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SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Check the appropriate box:
/X/ Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/ / Definitive Information Statement
Bull & Bear U.S. Government Securities Fund, Inc.
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(Name of Registrant as Specified In Its Charter)
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/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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KARPUS INVESTMENT MANAGEMENT
14A Tobey Village Office Park
Pittsford, NY 14534
Dear Fellow Bull & Bear U.S. Government Securities Fund Shareholders:
As the largest shareholder of Bull & Bear U.S. Government Securities Fund,
Karpus Investment Management ("KIM") owner of approximately 16.1% of the
outstanding shares of the Fund, believes you should be fully informed of
recent changes to your Fund. Like KIM, many of you invested in the Fund for
the purpose of earning fixed income on high-quality U.S. government
securities. Now, without the approval of its shareholders, the Fund has
decided to invest up to 35% of its assets in riskier equity investments, such
as common stock, ....., at a time when the stock market has become a perilous
place.
This in not the first time management has proposed major changes in the Fund.
In October 1996, management recommended, and shareholders approved, the Fund's
conversion from an open-end to a closed-end mutual fund. The Fund's shares now
trade at about a 10% discount to its current net asset value. This means that
shares sold in the market today would be worth approximately 10% less than if
the Fund had remained an open-end fund.
Both in September 1997 and in July 1998, the Fund, at shareholder expense, had
preliminary proxy materials prepared and filed with the SEC to convert this
U.S. Government Securities Fund into what, in our opinion, would have been a
fairly risky balanced fund that may invest in common stocks, commodities,
options, futures, limited partnerships, etc. The Fund, after incurring these
expenses, dropped these proposals that would have required our votes on the
Fund's investment objectives.
The Fund decided that it did not need our consent to invest 35% of the Fund's
assets in the highly volatile stock market beginning October 19, 1998.
Fellow shareholders, we need to protect ourselves and voice our opinion. We
need to "fire" Bull & Bear Advisors Inc. as the investment manager of our
Fund.
Why?
The Fund has one of the worst performance records in its category, as well as
one of the highest expense ratios in the industry (5.77%). Average expense
ratios of bond funds range from .55% to 1.2%. From October 4, 1996 through
June 26, 1998 the annualized return of the Fund equaled 0.0462% (including
reinvested dividends). During the same period, the Merrill Lynch 1-10 year
U.S. Treasury Index generated a 7.33% annualized return. Based on the Fund's
failure as a fixed income fund in a rising bond market, how much confidence do
you have in the Fund manager's ability to invest your money in a jittery stock
market -- or in other more complex and riskier investments?
Bull & Bear's three open-end mutual funds, that are listed in the Wall Street
Journal, that invest in stocks and other investments, are all losing between
15% and 24% year-to-date (9/30/98). I believe all three of these funds are
also very poor performers. How could the Board of Directors,
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without our approval as shareholders, dictate to us they are going to invest
our monies in stocks and other investments? Why would the Directors of the
Fund pick Bull & Bear Advisors to manage equity and other investments in light
of their poor performance record?
The Fund last year held its annual meeting in November, and to the best of our
knowledge, the date of this year's annual meeting has not been scheduled.
This meeting may be the only chance to send the message and protect our
investment. The replacement manager should be able to demonstrate top quartile
investment performance, be dedicated to reducing fund expenses and be willing
to take actions where we may be able to sell our shares at a 10% greater
value.
To protect your investments, we urge you not to return any proxy card you may
receive from Bull & Bear U.S. Government Securities Fund, Inc. ("the Fund")
until you have received and reviewed proxy materials from Karpus Investment
Management ("KIM").
PROTECT YOUR INVESTMENT. DO NOT VOTE ANY PROXY CARD YOU MAY RECEIVE FROM THE
FUND UNTIL YOU HAVE HAD AN OPPORTUNITY TO CONSIDER KIM'S PROXY STATEMENT.
For further information, please contact George Karpus at 1-800-646-4005. Mr.
Karpus is a principal of Karpus Investment Management ("KIM"), which owns
119,250 shares of the Bull & Bear U.S. Government Securities Fund, Inc. KIM
has retained Georgeson & Company Inc. to solicit proxies in connection with
this matter and will pay Georgeson a fee not to exceed $20,000 plus reasonable
expenses.
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George W. Karpus, President
