<PAGE>
REGISTRATION NO. 333-14927
REGISTRATION NO. 811-7883
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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. 9
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9
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, Texas 78232-1305
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<PAGE>
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/X/ 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
<PAGE>
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PART A
PROSPECTUS
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<PAGE>
[LOGO]
PROSPECTUS
JANUARY , 2001
U.S. EQUITY FUNDS
ICON Materials Fund (formerly ICON Basic Materials Fund)
ICON Consumer Discretionary Fund (formerly ICON Consumer
Cyclicals Fund)
ICON Energy Fund
ICON Financial Fund (formerly ICON Financial Services Fund)
ICON Healthcare Fund
ICON Leisure and Consumer Staples Fund (formerly ICON
Leisure Fund)
ICON Information Technology Fund (formerly ICON Technology
Fund)
ICON Telecommunication & Utilities Fund
ICON Industrials Fund (formerly ICON Transportation Fund)
FIXED INCOME FUND
ICON Short-Term Fixed Income Fund
INTERNATIONAL EQUITY FUNDS
ICON Asia Region Fund
ICON South Pacific Region Fund
ICON North Europe Region Fund
ICON South Europe Region Fund
ICON Western Hemisphere Fund
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,...................................6
STRATEGIES AND RISKS..........................................................6
U.S. EQUITY FUNDS..........................................................6
INTERNATIONAL EQUITY FUNDS.................................................8
FIXED INCOME FUND.........................................................10
FUND BY FUND SUMMARIES.......................................................11
HOW HAVE THE FUNDS PERFORMED.................................................11
FEES AND EXPENSES OF THE FUND................................................25
MORE INFORMATION ABOUT THE FUNDS.............................................27
INVESTMENT OBJECTIVES, PRINCIPAL STRATEGIES AND RISKS........................27
U.S. EQUITY FUNDS.........................................................27
INTERNATIONAL EQUITY FUNDS................................................32
FIXED INCOME FUND.........................................................43
ORGANIZATION AND MANAGEMENT OF THE FUNDS.....................................44
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.........................................................50
ICON MATERIALS FUND.......................................................52
ICON CONSUMER DISCRETIONARY FUND..........................................53
ICON ENERGY FUND..........................................................54
ICON FINANCIAL FUND.......................................................55
ICON HEALTHCARE FUND......................................................56
ICON LEISURE AND CONSUMER STAPLES FUND....................................57
ICON INFORMATION TECHNOLOGY FUND..........................................58
ICON TELECOMMUNICATION & UTILITIES FUND...................................59
ICON INDUSTRIALS FUND.....................................................60
ICON ASIA REGION FUND.....................................................61
ICON NORTH EUROPE REGION FUND.............................................62
ICON SHORT-TERM FIXED INCOME FUND.........................................64
NOTICE OF PRIVACY POLICIES AND PROCEDURES....................................65
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ICON Funds-Prospectus Page 5 of 116
<PAGE>
SUMMARY OF PRINCIPAL INVESTMENT OBJECTIVES,
STRATEGIES AND RISKS
The ICON Funds consist of sixteen portfolios. This prospectus discusses fifteen
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
<TABLE>
<CAPTION>
NAME OF FUND INDUSTRY BASKETS INCLUDE, BUT ARE NOT LIMITED TO:
------------------------------------------ ----------------------------------------------------------------
<S> <C>
ICON Materials Fund (formerly ICON Aluminum; Commodity Chemicals; Construction Materials;
Basic Materials Fund) Diversified Chemicals; Diversified Metals & Mining; Fertilizers
& Agricultural Chemicals; Forest Products; Gold; Industrial
Gases; Metal & Glass Containers; Paper Packaging; Paper
Products; Precious Metals & Minerals; Specialty Chemicals; and
Steel.
------------------------------------------ ----------------------------------------------------------------
ICON Consumer Discretionary Fund Advertising; Apparel & Accessories; Apparel Retail; Auto Parts
(formerly ICON Consumer Cyclicals & Equipment; Automobile Manufacturers; Catalog Retail;
Fund) Computer & Electronics Retail; Consumer Electronics;
Department Stores; Distributors; Footwear; General
Merchandise Stores; Home Furnishings; Home Improvement
Retail; Homebuilding; Household Appliances; Housewares &
Specialties; Internet Retail; Motorcycle Manufactures;
Photographic Products; Specialty Stores; Textiles; and Tires &
Rubber.
------------------------------------------ ----------------------------------------------------------------
ICON Energy Fund Integrated Oil & Gas; Oil & Gas Drilling; Oil & Gas Equipment &
Services; Oil & Gas Exploration & Production; and Oil & Gas
Refining & Marketing.
------------------------------------------ ----------------------------------------------------------------
ICON Financial Fund (formerly ICON Banks; Consumer Finance; Diversified Financial Services;
Financial Services Fund) Insurance Brokers; Life & Health Insurance; Multi-Line
Insurance; MultiSector Holdings;
Property & Casualty Insurance; Real
Estate Investment Trusts; Real Estate
Management & Development; and
Reinsurance.
------------------------------------------ ----------------------------------------------------------------
ICON Healthcare Fund Biotechnology; Health
Care Distributors & Services; Health
Care Equipment; Health Care
Facilities; Health Care Supplies;
Managed Health Care; and
Pharmaceuticals.
------------------------------------------ ----------------------------------------------------------------
ICON Leisure and Consumer Staples Broadcasting/Cable; Casinos & Gaming; Leisure Products;
Fund (formerly ICON Leisure Fund) Hotels; Publishing & Printing; Tobacco; Agricultural Products;
Brewers; Distillers & Vintners; Drug
Retail; Food Distributors; Food
Retail; Household Products; Leisure
Facilities; Meat, Poultry & Fish;
Movies & Entertainment; Packaged
Foods; Personal Products; Soft
Drinks; Restaurants.
------------------------------------------ ----------------------------------------------------------------
</TABLE>
ICON Funds-Prospectus Page 6 of 116
<PAGE>
<TABLE>
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<S> <C>
ICON Information Technology Fund Application Software; Computer Hardware; Computer Storage &
(formerly ICON Technology Fund) Peripherals; Electronic Equipment & Instruments; Internet
Software & Services; IT Consulting & Services; Networking
Equipment; Office Electronics; Semiconductor Equipment;
Semiconductors; Systems Software; and Telecommunications
Equipment.
------------------------------------------ ----------------------------------------------------------------
ICON Telecommunication & Utilities Electric Utilities; Gas Utilities; Multi-Utilities; Water Utilities;
Fund Alternative Carriers; Integrated Telecommunications Services;
and Wireless Telecommunication Services.
------------------------------------------ ----------------------------------------------------------------
ICON Industrials Fund (formerly ICON Aerospace & Defense; Air Freight & Couriers; Airlines; Airport
Transportation Fund) Services; Building Products; Commercial Printing; Construction
& Engineering; Construction & Farm Machinery; Data
Processing Services; Diversified Commercial Services; Electrical
Components & Equipment; Employment Services;
Environmental Services; Heavy Electrical Equipment; Highways
& Railtracks; Industrial
Conglomerates; Industrial Machinery;
Marine; Marine Ports & Services;
Office Services & Supplies;
Railroads; Trading Companies &
Distributors; and Trucking.
------------------------------------------ ----------------------------------------------------------------
</TABLE>
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' Investment Committee 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 companies comprising
the Standard & Poors SuperComposite 1500 Index ("S&P 1500"), which have been
divided into economic sectors and industry groups under the Morgan Stanley
Country Index ("MSCI") and S&P Global Industry Classification Standard 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 Investment Committee 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
Information Technology which is made up of twelve industries. Application
Software is an industry inside of the Information Technology sector.
Financial is also a sector. It is made up of ten industries. Banks is an
industry inside of the Financial sector.
The Investment Committee 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 Investment Committee believes
that it is important to invest in them.
Unlike ICON Funds' Investment Committee, 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
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ICON Funds-Prospectus Page 7 of 116
<PAGE>
will do, and they work their way down to what sectors in which to invest. The
ICON Funds' Investment Committee starts at the bottom. The Committee 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.
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 is 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
<TABLE>
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<S> <C>
NAME OF FUND MAY INCLUDE, BUT IS NOT
LIMITED TO, BASKETS OF SECURITIES
FROM THE FOLLOWING COUNTRIES:
------------------------------------------- ------------------------------------------------------------
ICON Asia Region Fund Japan; Korea; China (plus Hong Kong); and Taiwan.
------------------------------------------- ------------------------------------------------------------
ICON South Pacific Region Fund * Australia; Indonesia; Malaysia; New Zealand; and
Singapore.
------------------------------------------- ------------------------------------------------------------
ICON North Europe Region Fund Belgium; Denmark; Finland; Germany; Ireland; Netherlands;
Norway; Sweden; and United Kingdom.
------------------------------------------- ------------------------------------------------------------
</TABLE>
ICON Funds-Prospectus Page 8 of 116
<PAGE>
<TABLE>
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<S> <C>
ICON South Europe Region Fund Austria; France; Greece; Italy; Portugal; Spain; and
Switzerland.
------------------------------------------- ------------------------------------------------------------
ICON Western Hemisphere Fund * Argentina; Brazil; Canada; Chile; and Mexico.
------------------------------------------- ------------------------------------------------------------
* (fund has not commenced operations)
</TABLE>
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 Investment Committee attempts to produce above average returns
compared to its geographical region.
The Investment Committee 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 Investment Committee believes
that it is important to invest in them.
Unlike ICON Funds' Investment Committees, 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' Investment Committee starts at the bottom.
The Committee determines which countries are attractive relative to other
countries. The Committee 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.
>> 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.
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ICON Funds-Prospectus Page 9 of 116
<PAGE>
>> 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 is 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
<TABLE>
<CAPTION>
----------------------------- -----------------------------------------------------------------------
NAME OF FUND UNDER NORMAL MARKET CONDITIONS, THE FUND INVESTS EXCLUSIVELY IN:
----------------------------- -----------------------------------------------------------------------
<S> <C>
ICON Short-Term Fixed U.S. Treasury obligations; obligations issued or guaranteed by the
Income Fund agencies and instruments of the U.S. Government; and
repurchase agreements involving those obligations.
----------------------------- -----------------------------------------------------------------------
</TABLE>
INVESTMENT OBJECTIVE
The ICON Short-Term Fixed Income Fund seeks to provide high current income
consistent with the preservation of capital.
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
ICON Funds - Prospectus Page 10 of 116
<PAGE>
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 27.
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 for periods reflected in
Bar Chart, 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.
ICON Funds - Prospectus Page 11 of 116
<PAGE>
ICON MATERIALS FUND (FORMERLY 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.
-------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: -10.59% 1999: 23.12% 2000: %
------------------------------------------------------------------------------
For Periods Ended 12-31-00:
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 5-5-1997
<S> <C> <C>
ICON Materials Fund
(formerly ICON Basic Materials Fund) % %
S&P 1500 Index* % %
--------------------------------------------------------------------------------
</TABLE>
* 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.
ICON Funds - Prospectus Page 12 of 116
<PAGE>
ICON CONSUMER DISCRETIONARY FUND (FORMERLY 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.
------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return -Calendar Year
[GRAPHIC OMITTED]
1998: 5.60% 1999: 4.74% 2000% %
------------------------------------------------------------------------------
For Periods Ended:
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: %
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Periods Ended
1 Year Since Inception Date 7-9-1997
<S> <C> <C>
ICON Consumer Discretionary Fund % %
(formerly ICON Consumer Cyclicals Fund)
S&P 1500 Index* % %
-------------------------------------------------------------------------------------
</TABLE>
* 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.
ICON Funds - Prospectus Page 13 of 116
<PAGE>
ICON ENERGY 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: -37.12% 1999: 50.27% 2000: %
------------------------------------------------------------------------------
For Periods Ended 12-31-00:
Best Quarter: Quarter Ended 6-30-99 Total Return for that Quarter: %
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 11-5-1997
<S> <C> <C>
ICON Energy Fund % %
S&P 1500 Index* % %
-------------------------------------------------------------------------------------
</TABLE>
* 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.
ICON Funds - Prospectus Page 14 of 116
<PAGE>
ICON FINANCIAL FUND (FORMERLY ICON FINANCIAL SERVICES 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: 7.04% 1999: -1.71% 2000: %
------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 7-1-1997
<S> <C> <C>
ICON Financial Fund
(formerly ICON Financial Services Fund) % %
S&P 1500 Index* % %
------------------------------------------------------------------------------------
</TABLE>
* 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.
ICON Funds - Prospectus Page 15 of 116
<PAGE>
ICON HEALTHCARE 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: 15.31% 1999: 3.80% 2000: %
------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Periods Ended 12-31-99
1 Year Since Inception Date 2-24-1997
<S> <C> <C>
ICON Healthcare Fund % %
S&P 1500 Index* % %
--------------------------------------------------------------------------------------
</TABLE>
* 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.
ICON Funds - Prospectus Page 16 of 116
<PAGE>
ICON LEISURE AND CONSUMER STAPLES FUND (FORMERLY 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.
------------------------------------------------------------------------------
Bar Chart: Year-by-Year Total Return - Calendar Year
[GRAPHIC OMITTED]
1998: 17.84% 1999: -4.51% 2000: %
------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 5-9-1997
<S> <C> <C>
ICON Leisure and Consumer Staples Fund % %
(formerly ICON Leisure Fund)
S&P 1500 Index* % %
--------------------------------------------------------------------------------------------------
</TABLE>
* 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.
ICON Funds - Prospectus Page 17 of 116
<PAGE>
ICON INFORMATION TECHNOLOGY FUND (FORMERLY ICON TECHNOLOGY 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: 33.96% 1999: 111.03% 2000: %
------------------------------------------------------------------------------
For Periods Ended 12-31-99:
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 2-19-1997
<S> <C> <C>
ICON Information Technology Fund *
(formerly ICON Technology Fund) % %
S&P 1500 Index** % %
-------------------------------------------------------------------------------------------------
</TABLE>
* In general, the market over the last year has been led by large cap
technology stocks, which have appreciated substantially. The ICON Information
Technology Fund's (formerly ICON Technology Fund) 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.
ICON Funds - Prospectus Page 18 of 116
<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% 2000: %
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For Periods Ended 12-31-00:
<S> <C> <C>
Best Quarter: Quarter Ended 12-31-97 Total Return for that Quarter: %
Worst Quarter: Quarter Ended 3-31-99 Total Return for that Quarter: -5.13%
</TABLE>
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 12-31-00
<S> <C> <C>
1 Year Since Inception Date 7-9-1997
ICON Telecommunication & Utilities Fund % %
S&P 1500 Index* % %
</TABLE>
-------------------------------------------------------------------------------
* 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.
-------------------------------------------------------------------------------
ICON Funds - Prospectus Page 19 of 116
<PAGE>
ICON INDUSTRIALS FUND (FORMERLY 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% 2000: %
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For Periods Ended 12-31-00:
<S> <C> <C>
Best Quarter: Quarter Ended 12-31-98 Total Return for that Quarter: %
Worst Quarter: Quarter Ended 9-30-98 Total Return for that Quarter: %
</TABLE>
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 12-31-00
<S> <C> <C>
1 Year Since Inception Date 5-9-1997
ICON Industrials Fund
(formerly ICON Transportation Fund) % %
S&P 1500 Index* % %
</TABLE>
-------------------------------------------------------------------------------
* 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.
-------------------------------------------------------------------------------
ICON Funds - Prospectus Page 20 of 116
<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% 2000: %
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For Periods Ended 12-31-00:
<S> <C> <C>
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
</TABLE>
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 2-25-1997
<S> <C> <C>
ICON Asia Region Fund % %
MSCI Pacific Free Index* % %
</TABLE>
-------------------------------------------------------------------------------
* The Morgan Stanley Capital International 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 21 of 116
<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% 2000: %
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For Periods Ended 12-31-00:
<S> <C> <C>
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
</TABLE>
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 2-18-1997
<S> <C> <C>
ICON North Europe Region Fund % %
MSCI Europe 15 Index* % %
</TABLE>
-------------------------------------------------------------------------------
* The Morgan Stanley Capital International 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 22 of 116
<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% 2000 %
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For Periods Ended 12-31-00:
<S> <C> <C>
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
</TABLE>
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 12-31-00
1 Year Since Inception Date 2-20-1997
<S> <C> <C>
ICON South Europe Region Fund % %
MSCI Europe 15 Index* % %
</TABLE>
-------------------------------------------------------------------------------
* The Morgan Stanley Capital International 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 23 of 116
<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% 2000: %
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For Periods Ended 12-31-00:
<S> <C> <C>
Best Quarter: Quarter Ended Total Return for that Quarter: %
Worst Quarter: Quarter Ended Total Return for that Quarter: %
</TABLE>
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Periods Ended 12-31-00
1 Year Since Inception Date 2-7-1997
<S> <C> <C>
ICON Short-Term Fixed Income Fund % %
Merrill Lynch 1 Year Treasury Index* % %
</TABLE>
-------------------------------------------------------------------------------
* 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 24 of 116
<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.
<TABLE>
<CAPTION>
ICON
ICON SHORT-TERM
ICON U.S INTERNATIONAL FIXED
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR EQUITY EQUITY INCOME
INVESTMENT FUNDS FUNDS FUND
<S> <C> <C> <C>
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
</TABLE>
<TABLE>
<CAPTION>
TOTAL FUND
ANNUAL FUND OPERATING EXPENSES MANAGEMENT OTHER OPERATING
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) FEES EXPENSES EXPENSE
<S> <C> <C> <C>
U.S. EQUITY FUNDS
ICON Materials Fund 1.00% 0.41% 1.41%
(formerly ICON Basic Materials Fund)
ICON Consumer Discretionary Fund 1.00% 0.35% 1.35%
(formerly ICON Consumer Cyclicals Fund)
ICON Energy Fund 1.00% 0.36% 1.36%
ICON Financial Fund 1.00% 0.33% 1.33%
(formerly ICON Financial Services Fund)
ICON Healthcare Fund 1.00% 0.38% 1.38%
ICON Leisure and Consumer Staples Fund 1.00% 0.51% 1.51%
(formerly ICON Leisure Fund)
ICON Information Technology Fund 1.00% 0.35% 1.35%
(formerly ICON Technology Fund)
ICON Telecommunication & Utilities Fund 1.00% 0.53% 1.53%
</TABLE>
-------------------------------------------------------------------------------
ICON Funds - Prospectus Page 25 of 116
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ICON Industrials Fund 1.00% 0.38% 1.38%
(formerly ICON Transportation Fund)
INTERNATIONAL EQUITY FUNDS
ICON Asia Region Fund 1.00% 0.53% 1.53%
ICON South Pacific Region Fund* 1.00% 0.65% 1.65%
ICON North Europe Region Fund 1.00% 0.52% 1.52%
ICON South Europe Region Fund 1.00% 0.80% 1.80%
ICON Western Hemisphere Fund* 1.00% 0.65% 1.65%
FIXED INCOME FUND
ICON Short-Term Fixed Income Fund 0.65% 0.87% 1.52%
</TABLE>
* Fund has not commenced operations. Estimated amounts expected for the first
fiscal year.
HYPOTHETICAL EXAMPLE
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in 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:
<TABLE>
<CAPTION>
FUND
U.S. EQUITY FUNDS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
ICON Materials Fund $144 $446 $771 $1,691
(formerly ICON Basic Materials Fund)
ICON Consumer Discretionary Fund $137 $428 $739 $1,624
(formerly ICON Consumer Cyclicals Fund)
ICON Energy Fund $138 $431 $745 $1,635
ICON Financial Fund $135 $421 $729 $1,601
(formerly ICON Financial Services Fund)
ICON Healthcare Fund $140 $437 $755 $1,657
ICON Leisure and Consumer Staples Fund $154 $477 $824 $1,802
(formerly ICON Leisure Fund)
</TABLE>
-------------------------------------------------------------------------------
ICON Funds - Prospectus Page 26 of 116
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ICON Information Technology Fund $137 $428 $739 $1,624
(formerly ICON Technology Fund)
ICON Telecommunication & Utilities Fund $156 $483 $834 $1,824
ICON Industrials Fund $140 $437 $755 $1,657
(formerly ICON Transportation Fund)
INTERNATIONAL EQUITY FUNDS
ICON Asia Region Fund $156 $483 $834 $1,824
ICON South Pacific Region Fund* $168 $520 $897 $1,955
ICON North Europe Region Fund $155 $480 $829 $1,813
ICON South Europe Region Fund $183 $566 $975 $2,116
ICON Western Hemisphere Fund* $168 $520 $897 $1,955
FIXED INCOME FUND
ICON Short-Term Fixed Income Fund $155 $480 $829 $1,813
</TABLE>
* 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 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 27 of 116
<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 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 is 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 MATERIALS FUND (FORMERLY ICON BASIC MATERIALS FUND) - Industry baskets
include, but are not limited to: Aluminum; Commodity Chemicals; Construction
Materials; Diversified Chemicals; Diversified Metals & Mining; Fertilizers &
Agricultural Chemicals; Forest Products; Gold; Industrial Gases; Metal & Glass
Containers; Paper Packaging; Paper Products; Precious Metals & Minerals;
Specialty Chemicals; and Steel.
Many companies in the 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
-------------------------------------------------------------------------------
ICON Funds - Prospectus Page 28 of 116
<PAGE>
regulations, and enforcement policies. As regulations are developed and
enforced, companies may be required to alter or cease production of a product
or service.
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 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 CONSUMER DISCRETIONARY FUND (FORMERLY ICON CONSUMER CYCLICALS FUND) -
Industry baskets include, but are not limited to: Advertising; Apparel &
Accessories; Apparel Retail; Auto Parts & Equipment; Automobile Manufacturers;
Catalog Retail; Computer & Electronics Retail; Consumer Electronics; Department
Stores; Distributors; Footwear; General Merchandise Stores; Home Furnishings;
Home Improvement Retail; Homebuilding; Household Appliances; Housewares &
Specialties; Internet Retail; Motorcycle Manufactures; Photographic Products;
Specialty Stores; Textiles; and Tires & Rubber.
The success of consumer product manufacturers and retailers is closely tied to
the performance of the overall economy, interest rates, competition, and
consumer confidence. Success depends heavily on disposable household income and
consumer spending. Changes in demographics and consumer tastes can affect the
demand for, and success of, consumer products in the marketplace.
ICON ENERGY FUND - Industry baskets include, but are not limited to: Integrated
Oil & Gas; Oil & Gas Drilling; Oil & Gas Equipment & Services; Oil & Gas
Exploration & Production; and Oil & Gas Refining & Marketing.
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 FUND (FORMERLY ICON FINANCIAL SERVICES FUND) - Industry baskets
include, Banks; Consumer Finance; Diversified Financial Services; Insurance
Brokers; Life & Health Insurance; Multi-Line Insurance; MultiSector Holdings;
Property & Casualty Insurance; Real Estate Investment Trusts; Real Estate
Management & Development; and Reinsurance.
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
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 29 of 116
<PAGE>
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.
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; Health Care Distributors & Services; Health Care Equipment;
Health Care Facilities; Health Care Supplies; Managed Health Care; and
Pharmaceuticals.
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 AND CONSUMER STAPLES FUND (FORMERLY ICON LEISURE FUND) - Industry
baskets include, but are not limited to: Broadcasting/Cable; Casinos & Gaming;
Leisure Products; Hotels; Publishing & Printing; Tobacco; Agricultural
Products; Brewers; Distillers & Vintners; Drug Retail; Food Distributors; Food
Retail; Household Products; Leisure Facilities; Meat, Poultry & Fish; Movies &
Entertainment; Packaged Foods; Personal Products; Soft Drinks; 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.
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 Funds - Prospectus Page 30 of 116
<PAGE>
ICON INFORMATION TECHNOLOGY FUND (FORMERLY ICON TECHNOLOGY FUND) - Industry
baskets include, but are not limited to: Application Software; Computer
Hardware; Computer Storage & Peripherals; Electronic Equipment & Instruments;
Internet Software & Services; IT Consulting & Services; Networking Equipment;
Office Electronics; Semiconductor Equipment; Semiconductors; Systems Software;
and Telecommunications Equipment.
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 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: Electric Utilities; Gas Utilities; Multi-Utilities; Water
Utilities; Alternative Carriers; Integrated Telecommunications Services; and
Wireless Telecommunication 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 INDUSTRIALS FUND (FORMERLY ICON TRANSPORTATION FUND) - Industry baskets
include, but are not limited to: Aerospace & Defense; Air Freight & Couriers;
Airlines; Airport Services; Building Products; Commercial Printing; Construction
& Engineering; Construction & Farm Machinery; Data Processing Services;
Diversified Commercial Services; Electrical Components & Equipment; Employment
Services; Environmental Services; Heavy Electrical Equipment; Highways &
Railtracks; Industrial Conglomerates; Industrial Machinery; Marine; Marine
Ports & Services; Office Services & Supplies; Railroads; Trading Companies &
Distributors; and Trucking.
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.
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
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 31 of 116
<PAGE>
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.
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.
>> 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.
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>> 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 is 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 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.
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>> 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.
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.
JAPAN
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%.
SOUTH KOREA
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.
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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.
CHINA
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
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.
TAIWAN
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.
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AUSTRALIA
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
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. 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
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.
SINGAPORE
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
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the two remained closely tied until 1989 when dual listings were terminated.
The Singapore market has a strong international orientation.
There is no dividend withholding tax in Singapore. Tax credits are attached
to dividends and non-Singaporean residents are not entitled to the credit.
Therefore, non-residents may see a 27% tax charge on gross dividends. Capital
gains are not taxable in Singapore.
NEW ZEALAND
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.
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
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
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.
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FINLAND
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
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.
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.
REPUBLIC OF IRELAND
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
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.
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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
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.
SWEDEN
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.
UNITED KINGDOM
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
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.
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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.
FRANCE
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
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
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
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
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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.
SPAIN
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
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
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.
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There is no withholding of dividends in Argentina. Capital gains are also not
taxable.
BRAZIL
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.
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
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
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
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).
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Dividends are not subject to withholding tax where the underlying profits have
been subject to corporate tax. Otherwise the dividends are taxed at 34%.
Capital gains are not taxed. Property transfers however, are taxed at a rate of
20% on the gross transfer value.
FIXED INCOME FUND
ICON SHORT-TERM FIXED INCOME FUND
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 is 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 include,
among other things, limiting borrowing to 33 1/3% for temporary,
extraordinary purposes; restricting short sales
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ICON Funds - Prospectus Page 43 of 116
<PAGE>
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.
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,
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
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ICON Funds - Prospectus Page 44 of 116
<PAGE>
more than $450 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 a 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 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:
<TABLE>
<CAPTION>
FUND ADVISORY FEE RATE MANAGEMENT FEE PAID FY 2000
<S> <C> <C>
U.S. Equity Funds 1.00% 1.00%
International Equity Funds 1.00% 1.00%
Fixed Income Fund 0.65% 0.65%
</TABLE>
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.
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ICON Funds - Prospectus Page 45 of 116
<PAGE>
THE DISTRIBUTOR
The Funds retain Meridian Clearing Corp, 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, 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 page 50) 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.
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ICON Funds - Prospectus Page 46 of 116
<PAGE>
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.
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 substantially 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.
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ICON Funds - Prospectus Page 47 of 116
<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.
>> 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
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ICON Funds - Prospectus Page 48 of 116
<PAGE>
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.
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.
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ICON Funds - Prospectus Page 49 of 116
<PAGE>
>> 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 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.
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ICON Funds - Prospectus Page 50 of 116
<PAGE>
AN EXPLANATION OF THE FINANCIAL HIGHLIGHTS
The schedules provide an analysis of the items that affected the Funds' net
asset value, on a per share basis. The schedules provide the total return,
distributions per share, assets in the Fund, expense ratios and portfolio
turnover.
The first line is the beginning of period net asset value per share (NAV) and
the components of the current fiscal period's activity are shown in sections
that follow. The increase or (decrease) due to investment operations is first
followed by gains or (losses), either realized or unrealized, then dividends
& dist. are subtracted to arrive at the NAV per share at the end of the
fiscal period.
Also included in the schedule are the total return percentages for the Funds.
Total return is the annual rate of return on an investment including
appreciation and dividends or interest.
The next item in this schedule are the Funds' expense ratios, or percentage
of net assets that was used to cover the operating expenses of the Fund
during the period. This is determined by dividing the total expenses incurred
by the Fund by the average net assets in the Fund during the year.
The next item on the schedule is the ratio of net investment income, which is
the net investment income earned from investment operations divided by the
average net assets of the Funds during the reporting period.
The next item is the portfolio turnover rate, which is a measure of the
amount of buying and selling activity in the Funds' portfolio. The turnover
is affected by many things including, market conditions, changes in the size
of the Fund, due to purchase or redemption's by shareholders, the types of
Fund investments, and the investment style of the portfolio manager. A 100%
rate implies that an amount equal to the value of the entire portfolio is
turned over during the reporting period, a 50% rate means that an amount
equal to the value of half the portfolio is traded during the reporting
period.
ICON Funds - Prospectus Page 51 of 116
<PAGE>
FINANCIAL HIGHLIGHTS
ICON MATERIALS FUND
(formerly 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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
---------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.31 $ 6.58 $ 10.90 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.03 0.02 0.02 (0.01)
Net Gains or (Losses) on Securities (both
Realized and Unrealized) (0.85) 0.74 (4.08) 0.91
---------------- ------------- ------------- --------------
Total from Investment Operations (0.82) 0.76 (4.06) 0.90
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 (0.03) 0.00 0.00
Distributions in Excess of Net
Investment Income 0.00 0.00 0.00 0.00
Distributions (from Net Realized Gain) 0.00 0.00 (0.26) 0.00
Distributions in Excess of Net Realized
Gain 0.00 0.00 0.00 0.00
---------------- ------------- ------------- --------------
Total Dividends and Distributions 0.00 (0.03) (0.26) 0.00
NET ASSET VALUE, END OF PERIOD $ 6.49 $ 7.31 $ 6.58 $ 10.90
Total Return (11.22)% 11.65% (37.45)% 9.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $18,162 $ 26,373 $ 17,318 $ 50,251
Average Net Assets for the Period (000's) $23,620 $ 17,145 $ 27,117 $ 45,001
Ratio of Expenses to Average Net Assets 1.41% 1.45% 1.33% 1.45%
Ratio of Net Investment Income (Loss) to
Average Net Assets** 0.42% 0.16% 0.08% (0.24)%
Portfolio Turnover Rate 91.76% 118.29% 106.70% 32.35%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 52 of 116
<PAGE>
FINANCIAL HIGHLIGHTS
ICON CONSUMER DISCRETIONARY FUND
(formerly 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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
---------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.67 $ 7.87 $ 10.96 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* (0.02) 0.00 (0.01) (0.01)
Net Gains or (Losses) on Securities (both
Realized and Unrealized) (0.42) 2.04 (3.08) 0.97
---------------- ------------- -------------- -------------
Total from Investment Operations (0.44) 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 0.00
Distributions (from Net Realized Gain) 0.00 0.00 0.00 0.00
Distributions in Excess of Net Realized
Gain 0.00 (0.24) 0.00 0.00
---------------- ------------- -------------- -------------
Total Dividends and Distributions 0.00 (0.24) 0.00 0.00
NET ASSET VALUE, END OF PERIOD $ 9.23 $ 9.67 $ 7.87 $ 10.96
Total Return (4.55)% 25.78% (28.26)% 9.60%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 40,894 $ 54,351 $ 49,003 $ 20,916
Average Net Assets for the Period (000's) $ 46,245 $ 58,294 $ 39,883 $ 19,876
Ratio of Expenses to Average Net Assets 1.35% 1.35% 1.37% 1.89%
Ratio of Net Investment Income (Loss) to
Average Net Assets** (0.27)% (0.46)% (0.36)% (0.67)%
Portfolio Turnover Rate 88.44% 27.83% 72.42% 0.00%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 53 of 116
<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, and 2000:
<TABLE>
<CAPTION>
2000 1999 1998
------------- ------------- ----------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.98 $ 6.35 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (loss)* 0.04 0.01 0.06
Net Gains or (losses) on Securities (both
Realized and unrealized) 5.17 1.69 (3.71)
------------- ------------- ----------------
Total from Investment Operations 5.21 1.70 (3.65)
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from net investment income) 0.00 (0.05) 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 (0.02) 0.00
------------- ------------- ----------------
Total Dividends and Distributions 0.00 (0.07) 0.00
NET ASSET VALUE, END OF PERIOD $13.19 $ 7.98 $ 6.35
Total Return 65.29% 27.28% (36.50)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 44,294 $ 19,230 $ 12,335
Average Net Assets for the Period (000's) $ 29,564 $ 13,801 $ 21,128
Ratio of Expenses to Average Net Assets 1.36% 1.45% 1.20%
Ratio of Net Investment Income (loss) to
Average Net Assets** 0.43% (0.26)% 0.51%
Portfolio Turnover Rate 123.70% 34.41% 112.62%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 54 of 116
<PAGE>
FINANCIAL HIGHLIGHTS
ICON FINANCIAL FUND
(formerly 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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
----------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 8.99 $ 9.37 $ 10.51 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.11 0.02 0.04 0.01
Net Gains or (Losses) on Securities (both
Realized and Unrealized) 3.28 1.05 (1.14) 0.50
----------------- ------------- -------------- --------------
Total from Investment Operations 3.39 1.07 (1.10) 0.51
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 (0.04) (0.01) 0.00
Distributions in Excess of Net
Investment Income 0.00 (0.02) 0.00 0.00
Distributions (from Net Realized Gain) (0.12) (1.39) (0.03) 0.00
Distributions in Excess of Net Realized
Gain 0.00 0.00 0.00 0.00
----------------- ------------- -------------- --------------
Total Dividends and Distributions (0.12) (1.45) (0.04) 0.00
NET ASSET VALUE, END OF PERIOD $12.26 $ 8.99 $ 9.37 $ 10.51
Total Return 38.14% 10.05% (10.46)% 5.10%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $100,404 $ 5,483 $ 17,211 $ 32,237
Average Net Assets for the Period (000's) $ 43,690 $ 10,415 $ 28,304 $ 29,803
Ratio of Expenses to Average Net Assets 1.33% 1.58% 1.33% 1.70%
Ratio of Net Investment Income (Loss) to
Average Net Assets** 1.14% 0.09% 0.35% 0.12%
Portfolio Turnover Rate 28.99% 53.29% 87.68% 0.00%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 55 of 116
<PAGE>
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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
---------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.98 $ 11.39 $ 11.78 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* (0.08) 0.00 0.02 (0.04)
Net Gains or (Losses) on Securities (both
Realized and Unrealized) 4.34 (0.25) 0.35 1.82
---------------- ------------- ------------ --------------
Total from Investment Operations 4.26 (0.25) 0.37 1.78
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 0.00 0.00 0.00
Distributions in Excess of Net
Investment Income 0.00 0.00 0.00 0.00
Distributions (from Net Realized Gain) (0.31) (3.16) (0.76) 0.00
Distributions in Excess of Net Realized
Gain 0.00 0.00 0.00 0.00
---------------- ------------- ------------ --------------
Total Dividends and Distributions (0.31) (3.16) (0.76) 0.00
NET ASSET VALUE, END OF PERIOD $11.93 $7.98 $ 11.39 $ 11.78
Total Return 55.35% (5.34)% 3.77% 17.80%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 49,066 $ 24,550 $ 31,153 $ 77,307
Average Net Assets for the Period (000's) $ 38,688 $ 29,272 $ 56,620 $ 59,164
Ratio of Expenses to Average Net Assets 1.38% 1.40% 1.24% 1.45%
Ratio of Net Investment Income (Loss) to
Average Net Assets** (0.74)% (0.83)% (0.13)% (0.80)%
Portfolio Turnover Rate 115.05% 85.99% 52.16% 71.81%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 56 of 116
<PAGE>
FINANCIAL HIGHLIGHTS
ICON LEISURE AND CONSUMER STAPLES FUND
(formerly 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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
----------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.05 $ 11.79 $ 11.35 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.01 0.10 0.02 (0.01)
Net Gains or (Losses) on Securities (both
Realized and Unrealized) 0.25 1.61 0.45 1.36
----------------- ------------- -------------- --------------
Total from Investment Operations 0.26 1.71 0.47 1.35
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 (0.24) 0.00 0.00
Distributions in Excess of Net
Investment Income 0.00 (0.03) 0.00 0.00
Distributions (from Net Realized Gain) (1.85) (1.18) (0.03) 0.00
Distributions in Excess of Net Realized
Gain (1.22) 0.00 0.00 0.00
----------------- ------------- -------------- --------------
Total Dividends and Distributions (3.07) (1.45) (0.03) 0.00
NET ASSET VALUE, END OF PERIOD $ 9.24 $ 12.05 $ 11.79 $ 11.35
Total Return 5.27% 14.76% 4.18% 13.50%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 7,765 $ 31,559 $ 54,426 $ 66,608
Average Net Assets for the Period (000's) $18,029 $ 40,054 $ 74,443 $ 45,444
Ratio of Expenses to Average Net Assets 1.51% 1.38% 1.30% 1.48%
Ratio of Net Investment Income (Loss) to
Average Net Assets** 0.13% (0.12)% 0.07% (0.36)%
Portfolio Turnover Rate 24.50% 49.22% 34.17% 2.52%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 57 of 116
<PAGE>
FINANCIAL HIGHLIGHTS
ICON INFORMATION TECHNOLOGY FUND
(formerly 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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
---------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 19.00 $ 9.20 $ 12.96 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* (0.05) 0.00 (0.06) (0.05)
Net Gains or (Losses) on Securities (both
Realized and Unrealized) 9.62 10.58 (3.31) 3.01
---------------- ------------- ------------- ---------------
Total from Investment Operations 9.57 10.58 (3.37) 2.96
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 0.00 0.00 0.00
Distributions in Excess of Net
Investment Income 0.00 0.00 0.00 0.00
Distributions (from Net Realized Gain) (6.44) (0.78) (0.39) 0.00
Distributions in Excess of Net Realized
Gain 0.00 0.00 0.00 0.00
---------------- ------------- ------------- ---------------
Total Dividends and Distributions (6.44) (0.78) (0.39) 0.00
NET ASSET VALUE, END OF PERIOD $ 22.13 $ 19.00 $ 9.20 $ 12.96
Total Return 59.24% 119.53% (26.17)% 29.60%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 46,689 $ 55,126 $ 60,494 $ 41,849
Average Net Assets for the Period (000's) $ 56,279 $ 66,977 $ 73,057 $ 29,766
Ratio of Expenses to Average Net Assets 1.35% 1.37% 1.31% 1.47%
Ratio of Net Investment Income (Loss) to
Average Net Assets** (0.23)% (1.06)% (0.99)% (0.88)%
Portfolio Turnover Rate 137.69% 31.75% 31.68% 44.57%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 58 of 116
<PAGE>
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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
----------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.04 $ 14.17 $ 10.63 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.20 0.83 0.31 0.06
Net Gains or (Losses) on Securities (both
Realized and Unrealized) 0.99 1.18 3.28 0.57
----------------- ------------- -------------- --------------
Total from Investment Operations 1.19 2.01 3.59 0.63
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) (0.16) (1.02) (0.04) 0.00
Distributions in Excess of Net
Investment Income 0.00 0.00 0.00 0.00
Distributions (from Net Realized Gain) (2.94) (5.12) (0.01) 0.00
Distributions in Excess of Net Realized
Gain 0.00 0.00 0.00 0.00
----------------- ------------- -------------- --------------
Total Dividends and Distributions (3.10) (6.14) (0.05) 0.00
NET ASSET VALUE, END OF PERIOD $ 8.13 $ 10.04 $ 14.17 $ 10.63
Total Return 14.99% 15.25% 33.88% 6.30%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 8,619 $ 7,129 $ 23,749 $ 20,422
Average Net Assets for the Period (000's) $ 7,231 $ 9,825 $ 36,698 $ 19,230
Ratio of Expenses to Average Net Assets 1.53% 1.59% 1.34% 1.91%
Ratio of Net Investment Income (Loss) to
Average Net Assets** 2.43% 1.84% 2.12% 1.62%
Portfolio Turnover Rate 41.86% 18.85% 155.72% 2.55%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
ICON Funds - Prospectus Page 59 of 116
<PAGE>
FINANCIAL HIGHLIGHTS
ICON INDUSTRIALS FUND
(formerly 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, 1999, and 2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.31 $ 9.45 $ 12.40 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.03 0.01 0.01 0.00
Net Gains or (Losses) on Securities (both (0.47) 1.63 (2.71) 2.40
Realized and Unrealized) -----------------------------------------------------------
Total from Investment Operations (0.44) 1.64 (2.70) 2.40
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 (0.02) (0.01) 0.00
Distributions in Excess of Net 0.00 0.00 0.00 0.00
Investment Income
Distributions (from Net Realized Gain) (0.80) (0.76) (0.24) 0.00
Distributions in Excess of Net Realized 0.00 0.00 0.00 0.00
Gain -----------------------------------------------------------
Total Dividends and Distributions (0.80) (0.78) (0.25) 0.00
NET ASSET VALUE, END OF PERIOD $ 9.07 $ 10.31 $ 9.45 $ 12.40
Total Return (4.32)% 16.89% (22.08)% 24.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 22,068 $ 21,004 $ 11,318 $22,531
Average Net Assets for the Period (000's) $ 21,220 $ 24,387 17,975 $19,459
Ratio of Expenses to Average Net Assets 1.38% 1.41% 1.41% 1.61%
Ratio of Net Investment Income (Loss) to 0.34% 0.10% 0.08% (0.04)%
Average Net Assets**
Portfolio Turnover Rate 72.90% 47.97% 10.62% 15.97%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 60 of 116
<PAGE>
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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.87 $ 6.09 $ 9.94 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.03 (0.01) (0.04) (0.01)
Net Gains or (Losses) on Securities (both (0.65) 4.79 (3.81) (0.05)
Realized and Unrealized) -----------------------------------------------------------
Total from Investment Operations (0.62) 4.78 (3.85) (0.06)
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 0.00 0.00 0.00
Distributions in Excess of Net 0.00 0.00 0.00 0.00
Investment Income
Distributions (from Net Realized Gain) 0.00 0.00 0.00 0.00
Distributions in Excess of Net Realized 0.00 0.00 0.00 0.00
Gain -----------------------------------------------------------
Total Dividends and Distributions 0.00 0.00 0.00 0.00
NET ASSET VALUE, END OF PERIOD $ 10.25 $ 10.87 $ 6.09 $ 9.94
Total Return (5.70)% 78.49% (38.73)% (0.60)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 25,710 $ 33,564 $ 26,730 $ 58,279
Average Net Assets for the Period (000's) $ 32,629 $ 29,191 $ 45,361 $ 45,191
Ratio of Expenses to Average Net Assets 1.53% 1.59% 1.65% 1.66%
Ratio of Net Investment Income (Loss) to 0.24% (0.57)% (0.45)% (0.23)%
Average Net Assets**
Portfolio Turnover Rate 101.88% 62.82% 69.57% 0.00%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 61 of 116
<PAGE>
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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.74 $ 11.63 $ 11.06 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.04 (0.05) (0.02) 0.07
Net Gains or (Losses) on Securities (both
Realized and Unrealized) 1.21 1.51 0.79 0.99
-----------------------------------------------------------
Total from Investment Operations 1.25 1.46 0.77 1.06
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0.00 (0.17) (0.06) 0.00
Distributions in Excess of Net
Investment Income 0.00 0.00 0.00 0.00
Distributions (from Net Realized Gain) (1.20) (1.18) (0.14) 0.00
Distributions in Excess of Net Realized
Gain 0.00 0.00 0.00 0.00
-----------------------------------------------------------
Total Dividends and Distributions (1.20) (1.35) (0.20) 0.00
NET ASSET VALUE, END OF PERIOD $ 11.79 $ 11.74 $ 11.63 $ 11.06
Total Return 10.43% 12.78% 7.00% 10.60%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 33,315 $ 23,971 $ 39,726 $49,947
Average Net Assets for the Period (000's) $ 29,412 $ 30,993 $ 49,406 $36,212
Ratio of Expenses to Average Net Assets 1.52% 1.59% 1.54% 1.66%
Ratio of Net Investment Income (Loss) to
Average Net Assets** 0.30% 0.25% -0.41% 1.34%
Portfolio Turnover Rate 34.24% 50.36% 57.84% 13.89%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 62 of 116
<PAGE>
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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.12 $11.87 $11.90 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.02 0.02 (0.23) 0.10
Net Gains or (Losses) on Securities (both (0.00) 1.06 0.93 1.80
Realized and Unrealized)
-----------------------------------------------------------
Total from Investment Operations 0.02 1.08 0.70 1.90
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) 0,00 0.00 (0.07) 0.00
Distributions in Excess of Net 0.00 (0.03) 0.00 0.00
Investment
Distributions (from Net Realized Gain) 0.00 (2.80) (0.66) 0.00
Distributions in Excess of Net Realized 0.00 0.00 0.00 0.00
Gain
-----------------------------------------------------------
Total Dividends and Distributions 0.00 (2.83) (0.73) 0.00
NET ASSET VALUE, END OF PERIOD $10.14 $10.12 $11.87 $11.90
Total Return 0.20% 6.41% 6.11% 19.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $6,560 $5,298 $9,452 $21,088
Average Net Assets for the Period (000's) $7,109 $8,107 $20,263 $15,055
Ratio of Expenses to Average Net Assets 1.80% 1.81% 1.56% 1.69%
Ratio of Net Investment Income (Loss) to 0.18% (0.53)% (0.26)%*** 1.92%
Average Net Assets**
Portfolio Turnover Rate 62.17% 70.65% 113.55% 7.29%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
*** 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 of 116
<PAGE>
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, 1999, and
2000:
<TABLE>
<CAPTION>
2000 1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.15 $ 9.79 $ 10.03 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)* 0.39 0.43 0.76 0.47
Net Gains or (Losses) on Securities (both 0.02 (0.12) (0.14) 0.03
Realized and Unrealized)
-----------------------------------------------------------
Total from Investment Operations 0.41 0.31 0.62 0.50
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends (from Net Investment Income) (0.39) (0.65) (0.53) (0.47)
Distributions in Excess of Net 0.00 0.00 0.00 0.00
Investment Income
Distributions (from Net Realized Gain) (0.03) (0.30) (0.33) 0.00
Distributions in Excess of Net Realized 0.00 0.00 0.00 0.00
Gain
-----------------------------------------------------------
Total Dividends and Distributions (0.42) (0.95) (0.86) (0.47)
NET ASSET VALUE, END OF PERIOD $ 9.14 $ 9.15 $ 9.79 $ 10.03
Total Return 4.45% 3.54% 6.55% 3.18%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000's) $ 5,386 $ 5,111 $ 5,350 $ 81,382
Average Net Assets for the Period (000's) $ 5,367 $ 4,658 $17,542 $ 128,897
Ratio of Expenses to Average Net Assets 1.52% 1.06%**** 0.11%*** 1.10%
Ratio of Net Investment Income (Loss) to 4.16% 4.42%**** 5.66%*** 4.66%
Average Net Assets**
Portfolio Turnover Rate 53.26% 53.22% 163.75% 297.62%
</TABLE>
* Calculated Using Average Share Method
** Annualized for Periods Less Than a Year
*** 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 of 116
<PAGE>
NOTICE OF PRIVACY POLICIES AND PROCEDURES
We collect non-public personal information about you from the following sources:
(i) information we receive from you on applications or other forms; and (ii)
information about your transactions with us.
Our policies prohibit disclosure of non-public personal information about
present or former individual shareholders to anyone, EXCEPT as permitted or
required by law AND EXCEPT as necessary for entities providing services to us,
performing functions for us or maintaining records on our behalf, to perform the
applicable function.
All services provided to you are through our service providers and all
records containing your non-public personal information are maintained at the
service providers' places of business. These entities include our transfer
agent, administrative service provider and investment adviser.
Contracts with these entities prohibit them from disclosing non-public personal
information about you, require them to restrict access to the information to
those employees who need to know that information, and require them to maintain
physical, electronic, and procedural safeguards that comply with federal
standards to guard your non-public personal information. We restrict access to
non-public personal information about you to the entities described above.
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 65 of 116
<PAGE>
[GRAPHIC OMITTED]
OFFERED BY THIS PROSPECTUS:
U.S. EQUITY FUNDS
ICON Materials Fund (formerly ICON Basic Materials
Fund)
ICON Consumer Discretionary Fund (formerly ICON
Consumer Cyclicals Fund)
ICON Energy Fund
ICON Financial Fund (formerly ICON Financial
Services Fund)
ICON Healthcare Fund
ICON Leisure and Consumer Staples Fund (formerly
ICON Leisure Fund)
ICON Information Technology Fund (formerly
ICON Technology Fund)
ICON Telecommunication & Utilities Fund
ICON Industrials Fund (formerly ICON Transportation
Fund)
FIXED INCOME FUND
ICON Short-Term Fixed Income Fund
INTERNATIONAL EQUITY FUNDS
ICON Asia Region Fund
ICON South Pacific Region Fund
ICON North Europe Region Fund
ICON South Europe Region Fund
ICON Western Hemisphere Fund
OFFERED BY A SEPARATE PROSPECTUS:
U.S. EQUITY FUND
ICON Fund
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT ADVISER...............................Meridian Investment Management Corporation
ADMINISTRATOR....................................Meridian Investment Management Corporation
DISTRIBUTOR......................................Meridian Clearing Corp
INDEPENDENT ACCOUNTANTS..........................PricewaterhouseCoopers LLP
COUNSEL..........................................Charles W. Lutter, Jr.
TRANSFER AGENT...................................Firstar Mutual Fund Services, LLC
CUSTODIAN........................................Firstar Bank Milwaukee
</TABLE>
--------------------------------------------------------------------------------
ICON Funds - Prospectus Page 66 of 116
<PAGE>
[GRAPHIC OMITTED]
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
<TABLE>
<S> <C>
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 For hours of operation.
e-mail address: [email protected]
</TABLE>
ICON Funds' SEC File No. 811-07883
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 67 of 116
<PAGE>
--------------------------------------------------------------------------------
PART B
STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
<PAGE>
ICON FUNDS
JANUARY _____, 2001
STATEMENT OF ADDITIONAL INFORMATION
ICON Fund
ICON Materials Fund (formerly ICON Basic Materials Fund)
ICON Consumer Discretionary Fund (formerly ICON Consumer Cyclicals Fund)
ICON Energy Fund
ICON Financial Fund (formerly ICON Financial Services Fund)
ICON Healthcare Fund
ICON Leisure and Consumer Staples Fund (formerly ICON Leisure Fund)
ICON Information Technology Fund (formerly ICON Technology Fund)
ICON Telecommunication & Utilities Fund
ICON Industrials Fund (formerly 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 ("SAI") is not a prospectus. It relates
to the Prospectus for the ICON Funds listed above, dated October 2, 2000, for
the ICON Fund, and January ___, 2001, for the other listed ICON Funds, 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.
<PAGE>
TABLE OF CONTENTS
THE ICON FUNDS................................................................71
INVESTMENT POLICIES AND RESTRICTIONS..........................................71
ADDITIONAL INFORMATION ABOUT FUND INVESTMENTS AND RISK CONSIDERATIONS.........72
TEMPORARY DEFENSIVE POSITION..................................................82
PORTFOLIO TURNOVER............................................................83
TRUSTEES AND OFFICERS.........................................................83
PRINCIPAL SHAREHOLDERS........................................................84
THE INVESTMENT ADVISOR........................................................86
ADMINISTRATIVE SERVICES.......................................................87
CUSTODIAN.....................................................................88
TRANSFER AGENT................................................................88
INDEPENDENT ACCOUNTANTS AND COUNSEL...........................................88
DISTRIBUTOR...................................................................88
PORTFOLIO TRANSACTIONS - BROKERAGE ALLOCATION.................................89
PURCHASE AND REDEMPTION OF SHARES.............................................90
DETERMINATION OF SHARE OFFERING PRICE.........................................91
TAX STATUS....................................................................91
TAXATION OF THE FUNDS -- IN GENERAL........................................91
TAXATION OF THE FUNDS' INVESTMENTS.........................................92
TAXATION OF THE SHAREHOLDER................................................92
OTHER TAX CONSIDERATIONS......................................................93
CALCULATION OF PERFORMANCE DATA...............................................95
TOTAL RETURN...............................................................95
YIELD......................................................................96
NONSTANDARDIZED TOTAL RETURN...............................................97
ADDITIONAL INFORMATION REGARDING THE FUNDS....................................97
FINANCIAL STATEMENTS..........................................................98
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THE ICON FUNDS
The ICON Funds are mutual funds registered with the SEC. The ICON Funds 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.
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(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.
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,
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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
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
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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
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.
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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.
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
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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
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
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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.
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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
the U.S. dollar. Foreign securities markets generally have less trading volume
and less liquidity than U.S. markets. Further, prices
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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
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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.
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
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 80 of 116
<PAGE>
value of portfolio securities will be on the settlement date of a currency
transaction. Accordingly, it may be necessary for the Fund to buy 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
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 81 of 116
<PAGE>
underlying security. The Fund may engage in a repurchase agreement with
respect to any security in which it is authorized to invest. Any repurchase
transaction in which the Fund engages will require collateralization equal to
at least 102% of the Seller's obligation during the entire term of the
repurchase agreement. While it does not presently appear possible to eliminate
all risks from these transactions (particularly the possibility of a decline
in the market value of the underlying securities, as well as delays and costs
to the Fund in connection with bankruptcy proceedings), it is the Fund's
current policy to limit repurchase agreement transactions to those parties
whose creditworthiness has been reviewed and deemed satisfactory by the
Advisor.
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-third 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
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 82 of 116
<PAGE>
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.
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>
------------------------------------ --------------------------- ---------------------------------------------------
NAME, AGE AND ADDRESS POSITION Principal Occupation During Past 5 Years
------------------------------------ --------------------------- ---------------------------------------------------
<S> <C> <C>
Craig T. Callahan * President and Trustee President of Meridian Management &
Age: 49 (Since Inception) Research Corporation, President and Chief
52 Glenmoor Way Investment Officer of the Advisor, and
Englewood, CO 80110 President of Meridian Clearing Corporation,
the principal underwriter for the Funds.
------------------------------------ --------------------------- ---------------------------------------------------
R. Michael Sentel Trustee, Senior Attorney for U.S. Department of
Age: 52 Audit Committee Education since October 1996; owner of Sentel
15663 Wedge Way Member & Company from 1994 to present; Counsel
Morrison, CO 80465 (Since Inception) (Section Chief) of Professional Liability
Section of FDIC's Rocky Mountain
Litigation Division from 1991 to 1994.
------------------------------------ --------------------------- ---------------------------------------------------
James W. Hire Trustee, Principal of Hire & Associates since 1988.
Age: 52 Audit Committee Managing Partner, H&Co Hospitality LLC
5761 Harborage Drive Member since 2000.
Ft. Myers, FL 33908 (Since Inception)
------------------------------------ --------------------------- ---------------------------------------------------
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 83 of 116
<PAGE>
------------------------------------ --------------------------- ---------------------------------------------------
Glen F. Bergert Trustee, President, Venture Capital Management LLC
Age: 50 Audit Committee since 1997; Partner, KPMG Peat Marwick,
1010 Brentwater Road Member LLP from 1979 to 1997.
Camp Hill, PA 17011 (Since February 1999)
------------------------------------ --------------------------- ---------------------------------------------------
Erik L. Jonson, CPA Vice President and Chief Financial Officer and Secretary of
Age: 51 Chief Financial Officer, Meridian Management & Research
9465 West Geddes Place Chief Accounting Corporation, owner of Erik L. Jonson, CPA
Littleton, CO 80112 Officer from 1986 to 1996.
------------------------------------ --------------------------- ---------------------------------------------------
John Gregory Scott Vice President and Chief Legal Officer of the Advisor since
Age: 35 Secretary of the Trust September 2000; prior thereto Mr. Scott
6386 South Valleyview Street practiced law with Hall & Evans, L.L.C. from
Littleton, CO 80120 December 1998 to August 2000 and with
Kennedy & Christopher, P.C. from June
to December 1998 (both in Denver, CO);
prior thereto he was a Judge Advocate in
the U.S. Marine Corps, Camp Pendleton, CA
from October 1995 to June 1998; U.S.
Marine Corps officer since 1987.
------------------------------------ --------------------------- ---------------------------------------------------
</TABLE>
The compensation paid to the Trustees of the Trust during the fiscal year
ended September 30, 2000, 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 from Accrued As Part of Fund Benefits Upon Trust (the Trust is not in a
Name Trust Expenses Retirement 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 $22,000 $0 $0 $22,000
----------------------- ----------------- ----------------------- ---------------- -----------------------------
</TABLE>
PRINCIPAL SHAREHOLDERS
As of September 30, 2000, no person owned, beneficially or of record, more
than 5% of the outstanding shares of any of the Funds except:
<TABLE>
<CAPTION>
RECORD OWNER FUND NAME AMOUNT OWNED
<S> <C> <C>
Charles Schwab & Co., Inc. ICON Energy Fund 28.36%
101 Montgomery Street ICON Financial Fund 12.59%
San Francisco, CA 94104 (formerly ICON Financial Services Fund)
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 84 of 116
<PAGE>
ICON Information Technology Fund 24.90%
(formerly ICON Technology Fund)
ICON Healthcare Fund 5.98%
ICON Leisure and Consumer Staples Fund 11.70%
(formerly ICON Leisure Fund)
ICON Telecommunication & Utilities Fund 11.14%
ICON North Europe Region Fund 20.92%
ICON South Europe Region Fund 5.24%
National Investor Services Corp. ICON Energy Fund 5.11%
55 Water Street, Floor 32
New York, NY 10041
Resources Trust Corp. ICON Materials Fund (formerly ICON Basic Materials 89.68%
P.O. Box 5900 Fund)
Denver, CO 80217 ICON Consumer Discretionary Fund 91.11%
(formerly ICON Consumer Cyclicals
Fund)
ICON Energy Fund 45.51%
ICON Financial Fund 80.84%
(formerly ICON Financial Services Fund)
ICON Healthcare Fund 87.98%
ICON Leisure and Consumer Staples Fund 83.52%
(formerly ICON Leisure Fund)
ICON Information Technology Fund 58.07%
(formerly ICON Technology Fund)
ICON Telecommunication & Utilities Fund 80.07%
ICON Industrials Fund 90.95%
(formerly ICON Transportation Fund)
ICON Asia Region Fund 80.22%
ICON North Europe Region Fund 67.75%
ICON South Europe Region Fund 85.36%
ICON Short-Term Fixed Income Fund 55.26%
Russo K. Frank ICON Short-Term Fixed Income Fund 10.21%
11300 4th St. N Ste. 121
St. Petersburg, FL 33716-2939
Bear Stearns Sec. Corp. ICON Short-Term Fixed Income Fund 7.41%
1 MetroTech Center North
Brooklyn, NY 11201-3859
Firstar Bank Custodian ICON Short-Term Fixed Income Fund 6.05%
Evelyn T. Goldberg IRA
1260 Northwood Rd. Apt. 164B
Seal Beach, CA 90740-3344
</TABLE>
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
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 85 of 116
<PAGE>
any of the Funds. As of November 17, 2000, 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 and Ms. Urtz 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; and 0.75% for the ICON 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 during the Funds most recent
fiscal years.
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
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 2001. The Advisory Agreement may be terminated on 60 days'
written notice by either party and will terminate automatically if assigned.
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
ICON Materials Fund (formerly ICON Basic Materials Fund) $237,043 $171,976 $272,115
ICON Consumer Discretionary Fund (formerly ICON 463,947 582,809 397,733
Consumer Cyclicals Fund)
ICON Energy Fund 295,547 137,737 194,049
ICON Financial Fund (formerly ICON Financial Services Fund) 435,253 104,440 283,463
ICON Healthcare Fund 387,220 292,840 567,600
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 86 of 116
<PAGE>
ICON Leisure and Consumer Staples Fund (formerly ICON
Leisure Fund) 181,431 401,048 744,731
ICON Information Technology Fund (formerly ICON
Technology Fund) 564,226 669,756 729,901
ICON Telecommunication & Utilities Fund 72,478 98,701 366,467
ICON Industrials Fund (formerly ICON Transportation Fund) 212,663 244,119 179,454
ICON Asia Region Fund 326,119 291,576 454,406
ICON North Europe Region Fund 294,019 310,516 494,302
ICON South Europe Region Fund* 71,170 81,112 202,940
ICON South Pacific Region Fund* 0 0 0
ICON Western Hemisphere Fund* 0 0 0
ICON Fund* 0 0 0
ICON Short-Term Fixed Income Fund 35,324 30,268 113,919
</TABLE>
* (funds not commenced operation)
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
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 87 of 116
<PAGE>
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
............................................................................................... ..............
Administrative Fee Paid to Meridian as Administrator 10-1-99 through 9-30-00 $180,149
............................................................................................... ..............
</TABLE>
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, 1670 Broadway, Suite 1000, Denver, Colorado
80202, has been selected as independent accountants for the Trust for the
fiscal year ending September 30, 2001. Charles W. Lutter, Jr., 103 Canyon
Oaks, San Antonio, Texas 78232, is legal counsel to the Trust.
DISTRIBUTOR
Meridian Clearing Corp, 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. Shares of all
ICON Funds, except the ICON Fund, are no-load, no 12b-1
(distribution/shareholder service) fee. The Class C shares of the ICON Fund
carry a 1.00%12b-1 fee and the Class I shares carry a 0.25% 12b-1 fee.
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 88 of 116
<PAGE>
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.
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:
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 89 of 116
<PAGE>
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
ICON Materials Fund (formerly ICON Basic Materials Fund) $ 71,972 $ 91,777 $238,749
ICON Consumer Discretionary Fund (formerly ICON Consumer 125,478 76,184 138,972
Cyclicals Fund)
ICON Energy Fund 139,725 25,661 69,414
ICON Financial Fund (formerly ICON Financial Services Fund) 115,643 24,563 50,068
ICON Healthcare Fund 78,196 100,929 121,805
ICON Leisure and Consumer Staples Fund (formerly ICON 66,762 128,109 98,876
Leisure Fund)
ICON Information Technology Fund (formerly ICON 140,598 114,662 105,308
Technology Fund)
ICON Telecommunication & Utilities Fund 7,881 24,532 121,874
ICON Industrials Fund (formerly ICON Transportation Fund) 34,454 26,200 14,011
ICON Asia Region Fund 116,552 65,179 104,289
ICON North Europe Region Fund 28,699 93,816 100,757
ICON South Europe Region Fund 20,791 33,177 129,283
ICON South Pacific Region Fund* 0 0 0
ICON Western Hemisphere Fund* 0 0 0
ICON Fund* 0 0 0
</TABLE>
* (funds have not commenced operations)
Year over year differences in brokerage fees paid are the result of internal and
external actions. Internal action is the Adviser repositioning fund assets to
different industries and/or sectors. External action is from assets moving in or
out of a fund due to purchases and redemptions of a fund's shares. Many share
transactions are the result of external investment advisers moving client monies
(advisers that use the funds for industry sector allocation or rotation).
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,
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 90 of 116
<PAGE>
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.
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 "About Your Account" 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"). Generally, a fund will not be subject to 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. The Funds intend to distribute substantially all of such income.
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 91 of 116
<PAGE>
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
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 92 of 116
<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,
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 93 of 116
<PAGE>
over-the-counter options or foreign currencies and certain options graded on
foreign exchanges will also be treated as section 988 gains or losses.
Forward currency contracts and certain options entered into by the Fund may
create "straddles" for U.S. Federal income tax purposes and this may affect the
character of gains or losses realized by the Fund on forward currency contracts
or on the underlying securities and cause losses to be deferred. Transactions in
forward currency contracts may also result in the loss of the holding period of
underlying securities. 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.
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 94 of 116
<PAGE>
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.
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 one year period ended September 30, 2000.
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 95 of 116
<PAGE>
AVERAGE
ANNUAL
FUND TOTAL RETURN
---- ------------
ICON Materials Fund (formerly ICON Basic Materials Fund) (11.22)%
ICON Consumer Discretionary Fund (formerly ICON Consumer (4.55)%
Cyclicals Fund)
ICON Energy Fund 65.29%
ICON Financial Fund (formerly ICON Financial Services Fund) 38.14%
ICON Healthcare Fund 55.35%
ICON Leisure and Consumer Staples Fund (formerly ICON 5.27%
Leisure Fund)
ICON Information Technology Fund (formerly ICON 59.24%
Technology Fund)
ICON Telecommunication & Utilities Fund 14.99%
ICON Industrials Fund (formerly ICON Transportation Fund) (4.32)%
ICON Asia Region Fund (5.70)%
ICON North Europe Region Fund 10.43%
ICON South Europe Region Fund 0.20%
ICON Short-Term Fixed Income Fund 4.45%
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:
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 96 of 116
<PAGE>
YIELD = 2 [ (A - B + 1)TO THE POWER OF 6 - 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 maximum offering price per share on the
last day of the period
The yield for the 30-day period ended September 30, 2000, for the ICON
Short-Term Fixed Income Fund was 4.818260%.
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.
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.
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 97 of 116
<PAGE>
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:
Meridian Investment Management Corporation
12835 East Arapahoe Road, Tower II
Englewood, Colorado 80112
FINANCIAL STATEMENTS
The audited financial highlights with respect to the following series of
the ICON Funds for the year ended September 30, 2000, and for the period
from the commencement of operations through September 30, 1997, 1998, and
1999, are found in Part A of this Registration Statement.
--------------------------------------------------------------------------------
ICON Funds - Statement of Additional Information Page 98 of 116
<PAGE>
<TABLE>
<CAPTION>
COMMENCEMENT
SERIES NAME OF OPERATIONS
------------------------------------------------------------------------------------- ------------------------
<S> <C>
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 Information Technology Fund (formerly ICON Technology Fund) February 19, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Materials Fund (formerly ICON Basic Materials Fund) May 5, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Leisure and Consumer Staples Fund (formerly ICON Leisure Fund) May 9, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Industrials Fund (formerly ICON Transportation Fund) May 9, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Financial Fund (formerly ICON Financial Services Fund) July 1, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Consumer Discretionary Fund (formerly ICON Consumer Cyclicals Fund) July 9, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Telecommunication & Utilities Fund July 9, 1997
------------------------------------------------------------------------------------- ------------------------
ICON Energy Fund November 5, 1997
------------------------------------------------------------------------------------- ------------------------
</TABLE>
At September 30, 2000, the following funds had not yet commenced operations:
ICON Fund, ICON South Pacific Region Fund, and ICON Western Hemisphere Fund.
The financial statements for the fiscal period ended September 30, 2000, 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. 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 99 of 116
<PAGE>
--------------------------------------------------------------------------------
PART C
OTHER INFORMATION
--------------------------------------------------------------------------------
<PAGE>
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 incorporated by reference from Post-Effective amendment
No. 7 to Registrant's Registration Statement filed January 20, 2000.
(5) Amendment No. 4 to the Master Trust Agreement dated June 28, 2000,
is incorporated by reference from Post-Effective amendment No. 8 to
Registrant's Registration Statement filed September 25, 2000.
(6) Amendment No. 5 to the Master Trust Agreement dated August 16, 2000,
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, 1999, is incorporated by reference from Post-Effective
amendment No. 7 to Registrant's Registration Statement filed
January 20, 2000.
(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.
--------------------------------------------------------------------------------
ICON Funds - Part C Page 101 of 116
<PAGE>
(h)(1) Administrative Services Agreement between Registrant and Meridian
Investment Management Corporation dated March 1, 1999, is
incorporated by reference from Post-Effective amendment No. 7 to
Registrant's Registration Statement filed January 20, 2000.
(2) Transfer Agent Agreement between Registrant and Firstar Trust
Company dated October 9, 1996, is incorporated by reference from
Registrant's Initial Registration Statement.
(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 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) Rule 12b-1 plan filed is incorporated by reference from
Post-Effective amendment No. 8 to Registrant's Registration
Statement filed September 25, 2000.
(n) Rule 18f-3 plan is incorporated by reference from Post-Effective
amendment No. 8 to Registrant's Registration Statement filed
September 25, 2000.
(o) Code of Ethics for ICON Funds, the Advisor and related entities is
incorporated by reference from Post-Effective amendment No. 7 to
Registrant's Registration Statement filed January 20, 2000.
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
--------------------------------------------------------------------------------
ICON Funds - Part C Page 102 of 116
<PAGE>
proceeding, whether civil or criminal before any court or
administrativeor 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 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.
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ICON Funds - Part C Page 103 of 116
<PAGE>
INDEX to EXHIBITS
ITEM DESCRIPTION
a(6) Amendment No. 5 to the Master Trust Agreement
(i) Opinion and Consent of Lynch, Brewer, Hoffman, & Sands, LLP
(j)(1) Consent of PricewaterhouseCoopers LLP
(2) Power of Attorney for Trustees and Officers
--------------------------------------------------------------------------------
ICON Funds - Part C Page 104 of 116
<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(a) 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 30 day of November, 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 November 30, 2000 by the following persons
in the capacities indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Craig T. Callahan President and Trustee November 30, 2000
---------------------
CRAIG T. CALLAHAN
/s/ R. Michael Sentel* Trustee November 30, 2000
----------------------
R. MICHAEL SENTEL
/s/ James W. Hire* Trustee November 30, 2000
------------------
JAMES W. HIRE
/s/ Glen F. Bergert* Trustee November 30, 2000
--------------------
GLEN F BERGERT
/s/ Erik L. Jonson Vice President, Chief Accounting Officer November 30, 2000
------------------ and Chief Financial Officer
ERIK L. JONSON
</TABLE>
* By: /s/Charles W. Lutter, Jr.
--------------------------
Charles W. Lutter, Jr.
Attorney-in-Fact
--------------------------------------------------------------------------------
ICON Funds - Part C Page 105 of 116
