EVERGREEN INTERNATIONAL AND GLOBAL GROWTH FUNDS
EVERGREEN PERPETUAL INTERNATIONAL FUND
(FORMERLY MENTOR PERPETUAL INTERNATIONAL PORTFOLIO)
[Evergreen Logo]
CLASS A
CLASS B
CLASS C
CLASS Y
PROSPECTUS, MARCH 1, 1999, AS AMENDED OCTOBER 15, 1999
The Securities and Exchange Commission has not determined that the information
in this prospectus is accurate or complete, nor has it approved or disapproved
these securities. Anyone who tells you otherwise is committing a crime.
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TABLE OF CONTENTS
Summary Information...................................................... 1
Fund Performance......................................................... 2
Expense Summary.......................................................... 3
Principal Investment Strategies and Risks................................ 4
Other Investments and Risks.............................................. 5
Management............................................................... 7
Calculating the Share Price.............................................. 7
How to Choose an Evergreen Fund.......................................... 8
How to Choose the Share Class that Best Suits You........................ 8
How to Buy Shares........................................................11
How to Redeem Shares.....................................................12
Other Services...........................................................13
The Tax Consequences of Investing in the Fund............................13
Fees and Expenses of the Funds...........................................14
Financial Highlights.....................................................16
RISK FACTORS FOR ALL MUTUAL FUNDS
Please remember that mutual fund shares are:
o not guaranteed to achieve their investment goal
o not a deposit with a bank
o not insured, endorsed or guaranteed by the FDIC or any government agency
o subject to investment risks, including possible loss of your original
investment
Like most investments, your investment in the Fund could fluctuate significantly
in value over time and could result in a loss of money.
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SUMMARY INFORMATION
The following summary describes the Fund's investment objective and
principal investment strategies and identifies the principal risks of investing
in the Fund. Below the Fund's description is a bar chart which provides some
indication of the risks of investing in the Fund by showing how the investment
returns of the Fund's Class A shares have varied in the period since they were
first offered. The table following the bar chart shows how the Fund's average
annual returns for its Class A shares for the last year and for the life of the
Fund compared to returns of a comparable index, generally a broad-based
securities market index. PAST PERFORMANCE IS NOT NECESSARILY AN INDICATION OF
FUTURE PERFORMANCE.
INVESTMENT OBJECTIVE. Long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES. The Fund seeks to invest in companies, large or
small, where earnings are believed to be in a relatively strong growth trend, or
where significant further growth is not anticipated but where the shares are
thought to be undervalued. The Fund will normally invest a substantial portion
of its assets in securities of smaller companies and may at times invest a
substantial portion of its assets in issuers located in emerging markets. In
identifying candidates for investment, Mentor Perpetual Advisors, LLC ("Mentor
Perpetual") considers a variety of factors, including the likelihood of above
average earnings growth, attractive relative valuation, and whether the company
has any proprietary advantages. Mentor Perpetual may also conduct discussions
with management, visit the premises of issuers and analyze industry and market
trends in order to select its investments. The Fund's investments will normally
include a diversified portfolio of equity securities of issuers located outside
the United States, such as common stocks, preferred stocks, securities
convertible into common stocks or preferred stocks, and warrants to purchase
common stocks or preferred stocks. The Fund may invest to a lesser extent in
debt securities if Mentor Perpetual believes they would help achieve the Fund's
objective. When it chooses to invest in debt, the Fund seeks to maintain
relatively high average credit quality but may vary its maturity. To this end,
it will only invest in debt securities which are of investment grade. Mentor
Perpetual will adjust the maturity of the Fund's debt securities in response to
changing market conditions.
PRINCIPAL RISKS.
EQUITY SECURITIES. A risk of investing in the Fund is the risk that the
value of the equity securities in the Fund will fall, or will not
appreciate as anticipated by Mentor Perpetual, due to factors that
adversely affect markets in general or particular companies in the
portfolio. The Fund is more sensitive to this risk because it may
invest a substantial portion of its assets in smaller companies.
FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among other things, risks
related to political or economic instability, currency exchange and
taxation.
EMERGING MARKET SECURITIES. Investments in emerging markets are subject
to the same risks applicable to foreign investments generally but to a
greater extent. For example, the securities markets and legal systems
in emerging markets may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed
countries. Many of the securities in which the Fund may invest may
trade in limited volume and may be illiquid. Exchanges, if any, on
which they trade may not provide all of the conveniences or protections
provided by securities exchanges in more developed markets.
SMALLER COMPANIES. The Fund may invest a substantial portion of its
assets in smaller companies, which tend to be more vulnerable to
adverse developments than larger companies. Smaller companies may have
limited product lines, markets, or financial resources, or may depend
on a limited management group. Their securities may trade infrequently
and in limited volumes. As a result, the prices of these securities may
fluctuate more than the prices of securities of larger, more widely
traded companies.
DEBT SECURITIES. The Fund invests in debt securities, which are subject
to market risk (the fluctuation of market value in response to changes
in interest rates) and to credit risks (the risk that the issuer may
become unable or unwilling to make timely payments of principal and
interest). Securities rated Baa by Moody's Investment Services, Inc. or
BBB by Standard & Poor's Ratings Service lack outstanding investment
characteristics and have speculative characteristics and are subject to
greater credit and market risks than higher-rated securities. When
interest rates rise, the values of fixed-income securities held by the
Fund decline. The longer the maturity of a security, the more its value
will decline when interest rates rise. Although the Fund will only
purchase securities which meet its credit guidelines at the time of
purchase, it will not necessarily sell securities which are downgraded
after purchase.
FUND PERFORMANCE
YEAR-BY-YEAR TOTAL RETURN FOR CLASS Y SHARES (%)
- --------------------------------------------
1997 1998
10.60% 13.53%
During the periods shown above, the highest quarterly return was 16.89%
for the quarter ended December 31, 1998, and the lowest was (15.02)% for the
quarter ended September 30, 1998.
INCEPTION PERFORMANCE
AVERAGE ANNUAL TOTAL RETURNS DATE SINCE
(FOR PERIODS ENDING DECEMBER 31, 1998* OF CLASS 1YEAR 5/29/96
- ------------------------------------- -------- ------- -----------
Class A 12/27/96 ......... 7.92% 7.50%
Class B 10/18/99 ......... 8.53% 8.81%
Class C 12/27/96 .........11.46% 9.12%
Class Y 5/29/96 .........13.53% 9.82%
Morgan Stanley Capital
International EAFE Index** .........20.33% 9.20%
*Historical performance shown for Classes A, B, and C prior to their inception
is based on the performance of Class Y, the original class offered. These
historical returns for Classes A, B, and C have not been adjusted to reflect the
effect of each Class' 0.25% 12b-1 fees. These fees for Class A are 0.25%, for
Class B are 1.00% and for Class C are 1.00%. Class Y does not pay a 12b-1 fee.
If these fees had been reflected, returns would have been lower.
**The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of approximately 1,119 securities issued by foreign companies listed on
Europe, Australia & Far East (EAFE) stock exchanges. This is a total return
index with gross dividends reinvested. The performance of countries and
unmanaged indexes does not reflect expenses and may not correspond to the
performance of the Fund, which is actively managed and incurs expenses.
EXPENSE SUMMARY
Expenses are one of several factors to consider when investing in the
Fund. Expenses shown for Class A, Class C and Class Y are actual expenses
incurred for the 1998 fiscal year. Expenses shown for Class B are estimated for
the Fund's 1999 fiscal year.
FEES AND EXPENSES OF THE FUND. This table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT): CLASS A CLASS B CLASS C CLASS Y
- ------------------------------------------ ------- ------- ------- -------
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.75% None None None
Maximum Deferred Sales Load
(as a percentage of the lower of the
original purchase price or redemption
proceeds) None*** 5.00% 1.00% None
***Investments of $1 million of more are not subject to a front-end sales
charge, but may be subject to a contingent deferred sales charge of 1.00%
upon redemption within one year after the month of purchase.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS) CLASS A CLASS B CLASS C CLASS Y
- -------------------------------------- ------- ------- ------- -------
Management Fees 1.00% 1.00% 1.00% 1.00%
12b-1 Fees 0.25% 1.00% 1.00% 0.00%
Other Expenses 0.43% 0.43% 0.43% 0.43%
----- ----- ----- -----
Total Annual Fund Operating Expenses 1.68% 2.43% 2.43% 1.43%
EXAMPLES. These Examples are intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Examples
assume that you invest $10,000 in the class of shares of the Fund indicated for
the time periods indicated. The Examples also assume that your investment has a
5% return each year and that the Fund's operating expenses remain the same. Your
actual costs may be higher or lower.
ASSUMING REDEMPTION AT ASSUMING
END OF PERIOD NO REDEMPTION
CLASS A CLASS B CLASS C CLASS Y CLASS B CLASS C
--------- ------- ------- ------- ------- -------
1 year $ 638 $ 746 $ 346 $ 146 $ 246 $ 246
3 years $ 979 $1,058 $ 758 $ 452 $ 758 $ 758
5 years $1,344 $1,496 $1,296 $ 782 $1,296 $1,296
10 years $2,368 $2,494 $2,766 $1,713 $2,494 $2,766
PRINCIPAL INVESTMENT STRATEGIES AND RISKS
The Fund may not achieve its objective and you could lose money by
investing. The following provides more detail about the Fund's principal
strategies and risks.
FOREIGN SECURITIES. Investments in foreign securities entail certain risks.
Since foreign securities are normally denominated and traded in foreign
currencies, the values of the Fund's assets may be affected favorably or
unfavorably by currency exchange rates, exchange control regulations, foreign
withholding taxes and restrictions or prohibitions on the repatriation of
foreign currencies. There may be less information publicly available about a
foreign company than about a U.S. company, and foreign companies are not
generally subject to accounting, auditing, and financial reporting standards and
practices comparable to those in the United States. The securities of some
foreign companies are less liquid and at times more volatile than securities of
comparable U.S. companies. Foreign brokerage commissions and other fees are also
generally higher than in the United States. Foreign settlement procedures and
trade regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of the Fund's assets held abroad) and
expenses not present in the settlement of domestic investments.
In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange controls, confiscatory
taxation, political or financial instability, and diplomatic developments which
could affect the value of the Fund's investments in certain foreign countries.
Legal remedies available to investors in certain foreign countries may be more
limited than those available with respect to investments in the United States or
in other foreign countries. In the case of securities issued by a foreign
governmental entity, the issuer may in certain circumstances be unable to
unwilling to meet its obligations on the securities in accordance with their
terms, and the Fund may have limited recourse available to it in the event of
default. The laws of some foreign countries may limit the Fund's ability to
invest in securities of certain issuers located in those foreign countries.
Special tax considerations apply to foreign securities. The Fund may buy or sell
foreign currencies and options and futures contracts on foreign currencies for
hedging purposes in connection with its foreign investments.
SMALLER COMPANIES. Smaller companies may offer greater opportunities for capital
appreciation than larger companies, but investments in such companies involve
certain special risks. Small companies often have limited product lines,
markets, or financial resources. They may be dependent on a limited management
group. While the markets in small company securities have grown rapidly in
recent years, such securities trade less frequently and in smaller volume than
more widely held securities. These securities tend to fluctuate more sharply in
value than other securities, and the Fund may experience some difficulty in
establishing or closing out positions in these securities at prevailing market
prices. There is usually less publicly-available information about small
companies and less market interest in small company securities than in large
company securities, and these securities may therefore take longer to reflect
the full value of their issuers' underlying earnings potential or assets.
Some securities of smaller issuers may be restricted as to resale or
may otherwise be highly illiquid. The Fund may not be able to sell such
securities when it wishes. Mentor Perpetual or its affiliates or clients may
hold securities issued by the same issuers, and may in some cases have acquired
the securities at different times, on more favorable terms, or at more favorable
prices, than the Fund.
TEMPORARY DEFENSIVE STRATEGIES. Mentor Perpetual may implement temporary
defensive strategies in order to reduce fluctuations in the value of the Fund's
assets. At those times, the Fund may invest any portion of its assets in cash or
cash equivalent, money market instruments, or other short-term, high-quality
investments Mentor Perpetual considers consistent with such defensive
strategies. It is impossible to predict when, or for how long, the Fund will use
these defensive strategies.
PORTFOLIO TURNOVER. The length of time the Fund has held a particular security
is not generally a consideration in investment decisions. The investment
policies of the Fund may lead to frequent changes in the Fund's investments,
particularly in periods of volatile market movements. A change in the securities
held by the Fund is known as "portfolio turnover." Portfolio turnover generally
involves some expense to the Fund, including brokerage commissions or dealer
mark-ups and other transaction costs on the sale of securities and reinvestment
in other securities, and therefore will affect Fund performance. Such sales may
increase the amount of capital gains (and, in particular, short-term gains)
realized by the Fund, on which shareholders pay tax.
OTHER INVESTMENTS AND RISKS
The following provides more detail about the Fund's other investments
and risks and other circumstances which could adversely affect the Fund's shares
or its total return.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Fund may engage in foreign currency
exchange transactions to protect against uncertainty in the level of future
currency exchange rates. The Fund may engage in foreign currency exchange
transactions in connection with the purchase and sale of portfolio securities
("transaction hedging") and to protect against changes in the value of specific
portfolio positions ("position hedging").
The Fund also may engage in transaction hedging to protect against a
change in foreign currency exchange rates between the date on which it contracts
to purchase or sell and the settlement date, or to "lock in" the U.S. dollar
equivalent of a dividend or interest payment in a foreign currency. The Fund may
purchase or sell a foreign currency on a spot (or cash) basis at the prevailing
spot rate in connection with transaction hedging.
The Fund may also enter into contracts to purchase or sell foreign
currencies at a future date ("forward contracts") and may purchase and sell
foreign currency futures contracts, for hedging and not for speculation. A
foreign currency forward contract is a negotiated agreement to exchange currency
at a future time at a rate or rates that may be higher or lower than the spot
rate. Foreign currency futures contracts are standardized exchange- traded
contracts and have margin requirements. For transaction hedging purposes, the
Fund may also purchase and sell call and put options on foreign currency futures
contracts and on foreign currencies.
The Fund may engage in position hedging to protect against a decline in
value relative to the U.S. dollar of the currencies in which Fund securities are
denominated or quoted (or an increase in value of a currency in which securities
the Fund intends to buy are denominated). For position hedging purposes, the
Fund may purchase or sell foreign currency futures contracts and foreign
currency forward contracts, and may purchase and sell put and call options on
foreign currency futures contracts and on foreign currencies. In connection with
position hedging, the Funds may also purchase or sell foreign currencies on a
spot basis.
Although there is no limit to the amount of the Fund's assets that may
be invested in foreign currency exchange and foreign currency forward contacts,
the Fund will only enter into such transactions to the extent necessary to
effect the hedging transactions described above.
LEVERAGE. The Fund may borrow money to invest in additional portfolio
securities. This practice, known as "leverage", increase the Fund's market
exposure and its risk and may result in losses. When the Fund has borrowed money
for leverage and its investments increase or decrease in value, the Fund's net
asset value will normally increase or decrease more than if it had not borrowed
money. The interest the Fund must pay on borrowed money will reduce the amount
of any potential gains or increase any losses. The extent to which the Fund will
borrow money, and the amount it may borrow, depend on market conditions and
interest rates. Successful use of leverage depends on Mentor Perpetual's ability
to predict market movements correctly.
OPTIONS AND FUTURES. The Fund may buy and sell call and put options to hedge
against changes in net asset value or to realize a greater current return. In
addition, through the purchase and sale of futures contracts and related
options, the Fund may at times seek to hedge against fluctuations in net asset
value and, to the extent consistent with applicable law, to increase investment
return.
The Fund's ability to engage in options and futures strategies will
depend on the availability of liquid markets in such instruments. It is
impossible to predict the amount of trading interest that may exist in various
types of options of futures contracts. Therefore, there is no assurance that the
Fund will be able to utilize these instruments effectively for the purposes
stated above. Transactions in options and futures involve certain risks which
are described below and in the Statement of Additional Information.
Transactions in options and futures contracts involve brokerage costs
and may require the Fund to segregate assets to cover its outstanding positions.
For more information, see the Statement of Additional Information.
INDEX FUTURES AND OPTIONS. The Fund may buy and sell index futures contracts
("index futures") and options on index futures and on indices for hedging
purposes (or may purchase warrants whose value is based on the value from time
to time of one or more foreign securities indices). An "index future" is a
contract to buy or sell units of a particular bond or stock index at an agreed
price on a specified future date. Depending on the change in value of the index
between the time when the Fund enters into and terminates an index future or
option transaction, the Fund realizes a gain or loss. The Fund may also, to the
extent consistent with applicable law, buy and sell index futures and options to
increase its investment return.
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index or of the securities held by the Fund that are the subject of a hedge. The
successful use by the Fund of the strategies described above further depends on
the ability of its investment adviser to forecast market movements correctly.
Other risks arise from the Fund's potential inability to close out futures or
options positions. Although the Fund will enter into options or futures
transactions only if its investment adviser believes that a liquid secondary
market exists for such options or futures contracts, there can be no assurance
that the Fund will be able to effect closing transactions at any particular time
or at an acceptable price.
The Fund generally expects that its options transactions will be
conducted on recognized exchanges. The Fund may in certain instances purchase
and sell options in the over-the-counter markets. The Fund's ability to
terminate options in the over-the-counter markets may be more limited than for
exchange-traded options and may also involve the risk that securities dealers
participating in such transactions would be unable to meet their obligations to
the Fund. The Fund will, however, engage in over-the-counter transactions only
when appropriate exchange-traded transactions are unavailable and when, in the
opinion of its investment adviser, the pricing mechanism and liquidity of the
over-the-counter markets are satisfactory and the participants are responsible
parties likely to meet their obligations.
The Fund will not purchase futures or options on futures or sell
futures if as a result the sum of the initial margin deposits on the Fund's
existing futures positions and premiums paid for outstanding options on futures
contracts would exceed 5% of the Fund's assets. (For options that are
"in-the-money" at the time of purchase, the amount by which the option is
"in-the-money" is excluded from this calculation.)
REPURCHASE AGREEMENTS AND SECURITIES LOANS. The Fund may enter into repurchase
agreements and securities loans. Under a repurchase agreement, the Fund
purchases a debt instrument for a relatively short period (usually not more than
one week), which the seller agrees to repurchase at a fixed time and price,
representing the Fund's cost plus interest. Under a securities loan, the Fund
lends portfolio securities. The Fund will enter into repurchase agreements and
securities loans only with commercial banks and with registered broker-dealers
who are members of a national securities exchange or market makers in government
securities, and in the case of repurchase agreements, only if the debt
instrument is a U.S. Government security. Although Mentor Perpetual will monitor
these transactions to ensure that they will be fully collateralized at all
times, the Fund bears a risk of loss if the other party defaults on its
obligation and the Fund is delayed or prevented from exercising its rights to
dispose of the collateral. If the other party should become involved in
bankruptcy or insolvency proceedings, it is possible that the Fund may be
treated as an unsecured creditor and be required to return the underlying
collateral to the other party's estate.
YEAR 2000. It is generally recognized that certain computer systems in use today
may not perform their intended functions adequately after the Year 1999 because
of the inability of the software to distinguish the Year 2000 from the Year
1900. The Fund receives services from a number of providers which rely on the
smooth functioning of their respective systems and the systems of others to
perform those services. In addition, the Fund's software and that of the issuers
of securities held by the Fund could be subject to problems caused by the "Year
2000" problem. Mentor Perpetual is taking steps that it believes are reasonably
designed to address each of these potential "Year 2000" problems and to obtain
satisfactory assurances that comparable steps are being taken by the Fund's
other major service providers. There can be no assurance, however, that these
steps will be sufficient to avoid any adverse impact on the Fund from this
problem.
MANAGEMENT RISK. Although the Fund may have the flexibility to use some or all
of the investment strategies, securities and derivative instruments described in
this prospectus and in the Statement of Additional Information, Mentor Perpetual
may choose not to use a particular strategy or type of security for a variety of
reasons. Also, in some market conditions some strategies and securities may not
be available for use. These choices may cause the Fund to miss opportunities,
lose money or not achieve its objective.
CHANGES IN INVESTMENT POLICY. Except for investment policies designated in this
Prospectus or the Statement of Additional Information as fundamental, the
investment objective and policies described herein are not fundamental and may
be changed by the Trustees without shareholder approval. (Any such change could,
of course, result in a change in the nature of the securities in which the Fund
may invest and the risks involved in an investment in the Fund.)
MANAGEMENT
The Trustees of Evergreen International Trust ("the Trust") are
responsible for generally overseeing the conduct of the Trust's business. They
have hired MENTOR PERPETUAL ADVISORS ("MENTOR PERPETUAL"), LLC, located at 901
East Byrd Street, Richmond, Virginia, to act as investment adviser to the Fund.
Mentor Perpetual, an investment advisory firm organized in 1995, is owned
equally by Perpetual plc and Mentor Investment Advisors, LLC. ("Mentor
Advisors"). Mentor Advisors is a subsidiary of First Union Corporation, the
sixth largest bank holding company in the United States, with over $230 billion
in consolidated assets as of 6/30/99. First Union Corporation is located at 301
South College Street, Charlotte, North Carolina 28288-0013.
In 1998, Mentor Perpetual received a fee of 1.00% of average net assets
for its advisory services to the Fund. Mentor Perpetual may agree to bear
certain expenses of the Fund pursuant to voluntary expense limitations from time
to time in effect.
The Fund is managed by the following team of investment professionals:
Robert Stephens, Scott McGlashan, Kathryn Langridge, Margaret Roddan, Mark
Turner, Stephen Whittaker. Mr. Stephens is a Senior Vice President and global
invesment specialist based in Richmond, Virginia. He has 30 years of experience
in international asset management. Mr. McGlashan is Far East Team Leader for the
Fund, focusing on the Japanese market. He has 20 years management experience and
has been with Perpetual, plc since 1987. Ms. Langridge is Southeast Asia Team
Leader for the Fund, focusing on equity investment in the non-Japanese stock
markets of the Far East. She has 16 years of investment management experience,
joining Perpetual, plc in 1990. Ms. Roddan is Europe Team Leader. She has 12
years of investment experience and has been with Perpetual, plc since 1994. Mr.
Turner is Latin America Team Leader for the Fund. He has 9 years of investment
management experience, joining Perpetual, plc in 1993. Mr. Whittaker is UK Team
Leader. He has 18 years of investment management experience and has been with
Perpetual, plc since 1988.
CALCULATING THE SHARE PRICE
The value of one share of a Fund, also known as the net asset value, or
NAV, is calculated on each day the New York Stock Exchange is open as of the
time the Exchange closes (normally 4:00 p.m. Eastern time). The Fund calculates
its share price for each share by adding up its total assets, subtracting all
liabilities, then dividing the result by the total number of shares outstanding.
Each class of shares is calculated separately. Each security held by a Fund is
valued using the most recent market data for that security. If no market data is
available for a given security, the Fund will price that security at fair value
according to policies established by the Funds' Board of Trustees. Short-term
securities with maturities of 60 days or less will be valued on the basis of
amortized cost.
Securities quoted in foreign currencies are translated into U.S.
dollars at the current exchange rates or at such other rates as may be used in
accordance with procedures approved by the Trustees. As a result, fluctuations
in the values of such currencies in relation to the U.S. dollar will affect the
net asset value of Portfolio shares even though there has not been any change in
the values of such securities as quoted in such foreign currencies. All assets
and liabilities of the Portfolio denominated in foreign currencies are valued in
U.S. dollars based on the exchange rate last quoted by a major bank prior to the
time when the net asset value of the Portfolio's shares is calculated.
Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset value
of a particular class of shares are computed as of such times. Also, because of
the amount of time required to collect and process trading information as to
large numbers of securities issues, the values of certain securities (such as
convertible bonds) are determined based on market quotations collected earlier
in the day at the latest practicable time prior to the close of the Exchange.
Occassionally, events affecting the value of the such securities may occur
between such times and the close of the Exchange which will not be reflected in
the computation of net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be valued
at their fair value following procedures approved by the Trustees.
The price per share you pay for a Fund purchase or the amount you
receive for a Fund redemption is based on the next price calculated after the
order is received and all required information is provided. The value of your
account at any given time is the latest share price multiplied by the number of
shares you own. Your account balance may change daily because the share price
may change daily.
HOW TO CHOOSE AN EVERGREEN FUND
When choosing an Evergreen Fund, you should:
o Most importantly, read the prospectus to see if the Fund is suitable
for you.
o Consider talking to an investment professional. He or she is qualified
to give you investment advice based on your investment goals and
financial situation and will be able to answer questions you may have
after reading the Fund's prospectus. He or she can also assist you
through all phases of opening your account.
o Request any additional information you want about the Fund, such as the
Statement of Additional Information, Annual Report or Semi-annual
Report by calling 1-800-343-2898.
HOW TO CHOOSE THE SHARE CLASS THAT BEST SUITS YOU
After choosing a Fund, you select a share class. The Fund offers four
different share classes: Class A, Class B, Class C and Class Y. Each class
except Class Y has its own sales charge. Pay particularly close attention to the
fee structure of each class so you know how much you will be paying before you
invest.
CLASS A
If you select Class A shares, you may pay a front-end sales charge of
up to 4.75%. This charge is deducted from your investment before it is invested.
The actual charge depends on the amount invested, as shown below:
AS A % OF AS A % DEALER
YOUR NAV EXCLUDING OF YOUR COMMISSION
INVESTMENT SALES CHARGE INVESTMENT AS A % OF NAV
- ---------- ------------ ---------- -------------
Up to $49,999 .........4.75% 4.99% 4.25%
$50,000-$99,999 .........4.50% 4.71% 4.25%
$100,000-$249,999........3.75% 3.90% 3.25%
$250,000-$499,999........2.50% 2.56% 2.00%
$500,000-$999,999........2.00% 2.04% 1.75%
$1,000,000 and over .....0% 0% 1.00 to .25%
Although no front-end sales charge applies to purchases of $1,000,000
and over, you will pay a 1% deferred sales charge if you redeem any such shares
within 13 months of purchase.
TWO WAYS YOU CAN REDUCE YOUR CLASS A SALES CHARGES:
1. Rights of Accumulation allow you to combine your investment with all existing
investments in all your Evergreen Fund accounts when determining whether you
meet the threshold for a reduced Class A sales charge.
2. Letter of Intent. If you agree to purchase at least $50,000 over a 13-month
period, you pay the same sales charge as if you had invested the full amount all
at once. The Fund will hold a certain portion of your investment in escrow until
your commitment is met.
Contact your broker or the Evergreen Service Company at 1-800-343-2898 if you
think you may qualify for either of these services.
The Fund may also sell Class A shares at net asset value without any
initial or contingent sales charge to the Directors, Trustees, officers and
employees of the Fund and the advisory affiliates of First Union Corporation,
and to members of their immediate families, to registered representatives of
firms with dealer agreements with Evergreen Distributor, Inc. ("EDI"), and to a
bank or trust company acting as trustee for a single account.
CLASS B
If you select Class B shares, you do not pay a front-end sales charge,
so the entire amount of your purchase is invested in the Fund. However, your
shares are subject to an additional expense, known as the 12b-1 fee. In
addition, you may pay a deferred sales charge if you redeem your shares within
six years after the month of purchase. The amount of the deferred sales charge
depends on the length of time the shares were held, as shown below:
TIME HELD CONTINGENT DEFERRED SALES CHARGE
- ------------------------------------------ -----------------------------------
Month of Purchase + First 12 Month Period 5.00%
Month of Purchase + Second 12 Month Period 4.00%
Month of Purchase + Third 12 Month Period 3.00%
Month of Purchase + Fourth 12 Month Period 3.00%
Month of Purchase + Fifth 12 Month Period 2.00%
Month of Purchase + Sixth 12 Month Period 1.00%
Thereafter 0%
After 7 years Converts to Class A
Dealer Allowance 4.00%
The deferred sales charge percentage is applied to the value of the
shares when purchased or when redeemed, whichever is less. No deferred sales
charge is paid on shares purchased through dividend or capital gain
reinvestments or on any gains in the value of your shares.
CLASS C
Class C shares are similar to Class B shares, except the deferred sales
charge is less and only applies if shares are redeemed within the first year
after the month of purchase. Also, these shares do not convert to Class A shares
and so the higher 12b-1 fee continues for the life of the account.
TIME HELD CONTINGENT DEFERRED SALES CHARGE
- ------------------------------------------ ----------------------------------
Month of Purchase + Less than 1 year 1.00%
Month of Purchase + 1 year or more 0%
WAIVER OF CLASS B OR CLASS C SALES CHARGES:
You will not be assessed a deferred sales charge for Class B or Class C
shares if you redeem shares in the following situations:
o When the shares were purchased through reinvestment of dividends/capital
gains
o Death or disability
o Lump-sum distribution from a 401(k) plan or other benefit plan qualified under
ERISA
o Automatic IRA withdrawals if your age is at least 59 1/2
o Automatic withdrawals of up to 1.0% of the account balance per month
o Loan proceeds and financial hardship distributions from a retirement plan
o Returns of excess contributions or excess deferral amounts made to a
retirement plan participant
CLASS Y
Each Fund offers Class Y shares at net asset value without an initial
sales charge, deferred sales charge or 12b-1 fees. Class Y shares are only
offered to persons who owned shares in an Evergreen Fund advised by Evergreen
Asset Management Corp. on or before December 31, 1994; certain institutional
investors; and investment advisory clients of an investment advisor of an
Evergreen Fund (or the investment advisor's affiliates).
HOW TO BUY SHARES
Evergreen Funds' low investment minimums make investing easy. Once you decide on
an amount and a share class, simply fill out an application and send in your
payment, or talk to your investment professional.
MINIMUM INVESTMENTS INITIAL ADDITIONAL
Regular Accounts $1,000 None
IRAs $250 None
Systematic Investment Plan $50 $25
<TABLE>
<CAPTION>
METHOD OPENING AN ACCOUNT ADDING TO AN ACCOUNT
<S> <C> <C>
BY MAIL OR THROUGH o Complete and sign the account application. o Make your check payable to
AN INVESTMENT o Make the check payable to Evergreen Funds. Evergreen Funds
PROFESSIONAL o Mail the application and your check to the address o Write a note specifying:
below: - The Fund name
Evergreen Service Company OVERNIGHT ADDRESS: - Share class
P.O. Box 2121 Evergreen Service Company - Your account number
Boston, MA 02106-2121 200 Berkeley St. - The name(s) in which the account is
Boston, MA 02116-5039 registered.
o Mail to the address to the left or
deliver to your investment
o Or deliver them to your investment representative representative
(provided he or she has a broker/dealer arrangement
with EDI.)
BY PHONE o Call 1-800-343-2898 to set up an account number o Call the Evergreen Express Line at
and get wiring instructions (call before 12 noon if 1-800-346-3858 24 hours a day or
you want wired funds to be credited that day). 1-800-343-2898 between 8 a.m. and 6
o Instruct your bank to wire or transfer your p.m. Eastern time, on any business
purchase (they may charge a wiring fee). day.
o Complete the account application and mail to: o If your bank account is set up on
Evergreen Service Company OVERNIGHT ADDRESS: file, you can request either:
P.O. Box 2121 Evergreen Service Company - Federal Funds Wire (offers
Boston, MA 02106-2121 200 Berkeley St. immediate access to funds) or
Boston, MA 02116-5039 - Electronic transfer through the
Automated Clearing House which
avoids wiring fees.
o Wires received after 4 p.m. Eastern time on market
trading days will receive the next market day's
closing price.*
BY EXCHANGE o You can make an additional investment by
exchange from an existing Evergreen Funds account by
contacting your investment representative or calling
the Evergreen Express Line at 1-800-346-3858.**
o You can only exchange shares within the same class.
o There is no sales charge or redemption fee when exchanging Funds within the Evergreen Funds
family.***
o Orders placed before 4 p.m. Eastern time on market
trading days will receive that day's closing share
price (if not, you will receive the next market
day's closing price).*
o Exchanges are limited to three per calendar quarter,
but in no event more than five per calendar year.
o Exchanges between accounts which do not have
identical ownership must be made in writing with a
signature guarantee (see below).
SYSTEMATIC o You can transfer money automatically from your bank account o To establish automatic
INVESTMENT PLAN into your Fund on a monthly basis. investing for an existing
(SIP) o Initial investment minimum is $50 if you invest at least $25 account, call
per month with this service. 1-800-343-2898 for an
o To enroll, check off the box on the account application and application.
provide: o The minimum is $25 per
- Your bank account information month or $75 per quarter.
- The amount and date of your monthly investment. o You can also establish
an investing program
through direct deposit
from your paycheck. Call
1-800-343-2898 for details.
</TABLE>
* The Fund's shares may be made available through financial service firms which
are also investment dealers and which have a service agreement with EDI. The
Fund has approved the acceptance of purchase and repurchase request orders
effective as of the time of their receipt by certain authorized financial
intermediaries.
** Once you have authorized either the telephone exchange or redemption service,
anyone with a Personal Identification Number (PIN) and the required account
information (including your broker) can request a telephone transaction in your
account. All calls are recorded or monitored for verification, recordkeeping and
quality-assurance purposes. The Evergreen Funds reserve the right to terminate
the exchange privilege of any shareholder who exceeds the listed maximum number
of exchanges, as well as to reject any large dollar exchange if placing it
would, in the judgment of the portfolio manager, adversely affect the price of
the Fund.
***This does not apply to exchanges from Class A of an Evergreen Money Market
Fund
HOW TO REDEEM SHARES
We offer you several convenient ways to redeem your shares in any of
the Evergreen Funds:
<TABLE>
<CAPTION>
METHODS REQUIREMENTS
<S> <C>
CALL US o Call the Evergreen Express Line at 1-800-346-3858 24 hours a day or 1-800-343-2898 between 8 a.m.
and 6 p.m. Eastern time, on any business day.
o This service must be authorized ahead of time, and is only
available for regular accounts.** o All authorized requests
made before 4 p.m. Eastern time on market trading days will be
processed at that day's closing price. Requests after 4 p.m. will be processed the following business day.*
o We can either:
- wire the proceeds into your bank account (service charges may apply)
- electronically transmit the proceeds to your bank account via the Automated Clearing House
service
- mail you a check.
o All telephone calls are recorded for your protection. We
are not responsible for acting on telephone orders we
believe are genuine.
o See exceptions list below for requests that must be made in writing.
WRITE US o You can mail a redemption request to:
Evergreen Service Company OVERNIGHT ADDRESS:
P.O. Box 2121 Evergreen Service Company
Boston, MA 02106-2121 200 Berkeley St.
Boston, MA 02116-5039
o Your letter of instructions must:
- list the Fund name and the account number
- indicate the number of shares or dollar value you wish to redeem
- be signed by the registered owner(s)
o See exceptions list below for requests that must be signature guaranteed.
o To redeem from an IRA or other retirement account, call 1-800-343-2898 for a special application.
REDEEM YOUR o You may also redeem your shares through participating broker-dealers by delivering a letter as
SHARES IN PERSON described above to your broker-dealer.
o A fee may be charged for this service.
SYSTEMATIC o You can transfer money automatically from your Fund account on a monthly or quarterly basis
WITHDRAWAL without redemption fees.
PLAN (SWP) o The withdrawal can be mailed to you, or deposited directly to your bank account.
o The minimum is $75 per month.
o The maximum is 1% of your account per month or 3% per quarter.
o To enroll, call 1-800-343-2898 for an application.
</TABLE>
TIMING OF PROCEEDS
Normally, we will send your redemption proceeds on the next business day after
we receive your request; however, we reserve the right to wait up to seven
business days to redeem any investments made by check and five business days for
investments made by Automated Clearing House transfer. We also reserve the right
to redeem in kind by paying you the proceeds of a redemption in securities
rather than cash, and to redeem the remaining amount in the account if your
redemption brings the account balance below the initial minimum of $1,000.
EXCEPTIONS: REDEMPTION REQUESTS THAT REQUIRE A SIGNATURE GUARANTEE
To protect you and the Evergreen Funds against fraud, certain redemption
requests must be made in writing with your signature guaranteed. A signature
guarantee can be obtained at most banks and securities dealers. A notary public
is not authorized to provide a signature guarantee.
The following circumstances require signature guarantees:
o You are redeeming more than $50,000.
o You want the proceeds transmitted to a bank account not listed on the account.
o You want the proceeds payable to anyone other than the registered owner(s) of
the account.
o Either your address or the address of your bank account has been changed
within 30 days.
o The account is registered in the name of a fiduciary corporation or any other
organization.
In these cases, additional documentation is required:
CORPORATE ACCOUNTS: certified copy of corporate resolution
FIDUCIARY ACCOUNTS: copy of the power of attorney or other governing document
WHO CAN PROVIDE A SIGNATURE GUARANTEE:
o Commercial Bank
o Trust Company
o Savings Association
o Credit Union
o Member of a U.S. stock
exchange
OTHER SERVICES
EVERGREEN EXPRESS LINE. Use our automated, 24-hour service to check the value of
your investment in a Fund; purchase, redeem or exchange Fund shares; find a
Fund's price, yield or total return; order a statement or duplicate tax form; or
hear market commentary from Evergreen portfolio managers.
AUTOMATIC REINVESTMENT OF DIVIDENDS. For the convenience of investors, all
dividends and capital gains distributions are automatically reinvested, unless
you request otherwise. Distributions can be made by check or electronic transfer
through the Automated Clearing House to your bank account. The details of your
dividends and other distributions will be included on your statement.
PAYROLL DEDUCTION (CLASS A, CLASS B AND CLASS C ONLY). If you want to invest
automatically through your paycheck, call us to find out how you can set up
direct payroll deductions. The amounts deducted will be invested in your Fund
using the Electronic Funds Transfer System. We will provide the Fund account
number. Your payroll department will let you know the date of the pay period
when your investment begins.
TELEPHONE INVESTMENT PLAN. You may make additional investments electronically in
an existing Fund account at amounts of not less than $100 or more than $10,000
per investment. Telephone requests received by 4:00 p.m. Eastern time will be
invested the day the request is received.
DIVIDEND EXCHANGE. You may elect on the application to reinvest capital gains
and/or dividends earned in one Evergreen Fund into an existing account in
another Evergreen Fund in the same share class -- automatically. Please indicate
on the application the Evergreen Fund(s) into which you want to invest the
distributions.
REINVESTMENT PRIVILEGES. Under certain circumstances, shareholders may,
within one year of redemption, reinstate their accounts at the current price
(NAV).
THE TAX CONSEQUENCES OF INVESTING IN THE FUND
You may be taxed in two ways:
o On Fund distributions (capital gains and dividends)
o On any profit you make when you sell any or all of your shares.
FUND DISTRIBUTIONS. A mutual fund passes along to all of its shareholders the
net income or profits it receives from its investments. The shareholders of the
fund then pay any taxes due, whether they receive these distributions in cash or
elect to have them reinvested. The Fund will distribute two types of taxable
income to you:
o DIVIDENDS. To the extent that regular dividends are derived from interest
that is not tax exempt, or from short term capital gains, you will have to
include them in your federal taxable income. The Fund pays a monthly
dividend from the dividends, interest and other income on the securities in
which it invests.
o CAPITAL GAINS. When a mutual fund sells a security it owns for a profit,
the result is a capital gain. He Fund generally distributes capital gains,
if any, at least once a year, near the end of the calendar year. Short-term
capital gains reflect securities held by the Fund for a year or less and
are considered ordinary income just like dividends. Profits on securities
held longer than 12 months are considered long-term capital gains and are
taxed at a special tax rate (20% for most taxpayers).
DIVIDEND AND CAPITAL GAIN REINVESTMENT. Unless you choose otherwise on the
account application, all dividend and capital gain payments will be reinvested
to buy additional shares. Distribution checks that are returned and distribution
checks that are uncashed when the shareholder has failed to respond to mailings
from the shareholder servicing agent will automatically be reinvested to buy
additional shares. No interest will accrue on amounts represented by uncashed
distribution or redemption checks. We will send you a statement each January
with the federal tax status of dividends and distributions paid by each Fund
during the previous calendar year.
PROFITS YOU REALIZE WHEN YOU REDEEM SHARES. When you sell shares in a mutual
fund, whether by redeeming or exchanging, you have created a taxable event. You
must report any gain or loss on your tax return unless the transaction was
entered into by a tax-deferred retirement plan. Investments in money market
funds typically do not generate capital gains. It is your responsibility to keep
accurate records of your mutual fund transactions. You will need this
information when you file your income tax return, since you must report any
capital gains or losses you incur when you sell shares. Remember, an exchange is
a purchase and a sale for tax purposes.
TAX REPORTING. Evergreen Service Company provides you with a tax statement of
your dividend and capital gains distributions for each calendar year on Form
1099 DIV. Proceeds from a sale are reported on Form 1099B. You must report these
on your tax return. Since the IRS receives a copy as well, you could pay a
penalty if you neglect to report them.
Evergreen Service Company will send you a tax information guide each year during
tax season, which may include a cost basis statement detailing the gain or loss
on taxable transactions you had during the year. Please consult your own tax
advisor for further information regarding the federal, state and local tax
consequences of an investment in the Funds.
RETIREMENT PLANS. You may invest in each Fund through various retirement plans,
including IRAs, 401(k) plans, Simplified Employee Plans, (SEPs), IRAs, 403(b)
plans, 457 plans and others. For special rules concerning these plans, including
applications, restrictions, tax advantages, and potential sales charge waivers,
contact your broker-dealer. To determine if a retirement plan may be appropriate
for you, consult your tax advisor.
FEES AND EXPENSES OF THE FUNDS
Every mutual fund has fees and expenses that are assessed either
directly or indirectly. This section describes each of those fees.
MANAGEMENT FEE. The management fee pays for the normal expenses of managing the
fund, including portfolio manager salaries, research costs, corporate overhead
expenses and related expenses.
12B-1 FEE. The Trustees of the Evergreen Funds have approved a policy to assess
12b-1 fees for Class A, Class B and Class C shares. Up to 0.75% of the average
daily net assets of Class A and up to 1.00% of the average daily net assets of
Class B and Class C are payable as a 12b-1 fee. However, currently the 12b-1 fee
for Class A shares is limited to 0.25% of the average daily net assets of the
class. These fees increase the cost of your investment. The purpose of the 12b-1
fee is to promote the sale of more shares of the Funds to the public. The Fund
might use this fee for advertising and marketing and as a "service fee" to the
broker-dealer for additional shareholder services.
OTHER EXPENSES. Other expenses include miscellaneous fees from affiliated and
outside service providers. These may include legal, audit, custodial and
safekeeping fees, the printing and mailing of reports and statements, automatic
reinvestment of distributions and other conveniences for which the shareholder
pays no transaction fees.
TOTAL FUND OPERATING EXPENSES. The total cost of running the Fund is called the
expense ratio. As a shareholder, you are not charged these fees directly;
instead they are taken out before the Fund's net asset value is calculated, and
are expressed as a percentage of the Fund's average daily net assets. The effect
of these fees is reflected in the performance results for that share class.
Because these fees are "invisible," investors should examine them closely in the
prospectus, especially when comparing one fund with another fund in the same
investment category. There are three things to remember about expense ratios: 1)
your total return in the Fund is reduced in direct proportion to the fees; 2)
expense ratios can vary greatly between funds and fund families, from under
0.25% to over 3.0%; and 3) a Fund's advisor may waive a portion of the Fund's
expenses for a period of time, reducing its expense ratio.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights for the Class A, Class C and Class Y shares of
Mentor Perpetual International Portfolio, the Fund's predecessor, presented
below have been derived from the financial statements of Mentor Institutional
Trust (the "Mentor Trust") which were audited by KPMG LLP, the Mentor Trust's
independent auditors. Their report dated December 18, 1998 on the financial
statements of the Trust for the fiscal year ended October 31, 1998 is included
in the Fund's Annual Report to shareholders, which is incorporated into the
Statement of Additional Information by reference. A copy of the Annual Report
may be obtained free of charge from the Mentor Trust.
<TABLE>
<CAPTION>
CLASS A SHARES
YEAR PERIOD
ENDED ENDED
10/31/98 10/31/97 (B)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD............................................ $13.83 $12.53
====== ======
INCOME FROM INVESTMENT OPERATIONS
Net investment income......................................................... 0.11 0.01
Net realized and unrealized gain on investments............................... 0.91 1.29
---- ----
Total from investment operations.............................................. 1.02 1.30
---- ----
LESS DISTRIBUTIONS FROM
Net investment income......................................................... (0.03) --
Capital gains................................................................. (0.03) --
Tax return of capital......................................................... (0.14) --
------ --
Total distributions........................................................... (0.20) --
------ --
NET ASSET VALUE, END OF PERIOD.................................................. $14.65 $13.83
====== ======
Total Return*................................................................... 7.43% 10.38%
===== ======
RATIOS / SUPPLEMENTAL DATA
Net assets, end of period (in thousands)........................................ $62,782 $33,213
Ratio of expenses to average net assets......................................... 1.35% 1.35% (a)
Ratio of expenses to average net assets excluding waiver........................ 1.68% 1.92% (a)
Ratio of net investment income to average net assets............................ 0.96% 0.71% (a)
Fund turnover rate.............................................................. 120% 107%
==== ====
</TABLE>
(a) Annualized.
(b) For the period from December 27, 1996 (initial offering of Class A shares)
to October 31, 1997.
* Total return does not reflect sales commission and is not annualized.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES**
YEAR PERIOD
ENDED ENDED
10/31/98 10/31/97 (C)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD............................................ $13.81 $12.53
====== ======
INCOME FROM INVESTMENT OPERATIONS
Net investment income......................................................... 0.03 --
Net realized and unrealized gain on investments............................... 0.88 1.28
---- ----
Total from investment operations.............................................. 0.91 1.28
---- ----
LESS DISTRIBUTIONS FROM
Net investment income......................................................... (0.03) --
Capital gains................................................................. (0.03) --
Tax return of capital......................................................... (0.14) --
------ --
Total distributions........................................................... (0.20) --
------ --
NET ASSET VALUE, END OF PERIOD.................................................. $14.52 $13.81
====== ======
Total Return*................................................................... 6.64% 10.22%
===== ======
RATIOS / SUPPLEMENTAL DATA
Net assets, end of period (in thousands)........................................ $42,354 $19,371
Ratio of expenses to average net assets......................................... 2.10% 2.10% (a)
Ratio of expenses to average net assets excluding waiver........................ 2.43% 2.65% (a)
Ratio of net investment income to average net assets............................ 0.21% 0.04% (a)
Fund turnover rate.............................................................. 120% 107%
==== ====
</TABLE>
(a) Annualized.
(c) For the period from December 27, 1996 (initial offering of Class B shares)
to October 31, 1997.
* Total return does not reflect sales commission and is not annualized.
** Designated "Class B" shares prior to October 18, 1999.
See notes to financial statements.
<TABLE>
<CAPTION>
CLASS Y SHARES
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/98 10/31/97 10/31/96(D)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $13.89 $12.12 $12.50
====== ====== ======
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.27..... 0.15 0.04
Net realized and unrealized gain on investments 0.79..... 1.67 (0.42)
---------------------- ------
Total from investment operations 1.06..... 1.82 (0.38)
---- ---- ------
LESS DISTRIBUTIONS FROM
Net investment income (0.02)... (0.05) --
Capital gains (0.05)... -- --
Tax return of capital (0.14)
------ --------- --------
Total distributions (0.21)... (0.05) --
------
NET ASSET VALUE, END OF PERIOD $14.74... $13.89 $12.12
======== ======== ======
Total Return* 7.69% $15.07% (3.04%)
========= ======== =======
RATIOS / SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $10,979 $16,110 $8,741
Ratio of expenses to average net assets 1.10% 1.10% 1.10%(a)
Ratio of expenses to average net assets excluding waiver 1.43% 1.74% 1.75%(a)
Ratio of net investment income to average net assets 1.21% 1.20% 0.89%(a)
Fund turnover rate 120% 107% 59%
========= ======== ===
</TABLE>
(a) Annualized.
(d) For the period from May 29, 1996 (commencement of operations) to October 31,
1996.
* Total return does not reflect sales commission and is not annualized.
See notes to financial statements.
Evergreen Funds
MONEY MARKET
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Florida Municipal Money Market Fund
New Jersey Municipal Money Market Fund
California Municipal Money Market Fund
U.S. Government Money Market Fund
MUNICIPAL BOND
Short-Intermediate Municipal Fund
High Grade Municipal Bond Fund
Municipal Bond Fund
Municipal Income Fund
Connecticut Municipal Bond Fund
Florida High Income Municipal Bond Fund
Florida Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
New Jersey Municipal Bond Fund
North Carolina Municipal Bond Fund
Pennsylvania Municipal Bond Fund
South Carolina Municipal Bond Fund
Virginia Municipal Bond Fund
INCOME
Capital Preservation and Income Fund
Short-Intermediate Bond Fund
Short-Duration Income Fund
Intermediate Term Bond Fund
U.S. Government Fund
Diversified Bond Fund
Strategic Income Fund
High Yield Bond Fund
Quality Income Fund
High Income Fund
BALANCED
Balanced Fund
Tax Strategic Foundation Fund
Foundation Fund
Capital Balanced Fund
Capital Income and Growth Fund
GROWTH & INCOME
Utility Fund
America's Utility Fund
Income and Growth Fund
Equity Income Fund
Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Value Fund
DOMESTIC GROWTH
Strategic Growth Fund
Stock Selector Fund
Evergreen Fund
Omega Fund
Small Company Growth Fund
Aggressive Growth Fund
Tax Strategic Equity Fund
Masters Fund Growth Fund
Capital Growth Fund
Select Equity Index Fund
Select Special Equity Fund
GLOBAL INTERNATIONAL
Global Leaders Fund
International Growth Fund
Global Opportunities Fund
Precious Metals Fund
Emerging Markets Growth Fund
Latin America Fund
Perpetual International Fund
Perpetual Global Fund
EXPRESS LINE
800.346.3858
INVESTOR SERVICES
800.343.2898
<PAGE>
1. EVERGREEN EXPRESS LINE
Call 1-800-346-3858
24 hours a day to
o check your account
o order a statement
o get a Fund's current price, yield and
total return
o buy, redeem or exchange Fund shares
2. NON-RETIREMENT ACCOUNT HOLDERS Call 1-800-343-2898
Monday through Friday, 8 a.m. to 6 p.m. Eastern time to
o buy, redeem or exchange shares
o order applications
o get assistance with your account
3. INFORMATION LINE FOR HEARING AND SPEECH IMPAIRED (TTY/TDD) Call
1-800-343-2888 Monday through Friday, 8 a.m. to 6 p.m. Eastern time
4. WRITE US A LETTER
Evergreen Service Company
P.O. Box 2121
Boston, MA 02106-2121
o to buy, redeem or exchange shares
o to change the registration on your account
o for general correspondence
5. FOR EXPRESS, REGISTERED, CERTIFIED MAIL:
Evergreen Service Company
200 Berkeley Street
Boston, MA 02116-5039
6. VISIT US ON-LINE: WWW.EVERGREEN-FUNDS.COM
7. REGULAR COMMUNICATIONS YOU WILL RECEIVE:
ACCOUNT STATEMENTS -- You will receive quarterly statements for each
Fund you own.
CONFIRMATION NOTICES -- We send a confirmation of any transaction you
make within five days of the transaction.
ANNUAL AND SEMIANNUAL REPORTS -- You will receive a detailed financial
report on your Funds twice a year.
TAX FORMS -- Each January you will receive any tax forms you need to
file in your taxes as well as the Evergreen Tax Information Guide.
<PAGE>
For More Information About Evergreen Perpetual International Fund, Ask for:
THE FUND'S MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT, which contains a complete
financial accounting for the Fund and a complete list of the Fund's holdings as
of a specific date, as well as commentary from the Fund's portfolio manager.
This Report discusses the market conditions and investment strategies that
significantly affected the Fund's performance during the most recent fiscal year
or period.
THE STATEMENT OF ADDITIONAL INFORMATION (SAI), which contains more detailed
information about the policies and procedures of the Fund. The SAI has been
filed with the Securities and Exchange Commission (SEC) and its contents are
legally considered to be part of this prospectus.
For questions, other information, or to request a copy, without charge, of any
of the documents, call 1-800-343-2898 or ask your investment representative. We
will mail material within three business days.
Information about the Fund (including the SAI) is also available on the SEC's
Internet web site at http://www.sec.gov, or, for a duplication fee, by writing
the SEC Public Reference Section, Washington DC 20549-6009. This material can
also be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. For more information, call the SEC at 1-800-SEC-0330.
Evergreen Distributor, Inc.
90 Park Avenue
New York, New York 10016
SEC File No.: 811-085553
