be paid to Distributor.
6. Conversion Features: None.
7. Exchange Privileges: None.
8. Other Incidental Shareholder Services: As
provided in the Prospectus.
B. Class C Shares -
1. Initial Maximum Sales Load: None.
2. Contingent Deferred Sales Charge: 1.00% for
shares held less than one year.
3. Redemption Fee: 2.00% for shares held less
than one year.
4. Rule 12b-1 Distribution Fees: 0.75% per
annum of the average daily net assets of the
Class to be paid to the Distributor.
5. Rule 12b-1 Shareholder Servicing Fees: 0.25%
per annum of the average daily net assets of
the Class to be paid to the Distributor.
6. Conversion Features: None.
7. Exchange Privileges: None.
8. Other Incidental Shareholder Services: As
provided in the Prospectus.
940992.1
-3-
<PAGE>
C. Class D Shares -
1. Initial Maximum Sales Load: None.
2. Contingent Deferred Sales Charge: None.
3. Redemption Fee: 2.00% for shares held less
than one year.
4. Rule 12b-1 Distribution Fees: None.
5. 12b-1 Shareholder Servicing Fees: 0.25% per
annum of the average daily net assets of the
Class to be paid to the Advisor.
6. Conversion Features: None.
7. Exchange Privileges: None.
8. Other Incidental Shareholder Services: As
provided in the Prospectus.
IV. Board Review.
------------
The Board of Directors of the Company shall review this Plan
as frequently as they deem necessary. Prior to any material amendments to this
Plan, the Company's Board of Directors, including a majority of the Directors
that are not interested persons of the Company, shall find that the Plan, as
proposed to be amended (including any proposed amendments to the method of
allocating class and/or fund expenses) is in the best interest of each class of
shares of a Fund individually and the Fund as a whole. In considering whether to
approve any proposed amendments(s) to the Plan, the Directors of the Company
shall request and evaluate such information as they consider reasonably
necessary to evaluate the proposed amendments(s) to the Plan.
In making its determination to amend this Plan, the Board has
focused on, among other things, the relationship between or among the classes
and has examined potential conflicts of interest among classes regarding the
allocation of fees, services, waivers and reimbursement of expenses, and voting
rights. The Board has evaluated the level of services provided to each class and
the cost of those services to ensure that the services are appropriate and the
allocation of expenses is reasonable. In approving any subsequent amendments to
this Plan, the Board shall focus on and evaluate such factors as well as any
others deemed necessary by the Board.
940992.1
-4-
<PAGE>
Schedule A
Amerindo Technology Fund
Amerindo Internet B2B Fund
Amerindo Health & Biotechnology Fund
Amerindo Technology Fund II
940992.1
-5-
CODE OF ETHICS FOR
AMERINDO FUNDS INC.
AMERINDO INVESTMENT ADVISORS INC.
Amerindo Funds Inc. (the "Fund") and Amerindo Investment Advisors Inc.
(the "Adviser") have determined to adopt this Code of Ethics (the "Code") as of
May 14, 1996, as amended May 4, 2000, to specify and prohibit certain types of
personal securities transactions deemed to create a conflict of interest and to
establish reporting requirements and preventive procedures pursuant to the
provisions of Rule 17j-1(b)(1) under the Investment Company Act of 1940, as
amended (the "1940 Act").
I. DEFINITIONS
-----------
A. An "Access Person" means (i) any Trustee, Director, officer or
Advisory Person (as defined below) of the Fund or any
investment adviser thereof, or (ii) any director or officer of
a principal underwriter of the Fund who, in the ordinary
course of his or her business, makes, participates in or
obtains information regarding the purchase or sale of
securities for the Fund for which the principal underwriter so
acts or whose functions or duties as part of the ordinary
course of his or her business relate to the making of any
recommendation to the Fund regarding the purchase or sale of
securities or (iii) notwithstanding the provisions of clause
(i) above, where the investment adviser is primarily engaged
in a business or businesses other than advising registered
investment companies or other advisory clients, any trustee,
director, officer or Advisory Person of the investment adviser
who, with respect to the Fund, makes any recommendation or
participates in the determination of which recommendation
shall be made, or whose principal function or duties relate to
the determination of which recommendation shall be made to the
Fund or who, in connection with his or her duties, obtains any
information concerning securities recommendations being made
by such investment adviser to the Fund.
B. An "Advisory Person" means any employee of the Fund or any
investment adviser thereof (or of any company in a control
relationship to the Fund or such investment adviser), who, in
connection with his or her regular functions or duties, makes,
participates in or obtains information regarding the purchase
or sale of securities by the Fund or whose functions relate to
any recommendations with respect to such purchases or sales
and any natural person in a control relationship with the Fund
or adviser who obtains information regarding the purchase or
sale of securities.
C. A "Portfolio Manager" means any person or persons with the
direct responsibility and authority to make investment
decisions affecting the Fund.
D. "Access Persons," "Advisory Persons" and "Portfolio Managers"
shall not include any individual who is required to and does
file quarterly reports with
939797.3
<PAGE>
Code of Ethics - Page 2
any investment adviser, sub-adviser, administrator or the
principal underwriter substantially in conformity with Rule
17j-1 of the 1940 Act or Rule 204-2 of the Investment Advisers
Act of 1940, provided however, that the compliance officer of
any investment adviser, sub-adviser, administrator, or the
principal underwriter shall (i) file an annual certification
with the Fund stating that such entity has adopted or approved
the continuation of its Code of Ethics, substantially in the
form that was provided to the Fund's Board of Directors at the
time when the Fund's Code of Ethics was adopted; and (ii)
notify the Fund's compliance officer of any violation of such
entity's Code of Ethics upon actual knowledge by such
compliance officer that a violation had occurred. The Fund's
compliance officer shall report any such violations to the
Fund's Board of Directors in accordance with the provisions of
the Fund's Code of Ethics as if the report of the violation
had been made under the Fund's Code of Ethics.
E. "Beneficial Ownership" shall be interpreted subject to the
provisions of Rule 16a-l(a) of the Securities Exchange Act of
1934.
F. "Control" shall have the same meaning as set forth in Section
2(a)(9) of the 1940 Act.
G. "Disinterested Director" means a Director who is not an
"interested person" within the meaning of Section 2(a)(19) of
the 1940 Act. An "interested person" includes any person who
is a trustee, director, officer, employee or owner of 5% or
more of the outstanding stock of the Adviser. Affiliates of
brokers or dealers are also "interested persons," except as
provided in Rule 2(a)(19)(1) under the 1940 Act.
H. The "Review Officer" is the person designated by the Fund's
Board of Directors to monitor the overall compliance with this
Code. In the absence of any such designation the Review
Officer shall be the Treasurer or any Assistant Treasurer of
the Fund.
I. The "Preclearance Officer" is the person designated by the
Fund's Board of Directors to provide preclearance of any
personal security transaction as required by this Code of
Ethics.
J. "Purchase or sale of a security" includes, among other things,
the writing of an option to purchase or sell a security or the
purchase or sale of a future or index on a security or option
thereon.
939797.3
<PAGE>
Code of Ethics - Page 3
K. "Security" shall have the meaning as set forth in Section
2(a)(36) of the 1940 Act (in effect, all securities), except
that it shall not include securities issued by the U.S.
Government (or any other "government security" as that term is
defined in the 1940 Act), bankers' acceptances, bank
certificates of deposit, commercial paper and such other money
market instruments as may be designated by the Directors of
the Fund and shares of registered open-end investment
companies.
L. A security is "being considered for purchase or sale" when a
recommendation to purchase or sell the security has been made
and communicated and, with respect to the person making the
recommendation, when such person seriously considers making
such a recommendation.
II. STATEMENT OF GENERAL PRINCIPLES
-------------------------------
The following general fiduciary principles shall govern the
personal investment activities of all Access Persons.
Each Access Person shall adhere to the highest ethical
standards and shall:
A. at all times, place the interests of the Fund before his
personal interests;
B. conduct all personal securities transactions in a manner
consistent with this Code, so as to avoid any actual or
potential conflicts of interest, or an abuse of position of
trust and responsibility; and
C. not take any inappropriate advantage of his position with or
on behalf of the Fund.
III. RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES
---------------------------------------------
A. Blackout Periods
----------------
1. No Access Person (other than a Disinterested
Director) shall purchase or sell, directly or
indirectly, any security in which he has, or by
reason of such transaction acquires, any direct or
indirect beneficial ownership on a day during which
he knows or should have known the Fund has a pending
"buy" and "sell" order in that same security until
that order is executed or withdrawn.
939797.3
<PAGE>
Code of Ethics - Page 4
2. No Advisory Person or Portfolio Manager shall
purchase or sell, directly or indirectly, any
security in which he has, or by reason of such
transaction acquires, any direct or indirect
beneficial ownership within at least seven calendar
days before and after the Fund trades (or has traded)
in that security.
B. Initial Public Offerings and Private Placements
-----------------------------------------------
With regard to initial public offerings and private
placements, each Advisory Person shall:
1. obtain express prior written approval from the Review
Officer (who, in making such determination, shall
consider among other factors, whether the investment
opportunity should be reserved for the Fund, and
whether such opportunity is being offered to such
Advisory Person by virtue of his position with the
Fund) for any acquisition of securities in an initial
public offering or private placement. A record of any
decision, and the reasons supporting the decision, to
approve the acquisition by Advisory Persons of such
securities, must be maintained for at least five
years after the end of the fiscal year in which the
approval is granted; and
2. after authorization to acquire securities in an
initial public offering or private placement has been
obtained, disclose such personal investment with
respect to any subsequent consideration by the Fund
(or any other investment company for which he acts in
a capacity as an Advisory Person) for investment in
that issuer.
Any express prior written approval received from the
Review Officer shall be valid only on the day on
which it was issued. If the Fund decides to purchase
securities of an issuer the shares of which have been
previously obtained for personal investment by an
Advisory Person, that decision shall be subject to an
independent review by Advisory Persons with no
personal interest in the issuer.
C. Short-Term Trading Profits
--------------------------
No Advisory Person shall profit from the purchase and
sale, or sale and purchase, of the same (or
equivalent) securities of which such Advisory Person
has beneficial ownership within 60 calendar days. Any
profit so realized shall, unless the Fund's Board of
Directors approves otherwise, be disgorged as
directed by the Fund's Board of Directors.
939797.3
<PAGE>
Code of Ethics - Page 5
D. Gifts
-----
No Advisory Person shall receive any gift or other things of
value from any person or entity that does business with or on
behalf of the Fund that poses a potential conflict of
interest.
E. Service as a Director
---------------------
1. No Advisory Person shall serve on a board of
directors of a publicly traded company without prior
authorization from the Board of Directors of the
Fund, based upon a determination that such board
service would be consistent with the interests of the
Fund and its investors.
2. If board service of an Advisory Person is authorized
by the Board of Directors of the Fund such Advisory
Person shall be isolated from the investment making
decisions of the Fund with respect to the company of
which he is a director.
F. Exempted Transactions
---------------------
The prohibitions of Section III shall not apply to:
1. purchases or sales effected in any account over which
the Access Person has no direct or indirect influence
or control;
2. purchases or sales that are non-volitional on the
part of the Access Person or the Fund, including
mergers, recapitalizations or similar transactions;
3. purchases which are part of an automatic dividend
reinvestment plan;
4. purchases effected upon the exercise of rights issued
by an issuer pro rata to all holders of a class of
its securities, to the extent such rights were
acquired from such issuer, and sales of such rights
so acquired; and
5. purchases and sales that receive prior approval in
writing by the Preclearance Officer as (a) only
remotely potentially harmful to the Fund because they
would be very unlikely to affect a highly
institutional market, (b) clearly not economically
related to the securities to be purchased or sold or
held by the Fund or client or (c) not representing
any danger of the abuses prescribed by Rule 17j-l,
but only if in each
939797.3
<PAGE>
Code of Ethics - Page 6
case the prospective purchaser has identified to the
Review Officer all factors of which he or she is
aware which are potentially relevant to a conflict of
interest analysis, including the existence of any
substantial economic relationship between his or her
transaction and securities held or to be held by the
Fund.
IV. COMPLIANCE PROCEDURES
---------------------
A. Preclearance
------------
An Access Person (other than a Disinterested Director) may
not, directly or indirectly, acquire or dispose of beneficial
ownership of a security except as provided below unless:
1. such purchase or sale has been approved by the
Preclearance Officer;
2. the approved transaction is completed on the same day
approval is received; and
3. the Preclearance Officer has not rescinded such
approval prior to execution of the transaction.
Each Access Person may effect total purchases and
sales of up to $25,000 of securities listed on a
national securities exchange within any six month
period without preclearance from the Board of
Directors or the Preclearance Officer.
1) The six month period is a "rolling"
period, i.e., the limit is applicable between any two
dates which are six months apart.
2) Transactions in options and futures,
other than options or futures on commodities, will be
included for purposes of calculating whether the
$25,000 limit has been exceeded. Such transactions
will be measured by the value of the securities
underlying the options and futures.
3) Although preclearance is not
required for personal transactions in securities
which fall into this "de minimis" exception, these
trades must still be reported on a quarterly basis
pursuant to Section IV.B, if such transactions are
reportable.
939797.3
<PAGE>
Code of Ethics - Page 7
B. Reporting
---------
1. Coverage: Each Access Person (other than
Disinterested Directors) shall file with the Review
Officer confidential quarterly reports containing the
information required in Section IV.B.2 of this Code
with respect to all transactions during the
preceding quarter in any securities in which such
person has, or by reason of such transaction
acquires, any direct or indirect beneficial
ownership, provided that no Access Person shall be
required to report transactions effected for
any account over which such Access Person has no
direct or indirect influence or control (except that
such an Access Person must file a written
certification stating that he or she has no direct or
indirect influence or control over the account in
question). All such Access Persons shall file
reports, even when no transactions have been
effected, representing that no transactions subject
to reporting requirements were effected.
2. Quarterly Transaction Reports: No later than 10 days
after the end of a calendar quarter, the following
information must be provided:
a. With respect to any transaction during the
quarter in a security in which the Access
Person had any direct or indirect beneficial
ownership:
1. the date of the transaction, the
title, the interest rate and
maturity date (if applicable) and
the number of shares and the
principal amount of each security
involved;
2. the nature of the transaction (i.e.,
purchase, sale or any other type of
acquisition or disposition);
3. the price at which the transaction
was effected;
4. the name of the broker, dealer or
bank with or through whom the
transaction was effected; and
5. the date that the report is
submitted by the Access Person.
.
b. With respect to any account established by
the Access Person in which any securities
were held during the quarter for the direct
or indirect benefit of the Access Person:
939797.3
<PAGE>
Code of Ethics - Page 8
1. the name of the broker, dealer or
bank with whom the Access Person
established the account;
2. the date the account was established;
and
3. the date that the report is submitted
by the Access Person.
3. Any report may contain a statement that it shall not
be construed as an admission by the person making the
report that he or she has any direct or indirect
beneficial ownership in the security to which the
report relates.
4. Confirmations: All Access Persons (other than
Disinterested Directors) shall direct their brokers
to supply the Fund's Review Officer on a timely
basis, duplicate copies of confirmations of all
personal securities transactions.
C. Review
------
In reviewing transactions, the Review Officer shall take into
account the exemptions allowed under Section III.F. Before
making a determination that a violation has been committed by
an Access Person, the Review Officer shall give such person an
opportunity to supply additional information regarding the
transaction in question.
D. Disclosure of Personal Holdings
-------------------------------
1. Initial Holdings Reports. No later than 10 days after
the person becomes an Access Person, the following
information must be provided:
a. the title, number of shares and principal
amount of each security in which the Access
Person had any direct or indirect beneficial
ownership when the person became an Access
Person;
b. the name of any broker, dealer or bank with
whom the Access Person maintained an account
in which any securities were held for the
direct or indirect benefit of the Access
Person as of the date the person became an
Access Person; and
c. the date that the report is submitted by the
Access Person.
939797.3
<PAGE>
Code of Ethics - Page 9
2. Annual Holdings Reports. Annually, the following
information (which information must be current as of
a date no more than 30 days before the report is
submitted) must be provided:
a. the title, number of shares and principal
amount of each security in which the Access
Person had any direct or indirect beneficial
ownership;
b. the name of any broker, dealer or bank with
whom the Access Person maintains an account
in which any securities are held for the
direct or indirect benefit of the Access
Person; and
c. the date that the report is submitted by the
Access Person.
E. Certification of Compliance
---------------------------
Each Access Person is required to certify annually that he or
she has read and understood the Fund's Code and recognizes
that he or she is subject to such Code. Further, each Access
Person is required to certify annually that he or she has
complied with all the requirements of the Code and that he or
she has disclosed or reported all personal securities
transactions pursuant to the requirements of the Code.
V. REQUIREMENTS FOR DISINTERESTED DIRECTORS
----------------------------------------
A. Every Disinterested Director shall file with the Review
Officer a quarterly report indicating that he or she had no
reportable transactions or a report containing the information
required in Section IV.B. of this Code with respect to
transactions (other than exempted transactions listed under
Section III.F.) in any securities in which such person has, or
by reason of such transactions acquires, any direct or
indirect beneficial ownership, if such Director, at the time
of that transaction, knew or should have known, in the
ordinary course of pursuing his or her official duties as
Director, that during the 15-day period immediately preceding
or after the transaction by the Director:
1. such security was being purchased or sold by the
Fund; or
2. such security was being considered for purchase or
sale by the Fund.
939797.3
<PAGE>
Code of Ethics - Page 10
All Disinterested Directors shall file such reports, even when
no transactions have been effected, representing that no
transactions subject to reporting requirement were effected.
B. Notwithstanding the preceding section, any Disinterested
Director may, at his or her option, report the information
described in section IV.B.2.a with respect to any one or more
transactions and may include a statement that the report shall
not be construed as an admission that the person knew or
should have known of portfolio transactions by the Fund in
such securities.
VI. REVIEW BY THE BOARD OF DIRECTORS
--------------------------------
A. The Board of Directors must approve a material change to the
Code no later than six months after adoption of the material
change.
B. At least annually, the Review Officer shall furnish to the
Board of Directors and the Board must consider, a written
report that includes:
1. all existing procedures concerning Access Persons'
personal trading activities and any procedural
changes made during the past year;
2. any recommended changes to the Code or procedures;
3. a summary of any issues arising under the Code since
the last report to the Board, including, but not
limited to, violations which occurred during the past
year with respect to which significant remedial
action was taken; and
4. a certification that the Fund and Adviser have
adopted procedures reasonably necessary to prevent
Access Persons from violating the Code.
VII. SANCTIONS
---------
A. Sanctions for Violations by Access Persons
------------------------------------------
If the Review Officer determines that a violation of this Code
has occurred, he or she shall so advise the Board of Directors
and the Board may impose such sanctions as it deems
appropriate, including, inter alia, disgorgement of profits,
censure, suspension or termination of the employment of the
violator. All material violations of the Code and any
sanctions imposed as a result thereto shall be reported
periodically to the Board of Directors.
939797.3
<PAGE>
Code of Ethics - Page 11
B. Sanctions for Violations by Disinterested Directors
---------------------------------------------------
If the Review Officer determines that any Disinterested
Director has violated this Code, he or she shall so advise the
President of the Fund and also a committee consisting of the
Disinterested Directors (other than the person whose
transaction is at issue) and shall provide the committee with
a report, including the record of pertinent actual or
contemplated portfolio transactions of the Fund and any
additional information supplied by the person whose
transaction is at issue. The committee, at its option, shall
either impose such sanctions as it deems appropriate or refer
the matter to the full Board of Directors of the Fund, which
shall impose such sanctions as it deems appropriate.
VIII. MISCELLANEOUS
-------------
A. Access Persons
--------------
The Review Officer of the Fund will identify all Access
Persons who are under a duty to make reports to the Fund and
will inform such persons of such duty. Any failure by the
Review Officer to notify any person of his or her duties under
this Code shall not relieve such person of his or her
obligations hereunder.
B. Records
-------
The Fund's Administrator shall maintain records in the manner
and to the extent set forth below, which records may be
maintained on microfilm under the conditions described in Rule
31a-2(f) under the 1940 Act, and shall be available for
examination by representatives of the Securities and Exchange
Commission:
1. a copy of this Code and any other code which is, or
at any time within the past five years has been, in
effect shall be preserved in an easily accessible
place;
2. a record of any violation of this Code and of any
action taken as a result of such violation shall be
preserved in an easily accessible place for a period
of not less than five years following the end of the
fiscal year in which the violation occurs;
939797.3
<PAGE>
Code of Ethics - Page 12
3. a copy of each report made pursuant to this Code
shall be preserved for a period of not less than five
years from the end of the fiscal year in which it is
made, the first two years in an easily accessible
place; and
4. a list of all persons who are required, or within the
past five years have been required, to make reports
or who are responsible for reviewing such reports
pursuant to this Code shall be maintained in an
easily accessible place.
C. Confidentiality
---------------
All reports of securities transactions and any other
information filed pursuant to this Code shall be treated as
confidential, except to the extent required by law.
D. Interpretation of Provisions
----------------------------
The Board of Directors of the Fund may from time to time adopt
such interpretations of this Code as it deems appropriate.
939797.3
<PAGE>
AMERINDO FUNDS INC.
AMERINDO INVESTMENT ADVISORS INC.
QUARTERLY TRANSACTION REPORT
To: , Review Officer
----------------------------------------------------------
From:
---------------------------------------------------------------------------
(Your Name)
Date:
---------------------------------------------------------------------------
This Quarterly Transaction Report (the "Report") is submitted pursuant
to Section IV.B.2.a. of the Code of Ethics of Amerindo Funds Inc. and Amerindo
Investment Advisors Inc. and supplies (below) information with respect to
transactions in any security in which I may be deemed to have, or by reason of
such transaction acquire, any direct or indirect beneficial ownership interest
(whether or not such security is a security held or to be acquired by the Fund)
for the calendar quarter ended ____________________________.
Unless the context otherwise requires, all terms used in the Report
shall have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics and Rule 16a-l(a) (2) of the
Securities Exchange Act of 1934.
939797.3
<PAGE>
<TABLE>
<CAPTION>
Nature of Name of the
Transaction Broker, Dealer
(whether Principal or Bank With
Purchase, Sale Amount of Price At or Through
or Other Type Number Securities Which the Whom The Nature of
Date of Title of Interest Maturity of Disposition of Acquired or Transaction Transaction Ownership of
Transaction Transaction Rate Date Or Acquisition Shares Disposed Of Was Effected Was Effected Securities*
- ----------- ----------- ---- ---- -------------- ------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
- ---------------
* If appropriate, you may disclaim beneficial ownership of any security listed
in this report.
939797.3
<PAGE>
AMERINDO FUNDS INC.
AMERINDO INVESTMENT ADVISORS INC.
QUARTERLY TRANSACTION REPORT: NEW ACCOUNT
To: , Review Officer
----------------------------------------------------------
From:
---------------------------------------------------------------------------
(Your Name)
Date:
---------------------------------------------------------------------------
This Quarterly Transaction Report: New Account (the "Report") is
submitted pursuant to Section IV.B.2.b. of the Code of Ethics of Amerindo Funds
Inc. and Amerindo Investment Advisors Inc. and supplies information with respect
to any account established by me in which any securities were held during the
quarter in which I may be deemed to have any direct or indirect beneficial
ownership interest (whether or not such security is a security held or to be
acquired by the Fund) for the calendar quarter ended ________________.
Unless the context otherwise requires, all terms used in the Report
shall have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics and Rule 16a-1(a)(2) of the
Securities Exchange Act of 1934.
Name of Broker, Dealer or Bank With Whom Date Account
Account Was Established Was Established
----------------------- ---------------
939797.3
<PAGE>
AMERINDO FUNDS INC.
AMERINDO INVESTMENT ADVISORS INC.
INITIAL HOLDINGS REPORT
To: , Review Officer
----------------------------------------------------------
From:
---------------------------------------------------------------------------
(Your Name)
Date:
---------------------------------------------------------------------------
This Initial Holdings Report (the "Report") is submitted pursuant to
Section IV.D.1. of the Code of Ethics of Amerindo Funds Inc. and Amerindo
Investment Advisors Inc. and supplies information with respect to securities in
which I may be deemed to have, or to have had, any direct or indirect beneficial
ownership interest (whether or not such security is a security held or to be
acquired by the Fund).
Unless the context otherwise requires, all terms used in the Report
shall have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics and Rule 16a-1(a)(2) of the
Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Name of the Broker,
Dealer or Bank With
Whom Account in
Principal Amount Which Securities Were
Title of Securities Number of Shares of Securities Held is Maintained
------------------- ---------------- ------------- ------------------
<S> <C> <C> <C>
</TABLE>
939797.3
<PAGE>
AMERINDO FUNDS INC.
AMERINDO INVESTMENT ADVISORS INC.
ANNUAL HOLDINGS REPORT
To: , Review Officer
----------------------------------------------------------
From:
---------------------------------------------------------------------------
(Your Name)
Date:
---------------------------------------------------------------------------
This Annual Holdings Report (the "Report") is submitted pursuant to
Section IV.D.2. of the Code of Ethics of Amerindo Funds Inc. and Amerindo
Investment Advisors Inc. and supplies information with respect to securities in
which I may be deemed to have any direct or indirect beneficial ownership
interest (whether or not such security is a security held or to be acquired by
the Fund) as of December 31, ______.
Unless the context otherwise requires, all terms used in the Report
shall have the same meaning as set forth in the Code of Ethics.
For purposes of the Report beneficial ownership shall be interpreted
subject to the provisions of the Code of Ethics and Rule 16a-1(a)(2) of the
Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Name of the Broker,
Dealer or Bank With
Whom Account in
Principal Amount Which Securities Are
Title of Securities Number of Shares of Securities Held is Maintained
------------------- ---------------- ------------- ------------------
<S> <C> <C> <C>
</TABLE>
939797.3
<PAGE>
I HEREBY CERTIFY THAT I (1) HAVE READ AND UNDERSTAND THE CODE OF ETHICS
OF THE FUND, DATED MAY 14, 1996, AS AMENDED MAY 4, 2000, (2) RECOGNIZE THAT I AM
SUBJECT TO THE CODE OF ETHICS, (3) HAVE COMPLIED WITH THE REQUIREMENTS OF THE
CODE OF ETHICS OVER THE PAST YEAR, (4) HAVE DISCLOSED ALL PERSONAL SECURITIES
TRANSACTIONS, OVER THE PAST YEAR, REQUIRED TO BE DISCLOSED BY THE CODE OF
ETHICS, (5) HAVE SOUGHT AND OBTAINED PRECLEARANCE WHENEVER REQUIRED BY THE CODE
OF ETHICS AND (6) CERTIFY THAT TO THE BEST OF MY KNOWLEDGE THE INFORMATION
FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
Name (Print) _____________________________________________
Signature _____________________________________________
Date _____________________________________________
939797.3
<PAGE>
AMERINDO TECHNOLOGY FUND
AMERINDO INVESTMENT ADVISORS INC.
PERSONAL TRADING REQUEST AND AUTHORIZATION
Personal Trading Request (to be completed by access person prior to any personal
trade):
Name:
Date For Which You Seek Approval:
Name of the issuer and dollar amount or number of securities of the issuer to be
purchased or sold:
Nature of the transaction (i.e., purchase, sale): 1
Are you or is a member of your immediate family an officer or director of the
issuer of the securities or any affiliate 2 of the issuer? Yes __ No __
If yes, please describe:
Describe the nature of any direct or indirect professional or business
relationship that you may have with the issuer of the securities. 3
- --------
1 If other than market order, please describe any proposed limits.
2 For purposes of this question, "affiliate" includes (i) any entity
that directly or indirectly owns, controls or holds with power to vote 5% or
more of the outstanding voting securities of the issuer and (ii) any entity
under common control with the issuer.
3 A "professional relationship" includes, for example, the provision of
legal counsel or accounting services. A, "business relationship" includes, for
example, the provision of consulting services or insurance coverage.
939797.3
<PAGE>
Personal Trading Request and Authorization Form - Page 2
Do you have any material nonpublic information concerning the issuer?
Yes ___ No___
Do you beneficially own more than1/2of 1% of the outstanding equity securities
of the issuer?
Yes___ No___
If yes, please report the name of the issuer and the total number of shares
"beneficially owned":
Are you aware of any facts regarding the proposed transaction, including the
existence of any substantial economic relationship, between the proposed
transaction and any securities held or to be acquired by a Fund that may be
relevant to a determination as to the existence of a potential conflict of
interest?4
Yes___ No___
If yes, please describe:
To the best of your knowledge and belief, the answers that you have
provided above are true and correct.
_________________________
Signature
- --------
4 Facts that would be responsive to this question include, for example,
the receipt of "special favors" from a stock promoter, such as participation in
a private placement or initial public offering, as an inducement to purchase
other securities of the Fund. Another example would be investment in securities
of a limited partnership that in turn owned warrants of a company formed for the
purpose of effecting a leveraged buy-out in circumstances where the Fund might
invest in securities related to the leveraged buy-out. The foregoing are only
examples of pertinent facts and in no way limit the types of facts that may be
responsive to this question.
939797.3
<PAGE>
Personal Trading Request and Authorization - Page 3
Approval or Disapproval of Personal Trading Request (to be completed by
Preclearance Officer):
_______ I confirm that the above-described proposed transaction appears
to be consistent with the policies described in the Code and
that the conditions necessary 5 for approval of the proposed
transaction have been satisfied.
_______ I do not believe the above-described proposed transaction is
consistent with the policies described in the Code or that the
conditions necessary for approval of the proposed transaction
have been satisfied.
Dated: Signed:-----------------------------
----------------------------- Title:-------------------------------
- --------
5 In the case of a personal securities transaction by an Access Person of
the Fund (other than Disinterested Directors of the Fund), the Code of Ethics of
the Fund requires that the Fund's Preclearance Officer determine that the
proposed personal securities transaction (i) is not potentially harmful to the
Fund, (ii) would be unlikely to affect the market in which the Fund's portfolio
securities are traded, or (iii) is not related economically to securities to be
purchased, sold, or held by the Fund. In addition, the Code requires that the
Fund's Preclearance Officer determine that the decision to purchase or sell the
security at issue is not the result of information obtained in the course of the
Access Person's relationship with the Fund.
939797.3
