CONFORMED SUBMISSION TYPE: 485BPOS
PUBLIC DOCUMENT COUNT: 8
FILED AS OF DATE: 20000120
EFFECTIVENESS DATE: 20000120
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ICON FUNDS
CENTRAL INDEX KEY: 0001025770
STANDARD INDUSTRIAL CLASSIFICATION: []
STATE OF INCORPORATION: MA
FISCAL YEAR END: 0930
FILING VALUES:
FORM TYPE: 485BPOS
SEC ACT:
SEC FILE NUMBER: 333-14927
FILM NUMBER: 98767816
FILING VALUES:
FORM TYPE: 485BPOS
SEC ACT:
SEC FILE NUMBER: 811-07883
FILM NUMBER: 98767301
BUSINESS ADDRESS:
STREET 1: 12835 ARAPAHOE ROAD
STREET 2: TOWER II, PENTHOUSE
CITY: ENGLEWOOD
STATE: CO
ZIP: 80112
BUSINESS PHONE: 3037901600
MAIL ADDRESS:
STREET 1: 12835 ARAPAHOE ROAD
STREET 2: TOWER II, PENTHOUSE
CITY: ENGLEWOOD
STATE: CO
ZIP: 80112
REGISTRATION NO. 333-14927
REGISTRATION NO. 811-7883
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.......
Post-Effective Amendment No. 7
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 7
ICON Funds
(Exact Name Of Registrant As Specified In Charter)
12835 East Arapahoe Road Tower II Englewood, Colorado 80112
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code: (303) 790-1600
Erik L. Jonson
12835 East Arapahoe Road Tower II Englewood, Colorado 80112
(Name and Address of Agent for Service)
With copy to:
Charles W. Lutter, Jr., Attorney
103 Canyon Oaks, San Antonio, TX 78232-1305
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ X / on January 20, 2000 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act of
1940. Registrant's Rule 24f-2 Notice for the fiscal year ended September 30,
1999 was filed on December 27, 1999.
<PAGE>
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PART A
PROSPECTUS
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ICON FUNDS
PROSPECTUS
JANUARY 20, 2000
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 Fixed Income Fund
ICON Leisure Fund ICON Short-Term Fixed Income Fund
ICON Technology Fund
ICON Telecommunication & Utilities Fund
ICON Transportation Fund
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has any commission
determined whether this prospectus is accurate or complete. It is a criminal
offense to state otherwise.
<PAGE>
TABLE OF CONTENTS
SUMMARY OF PRINCIPAL INVESTMENT OBJECTIVES, STRATEGIES AND RISKS .......... 3
U.S. Equity Funds .............................................. 3
International Equity Funds ..................................... 5
Fixed Income Fund .............................................. 7
FUND BY FUND SUMMARY-HOW HAVE THE FUNDS PERFORMED ......................... 8
ICON Basic Materials Fund ...................................... 9
ICON Consumer Cyclicals Fund ................................... 10
ICON Energy Fund ............................................... 11
ICON Financial Services Fund ................................... 12
ICON Healthcare Fund ........................................... 13
ICON Leisure Fund .............................................. 14
ICON Technology Fund ........................................... 15
ICON Telecommunication & Utilities Fund ........................ 16
ICON Transportation Fund ....................................... 17
ICON Asia Region Fund .......................................... 18
ICON North Europe Region Fund .................................. 19
ICON South Europe Region Fund .................................. 20
ICON Short-Term Fixed Income Fund .............................. 21
FEES AND EXPENSES OF THE FUND ............................................. 22
MORE INFORMATION ABOUT THE FUNDS' INVESTMENT OBJECTIVES,
PRINCIPAL STRATEGIES AND RISKS ............................................ 24
U.S. Equity Funds .............................................. 24
International Equity Funds ..................................... 30
Fixed Income Fund .............................................. 42
ADDITIONAL CONSIDERATIONS ................................................. 42
ORGANIZATION AND MANAGEMENT OF THE FUNDS .................................. 43
ABOUT YOUR ACCOUNT ........................................................ 46
USEFUL INFORMATION ABOUT DISTRIBUTIONS AND TAXES .......................... 47
HOW TO INVEST IN THE FUND ................................................. 48
HOW TO REDEEM SHARES ...................................................... 49
HOW TO MAKE EXCHANGES ..................................................... 50
FINANCIAL HIGHLIGHTS ...................................................... 51
ICON Basic Materials Fund ...................................... 52
ICON Consumer Cyclicals Fund ................................... 53
ICON Energy Fund ............................................... 54
ICON Financial Services Fund ................................... 55
ICON Healthcare Fund ........................................... 56
ICON Leisure Fund .............................................. 57
ICON Technology Fund ........................................... 58
ICON Telecommunication & Utilities Fund ........................ 59
ICON Transportation Fund ....................................... 60
ICON Asia Region Fund .......................................... 61
ICON North Europe Region Fund .................................. 62
ICON South Europe Region Fund .................................. 63
ICON Short-Term Fixed Income Fund .............................. 64
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ICON Funds Prospectus Page 2
<PAGE>
SUMMARY OF PRINCIPAL INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
The ICON Funds consist of seventeen portfolios each of which has its own
investment objectives and policies. The portfolios are designed to serve a wide
range of investor needs. To help you understand the ICON Funds and decide which
fund is appropriate for you, this section reviews the investment objectives,
strategies and risks.
U.S. EQUITY FUNDS
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Name of Fund Industry baskets include, but are not limited to:
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ICON Basic Materials Fund Construction; Containers; Gold Mining; Chemicals;
Metals Mining; Aluminum; Paper & Forest Products;
Metal Fabricators; and Steel.
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ICON Capital Goods Fund * Chemicals; Building Materials; Conglomerates;
Electrical Equipment; Machine Tools; Machinery
(Diversified); Manufacturing; and Pollution
Control/Environment.
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ICON Consumer Cyclicals Hardware & Tools; Engineering & Construction;
Fund Homebuilding/Manufactured Housing; Household
Furnishings & Appliances; Housewares;
Retail-General/Department Stores; Retail-Specialty;
Retail-Specialty Apparel; Shoes; Textile-Apparel
Manufacturers; and Toys.
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ICON Consumer Staples Beverages; Cosmetics; Distributors-Consumer
Fund * Products; Foods; Household Products; Retail-Drug;
Retail-Food Chains; and Tobacco.
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ICON Energy Fund Oil-Domestic and International Integrated; Oil and
Gas-Equipment & Drilling; Oil and Gas-Exploration &
Production; Oil and Gas-Refining and Marketing; and
Natural Gas.
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ICON Financial Services Banks; Financial Services; Insurance Property
Fund Casualty; Insurance-Life/Multi-line; Investment
Banks/Brokerage Firms; Personal Loans; Real Estate
Investment Trusts; and Savings & Loan Companies.
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ICON Healthcare Fund Biotechnology; Hospital Management; Long-Term Care;
Special Services; Managed Care; Healthcare Drugs/
Pharmaceuticals; and Medical Equipment & Devices.
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ICON Leisure Fund Broadcasting/Cable; Entertainment; Gaming; Leisure
Time Products; Lodging-Hotels; Publishing;
Publishing-Newspapers; Tobacco; and Restaurants.
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ICON Funds Prospectus Page 3
<PAGE>
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ICON Technology Fund Communication Equipment; Computers, Hardware,
Software Networking, Peripherals and Servicing; Data
Processing; Electronics, Defense, Components,
Distributors, and Instruments; Semiconductors,
Equipment and Electronics; Office Equipment &
Supplies; and Photography/Imaging.
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ICON Telecommunication Cellular; Electric, Gas and Water Utilities; and
& Utilities Fund Telecommunications.
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ICON Transportation Fund Aerospace/Defense; Automobiles; Airlines; Railroads;
Heavy Duty Truck & Parts; and Truckers.
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* (not funded as of the date of this document)
Investment Objectives
The investment objective of each U.S. Equity Fund is to provide long-term growth
through investing primarily in the common stock and securities convertible into
common stock of U.S. issuers.
Principal Strategies
The ICON Funds are managed using a value-based industry rotation approach. The
ICON Funds' portfolio manager for the U.S. Equity Funds strives to add value by
under-weighting and over-weighting industries within each portfolio's sector.
The strategy focuses primarily on industries and companies comprising the
Standard & Poors SuperComposite 1500 Index ("S&P 1500"), which have been divided
into industry groups or sectors as set forth in the table above. As a result,
the Funds primarily invest in stocks of mid-cap and large cap companies, and
generally will have a minimum of 2-3 industries for diversification. A basket of
stocks is selected to achieve industry exposure. The portfolio manager attempts
to produce above average returns compared to its industry/sector.
A sector fund is a targeted mutual fund. An example of a sector would be
Technology which is made up of fourteen industries. Computer Software is an
industry inside of the Technology sector. Financial Services is also a sector.
It is made up of twelve industries. Money Center Banks is an industry inside of
the Financial Services sector.
The portfolio manager uses this value bargain-hunting approach to identify
industries that are bargains. That is, most of the stocks in an industry have
fallen out of favor. They're cheap, and the portfolio manager believes that it
is important to invest in them.
Unlike ICON Funds' portfolio managers, most sector rotation managers perform
"top down" investing. They try to predict the economy, predict what Congress
will do, predict what the Federal Reserve Bank will do, and they work their way
down to what sectors in which to invest. The ICON Funds' portfolio manager
starts at the bottom. The manager determines which sectors and industries are on
sale; and simply buys them. In other words, it is approached from bottom-up,
where industries are acquired because they are bargains.
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ICON Funds Prospectus Page 4
<PAGE>
Principal Risks
Please keep in mind that no Fund can guarantee that it will meet its objective
and that, as with any investment, you can lose money by investing in the Fund.
As with all equity funds, the share price can fall because of weakness in the
market as a whole, weakness in a particular industry, or weakness in specific
holdings. The Funds' investments in value stocks carry the risks that the market
will not recognize a stock's intrinsic value for a long time, or that a stock
believed to be undervalued may actually be appropriately priced. We believe the
four main risks of investing in the U.S. Equity Funds are market risk,
management risk, concentration risk and non-diversification risk.
* Market Risk: The risk that the market value of a security may move up or down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than it was worth at an earlier time. Mid-cap stocks are more
vulnerable to these fluctuations than large cap stocks. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole.
* Management Risk: The risk that a strategy used by a Fund's management may fail
to produce the intended result.
* Concentration Risk: The risk associated with portfolios concentrated in a
particular sector or limited number of industries that the entire sector or
industries will be negatively affected, resulting in losses greater than a
portfolio not so narrowly invested would have experienced. Consequently, the
Fund may be more vulnerable to any single economic, political or regulatory
occurrence.
* Non-Diversification Risk: 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 at the
time of purchase. The Fund's net asset value may be more volatile than that of a
more-widely diversified fund because the Fund may invest more of its assets in a
smaller number of issuers. Consequently, the Fund may be more vulnerable to any
single economic, political or regulatory occurrence, and the gains or losses on
a single stock may have a greater impact on the Fund's net asset value.
INTERNATIONAL EQUITY FUNDS
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Name of Fund May include, but is not limited to, baskets of
securities from the following countries:
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ICON Asia Region Fund Japan; Korea; China (plus Hong Kong); and Taiwan.
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ICON South Pacific Region Australia; Indonesia; Malaysia; New Zealand; and
Fund * Singapore.
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ICON Funds Prospectus Page 5
<PAGE>
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ICON North Europe Region Belgium; Denmark; Finland; Germany; Ireland;
Fund Netherlands; Norway; Sweden; and United Kingdom.
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ICON South Europe Region Austria; France; Greece; Italy; Portugal; Spain; and
Fund Switzerland.
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ICON Western Hemisphere Argentina; Brazil; Canada; Chile; and Mexico.
Fund *
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* (not funded as of the date of this document)
Investment Objectives
The International Equity Funds seek to provide long-term capital appreciation.
Each Fund seeks to achieve its objective by investing primarily in common stocks
of foreign issuers.
Principal Strategies
Each International Equity Fund focuses on a particular geographic region of the
world as set forth in the table above. The investment strategy focuses on
country rotation within the region using a value approach. A basket of stocks is
selected for each country within the region to achieve broad exposure across
industries. The portfolio manager attempts to produce above average returns
compared to its geographical region.
The portfolio manager uses this value bargain-hunting approach to identify
countries that are bargains. That is, most of the stocks in a country have
fallen out of favor. They're cheap, and the portfolio manager believes that it
is important to invest in them.
Unlike ICON Funds' portfolio managers, most sector/regional fund rotation
managers perform "top down" investing. They try to predict the economies,
predict what the governments will do, predict what the national banks and/or
currency regulators will do, and they work their way down to the stocks in which
to invest. The ICON Funds' portfolio manager starts at the bottom. The manager
determines which countries are attractive relative to other countries. The
manager then uses its proprietary valuation model to calculate the value of
stocks in those countries from its approved list of international stocks, and
simply buys them. In other words, it is approached from bottom-up, where
countries are acquired because they are bargains.
Principal Risks
Please keep in mind that no Fund can guarantee that it will meet its objective
and that, as with any investment, you can lose money by investing in the Fund.
As with all equity funds, the share price can fall because of weakness in the
market as a whole, weakness in a particular industry, or weakness in specific
holdings. The Funds' investments in value stocks carry the risks that the market
will not recognize a stock's intrinsic value for a long time, or that a stock
believed to be undervalued may actually be appropriately priced. We believe the
five main risks of investing in the International Equity Funds are market risk,
management risk, concentration risk, non-diversification risk and international
investing risks.
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ICON Funds Prospectus Page 6
<PAGE>
* Market Risk: The risk that the market value of a security may move up or down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than it was worth at an earlier time. Mid-cap stocks are more
vulnerable to these fluctuations than large cap stocks. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole.
* Management Risk: The risk that a strategy used by a Fund's management may fail
to produce the intended result.
* Concentration Risk: The risk associated with portfolios concentrated in a
particular region or country that the entire country will be negatively
affected, resulting in losses greater than a portfolio not so narrowly invested
would have experienced. Consequently, the Fund may be more vulnerable to any
single economic, political or regulatory occurrence.
* Non-Diversification Risk: The International Equity Funds are non-diversified,
and each may invest up to 25% of its total assets in the securities of one
issuer at the time of purchase. The Fund's net asset value may be more volatile
than that of a more-widely diversified fund because the Fund may invest more of
its assets in a smaller number of issuers. Consequently, the Fund may be more
vulnerable to any single economic, political or regulatory occurrence, and the
gains or losses on a single stock may have a greater impact on the Fund's net
asset value.
* International Investing Risks: There are additional risks with investing in
foreign countries, especially in developing countries -- specifically, economic,
currency, information, political and transaction risks. As a result of these
additional risks, the Fund may be more volatile than a domestic equity fund. For
example, the European funds are made up of countries with established capital
markets and economies. The other funds represent regions with mostly developing
markets and economies. In addition, foreign stocks may not move in concert with
the U.S. markets.
FIXED INCOME FUND
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Name of Fund Under normal market conditions, the Fund invests exclusively
in:
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ICON Short-Term U.S. Treasury obligations; obligations issued or guaranteed
Fixed Income Fund by the agencies and instruments of the U.S. Government; and
repurchase agreements involving those obligations.
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Investment Objective
The ICON Short-Term Fixed Income Fund seeks to provide high current income
consistent with the preservation of capital.
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ICON Funds Prospectus Page 7
<PAGE>
Principal Strategies
The ICON Short-Term Fixed Income Fund seeks to provide higher current income
than that typically offered by a money market fund. Under normal market
conditions, the Fund invests exclusively in (i) U.S. Treasury obligations; (ii)
obligations issued or guaranteed by the agencies and instruments of the U.S.
Government; and (iii) repurchase agreements involving those obligations. The
Fund also seeks to maintain a high degree of liquidity. To this end, the maximum
remaining maturity of any single issue will be two years, with the exception of
floating rate securities that reset at least annually.
Principal Risks
Please keep in mind that no Fund can guarantee that it will meet its objective
and that, as with any investment, you can lose money by investing in the Fund.
This is not a money market fund that endeavors to maintain a stable net asset
value. An investment in this Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. We believe the main risk of investing in the ICON Short-Term Fixed
Income Fund is interest rate risk.
* Interest Rate Risk: The risk that changes in interest rates will adversely
affect the value of a security. When interest rates rise, the value of
fixed-income securities will generally fall.
FUND BY FUND SUMMARIES
HOW HAVE THE FUNDS PERFORMED
The following descriptions provide an overview of each Fund's historical
performance. Detailed information about the Funds' strategies and risks begins
on page 22.
Below each Fund's name are:
* A bar chart that shows how the Fund has performed in the past.
You should be aware that the Funds have a short operating history.
* The highest and lowest quarterly Fund return since inception, to show the
Fund's short-term volatility in the past
* A table that shows how the Fund's average annual returns compare to
returns of a broad-based index
The comparative indexes included with each Fund's performance are included to
provide a basis for comparing a Fund's performance against a specific securities
market index and/or its peer group. Each index accounts for both change in
security price and reinvestment of dividends. The indexes are unmanaged groups
of securities that do not reflect the costs of managing a mutual fund. An
investor cannot invest directly in the indexes.
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ICON Funds Prospectus Page 8
<PAGE>
ICON Basic Materials Fund
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The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: -10.59% 1999: 23.12%
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For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 6-30-99 Total Return for that Quarter: 22.66%
Worst Quarter: Quarter Ended 12-31-97 Total Return for that Quarter: -30.22%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
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Periods Ended 12-31-99
1 Year Since Inception Date 5-5-1997
ICON Basic Materials Fund 23.12% -6.46%
S&P 1500 Index* 20.25% 25.01%
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* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the S&P Basic Materials Index. It has been
changed to a more broad-based index.
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ICON Funds Prospectus Page 9
<PAGE>
ICON Consumer Cyclicals Fund
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The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return -Calendar Year
[GRAPHIC OMITTED]
1998: 5.60% 1999: 4.74%
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For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: 31.64%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -27.47%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 7-9-1997
ICON Consumer Cyclicals Fund 4.74% 3.35%
S&P 1500 Index* 20.25% 22.33%
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* The S&P 1500 Index is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices.
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ICON Funds Prospectus Page 10
<PAGE>
ICON Energy Fund
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The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: -37.12% 1999: 50.27%
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For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 6-30-99 Total Return for that Quarter: 21.39%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -26.42%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 11-5-1997
ICON Energy Fund 50.27% -6.77%
S&P 1500 Index* 20.25% 23.05%
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* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the S&P Energy Index. It has been changed to a
more broad-based index.
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ICON Funds Prospectus Page 11
<PAGE>
ICON Financial Services Fund
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The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 7.04% 1999: -1.71%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: 19.72%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -23.45%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 7-1-1997
ICON Financial Services Fund -1.71% 4.16%
S&P 1500 Index* 20.25% 23.03%
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* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the Lipper Financial Services Funds Index. It has
been changed to a more broad-based index.
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ICON Funds Prospectus Page 12
<PAGE>
ICON Healthcare Fund
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The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 15.31% 1999: 3.80%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-99 Total Return for that Quarter: 20.45%
Worst Quarter: Quarter Ended 9-30-99 Total Return for that Quarter: -16.53%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-24-1997
ICON Healthcare Fund 3.80% 12.36%
S&P 1500 Index* 20.25% 24.25%
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* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the Lipper Health/Biotechnology Funds Index. It
has been changed to a more broad-based index.
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ICON Funds Prospectus Page 13
<PAGE>
ICON Leisure Fund
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 17.84% 1999: -4.51%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: 15.14%
Worst Quarter: Quarter Ended 9-30-99 Total Return for that Quarter: -12.11%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 5-9-1997
ICON Leisure Fund -4.51% 10.42%
S&P 1500 Index* 20.25% 25.40%
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* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the S&P Entertainment/Leisure Composite Index. It
has been changed to a more broad-based index.
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ICON Funds Prospectus Page 14
<PAGE>
ICON Technology Fund
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The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
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Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 33.96% 1999: 111.03%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: 46.05%
Worst Quarter: Quarter Ended 12-31-97 Total Return for that Quarter: -19.51%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-19-1997
ICON Technology Fund* 111.03% 45.90%
S&P 1500 Index** 20.25% 23.96%
- --------------------------------------------------------------------------------
* In general, the market over the last year has been led by large cap technology
stocks, which have appreciated substantially. The ICON Technology Fund's
performance reflected this trend.
** The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the Lipper Science & Technology Funds Index. It
has been changed to a more broad-based index.
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ICON Funds Prospectus Page 15
<PAGE>
ICON Telecommunication and Utilities Fund
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
- --------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 29.99% 1999: 6.90%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-97 Total Return for that Quarter: 15.27%
Worst Quarter: Quarter Ended 3-31-99 Total Return for that Quarter: -5.13%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 7-9-1997
ICON Telecommunication & Utilities Fund 6.90% 23.94%
S&P 1500 Index* 20.25% 22.33%
- --------------------------------------------------------------------------------
* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the Lipper Utilities Funds Index. It has been
changed to a more broad-based index.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 16
<PAGE>
ICON Transportation Fund
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
- --------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 5.35% 1999: -6.73%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: 26.53%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -18.25%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 5-9-1997
ICON Transportation Fund -6.73% 5.09%
S&P 1500 Index* 20.25% 25.40%
- --------------------------------------------------------------------------------
* The S&P 1500 is a broad-based capitalization-weighted index of 1500 U.S.
companies and is comprised of the S&P MidCap 400, S&P 500 and the S&P SmallCap
600 indices. Last year we used the S&P Transportation Index. It has been changed
to a more broad-based index.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 17
<PAGE>
ICON Asia Region Fund
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
- --------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: -6.17% 1999: 69.72%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: 27.42%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -17.26%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-25-1997
ICON Asia Region Fund 69.72% 10.16%
MSCI Pacific Free Index* 55.20% 7.20%
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Pacific Free Index is
comprised of stocks traded in the developed markets of the Pacific Basin
(Australia, Hong Kong, Japan, Malaysia, New Zealand, and Singapore). The index
tries to capture at least 60% of investable capitalization in those markets
subject to constraints governed by industry representation, maximum liquidity,
maximum float, and minimum cross-ownership (companies with exposure in multiple
countries). The index is capitalization weighted.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 18
<PAGE>
ICON North Europe Region
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
- --------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 15.25% 1999: 20.74%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 12-31-99 Total Return for that Quarter: 17.55%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -12.69%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-18-1997
ICON North Europe Region Fund 20.74% 17.02%
MSCI Europe 15 Index* 14.12% 21.18%
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Europe 15 Index is comprised
of stocks traded in the developed markets of Europe. The index tries to capture
at least 60% of investable capitalization in those markets subject to
constraints governed by industry representation, maximum liquidity, maximum
float, and minimum cross-ownership (companies with exposure in multiple
countries). The index is capitalization weighted.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 19
<PAGE>
ICON South Europe Region Fund
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
- --------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 21.71% 1999: -4.67%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 3-31-98 Total Return for that Quarter: 21.99%
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: -19.09%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-20-1997
ICON South Europe Region Fund -4.67% 13.51%
MSCI Europe 15 Index* 14.12% 21.22%
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Europe 15 Index is comprised
of stocks traded in the developed markets of Europe. The index tries to capture
at least 60% of investable capitalization in those markets subject to
constraints governed by industry representation, maximum liquidity, maximum
float, and minimum cross-ownership (companies with exposure in multiple
countries). The index is capitalization weighted.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 20
<PAGE>
ICON Short-Term Fixed Income Fund
- --------------------------------------------------------------------------------
The following information provides some indication of the risks of investing in
the Fund by showing how much returns can differ from one year to the next and by
showing how the Fund's average annual returns compare with the returns of a
broad measure of market performance. Past performance is no guarantee of future
returns.
- --------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 6.06% 1999: 3.48%
- --------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: 2.61%
Worst Quarter: Quarter Ended 6-30-99 Total Return for that Quarter: 0.50%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-7-1997
ICON Short-Term Fixed Income Fund 3.48% 4.83%
Merrill Lynch 1 Year Treasury Index* 4.03% 5.24%
- --------------------------------------------------------------------------------
* The Merrill Lynch 1 Year Treasury Index captures the performance of
obligations of the U.S. Treasury that have one year to maturity, with certain
exceptions.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 21
<PAGE>
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of a Fund. The table does not reflect any additional fees an investor
will pay to the professional adviser/broker responsible for the shareholder's
purchase or sale of Fund shares. Those fees should be considered along with Fund
and other expenses incurred by the shareholder.
Shareholder Fees (fees paid directly
from your investment)
ICON ICON
U.S. ICON Short-Term
Equity International Fixed Income
Funds Equity Funds Fund
----- ------------ ----
Sales Charge (Load) Imposed on Purchases None None None
Deferred Sales Charge (Load) None None None
Redemption Fee None None None
Exchange Fee None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets) Total Fund
Management Other Operating
Fees Expenses Expenses
---- -------- --------
U.S. Equity Funds
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% 0.35% 1.35%
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% 0.58% 1.58%
ICON Healthcare Fund 1.00% 0.40% 1.40%
ICON Leisure Fund 1.00% 0.38% 1.38%
ICON Technology Fund 1.00% 0.37% 1.37%
ICON Telecommunication & Utilities Fund 1.00% 0.59% 1.59%
ICON Transportation Fund 1.00% 0.41% 1.41%
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 22
<PAGE>
International Equity Funds
ICON Asia Region Fund 1.00% 0.59% 1.59%
ICON South Pacific Region Fund* 1.00% 0.65% 1.65%
ICON North Europe Region Fund 1.00% 0.59% 1.59%
ICON South Europe Region Fund 1.00% 1.81% 1.81%
ICON Western Hemisphere Fund* 1.00% 0.65% 1.65%
Fixed Income Fund
ICON Short-Term Fixed Income Fund** 0.65% 0.83% 1.48%
* Fund has not commenced operations. Estimated amounts expected for the first
fiscal year
** Does not include change in accounting estimate for over accrual of expenses.
This change made the ratio of expenses to average net assets 1.06%.
Hypothetical Example
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
FUND
U.S. Equity Funds
ICON Basic Materials Fund $148 $459 $792 $1,735
ICON Capital Goods Fund* $148 $459 $792 $1,735
ICON Consumer Cyclicals Fund $137 $428 $739 $1,624
ICON Consumer Staples Fund* $148 $459 $792 $1,735
ICON Energy Fund $148 $459 $792 $1,735
ICON Financial Services Fund $161 $499 $860 $1,878
ICON Healthcare Fund $143 $443 $766 $1,680
ICON Leisure Fund $140 $437 $755 $1,657
ICON Technology Fund $139 $434 $750 $1,646
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 23
<PAGE>
ICON Telecommunication & Utilities Fund $162 $502 $866 $1,889
ICON Transportation Fund $144 $446 $771 $1,691
International Equity Funds
ICON Asia Region Fund $162 $502 $866 $1,889
ICON South Pacific Region Fund* $168 $520 $897 $1,955
ICON North Europe Region Fund $162 $502 $866 $1,889
ICON South Europe Region Fund $184 $569 $980 $2,127
ICON Western Hemisphere Fund* $168 $520 $897 $1,955
Fixed Income Fund
ICON Short-Term Fixed Income Fund $151 $468 $808 $1,768
* Fund has not commenced operations.
MORE INFORMATION ABOUT THE FUNDS'
INVESTMENT OBJECTIVES, PRINCIPAL STRATEGIES AND RISKS
U.S. EQUITY FUNDS
Investment Objectives
Each U.S. Equity Fund seeks to achieve long-term capital appreciation and
maximum after-tax performance by investing primarily in equity securities. These
securities include common stock and securities convertible into common stock of
U.S. issuers.
Principal Strategies
Each U.S. Equity Fund focuses on a particular investment area. Under normal
circumstances, at least 65% of the total assets of each Fund is invested in
securities of companies principally engaged in a particular industry sector at
the time of purchase. 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 that sector, or at least 50%
of its assets are dedicated to the production of revenues from that 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 the portfolio manager believes those securities stand to benefit from
developments in the sector.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 24
<PAGE>
Each U.S. Equity Fund is comprised of industry-specific "baskets" of securities
which are subsets of the sector, examples of which are provided below under each
Fund's description. Each industry basket will encompass a sample of stocks
developed from the portfolio manager's approved list for the industry in
proportions set by the portfolio manager. Composition of the industry-specific
baskets is automatically maintained as monies move in and out of the fund until
changed by the portfolio manager.
Investment selection and weighting of baskets within each Fund are based on the
attractiveness of an industry. The portfolio manager uses its proprietary
valuation model to analyze its universe of 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. The portfolio manager then groups stocks into their representative
industry classifications to determine those industries it deems to be attractive
relative to other industries.
Principal Risks
As stated in the summary, we believe the four main risks of investing in the
U.S. Equity Funds are market risk, management risk, concentration risk and
non-diversification risk.
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. Mid-cap stocks are more
vulnerable to these fluctuations than large cap stocks. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole. This
risk is common to all stocks and bonds and the mutual funds that invest in them.
Management Risk: The risk that a strategy used by a Fund's management may fail
to produce the intended result. This risk is common to all mutual funds.
Concentration Risk: The risk associated with portfolios concentrated in a
particular sector or limited number of industries that the entire sector or
industries will be negatively affected, resulting in losses greater than a
portfolio not so narrowly invested would have experienced.
Non-Diversification Risk: The risk that there may be a limited number of
companies in a portfolio, 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.
Set forth below is industry data to be considered in light of these principal
risks.
ICON Basic Materials Fund - Industry baskets include, but are not limited to:
Construction; Containers; Gold Mining; Chemicals; Metals Mining; Aluminum; Paper
& Forest Products; Metal Fabricators; and Steel.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 25
<PAGE>
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. Companies may also be
exposed to 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 (not funded as of the date of this prospectus) -
Industry baskets include, but are not limited to: Chemicals; Building Materials;
Conglomerates; Electrical Equipment; Machine Tools; Machinery (Diversified);
Manufacturing; and Pollution Control/Environment.
Companies in the chemical processing field are subject to intense competition,
product obsolescence, and significant government regulation. As regulations are
developed and enforced, those 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; Homebuilding/Manufactured Housing;
Household Furnishings & Appliances; Housewares; Retail-General/Department
Stores; Retail-Specialty; Retail-Specialty Apparel; Shoes; Textile-Apparel
Manufacturers; and Toys.
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
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 26
<PAGE>
and consumer tastes can affect the demand for, and success of, consumer products
in the marketplace.
ICON Consumer Staples Fund (not funded as of the date of this prospectus) -
Industry baskets include, but are not limited to: Beverages; Cosmetics;
Distributors-Consumer Products; Foods; Household Products; Retail-Drug;
Retail-Food Chains; and Tobacco.
The success of retailing companies is closely tied to consumer spending.
Spending 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 and Gas-Equipment & Drilling; Oil
and Gas-Exploration & Production; Oil and Gas-Refining and Marketing; and
Natural Gas.
Securities of companies in the energy field are subject to changes in value and
dividend yield. These changes 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.
Financial services companies are subject to extensive governmental regulation.
This 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. Brokerage firms are affected by changes in regulations,
brokerage commission structure, stock and bond market activity, and competition.
Further, the operating leverage inherent in financial services companies can
produce erratic returns over time.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 27
<PAGE>
According to 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 at the time of
purchase.
Companies in the real estate industry are subject to changes in interest rates,
consumer confidence and spending, taxation, demographic patterns, the level of
new and existing home sales, and other economic activity. They are also affected
by what the government spends on housing subsidies, public works and
transportation.
ICON Healthcare Fund - Industry baskets include, but are not limited to:
Biotechnology; Hospital Management; Long-Term Care; Special Services; Managed
Care; Healthcare Drugs/Pharmaceuticals; and Medical Equipment & Devices.
The health care industry is subject to government regulation and approval of
products and services. This could have a significant effect on price and
availability. Moreover, federal and state governments provide a substantial
percentage of revenues to health care service providers. 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; Entertainment; Gaming; Leisure Time Products;
Lodging-Hotels; Publishing; Publishing-Newspapers; Tobacco; and Restaurants.
Securities of the companies in the leisure industry may be considered
speculative. These securities 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. Federal deregulation of cable and broadcasting has affected many
companies in these industries. 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; Computers, Hardware, Software Networking, Peripherals
and Servicing; Data Processing; Electronics, Defense, Components, Distributors,
and Instruments; Semiconductors, Equipment and Electronics; Office Equipment &
Supplies; and Photography/Imaging.
Competitive pressures and changing domestic and international demand may
significantly effect the financial condition of companies in the computer
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. Further, research and development are large costs
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 28
<PAGE>
to these companies, and they are also sensitive to the risk of product
obsolescence. 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.
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.
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 also 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.
Under SEC laws, the Fund may not own more than 5% of the outstanding voting
securities of more than one public utility company.
ICON Transportation Fund - Industry baskets include, but are not limited to:
Aerospace/Defense; Automobiles; Airlines; Railroads; Heavy Duty Truck & Parts;
and Truckers.
Profitability in these industries is influenced by the price of fuel,
competition, and domestic and foreign economies and government regulation. The
airline industry is still feeling the effects of deregulation. In addition, the
automotive industry is highly cyclical and companies 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.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 29
<PAGE>
INTERNATIONAL EQUITY FUNDS
Investment Objectives
Each Fund seeks to achieve long-term capital appreciation by investing primarily
in equity securities. These securities include common stocks and securities
convertible into common stocks of foreign issuers.
Principal Strategies
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
is invested in securities of companies principally engaged in the business
activities in its particular named geographic region. A company is considered to
be "principally engaged" in business activities in a specific region if 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. 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 the portfolio manager believes those 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 the region, examples of which are provided in
each Fund's description. Each of these country baskets will encompass a sample
of stocks from the portfolio manager's approved list for the country in
proportions set by the portfolio manager. Composition of the country-specific
baskets is automatically maintained as monies move in and out of the fund until
changed by the portfolio manager.
Investment selection and weighting of baskets within each Fund are based on
country attractiveness. The portfolio manager uses its proprietary valuation
model to analyze its universe of 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. The
portfolio manager then groups stocks into their country classifications to
determine those countries it deems to be attractive relative to other countries.
Principal Risks
As stated in the summary, we believe the five main risks of investing in the
International Equity Funds are market risk, management risk, concentration risk,
non-diversification risk and international investing risks.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 30
<PAGE>
Market Risk: The risk that the market value of a security may move up or down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than it was worth at an earlier time. Mid-cap stocks are more
vulnerable to these fluctuations than large cap stocks. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole.
Management Risk: The risk that a strategy used by a Fund's management may fail
to produce the intended result.
Concentration Risk: The risk associated with portfolios concentrated in a
particular region or country that the entire country will be negatively
affected, resulting in losses greater than a portfolio not so narrowly invested
would have experienced. Consequently, the Fund may be more vulnerable to any
single economic, political or regulatory occurrence.
Non-Diversification Risk: The International Equity Funds are non-diversified,
and each may invest up to 25% of its total assets in the securities of one
issuer at the time of purchase. The Fund's net asset value may be more volatile
than that of a more-widely diversified fund because the Fund may invest more of
its assets in a smaller number of issuers. Consequently, the Fund may be more
vulnerable to any single economic, political or regulatory occurrence, and the
gains or losses on a single stock may have a greater impact on the Fund's net
asset value.
Risks of International Investing
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 the currency.
Political and Economic Risk: The economies of many of the countries in
which a Fund may invest are not as developed as the U.S. economy and may be
subject to significantly different forces. Political or social instability,
limitations on the removal of funds, and taxation could also adversely affect
the value of a Fund's investments.
Market Risk: The securities markets in many of the countries in which a
Fund invests will have substantially less trading volume than the major U.S.
markets. As a result, the securities of some foreign companies may be less
liquid and experience more price volatility
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 31
<PAGE>
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,
such as brokerage commissions, in foreign securities markets are likely to be
higher. 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.
Regulatory Risk: Foreign companies are generally not subject to the
regulatory controls imposed on U.S. issuers. 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 taxes which
would reduce dividend income payable to the Fund's shareholders.
Emerging Markets and 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. These 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; those markets have also from
time to time provided higher rates of return but 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. A Fund could lose its entire investment in any such
country.
Foreign Investment Restrictions and Cost Increases: Certain countries
prohibit or impose substantial restrictions on investments in their capital
markets by foreign entities such as a Fund. These restrictions or controls may
at times limit or preclude investment in certain securities and may increase the
cost and expenses of the Fund. In addition, some countries require governmental
approval for the repatriation of investment income, capital or the proceeds of
securities sales by foreign investors such as a Fund. A Fund could be adversely
affected by these restrictions or delays in, or a refusal to grant, any required
governmental approval for repatriation.
Set forth below is country data to be considered in light of these principal
risks.
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ICON Asia Region Fund - May include, but is not limited to, baskets of
securities from the following countries: Japan; Korea; China (plus Hong Kong);
and Taiwan. China is a nation in Eastern Asia bordering the South China Sea.
China has a population of over 1.2 billion. China's main trading partners are
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. The
currency is the Chinese Yuan. The Chinese government continues its move to a
more open economy under Communist rule. State approval is required for projects
over $30 million.
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. Hong
Kong's population is over 6 million. Principal exports to the United States are
machinery, precious metals and stones, plastics, optical and surgical
instruments, meat and vehicles. The national currency is the Hong Kong Dollar.
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. Japan's population is
over 125 million. Electrical and electronic equipment, automobiles, machinery
and chemicals are the major industries. The currency is the Japanese Yen. 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.
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%.
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South Korea, bordering the Sea of Japan and the Yellow Sea, lies in Eastern Asia
on the southern half of the Korean peninsula. South Korea has a population of
over 45 million. Electronics, auto production, chemicals, shipbuilding, steel,
textiles, clothing, footwear and food processing are the major industries. The
currency is the Korean Won. 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.
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. Taiwan
has a population over 21 million. Electronics, textiles, chemicals, clothing,
food processing, plywood, sugar milling, cement, shipbuilding and petroleum
refining constitute the major industries. The currency is the Taiwan Dollar.
Taiwan's major trading partners are the United States, Hong Kong, Japan and the
European Union countries.
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.
ICON South Pacific Region Fund (not funded as of the date of this prospectus) -
May include, but is not limited to, baskets of securities from the following
countries: Australia; Indonesia; Malaysia; New Zealand; and Singapore. AUSTRALIA
is located in the South Pacific. Australia has a population over 18 million.
Mining, industrial and transportation equipment, food processing, chemicals and
steel are included in Australia's major industries. The currency is the
Australian Dollar. 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.
INDONESIA is a nation in Southeastern Asia that sits as an archipelago between
the Indian and Pacific Oceans. Indonesia has a population over 200 million.
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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. The currency is the Indonesian Rupiah. Dividends are withheld at a
standard rate of 20%. Capital gains are taxed at a rate of 0.10%.
MALAYSIA is located in Southeastern Asia as a peninsula and the northern
one-third of the island of Borneo. Malaysia has a population over 19 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. The currency is the Malaysian Ringitt. 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 (e.g., effective September 1998, foreign investors
may not convert Ringitts until one year after the investment dates).
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. New Zealand
has a population over 3 million. Major exports to the United States are:
aircraft, data processing equipment, fertilizers, telecommunications equipment,
scientific instruments, polymers, petroleum products, books and sound
recordings. The currency is the New Zealand Dollar.
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. Singapore's population is over 3 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. The currency is the Singapore Dollar. 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.
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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.
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. BELGIUM is a European
nation located northeast of the English Channel and southeast of the North Sea.
Belgium has a population over 10 million. 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, which is a denomination of the Euro. 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.
DENMARK is located in Northern Europe. Denmark has a population over 5 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 currency is the Krona. The bank attempts to maintain a stable Krona
against the core European currencies.
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.
Finland has a population over 5 million. Metal products, shipbuilding, forestry
and wood processing, copper refining, foodstuffs, chemicals, textiles and
clothing are the major industries. The currency is the Finnish Markka, which is
a denomination of the Euro. Other 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.
GERMANY is a Western European nation bordered by Denmark, Poland, the Czech
Republic, Austria, Switzerland, France, the Netherlands, Belgium and Luxembourg.
Germany has a population over 83 million. Iron, steel, coal, cement, machinery,
chemicals, coal, steel, ships and automobiles constitute the major industries.
The currency is the German Mark, which is a denomination of the Euro.
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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. 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. Ireland has a population over 3
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. The currency is the Irish
Pound, which is a denomination of the Euro. 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. Netherlands has a
population over 15 million. Agroindustries, metal and engineering products,
electrical machinery and equipment, chemicals, petroleum, fishing, construction
and microelectronics constitute the major industries. The currency is the Dutch
Guilder, which is a denomination of the Euro. 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. Netherlands is a
member of the European Union.
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.
NORWAY is the western most country in Scandinavia, located in Northern Europe.
Norway has a population over 4 million. Fishing, engineering, metals, chemicals,
Food processing, paper, shipbuilding and oil and gas constitute the major
industries. The currency is the Norwegian Krone.
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.
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SWEDEN is a nation located in Northern Europe between Norway and Finland. Sweden
has a population over 8 million. Iron and steel, precision equipment, wood pulp
and paper products, processed food and automobiles constitute the major
industries. The Swedish Krona is the country's currency.
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. Countries within the
European Union are Sweden's main trading partners.
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. The United Kingdom has a population over
58 million. Steel, metals, ship building, shipping, banking and insurance are
some of the major industries. The currency is the British Pound. 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.
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. AUSTRIA is a Central European nation with
Germany, the Czech Republic, Hungary, Italy, Slovenia and Croatia as its
neighbors. Austria has a population over 8 million. Major industries include
foods, iron and steel, machines, textiles, chemicals, paper and pulp, tourism,
mining and autos. The currency is the Austrian Schilling, which is a
denomination of the Euro. 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.
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FRANCE is a Western European nation bordered by Belgium, Luxembourg, Germany,
Switzerland, Italy and Spain. France has a population over 58 million. Steel,
chemicals, textiles, automobiles, wine, perfume, aircraft and electronic
equipment are the major industries. The currency is the French Franc, which is a
denomination of the Euro. 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.
GREECE, bordered by the Mediterranean Sea to the south, is a nation in Southern
Europe. Greece has a population over 10 million. Tourism, food and tobacco
processing, textiles, chemicals, metal products, mining and petroleum constitute
the major industries. The currency is the Greek Drachma. Greece is a member of
the European Union.
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. Italy has a population over 57 million. Steel, food processing, clothing,
machinery, autos, textiles, shoes, machine tools and chemicals are the major
industries. The currency is the Italian Lira, which is a denomination of the
Euro. 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.
PORTUGAL is a Western European nation situated between Spain and the Atlantic
Ocean. Portugal has a population over 9 million. Textiles and footwear, wood
pulp and paper, cork, metalworking, oil refining, chemicals, fish canning, wine
and tourism constitute the major industries. The currency is the Portuguese
Escudo, which is a denomination of the Euro. 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. 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.
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SPAIN is a Southern European nation located southwest of France. Spain has a
population over 39 million. Textiles and apparel, food and beverages, metals and
metal manufactures, chemicals, shipbuilding, autos, machine tools and tourism
are the major industries. The currency is the Spanish Peseta, which is a
denomination of the Euro. 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. The countries of the European Union are Spain's main trading partners.
SWITZERLAND, bordered by France, Italy, Germany and Austria, is a nation located
in Central Europe. Switzerland has a population over 7 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. The Swiss Franc is the country's currency.
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 (not funded as of the date of this prospectus) -
May include, but is not limited to, baskets of securities from the following
countries: Argentina; Brazil; Canada; Chile; and Mexico. ARGENTINA is a nation
located in Southern South America between Chile and Uruguay. Argentina has a
population over 34 million. Major industries include food processing,
automobiles, consumer durables, textiles, chemicals, printing, metallurgy and
steel. The currency is the Argentinean Peso.
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.
There is no withholding of dividends in Argentina. Capital gains are also not
taxable.
BRAZIL is a South American nation bordering the Atlantic Ocean. Brazil has a
population over 162 million. Major industries include textiles, shoes,
chemicals, cement, lumber, mining, steel making and machine building. The
currency is the Brazilian Real.
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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.
CANADA is the second largest country in the world after Russia. The official
languages are English and French. Canada has a population over 28 million.
Processed and unprocessed minerals, food products, wood and paper products,
transportation equipment, chemicals, fish products, petroleum and natural gas
constitute the major industries. The currency is the Canadian Dollar. 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.
CHILE is located in South America, bordering the South Atlantic and the South
Pacific Oceans, between Argentina and Peru. Chile has a population over 14
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. The currency is the Chilean peso.
Dividends are withheld at a rate of 35% plus a tax credit of 15%. Capital gains
are not taxable in Chile.
MEXICO is a nation in North America located south of the United States. Mexico
has a population over 95.77 million. Food and beverages, tobacco, chemicals,
iron and steel, petroleum, mining, textiles, clothing, autos, consumer durables
and tourism are the major industries. The currency is the Mexican Peso with.
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).
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.
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Fixed Income Fund
ICON Short-Term Fixed Income Fund
Investment Objective
The objective of the Short-Term Fixed Income Fund is to attain high current
income consistent with preservation of capital.
Principal Strategies
The Fund seeks to provide higher current income than that typically offered by a
money market fund while maintaining a high degree of liquidity. Therefore, there
is a 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 agencies and instruments of
the U.S. Government; and (iii) repurchase agreements involving those
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.
Principal Risks
As stated in the summary, we believe the main risk of investing in the ICON
Short-Term Fixed Income Fund is interest rate risk. This is not a money market
fund that endeavors to maintain a stable net asset value. An investment in this
Fund is not a bank deposit and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Interest Rate Risk: The risk that changes in interest rates will adversely
affect the value of a security. When interest rates rise, the value of
fixed-income securities will generally fall.
ADDITIONAL CONSIDERATIONS
Non-Diversified Portfolio: The Funds are non-diversified portfolios, which means
that, with respect to 50% of its total assets, each Fund 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
concentration percentages, 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
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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.
Temporary Defensive Position: In seeking its primary investment objective of
capital appreciation, a Fund may expect that it generally will hold investments
for at least six months. However, if the Advisor concludes that economic,
market, or industry conditions warrant major adjustments in any Fund's
investment positions, or if unusual market conditions or developments dictate
the taking of a temporary defensive position in short-term money market
instruments, changes may be made without regard to the length of time an
investment has been held, or whether a sale results in profit or loss, or a
purchase results in the reacquisition of an investment which may have only
recently been sold by the Fund. To the extent a Fund takes a defensive position,
it may not achieve its stated objective.
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.
Year 2000 Computer Issue: Many computer systems in use today cannot properly
process date-related information from and after January 1, 2000. Computer
systems employed by the Funds and the Funds' major service providers have not
had failures resulting in a negative impact on fund operations and shareholder
services. However, management continues to monitor computer systems. The Year
2000 problem also presents some uncertainties and possible risks (particularly
in foreign markets) as to whether payment and operational systems of banks,
brokers and other financial institutions will be affected. At this time, the
Funds and the Funds' adviser have no reason to believe that there will be a
negative impact on fund operations as a result of the Year 2000 problem.
ORGANIZATION AND MANAGEMENT OF THE FUNDS
How are the ICON Funds organized?
The ICON Funds is a non-diversified "open-end management investment company" or
mutual fund. Mutual funds pool money from shareholders and invest it to try to
achieve specified objectives.
The ICON Funds was formed on 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 has
the power to create additional portfolios at any time without a vote of
shareholders. No annual or regular meeting of shareholders is required,
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 43
<PAGE>
although the Trustees may authorize special meetings from time to time. On any
matter submitted to shareholders, shares of each portfolio entitle their holder
to one vote per share.
Who runs the Funds?
Trustees
The business affairs of each Fund are governed by the Funds' Board of Trustees.
The Trustees meet regularly to establish and review policies, review the Funds'
investments, performance, expenses, contracts, and other business affairs. The
Trustees also elect the officers and select the Trustees to serve as executive
and audit committee members.
Portfolio Management - The Investment Advisor
Meridian Investment Management Corporation, of 12835 East Arapahoe Road, Tower
II, Penthouse, Englewood, Colorado 80112, furnishes investment advice to the
Funds and manages each Fund's investments. As successor to an advisory service
established in 1986, Meridian was incorporated in Colorado in April 1991. It is
owned by Dr. Craig T. Callahan. Meridian's sole business is the management and
service of growth-oriented portfolios to meet the investment needs of its
clients. Meridian manages more than $380 million for clients which include
individuals, pension and profit sharing plans, foundations, endowments, and
public retirement systems. Meridian's value-based investment style utilizes
fundamental procedures and quantitative tools developed internally.
The investment decisions for each Fund are made by the Advisor's Investment
Committee. The Investment Committee is primarily responsible for the day-to-day
management of each Fund's portfolio. The Committee meets regularly as well as
when circumstances dictate. Quantitative data and investment recommendations are
presented by members of the research team and are discussed by the Committee.
Decisions concerning industries and countries for the Funds are agreed upon by
the Committee. The portfolio managers are responsible for selecting the baskets
of securities in each industry and country. The analysts provide all of the data
necessary to make decisions at the portfolio manager and investment committee
level. Once an investment decision has been reached, trading instructions are
executed by the trading department.
Dr. Craig T. Callahan is Chairman of the Investment Committee and the portfolio
manager. He also directs Meridian's investment research and analysis. Dr.
Callahan has been Chief Investment Officer for the Advisor and its predecessor
since 1986. He previously obtained a Doctorate of Business Administration
(Finance) degree from Kent State University, and began his investment career in
1979. The Advisor and Dr. Callahan, without admitting or denying any wrongdoing,
consented to the entry of a SEC order finding that some of the Advisor's
advertising and related recordkeeping during periods prior to the creation of
the ICON Funds violated provisions of the Investment Advisers Act of 1940. In
the Matter of Meridian Investment Management Corporation, et al., Investment
Advisers Act Release No. 1779, December 28, 1998.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 44
<PAGE>
Dr. Nicholas G. Azari is the Senior Equity Analyst for the Advisor and a member
of the Investment Committee. He previously obtained a PhD in Electrical
Engineering from Cornell University. Dr. Azari began his investment career in
1994, and has been an assistant portfolio manager and analyst for two investment
firms prior to joining Meridian in September 1999.
The Management Fee
For the services provided to ICON Funds, Meridian receives a monthly fee from
each Fund. The fee is calculated at an annual rate. It is based on the fund's
average daily net assets. The fee schedule is 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. Subject to regulations and its
obligation to seek best execution, the Advisor may give consideration to sales
of shares of the Fund as a factor in selecting brokers and dealers to execute
portfolio transactions.
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.
The Administrator
The Funds retain Meridian as administrator to manage its business affairs and
provide administrative services. Some of these services include reporting to
regulators, such as the SEC, and providing necessary office equipment, personnel
and facilities. The Administrator receives a monthly fee from the Funds. The fee
is calculated at an average annual rate of 0.05%, declining to 0.04% for net
assets above $500 million. Some employees of Meridian act as officers of the
Funds.
The Distributor
The Funds retain Meridian Clearing Corporation, an affiliate of the Advisor, to
act as the principal distributor of the Fund's shares. Craig T. Callahan and
Erik L. Jonson are officers of the distributor and officers of the Funds. The
Distributor provides its services to the Funds for no additional or ongoing
compensation. The Distributor is responsible for its out of pocket expenses.
The Funds pay all other expenses for their operations and activities. Each of
the Funds pays its allocable portion of these expenses. The expenses borne by
the Funds 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,
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 45
<PAGE>
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.
ABOUT YOUR ACCOUNT
PRICING SHARES AND RECEIVING SALES PROCEEDS
Here are some procedures you should know when investing in an ICON Fund.
How and when shares are priced
The share price (also called the net asset value or NAV) for each Fund is
calculated at the close of the New York Stock Exchange, normally 4 p.m. Eastern
time, each day the New York Stock Exchange is open for business. To calculate
the NAV, each Fund's assets are valued and totaled, liabilities are subtracted,
and the balance, called net assets, is divided by the number of shares
outstanding. The net asset value per share of each Fund will fluctuate.
When the Funds calculate their share price, they value the securities they hold
at market value. Sometimes market quotes for some securities are not available
or are not representative of market value. Examples would be when events occur
that materially affect the value of a security at a time when the security is
not trading or when the securities are illiquid. In that case, securities may be
valued in good faith at fair value, using consistently applied procedures
decided on by the Board of Trustees. Assets and liabilities expressed in foreign
currencies are converted into U.S. dollars at the prevailing market rates quoted
by one or more banks or dealers shortly before the close of the Exchange.
A Fund's foreign securities may trade on days that the Exchange is closed and
the Fund's daily share price is not calculated. As a result, the Fund's daily
share price may be affected and you will not be able to purchase or redeem
shares.
How your purchase, sale or exchange price is determined
If your request is received in "proper order" (as defined on p. 49) by our
Transfer Agent in correct form by 4 p.m. Eastern time, your transaction will be
priced at that day's NAV. If your request is received after 4 p.m. Eastern time,
it will be priced at the next day's NAV.
How you can receive the proceeds from a sale
If your redemption request is received by our Transfer Agent in correct form by
4 p.m. Eastern time, proceeds are sent within five business days. You may
receive redemption payments in the form of a check or federal wire transfer. If
you use a broker to redeem, the 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 in the future.
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ICON Funds Prospectus Page 46
<PAGE>
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.
Excessive short-term trading has an adverse impact on effective portfolio
management as well as upon Fund expenses. The Funds have reserved the right to
refuse investments from shareholders who engage in short-term trading.
USEFUL INFORMATION ABOUT DISTRIBUTIONS AND TAXES
DIVIDENDS, CAPITAL GAIN AND TAXES
United States Taxes
Dividends and capital gain distributions are reinvested, without charge, in
additional fund shares, unless you select differently on your new account form.
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. The advantage of reinvesting distributions arises from you
receiving income dividends and capital gains distributions on a rising number of
shares. Dividends not reinvested are paid by check or wire to your financial
institution.
The Fund expects to distribute almost all of its net investment income, if any,
and any net realized capital gains, at least once each year. 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.
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.
This occurs whether the dividend or distribution was received in cash or
reinvested in additional shares. 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.
You should consult your own tax advisor about your particular situation. For
more information about other tax matters, see the SAI.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 47
<PAGE>
HOW TO INVEST IN THE FUND
Shares of each Fund are sold on a continuous basis. You may invest any amount
you choose as often as you wish. However, the minimum amount of an initial
investment in any one ICON Fund is $1,000. Shares may also be purchased through
a broker-dealer or other financial institution authorized by the Fund's
distributor, and you may be charged a fee for this service by that 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. Cash
is not accepted.
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 53201-0701 Milwaukee, Wisconsin 53202
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 Funds with the states in which the beneficial owners
reside at the time of purchasing shares so that the Funds can 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, the Custodian and Transfer Agent are
open for business. A wire purchase will not be considered made until the wired
money is received. 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 above 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.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 48
<PAGE>
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 $100 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 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.
HOW TO REDEEM 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 Mutual Fund
Services, 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.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 49
<PAGE>
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 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 SEC, the Funds may suspend redemptions or postpone payment dates.
Because the Funds incur certain fixed costs in maintaining shareholder accounts,
the Funds reserve the right to require any shareholder to redeem all of his or
her shares in the Funds 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 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 to the minimum amount within the 30 day period. Each share is
subject to redemption at any time if the Board of Trustees determines in its
sole discretion that failure to redeem may have materially adverse consequences
to all or any of the shareholders of the Fund.
The Funds have the authority to redeem existing accounts and to refuse a
potential account if the Fund reasonably determines that the failure to redeem,
or to prohibit, would have a material adverse consequence to the Fund and its
shareholders.
HOW TO MAKE EXCHANGES
Shares of a Fund may be exchanged for shares of any other ICON 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
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 50
<PAGE>
order is treated the same as a redemption followed by a purchase and may result
in a capital gain or loss for tax purposes.
FINANCIAL HIGHLIGHTS
The financial highlights for each Fund will help you understand each Fund's
financial performance for the periods indicated. Certain information reflects
financial results for a single Fund share. Total return shows how much your
investment in the Fund increased or decreased during each period, assuming you
reinvested all dividends and distributions. PricewaterhouseCoopers LLP,
independent accountants, audited this information. Their report is included in
the Funds' annual report, which is available without charge upon request. The
Financial Highlights should be read in conjunction with the financial statements
and notes included in the annual report.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 51
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON BASIC MATERIALS FUND
For the period from May 5, 1997 (commencement of operations) through September 30, 1997
and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 6.58 $ 10.90 $ 10.00
Income from Investment Operations:
Net Investment Income (loss) 0.02 0.02 (0.01)
Net Gains or (Losses) on Securities
(both realized and unrealized) 0.74 (4.08) 0.91
----------------------------------------
Total from Investment Operations 0.76 (4.06) 0.90
Less Dividends and Distributions:
Dividends (from net investment income) (0.03) 0.00 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) 0.00 (0.26) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (0.03) (0.26) 0.00
Net Asset Value, End of Period $ 7.31 $ 6.58 $ 10.90
Total Return 11.65% (37.45)% 9.00%**
Net Assets, End of Period (000's) $ 26,373 $ 17,318 $ 50,251
Average Net Assets for the Period (000's) $ 17,145 $ 27,117 $ 45,001
Ratio of Expenses to Average Net Assets 1.45% 1.33% 1.45%*
Ratio of Net Investment Income (loss) to
Average Net Assets 0.16% 0.08% (0.24)%*
Portfolio Turnover Rate 118.29% 106.70% 32.35%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON CONSUMER CYCLICALS FUND
For the period from July 9, 1997 (commencement of operations) through September 30, 1997
and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.87 $ 10.96 $ 10.00
Income from Investment Operations:
Net Investment Income (loss) 0.00 (0.01) (0.01)
Net Gains or (Losses) on Securities
(both realized and unrealized) 2.04 (3.08) 0.97
----------------------------------------
Total from Investment Operations 2.04 (3.09) 0.96
Less Dividends and Distributions:
Dividends (from net investment income) 0.00 0.00 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) 0.00 0.00 0.00
Distributions in excess of net realized
gain (0.24) 0.00 0.00
----------------------------------------
Total Distributions (0.24) 0.00 0.00
Net Asset Value, End of Period $ 9.67 $ 7.87 $ 10.96
Total Return 25.78% (28.26)% 9.60%**
Net Assets, End of Period (000's) $ 54,351 $ 49,003 $ 20,916
Average Net Assets for the Period (000's) $ 58,294 $ 39,883 $ 19,876
Ratio of Expenses to Average Net Assets 1.35% 1.37% 1.89%*
Ratio of Net Investment Income (loss) to
Average Net Assets (0.46)% (0.36)% (0.67)%*
Portfolio Turnover Rate 27.83% 72.42% 0.00%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 53
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
ICON ENERGY FUND
For the period from November 5, 1997 (commencement of operations) through
September 30, 1998 and for the fiscal year ended September 30, 1999:
1999 1998
-------------------------
Net Asset Value, Beginning of Period $ 6.35 $ 10.00
Investment from Investment Operations:
Net Investment Income (loss) 0.01 0.06
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.69 (3.71)
-------------------------
Total from Investment Operations 1.70 (3.65)
Less Dividends and Distributions:
Dividends (from net investment income) (0.05) 0.00
Distributions in excess of net investment
income 0.00 0.00
Distributions (from net realized gain) 0.00 0.00
Distributions in excess of net realized
gain (0.02) 0.00
-------------------------
Total Distributions (0.07) 0.00
Net Asset Value, End of Period $ 7.98 $ 6.35
Total Return 27.28% (36.50%)**
Net assets, End of Period (000's) $ 19,230 $ 12,335
Average Net Assets for the Period (000's) $ 13,801 $ 21,128
Ratio of Expenses to Average Net Assets 1.45% 1.20%*
Ratio of Net Investment Income (loss) to
Average Net Assets (0.26%) 0.51%*
Portfolio Turnover Rate 34.41% 112.62%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 54
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON FINANCIAL SERVICES FUND
For the period from July 1, 1997 (commencement of operations) through September 30,
1997 and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.37 $ 10.51 $ 10.00
Income from Investment Operations:
Net Investment Income (loss) 0.02 0.04 0.01
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.05 (1.14) 0.50
----------------------------------------
Total from Investment Operations 1.07 (1.10) 0.51
Less Dividends and Distributions:
Dividends (from net investment income) (0.04) (0.01) 0.00
Distributions in excess of net investment
income (0.02) 0.00 0.00
Distribution (from net realized gain) (1.39) (0.03) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (1.45) (0.04) 0.00
Net Asset Value, End of Period $ 8.99 $ 9.37 $ 10.51
Total Return 10.05% (10.46%) 5.10**
Net Assets, End of Period (000's) $ 5,483 $ 17,211 $ 32,237
Average Net Assets for the Period (000's) $ 10,415 $ 28,304 $ 29,803
Ratio of Expenses to Average Net Assets 1.58% 1.33% 1.70%*
Ratio of Net Investment Income (loss) to
Average Net Assets 0.09% 0.35% 0.12%*
Portfolio Turnover Rate 53.29% 87.68% 0.00%
* Annualized
** Total Return for periods less than ne year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 55
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON HEALTHCARE FUND
For the period from February 24, 1997 (commencement of operations) through September 30,
1997 and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset value, Beginning of Period $ 11.39 $ 11.78 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.00 0.02 (0.04)
Net Gains or (Losses) on Securities
(both realized and unrealized) (0.25) 0.35 1.82
----------------------------------------
Total from Investment Operations (0.25) 0.37 1.78
Less Dividends and Distributions
Dividends (from net investment income) 0.00 0.00 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distribution (from net realized gain) (3.16) (0.76) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (3.16) (0.76) 0.00
Net Asset Value, End of Period $ 7.98 $ 11.39 $ 11.78
Total Return (5.34%) 3.77% 17.80%**
Net Assets, End of Period (000's) $ 24,550 $ 31,153 $ 77,307
Average Net Assets for the Period (000's) $ 29,272 $ 56,620 $ 59,164
Ratio of Expenses to Average Net Assets 1.40% 1.24% 1.45%*
Ratio of Net Investment Income (loss) to
Average Net Assets (0.83%) (0.13%) (0.80%)*
Portfolio Turnover Rate 85.99% 52.16% 71.81%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 56
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON LEISURE FUND
For the period from May 9, 1997 (commencement of operations) through September 30, 1997
and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.79 $ 11.35 $ 10.00
Income from Investment Operations:
Net Investment Income (loss) 0.10 0.02 (0.01)
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.61 0.45 1.36
----------------------------------------
Total from Investment Operations 1.71 0.47 1.35
Less Dividends and Distributions:
Dividends (from net investment income) (0.24) 0.00 0.00
Distributions in excess of net investment
income (0.03) 0.00 0.00
Distributions (from net realized gain) (1.18) (0.03) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (1.45) (0.03) 0.00
Net Asset Value, End of Period $ 12.05 $ 11.79 $ 11.35
Total Return 14.76% 4.18% 13.50%**
Net Assets, End of Period (000's) $ 31,559 $ 54,426 $ 66,608
Average Net Assets for the Period (000's) $ 40,054 $ 74,443 $ 45,444
Ratio of Expenses to Average Net Assets 1.38% 1.30% 1.48%*
Ratio of Net Investment Income (loss) to
Average Net Assets (0.12%) 0.07% (0.36%)*
Portfolio Turnover Rate 49.22% 34.17% 2.52%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 57
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON TECHNOLOGY FUND
For the period from February 19, 1997 (commencement of operations) through September 30,
1997 and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.20 $ 12.96 $ 10.00
Income from Investment Operations:
Net Investment Income (loss) 0.00 (0.06) (0.05)
Net Gains or (Losses) on Securities
(both realized and unrealized) 10.58 (3.31) 3.01
----------------------------------------
Total from Investment Operations 10.58 (3.37) 2.96
Less Dividends and Distributions:
Dividends (from net investment income) 0.00 0.00 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) (0.78) (0.39) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (0.78) (0.39) 0.00
Net Asset Value, End of Period $ 19.00 $ 9.20 $ 12.96
Total Return 119.53% (26.17%) 29.60%**
Net Assets, End of Period (000's) $ 55,126 $ 60,494 $ 41,849
Average Net Assets for the Period (000's) $ 66,977 $ 73,057 $ 29,766
Ratio of Expenses to Average Net Assets 1.37% 1.31% 1.47%*
Ratio of Net Investment Income (loss) to
Average Net Assets (1.06%) (0.99%) (0.88)%*
Portfolio Turnover Rate 31.75% 31.68% 44.57%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 58
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON TELECOMMUNICATION & UTILITIES FUND
For the period from July 9, 1997 (commencement of operations) through September 30, 1997
and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
---------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 14.17 $ 10.63 $ 10.00
Income from Investment Operations:
Net Investment Income (loss) 0.83 0.31 0.06
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.18 3.28 0.57
---------------------------------------
Total from Investment Operations 2.01 3.59 0.63
Less Dividends and Distributions:
Dividends (from net investment income) (1.02) (0.04) 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) (5.12) (0.01) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
---------------------------------------
Total Distributions (6.14) (0.05) 0.00
Net Asset Value, End of Period $ 10.04 $ 14.17 $ 10.63
Total Return 15.25% 33.88% 6.30%**
Net Assets, End of Period (000's) $ 7,129 $ 23,749 $ 20,422
Average Net Assets for the Period (000's) $ 9,825 $ 36,698 $ 19,230
Ratio of Expenses to Average Net Assets 1.59% 1.34% 1.91%*
Ratio of Net Investment Income (loss) to
Average Net Assets 1.84% 2.12% 1.62%*
Portfolio Turnover Rate 18.85% 155.72% 2.55%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 59
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON TRANSPORTATION FUND
For the period from May 9, 1997 (commencement of operations) through September 30, 1997
and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.45 $ 12.40 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.01 0.01 0.00
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.63 (2.71) 2.40
----------------------------------------
Total from Investment Operations 1.64 (2.70) 2.40
Less Dividends and Distributions:
Dividends (from net investment income) (0.02) (0.01) 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) (0.76) (0.24) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (0.78) (0.25) 0.00
Net Asset Value, End of Period $ 10.31 $ 9.45 $ 12.40
Total Return 16.89% (22.08%) 24.00%**
Net Assets, End of Period (000's) $ 21,004 $ 11,318 $ 22,531
Average Net Assets for the Period (000's) $ 24,387 $ 17,975 $ 19,459
Ratio of Expenses to Average Net Assets 1.41% 1.41% 1.61%*
Ratio of Net Investment Income (loss) to
Average Net Assets 0.10% 0.08% (0.04%)*
Portfolio Turnover Rate 47.97% 10.62% 15.97%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 60
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON ASIA REGION FUND
For the period from February 25, 1997 (commencement of operations) through September 30,
1997 and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 6.09 $ 9.94 $ 10.00
Income from Investment Operations:
Net investment income (loss) (0.01) (0.04) (0.01)
Net Gains or (Losses) on Securities
(both realized and unrealized) 4.79 (3.81) (0.05)
----------------------------------------
Total from Investment Operations 4.78 (3.85) (0.06)
Less Dividends and Distributions:
Dividends (from net investment income) 0.00 0.00 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) 0.00 0.00 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions 0.00 0.00 0.00
Net Asset Value, End of Period $ 10.87 $ 6.09 $ 9.94
Total Return 78.49% (38.73%) (0.60)%**
Net Assets, End of Period (000's) $ 33,564 $ 26,730 $ 58,279
Average Net Assets for the Period (000's) $ 29,191 $ 45,361 $ 45,191
Ratio of Expenses to Average Net Assets 1.59% 1.65% 1.66%*
Ratio of Net Investment Income (loss) to
average net assets (0.57%) (0.45%) (0.23)%*
Portfolio Turnover Rate 62.82% 69.57% 0.00%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON NORTH EUROPE REGION FUND
For the period from February 18, 1997 (commencement of operations) through September 30,
1997 and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
----------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.63 $ 11.06 $ 10.00
Income from Investment Operations:
Net investment income (loss) (0.05) (0.02) 0.07
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.51 0.79 0.99
----------------------------------------
Total from Investment Operations 1.46 0.77 1.06
Less Dividends and Distributions:
Dividends (from net investment income) (0.17) (0.06) 0.00
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) (1.18) (0.14) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
----------------------------------------
Total Distributions (1.35) (0.20) 0.00
Net Asset Value, End of Period $ 11.74 $ 11.63 $ 11.06
Total Return 12.78% 7.00% 10.60%**
Net Assets, End of Period (000's) $ 23,971 $ 39,726 $ 49,947
Average Net Assets for the Period (000's) $ 30,993 $ 49,406 $ 36,212
Ratio of Expenses to Average Net Assets 1.59% 1.54% 1.66%*
Ratio of Net Investment Income (loss) to
Average Net Assets 0.25% 0.41% 1.34%*
Portfolio Turnover Rate 50.36% 57.84% 13.89%
* Annualized
** Total Return for periods less than one year is not annualized
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 62
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON SOUTH EUROPE REGION FUND
For the period from February 20, 1997 (commencement of operations) through September 30,
1997 and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.87 $ 11.90 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.02 (0.23) 0.10
Net Gains or (Losses) on Securities
(both realized and unrealized) 1.06 0.93 1.80
------------------------------------------
Total from Investment Operations 1.08 0.70 1.90
Less Dividends and Distributions:
Dividends (from net investment income) 0.00 (0.07) 0.00
Distributions in excess of net investment
income (0.03) 0.00 0.00
Distributions (from net realized gain) (2.80) (0.66) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
------------------------------------------
Total Distributions (2.83) (0.73) 0.00
Net Asset Value, End of Period $ 10.12 $ 11.87 $ 11.90
Total Return 6.41% 6.11% 19.00%**
Net Assets, End of Period (000's) $ 5,298 $ 9,452 $ 21,088
Average Net Assets for the Period (000's) $ 8,107 $ 20,263 $ 15,055
Ratio of Expenses to Average Net Assets 1.81% 1.56%*** 1.69%*
Ratio of Net Investment Income (loss) to
Average Net Assets (0.53%) (0.26%)*** 1.92%*
Portfolio Turnover Rate 70.65% 113.55% 7.29%
* Annualized
** Total Return for periods less than one year is not annualized
*** Includes reimbursement for fees and expenses. If these fees and expenses
had not been reimbursed, the ratio of expenses to average net assets would
have been 2.10% and the ratio of net investment income to average net
assets would have been (0.79%)
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 63
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
ICON SHORT-TERM FIXED INCOME FUND
For the period from February 7, 1997 (commencement of operations) through September 30, 1997
and the fiscal years ended September 30, 1998 and 1999:
1999 1998 1997
-----------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.79 $ 10.03 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.43 0.76 0.47
Net Gains or (Losses) on Securities
(both realized and unrealized) (0.12) (0.14) 0.03
-----------------------------------------------
Total from Investment Operations 0.31 0.62 0.50
Less Dividends and Distributions:
Dividends (from net investment income) (0.65) (0.53) (0.47)
Distributions in excess of net investment
income 0.00 0.00 0.00
Distributions (from net realized gain) (0.30) (0.33) 0.00
Distributions in excess of net realized
gain 0.00 0.00 0.00
-----------------------------------------------
Total Distributions (0.95) (0.86) (0.47)
Net Asset Value, End of Period $ 9.15 $ 9.79 $ 10.03
Total Return 3.54% 6.55% 3.18%**
Net Assets, End of Period (000's) $ 5,111 $ 5,350 $ 81,382
Average Net Assets for the Period (000's) $ 4,658 $ 17,542 $ 128,897
Ratio of Expenses to Average Net Assets 1.06%**** 0.11%*** 1.10%*
Ratio of Net Investment Income (loss) to
Average Net Assets 4.42%**** 5.66%*** 4.66%*
Portfolio Turnover Rate 53.22% 163.75% 297.62%
* Annualized
** Total Return for periods less than one year is not annualized
*** Includes change in accounting estimate. If this change had not been made
the ratio of expenses to average net assets would have been 0.84% and the
ratio of net investment income to average net assets would have been 4.93%.
**** Includes change in accounting estimate. If this change had not been made
the ratio of expenses to average net assets would have been 1.48% and the
ratio of net investment income to average net assets would have been 4.00%.
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 64
</TABLE>
<PAGE>
ICON FUNDS
FOR FURTHER INFORMATION
More information about the Funds is available to you free of charge. The Funds'
Annual and Semi-Annual Reports contain the Funds' financial statements,
portfolio holdings, and historical performance. You will also find a discussion
of the market conditions and investment strategies that significantly affected
the Funds' performance in these reports. In addition, a current Statement of
Additional Information (SAI) containing more detailed information about the
Funds and their policies has been filed with the Securities and Exchange
Commission and is incorporated by reference as part of this Prospectus. You can
request copies of the Annual and Semi-Annual Reports and the SAI from the ICON
Funds:
BY TELEPHONE Call 1-888-389-4266
BY MAIL ICON Funds
c\o Meridian Investment Management Corporation
12835 East Arapahoe Road, Tower II
Englewood, Colorado 80112
IN PERSON Meridian Investment Management Corporation
12835 East Arapahoe Road, Tower II
Englewood, Colorado 80112
ON THE INTERNET www.iconfunds.com or text-only
versions of fund documents can be
viewed or downloaded from the
Securities and Exchange Commission's
internet site at www.sec.gov
BY MAIL, E-MAIL OR IN PERSON FROM THE Visit, write or e-mail:
SECURITIES AND EXCHANGE COMMISSION SEC's Public Reference Section
(YOU WILL PAY A COPYING FEE) Washington, D.C. 20549-6009
(202) 942-8090
e-mail address: [email protected]
ICON Funds' SEC File No. 811-07883
- --------------------------------------------------------------------------------
ICON Funds Prospectus Page 65
<PAGE>
ICON FUNDS
JANUARY 20, 2000
STATEMENT OF ADDITIONAL INFORMATION
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
ICON Asia Region Fund
ICON South Pacific Region Fund
ICON North Europe Region Fund
ICON South Europe Region Fund
ICON Western Hemisphere Fund
ICON Short-Term Fixed Income Fund
This Statement of Additional Information is not a prospectus. It relates to the
Prospectus for the ICON Funds listed above, dated January 20, 2000, as it may be
amended or supplemented from time to time. The SAI should be read in conjunction
with the Prospectus and Annual Reports, all of which may be obtained by writing
the Advisor at 12835 E. Arapahoe Road Tower II, PH, Englewood, CO 80112 or by
calling 1-888-389-4266.
ICON Funds Statement of Additional Information
Page 1
<PAGE>
TABLE OF CONTENTS
THE ICON FUNDS 3
INVESTMENT POLICIES AND RESTRICTIONS 3
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
AND RISK CONSIDERATIONS 5
TEMPORARY DEFENSIVE POSITION 14
PORTFOLIO TURNOVER 15
TRUSTEES AND OFFICERS 15
PRINCIPAL SHAREHOLDERS 16
THE INVESTMENT ADVISOR 17
ADMINISTRATIVE SERVICES 18
CUSTODIAN 19
TRANSFER AGENT 19
INDEPENDENT ACCOUNTANTS AND COUNSEL 19
DISTRIBUTOR 19
PORTFOLIO TRANSACTIONS-BROKERAGE ALLOCATION 19
PURCHASE AND REDEMPTION OF SHARES 20
DETERMINATION OF SHARE OFFERING PRICE 21
TAX STATUS 21
OTHER TAX CONSIDERATIONS 23
CALCULATION OF PERFORMANCE DATA 24
Total Return 25
Yield 26
Non-standardized Total Return 26
ADDITIONAL INFORMATION ABOUT THE FUNDS 26
FINANCIAL STATEMENTS 28
ICON Funds Statement of Additional Information
Page 2
<PAGE>
THE ICON FUNDS
The ICON Funds is a no-load, no 12b-1 fee mutual fund registered with the SEC.
It was organized as a "business trust" under the laws of the Commonwealth of
Massachusetts in September 19, 1996. There are numerous series within the Funds.
Each series represents a separate non-diversified portfolio of securities.
INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus describes the investment objective of each of the Funds and the
principal investment policies and strategies used to achieve that objective. It
also describes the principal risks of investing in each Fund.
This section contains supplemental information concerning the types of
securities and other instruments in which the Funds may invest, the investment
policies and portfolio strategies that the Funds may utilize and certain risks
attendant to those investments, policies and strategies.
Each Fund has adopted investment restrictions as fundamental and policies. These
restrictions cannot be changed without approval by the holders of a majority of
the outstanding voting securities of the Fund. This means the lesser of (i) 67%
of the Fund's outstanding shares present at a meeting at which more than 50% of
the outstanding shares of the Fund are represented either in person or by proxy,
or (ii) more than 50% of the Fund's outstanding shares.
No Fund may:
(1) Issue senior securities.
(2) Borrow money, except that the Fund may borrow not
in excess of 33 1/3% of the total assets of the
Fund from banks as a temporary measure for
extraordinary purposes.
(3) Underwrite the securities of other issuers.
(4) Purchase or sell real property (including limited
partnership interests, but excluding readily
marketable interests in real estate investment
trusts or readily marketable securities or
companies which invest in real estate).
(5) Engage in the purchase or sale of commodities or
commodity contracts, except that the Funds may
invest in financial and currency futures contracts
and related options for bona fide hedging purposes
and to provide exposure while attempting to reduce
transaction costs.
(6) Lend its assets, except that purchases of debt
securities in furtherance of the Fund's investment
objectives will not constitute lending of assets,
and except that the Fund may lend portfolio
securities with an aggregate market value of not
more than one-third of the Fund's net assets.
ICON Funds Statement of Additional Information
Page 3
<PAGE>
(7) Purchase any security on margin, except that it
may obtain short-term credits as are necessary for
clearance of securities transactions. This
restriction does not apply to bona fide hedging
activity utilizing financial futures and related
options.
(8) Make short sales in situations where the security
is not owned by a Fund.
(9) Acquire more than 10% of the voting securities of
any one issuer.
(10) Invest more than 5% of the value of its total
assets, with respect to 50% of a Fund, in
securities of any one issuer, except such
limitation shall not apply to obligations issued
or guaranteed by the United States Government, its
agencies or instrumentalities.
The following investment restrictions may be changed by the
Board of Trustees without a shareholder vote:
No Fund may:
(11) Invest in companies for the purpose of exercising
control of management.
(12) Hypothecate, pledge, or mortgage any of its
assets, except to secure loans as a temporary
measure for extraordinary purposes and except as
may be required to collateralize letters of credit
to secure state surety bonds.
(13) Invest more than 15% of its net assets in illiquid
securities.
(14) Invest in oil, gas or other mineral leases.
(15) In connection with bona fide hedging activities,
invest more than 5% of its assets as initial
margin deposits or premiums for futures contracts
and provided that said Funds may enter into
futures contracts and option transactions only to
the extent that obligations under such contracts
or transactions represent not more than 100% of a
Fund's assets.
(16) Invest in shares issued by other investment
companies except for cash management purposes and
as permitted under applicable laws and
regulations.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage, resulting from a change in values of
portfolio securities or amount of net assets, will not be considered a violation
of any of these restrictions.
ICON Funds Statement of Additional Information
Page 4
<PAGE>
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS
AND RISK CONSIDERATIONS
This section contains a more detailed discussion of some of the investments the
Funds may make and some of the techniques it may use, as described in the
Prospectus.
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. This 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 those 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, those 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, 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.
Forward Commitments and Reverse Repurchase Agreements: A Fund will direct its
Custodian to place cash or U.S. government obligations in a separate account of
the Fund in an amount equal to the commitments of the Funds to purchase or
ICON Funds Statement of Additional Information
Page 5
<PAGE>
repurchase securities as a result of its forward commitment or reverse
repurchase agreement obligations. With respect to forward commitments to sell
securities, the Fund will direct its Custodian to place the securities in a
separate account. A Fund will direct its Custodian to segregate such assets for
when, as and if issued commitments only when it determines that issuance of the
security is probable. When a separate account is maintained, the securities
deposited in the separate account will be valued daily at market for the purpose
of determining the adequacy of the securities in the account. To the extent
funds are in a separate account, they will not be available for new investment
or to meet redemptions.
Commitments to purchase securities on a when, as and if issued basis will not be
recognized in the portfolio of a Fund until the Advisor determines that issuance
of the security is probable. At such time, a Fund will record the transaction
and, in determining its net asset value, will reflect the value of the security
daily.
Securities purchased on a forward commitment basis and subject to reverse
repurchase agreements are subject to changes in market value based upon the
public's perception of the creditworthiness of the issuer and changes in the
level of interest rates (which will generally result in all of those securities
changing in value in the same way; i.e., all those securities experiencing
appreciation when interest rates decline and depreciation when interest rates
rise). Therefore, if in order to achieve a higher level of income, a Fund
remains substantially fully invested at the same time that it has purchased on a
forward commitment basis or entered into reverse repurchase transactions, there
will be a possibility that the market value of the Fund's assets will have
greater fluctuation.
Leveraging: Leveraging a Fund creates an opportunity for increased net income
but, at the same time, creates special risk considerations. For example,
leveraging may exaggerate changes in the net asset value of Fund shares and in
the yield on the Fund's portfolio. Although the principal of such borrowings
will be fixed, the Fund's assets may change in value during the time the
borrowing is outstanding. Leveraging will create interest expenses for the Fund
which can exceed the income from the assets retained. To the extent the income
derived from securities purchased with borrowed funds exceeds the interest the
Fund will have to pay, the Fund's net income will be greater than if leveraging
were not used. Conversely, if the income from the assets retained with borrowed
funds is not sufficient to cover the cost of leveraging, the net income of the
Fund will be less than if leveraging were not used, and therefore the amount
available for distribution to shareholders will be reduced.
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.
Purchasing 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.
By purchasing a put option, a Fund obtains the right (but not the obligation) to
sell the option's underlying instrument at a fixed "strike" price. In return for
this right, the Fund pays the current market price for the option (known as the
option premium). Options have various types of underlying instruments, including
ICON Funds Statement of Additional Information
Page 6
<PAGE>
specific securities, indices of securities prices, and futures contracts. A Fund
may terminate its position in a put option it has purchased by allowing it to
expire or by exercising the option. If the option is allowed to expire, the Fund
will lose the entire premium it paid. If the Fund exercises the option, it
completes the sale of the underlying instrument at the "strike" price. A Fund
also may terminate a put option position by closing it out in the secondary
market at its current price, if a liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).
The features of call options are essentially the same as those of put options,
except that the purchaser of a call option obtains the right to purchase, rather
than sell, the underlying instrument at the option's "strike" price. A call
buyer typically attempts to participate in potential price increases of the
underlying instrument with risk limited to the cost of the option if security
prices fall. At the same time, the buyer can expect to suffer a loss if the
underlying prices do not rise sufficiently to offset the cost of the option.
Writing Put Options: When a Fund writes a put option, it takes the opposite side
of the transaction from the option's purchaser. In return for receipt of the
premium, the Fund assumes the obligation to pay the "strike" price for the
option's underlying instrument if the other party to the option chooses to
exercise it. When writing an option on a futures contract the Fund will be
required to make margin payments for futures contracts. The Fund may seek to
terminate its position in a put option it writes before exercise by closing out
the option in the secondary market at its current price. If the secondary market
is not liquid for a put option the Fund has written, however, the Fund must
continue to be prepared to pay the "strike" price while the option is
outstanding, regardless of price changes, and must continue to segregate assets
to cover its position.
If the underlying prices rise, a put writer would generally expect to profit.
Although its gain would be limited to the amount of the premium it received. If
security prices remain the same over time, the writer also may profit, because
it should be able to close out the option at a lower price. If the underlying
prices fall, the put writer would expect to suffer a loss. This loss should be
less than the loss from purchasing the underlying instrument directly, however,
because the premium received for writing the option should mitigate the effects
of the decline.
Writing a call option obligates a Fund to sell or deliver the option's
underlying instrument, in return for the "strike" price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if the underlying prices remain the same or fall. Through receipt of
the option premium, a call writer mitigates the effects of a price decline. At
the same time, because a call writer must be prepared to deliver the underlying
instrument in return for the "strike" price, even if its current value is
greater, a call writer gives up some ability to participate in the underlying
price increases.
Purchasing 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.
ICON Funds Statement of Additional Information
Page 7
<PAGE>
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.
Combined Positions: A Fund may purchase and write options in combination with
each other, or in combination with futures or forward contracts, to adjust the
risk and return characteristics of the overall position. For example, a Fund may
purchase a put option and write a call option on the same underlying instrument,
in order to construct a combined position whose risk and return characteristics
are similar to selling a futures contract. Another possible combined position
would involve writing a call option at one "strike" price and buying a call
option at a lower price, in order to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options positions
involve multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.
Correlation of Price Changes: Because there are a limited number of types of
exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a Fund's current or anticipated
investments exactly. The Fund may invest in options and futures contracts based
on securities with different issuers, maturities, or other characteristics from
the securities in which it typically invests.
Options and futures prices also can diverge from the prices of their underlying
instruments or precious metals, even if the underlying instruments or precious
metals match the Fund's investment well. Options and futures prices are affected
by such factors as current and anticipated short-term interest rates, changes in
volatility of the underlying instrument or precious metal, and the time
remaining until expiration of the contract, which may not affect the security or
the precious metal prices the same way. Imperfect correlation also may result
from: differing levels of demand in the options and futures markets and the
securities or precious metal markets, structural differences in how options and
futures and securities or precious metal are traded, or imposition of daily
price fluctuation limits or trading halts. The Fund may purchase or sell options
and futures contracts with a greater or lesser value than the securities or
precious metal it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the securities
or precious metals, although this may not be successful in all cases. If price
changes in the Fund's options or futures positions are poorly correlated with
its other investments, the positions may fail to produce anticipated gains or
result in losses that are not offset by gains in other investments.
Liquidity of Options and Futures Contracts: There is no assurance a liquid
secondary market will exist for any particular options or futures contract at
any particular time. Options may have relatively low trading volume and
liquidity if their "strike" prices are not close to the underlying instrument or
precious metal's current price. In addition, exchanges may establish daily price
fluctuation limits for options and futures contracts, and may halt trading if a
contract's price moves upward or downward more than the limit in a given day. On
volatile trading days when the price fluctuation limit is reached or a trading
halt is imposed, it may be impossible for the Fund to enter into new positions
or close out existing positions. If the secondary market for a contract is not
ICON Funds Statement of Additional Information
Page 8
<PAGE>
liquid because of price fluctuation limits or otherwise, it could prevent prompt
liquidation of unfavorable positions, and potentially could require the Fund to
continue to hold a position until delivery or expiration regardless of changes
in its value. As a result, the Fund's access to other assets held to cover its
options or futures positions also could be impaired. In addition, one of the
requirements for qualification as a regulated investment company for tax
purposes in that less than 30% of the Fund's gross income be derived from gains
from the sale or other disposition of securities held for less than three
months. Accordingly, the Fund may be restricted in effecting closing
transactions within three months after entering into an option or futures
contract.
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.
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.
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.
Segregated Assets and Covered Positions: When purchasing a stock index futures
contract, selling an uncovered call option, or purchasing securities on a
when-issued or delayed delivery basis, a Fund will restrict cash, which may be
invested in repurchase obligations or liquid securities. When purchasing a stock
index futures contract, the amount of restricted cash or liquid securities, when
added to the amount deposited with the broker as margin, will be at least equal
to the market value of the futures contract and not less than the market price
at which the futures contract was established. When selling an uncovered call
option, the amount of restricted cash or liquid securities, when added to the
amount deposited with the broker as margin, will be at least equal to the value
of securities underlying the call option and not less than the strike price of
the call option. When purchasing securities on a when-issued or delayed delivery
basis, the amount of restricted cash or liquid securities will be at least equal
to the Fund's when-issued or delayed delivery commitments.
The restricted cash or liquid securities will either be identified as being
restricted in a Fund's accounting records or physically segregated in a separate
account at Firstar Trust Company, the Fund's custodian. For the purpose of
determining the adequacy of the liquid securities which have been restricted,
the securities will be valued at market or fair value. If the market or fair
value of such securities declines, additional cash or liquid securities will be
restricted on a daily basis so that the value of the restricted cash or liquid
securities, when added to the amount deposited with the broker as margin, equals
the amount of such commitments by a Fund.
ICON Funds Statement of Additional Information
Page 9
<PAGE>
Fund assets need not be segregated if a Fund "covers" the futures contract or
call option sold. For example, the Fund could cover a futures or forward
contract which it has sold short by owning the securities or currency underlying
the contract. A Fund may also cover this position by holding a call option
permitting the Fund to purchase the same futures or forward contract at a price
no higher than the price at which the sell position was established. A Fund
could cover a call option which it has sold by holding the same currency or
security (or, in the case of a stock index, a portfolio of stock substantially
replicating the movement of the index) underlying the call option. The Fund may
also cover by holding a separate call option of the same security or stock index
with a strike price no higher than the strike price of the call option sold by
the Fund. The Fund could cover a call option which it has sold on a futures
contract by entering into a long position in the same futures contract at a
price no higher than the strike price of the call option or by owning the
securities or currency underlying the futures contract. The Fund could also
cover a call option which it has sold by holding a separate call option
permitting it to purchase the same futures contract at a price no higher than
the strike price of the call option sold by the Fund.
OTC Options: Unlike exchange-traded options, which are standardized with respect
to the underlying instrument, expiration date, contract size, and "strike"
price, the terms of over-the-counter options i.e., options not traded on
exchanges ("OTC options"), generally are established through negotiation with
the other party to the option contract. While this type of arrangement allows a
Fund greater flexibility to tailor an option to its needs, OTC options generally
involve greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded. The risk of
illiquidity also is greater with OTC options, since these options generally can
be closed out only by negotiation with the other party to the option.
Illiquid Investments: Illiquid investments are investments that cannot be sold
or disposed of in the ordinary course of business at approximately the prices at
which they are valued. Under the supervision of the Board of Trustees, the
Advisor determines the liquidity of a Fund's investments and, through reports
from the Advisor, the Board monitors trading activity in illiquid investments.
In determining the liquidity of the Fund's investments, the Advisor may consider
various factors, including (i) the frequency of trades and quotations, (ii) the
number of dealers and prospective purchasers in the marketplace, (iii) dealer
undertakings to make a market, (iv) the nature of the security (including any
demand or tender features), and (v) the nature of the marketplace for trades
(including the ability to assign or offset the Fund's rights and obligations
relating to the investment). Investments currently considered by the Trust to be
illiquid include repurchase agreements not entitling the holder to payments of
principal and interest within seven days, over-the-counter options, and
restricted securities. However, with respect to OTC options which the Fund
writes, all or a portion of the value of the underlying instrument may be
illiquid depending on the assets held to cover the option and the nature and
terms of any agreement the Fund may have to close out the option before
expiration. In the absence of market quotations, illiquid investments are priced
at fair value as determined in good faith by the Advisor, subject to review of
the Board of Trustees. If, through a change in values, net assets or other
circumstances, the Fund were in a position where more than 15% of its net assets
were invested in illiquid securities, it would seek to take appropriate steps to
protect liquidity.
Foreign Securities: Each International Fund invests 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 those securities, can
change significantly when foreign currencies strengthen or weaken relative to
ICON Funds Statement of Additional Information
Page 10
<PAGE>
the U.S. dollar. Foreign securities markets generally have less trading volume
and less liquidity than U.S. markets. Further, 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 those restrictions.
Foreign Currency Transactions: Investments in foreign companies usually involve
use of currencies of foreign countries. A Fund also may hold cash and
cash-equivalent investments in foreign currencies. The value of the Fund's
assets as measured in U.S. dollars will be affected by changes in currency
exchange rates and exchange control regulations. The Fund may, as appropriate
markets are developed, but is not required to, engage in currency transactions
including cash market purchases at the spot rates, forward currency contracts,
exchange listed currency futures, exchange listed and over-the-counter options
on currencies, and currency swaps for two purposes. One purpose is to settle
investment transactions. The other purpose is to try to minimize currency risks.
All currency transactions involve a cost. Although foreign exchange dealers
generally do not charge a fee, they do realize a profit based on the difference
(spread) between the prices at which they are buying and selling various
currencies. Commissions are paid on futures options and swaps transactions, and
options require the payment of a premium to the seller.
A forward contract involves a privately negotiated obligation to purchase or
sell at a price set at the time of the contract with delivery of the currency
generally required at an established future date. A futures contract is a
standardized contract for delivery of foreign currency traded on an organized
exchange that is generally settled in cash. An option gives the right to enter
into a contract. A swap is an agreement based on a nominal amount of money to
exchange the differences between currencies.
ICON Funds Statement of Additional Information
Page 11
<PAGE>
The Fund will generally use spot rates or forward contracts to settle a security
transaction or handle dividend and interest collection. When a Fund enters into
a contract for the purchase or sale of a security denominated in a foreign
currency or has been notified of a dividend or interest payment, it may desire
to lock in the price of the security or the amount of the payment in dollars. By
entering into a spot rate or forward contract, the Fund will be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the security is
purchased or sold to the date on which payment is made or received or when the
dividend or interest is actually received.
A Fund may use forward or futures contracts, options, or swaps when the
investment manager believes the currency of a particular foreign country may
suffer a substantial decline against another currency. For example, it may enter
into a currency transaction to sell, for a fixed amount of dollars, the amount
of foreign currency approximating the value of some or all of the Fund's
portfolio securities denominated in such foreign currency. The precise matching
of the securities transactions and the value of securities involved generally
will not be possible. The projection of short-term currency market movements is
extremely difficult and successful execution of a short-term strategy is highly
uncertain.
A Fund will not enter into a foreign 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 this manner does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of those securities decline. Furthermore, hedging transactions preclude
the opportunity for gain if the value of the hedging currency should rise.
Foreign 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.
A Fund may cross-hedge currencies by entering into transactions to purchase or
sell one or more currencies that are expected to decline in value relative to
other currencies in which a Fund has (or expects to have) portfolio exposure.
A Fund may engage in proxy hedging. Proxy hedging is often used when the
currency to which a fund's portfolio is exposed is difficult to hedge. Proxy
hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and simultaneously buy U.S. dollars. The amount of
the contract would not exceed the value of the Fund's securities denominated in
linked securities.
A Fund will not enter into a currency transaction or maintain an exposure as a
result of the transaction when it would obligate a Fund to deliver an amount of
foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency. The Fund will designate cash or
securities in an amount equal to the value of the Fund's total assets committed
to consummating the transaction. If the value of the securities declines,
additional cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the Fund's commitment.
On the settlement date of the currency transaction, a Fund may either sell
portfolio securities and make delivery of the foreign currency or retain the
securities and terminate its contractual obligation to deliver the foreign
currency by purchasing an offsetting position. It is impossible to forecast what
the market value of portfolio securities will be on the settlement date of a
currency transaction. Accordingly, it may be necessary for the Fund to buy
ICON Funds Statement of Additional Information
Page 12
<PAGE>
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the securities are less than the amount of
foreign currency the Fund is obligated to deliver and a decision is made to sell
the securities and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received on
the sale of the portfolio securities if its market value exceeds the amount of
foreign currency the Fund is obligated to deliver. The Fund will realize gains
or losses on currency transactions.
The Fund may also buy put options and write covered call options on foreign
currencies to try to minimize currency risks. The risk of buying an option is
the loss of premium. The risk of selling (writing) an option is that the
currency option will minimize the currency risk only up to the amount of the
premium, and then only if rates move in the expected direction. If this does not
occur, the option may be exercised and a Fund would be required to buy the
underlying currency at the loss which may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, the Fund may also
be required to forego all or a portion of the benefits which might otherwise
have been obtained from favorable movements on exchange rates. All options
written on foreign currencies will be covered; that is, the Fund will own
securities denominated in the foreign currency, hold cash equal to its
obligations or have contracts that offset the options.
The Fund may construct a synthetic foreign currency investment, sometimes called
a structured note, by (a) purchasing a money market instrument which is a note
denominated in one currency, generally U.S. dollars, and (b) concurrently
entering into a forward contract to deliver a corresponding amount of that
currency in exchange for a different currency on a future date and at a
specified rate of exchange. Because the availability of a variety of highly
liquid short-term U.S. dollar market instruments, or notes, a synthetic money
market position utilizing such U.S. dollar instruments may offer greater
liquidity than direct investment in foreign currency.
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 those 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 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
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
ICON Funds Statement of Additional Information
Page 13
<PAGE>
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.
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 the Advisor, 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 the Advisor in response to requests of
broker-dealers or institutional investors which the Advisor 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-thir of the Fund's net assets.
Restricted Securities: Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where the
registration is required, a Fund holding restricted securities may be obligated
to pay all or part of the registration expense and a considerable period may
elapse between the time it decides to seek registration and the time the Fund
may be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the Fund
might obtain a less favorable price than prevailed when it decided to seek
registration of the security.
TEMPORARY DEFENSIVE POSITION
In seeking its primary investment objective of capital appreciation, a Fund may
expect that it generally will hold investments for at least six months. However,
if the Advisor concludes that economic, market, or industry conditions warrant
major adjustments in any Fund's investment positions or if unusual market
conditions or developments dictate the taking of a temporary defensive position
in short-term money market instruments, changes may be made without regard to
the length of time an investment has been held, or whether a sale results in
profit or loss, or a purchase results in the reacquisition of an investment
which may have only recently been sold by the Fund.
ICON Funds Statement of Additional Information
Page 14
<PAGE>
PORTFOLIO TURNOVER
The Advisor buys and sells securities for the Funds to accomplish its investment
objectives. The Funds' investment policies may lead to frequent changes in
investments, particularly in periods of rapidly fluctuating interest rates. The
Funds' investments may also be traded to take advantage of perceived short-term
disparities in market values or yields among securities of comparable quality
and maturity. A change in the securities held by a Fund is known as "portfolio
turnover." It is anticipated that portfolio turnover for each fund will
generally not exceed 100%. However, the Funds are to be used by other investment
advisers allocating client assets between various sectors or countries. If those
advisers move client assets in and out of a Fund, that Fund's portfolio turnover
rate could be significantly greater. Portfolio turnover rates for prior fiscal
periods are set forth in the "Financial Highlights" portion of the prospectus.
TRUSTEES AND OFFICERS
The Funds are supervised by a board of Trustees who are responsible for major
decisions about the Funds' policies and overall Fund oversight. The names of the
Trustees and executive officers of the Trust are shown below. Each Trustee who
is an "interested person" of the Trust, as defined in the Investment Company Act
of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name, Age and Address Position Principal Occupation During Past 5 Years
- ------------------------------------------------------------------------------------------------------
Craig T. Callahan * President and Trustee President of Meridian Management & Research
Age: 48 (Since Inception) Corporation, President and Chief Investment
52 Glenmoor Way Officer of the Advisor, and President of
Englewood, CO 80110 Meridian Clearing Corporation, the principal
underwriter for the Funds.
- ------------------------------------------------------------------------------------------------------
R. Michael Sentel Trustee, Attorney for U.S. Department of Education
Age: 51 Audit Committee Member since October 1996; owner of Sentel & Company
15663 Wedge Way (Since Inception) from 1994 to present; Counsel (Section Chief)
Morrison, CO 80465 of Professional Liability Section of FDIC's
Litigation Division from 1991 to 1994.
- ------------------------------------------------------------------------------------------------------
James W. Hire Trustee, Principal of Hire & Associates since 1988.
Age: 51 Audit Committee Member
1383 Solitude Lane (Since Inception)
Evergreen, CO 80439
- ------------------------------------------------------------------------------------------------------
Glen F. Bergert Trustee, President, Venture Capital Management LLC
Age: 49 Audit Committee Member since 1997; Partner, KPMG Peat Marwick, LLP
1010 Brentwater Road (Since February 1999) from 1979 to 1997.
Camp Hill, PA 17011
- ------------------------------------------------------------------------------------------------------
Erik L. Jonson, CPA Vice President and Chief Financial Officer and Secretary of
Age: 50 Chief Financial Officer, Meridian Management & Research Corporation,
9465 West Geddes Place Chief Accounting owner of Erik L. Jonson, CPA from 1986 to
Littleton, CO 80112 Officer 1996.
- ------------------------------------------------------------------------------------------------------
ICON Funds Statement of Additional Information
Page 15
<PAGE>
- ------------------------------------------------------------------------------------------------------
Name, Age and Address Position Principal Occupation During Past 5 Years
- ------------------------------------------------------------------------------------------------------
Deborah Zele Urtz Chief Compliance Chief Compliance Officer of the Advisor,
Age: 35 Officer Financial and Operations Principal of
5928 E. Weaver Circle Meridian Clearing Corporation, the principal
Englewood, CO 80111 underwriter of the Funds; 14 years experience
in securities industry in operations and
compliance.
- ------------------------------------------------------------------------------------------------------
Robin B. Shipman Vice President Since December 1, 1998: General Counsel and
Age: 43 and Secretary Assistant Secretary to Meridian Management &
3952 S. Carson St., Unit 206 (Since February 1999) Research Corporation; General Counsel,
Aurora, CO. 80014 Vice-President and Assistant Secretary to the
Advisor; General Counsel to Meridian Clearing
Corporation; Senior Enforcement Attorney,
U.S. Securities and Exchange Commission from
December 1988 through November 1998.
- ------------------------------------------------------------------------------------------------------
</TABLE>
The compensation paid to the Trustees of the Trust during the fiscal year ended
September 30, 1999, is set forth in the following table. Trustee fees are Trust
expenses and each fund of the Trust pays a portion of the Trustee fees.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Aggregate Pension or Retirement Estimated Annual Total Compensation from
Compensation Accrued As Part of Benefits Upon Trust (the Trust is not
Name from Trust Fund Expenses Retirement in a Fund Complex)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Craig T. Callahan $0 $0 $0 $0
- ------------------------------------------------------------------------------------------------------
R. Michael Sentel $8,000 $0 $0 $8,000
- ------------------------------------------------------------------------------------------------------
James W. Hire $8,000 $0 $0 $8,000
- ------------------------------------------------------------------------------------------------------
Glen F. Bergert $6,000 $0 $0 $6,000
- ------------------------------------------------------------------------------------------------------
TOTAL $24,000 $0 $0 $24,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
PRINCIPAL SHAREHOLDERS
As of December 31, 1999, no person owned, beneficially or of record, more than
5% of the outstanding shares of any of the Funds except:
Fund Amount owned
-----------------------------------------
Charles Schwab & Co., Inc., ICON Energy Fund 12.45%
101 Montgomery Street ICON Financial Services Fund 15.12%
San Francisco, CA 94104 ICON Technology Fund 14.08%
(record owner) ICON Telecommunication &
Utilities Fund 7.90%
ICON Transportation Fund 5.57%
ICON Asia Region Fund 28.04%
ICON North Europe Region Fund 9.31%
ICON Short-Term Fixed Income Fund 6.79%
National Financial Services Corp. ICON Short-Term Fixed Income Fund 5.84%
P.O. Box 3908
Church Street Station
New York, NY 10008
(record owner)
ICON Funds Statement of Additional Information
Page 16
<PAGE>
Jack White & Company ICON Asia Region Fund 5.59%
9191 Towne Centre Drive, Suite 220
San Diego, California 92122
(record owner)
Hunters Creek LLC ICON Short-Term Fixed Income Fund 15.80%
22463 Sunnydale Street
Saint Clair Shores, MI 48081
(record owner)
Resources Trust Corporation
P.O. Box 5900 ICON Basic Materials Fund 92.68%
Denver, Colorado 80217 ICON Consumer Cyclicals Fund 93.55%
(record owner) ICON Energy Fund 78.68%
ICON Financial Services Fund 81.46%
ICON Healthcare Fund 93.64%
ICON Leisure Fund 94.82%
ICON Technology Fund 79.42%
ICON Telecommunication &
Utilities Fund 88.63%
ICON Transportation Fund 90.41%
ICON Asia Region Fund 58.29%
ICON North Europe Region Fund 84.40%
ICON South Europe Region Fund 90.51%
ICON Short-Term Fixed Income Fund 51.77%
These broker-dealers and/or trust company custodians hold the shares for the
benefit of their customers. The Trust is not aware of any person who
beneficially owns more than 5% of the outstanding shares of any of the Funds. As
of December 31, 1999, the officers and Trustees of the Trust, as a group, owned
less than 1% of the outstanding shares of any Fund.
THE INVESTMENT ADVISOR
The Trust retains Meridian Investment Management Corporation, 12835 East
Arapahoe Road, Tower II, Englewood, Colorado 80112 (the "Advisor") to manage
each Fund's investments. Meridian is a wholly-owned subsidiary of Meridian
Management & Research Corporation ("MM&R"). Prior to January 2, 1999, Michael J.
Hart and Dr. Craig T. Callahan each owned 50% of MM&R. Beginning January 2,
1999, Dr. Callahan became the sole owner of MM&R. He may be deemed to control
the Advisor due to his ownership of MM&R shares and his position as an officer
and director of the Advisor.
As shown in the table above, Mr. Jonson, Ms. Urtz and Ms. Shipman hold positions
with both the Advisor, its affiliates, and the Funds, but have no ownership
positions with the Adviser or its affiliates.
Under the terms of the Advisory Agreement, the Advisor manages the Funds'
investments subject to approval of the Board of Trustees. As compensation for
its management services, a Fund is obligated to pay the Advisor a fee computed
and accrued daily and paid monthly at an annual rate of 1.00% for the ICON U.S.
Equity Funds of the average daily net assets; 1.00% for the ICON Foreign Equity
Funds; 0.65% for the ICON Fixed Income Fund. The Advisor may waive all or part
of its fee, at any time, and at its sole discretion, but such action shall not
obligate the Advisor to waive any fees in the future. The Fund is responsible
for the payment of all expenses incurred in connection with the organization and
initial registration of shares of a Fund. Below is a table which shows the
advisory fees paid from inception.
The Board of Trustees voted (including a majority of the "disinterested
Trustees") and shareholder approval was given for the Advisory Agreement through
October 1998. The Agreement provides that it will continue initially for two
years, and from year to year thereafter, with respect to each Fund, as long as
it is approved at least annually (i) by a vote of a majority of the outstanding
voting securities of such Fund (as defined in the 1940 Act) or (ii) by the Board
of Trustees of the Trust, and/or by a vote of a majority of the Trustees who are
not parties to the Advisory Agreement or "interested persons" of any party
ICON Funds Statement of Additional Information
Page 17
<PAGE>
thereto, cast in person at a meeting called for the purpose of voting on such
approval. As of the date of this SAI, the Advisory Agreement has been continued
through October 2000. The Advisory Agreement may be terminated on 60 days'
written notice by either party and will terminate automatically if assigned.
- --------------------------------------------------------------------------------
Advisory Fee Paid to Meridian-Inception through 9-30-97 $ 2,237,124
- --------------------------------------------------------------------------------
Advisory Fee Paid to Meridian 10-1-97 through 9-30-98 $ 5,001,160
- --------------------------------------------------------------------------------
Advisory Fee Paid to Meridian 10-1-98 through 9-30-99 $ 3,416,898
- --------------------------------------------------------------------------------
The Advisor retains the right to use the name "ICON" in connection with another
investment company or business enterprise with which the Advisor is or may
become associated. The Trust's right to use the name "ICON" automatically ceases
ninety days after termination of the Agreement and may be withdrawn by the
Advisor on ninety days written notice.
The Advisor may make payments to banks or other financial institutions that
provide shareholder services and administer shareholder accounts. The
Glass-Steagall Act which was repealed in 1999 prohibited banks from engaging in
the business of underwriting, selling or distributing securities. Although the
scope of this prohibition under the Glass-Steagall Act was not been clearly
defined by the courts or appropriate regulatory agencies, management of a Fund
believes that the Glass-Steagall Act did not preclude a bank from providing such
services. However, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law. If a
bank were prohibited from continuing to perform all or a part of such services,
management of the Funds believes that there would be no material impact on the
Funds or its shareholders. Banks may charge their customers fees for offering
these services to the extent permitted by applicable regulatory authorities, and
the overall return to those shareholders availing themselves of the bank
services will be lower than to those shareholders who do not. The Fund may from
time to time purchase securities issued by banks which provide such services;
however, in selecting investments for the Funds, no preference will be shown for
such securities.
ADMINISTRATIVE SERVICES
Under a separate written agreement, Meridian as ("Administrator") provides
day-to-day administrative services to the Trust. The Administrator provides the
Trust with office space, facilities and simple business equipment, and generally
administers the Trust's business affairs and provides the services of executive
and clerical personnel for administering the affairs of the Trust. Meridian
compensates all personnel, officers and Trustees of the Trust if such persons
are employees of the Administrator or its affiliates. From October 1996 until
April 1, 1998, the Funds had retained an administrator other than Meridian. In
April 1998, the Funds entered into a Co-Administration Agreement with Meridian
and the prior administrator. As of March 1, 1999, the Funds have retained
Meridian as the Administrator. Below is a table which shows the administration
fees paid from inception.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
<S> <C>
Administrative Fee paid to prior administrator-Inception through 9-30-97 $125,701
- ------------------------------------------------------------------------------------
Administrative Fee paid to prior administrator 10-1-97 through 9-30-98 $182,127
- ------------------------------------------------------------------------------------
Administrative Fee paid to Meridian 10-1-97 through 9-30-98 $ 66,546
- ------------------------------------------------------------------------------------
Administrative Fee paid to prior co-administrator 10-1-98 through 2-28-99 $ 30,135
- ------------------------------------------------------------------------------------
Administrative Fee paid to Meridian as co-administrator and administrator
10-1-98 through 9-30-99 $141,461
- ------------------------------------------------------------------------------------
</TABLE>
ICON Funds Statement of Additional Information
Page 18
<PAGE>
CUSTODIAN
Firstar Bank Milwaukee, Post Office Box 701, Milwaukee, Wisconsin 53201, is
Custodian of the Funds' investments. The Custodian acts as the Funds'
depository, safekeeps its portfolio securities, collects all income and other
payments with respect thereto, disburses funds at the Funds' request and
maintains records in connection with its duties.
TRANSFER AGENT
Firstar Mutual Fund Services, LLC, Post Office Box 701, Milwaukee, Wisconsin
53201, acts as the Funds' transfer agent and, in such capacity, maintains the
records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Funds'
shares, acts as dividend and distribution disbursing agent and performs other
accounting and shareholder service functions.
INDEPENDENT ACCOUNTANTS AND COUNSEL
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500, Denver, Colorado
80202, has been selected as independent accountants for the Trust for the fiscal
year ending September 30, 2000. Charles W. Lutter, Jr., 103 Canyon Oaks, San
Antonio, Texas 78232, is legal counsel to the Trust.
DISTRIBUTOR
Meridian Clearing Corporation, 12835 E. Arapahoe Road, Tower II, Englewood,
Colorado 80112, an affiliate of the Advisor, is the exclusive agent for
distribution of shares of the Funds. The Distributor is obligated to sell the
shares of the Funds on a best efforts basis only against purchase orders for the
shares. Shares of the Funds are offered on a continuous basis.
PORTFOLIO TRANSACTIONS - BROKERAGE ALLOCATION
The Advisory Agreement between the Trust and the Advisor requires that the
Advisor, in executing portfolio transactions and selecting brokers or dealers,
seek the best overall terms available. In assessing the terms of a transaction,
consideration may be given to various factors, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer (for a specified transaction and on
a continuing basis), the reasonableness of the commission, if any, and the
brokerage and research services provided to the Trust and/or other accounts over
which the Advisor or an affiliate of the Advisor exercises investment
discretion. Under the Advisory Agreement, the Advisor is permitted, in certain
circumstances, to pay a higher commission than might otherwise be obtained in
order to acquire brokerage and research services. The Advisor must determine in
good faith, however, that such commission is reasonable in relation to the value
of the brokerage and research services provided -- viewed in terms of that
particular transaction or in terms of all the accounts over which investment
discretion is exercised. In such case, the Board of Trustees will review the
commissions paid by each Fund of the Trust to determine if the commissions paid
over representative periods of time were reasonable in relation to the benefits
obtained. The advisory fee of the Advisor would not be reduced by reason of its
receipt of such brokerage and research services. To the extent that research
services of value are provided by broker/dealers through or with whom the Trust
places portfolio transactions the Advisor may be relieved of expenses which it
might otherwise bear.
ICON Funds Statement of Additional Information
Page 19
<PAGE>
The Trust may, in some instances, purchase securities that are not listed on a
national securities exchange or quoted on NASDAQ, but rather are traded in the
over-the-counter market. When the transactions are executed in the
over-the-counter market, it is intended generally to seek first to deal with the
primary market makers. However, the services of brokers will be utilized if it
is anticipated that the best overall terms can thereby be obtained. Purchases of
newly issued securities usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Those dealers may be
acting as either agents or principals.
The Funds purchase portfolio securities from broker-dealers in both principal
and agency transactions. When a dealer sells a security on a principal basis it
is compensated by the "markup" it includes in the price of the security. Listed
securities are generally traded on an agency basis and the broker receives a
commission for acting as agent. The aggregate dollar amount of brokerage fees
paid by the Funds for the most recent fiscal years are as follows:
1999 1998 1997
---- ---- ----
ICON Basic Materials $ 91,777 $238,749 $224,797
ICON Capital Goods 0 0 0
ICON Consumer Cyclicals 76,184 138,972 20,267
ICON Consumer Staples 0 0 0
ICON Energy 25,661 69,414 0
ICON Financial Services 24,563 50,068 22,998
ICON Healthcare 100,929 121,805 211,695
ICON Leisure 128,109 98,876 88,637
ICON Technology 114,662 105,308 57,749
ICON Telecommunication & Utilities 24,532 121,874 16,438
ICON Transportation 26,200 14,011 29,534
ICON Asia Region 65,179 104,289 92,427
ICON North Europe 93,816 100,757 104,419
ICON South Europe 33,177 129,283 40,549
ICON South Pacific 0 0 0
ICON Western Hemisphere 0 0 0
PURCHASE AND REDEMPTION OF SHARES
There is no sales charge on the purchase of Fund shares. Shares may be purchased
by contacting the Transfer Agent at 1-800-764-0442 or simply complete the
application form enclosed with the Prospectus. Shares of any Funds may be
purchased at the net asset value per share next determined after receipt of the
purchase order. Investors may invest any amount as often as they wish; however,
the minimum investment in any one Fund is $1,000. Subject to the minimum
investment amount, shares may also be purchased by exchange.
The Funds have authorized one or more brokers to accept purchase orders on the
Fund's behalf. Such brokers are authorized to designate other intermediaries to
accept purchase orders on the Funds' behalf. The Funds will be deemed to have
received a purchase order when an authorized broker or, if applicable, a
broker's authorized designee, accepts the order. A purchase order will be priced
at the Fund's Net Asset Value next calculated after the order has been accepted
by an authorized broker or the broker's authorized designee.
ICON Funds Statement of Additional Information
Page 20
<PAGE>
The Funds have also authorized one or more brokers to accept redemption orders
on the Funds' behalf. Such brokers are authorized to designate other
intermediaries to accept redemption orders on the Fund's behalf. The Fund will
be deemed to have received a redemption order when an authorized broker or, if
applicable, a broker's authorized designee, accepts the order. A redemption
order will be priced at the Fund's Net Asset Value next calculated after the
order has been accepted by an authorized broker or the broker's authorized
designee.
It is possible that in the future conditions may exist which would, in the
opinion of the Funds' Advisor, make it undesirable for the Fund to pay for
redeemed shares in cash. In such cases, the Advisor may authorize payment to be
made in portfolio securities or other property of the Fund. However, the Company
is obligated under the 1940 Act to redeem for cash all shares of the Fund
presented for redemption by any one shareholder having a value up to $250,000
(or 1% of the Fund's net assets if that is less) in any 90-day period.
Securities delivered in payment of redemptions are selected entirely by the
Advisor based on what is in the best interests of the Fund and its shareholders,
and are valued at the value assigned to them in computing the Fund's net asset
value per share. Shareholders receiving such securities are likely to incur
brokerage costs on their subsequent sales of the securities.
Other procedures for purchasing, selling (redeeming) and exchanging Fund shares
are described in the Prospectus.
DETERMINATION OF SHARE OFFERING PRICE
The price (net asset value) of the shares of a Fund is determined as of 4:00
p.m., Eastern time on each day the Funds are open for business and on any other
day on which there is sufficient trading in the Funds' securities to materially
affect the net asset value. In the event markets close early (such as on the eve
of a holiday), net asset value per share will be determined as of such earlier
time. The Funds are open for business on every day except Saturdays, Sundays and
the following holidays: New Year's Day, Martin Luther King Jr. Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. For a description of the methods used to determine the net asset
value (share price), see "Pricing Shares and Receiving Sales Proceeds" in the
Prospectus.
TAX STATUS
Taxation of the Funds -- in General
As stated in its prospectus, each Fund intends to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, each Fund will not be liable for federal
income taxes on its taxable net investment income and capital gain net income
that are distributed to shareholders, provided that the Fund distributes at
least 90% of its net investment income and net short-term capital gain for the
taxable year.
To qualify as a regulated investment company, each Fund must, among other
things, (a) derive in each taxable year at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, gains from the
sale or other disposition of stock, securities or foreign currencies, or other
income derived with respect to its business of investing in such stock,
securities or currencies (the "90% test"); (b) satisfy certain diversification
requirements at the close of each quarter of the Fund's taxable year.
The Code imposes a non-deductible 4% excise tax on a regulated investment
company that fails to distribute during each calendar year an amount equal to
the sum of (1) at least 98% of its ordinary income for the calendar year, (2) at
ICON Funds Statement of Additional Information
Page 21
<PAGE>
least 98% of its net capital gains for the twelve-month period ending on October
31 and (3) any portion (not taxable to the Fund) of the respective balance from
the preceding calendar year. The Funds intend to make such distributions as are
necessary to avoid imposition of this excise tax.
Taxation of the Funds' Investments
The Fund's ability to make certain investments may be limited by provisions of
the Code that require inclusion of certain unrealized gains or losses in the
Fund's income for purposes of the 90% test, and the distribution requirements of
the Code, and by provisions of the Code that characterize certain income or loss
as ordinary income or loss rather than capital gain or loss. Such recognition,
characterization and time rules generally apply to investments in certain
forward currency contracts, foreign currencies and debt securities denominated
in foreign currencies.
Taxation of the Shareholder
Taxable distributions generally are included in a shareholder's gross income for
the taxable year in which they are received. However, dividends declared in
October, November or December and made payable to shareholders of record in such
a month will be deemed to have been received on December 31, if a Fund pays the
dividends during the following January. To the extent that a Fund's net
investment income does not arise from dividends on domestic common or preferred
stock, the Funds' distributions will not qualify for the 70% corporate
dividends-received deduction.
Distributions by a Fund will result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying shares of a Fund just prior to a distribution. The price of such shares
purchased at that time includes the amount of any forthcoming distribution.
Those investors purchasing the Fund's shares just prior to a distribution may
receive a return of investment upon distribution which will nevertheless be
taxable to them.
A shareholder of a Fund should be aware that a redemption of shares (including
any exchange into another Portfolio) is a taxable event and, accordingly, a
capital gain or loss may be recognized. If a shareholder of a Fund receives a
distribution taxable as long-term capital gain with respect to shares of the
Fund and redeems or exchanges shares before he has held them for more than six
months, any loss on the redemption or exchange (not otherwise disallowed as
attributable to an exempt-interest dividend) will be treated as long-term
capital loss to the extent of the long term capital gain recognized.
ICON Funds Statement of Additional Information
Page 22
<PAGE>
OTHER TAX CONSIDERATIONS
Distributions to shareholders may be subject to additional state, local and
non-U.S. taxes, depending on each shareholder's particular tax situation.
Shareholders subject to tax in certain states may be exempt from state income
tax on distributions made by a Fund to the extent such distributions are derived
from interest on direct obligations of the United States Government.
Shareholders are advised to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in shares of a Fund.
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. Those kind of 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 those shares, even if
that 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 those 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. This type of 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 IRS 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 those receivables or pays
those 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 other net investment income
during a taxable year, any distributions made by the Fund could be
re-characterized 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 those distributions exceed those 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.
ICON Funds Statement of Additional Information
Page 23
<PAGE>
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. 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 those 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 those foreign taxes paid. However, 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 an election
with the IRS to "pass-through" to the Fund's shareholders the amount of 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 foreign taxes paid by
the Fund; (2) treat his pro rata share of foreign taxes as having been paid by
him; and (3) either deduct his pro rata share of 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 foreign taxes may be claimed by a shareholder who does
not itemize deductions. Each shareholder will be notified 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, the notification will designate (a) the
shareholder's portion of the foreign taxes paid to each country; and (b) the
portion of dividends that represents income derived from sources within each
country.
The amount of foreign taxes for which a shareholder may claim a credit in any
year is subject to an overall limitation which is applied separately to "passive
income," which includes, among other types of income, dividends and interest.
However this limitation does not apply to individual shareholders to the extent
of limits established under the code.
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.
CALCULATION OF PERFORMANCE DATA
UNDERSTANDING PERFORMANCE INFORMATION
This section should help you understand the terms used to describe fund
performance. You will come across them in shareholder reports, advertisements,
promotional materials, and the media. Each of the Funds may compare its
performance to that of other mutual funds with similar investment objectives and
to stock or other indices. Past performance is not representative of future
performance.
ICON Funds Statement of Additional Information
Page 24
<PAGE>
Total Return tells you how much an investment in a Fund has changed in value
over a given time period. It reflects any net increase or decrease in the share
price, and assumes that all dividends and capital gains (if any) paid during the
period were re-invested in additional shares.
Cumulative Total Return is the actual return of an investment for a specific
time period. A cumulative return does not reflect how much the value of the
investment may have fluctuated during the period.
Average Annual Return is hypothetical and should not be confused with actual
yearly results. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same total return if the
Fund's performance had been constant over the entire period.
Total Return
A Fund may advertise performance in terms of average annual total return for 1,
5 and 10 year periods, or for such lesser periods as the Fund has been in
existence. Average annual total return is computed by finding the average annual
compounded rates of return over the periods that would equate the initial amount
invested to the ending redeemable value according to the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical $1,000 initial investment
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
applicable period of the hypothetical
$1,000 investment made at the beginning
of the applicable period.
The calculation assumes all charges are deducted from the initial $1,000 payment
and assumes all dividends and distributions by the Fund are reinvested at the
price stated in the prospectus on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts.
Pursuant to Item 21 of Form N-1A the Trust is providing average annual Total
Returns for the active funds for the 1 year period ended September 30, 1999.
- ------------------------------------------------------------------------
1999
Fund Average Annual Total Return
- ------------------------------------------------------------------------
ICON Basic Materials Fund 11.65
- ------------------------------------------------------------------------
ICON Consumer Cyclicals Fund 25.78
- ------------------------------------------------------------------------
ICON Energy Fund 27.28
- ------------------------------------------------------------------------
ICON Financial Services Fund 10.05
- ------------------------------------------------------------------------
ICON Healthcare Fund (5.34)
- ------------------------------------------------------------------------
ICON Leisure Fund 14.76
- ------------------------------------------------------------------------
ICON Technology Fund 119.53
- ------------------------------------------------------------------------
ICON Telecommunication & Utilities Fund 15.25
- ------------------------------------------------------------------------
ICON Transportation Fund 16.89
- ------------------------------------------------------------------------
ICON Asia Region Fund 78.49
- ------------------------------------------------------------------------
ICON North Europe Region Fund 12.78
- ------------------------------------------------------------------------
ICON South Europe Region Fund 6.41
- ------------------------------------------------------------------------
ICON Short-Term Fixed Income Fund 3.54
- ------------------------------------------------------------------------
ICON Funds Statement of Additional Information
Page 25
<PAGE>
A Fund's investment performance will vary depending upon market conditions, the
composition of the Fund's portfolio and operating expenses of the Fund. These
factors and possible differences in the methods and time periods used in
calculating non-standardized investment performance should be considered when
comparing the Fund's performance to those of other investment companies or
investment vehicles. The risks associated with the Fund's investment objective,
policies and techniques should also be considered. At any time in the future,
investment performance may be higher or lower than past performance, and there
can be no assurance that any performance will continue.
Yield
A Fund may also advertise performance in terms of a 30 day yield quotation. The
30 day yield quotation is computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period according to the following formula:
6
YIELD = 2 [(A - B + 1) - 1]
---------
CD
Where: A = dividends and interest earned during the period
B = expenses accrued for the period (net of
reimbursement)
C = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
D = the maximumoffering price per share on the last
day of the period
The yield for the 30-day period ended September 30, 1999 for the Short-Term
Fixed-Income Fund was 2.652985%.
Non-standardized Total Return
A Fund may provide the above described standard total return results for a
period which ends as of not earlier than the most recent calendar quarter end
and which begins either twelve months before or at the time of commencement of
the Fund's operations. In addition, the Fund may provide non-standardized total
return results for differing periods, such as for the most recent six months.
Such non-standardized total return is computed as otherwise described under
"Total Return" except that no annualization is made.
ADDITIONAL INFORMATION REGARDING THE FUNDS
The assets received by the Trust from the issue or sale of shares of each of the
Funds, and all income, earnings, profits and proceeds thereof, subject only to
the rights of creditors, are separately allocated to such Fund. They constitute
the underlying assets of each Fund, are required to be segregated on the books
of accounts, and are to be charged with the expenses with respect to such Fund.
Any general expenses of the Trust, not readily identifiable as belonging to a
particular Fund, shall be allocated by or under the direction of the Board of
Trustees in such manner as the Board determines to be fair and equitable.
ICON Funds Statement of Additional Information
Page 26
<PAGE>
Each share of each of the Funds represents an equal proportionate interest in
that Fund with each other share and is entitled to such dividends and
distributions, out of the income belonging to that Fund, as are declared by the
Board. Upon liquidation of the Trust, shareholders of each Fund are entitled to
share pro rata in the net assets belonging to the Fund available for
distribution.
The Trustees have exclusive power, without the requirement of shareholder
approval, to issue series of shares without par value, each series representing
interests in a separate portfolio, or divide the shares of any portfolio into
classes, each class having such different dividend, liquidation, voting and
other rights as the Trustees may determine, and may establish and designate the
specific classes of shares of each portfolio. Before establishing a new class of
shares in an existing portfolio, the Trustees must determine that the
establishment and designation of separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes.
As described in the prospectus, under the Trust's Master Trust Agreement, no
annual or regular meeting of shareholders is required. In addition, after the
Trustees were initially elected by the shareholders, the Trustees became a
self-perpetuating body. Thus, there will ordinarily be no shareholder meetings
unless otherwise required by the Investment Company Act of 1940.
On any matter submitted to shareholders, the holder of each share is entitled to
one vote per share (with proportionate voting for fractional shares). On matters
affecting any individual Fund, a separate vote of that Fund would be required.
Shareholders of any Fund are not entitled to vote on any matter which does not
affect their Fund but which requires a separate vote of another Fund.
Shares do not have cumulative voting rights, which means that in situations in
which shareholders elect Trustees, holders of more than 50% of the shares voting
for the election of Trustees can elect 100% of the Trust's Trustees, and the
holders of less than 50% of the shares voting for the election of Trustees will
not be able to elect any person as a Trustee.
Shares have no preemptive or subscription rights and are fully transferable.
There are no conversion rights. Under Massachusetts law, the shareholders of the
Trust could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Master Trust Agreement disclaims
shareholder liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Trust or the Trustees. The Master Trust
Agreement provides for indemnification out of the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust itself would be unable to meet its obligations.
The Funds and Meridian have adopted a strict Code of Ethics that limits
directors, officers, investment personnel and other Meridian employees in
investing in securities for their own accounts. The Code complies in all
material respects with the Investment Company Act of 1940. The Code requires all
covered persons to conduct their personal securities transactions in a manner
which does not operate adversely to the interests of the Funds or the Advisor's
other clients. With certain exceptions, the Code of Ethics requires
pre-clearance of personal securities transactions and imposes restrictions and
reporting requirements upon such transactions. Among others, the code of ethics
provides an exemption from the pre-approval requirement for "de minimis"
transactions or transactions involving no more than $5,000. The Funds and
Meridian carefully monitor compliance with the Code of Ethics. The Code is
available upon request by calling 1-888-389-ICON or writing:
ICON Funds Statement of Additional Information
Page 27
<PAGE>
Meridian Investment Management Corporation
12835 East Arapahoe Road, Tower II
Englewood, Colorado 80112
FINANCIAL STATEMENTS
(1) The audited financial highlights with respect to the following series of the
ICON Funds for the year ended September 30, 1999 and for the period from the
commencement of operations through September 30, 1997 and 1998, are found in
Part A of this Registration Statement.
SERIES COMMENCEMENT OF OPERATIONS
ICON Short-Term Fixed Income Fund February 7, 1997
ICON North Europe Region Fund February 18, 1997
ICON South Europe Region Fund February 20, 1997
ICON Healthcare Fund February 24, 1997
ICON Asia Region Fund February 25, 1997
ICON Technology Fund February 19, 1997
ICON Basic Materials Fund May 5, 1997
ICON Leisure Fund May 9, 1997
ICON Transportation Fund May 9, 1997
ICON Financial Services Fund July 1, 1997
ICON Consumer Cyclicals Fund July 9, 1997
ICON Telecommunication & Utilities Fund July 9, 1997
At September 30, 1999, the following funds had not yet commenced operations:
ICON Capital Goods Fund, ICON Consumer Staples Fund, ICON South Pacific Region
Fund, and ICON Western Hemisphere Fund.
The financial statements for the fiscal period ended September 30, 1999, are
hereby incorporated by reference from the Annual Report to Shareholders of that
date which has been delivered with this Statement of Additional Information,
unless previously provided. In that case, the Trust will promptly provide
another copy, free of charge, upon request to:
Meridian Investment Management Corporation
12835 East Arapahoe Road, Tower II
Englewood, Colorado 80112
OR
call 1-888-389-ICON
ICON Funds Statement of Additional Information
Page 28
<PAGE>
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
- --------------------------------------------------------------------------------
ICON FUNDS
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
(a) (1) Master Trust Agreement dated September 19, 1996, is incorporated
by reference from Registrant's Initial Registration Statement on
Form N-1A filed with the Commission on October 28, 1996 (the
"Initial Registration Statement").
(2) Amendment No. 1 to Master Trust Agreement dated October 24, 1996,
is incorporated by reference from Registrant's Initial
Registration Statement.
(3) Amendment No. 2 to the Master Trust Agreement dated December 18,
1996, incorporated by reference from Pre-effective amendment No.
1 to registrant's registration statement on Form N-1A filed with
the Commission on December 19, 1996 ("Pre-effective Amendment").
(4) Amendment No. 3 to the Master Trust Agreement dated February 18,
1999, is filed herewith.
(b) By-Laws dated October 9, 1996, are incorporated by reference from
Registrant's Initial Registration Statement.
(c) Relevant parts, including Article V of the Master Trust Agreement
dated September 19, 1996, is incorporated by reference from
Registrant's Initial Registration Statement. Other instruments
defining rights of security holders - Not applicable.
(d) Advisory Agreement between Registrant and Meridian Investment
Management Corporation dated October 9, 1996, is incorporated by
reference from Registrant's Initial Registration Statement.
(e) Distribution Agreement among Registrant, Meridian Investment
Management Corporation, and Meridian Clearing Corp dated December
1, 1998 is filed herewith.
(f) Bonus or profit sharing contracts - Not applicable
(g) Custodian Agreement between Registrant and Firstar Trust Company,
including Global Custody arrangement with Chase Manhattan Bank is
incorporated by reference from Registrant's Initial Registration
Statement.
(h) (1) Administrative Services Agreement Between Registrant and Meridian
Investment Management Corporation dated March 1, 1999, is filed
herewith.
(2) Transfer Agent Agreement between Registrant and Firstar Trust
Company dated October 9, 1996, is incorporated by reference from
Registrant's Initial Registration Statement.
<PAGE>
(3) Fund Accounting Servicing Agreement between Registrant and
Firstar Trust Company dated October 9, 1996, is incorporated by
reference from Registrant's Initial Registration Statement.
(i) Opinion and Consent of Lynch, Brewer, Hoffman & Sands, LLP,
Attorneys at Law, is filed herewith.
(j) (1) Consent of PricewaterhouseCoopers LLP, is filed herewith.
(2) Power of Attorney for Trustees and Officers is filed herewith.
(k) Omitted financial statements - Not applicable.
(l) Copy of Letter of Initial Stockholder is incorporated by
reference to the Pre-effective Amendment.
(m,o) Rules 12b-1 and 18f-3 plans - Not applicable.
(o) Code of Ethics for ICON Funds, the Advisor and related entities
is filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Information pertaining to persons controlled by or under common
control with Registrant is incorporated by reference to the Statement
of Additional Information contained in Part B of this Registration
Statement at the section entitled "Administrative Services", "The
Investment Advisor" and "Distributor".
ITEM 25. INDEMNIFICATION
Under Article VI of the Registrant's Master Trust Agreement, each of
its Trustees and officers or person serving in such capacity with
another entity at the request of the Registrant (a "Covered Person")
shall be indemnified (from the assets of the Sub-Trust or Sub-Trusts
in question) against all liabilities, including, but not limited to,
amounts paid in satisfaction of judgments, in compromises or as fines
or penalties, and expenses, including reasonable legal and accounting
fees, incurred by the Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party
or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, except
with respect to any matter as to which it has been determined that
such Covered Person (i) did not act in good faith in the reasonable
belief that such Covered Person's action was in or not opposed to the
best interests of the Trust or (ii) had acted with willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office (either
and both of the conduct described in (i) and (ii) being referred to
hereafter as "Disabling Conduct"). A determination that the Covered
Person is not entitled to indemnification may be made by (i) a final
decision on the merits by a court or other body before whom the
<PAGE>
proceeding was brought that the person to be indemnified was not
liable by reason of Disabling Conduct, (ii) dismissal of a court
action or an administrative proceeding against a Covered Person for
insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the indemnitee
was not liable by reason of Disabling Conduct by (a) a vote of the
majority of a quorum of Trustees who are neither "interested persons"
of the Trust as defined in Section 1(a)(19) of the 1940 Act nor
parties to the proceeding, or (b) as independent legal counsel in a
written opinion.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Registrant's investment adviser, administrator and distributor is
incorporated by reference to the Prospectus and SAI contained in Part
A and Part B of this Registration Statement at the sections entitled
"Organization and Management of the Fund" in the Prospectus, and "The
Investment Advisor", "Administrative Services" and "Distributor" in
the SAI.
ITEM 27. PRINCIPAL UNDERWRITERS
Meridian Clearing Corp. is the Registrant's principal underwriter. It
receives no commissions or other compensation as underwriter. It is
not an underwriter for any other investment company. Craig T.
Callahan, 12835 East Arapahoe Road, Tower II, Englewood, Colorado
80112, owns 100% of the firm. Dr. Callahan is a trustee, officer and
President of the Funds, and owns 100% of the Advisor and is its
President.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder will be maintained by the Registrant at 12835
East Arapahoe, Tower II, Englewood, Colorado 80112 and/or by the
Registrant's Custodian, transfer and shareholder service agent,
Firstar Mutual Fund Services, LLC, 615 East Michigan Street,
Milwaukee, Wisconsin 53202.
ITEM 29. MANAGEMENT SERVICES NOT DISCUSSED IN PARTS A OR B
None.
ITEM 30. UNDERTAKINGS
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this post-effective
amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Englewood, State of Colorado, on the 19th day of
January, 2000.
ICON Funds
By: /s/ Craig T. Callahan
----------------------
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 19, 2000 by the
following persons in the capacities indicated.
/s/ Craig T. Callahan
- ------------------------------------- President and Trustee
CRAIG T. CALLAHAN
/s/ R. Michael Sentel*
- ------------------------------------- Trustee
R. MICHAEL SENTEL
/s/ James W. Hire*
- ------------------------------------- Trustee
JAMES W. HIRE
/s/ Glen F. Bergert*
- ------------------------------------- Trustee
GLEN F BERGERT
/s/ Erik L. Jonson
- ------------------------------------- Vice President and
ERIK L. JONSON Chief Accounting Officer
Chief Financial Officer
* By: /s/Charles W. Lutter, Jr.
-------------------------
Charles W. Lutter, Jr.
Attorney-in-Fact
ICON FUNDS
AMENDMENT NO. 3 TO MASTER TRUST AGREEMENT
AMENDMENT No. 3 to the Master Trust Agreement of ICON Funds, dated
September 19, 1996, made at Englewood, Colorado as of this February 9, 1999 by
the Trustees hereunder.
WITNESSETH
WHEREAS, Section 7.3 of the ICON Master Trust Agreement dated September 19,
1996 (the "Agreement"), of ICON Funds (the "Trust") provides that the Agreement
may be amended at any time, so long as such amendment does not adversely affect
the rights of any shareholder with respect to which such amendment is or
purports to be applicable and so long as such amendment is not in contravention
of applicable law, including the Investment Company Act of 1940, by an
instrument in writing, signed by an officer of the Trust pursuant to a vote of a
majority of the Trustees of the Trust;
NOW, THEREFORE,
The undersigned Trustees, pursuant to the authorization described above,
hereby amend the Agreement, as heretofore in effect, as follows:
All references to 1793 Kingswood Drive, Suite 200, Southlake, Texas 76092
shall be deleted and the following shall be inserted in lieu thereof:
"12835 East Arapahoe Road, Tower II, Penthouse, Englewood, CO 80112"
WITNESS WHEREOF, our hands and seals this 9th day of February 1999.
/s/ Glen F. Bergert
--------------------------------
Glen F. Bergert, Trustee
/s/ Craig T. Callahan
--------------------------------
Craig T. Callahan, Trustee
/s/ James W. Hire
--------------------------------
James W. Hire, Trustee
/s/ R. Michael Sentel
--------------------------------
R. Michael Sentel, Trustee
STATE OF COLORADO )
) ss:
COUNTY OF ARAPAHOE )
Before me, a Notary Public in and for said county and state, personally
appeared the above named , who acknowledged that he did sign the foregoing
instrument in the capacity indicated and that the same is his free act and deed
on this 9th day of February, 1999.
/s/
-------------------------------
Notary Public
My Commission Expires: 9-30-2002
ICON FUNDS
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement"), dated as of December 1,
1998, is between the ICON Funds (the "Trust"), a Massachusetts business trust,
Meridian Investment Management Corporation (the "Adviser"), a Colorado
corporation, and Meridian Clearing Corporation ("MCC"), a Colorado corporation.
The Trust is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "IC Act") and has registered
its shares of common stock (the "Shares") under the Securities Act of 1933, as
amended (the "1933 Act") in one or more distinct series of Shares (the
"Portfolio" or "Portfolios"). The Adviser has been appointed investment adviser
to the Portfolios of the Trust. MCC is registered as a broker-dealer with the
U.S. Securities and Exchange Commission (the "SEC") and is a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD").
The Trust, the Adviser and the Distributor desire to enter into this Agreement
pursuant to which the Distributor will provide distribution services to the
Portfolios of the Trust identified on Schedule A, as may be amended from time to
time. The Fund desires to retain MCC as Distributor of the Fund ("Distributor"),
subject to the terms and conditions of this Agreement.
In consideration of the premises and mutual covenants contained in this
Agreement, the Trust, the Adviser and MCC, intending to be legally bound hereby,
agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. The Trust hereby appoints MCC as Distributor for
the distribution of the Trust's Shares, and MCC hereby accepts such appointment
under the terms of this Agreement. The Trust shall not sell any Shares to any
person except to fill orders for the Shares received through the Distributor;
provided, however, that the foregoing exclusive right shall not apply: (i) to
Shares issued or sold in connection with the merger or consolidation of any
other investment company with the Trust or the acquisition by purchase or
otherwise of all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the Trust;
(ii) to Shares which may be offered by the Trust to its shareholders for
reinvestment of cash distributed from capital gains or net investment income of
the Trust; or (iii) to Shares which may be issued to shareholders of other funds
who exercise any exchange privilege set forth in the Trust's Prospectus.
Notwithstanding any other provision hereof, the Trust may terminate, suspend, or
withdraw the offering of the Shares whenever, in its sole discretion, it deems
such action to be desirable, and the Distributor shall process no further orders
for Shares after it receives notice of such termination, suspension or
withdrawal.
2. TRUST DOCUMENTS. The Trust has provided the Distributor with properly
certified or authenticated copies of the following Trust related documents in
effect on the date hereof: the Trust's organizational documents, including
Master Trust Agreement and By-Laws; the Trust's Registration Statement on Form
N-1A, including all exhibits thereto; the Trust's most current Prospectus and
Statement of Additional Information; and resolutions of the Trust's Board of
Trustees authorizing the appointment of the Distributor and approving this
Agreement. The Trust shall promptly provide to the Distributor copies, properly
certified or authenticated, of all amendments or supplements to the foregoing.
The Trust shall also provide to the Distributor copies of all other information
which a Distributor may reasonably request for use in connection with the
distribution of Shares, including, but not limited to, a certified copy of all
financial statements prepared for the Trust by its independent public
accountants. The Trust shall also supply the Distributor with such number of
copies of the current Prospectus, Statement of Additional Information and
shareholder reports as the Distributor shall reasonably request.
3. DISTRIBUTION SERVICES. The Distributor shall sell and repurchase Shares as
set forth below, subject to the registration requirements of the 1933 Act and
the rules and regulations thereunder, and the laws governing the sale of
securities in the various states ("Blue Sky Laws"):
<PAGE>
a. The Distributor, as agent for the Trust, shall sell Shares to the public
against orders therefor at the public offering price, which shall be the net
asset value of the Shares then in effect.
b. The net asset value of the Shares shall be determined in the manner
provided in the then current Prospectus and Statement of Additional Information.
The net asset value of the Shares shall be calculated by the Trust or by another
entity on behalf of the Trust. The Distributor shall have no duty to inquire
into or liability for the accuracy of the net asset value per Share as
calculated.
c. Upon receipt of purchase instructions, the Distributor shall transmit
such instructions to the Trust or its transfer agent for registration of the
Shares purchased.
d. The Distributor shall also have the right to take, as agent for the
Trust, all actions which, in the Distributor's judgment, are necessary to effect
the distribution of Shares, in accordance with the Trust's policies, procedures
and disclosure documents.
e. Nothing in this Agreement shall prevent the Distributor or any
"affiliated person" from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that the Distributor expressly agrees that it shall
not for its own account purchase any Shares of the Trust except for investment
purposes and that it shall not for its own account sell any such Shares except
for redemption of such Shares by the Trust, and that it shall not undertake
activities which, in its judgment, would adversely affect the performance of its
obligations to the Trust under this Agreement.
f. The Distributor, as agent for the Trust, shall repurchase Shares at such
prices and upon such terms and conditions as shall be specified in the
Prospectus.
4. DISTRIBUTION SUPPORT SERVICES. In addition to the sale and repurchase of
Shares, the Distributor shall perform distribution support services. Such
distribution support services shall include: review of sales and marketing
literature and submission to the NASD; NASD record keeping; quarterly reports to
the Trust's Board of Directors and licensing Adviser or Trust personnel as
registered representatives of the Distributor and related supervisory
activities.
5. REASONABLE EFFORTS. The Distributor shall use all reasonable efforts in
connection with the distribution of Shares. The Distributor shall have no
obligation to sell any specific number of Shares and shall only sell Shares
against orders received therefor. The Trust shall retain the right to refuse at
any time to sell any of its Shares for any reason deemed adequate by it.
6. COMPLIANCE. In furtherance of the distribution services being provided
hereunder, the Distributor and the Trust agree as follows:
a. The Distributor shall comply with the Rules of Fair Practice of the NASD
and the securities laws of any jurisdiction in which it sells, directly or
indirectly, Shares.
b. The Distributor shall require each dealer with whom it has a selling
agreement to conform to the applicable provisions of the Trust's most current
Prospectus and Statement of Additional Information, with respect to the public
offering price of the Shares.
c. The Trust agrees to furnish to the Distributor sufficient copies of any
agreements, plans, communications with the public or other materials it intends
to use in connection with any sales of Shares in a timely manner in order to
allow the Distributor to review, approve and file such materials with the
appropriate regulatory authorities and obtain clearance for use. The Trust
agrees not to use any such materials until so filed and cleared for use by
appropriate authorities and/or the Distributor.
d. The Distributor, at its own expense, shall qualify as a broker or dealer
under all applicable Federal or state laws required to permit the sale of Shares
in such states as shall be mutually agreed upon by the parties; provided,
however that the Distributor shall have no obligation to register as a broker or
dealer under the Blue Sky Laws of any jurisdiction if it determines that
registering or maintaining registration in such jurisdiction would be
uneconomical.
<PAGE>
e. The Distributor shall not, in connection with any sale or solicitation
of a sale of the Shares, make or authorize any representative, service
organization, broker or dealer to make, any representations concerning the
Shares except those contained in the Trust's most current Prospectus covering
the Shares and in communications with the public or sales materials approved by
the Distributor as information supplemental to such Prospectus.
7. EXPENSES. Expenses shall be allocated as follows:
a. The Trust shall bear the following expenses: preparation, setting in
type, and printing of sufficient copies of the Prospectus and Statement of
Additional Information for distribution to existing shareholders; preparation
and printing of reports and other communications to existing shareholders;
distribution of copies of the Prospectus, Statement of Additional Information
and all other communications to existing shareholders; registration of the
Shares under the Federal securities laws; qualification of the Shares for sale
in the jurisdictions mutually agreed upon by the Trust and the Distributor;
transfer agent/shareholder servicing agent services; supplying information,
prices and other data to be furnished by the Trust under this Agreement; and any
original issue taxes or transfer taxes applicable to the sale or delivery of the
Shares or certificates.
b. The Adviser shall pay all other expenses incident to the sale and
distribution of the Shares sold hereunder, including, without limitation:
printing and distributing copies of the Prospectus, Statement of Additional
Information and reports prepared for use in connection with the offering of
Shares for sale to the public; advertising in connection with such offering,
including public relations services, sales presentations, media charges,
preparation, printing and mailing of advertising and sales literature; data
processing necessary to support a distribution effort; distribution and
shareholder servicing activities of broker-dealers and other financial
institutions; filing fees required by regulatory authorities for sales
literature and advertising materials; any additional out-of-pocket expenses
incurred in connection with the foregoing and any other costs of distribution.
8. COMPENSATION. For the distribution and distribution support services provided
by the Distributor pursuant to the terms of the Agreement, the Trust shall
reimburse the Distributor for its out-of-pocket expenses related to the
performance of their duties hereunder, including, without limitation,
telecommunications charges, postage and delivery charges, record retention
costs, reproduction charges and traveling and lodging expenses incurred by
officers and employees of the Distributor. All rights of reimbursement under
this Agreement for expenses incurred by the Distributor as of the termination
date shall survive the termination of this Agreement. The parties acknowledge
that the Distributor will receive no compensation, other than expense
reimbursement, for distribution services rendered.
9. USE OF DISTRIBUTOR'S NAME. The Trust shall not use the name of the
Distributor nor any of affiliates in the Prospectus, Statement of Additional
Information, sales literature or other material relating to the Trust in a
manner not approved prior thereto in writing by the Distributor; provided,
however, that the Distributor shall approve all uses of its and its affiliates'
names that merely refer in accurate terms to their appointments or that are
required by the Securities and Exchange Commission (the "SEC") or any state
securities commission; and further provided, that in no event shall such
approval be unreasonably withheld.
10. USE OF TRUST'S NAME. The Distributor nor any of its affiliates shall use the
name of the Trust or material relating to the Trust on any forms (including any
checks, bank drafts or bank statements) for other than internal use in a manner
not approved prior thereto in writing by the Trust; provided, however, that the
Trust shall approve all uses of its name that merely refer in accurate terms to
the appointment of the Distributor hereunder or that are required by the SEC or
any state securities commission; and further provided, that in no event shall
such approval be unreasonably withheld.
<PAGE>
11. LIABILITY OF DISTRIBUTOR. The duties of the Distributor shall be limited to
those expressly set forth herein, and no implied duties are assumed by or may be
asserted against the Distributor. The Distributor may, in connection with this
Agreement employ agents or attorneys in fact, and shall not be liable for any
loss arising out of or in connection with its actions under this Agreement, so
long as it acts in good faith and with due diligence, and is not negligent or
guilty of any willful misfeasance, bad faith or gross negligence, or reckless
disregard of its obligations and duties under this Agreement. As used in this
Section 11 and in Section 12 (except the second paragraph of Section 12), the
term "Distributor" shall include directors, officers, employees and other agents
of the Distributor.
12. INDEMNIFICATION OF DISTRIBUTOR. Any director, officer, employee, shareholder
or agent of a Distributor who may be or become an officer, Trustee, employee or
agent of the Trust, shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or business in
connection with the Distributor's duties hereunder), to be rendering such
services to or acting solely for the Trust and not as a director, officer,
employee, shareholder or agent, or one under the control or direction of the
Distributor, even though receiving a salary from the Distributor.
The Trust agrees to indemnify and hold harmless the Distributor, and each
person, who controls the Distributor within the meaning of Section 15 of the
1933 Act, or Section 20 of the Securities Exchange Act of 1934, as amended
("1934 Act"), against any and all liabilities, losses, damages, claims and
expenses, joint or several (including, without limitation, reasonable attorneys'
fees and disbursements and investigation expenses incident thereto) to which it,
or any of them, may become subject under the 1933 Act, the 1934 Act, the 1940
Act or other Federal or state laws or regulations, at common law or otherwise,
insofar as such liabilities, losses, damages, claims and expenses (or actions,
suits or proceedings in respect thereof) arise out of or relate to any untrue
statement or alleged untrue statement of a material fact contained in a
Prospectus, Statement of Additional Information, supplement thereto, sales
literature or other written information prepared by the Trust and provided by
the Trust to the Distributor for the Distributor's use hereunder, or arise out
of or relate to any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Distributor (or any person controlling the Distributor)
shall not be entitled to indemnity hereunder for any liabilities, losses,
damages, claims or expenses (or actions, suits or proceedings in respect
thereof) resulting from (i) an untrue statement or omission or alleged untrue
statement or omission made in the Prospectus, Statement of Additional
Information, or supplement, sales or other literature, in reliance upon and in
conformity with information furnished in writing to the Trust by the Distributor
specifically for use therein or (ii) the Distributor's own willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties and obligations
in the performance of this Agreement.
The Distributor agrees to indemnify and hold harmless the Trust, and each
person who controls the Trust within the meaning of Section 15 of the 1933 Act,
or Section 20 of the 1934 Act, against any and all liabilities, losses, damages,
claims and expenses, joint or several (including, without limitation reasonable
attorneys' fees and disbursements and investigation expenses incident thereto)
to which it, or any of them, may become subject under the 1933 Act, the 1934
Act, the 1940 Act or other Federal or state laws, at common law or otherwise,
insofar as such liabilities, losses, damages, claims or expenses arise out of or
relate to any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or Statement of Additional Information or any
supplement thereto, sales literature or other written material, or arise out of
or relate to actions or oral representations of the Distributor's associated
persons and to any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if based upon information furnished in writing to the Trust by the
Distributor specifically for use therein.
13. ADVISER PERSONNEL. The Adviser agrees that only its employees who are
registered representatives of the Distributor ("dual employees") or registered
representatives of another NASD member firm shall offer or sell Shares of the
Portfolios. The Adviser further agrees that the activities of any such employees
as registered representatives of the Distributor shall be limited to offering
and selling Shares. If there are dual employees, one employee of the Adviser
shall register as a principal of that the Distributor and assist the Distributor
in monitoring the marketing and sales activities of the dual employees. The
Adviser shall maintain errors and omissions and fidelity bond insurance policies
providing reasonable coverage for its employees' activities and shall provide
copies of such policies to the Distributor. The Adviser shall indemnify and hold
<PAGE>
harmless the Distributor against any and all liabilities, losses, damages,
claims and expenses (including reasonable attorneys' fees and disbursements and
investigation costs incident thereto) arising from or related to the Adviser's
employees' activities as registered representatives, including, without
limitation, any and all such liabilities, losses, damages, claims and expenses
arising from or related to the breach by such employees of any rules or
regulations of the NASD or SEC.
14. DURATION. This Agreement shall become effective as of the date first above
written, and shall remain in effect for one year from such date.
15. TERMINATION. Nothwithstanding Section 14 above:
a. This Agreement shall terminate automatically in the event of its
assignment.
b. This Agreement shall terminate at any time upon a vote of the majority
of the Trustees who are not interested persons of the Trust or by a vote of the
majority of the outstanding voting securities of each Portfolio, upon not less
than 60 days prior written notice to the Distributor.
16. AMENDMENT. The terms of this Agreement shall not be waived, altered,
modified, amended or supplemented in any manner whatsoever except by a written
instrument signed by the Distributor and the Trust and shall not become
effective unless its terms have been approved by the majority of the Trustees of
the Trust or by a "vote of majority of the outstanding voting securities" of
each Portfolio and by a majority of those Trustees who are not "interested
persons" of the Trust or any party to this Agreement.
17. NON-EXCLUSIVE SERVICES. The services of the Distributor rendered to the
Trust are not exclusive. The Distributor may render such services to any other
investment company.
18. DEFINITIONS. As used in this Agreement, the terms "vote of a majority of the
outstanding voting securities," "assignment," "interested person" and
"affiliated person" shall have the respective meanings specified in the 1940 Act
and the rules enacted thereunder as now in effect or hereafter amended.
19. CONFIDENTIALITY. The Distributor shall treat confidentially and as
proprietary information of the Trust all records and other information relating
to the Trust and prior, present or potential shareholders and shall not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except as may be required by
administrative or judicial tribunals or as requested by the Trust.
20. NOTICE. All notices required under this Agreement shall be given in writing,
addressed and delivered, or mailed postage prepaid, to the other parties at the
principal office of each party.
21. GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with the laws of the State of Massachusetts and the applicable provisions of the
federal securities laws. To the extent that the applicable law of the State of
Massachusetts or any of the provisions herein conflict with the applicable
provisions of the federal securities laws, the latter shall control.
22. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached hereto)
contains the entire agreement and understanding of the parties and supersedes
all prior written or oral agreements and understandings.
23. LIMITATION OF LIABILITY. The term "ICON Funds" means and refers to the
Trustees from time to time serving under the Master Trust Agreement of the Trust
dated September 19, 1996, as amended from time to time. It is expressly agreed
that obligations of the Trust hereunder shall not be binding upon any Trustee,
Shareholder, nominees, officers, agents or employees of the Trust, personally,
but bind only the assets and property of the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the Trust and signed
by an authorized officer of the Trust, acting as such, and neither such
authorization nor such execution and delivery shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, but shall bind only the assets and property of the Trust.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
ICON FUNDS MERIDIAN CLEARING CORPORATION
By: /s/ Erik Jonson By: /s/ Deborah Zele Urtz
- ------------------- -------------------------
Erik Jonson, Chief Financial Officer Deborah Zele Urtz, Assistant Secretary
MERIDIAN INVESTMENT MANAGEMENT CORPORATION
By: /s/ Craig T. Callahan
- -------------------------
Craig T. Callahan, President
<PAGE>
SCHEDULE A
ICON FUNDS
Portfolios covered by Distribution Agreement:
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
ICON Technology Fund
ICON Telecommunication & Utilities Fund
ICON Transportation Fund
ICON Short-Term Fixed Income Fund
ICON FUNDS
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, dated as of March 1, 1999, is between the ICON Funds (the
"Trust"), a Massachusetts business trust, and Meridian Investment Management
Corporation ("Meridian"), a Colorado corporation.
The Trust is registered as an open-end management investment company
registered under the Investment Company Act of 1940 (the "IC Act"). The Trust
desires to retain Meridian and avail itself of the information, advice,
assistance and facilities of Meridian by retaining it as Administrator of the
Trust ("Administrator"), subject to the terms and conditions of this Agreement.
The Administrator wishes to provide such services to the Trust under the
conditions set forth below.
In consideration of the premises and mutual covenants contained in this
Agreement, the Trust and the Administrator agree as follows:
1. EMPLOYMENT. The Trust, being duly authorized, hereby retains the
Administrator to perform those services described in this Agreement and the
Administrator shall perform its obligations upon the terms and conditions set
forth in this Agreement. Any administrative services undertaken by the
Administrator pursuant to this Agreement, as well as any other activities of the
Administrator on behalf of the Trust, shall at all times be subject to
directives of the Board of Trustees of the Trust.
2. TRUST ADMINISTRATION. The Trust hereby retains the Administrator to provide
executive and administrative services to the Trust, with the individual
responsibilities of Meridian more fully defined in Exhibit A to this Agreement.
The Administrator shall give the Trust the benefit of its best judgment, efforts
and facilities in rendering services as administrator. The Administrator shall
at all times conform to: (i) all applicable provisions of the IC Act and any
rules and regulations adopted thereunder, (ii) the provisions of the
Registration Statement of the Trust under the Securities Act of 1933, as amended
from time to time, (iii) the provisions of the Agreement and Declaration of
Trust and the By-Laws of the Trust, and (iv) any other applicable provisions of
state and federal law.
3. STAFFING AND FACILITIES. The Administrator shall, at its own expense, employ
or retain personnel and consult with such other persons as it may determine to
be necessary or useful to the performance of its obligations under this
Agreement. The Administrator shall also provide personnel to serve as officers
of the Trust if so elected by the Board of Trustees.
The Administrator, shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer equipment,
communication lines and supplies) to provide the services to the Trust.
4. RECORD KEEPING AND OTHER INFORMATION. The Administrator shall create and
maintain all necessary records in accordance with all applicable laws, rules and
regulations, including but not limited to records required by Section 31(a) of
the IC Act and the rules thereunder, as the same may be amended from time to
time, pertaining to the various functions performed by it and not otherwise
created and maintained by another party pursuant to contract with the Trust.
Where applicable, such records shall be maintained by the Administrator for the
periods and in the places required by Rule 31a-2 under the IC Act. It is
understood that the records created by the Administrator on behalf of the Trust
are the property of the Trust and will be surrendered promptly upon request.
<PAGE>
5. AUDIT, INSPECTION AND VISITATION. The Administrator shall make available to
the Trust during regular business hours all records and other data created and
maintained pursuant to the foregoing provisions of this Agreement for reasonable
audit and inspection by the Trust or any regulatory agency having authority over
the Trust. The Administrator shall also permit representatives of the Trust,
including the Trust's independent auditors, to have reasonable access to the
personnel and records of the Administrator in order to enable such
representatives to monitor the quality of services being provided and the
reasonableness of fees due the Administrator pursuant to this Agreement. In
addition, the Administrator shall promptly deliver to the Board of Trustees of
the Trust such information as may reasonably be requested from time to time to
permit the Board of Trustees to make an informed determination regarding
continuation of this Agreement.
6. COMPENSATION. For the services rendered to the Trust by the Administrator,
each series of the Trust shall pay the Administrator, upon presentation of an
invoice to the Fund's custodian, a fee as set out in the fee schedule attached
hereto as Exhibit B. In addition, the Trust shall reimburse the Administrator
for out of pocket expenses incurred on behalf of the Trust. The Administrator
shall not be required to reimburse the Trust or the Trust's investment adviser
for (or have deducted from its fees) any expenses in excess of expense
limitations imposed by certain state securities commissions having jurisdiction
over the Trust.
7. LIMITATION OF LIABILITY. The Administrator may rely on information reasonably
believed by it to be accurate and reliable. Except as may be required by the Act
or the rules thereunder, the Administrator nor its shareholders, officers,
directors, employees, agents, control persons or affiliates shall be subject to
liability for, or any damages, expenses or losses incurred by the Trust except
by reason of willful misfeasance, bad faith or negligence on the part of any
such person in the performance of the duties of the Administrator under this
Agreement or by reason of reckless disregard of the obligations and duties of
the Administrator under this Agreement.
8. INDEMNIFICATION OF ADMINISTRATOR. Subject to and except as otherwise provided
in the Securities Act of 1933, as amended, and the IC Act, the Trust shall
indemnify Administrator and each of Administrator's Employees (hereinafter
collectively referred to as a "Covered Person") against all liabilities,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered Person in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened, while
serving as the administrator for the Trust or as one of Administrator's
Employees, or, thereafter, by reason of being or having been the administrator
for the Trust or one of Administrator's Employees, including but not limited to,
liabilities arising due to any misrepresentation or misstatement in the Trust's
prospectus, other regulatory filings, and amendments thereto, or in other
documents originating from the Trust that are not otherwise the responsibility
of the person seeking indemnification. Notwithstanding the foregoing, in no case
shall a Covered Person be indemnified against any liability to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, negligence or reckless disregard of the duties of such Covered Person.
9. SERVICES FOR OTHERS. Nothing in this Agreement shall prevent the
Administrator or any affiliated person of the Administrator from providing
services for any other person, firm or corporation, including other investment
companies; provided, however, that the Administrator expressly represents that
it will not undertake any activities which, in its judgment, will adversely
affect the performance of its obligations to the Trust under this Agreement.
<PAGE>
10. COMPLIANCE WITH THE ACT. The parties hereto acknowledge and agree that
nothing contained in this Agreement shall be construed to supersede or
contravene the Prospectus or Statement of Additional Information of any series
of the Trust or any provisions of the Act and the rules thereunder. It is
acknowledged that Meridian is an investment adviser to the Trust.
11. RENEWAL AND TERMINATION. This Agreement shall become effective on the date
first above written and shall remain in effect for a period of one year from
such date, and thereafter shall be renewed automatically for successive one year
terms, unless written notice not to renew is given by the non-renewing party to
the other party at least sixty days prior to the expiration of the current term,
provided such continuance is approved at least annually by the vote of a
majority of the Trustees of the fund who are not parties to this Agreement or
"interested persons" (as defined in the IC Act) of any such party, which vote
must be cast in person at a meeting called for the purpose of voting on such
approval. The previous Administrative Services Agreement between the Trust and
AmeriPrime Financial Services, Inc. and Meridian is hereby superseded by this
Agreement.
Notwithstanding the foregoing, the Trust may, at any time and without the
payment of any penalty, terminate this Agreement for Cause as to the
Administrator, upon sixty days written notice to the other party. "Cause" shall
mean unreasonable neglect or refusal to perform the services defined under this
Agreement, or the willful misconduct in following the legitimate directions of
the Board of Trustees of the Trust.
12. NOTICES. Any notice required under this Agreement shall be given in writing,
addressed and delivered, or mailed postage prepaid, to the other parties at the
principal office of each party.
13. THE TRUST. The term "ICON Funds" means and refers to the Trustees from time
to time serving under the Trust's Agreement and Declaration of Trust as amended
from time to time. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agent or employees of the Trust, personally, but bind only the trust
property of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an officer of the Trust,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust.
14. MISCELLANEOUS. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Massachusetts and the applicable
provisions of the federal securities laws. To the extent that applicable law of
the State of Massachusetts or any of the provisions herein conflict with the
applicable provisions of the federal securities laws, the latter shall control .
Every contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officer of the Trust shall give notice that (a) the document
was executed or made on behalf of the Trust or by them as Trustees or as
officers and not by them individually, and (b) that the obligations of such
instrument are not binding upon any of them or the Shareholders individually,
but are only upon the assets and property of the Trust. Omission of such notice
shall not operate to bind any Trustee, officer or shareholder individually.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
ICON FUNDS MERIDIAN INVESTMENT
MANAGEMENT CORPORATION
By: /s/ Erik Jonson By: /s/ Craig T. Callahan
- ------------------- -------------------------
Erik Jonson, Chief Financial Officer Craig T. Callahan, President
<PAGE>
EXHIBIT A
ICON FUNDS
ADMINISTRATIVE SERVICES AGREEMENT
Dated March 1, 1999
The Administrator, Meridian Investment Management Corporation ("Meridian") shall
provide the following categories of executive and administrative services to the
Trust:
ADMINISTRATIVE RESPONSIBILITIES
1. Daily Compliance-Test all Funds for SEC, IRS and Prospectus Restrictions
2. Review and resolve all potential restriction violations
3. Blue Sky Monitoring
4. Compile information for annual review of Fidelity Bond
5. Compile information for annual review of E&O Insurance
6. Review of trading commissions, soft dollars and best execution
7. Tax preparation
8. Subchapter M Compliance
9. Review PFIC status for tax
10. Expense Accruals
11. Review and approve all invoices
12. Review and approve all monthly accounting transition reports
13. Review daily cash balances available for investment or redemption
14. Review pricing of portfolio securities and NAV computations
15. Monitor compliance with and revise Code of Ethics, as needed
16. Prepare and update policies and procedures manual
17. Proxy voting and recording with respect to portfolio securities
18. Preparation of quarterly trustee meeting information and reports
19. Preparation of Board Minutes
20. Preparation of reports to Lipper, Morningstar
21. Maintain relationship with ICI
22. Relations with third party vendors
23. Prepare prospectus and statement of additional information
24. Prepare semi-annual and year end financials
25. Prepare and File SEC reports and registration statements
26. Maintain files of all original fund documents
27. Relations with Custodian, Transfer Agent, auditors
28. Maintain relationships with Platforms
29. Maintain relationships with other Broker-Dealers
<PAGE>
EXHIBIT B
ICON FUNDS
ADMINISTRATIVE SERVICES AGREEMENT
Dated March 1, 1999
MONTHLY FEE SCHEDULE
I. FEE SCHEDULE
The Funds of the Trust shall pay the Administrator the following fee per year
per Portfolio base, computed on a daily basis and paid on a monthly basis. For
purposes of each daily calculation of this fee, the most recently determined net
asset value of each Portfolio, as determined by a valuation made in accordance
with the Trust's procedure for calculating each Portfolio's net asset value as
described in the Funds' Prospectus and/or Statement of Additional Information,
shall be used. The fee is payable on the first business day following the end of
each month.
AVERAGE VALUE OF DAILY NET ASSETS ANNUAL RATE
Assets Under Five Hundred Million Dollars 0.050%
Assets Over Five Hundred Million Dollars 0.040%
ICON FUNDS
October 25, 1996
LYNCH, BREWER, HOFFMAN & SANDS, LLP
ATTORNEYS AT LAW
101 FEDERAL STREET, 22ND FLOOR
BOSTON, MASSACHUSETTS 02110-1800
------------------
Telephone (617) 951-0800
Fax (617) 951-0811
January 13, 2000
ICON FUNDS
12835 East Arapahoe Road
Tower II, Penthouse
Englewood, CO 80112
Ladies and Gentlemen:
As counsel to ICON FUNDS, a Massachusetts business trust (the "Trust"), we
have been asked to render our opinion with respect to the issuance of an
indefinite number of shares of beneficial interest in the Trust (the "Shares")
representing interests in 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, ICON Asia Region Fund, ICON South Pacific Region Fund, ICON North Europe
Region Fund, ICON South Europe Region Fund, ICON Western Hemisphere Fund and
ICON Short-Term Fixed Income Fund (collectively, the "Funds"), the shares of
each of such Funds being a series of the Trust, as more fully described in the
Prospectus in the form contained in the Trust's Registration Statement on Form
N-1A, dated January 20, 2000, to which this opinion is an exhibit, to be filed
with the Securities and Exchange Commission.
We have examined the Master Trust Agreement of the Trust, dated September
19, 1996, as amended to the date hereof, and the Prospectus contained in such
Registration Statement, and such other documents, records and certificates as we
have deemed necessary for the purposes of this opinion. In rendering this
opinion, we have, with your approval, relied, as to all questions of fact
material to this opinion, upon certain certificates of public officials and of
your officers and assumed the genuineness of the signatures on, and the
authenticity of, all documents furnished to us, which facts we have not
independently verified.
Based upon the foregoing, we are of the opinion that the Shares, when
issued, delivered and paid for in accordance with the terms of the Master Trust
Agreement and the Prospectus will be legally issued, fully paid and
non-assessable by the Trust.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/ LYNCH, BREWER, HOFFMAN & SANDS, LLP
---------------------------------------
LYNCH, BREWER, HOFFMAN & SANDS, LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form N-1A of our report dated November 5, 1999, relating to the
financial statements and financial highlights which appears in the September 30,
1999 Annual Report to Shareholders of ICON Funds, which is also incorporated by
reference into the Registration Statement. We also consent to the references to
us under the headings "Financial Highlights" and "Independent Accountants and
Counsel" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Denver, Colorado
January 17, 2000
POWER OF ATTORNEY
We the undersigned officers and Trustees of ICON Funds (the "Trust"), do
hereby severally constitute and appoint Erik L. Jonson, Charles W. Lutter, Jr.
and Robin B. Shipman, and each of them acting singularly, as our true and lawful
attorneys, with full powers to them and each of them to sign for us, in our
names in the capacities indicated below, any amendment to the Registration
Statement of the Trust on Form N-1A to be filed with the Securities and Exchange
Commission and to take such further action in respect thereto as they, in their
sole discretion, deem necessary to enable the Trust to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of 1940
and all requirements and regulations of the Securities and Exchange Commission,
hereby ratifying and confirming our signatures as they may be signed by our said
attorneys to any and all documents related to said amendment to the Registration
Statement.
IN WITNESS WHEREOF, we have hereunto set out hands on the dates indicated
below.
SIGNATURE TITLE DATE
/s/ Craig T. Callahan PRESIDENT AND TRUSTEE 4-99
- ---------------------
Craig T. Callahan
/s/ R. Michael Sentel TRUSTEE 4-99
- ---------------------
R. Michael Sentel
/s/ James W. Hire TRUSTEE 4-99
- -----------------
James W. Hire
/s/ Glen F. Bergert TRUSTEE 4-99
- -------------------
Glen F. Bergert
/s/ Erik L. Jonson VICE PRESIDENT AND 4-99
- ------------------ CHIEF FINANCIAL OFFICER
Erik L. Jonson
/s/ Robin B. Shipman VICE PRESIDENT AND 4-99
- -------------------- SECRETARY
Robin B. Shipman
ICON FUNDS
MERIDIAN MANAGEMENT & RESEARCH INC
MERIDIAN INVESTMENT MANAGEMENT CORPORATION
MERIDIAN CLEARING CORPORATION
CODE OF ETHICS
Summary
- -------
The ICON Funds, Meridian Management & Research, and its affiliates have a
fiduciary duty to investment company and investment adviser clients which
requires each employee to act solely for the benefit of clients. Each employee
also has a duty to act in the best interest of the firm. In addition to the
various laws and regulations covering the firm's activities, it is clearly in
the firm's best interest as a professional investment advisory organization to
avoid potential conflicts of interest or even the appearance of such conflicts
with respect to the conduct of the firm's employees. The personal trading and
conduct of the firm and its employees must recognize that the firm's clients
always come first, that the firm must avoid any actual or potential abuse of our
positions of trust and responsibility, and that the firm must never take
inappropriate advantage of its positions. While it is not possible to anticipate
all instances of potential conflict, the standard is clear.
In light of the firm's professional and legal responsibilities, we believe it is
appropriate to restate and periodically distribute the firm's Code of Ethics to
all employees. The aim is to be as flexible as possible in the firm's internal
procedures, while simultaneously protecting the organization and its clients
from the damage that could arise from a situation involving a real or apparent
conflict of interest. While it is not possible to specifically define and
prescribe rules regarding all possible cases in which conflicts might arise,
this Code of Ethics is designed to set forth the policy regarding employee
conduct in those situations in which conflicts are most likely to develop. If an
employee has any doubt as to the propriety of any activity, he or she should
consult the firm's President, General Counsel or Compliance Officer.
Policy on Personal Securities Transactions
- ------------------------------------------
This Policy requires that all personal securities transactions (including
acquisitions or dispositions other than through a purchase or sale) by all
Employees must be cleared prior to execution. The only exceptions to this policy
of prior clearance are noted below.
- 1 -
<PAGE>
Definition of "Personal Transactions"
- -------------------------------------
The following transactions by Employees are considered "personal" under
applicable SEC rules and therefore subject to this statement of policy:
o Transactions for an Employee's own account, including IRA' accounts;
o Transactions for an account in which an Employee has indirect beneficial
ownership, unless the Employee has no direct or indirect influence or
control over the account;
o Accounts involving family (including husband, wife, minor children or other
dependent relatives), or accounts in which an Employee has a beneficial
interest (such as a trust of which the Employee is a beneficiary) are
included within the meaning of "indirect beneficial interest."
If an employee has a substantial measure of influence or control over an account
but neither the Employee nor the Employee's family has any direct or indirect
beneficial interest (e.g. a trust for which the Employee is a trustee but not a
direct or indirect beneficiary), the rules relating to personal securities
transactions are not considered to be directly applicable. Therefore, prior
clearance and subsequent reporting of such transactions is not required. In all
transactions involving such an account an Employee should, however, conform to
the spirit of these rules and avoid any activity which might appear to conflict
with the investment company or counseling clients or with respect to the
Employee's position within Meridian. In this regard, please note "Other
Conflicts of Interest", found later in this Code of Ethics, which does apply to
such situations.
Pre-Clearance Required
- ----------------------
Except as specifically exempted in this section, all Employees must clear
personal securities transactions prior to execution. This includes:
o stocks;
o bonds;
o closed end mutual funds;
o convertibles;
o preferreds,
o options on securities;
o warrants;
o rights; and
o trades in the ICON Funds,
for domestic and private securities, whether publicly traded or privately
placed.
- 2 -
<PAGE>
Exceptions
- ----------
The only exceptions to this requirement are:
o transactions in open-end mutual funds other than the ICON Funds;
o trades $5,000 or less within a 24 hour period;
o automatic dividend reinvestment plan acquisitions;
o U.S. government securities;
o automatic employee stock purchase plan acquisitions;
o commercial paper;
o non-volitional transactions; or
o discretionary managed accounts.
Non-volitional transactions include transactions which result from corporate
action applicable to all similar security holders (such as splits, tender
offers, mergers, stock dividends, etc.) Please note that most of these
transactions must be reported even though they do not have to be pre-cleared.
See the following section on reporting obligations.
Clearance for personal securities transactions for publicly traded companies
will be in effect for seven trading days only. Private placements (including
both securities and partnership interests) clearances will remain in effect for
a reasonable period, not to exceed 90 days. Clearance for personal securities
transactions must be obtained by submitting a copy of the preclearance form
(which is attached to this Code of Ethics as Exhibit A and available from the
Compliance Department) and submitting it to the Compliance Department.
Filing of Reports
- -----------------
The Code requires a comprehensive "real time" system of maintaining records of
personal securities transactions by Employees. Under this system, the following
reporting requirements must be complied with:
1. Duplicate Brokerage Confirmations;
2. Quarterly Reporting of All Personal Securities Transactions
3. Filing of Annual Personal Holding Report
Confidential Nature of Documents
- --------------------------------
Meridian recognizes and understands the confidential nature of the documents and
information Employees are required to provide under this Code of Ethics. Several
procedures have been established to ensure to confidentiality of this
information. First, a separate mail box has been established to receive copies
of the documents provided by brokerage firm. All such documents (such as
confirms and statements) should be directed to:
- 3 -
<PAGE>
Meridian Investment Management Compliance Department
9678 E. Arapahoe Road #233
Englewood, Colorado 80112-3703
Further, only the firm's Compliance Officer will review this information (unless
there is a potential or real violation of the firm's Code) and keeps the
required documents in a secure place. Any unauthorized disclosure of this
confidential information will result in severe sanctions, including suspension
or termination.
Duplicate Brokerage Confirmations
- ---------------------------------
All Employees must require their securities brokers to send duplicate
confirmations of securities transactions to the Compliance Department. Brokerage
firms are accustomed to providing this service; a sample form is attached as
Exhibit B. The form must be completed and returned to the Compliance Department.
The Compliance Department will process the form to assure delivery of the
confirms directly to them and to preserve the confidentiality of this
information. Each Employee must return to the Compliance Department a completed
form for each brokerage account that is used for personal securities
transactions of the Employee. Employees should not send the completed forms to
their brokers directly.
Filing of Quarterly Report of All Personal Securities Transactions
- ------------------------------------------------------------------
SEC rules require that a quarterly record of all personal securities
transactions be available for SEC inspection. All transactions, whether required
to be precleared or not, must be reported. To comply with these rules, every
Employee must file a quarterly report (on the form attached as Exhibit C) within
10 calendar days after the end of each calendar quarter. Employees may direct
the brokerage firms where they maintain their accounts to send a quarterly
statement to the Compliance Department in lieu of filling out a handwritten
quarterly report. However, Employee's are still required to sign Meridian's form
even if there were no reportable transactions during the quarter, acknowledging
that all accounts and transactions have been disclosed. (Write "none" on the
form, sign the form, and return it to Compliance).
IMPORTANT NOTE: The quarterly report must include the required information for
all "personal securities transactions" as defined above. Non-volitional
transactions and those resulting from corporate actions must also be reported
even though pre-clearance is not required and the nature of the transaction must
be clearly specified in the report.
- 4 -
<PAGE>
Filing of Annual Personal Holding Report
- ----------------------------------------
All Employees must also file a schedule on the form attached as Exhibit D
indicating their personal securities holdings, excluding all non-Icon mutual
funds, as of December 31 of each year by the following February 15. Newly hired
Employees are required to file an initial holding report upon beginning
employment on the form attached as Exhibit E. Again, Employees may indicate
securities held in a brokerage or Icon mutual fund account by attaching an
account statement, but are not required to do so.
Restrictions on "Personal Securities Transactions"
- --------------------------------------------------
While all personal securities transactions must be cleared prior to execution,
the following guidelines indicate which transactions will be prohibited,
discouraged, or subject to nearly automatic clearance. The clearance of personal
securities transactions also depend on other circumstances, including the timing
of the proposed transaction relative to transactions by the investment
committee, the nature of the securities and the parties involved in the
transaction, and the percentage of securities involved in the transaction
relative to ownership by clients. The word "clients" refers collectively to
investment company clients and advisory clients. Employees are expected to be
particularly sensitive to meeting the spirit as well as the letter of these
restrictions.
Please note that the restrictions apply in the case of common stock, not only to
the common stock, but to any equity related security of the same issuer
including preferred stock, options, warrants and convertible bonds.
No employee may engage in any personal transactions involving any securities
which are:
o Being bought or sold on behalf of clients until one trading day after such
buying or selling is completed or cancelled. In addition, no one in the
Research Department may engage in a personal transaction involving any
security for seven days before and 7 days following, a transaction in the
same security for a client account without a special exemption. See
"Exemptive Procedures" below.
o Actively contemplated for transactions on behalf of clients, even though no
buy or sell order have been placed. This restriction applies from the
moment that an Employee has knowledge that the firm is considering
purchasing or selling a specific security for any client account. This a
particularly sensitive area in which Employees must exercise caution to
avoid actions which, to his or her knowledge, are in conflict or in
competition with the interests of clients.
- 5 -
<PAGE>
These provisions do not include transactions that involve routine maintenance of
a client account, such as honoring redemption requests, or to any model
reallocations.
o No Employee may enter into any personal securities transaction in which a
Client is the counter party to the trade.
o No Employee may take a "short term trading profit" in a security, which
means the sale of a security at a gain (or closing of a short position at a
gain) within 60 days of its purchase, without a special exemption. See
"Exemptive Procedures". The 60 day prohibition does not apply to
transactions resulting in a loss.
o Subject to preclearance, Employees may engage in short sales, options and
margin transactions, but such transactions are strongly discouraged,
particularly due to the 60 day short term profit taking prohibition. Any
Employee engaging in such transactions should also recognize the danger of
being "frozen" or subject to a forced close out because of the general
restrictions which apply to personal transactions noted above. In specific
cases of hardship, an exception may be granted by upon approval by the
Ethics Committee with respect to an otherwise "frozen" transaction.
o Employees may not purchase securities in initial public offerings or
private placements offered by any firm or entity that Meridian executes
trades through. All initial public offering or private placement purchases
require preclearance. This approval will be based upon a determination that
the Employee is not being offered the investment opportunity due to his or
her employment with Meridian and other relevant factors on a case-by-case
basis.
Gifts and Other Sensitive Payments
- ----------------------------------
Employees should not seek, accept or offer gifts or favors of more than minimal
value or any preferential treatment in dealing with any client, broker/dealer,
portfolio company, financial institution or any other organization with whom the
firm transacts business. Occasional participation in lunches, dinners, cocktail
parties, sporting activities or similar gatherings conducted for business
purposes are not prohibited. However, for both the Employee's protection and
that of the firm, it is extremely important that even the appearance of a
possible conflict of interest be avoided. Extreme caution is to be exercised in
any instance in which business related travel and lodgings are paid for other
than by Meridian.
- 6 -
<PAGE>
Employees must not participate individually or on behalf of the firm, a
subsidiary, or any client, directly or indirectly, in any of the following
transactions:
o Use of the firm's funds for political purposes;
o Payment or receipt of bribes, kickbacks, or payment or receipt of any other
amount, including any understanding that part or all of such amount will be
refunded or delivered to a third party in violation of any law applicable
to the transaction
o Payment to government officials or employees (other than disbursements in
the ordinary course of business for such legal purposes as payment of
taxes.
o Payment of compensation or fees in a manner the purpose of which is to
assist the recipient to evade taxes, or federal or state law.
o Use of funds or assets of the firm or any subsidiary for any other unlawful
or improper purpose.
Other Conflicts of Interest
- ---------------------------
Employees should also be aware that areas other than personal securities
transactions or gifts and sensitive payments may involve conflicts of interest.
The following should be regarded as examples of situations involving real or
potential conflicts, rather than a complete list of situations to avoid.
o "Inside Information" Specific reference is made to the firm's policy on the
use of inside information", which applies to personal securities
transactions as well as to client transactions.
o Use of Information. Information acquired in connection with employment by
the firm may not be used in any way which might be contrary to or in
competition with the interests of clients. Employees are reminded that
client relationships with Meridian are to be treated confidentially.
o Disclosure of Information. Information regarding actual or contemplated
investment decisions, research priorities or client interests should not be
disclosed to persons outside our firm and in no way can be used for
personal gain.
o Outside Activities. All outside relationships such as directorships or
trusteeships of any kind, or membership in investment organizations (e.g.
an investment club) must be cleared by the Compliance Department prior to
the acceptance of such a position. As a general matter, directorships in
unaffiliated public companies or companies which may reasonably be expected
to become public companies will not be authorized because of the potential
for conflicts which may impede our freedom to act in the best interests of
clients. Service with charitable organizations generally will be
authorized, subject to considerations related to time required during
working hours and use of proprietary information.
- 7 -
<PAGE>
Exemptive Procedure
- -------------------
The Ethics Committee can grant exemptions from the personal trading restrictions
in this Code upon determining that the transaction for which an exemption is
requested would not result in a conflict of interest or violate any other policy
embodied in this Code. Factors to be considered include: the size and holding
period of the Employee's position in the security, the market capitalization of
the issuer, the liquidity of the security, the reason for the Employee's
requested transaction, the amount and timing of client trading in the same or a
related security, and other relevant factors.
Any employee wishing an exemption should submit a written request to the
Compliance Officer setting forth the pertinent facts and reasons why the
employee believes that the exemption should be granted. Employees are cautioned
that exemptions are intended to be exceptions, and repetitive exemptive
applications by an Employee will not be well received.
Compliance with The Code of Ethics
- ----------------------------------
Adherence to the Code of Ethics is considered a basic condition of employment
with our organization. The Ethics Committee monitors compliance with the Code
and reviews violations of the Code to determine what action or sanctions are
appropriate.
If an Employee fails to abide by the reporting provisions of this Code of
Ethics, paychecks and/or commissions checks will be withheld until the Employee
is in compliance.
Violations of the provisions regarding personal trading will be presumptively be
subject to being reversed in the case of a violative purchase, and to
disgorgement of any profit realized from the position (net of transaction costs
and capital gains taxes payable with respect to the transaction) by payment of
the profit to any client disadvantaged by the transaction, or to a charitable
organization, as determined by the Ethics Committee, unless the Employee
establishes to the satisfaction of the Ethics Committee that under the
particular circumstances, disgorgement would be an unreasonable remedy for the
violation.
Violation of the Code of Ethics may also adversely affect an Employee's career
with Meridian with respect to such matters as compensation and advancement.
Employees must recognize that a serious violation of the Code of Ethics or
related policies may result, at a minimum, in immediate dismissal. Since many
provisions of the Code of Ethics also reflect provisions of the U.S. securities
laws, Employees should be aware that violations could also lead to regulatory
enforcement action resulting in suspension or expulsion from the securities
business, fines, penalties, and imprisonment.
- 8 -
<PAGE>
Again, Meridian would like to emphasize the importance of obtaining prior
clearance of all personal securities transactions, avoiding prohibited
transactions, filing all required reports promptly and avoiding other situations
which might involve even an apparent conflict of interest. Questions regarding
interpretation of this policy or questions related to specific situations should
be directed to the firm's General Counsel or Compliance Officer.
Independent Trustees Reporting Requirements
- -------------------------------------------
The ICON Funds Independent Trustees only need to report transactions in a
security if the Independent Trustee knew, or should have known, that during the
seven day period before or the seven day period after the date of the securities
transaction by the Trustee, the security was bought or sold, or was being
considered for purchase or sale by the ICON Funds. Any transaction required to
be reported by the Independent Trustee is to be reported to the Funds'
Compliance Officer not later than 10 days after the end of the quarter in which
the transaction occurred.
Independent Trustees are not subject to the preclearance requirements of this
Code, to the short term trading prohibition, to the prohibition on acting as a
director of a publicly held company or to the reporting requirements, except as
required by the preceeding paragraph.
- 9 -
<PAGE>
Exhibit A - Request for Permission
To Engage in Personal Securities Transaction
--------------------------------------------
I hereby request permission to effect a transaction in securities as
indicated below for my own account or other account in which I have a beneficial
interest or legal title. (Use approximate dates and amounts of proposed
transactions.)
PURCHASES AND ACQUISITIONS
--------------------------
Date # Shares/Amount Security Name Unit Price Total Price Broker
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SALES AND OTHER DISPOSITIONS
----------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Date: Name:
- ------------------------------ -----------------------------------
Signature:
-----------------------------------
Permission Granted Permission Denied
- ------------------------------ -----------------------------------
Date: Signature:
- ------------------------------ -----------------------------------
(Clearing Officer)
Date: Signature:
- ------------------------------ -----------------------------------
(Clearing Officer)
<PAGE>
EXHIBIT B
DISCLOSURE OF OUTSIDE ACCOUNTS
================================================================================
In accordance with ICON Funds/Meridian's Code of Ethics, NASD regulations, and
the policies of Meridian Clearing Corp. (MCC), I have listed below any accounts
in which I have authority to make investment decisions or in which I have or
will have a financial interest, whether or not my name is actually on the
accounts. I am not including accounts which are limited to transactions in unit
investment trusts, or certificates of deposit. Further, I agree and understand
that Meridian may contact these broker/dealers and request duplicate
confirmations and/or quarterly statements.
Employee Name:_______________________________________SS#: ______________________
1. Broker/Dealer: ______________________Account Executive:______________________
Branch Office Address:_______________________________________________________
_____________________________________________________________________________
Account Number (s):_______________________Date Opened:__________________________
_______________________Date Opened:__________________________
================================================================================
2. Broker/Dealer:_________________________Date Opened: _________________________
Branch Office Address:_______________________________________________________
_____________________________________________________________________________
Account Number (s):_______________________Date Opened:__________________________
_______________________Date Opened:__________________________
I hereby certify that the information I have provided above is accurate and
complete.
________________________________ __________________________________
Employee Signature Date
__________ I authorize duplicate confirmations to be sent directly to Meridian
Compliance Department.
__________ I authorize duplicate statements to be sent directly to Meridian
Compliance Department.
<PAGE>
<TABLE>
<CAPTION>
Exhibit C
REPORT OF SECURITIES TRANSACTIONS
FOR QUARTER ENDING________________
- ----------------------------------------------------------------------------------------
CHECK TYPE OF ACCOUNT
AMOUNT Fiduciary
OR DATE NAME OF Household or Other
SHARES SECURITY NAME BOUGHT SOLD PRICE DEALER Personal Member Beneficial
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
The above is a record of one or more purchase or sale transactions in a security
in which I have acquired or disposed of a direct or indirect beneficial
ownership in the last ten days, as more fully defined in the ICON/Meridian Code
of Ethics.
DATE:__________________ SIGNATURE:_________________________
Print Name: ______________________
Note 1. If the transaction is other than a sale or purchase, please explain on
a separate page.
Note 2. If no broker or bank was involved in the transaction, describe on a
separate page the circumstances surrounding the transaction and the
manner in which the transaction was executed.
Note 3. If a broker was involved in the transaction, a copy of the broker's
confirmation of the transaction is attached.
Note 4. Copies of Trade Authorizations are attached to this signed report in
lieu of or in addition to the above.
<PAGE>
Exhibit D
Report of Securities Ownership
For Calendar Year Ending ___________
- --------------------------------------------------------------------------------
CHECK TYPE OF ACCOUNT
AMOUNT
OR DATE Household Fiduciary/
SHARES SECURITY NAME BOUGHT PRICE Personal Member Other Beneficial
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The above is a listing of every security in which I have direct or indirect
beneficial ownership as of the end of the above-described calendar year, as more
fully defined in the ICON/Meridian Code of Ethics.
DATE:______________________________ SIGNATURE:______________________________
PRINT NAME:_____________________________
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT E
INITIAL REPORT OF SECURITIES TRANSACTIONS
- ----------------------------------------------------------------------------------------
CHECK TYPE OF ACCOUNT
AMOUNT Fiduciary
OR DATE NAME OF Household or Other
SHARES SECURITY NAME BOUGHT SOLD PRICE DEALER Personal Member Beneficial
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
The above is a record of one or more purchase or sale transactions in a security
in which I have acquired or disposed of a direct or indirect beneficial
ownership in the last ten days, as more fully defined in the ICON/Meridian Code
of Ethics.
DATE:__________________ SIGNATURE:_________________________
Print Name:________________________
Note 1. If the transaction is other than a sale or purchase, please explain on
a separate page.
Note 2. If no broker or bank was involved in the transaction, describe on a
separate page the circumstances surrounding the transaction and the
manner in which the transaction was executed.
Note 3. If a broker was involved in the transaction, a copy of the broker's
confirmation of the transaction is attached.
Note 4. Copies of Trade Authorizations are attached to this signed report in
lieu of or in addition to the above.
