PROSPECTUS
INTERNATIONAL EQUITY FUND
The International Equity Fund (the "Fund") is a "no-load" mutual fund,
more technically referred to as an open-end management investment company,
organized as a diversified series of the Berger/BIAM Worldwide Funds Trust (the
"Trust"). The investment objective of the Fund is long-term capital
appreciation. The Fund seeks to achieve this objective by investing all of its
investable assets in the Berger/BIAM International Portfolio (the "Portfolio")
which, in turn, invests primarily in common stocks of well established companies
located outside the United States. The Portfolio intends to diversify its
holdings among several countries and to have, under normal market conditions, at
least 65% of the Portfolio's total assets invested in the securities of
companies located in at least five countries, not including the United States.
UNLIKE MANY OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR
OWN PORTFOLIOS OF SECURITIES, THE FUND SEEKS ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS IN THE PORTFOLIO, AS DESCRIBED ABOVE.
Accordingly, the investment performance of the Fund will derive from the
investment performance of the Portfolio. The Portfolio is an open-end management
investment company and a diversified series of a separate trust known as the
Berger/BIAM Worldwide Portfolios Trust ("Worldwide Portfolios"). The Portfolio's
investment objective and policies are identical to those of the Fund. The
Portfolio is advised by BBOI Worldwide LLC ("BBOI Worldwide" or the "Advisor"),
which has delegated daily portfolio management of the Portfolio to Bank of
Ireland Asset Management (U.S.) Limited ("BIAM" or the "Sub-Advisor"). For
further information about the Fund's investment objective and structure, see
"Investment Objective and Policies and Risk Factors," "Introduction" and
"Additional Information About Master/Feeder Structure."
The Fund is designed primarily for investment by trust companies or
trust departments of other financial institutions regulated by federal or state
governmental authority, whether purchasing for their own account or for accounts
over which they exercise full or shared investment power in a fiduciary, agency,
advisory, custodial or similar capacity.
This Prospectus concisely sets forth the information about the Fund
that a prospective investor should consider before investing. Investors are
advised to retain this Prospectus for future reference. Additional information
about the Fund has been filed with the Securities and Exchange Commission. A
copy of the Statement of Additional Information, dated July 15, 1997, is
incorporated by reference into this Prospectus in its entirety and is available
upon request without charge by writing to the Fund at P.O. Box 5005, Denver, CO
80217, or by calling 1-800-706-0539.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK (INCLUDING BANK OF
IRELAND). SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN THE
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FUND IS SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
DATED JULY 15, 1997
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Table of Contents
Section Page
1. Fee Tables............................................................ 1
2. Condensed Financial Information....................................... 2
3. Introduction.......................................................... 4
4. Investment Objective and Policies and Risk Factors.................... 4
5. Portfolio Turnover.................................................... 12
6. Additional Information About Master/Feeder Structure.................. 12
7. Management and Investment Advice...................................... 14
8. Expenses of the Fund.................................................. 16
9. Purchase of Shares in the Fund........................................ 19
10. Net Asset Value...................................................... 21
11. Open Account System and Share Certificates........................... 22
12. Redemption of Fund Shares............................................ 22
13. Exchange Privilege................................................... 24
14. Plans and Programs................................................... 25
15. Income Dividends, Capital Gains Distributions and Tax Treatment...... 25
16. Additional Information............................................... 27
17. Performance.......................................................... 29
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1. FEE TABLES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases 0%
Maximum Sales Load Imposed on Reinvested Dividends 0%
Deferred Sales Load 0%
Redemption Fees 0%
Exchange Fee 0%
===============================================================================
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
TOTAL
INVESTMENT FUND
ADVISORY OTHER OPERATING
FEE* EXPENSES** EXPENSES***
International Equity Fund 0.90% 0.20% 1.10%
===============================================================================
* Although the Fund does not pay an investment advisory fee directly to
an investment advisor, it bears indirectly its pro rata portion of the
advisory fee paid to the Advisor by the Portfolio in which the assets
of the Fund are invested.
** Other Expenses primarily include administrative services fees paid by
the Fund and custodian fees paid by the Portfolio and are based on
estimated expenses for the first year of operations of the Fund and the
Portfolio, assuming that the decrease in administrative services fees
paid by the Fund that took effect on June 20, 1997, had been in effect
for the entire year.
*** Total Fund Operating Expenses are comprised of the Fund's annual
operating expenses plus the Fund's pro rata portion of the annual
operating expenses of the Portfolio in which the Fund's assets are
invested. See "Expenses of the Fund."
EXAMPLES
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return, and (2) redemption at the end of each time
period:
1 YEAR 3 YEARS
International Equity Fund $11* $35*
===============================================================================
* Based on estimated expenses for the first year of operations of the Fund
and the Portfolio, after waiver.
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THE EXPENSES SET FORTH IN THE PRECEDING TABLES SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS
HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT.
Total Fund Operating Expenses include the Fund's pro rata
share of the aggregate annual operating expenses of the Portfolio, in which all
of the investable assets of the Fund are invested. The trustees of the Trust
believe that the investment in the Portfolio by investors in addition to the
Fund may enable the Portfolio to achieve economies of scale which could reduce
expenses and, accordingly, that the aggregate per share expenses of the Fund and
the Fund's pro rata share of the expenses of the Portfolio will be less than or
approximately equal to the expenses the Fund would incur if it retained the
services of an investment advisor and the assets of the Fund were invested
directly in the type of securities held by the Portfolio.
The purpose of the preceding tables is to assist the investor
in understanding the various costs and expenses that an investor in the Fund
will bear directly or indirectly. The Fund's expenses are described in greater
detail under "Management and Investment Advice," and "Expenses of the Fund."
2. CONDENSED FINANCIAL INFORMATION
On the following page is a table setting forth certain
financial highlights of the Fund for the period October 11, 1996 (date
operations commenced) to January 31, 1997. The information contained in the
table is unaudited. Additional performance information is contained in the
Fund's most recent Semi-Annual Report, which may be obtained upon request and
without charge by calling the Fund at 1-800-706-0539. On June 20, 1997, a
decrease took effect in the administrative services fees paid by the Fund from
0.35% to 0.10% of the Fund's daily average net assets per year.
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INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
OCTOBER 11, 1996 (DATE OPERATIONS COMMENCED) TO JANUARY 31, 1997
Net Asset Value, Beginning of Period...................... $10.00
-----
Income From Investment Operations:
Net Investment Income (Loss).............................. (.01)
Net Realized and Unrealized Gains
(Losses) on Securities................................. .61
-----
Total From Investment Operations.......................... .60
-----
Less Distributions:
Dividends (from net investment income).................... .00
Distributions (from capital gains)........................ .00
-----
Total Distributions....................................... .00
-----
Net Asset Value, End of Period............................ $10.60
=====
Total Return/*/........................................... 6.00%
=====
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands).................. $5,295
Ratio of Expenses to Average Net Assets/~/................ 1.32%
Ratio of Net Income (Loss) to Average Net Assets/~/....... (0.29)%
Portfolio Turnover Rate/*/ /+/............................ 7.38%
Average Commission Rate/+/................................ $0.0254
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
~ Annualized.
+ Represents the Portfolio Turnover Rate and Average Commission Rate, as
applicable, of the Portfolio. All of the investable assets of the Fund are
invested in the Portfolio.
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3. INTRODUCTION
The International Equity Fund is an open-end, diversified management
investment company commonly referred to as a "mutual fund." The Fund is a
"no-load" fund, meaning that a buyer pays no commissions or sales load when
buying shares of the Fund. This Prospectus describes the securities offered by
the Fund.
The Fund is a series of the Berger/BIAM Worldwide Funds Trust, a
Delaware business trust, and invests in the Portfolio that, in turn, invests in
securities in accordance with an investment objective, policies and limitations
that are identical to those of the Fund. This is sometimes called a
master/feeder fund structure, because the Fund and other investors who invest in
the Portfolio "feed" shareholders' investments into the Portfolio, a "master"
fund. The structure looks like this:
Shareholders
BUY SHARES IN [down arrow]
Fund
INVESTS IN [down arrow]
Portfolio
INVESTS IN [down arrow]
Stocks and
Other Securities
The trustees of the Trust believe that this structure may benefit
shareholders, since investment in the Portfolio by investors in addition to the
Fund may enable the Portfolio to achieve economies of scale which could reduce
expenses. For more information about this structure, see "Additional Information
About Master/Feeder Structure."
The Fund is designed primarily for investment by trust companies or
trust departments of other financial institutions regulated by federal or state
governmental authority, whether purchasing for their own account or for accounts
over which they exercise full or shared investment power in a fiduciary, agency,
advisory, custodial or similar capacity
4. INVESTMENT OBJECTIVE AND POLICIES AND RISK FACTORS
The investment objective of the Fund is long-term capital appreciation.
The Fund seeks to achieve this objective by investing all of its investable
assets in the Portfolio which, in turn, invests primarily in common stocks of
well established companies located outside the United
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States. A company will be considered to be located outside the United States if
the principal securities trading market for its equity securities is located
outside the U.S. or it is organized under the laws of, and has a principal
office in, a country other than the U.S. The Portfolio may also invest in
securities other than common stock if the Sub-Advisor believes these are likely
to be the best suited at that time to achieve the Portfolio's objective. These
include equity-related securities (such as preferred stocks and convertible
securities), debt securities issued by foreign governments or foreign
corporations, U.S. or foreign short-term investments or other securities
described on the following pages. The Portfolio intends to diversify its
holdings among several countries and to have, under normal market conditions, at
least 65% of the Portfolio's total assets invested in the securities of
companies located in at least five countries, not including the United States.
Current income is not an investment objective of the Fund and any income
produced will be only of secondary importance as a by-product of the investment
selection process used to achieve the Fund's objective.
INVESTMENT SELECTION
In selecting its portfolio securities, the Portfolio places primary
emphasis on fundamentally undervalued stocks as determined by a range of
characteristics, including relatively low price/earnings multiples, dividend
yield, consistency of earnings growth and cash flow, financial strength,
realizable asset value and liquidity. Securities of companies with medium to
large market capitalizations usually constitute the majority of the Portfolio's
investments. The Portfolio currently considers medium to large market
capitalizations to be those in excess of $1 billion. Market capitalization is
defined as total current market value of a company's outstanding common stock.
In addition, the Portfolio is presently anticipated to be weighted largely
toward companies located in Western Europe (for example, the United Kingdom,
Germany, France, Italy, Spain, Switzerland, the Netherlands, Sweden, Ireland and
Finland), Australia and the Far East (for example, Japan, Hong Kong, Singapore,
Malaysia, Thailand, Indonesia and the Philippines). However, the Portfolio is
free to invest in companies of any size and in companies located in other
foreign countries, including developing countries.
INVESTMENT DECISION MAKING PROCESS
The Sub-Advisor's investment approach is based on "bottom-up"
fundamental analysis of individual companies within a framework of dynamic
economic and business themes that are believed to provide the best opportunities
for effective stock selection. Stock selection decisions are guided by:
o GLOBAL ECONOMIC AND BUSINESS THEMES. The Sub-Advisor identifies
economic and business themes and trends that have the potential to
support the long-term growth prospects of companies best positioned to
take advantage of them. These themes and trends may transcend political
and geographic boundaries and may be global or regional in nature.
Current themes and trends include, for example, worldwide growth in
telecommunications and multimedia, positive banking environment, rapid
economic
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development in the Pacific Basin, global healthcare trends and unique
consumer franchises.
o FUNDAMENTAL ANALYSIS. The Sub-Advisor seeks to identify companies
that it believes are best positioned to benefit from the identified
themes and trends. It conducts an extensive "bottom-up" analysis
seeking individual quality companies with stocks that are
fundamentally undervalued relative to their long-term prospective
earnings growth rate, their historic valuation levels and their peer
group. This process includes examining financial statements,
evaluating management and products, assessing competitive position and
strengths, as well as analyzing the economic variables affecting the
company's operating environment. This in-depth, fundamental analysis
is believed to be the most important step in identifying stock
selections for the Portfolio.
Actual country weightings are a by-product of the bottom-up stock
selection approach. Accordingly, the country in which a company is located is
considered by the Sub-Advisor to be less important than the diversity of its
sources of earnings and earnings growth.
WHY INVEST IN THIS FUND?
The Advisor believes there is substantial opportunity for long-term
capital growth in foreign markets, as certain foreign economies may grow more
rapidly than the U.S. economy. In addition, boundaries and borders no longer
define or confine the operations of many of the world's business entities.
Companies raise capital, purchase raw materials, manufacture and distribute
products on a worldwide basis. Many profitable, successful companies benefit
from global economic growth, including companies in foreign markets. The Fund
seeks to take advantage of the investment opportunities created by an
increasingly global economy.
One reason for investing internationally is the opportunity to earn
higher investment returns. On a total return basis, foreign stocks represented
by the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East)
Index outperformed U.S. stocks represented by the Standard & Poor's 500 Stock
Index in all but two rolling ten-year periods ended 1981 through 1995. Of
course, during this time there were shorter periods when U.S. stocks had higher
returns, and there have been periods when the EAFE Index produced negative
returns. Accordingly, investors in foreign equity securities should have a
long-term investment perspective, as international markets tend to be more
volatile than the U.S. market.
International investing also expands investment opportunities. The U.S.
percentage of the world's stock market capitalization has decreased over the
past 20 years. Today, nearly two-thirds of the world's stock market
capitalization consists of non-U.S. stocks and companies. Since foreign stocks
do not always move in tandem with U.S. stocks and with each other, international
investing also has the potential to add diversification to an all- U.S. stock
portfolio by spreading investments across a number of markets.
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Investors who wish to diversify their portfolio internationally can do
so by investing directly in foreign stocks, but they may find it difficult to
make purchases and sales, obtain reliable information, hold securities in
safekeeping and manage the conversion of the value of their international
investments into U.S. dollars. Investing in the Fund, however, eliminates these
complications. With a single investment, the investor owns a diversified
international investment portfolio that is actively managed by experienced
professionals. BIAM, the Portfolio's Sub-Advisor, has extensive experience in
dealing with foreign markets and with brokers and custodian banks around the
world. BIAM also has the benefit of an established information network and
believes the Fund offers a convenient and cost-effective means of investing
internationally.
Of course, as an international fund, the Fund entails special risks as
described below. The Fund seeks to reduce these risks through diligent research
and diversification.
SECURITIES, INVESTMENT PRACTICES AND RISK FACTORS
Since the shares of the Fund represent an investment in the Portfolio,
which in turn primarily represents an investment in common stocks, investors
should understand that the net asset value of the Fund will change as the market
value of the securities held in the Portfolio changes and that the value of a
Fund share will go up and down. Investors should also be aware that investment
in foreign securities carries additional risks not present when investing in
domestic securities. See "Foreign Securities" below.
The Fund is not intended as a complete or balanced investment vehicle,
but rather as an investment for those who are in a financial position to assume
the risk and share price volatility associated with foreign investments. As a
result, the Fund should be considered as a long-term investment vehicle.
The investment objective of the Fund and the Portfolio is considered
fundamental, meaning that it cannot be changed without a vote of the
shareholders of the Fund and, as to the Portfolio's objective, of the investors
in the Portfolio. There can be no assurance that the Fund's or the Portfolio's
investment objective will be realized. Following is additional information about
some of the specific types of securities and other instruments in which the
Portfolio may invest.
FOREIGN SECURITIES. Investments in foreign securities involve some
risks that are different from the risks of investing in securities of U.S.
issuers, such as the risk of adverse political, social, diplomatic and economic
developments and, with respect to certain countries, the possibility of
expropriation, taxes imposed by foreign countries or limitations on the removal
of monies or other assets of the Portfolio. Moreover, the economies of
individual foreign countries will vary in comparison to the U.S. economy in such
respects as growth of gross domestic product, rate of inflation, capital
reinvestment, resources, self-sufficiency and balance of payments position.
Securities of some foreign companies, particularly those in developing
countries, are less liquid and more volatile than securities of comparable
domestic companies.
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Investing in the securities of developing countries may involve exposure to
economic structures that are less diverse and mature, and to political systems
that can be expected to have less stability than developed countries. The
Portfolio's investments may include American Depositary Receipts (ADRs). The
Portfolio may also invest in European Depositary Receipts (EDRs) which are
similar to ADRs, in bearer form, designed for use in the European securities
markets, and in Global Depositary Receipts (GDRs). Some of the companies in
which the Portfolio invests may be considered passive foreign investment
companies (PFICs), which are described in greater detail in the Statement of
Additional Information.
There also may be less publicly available information about foreign
issuers and securities than domestic issuers and securities, and foreign issuers
generally are not subject to accounting, auditing and financial reporting
standards, requirements and practices comparable to those applicable to domestic
issuers. Also, there is generally less government supervision and regulation of
exchanges, brokers, financial institutions and issuers in foreign countries than
there is in the U.S. Foreign financial markets typically have substantially less
volume than U.S. markets. Foreign markets also have different clearance and
settlement procedures and, in certain markets, delays or other factors could
make it difficult to effect transactions, potentially causing the Portfolio to
experience losses or miss investment opportunities.
Costs associated with transactions in foreign securities are generally
higher than with transactions in U.S. securities. The Portfolio will incur
greater costs in maintaining assets in foreign jurisdictions and in buying and
selling foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, the Portfolio might have greater
difficulty taking appropriate legal action with respect to foreign investments
in non-U.S. courts than with respect to domestic issuers in U.S. courts, which
may heighten the risk of possible losses through the holding of securities by
custodians and securities depositories in foreign countries.
Since the Portfolio will invest in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of the investments in its portfolio and the
unrealized appreciation or depreciation of investments insofar as U.S. investors
are concerned. If the foreign currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the foreign currency
against the U.S. dollar would adversely affect the dollar value of the foreign
securities. Foreign currency exchange rates are determined by forces of supply
and demand on the foreign exchange markets, which are in turn affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors.
CONVERTIBLE SECURITIES. The Portfolio may purchase securities that are
convertible into common stock when the Sub-Advisor believes they offer the
potential for a higher total return than nonconvertible securities. While fixed
income securities generally have a priority claim on a corporation's assets over
that of common stock, some of the convertible securities which the Portfolio may
hold are high-yield/high-risk securities that are subject to special risks,
including
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the risk of default in interest or principal payments which could result in a
loss of income to the Portfolio or a decline in the market value of the
securities. Convertible securities often display a degree of market price
volatility that is comparable to common stocks. The credit risk associated with
convertible securities generally is reflected by their being rated below
investment grade by organizations such as Moody's Investors Service, Inc., and
Standard & Poor's Corporation, or being of similar creditworthiness in the
determination of the Sub-Advisor. The Portfolio has no pre-established minimum
quality standards for convertible securities and may invest in convertible
securities of any quality, including lower rated or unrated securities. However,
the Portfolio will not invest in any security in default at the time of purchase
or in any nonconvertible debt securities rated below investment grade, and the
Portfolio will invest less than 20% of the market value of its net assets at the
time of purchase in convertible securities rated below investment grade. If
convertible securities purchased by the Portfolio are downgraded following
purchase, or if other circumstances cause 20% or more of the Portfolio's assets
to be invested in convertible securities rated below investment grade, the
trustees of Worldwide Portfolios, in consultation with the Sub-Advisor, will
determine what action, if any, is appropriate in light of all relevant
circumstances. For a further discussion of debt security ratings, see Appendix A
to the Statement of Additional Information.
SECURITIES OF SMALLER COMPANIES. The Portfolio may invest in securities
of companies with small or medium market capitalizations. Market capitalization
is defined as total current market value of a company's outstanding common
stock. Investments in companies with smaller market capitalizations may involve
greater risks and price volatility (that is, more abrupt or erratic price
movements) than investments in larger, more mature companies since smaller
companies may be at an earlier stage of development and may have limited product
lines, reduced market liquidity for their shares, limited financial resources or
less depth in management than larger or more established companies. Smaller
companies also may be less significant factors within their industries and may
have difficulty withstanding competition from larger companies. While smaller
companies may be subject to these additional risks, they may also realize more
substantial growth than larger or more established companies.
LENDING PORTFOLIO SECURITIES. The Portfolio may lend its securities to
qualified institutional investors such as brokers, dealers or other financial
organizations. This practice permits the Portfolio to earn income, which, in
turn, can be invested in additional securities to pursue its investment
objective. Loans of securities by the Portfolio will be collateralized by cash,
letters of credit, or securities issued or guaranteed by the U.S. Government or
its agencies. The collateral will equal at least 100% of the current market
value of the loaned securities, marked-to-market on a daily basis. The Portfolio
bears a risk of loss in the event that the other party to a securities lending
transaction defaults on its obligations and the Portfolio is delayed in or
prevented from exercising its rights to dispose of the collateral, including the
risk of a possible decline in the value of the collateral securities during the
period in which the Portfolio seeks to assert these rights, the risk of
incurring expenses associated with asserting these rights and the risk of losing
all or a part of the income from the transaction. The Portfolio will not lend
any security if, as a result of such loan, the aggregate value of securities
then on loan would exceed 33-1/3% of the market value of the Portfolio's total
assets.
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HEDGING TRANSACTIONS. The Portfolio is authorized to make limited
commitments in certain forward contracts, but only for the purpose of hedging,
that is, protecting against the risk of market movements that may adversely
affect the value (in foreign currency or U.S. dollar terms) of the Portfolio's
securities or the price of securities that the Portfolio is considering
purchasing. Forward contracts are obligations between two parties to exchange
particular goods or instruments (such as foreign currencies) at a set price on a
future date. The Portfolio currently intends that it will use forward contracts
only for hedging purposes and that it may enter into forward foreign currency
exchange contracts, provided the aggregate value of all outstanding contracts
does not exceed the value of the Portfolio's assets. Although a hedging
transaction may, for example, partially protect the Portfolio from a decline in
the foreign exchange price of a particular security or its portfolio generally,
hedging may also limit the potential return to the Portfolio due to positive
foreign exchange movements, and the cost of the transaction will reduce the
potential return on the security or the portfolio. In addition, forward foreign
currency exchange contracts do not eliminate fluctuations in the prices of the
underlying securities the Portfolio owns or intends to acquire.
The Portfolio will generally enter into forward foreign currency
exchange contracts either with respect to specific transactions or with respect
to the Portfolio's security positions. For example, the Portfolio may enter into
a forward contract in order to fix the price (in terms of a specified currency,
which may be U.S. dollars or a foreign currency) for securities it has agreed to
buy or sell or is considering buying or selling. Further, when the Sub-Advisor
believes that a particular foreign currency in which some or all of the
Portfolio's investments are denominated may decline compared to the U.S. dollar,
the Portfolio may enter into a forward contract to sell the currency that is
expected to decline (or another currency which acts as a proxy for that
currency). However, the Portfolio will be permitted to make such investments for
hedging purposes only, and only if the aggregate amount of its obligations under
these contracts does not exceed the total market value of the assets the
Portfolio is attempting to hedge, such as a portion or all of its securities
denominated in a specific foreign currency. To ensure that the Portfolio will be
able to meet its obligations under its forward foreign currency exchange
contracts, the Portfolio will be required to place liquid assets in a segregated
account with its custodian bank or to set aside securities to "cover" its
commitments in these contracts.
Forward foreign currency exchange contracts are privately negotiated
(i.e., over-the-counter) and the parties may agree to offset or terminate the
contract before its maturity or may hold the contract to maturity and complete
the contemplated delivery of the underlying foreign currency. Transactions in
forward foreign currency exchange contracts by the Portfolio involve the
potential for a loss that may exceed the amount of commitment the Portfolio
would be permitted to make in those contracts under its investment limitations.
The principal risks of the Portfolio's use of forward foreign currency exchange
contracts are: (a) losses resulting from currency market movements not
anticipated by the Portfolio; (b) possible imperfect correlation between
movements in the prices of forward contracts and movements in the spot (i.e.,
cash) prices of the currencies hedged or used to cover such positions; (c) lack
of assurance that the Portfolio will be able to enter into an offset or
termination of the contract at any particular time; (d) the need for additional
information and skills beyond those required for the management of a
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portfolio of traditional securities; and (e) possible need to defer closing out
certain forward contracts in order to facilitate the Fund's qualification for
beneficial tax treatment afforded "regulated investment companies" under the
Internal Revenue Code of 1986. In addition, when the Portfolio enters into an
over-the-counter contract with a counterparty, the Portfolio will assume
counterparty credit risk, that is, the risk that the counterparty will fail to
perform its obligations, in which case the Portfolio could be worse off than if
the contract had not been entered into.
Although they currently have no intention of doing so, the trustees of
Worldwide Portfolios may, without shareholder approval, authorize the Portfolio
to invest in certain types of other instruments for hedging purposes, such as
financial futures and options. Appropriate notice to shareholders will be
provided of any intention to commence investing in such instruments. Additional
detail concerning the Portfolio's transactions in forwards, futures and options
and the risks of such investments can be found in the Statement of Additional
Information.
ILLIQUID SECURITIES. The Portfolio is authorized to invest in
securities which are illiquid or not readily marketable because they are subject
to restrictions on their resale ("restricted securities") or because, based upon
their nature or the market for such securities, no ready market is available.
However, the Portfolio may not purchase any security, the purchase of which
would cause the Portfolio to invest more than 15% of its net assets, measured at
the time of purchase, in illiquid securities. If securities become illiquid
following purchase or other circumstances cause more than 15% of the Portfolio's
net assets to be invested in illiquid securities, the trustees of Worldwide
Portfolios, in consultation with the Sub-Advisor, will determine what action, if
any, is appropriate in light of all relevant circumstances. Repurchase
agreements maturing in more than seven days will be considered as illiquid for
purposes of this restriction. Certain restricted securities, such as Rule 144A
securities, may be treated as liquid under this restriction if a determination
is made that such securities are readily marketable. Investments in illiquid
securities involve certain risks to the extent that the Portfolio may be unable
to dispose of such a security at the time desired or at a reasonable price or,
in some cases, may be unable to dispose of it at all. In addition, in order to
resell a restricted security, the Portfolio might have to incur the potentially
substantial expense and delay associated with effecting registration.
INVESTMENT RESTRICTIONS
In addition to its investment objective, the Portfolio has adopted a
number of restrictions on its investments and other activities that may not be
changed without shareholder approval. For example, the Portfolio may not borrow
money, except borrowing undertaken from banks for temporary or emergency
purposes in amounts not to exceed 25% of the market value of its total assets
(including the amount borrowed) and may not make loans (except that the
Portfolio may lend portfolio securities and enter into repurchase agreements in
accordance with its investment policies). The Portfolio may not invest in any
one industry 25% or more of the value of its total assets at the time of
investment, nor invest in commodities, except, only for the purpose of
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hedging, the Portfolio may invest in forward foreign currency exchange contracts
and other instruments as specified in greater detail above and in the Statement
of Additional Information.
Further, with respect to 100% of its total assets, the Portfolio may
not purchase securities of any issuer (except U.S. Government securities) if,
immediately after and as a result of such purchase, the value of the Portfolio's
holdings in the securities of that issuer exceeds 5% of the value of its total
assets or it owns more than 10% of the outstanding voting securities or of any
class of securities of such issuer, although this restriction may be reduced to
apply to 75% or more of the Portfolio's total assets without a shareholder vote.
Also, the Portfolio does not currently intend to purchase or sell
securities on a when- issued or delayed delivery basis if as a result, more than
5% of its net assets would be invested in such securities, although this
restriction may be changed without shareholder approval. For more detail about
the Portfolio's investment restrictions, see the Statement of Additional
Information.
5. PORTFOLIO TURNOVER
In pursuit of the Portfolio's investment objective, the Sub-Advisor
continuously monitors the Portfolio's investments and makes portfolio changes
whenever changes in investment themes, the fundamentals of any portfolio company
or the price of any portfolio security indicate to the Sub-Advisor that more
attractive alternatives exist or that the Portfolio's investment objective could
be better achieved by investment in another security, regardless of portfolio
turnover. In addition, portfolio turnover may increase as a result of large
amounts of purchases and redemptions of shares of the Fund or interests in the
Portfolio due to economic, market or other factors that are not within the
control of management. Although the annual portfolio turnover rate of the
Portfolio will vary, it is normally expected to range from 25% to 75%.
6. ADDITIONAL INFORMATION ABOUT MASTER/FEEDER STRUCTURE
Unlike other mutual funds that directly acquire and manage their own
portfolios of securities, the Fund (referred to as a feeder fund) seeks to
achieve its investment objective by investing all of its investable assets in
the Portfolio (referred to as a master fund). This two-tier structure is known
as a master/feeder. The Fund has the same investment objective and policies as
the Portfolio. The Fund will invest only in the Portfolio, and the Fund's
shareholders will therefore acquire only an indirect interest in the investments
of the Portfolio.
In addition to selling a beneficial interest to the Fund, the Portfolio
may sell beneficial interests to other mutual funds or institutional investors
(that is, other feeder funds). Such investors will invest in the Portfolio on
the same terms and conditions and will pay their proportionate share of the
Portfolio's expenses. However, the other investors investing in the Portfolio
are not required to issue their shares at the same public offering price as the
Fund due to potential differences in expense structures. Accordingly, investors
in the Fund should be aware that these differences may result in differences in
returns experienced by investors in the
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different funds that invest in the Portfolio. Such differences in returns are
common in this type of mutual fund structure and are also present in other
mutual fund structures. Information concerning other investors in the Portfolio
(for example, other feeder funds) can be obtained from the Fund at
1-800-706-0539.
The investment objective of the Fund may not be changed without the
approval of the Fund's shareholders. The investment objective of the Portfolio
may not be changed without the approval of the investors in the Portfolio,
including the Fund. If the objective of the Portfolio changes and the
shareholders of the Fund do not approve a parallel change in the Fund's
investment objective, the trustees of the Trust will consider other
alternatives, including seeking an alternative investment vehicle or directly
retaining the Fund's own investment advisor. Shareholders will be given at least
30 days' written notice prior to any change in the investment objective of the
Fund or the Portfolio.
Smaller funds investing in the Portfolio may be materially affected by
the actions of larger funds investing in the Portfolio. For example, if a larger
fund invests or withdraws from the Portfolio, the remaining funds may experience
lower or higher pro rata operating expenses. Lower returns could possibly result
from a large withdrawal. However, this possibility also exists for traditionally
structured funds which have large or institutional investors. Also, a fund with
a greater pro rata ownership in the Portfolio could have effective voting
control over the operations of the Portfolio.
Whenever the Fund is requested to vote as an investor in the Portfolio
on matters pertaining to the Portfolio (other than a vote by the Fund to
continue the operation of the Portfolio upon the withdrawal of another investor
in the Portfolio), the Fund will hold a meeting of its shareholders and will
cast all of its votes as an investor in the Portfolio in the same proportion as
directed by the votes of the Fund's shareholders. Fund shareholders who do not
vote will not affect the votes cast by the Fund at the meeting of the Portfolio
investors. The percentage of the votes representing the Fund's shareholders who
do not vote will be voted by the Fund in the same proportion as the Fund's
shareholders who do, in fact, vote.
The Fund may withdraw its investment in the Portfolio at any time, if
the trustees of the Trust determine that it is in the best interests of the Fund
to do so. Certain changes in the Portfolio's investment objective, policies and
limitations may require the Fund to withdraw its investment in the Portfolio.
Upon any such withdrawal, the trustees would consider what action might be
taken, including investing the Fund's assets in another pooled investment entity
having the same investment objective and policies as the Fund or retaining an
investment advisor to manage the Fund's assets in accordance with the investment
policies described above with respect to the Portfolio. Any such withdrawal
could result in a distribution in-kind of portfolio securities (as opposed to a
cash distribution) from the Portfolio. If securities are distributed, the Fund
could incur brokerage, tax or other charges in converting the securities to
cash. In addition, a distribution in-kind may adversely affect the liquidity of
the Fund.
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<PAGE>
This Prospectus and the Statement of Additional Information contain
more detailed information about this master/feeder organizational structure,
including information related to: (i) the investment objective, policies and
restrictions of the Fund and the Portfolio; (ii) the trustees and officers of
the Trust and Worldwide Portfolios, and the management of the Fund and the
Portfolio; (iii) portfolio transactions and brokerage commissions; (iv) the
Fund's shares, including the rights and liabilities of its shareholders; (v)
additional performance information, including the method used to calculate total
return; and (vi) the determination of the value of the shares of the Fund. The
master/feeder fund structure is still relatively new and lacks a substantial
history.
7. MANAGEMENT AND INVESTMENT ADVICE
The trustees of the Trust are responsible for major decisions relating
to the Fund's policies and objective. They also oversee the operation of the
Fund by its officers and review the investment performance of the Fund on a
regular basis. The trustees of Worldwide Portfolios have overall responsibility
for operation of the Portfolio. A majority of the trustees of the Trust and
Worldwide Portfolios who are not "interested persons" (as defined in the
Investment Company Act of 1940) of the Trust or Worldwide Portfolios
("Independent Trustees") have adopted written procedures reasonably appropriate
to deal with potential conflicts of interest arising from the fact that the same
individuals are trustees of the Trust and Worldwide Portfolios, up to and
including creating a new board of trustees for the Trust or Worldwide
Portfolios. Additional information concerning the trustees and the officers of
the Trust and Worldwide Portfolios is furnished in the Statement of Additional
Information under the heading "Management of the Fund."
THE ADVISOR -- GENERAL BUSINESS MANAGEMENT AND INVESTMENT OVERSIGHT
The investment advisor to the Portfolio is BBOI Worldwide LLC (the
"Advisor" or "BBOI Worldwide"), 210 University Boulevard, Denver, CO 80206. The
Advisor oversees, evaluates and monitors the investment advisory services
provided to the Portfolio by the Portfolio's Sub-Advisor and is responsible for
furnishing general business management and administrative services to the
Portfolio, such as coordinating certain matters relating to the operations of
the Portfolio and monitoring the Portfolio's compliance with all applicable
federal and state securities laws. Currently, the Advisor serves in this
capacity only to the Portfolio.
The Advisor is a Delaware limited liability company formed in 1996.
Since the Advisor was only recently formed, it has only limited prior experience
as an investment advisor. However, the Advisor is a joint venture between Berger
Associates, Inc. ("Berger Associates") and Bank of Ireland Asset Management
(U.S.) Limited ("BIAM"), the Sub-Advisor to the Portfolio, which have both been
in the investment advisory business for many years.
Berger Associates and BIAM each own a 50% membership interest in the
Advisor and each have an equal number of representatives on the Advisor's Board
of Managers. Berger Associates' role in the joint venture is to provide
administrative services, and BIAM's role is to
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provide international and global investment management expertise. Agreement of
representatives of both Berger Associates and BIAM is required for all
significant management decisions.
Berger Associates serves as investment advisor or sub-advisor to mutual
funds, pension and profit-sharing plans, and institutional and private
investors, and had assets under management of more than $3.5 billion as of
December 31, 1996. Kansas City Southern Industries, Inc. ("KCSI") owns
approximately 87% of the outstanding shares of Berger Associates. KCSI is a
publicly traded holding company with principal operations in rail
transportation, through its subsidiary The Kansas City Southern Railway Company,
and financial asset management businesses. BIAM is described immediately below.
THE SUB-ADVISOR -- EXPERIENCED INTERNATIONAL INVESTMENT MANAGEMENT
Since its founding in 1966, Bank of Ireland's investment management
group has become recognized among international and global investment managers,
serving clients in Europe, the United States, Canada, Australia and South
Africa. BIAM, the Sub-Advisor to the Portfolio, is an indirect wholly-owned
subsidiary of Bank of Ireland. Bank of Ireland, founded in 1783, is a publicly
traded, diversified financial services group with business operations worldwide.
Bank of Ireland provides investment management services through a network of
related companies, including BIAM which serves primarily institutional clients
in the United States and Canada. Bank of Ireland and its affiliates managed
assets for clients worldwide in excess of $21 billion as of December 31, 1996.
As permitted in its Investment Advisory Agreement with the Portfolio,
the Advisor has delegated day-to-day portfolio management responsibility to
BIAM, as the Sub-Advisor. As Sub-Advisor, BIAM manages the investments in the
Portfolio and determines what securities and other investments will be
purchased, retained, sold or loaned, consistent with the investment objective
and policies established by the trustees of Worldwide Portfolios.
BIAM serves as investment advisor or sub-advisor to pension and
profit-sharing plans and other institutional investors and mutual funds. BIAM's
main offices are at 26 Fitzwilliam Place, Dublin 2, Ireland. BIAM maintains a
representative office at 2 Greenwich Plaza, Greenwich, CT 06830.
All investment decisions made for the Portfolio by the Sub-Advisor are
made by a team of BIAM investment personnel. No one individual is primarily
responsible for making the day-to-day investment decisions for the Portfolio.
Most of the investment professionals at BIAM have been with BIAM at least 10
years.
Bank of Ireland or its affiliates may have deposit, loan or other
commercial or investment banking relationships with the issuers of securities
which may be purchased by the Portfolio, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities purchased by the Portfolio. Federal law prohibits the Sub-Advisor, in
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making investment decisions, from using material non-public information in its
possession or in the possession of any of its affiliates. In addition, in making
investment decisions for the Portfolio, the Sub-Advisor will not take into
consideration whether an issuer of securities proposed for purchase or sale by
the Portfolio is a customer of Bank of Ireland or its affiliates.
The trustees of Worldwide Portfolios have authorized the Sub-Advisor to
consider sales of shares of the Fund by a broker-dealer and the recommendations
of a broker-dealer to its customers that they purchase Fund shares as factors in
the selection of broker-dealers to execute securities transactions for the
Portfolio. In placing portfolio business with such broker-dealers, the
Sub-Advisor will seek the best execution of each transaction.
ADVISORY FEES
Under the Investment Advisory Agreement for the Portfolio, the Advisor
is compensated for its services to the Portfolio by the payment of a fee at the
annual rate of 0.90% of the average daily net assets of the Portfolio. Until at
least April 30, 1998, the Advisor has agreed voluntarily to waive the investment
advisory fee paid by the Portfolio under the Investment Advisory Agreement to
the extent that the Portfolio's normal operating expenses in any fiscal year,
including the investment advisory fee and custodian fees, but excluding
brokerage commissions, interest, taxes and extraordinary expenses, exceed 1.00%
of the Portfolio's average daily net assets for that fiscal year. Any reduction
in the advisory fee paid by the Portfolio will also reduce the pro rata share of
the advisory fee borne indirectly by the Fund.
The Portfolio pays no fees directly to the Sub-Advisor. The Sub-Advisor
will receive from the Advisor a fee at the annual rate of 0.45% of the average
daily net assets of the Portfolio. During certain periods, the Sub-Advisor may
voluntarily waive all or a portion of its fee under the Sub-Advisory Agreement,
which will not affect the fee paid by the Portfolio to the Advisor.
8. EXPENSES OF THE FUND
The Fund is allocated and bears indirectly its pro rata share of the
aggregate annual operating expenses of the Portfolio, since all of the
investable assets of the Fund are invested in the Portfolio. Expenses of the
Portfolio include, among others, its pro rata share of the expenses of Worldwide
Portfolios of which the Portfolio is a series, such as: expenses of registering
Worldwide Portfolios with securities authorities; the compensation of its
Independent Trustees; expenses of preparing reports to investors and to
governmental offices and commissions; expenses of meetings of investors and
trustees of Worldwide Portfolios; legal fees; and insurance premiums of
Worldwide Portfolios. Expenses of the Portfolio also include, among others,
expenses connected with the execution of portfolio transactions, including
brokerage commissions on purchases and sales of portfolio securities (which are
considered a cost of securities of the Portfolio); custodian fees; auditors'
fees; interest and taxes imposed on the Portfolio; transfer agent, recordkeeping
and pricing agent fees; the fees payable to the Advisor under the Investment
Advisory Agreement; and such other non-recurring and extraordinary items as may
arise from time to time.
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<PAGE>
Until at least April 30, 1998, the Advisor has agreed voluntarily to
waive the investment advisory fee paid by the Portfolio under the Investment
Advisory Agreement to the extent that the Portfolio's normal operating expenses
in any fiscal year, including the investment advisory fee and custodian fees,
but excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.00% of the Portfolio's average daily net assets for that fiscal year.
Any reduction in the advisory fee paid by the Portfolio will also reduce the pro
rata share of the advisory fee borne indirectly by the Fund.
Expenses of the Fund include, among others, its pro rata share of the
expenses of the Trust, such as expenses of meetings of the shareholders of the
Trust. Expenses of the Fund also include, among others, taxes imposed on the
Fund; the fee payable to the Advisor under the Administrative Services
Agreement; and such other non-recurring and extraordinary items as may arise
from time to time.
Service Arrangements for the Fund
- ---------------------------------
Under the Administrative Services Agreement with the Fund, the Advisor
serves as the administrator of the Fund. In this capacity, it is responsible for
administering and managing all aspects of the Fund's day-to-day operations,
subject to the oversight of the trustees of the Trust. The Advisor is
responsible, at its expense, for furnishing (or procuring other parties to
furnish) all administrative services reasonably necessary for the operation of
the Fund, including recordkeeping and pricing services, custodian services,
transfer agency and dividend disbursing services, tax and audit services,
insurance, legal services, printing and mailing to shareholders of prospectuses
and other required communications, and certain other administrative and
recordkeeping services, such as coordinating matters relating to the operations
of the Fund, monitoring the Fund's status as a "regulated investment company"
under the Internal Revenue Code of 1986, registering sufficient Fund shares
under federal and state securities laws, and arranging for and supervising the
preparation of registration statements, tax returns, proxy materials, financial
statements and reports for filing with regulatory authorities and distribution
to shareholders of the Fund. Under the Administrative Services Agreement, the
Fund pays the Advisor a fee at an annual rate equal to the lesser of (i) 0.10%
of its average daily net assets, or (ii) the Advisor's annual cost to provide or
procure these services (including the fees of any services providers whose
services are procured by the Advisor), plus an additional 0.01% of the Fund's
average daily net assets. The trustees of the Trust regularly review amounts
paid to and expenditures incurred by the Advisor pursuant to the Administrative
Services Agreement. In addition, in the event that the Advisor's duties under
the Administrative Services Agreement are delegated to another party, the
Advisor may take into account, in calculating the cost of such services, only
the costs incurred by such other party in discharging the delegated duties.
Arrangements may be entered into by the Advisor or its affiliates with
certain organizations to provide sub-transfer agency, recordkeeping, shareholder
communications, sub- accounting and/or other services to investors purchasing
shares of the Fund through investment accounts, programs or plans established or
serviced by those organizations. The Advisor or its affiliates may pay fees to
these organizations for their services. For purposes of determining the
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Advisor's cost of providing or procuring transfer agency, dividend disbursing or
other services under the Administrative Services Agreement, the Advisor may take
into account only the fees that otherwise would be paid for by the Advisor if
all the investors who own Fund shares through the organization were instead
direct registered record holders of shares in the Fund.
Under a Sub-Administration Agreement between the Advisor and Berger
Associates, Berger Associates has been delegated the responsibility to perform
certain administrative and recordkeeping services required under the
Administrative Services Agreement and to procure, at the Advisor's expense,
third parties to provide the services not provided by Berger Associates. Under
the Sub-Administration Agreement, Berger Associates is paid a fee by the Advisor
of 0.25% of the Fund's average daily net assets for its services. During certain
periods, Berger Associates may voluntarily waive all or a portion of its fee
from the Advisor, which will not affect the fee paid by the Fund to the Advisor
under the Administrative Services Agreement. Investors Fiduciary Trust Company
("IFTC") has been appointed to provide recordkeeping and pricing services to the
Fund, including calculating the daily net asset value of the Fund, and to
perform certain accounting and recordkeeping functions that it requires. In
addition, IFTC has been appointed to serve as the Fund's custodian, transfer
agent and dividend disbursing agent. IFTC has engaged DST Systems, Inc. ("DST"),
as sub-transfer agent to provide transfer agency and dividend disbursing
services for the Fund. The fees of Berger Associates, IFTC and DST are all paid
by the Advisor. Approximately 40% of the outstanding shares of DST are owned by
KCSI, which also owns approximately 87% of the outstanding shares of Berger
Associates.
Service Arrangements for the Portfolio
- --------------------------------------
Under the Investment Advisory Agreement between the Advisor and the
Portfolio, in addition to providing advisory services, the Advisor is
responsible for providing or arranging for all managerial and administrative
services necessary for the operations of the Portfolio. The Advisor is
responsible for providing certain of these services at its own expense, such as
compliance monitoring and preparing investor communications, which have been
delegated to Berger Associates as part of the Sub-Administration Agreement
discussed above. Other services are procured from third party service providers
at the Portfolio's own expense, such as custody, recordkeeping and pricing
services. The Portfolio has appointed IFTC as recordkeeping and pricing agent to
calculate the daily net asset value of the Portfolio and to perform certain
accounting and recordkeeping functions required by the Portfolio. In addition,
the Portfolio has appointed IFTC as its custodian and transfer agent. IFTC has
engaged State Street Bank and Trust Company ("State Street") as sub-custodian
for the Portfolio. For custodian, recordkeeping and pricing services, the
Portfolio pays fees directly to IFTC based on a percentage of its net assets,
subject to certain minimums, and reimburses IFTC for certain out-of-pocket
expenses.
The trustees of Worldwide Portfolios have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are
effected through DSTS, the commission received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Portfolio would otherwise
be obligated to pay. No portion of the commission is retained by DSTS.
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Distributor
- -----------
The distributor (principal underwriter) of the Fund's shares is Berger
Distributors, Inc. (the "Distributor"), 210 University Boulevard, Suite 900,
Denver, CO 80206. The Distributor may be reimbursed by Berger Associates for its
costs in distributing the Fund's shares. The Distributor is a wholly-owned
subsidiary of Berger Associates, and certain officers of the Fund are officers
or directors of the Distributor.
9. PURCHASE OF SHARES IN THE FUND
The Fund is designed primarily for investment by trust companies or
trust departments of other financial institutions regulated by federal or state
governmental authority, whether purchasing for their own account or for accounts
over which they exercise full or shared investment power in a fiduciary, agency,
advisory, custodial or similar capacity.
Shares in the Fund may be purchased at the relevant net asset value
without a sales charge. The minimum initial investment for shares of the Fund is
$1,000,000. To purchase shares in the Fund, simply complete the application form
enclosed with this Prospectus and mail it to the Fund in care of DST Systems,
Inc., the Fund's transfer agent, as follows:
Berger Funds
c/o DST Systems, Inc.
P.O. Box 419958
Kansas City, MO 64141
Additional investments may be made at any time by telephone or by mail
at the relevant net asset value by calling or writing the Fund.
A confirmation indicating the details of the transaction will be sent
promptly. Unless full shares only are specified, all purchases will be made in
full and fractional shares calculated to three decimal places.
All purchase orders are effected at the relevant net asset value per
share of the Fund next determined after receipt of the purchase order, completed
application and payment. A purchase order, together with payment in proper form,
received by the transfer agent, sub-transfer agent or any other authorized agent
of the Fund prior to the close of the New York Stock Exchange (the "Exchange")
on a day the Fund is open for business will be effected at that day's net asset
value. An order received after that time will be effected at the net asset value
determined on the next business day. See "Redemptions of Fund Shares -
Redemptions by Telephone" for the Fund's policies and procedures on effecting
transactions by telephone.
Payment for shares purchased may be made as follows:
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BY WIRE OR ELECTRONIC FUNDS TRANSFER. Payment for shares purchased may
be made by wire or electronic funds transfer to DST Systems, Inc. Please call
1-800-960- 8427 for current wire or electronic funds transfer instructions. The
following information may be requested: name of authorized person; shareholder
name; shareholder account number; name of Fund; amount being wired or
transferred; and name of wiring or transferring bank.
BY MAIL. Alternatively, payment for shares purchased may be made by
mail, so long as payment is accompanied or preceded by a completed account
application. Payment should be made by check or money order drawn on a United
States bank and made payable to the "Berger Funds." Checks not made payable to
the Berger Funds, the account registrant, transfer agent or retirement account
custodian will not be accepted. The Fund will not accept purchases by cash or
credit card or checks drawn on foreign banks unless provision is made for
payment through a U.S. bank in U.S. dollars.
Fund shares may also be purchased through certain organizations which
make available investment accounts, programs or pension or retirement plans.
These organizations may charge investors a transaction or other fee for their
services, may require different minimum initial and subsequent investments than
the Fund and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will be paid by an
investor who purchases the Fund shares directly from the Fund.
The Fund will, at its discretion, accept orders transmitted by these
organizations although not accompanied by payment for the shares being
purchased. Payment must be received by the Fund within three business days after
acceptance of the order. The price at which a purchase will be effected is based
on the next calculation of net asset value after the order is received by the
Fund's transfer agent, sub-transfer agent or any other authorized agent of the
Fund.
The Fund reserves the right in its sole discretion to withdraw all or
any part of the offering made by this Prospectus or to reject purchase orders,
when in the judgment of management, such withdrawal or rejection is in the best
interest of the Fund. The Fund also reserves the right at any time to waive the
minimum investment requirements applicable to initial investments or to increase
the minimum investment or account balance requirements following notice. No
application to purchase shares is binding on the Fund until accepted in writing.
Investors may, subject to the approval of the Trust and Worldwide
Portfolios, purchase shares of the Fund with liquid securities that are eligible
for purchase by the Portfolio (consistent with the Fund's and the Portfolio's
investment policies and restrictions) and that have a value that is readily
ascertainable in accordance with the valuation policies of the Trust and
Worldwide Portfolios. These transactions will be effected only if the
Sub-Advisor intends to retain the securities in the Portfolio as an investment.
Assets so purchased will be valued in generally the same manner as they would be
valued for purposes of pricing the Fund's shares, if such assets
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were included in the Portfolio's assets at the time of purchase. The Trust and
Worldwide Portfolios reserve the right to amend or terminate this practice at
any time.
10. NET ASSET VALUE
The price of the Fund's shares is based on the net asset value of the
Fund, which is determined at the close of the regular trading session of the
Exchange (normally 4:00 p.m., New York time) each day that the Exchange is open.
The per share net asset value of the Fund is determined by dividing the total
value of its assets, less liabilities, by the total number of shares
outstanding. Since the Fund will invest all of its investable assets in the
Portfolio, the value of the Fund's investable assets will be equal to the value
of its beneficial interest in the Portfolio.
The Portfolio's securities and other assets are valued as follows:
securities are valued at market value or, if market quotations are not readily
available, at their fair value determined in good faith pursuant to consistently
applied procedures established by the trustees. Money market instruments
maturing within 60 days are valued at amortized cost, which approximates market
value. All assets and liabilities initially expressed in terms of non-U.S.
dollar currencies are translated into U.S. dollars at the prevailing market
rates as quoted by one or more banks or dealers shortly before the close of the
Exchange. See the Statement of Additional Information for more detailed
information.
Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of the Exchange. The
values of foreign securities used in computing the net asset value of the shares
of the Fund are determined as of the earlier of such market close or the closing
time of the Exchange. Occasionally, events affecting the value of such
securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities will be valued at
their fair market value as determined in good faith pursuant to consistently
applied procedures established by the trustees.
The Portfolio's securities may be listed primarily on foreign exchanges
or over-the-counter dealer markets which may trade on days when the Exchange is
closed (such as customary U.S. holidays) and the Fund's net asset value is not
calculated. As a result, the net asset value of the Fund may be significantly
affected by such trading on days when shareholders cannot purchase or redeem
shares of the Fund.
Since the Fund does not impose any front-end sales load or redemption
fee, both the purchase price and the redemption price of a Fund share are the
same and will be equal to the next calculated net asset value of a share of the
Fund.
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11. OPEN ACCOUNT SYSTEM AND SHARE CERTIFICATES
Unless otherwise directed, all investor accounts are maintained on a
book-entry basis without the issuance of share certificates. Shares purchased by
dividend reinvestment, and shares redeemed under a Systematic Withdrawal Plan,
will be confirmed after the end of each calendar quarter. Following any other
investment or redemption, the investor will receive a printed confirmation
indicating the dollar amount of the transaction, the per share price of the
transaction and the number of shares purchased or redeemed.
12. REDEMPTION OF FUND SHARES
(i) Share Redemptions by Mail. The Fund will redeem, at current net
---------------------------
asset value, all shares of the Fund offered for redemption. The redemption price
of shares tendered for redemption will be the net asset value next determined
after receipt of all required documents by the Fund's transfer agent,
sub-transfer agent or other authorized agent of the Fund. To receive the net
asset value for a specific day, a redemption request must be received before the
close of the Exchange on that day. Shareholders who purchased their shares
directly from the Fund may redeem all or part of their shares in the Fund by
sending a written request to the Fund, c/o DST Systems, Inc., P.O. Box 419958,
Kansas City, MO 64141. The written request for redemption must be signed by each
registered owner exactly as the shares are registered and must clearly identify
the account and the number of shares or the dollar amount to be redeemed.
The signatures of the redeeming shareholders must be guaranteed by a
national or state bank, a member firm of a domestic stock exchange or the
National Association of Securities Dealers (NASD), a credit union, a federal
savings and loan association or another eligible guarantor institution if the
redemption: is being made payable other than exactly as registered; is being
mailed to an address which has been changed within 30 days of the redemption
request; or is being mailed to an address other than the one on record. A notary
public is not an acceptable guarantor. The Fund also reserves the right to
require a signature guarantee under other circumstances. The signature
guarantees must appear, together with the signatures of the registered owners,
(i) on the written request for redemption which clearly identifies the account
and the number of shares to be redeemed, (ii) on a separate instrument of
assignment ("stock power") which may be obtained from a bank or broker, or (iii)
on any share certificates tendered for redemption. The use of signature
guarantees is intended to protect the shareholder and the Fund from a possibly
fraudulent application for redemption.
(ii) Redemptions by Telephone. All shareholders have Telephone
--------------------------
Transaction Privileges to authorize purchases, exchanges or redemptions unless
they specifically decline this service on the account application or by writing
to the Fund, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141. The
telephone redemption option is not available for shares held in retirement
accounts sponsored by the Fund. Redemption requests may be made by telephoning
DST Systems, Inc., at 1-800-960-8427. To receive the net asset value for a
specific day, a redemption request must be received before the close of the
Exchange on that day. As discussed above, certain requests must be in writing
and the signature of a redeeming shareholder must be
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signature guaranteed, and therefore shares may not be redeemed by telephone, if
the redemption: is being made payable other than exactly as registered; is being
mailed to an address which has been changed within 30 days of the redemption
request; is being mailed to an address other than the one on record; or the
shares are represented by share certificates issued to the shareholder.
All telephone transactions are recorded and written confirmations
indicating the details of all telephone transactions will promptly be sent to
the shareholder of record. Prior to accepting a telephone transaction, the
shareholder placing the order may be required to provide certain identifying
information. A shareholder electing to communicate instructions by telephone may
be giving up some level of security that would otherwise be present were the
shareholder to request a transaction in writing. Neither the Fund nor its
transfer agent or Advisor assume responsibility for the authenticity of
instructions communicated by telephone which are reasonably believed to be
genuine and which comply with the foregoing procedures. The Fund, and/or its
transfer agent, may be liable for losses resulting from unauthorized or
fraudulent telephone instructions in the event these procedures are not
followed.
In times of extreme economic or market conditions, redeeming shares by
telephone may be difficult. The Fund may terminate or modify the procedures
concerning the telephone redemption and wire transfer services at any time,
although shareholders of the Fund will be given at least 60 days' prior notice
of any termination or material modification. The Advisor may, at its own risk,
waive certain of the redemption requirements described in the preceding
paragraphs.
(iii) Payment for Redeemed Shares. Payment for shares redeemed upon
----------------------------
written request will be made by draft and generally will be mailed within three
business days after receipt by the transfer agent of the properly executed
redemption request and any outstanding certificates for the shares to be
redeemed. Payment for shares redeemed by telephone will be made by draft payable
to the account name(s) and address exactly as registered, and generally will be
mailed within three business days following the date of the request for
redemption.
A shareholder may request that payment for redeemed shares of the Fund
be made by wire or electronic funds transfer. Shareholders may elect to use
these services on the account application or by providing the Fund with a
signature guaranteed letter requesting these services and designating the bank
to receive all wire or electronic funds transfers. A shareholder may change the
predesignated bank of record by providing the Fund with written, signature
guaranteed instructions. Redemption proceeds paid by wire transfer generally
will be transmitted to the shareholder's predesignated bank account on the next
business day after receipt of the shareholder's redemption request. Redemption
proceeds paid by electronic funds transfer will be electronically transmitted to
the shareholder's predesignated bank account on the second business day after
receipt of the shareholder's redemption request. There is no fee for wire or
electronic funds transfer of proceeds from the redemption of Fund shares.
Shareholders may encounter delays in redeeming shares purchased by
check (other than cashier's or certified checks) or electronic funds transfer if
the redemption request is made within
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<PAGE>
15 days after the date of purchase. In those situations, the redemption draft
will be mailed within 15 days after the transfer agent's receipt of the purchase
instrument, provided that it has not been dishonored or cancelled during that
time. The foregoing policy is to ensure that all payments for the shares being
redeemed have been honored. In addition to the foregoing restrictions, no
redemption payment can be made for shares which have been purchased by telephone
order until full payment for the shares has been received. In any event, valid
redemption requests concerning shares for which full payment has been made will
be priced at the net asset value next determined after receipt of the request.
(iv) Redemption In-Kind. The Fund intends to redeem its shares only for
------------------
cash, although it retains the right to redeem its shares in-kind under unusual
circumstances, in order to protect the interests of the remaining shareholders,
by the delivery of securities selected from its assets at its discretion. The
Fund is, however, governed by Rule 18f-1 under the Investment Company Act of
1940 pursuant to which the Fund is obligated to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day
period for any one shareholder. Should redemptions by any shareholder during any
90-day period exceed such limitation, the Fund will have the option of redeeming
the excess in cash or in-kind. If shares are redeemed in-kind, the redeeming
shareholder generally will incur brokerage costs in converting the assets to
cash.
(v) Redemptions by the Fund. As a means of reducing its expenses, the
-----------------------
Fund is authorized to redeem involuntarily all shares held in accounts with a
value of less than $1,000,000. Such redemptions will be permitted only when the
account is reduced below the minimum value by redemption, and not by declines in
per share net asset value. As a result, accounts established with the applicable
minimum investment might be subject to redemption after only a small redemption
has been made by the shareholder. At least 60 days' written notice will be given
to a shareholder before such an account is redeemed. During that time, the
shareholder may add sufficient funds to the account. If such amount is not added
to the account, the shares will be redeemed, at the per share net asset value
next determined after the 60th day following the notice. A draft for the
proceeds will be sent to the shareholder unless a share certificate has been
issued, in which case payment will be made upon surrender of the certificate.
13. EXCHANGE PRIVILEGE
(i) Exchanges. By telephoning the Fund at 1-800-960-8427, or writing to
---------
the Fund, in care of DST at P.O. Box 419958, Kansas City, MO 64141, any
shareholder may exchange, without charge, any or all of his shares in the Fund,
subject to stated minimums, for shares of any of the other publicly available
Berger Funds. Exchanges may be made only if the Berger Fund into which a
shareholder wishes to exchange shares is eligible for sale in the shareholder's
state of residence.
It is each investor's responsibility to obtain and read a prospectus of
the Berger Fund into which the investor is exchanging. By giving exchange
instructions, a shareholder will be deemed to have acknowledged receipt of the
prospectus for the Berger Fund being purchased.
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<PAGE>
Up to four exchanges out of the Fund are permitted during the calendar year.
This limit helps keep the Fund's net asset base stable and reduces the Fund's
administrative expenses. In times of extreme economic or market conditions,
exchanging Fund shares by telephone may be difficult. See "Redemption of Fund
Shares - Redemptions by Telephone" for procedures for telephone transactions.
Redemptions of shares in connection with exchanges into or out of the
Fund are made at the net asset value per share next determined after the
exchange request is received. To receive a specific day's price, a letter or
call must be received before that day's close of the New York Stock Exchange.
Each exchange represents the sale of shares from one fund and the purchase of
shares in another, which may produce a gain or loss for U.S. Federal income tax
purposes.
All exchanges are subject to the minimum and subsequent investment
requirements of the fund into which shares are being exchanged. Exchanges will
be accepted only if the registration of the two accounts is identical. Neither
the Fund, the Berger Funds, nor their transfer agents or advisors assume
responsibility for the authenticity of exchange instructions communicated by
telephone or in writing which are believed to be genuine. See "Redemption of
Fund Shares Redemptions by Telephone" for procedures for telephone transactions.
All shareholders have Telephone Transaction Privileges to authorize exchanges
unless they specifically decline this service on the account application or by
writing to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas
City, MO 64141.
14. PLANS AND PROGRAMS
The Fund offers several tax-qualified retirement plans for adoption by
individuals and employers. The Fund also offers both a profit-sharing plan and a
money purchase pension plan for employers and self-employed persons, an
Individual Retirement Account ("IRA") and a 403(b) Custodial Account.
In order to receive the necessary materials to create a profit-sharing
or money purchase pension plan account, an IRA account or a 403(b) Custodial
Account, please write to the Fund, c/o BBOI Worldwide, P.O. Box 5005, Denver, CO
80217, or call 1-800-706-0539. Trustees for existing 401(k) or other plans
interested in utilizing Fund shares as an investment or investment alternative
in their plans should contact the Fund at 1-800-960-8427.
The Fund also offers a systematic withdrawal plan. Forms to open such
an account may be obtained by writing to the Fund, c/o DST Systems, Inc., P.O.
Box 419958, Kansas City, MO 64141, or call 1-800-960-8427.
15. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT
The Fund intends to declare dividends representing the Fund's net
investment income annually, normally in December. It is also the present policy
of the Fund to distribute annually all of its net realized capital gains.
Dividends declared and payable to shareholders of record on
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a specified date in December will be deemed to have been received by
shareholders on December 31 for tax purposes if paid during January the
following year.
The Fund is treated as a separate entity for tax purposes and intends
to elect and maintain qualification to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended. The
Fund's qualification as a regulated investment company will depend on the
Portfolio maintaining its status as a partnership for tax purposes. If the Fund
qualifies under Subchapter M and meets certain minimum distribution
requirements, the Fund generally will not be liable for U.S. Federal income tax
on the amount of its earnings that are timely distributed. If the Fund
distributes annually less than 98% of its income and gain, it may be subject to
a nondeductible excise tax equal to 4% of the shortfall.
All dividends and capital gains distributions paid by the Fund will be
automatically reinvested in shares of the Fund at the net asset value on the
ex-dividend date unless an investor specifically requests that either dividends
or distributions, or both, be paid in cash. The election to receive dividends or
distributions in cash or to reinvest them in Fund shares may be changed by
calling the Fund at 1-800-960-8427 or by written request to the Fund, c/o DST
Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, and must be received at
least ten days prior to the record date of any dividend or capital gains
distribution.
The Fund will inform its shareholders of the amount and nature of such
income or gains resulting from their investment in the Fund. Dividends paid by
the Fund from net investment income and distributions from net short-term
capital gains in excess of any net long-term capital losses, whether received in
cash or reinvested, generally will be taxable as ordinary income. Distributions
received from the Fund designated as long-term capital gains (net of capital
losses), whether received in cash or reinvested, will be taxable as long-term
capital gains without regard to the length of time a shareholder has owned
shares in the Fund. Any loss on the redemption or other sale or exchange of the
Fund's shares held for six months or less will be treated as a long-term capital
loss to the extent of any long-term capital gain distribution received on the
shares. If a shareholder is exempt from U.S. Federal income tax, the shareholder
will not generally be taxed on amounts distributed by the Fund.
Under the Internal Revenue Code, gains recognized by the Portfolio upon
a disposition of assets contributed in-kind to it by the Fund will be specially
allocated to the Fund and not to other investors in the Portfolio to the extent
of the unrealized appreciation in those assets at the time of their transfer. As
a result, shareholders of the Fund may receive distributions of a greater amount
of gains than if the Portfolio had purchased those assets in the open market
upon commencement of Fund operations or in a transaction that did not involve
contributions of assets in-kind.
Investment income received by the Fund, directly or through the
Portfolio, from sources within foreign countries may be subject to foreign
withholding and other taxes withheld at the source. The U.S. has entered into
tax treaties with many foreign countries that, in some circumstances, may
entitle the Fund or Portfolio to a reduced rate of tax or exemption from tax
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<PAGE>
on such income. It is impossible to determine the effective rate of foreign tax
in advance since the amount of the Portfolio's assets to be invested within
various countries will fluctuate and the extent to which tax refunds will be
recovered is uncertain. If, directly or through the Portfolio, more than 50% in
value of the Fund's total assets at the close of its taxable year consists of
securities of foreign corporations, the Fund may elect to "pass-through" to its
shareholders the income taxes paid by the Fund to foreign governments during a
year. Under this election, each shareholder will be required to include the
shareholder's pro rata portion of these foreign taxes in gross income, but will
be able to deduct (as an itemized deduction for shareholders who itemize) or
claim a foreign tax credit for such amount (subject to various limitations). If
the election is not made, foreign taxes will be treated as an expense of the
Fund.
At certain levels of taxable income, the Internal Revenue Code provides
a preferential tax rate for long-term capital gains. Long-term capital gains of
taxpayers other than corporations are taxed at a 28% maximum rate, whereas
ordinary income is taxed at a 39.6% maximum rate. Capital losses continue to be
deductible only against capital gains plus (in the case of taxpayers other than
corporations) $3,000 of ordinary income annually ($1,500 for married individuals
filing separately).
Some shareholders may be subject to 31% "backup withholding" on
dividends, capital gains distributions and redemption payments made by the Fund.
Backup withholding generally will apply to shareholders who fail to provide the
Fund with their correct taxpayer identification number or to make required
certifications. Backup withholding is not an additional tax. Any amounts
withheld may be credited against a shareholder's U.S. Federal income tax
liability.
The foregoing is only a brief summary of the U.S. Federal income tax
considerations affecting the Fund and its shareholders. See "Income Dividends,
Capital Gains Distributions and Tax Treatment" in the Statement of Additional
Information for more information regarding taxation. Potential investors should
consult their tax advisors with specific reference to their own tax situation.
16. Additional Information
The Trust is a Delaware business trust organized on May 31, 1996. The
Fund was established on May 31, 1996, as a series or fund under the Trust and
was originally named the Berger/BIAM International Institutional Fund. Since the
Trust and the Fund were only recently organized, they have only limited prior
operating history, although the Fund calculates its performance taking into
account the prior performance of a trust fund whose assets were transferred into
the Portfolio as described under "Performance" below. Effective June 1997, the
Fund's name was changed to the International Equity Fund.
The Trust is authorized to issue an unlimited number of shares of
beneficial interest in series. The Trust is also authorized to establish
multiple classes of shares representing differing interests in an existing or
new series. As of the date of this Prospectus, the series comprising the
International Equity Fund is one of three series established under the Trust,
although others may
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be added in the future. Shares of the Fund are fully paid and non-assessable
when issued. Each share has a par value of $.01. All shares issued by the Fund
participate equally in dividends and other distributions by the Fund, and in the
residual assets of the Fund in the event of its liquidation.
Shareholders of the International Equity Fund and the other funds or
series of the Berger/BIAM Worldwide Funds Trust generally vote separately on
matters relating to those respective funds, although they vote together and with
the holders of any other series of the Trust issued in the future in the
election of trustees of the Trust and on all matters relating to the Trust as a
whole. Each full share of the Fund has one vote. Shares of the Fund have
non-cumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of trustees can elect 100% of the trustees if
they choose to do so and, in such event, the holders of the remaining less than
50% of the shares voting for the election of trustees will not be able to elect
any person or persons as trustees. The Fund is not required to hold annual
shareholder meetings unless required by the Investment Company Act of 1940 or
other applicable law or unless called by the trustees.
If shareholders owning at least 10% of the outstanding shares of the
Berger/BIAM Worldwide Funds Trust so request, a special shareholders' meeting
will be held for the purpose of considering the removal of a trustee of the
Trust. Special meetings will be held for other purposes if the holders of at
least 25% of the outstanding shares of the Trust so request. Subject to certain
limitations, the Trust will facilitate appropriate communications by
shareholders desiring to call a special meeting for the purpose of considering
the removal of a trustee.
The Fund invests all of its investable assets in the Portfolio, a
series of Worldwide Portfolios, which is also a Delaware business trust divided
into series. Investors in each series of Worldwide Portfolios will vote
separately or together in the same manner as shareholders of the Trust's series.
For more information on the Trust and Worldwide Portfolios, see "Additional
Information" in the Statement of Additional Information.
The Glass-Steagall Act prohibits a depository institution and certain
affiliates from underwriting or distributing most securities and from
affiliating with businesses engaged in certain similar activities. BIAM
believes, based on advice of its counsel, that it may perform the services for
the Fund contemplated by this Prospectus consistent with the Glass-Steagall Act
and other applicable banking laws and regulations. However, future changes in
either Federal or state statutes and regulations concerning the permissible
activities of banks and their affiliates, as well as future judicial or
administrative decisions or interpretations of present and future statutes and
regulations, might prevent BIAM from continuing to perform those services for
the Fund. If the circumstances described above should change, the trustees of
the Trust and Worldwide Portfolios would review the relationships with BIAM and
consider taking all actions appropriate under the circumstances.
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<PAGE>
17. PERFORMANCE
From time to time in advertisements, the Fund may discuss its
performance ratings as published by recognized mutual fund statistical services,
such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc., or Value Line Investment Survey or by publications of general
interest such as The Wall Street Journal, Investor's Business Daily, Barron's,
Financial World or Kiplinger's Personal Finance Magazine. In addition, the Fund
may compare its performance to that of recognized broad-based securities market
indices, including the Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) Index, the Dow Jones World Index, the Standard & Poor's
500 Stock Index, the Nasdaq Composite Index, or more narrowly-based indices
which reflect the market sectors in which the Fund invests.
The total return of the Fund is calculated for any specified period of
time by assuming the purchase of shares of the Fund at the net asset value at
the beginning of the period. Each dividend or other distribution paid by the
Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.
The Fund's total return reflects the Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same total return if the
Fund's performance had been constant over the entire period. Total return
figures are based on the overall change in value of a hypothetical investment in
the Fund. Because average annual total returns for more than one year tend to
smooth out variations in the Fund's return, investors should recognize that such
figures are not the same as actual year-by-year results.
Any performance figures for the Fund are based upon historical results
and do not assure future performance. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
The Portfolio commenced operations upon the transfer to the Portfolio
of assets held in a pooled trust (the "Pool") maintained by Citizens Bank New
Hampshire, for which BIAM has provided day-to-day portfolio management as
sub-advisor since the inception of the Pool. BIAM's bank holding company parent
indirectly owns a 23.5% interest in the parent of Citizens Bank New Hampshire.
The Pool had substantially the same investment objective, policies and
limitations of the Fund and the Portfolio. Assets from the Pool were transferred
to the Fund which, in turn, transferred those assets to the Portfolio in
exchange for an interest in the Portfolio. As a result of this transaction, the
investment holdings in the Portfolio (in which the Fund invests all of its
investable assets) were the same as the investment holdings in the portfolio of
the Pool immediately prior to the transfer, except for the seed capital provided
by Berger Associates.
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The Pool was not a registered investment company since it was exempt
from registration under the Investment Company Act of 1940 (the "1940 Act").
Since, in a practical sense, the Pool constitutes the "predecessor" of the
Portfolio, the Fund calculates its performance for periods commencing prior to
the transfer of the Pool's assets to the Portfolio by including the Pool's total
return, adjusted to reflect the deduction of fees and expenses applicable to the
Fund as stated in the Fee Table above in this Prospectus (that is, adjusted to
reflect estimated expenses, including the Fund's pro rata share of the aggregate
annual operating expenses, net of fee waivers, of the Portfolio in which all of
the investable assets of the Fund are invested).
The performance data set forth below includes the performance of the
Pool for periods before the Fund's and the Portfolio's registration statements
became effective. As noted above, the Pool was not registered under the 1940 Act
and thus was not subject to certain investment restrictions that are imposed by
the 1940 Act. If the Pool had been registered under the 1940 Act, the Pool's
performance might have been adversely affected.
AVERAGE ANNUAL TOTAL RETURN
FOR PERIODS ENDED DECEMBER 31, 1996
INTERNATIONAL EAFE INDEX/2/
EQUITY FUND/1/
1-YEAR 18.87% 6.36%
3-YEAR 9.46% 8.64%
5-YEAR 14.72% 8.48%
SINCE INCEPTION/3/ 14.05% 4.20%
===============================================================================
1 Total return data for the Fund for periods prior to October 11, 1996, reflect
the performance of the pool of assets transferred on that date into the
Portfolio in which all of the Fund's assets are invested, adjusted at that time
for any increase in expenses anticipated in operating the Fund, including the
Fund's pro rata share of the aggregate annual operating expenses, net of fee
waivers, of the Portfolio.
2 Source: Morgan Stanley Capital International (MSCI). The MSCI EAFE Index is a
market capitalization weighted index composed of companies representative of the
market structure of 20 developed market countries in Europe, Australasia and the
Far East.
3 Covers the period since July 31, 1989.
All of the foregoing performance data were calculated in accordance
with methods prescribed by the Securities and Exchange Commission which are
discussed in more detail under the heading "Performance Information" in the
Statement of Additional Information.
Shareholders with questions should write to the Fund, c/o BBOI
Worldwide, P.O. Box 5005, Denver, CO 80217, or call 1-303-329-0200 or
1-800-706-0539.
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Prospectuses are also available upon request for the following funds
advised by Berger Associates, Inc.: the Berger 100 Fund, the Berger Growth and
Income Fund, the Berger Small Company Growth Fund, the Berger New Generation
Fund and the Berger Small Cap Value Fund. Please call 1-800-706-0539 for
information.
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<PAGE>
INTERNATIONAL EQUITY FUND
STATEMENT OF ADDITIONAL INFORMATION
SHAREHOLDER SERVICES: 1-800-551-5849
This Statement of Additional Information about the International Equity
Fund (the "Fund"), a series of the Berger/BIAM Worldwide Funds Trust (the
"Trust"), is not a prospectus. It should be read in conjunction with the
Prospectus describing the Fund, dated July 15, 1997, which may be obtained by
writing the Fund at P.O. Box 5005, Denver, Colorado 80217, or calling 1-800-706-
0539. The Fund is a no-load mutual fund.
The investment objective of the Fund is long-term capital appreciation.
The Fund seeks to achieve this objective by investing all of its investable
assets in the Berger/BIAM International Portfolio (the "Portfolio") which, in
turn, invests primarily in common stocks of well established companies located
outside the United States. A company will be considered to be located outside
the United States if the principal securities trading market for its equity
securities is located outside the U.S. or it is organized under the laws of, and
has a principal office in, a country other than the U.S. The Portfolio intends
to diversify its holdings among several countries and to have, under normal
market conditions, at least 65% of the Portfolio's total assets invested in the
securities of companies located in at least five countries, not including the
United States.
The Fund is an open-end management investment company organized as a
diversified series of the Trust. UNLIKE MANY OTHER MUTUAL FUNDS WHICH DIRECTLY
ACQUIRE AND MANAGE THEIR OWN PORTFOLIOS OF SECURITIES, THE FUND SEEKS ITS
INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE PORTFOLIO,
AS DESCRIBED ABOVE. Accordingly, the investment performance of the Fund will
derive from the investment performance of the Portfolio. The Portfolio is an
open-end management investment company and a diversified series of a separate
trust known as the Berger/BIAM Worldwide Portfolios Trust ("Worldwide
Portfolios"). The Portfolio's investment objective and policies are identical to
those of the Fund. The Portfolio is advised by BBOI Worldwide LLC ("BBOI" or the
"Advisor"), which has delegated daily portfolio management of the Portfolio to
Bank of Ireland Asset Management (U.S.) Limited ("BIAM" or the "Sub-Advisor").
JULY 15, 1997
<PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
Cross-References to
Related Disclosures
Table of Contents in Prospectus
----------------- -------------------
Introduction Section 3
1. Investment Policies Section 3, 4, 5
2. Investment Restrictions Section 4
3. Management of the Fund Section 7
4. Investment Advisor and Sub-Advisor Section 7
5. Expenses of the Fund Section 7, 8
6. Brokerage Policy Section 7, 8
7. Purchase of Shares Section 9
8. Net Asset Value Section 10
9. Income Dividends, Capital Gains Section 15
Distributions and Tax Treatment
10. Suspension of Redemption Rights Section 12
11. Tax-Sheltered Retirement Plans Section 14
12. Special Purchase and Exchange Plans Section 13, 14
13. Performance Information Section 17
14. Additional Information Section 16
Financial Statements
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<PAGE>
INTRODUCTION
The International Equity Fund is a mutual fund, or open-end,
diversified management investment company. The investment objective of the Fund
is long-term capital appreciation. This is also the investment objective of the
Portfolio in which the Fund invests all of its investable assets. Current income
is not an investment objective of the Fund and any income produced will be only
of secondary importance as a by-product of the investment selection process used
to achieve the Fund's objective.
1. Investment Policies
-------------------
The Prospectus discusses the investment objective of the Fund and the
Portfolio and the policies to be employed to achieve that objective. This
section contains supplemental information concerning the types of securities and
other instruments in which the Portfolio may invest, the investment policies and
portfolio strategies that the Portfolio may utilize and certain risks attendant
to those investments, policies and strategies.
ILLIQUID AND RESTRICTED SECURITIES. The Portfolio is authorized to
invest in securities which are illiquid or not readily marketable because they
are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, no ready
market is available. However, the Portfolio may not purchase any security, the
purchase of which would cause the Portfolio to invest more than 15% of its net
assets, measured at the time of purchase, in illiquid securities. Investments in
illiquid securities involve certain risks to the extent that the Portfolio may
be unable to dispose of such a security at the time desired or at a reasonable
price or, in some cases, may be unable to dispose of it at all. In addition, in
order to resell a restricted security, the Portfolio might have to incur the
potentially substantial expense and delay associated with effecting
registration. If securities become illiquid following purchase or other
circumstances cause more than 15% of the Portfolio's net assets to be invested
in illiquid securities, the trustees of Worldwide Portfolios, in consultation
with the Sub-Advisor, will determine what action, if any, is appropriate in
light of all relevant circumstances.
Repurchase agreements maturing in more than seven days will be
considered as illiquid for purposes of this restriction. Pursuant to guidelines
established by the trustees, the Portfolio's Sub- Advisor will determine whether
securities eligible for resale to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933 should be treated as illiquid
investments considering, among other things, the following factors: (1) the
frequency of trades and quotes for the security; (2) the number of dealers
wanting to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and (4)
the nature of the security and the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics of
the transfer). The liquidity of the Portfolio's investments in Rule 144A
securities could be impaired if qualified institutional buyers become
uninterested in purchasing these securities.
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<PAGE>
REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase
agreements with various financial organizations, including commercial banks,
registered broker-dealers and registered government securities dealers. A
repurchase agreement is a means of investing cash for a short period. A
repurchase agreement is an agreement under which the Portfolio acquires a debt
security (generally a security issued or guaranteed by the U.S. government or an
agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an agreed
upon price and date (normally, the next business day). A repurchase agreement
may be considered a loan collateralized by securities. The resale price reflects
an agreed upon interest rate effective for the period the instrument is held by
the Portfolio and is unrelated to the interest rate on the underlying
instrument.
In these transactions, the securities acquired by the Portfolio
(including accrued interest earned thereon) must have a total value equal to or
in excess of the value of the repurchase agreement and are held by the
Portfolio's custodian bank until repurchased. In addition, the trustees will
establish guidelines and standards for review by the Sub-Advisor of the
creditworthiness of any bank, broker or dealer party to a repurchase agreement
with the Portfolio. The Portfolio will not enter into a repurchase agreement
maturing in more than seven days if as a result more than 15% of the Portfolio's
net assets would be invested in such repurchase agreements and other illiquid
securities.
The use of repurchase agreements involves certain risks. For example,
if the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, the
Portfolio may incur a loss upon disposition of the security. If the other party
to the agreement becomes insolvent and subject to liquidation or reorganization
under the bankruptcy or other laws, a court may determine that the underlying
security is collateral for a loan by the Portfolio not within the control of the
Portfolio and therefore the realization by the Portfolio on such collateral may
automatically be stayed. Finally, it is possible that the Portfolio may not be
able to substantiate its interest in the underlying security and may be deemed
an unsecured creditor of the other party to the agreement. Although these risks
are acknowledged, it is expected that they can be controlled through careful
monitoring procedures.
UNSEASONED ISSUERS. The Portfolio may invest to a limited degree in
securities of unseasoned issuers. Unseasoned issuers are companies with a record
of less than three years' continuous operation, even including the operations of
any predecessors and parents. Unseasoned issuers by their nature have only a
limited operating history which can be used for evaluating the company's growth
prospects. As a result, investment decisions for these securities may place a
greater emphasis on current or planned product lines and the reputation and
experience of the company's management and less emphasis on fundamental
valuation factors than would be the case for more mature growth companies. In
addition, many unseasoned issuers may also be small companies and involve the
risks and price volatility associated with smaller companies. The Portfolio may
invest up to 5% of its total assets in securities of unseasoned issuers.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICS). The Portfolio may
purchase the securities of certain foreign investment funds or trusts considered
Passive Foreign Investment
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<PAGE>
Companies (PFICs) under U.S. tax laws. In addition to bearing their
proportionate share of the Portfolio's expenses (management fees and operating
expenses), shareholders will also indirectly bear similar expenses of such PFIC.
PFIC investments also may be subject to less favorable U.S.
tax treatment, as discussed in Section 9 below.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase
and sell securities on a when-issued or delayed delivery basis. However, the
Portfolio does not currently intend to purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its net
assets taken at market value at the time of purchase would be invested in such
securities. When-issued or delayed delivery transactions arise when securities
are purchased or sold by the Portfolio with payment and delivery taking place in
the future in order to secure what is considered to be an advantageous price or
yield. However, the yield on a comparable security available when delivery takes
place may vary from the yield on the security at the time that the when-issued
or delayed delivery transaction was entered into. Any failure to consummate a
when- issued or delayed delivery transaction may result in the Portfolio missing
the opportunity of obtaining a price or yield considered to be advantageous.
When-issued and delayed delivery transactions may generally be expected to
settle within one month from the date the transactions are entered into, but in
no event later than 90 days. However, no payment or delivery is made by the
Portfolio until it receives delivery or payment from the other party to the
transaction.
When the Portfolio purchases securities on a when-issued basis, it will
maintain in a segregated account with its custodian cash, U.S. government
securities or other liquid assets having an aggregate value equal to the amount
of such purchase commitments, until payment is made. If necessary, additional
assets will be placed in the account daily so that the value of the account will
equal or exceed the amount of the Portfolio's purchase commitments.
LENDING OF SECURITIES. As discussed in the Prospectus, the Portfolio
may lend its securities to qualified institutional investors who need to borrow
securities in order to complete certain transactions, such as covering short
sales, avoiding failures to deliver securities, or completing arbitrage
operations. By lending its securities, the Portfolio will be attempting to
generate income through the receipt of interest on the loan which, in turn, can
be invested in additional securities to pursue the Portfolio's investment
objective. Any gain or loss in the market price of the securities loaned that
might occur during the term of the loan would be for the account of the
Portfolio. The Portfolio may lend its portfolio securities to qualified brokers,
dealers, banks or other financial institutions, so long as the terms, the
structure and the aggregate amount of such loans are not inconsistent with the
Investment Company Act of 1940, or the Rules and Regulations or interpretations
of the Securities and Exchange Commission (the "Commission") thereunder, which
currently require that (a) the borrower pledge and maintain with the Portfolio
collateral consisting of cash, an irrevocable letter of credit or securities
issued or guaranteed by the U.S. government having a value at all times not less
than 100% of the value of the securities loaned, (b) the borrower add to such
collateral whenever the price of the securities loaned rises (i.e., the borrower
"marks to the market" on a daily basis), (c) the loan be made subject to
termination by the Portfolio at any time and (d) the Portfolio receive
reasonable interest on the loan, which interest may include the Portfolio's
investing cash collateral in interest bearing short-term investments, and (e)
the Portfolio
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<PAGE>
receive all dividends and distributions on the loaned securities and any
increase in the market value of the loaned securities.
The Portfolio bears a risk of loss in the event that the other party to
a securities lending transaction defaults on its obligations and the Portfolio
is delayed in or prevented from exercising its rights to dispose of the
collateral, including the risk of a possible decline in the value of the
collateral securities during the period in which the Portfolio seeks to assert
these rights, the risk of incurring expenses associated with asserting these
rights and the risk of losing all or a part of the income from the transaction.
The Portfolio will not lend its portfolio securities if, as a result, the
aggregate value of such loans would exceed 33-1/3% of the value of the
Portfolio's total assets. Loan arrangements made by the Portfolio will comply
with all other applicable regulatory requirements, including the rules of the
New York Stock Exchange, which rules presently require the borrower, after
notice, to redeliver the securities within the normal settlement time of three
business days. All relevant facts and circumstances, including creditworthiness
of the broker, dealer or institution, will be considered in making decisions
with respect to the lending of securities, subject to review by Worldwide
Portfolio's trustees.
HEDGING TRANSACTIONS. As described in the Prospectus, the Portfolio is
authorized to make limited commitments in certain forward contracts, but only
for the purpose of hedging, that is, protecting against the risk of market
movements that may adversely affect the value (in foreign currency or U.S.
dollar terms) of the Portfolio's securities or the price of securities that the
Portfolio is considering purchasing. A hedging transaction may partially protect
the Portfolio from a decline in the value of a particular security or its
portfolio generally, although hedging may also limit the Portfolio's opportunity
to profit from favorable price movements, and the cost of the transaction will
reduce the potential return on the security or the portfolio. In addition,
hedging transactions do not eliminate fluctuations in the prices of the
underlying securities the Portfolio owns or intends to acquire.
Any utilization of forwards or any other hedging technique (investing,
for example, in futures or options) is subject to policies and procedures which
may be established and changed by the trustees from time to time without
shareholder vote. Currently, the Portfolio is authorized to utilize forward
contracts only for hedging purposes and is not permitted to invest in futures or
options. If the trustees ever authorize the Portfolio to invest in futures or
options, such investments would be permitted solely for hedging purposes, and
the Portfolio would not be permitted to invest more than 5% of its net assets at
the time of purchase in initial margins for financial futures transactions and
premiums for options. In addition, the Advisor or Sub-Advisor may be required to
obtain bank regulatory approval before the Portfolio engages in futures and
options transactions. The following information should be read in conjunction
with the information concerning the Portfolio's investment in forwards and the
risks of such investments contained in the Prospectus.
Forward Foreign Currency Exchange Contracts. A forward contract is a
---------------------------------------------
privately negotiated agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the asset at the time of delivery. The Portfolio currently intends that the
only
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<PAGE>
forward contracts or commitments that it might use are forward foreign currency
exchange contracts and that it may use such contracts solely for hedging
purposes, although the Portfolio may enter into additional forms of forward
contracts or commitments in the future for hedging purposes if they become
available and advisable in light of the Portfolio's objective and investment
policies. Forward contracts generally are negotiated in an interbank market
conducted directly between traders (usually large commercial banks) and their
customers. Unlike futures contracts, which are standardized, exchange-traded
contracts, forward contracts can be specifically drawn to meet the needs of the
parties that enter into them. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the contract
to maturity and complete the contemplated exchange.
The following discussion summarizes the Portfolio's principal uses of
forward foreign currency exchange contracts ("forward currency contracts"). The
Portfolio may enter into forward currency contracts with aggregate stated
contract values of up to the value of the Portfolio's assets. A forward currency
contract is an obligation to buy or sell an amount of a specified currency for
an agreed price (which may be in U.S. dollars or a foreign currency) on a
specified date. The Portfolio will exchange foreign currencies for U.S. dollars
and for other foreign currencies in the normal course of business and may buy
and sell currencies through forward currency contracts in order to fix a price
(in terms of a specified currency) for securities it has agreed to buy or sell
("transaction hedge"). The Portfolio also may hedge some or all of its
investments denominated in foreign currency against a decline in the value of
that currency relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency (or a proxy currency whose price
movements are expected to have a high degree of correlation with the currency
being hedged) approximating the value of some or all of its portfolio securities
denominated in that currency ("position hedge"). The Portfolio also may enter
into a forward currency contract with respect to a currency where the Portfolio
is considering the purchase or sale of investments denominated in that currency
but has not yet selected the specific investments ("anticipatory hedge").
These types of hedging minimize the effect of currency appreciation as
well as depreciation, but do not eliminate fluctuations in the underlying U.S.
dollar equivalent value of the proceeds of or rates of return on the Portfolio's
foreign currency denominated portfolio securities. The matching of the increase
in value of a forward foreign currency exchange contract and the decline in the
U.S. dollar equivalent value of the foreign currency denominated asset that is
the subject of the hedge generally will not be precise. Shifting the Portfolio's
currency exposure from one foreign currency to another limits the Portfolio's
opportunity to profit from increases in the value of the original currency and
involves a risk of increased losses to the Portfolio if the Sub-Advisor's
projection of future exchange rates is inaccurate.
The Portfolio will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in the currency underlying
the forward contract or the currency being hedged. To the extent that the
Portfolio is not able to cover its forward currency positions with underlying
portfolio securities, the Portfolio's custodian will segregate cash or liquid
assets having a value equal to the aggregate amount of the Portfolio's
commitments under forward contracts entered into. If the value of the securities
used to cover a position or the value of
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<PAGE>
segregated assets declines, the Portfolio must find alternative cover or
segregate additional cash or liquid assets on a daily basis so that the value of
the covered and segregated assets will be equal to the amount of the Portfolio's
commitments with respect to such contracts.
While forward contracts are not currently regulated by the Commodity
Futures Trading Commission ("CFTC"), the CFTC may in the future assert authority
to regulate forward contracts. In such event, the Portfolio's ability to utilize
forward contracts may be restricted. The Portfolio may not always be able to
enter into forward contracts at attractive prices and may be limited in its
ability to use these contracts to hedge Portfolio assets. In addition, when the
Portfolio enters into a privately negotiated forward contract with a
counterparty, the Portfolio assumes counterparty credit risk, that is, the risk
that the counterparty will fail to perform its obligations, in which case the
Portfolio could be worse off than if the contract had not been entered into.
Unlike many exchange-traded futures contracts and options on futures, there are
no daily price fluctuation limits with respect to forward contracts and other
negotiated or over-the-counter instruments, and with respect to those contracts,
adverse market movements could therefore continue to an unlimited extent over a
period of time. However, the Portfolio intends to monitor its investments
closely and will attempt to renegotiate or close its positions when the risk of
loss to the Portfolio becomes unacceptably high.
PORTFOLIO TURNOVER. Although the annual portfolio turnover rate of the
Portfolio will vary, it is normally expected to range from 25% to 75%. In
pursuit of the Portfolio's investment objective, the Sub-Advisor continuously
monitors the Portfolio's investments and makes portfolio changes whenever
changes in investment themes, the fundamentals of any portfolio company or the
price of any portfolio security indicate to the Sub-Advisor that more attractive
alternatives exist or that the Portfolio's investment objective could be better
achieved by investment in another security, regardless of portfolio turnover. In
addition, portfolio turnover may increase as a result of large amounts of
purchases and redemptions of shares of the Portfolio due to economic, market or
other factors that are not within the control of management.
2. Investment Restrictions
-----------------------
The Fund has adopted the investment policy that it may, notwithstanding
any other fundamental or non-fundamental investment policy or restriction,
invest all of its investable assets in the securities of another open-end
investment company or series thereof with substantially the same investment
objective, policies and limitations as the Fund.
All other fundamental and non-fundamental investment policies and
restrictions of the Fund and the Portfolio are identical. Therefore, although
the following investment restrictions refer to the Portfolio and the trustees of
Worldwide Portfolios, they apply equally to the Fund and the trustees of the
Trust.
The Portfolio has adopted certain fundamental restrictions on its
investments and other activities, and none of these restrictions may be changed
without the approval of (i) 67% or more of the voting securities of the
Portfolio present at a meeting of shareholders thereof if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or
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<PAGE>
(ii) more than 50% of the outstanding voting securities of the Portfolio.
Whenever the Fund is requested to vote on a change in the investment
restrictions of the Portfolio, the Fund will hold a meeting of its shareholders
and will cast its votes as instructed by the shareholders.
The following fundamental restrictions apply to the Portfolio. The
Portfolio may not:
1. With respect to 75% of the Portfolio's total assets, purchase the
securities of any one issuer (except U.S. government securities) if immediately
after and as a result of such purchase (a) the value of the holdings of the
Portfolio in the securities of such issuer exceeds 5% of the value of the
Portfolio's total assets or (b) the Portfolio owns more than 10% of the
outstanding voting securities of such issuer.
2. Invest in any one industry (other than U.S. government securities)
25% or more of the value of its total assets at the time of such investment.
3. Borrow money, except from banks for temporary or emergency purposes
in amounts not to exceed 25% of the Portfolio's total assets (including the
amount borrowed) taken at market value, nor pledge, mortgage or hypothecate its
assets, except to secure permitted indebtedness and then only if such pledging,
mortgaging or hypothecating does not exceed 25% of the Portfolio's total assets
taken at market value. When borrowings exceed 5% of the Portfolio's total
assets, the Portfolio will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the Portfolio
may be deemed an underwriter under the Securities Act of 1933 in disposing of a
security), issue senior securities (except to the extent permitted under the
Investment Company Act of 1940), invest in real estate (although it may purchase
shares of a real estate investment trust), or invest in commodities or commodity
contracts except financial futures transactions, futures contracts on securities
and securities indices and options on such futures, forward foreign currency
exchange contracts, forward commitments or securities index put or call options.
5. Make loans, except that the Portfolio may enter into repurchase
agreements and may lend portfolio securities in accordance with the Portfolio's
investment policies. The Portfolio does not, for this purpose, consider the
purchase of all or a portion of an issue of publicly distributed bonds, bank
loan participation agreements, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the purchase is made
upon the original issuance of the securities, to be the making of a loan.
In applying the industry concentration investment restriction (no. 2
above), the Portfolio uses the industry groups designated by the Financial Times
World Index Service.
The trustees have adopted additional non-fundamental investment
restrictions for the Portfolio. These limitations may be changed by the trustees
without a shareholder vote. The non- fundamental investment restrictions include
the following:
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<PAGE>
1. With respect to 100% of the Portfolio's total assets, the Portfolio
may not purchase the securities of any one issuer (except U.S. government
securities) if immediately after and as a result of such purchase (a) the value
of the holdings of the Portfolio in the securities of such issuer exceeds 5% of
the value of the Portfolio's total assets or (b) the Portfolio owns more than
10% of the outstanding voting securities of such issuer.
2. The Portfolio may not purchase securities of any company which,
including its predecessors and parents, has a record of less than three years'
continuous operation, if such purchase would cause the Portfolio's investments
in all such companies taken at cost to exceed 5% of the value of the Portfolio's
total assets.
3. The Portfolio may not purchase securities on margin from a broker or
dealer, except that the Portfolio may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities. This limitation shall not prohibit or restrict the Portfolio from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.
4. The Portfolio may not purchase the securities of any other
investment company, except by purchase in the open market involving no
commission or profit to a sponsor or dealer (other than the customary broker's
commission).
5. The Portfolio may not invest in companies for the purposes of
exercising control of management.
6. The Portfolio may not purchase any security, including any
repurchase agreement maturing in more than seven days, which is not readily
marketable, if more than 15% of the net assets of the Portfolio, taken at market
value at the time of purchase would be invested in such securities.
7. The Portfolio may not enter into any futures, forwards or options,
except that only for the purpose of hedging, the Portfolio may enter into
forward foreign currency exchange contracts with stated contract values of up to
the value of the Portfolio's assets.
8. The Portfolio may not purchase or sell securities on a when-issued
or delayed delivery basis, if as a result more than 5% of its net assets taken
at market value at the time of purchase would be invested in such securities.
9. The Portfolio may not purchase or sell any interest in an oil, gas
or mineral development or exploration program, including investments in oil, gas
or other mineral leases, rights or royalty contracts (except that the Portfolio
may invest in the securities of issuers engaged in the foregoing activities).
10. The Portfolio may not invest more than 5% of its net assets in
warrants. Included in that amount, but not to exceed 2% of net assets, are
warrants whose underlying securities are not
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<PAGE>
traded on principal domestic or foreign exchanges. Warrants acquired by the
Portfolio in units or attached to securities are not subject to these limits.
The Trust has undertaken to the State of Ohio that the Fund will
prohibit the purchase or retention by the Fund of the securities of any issuer
if the officers, directors or trustees of the Fund, its advisors, or managers
owning beneficially more than 1/2 of 1% of the securities of an issuer together
own beneficially more than 5% of the securities of that issuer.
3. Management of the Fund
---------------------
The trustees and executive officers of the Trust are listed below,
together with information which includes their principal occupations during the
past five years and other principal business affiliations. The trustees and
executive officers of the Trust also serve in the same capacities as trustees
and officers of Worldwide Portfolios.
* GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO 80206, age
54. President and a trustee of Berger/BIAM Worldwide Portfolios Trust and
Berger/BIAM Worldwide Funds Trust since their inception in May 1996.
President and a director of the Berger 100 Fund and the Berger Growth and
Income Fund since February 1997. President and a trustee of Berger
Institutional Products Trust since its inception in October 1995. President
and a trustee of Berger Investment Portfolio Trust and Berger Omni
Investment Trust since February 1997. President and a director since April
1995 of Berger Associates, Inc. Member and Chairman of the Board of
Managers and Chief Executive Officer on the Management Committee of BBOI
Worldwide LLC since November 1996. A Vice President of DST Systems, Inc.
(data processing) since July 1995. Director of First of Michigan Capital
Corp. (holding company) and First of Michigan Corp. (broker-dealer) since
March 1995. Formerly President and Chief Executive Officer of Investors
Fiduciary Trust Company (banking) from February 1992 to March 1995 and
Chief Operating Officer of SunAmerica Asset Management Co. (money
management) from January 1990 to February 1992.
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, age 68.
President, Baldwin Financial Counseling. Formerly (1978-1990), Vice
President and Denver Office Manager of Merrill Lynch Capital Markets.
Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust
and Berger Omni Investment Trust.
* WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 71. Director and, formerly, President (1974-1994) of Berger 100
Fund and Berger Growth and Income Fund. Trustee of Berger Investment
Portfolio Trust since its inception in August 1993 (Chairman of the
Trustees through November 1994). Trustee of Berger Institutional Products
Trust since its inception in October 1995. Trustee of Berger/BIAM Worldwide
Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their
inception in May 1996. Trustee of Berger Omni Investment Trust since
February 1997. Chairman (since
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<PAGE>
1994) and a Director (since 1973) and, formerly, President
(1973-1994) of Berger Associates, Inc.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 71. President, Climate
Engineering, Inc. (building environmental systems). Director of Berger 100
Fund and Berger Growth and Income Fund. Trustee of Berger Investment
Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide
Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age 52. Managing
Principal, Sovereign Financial Services, L.L.C. (investment consulting
firm). Formerly (1981-1988), Executive Vice President, Captiva Corporation,
Denver, Colorado (private investment management firm). Ph.D. in Finance
(Arizona State University); Chartered Financial Analyst (CFA). Director of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust
and Berger Omni Investment Trust.
LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age 69. Associate,
University College, University of Denver. Formerly, President of the
Colorado State Board of Land Commissioners (1989-1995), and Vice President
and Economist (1983-1988) and Consulting Economist (1989) for First
Interstate Bank of Denver. Ph.D. in Economics (Harvard University).
Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust
and Berger Omni Investment Trust.
* DENIS CURRAN, Two Greenwich Plaza, Greenwich, CT 06830, age 50. President
and a director since December 1994, and Senior Vice President and a
director from September 1991 to December 1994, of Bank of Ireland Asset
Management (U.S.) Limited (investment advisory firm). Member of the Board
of Managers and Chief Executive Officer on the Management Committee of BBOI
Worldwide LLC since November 1996. Trustee of Berger/BIAM Worldwide Funds
Trust and Berger/BIAM Worldwide Portfolios Trust since November 1996.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL 60602, age 51.
Since 1991, Director, Chairman, President and Chief Executive Officer of
Catalyst Institute (international public policy research organization
focused primarily on financial markets and institutions) and Catalyst
Consulting (international financial institutions business consulting firm).
Formerly (1988-1991), Director, President and Chief Executive Officer of
Kessler Asher Group (brokerage, clearing and trading firm). Director of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust
and Berger Omni Investment Trust.
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<PAGE>
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, age 64.
Self- employed as a private investor. Formerly (1981-1988), Senior Vice
President, Rocky Mountain Region, of Dain Bosworth Incorporated and member
of that firm's Management Committee. Director of Berger 100 Fund and Berger
Growth and Income Fund. Trustee of Berger Investment Portfolio Trust,
Berger Institutional Products Trust, Berger/BIAM Worldwide Funds Trust,
Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment Trust.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT 59717, age
60. Since 1994, Dean, and from 1989 to 1994, a member of the Finance
faculty, of the College of Business, Montana State University.
Self-employed as a financial and management consultant, and in real estate
development. Formerly (1976-1989), Chairman and Chief Executive Officer of
Royal Gold, Inc. (mining). Chairman of the Board of Berger 100 Fund and
Berger Growth and Income Fund. Chairman of the Trustees of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust
and Berger Omni Investment Trust.
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, age 68.
President, Sinclaire Cattle Co., and private investor. Director of Berger
100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment
Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide
Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
* CRAIG D. CLOYED, 210 University Boulevard, Suite 900, Denver, CO 80206, age
51. Vice President of Berger/BIAM Worldwide Funds Trust and Berger/BIAM
Worldwide Portfolios Trust since their inception in May 1996. Vice
President of Berger Omni Investment Trust since February 1997. Also, Senior
Vice President (since January 1997), Vice President (August 1995 to January
1997) and Chief Marketing Officer (since August 1995) of Berger Associates,
Inc., and President, CEO and a director of Berger Distributors, Inc., since
its inception in May 1996. Formerly (September 1989 to August 1995), Senior
Vice President of INVESCO Funds Group (mutual funds).
* KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206, age
41. Vice President, Secretary and Treasurer of Berger 100 Fund and Berger
Growth and Income Fund since October 1991, of Berger Investment Portfolio
Trust since its inception in August 1993, of Berger Institutional Products
Trust since its inception in October 1995, of Berger/BIAM Worldwide Funds
Trust and Berger/BIAM Worldwide Portfolios Trust since their inception in
May 1996 and of Berger Omni Investment Trust since February 1997. Also,
Senior Vice President-Finance and Administration (since January 1997), Vice
President-Finance and Administration (September 1991 to January 1997),
Secretary and Treasurer of Berger Associates, Inc., and a director of
Berger Distributors, Inc., since its inception in May 1996. Formerly,
Financial Consultant (registered representative) with Neidiger Tucker
Bruner, Inc. (broker-dealer) (October 1989 to September 1991) and
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Financial Consultant with Merrill Lynch, Pierce, Fenner & Smith, Inc.
(October 1985 to October 1989).
- ----------------
* Interested person (as defined in the Investment Company Act of 1940) of
the Fund and of the Portfolio's Advisor or Sub-Advisor.
The trustees of the Trust have adopted a trustee retirement age of 75
years.
TRUSTEE COMPENSATION
Officers of the Trust receive no compensation from the Trust. However,
trustees of the Trust who are not interested persons of the Portfolio's Advisor
or Sub-Advisor, who are also trustees of Worldwide Portfolios, are compensated
for their services according to a fee schedule, allocated among the Berger
Funds, which includes an annual fee component and a per meeting fee component.
Neither the officers of the Trust nor the trustees receive any form of pension
or retirement benefit compensation from the Trust.
Set forth below is information regarding compensation (including
reimbursement of expenses) estimated to be paid or accrued during the current
fiscal year ended July 31, 1997, for each trustee of the Trust and of the other
funds in the Berger Fund complex.
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<PAGE>
NAME AND POSITION WITH AGGREGATE AGGREGATE
BERGER FUNDS COMPENSATION COMPENSATION
FROM FROM
THE FUND/(1)/ ALL BERGER
FUNDS/(2)/
Dennis E. Baldwin/(3)/ $57 $35,700
William M.B. Berger/(3)/,/(5)/ $0 $0
Louis R. Bindner/(3)/ $51 $32,400
Katherine A. Cattanach/(3)/ $57 $35,700
Lucy Black Creighton/(3)/ $51 $32,400
Paul R. Knapp/(3)/ $57 $35,700
Gerard M. Lavin/(4)/,/(5)/ $0 $0
Harry T. Lewis/(3)/ $57 $35,700
Michael Owen/(3)/ $70 $43,367
William Sinclaire/(3)/ $51 $32,400
=================================================================
(1) Comprised of the portion of the estimated trustee compensation to be
paid by Worldwide Portfolios to its trustees and allocated to the Fund.
(2) Consisting of Berger 100 Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM
Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger
Omni Investment Trust.
(3) Director of Berger 100 Fund and Berger Growth and Income Fund.
Trustee of Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Funds Trust, Berger/BIAM Worldwide Portfolios
Trust and Berger Omni Investment Trust.
(4) Trustee of Berger Institutional Products Trust, Berger/BIAM Worldwide
Funds Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni Investment
Trust.
(5) Interested person of the Berger/BIAM Worldwide Funds Trust and/or the
Portfolio's Advisor or Sub-Advisor.
Trustees may elect to defer receipt of all or a portion of their fees
pursuant to a fee deferral plan adopted by the Berger/BIAM Worldwide Portfolios
Trust. Under the plan, deferred fees are credited to an account and adjusted
thereafter to reflect the investment experience of whichever of the Berger Funds
(or approved money market funds) is designated by the trustees for this purpose.
Pursuant to an SEC exemptive order, Worldwide Portfolios is permitted to
purchase shares of the designated funds in order to offset its obligation to the
trustees participating in the plan. Purchases made pursuant to the plan are
excepted from any otherwise applicable investment restriction limiting the
purchase of securities of any other investment company. Worldwide Portfolios'
obligation to make payments of deferred fees under the plan is a general
obligation of Worldwide Portfolios.
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<PAGE>
As of March 13, 1997, the officers and trustees of the Trust as a group
owned 2.44% of the outstanding shares of the International Equity Fund.
4. Investment Advisor and Sub-Advisor
----------------------------------
INVESTMENT ADVISOR
The investment advisor to the Portfolio is BBOI Worldwide LLC (the
"Advisor" or "BBOI Worldwide"), 210 University Boulevard, Denver, CO 80206. The
Advisor oversees, evaluates and monitors the investment advisory services
provided to the Portfolio by the Portfolio's Sub-Advisor and is responsible for
furnishing general business management and administrative services to the
Portfolio.
The Advisor is a Delaware limited liability company formed in 1996.
Since the Advisor was only recently formed, it has only limited prior experience
as an investment advisor. However, the Advisor is a joint venture between Berger
Associates, Inc. ("Berger Associates") and Bank of Ireland Asset Management
(U.S.) Limited ("BIAM"), the Sub-Advisor to the Portfolio, which have both been
in the investment advisory business for many years.
Berger Associates and BIAM each own a 50% membership interest in the
Advisor and each have an equal number of representatives on the Advisor's Board
of Managers. Berger Associates' role in the joint venture is to provide
administrative services, and BIAM's role is to provide international and global
investment management expertise. Agreement of representatives of both Berger
Associates and BIAM is required for all significant management decisions.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 87%
of the outstanding shares of Berger Associates. KCSI is a publicly traded
holding company with principal operations in rail transportation, through its
subsidiary The Kansas City Southern Railway Company, and financial asset
management businesses. BIAM is described immediately below.
SUB-ADVISOR
As permitted in its Investment Advisory Agreement with the Portfolio,
the Advisor has delegated day-to-day portfolio management responsibility to Bank
of Ireland Asset Management (U.S.) Limited (the "Sub-Advisor" or "BIAM"). As
Sub-Advisor, BIAM manages the investments in the Portfolio and determines what
securities and other investments will be purchased, retained, sold or loaned,
consistent with the investment objective and policies established by the
trustees of Worldwide Portfolios. BIAM's main offices are at 26 Fitzwilliam
Place, Dublin 2, Ireland. BIAM maintains a representative office at 2 Greenwich
Plaza, Greenwich, CT 06830. BIAM is an indirect wholly-owned subsidiary of Bank
of Ireland, a publicly traded, diversified financial services group with
business operations worldwide.
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<PAGE>
INVESTMENT ADVISORY AGREEMENT AND SUB-ADVISORY AGREEMENT
Under the Investment Advisory Agreement between the Advisor and
Berger/BIAM Worldwide Portfolios Trust with respect to the Portfolio, the
Advisor oversees, evaluates and monitors the investment advisory services
provided to the Portfolio by the Sub-Advisor and is responsible for furnishing
general business management and administrative services to the Portfolio. Under
the Investment Advisory Agreement for the Portfolio, the Advisor is compensated
for its services to the Portfolio by the payment of a fee at the annual rate of
0.90% of the average daily net assets of the Portfolio. The Fund bears a pro
rata portion of the fee paid by the Portfolio to the Advisor.
Until at least April 30, 1998, the Advisor has agreed voluntarily to
waive the investment advisory fee paid by the Portfolio under the Investment
Advisory Agreement to the extent that the Portfolio's normal operating expenses
in any fiscal year, including the investment advisory fee and custodian fees,
but excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.00% of the Portfolio's average daily net assets for that fiscal year.
Any reduction in the advisory fee paid by the Portfolio will also reduce the pro
rata share of the advisory fee borne indirectly by the Fund.
The Investment Advisory Agreement will continue in effect until April
1998, and thereafter from year to year if such continuation is specifically
approved at least annually by the trustees or by vote of a majority of the
outstanding shares of the Portfolio and in either case by vote of a majority of
the trustees of Worldwide Portfolios who are not "interested persons" (as that
term is defined in the Investment Company Act of 1940) of the Portfolio or the
Advisor. The Agreement is subject to termination by the Portfolio or the Advisor
on 60 days' written notice, and terminates automatically in the event of its
assignment.
Under the Sub-Advisory Agreement between the Advisor and the
Sub-Advisor, the Advisor has delegated day-to-day portfolio management
responsibility to the Sub-Advisor. The Sub-Advisor manages the investments in
the Portfolio and determines what securities and other investments will be
purchased, retained, sold or loaned, consistent with the investment objective
and policies established by the trustees of Worldwide Portfolios. The Portfolio
pays no fees directly to the Sub- Advisor. The Sub-Advisor will receive from the
Advisor a fee at the annual rate of 0.45% of the average daily net assets of the
Portfolio. During certain periods, the Sub-Advisor may voluntarily waive all or
a portion of its fee under the Sub-Advisory Agreement, which will not affect the
fee paid by the Portfolio to the Advisor.
The Sub-Advisory Agreement will continue in effect until April 1998,
and thereafter from year to year if such continuation is specifically approved
at least annually by the trustees or by vote of a majority of the outstanding
shares of the Portfolio and in either case by vote of a majority of the trustees
of Worldwide Portfolios who are not "interested persons" (as that term is
defined in the Investment Company Act of 1940) of the Portfolio or the Advisor
or the Sub-Advisor. The Sub- Advisory Agreement is subject to termination by the
Portfolio, the Advisor or the Sub-Advisor on 60 days' written notice, and
terminates automatically in the event of its assignment and in the event of
termination of the Investment Advisory Agreement.
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<PAGE>
TRADE ALLOCATIONS
Investment decisions for the Portfolio and other accounts advised by
the Sub-Advisor are made independently with a view to achieving each of their
respective investment objectives and after consideration of such factors as
their current holdings, availability of cash for investment and the size of
their investments generally. However, certain investments may be appropriate for
the Portfolio and one or more such accounts. If the Portfolio and other accounts
advised by the Sub- Advisor are contemporaneously engaged in the purchase or
sale of the same security, the orders may be aggregated and/or the transactions
averaged as to price and allocated equitably to the Portfolio and each
participating account. While in some cases, this policy might adversely affect
the price paid or received by the Portfolio or other participating accounts, or
the size of the position obtained or liquidated, the Sub-Advisor will aggregate
orders if it believes that coordination of orders and the ability to participate
in volume transactions will result in the best overall combination of net price
and execution.
RESTRICTIONS ON PERSONAL TRADING
The Advisor has adopted a Code of Ethics covering all board members,
officers, employees and other access persons (as defined below) of the Advisor
who are not also covered by an approved Code of Ethics of an affiliated person
who is an investment advisor ("covered persons"). At present, there are no
persons who would be covered by the Advisor's Code of Ethics who are not also
covered by the Code of Ethics of Berger Associates, which is an investment
advisor affiliated with the Advisor.
The Advisor's Code, which is substantially similar to the Code of
Ethics adopted by Berger Associates, permits its covered persons to purchase and
sell securities for their own accounts in accordance with provisions governing
personal investing. The Code requires all covered persons to conduct their
personal securities transactions in a manner which does not operate adversely to
the interests of the Fund or the Portfolio or the Advisor's other advisory
clients. Board members and officers of the Advisor (including those who also
serve as trustees of the Trust or of Worldwide Portfolios), investment personnel
and other designated covered persons deemed to have access to current trading
information ("access persons") are required to pre-clear all transactions in
securities not otherwise exempt under the Code. Requests for authority to trade
will be denied pre-clearance when, among other reasons, the proposed personal
transaction would be contrary to the provisions of the Code or would be deemed
to adversely affect any transaction then known to be under consideration for or
currently being effected on behalf of any client account, including the Fund or
the Portfolio.
In addition to the pre-clearance requirements described above, the Code
subjects those covered persons deemed to be access persons to various trading
restrictions and reporting obligations. All reportable transactions are reviewed
for compliance with the Advisor's Code. Those covered persons (as well as board
members, officers, employees and other access persons of the Advisor covered by
an approved Code of Ethics of an affiliated investment advisor) also may be
required under certain circumstances to forfeit their profits made from personal
trading. The
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<PAGE>
Code is administered by the Advisor and the provisions of the Code are subject
to interpretation by and exceptions authorized by its board of managers.
The Sub-Advisor has also adopted a Code of Ethics which restricts its
officers, employees and other staff from personal trading in specified
circumstances, including among others prohibiting participation in initial
public offerings, prohibiting dealing in a security for the seven days before
and after any trade in that security on behalf of clients, prohibiting trading
in a security while an order is pending for any client on that same security,
and requiring profits from short-term trading in securities (purchase and sale
within a 60-day period) to be forfeited. In addition, staff of the Sub- Advisor
must report all of their personal holdings in securities annually and must
disclose their holdings in any private company if an investment in that same
company is being considered for clients. Staff of the Sub-Advisor are required
to pre-clear all transactions in securities not otherwise exempt under the Code
of Ethics and must instruct their broker to provide the Sub-Advisor with
duplicate confirmations of all such personal trades.
5. Expenses of the Fund
--------------------
The Fund is allocated and bears indirectly its pro rata share of the
aggregate annual operating expenses of the Portfolio, since all of the
investable assets of the Fund are invested in the Portfolio. Expenses of the
Portfolio include, among others, its pro rata share of the expenses of Worldwide
Portfolios of which the Portfolio is a series, such as: expenses of registering
Worldwide Portfolios with securities authorities; the compensation of its
Independent Trustees; expenses of preparing reports to investors and to
governmental offices and commissions; expenses of meetings of investors and
trustees of Worldwide Portfolios; legal fees; and insurance premiums of
Worldwide Portfolios. Expenses of the Portfolio also include, among others,
expenses connected with the execution of portfolio transactions, including
brokerage commissions on purchases and sales of portfolio securities (which are
considered a cost of securities of the Portfolio); custodian fees; auditors'
fees; interest and taxes imposed on the Portfolio; transfer agent, recordkeeping
and pricing agent fees; the fees payable to the Advisor under the Investment
Advisory Agreement; and such other non-recurring and extraordinary items as may
arise from time to time.
Until at least April 30, 1998, the Advisor has agreed voluntarily to
waive the investment advisory fee paid by the Portfolio under the Investment
Advisory Agreement to the extent that the Portfolio's normal operating expenses
in any fiscal year, including the investment advisory fee and custodian fees,
but excluding brokerage commissions, interest, taxes and extraordinary expenses,
exceed 1.00% of the Portfolio's average daily net assets for that fiscal year.
Any reduction in the advisory fee paid by the Portfolio will also reduce the pro
rata share of the advisory fee borne indirectly by the Fund.
Expenses of the Fund include, among others, its pro rata share of the
expenses of the Trust, such as expenses of meetings of the shareholders of the
Trust. Expenses of the Fund also include, among others, taxes imposed on the
Fund; the fee payable to the Advisor under the Administrative Services
Agreement; and such other non-recurring and extraordinary items as may arise
from time to time.
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<PAGE>
Service Arrangements for the Fund
- ---------------------------------
Under the Administrative Services Agreement with the Fund, the Advisor
serves as the administrator of the Fund. In this capacity, it is responsible for
administering and managing all aspects of the Fund's day-to-day operations,
subject to the oversight of the trustees of the Trust. The Advisor is
responsible, at its expense, for furnishing (or procuring other parties to
furnish) all administrative services reasonably necessary for the operation of
the Fund, including recordkeeping and pricing services, custodian services,
transfer agency and dividend disbursing services, tax and audit services,
insurance, legal services, printing and mailing to shareholders of prospectuses
and other required communications, and certain other administrative and
recordkeeping services, such as coordinating matters relating to the operations
of the Fund, monitoring the Fund's status as a "regulated investment company"
under the Internal Revenue Code of 1986, registering sufficient Fund shares
under federal and state securities laws, arranging for and supervising the
preparation of registration statements, tax returns, proxy materials, financial
statements and reports for filing with regulatory authorities and distribution
to shareholders of the Fund. Under the Administrative Services Agreement, the
Fund pays the Advisor a fee at an annual rate equal to the lesser of (i) 0.10%
of its average daily net assets, or (ii) the Advisor's annual cost to provide or
procure these services (including the fees of any services providers whose
services are procured by the Advisor), plus an additional 0.01% of the Fund's
average daily net assets. The trustees of the Trust regularly review amounts
paid to and expenditures incurred by the Advisor pursuant to the Administrative
Services Agreement. In addition, in the event that the Advisor's duties under
the Administrative Services Agreement are delegated to another party, the
Advisor may take into account, in calculating the cost of such services, only
the costs incurred by such other party in discharging the delegated duties.
Arrangements may be entered into by the Advisor or its affiliates with
certain organizations to provide sub-transfer agency, recordkeeping, shareholder
communications, sub-accounting and/or other services to investors purchasing
shares of the Fund through investment accounts, programs or pension plans
established or serviced by those organizations. The Advisor or its affiliates
may pay fees to these organizations for their services. For purposes of
determining the Advisor's cost of providing or procuring transfer agency,
dividend disbursing or other services under the Administrative Services
Agreement, the Advisor may take into account only the fees that otherwise would
be paid for by the Advisor if all the investors who own Fund shares through the
organization were instead direct registered record holders of shares in the
Fund.
Under a Sub-Administration Agreement between the Advisor and Berger
Associates, Berger Associates has been delegated the responsibility to perform
certain of the administrative and recordkeeping services required under the
Administrative Services Agreement and to procure, at the Advisor's expense,
third parties to provide the services not provided by Berger Associates. Under
the Sub-Administration Agreement, Berger Associates is paid a fee by the Advisor
of 0.25% of the Fund's average daily net assets for its services. During certain
periods, Berger Associates may voluntarily waive all or a portion of its fee
from the Advisor, which will not affect the fee paid by the Fund to the Advisor
under the Administrative Services Agreement. Investors Fiduciary Trust Company
("IFTC"), 127 W. 10th Street, Kansas City, MO 64105, has been appointed to
provide recordkeeping and pricing services to the Fund, including calculating
the daily net asset value of the
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<PAGE>
Fund, and to perform certain accounting and recordkeeping functions that it
requires. In addition, IFTC has been appointed to serve as the Fund's custodian,
transfer agent and dividend disbursing agent. IFTC has engaged DST Systems, Inc.
("DST"), P.O. Box 419958, Kansas City, MO 64141, as sub-transfer agent to
provide transfer agency and dividend disbursing services for the Fund. The fees
of Berger Associates, IFTC and DST are all paid by the Advisor. Approximately
40% of the outstanding shares of DST are owned by KCSI, which also owns
approximately 87% of the outstanding shares of Berger Associates.
Service Arrangements for the Portfolio
- --------------------------------------
Under the Investment Advisory Agreement between the Advisor and the
Portfolio, in addition to providing advisory services, the Advisor is
responsible for providing or arranging for all managerial and administrative
services necessary for the operations of the Portfolio. The Advisor is
responsible for providing certain of these services at its own expense, such as
compliance monitoring and preparing investor communications, which have been
delegated to Berger Associates as part of the Sub-Administration Agreement
discussed above. Other services are procured from third party service providers
at the Portfolio's own expense, such as custody, recordkeeping and pricing
services. The Portfolio has appointed IFTC as recordkeeping and pricing agent to
calculate the daily net asset value of the Portfolio and to perform certain
accounting and recordkeeping functions required by the Portfolio. In addition,
the Portfolio has appointed IFTC as its custodian and transfer agent. IFTC has
engaged State Street Bank and Trust Company ("State Street"), P.O. Box 351,
Boston, MA 02101, as sub-custodian for the Portfolio. For custodian,
recordkeeping and pricing services, the Portfolio pays fees directly to IFTC
based on a percentage of its net assets, subject to certain minimums, and
reimburses IFTC for certain out-of-pocket expenses.
The trustees of Worldwide Portfolios have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are
effected through DSTS, the commission received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Portfolio would otherwise
be obligated to pay. No portion of the commission is retained by DSTS.
Distributor
- -----------
The distributor (principal underwriter) of the Fund's shares is Berger
Distributors, Inc. (the "Distributor"), 210 University Boulevard, Suite 900,
Denver, CO 80206. The Distributor may be reimbursed by Berger Associates for its
costs in distributing the Fund's shares.
6. Brokerage Policy
----------------
Although the Portfolio retains full control over its own investment
policies, the Sub-Advisor is authorized to place the portfolio transactions of
the Portfolio. The Sub-Advisor is required to report on the placement of
brokerage business to the trustees of Worldwide Portfolios every quarter,
indicating the brokers with whom portfolio business was placed and the basis for
such placement.
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<PAGE>
The Investment Advisory Agreement that the Portfolio has with the
Advisor and the Sub- Advisory Agreement between the Advisor and the Sub-Advisor
authorizes and directs portfolio transactions for the Portfolio to be placed
only with brokers and dealers who render satisfactory service in the execution
of orders at the most favorable prices and at reasonable commission rates.
However, the Sub-Advisor is specifically authorized to place such transactions
with a broker with whom it has negotiated a commission that is in excess of the
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker viewed in terms of either that particular
transaction or the overall responsibilities of the Sub-Advisor.
In accordance with these provisions, the Sub-Advisor may place
portfolio brokerage business of the Portfolio with brokers who provide useful
research services to the Sub-Advisor. Such research services typically consist
of studies made by investment analysts or economists relating either to the past
record of and future outlook for companies and the industries in which they
operate, or to national and worldwide economic conditions, monetary conditions
and trends in investors' sentiment, and the relationship of these factors to the
securities market. In addition, such analysts may be available for regular
consultation so that the Sub-Advisor may be apprised of current developments in
the above-mentioned factors.
The research services received from brokers are often helpful to the
Sub-Advisor in performing its investment advisory responsibilities to the
Portfolio, but they are not essential, and the availability of such services
from brokers does not reduce the responsibility of the Sub-Advisor's advisory
personnel to analyze and evaluate the securities in which the Portfolio invests.
The research services obtained as a result of the Portfolio's brokerage business
may also be useful to the Sub-Advisor in making investment decisions for its
other advisory accounts, and, conversely, information obtained by reason of
placement of brokerage business of such other accounts may be used by the
Sub-Advisor in rendering investment advice to the Portfolio. Although such
research services may be deemed to be of value to the Sub-Advisor, they are not
expected to decrease the expenses that the Sub-Advisor would otherwise incur in
performing its investment advisory services for the Portfolio nor will the fee
that is received by the Sub-Advisor from the Advisor or the advisory fee
received by the Advisor from the Portfolio be reduced as a result of the
availability of such research services from brokers.
The trustees of Worldwide Portfolios have authorized portfolio
transactions to be placed on an agency basis through DST Securities, Inc.
("DSTS"), a wholly-owned broker-dealer subsidiary of DST. When transactions are
effected through DSTS, the commission received by DSTS is credited against, and
thereby reduces, certain operating expenses that the Portfolio would otherwise
be obligated to pay. No portion of the commission is retained by DSTS.
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<PAGE>
7. Purchase of Shares
------------------
Minimum Initial Investment $1,000,000.00
Shares in the Fund may be purchased at the relevant net asset value
without a sales charge. The minimum initial investment for shares of the Fund is
$1,000,000. To purchase shares in the Fund, simply complete the application form
enclosed with the Prospectus and mail it to the Fund in care of DST Systems,
Inc., the Fund's transfer agent, as follows:
Berger Funds
c/o DST Systems, Inc.
P.O. Box 419958
Kansas City, MO 64141
Payment for shares purchased may be made by wire, electronic funds
transfer or mail. All purchase orders are effected at the relevant net asset
value per share of the Fund next determined after receipt of the purchase order,
completed application and payment. A purchase order, together with payment in
proper form, received by the transfer agent, subtransfer agent or any other
authorized agent of the Fund prior to the close of the New York Stock Exchange
(the "Exchange") on a day the Fund is open for business will be effected at that
day's net asset value. An order received after that time will be effected at the
net asset value determined on the next business day.
Additional investments may be made at any time by telephone or by mail
at the relevant net asset value by calling or writing the Fund and making
payment by wire or electronic funds transfer as outlined above.
In addition, Fund shares may be purchased through certain organizations
which make available investment accounts, programs or pension or retirement
plans. These organizations may charge investors a transaction or other fee for
their services, may require different minimum initial and subsequent investments
than the Fund and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Fund directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will be paid by an
investor who purchases the Fund shares directly from the Fund.
8. Net Asset Value
---------------
The net asset value of the Fund is determined once daily, at the close
of the regular trading session of the Exchange (normally 4:00 p.m., New York
time, Monday through Friday) each day that the Exchange is open. The Exchange is
closed and the net asset value of the Fund is not determined on weekends and on
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day each year. The per share net asset
value of the Fund is determined by dividing the total value of its assets, less
liabilities, by the total number of shares outstanding. Since the Fund invests
all of its investable assets in the
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<PAGE>
Portfolio, the value of the Fund's investable assets will be equal to the value
of its beneficial interest in the Portfolio.
The Portfolio's securities and other assets are valued as follows:
securities listed or traded primarily on national exchanges, The Nasdaq Stock
Market and foreign exchanges are valued at the last sale price on such markets,
or, if such a price is lacking for the trading period immediately preceding the
time of determination, such securities are valued at the mean of their current
bid and asked prices. Securities that are traded in the over-the-counter market
are valued at the mean between their current bid and asked prices. The market
value of individual securities held by the Portfolio will be determined by using
prices provided by pricing services which provide market prices to other mutual
funds or, as needed, by obtaining market quotations from independent
broker/dealers. Short-term money market securities maturing within 60 days are
valued on the amortized cost basis, which approximates market value. All assets
and liabilities initially expressed in terms of non-U.S. dollar currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers shortly before the close of the Exchange. Securities and
assets for which quotations are not readily available are valued at fair values
determined in good faith pursuant to consistently applied procedures established
by the trustees.
Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of the Exchange. The
values of foreign securities used in computing the net asset value of the shares
of the Portfolio are determined as of the earlier of such market close or the
closing time of the Exchange. Occasionally, events affecting the value of such
securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities will be valued at
their fair market value as determined in good faith pursuant to consistently
applied procedures established by the trustees.
The Portfolio's securities may be listed primarily on foreign exchanges
or over-the-counter dealer markets which may trade on days when the Exchange is
closed (such as a customary U.S. holiday) and on which the Fund's net asset
value is not calculated. As a result, the net asset value of the Fund may be
significantly affected by such trading on days when shareholders cannot purchase
or redeem shares of the Fund.
9. Income Dividends, Capital Gains
Distributions and Tax Treatment
-------------------------------
TAX STATUS OF THE FUND AND THE PORTFOLIO
The Fund intends to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") and to distribute to its
investors all or substantially all of its taxable income as defined in the Code.
If the Fund meets the Subchapter M requirements, it generally is not liable for
U.S. Federal income taxes to the extent its earnings are timely distributed.
Qualification as a regulated investment company ("RIC") under the Code does not,
however, involve any federal supervision of management or of the investment
practices or policies of the Fund. If the
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<PAGE>
Fund distributes annually less than 98% of its income and gain, it may be
subject to a nondeductible excise tax equal to 4% of the shortfall.
The Trust anticipates that (1) the Portfolio will be treated for U.S.
Federal income tax purposes as a partnership, and (2) for purposes of
determining whether the Fund satisfies the income and diversification
requirements to maintain its status as a RIC, the Fund, as an investor in the
Portfolio, will be deemed to own a proportionate share of the Portfolio's assets
and will be deemed to be entitled to the Portfolio's income or loss attributable
to that share. The Portfolio has advised the Fund that it intends to conduct its
operations so as to enable its investors, including the Fund, to satisfy those
requirements.
TAXATION OF FUND DISTRIBUTIONS
Advice as to the tax status of each year's dividends and distributions
will be mailed annually to the shareholders of the Fund. Dividends paid by the
Fund from net investment income and distributions from the Fund's net short-term
capital gains in excess of any net long-term capital losses, whether received in
cash or reinvested, generally will be taxable as ordinary income. Distributions
received from the Fund designated as long-term capital gains (net of capital
losses), whether received in cash or reinvested, will be taxable as long-term
capital gains without regard to the length of time a shareholder has owned
shares in the Fund. Any loss on the redemption or other sale or exchange of the
Fund's shares held for six months or less will be treated as a long-term capital
loss to the extent of any long-term capital gain distribution received on the
shares. A portion of the dividends (but not capital gains distributions) paid by
the Fund may be eligible for the dividends received deduction for corporate
shareholders to the extent that the Fund's income consists of dividends paid by
United States corporations. If a shareholder is exempt from U.S. Federal income
tax, the shareholder will not generally be taxed on amounts distributed by the
Fund.
Under the Internal Revenue Code, gains recognized by the Portfolio upon
a disposition of assets contributed in-kind to it by the Fund will be specially
allocated to the Fund and not to other investors in the Portfolio to the extent
of the unrealized appreciation in those assets at the time of their transfer. As
a result, shareholders of the Fund may receive distributions of a greater amount
of gains than if the Portfolio had purchased those assets in the open market
upon commencement of Fund operations or in a transaction that did not involve
contributions of assets in-kind.
If the amount of the Fund's distributions for a taxable year exceeds
the Fund's tax earnings and profits available for distribution, all or portion
or the distributions may be treated as a return of capital or as capital gains.
In the event a distribution is treated as a return of capital, the shareholder's
basis in his or her Fund shares will be reduced to the extent the distribution
is so treated.
At certain levels of taxable income, the Code provides a preferential
tax rate for long-term capital gains. Long-term capital gains of taxpayers other
than corporations are taxed at a 28% maximum rate, whereas ordinary income is
taxed at a 39.6% maximum rate. Capital losses continue to be deductible only
against capital gains plus (in the case of taxpayers other than corporations)
$3,000 of ordinary income annually ($1,500 for married individuals filing
separately).
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FOREIGN SOURCE INCOME
Income received by the Fund, directly or through the Portfolio, from
sources within foreign countries may be subject to withholding and other income
or similar taxes imposed by such countries. The U.S. has entered into tax
treaties with many foreign countries that, in some circumstances, may entitle
the Fund or the Portfolio to a reduced rate of tax or exemption from tax on such
income. If, directly or through the Portfolio, more than 50% in value of the
Fund's total assets at the close of its taxable year consists of securities of
foreign corporations, the Fund may elect to "pass-through" to its shareholders
the amount of foreign income taxes paid by the Fund and the foreign-source
character of the income received by the Fund. Under this election, each
shareholder will be required to include the shareholder's pro rata portion of
these foreign taxes in gross income, but will be able to deduct (as an itemized
deduction) or claim a foreign tax credit for such amount (subject to various
limitations).
Depending upon their particular tax circumstances, shareholders may be
unable to claim a full credit for their proportionate share of the foreign
income taxes passed through by the Fund. Further limitations as to the credit or
deduction of the foreign income taxes may apply for purposes of the alternative
minimum tax. If the election to pass through foreign income taxes is not made,
foreign taxes will be treated as an expense of the Fund, reducing its investment
company taxable income, and the distributions by the Fund will be treated as
United States source income.
OTHER TAX CONSIDERATIONS
The amount, timing and character of Fund income taxed to Fund
shareholders may be affected by certain special U.S. tax rules that may apply to
various investments of the Fund and the Portfolio, including the following:
Currency Transactions. On the disposition of foreign
-----------------------
currency, foreign currency denominated debt securities and certain
financial contracts, forward contracts and options, gains or losses
attributable to currency fluctuations are treated as ordinary gain or
loss. These gains or losses, termed "section 988" gains or losses, may
increase, decrease or eliminate the amount to be distributed to
shareholders as ordinary income. If section 988 losses exceed other net
investment income during a taxable year the Fund generally would not be
able to make ordinary dividend distributions, or distributions made
before the losses were realized would be recharacterized as return of
capital to shareholders for U.S. Federal income tax purposes (reducing
each shareholder's basis in his or her Fund shares) or as a capital
gain. To minimize the risk of such distributions, the Fund may adjust
its dividends (if any) to take currency fluctuations into account.
Hedging Transactions. On the disposition of certain
----------------------
contracts, such as options, futures contracts and forward contracts
(termed "section 1256 contracts"), the resulting gains or losses
generally are considered 60% long-term and 40% short-term capital gains
or losses, regardless of the time the Fund or the Portfolio has held
the contract. However, foreign currency gains or losses (as discussed
above) arising from certain section 1256 contracts may
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<PAGE>
be treated as ordinary income or loss. In addition, section 1256
contracts held by the Fund, directly or through the Portfolio, at the
end of each taxable year and on certain other dates prescribed by the
tax laws are "marked-to-market" such that unrealized gains or losses
are treated as though they were realized. Further, requirements
relating to the Fund's tax status as a regulated investment company may
limit the extent to which the Fund and the Portfolio will be able to
engage in transactions in such contracts.
Hedging transactions undertaken by the Fund and the Portfolio
may result in "straddles" for U.S. Federal income tax purposes,
affecting the character of gains (or losses) realized by the Fund. In
addition, losses realized by the Fund on straddle positions may be
deferred.
Passive Foreign Investment Companies. The Portfolio may
---------------------------------------
invest in foreign entities that are classified as passive foreign
investment companies ("PFICs") for U.S. tax purposes. If the Fund or
the Portfolio receives an "excess distribution" with respect to PFIC
stock, the Portfolio or the Fund itself may be subject to tax on a
portion of the excess distribution, whether or not the corresponding
income is distributed by the Fund to shareholders. However, the Fund or
the Portfolio may be eligible to elect one of two alternative tax
treatments with respect to PFIC shares which would avoid the foregoing
"excess distribution" taxes, but also may affect, among other things,
the amount and character of gain or loss and the timing of the
recognition of income with respect to PFIC shares. Accordingly, the
amounts, character and timing of income distributed to shareholders of
the Fund may differ substantially as compared to a fund that did not
invest in PFIC shares.
FOREIGN SHAREHOLDERS
Foreign shareholders of the Fund generally will be subject to a 30%
U.S. withholding tax on ordinary income dividends paid by the Fund. This
withholding may be reduced by an applicable tax treaty. Foreign shareholders are
urged to consult with their own tax advisors with respect to this withholding
tax and the other particular U.S. and foreign tax consequences to them of an
investment in the Fund.
The foregoing discussion relates only to U.S. Federal income tax law.
Ordinary income and capital gains dividends also may be subject to state and
local taxes, which may differ from the U.S. Federal treatment. Shareholders are
urged to consult with their tax advisors with respect to the particular tax
consequences to them of an investment in the Fund, including the application and
effect of state and local taxes.
10. Suspension of Redemption Rights
-------------------------------
The right of redemption may be suspended for any period during which
the New York Stock Exchange is closed or the Securities and Exchange Commission
determines that trading on the Exchange is restricted, or when there is an
emergency as determined by the Securities and Exchange Commission as a result of
which it is not reasonably practicable for the Portfolio to dispose of
securities owned by it or to determine the value of its net assets, or for such
other period as the
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Securities and Exchange Commission may by order permit for the protection of
shareholders of the Fund.
The Fund intends to redeem its shares only for cash, although it
retains the right to redeem its shares in-kind under unusual circumstances, in
order to protect the interests of the remaining shareholders, by the delivery of
securities selected from its assets at its discretion. The Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
method of valuing securities used to make redemption in-kind will be the same as
the method of valuing portfolio securities described under Section 8.
Shareholders have the ability to request in writing a review of the valuation of
in-kind redemptions, which will be considered by the trustees of the Trust
within 90 days of such written request.
11. Plans and Programs
------------------
The Fund offers several tax-qualified retirement plans for adoption by
individuals and employers. The Fund also offers both a profit-sharing plan and a
money purchase pension plan for employers and self-employed persons, an
Individual Retirement Account ("IRA") and a 403(b) Custodial Account.
In order to receive the necessary materials to create a profit-sharing
or money purchase pension plan account, an IRA account or a 403(b) Custodial
Account, please write to the Fund, c/o BBOI Worldwide, P.O. Box 5005, Denver, CO
80217, or call 1-800-706-0539. Trustees for 401(k) or other existing plans
interested in utilizing Fund shares as an investment or investment alternative
in their plans should contact the Fund at 1-800-551-5849.
The Fund also offers a systematic withdrawal plan. Forms to open such
an account may be obtained by writing to the Fund, c/o DST Systems, Inc., P.O.
Box 419958, Kansas City, MO 64141, or call 1-800-551-5849.
12. Exchange Privilege
------------------
Any shareholder may exchange any or all of the shareholder's shares in
the Fund, subject to stated minimums, for shares of any of the other publicly
available Berger Funds, without charge, after receiving a current prospectus of
the other Berger Fund. Exchanges into or out of the Fund are made at the net
asset value per share next determined after the exchange request is received.
Each exchange represents the sale of shares from one fund and the purchase of
shares in another, which may produce a gain or loss for U.S. Federal income tax
purposes. An exchange of shares may be made by written request directed to the
Fund, in care of DST Systems, Inc., or simply by telephoning the Fund at
1-800-551-5849. This privilege is revocable by the Fund, and is not available in
any
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<PAGE>
state in which the shares of the Berger Fund being acquired in the exchange are
not eligible for sale. Shareholders automatically have telephone privileges to
authorize exchanges unless they specifically decline this service in the account
application or in writing.
13. Performance Information
-----------------------
The Prospectus contains a brief description of how total return is
calculated.
Quotations of average annual total return for the Fund will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
of return are calculated pursuant to the following formula: P(1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Fund expenses on
an annual basis, and assume that all dividends and distributions are reinvested
when paid.
14. Additional Information
----------------------
BERGER/BIAM WORLDWIDE FUNDS TRUST AND THE FUND
The Trust is a Delaware business trust organized on May 31, 1996. The
Fund was established on May 31, 1996, as a series of the Trust and was
originally named the Berger/BIAM International Institutional Fund. Effective
June 1997, the Fund's name was changed to the International Equity Fund. The
Trust is authorized to issue an unlimited number of shares of beneficial
interest in series or portfolios. Currently, the series comprising the Fund is
one of three series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of shares
representing differing interests in an existing or new series.
Under Delaware law, shareholders of the Trust will enjoy the same
limitations on personal liability as extended to stockholders of a Delaware
corporation. Further, the Trust Instrument of the Trust provides that no
shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for or otherwise existing with respect to,
the Trust or any particular series (fund) of the Trust. However, the principles
of law governing the limitations of liability of beneficiaries of a business
trust have not been authoritatively established as to business trusts organized
under the laws of one jurisdiction but operating or owning property in other
jurisdictions. In states that have adopted legislation containing provisions
comparable to the Delaware Business Trust Act, it is believed that the
limitation of liability of beneficial owners provided by Delaware law should be
respected. In those jurisdictions that have not adopted similar legislative
provisions, it is possible that a court might hold that the shareholders of the
Trust are not entitled to the limitations of liability set forth in Delaware law
or the Trust Instrument and, accordingly, that they may be personally liable for
the obligations of the Trust.
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<PAGE>
In order to protect shareholders from such potential liability, the
Trust Instrument requires that every written obligation of the Trust or any
series thereof contain a statement to the effect that such obligation may only
be enforced against the assets of the Trust or such series. The Trust Instrument
also provides for indemnification from the assets of the relevant series for all
losses and expenses incurred by any shareholder by reason of being or having
been a shareholder, and that the Trust shall, upon request, assume the defense
of any such claim made against such shareholder for any act or obligation of the
relevant series and satisfy any judgment thereon from the assets of that series.
As a result, the risk of a International Equity Fund shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its obligations.
The Trust believes that, in view of the above, the risk of personal liability to
shareholders of the Fund is remote. The trustees intend to conduct the
operations of the Trust and the Fund so as to avoid, to the extent possible,
liability of shareholders for liabilities of the Trust or the Fund.
Shares of the Fund have no preemptive rights, and since the Fund has
only one class of securities there are no sinking funds or arrearage provisions
which may affect the rights of the Fund shares. Fund shares have no conversion
or subscription rights.
BERGER/BIAM WORLDWIDE PORTFOLIOS TRUST AND THE PORTFOLIO
Worldwide Portfolios is also a Delaware business trust organized on May
31, 1996. The Portfolio was established on May 31, 1996, as a series of
Worldwide Portfolios. The Portfolio commenced operations upon the transfer to
the Portfolio of assets held in a pooled trust. See "Performance" in the
Prospectus for additional information on the asset transfer.
Worldwide Portfolios is authorized to sell unlimited interests in
series or portfolios. Currently, the series comprising the Portfolio is the only
series established under Worldwide Portfolios, although others may be added in
the future. The Delaware law information set forth above with respect to the
Trust also applies to Worldwide Portfolios and investors in the Portfolio.
Each investor in the Portfolio, including the Fund, is entitled to a
vote in proportion to the amount of its investment in the Portfolio. Whenever
the Fund is requested to vote as an investor in the Portfolio on matters
pertaining to the Portfolio (other than a vote by the Fund to continue the
operation of the Portfolio upon the withdrawal of another investor in the
Portfolio), the Fund will hold a meeting of its shareholders and will cast all
of its votes as an investor in the Portfolio in the same proportion as directed
by the votes of the Fund's shareholders. Fund shareholders who do not vote will
not affect the votes cast by the Fund at the meeting of the Portfolio investors.
The percentage of the votes representing the Fund's shareholders who do not vote
will be voted by the Fund in the same proportion as the Fund's shareholders who
do, in fact, vote.
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<PAGE>
DISTRIBUTION
The Distributor is the principal underwriter of the Fund's shares. The
Distributor is a registered broker-dealer under the Securities Exchange Act of
1934 and is a member of the National Association of Securities Dealers, Inc. The
Distributor acts as the agent of the Fund in connection with the sale of its
shares in all states in which the shares are registered and in which the
Distributor is qualified as a broker-dealer.
The Trust, on behalf of the Fund, and the Distributor are parties to a
Distribution Agreement that continues until April 30, 1998, and thereafter from
year to year if such continuation is specifically approved at least annually by
the trustees or by vote of a majority of the outstanding shares of the Fund and
in either case by vote of a majority of the trustees of the Trust who are not
"interested persons" (as that term is defined in the Investment Company Act of
1940) of the Trust or the Distributor. The Distribution Agreement is subject to
termination by the Fund or the Distributor on 60 days' prior written notice, and
terminates automatically in the event of its assignment. Under the Distribution
Agreement, the Distributor continuously offers the Fund's shares and solicits
orders to purchase Fund shares at net asset value.
PRINCIPAL SHAREHOLDER
Insofar as the management of the Fund is aware, as of March 13, 1997,
no person owned, beneficially or of record, more than 5% of the outstanding
shares of the Fund, except for Citizens Bank New Hampshire ("Citizens"), 870
Westminster Street, Providence, Rhode Island 02903, which owned of record 83.26%
of the outstanding shares of the Fund as nominee for its customers.
OTHER INFORMATION
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado,
has acted as counsel for the Trust and the Fund. Dechert Price & Rhoads, 1500 K
Street, N.W., Washington, DC, has acted as special counsel for the Trust and the
Fund.
Price Waterhouse LLP, 950 Seventeenth Street, Denver, Colorado, has
been appointed to act as independent accountants for the Fund and the Portfolio
for the current fiscal year.
The Berger/BIAM Worldwide Funds Trust has filed with the Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
amended, with respect to the securities of the International Equity Fund, of
which this Statement of Additional Information is a part. If further information
is desired with respect to the Fund or its securities, reference is made to the
Registration Statement and the exhibits filed as a part thereof.
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<PAGE>
Financial Statements
- --------------------
The following financial statements are incorporated herein by reference
from the Statement of Additional Information contained in the Trust's
Post-Effective Amendment No. 1 to the Trust's Registration Statement, filed with
the Securities and Exchange Commission on October 15, 1996:
For the International Equity Fund (formerly known as the Berger/BIAM
International Institutional Fund):
Report of Independent Accountants, dated October 7, 1996
Statement of Assets and Liabilities of the Berger/BIAM International
Institutional Fund, as of October 4, 1996
Notes to Statement of Assets and Liabilities, dated October 4, 1996
For Berger/BIAM International Portfolio:
Report of Independent Accountants, dated October 7, 1996
Statement of Assets and Liabilities of the Berger/BIAM International
Portfolio, as of October 4, 1996
Notes to Statement of Assets and Liabilities, dated October 4, 1996
The following financial statements are incorporated herein by reference
from the Trust's Semi-Annual Report dated January 31, 1997:
For the International Equity Fund (formerly known as the Berger/BIAM
International Institutional Fund):
Statement of Assets and Liabilities as of January 31, 1997 (Unaudited)
Statement of Operations for the Period October 11, 1996 (Date
Operations Commenced) to January 31, 1997 (Unaudited)
Statement of Changes in Net Assets for the Period October 11, 1996
(Date Operations Commenced) to January 31, 1997 (Unaudited)
Notes to Financial Statements, January 31, 1997
Financial Highlights for the Period October 11, 1996 (Date Operations
Commenced) to January 31, 1997 (Unaudited)
For Berger/BIAM International Portfolio:
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<PAGE>
Schedule of Investments as of January 31, 1997
Statement of Assets and Liabilities as of January 31, 1997 (Unaudited)
Statement of Operations for the Period October 11, 1996 (Date
Operations Commenced) to January 31, 1997 (Unaudited)
Statement of Changes in Net Assets for the Period October 11, 1996
(Date Operations Commenced) to January 31, 1997 (Unaudited)
Notes to Financial Statements, January 31, 1997
Ratios/Supplemental Data for the Period October 11, 1996 (Date
Operations Commenced) to January 31, 1997 (Unaudited)
Copies of the above-referenced financial statements as incorporated
herein by reference are enclosed with a copy of this Statement of Additional
Information.
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<PAGE>
APPENDIX A
HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS
The Portfolio may purchase securities which are convertible into common
stock when the Portfolio's Sub-Advisor believes they offer the potential for a
higher total return than nonconvertible securities. While fixed income
securities generally have a priority claim on a corporation's assets over that
of common stock, some of the convertible securities which the Portfolio may hold
are high- yield/high-risk securities that are subject to special risks,
including the risk of default in interest or principal payments which could
result in a loss of income to the Portfolio or a decline in the market value of
the securities. Convertible securities often display a degree of market price
volatility that is comparable to common stocks.
Specifically, corporate debt securities which are below investment
grade (securities rated Ba or lower by Moody's or BB or lower by Standard &
Poor's) and unrated securities which the Portfolio may purchase and hold are
subject to a higher risk of non-payment of principal or interest, or both, than
higher grade debt securities. Generally speaking, the lower the quality of a
debt security (which may be reflected in its Moody's and/or Standard & Poor's
ratings), the higher the yield it will provide, but the greater the risk that
interest or principal payments will not be made when due. Thus, the lower the
grade of a security, the more speculative characteristics it generally has.
Information about the ratings of Moody's and Standard & Poor's, and the
investment risks associated with the various ratings, is set forth below.
The market prices of these lower grade convertible securities are
generally less sensitive to interest rate changes than higher-rated investments,
but more sensitive to economic changes or individual corporate developments.
Periods of economic uncertainty and change can be expected to result in
volatility of prices of these securities. Lower rated securities also may have
less liquid markets than higher rated securities, and their liquidity as well as
their value may be adversely affected by poor economic conditions. Adverse
publicity and investor perceptions as well as new or proposed laws may also have
a negative impact on the market for high-yield/high-risk bonds.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard & Poor's
are a generally accepted measurement of credit risk. However, they are subject
to certain limitations. Ratings are generally based upon historical events and
do not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
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protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future. Uncertainty of position
characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca-Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C-Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.
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KEY TO STANDARD & POOR'S CORPORATE RATINGS
AAA-Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A-Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC and C-Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are out-weighed by the large uncertainties or major risk exposures to adverse
conditions.
C1-The rating C1 is reserved for income bonds on which no interest is
being paid.
D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
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