ICON FUNDS PROSPECTUS January 5, 1998
U.S. EQUITY FUNDS INTERNATIONAL EQUITY FUNDS
ICON Basic Materials Fund ICON Asia Region Fund
ICON Capital Goods Fund ICON South Pacific Region Fund
ICON Consumer Cyclicals Fund ICON North Europe Region Fund
ICON Consumer Staples Fund ICON South Europe Region Fund
ICON Energy Fund ICON Western Hemisphere Fund
ICON Financial Services Fund
ICON Healthcare Fund
ICON Leisure Fund FIXED INCOME FUND
ICON Technology Fund ICON Short-Term Fixed Income Fund
ICON Telecommunication & Utilities Fund
ICON Transportation Fund
C/O MERIDIAN INVESTMENT MANAGEMENT CORPORATION
12835 EAST ARAPAHOE ROAD, TOWER II
ENGLEWOOD, COLORADO 80112
FOR INFORMATION, SHAREHOLDER SERVICES AND REQUESTS: 1-888-389-4266
This prospectus presents information that a prospective investor should know
about the various series of the ICON Funds (the "Trust"). Each Fund is a
portfolio of the Trust, a non-diversified, open-end management investment
company ("Fund" or collectively the "Funds"). The Funds are designed for use by
institutional money managers who have discretionary authority to direct
investments on behalf of the beneficial owners of fund shares. The Short-Term
Fixed Income Fund objective is to attain high current income consistent with
preservation of capital. The other Funds are designed to provide long-term
capital appreciation with respect to the sectors selected by the money managers;
and, a Fund may not contain significant assets at times when money managers
place client funds in other sectors. The Trust will report performance of each
Fund. Investors should consider the performance of their investment adviser
independent of fund performance.
Shares of the Funds are offered on a "no-load" basis which means there are no
sales charges or commissions. The Funds are distributed by AmeriPrime Financial
Securities, Inc.
A Statement of Additional Information dated January 5, 1998, has been filed
with the Securities and Exchange Commission and is incorporated herein by
reference. This Statement is available free from ICON Funds upon written request
at the address set forth above or by calling 1-888-389-4266.
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.
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUMMARY.............................................................3
SUMMARY OF FUND EXPENSES.......................................................6
FINANCIAL HIGHLIGHTS...........................................................7
U.S. Equity Funds.....................................................7
International Equity Funds............................................8
Fixed Income Fund ................................................... 9
INVESTMENT OBJECTIVE AND STRATEGIES...........................................10
U.S. Equity Funds....................................................10
ICON Basic Materials Fund...................................10
ICON Capital Goods Fund.....................................10
ICON Consumer Cyclicals Fund................................11
ICON Consumer Staples Fund..................................11
ICON Energy Fund............................................11
ICON Financial Services Fund................................11
ICON Healthcare Fund........................................12
ICON Leisure Fund...........................................12
ICON Technology Fund........................................12
ICON Telecommunication & Utilities Fund.....................13
ICON Transportation Fund....................................13
International Equity Funds...........................................13
ICON Asia Region Fund.......................................14
ICON South Pacific Region Fund.............................15
ICON North Europe Region Fund...............................17
ICON South Europe Region Fund...............................19
ICON Western Hemisphere Fund................................21
Fixed Income Fund....................................................22
ICON Short-Term Fixed Income Fund...........................22
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS....................22
TYPES OF INVESTMENT RISK......................................................26
RISKS OF INTERNATIONAL INVESTING..............................................27
SPECIAL CONSIDERATIONS........................................................28
HOW TO INVEST IN THE FUND.....................................................29
HOW TO REDEEM SHARES..........................................................30
HOW TO MAKE EXCHANGES.........................................................31
SHARE PRICE CALCULATION.......................................................31
DIVIDENDS AND TAXES...........................................................31
THE TRUST.....................................................................33
MANAGEMENT OF THE FUNDS.......................................................32
PERFORMANCE INFORMATION.......................................................34
<PAGE>
PROSPECTUS SUMMARY
The information summarized below is qualified in its entirety by the more
detailed information set forth below in this Prospectus.
The Trust.................................. ICON Funds (the "Trust") is an
open-end management investment
company. It is registered as an
investment company under the
Investment Company Act of 1940, as
amended (the "1940 Act"). The Trust
consists of, and on a continuous
basis issues, redeemable shares of
numerous separate, non-diversified
portfolios each of which has its
own investment objectives and
policies (commonly referred to as
"mutual funds"). The portfolios are
designed to serve a wide range of
investor needs.
The Funds.................................. The following Funds are offered
through this Prospectus:
U.S. EQUITY FUNDS
ICON Basic Materials Fund
ICON Capital Goods Fund
ICON Consumer Cyclicals Fund
ICON Consumer Staples Fund
ICON Energy Fund
ICON Financial Services Fund
ICON Healthcare Fund
ICON Leisure Fund
ICON Technology Fund
ICON Telecommunication & Utilities
Fund
ICON Transportation Fund
INTERNATIONAL EQUITY FUNDS
ICON Asia Region Fund
ICON South Pacific Region Fund
ICON North Europe Region Fund
ICON South Europe Region Fund
ICON Western Hemisphere Fund
FIXED INCOME FUND
ICON Short-Term Fixed Income Fund
U.S. Equity Funds -- Investment............. The investment objective of the
Objective U.S. Equity Funds is to provide
long-term capital appreciation.
Each Fund seeks to achieve its
objective by investing primarily in
equity securities, including common
stock and securities convertible
into common stock of U.S. issuers.
International Equity Funds -- Investment.... The investment objective of the
Objective International Equity Funds is to
provide long-term capital
appreciation. Each Fund seeks to
achieve its objective by investing
primarily in equity securities
including common stocks and
securities convertible into common
stocks of foreign issuers.
Fixed Income Fund -- Investment............. The investment objective of the
Objective Fixed Income Fund is to provide
high current income consistent with
the preservation of capital.
The Investment Advisor..................... Meridian Investment Management
Corporation, 12835 East Arapahoe
Road, Tower II, Englewood,
Colorado, ("Meridian" or the
"Advisor") has been selected to
serve as the investment advisor to
carry out the investment and
reinvestment of the Funds' assets.
The Investment Sub-Advisor................. Wellington Management Company, LLP,
75 State Street, Boston,
Massachusetts ("Wellington
Management" or the "Sub-Advisor")
has been retained to serve as the
Sub-Advisor to the Short-Term Fixed
Income Fund.
The Administrator.......................... The Fund has retained AmeriPrime
Financial Services, Incorporated,
1793 Kingswood Drive, Suite 200,
Southlake, Texas, ("AmeriPrime" or
the "Administrator") as the
administrator to manage the Funds'
business affairs.
Purpose of the Trust...................... Meridian is a sponsor of the
Funds offered by this prospectus.
The Funds were created so
investment advisory clients of
Meridian and other similarly
situated investment advisers would
have available to them no load
sector funds focusing on selected
industries or countries; and so
the investment advisers may move
money freely from sector to sector
on behalf of their clients without
the limitations imposed by many
fund groups where large movements
of money in and out of a fund could
disrupt portfolio management and
performance.
Who May Purchase Fund Shares............... The Funds were established to
provide broadly based investment
opportunities in various domestic
sectors and in the main security
markets of the world for investment
portfolios managed by professional
fiduciaries such as trustees,
investment advisers and other
persons and institutions acting in
a fiduciary capacity. The Funds are
designed to enable fiduciaries to
comply with the rule that
investments made by fiduciaries
should be selected with the care,
skill and caution that would be
exercised by a prudent person based
on their clients investment
objectives.
Special Consideration...................... Shares of the Funds are not
directly available to the public,
only through these professional
advisers/fiduciaries. In this
regard, investors should be aware
that a Fund may not contain
significant assets at times when
money managers place their client
funds in other sectors. To the
extent an investor remains in a
Fund without significant assets,
that investor's holding would be
exposed to bearing a
proportionately greater portion of
the Fund's expenses and/or
distributions, potentially eroding
the investment and/or exposing the
investor to additional taxes in
respect to the distributions.
The Distributor............................ AmeriPrime Financial Securities,
Inc. 1793 Kingswood Drive, Suite
200, Southlake , Texas ("AFSI" or
the "Distributor") has agreed to
act as Distributor as an
accommodation for the Trust in
connection with acting as agent in
the various states and with
clearing promotional materials with
appropriate regulatory authorities.
How to Purchase Funds Shares............... There is no sales charge on the
purchase of Fund shares. Shares may
be purchased by contacting the
Trust's advisor at 1-888-389-4266.
Shares of any Funds may be
purchased at the net asset value
per share next determined after
receipt of the purchase order. On
behalf of its clients an investment
adviser/fiduciary may invest any
amount as often as it wishes;
however, the minimum amount it may
place in any one Fund is $50,000.
Subject to the minimum investment
amount,shares may also be purchased
by exchange.
Redemptions................................ Shares may be redeemed directly
from a Fund at the net asset value
per share next determined after
receipt of the redemption request
in good order.
Exchange Privilege......................... Shares of the Funds may be
exchanged for shares of certain
other funds managed by the Advisor
at the net asset value next
determined after receipt of the
exchange request.
Shareholder Communication.................. Each shareholder will receive
annual and semi-annual reports
containing financial statements,
and a statement confirming each
share transaction. Financial
statements included in annual
reports will be audited by the
Trust's independent accountants.
Where possible, shareholder
confirmations and account
statements will consolidate all
ICON Funds holdings of the
shareholder.
Special Risk Considerations................ International investments pose
additional risks including currency
exchange rate fluctuation, currency
revaluation and political risks.
Transfer Agent and Custodian............... Firstar Trust Company, Incorporated
is located at 615 East Michigan
Street, Milwaukee, Wisconsin 53202.
THE PROSPECTUSES OF THE FUNDS ARE COMBINED IN THIS PROSPECTUS. EACH FUND OFFERS
ONLY ITS OWN SHARES, YET IT IS POSSIBLE THAT A FUND MIGHT BECOME LIABLE FOR A
MISSTATEMENT IN THE PROSPECTUS OF ANOTHER FUND. THE TRUSTEES OF THE TRUST HAVE
CONSIDERED THIS IN APPROVING THE USE OF A COMBINED PROSPECTUS.
SUMMARY OF FUND EXPENSES
The tables below are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in a Fund. The
expense information is based on actual results for the time each fund was open
during the fiscal period ending September 30, 1997. With respect to Funds which
have not yet commenced investment operations, marked with an asterisk, expense
information is based on estimated amounts for the current fiscal year. The
expenses are expressed as a percentage of average net assets. In light of the
short period of time from the commencement of operations to present, management
believes the estimates to be appropriate. The example should not be considered a
representation of future Fund performance or expenses, both of which may vary
from the example.
Shareholders should be aware that each Fund is a no-load fund and, accordingly,
a shareholder does not pay any sales charge or commission upon purchase or
redemption of shares of the Fund.
THE TABLES DO NOT REFLECT THE PAYMENT OF ANY ADDITIONAL FEES AN INVESTOR WILL
PAY TO THE PROFESSIONAL ADVISER/FIDUCIARY RESPONSIBLE FOR THE INVESTOR'S
PURCHASE OF FUND SHARES. SUCH FEES SHOULD BE CONSIDERED ALONG WITH FUND
AND OTHER EXPENSES INCURRED BY THE INVESTOR.
<TABLE>
ICON ICON ICON
U.S. INTERNATIONAL SHORT-TERM
EQUITY EQUITY FIXED INCOME
SHAREHOLDER TRANSACTION EXPENSES FUNDS FUNDS FUND
- --------------------------------- ----- ----- ----
<S> <C> <C> <C>
Sales Load Imposed on Purchases None None None
Deferred Sales Load None None None
Redemption Fees None None None
Exchange Fees None None None
TOTAL FUND
ANNUAL FUND OPERATING EXPENSES MANAGEMENT OTHER OPERATING
(AS A PERCENTAGE OF AVERAGE NET ASSETS) FEES EXPENSES EXPENSES
U.S. Equity Funds
<S> <C> <C> <C>
ICON Basic Materials Fund 1.00% 0.45% 1.45%
ICON Capital Goods Fund* 1.00% 0.45% 1.45%
ICON Consumer Cyclicals Fund 1.00% 0.89% 1.89%
ICON Consumer Staples Fund* 1.00% 0.45% 1.45%
ICON Energy Fund* 1.00% 0.45% 1.45%
ICON Financial Services Fund 1.00% 0.70% 1.70%
ICON Healthcare Fund 1.00% 0.45% 1.45%
ICON Leisure Fund 1.00% 0.48% 1.48%
ICON Technology Fund 1.00% 0.47% 1.47%
ICON Telecommunication & Utilities Fund 1.00% 0.91% 1.91%
ICON Transportation Fund 1.00% 0.61% 1.61%
International Equity Funds
ICON Asia Region Fund 1.00% 0.66% 1.66%
ICON South Pacific Region Fund* 1.00% 0.65% 1.65%
ICON North Europe Region Fund 1.00% 0.66% 1.66%
ICON South Europe Region Fund 1.00% 0.69% 1.69%
ICON Western Hemisphere Fund* 1.00% 0.65% 1.65%
Fixed Income Fund
ICON Short-Term Fixed Income Fund 0.65% 0.45% 1.10%
</TABLE>
The tables above are provided to assist an investor in understanding the direct
and indirect expenses that an investor may incur as a shareholder in the Funds.
HYPOTHETICAL EXAMPLE OF EFFECT OF FUND EXPENSES
You would pay the following expenses on a $1,000 investment, assuming 5% annual
return and redemption at the end of each time period:
<TABLE>
FUND 1 YEAR 3 YEARS
U.S. Equity Funds
<S> <C> <C>
ICON Basic Materials Fund $15 $46
ICON Capital Goods Fund $15 $46
ICON Consumer Cyclicals Fund $19 $59
ICON Consumer Staples Fund $15 $46
ICON Energy Fund $15 $46
ICON Financial Services Fund $17 $54
ICON Healthcare Fund $15 $46
ICON Leisure Fund $15 $47
ICON Technology Fund $15 $46
ICON Telecommunication & Utilities Fund $19 $60
ICON Transportation Fund $16 $51
International Equity Funds
ICON Asia Region Fund $17 $52
ICON South Pacific Region Fund $17 $52
ICON North Europe Region Fund $17 $52
ICON South Europe Region Fund $17 $53
ICON Western Hemisphere Fund $17 $52
Fixed Income Fund
ICON Short-Term Fixed Income Fund $12 $36
</TABLE>
FINANCIAL HIGHLIGHTS
ICON BASIC MATERIALS FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from May 5, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.01)
Net gains or (losses) on securities
(both realized and unrealized) 0.91
-------------
Total from investment operations 0.90
Less dividends and distributions:
dividends (from net investment income) 0.00
-------------
Net asset value,
end of period $10.90
=============
Total Return 9.00%**
Net assets, end of period (000's) $50,251
Average net assets for the period (000's) $45,001
Ratio of expenses to
average net assets 1.45%*
Ratio of net investment income to
average net assets (0.24)%*
Portfolio turnover rate 32.35%*
Average commission rate per share $ 0.0505
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON CONSUMER CYCLICALS FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from July 9, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.01)
Net gains or (losses) on securities
(both realized and unrealized) 0.97
-------------
Total from investment operations 0.96
Less dividends and distributions:
dividends (from net investment income) 0.00
-------------
Net asset value,
end of period $10.96
=============
Total Return 9.60%**
Net assets, end of period (000's) $20,916
Average net assets for the period (000's) $19,876
Ratio of expenses to
average net assets 1.89%*
Ratio of net investment income to
average net assets (0.67)%*
Portfolio turnover rate 0.00%*
Average commission rate per share $ 0.0308
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON FINANCIAL SERVICES FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from July 1, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.01
Net gains or (losses) on securities
(both realized and unrealized) 0.50
-------------
Total from investment operations 0.51
Less dividends and distributions:
dividends (from net investment income) 0.00
-------------
Net asset value,
end of period $10.51
=============
Total Return 5.10%**
Net assets, end of period (000's) $32,237
Average net assets for the period (000's) $29,803
Ratio of expenses to
average net assets 1.70%*
Ratio of net investment income to
average net assets 0.12%*
Portfolio turnover rate 0.00%*
Average commission rate per share $ 0.0418
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON HEALTHCARE FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from February 24, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.04)
Net gains or (losses) on securities
(both realized and unrealized) 1.82
-----------
Total from investment operations 1.78
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $11.78
===========
Total Return 17.80%**
Net assets, end of period (000's) $77,307
Average net assets for the period (000's) $59,164
Ratio of expenses to
average net assets 1.45%*
Ratio of net investment loss to
average net assets (0.80)*
Portfolio turnover rate 71.81%
Average commission rate per share $0.0490
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON LEISURE FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from May 9, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.01)
Net gains or (losses) on securities
(both realized and unrealized) 1.36
-----------
Total from investment operations 1.35
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $11.35
===========
Total Return 13.50%**
Net assets, end of period (000's) $66,608
Average net assets for the period (000's) $45,444
Ratio of expenses to
average net assets 1.48%*
Ratio of net investment income to
average net assets (0.36%)*
Portfolio turnover rate 2.52%
Average commission rate per share $0.0457
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON TECHNOLOGY FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from February 19, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.05)
Net gains or (losses) on securities
(both realized and unrealized) 3.01
-----------
Total from investment operations 2.96
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $12.96
===========
Total Return 29.60%**
Net assets, end of period (000's) $41,849
Average net assets for the period (000's) $29,766
Ratio of expenses to
average net assets 1.47%*
Ratio of net investment loss to
average net assets (0.88)%*
Portfolio turnover rate 44.57%
Average commission rate per share $0.0489
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON TELECOMMUNICATION & UTILITIES FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from July 9, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.06
Net gains or (losses) on securities
(both realized and unrealized) 0.57
-----------
Total from investment operations 0.63
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $10.63
===========
Total Return 6.30%**
Net assets, end of period (000's) $20,422
Average net assets for the period (000's) $19,230
Ratio of expenses to
average net assets 1.91%*
Ratio of net investment loss to
average net assets 1.62%*
Portfolio turnover rate 2.55%
Average commission rate per share $0.0313
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON TRANSPORTATION FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from May 9, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.00
Net gains or (losses) on securities
(both realized and unrealized) 2.40
-----------
Total from investment operations 2.40
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $12.40
===========
Total Return 24.00%**
Net assets, end of period (000's) $22,531
Average net assets for the period (000's) $19,459
Ratio of expenses to
average net assets 1.61%*
Ratio of net investment income to
average net assets (0.04%)*
Portfolio turnover rate 15.97%
Average commission rate per share $0.0489
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON ASIA REGION FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from February 25, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) (0.01)
Net gains or (losses) on securities
(both realized and unrealized) (0.05)
-----------
Total from investment operations (0.06)
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $9.94
===========
Total Return (0.60)%**
Net assets, end of period (000's) $58,279
Average net assets for the period (000's) $45,191
Ratio of expenses to
average net assets 1.66%*
Ratio of net investment loss to
average net assets (0.23)%*
Portfolio turnover rate 0.00%
Average commission rate per share $0.0109
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON NORTH EUROPE REGION FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from February 18, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.07
Net gains or (losses) on securities
(both realized and unrealized) 0.99
-----------
Total from investment operations 1.06
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $11.06
===========
Total Return 10.60%**
Net assets, end of period (000's) $49,947
Average net assets for the period (000's) $36,212
Ratio of expenses to
average net assets 1.66%*
Ratio of net investment income to
average net assets 1.34%*
Portfolio turnover rate 13.89%
Average commission rate per share $0.1169
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON SOUTH EUROPE REGION FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from February 20, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.10
Net gains or (losses) on securities
(both realized and unrealized) 1.80
-----------
Total from investment operations 1.90
Less dividends and distributions:
dividends (from net investment income) 0.00
-----------
Net asset value,
end of period $11.90
===========
Total Return 19.00%**
Net assets, end of period (000's) $21,088
Average net assets for the period (000's) $15,055
Ratio of expenses to
average net assets 1.69%*
Ratio of net investment income to
average net assets 1.92%*
Portfolio turnover rate 7.29%
Average commission rate per share $0.0109
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
ICON SHORT-TERM FIXED INCOME FUND
The following per share data and ratios for a share of beneficial interest
outstanding throughout the period from February 7, 1997 - September 30, 1997
(commencement of operations through September 30, 1997) have been audited by
Price Waterhouse LLP, independent accountants, whose unqualified report is
included in the Annual Report to Shareholders which is incorporated by reference
into the Statement of Additional Information ("SAI"). The Financial Highlights
should be read in conjunction with the financial statements and notes included
in the Annual Report.
Net asset value,
beginning of period $10.00
Income from investment operations:
Net investment income (loss) 0.47
Net gains or (losses) on securities
(both realized and unrealized) 0.03
-----------
Total from investment operations 0.50
Less dividends and distributions:
dividends (from net investment income) (0.47)
-----------
Net asset value,
end of period $10.03
===========
Total Return 3.18%**
Net assets, end of period (000's) $81,382
Average net assets for the period (000's) $128,897
Ratio of expenses to
average net assets 1.10%*
Ratio of net investment income to
average net assets 4.66%*
Portfolio turnover rate 297.62%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND STRATEGIES
U.S. EQUITY FUNDS
The investment objective of each U.S. Equity Fund is to provide long-term
capital appreciation. Each Fund seeks to achieve its objective by investing
primarily in equity securities, including common stock and securities
convertible into common stock of U.S. issuers.
Each U.S. Equity Fund focuses on a particular investment area. Under normal
circumstances, at least 65% of the total assets of each Fund will be invested in
securities of companies principally engaged in its particular named industry
sector. For the purposes of these policies, a company is considered to be
"principally engaged" in business activities in a specific sector if at least
50% of its assets, gross income or net sales are derived from activities in such
sector, or at least 50% of its assets are dedicated to the production of
revenues from such sector. In circumstances where, based on available financial
information, a question exists as to whether or not a company meets one of these
standards, the Fund may invest in the securities of such a company only if
Meridian determines, after review of information describing the company and its
business activities, that the company's primary business is within the sector.
The remainder of the Fund's assets may be invested in debt securities of
companies in the sector and/or equity and debt securities of companies outside
of the sector if, in the opinion of Meridian, such securities stand to benefit
from developments in the sector.
Each U.S. Equity Fund is comprised of industry-specific "baskets" of securities
which are subsets of such sector, examples of which are provided below under
each fund's description. Each industry basket will encompass a sample of stocks
from Meridian's approved list for such industry. In selecting and weighting
companies for inclusion in each basket, Meridian ordinarily looks for several of
the following characteristics: high growth; healthy balance sheet; pricing
flexibility; strong management; liquidity; and generally operating
characteristics which will enable the companies to compete successfully in their
respective markets. Based on its proprietary research and investment methods,
Meridian may, from time to time, add, delete, or replace a company within a
basket.
Investment selection and weighting of baskets within each Fund are based on
industry attractiveness. In attempting to determine industry attractiveness,
Meridian uses its proprietary valuation model to analyze its universe of
individual stocks based on the following factors: historical and estimated
future earnings; long-term earnings growth projections; risk; current and future
interest rate conditions; and current price. Meridian then groups stocks into
their representative industry classifications in order to determine those
industries Meridian deems to be attractive relative to other industries.
The U.S. Equity Funds are non-diversified, and each may invest up to 25% of its
total assets in the securities of one issuer. However, no Fund may invest more
than 5% of its total assets in securities of any company that derives more than
15% of its revenues from brokerage or investment management activities. As a
result, investments in the equity funds may involve greater risks than
investments in other types of mutual funds.
ICON BASIC MATERIALS FUND - Industry baskets include, but are not limited to:
Construction; Containers; Gold; Chemicals; Mining; Metal/Aluminum; Paper &
Forest Products; Metal Fabricators; and Steel. Based on Meridian's proprietary
research and methodology and under normal market conditions, Meridian will
actively invest and weight the Fund's assets in those industry baskets within
the Basic Materials Fund that are deemed to be attractive relative to other
industries in the sector.
Many companies in the basic materials sector are significantly affected by the
level and volatility of commodity prices, the exchange value of the dollar,
import controls, and worldwide competition. At times, worldwide production of
these materials has exceeded demand as a result of over-building or economic
downturns, leading to poor investment returns or losses. Other risks may include
liability for environmental damage, depletion of resources, and mandated
expenditures for safety and pollution control. In addition, the environment
services industry can be impacted by legislation, government regulations, and
enforcement policies. As regulations are developed and enforced, companies may
be required to alter or cease production of a product or service.
The price of precious metals is affected by broad economic and political
conditions. For example, the price of gold and other precious metal mining
securities can face substantial short-term volatility caused by international
monetary and political developments such as currency devaluations or
revaluations, economic and social conditions within a country, or trade
restrictions between countries. Since much of the world's gold reserves are
located in South Africa, the social and economic conditions there can affect
gold and gold-related companies located elsewhere. The price of precious metals
is closely tied to broad economic and political conditions.
ICON CAPITAL GOODS FUND - Industry baskets include, but are not limited to:
Chemicals; Building Materials; Conglomerates; Electrical Equipment; Machine
Tools; Machinery (Diversified); Manufacturing; and Pollution
Control/Environment. Based on Meridian's proprietary research and methodology
and under normal market conditions, Meridian will actively invest and weight the
Fund's assets in those industry baskets within the Capital Goods Fund that are
deemed to be attractive relative to other industries in the sector.
Companies in the chemical processing field are subject to intense competition,
product obsolescence, and significant government regulation. As regulations are
developed and enforced, such companies may be required to alter or cease
production of a product, to pay fines, or to pay for cleaning up a disposal
site. In addition, chemical companies face unique risks associated with handling
hazardous products.
The success of equipment manufacturing and distribution companies is closely
tied to overall capital spending levels, which is influenced by an individual
company's profitability, and broader issues such as interest rates and foreign
competition. The industry may also be affected by economic cycles, technical
progress, labor relations, and government regulations.
ICON CONSUMER CYCLICALS FUND - Industry baskets include, but are not limited to:
Hardware & Tools; Engineering & Construction; Home-building/Manufactured
Housing; Household Furnishings & Appliances; Household/Housewares;
Retail-General/Department Stores; Retail-Specialty; Retail-Specialty Apparel;
Shoes; Textile-Apparel Manufacturers; and Toys. Based on Meridian's proprietary
research and methodology and under normal market conditions, Meridian will
actively invest and weight the Fund's assets in those industry baskets within
the Consumer Cyclicals Fund that are deemed to be attractive relative to other
industries in the sector.
The success of consumer product manufacturers and retailers is closely tied to
the performance of the overall economy, interest rates, competition, and
consumer confidence. Success depends heavily on disposable household income and
consumer spending. Changes in demographics and consumer tastes can affect the
demand for, and success of, consumer products in the marketplace.
ICON CONSUMER STAPLES FUND - Industry baskets include, but are not limited to:
Beverages; Cosmetics; Distributors-Consumer Products; Foods;
Household/Housewares; Retail-Drug; Retail-Food Chains; and Tobacco. Based on
Meridian's proprietary research and methodology and under normal market
conditions, Meridian will actively invest and weight the Fund's assets in those
industry baskets within the Consumer Staples Fund that are deemed to be
attractive relative to other industries in the sector.
The success of retailing companies is closely tied to consumer spending, which
is affected by general economic conditions and consumer confidence levels. The
retailing industry is highly competitive, and a company's success is often tied
to its ability to anticipate changing consumer tastes. In addition, the
agriculture/food industry is impacted by supply and demand, which may be
affected by demographic and product trends, and by food fads, marketing
campaigns, and environmental factors. In the U.S., the agricultural products
industry is subject to regulation by numerous government agencies.
ICON ENERGY FUND - Industry baskets include, but are not limited to:
Oil-Domestic and International Integrated; Oil-Equipment & Drilling;
Oil-Exploration & Production; and Natural Gas. Based on Meridian's proprietary
research and methodology and under normal market conditions, Meridian will
actively invest and weight the Fund's assets in those industry baskets within
the Energy Fund that are deemed to be attractive relative to other industries in
the sector.
Securities of companies in the energy field are subject to changes in value and
dividend yield which depend largely on the price and supply of both conventional
and alternative energy sources. Swift price and supply fluctuations may be
caused by events relating to international politics, energy conservation, the
success of energy source exploration projects, and tax and other regulatory
policies of domestic and foreign governments.
ICON FINANCIAL SERVICES FUND - Industry baskets include, but are not limited to:
Banks; Financial Services; Insurance Property Casualty;
Insurance-Life/Multi-line; Investment Banks/Brokerage Firms; Personal Loans;
Real Estate Investment Trusts; and Savings & Loan Companies. Based on Meridian's
proprietary research and methodology and under normal market conditions,
Meridian will actively invest and weight the Fund's assets in those industry
baskets within the Financial Services Fund that are deemed to be attractive
relative to other industries in the sector.
Financial services companies are subject to extensive governmental regulation
which may limit both the amounts and types of services offered, loans and other
financial commitments permitted, and the interest rates and fees they can
charge. Profitability is largely dependent on the availability and cost of
capital funds, and can fluctuate significantly when interest rates change.
Credit losses resulting from financial difficulties of borrowers can negatively
impact the industry. Company profits are affected by interest rate levels,
general economic conditions, and price and marketing competition. Insurance
companies are subject to severe price competition and may be impacted by events
or trends such as natural catastrophes, mortality rates, or recessions.
Similarly, as the services offered by banks expand, banks are becoming more
exposed to well-established competitors. This exposure has also increased due to
the erosion of historical distinctions between regional banks and other
financial institutions. With respect to brokerage firms, changes in regulations,
brokerage commission structure, stock and bond market activity, and the
competitive environment, combined with the operating leverage inherent in
companies in these industries, can produce erratic returns over time. (Under the
1940 Act and SEC regulations, the Fund may not invest more than 5% of its total
assets in the equity securities of any company that derives more than 15% of its
revenues from brokerage or investment management activities.) Legislation is
currently being considered which would reduce the separation between commercial
and investment banking businesses. If enacted, this could significantly impact
the industry and the Fund.
Companies in the real estate industry are subject to a variety of factors such
as government spending on housing subsidies, public works, and transportation
facilities, as well as changes in interest rates, consumer confidence and
spending, taxation, demographic patterns, the level of new and existing home
sales, and other economic activity.
ICON HEALTHCARE FUND - Industry baskets include, but are not limited to:
Biotechnology; Healthcare Delivery; Healthcare Drugs (Pharmaceuticals); and
Medical Equipment & Devices. Based on Meridian's proprietary research and
methodology and under normal market conditions, Meridian will actively invest
and weight the Fund's assets in those industry baskets within the Healthcare
Fund that are deemed to be attractive relative to other industries in the
sector.
The demand for health care services should increase as the population ages.
However, studies have shown the ability of health care providers to curtail
unnecessary hospital stays and reduce costs. These changes could alter the
health care industry, focusing it more on home care, and placing less emphasis
on inpatient revenues as a source of profit. The health care industry is subject
to government regulation and approval of products and services, which could have
a significant effect on price and availability. Moreover, federal and state
governments provide a substantial percentage of revenues to health are service
providers. These sources are subject to extensive governmental regulation, and
appropriations are a continued source of debate. The types of products or
services produced or provided by a particular company may quickly become
obsolete. Similarly, biotechnology companies are affected by patent
considerations, intense competition, rapid technological change and
obsolescence, and regulatory requirements. In addition, many of these companies
may not offer products yet and may have persistent losses or erratic review
patterns.
ICON LEISURE FUND - Industry baskets include, but are not limited to:
Broadcasting/Cable; Hotel-Motel; Leisure Time/Recreation/Gaming;
Publishing-Newspapers; Publishing/Printing; Tobacco; and Restaurants. Based on
Meridian's proprietary research and methodology and under normal market
conditions, Meridian will actively invest and weight the Fund's assets in those
industry baskets within the Leisure Fund that are deemed to be attractive
relative to other industries in the sector.
Securities of the companies in the leisure industry may be considered
speculative and generally exhibit greater volatility than the overall market.
Many companies have unpredictable earnings due, in part, to changing consumer
tastes and intense competition. The industry has reacted strongly to
technological developments and to the threat of government regulations. Some of
the companies in these industries are undergoing significant change because of
federal deregulation of cable and broadcasting. As a result, competitive
pressures are intense and the stocks are subject to increased price volatility.
ICON TECHNOLOGY FUND - Industry baskets include, but are not limited to:
Communication-Equipment/Manufacturing; Computer Software & Services; Computer
Systems; Electronics-Defense/Instrumentation; Electronics-Semiconductors; Office
Equipment & Supplies; and Photography/Imaging. Based on Meridian's proprietary
research and methodology and under normal market conditions, Meridian will
actively invest and weight the Fund's assets in those industry baskets within
the Technology Fund that are deemed to be attractive relative to other
industries in the sector.
Competitive pressures and changing domestic and international demand may have a
significant effect on the financial condition of companies in the computer
industry. Companies in the industry spend heavily on research and development
and are sensitive to the risk of product obsolescence. Competitive pressures may
have a significant effect on the financial condition of companies in the
technology industry. For example, if technology continues to advance at an
accelerated rate, and the number of companies and product offerings continues to
expand, these companies could become increasingly sensitive to short product
cycles and aggressive pricing. Products or services provided by these industries
may be in the development stage and can face risks such as failure to obtain
financing or regulatory approval, intense competition, product incompatibility,
consumer preference, and rapid obsolescence.
ICON TELECOMMUNICATION & UTILITIES FUND - Industry baskets include, but are not
limited to: Cellular; Electric, Gas and Water Utilities; and Telecommunications.
Based on Meridian's proprietary research and methodology and under normal market
conditions, Meridian will actively invest and weight the Fund's assets in those
industry baskets within the Telecommunication & Utilities Fund that are deemed
to be attractive relative to other industries in the sector.
Energy service firms are affected by supply and demand both for their specific
product or service, and for energy products in general. The price of oil and
gas, exploration and production spending, governmental regulation, world events
and economic conditions will likewise affect the performance of these companies.
Public utility stocks have traditionally produced above-average dividend income,
but the Fund's investments are based on growth potential. The gas and electric
public utilities industries may be subject to broad risks resulting from
governmental regulation, financing difficulties, supply and demand of services
or fuel, and special risks associated with energy and atmosphere conservation.
The Fund may not own more than 5% of the outstanding voting securities of more
than one public utility company as defined by the Public Utility Holding Company
Act of 1935.
Companies in the telecommunications field may range from traditional local and
long-distance telephone service or equipment providers, to companies involved in
new technologies such as cellular telephone or paging services. Telephone
operating companies are subject to both federal and state regulations governing
rates of return and services that may be offered. Many companies in the industry
fiercely compete for market share. Although telephone companies usually pay an
above average dividend, the Fund's investment decisions are primarily based on
growth potential and not on income.
ICON TRANSPORTATION FUND - Industry baskets include, but are not limited to:
Aerospace/Defense; Automobiles; Airlines; Railroads; Heavy Duty Truck & Parts;
and Truckers. Based on Meridian's proprietary research and methodology and under
normal market conditions, Meridian will actively invest and weight the Fund's
assets in those industry baskets within the Transportation Fund that are deemed
to be attractive relative to other industries in the sector.
Profitability in these industries is substantially influenced by competition
within the industry, domestic and foreign economies and government regulation,
and the price of fuel. The airline industry is still feeling the effects of
deregulation. In addition, the automotive industry is highly cyclical and
companies in the industry may suffer periodic operating losses. While most of
the major participants in the transportation sector are large, financially
strong companies, some are smaller with a non-diversified product line or
customer base.
INTERNATIONAL EQUITY FUNDS
The investment objective of each International Equity Fund is to provide
long-term capital appreciation. Each Fund seeks to achieve its objective by
investing primarily in equity securities including common stocks and securities
convertible into common stocks of foreign issuers.
Each International Equity Fund focuses on a particular geographic region of the
world. Under normal circumstances, at least 65% of the total assets of each Fund
will be invested in securities of companies principally engaged in the business
activities in its particular named geographic region. For the purposes of these
policies, a company is considered to be "principally engaged" in business
activities in a specific region if, in the opinion of Meridian, it has one or
more of the following characteristics: (i) its principal securities trading
market is in that region; (ii) the company derives at least 50% of its annual
revenue from either goods produced, sales made, or services performed in that
region; or (iii) the company is operating in and is organized under the laws of,
or has its principal offices in, a country in that region. In circumstances
where, based on available financial information, a question exists whether a
company meets one of these standards, the Fund may invest in the securities of
such a company only if Meridian determines, after review of information
describing the company and its business activities, that the company's primary
business is within the region. The remainder of the Fund's assets may be
invested in debt securities of companies in the region and/or equity and debt
securities of companies outside of the region if, in the opinion of Meridian,
such securities stand to benefit from developments in the region. The
International Equity Funds do not have a policy to concentrate in a particular
industry or group of industries.
Each International Equity Fund is comprised of country-specific "baskets" of
securities which are subsets of such region, examples of which are provided in
each Fund's description. Each of these country baskets will encompass a sample
of stocks from Meridian's approved list for its respective country. In selecting
and weighting companies for inclusion in each basket, Meridian ordinarily looks
for several of the following characteristics: high growth; healthy balance
sheet; pricing flexibility; strong management; liquidity; and acceptable
operating characteristics which will enable the countries to compete
successfully in their respective markets. Based on its proprietary research and
investment methods, Meridian may, from time to time, add, delete, or replace a
company within a basket.
Investment selection and weighting of baskets within each Fund are based on
country attractiveness. In attempting to determine country attractiveness,
Meridian uses its proprietary valuation model to analyze its universe of
individual stocks based on the following factors: historical and estimated
future earnings; long-term earnings growth projections; risk; current and future
interest rate conditions; and current price. Meridian then groups stocks into
their representative country classifications in order to determine those
countries Meridian deems to be attractive relative to other countries.
The International Equity Funds are non-diversified, and each Fund may invest up
to 25% of its total assets in the securities of one issuer. As a result,
investments in these Equity Funds may involve greater risks than investments in
other types of mutual funds.
ICON ASIA REGION FUND - May include, but is not limited to, baskets of
securities from the following countries: Japan; Korea; China; Hong Kong; and
Taiwan. Based on Meridian's proprietary research and methodology and under
normal market conditions, Meridian will actively invest and weight the Fund's
assets in those country baskets within the Asia Region Fund that are deemed to
be attractive relative to other countries in the region.
China is a nation in Eastern Asia bordering the South China Sea. Based on 1996
estimates, China has a population of 1.2 billion. Gross domestic product for
1995 has been reported to be US$502.1 billion according to "U.S.-China trade and
investment data" by the office of the Chinese Economic Area. China's main
trading partners are Hong Kong, Japan, Taiwan, United States, Germany and South
Korea. Primary industries include iron and steel, coal, machine building,
armaments, chemical fertilizers, consumer durables, automobiles, consumer
electronics and telecommunications. Growth expectations for gross domestic
product reach 10.3%. The currency is the Chinese Yuan with an exchange rate as
of 1995 measuring Y8.35=US$1. The Chinese government continues its move to a
more open economy under Communist rule. State approval is required for projects
over $30 million. External debt is measured at $92 billion according to the
world fact book on China.
The standard rate of withholding for dividends is 10%. However, there is
currently no withholding tax in China. The tax has been suspended indefinitely
since October, 1993. Capital gains may be taxed at a 10% rate; however, capital
gains taxes have also been suspended indefinitely since October 1993.
Hong Kong is located off the coast of China bordering the South China Sea. Based
on 1995 census data, Hong Kong's population is 6.06 million. Principal exports
to the United States are machinery, precious metals and stones, plastics,
optical and surgical instruments, meat and vehicles. Gross domestic product in
1995 was US$143.74 billion or approximately US$23,700 per capita. Growth
expectations for gross domestic product in 1996 and 1997 are 4.8% and 5.1%,
respectively. The national currency is the Hong Kong Dollar with an exchange
rate as of November 1, 1996, measured at HK$7.73=US$1. The value of the Stock
Exchange of Hong Kong Limited is greater than 100% of the Hong Kong gross
domestic product.
There are no dividend or capital gains taxes in Hong Kong. However, if profits
arise from trading an investment that was held for speculative reasons, a 17.5%
tax rate may be levied.
Hong Kong was transferred from the status of British territory to the rule of
The People's Republic of China on July 1, 1997. Hong Kong is now considered a
special administrative region with its own law for another fifty years under a
government imposed by China.
JAPAN is a country located off the east coast of Asia. Based on 1996 estimate
data, Japan has a population of 125.45 million. Electrical and electronic
equipment, automobiles, machinery and chemicals are the major industries. Gross
domestic product in 1995 was US$4960.7 billion and is expected to grow by 2.1%
in 1997 and by 2.6% in 1998. The currency is the Japanese Yen with an exchange
rate as of October 31, 1997, measured at (Y)120.57=US$1. There are eight stock
exchanges in Japan along with an over-the-counter market. The market in Japan is
divided into three sections. The First Section trades in the largest and most
active stocks. This section accounts for 95% of total market capitalization. The
Second Section trades in those issues which have lower turnover than the First
Section, which are newly quoted on the exchange or which would otherwise be
traded over-the-counter. The Third Section consists of foreign stocks. These are
traded over-the-counter. The Japanese current account surplus for the 12 months
ended August 1996, is US$77.2 billion.
Dividends are withheld at a standard rate of 20%. Capital gains are not taxed
unless the holding is at least 25% of a company's shares and at least 5% of the
position is sold. Here, the tax liability is 18%.
SOUTH KOREA, bordering the Sea of Japan and the Yellow Sea, lies in Eastern Asia
on the southern half of the Korean peninsula. Based on July 1996 estimate data,
South Korea has a population of 45.48 million. Electronics, auto production,
chemicals, shipbuilding, steel, textiles, clothing, footwear and food processing
are the major industries. Gross domestic product in 1995 is estimated to be
US$590.7 billion according to Central Intelligence Agency Publications. The
currency is the Korean Won with an exchange rate as of January 1996 measured at
W787.27=US$1. The export-oriented economy has grown dynamically with the help of
a entrepreneurial society. Korea's main trading partners are the United States,
Japan and the countries of the European Union. The 12 month current account
deficit as of August 1996, measured US$16.0 billion.
Dividends are withheld at a standard rate of 25%. An additional 10% surtax is
levied. Capital gains realized by a foreign investor from South Korean
securities are taxed at an 11% rate. Where there is an identifiable purchase
price, taxes may be withheld at the lower of 11% of sale proceeds or 27.5% of
the gain.
TAIWAN is an Eastern Asian nation off the southeastern coast of China. Based on
1996 estimates, Taiwan has a population of 21.5 million. Electronics, textiles,
chemicals, clothing, food processing, plywood, sugar milling, cement,
shipbuilding and petroleum refining constitute the major industries. Gross
domestic product is expected to grow at a rate of 6.0% in 1997 and 6.3% in 1998,
according to the Economist Intelligence Unit. The currency is the Taiwan Dollar
with an exchange rate as of October 1997 measured at T$28.50=US$1.
Dividends are withheld at a rate of 20% if invested through an approved foreign
investment company. The full local withholding tax is 25%. Capital gains are
currently not taxable although the government has recently made proposals to
reimpose the tax.
Taiwan's major trading partners are the United States, Hong Kong, Japan and the
European Union countries. The 12 month current account surplus as of the second
quarter of 1996, measured US$7.7 billion.
ICON SOUTH PACIFIC REGION FUND - May include, but is not limited to, baskets of
securities from the following countries: Australia; Indonesia; Malaysia; New
Zealand; and Singapore. Based on Meridian's proprietary research and methodology
and under normal market conditions, Meridian will actively invest and weight the
Fund's assets in those country baskets within the South Pacific Region Fund that
are deemed to be attractive relative to other countries in the region.
AUSTRALIA is located in the South Pacific. Based on 1996 census data, Australia
has a population of 18.3 million. Gross domestic product in 1995 was US$347.9
billion or US$18,805 per capita. Growth expectations for gross domestic product
in 1997 and 1998 are 2.9% and 3.6% respectively. Mining, industrial and
transportation equipment, food processing, chemicals and steel are included in
Australia's major industries. The currency is the Australian Dollar which has a
October 1997 exchange rate of AUD$1.36=US$1. Australia houses seven stock
exchanges with the Sydney and Melbourne being the largest regionally. The
Australian Stock Exchange is the national exchange. All seven are subject to the
Securities Industry Act.
Dividends are generally paid semi-annually. Unfranked dividends are subject to
30% tax withholding. Dividends are considered franked if they are paid out of
profits already subject to the corporate income tax of 39%. Capital gains are
not taxed if they result from an equity holding of less than 10% of a public
company. Otherwise, capital gains are taxed at 33%.
Australia is the world's largest producer of wool. Leading trading partners are
the United States, New Zealand and Japan. Principal exports to the United States
from Australia include aircraft and associated equipment, computers (ADP
equipment), computer parts and accessories and measuring instruments. The
trailing 12 month current account deficit measured US$13 billion as of June
1997.
INDONESIA is a nation in Southeastern Asia that sits as an archipelago between
the Indian and Pacific Oceans. Based on 1996 estimates, Indonesia has a
population of 206.6 million. Agriculture accounts for 21% of gross domestic
product. Indonesia was once the world's largest rice importer. The country is
now nearly self-sufficient. Petroleum and natural gas, textiles, mining, cement,
chemical fertilizers, plywood, food and rubber are other important industries to
the Indonesian economy. Gross domestic product in 1995 was US$167 billion as
estimated by the Indonesian Embassy. The currency is the Indonesian Rupiah with
a January 1996 exchange rate of Rp2306.3=US$1.
Dividends are withheld at a standard rate of 20%. Capital gains are taxed at a
rate of 0.10%. The 12 month current account deficit as of the second quarter of
1997, measured US$7.9 billion.
MALAYSIA is located in Southeastern Asia as a peninsula and the northern
one-third of the island of Borneo. Based on 1996 census data, Malaysia has a
population of 19.96 million. Singapore, the United States and Japan are major
trading partners. Commodity exports of the nation include electronic equipment,
petroleum, palm oil, wood, rubber and textiles. Gross domestic product grew by
7.8% from the second quarter of 1996 to the second quarter of 1997. The currency
is the Malaysian Ringitt with an exchange rate as of December 1, 1997, measured
at M$3.56=US$1. Malaysia has experienced rapid development with the help of
foreign investment. The potential for damaging inflation is present but fiscal
and monetary policies are closely monitored by the government. The 12 month
current account deficit as of 1996, measured US$4.4 billion.
Markets have been regulated under the Securities Industry Act as of 1983. The
main board of the Kuala Lumpur Stock Exchange houses large issues. A second
board was established in 1988 to handle smaller companies. There is no dividend
withholding tax in Malaysia. However, Malaysian residents receive a corporate
tax credit attached to dividends at a rate of 30%. Non-resident Malaysians may
see a 30% charge on gross dividends. This is not a withholding tax, it is a
deduction of tax credits. Capital gains may be levied on a disposal of real
estate company shares up to 20%. Otherwise, capital gains are not taxable in
Malaysia.
NEW ZEALAND consists of two islands located in the South Pacific. Based on 1995
census data, New Zealand has a population of 3.54 million. Major exports to the
United States are: aircraft, data processing equipment, fertilizers,
telecommunications equipment, scientific instruments, polymers, petroleum
products, books and sound recordings. Gross domestic product in 1995 was US$59.2
billion or approximately US$16,700 per capita. The currency is the New Zealand
Dollar with an exchange rate as of October 1997 measured at NZ$1.61=US$1. The
current account deficit for New Zealand in 1995 measured US$994 million.
Dividends are withheld at a standard rate of 30%. Investors holding a voting
interest of less than 10% in a dividend paying company are entitled to a partial
refund of the imputed tax credit. Imputed tax credits are given on dividends
made out of income that has suffered corporate tax at a 33% rate. The credit
allowed is 35.82% of the imputed credits on the dividend. Capital gains are not
taxed.
SINGAPORE is a nation in Southeastern Asia. The country's islands fall between
Malaysia and Indonesia. Based on 1996 estimates, Singapore has a population of
3.39 million. Major industries include petroleum refining, electronics, oil
drilling equipment, rubber processing and rubber products, processed food and
beverages, ship repair, financial services, and biotechnology. Singapore acts as
a center for trade. Gross domestic product grew 7.8% from the second quarter of
1996 to the second quarter of 1997. The currency is the Singapore Dollar with an
exchange rate as of October 1997 measured at S$1.55=US$1. The Stock Exchange of
Singapore separated from the Kuala Lumpur Stock Exchange in 1973 but the two
remained closely tied until 1989 when dual listings were terminated. The
Singapore market has a strong international orientation.
There is no dividend withholding tax in Singapore. Tax credits are attached to
dividends and non-Singaporean residents are not entitled to the credit.
Therefore, non-residents may see a 27% tax charge on gross dividends. Capital
gains are not taxable in Singapore. The 12 month capital account surplus as of
the second quarter of 1997 is US$15.5 billion.
ICON NORTH EUROPE REGION FUND - May include, but is not limited to, baskets of
securities from the following countries: Belgium; Denmark; Finland; Germany;
Ireland; Netherlands; Norway; Sweden; and United Kingdom. Based on Meridian's
proprietary research and methodology and under normal market conditions,
Meridian will actively invest and weight the Fund's assets in those country
baskets within the North Europe Region Fund that are deemed to be attractive
relative to other countries in the region.
BELGIUM is a European nation located northeast of the English Channel and
southeast of the North Sea. Based on 1996 estimates, Belgium has a population of
10.17 million. Gross domestic product grew 2.3% for the twelve-months ending
March of 1997. Growth expectations for gross domestic product in 1997 and 1998
are 2.2% and 2.7% respectively. Engineering and metal products, auto assembly,
processed food and beverages, chemicals, basic metals, textiles, glass,
petroleum and coal are the major industries.
The currency is the Belgian Franc with an exchange rate as of October 1, 1997,
measured at BFr36.1=US$1. The Brussels Stock Exchange is organized as the
Societe de la Bourse de Valeurs Mobileres de Bruxelles (SBVM). The Banking and
Finance Commission controls the power to approve securities houses. Belgium is a
multi-lingual country with Dutch and French the two official languages in
Brussels. English and German are spoken often in business. Dividends are
withheld at a standard rate of 25%. A sign off by the tax office is necessary in
cases where reclamation is available. Capital gains are not taxed in Belgium.
Belgium is a member of the European Union and Brussels houses the main offices
of the European Parliament. The 12 month current account surplus as of the March
1997 is measured at US$15.2 billion.
DENMARK is located in Northern Europe. Based on 1996 estimates, Denmark has a
population of 5.25 million. Chief industries of the nation include food
processing, machinery and equipment, textiles and clothing, chemicals,
electronics, construction, furniture and other wood products and shipbuilding.
Denmark is a member of the European Union. The Danish Krona is valued at an
exchange rate of DKr$6.67=US$1 as of October 1997. The central bank attempts to
maintain a stable krona against the core European currencies. Gross domestic
product grew 3.7% for the twelve months ending June 1997. Growth expectations
for gross domestic product in 1997 and 1998 are 2.9% each. The 12 month current
account surplus as of July 1996, is measured at US$1.2 billion.
Dividends are withheld at a rate of 25%. A sign off by the tax office is
necessary in cases where reclamation is available. Capital gains are not taxed
in Denmark.
FINLAND, bordered by Norway, Sweden and Russia, is located in Northern Europe.
Based on 1996 estimates, Finland has a population of 5.11 million. Gross
domestic product in 1995 was US$125.5 billion or approximately US$24,500 per
capita. Growth expectations for gross domestic product in 1996 and 1997 are 3.2%
and 3.1% respectively. Metal products, shipbuilding, forestry and wood
processing, copper refining, foodstuffs, chemicals, textiles and clothing are
the major industries. The currency is the Finnish Markka with an exchange rate
as of October 1997 measured at FM5.24=US$1. The major industries are machinery,
metals, ship building, textiles and clothing.
The only stock exchange in Finland is the Helsinki exchange. Dividends are
withheld at a standard rate of 28%. Capital gains are not taxed.
Finland is a member of the European Union. The current account surplus for 1996
is expected to fall to 2.7% of gross domestic product.
GERMANY is a Western European nation bordered by Denmark, Poland, the Czech
Republic, Austria, Switzerland, France, the Netherlands, Belgium and Luxembourg.
Based on 1996 estimates, Germany has a population of 83.54 million. Iron, steel,
coal, cement, machinery, chemicals, coal, steel, ships and automobiles
constitute the major industries. Gross domestic product grew 29% for the twelve
month period ending June 1997. Growth expectations for gross domestic product in
1997 and 1998 are 2.4% and 2.9%, respectively. The currency is the German Mark
with an exchange rate as of October 1997, measured at DM1.75=US$1. Germany
houses eight stock exchanges with the Frankfurt exchange being the largest. The
need for financing is primarily filled by banking institutions. The equity
market is relegated to a lesser role. There are, however, three levels of equity
trading. The first is the official market where there is trading in shares of
the official listings. The "semi-official" market controls trading in shares not
in the official listing. Finally, there is the unofficial, over-the-counter
market.
Dividends are withheld at a standard rate of 26.875%. A sign off by the tax
office is necessary in cases where reclamation is available. Capital gains are
not taxed if they result from an equity holding of less than 25% of a public
company. Otherwise, capital gains are taxed at a maximum of 45%. Germany is one
of the original members of the European Common Market which eventually became
the European Union. The 12 month current account deficit as of July 1997,
measured US$9.8 billion. Economic unification of East and West Germany occurred
in July of 1990, with political unification following suit in October of the
same year.
The REPUBLIC OF IRELAND is a European nation that occupies five-sixths of the
island of Ireland, located just west of England. Based on 1996 estimates,
Ireland has a population of 3.57 million. Food products, textiles, chemicals,
clothing, pharmaceuticals, transportation equipment, glass and crystal, brewing
and machinery are the major industries of Ireland. The economy is trade
dependent. Gross domestic product in 1995 was US$60.1 billion or approximately
US$16,800 per capita. The currency is the Irish Pound with an exchange rate as
of October 1997, measured at I(pound)1.50=US$1. Ireland is a member of the
European Union.
Dividends are taxed at the corporate level before distribution. The advance
payment of corporation tax is currently 29.87%. There is no capital gains tax.
NETHERLANDS is located in Western Europe on the North Sea. Based on 1996
estimates, Netherlands has a population of 15.56 million. Agroindustries, metal
and engineering products, electrical machinery and equipment, chemicals,
petroleum, fishing, construction and microelectronics constitute the major
industries. Gross domestic product grew 3.1% for the twelve month period ending
June 1997. Growth expectations for gross domestic product in 1997 and 1998 are
2.9% and 3.3%, respectively. The currency is the Dutch Guilder with an exchange
rate as of October 1997, measured at NLG1.97=US$1. Trading occurs on the
Amsterdam Stock Exchange although there is not a significant amount of activity.
Bank financing is used extensively to fulfill capital requirements.
Dividends are withheld at a standard rate of 25%. A sign off by the tax office
is necessary in cases where reclamation is available. Capital gains are not
taxed.
The 12 month current account deficit as of the first quarter, 1997, measured
US$21.2 billion.
NORWAY is the western most country in Scandinavia, located in Northern Europe.
Based on 1996 estimates, Norway has a population of 4.38 million. Fishing,
engineering, metals, chemicals, food processing, paper, shipbuilding and oil and
gas constitute the major industries. Gross domestic product in 1995 was US$147.7
billion or approximately US$33,900 per capita. Growth expectations for gross
domestic product in 1997 and 1998 are 3.5% and 3.8%, respectively. The currency
is the Norwegian Krone with an exchange rate as of October 1997, measured at
NKr7.01=US$1.
Dividends are withheld at a standard rate of 25%. Capital gains are not taxable
in Norway. The Norwegian population has opted out of the European Union. The 12
month current account surplus is expected to be at 6% of gross domestic product
in 1997 and at 6.2% of gross domestic product in 1998 as estimated by the Bank
of Ireland Group Treasury.
SWEDEN is a nation located in Northern Europe between Norway and Finland. Based
on 1996 estimates, Sweden has a population of 8.9 million. Iron and steel,
precision equipment, wood pulp and paper products, processed food and
automobiles constitute the major industries. Gross domestic product grew 2.6%
for the twelve month period ending June 1997. Growth expectations for gross
domestic product in 1997 and 1998 are 2.5% and 2.9%, respectively. The Swedish
Krona is the country's currency and, as of October 1997, the exchange rate with
the US Dollar measured at SKr7.58=US$1.
The Stockholm Stock Exchange is the largest exchange in Sweden. There are three
markets for trading shares. The A1 list consists of the largest and most heavily
traded companies. The over-the-counter market caters to small and medium sized
companies. Finally, there is the unofficial parallel market which trades in
unlisted shares.
Dividends are withheld at a standard rate of 30%. Capital gains are not taxable
in Sweden.
Sweden is a member of the European Union(EU). Countries within the EU are
Sweden's main trading partners. The 12 month current account deficit as of July
1997, measured US$6.1 billion.
The UNITED KINGDOM is a group of islands located to the northwest of the
European mainland, across the English Channel. It is comprised of England,
Scotland, Wales and northern Ireland. Based on 1996 estimates, the United
Kingdom has a population of 58.49 million. Steel, metals, ship building,
shipping, banking and insurance are some of the major industries. Gross domestic
product grew 3.5% for the twelve month period ending June 1997. Growth
expectations for gross domestic product in 1997 and 1998 are 3.5% and 2.6%,
respectively. The currency is the British Pound with an exchange rate as of
October 1997, measured at (pound)1.61=US$1. The United Kingdom is the largest
equity market in Europe in terms of market capitalization. There are fourteen
stock exchanges in the United Kingdom which make up the International Stock
Exchange. The largest is the London Stock Exchange which has the largest volume
of trading in international equities in the world.
Corporations are taxed on any dividend before it is distributed. A credit is
available for a refund less a 15% tax on the total distribution plus tax credit.
Capital gains are not taxed in the United Kingdom.
The United Kingdom is a member of the European Union. The 12 month trailing
current account deficit as of the second quarter, 1997, is measured at US$3.8
billion.
ICON SOUTH EUROPE REGION FUND - May include, but is not limited to, baskets of
securities from the following countries: Austria; France; Greece; Italy;
Portugal; Spain; and Switzerland. Based on Meridian's proprietary research and
methodology and under normal market conditions, Meridian will actively invest
and weight the Fund's assets in those country baskets within the South Europe
Region Fund that are deemed to be attractive relative to other countries in the
region.
AUSTRIA is a Central European nation with Germany, the Czech Republic, Hungary,
Italy, Slovenia and Croatia as its neighbors. Based on 1996 estimates, Austria
has a population of 8.02 million. Major industries include foods, iron and
steel, machines, textiles, chemicals, paper and pulp, tourism, mining and autos.
Gross domestic product in 1995 was US$234.2 billion or US$29,165 per capita.
Growth expectations for gross domestic product in 1997 and 1998 are 1.7% and
2.4%, respectively. The currency is the Austrian Schilling with an exchange rate
as of October 1997, measured at ATS12.30=US$1. The Vienna Stock Exchange was
established in 1771 and declared an autonomous institution by the Stock Exchange
Act of 1875.
Dividends are withheld at a standard rate of 22%. A sign off by the tax office
is necessary in cases where reclamation is available. Capital gains are not
taxed if they result from an equity holding of less than 10% of a public
company. Otherwise, capital gains are taxed at a maximum of 34%.
Austria has been a member of the European Union since the beginning of 1995, and
Austria's monetary policy closely tracks that of Germany. The 12 month current
account deficit as of August 1997, measured US$6.4 billion.
FRANCE is a Western European nation bordered by Belgium, Luxembourg, Germany,
Switzerland, Italy and Spain. Based on 1996 estimates, France has a population
of 58.32 million. Steel, chemicals, textiles, automobiles, wine, perfume,
aircraft and electronic equipment are the major industries. Gross domestic
product grew 2.3% for the twelve months ending June 1997. Growth expectations
for gross domestic product in 1997 and 1998 are 2.2% and 2.9%, respectively. The
currency is the French Franc with an exchange rate as of October 1997, measured
at FFr5.87=US$1. France houses seven stock exchanges but the Paris Stock
Exchange handles more than 95% of the transactions of the country.
Dividends are withheld at a rate of 25%. A tax credit is available for refund
equal to 50% of the dividend. There is a further 15% tax on the total of the
dividend and refund. Capital gains are not taxed if they result from an equity
holding of less than 25% of a public company. Otherwise, capital gains are taxed
at 16%.
France is a member of the European Union. The 12 month trailing current account
surplus as of July 1997, measured US$34.3 billion.
GREECE, bordered by the Mediterranean Sea to the south, is a nation in Southern
Europe. Based on 1996 estimates, Greece has a population of 10.54 million.
Tourism, food and tobacco processing, textiles, chemicals, metal products,
mining and petroleum constitute the major industries. Gross domestic product
grew 2.6% in 1996. Growth expectations for gross domestic product in 1997 is
2.4%. The currency is the Greek Drachma with an exchange rate as of October
1997, measured at Dr276.00=US$1. Greece is a member of the European Union. The
level of the current account deficit is expected to be at 4% of gross domestic
product in 1997 and at 3.8% of gross domestic product in 1998 according to the
Bankof Ireland Group Treasury.
There is no withholding tax on dividends from profits that have been subject to
the 35% corporate tax. Capital gains are not taxed in Greece.
ITALY is a nation in Southern Europe with Austria, Switzerland and France to its
north. Based on 1996 estimates, Italy has a population of 57.46 million. Steel,
food processing, clothing, machinery, autos, textiles, shoes, machine tools and
chemicals are the major industries. Gross domestic product grew 1.9% for the
twelve month period ending June 1997. Growth expectations for gross domestic
product in 1997 and 1998 are 1.2% and 2.3%, respectively. The currency is the
Italian Lira with an exchange rate as of October 1997, measured at
L1713.00=US$1. Italy houses nine stock exchanges with the Milan Exchange being
the largest. Societa di intermediazone mobiliare (SIMs) were created in 1991 to
regulate brokerage activity in the securities market. Italy's government
securities market is the third largest in the world after the United States and
Japan.
Dividends are withheld at a standard rate of 30%. There is an 8% surtax making
the effective rate 32.4%. Capital gains are currently not taxed.
Italy is a member of the European Union. The 12 month current account surplus as
of July 1997, measured US$40.1 billion.
PORTUGAL is a Western European nation situated between Spain and the Atlantic
Ocean. Based on 1996 estimates, Portugal has a population of 9.87 million.
Textiles and footwear, wood pulp and paper, cork, metalworking, oil refining,
chemicals, fish canning, wine and tourism constitute the major industries. Gross
domestic product grew 3% for the twelve month period ending June 1997. Growth
expectations for gross domestic product in 1997 and 1998 are 2.6% and 2.8%,
respectively. The currency is the Portuguese Escudo with an exchange rate as of
October 1997, measured at Es178.00=US$1. Portugal follows a policy of keeping
the Escudo stable against the Deutsche Mark and against the currencies of its
other major trading partners. The countries of the European Union are the
primary trading partners of Portugal. The deficit is expected to be 3% of gross
domestic product in 1997 and 2.8% of gross domestic product in 1998 budget
according to the Bank of Ireland Group Treasury. Portugal is a member of the
European Union.
Dividends are withheld at a standard rate of 25%. This is reduced to 12.5% if
the dividends are distributed by listed companies and any other privatized
company within the first five years after share issuance. Capital gains are not
taxable in Portugal.
SPAIN is a Southern European nation located southwest of France. Based on 1996
estimates, Spain has a population of 39.18 million. Textiles and apparel, food
and beverages, metals and metal manufactures, chemicals, shipbuilding, autos,
machine tools and tourism are the major industries. Gross domestic product grew
3.1% for the twelve month period ending June 1997. Growth expectations for gross
domestic product in 1997 and 1998 are 2.6% and 3.0%, respectively. The currency
is the Spanish Peseta with an exchange rate as of October 1997, measured at
Pta148.00=US$1. There are four stock exchanges in Spain with the Madrid Stock
Exchange being the largest. Membership at all exchanges in Spain is restricted
to stockbrokers nominated by the Ministry of Finance. Brokers must belong to the
Association of Brokers in order to practice.
Dividends are withheld at a standard rate of 25%. A sign off by the tax office
is necessary in cases where reclamation is available. Capital gains can be taxed
at 35%. This is not current market practice.
Spain is a member of the European Union(EU). The countries of the EU are Spain's
main trading partners. The 12 month current account surplus as of July 1997,
measured US$11.0 billion.
SWITZERLAND, bordered by France, Italy, Germany and Austria, is a nation located
in Central Europe. Based on 1996 estimates, Switzerland has a population of 7.21
million. Primary trading is conducted with the countries of Western Europe.
Major commodity exports are machinery and equipment, precision instruments,
metal products, foodstuffs, textiles and clothing. Gross domestic product grew
19% for the twelve month period ending June 1997. Growth expectations for gross
domestic product in 1997 and 1998 at 1.4% and 1.9%, respectively. The Swiss
Franc is the country's currency and, as of October 1997, the exchange rate with
the US Dollar measured at SFr1.46=US$1. The 12 month current account surplus as
of the second quarter, 1997, measured US$19.8 billion.
There are three principal exchanges in Switzerland. Under public law, the Geneva
Exchange is a corporation and the Zurich and Basle exchanges are institutions.
Zurich is the largest of the three. There are official, semi-official and an
unofficial markets.
Dividends are withheld at a standard rate of 35%. A tax office sign off is
necessary where reclamation is available. Capital gains are not taxable in
Switzerland.
ICON WESTERN HEMISPHERE FUND - May include, but is not limited to, baskets of
securities from the following countries: Argentina; Brazil; Canada; Chile; and
Mexico. Based on Meridian's proprietary research and methodology and under
normal market conditions, Meridian will actively invest and weight the Fund's
assets in those country baskets within the Western Hemisphere Fund that are
deemed to be attractive relative to other countries in the region.
ARGENTINA is a nation located in Southern South America between Chile and
Uruguay. Based on 1996 estimates, Argentina has a population of 34.67 million.
Major industries include food processing, automobiles, consumer durables,
textiles, chemicals, printing, metallurgy and steel. Gross domestic product grew
7.8% for the twelve month period ending June 1997. Agriculture accounts for 8%
of gross domestic product. The currency is the Argentinean Peso with an exchange
rate as of October 1997, of P1=US$1.
Argentina benefits from an abundance of natural resources. After experiencing
growing external debt and hyperinflation in the 1980's, Argentina elected
President Menem who, in 1989, implemented an economic restructuring program.
Argentines have reacted to this program with a repatriation of capital.
Argentina appears to be on a path of stable, sustainable growth. The 12 month
current account deficit as of the first quarter of 1997 measures US$4.9 billion.
There is no withholding of dividends in Argentina. Capital gains are also not
taxable.
BRAZIL is a South American nation bordering the Atlantic Ocean. Based on 1996
estimates, Brazil has a population of 162.6 million. Major industries include
textiles, shoes, chemicals, cement, lumber, mining, steel making and machine
building. Gross domestic product estimates for 1995 measured US$584 billion. The
currency is the Brazilian Real with an exchange rate as of October 1997,
measured at R$1.10=US$1. The Real was introduced as a new currency on July 1,
1994 to help stabilize the economy. Inflation subsequently dropped from a rate
of 50% a month to a rate of 3% a month through the end of 1994. The nation's
natural resources are a substantial economic strength.
There is no withholding tax on dividends. Capital gains are also not taxable in
Brazil. The 12 month current account deficit as of the second quarter of 1997 is
US$32.3 billion.
CANADA is the second largest country in the world after Russia. The official
languages are English and French. Based on 1996 estimates, Canada has a
population of 28.82 million. Processed and unprocessed minerals, food products,
wood and paper products, transportation equipment, chemicals, fish products,
petroleum and natural gas constitute the major industries. Gross domestic
product grew 3.7% for the twelve months neding June 1997. Growth expectations
for gross domestic product in 1997 and 1998 are 3.6% and 3.5%, respectively. The
currency is the Canadian Dollar with an exchange rate as of October 1997,
measured at C$1.39=US$1. Canada houses five stock exchanges across the country
with the Toronto Stock Exchange being the largest.
Dividends are generally paid quarterly and withheld at a rate of 25%. A sign off
by the tax office is necessary in cases where reclamation is available. Capital
gains are not taxed unless they result from the liquidation of greater than 25%
of the issued shares of the company. In this case, gains can be taxed up to 36%.
Canada is a member of the North American Free Trade Agreement (NAFTA) with the
United States and Mexico. The 12 month trailing current account deficit as of
the second quarter, 1997, measured US$2.2 billion.
CHILE is located in South America, bordering the South Atlantic and the South
Pacific Oceans, between Argentina and Peru. Based on 1996 estimates, Chile has a
population of 14.33 million. Major industries include copper, foodstuffs, fish
processing, iron and steel, wood and wood products, transport equipment, cement
and textiles. Copper is vital to the health of the economy. Gross domestic
product in 1995 was estimated to be US$113.2 billion. The currency is the
Chilean peso with an exchange rate as of October 1997, measured at
Ch$413.00=US$1.
Dividends are withheld at a rate of 35% plus a tax credit of 15%. Capital gains
are not taxable in Chile. The 12 month current account deficit as of the second
quarter, 1997, measured US$3.0 billion.
MEXICO is a nation in North America located south of the United States. Based on
1996 estimates, Mexico has a population of 95.77 million. Food and beverages,
tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing,
autos, consumer durables and tourism are the major industries. Gross domestic
product grew 8.8% for the twelve month period ending June 1997. The currency is
the Mexican Peso with an exchange rate as of October 1997, measured at New
Peso7.74=US$1. There is one stock exchange in Mexico. The Bolsa Mexicana de
Valores (BMV) is located in Mexico City. Mexico is a member of the North
American Free Trade Agreement (NAFTA). The Mexican current account surplus for
the 12 months ended March 1997, is US$2.2 million.
Dividends are not subject to withholding tax where the underlying profits have
been subject to corporate tax. Otherwise the dividends are taxed at 34%. Capital
gains are not taxed. Property transfers however, are taxed at a rate of 20% on
the gross transfer value.
FIXED INCOME FUND
ICON SHORT-TERM FIXED INCOME FUND - The objective of the Short-Term Fixed Income
Fund is to attain high current income consistent with preservation of capital.
The Short-Term Fixed Income Fund seeks to provide higher current income than
that typically offered by a money market fund while maintaining a high degree of
liquidity and a correspondingly higher risk of principal volatility. Under
normal market conditions, the Fund invests exclusively in (i) U.S. Treasury
obligations; (ii) obligations issued or guaranteed as to principal and interest
by the agencies and instrumentalities of the U.S. Government; and (iii)
repurchase agreements involving such obligations. Under normal conditions, the
Fund's duration (a measure of the Fund's sensitivity to changes in interest
rates) will range from half a year to one and a half years. Maximum remaining
maturity of any single issue will be two years, with the exception of floating
rate securities that reset at least annually.
INVESTMENT POLICIES AND TECHNIQUES AND RISK CONSIDERATIONS
As all investment securities are subject to inherent market risks and
fluctuations in value due to earnings, economic and political conditions, and
other factors, and because of their narrow industry focus, each Fund's
performance is closely tied to and affected by its industry or foreign region.
In addition, you should be aware that the Funds have no operating history. This
section contains general information about various types of securities and
investment techniques that the Fund may purchase or employ.
EQUITY SECURITIES: Except for the Short-Term Fixed Income Fund, each Fund may
invest in equity securities, including common stocks, preferred stocks and
securities convertible into common stocks, such as rights, warrants and
convertible debt securities. Equity securities may be issued by either
established, well capitalized companies or newly-formed, small-cap companies,
and may trade on regional or national stock exchanges or in the over-the counter
market.
DEBT SECURITIES: Each Fund may temporarily invest in short-term debt securities.
Each Fund will limit its investment in fixed income securities to corporate debt
securities and U.S. government securities. Debt securities are generally
considered to be interest rate sensitive, which means that their value will
generally decrease when interest rates rise and increase when interest rates
fall. Securities with shorter maturities, while offering lower yields, generally
provide greater price stability than longer term securities and are less
affected by changes in interest rates.
CORPORATE DEBT SECURITIES: Corporate debt securities are long and short-term
debt obligations issued by companies (such as publicly issued and privately
placed bonds, notes and commercial paper). The Fund will only invest in
corporate debt securities rated A or higher by Standard & Poor's Corporation or
Moody's Investors Services, Inc.
U.S. TREASURY OBLIGATIONS: U.S. Treasury obligations consist of bills, notes,
and bonds issued by the U.S. Treasury as well as separately traded interest and
principal components parts of such obligations, known as Separately Traded
Registered Interest and Principal Securities ("STRIPS"), that are transferable
through the federal book-entry system.
U.S. TREASURY STRIPS: U.S. Treasury STRIPS are sold as zero coupon securities,
which means that they are sold at a substantial discount and redeemed at face
value at their maturity date without interim cash payments of interest or
principal.
This discount is accreted over the life of the security for both accounting and
tax purposes. Because of these features, such securities may be subject to
greater interest rate volatility than interest-paying investments.
U.S. GOVERNMENT OBLIGATIONS: U.S. government obligations may be backed by the
credit of the government as a whole or only by the issuing agency. U.S. Treasury
bonds, notes, and bills and some agency securities, such as those issued by the
Federal Housing Administration and the Government National Mortgage Association
(GNMA), are backed by the full faith and credit of the U.S. government as to
payment of principal and interest and are the highest quality government
securities. Other securities issued by U.S. government agencies or
instrumentalities, such as securities issued by the Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities issued
by the Federal Farm Credit System, the Federal Land Banks, and the Federal
National Mortgage Association (FNMA) are supported by the agency's right to
borrow money from the U.S. Treasury under certain circumstances, but are not
backed by the full faith and credit of the U.S. government.
FOREIGN SECURITIES: Each Fund may invest in foreign securities. Foreign
investments can involve significant risks in addition to the risks inherent in
U.S. investments. The value of securities denominated in or indexed to foreign
currencies, and of dividends and interest from such securities, can change
significantly when foreign currencies strengthen or weaken relative to the U.S.
dollar. Foreign securities markets generally have less trading volume and less
liquidity than U.S. markets, and prices on some foreign markets can be highly
volatile. Many foreign countries lack uniform accounting and disclosure
standards comparable to those applicable to U.S. companies, and it may be more
difficult to obtain reliable information regarding an issuer's financial
condition and operations. In addition, the costs of foreign investing, including
withholding taxes, brokerage commissions, and custodial costs, generally are
higher than for U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may invoke increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays. It also may be difficult to enforce legal rights
in foreign countries.
Investing abroad also involves different political and economic risks. Foreign
investments may be affected by actions of foreign governments adverse to the
interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory taxation, restrictions on U.S.
investment or on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. There may be a greater possibility of
default by foreign governments or foreign government-sponsored enterprises.
Investments in foreign countries also involve a risk of local political,
economic or social instability, military action or unrest, or adverse diplomatic
developments. There is no assurance that an Advisor will be able to anticipate
or counter these potential events and their impacts on the Fund's share price.
The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
that trade a small number of securities.
The Fund may invest in foreign securities that impose restrictions on transfer
within the U.S. or to U.S. persons. Although securities subject to transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
FORWARD FOREIGN CURRENCY CONTRACTS: Each Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contract") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate. A
Fund will not enter into a forward contract for a term of more than one year or
for purposes of speculation. Investors should be aware that hedging against a
decline in the value of a currency in the foregoing manner does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions
preclude the opportunity for gain if the value of the hedging currency should
rise. Forward contracts may, from time to time, be considered illiquid, in which
case they would be subject to a Fund's limitation on investing in illiquid
securities.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS: In order to remain fully invested,
and to reduce transaction costs, each Fund may purchase and sell index futures
contracts or purchase and sell options thereon as a hedge against changes in
market conditions. An index futures contract is an agreement pursuant to which
two parties agree to take or make delivery of an amount of cash equal to a
specified dollar or other currency amount times the difference between the index
value at the close of the last trading day of the contract and the price at
which the futures contract is originally struck. No physical delivery of the
underlying securities are made.
PUT AND CALL OPTIONS: Each Fund may purchase and sell futures contracts and
options (i) to hedge against changes in market conditions; and (ii) to provide
market exposure while attempting to reduce transaction costs.
SELLING (OR WRITING) COVERED CALL OPTIONS: Each Fund may sell (or write) covered
call options on portfolio securities to hedge against adverse movements in the
prices of these securities. A call option gives the buyer of the option, upon
payment of a premium, the right to call upon the writer to deliver a security on
or before a fixed date at a predetermined price, referred to as the strike
price. If the price of the hedged security should fall or remain below the
strike price, the Fund will not be called upon to deliver the security, and the
Fund will retain the premium received for the option as additional income,
offsetting all or part of any decline in the value of the security. The hedge
provided by writing covered call options is limited to a price decline in the
security of no more than the option premium received by the Fund for writing the
option. If the security owned by the Fund appreciates above the option's strike
price, the Fund will generally be called upon to deliver the security, which
will prevent the Fund from receiving the benefit of any price appreciation above
the strike price.
BUYING CALL OPTIONS: Each Fund may purchase call options on securities which
each Fund intends to purchase to take advantage of anticipated positive
movements in the prices of these securities. Each Fund will realize a gain from
the exercise of a call option if, during the option period, the price of the
underlying security to be purchased increases by more than the amount of the
premium paid. A Fund will realize a loss equal to all or a portion of the
premium paid for the option if the price of the underlying security decreases or
does not increase by more than the premium.
BUYING PUT OPTIONS: Each Fund may purchase put options on portfolio securities
to hedge against adverse movements in the prices of these securities. A put
option gives the buyer of the option, upon payment of a premium, the right to
sell a security to the writer of the option on or before a fixed date at a
predetermined price. A Fund will realize a gain from the exercise of a put
option if, during the option period, the price of the security declines by an
amount in excess of the premium paid. A Fund will realize a loss equal to all or
a portion of the premium paid for the option if the price of the security
increases or does not decrease by more than the premium.
CLOSING TRANSACTIONS: Each Fund may dispose of an option written by the Fund by
entering into a "closing purchase transaction" for an identical option and may
dispose of an option purchased by the Fund by entering into a "closing sale
transaction" for an identical option. In each case, the closing transaction will
have the effect of terminating the rights of the option holder and the
obligations of the option purchaser and will result in a gain or loss to the
Fund based upon the relative amount of the premiums paid or received for the
original option and the closing transaction. A Fund may sell (or write) put
options solely for the purpose of entering into closing sale transactions.
INDEX FUTURES CONTRACTS AND RELATED OPTIONS: Each Fund may purchase and sell
call options and purchase put options on stock indices in order to manage cash
flow, reduce equity exposure, or to remain fully invested in equity securities.
Options on securities indices are similar to options on a security except that,
upon the exercise of an option on a securities index, settlement is made in cash
rather than in specific securities. An index futures contract is an agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to a specified dollar or other currency amount times the difference
between the index value at the close of the last trading day of the contract and
the price at which the futures contract is originally struck. No physical
delivery of the underlying securities are made.
LIMITATIONS: Each Fund will purchase and sell only options that are listed on a
securities exchange or quoted on NASDAQ. A Fund will not purchase any option if,
immediately thereafter, the aggregate market value of all outstanding options
purchased and written by the Fund would exceed 5% of the Fund's total assets. A
Fund will not effect a futures or option transaction, if immediately thereafter,
the aggregate value of the Fund's securities subject to outstanding call options
would exceed 100% of the value of the Fund's total assets.
SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS: Each Fund may
purchase securities on a "when-issued" basis, that is, delivery of and payment
for the securities is not fixed at the date of purchase, but is set after the
securities are issued (often a month or more later). Each Fund also may purchase
or sell securities on a delayed delivery basis. The payment obligation and
interest rate that will be received on the delayed delivery securities are fixed
at the time the buyer enters into the commitment. A Fund will only make
commitments to purchase when-issued or delayed delivery securities with the
intention of actually acquiring such securities, but the Fund may sell these
securities before the settlement date if is deemed advisable. During the period
between purchase and settlement, no payment is made by the Fund and no interest
accrues to the Fund. At the time of settlement, the market value of the security
may be more or less than the purchase price, and Fund bears the risk of such
market value fluctuations. Each Fund maintains, in a segregated account, cash,
U.S. Government securities, or other high-grade portfolio securities readily
convertible into cash having an aggregate value at least equal to the amount of
such purchase commitments.
REPURCHASE AGREEMENTS: Each Fund may invest in repurchase agreement. In a
repurchase agreement, the Fund purchases a security and simultaneously commits
to resell that security to the seller at an agreed upon price on an agreed upon
date within a number of days (usually not more than seven) from the date of
purchase. The resale price reflects the purchase price plus an agreed upon
incremental amount which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the seller
to pay the agreed upon price, which obligation is, in effect, secured by the
value (at least equal to the amount of the agreed upon resale price and marked
to market daily) of the underlying security. The Fund may engage in a repurchase
agreement with respect to any security in which it is authorized to invest. Any
repurchase transaction in which the Fund engages will require collateralization
equal to at least 102% of the Seller's obligation during the entire term of the
repurchase agreement. While it does not presently appear possible to eliminate
all risks from these transactions (particularly the possibility of a decline in
the market value of the underlying securities, as well as delays and costs to
the Fund in connection with bankruptcy proceedings), it is the Fund's current
policy to limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and deemed satisfactory by the Advisor or
Sub-Advisor.
ILLIQUID AND RULE 144A SECURITIES: Each Fund may invest up to 15% of its net
assets in securities that are illiquid. Illiquid securities include securities
that have no readily available market quotations and cannot be disposed of
promptly (within seven days) in the normal course of business at a price at
which they are valued. Certain restricted securities that are not registered for
sale to the general public, but that can be resold to dealers or institutional
investors ("Rule 144A Securities"), may be purchased without regard to the
foregoing limitation if a liquid institutional trading market exists. The
liquidity of a Fund's investments in Rule 144A Securities could be impaired if
dealers or institutional investors become uninterested in purchasing these
securities. The Trust's Board of Trustees has delegated to Meridian, the
authority to determine the liquidity of Rule 144A Securities pursuant to
guidelines approved by the Board.
LOANS OF PORTFOLIO SECURITIES: Each Fund may make short and long term loans of
its portfolio securities. Under the lending policy authorized by the Board of
Trustees and implemented by Meridian in response to requests of broker-dealers
or institutional investors which Meridian deems qualified, the borrower must
agree to maintain collateral, in the form of cash or U.S. government
obligations, with the Fund on a daily mark-to-market basis in an amount at least
equal to 100% of the value of the loaned securities. The Fund will continue to
receive dividends or interest on the loaned securities and will require that
proxies and other materials be provided in time to vote on any matter which the
Board of Trustees determines to be serious. With respect to loans of securities,
there is the risk that the borrower may fail to return the loaned securities or
that the borrower may not be able to provide additional collateral. A Fund will
not lend securities with an aggregate market value of more than one-third of the
Fund's net assets.
TYPES OF INVESTMENT RISK
CONCENTRATION RISK: The risk associated with portfolios concentrated in a
particular sector or country that the entire sector or country will be
negatively affected, resulting in losses greater than a portfolio not so
narrowly invested would have experienced.
CORRELATION RISK: The risk that changes in the value of a hedging instrument
will not match those of the asset being hedged (hedging is the use of one
investment to offset the effects of another investment).
CREDIT RISK: The risk that the issuer of a security, or the counter party to a
contract, will default or otherwise become unable to honor a financial
obligation.
CURRENCY RISK: The risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment.
INFORMATION RISK: The risk that key information about a security or market is
inaccurate or unavailable.
INTEREST RATE RISK: The risk of market losses attributable to changes in
interest rates. With fixed-rate securities, a rise in interest rates typically
causes a fall in values, while a fall in rates typically causes a rise in
values.
LEVERAGE RISK: Associated with securities or practices (such as borrowing) that
multiply small index or market movements into large changes in value.
- --HEDGED: When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position which the
Fund also holds, any loss generated by the derivative should be substantially
offset by gains on the hedged investment, and vice versa. While hedging can
reduce or eliminate losses, it can also reduce or eliminate gains.
- --SPECULATIVE: To the extent that a derivative is not used as a hedge,
the fund is directly exposed to the risks of that derivative. Gains or losses
from speculative positions in a derivative may be substantially greater than the
derivative's original cost.
LIQUIDITY RISK: The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like.
MANAGEMENT RISK: The risk that a strategy used by a Fund's management may fail
to produce the intended result. Common to all mutual funds.
MARKET RISK: The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than it was worth at an earlier time. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole. Common
to all stocks and bonds and the mutual funds that invest in them.
NATURAL EVENT RISK: The risk of losses attributable to natural disasters, crop
failures and similar events.
NON-DIVERSIFICATION RISK: The risk associated with non-diversified portfolios
that there may be a limited number of companies each representing a larger
percentage of the portfolio and, if adversely effected by some event, each would
have a greater adverse effect on the portfolio than on a portfolio where assets
are diversified among a larger number of companies.
OPPORTUNITY RISK: The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in other investments.
POLITICAL RISK: The risk of losses directly attributable to government or
political actions of any sort. These actions may range from changes in tax or
trade statutes to expropriation, governmental collapse and war.
VALUATION RISK: The risk that a Fund has valued certain of its securities at a
higher price than it can sell them for.
RISKS OF INTERNATIONAL INVESTING
There can be no assurance that each Fund's investment objective will be
attained. In addition, investing in securities of foreign companies generally
involves greater risks than investing in securities of domestic companies.
Investors should consider carefully the following special factors before
investing in a Fund.
CURRENCY RISK: The value of a Fund's foreign investments may be affected by
changes in currency exchange rates. The U.S. dollar value of a foreign security
generally decreases when the value of the U.S. dollar rises against the foreign
currency in which the security is denominated, and tends to increase when the
value of the U.S. dollar falls against such currency.
POLITICAL AND ECONOMIC RISK: The economies of many of the countries in which a
Fund may invest are not as developed as the United States economy and may be
subject to significantly different forces. Political or social instability,
expropriation or confiscatory taxation, and limitations on the removal of funds
or other assets could also adversely affect the value of a Fund's investments.
REGULATORY RISK: Foreign companies are generally not subject to the regulatory
controls imposed on United States issuers and, as a consequence, there is
generally less public information available about foreign securities than is
available about domestic securities. Foreign companies are not subject to
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic companies. Income from
foreign securities owned by a Fund may be reduced by withholding tax at the
source which would reduce dividend income payable to the Fund's shareholders.
MARKET RISK: The securities markets in many of the countries in which a Fund
invests will have substantially less trading volume than the major United States
markets. As a result, the securities of some foreign companies may be less
liquid and experience more price volatility than comparable domestic securities.
There is generally less government regulation and supervision of foreign stock
exchanges, brokers and issuers which may make it difficult to enforce
contractual obligations. Transaction costs in foreign securities markets are
likely to be higher, since brokerage commission rates in foreign countries are
likely to be higher than in the United States. Further, the settlement period of
securities transactions in foreign markets may be longer than in domestic
markets. These considerations generally are more of a concern in developing
countries. For example, the possibility of revolution and the dependence on
foreign economic assistance may be greater in these countries than in developed
countries. The management of the Funds seeks to mitigate the risks associated
with these considerations through diversification and active professional
management.
EMERGING MARKETS AND DEVELOPING COUNTRIES: Investors should also be aware that
the Funds may invest in companies located within emerging or developing
countries. Investments in emerging markets or developing countries involve
exposure to economic structures that are generally less diverse and mature and
to political systems which can be expected to have less stability than those of
more developed countries. Such countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
which trade only a small number of securities. Historical experience indicates
that emerging markets have been more volatile than the markets of more mature
economies; such markets have also from time to time provided higher rates of
return and greater risks to investors. The Advisor believes that these
characteristics of emerging markets can be expected to continue in the future.
In addition, throughout the countries commonly referred to as the Eastern Bloc,
the lack of a capital market structure or market-oriented economy and the
possible reversal of recent favorable economic, political and social events in
some of those countries present greater risks than those associated with more
developed, market-oriented Western European countries and markets.
SPECIAL CONSIDERATIONS
NON-DIVERSIFIED PORTFOLIO: The Funds are non-diversified portfolios, which means
that, with respect to 50% of its total assets, they may invest more than 5% of
its assets in obligations of one issuer. (A diversified portfolio may not invest
more than 5% of its assets in obligations of one issuer, with respect to 75% of
its total assets.) Since the Funds may invest a greater percentage of their
assets in securities of fewer issuers than a diversified portfolio, they may be
subject to greater investment and credit risks than a diversified portfolio.
FUNDAMENTAL POLICIES: The investment objectives of the Funds, including the
concentration percentages set forth along with the objectives of the U.S. Equity
Funds and the policy of the International Equity Funds not to concentrate in a
particular industry , and certain of the limitations set forth in the Statement
of Additional Information ("SAI") as fundamental policies may not be changed
without the affirmative vote of the majority of the outstanding shares of the
Fund. Fundamental limitations set forth in the SAI include, among other things,
limiting borrowing to 33 1/3% for temporary, extraordinary purposes; restricting
short sales to situations where the security is owned by the Fund; restricting
the acquisition of more than 10% of the voting securities of any one issuer; and
limiting lending of Fund assets.
PORTFOLIO TURNOVER AND FUND ASSETS: Each Fund does not intend to purchase or
sell securities for short-term trading purposes. A Fund will, however, sell any
portfolio security (without regard to the length of time it has been held) when
Meridian believes that market conditions, creditworthiness factors or general
economic conditions warrant such action. The portfolio turnover rate of each
Fund will generally not exceed 100%. However, investment advisers will be using
the various funds to accommodate their clients' needs. If the asset allocation
or timing models dictate, they may move significant funds in or out of a
particular fund, increasing the portfolio turnover rate. In this regard
investors should be aware that a Fund may not have significant assets at a time
when money managers place their client funds in other sectors which may expose
remaining shareholders to higher expense ratios.
SHAREHOLDER RIGHTS: The Trust does not hold an annual meeting of shareholders.
When matters are submitted to shareholders for a vote, each shareholder is
entitled to one vote for each whole share he owns and fractional votes for
fractional shares he owns. All shares of the Fund have equal voting rights and
liquidation rights.
HOW TO INVEST IN THE FUND
Shares of the Fund are not directly available to the public, only through
professional advisers/fiduciaries. Shares of each Fund are sold on a continuous
basis. An investment adviser or other fiduciary may invest any amount it chooses
as often as it wishes. However, the minimum amount an investment
adviser/fiduciary may place in any one ICON Fund on behalf of its clients is
$50,000. Shares may be purchased directly from the Trust. Alternatively,
investment advisers/fiduciaries may purchase shares through a broker-dealer or
other financial institution authorized by the Fund's distributor, and may be
charged a fee for this service by said broker-dealer or institution.
INITIAL PURCHASE BY MAIL: You may purchase shares of the Fund by completing and
signing the investment application form which accompanies this Prospectus and
mailing it in proper form, together with a check (subject to the above minimum
amounts) made payable to ICON Funds and sent to the address listed below. If you
prefer overnight delivery, use the overnight street address listed below.
<TABLE>
<S> <C>
U.S. MAIL: ICON Funds OVERNIGHT: ICON Funds
Mutual Fund Services Mutual Fund Services - Third Floor
Post Office Box 701 615 East Michigan Street
Milwaukee, Wisconsin Milwaukee, Wisconsin
53201-0701 53202
</TABLE>
Your purchase of shares of the Fund will be effected at the next share price
calculated after receipt of your investment. The beneficial owners custodians
will agree to provide the Trust with the states in which the beneficial owners
reside at the time of purchasing shares so that the Trust will be able to comply
with applicable state laws.
INITIAL PURCHASE BY WIRE: You may also purchase shares of each Fund by wiring
federal funds from your bank, which may charge you a fee for doing so. If the
money is to be wired, you must call the Transfer Agent at 1-800-764-0442 for
wiring instructions. You should be prepared to provide the information on the
application to the Transfer Agent.
You are required to mail a signed application to the Custodian at the above
address in order to complete your initial wire purchase. Wire orders will be
accepted only on a day on which the Fund and the Custodian and Transfer Agent
are open for business. A wire purchase will not be considered made until the
wired money is received and the purchase is accepted by the Funds. Any delays
which may occur in wiring money, including delays which may occur in processing
by the banks, are not the responsibility of the Fund or the Transfer Agent.
There is presently no fee for the receipt of wired funds, but the right to
charge shareholders for this service is reserved by the Funds.
ADDITIONAL INVESTMENTS: Shareholders may add to their account at any time by
purchasing shares by mail or by wire according to the aforementioned wiring
instructions. Shareholders should notify the Transfer Agent at 1-800-764-0442
prior to sending their wire. The remittance form which is attached to a
shareholder's individual account statement should, if possible, accompany any
investment made through the mail. Every purchase request must include a
shareholder's account registration number in order to assure that funds are
credited properly.
AUTOMATIC INVESTMENT PLAN: You may make regular investments in the Funds with
the Automatic Investment Plan by completing the appropriate section of the
account application and attaching a voided personal check. Investments may be
made monthly to allow dollar-cost averaging by automatically deducting $50 or
more from your bank checking account. You may change the amount of your monthly
purchase at any time.
TAX SHELTERED RETIREMENT PLANS: Since the Funds are oriented to longer term
investments, shares of the Funds may be an appropriate investment medium for tax
sheltered retirement plans, including: individual retirement plans (IRAs);
simplified employee pensions (SEPs); 401(k) plans; qualified corporate pension
and profit sharing plans (for employees); tax deferred investment plans (for
employees of public school systems and certain types of charitable
organizations); and other qualified retirement plans. You should contact your
adviser for the procedure to open an IRA or SEP plan, as well as more specific
information regarding these retirement plan options. Consultation with an
attorney or tax adviser regarding these plans is advisable.
OTHER PURCHASE INFORMATION: Dividends begin to accrue after you become a
shareholder. The Funds do not issue share certificates. All shares are held in
non-certificate form registered on the books of the Funds and the Fund's
Transfer Agent for the account of the shareholder. The rights to limit the
amount of purchases and to refuse to sell to any person are reserved by the
Fund. If your check or wire does not clear, you will be responsible for any loss
incurred by the Fund, and a fee of $20 will be charged . If you are already a
shareholder, the Fund can redeem shares from any identically registered account
in the Fund as reimbursement for any loss incurred. You may be prohibited or
restricted from making future purchases in the Fund.
HOW TO REDEEM SHARES
All redemptions will be made at the net asset value determined after the
redemption request has been received by the Transfer Agent in proper order.
Shareholders may receive redemption payments in the form of a check or federal
wire transfer. The proceeds of the redemption may be more or less than the
purchase price of your shares, depending on the market value of the Fund's
securities at the time of your redemption. A broker may charge a transaction fee
for the redemption. There is no charge for wire redemptions; however, the Fund
reserves the right to charge for this service. Any charges for wire redemptions
will be deducted from the shareholder's Fund account by redemption of shares.
REDEMPTIONS BY MAIL: You may redeem any part of your account in the Fund at no
charge by mail. Your request should be addressed to:
ICON Funds
Mutual Fund Services
Post Office Box 701
Milwaukee, Wisconsin 53201
"Proper order" means your request for a redemption must include your letter of
instruction, including the Fund name, account number, account name(s), the
address and the dollar amount or number of shares you wish to redeem. This
request must be signed by all registered share owner(s) in the exact name(s) and
any special capacity in which they are registered. For all redemptions in excess
of $25,000, the Fund requires that signatures be guaranteed by a bank or member
firm of a national securities exchange. Signature guarantees are for the
protection of shareholders. At the discretion of the Fund or Firstar Trust
Company, a shareholder, prior to redemption, may be required to furnish
additional legal documents to insure proper authorization.
REDEMPTIONS BY TELEPHONE: If an election is made on the investment application
(or subsequently in writing), you may redeem any part of your account in any
Fund by calling the Transfer Agent at 1-800-764-0442. The Fund, the Transfer
Agent and the Custodian are not liable for following redemption or exchange
instructions communicated by telephone that they reasonably believe to be
genuine. However, if they do not employ reasonable procedures to confirm that
telephone instructions are genuine, they may be liable for any losses due to
unauthorized or fraudulent instructions. Procedures employed may include
recording telephone instructions and requiring a form of personal identification
from the caller.
The telephone redemption and exchange procedures may be terminated at any time
by the Fund or the Transfer Agent. During periods of extreme market activity it
is possible that shareholders may encounter some difficulty in telephoning the
Fund, although neither the Fund nor the Transfer Agent has ever experienced
difficulties in receiving and in a timely fashion responding to telephone
requests for redemptions or exchanges. If you are unable to reach the Fund by
telephone, you may request a redemption or exchange by mail.
SPECIAL REDEMPTION ARRANGEMENTS: Special arrangements may be made by
institutional investors or on behalf of accounts established by brokers,
advisers, banks or similar institutions to have redemption proceeds transferred
by wire to pre-established accounts upon telephone instructions. For further
information call the Trust at 1-800-764-0442.
ADDITIONAL INFORMATION: If you are not certain of the requirements for a
redemption please call the Transfer Agent at 1-800-764-0442. Redemptions
specifying a certain date or share price cannot be accepted and will be
returned. You will be mailed the proceeds on or before the fifth business day
following the redemption. However, payment for redemption made against shares
purchased by check will be made only after the check has been collected, which
normally may take up to fifteen days. Also, when the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than its customary
weekend or holiday closing or under any emergency circumstances, as determined
by the Securities and Exchange Commission, the Fund may suspend redemptions or
postpone payment dates.
Because the Fund incurs certain fixed costs in maintaining shareholder accounts,
the Fund reserves the right to require any shareholder to redeem all of his or
her shares in the Fund on 30 days' written notice if the value of his or her
shares in the Fund is less than $5,000 due to redemption, or such other minimum
amount as the Fund may determine from time to time. An involuntary redemption
constitutes a sale. You should consult your tax adviser concerning the tax
consequences of involuntary redemptions. A shareholder may increase the value of
his or her shares in the Fund to the minimum amount within the 30 day period.
Each share of the Fund is subject to redemption at any time if the Board of
Trustees determines in its sole discretion that failure to so redeem may have
materially adverse consequences to all or any of the shareholders of the Fund.
The Trust has the authority to redeem existing accounts and to refuse a
potential account the privilege of having an account in the Trust if the Trust
reasonably determines that the failure to so redeem, or to so prohibit, would
have a material adverse consequence to the Trust and its shareholders.
Excessive short-term trading has an adverse impact on effective portfolio
management as well as upon Fund expenses. The Trust has reserved the right to
refuse investments from shareholders who engage in short-term trading.
HOW TO MAKE EXCHANGES
Shares of a Fund may be exchanged for shares of any other Fund based on the
respective net asset values of each Fund involved. An exchange may be made by
following the redemption procedure described above under "How to Redeem Shares"
or if a telephone redemption has been elected, by calling the transfer agent at
1-800-764-0442. An exchange order is treated the same as a redemption followed
by a purchase and may result in a capital gain or loss for tax purposes.
SHARE PRICE CALCULATION
The value of an individual share in each Fund (the net asset value) is
calculated by dividing the total value of the Fund's investments and other
assets (including accrued income), less any liabilities (including estimated
accrued expenses), by the number of shares outstanding, rounded to the nearest
cent. Net asset value per share is determined as of 4:00 p.m., Eastern time on
each day the exchange is open for business, and on any other day on which there
is sufficient trading in the Fund's securities to materially affect the net
asset value. In the event markets are closed early (such as on the eve of a
holiday), net asset value per share will be determined at such earlier time. The
net asset value per share of each Fund will fluctuate.
Securities which are traded on any exchange or on the NASDAQ over-the-counter
market are valued at the last quoted sale price. Lacking a last sale price, a
security is valued at its last bid price except when, in Meridian's opinion, the
last bid price does not accurately reflect the current value of the security.
All other securities for which over-the-counter market quotations are readily
available are valued at their last bid price. When market quotations are not
readily available, when Meridian determines the last bid price does not
accurately reflect the current value or when restricted securities are being
valued, such securities are valued as determined in good faith by Meridian,
subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by a pricing service when Meridian
believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by Meridian,
subject to review of the Board of Trustees. Short-term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
DIVIDENDS AND TAXES
UNITED STATES TAXES
Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
complying with the applicable provisions of the Code, a Fund will not be subject
to Federal income tax on its net investment income and capital gain net income
that are distributed to shareholders.
All income dividends and capital gain distributions are normally reinvested,
without charge, in additional full and fractional shares of the Fund. The share
price of the reinvestment will be the net asset value of the Fund shares
computed at the close of business on the date the dividend or distribution is
paid.
At the time of purchase, the share price of the Fund may reflect undistributed
income, capital gains or unrealized appreciation of securities. Any dividend or
capital gain distribution paid to a shareholder shortly after a purchase of
shares will reduce the per share net asset value by the amount of the
distribution. Although in effect a return of capital to the shareholder, these
distributions are fully taxable.
The Fund expects to distribute substantially all of its net investment income,
if any, and any net realized capital gains at least once each year.
The Fund is subject to a nondeductible 4 percent excise tax calculated as a
percentage of certain undistributed amounts of taxable ordinary income and
capital gains net of capital losses. The Fund intends to make such distributions
as may be necessary to avoid this excise tax.
Dividends from taxable net investment income and distributions of net short-term
capital gains paid by the Fund are taxable to shareholders as ordinary income,
whether received in cash or reinvested in additional shares of the Fund. A
portion of these dividends may qualify for the 70 percent dividends received
deduction available to corporations. Distributions of net capital gains will be
taxable to shareholders as long-term capital gains, whether paid in cash or
reinvested in additional shares, and regardless of the length of time the
investor has held his shares.
Each January, the Fund will report to its shareholders the Federal tax status of
dividends and distributions paid or declared by the Fund during the preceding
calendar year. This statement will also indicate whether and to what extent
distributions qualify for the 70 percent dividends received deduction available
to corporations.
There is a possibility that a foreign country (e.g. China with exchange control
regulations) may restrict or limit the ability of the Fund to distribute net
investment income or the proceeds from the sale of its investments to its
shareholders. Any such restrictions or limitations could impact the Fund's
ability to meet the distribution requirements described above.
If the Fund owns shares in a foreign corporation that constitutes a "passive
foreign investment company" for U.S. Federal income tax purposes and the Fund
does not elect to treat the foreign corporation as a "qualified electing fund"
within the meaning of the Code, the Fund may be subject to U.S. Federal income
tax on a portion of any "excess distribution" it receives from the foreign
corporation or any gain it derives from the disposition of such shares, even if
such income is distributed as a taxable dividend by the Fund to its U.S.
shareholders. The Fund may also be subject to additional tax in the nature of an
interest charge with respect to deferred taxes arising from such distributions
or gains. Any tax paid by the Fund as a result of its ownership of shares in a
"passive foreign investment company" will not give rise to any deduction or
credit to the Fund or any shareholder. If the Fund owns shares in a "passive
foreign investment company" and the Fund does elect to treat the foreign
corporation as a "qualified electing fund" under the Code, the Fund may be
required to include in its income each year a portion of the ordinary income and
net capital gains of the foreign corporation, even if this income is not
distributed to the Fund. Any such income would be subject to the distribution
requirements described above even if the Fund did not receive any income to
distribute.
CURRENCY FLUCTUATIONS - "SECTION 988" GAINS OR LOSSES
Under the Code, gains or losses attributable to fluctuations in exchange rates
which occur between the time the Fund accrues interest or other receivables, or
accrues expenses or other liabilities denominated in a foreign currency and the
time the Fund actually collects such receivables or pays such liabilities are
treated as ordinary income or ordinary loss. Similarly, gains or losses from the
disposition of foreign currencies or from the disposition of debt securities
denominated in a foreign currency attributable to fluctuations in the value of
the foreign currency between the date of acquisition of the currency or security
and the date of disposition also are treated as ordinary gain or loss. These
gains or losses, referred to under the Code as "section 988" gains or losses,
increase or decrease the amount of the Fund's net investment income (which
includes, among other things, dividends, interest and net short-term capital
gains in excess of net long-term capital losses, net of expenses) available to
be distributed to its shareholders as ordinary income, rather than increasing or
decreasing the amount of the Fund's net capital gain. If section 988 losses
exceed such other net investment income during a taxable year, any distributions
made by the Fund could be recharacterized as a return of capital to
shareholders, rather than as an ordinary dividend, reducing each shareholder's
basis in his Fund shares. To the extent that such distributions exceed such
shareholder's basis, they will be treated as a gain from the sale of shares. As
discussed below, certain gains or losses with respect to forward foreign
currency contracts, over-the-counter options or foreign currencies and certain
options graded on foreign exchanges will also be treated as section 988 gains or
losses.
Forward currency contracts and certain options entered into by the Fund may
create "straddles" for U.S. Federal income tax purposes and this may affect the
character of gains or losses realized by the Fund on forward currency contracts
or on the underlying securities and cause losses to be deferred. Transactions in
forward currency contracts may also result in the loss of the holding period of
underlying securities for purposes of the 30% of gross income test. The Fund may
also be required to "mark-to-market" certain positions in its portfolio (i.e.,
treat them as if they were sold at year end). This could cause the Fund to
recognize income without having the cash to meet the distribution requirements.
FOREIGN TAXES
Income received by the Fund from sources within other countries in which the
issuers of securities purchased by the Fund are located may be subject to
withholding and other taxes imposed by such countries.
If the Fund is liable for foreign income and withholding taxes that can be
treated as income taxes under U.S. Federal income tax principles, the Fund
expects to meet the requirements of the Code for "passing-through" to its
shareholders such foreign taxes paid, but there can be no assurance that the
Fund will be able to do so. Under the Code, if more than 50% of the value of the
Fund's total assets at the close of its taxable year consists of stocks or
securities of foreign corporations, the Fund will be eligible for, and intends
to file, an election with the Internal Revenue Service to "pass-through" to the
Fund's shareholders the amount of such foreign income and withholding taxes paid
by the Fund. Pursuant to this election a shareholder will be required to: (1)
include in gross income (in addition to taxable dividends actually received) his
pro rata share of such foreign taxes paid by the Fund; (2) treat his pro rata
share of such foreign taxes as having been paid by him; and (3) either deduct
his pro rata share of such foreign taxes in computing his taxable income or use
it as a foreign tax credit against his U.S. Federal income taxes. No deduction
for such foreign taxes may be claimed by a shareholder who does not itemize
deductions. Each shareholder will be notified within 60 days after the close of
the Fund's taxable year whether the foreign taxes paid by the Fund will
"pass-through" for that year and, if so, such notification will designate (a)
the shareholder's portion of the foreign taxes paid to each such country; and
(b) the portion of dividends that represents income derived from sources within
each such country.
The amount of foreign taxes for which a shareholder may claim a credit in any
year will be subject to an overall limitation which is applied separately to
"passive income," which includes, among other types of income, dividends and
interest.
The foregoing is only a general description of the foreign tax credit under
current law. Because applicability of the credit depends on the particular
circumstances of each shareholder, shareholders are advised to consult their own
tax advisers.
The foregoing discussion relates only to generally applicable Federal income tax
provisions in effect as of the date of this Prospectus. Shareholders should
consult their tax advisers about the status of distributions from the Fund in
their own states and localities.
THE TRUST
ICON Funds (the "Trust") is an open-end management investment company,
consisting of numerous separate, non-diversified portfolios each of which has
its own investment objectives and policies. The portfolios are designed to serve
a wide range of investor needs.
The Trust was formed September 19, 1996 as a "business trust" under the laws of
the Commonwealth of Massachusetts. It is a "series" company which is authorized
to issue shares without par value in separate series of the same class. Shares
of numerous series have been authorized. The Board of Trustees of the Trust has
the power to create additional portfolios at any time without a vote of
shareholders of the Trust.
Under the Trust's Master Trust Agreement, no annual or regular meeting of
shareholders is required, although the Trustees may authorize special meetings
from time to time. Under the terms of the Master Trust Agreement, the Trustees
will be a self-perpetuating body and will continue their positions until they
resign, die or are removed by a written instrument signed by a least two-thirds
of the Trustees, by vote of shareholders holding not less than two- thirds of
the shares then outstanding of the Trust cast at any meeting called for that
purpose, or by a written declaration signed by shareholders holding not less
than two-thirds of the shares then outstanding.
On any matter submitted to shareholders, shares of each portfolio entitle their
holder to one vote per share, irrespective of the relative net asset values of
the portfolios' shares. On matters affecting an individual portfolio, a separate
vote of shareholders of the portfolio is required. Each portfolio's shares are
fully paid and non-assessable by the Trust, have no preemptive or subscription
rights, and are fully transferable, with no conversion rights.
MANAGEMENT OF THE FUNDS
TRUSTEES: The business affairs of each Fund are managed by the Trust's Board of
Trustees. The Trustees establish policies, as well as review and approve
contracts and their continuance. The Trustees also elect the officers and select
the Trustees to serve as executive and audit committee members.
THE INVESTMENT ADVISOR: Meridian Investment Management Corporation, 12835 East
Arapahoe Road, Tower II, Englewood, Colorado 80112 under an investment advisory
agreement with the Trust dated October 9, 1996, furnishes investment advice to
the Trust and manages each Fund's investments. Meridian is a wholly-owned
subsidiary of Meridian Management & Research Corporation ("MM&R"). Michael J.
Hart and Dr. Craig T. Callahan each own 50% of MM&R. Meridian's sole business is
the management of growth-oriented portfolio's and related services designed to
meet the investment needs of clients including individuals, pension and profit
sharing plans, foundations, endowments, public retirement systems and insurance
companies. For example, Meridian provides research/recommendations to make asset
allocation and industry/country allocations to Security Benefit Life for use in
managing a variable annuity separate account and related mutual fund. In
addition, it is sub-advisor of three portfolios of the WRL Series Fund, Inc.
Meridian's value-based investment style utilizes fundamental procedures and
quantitative tools developed internally.
The Advisor provides to the Trust, and to each of the Funds within the Trust,
management and investment advisory services. The Advisor furnishes an investment
program for each of the Funds, determines, subject to the overall supervision
and review of the Board of Trustees of the Trust, what investments should be
purchased, sold and held, and makes changes on behalf of the Trust in the
investments of each of the Funds. With respect to the Short-Term Fixed Income
Fund, investment advisory services have been delegated to the investment
Sub-Advisor discussed below, subject to the general supervision and control of
the Advisor and the Board of Trustees.
The investment decisions for each Fund are made by an investment committee of
Meridian, which is primarily responsible for the day-to-day management of each
Fund's portfolio. Dr. Craig T. Callahan is Chairman of the Investment Management
Committee. He directs Meridian's investment research and analysis. Dr. Callahan
has been Chief Investment Officer for the Advisor and its predecessor since
1986.
For the services provided to ICON Funds, Meridian receives a monthly fee from
each Fund at an annual rate based on the fund's average daily net assets as
follows:
Fund Advisory Fee Rate
---- -----------------
U.S. Equity Funds 1.00%
International Equity Funds 1.00%
Fixed Income Fund 0.65%
The Advisor pays the expense of printing and mailing prospectuses and sales
materials used for promotional purposes.
The Advisor may, from its management fee, pay certain financial institutions
(which may include banks, securities dealers and other industry professionals) a
"servicing fee" for performing certain administrative servicing functions for
Fund shareholders to the extent these institutions are allowed to do so by
applicable statute, rule or regulation.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to its obligation of seeking best
execution, Meridian may give consideration to sales of shares of the Fund as a
factor in the selection of brokers and dealers to execute portfolio
transactions.
THE INVESTMENT SUB-ADVISOR: Wellington Management Company, LLP ("Wellington
Management"), 75 State Street, Boston, Massachusetts 02109, under an investment
sub-advisory agreement with the Trust and the Advisor dated December 18, 1996,
serves as Sub-Advisor to the Short-Term Fixed Income Fund. Wellington Management
is a Massachusetts limited liability partnership of which the following persons
are managing partners: Robert W. Doran, Duncan M. McFarland and John R. Ryan.
Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowment funds, foundations and other institutions and individuals. Wellington
Management and its predecessor organizations have provided advisory services to
investment companies since 1933 and to investment counseling clients since 1960.
As of September 30, 1997, Wellington Management had investment management
authority with respect to approximately $169 billion of assets.
John C. Keogh, Senior Vice President of Wellington Management, serves as the
portfolio manager for the Short-Term Fixed Income Fund. He has been an
investment professional with Wellington Management since 1983. Mr. Keogh is
supported by research and other investment services provided by the professional
staff of Wellington Management.
For the services provided to the Short-Term Fixed Income Fund, Wellington
Management receives a quarterly fee from the Advisor at an annual rate based on
the average month-end net assets of the Fund for each such calendar quarter as
follows:
Average Net Assets Annual Rate
------------------ -----------
On First $250 million 0.20%
On Next $250 million 0.15%
Over $500 million 0.125%
Notwithstanding the foregoing, Wellington Management is entitled to receive from
the Advisor a minimum annual fee of $100,000.
THE ADMINISTRATOR: The Trust retains AmeriPrime Financial Services, Inc. (the
Administrator") to manage the Trust's business affairs and provide the Trust
with administrative services, including all regulatory reporting and necessary
office equipment, personnel and facilities. The Administrator receives a monthly
fee from the funds equal to an annual average rate of 0.05%, declining to 0.04%
for net assets above $500 million. Employees of the Administrator act as
officers of the Trust and are reimbursed for expenses associated with attending
Board Meetings.
The Trust retains AmeriPrime Financial Securities, Inc., 1793 Kingswood Drive,
Suite 200, Southlake, Texas 76092, an affiliate of the Administrator, to act as
the principal distributor of the Fund's shares. Kenneth D. Trumpfheller is an
officer and principal shareholder of the Distributor and an officer of the
Trust. The Distributor provides its services to the Trust for no additional or
ongoing compensation. The Advisor is responsible for out of pocket expenses
incurred by the Distributor.
The Trust pays all other expenses for its operations and activities. Each of the
Funds of the Trust pays its allocable portion of these expenses. The expenses
borne by the Trust include the charges and expenses of any shareholder servicing
agents, custodian fees, legal and auditors' expenses, brokerage commissions for
portfolio transactions, the advisory fee, extraordinary expenses, expenses of
shareholder and trustee meetings, expenses for preparing, printing and mailing
proxy statements, reports and other communications to shareholders, and expenses
of registering and qualifying shares for sale, among others.
PERFORMANCE INFORMATION
From time to time, in advertisements or in reports to shareholders or
prospective shareholders, each of the Funds may compare its performance, either
in terms of its yield, total return or its yield and total return, to that of
other mutual funds with similar investment objectives and to stock or other
indices. For example, a Fund may compare its performance to rankings prepared by
Lipper Analytical Services, Inc. ("Lipper"), a widely recognized independent
service which monitors the performance of mutual funds; to Morningstar's Mutual
Fund Values; to the Standard & Poor's 500 Composite Stock Price Index ("S&P
500"), an index of unmanaged groups of common stock; to the Morgan Stanley
Capital International Index European (Free) Portion; to the FT-SE Eurotrack 200
Index; or to the Consumer Price Index. Performance information and rankings as
reported in Changing Times, Business Week, Institutional Investor, the Wall
Street Journal, Mutual Fund Forecaster, No-Load Investor, Money Magazine,
Forbes, Fortune, Investor's Business Daily and Barron's magazine may also be
used in comparing performance of the Funds. Performance comparisons shall not be
considered as representative of the future performance of any Fund.
A Fund's average annual total return is computed by determining the average
annual compounded rate of return for a specified period that, if applied to a
hypothetical $1,000 initial investment, would produce the redeemable value of
that investment at the end of the period, assuming reinvestment of all dividends
and distributions and with recognition of all recurring charges. A Fund may also
utilize a total return for differing periods computed in the same manner but
without annualizing the total return.
A Fund's "yield" refers to the income generated by an investment in the Fund
over a 30-day (or one month) period (which period will be stated in the
advertisement). Yield is computed by dividing the net investment income per
share earned during the most recent calendar month or 30-day period by the
maximum offering price per share on the last day of such period. This income is
then "annualized". That is, the amount of income generated by the investment
during that period is assumed to be generated each month over a 12-month period
and is shown as a percentage of the investment.
For purposes of the yield calculation, interest income is computed based on the
yield to maturity of each debt obligation and dividend income is computed based
upon the stated dividend rate of each security in the Fund's portfolio, and all
recurring charges are recognized.
<PAGE>
ICON FUNDS
SHARES OF ELEVEN U.S. EQUITY FUNDS,
FIVE FOREIGN EQUITY FUNDS
AND A FIXED INCOME FUND
ARE SOLD AT NET ASSET VALUE
WITHOUT SALES COMMISSIONS, 12b-1 FEES OR REDEMPTIONS FEES
INVESTMENT ADVISOR
Meridian Investment Management Corporation
12835 East Arapahoe Road, Tower II
Englewood, CO 80112
DISTRIBUTOR
AmeriPrime Financial Securities, Inc.
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
CUSTODIAN AND TRANSFER AGENT
Firstar Trust Company, Inc
615 E. Michigan Street
Milwaukee, Wisconsin 53202
ADMINISTRATOR
AmeriPrime Financial Services, Inc.
1793 Kingswood Drive, Suite 200
Southlake, Texas 76092
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
950 Seventeenth Street, Suite 2500
Denver, Colorado 80202
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS BEING AUTHORIZED BY
THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE FUND TO SELL ITS
SHARES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH STATE.
