As filed with the Securities and Exchange Commission on November 16, 2000.
Securities Act File No. 333-68099.
Investment Company Act No. 811-9123.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Amendment No. [7]
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Post Effective Amendment No. [4]
AMIDEX Funds, Inc.
26 Broadway, Suite 741
New York, NY 1004
212-425-0650
AGENT FOR SERVICE
Terence P. Smith
555 North Lane, Suite 6160
Conshohocken, PA 19428
Please send copy of communications to:
DAVID D. JONES, ESQUIRE
4747 Research Forest Drive
Suite 180, # 303
The Woodlands, TX 77381
(281) 367-8409
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to Rule 485(b), or
[ ] 60 days after filing pursuant to Rule 485(a)(1), or
[ ] 75 days after filing pursuant to Rule 485(a)(2), or
[ ] on ____________, pursuant to Rule 485(b), or
[X] 0n December 15, 2000, pursuant to Rule 485(a)(2)
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Registrant declares hereby that an indefinite number or amount of its securities
has been registered by this Registration Statement. Registrant filed its notice
pursuant to Rule 24f-2 on August 23, 2000.
TOTAL NUMBER OF PAGES _____
EXHIBIT INDEX BEGINS
ON PAGE _____
<PAGE>
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PROSPECTUS
Dated December 15, 2001
THE
AMIDEX ISRAEL
TECHNOLOGY
MUTUAL FUND
An Index-Based Mutual Fund offered by
AMIDEX(TM)Funds, Inc.
(the "Company")
26 Broadway, Suite 741
New York, New York 10004
1-888-876-3566
The minimum investment in the Fund is $500 for regular accounts and $250 for
retirement accounts or custodial accounts for minors. The minimum subsequent
investment is $250 for regular accounts and $100 for retirement accounts or
custodial accounts for minors.
The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a crime.
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TABLE OF CONTENTS
THE BASICS
ABOUT THE FUND 2
---------------------------
FEES AND
EXPENSES 3
---------------------------
ADDITIONAL
INVESTMENT
INFORMATION 4
---------------------------
AMIDEX ISRAEL
TECHNOLOGY INDEX 5
---------------------------
THE FUND'S
INVESTMENT
ADVISER 6
---------------------------
HOW TO BUY
AND
SELL SHARES 7
---------------------------
DIVIDENDS AND
DISTRIBUTIONS 9
---------------------------
TAX
CONSIDERATIONS 10
---------------------------
GENERAL
INFORMATION 11
---------------------------
FOR MORE
INFORMATION 12
---------------------------
<PAGE>
THE BASICS ABOUT THE FUND
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THE FUND'S Long-term growth of capital. Current income is not a
INVESTMENT significant investment consideration, and any such income
OBJECTIVE IS: realized will be considered incidental to the Fund's
investment objective.
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THE FUND'S o Normally investing at least 95% of the Fund's total
PRINCIPAL assets in the common stock of companies listed on the
INVESTMENT AMIDEX ISRAEL TECHNOLOGY(TM) Index (the "Index"). The
STRATEGIES ARE: Index is a new index tracking the performance of
smaller market capitalization Israeli Technology
Companies traded on the NASDAQ. An explanation of the
Index can be found at page 5 of this prospectus;
o Employing a "passive management" approach to investing
the Fund's assets. This means that the Fund normally
will invest in all of the companies in the Index, in
approximately the same percentages as those companies
are represented in the Index. By replicating the
composition of the Index, the Fund seeks also to
replicate the performance of the Index.
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THE PRINCIPAL o GENERAL RISK- As is the case with most investments, you
RISKS OF may lose money by investing in the Fund. The Fund's
INVESTING IN share prices will fluctuate each day, depending on the
THE FUND ARE: changing value of the securities making up the Fund's
portfolio. On any given day, your shares may be worth
less than what you paid for them.
o STOCK RISK- The Fund invests in the stocks of companies
included in the Index, all of which trade on the
NASDAQ. A company's stock that is included in the Index
may fall because of problems with the company or for no
readily apparent reason. Further, the stock market may
suffer a general decline resulting from changing
economic or political conditions, or from a lack of
investor confidence. In the past, stocks and the stock
market have recovered, but some stock market slumps
have lasted for months and even years.
o DIVERSIFICATION RISK- The Fund is a "non-diversified"
Fund because it primarily invests in the companies that
are included in the Index. The Index normally is
limited to approximately 35 companies, and some of
those companies represent a large percentage of the
Index. When the Index was first calculated on November
1st, 2000, 6 Index companies individually comprised
more than 5% of the Index and together made up about
49.85% of the Index. Investing a larger percentage of
the Fund's assets in a relatively small number of
companies can be riskier than investing in a broader
variety of securities.
o INDEX RISK- The Fund invests almost exclusively in
Index companies. Also, once the Fund invests in Index
companies, it stays invested in those companies for as
long as they remain in the Index. As a result, the Fund
does not predict which stocks will outperform- or under
perform, the market. If the Index stocks decrease in
value, the Fund decreases in value. Also, some of the
companies in the Index may not have a vigorous
secondary trading market. As a result, the Fund could
experience difficulties in timely buying or selling of
these securities, which could have a negative impact on
the Fund.
o PORTFOLIO TURNOVER RISK- The Index is adjusted to add
or delete companies twice a year. As companies leave
and enter the Index, the Fund's portfolio will be
adjusted to match the current Index composition. This
practice can result in the realization of capital gains
or losses and can have adverse tax consequences for you
as an investor.
o SMALL COMPANY RISK- The companies in the Index are
generally smaller companies. Small companies usually
don't have the depth of resources that large companies
have to see them through hard times. Also, investors
may be more reluctant to invest in smaller companies.
As a result, small company stocks tend to be more
volatile than the stocks of larger companies.
--------------------------------------------------------------------------------
<PAGE>
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THE FUND Based on its research into the performance of Israeli
INVESTS IN companies trading on the U. S. Exchanges, the Fund's Adviser
INDEX believes that the companies in the Index are experiencing,
SECURITIES or have the potential to experience, above-average capital
BECAUSE: growth. The Adviser believes that investing primarily in
Index companies will allow the Fund to achieve its
investment objective of capital growth over the long term.
You should be aware that there is no assurance that the
Adviser will be successful in achieving the Fund's
objectives, since all investments involve risks.
--------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED IN THE PAST?
This is a new Fund without a prior performance history. Accordingly, performance
information is not yet available for this Fund.
FEES AND EXPENSES
This table describes the fees and expenses you may pay if you buy and hold
shares of the Fund.
Shareholder Fees:
-----------------
(Fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases None
(As a percentage of offering price)
Maximum Deferred Sales
Charge (Load) None
(As a percentage of redemption proceeds)
Redemption Fees 1.00% (1)
1. You will be charged a redemption fee equal to 1.00% of the net amount of your
redemption if you redeem your shares less than 365 calendar days after you buy
them, unless the Fund agrees to waive the fee. If this fee is imposed, it will
raise the expenses of your shares. This fee is imposed only to discourage
short-term trading of Fund shares. Such fees, when imposed, are credited
directly to the assets of the Fund to help defray the expense to the Fund of
such short-term trading activities. These fees are never used to pay for
distribution or sales fees.
Annual Fund Operating Expenses:
------------------------------
(Expenses that are deducted from Fund assets)
Management Fees (1) 0.50%
Distribution & Servicing (12b-1) Fees (2) 0.25%
Other Expenses (3) 0.70%
---------------------------------------------------------
Total Annual Fund
Operating Expenses 1.45%
=========================================================
1. Management fees include a fee of 0.50% for investment advisory services
provided to the Fund by the Fund's Adviser.
2. Because 12b-1 fees are paid out of the assets of the Fund on an ongoing
basis, over time these fees will increase the cost of your investment and
may cost you more than paying other types of sales charges.
3. These fees include an annual fee of 0.70 % for administrative services
provided to the Fund by the Fund's Adviser. Under normal circumstances,
most expenses of the Fund are the contractual obligation of the Adviser.
Accordingly, the Fund does not anticipate incurring any additional "Other
Expenses" during its first year.
<PAGE>
Example: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all 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 as described in the table above. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------
$148 $460 $795 $1,744
ADDITIONAL INVESTMENT INFORMATION
The Fund's principal investment objectives and strategies have been set out in
the "Basics About the Fund" Section of this Prospectus. What follows is
additional information that you should know concerning your investment in the
Fund.
Under normal circumstances, the Fund will invest at least 95% of its net assets
in the common stocks of the companies comprising the Index, in approximately the
same percentages as those companies are included in the Index. You should be
aware that the Index is a new index, and no historical performance data are
available for the Index.
Any Fund assets that are not invested in Index companies will be invested in
short term, high quality debt instruments such as money market funds, short term
US Government securities, and investment grade quality corporate securities.
Investing the Fund's assets primarily in Index companies is not a fundamental
policy of the Fund. The Board of Directors of the Fund may vote to change or
eliminate the percentages of Fund assets invested in Index companies and to
choose other investment strategies. If the Board votes to change the Fund's
investment strategies, we will notify you in writing at least 30 days before the
changes take place. If you decide to redeem your shares as a result of such a
change, you will not be charged any redemption fees, even if you have held your
shares for less than 365 days. If you would like to get additional information
about all of the Fund's fundamental and non-fundamental investment policies and
restrictions, they can be found in the Fund's Statement of Additional
Information ("SAI") in the Section entitled, "Investment Policies and
Restrictions."
AMIDEX(TM) ISRAEL TECHNOLOGY INDEX
AMIDEX(TM) Israel Technology Index is a new, unmanaged Index. The companies
included in the Index are smaller market capitalization "Israeli Technology
Companies" whose stock is publicly traded on the NASDAQ.
What is an "Israel Technology Company"?
---------------------------------------
To be an "Israel Technology Company", a company has to satisfy ALL of the
following requirements:
1. Its stock is traded on the NASDAQ over-the-counter market and the company
has been listed by the Israeli financial newspaper, Globes as one of the
"Israeli shares traded on the New York Bourse." (if Globes stops publishing
a list of "Israeli shares traded on the New York Bourse," the Board of
Directors will select an alternative publication that similarly defines
such companies); and
2. The company is designated by Bloomberg, L.P. or a comparable nationally
recognized financial data provider as being in a Technology Sector; and
<PAGE>
3. The company is not listed as a company included in the AMIDEX ISRAEL
TECHNOLOGY(TM)Index. The AMIDEX ISRAEL TECHNOLOGY(TM)Index is an index of
the 35 largest Israeli companies (measured by market capitalization),
traded either on the Tel Aviv Stock Exchange or the U.S. exchanges; and
4. It must have maintained an average minimum daily trading volume of at least
$500,000 in the previous two calendar quarters; and
5. It may not be listed in the U.S. as an ADR or ADS.
The largest (as measured by market capitalization) 35 Israel companies that
satisfy all of the criteria described above will be included in the Index. You
should be aware that the Index might contain more or less than 35 companies
during certain periods of the year. If less than 35 Israeli companies meet the
criteria for inclusion at the beginning of an adjustment date, then the Index
will contain only those companies that qualify. The Index is adjusted to add or
delete companies, as necessary on or about November 30th and May 31st of each
year.
If a company ceases operation, is de-listed on the NASDAQ, or becomes insolvent,
it will be immediately deleted from the Index and not replaced until the next
adjustment date. If a single company splits into multiple companies, all such
companies will be included in the Index until the Index is readjusted, at which
time each company's individual qualifications to be included in the Index will
be determined.
An "unmanaged" index means that the criteria for inclusion of companies in the
Index are objective and not subject to arbitrary change, so that any company
that is eligible for inclusion in the Index must be included, and any company
that ceases to qualify for inclusion in the Index must be deleted.
The Index is a market capitalization index. Market capitalization means the
total current U.S. dollar value of a company's outstanding shares of common
stock, and is calculated by multiplying the number of outstanding shares of
common stock of a company by the price of that common stock.
The Index began being calculated on November 1st, 2000 at an initial Index Value
of 1,000. The Index name, rules, methods of calculation, and proprietary data
are owned by the Adviser. The Adviser developed the criteria and the rules of
operation for the Index. The Adviser has entered into agreements with various
companies to construct, calculate and publish the Index. Bloomberg, L.P.
performed the initial calculations needed to create the Index and selects the
companies that will be included in or deleted from the Index, based on the
criteria described above. Bloomberg, L.P. is responsible for maintaining and
publishing the Index. Bloomberg, L.P. has no affiliation with the Fund, the
Adviser, or any of the Fund's other service providers, and currently calculates
and publishes the AMIDEX ISRAEL TECHNOLOGY Index. The Adviser may, if necessary,
select an alternative independent company to calculate, maintain or publish the
Index in the future.
When companies are added to or deleted from the Index, the Adviser will alter
the Fund's investments to conform the portfolio to the Index. This will result
in certain risks to the Fund, including the risks of losses and tax consequences
to shareholders resulting from realized capital gains. You should also be aware
that the Fund will incur certain expenses that are not incurred by the Index,
including transaction charges. Accordingly, the performance of the Fund will
vary from that of the Index as a result of such expenses.
The Adviser will attempt to maintain a correlation coefficient of at least 0.95
in performance between the Index and the Fund. This means that the Adviser will
attempt to replicate at least 95% of the Index's performance. The Adviser will
be responsible for tracking the Fund's performance, under the supervision of the
Company's Board of Directors. If the Fund fails to achieve a 0.95 correlation
coefficient, the Board will take action to rectify whatever problem is causing
the discrepancy, including, as an example, altering the Fund's servicing
arrangements to reduce Fund expense ratios or changing the Fund's investment
strategy of investing in the Index.
The Adviser has determined that, in order to construct the Fund's portfolio to
reflect the performance of the Index, the Fund must have approximately $25
million in net assets. Until such asset levels are reached, the
<PAGE>
Adviser may invest Fund assets in a representative sample of Index securities
and such other permissible securities, the Adviser believes will likely track
Index performance most closely.
You should be aware that there is no assurance that the Adviser will be
successful in replicating the performance of the Index during this period. You
will find a more detailed discussion of the Index in the SAI in the Section
entitled "The Index."
WHY DOES THE FUND INVEST IN ISRAEL TECHNOLOGY COMPANIES?
The State of Israel is a highly developed, industrialized democracy. Since the
beginning of the decade, Israel's economy has grown significantly, presenting
improvement in most economic indicators. Israel has made substantial progress in
opening its economy, including the removal of its trade barriers and tariffs.
Israel has concluded free trade agreements with its major trading partners and
is the only nation that is a party to free trade agreements with both the United
States and the European Union. In recent years Israel has signed free trade
agreements with Switzerland, Norway, Canada, Turkey, the Czech Republic, the
Slovak Republic, Poland and Hungary.
The State of Israel has significantly improved its economic performance.
Inflation in 1999 fell to 1.3%, and exports more than doubled between 1992 and
2000. Israel is a member of a number of international organizations, including
the United Nations, the World Bank Group (including the International Finance
Corporation), the International Monetary Fund (the "IMF"), the European Bank for
Reconstruction and Development, and the Inter-American Development Bank. Israel
is a signatory to the General Agreement on Tariffs and Trade ("GATT") of 1947
and 1994, which provides for reciprocal lowering of trade barriers among its
members. Under GATT, Israel is eligible to receive a number of trade preferences
that are available only to certain GATT participants, including duty-free
treatment of its exports to certain countries pursuant to the GATT Generalized
System of Preferences.
Israel is not only rich in research, technology and intellectual investment, but
also is the only democratic nation in the Middle East. The influx of venture
capital, the infusion of human resources (Israel's population nearly doubled in
the last 15 years), and the conversion of the economic focus from military to
commercial (defense spending dropped from about 30% of GNP in 1973 to less than
8.14% in 1998), have led many to believe that Israel is the next "Silicon
Valley." There has been a dramatic increase in the number of Israeli companies
trading on U.S. Exchanges, particularly the NASDAQ.
Israel is third, behind only the U.S. and Canada, in the number of companies
traded on Wall Street. More than 100 Israeli companies trade shares on the major
U.S. exchanges. In Israel, the Tel Aviv Stock Exchange now lists more than 665
companies and over 1,000 securities, with a current market capitalization of
about $80 billion.
In 1999, Israel exported $9.9 billion of technology related products. Israel
leads all foreign nations in receipt of venture capital from abroad, and in the
number of high tech start-ups per year. In the first 6 months of the year 2000,
Israel received more than $12 billion of direct foreign investment.
These dramatic developments present a new and relatively unexploited opportunity
for equity investment. Currently, there is only one other U.S. based, open-end
mutual fund available as a vehicle for investment in Israeli securities. That
Fund, the AMIDEX ISRAEL TECHNOLOGY Mutual Fund (AMDEX, AMDAX,AMDCX) is an
index-based mutual fund also offered by AMIDEX(TM) Funds, Inc. that invests in
the stocks comprising the AMIDEX ISRAEL TECHNOLOGY(TM) Index, and index of the
35 largest Israeli companies (measured by market capitalization), traded either
on the Tel Aviv Stock Exchange or the U.S. exchanges. The AMIDEX Israel
Technology Mutual Fund is currently the only fund investing exclusively in U.S.
traded Israeli technology companies through the AMIDEX(TM) Israel Technology
Index.
<PAGE>
THE FUND'S INVESTMENT ADVISER
TransNations Investments, LLC, 26 Broadway, Suite 741, New York, NY 10004 (the
"Adviser"), has entered into an Investment Advisory Agreement (the "Advisory
Agreement") with the Fund to provide investment management services to the Fund.
In addition, the Adviser has entered into an Operating Services Agreement (the
"Services Agreement") with the Fund to provide virtually all day-to-day
operational services to the Fund. As explained further below, the combined
effect of the Advisory Agreement and the Services Agreement is to place a cap or
ceiling on the Fund's ordinary operating expenses at 1.2% of daily net asset
value of the Fund, excepting Rule 12b-1 fees, brokerage, interest, taxes,
litigation, custody and other extraordinary expenses. The Adviser is registered
with the Securities and Exchange Commission as an investment adviser, and also
serves as the investment adviser to the AMIDEX ISRAEL TECHNOLOGY(TM) Mutual
Fund. The Adviser was formed specifically to serve as investment adviser to the
Company's mutual funds, and rendering investment advice to mutual funds is
currently the Adviser's primary business. Mr. Clifford A. Goldstein is President
and Chief Executive Officer of the Adviser. Boaz Rahav is the Fund Manager, and
is responsible for all investment decisions relating to the Fund. Mr. Goldstein
also serves as the President and as a Director of AMIDEX Funds, Inc.
The Portfolio Manager.
---------------------
The Fund is an index fund. Rather than relying on any one manager or management
team to "pick" stocks, the Fund is managed "passively" by normally investing
only in the companies comprising the Index in approximately the same percentages
as each company represents in the Index. Mr. Boaz Rahav serves as portfolio
manager to the Fund. Mr. Ravav also has served as the portfolio manager of the
AMIDEX ISRAEL TECHNOLOGY(TM) Mutual Fund since that fund's inception (06/08/99).
Prior to his current position, Mr. Rahav last served as Chief Economist for the
Government of Israel Ministry of Finance in New York from 1996-1999. Mr. Rahav
has over 8 years experience in Israeli financial markets, having worked for a
large institutional brokerage house in Israel as a trader and as a mutual fund
manager from 1994 to 1996. Previously, Mr. Rahav worked from 1991 to 1993 for
the Federation of Israeli Chambers of Commerce. Mr. Rahav also served from 1987
to 1990 in the Intelligence Wing of the Israeli Air Force. Mr. Rahav has a
business degree from the Tel Aviv College of Business, an MBA (with
distinguished honors) from the New York Institute of Technology, an Investment
Adviser and Analyst Diploma from Tel Aviv University, and a Trader Certificate
from the Tel Aviv Stock Exchange. Mr. Rahav joined the Adviser in February 1999.
Mr. Rahav holds Series 63, and 7 licenses with the NASD.
The Adviser invests the assets of the Fund according to the Fund's investment
objectives, policies, and restrictions. The Fund pays the Adviser a fee, accrued
daily and payable monthly, at an annual rate of 0.50% of the Fund's net assets.
The Adviser furnishes at its own expense office space to the Company and all
necessary office facilities, equipment, and personnel for managing the assets of
the Fund. The Adviser also pays all expenses of marketing shares of the Fund,
and related bookkeeping.
The Adviser pays all expenses incident to the Fund's operations and business
except expenses relating to legal fees resulting from litigation, brokerage
expenses, taxes, if any, and other extraordinary charges.
HOW TO BUY AND SELL SHARES
BUYING SHARES
To purchase shares of the Fund, first complete and sign a New Account Purchase
Application, included with this Prospectus, and mail it, together with your
check for the total purchase price, to:
AMIDEX Israel Technology Index Fund
c/o Declaration Distributors, Inc.
555 North Lane, Suite 6160
Conshohocken, PA 19428.
Checks are accepted subject to collection at full face value in United States
currency. If your check does not clear, your purchase will be canceled and you
will be subject to any losses or fees incurred by the Fund with respect to the
transaction.
<PAGE>
After making your initial purchase, you can make subsequent purchases by mail or
by wire transfer. The wiring information to be used for wire transfers is:
Star Bank, N.A. Cinti/Trust
Xxxxxxxxxxxxxxxxxxxxx
Xxxxxxxxxxxxxxxxxxxxx
For Account: Amidex Israel Technology Index Fund
Each time you make a purchase, you will receive a statement showing the number
of shares purchased, the net asset value at which your shares were purchased,
and the new balance of Fund shares owned. The Fund does not issue stock
certificates. All full and fractional shares will be carried on the books of the
Fund.
MINIMUM INVESTMENTS
The minimum initial investment is $500 for ordinary accounts and.$250 for
Individual Retirement Accounts (IRAs) and other pension accounts and custodial
accounts for minors. $250 is the minimum subsequent purchase for regular
accounts, and $100 is the minimum subsequent investment for IRA, or pension
accounts or custodial accounts for minors.
All applications to purchase shares of the Fund are subject to acceptance by
authorized officers of the Fund and are not binding until accepted. The Fund
reserves the right to reject purchase orders under circumstances or in amounts
considered disadvantageous to existing shareholders. Please see the Sections of
the SAI entitled "Purchasing and Redeeming Shares" and "Tax Information" for
more information concerning share purchases.
You may direct inquiries concerning the Fund to:
AMIDEX(TM) Funds, Inc.
c/o The Declaration Group
555 North Lane, Suite 6160
Conshohocken, PA 19428
1-888-876-3566
DETERMINING SHARE PRICES
The Fund is open for business on each day that the New York Stock Exchange
("NYSE") is open. The Fund's share price or net asset value per share ("NAV") is
normally determined as of 4:00 p.m., New York time. The Fund's share price is
calculated by subtracting its liabilities from the closing fair market value of
its total assets and dividing the result by the total number of shares
outstanding on that day. Fund liabilities include accrued expenses and dividends
payable, and its total assets include the market value of the portfolio
securities as well as income accrued but not yet received. Since the Fund
generally does not charge sales or redemption fees, the NAV is the offering
price for shares of the Fund. Shares of the Fund are purchased at their net
asset value and are next computed after receipt of your purchase order or the
transfer of your assets from the Money Market Fund to the Fund.
The Fund's net asset value is determined on days on which the New York Stock
Exchange is open for trading. The Fund is a No-Load Fund. This means that you
will not be charged any sales commissions or underwriting discounts.
PLAN OF DISTRIBUTION
--------------------
The Fund has adopted a Plan of Distribution, or "12b-1 Plan" under which it may
finance activities primarily intended to sell shares. Under the 12b-1 Plan, the
Fund may pay a distribution fee at an annual rate of up to 0.25% of average
daily net assets of the Fund to the Adviser for services primarily intended to
sell shares and for providing certain shareholder services. These services
include, among other things, processing new shareholder account applications,
preparing and transmitting to the Fund's Transfer Agent computer processable
tapes of all transactions by customers, and serving as the primary source of
information to customers in answering questions concerning the Fund and their
transactions with the Fund.
<PAGE>
Payments under the 12b-1 Plan are not tied exclusively to the distribution
and/or shareholder servicing expenses actually incurred by the Adviser, and such
payments may exceed the expenses actually incurred. The Company's Board of
Directors evaluates the Plan on a regular basis. You should be aware that, over
time, 12b-1 fees will increase the costs of your investment, and may eventually
cost you more than other types of sales charges.
REDEEMING SHARES
You may redeem your shares in the Fund at any time and for any reason. Upon
receipt by the Fund of a redemption request in proper form, your shares of the
Fund will be redeemed at their next determined net asset value. Redemption
requests must be in writing and delivered to the Fund at:
AMIDEX Funds, Inc.
c/o The Declaration Group
555 North Lane, Suite 6160
Conshohocken, PA 19428.
To be in "proper form," your redemption request must:
1. Specify the number of shares or dollar amount to be redeemed, if less than
all shares are to be redeemed;
2. Be signed by all owners exactly as their names appear on the account; and
3. If required, include a signature guarantee from any "eligible guarantor
institution" as defined by the rules under the Securities Exchange Act of
1934. Eligible guarantor institutions include banks, brokers, dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations. A notary public
is not an eligible guarantor.
Further documentation, such as copies of corporate resolutions and instruments
of authority, may be requested from corporations, administrators, executors,
personal representatives, trustees, or custodians to evidence the authority of
the person or entity making the redemption request.
Signature Guarantees. A signature guarantee is designed to protect you and the
Fund by verifying your signature. SIGNATURE GUARANTEES ARE REQUIRED WHEN:
1. establishing certain services after the account is opened;
2. requesting redemptions in excess of $10,000;
3. redeeming or exchanging shares, when proceeds are:
a. being mailed to an address other than the address of record,
b. made payable to other than the registered owner(s); or
c. transferring shares to another owner.
The redemption price per share is net asset value per share, next determined
after your redemption order is received by the Fund. If you hold your shares for
365 days or longer, there is no redemption charge. Otherwise, a fee of 1.00% of
the value of your redeemed shares will be deducted from the proceeds of your
redemption and paid to the Fund. When you redeem your shares, they may be worth
more or less than you paid for them, depending upon the value of the Fund's
portfolio securities at the time of redemption. If the value of your account
falls below $100 as a result of previous redemptions and not market price
declines, the Fund may redeem the shares in your account. The Fund will notify
you first if such an event occurs, and you will have 60 days to bring your
account balance up to the minimum levels before the Fund will exercise its
option to redeem. Also, in the event your shares are redeemed by the Fund under
such circumstances, you will not be charged any redemption fees, regardless of
the time you have held your shares.
Payment for shares redeemed is made within seven days after receipt by the Fund
of a request for redemption in proper form. If shares are purchased by check and
redeemed by letter within seven business days of purchase, the Fund may hold
redemption proceeds until the purchase check has cleared, provided that the Fund
does not hold such proceeds for more than 15 calendar days. You will also be
subject to a
<PAGE>
redemption fee of 1.00% of total assets in such a circumstance. The Fund
reserves the right to suspend or postpone redemptions during any period when (a)
trading on any of the major U.S. stock exchanges is restricted, as determined by
the Securities and Exchange Commission, or that the major exchanges are closed
for other than customary weekend and holiday closings, (b) the Commission has by
order permitted such suspension, or (c) an emergency, as determined by the
Commission, exists making disposal of portfolio securities or valuation of net
assets of the Fund not reasonably practicable.
DIVIDENDS AND DISTRIBUTIONS
Dividends paid by the Fund are derived from net investment income. Net
investment income will be distributed at least annually. The Fund's net
investment income is made up of dividends received from the stocks and other
securities it holds, as well as interest accrued and paid on any other
obligations that might be held in the Fund's portfolio.
The Fund realizes capital gains when it sells a security for more than it paid
for it. The Fund may make distributions of its net realized capital gains (after
any reductions for capital loss carry forwards), generally, once a year.
Unless you elect to have your dividends and/or distributions paid in cash, your
distributions will be reinvested in additional shares of the Fund. You may
change the manner in which your dividends are paid at any time by writing to the
Transfer Agent.
TAX CONSIDERATIONS
The Fund intends to qualify as a regulated investment company under the Internal
Revenue Code so as to be relieved of federal income tax on its capital gains and
net investment income currently distributed to its shareholders. To qualify as a
regulated investment company, the Fund must, among other things, derive 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 other income derived with respect to its business of investing in such stock
or securities, and distribute substantially all of such income to its
shareholders at least annually.
The Fund intends to distribute to shareholders all net investment income and any
net capital gains realized from sales of the Fund's portfolio securities at such
times and in such amounts as to avoid all taxes, both state and federal.
Dividends from net investment income and distributions from any net realized
capital gains are reinvested in additional shares of the Fund unless you request
in writing to have them paid by check. Dividends from investment income and net
short-term capital gains are generally taxable to you as ordinary income.
Distributions of long-term capital gains are taxable as long-term capital gains
regardless of the length of time that shares in the Fund have been held.
Distributions are taxable, whether received in cash or reinvested in shares of
the Fund.
You will be advised annually of the source of distributions for federal income
tax purposes. If you fail to furnish your Social Security or other tax
identification number or to certify properly that it is correct, the Fund may be
required to withhold federal income tax at the rate of 31% (backup withholding)
from your dividend, capital gain and redemption payments. Dividend and capital
gain payments may also be subject to backup withholding if you fail to certify
properly that you are not subject to backup withholding due to the
under-reporting of certain income.
Distributions by the 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 your
cost basis, such distribution would be taxable to you as ordinary income or as a
long-term capital gain, even though, from an investment standpoint, it may
constitute a partial return of capital. In particular, you should be careful to
consider the tax implications of buying shares of the Fund just prior to a
distribution. The price of such shares includes the amount of any forthcoming
distribution so that you may receive a return of investment upon distribution
that will, nevertheless, be taxable.
<PAGE>
A redemption of shares is a taxable event and, accordingly, a capital gain or
loss may be recognized. You should consult a tax adviser regarding the effect of
federal, state, local, and foreign taxes on an investment in the Fund. The
information in this Prospectus is not intended to be a full discussion of
present or future tax ramifications of investment in the Fund, and investors
should consult their own tax advisers for a detailed and complete review of tax
ramifications. In view of the individual nature of tax consequences, you should
consult your own tax adviser with respect to the specific tax consequences of
participation in the Fund, including the effect and applicability of state,
local, foreign and other tax laws and the possible effects of changes in federal
or other tax laws.
GENERAL INFORMATION
The Fund will not issue stock certificates evidencing shares. Instead, your
account will be credited with the number of shares purchased, relieving you of
responsibility for safekeeping of certificates and the need to deliver them upon
redemption. Written confirmations are issued for all purchases of shares. You
will be provided at least semi-annually with a report showing the Fund's
portfolio and other information and annually after the close of the Fund's
fiscal year, which ends December 31, with a report containing audited financial
statements. The Fund's average annual total return is computed by determining
the average annual compounded rate of return for a specified period that, if
applied to a hypothetical $1,000 initial investment, would produce the
redeemable value of that investment at the end of the period, assuming
reinvestment of all dividends and distributions and with recognition of all
recurring charges. The Fund may also utilize a total return calculation for
differing periods computed in the same manner but without annualizing the total
return.
In reports or other communications to investors, or in advertising material, the
Fund may describe general economic and market conditions affecting the Fund and
may compare its performance with other mutual funds as listed in the rankings
prepared by Lipper Analytical Services, Inc. or similar nationally recognized or
international rating services and financial publications that monitor mutual
fund performance. The Fund may also, from time to time, compare its performance
to the Standard & Poor's Composite Index of 500 Stocks ("S&P 500"), or some
other widely recognized, unmanaged index of common stock prices.
The Board of Directors of the Company has approved a Code of Ethics (the "Code")
for the Fund, the Adviser and the Fund's principal underwriter. The Code governs
the personal activities of persons who may have knowledge of the investment
activities of the Fund, requires that they file regular reports concerning their
personal securities transactions, and prohibits activities that might result in
harm to the Fund. The Board is responsible for overseeing the implementation of
the Code. The Fund has filed copies of each Code with the Securities and
Exchange Commission. Copies of the Codes of Ethics may be reviewed and copied at
the SEC's Public Reference Room in Washington, DC. The Codes are also available
on the SEC's EDGAR database at the SEC's web site (www.sec.gov ). Copies of this
information can be obtained, after paying a duplicating fee, by electronic
request ([email protected]), or by writing the SEC's Public Reference Section,
Washington, DC 20549-0102.
<PAGE>
FOR MORE INFORMATION
Additional information about the Fund is available in the Company's latest
Statement of Additional Information (SAI). The SAI contains more detailed
information on all aspects of the Funds. A current SAI, dated December 15, 2000
has been filed with the SEC and is incorporated by reference into this
prospectus.
To receive information without charge concerning the Fund, or to request a copy
of the SAI, please contact the Fund at:
AMIDEX FUNDS, INC.
c/o Declaration Service Company
555 North Lane, Suite 6160
Conshohocken, PA 19460
(888) 876-3566
A copy of your requested document(s) will be sent to you within three days of
your request.
Information about the Fund (including the SAI) can also be reviewed and copied
at the SEC's Public Reference Room in Washington, DC, and information concerning
the operation of the Public Reference Room may be obtained by calling the SEC at
1-202-942-8090. Information about the Fund is also available on the SEC's EDGAR
database at the SEC's web site (www.sec.gov ). Copies of this information can be
obtained, after paying a duplicating fee, by electronic request
([email protected]), or by writing the SEC's Public Reference Section,
Washington, DC 20549-0102.
Investment Company Act No.
811-9123
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
FOR THE
AMIDEX(TM) ISRAEL TECHNOLOGY INDEX FUND
Dated December 15, 2000
A series of
AMIDEX(TM) FUNDS, INC.
(the "Company")
26 Broadway, Suite 741
New York, New York 10004
This Statement of Additional Information ("SAI") is not a prospectus and should
be read in conjunction with the Prospectus of The AMIDEX(TM) Israel Technology
Index Fund, dated December 15, 2000. You may obtain a copy of the Prospectus,
free of charge, by writing to AMIDEX(TM) Funds, Inc, c/o The Declaration Group,
555 North Lane, Suite 6160, Conshohocken, PA 19428, phone number 1-888-876-3566.
TABLE OF CONTENTS
About AMIDEX Funds, Inc.
Investment Policies and Restrictions
Investment Adviser
Directors and Officers
Performance Information
Purchasing and Redeeming Shares
Tax Information
Portfolio Transactions
The AMIDEX(TM)Israel Technology Index
Fund Service Providers
Financial Statements
ABOUT AMIDEX FUNDS, INC.
AMIDEX(TM) Funds, Inc. (the "Company") was incorporated in Maryland on April 27,
1999. The Company is an open-end management investment company, and is
registered as such with the Securities and Exchange Commission. The Board of
Directors approves all significant agreements between the Company and the
persons and companies that furnish services to the Fund, including agreements
with the Fund's custodian, transfer agent, investment adviser and administrator.
The day-to-day operations of the Fund are delegated to the Adviser. This
Statement of Additional Information contains background information regarding
each of the Company's Directors and Executive Officers. The Company's Articles
of Incorporation permit the Board of Directors to issue 500,000,000 shares of
common stock. The Board of Directors has the power to designate one or more
classes ("series") of shares of common stock and to classify or reclassify any
unissued shares with respect to such series. Currently , the Company has
authorized the issuance of two series of shares, the AMIDEX ISRAEL TECHNOLOGY
Mutual Fund and the AMIDEX(TM) Israel Technology Index Fund. Further, the Board
has also authorized the offering of four classes of shares within each series; a
no-load class, a Class A share that is offered with a front-end sales charge, a
Class B share with a declining contingent deferred sales charge ("CDSC"), and a
Class C share, with a one year CDSC and an ongoing service and distribution fee.
Shareholders of each share class are entitled: (i) to one vote per full share;
(ii) to such distributions as may be declared by the Company's Board of
Directors out of funds legally available; and (iii) upon liquidation, to
participate ratably in the assets available for distribution. There are no
conversion or sinking fund provisions applicable to the shares, and the holders
have no preemptive rights and may not cumulate their votes in the election of
Directors. The
<PAGE>
shares are redeemable and are fully transferable. All shares issued and sold by
the Fund will be fully paid and nonassessable.
This SAI pertains only to No-Load shares of the AMIDEX(TM) Israel Technology
Index Fund (the "Fund").
The Board of Directors of the Company has approved a Code of Ethics (the "Code")
for the Fund, the Adviser and the Fund's principal underwriter. The Code governs
the personal activities of persons who may have knowledge of the investment
activities of the Fund, requires that they file regular reports concerning their
personal securities transactions, and prohibits activities that might result in
harm to the Fund. The Board is responsible for overseeing the implementation of
the Code. The Fund has filed copies of each Code with the Securities and
Exchange Commission. Copies of the Codes of Ethics may be reviewed and copied at
the SEC's Public Reference Room in Washington, DC. The Codes are also available
on the SEC's EDGAR database at the SEC's web site (www.sec.gov ). Copies of this
information can be obtained, after paying a duplicating fee, by electronic
request ([email protected]), or by writing the SEC's Public Reference Section,
Washington, DC 20549-0102.
INVESTMENT POLICIES AND RESTRICTIONS
The Fund is a non-diversified Fund. The Investment Company Act of 1940 defines a
diversified fund to mean that as to 75% of the Fund's assets (valued at the time
of investment), a fund will not invest more than 5% of its assets in securities
of any one issuer, except in obligations of the United States Government and its
agencies and instrumentalities, thereby reducing the risk of loss. The Fund
normally will invest at least 95% of its net assets in the approximately 35
Israeli companies that make up the AMIDEX(TM) ISRAEL TECHNOLOGY Index (the
"Index"), in approximately the same percentages as those companies represent in
the Index. It is likely that a few of these companies will comprise a large
percentage of the Fund's portfolio holdings--in excess of the 25% limit on
holdings in excess of 5%. As a result, the Fund will not be diversified.
PORTFOLIO TURNOVER. Because this is a new fund without an operating hitory, the
Fund's portfolio turnover is unknomwn. Higher portfolio turnover rates may
result in higher rates of net realized capital gains to the Fund, thus the
portion of the Fund's distributions constituting taxable gains may increase. In
addition, higher portfolio turnover activity can result in higher brokerage
costs to the Fund. The Fund anticipates that its annual portfolio turnover will
be not greater than 75%.
Under normal circumstances, the Fund will invest at least 95% of its average net
assets in the securities of companies listed on the Index. The Fund may invest
the remaining 5% of its assets in the following securities:
COMMON STOCK. Common stock is issued by companies to raise cash for business
purposes and represents a proportionate equity interest in the issuing
companies. Therefore, the Fund participates in the success or failure of any
company in which it holds common stock. The market value of common stock can
fluctuate significantly, reflecting the business performance of the issuing
company, investor perception, and general economic or financial market
movements. Smaller companies are especially sensitive to these factors. However,
common stocks historically have offered the greatest potential for gain on
investment, compared to other classes of financial assets. There is additional
risk inherent in investing in foreign-based companies. The Fund may invest in
the common stock of foreign issuers which are publicly traded on U.S. exchanges
either directly or in the form of American Depository Receipts (ADRs), but only
if such foreign issuers are included in the Index. The Fund will only invest in
ADRs that are issuer sponsored. Sponsored ADRs typically are issued by a U.S.
bank or Trust company and evidence ownership of underlying securities issued by
a foreign corporation. The Fund may also hold warrants or other rights on common
stock if such warrants are issued as dividends on stocks already held in the
Fund's portfolio. Because the Fund will concentrate its investments in Israeli
companies, the Fund will be exposed to the risks associated with Israeli
companies to a greater degree than will funds whose investment policies do not
require or allow such concentration. The Fund will invest in the common stock of
companies included in the Index that trade on the TASE, NYSE, the AMEX, or
NASDAQ.
MONEY MARKET FUNDS. The Fund may invest in securities issued by other registered
investment companies that invest in short-term debt securities (i.e., money
market funds) to maintain liquidity. As a
<PAGE>
shareholder of another registered investment company, the Fund would bear a pro
rata portion of that company's advisory fees and other expenses. Such fees and
expenses will be borne indirectly by the Fund's shareholders. The Fund will not
invest more than 5% of its net assets in such securities, and will not invest in
such securities, if such investments would represent more than 3% of such
issuer's outstanding shares.
DEBT SECURITIES. The Fund may invest in U.S. Government debt securities
including Treasury Bills and short-term notes, to maintain liquidity. U.S.
Government securities include direct obligations of the U.S. Government and
obligations issued by U.S. Government agencies and instrumentalities. The market
value of such securities fluctuates in response to interest rates and the
creditworthiness of the issuer. In the case of securities backed by the full
faith and credit of the United States Government, shareholders are only exposed
to interest rate risk. The Fund will not invest more than 5% of its net assets
in such securities, and will not invest in any such security with a maturity in
excess of one year.
REPURCHASE AGREEMENTS. The Fund may invest a portion of its assets in repurchase
agreements ("Repos") with broker-dealers, banks and/or other financial
institutions to maintain liquidity. The Fund's custodian must always have
possession of the securities serving as collateral for the Repos or have proper
evidence of book entry receipt of such securities. In a Repo, the Fund purchases
securities subject to the seller's simultaneous agreement to repurchase those
securities from the Fund at a specified time (usually one day) and price. The
repurchase price reflects an agreed-upon interest rate during the time of
investment. All Repos entered into by the Fund must be collateralized by U.S.
Government Securities, the market value of which equals or exceeds 102% of the
principal amount of the money invested by the Fund. If an institution with which
the Fund has entered into a Repo enters insolvency proceedings, the resulting
delay, if any, in the Fund's ability to liquidate the securities serving as
collateral could cause the Fund some loss if the securities declined in value
prior to liquidation. To minimize the risk of such loss, the Fund will enter
into Repos only with institutions and dealers considered creditworthy, and will
not invest more than 5% of its net assets in such transactions.
The Fund may also invest in the following securities and employ the following
investment guidelines:
CASH RESERVES. The Fund may, to meet liquidity needs, temporarily hold up to 5%
of its net assets in cash. The Fund may hold cash in the United States, Israel,
or in both. The primary risk associated with such a policy is that the Fund's
performance will vary, perhaps significantly, from the performance of the Index
when the Fund holds a high percentage of its net assets as cash reserves.
FUTURES AND OPTIONS ON EQUITY SECURITIES AND THE INDEX. The Fund may enter into
futures contracts relating to the equity securities of companies included in the
Index, may write (i.e., sell) covered put and call options on such securities
and on the Index, and may purchase put and call options on such equity
securities and on the Index. Such options can include long-term options with
durations of up to three years. The Fund may use futures and options to increase
or decrease its exposure to the effects of changes in security prices, to hedge
securities held, to maintain cash reserves while remaining fully invested, to
facilitate trading, to reduce transaction costs, or to seek higher investment
returns when a futures or options contract is priced more attractively than the
underlying security or index. The Fund may enter into these transactions so long
as the value of the underlying securities on which such options or futures
contracts may be written at any one time does not exceed 100% of the net assets
of the Fund, and so long as the initial margin required to enter into such
contracts does not exceed five percent (5%) of the Fund's total net assets.
Risk Factors Associated With Futures and Options. The primary risks associated
with the use of options and futures are; (1) imperfect correlation between a
change in the value of the underlying security or index and a change in the
price of the option or futures contract, and (2) the possible lack of a liquid
secondary market for an options or futures contract and the resulting inability
of the Fund to close out the position prior to the maturity date.
RESTRICTED AND ILLIQUID SECURITIES. The Fund will not invest more than 15% of
its net assets in securities that the Adviser determines, under the supervision
of the Board of Directors, to be illiquid and/or restricted. Illiquid securities
are generally defined as securities that cannot be liquidated within seven (7)
days at the approximate price at which the Fund has valued the instrument. Also,
the sale of some illiquid and other types of securities may be subject to legal
restrictions. You should be aware that in the event that more than 15% of the
Index is comprised of companies considered to be illiquid, the Fund will be
unable to match precisely its investments to the percentages contained in the
Index, and that inability may pose additional risks to the Fund, including the
risk that the performance of the Fund will vary from that of the Index.
<PAGE>
WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS. The Fund may purchase
securities of companies comprising the Index on a when-issued basis, and it may
purchase or sell such securities for delayed-delivery. These transactions occur
when securities are purchased or sold by the Fund with payment and delivery
taking place at some future date. The Fund may enter into such transactions
when, in the Adviser's opinion, doing so may secure an advantageous yield and/or
price to the Fund that might otherwise be unavailable. The Fund has not
established any limit on the percentage of assets it may commit to such
transactions, but to minimize the risks of entering into these transactions, the
Fund will maintain a segregated account with its Custodian consisting of cash,
cash equivalents, U.S. Government Securities, or other high-grade liquid debt
securities, denominated in U.S. dollars or non-U.S. currencies, in an amount
equal to the aggregate fair market value of its commitments to such
transactions.
INVESTMENT RESTRICTIONS. The complete list of the Fund's investment restrictions
is as follows:
The Fund will not:
1. Acquire securities of any one issuer that at the time of investment (a)
represent more than 10% of the voting securities of the issuer or (b) have
a value greater than 10% of the value of the outstanding securities of the
issuer;
2. Borrow money, except from banks for temporary or emergency purposes in
amounts not exceeding 5% of the value of the Fund's net assets at the time
of borrowing;
3. Underwrite the distribution of securities of other issuers, or acquire
"restricted" securities that, in the event of a resale, might be required
to be registered under the Securities Act of 1933;
4. Make margin purchases or short sales of securities;
5. Invest in companies for the purpose of management or the exercise of
control;
6. Lend money (but this restriction shall not prevent the Fund from investing
in debt securities or repurchase agreements, or lend its portfolio
securities).
7. Acquire or retain any security issued by a company, an officer or director
of which is an officer or director of the Company or an officer, director
or other affiliated person of the Advisor.
8. Invest in oil, gas or other mineral exploration or development programs,
although it may invest in marketable securities of companies engaged in
oil, gas or mineral exploration, if such companies are members of the
AMIDEX(TM)Israel Technology Index;
9. Purchase or sell real estate or real estate loans or real estate limited
partnerships, although it may invest in marketable securities of companies
that invest in real estate or interests in real estate, if such companies
are members of the AMIDEX(TM) Israel Technology Index.
10. Purchase warrants on securities, although the Fund may receive and exercise
warrants received by the Fund as dividends on previous securities
purchases.
11. Issue senior securities.
12. Invest in commodities, or invest in futures or options on commodities.
13. Invest less than 95% of its assets (valued at time of investment) in
securities of issuers in the Technology Sector, as such sector is defined
by Bloomberg, LP or its successor.
Restrictions 1 through 13 listed above are fundamental policies, and may be
changed only with the approval of a "majority of the outstanding voting
securities" of the Fund as defined in the Investment Company Act of 1940.
<PAGE>
The Fund has also adopted the following restrictions that may be changed by the
Board of Directors without shareholder approval:
The Fund may not:
1. Invest more than 15% of its net assets in securities that are not readily
marketable;
2. Acquire securities of other Investment Companies except (a) by purchase in
the open market, where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission and
(b) where acquisition results from a dividend or merger, consolidation or
other reorganization.
3. purchase more than 3% of the voting securities of any one investment
company;
4. Pledge, mortgage or hypothecate its assets, except for temporary or
emergency purposes and then to an extent not greater than 5% of its total
assets at cost;
5. Invest more than 10% of the Fund's assets (valued at time of investment) in
initial margin deposits of options or futures contracts;
6. Invest less than 95% of its net assets (valued at the time of investment)
in securities of issuers which are not members of the AMIDEX(TM)ISRAEL
TECHNOLOGY(TM)Index.
INVESTMENT ADVISER
TransNations Investments, LLC (the "Adviser") was organized under the laws of
the State of Pennsylvania as an investment advisory corporation in October,
1998, and changed form to a limited liability company in March, 1999. The
Adviser registered as an Investment Advisor with the Securities and Exchange
Commission in December, 1998. The Adviser was created to provide investment
advice to Funds of the Company, and at present that is the exclusive business of
the Adviser. Mr. Clifford A. Goldstein owns a 40% interest in and controls the
Adviser. The Adviser manages the investment portfolio and the general business
affairs of the Fund pursuant to an investment services agreement with the Fund
dated December 15, 2000 (the "Agreement"). Clifford A. Goldstein, and Andrea
Fiest are affiliated persons of the Adviser and act as Directors of the Company.
The Agreement provides that the Adviser shall not be liable for any loss
suffered by the Fund or its shareholders as a consequence of any act or omission
in connection with services under the Agreement, except by reason of the
adviser's willful misfeasance, bad faith, gross negligence, or reckless
disregard of its obligations and duties under the Advisory Agreement.
The Agreement has a term of two years, but may be continued from year to year so
long as its continuance is approved annually (a) by the vote of a majority of
the Directors of the Fund who are not "interested persons" of the Fund or the
Adviser cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Board of Directors as a whole or by the vote of a
majority (as defined in the 1940 Act) of the outstanding shares of the Fund. The
Agreement will terminate automatically in the event of its assignment (as
defined in the 1940 Act). For the fund's fiscal year ending May 31, 2000, the
Fund paid advisory fees of $22,654 to the Adviser.
DIRECTORS AND OFFICERS
The board of directors has overall responsibility for conduct of the Company's
affairs. The day-to-day operations of the Fund are managed by the Adviser,
subject to the bylaws of the Company and review by the Board of Directors. The
directors of the Company, including those directors who are also officers, are
listed below:
<TABLE>
<CAPTION>
Name, Age, Address, Position Principal Occupation For the
with Fund Last Five Years
--------------------------------------------------------------------------------------------------------
<S> <C>
Clifford A. Goldstein* (Age 42) Managing Partner and Attorney with Weber,
President and Director of Fund, Goldstein, Greenberg, Gallagher, Phil. PA,
President, Controlling Partner of PA, a general litigation firm, since 1991. BA
<PAGE>
Adviser from Temple University, Philadelphia, PA,
4/78. J.D. from Temple University School of Law, 3/82.
Theodore A. Young, Esq.* (Age 53) Partner, law firm of Fox, Rothchild, O'Brien &
Director of Fund, Legal counsel Frankel, Philadelphia, PA, practicing securities
to Adviser and business law. Mr. Young has been the President of .
the Philadelphia-Israel Chamber of Commerce, and is the
Secretary of the Jewish Federation of Greater Philadelphia.
Mr. Young earned his law degree from the University of
Pennsylvania.
Andrea Kramer Fiest* (Age 42) Lawyer, self-employed since 12/95.
Director of Fund, Minority Partner International Derivatives Specialist with
Of Adviser SBG Warburg, New York, NY from 1/94 to
12/95. Attorney with firm of Cadwalader, Wickersham &
Tait, New York, NY from 10/87 to 1/94. B.A. degree form
Dickinson College, Carlisle, PA, 4/79. J.D. from Temple
University School of Law, Philadelphia, PA, 3/82. LLM in
taxation from New York University, New York, NY, 4/86.
Lee B. Zeplowitz* (Age 42) President, Greater Philadelphia Chapter of the American
Director Society for Technion/Israel Institute of Technology.
Mr. Zeplowitz is also a partner in the Kibbutz Kfar Blum
Hotel in the Galilee. He is also a Certified Public Accountant,
registered investment adviser and Certified Financial Planner
and is engaged in the private practice of estate planning and
financial management for high worth individuals. Mr.
Zeplowitz is a graduate of Temple University.
Dr. Moshe Porat, Phd. (Age 53) Dean of Fox School of Business & Management,
Director Temple University, Philadelphia, PA. Mr. Porat
Serves on the Boards of the Penn-America Group, the Willis
Corroon National Risk Management Board, the new Risk
Managers National Committee, and the American Risk and
Insurance Board. Mr. Porat received his BA and MBA
(magna cum laude) degrees from Tel Aviv University.
Daniel Schwartz (Age 38) Director of Trade, Government of Israel
Director Economic Mission, New York since 1996.
Previously employed in the real estate development industry
in California. Undergraduate degree from University of
Arizona, Tempe; Graduate studies undertaken at San
Francisco State University
Ami Miron (Age 52) Chairman, President and CEO of MoreCom, a
Director Pennsylvania based digital convergence, TV and
internet solutions solutions company. Educated at the
Technion, Columbia University and Polytechnic
University, Mr. Miron was previously a Vice
President with General Instruments, a Division
Leader at Phillips Labs.
H. Scott Herrin (Age 42) Mr. Herrin graduated from Amherst Collage
Director with a BA in economics and received his Juris
Doctorate from the Harvard Law School. After
serving as President of Klearfold, Inc. Mr. Herrin
<PAGE>
became a Director and Consultant to the IMPAC
Group, an international packaging and printing
corporation.
Zach Oppenheimer (Age 41) Mr. Oppenheimer is Fannie Mae's senior vice
Director president for its Northeastern Regional Office in
Philadelphia, Pennsylvania. Prior to joining Fannie
Mae in 1983, Mr. Oppenheimer was a savings
manager and corporate lending supervisor at Progress
Savings Bank in Norristown, Pennsylvania. Mr.
Oppenheimer is a member of Fannie Mae's
Operating Committee. He serves on the boards of
several community and religious organizations. Mr.
Oppenheimer has completed post-graduate courses at
The Wharton School of the University of
Pennsylvania. He received a master of business
administration degree from Drexel University and a
bachelor of business administration degree from
Temple University.
</TABLE>
* Indicates an "interested person" as defined in the Investment Company Act
of 1940.
For the Company's fiscal year ending May 31, 2000, no director received
compensation for his or her service to the Fund as a Director. Clifford
Goldstein received compensation from the Adviser for his services to the
Adviser, but did not receive any compensation for his services as a Director.
The Adviser intends to purchase all outstanding shares of the fund prior to the
Fund's effective date and will then be deemed to control the Fund.
The Company will call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when requested in writing to
do so by record holders of at least 10% of the Fund's outstanding common shares.
The Company's bylaws contain procedures for the removal of directors by its
stockholders. At any meeting of stockholders, duly called and at which a quorum
is present, the stockholders may by the affirmative vote of the holders of a
majority of the votes entitled to be cast thereon, remove any director or
directors from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of the removed directors.
PERFORMANCE INFORMATION
From time to time the Fund may quote total return figures. "Total Return" for a
period is the percentage change in value during the period of an investment in
Fund shares, including the value of shares acquired through reinvestment of all
dividends and capital gains distributions. "Average Annual Total Return" is the
average annual compounded rate of change in value represented by the Total
Return Percentage for the period.
[n]
Average Annual Total Return is computed as follows: P(1+T) = ERV
Where: P = a hypothetical initial investment of $1000]
T = average annual total return
n = number of years
ERV = ending redeemable value of shares at the end of the period
Yield. The Fund may 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:
<PAGE>
Yield = 2[(a-b/cd + 1)6 - 1]
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 they
were entitled to receive dividends
d = the maximum offering price per share on the last day of the period]
The Fund's performance is a function of conditions in the securities markets,
portfolio management, sales charges on particular classes of shares, if any, and
operating expenses. Although information such as that shown above is useful in
reviewing the Fund's performance and in providing some basis for comparison with
other investment alternatives, it should not be used for comparison with other
investments using different reinvestment assumptions or time periods.
In sales literature, the Fund's performance may be compared with that of market
indices and other mutual funds. In addition to the above computations, the Fund
might use comparative performance as computed in a ranking determined by Lipper
Analytical Services, Morningstar, Inc., or that of another service.
PURCHASING AND REDEEMING SHARES
Information concerning purchases and redemptions of shares is contained in the
Fund's Prospectus under the Section "How to Buy and Sell Shares". This section
supplements that information.
Redemptions will be made at net asset value. The Fund's net asset value is
determined on days on which the New York Stock Exchange is open for trading. For
purposes of computing the net asset value of a share of the Fund, securities
traded on security exchanges, or in the over-the-counter market in which
transaction prices are reported, are valued at the last sales price at the time
of valuation or, lacking any reported sales on that day, at the most recent bid
quotations. Securities for which quotations are not available and any other
assets are valued at a fair market value as determined in good faith by the
Advisor, subject to the review and supervision of the board of directors. The
price per share for a purchase order or redemption request is the net asset
value next determined after receipt of the order.
The Fund is open for business on each day that the New York Stock Exchange
("NYSE") is open. The Fund's share price or net asset value per share ("NAV") is
normally determined as of 4:00 p.m., New York time. The Fund's share price is
calculated by subtracting its liabilities from the closing fair market value of
its total assets and dividing the result by the total number of shares
outstanding on that day. Fund liabilities include accrued expenses and dividends
payable, and its total assets include the market value of the portfolio
securities as well as income accrued but not yet received. Since the Fund
generally does not charge sales or redemption fees, the NAV is the offering
price for shares of the Fund. For No-Load shares redeemed prior to being held
for at least 365 days, the redemption value is the NAV less a redemption fee
equal to 2.00% of the NAV.
TAX INFORMATION
Information concerning the taxation of the Fund is generally discussed in the
Prospectus under the Section titled "Tax Considerations". This Section
supplements that discussion.
The Fund intends to qualify as a regulated investment company under Sub Chapter
M of the Internal Revenue Code so as to be relieved of federal income tax on its
capital gains and net investment income currently distributed to its
shareholders. To qualify as a regulated investment company, the Fund must, among
other things, derive 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 other income derived with respect to its
business of investing in such stock or securities.
If the Fund qualifies as a regulated investment company and distributes at least
90% of its net investment income, the Fund will not be subject to Federal income
tax on the income so distributed. However, the
<PAGE>
Fund would be subject to corporate income tax on any undistributed income other
than tax-exempt income from municipal securities.
The Fund intends to distribute to shareholders, at least annually, substantially
all net investment income and any net capital gains realized from sales of the
Fund's portfolio securities. Dividends from net investment income and
distributions from any net realized capital gains are reinvested in additional
shares of the Fund unless the shareholder has requested in writing to have them
paid by check.
Dividends from investment income and net short-term capital gains are generally
taxable to the shareholder as ordinary income. Distributions of long-term
capital gains are taxable as long-term capital gains regardless of the length of
time shares in the Fund have been held. Distributions are taxable, whether
received in cash or reinvested in shares of the Fund.
Each shareholder is advised annually of the source of distributions for federal
income tax purposes. A shareholder who is not subject to federal income tax will
not be required to pay tax on distributions received.
If shares are purchased shortly before a record date for a distribution, the
shareholder will, in effect, receive a return of a portion of his investment,
but the distribution will be taxable to him even if the net asset value of the
shares is reduced below the shareholder's cost. However, for federal income tax
purposes the original cost would continue as the tax basis.
If a shareholder fails to furnish his social security or other tax
identification number or to certify properly that it is correct, the Fund may be
required to withhold federal income tax at the rate of 31% (backup withholding)
from dividend, capital gain and redemption payments to him. Dividend and capital
gain payments may also be subject to backup withholding if the shareholder fails
to certify properly that he is not subject to backup withholding due to the
under-reporting of certain income.
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 and December and made payable
to shareholders of record in such month will be deemed to have been received on
December 31st if paid by the Fund during the following January.
Distributions by the 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 would be taxable to the shareholder
as ordinary income or as a 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 the Fund just prior to a distribution. The price of such shares
include the amount of any forthcoming distribution so that those investors may
receive a return of investment upon distribution which will, nevertheless, be
taxable to them.
A redemption of shares is a taxable event and, accordingly, a capital gain or
loss may be recognized. Each investor should consult a tax advisor regarding the
effect of federal, state, local, and foreign taxes on an investment in the Fund.
Dividends. A portion of the Fund's income may qualify for the dividends-received
deduction available to corporate shareholders to the extent that the Fund's
income is derived from qualifying dividends. Because the Fund may earn other
types of income, such as interest, income from securities loans, non-qualifying
dividends, and short-term capital gains, the percentage of dividends from the
Fund that qualifies for the deduction generally will be less than 100%. The Fund
will notify corporate shareholders annually of the percentage of Fund dividends
that qualifies for the dividend received deductions.
A portion of the Fund's dividends derived from certain U.S. Government
obligations may be exempt from state and local taxation. Short-term capital
gains are distributed as dividend income. The Fund will send each shareholder a
notice in January describing the tax status of dividends and capital gain
distributions for the prior year.
<PAGE>
Capital Gain Distribution. Long-term capital gains earned by the Fund from the
sale of securities and distributed to shareholders are federally taxable as
long-term capital gains, regardless of the length of time shareholders have held
their shares. If a shareholder receives a long-term capital gain distribution on
shares of the Fund, and subsequently such shares are sold at a loss, the portion
of the loss equal to the amount of the long-term capital gain distribution may
be considered a long-term loss for tax purposes. Short-term capital gains
distributed by the Fund are taxable to shareholders as dividends, not as capital
gains. Taxation issues are complex and highly individual. You should consult
with your tax advisor concerning the effects of transactions in the Fund.
PORTFOLIO TRANSACTIONS
The Fund will generally purchase and sell securities without regard to the
length of time the security has been held. Accordingly, the rate of portfolio
turnover may be substantial. However, the Fund expects that its annual portfolio
turnover rate will not exceed 75% under normal conditions. However, there can be
no assurance that the Fund will not exceed this rate, and the portfolio turnover
rate may vary from year to year.
High portfolio turnover in any year will result in the payment by the Fund of
above-average transaction costs and could result in the payment by shareholders
of above-average amounts of taxes on realized investment gains. Distributions to
shareholders of such investment gains, to the extent they consist of short-term
capital gains, will be considered ordinary income for federal income tax
purposes.
Decisions to buy and sell securities for the Fund are made by the Adviser
subject to review by the Company's Board of Directors. In placing purchase and
sale orders for portfolio securities for the Fund, it is the policy of the
Adviser to seek the best execution of orders at the most favorable price. In
selecting brokers to effect portfolio transactions, the determination of what is
expected to result in the best execution at the most favorable price involves a
number of largely judgmental considerations. Among these are the Adviser's
evaluations of the broker's efficiency in executing and clearing transactions.
Over-the-counter securities are generally purchased and sold directly with
principal market makers who retain the difference in their cost in the security
and its selling price. In some instances, the Adviser feels that better prices
are available from non-principal market makers that are paid commissions
directly.
AMIDEX(TM) ISRAEL TECHNOLOGY INDEX
AMIDEX(TM) Israel Technology Index is a new, unmanaged Index. The companies
included in the Index are smaller market capitalization "Israeli Technology
Companies" whose stock is publicly traded on the NASDAQ.
What is an "Israel Technology Company"?
---------------------------------------
To be an "Israel Technology Company", a company has to satisfy ALL of the
following requirements:
6. Its stock is traded on the NASDAQ over-the-counter market and the company
has been listed by the Israeli financial newspaper, GLOBES as one of the
"Israeli shares traded on the New York Bourse." (if GLOBES stops publishing
a list of "Israeli shares traded on the New York Bourse," the Board of
Directors will select an alternative publication that similarly defines
such companies); and
7. The company is designated by Bloomberg, L.P. or a comparable nationally
recognized financial data provider as being in a Technology Sector; and
8. The company is not listed as a company included in the AMIDEX ISRAEL
TECHNOLOGY(TM)Index. The AMIDEX ISRAEL TECHNOLOGY(TM)Index is an index of
the 35 largest Israeli companies (measured by market capitalization),
traded either on the Tel Aviv Stock Exchange or the U.S. exchanges; and
9. It must have maintained an average minimum daily trading volume of at least
$500,000 in the previous two calendar quarters; and
10. It may not be listed in the U.S. as an ADR or ADS.
<PAGE>
The largest (as measured by market capitalization) 35 Israel companies that
satisfy all of the criteria described above will be included in the Index. You
should be aware that the Index might contain more or less than 35 companies
during certain periods of the year. If less than 35 Israeli companies meet the
criteria for inclusion at the beginning of an adjustment date, then the Index
will contain only those companies that qualify. The Index is adjusted to add or
delete companies, as necessary on or about November 30th and May 31st of each
year.
If a company ceases operation, is de-listed on the NASDAQ, or becomes insolvent,
it will be immediately deleted from the Index and not replaced until the next
adjustment date. If a single company splits into multiple companies, all such
companies will be included in the Index until the Index is readjusted, at which
time each company's individual qualifications to be included in the Index will
be determined.
An "unmanaged" index means that the criteria for inclusion of companies in the
Index are objective and not subject to arbitrary change, so that any company
that is eligible for inclusion in the Index must be included, and any company
that ceases to qualify for inclusion in the Index must be deleted.
The Index is a market capitalization index. Market capitalization means the
total current U.S. dollar value of a company's outstanding shares of common
stock, and is calculated by multiplying the number of outstanding shares of
common stock of a company by the price of that common stock.
The Index began being calculated on November 1st, 2000 at an initial Index Value
of 1,000. The Index name, rules, methods of calculation, and proprietary data
are owned by the Adviser. The Adviser developed the criteria and the rules of
operation for the Index. The Adviser has entered into agreements with various
companies to construct, calculate and publish the Index. Bloomberg, L.P.
performed the initial calculations needed to create the Index and selects the
companies that will be included in or deleted from the Index, based on the
criteria described above. Bloomberg, L.P. is responsible for maintaining and
publishing the Index. Bloomberg, L.P. has no affiliation with the Fund, the
Adviser, or any of the Fund's other service providers, and currently calculates
and publishes the AMIDEX ISRAEL TECHNOLOGY Index. The Adviser may, if necessary,
select an alternative independent company to calculate, maintain or publish the
Index in the future.
When companies are added to or deleted from the Index, the Adviser will alter
the Fund's investments to conform the portfolio to the Index. This will result
in certain risks to the Fund, including the risks of losses and tax consequences
to shareholders resulting from realized capital gains. You should also be aware
that the Fund will incur certain expenses that are not incurred by the Index,
including transaction charges. Accordingly, the performance of the Fund will
vary from that of the Index as a result of such expenses.
The Adviser will attempt to maintain a correlation coefficient of at least 0.95
in performance between the Index and the Fund. This means that the Adviser will
attempt to replicate at least 95% of the Index's performance. The Adviser will
be responsible for tracking the Fund's performance, under the supervision of the
Company's Board of Directors. If the Fund fails to achieve a 0.95 correlation
coefficient, the Board will take action to rectify whatever problem is causing
the discrepancy, including, as an example, altering the Fund's servicing
arrangements to reduce Fund expense ratios or changing the Fund's investment
strategy of investing in the Index.
The Adviser has determined that, in order to construct the Fund's portfolio to
reflect the performance of the Index, the Fund must have approximately $25
million in net assets. Until such asset levels are reached, the Adviser may
invest Fund assets in a representative sample of Index securities and such other
permissible securities, the Adviser believes will likely track Index performance
most closely.
You should be aware that there is no assurance that the Adviser will be
successful in replicating the performance of the Index during this period. You
will find a more detailed discussion of the Index in the SAI in the Section
entitled "The Index."
<PAGE>
WHY DOES THE FUND INVEST IN ISRAEL TECHNOLOGY COMPANIES?
The State of Israel is a highly developed, industrialized democracy. Since the
beginning of the decade, Israel's economy has grown significantly, presenting
improvement in most economic indicators. Israel has made substantial progress in
opening its economy, including the removal of its trade barriers and tariffs.
Israel has concluded free trade agreements with its major trading partners and
is the only nation that is a party to free trade agreements with both the United
States and the European Union. In recent years Israel has signed free trade
agreements with Switzerland, Norway, Canada, Turkey, the Czech Republic, the
Slovak Republic, Poland and Hungary.
The State of Israel has significantly improved its economic performance.
Inflation in 1999 fell to 1.3%, and exports more than doubled between 1992 and
2000. Israel is a member of a number of international organizations, including
the United Nations, the World Bank Group (including the International Finance
Corporation), the International Monetary Fund (the "IMF"), the European Bank for
Reconstruction and Development, and the Inter-American Development Bank. Israel
is a signatory to the General Agreement on Tariffs and Trade ("GATT") of 1947
and 1994, which provides for reciprocal lowering of trade barriers among its
members. Under GATT, Israel is eligible to receive a number of trade preferences
that are available only to certain GATT participants, including duty-free
treatment of its exports to certain countries pursuant to the GATT Generalized
System of Preferences.
Israel is not only rich in research, technology and intellectual investment, but
also is the only democratic nation in the Middle East. The influx of venture
capital, the infusion of human resources (Israel's population nearly doubled in
the last 15 years), and the conversion of the economic focus from military to
commercial (defense spending dropped from about 30% of GNP in 1973 to less than
8.14% in 1998), have led many to believe that Israel is the next "Silicon
Valley." There has been a dramatic increase in the number of Israeli companies
trading on U.S. Exchanges, particularly the NASDAQ.
Israel is third, behind only the U.S. and Canada, in the number of companies
traded on Wall Street. More than 100 Israeli companies trade shares on the major
U.S. exchanges. In Israel, the Tel Aviv Stock Exchange now lists more than 665
companies and over 1,000 securities, with a current market capitalization of
about $80 billion.
In 1999, Israel exported $9.9 billion of technology related products. Israel
leads all foreign nations in receipt of venture capital from abroad, and in the
number of high tech start-ups per year. In the first 6 months of the year 2000,
Israel received more than $12 billion of direct foreign investment.
These dramatic developments present a new and relatively unexploited opportunity
for equity investment. Currently, there is only one other U.S. based, open-end
mutual fund available as a vehicle for investment in Israeli securities. That
Fund, the AMIDEX ISRAEL TECHNOLOGY Mutual Fund (AMDEX, AMDAX,AMDCX) is an
index-based mutual fund also offered by AMIDEX(TM) Funds, Inc. that invests in
the stocks comprising the AMIDEX ISRAEL TECHNOLOGY(TM) Index, and index of the
35 largest Israeli companies (measured by market capitalization), traded either
on the Tel Aviv Stock Exchange or the U.S. exchanges. The AMIDEX Israel
Technology Mutual Fund is currently the only fund investing exclusively in U.S.
traded Israeli technology companies through the AMIDEX(TM) Israel Technology
Index.
DISTRIBUTION FEES
Amidex Funds, Inc. (the "Company") has adopted distribution plans (the
"Distribution Plans"), pursuant to Rule 12b-1 under The Investment Company Act
of 1940, as amended, by Class of Shares, for each Fund. The Distribution Plans
provide for fees to be deducted from the average net assets of the Funds in
order to compensate the Adviser or others for expenses relating to the promotion
and sale of shares of each Fund.
Under the No-Load and Class A Plans, each share Class compensates the Adviser
and others for distribution expenses at a maximum annual rate of 0.25% (of
which, the full amount may be service fees), payable on a monthly basis, of the
Fund's average daily net assets attributable to the applicable share Class.
<PAGE>
For the Fund's fiscal year ending May 31, 2000, the Fund accrued and paid
$11,120 in 12b-1 fees for its No-Load shares, and $205 in 12b-1 fees for its
Class A shares.
Under the Class B Plan, the Class B Shares of the Fund compensate the Adviser
and others for distribution and service fees at an annual rate of 1.00% (0.75%
of which is a distribution fee) payable on a monthly basis, of the Fund's
average daily net assets attributable to Class B shares. Amounts paid under the
Class B Plan are paid to the Adviser and others to compensate it for services
provided and expenses incurred in the distribution of Class B shares, including
the paying of commissions for sales of Class B shares. The Class B Plan is
designed to allow investors to purchase Class B shares without incurring a
front-end sales load and to permit the distributor to compensate authorized
dealers for selling such shares. Accordingly, the Class B Plan combined with the
CDSC for Class B shares is to provide for the financing of the distribution of
Class B shares. During the Fund's fiscal year ending May 31, 2000, the Fund did
not offer its Class B shares to the public, so no 12b-1 fees were accrued or
paid for these shares.
Under the Class C Plan, Class C Shares of the Fund compensate the Adviser and
others for distribution and service fees at an annual rate of 1.00% (0.75% of
which is a distribution fee) payable on a monthly basis, of the Fund's average
daily net assets attributable to Class C shares. Amounts paid under the Class C
Plan are paid to the Adviser and others to compensate it for services provided
and expenses incurred in the distribution of Class C shares, including the
paying of ongoing "trailer" commissions for sales of Class C shares. The Class C
Plan is designed to allow investors to purchase Class C shares without incurring
a front-end sales load or a CDSC charge, and to permit the distributor to
compensate authorized dealers for selling such shares. Accordingly, the Class C
Plan's purpose is to provide for the financing of the distribution of Class C
shares. For the Fund's fiscal year ending May 31, 2000, the Fund accrued and
paid $7 in 12b-1 fees for its Class C shares.
The Distribution Plans provide that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including but not
limited to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising materials and
sales literature, and payments to dealers and shareholder servicing agents.
The Distribution Plans are reviewed annually by the Company's Board of
Directors, and may be renewed only by majority vote of the shareholders of the
Fund's Classes, or by majority vote of the Board, and in both cases also a
majority vote of the disinterested Directors of the Company, as that term is
defined in the 1940 Act.
The Board of Directors has determined that a consistent cash flow resulting from
the sale of new shares is necessary and appropriate to meet redemptions and to
take advantage of buying opportunities without having to make unwarranted
liquidations of portfolio securities. The Board therefore believes that it will
likely benefit the Fund to have monies available for the direct distribution
activities of the Distributor in promoting the sale of the Fund's shares, and to
avoid any uncertainties as to whether other payments constitute distribution
expenses on behalf of the Fund. The Board of Directors, including the non-
interested Directors, has concluded that in the exercise of their reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plans will benefit the Fund and its shareholders.
The Plans have been approved by the Funds' Board of Directors, including all of
the Directors who are non-interested persons as defined in the 1940 Act. The
Plans must be renewed annually by the Board of Directors, including a majority
of the Directors who are non-interested persons of the Funds and who have no
direct or indirect financial interest in the operation of the Plans. The votes
must be cast in person at a meeting called for that purpose. It is also required
that the selection and nomination of such Directors be done by the
non-interested Directors. The Plans and any related agreements may be terminated
at any time, without any penalty: 1) by vote of a majority of the non-interested
Directors on not more than 60 days' written notice, 2) by the Underwriter on not
more than 60 days' written notice, 3) by vote of a majority of the Fund's
outstanding shares, on 60 days' written notice, and 4) automatically by any act
that terminates the Underwriting Agreement with the underwriter. The underwriter
or any dealer or other firm may also terminate their respective agreements at
any time upon written notice.
<PAGE>
The Plans and any related agreement may not be amended to increase materially
the amounts to be spent for distribution expenses without approval by a majority
of the Fund's outstanding shares, and all material amendments to the Plans or
any related agreements shall be approved by a vote of the non-interested
Directors, cast in person at a meeting called for the purpose of voting on any
such amendment.
The underwriter is required to report in writing to the Board of Directors of
the Fund, at least quarterly, on the amounts and purpose of any payment made
under the Plans, as well as to furnish the Board with such other information as
may reasonably be requested in order to enable the Board to make an informed
determination of whether the Plans should be continued.
FUND SERVICE PROVIDERS
CUSTODIAN FirStar Bank, N.A. of Cincinnati. Ohio acts as U.S. custodian for the
Fund. As such, the Bank holds all securities and cash of the Fund, delivers and
receives payment for securities sold, receives and pays for securities
purchased, collects income from investments and performs other duties, all as
directed by officers of the Company. The Bank does not exercise any supervisory
function over the management of the Fund, the purchase and sale of securities or
the payment of distributions to shareholders. All fees charged by the custodian
are paid by the Adviser.
TRANSFER AGENT Declaration Services Company ("DSC") acts as transfer, dividend
disbursing, and shareholder servicing agent for the Fund pursuant to a written
agreement with the Advisor and Fund. Under the agreement, DSC is responsible for
administering and performing transfer agent functions, dividend distribution,
shareholder administration, and maintaining necessary records in accordance with
applicable rules and regulations. All fees charged by the transfer agent are
paid by the Adviser.
ADMINISTRATION. DSC also provides services as Administrator to the Fund pursuant
to a written agreement with the Advisor and Fund. The Administrator supervises
all aspects of the operations of the Fund except those performed by the Adviser
under the Fund's investment advisory agreement. The Administrator is responsible
for:
(a) calculating the Fund's net asset value
(b) preparing and maintaining the books and accounts specified in Rule 31a-1
and 31a-2 of the Investment Company Act of 1940
(c) preparing financial statements contained in reports to stockholders of the
Fund
(d) preparing the Fund's federal and state tax returns
(e) preparing reports and filings with the Securities and Exchange Commission
(f) preparing filings with state Blue Sky authorities
(g) maintaining the Fund's financial accounts and records
DISTRIBUTOR Declaration Distributors, Inc., 555 North Lane, Suite 6160,
Conshohocken, PA 19428, a wholly-owned subsidiary of The Declaration Group,
serves as distributor and principal underwriter of the Fund's shares pursuant to
a written agreement with the Adviser and Fund. All fees charged by the
distributor are paid by the Adviser.
INDEPENDENT AUDITORS McCurdy & Associates, CPAs, Inc., 27955 Clemens Road,
Westlake, Ohio 44145 serves as the Company's independent auditors.
LEGAL COUNSEL: David Jones & Assoc., P.C., 4747 Research Forest Drive, Suite
180, # 303, The Woodlands, TX 77381, has passed on certain matters relating to
this registration statement and serves as counsel to the Fund.
<PAGE>
FINANCIAL STATEMENTS
Because this is a new Fund, financial performance information is not yet
available.
<PAGE>
PART C
OTHER INFORMATION
Item 23 Exhibits
A. ARTICLES OF INCORPORATION OF REGISTRANT- Incorporated by reference from
Pre-Effective Amendment # 2, filed on March 2, 1999
B. BYLAWS OF REGISTRANT- Incorporated by reference from Pre-Effective
Amendment # 2, filed on March 2, 1999
C. NONE [Not Applicable]
D. INVESTMENT ADVISORY AGREEMENT WITH TRANSNATIONS INVESTMENTS, INC.-
Incorporated by reference from Pre-Effective Amendment # 2, filed on March
2, 1999
E. DISTRIBUTION AGREEMENT WITH DECLARATION DISTRIBUTORS, INC.- Incorporated by
reference from Pre-Effective Amendment # 2, filed on March 2, 1999
F. NONE [Not Applicable]
G. CUSTODIAN AGREEMENT WITH FIRSTSTAR BANK, N.A.- Incorporated by reference
from Pre-Effective Amendment # 2, filed on March 2, 1999
H. (1) OPERATING SERVICES AGREEMENT WITH TRANSNATIONS INVESTMENTS, INC.-
Incorporated by reference from Pre-Effective Amendment # 2, filed on
March 2, 1999
(2) INVESTMENT SERVICES AGREEMENT WITH DECLARATION SERVICE COMPANY-
Incorporated by reference from Pre-Effective Amendment # 2, filed on
March 2, 1999
I. OPINION OF COUNSEL- Attached hereto as Exhibit 23I
J. CONSENT OF INDEPENDENT AUDITORS- Incorporated by reference from
Pre-Effective Amendment # 2, filed on March 2, 1999
K. NONE [Not Applicable]
L. SUBSCRIPTION AGREEMENT- None
M. PLANS OF DISTRIBUTION PURSUANT TO RULE 12b-1- Incorporated by reference
from post-Effective Amendment # 1, filed on June 12, 1999
N. FINANCIAL DATA SCHEDULE- Not Applicable
O. NONE- [Not Applicable]
P. CODE OF ETHICS- Incorporated by reference from post-Effective Amendment #
3, filed on October 4, 2000.
Item 24. Persons Controlled by or under Common Control with Registrant.
------------------------------------------------------------------------
No person is directly or indirectly controlled by, or under common control with
the Registrant.
Item 25. Indemnification.
-------------------------
Section 2-418 of the General Corporation Law of Maryland authorizes the
registrant to indemnify its directors and officers under specified
circumstances. Section 7 of Article VII of the bylaws of the Registrant (exhibit
2 to the registration statement, which is incorporated herein by reference)
provides in effect that the registrant shall provide certain indemnification to
its directors and officers. In accordance with section 17(h) of the Investment
Company Act, this provision of the bylaws shall not protect any person against
any liability to the registrant or its shareholders to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or
<PAGE>
reckless disregard of the duties involved in the conduct of his or her office.
With respect to the indemnification provisions of any agreement entered into by
the Company, to the extent that such indemnification provisions may be
inconsistent with, or unenforceable, under any federal or state securities law,
the Company shall not be liable therefore.
Item 26. Business and Other Connections of Investment Adviser.
--------------------------------------------------------------
The Adviser has no other business or other connections.
Item 27. Principal Underwriters.
--------------------------------
Declaration Distributors, Inc., 555 North Lane, Suite 6160, Conshohocken, PA
will be the Fund's principal underwriter.
Item 28. Location of Accounts and Records.
------------------------------------------
Declaration Service Company.
555 North Lane, Suite 6160
Conshohocken, PA 19468
TransNations Investment, LLC.
26 Broadway, Suite 741
New York, New York 10004
Item 29. Management Services.
-----------------------------
Declaration Service Company.
555 North Lane, Suite 6160
Conshohocken, PA
Item 30. Undertakings.
----------------------
Not Applicable
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that this post
effective amendment # 4 to the Company's Registration Statement on Form N-1A
meets all of the requirements for immediate effectiveness pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of New York and State of New York on the 16th day of November, 2000.
AMIDEX FUNDS, INC.
(Registrant)
/s/ Clifford A. Goldstein
------------------------------
CLIFFORD A. GOLDSTEIN
Its: President & Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
Name Title Date
--------------------------------------------------------------------------------
/s/ Clifford A. Goldstein President, Chairman November 16, 2000
-------------------------- Treasurer
CLIFFORD A GOLDSTEIN
/s/ Andrea Fiest Director, November 16, 2000
-------------------------- Secretary
ANDREA FIEST
/s/ Scott Herron Director November 16, 2000
--------------------------
SCOTT HERRON
/s/ Lee Zeppowitz Director November 16, 2000
--------------------------
LEE ZEPPOWITZ
/s/ Ami Miron Director November 16, 2000
--------------------------
AMI MIRON
/s/ Daniel Schwartz Director November 16, 2000
--------------------------
DANIEL SCHWARTZ
/s/ Zach Oppenheimer Director November 16, 2000
--------------------------
ZACH OPPENHEIMER
/s/ Moshe Perot Director November 16, 2000
--------------------------
MOSHE PEROT
/s/ Theodore Young Director November 16, 2000
--------------------------
THEODORE YOUNG
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EXHIBIT INDEX
Exhibit 23I Opinion and Consent of Legal Counsel
