WORLDWIDE INDEX FUNDSSM
Supplement dated September 1, 1999 to
the Prospectus dated September 1, 1998
This supplement supercedes and replaces any existing supplements to the
Prospectus. This supplement provides new and additional information beyond
that contained in the Prospectus. It should be retained and read in
conjunction with the Prospectus.
(All page numbers are in reference to the prospectus, unless otherwise noted)
Effective September 1, 1999, I Class shares of the Funds will no longer be
offered for sale to new or existing shareholders (except for the reinvestment
of distributions). Existing I Class shares of a Fund may be exchanged into R
Class shares (but not I Class shares) of any Fund, subject to the procedures
set forth under Exchanges below.
Effective September 1, 1999, shares of the Australia Index Fund, Netherlands
Index Fund, Sweden Index Fund and Switzerland Index Fund will no longer be
offered for sale to new or existing shareholders (except for the reinvestment
of distributions).
Effective September 1, 1999, the Europe Index Fund will purchase only R Class
shares of the following Country Index Funds: France, Germany, Italy, Spain
and United Kingdom (collectively, the "European Country Index Funds"). The
International Index Fund will purchase only R Class shares of the European
Country Index Funds and the Hong Kong and Japan Country Index Funds. Neither
the Europe Index Fund nor the International Index Fund will purchase shares
of the Australia Index Fund, the Netherlands Index Fund, the Sweden Index
Fund or the Switzerland Index Fund.
On page 2, delete the second full paragraph in the second column, and replace
with the following:
Each Fund of Index Funds will purchase R Class shares of its underlying
Country Index Funds and will allocate its investments in proportion to the
relative equity market capitalization of the countries represented (the
"Allocation Method"). For example, in the case of the Europe Index Fund, if
the total capitalization of Spain's equity market were to equal 5% of the
combined capitalization of the underlying countries in the Fund, the Fund
will seek to invest 5% of its assets in R Class shares of the Spain Index
Fund. Each Fund of Index Funds will reallocate its investments on a
continuous basis. Each Fund of Index Funds uses country capitalization
figures published by the Financial Times when calculating allocation
percentages under the Allocation Method.
On page 4, delete the Shareholder Fees and Annual Fund Operating Expenses
tables at the bottom of the page and replace with the following:
Shareholder Fees
R Class
Country Funds of
Index Funds Index Funds
Maximum Sales Charge (Load) Imposed
On Purchase (as a percentage of offering price) None None
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends (as a percentage of
net asset value) None None
Purchase Fee+ .50% .50% .
Annual Fund Operating Expenses++
(expenses that are deducted from Fund assets)
R Class
Country Funds of
Index Funds Index Funds
Management Fees .50% 0.0%
Other Expenses* .75% 1.30%
Underlying Fund Expenses None 1.25%
Miscellaneous .75% .05%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.25% 1.30%
+ The purchase fee is deducted from all purchases, but not from reinvested
dividends or capital gains distributions.
++ The Advisor commits, by waiving its fees and reimbursing expenses as
necessary, to limit each Country Index Fund's total expense ratio and each
Funds of Index Funds' total expense ratio,including the Underlying Fund
Expenses, to no greater than 0.99% for R Class shares over a calendar year
until December 31, 2001. Fee waivers and/or expense reimbursements are
voluntary.
The Advisor reserves the right to terminate any waiver and/or reimbursement
at any time after
December 31, 2001, without notice.
* Other Expenses are based on estimated amounts for the current fiscal year.
For R CLASS shares,
0.25% of Other Expenses is a shareholder servicing fee.
On page 7, delete the FUNDS OF INDEX FUNDS table at the bottom of the page
and replace with the following:
FUNDS OF INDEX FUNDS
Funds of Underlying Country Index Funds
Index Funds (and approximate allocation percentages as of August 31, 1999)
Europe * France Index Fund (18.09%) * Spain Index Fund
(5.40%)
Index Fund * Germany Index Fund (17.73%) * United Kingdom Index Fund
(49.96%)
* Italy Index Fund (8.82%)
International * France Index Fund (10.93%) * Japan Index Fund
(35.91%)
Index Fund * Germany Index Fund (10.71%) * Spain Index Fund (3.26%)
* Hong Kong Index Fund (3.69%) * United Kingdom Index
Fund (30.17%)
* Italy Index Fund (5.33%)
Under the sub-heading Futures Contracts/Options/Swaps on page 9, insert the
following paragraph at the end of the section:
Certain futures contracts may require a minimum investment by a Fund. The
Funds may borrow money to purchase these contracts. Borrowing money for
investment purposes, also known as leverage, is a speculative technique which
increases a Fund's investment risk. For more information on borrowing, see
"Borrowing" in the SAI.
Under the sub-headings Classes on page 10, and Purchase of Shares on page 11,
insert the following:
The minimum initial investment is changed to $1,000 for R Class shares of any
Fund, including individual retirement accounts ("IRAs") and Roth IRAs.
Under the sub-heading Redemption of Shares on page 13, delete the italicized
paragraph in the second column.
Under the sub-heading Procedures for Redemptions on page 13, insert the
following:
The time by which telephone redemption requests must be made is changed to
4:00 p.m., Eastern Time (1:00 p.m., Pacific Time), on any Business Day.
Following the paragraph under the sub-heading Transactions Over the Telephone
on page 14, insert the following:
Exchanges
You may exchange R Class shares or I Class shares of a Fund for R Class
shares of any other Fund. Exchanges will be based on the respective net
asset values of the shares involved. Exchanges may be made by letter or by
telephone subject to the procedures set forth below. There will be no
purchase fee charged for exchanges.
Money Market Fund Option -- You may also exchange R Class and I Class shares
of any Fund for shares of a money market fund, the Government Obligations
Fund managed by Federated Management (the "Money Market Fund"). Shares of
the Money Market Fund may then be exchanged for shares of any Fund. No
purchase fee will be charged on exchanges of assets that have previously been
invested in the Funds and were charged a purchase fee. Assets that have not
been invested previously in a Fund will be charged a purchase fee the first
time they are invested in a Fund through either a purchase or an exchange.
Information regarding the Money Market Fund is found in a separate prospectus
which is available from the Distributor. You should review the Money Market
Fund prospectus before making any investment. Nonetheless, to the extent
that this supplement conflicts with any disclosure in the Money Market Fund
prospectus, this supplement shall govern.
Please note that orders for purchases, redemptions and exchanges must be
received by 4:00 p.m. Eastern Time. Purchases of, and exchanges into,
shares of the Money Market Fund are subject to a $1,000 minimum investment
limit. When purchasing shares of the Money Market Fund, federal funds
received before 4:00 p.m. Eastern Time will begin earning dividends on
the next business day and will earn dividends through the day of redemption.
Proceeds from redemption requests made before 4:00 p.m. Eastern Time will be
wired the next business day. If shares are purchased by check, funds will
not be available for redemptions until the purchase payment has been
collected, which may take up to 10 business days from the purchase date.
Exchange Procedures -- To exchange your shares, you (or your Financial
Intermediary) need to provide certain information, including the name on the
account, the account number (or your taxpayer identification number), the
number or dollar value of shares (or the percentage of the total value of
your account) you want to exchange, and the names of the Funds involved
in the exchange transaction. Exchanges may be made only between identically
registered accounts.
Exchange orders for exchanges into another Fund must be received by 4:00 p.m.
, Eastern Time. The exchange privilege may be modified or discontinued at any
time.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
WORLDWIDE INDEX FUNDSSM
Supplement dated September 1, 1999 to
the Statement of Additional Information
dated September 1, 1998
This supplement supercedes and replaces any existing supplements to the
Statement of Additional Information. This supplement provides new and
additional information beyond that contained in the Statement of Additional
Information. It should be retained and read in conjunction with the
Statement of Additional Information.
Under the Funds of Index Funds sub-heading within the main heading, THE FUNDS
AND COUNTRY SPECIFIC ECONOMIC CONSIDERATIONS, delete the first paragraph
describing the Europe Index Fund and replace with the following:
The Europe Index Fund is a "fund of funds" which invests in shares of the
France, Germany, Italy, Spain and United Kingdom Country Index Funds
(collectively, the "European Country Index Funds"). The Europe Index Fund
seeks long-term capital appreciation in line with local market equity returns
of those European countries in which the underlying Country Index Funds
invest. The Europe Index Fund invests in its underlying Country Index Funds
in proportion to the relative equity market capitalization of the countries
represented by the underlying Country Index Funds. The Europe Index Fund
seeks to reduce or eliminate the impact of currency fluctuation by investing
in the Country Index Funds which are hedged against such risk. The Fund will
be subject to the country-specific economic considerations and risks
associated with each of the underlying Country Index Funds in its portfolio.
Five paragraphs below the above mentioned paragraph, delete the paragraph
that first describes the International Index Fund, and replace with the
following:
The International Index Fund is a "fund of funds" which invests in shares of
the five European Country Index Funds and the Hong Kong and Japan Country
Index Funds. The International Index Fund seeks long-term capital
appreciation in line with local market equity returns of those countries in
which the underlying Country Index Funds invest. The International Index
Fund invests in its underlying Country Index Funds in proportion to the
relative equity market capitalization of the countries represented by the
underlying Country Index Funds. The International Index Fund seeks to reduce
or eliminate the impact of currency fluctuation by investing in the Country
Index Funds which are hedged against such risk. The Fund will be subject to
the country-specific economic considerations and risks associated with each
of the underlying Country Index Funds in its portfolio.
Delete the paragraph titled Funds of Index Funds, immediately before the main
heading INVESTMENT TECHNIQUES, and replace with the following:
Funds of Index Funds. The Europe Index Fund and International Index Fund are
"funds of funds" (the "Funds of Index Funds") which will purchase only R
Class shares of a particular group of Country Index Funds. The Funds of
Index Funds seek long-term capital appreciation in line with local market
equity returns of the group of countries in which the underlying Country
Index Funds invest. The Funds of Index Funds seek to reduce or eliminate the
impact of currency fluctuation by investing in the Country Index Funds which
are hedged against such risk. The above stated investment objective of each
Fund of Index Funds is a fundamental policy and cannot be changed without the
approval of the holders of a majority of the respective Fund of Index Fund's
voting securities.
The Europe Index Fund will invest in the following Country Index Funds:
France, Germany, Italy, Spain and United Kingdom (collectively, the "European
Country Index Funds"). The International Index Fund will invest in the
European Country Index Funds and the Hong Kong and Japan Country Index Funds.
Each Fund of Index Funds invests in its underlying Country Index Funds in
proportion to the relative equity market capitalization of the countries
represented by the underlying Country Index Funds.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
