As filed with the Securities and Exchange Commission on December 29, 2000
Registration No. 333-84885
Registration No. 811-09531
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No.___ |_|
Post-Effective Amendment No. 4 |_|
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 4 |_|
(Check appropriate box or boxes)
DLJ Select Funds
(Exact name of registrant as specified in charter)
277 Park Avenue
New York, New York 10172
(Address of Principal Executive Offices)
(800) 825-5723
(Registrant's Telephone Number, Including Area Code)
Brian A. Kammerer
One Pershing Plaza, 10th Floor
Jersey City, NJ 07399
(Name and Address of Agent for Service)
Copy to:
Earl D. Weiner
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Approximate date of proposed public offering:
As soon as practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective (check appropriate box)
|_| Immediately upon filing pursuant to paragraph (b)
|X| 60 days after filing pursuant to paragraph (a)(1)
|_| on (date) pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2), or
|_| on (date) pursuant to paragraph (a)(2) of Rule 485
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 495)
<TABLE>
<CAPTION>
N-1A Item No. Location
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<S> <C> <C>
Part A
Item 1. Front and Back Cover Pages................................. Front and Back Cover Pages
Item 2. Risk/Return Summary: Investments, Risks
and Performance............................................ DLJ Mutual Funds Risk/Return Summary
Item 3. Risk/Return Summary: Fee Table............................. Summary of DLJ Mutual Fund Expenses
Item 4. Investment Objectives, Principal Investment DLJ Mutual Funds Investment
Strategies and Related Risks............................... Objectives and Policies
Item 5. Management's Discussion of Fund Performance................ Not Applicable
Item 6. Management, Organization, and Capital Structure............ Fund Management
Item 7. Shareholder Information.................................... How to Buy and Sell Shares; Other
Shareholder Information; Taxes
Item 8. Distribution Arrangements.................................. Dividend and Distribution
Information
Item 9. Financial Highlights Information........................... Financial Highlights
Part B
Item 10. Cover Page and Table of Contents........................... Cover Page
Item 11. Fund History............................................... Fund History
Item 12. Description of the Fund and Its Investments and Risks...... Investment Policies and Restrictions
Item 13. Management of the Fund .................................... Management
Item 14. Control Persons and Principal Holders of Securities........ Shares of Beneficial Interest
Item 15. Investment Advisory and Other Services..................... Management; Expenses of the Funds
Item 16. Brokerage Allocation and Other Practices................... Expenses of the Funds; Portfolio
Transactions
Item 17. Capital Stock and Other Securities......................... General Information; Purchases,
Redemptions, Exchanges and
Systematic Withdrawal Plan
Item 18. Purchase, Redemption and Pricing of Shares................. Purchases, Redemptions, Exchanges;
Systematic Withdrawal Plan; Net
Asset Value
Item 19. Taxation of the Fund....................................... Dividends; Distributions and Taxes
Item 20. Underwriters............................................... Distribution Plan
Item 21. Calculation of Performance Data............................ Investment Performance
</TABLE>
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<TABLE>
<CAPTION>
N-1A Item No. Location
------------- --------
<S> <C> <C>
Information
Item 22. Financial Statements....................................... General Information - Financial
Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
DLJ Mutual Funds
Prospectus
______, 2001
Leadership through Experience
DLJ Core Equity Fund
DLJ Growth and Income Fund
DLJ Small Company Value Fund
DLJ Strategic Growth Fund
DLJ Technology Fund
DLJ Developing Markets Fund
DLJ International Equity Fund
DLJ Fixed Income Fund
DLJ Municipal Trust Fund
DLJ High Income Fund
DLJ Municipal Money Fund
DLJ U.S. Government Money Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
An investment in any of the Funds is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
CONTENTS
2 DLJ Mutual Funds' Risk/Return Summary
16 Summary of DLJ Mutual Fund Expenses
18 Annual Fund Operating Expenses
25 Recent Developments
25 Purchase Information
27 DLJ Mutual Funds' Investment Objectives and Policies
41 Additional Information on Investment Policies and Risks
44 Fund Management
46 How to Buy and Sell Shares
49 Other Shareholder Information
54 Additional Shareholder Services
55 Distribution Charges
56 Dividend and Distribution Information
56 Taxes
57 Financial Highlights
69 For More Information
This part of the prospectus summarizes each Fund's investment objective,
principal investment strategies and principal risks. This section also contains
limited performance data. More information about the DLJ Mutual Funds is
contained in "DLJ Mutual Funds' Investment Objectives and Policies", and
"Additional Information on Investment Policies and Risks." Please read the
entire prospectus carefully before investing and save it for future reference.
1
<PAGE>
DLJ MUTUAL FUNDS' RISK/RETURN SUMMARY
DLJ DOMESTIC EQUITY FUNDS
The DLJ Core Equity Fund
The DLJ Core Equity Fund's investment objective is long-term capital
appreciation. The Fund seeks to achieve its objective by investing in companies
that offer long-term capital appreciation. The Fund invests in common stock,
securities convertible into common stock and other equity securities of
well-known and established companies. The Fund takes a long-term view of each
stock it buys, holding each company until its long-term growth potential no
longer meets the Fund's requirements. Generally, the Fund attempts to identify
companies with growth rates that will exceed that of the S&P 500 Index. The DLJ
Core Equity Fund is "sector neutral." This means that its investments are
allocated to industries in proportion to the sector allocation of the S&P 500
Index, with the exception of the electric and the gas utilities sectors. In the
opinion of the Adviser, this strategy enables the Fund to properly diversify its
portfolio within the most important and central realm ("core") of the U.S.
equity universe. The Fund may also make an investment to earn income when its
Adviser believes that it will not compromise the investment objective. To
achieve this objective, the Fund may invest up to 35% of the value of its assets
in investment-grade fixed income securities, including bonds, debentures, notes,
asset and mortgage-backed securities and money market instruments such as
commercial paper and bankers' acceptances and other financial instruments. The
Fund may also invest in non-U.S. securities.
Like any investment, an investment in the DLJ Core Equity Fund is subject to
risk and you could lose money. While investments are selected that the Adviser
believes will experience long-term appreciation, their value could decline. The
Fund is subject to risks that affect equity securities markets in general, such
as general economic conditions and adverse changes (generally increases) in
interest rates. These and other factors could adversely affect your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1, 5 and 10 years compare to those of the S&P 500 Composite Index,
which is a broad measure of market performance. The Fund's past performance is
not necessarily an indication of how it will perform in the future.
Calendar Year Total Returns
2000 __%
1999 28%
1998 28%
1997 28%
1996 20%
1995 24%
1994 -4%
1993 14%
1992 2%
1991 28%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 10-year period shown in the bar chart for Class A shares, the
highest return for a quarter was % (quarter ending ) and the lowest
return for a quarter was % (quarter ending ).
2
<PAGE>
================================================================================
Average Annual Total Returns
(for the periods ending
December 31, 2000) Past Year Past 5 years Past 10 years
================================================================================
DLJ Core Equity Fund % % %
Class A
DLJ Core Equity Fund % % %
Class B
DLJ Core Equity Fund % N/A N/A
Class D*
================================================================================
S&P 500** % % %
================================================================================
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class C and Class
R shares on February 28, 2000 and August 1, 2000 respectively. Therefore, the
Fund does not yet have a full calendar year of performance information for these
classes.
*The since inception (April 30, 1999) return for Class D shares for the period
ending December 31, 2000 was ____%
**The S & P 500(R) is the Standard & Poor's Composite Index of 500 Stocks, a
widely recognized, unmanaged index of common stock prices. The returns for the
S&P 500 do not include any sales charges, fees or other expenses.
The DLJ Growth and Income Fund
The DLJ Growth and Income Fund's investment objective is long-term capital
appreciation and continuity of income. The Fund seeks to achieve its objective
by investing in dividend paying common stock and by diversifying its investments
among different industries and different companies. Securities are selected on
the basis of their investment merit and their potential for appreciation in
value and/or income, with a focus on stability. The Adviser identifies companies
that it believes are undervalued and waits for the market to discover that
value. A portion of the Fund may be invested in debt securities that are of
investment-grade quality, U.S. Government securities and money market
instruments. The Fund may also invest in securities of non-U.S. based issuers or
issuers that do business principally outside of the U.S., which we refer to as
non-U.S. securities. There is no fixed percentage of the Fund's assets that must
be invested in any particular type of security.
Like any investment, an investment in the DLJ Growth and Income Fund is subject
to risk and you could lose money. While the Fund seeks investments that will
appreciate in value and/or provide income, the Adviser could select securities
that will decline in value and provide no income.
The Fund is also subject to risks that affect equity securities markets in
general, such as general economic conditions and adverse changes (generally
increases) in interest rates. These and other factors could adversely affect
your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1, 5 and 10 years compare to those of the S&P 500 Composite Index,
which is a broad measure of market performance. The Fund's past performance is
not necessarily an indication of how it will perform in the future.
Calendar Year Total Returns
3
<PAGE>
2000 ___%
1999 10%
1998 19%
1997 33%
1996 22%
1995 30%
1994 -2%
1993 16%
1992 6%
1991 24%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 10-year period shown in the bar chart for Class A shares, the
highest return for a quarter was % (quarter ending ) and the lowest
return for a quarter was % (quarter ending ).
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year Past 5 years Past 10 years
================================================================================
DLJ Growth and Income
Fund Class A % % %
DLJ Growth and Income
Fund Class B % % %
DLJ Growth and Income
Fund Class D* % N/A N/A
================================================================================
S&P 500** % % %
================================================================================
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class C and Class
R shares on February 28, 2000 and August 1, 2000, respectively. Prior to the
date of this prospectus, the Fund had not yet offered Advisor Class shares.
Therefore, the Fund does not yet have a full calendar year of performance
information for these classes.
*The since inception (April 30, 1999) return for Class D shares for the period
ending December 31, 2000 was ____%
**The S&P 500(R) is the Standard & Poor's Composite Index of 500 Stocks, a
widely recognized, unmanaged index of common stock prices. The returns for the
S&P 500 do not include any sales charges, fees or other expenses.
The DLJ Small Company Value Fund
The DLJ Small Company Value Fund's investment objective is a high level of
growth of capital. The Fund seeks to achieve its objective by investing in
common stock and other equity securities of "small cap" companies that appear to
be undervalued. Companies with market capitalizations of $2 billion or less at
the time of purchase are considered to be "small cap" companies.
4
<PAGE>
This Fund's investment objective causes it to be riskier than other funds and
you could lose money. While the Fund seeks investments that provide a high level
of growth of capital, they may decline in value. You should not invest in this
Fund if your principal objective is assured income or capital preservation.
Investments in smaller companies often involve greater risks than investments in
larger, more established companies. Smaller companies may have less management
experience, fewer financial resources, and limited product diversification, all
of which may increase risks.
The frequency and trading volume for securities of smaller companies are
substantially less than for larger companies. This can result in greater and
more abrupt price fluctuations and can cause small cap stocks to be less liquid
than securities of larger companies. The Fund is also subject to risks that
affect equity securities markets in general, such as general economic conditions
and adverse changes (generally increases) in interest rates. These and other
factors could adversely affect your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1, 5 and 10 years compare to those of the Russell 2000 Index, which
is a broad measure of market performance. The Fund's past performance is not
necessarily an indication of how it will perform in the future.
Calendar Year Total Returns
2000 __%
1999 1%
1998 -5%
1997 26%
1996 15%
1995 20%
1994 -1%
1993 22%
1992 18%
1991 51%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 10-year period shown in the bar chart for Class A shares, the
highest return for a quarter was % (quarter ending ) and the lowest
return for a quarter was % (quarter ending ).
================================================================================
Average Annual Total
Returns
for the periods ending
December 31, 2000) Past Year Past 5 years Past 10 years
================================================================================
DLJ Small Company
Value Fund Class A % % %
DLJ Small Company
Value Fund Class B % % %
================================================================================
Russell 2000* % % %
================================================================================
5
<PAGE>
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class C and Class
R shares on February 28, 2000 and August 1, 2000, respectively. Therefore, the
Fund does not yet have a full calendar year of performance information for these
classes.
*The Russell 2000 Index is an unmanaged index of common stock prices and is
composed of the 2,000 smallest companies in the Russell 3000 Index. The Russell
3000 Index is composed of 3,000 of the largest U.S. companies by market
capitalization. The returns for the Russell 2000 Index do not include any sales
charges, fees or other expenses.
THE DLJ STRATEGIC GROWTH FUND
The DLJ STRATEGIC GROWTH FUND's investment objective is long-term growth of
capital. The Fund seeks to achieve this objective by investing in equity
securities of a limited number of large, carefully selected companies that the
Adviser believes will achieve superior growth. The Fund intends to hold
securities of approximately 50-60 companies, which may fluctuate depending on
the Adviser's view of market conditions. The Fund seeks to achieve superior
performance as compared to other U.S. domestic growth funds.
Like any investment, an investment in the DLJ Strategic Growth Fund is subject
to risk, and you could lose money. While the Adviser believes that the
investments it selects will experience long-term appreciation, their value could
decline. Growth companies are typically characterized by higher
price-to-earnings and price-to-book ratios, lower dividend yields, greater
volatility, and higher historical and predicted earnings. The Fund is also
subject to risks that affect equity securities markets in general, such as
general economic conditions and adverse changes (generally increases) in
interest rates. Because the Fund normally invests in a smaller number of
securities than many other equity funds, an investment in this Fund has the risk
that changes in the value of a single security may have a more significant
effect, either negative or positive, on the Fund's net asset value. These and
other factors could adversely affect your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1 year and from inception, compare to those of the S&P 500 Barra
Index, which is a broad measure of market performance. The Fund's past
performance is not necessarily an indication of how it will perform in the
future.
Calendar Year Total Returns
2000 __%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 1-year period shown in the bar chart for Class R shares, the
highest return for a quarter was ____% (quarter ending ____) and the
lowest return for a quarter was ____% (quarter ending ____). 2000 was the
first full calendar year of operations.
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year From inception on 11/18/99
================================================================================
DLJ Strategic Growth % %
Fund Class R
================================================================================
S&P 500 Barra Index* % %
================================================================================
6
<PAGE>
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class A shares,
Class B shares and Class C shares on August 1, 2000. Therefore, the Fund does
not have a full calendar year of performance for these shares.
* The S&P 500 Barra Index is comprised of those companies within the S&P 500
Index with higher ratios of market price to book value than other companies
within the S&P 500 Index. The returns for the S&P 500 Barra Index do not include
any sales charges, fees or other expenses.
The Board of Trustees of the Fund has approved, subject to shareholder approval,
at a meeting scheduled for March 2000, the transfer of all of the assets and
liabilities of the Fund in exchange for shares of Warburg, Pincus Focus Fund,
Inc., a similar fund in the Warburg Pincus family of funds. See "Recent
Developments" for additional information.
THE DLJ TECHNOLOGY FUND
The DLJ TECHNOLOGY FUND's investment objective is growth of capital. The Fund
seeks to achieve this objective by investing in a broad number of industries
that comprise the U.S. domestic technology sector. The Fund seeks to create a
blend of stocks in companies that include the computer hardware, computer
software, electronics, semiconductor, semiconductor capital equipment,
telecommunication equipment, telecommunication services, and internet
industries.
Like any investment, an investment in the DLJ Technology Fund is subject to risk
and you could lose money. While the Fund seeks investments that will appreciate
in value, Credit Suisse Asset Management, LLC ("CSAM" or the "Adviser") could
select securities that will decline in value and provide no income. Technology
stocks, especially those of smaller, less-seasoned companies tend to be more
volatile than the overall stock market. When stock prices fall, you should
expect the value of your investment to fall as well, possibly to a greater
extent than the decline in equity markets generally. The fact that the Fund
concentrates in a single sector increases risk and volatility as compared to
more diverse funds. This is because factors that affect that sector are likely
to directly affect the Fund's performance, both negatively and positively. Even
if the overall direction of equity prices is upward, if technology stocks are
headed lower, Fund performance could be adversely affected. For example,
technology companies could be hurt by such factors as market saturation, price
competition, and the advent of competing technologies. The Fund is also subject
to risks that affect equity securities markets in general, such as general
economic conditions and adverse changes (generally increases) in interest rates.
These and other factors could adversely affect your investment.
The following chart and table illustrate risk by showing the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1 year and from inception, compare to those of the Chase H & Q
Technology Index, which is a broad measure of market performance. The Fund's
past performance is not necessarily an indication of how it will perform in the
future.
Calendar Year Total Returns
2000 ____%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
7
<PAGE>
During the 1-year period shown in the bar chart for Class R shares, the
highest return for a quarter was ____% (quarter ending ____) and the
lowest return for a quarter was ____% (quarter ending ____). 2000 was the
first full calendar year of operations.
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year From inception on 11/18/99
================================================================================
DLJ Technology % %
Fund Class R
================================================================================
Hambrecht & Quist Index* % %
================================================================================
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. Class R shares are not subject to a sales
charge. The Fund commenced offering Class A shares, Class B shares, Class C
shares on August 1, 2000 and Class D shares on September 1, 2000. Therefore, the
Fund does not have a full calendar year of performance for these shares.
* The Chase H & Q Technology Index is comprised of a cross-section of computer
hardware, computer software, communications, semiconductor, information services
and internet services companies. The returns for the Chase H & Q Technology
Index do not include any sales charges, fees or other expenses.
DLJ INTERNATIONAL FUNDS
The DLJ Developing Markets Fund
The DLJ Developing Markets Fund's investment objective is to provide long-term
growth of capital by primarily investing in common stocks and other equity
securities of companies from developing countries. The Fund seeks to achieve its
objective by investing in securities of issuers in countries included in the
Morgan Stanley Capital Index ("MSCI") Emerging Markets Free Index. The Fund's
investment approach is to seek to minimize country and sector risk by
maintaining country and sector neutrality, with weightings close to those of the
MSCI Emerging Markets Free index.
This Fund's investment objective causes it to be riskier than other mutual funds
and you could lose money. While the Fund seeks investments that provide a high
level of growth of capital, they may decline in value. The Fund invests
primarily in non-U.S. securities (securities of non-U.S. based issuers or
issuers that do business principally outside the United States) of issuers in
developing markets. Investments in non-U.S. securities present additional risks
including greater price volatility and a lack of liquidity. Investments in
developing markets present further risks because they tend to be smaller, less
mature and less stable than investments in developed markets. The Fund is also
subject to risks that affect equity securities markets in general, such as
general economic conditions and adverse changes in interest and foreign exchange
rates. These and other factors could adversely affect your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1 and 5 years and from inception compare to those of the MSCI
Emerging Markets Free Index, which is a broad measure of market performance. The
Fund's past performance is not necessarily an indication of how it will perform
in the future.
8
<PAGE>
Calendar Year Total Returns
2000 __%
1999 69%
1998 -22%
1997 -6%
1996 4%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 5-year period shown in the bar chart for Class A shares, the
highest return for a quarter was ___% (quarter ending __________) and the
lowest return for a quarter % (quarter ending ). 1996 was the first
full calendar year of operation.
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year Past 5 Years From Inception on 9/8/95
================================================================================
DLJ Developing Markets
Fund Class A % % %
DLJ Developing Markets
Fund Class B % % %
================================================================================
MSCI Emerging
Markets Free Index* % % %
================================================================================
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect.
The Fund commenced offering Class C shares and Class R shares on February 28,
2000 and August 1, 2000, respectively. Therefore, the Fund does not yet have a
full calendar year of performance information for these classes.
*The MSCI Emerging Markets Free Index is an unmanaged index composed of a sample
of companies representative of the market structure of developing countries
worldwide. The index is the property of Morgan Stanley & Co. Incorporated. The
returns for the Index do not include any sales charges, fees or other expenses.
The Board of Trustees of the Fund has approved, subject to shareholder approval,
at a meeting scheduled for March 2000, the transfer of all of the assets and
liabilities of the Fund in exchange for shares of Warburg, Pincus Emerging
Markets Fund, Inc., a similar fund in the Warburg Pincus family of funds. See
"Recent Developments" for additional information.
The DLJ International Equity Fund
The DLJ International Equity Fund's investment objective is long-term growth of
capital by investing in equity securities from established non-U.S. markets. The
Fund seeks to achieve this objective by focusing on investment selection based
primarily on the recommendations of CSFB International Research. The Fund
invests in securities of issuers in the developed countries of Europe, Australia
and the Far East ("EAFE"), using disciplined, quantitative methods in its
attempt to minimize country, industry and
9
<PAGE>
financial risks. The Fund is country and sector neutral and will seek to
maintain its weightings close to those of the MSCI EAFE Index.
Like any investment, an investment in the Fund is subject to risk and you could
lose money. While the Fund selects investments that the Adviser believes will
appreciate in value, those securities could decline in value and provide no
income. The Fund invests primarily in non-U.S. securities (securities of
non-U.S. based issuers or issuers that do business principally outside the
United States). Investments in non-U.S. securities present additional risks
including greater price volatility and a lack of liquidity. The Fund is also
subject to risks that affect equity securities markets in general, such as
general economic conditions and adverse changes in interest (generally
increases) and foreign exchange rates. These and other factors could adversely
affect your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1 year and 5 years and from inception compare to those of the
MSCI-EAFE(R) Index, which is a broad measure of market performance. The Fund's
past performance is not necessarily an indication of how it will perform in the
future.
Calendar Year Total Returns
2000 __%
1999 28%
1998 18%
1997 7%
1996 6%
The annual returns, referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 5-year period shown in the bar chart for Class A shares, the
highest return for a quarter was ___% (quarter ending ____________) and
the lowest return for a quarter was ____% (quarter ending ). 1996 was the
first full calendar year of operation.
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year Past 5 Years Since Inception*
================================================================================
DLJ International
Equity Fund Class A % % %
DLJ International
Equity Fund Class B % % %
DLJ International
Equity Fund Class D % N/A N/A
================================================================================
MSCI -EAFE** % % %
================================================================================
The Average Annual Returns for the Fund reflect the maximum applicable sales
charges. The Fund commenced offering Class C and Class R shares on February 28,
2000 and August 1, 2000, respectively. Therefore, the Fund does not yet have a
full calendar year of performance information for these classes.
* Inception date of Class A and Class B shares was September 8, 1999 and Class D
shares was May 13, 1999.
10
<PAGE>
**The MSCI-EAFE(R) is an unmanaged index composed of a sample of companies
representative of the market structure of European and Pacific Basin Countries.
The index is the property of Morgan Stanley & Co. Incorporated. The returns for
the Index do not include any sales charges, fees or other expenses.
DLJ FIXED INCOME FUNDS
The DLJ Fixed Income Fund
The DLJ Fixed Income Fund's investment objective is to provide as high a level
of total return as is consistent with capital preservation by investing
principally in debt securities, including, without limitation, convertible and
non-convertible debt securities of foreign and domestic companies, including
both well-known and established and new and lesser-known companies. The Fund
seeks to achieve its objective by investing primarily in a diversified portfolio
of high-grade intermediate-term corporate bonds and U.S. Government securities,
as well as in commercial paper and obligations issued or guaranteed by national
or state banks. In addition, the Adviser actively manages the maturities of the
securities in the portfolio in response to the Adviser's anticipation of the
movement of interest rates and relative yields. The Fund seeks to limit risk by
selecting investment-grade debt securities.
While the Fund seeks investments that will satisfy its investment objective, the
investments could decline in value and you could lose money. Concerns about an
issuer's ability to repay its borrowings or to pay interest will adversely
affect the value of its securities.
The Fund is subject to risks that affect the bond markets in general, such as
general economic conditions and adverse changes (generally increases) in
interest rates. As interest rates rise, absent other factors, bond prices and
the value of your investments will fall. The Fund is also subject to the risk
that, in seeking to enhance total return, the Adviser will incorrectly forecast
changes in interest rates or improperly assess the value of debt securities.
These and other factors could adversely affect your investment.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1, 5 and 10 years compare to those of the Lehman Brothers
Government/Corporate Intermediate Bond Index, which is a broad measure of market
performance. The Fund's past performance is not necessarily an indication of how
it will perform in the future.
Calendar Year Total Returns
2000 __%
1999 -1%
1998 8%
1997 8%
1996 3%
1995 15%
1994 -4%
1993 10%
1992 7%
1991 14%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 10-year period shown in the bar chart for Class A shares, the
highest return for a quarter was ____% (quarter ending ) and the lowest
return for a quarter was % (quarter ending ____________).
11
<PAGE>
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year Past 5 years Past 10 years
================================================================================
DLJ Fixed Income Fund % % %
Class A
DLJ Fixed Income Fund % % %
Class B
DLJ Fixed Income Fund % % %
Class D*
================================================================================
Lehman Index** % % %
================================================================================
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class C and Class
R shares on February 28, 2000 and August 1, 2000 , respectively. Therefore, the
Fund does not yet have a full calendar year of performance information for these
classes.
*The since inception (April 30, 1999) return for Class D shares for the period
ending December 31, 2000 was ___%
**The Lehman Brothers Government/Corporate Intermediate Bond Index is comprised
of securities in the Lehman Brothers Government/Corporate Bond Index that have
maturities of 5-10 years. The Lehman Brothers Government/Corporate Bond Index
includes the Lehman Brothers Government Bond Index and the Lehman Brothers
Corporate Bond Index and does not include sales charges, fees or expenses in its
calculation.
The Board of Trustees of the Fund has approved, subject to shareholder approval,
at a meeting scheduled for March 2000, the transfer of all of the assets and
liabilities of the Fund in exchange for shares of Warburg Pincus DLJ Fixed
Income Fund, a similar fund in the Warburg Pincus family of funds. See "Recent
Developments" for additional information.
The DLJ Municipal Trust Fund
The DLJ Municipal Trust Fund's investment objective is to provide as high a
level of total return as is consistent with capital preservation by investing
principally in high-grade tax-exempt municipal securities. By high-grade
tax-exempt municipal securities, we mean securities rated Aaa, Aa, A or MIG-1 by
Moody's or AAA, AA, A or SP-1 by S&P. It is important to note that unlike most
other municipal bond funds, the Fund's objective is not to provide current
income that is exempt from federal and/or state income tax. The Fund seeks to
achieve its objective by investing primarily in a diversified portfolio of
high-grade, intermediate-term municipal securities. In addition, the Adviser
actively manages the maturities of the securities in the portfolio in response
to the Adviser's anticipation of the movement of interest rates and relative
yields. Certain investments are selected that the Adviser believes are
undervalued. The Fund attempts to limit risk by selecting investment-grade debt
securities and by maintaining an average maturity of between five and ten years.
While the Fund seeks investments that will satisfy its investment objective,
these investments could decline in value and you could lose money. Concerns
about an issuer's ability to repay its borrowings or to pay interest will
adversely affect the value of its securities. The Fund is also subject to the
risk that, in seeking to enhance total return, the Adviser will incorrectly
forecast changes in interest rates or improperly assess the value of municipal
securities. Like all bond funds, this Fund is subject to risks that affect the
bond markets in general, such as general economic conditions and adverse changes
(generally increases) in
12
<PAGE>
interest rates. As interest rates rise, absent other factors, bond prices and
the value of your investment will fall. The Fund is also subject to risks of
investing in municipal securities. These risks include uncertainties regarding
the securities' tax status, political and legislative changes and the rights of
their holders. These and other factors could adversely affect your investment.
The following chart and table illustrate risk by showing the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1 and 5 years and from inception, compare to those of The Lehman
Brothers Seven Year Municipal Bond Index, which is a broad measure of market
performance. The Fund's past performance is not necessarily an indication of how
it will perform in the future.
Calendar Year Total Returns
2000 __%
1999 -1%
1998 5%
1997 8%
1996 4%
1995 12%
1994 -3%
The annual returns referenced in the bar chart are for the calendar years
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 7-year period shown in the bar chart for Class A shares, the
highest return for a quarter was ____% (quarter ending _________) and the
lowest return for a quarter was ____% (quarter ending ___________). 1994
was the first full calendar year of operations.
================================================================================
Average Annual Total
Returns
(for the periods ending From inception on
December 31, 2000) Past Year Past 5 years 7/28/93
================================================================================
DLJ Municipal Trust % % %
Fund Class A
DLJ Municipal Trust % % %
Fund Class B
================================================================================
LBSYMBI* % % %**
================================================================================
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class C and Class
R shares on February 28, 2000 and August 1, 2000, respectively. Therefore, the
Fund does not yet have a full calendar year of performance information for these
classes.
* The Lehman Brothers Seven Year Municipal Bond Index ("LBSYMBI") is comprised
of municipal securities having an average approximate maturity of seven years
and does not include sales charges, fees or expenses in its calculation.
**For comparative purposes the value of the index on 7/31/93 is used for the
beginning value on 7/28/93.
The Board of Trustees of the Fund has approved, subject to shareholder approval,
at a meeting scheduled for March 2000, the transfer of all of the assets and
liabilities of the Fund in exchange for shares of
13
<PAGE>
Warburg, Pincus Municipal Bond Fund, Inc., a similar fund in the Warburg Pincus
family of funds. See "Recent Developments" for additional information.
The DLJ High Income Fund
The DLJ High Income Fund's primary investment objective is to provide a high
level of current income and a secondary objective is capital appreciation. The
Fund seeks to achieve its objective by investing in fixed income securities of
U.S. issuers that are rated below investment-grade quality or unrated fixed
income securities deemed to be of comparable quality. Lower grade fixed income
securities are commonly known as "junk bonds".
This investment objective causes it to be riskier than other mutual funds and
you could lose money. Investments in lower grade securities are subject to
special risks, including greater price volatility and a greater risk of loss of
principal and non-payment of interest. The market value of longer maturity debt
securities, like those held by the Fund, is more sensitive to interest rate
changes than the market value of shorter maturity debt securities. The Fund is
not recommended for investors whose principal objectives are assured income or
capital preservation. This Fund is designed for investors willing to assume
additional risk in return primarily for the potential for high current income
and secondarily capital appreciation.
The following chart and table illustrate the risk and the variability of the
Fund's returns by showing the rate of return from year to year and how annual
returns for 1 year and from inception, compare to those of Lipper Open-End High
Yield Bond Fund Index, which is a broad measure of market performance. The
Fund's past performance is not necessarily an indication of how it will perform
in the future.
Calendar Year Total Returns
2000 ___%
The annual returns referenced in the bar chart are for the calendar year
ended December 31 and do not include sales charges. If sales charges were
included, the annual returns would be lower than those shown.
During the 1-year period shown in the bar chart for Class A shares, the
highest return for a quarter was % (quarter ending ) and the lowest
return for a quarter was % (quarter ending ). 2000 was the first
full calendar year of operations.
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year Since Inception*
================================================================================
DLJ High Income Fund % %
Class A
DLJ High Income Fund % %
Class B
DLJ High Income Fund % %
Class D
================================================================================
Lipper Open-End High
Yield Bond Fund
Index** % %
================================================================================
14
<PAGE>
The Average Annual Total Returns for the Fund reflect the maximum applicable
sales charges currently in effect. The Fund commenced offering Class C and Class
R shares on February 28, 2000 and August 1, 2000, respectively. Therefore, the
Fund does not yet have a full calendar year of performance for these classes.
* Inception for Class A and Class B shares on March 8, 1999 and Class D shares
on May 13, 1999.
** The Lipper Open-End High Yield Bond Fund Index is comprised of open-end
mutual funds that invest primarily in high yield debt securities. The Index does
not include sales charges, fees or expenses in its calculation.
The DLJ Municipal Money Fund
The DLJ Municipal Money Fund's investment objective is maximum current income,
consistent with liquidity and safety of principal, that is exempt from Federal
income taxation to the extent described herein. The Fund seeks to achieve this
objective by investing in a diversified portfolio of municipal securities. The
Fund earns income at current money market rates, and its yield generally
reflects short-term interest rates which vary from day to day. Such municipal
securities will have varying lengths of maturities but will generally have
remaining maturities of one year or less. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields.
Like any money market fund investment, this investment is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The Fund seeks to preserve the value of your investment at $1.00 per share,
however, it is possible to lose money by investing in the Fund.
Because this Fund began operations in February 1997, the first full calendar
year of performance was 1998. The Fund's past performance is not necessarily an
indication of how it will perform in the future.
Calendar Year Total Returns
2000 __%
1999 2%
1998 3%
During the 3-year period shown in the bar chart, the highest return for a
quarter was % (quarter ending ) and the lowest return for a quarter
was % (quarter ending ). The annual returns are for the calendar
years ended December 31.
================================================================================
Average Annual
Total Returns
(for the periods
ending
December 31, From Inception on
2000) Past Year 2/24/97
================================================================================
DLJ Municipal
Money Fund % %
================================================================================
Seven Day Yield as of December 31, 2000 was __%.
15
<PAGE>
The DLJ U.S. Government Money Fund
The DLJ U.S. Government Money Fund's investment objective is maximum current
income, consistent with liquidity and safety of principal. The Fund seeks to
achieve its objective by investing in a portfolio of U.S. Government securities,
including issues of the U.S. Treasury and other government agencies, which
generally have remaining maturities of one year or less and collateralized
repurchase agreements.
Like any money market fund investment, this investment is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. The Fund seeks to preserve the value of your investment at $1.00 per
share, however, it is possible to lose money by investing in the Fund. The Fund
earns income at current market rates, and its yield generally reflects
short-term interest rates, which vary from day to day.
Because this Fund began operations in February, 1997, the first full calendar
year of performance was 1998. The Fund's past performance is not necessarily an
indication of how it will perform in the future.
Calendar Year Total Returns
2000 __%
1999 4%
1998 5%
During the 3 year period shown in the bar chart, the highest return for a
quarter was ___% (quarter ending ___) and the lowest return for a quarter
was ___% (quarter ending ___). The annual returns are for the calendar
years ended December 31.
================================================================================
Average Annual Total
Returns
(for the periods ending
December 31, 2000) Past Year From Inception on 2/24/97
================================================================================
DLJ U.S. Government
Money Fund % %
================================================================================
Seven Day Yield as of December 31, 2000 was ___%.
SUMMARY OF DLJ MUTUAL FUND EXPENSES
Shareholder Transaction Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the DLJ Mutual Funds.
16
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Equity Funds*
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER FEES: Class A Class B Class C Class D Class R Advisor Class
(These fees are paid (1) (2)
directly from your
investment.)
-------------------------
Maximum sales charge 5.75% None None None None None
(load) imposed on
purchases (as a
percentage of offering
price)
-------------------------
Maximum sales charge None None None None None None
(load) imposed on
reinvested dividends (as
a percentage of offering
price)
-------------------------
Maximum deferred sales None 4% (3) 1% (4) None None None
charge (load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable)
-------------------------
Redemption Fees None None None None None None
-------------------------
Exchange Fee None None None None None None
-----------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
DLJ Fixed Income Funds** Money
Funds***
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SHAREHOLDER FEES: Class A (1) Class B (2) Class C Class D Class R
(These fees are paid
directly from your
investment.)
--------------------------- -------------
Maximum sales charge 4.75% None None None None None
(load) imposed on
purchases (as a
percentage of offering
price)
--------------------------- -------------
Maximum sales charge None None None None None None
(load) imposed on
reinvested dividends (as
a percentage of offering
price)
--------------------------- -------------
Maximum deferred sales None 4% (3) 1% (4) None None None
charge (load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable)
--------------------------- -------------
Redemption Fees None None None None None None
--------------------------- -------------
Exchange Fee None None None None None None
--------------------------------------------------------------------------------------------------------------
</TABLE>
* Includes the DLJ Core Equity Fund, the DLJ Growth and Income Fund, the DLJ
Small Company Value Fund, the DLJ Strategic Growth Fund, the DLJ Technology
Fund, the DLJ Developing Markets Fund and the DLJ International Equity Fund.
** Includes the DLJ Fixed Income Fund, the DLJ Municipal Trust Fund and the DLJ
High Income Fund.
*** Includes the DLJ Municipal Money Fund and DLJ U.S. Government Money Fund.
(1) The maximum sales charge imposed is reduced for larger purchases. Purchases
of $1,000,000 or more are not subject to an initial sales charge but may be
subject to a 1% CDSC (Contingent Deferred Sales Charge) on redemptions made
within one year of purchase. See "Other Shareholder Information."
(2) Class B shares of each Fund automatically convert to Class A shares after
eight years. The effect of the automatic conversion feature is reflected in the
Examples on page 15. See "Other Shareholder Information".
(3) 4% during the first year decreasing 1% annually to 0% after the fourth year.
(4) 1% during the first year.
ANNUAL FUND OPERATING EXPENSES
These examples help you compare the cost of investing in the Funds with the cost
of investing in other mutual funds. They assume that you invest $10,000 in the
applicable Fund for the periods indicated and then sell all of your shares at
the end of those periods. The examples also assume that your investment has
18
<PAGE>
a 5% return each year and that the Fund's operating expenses remain the same.
For each Fund that has Waived Fees below, the After 1 Year Examples and the
first year in each of the other Examples reflect the Waived Fees. For the DLJ
Strategic Growth Fund and the DLJ Technology Fund, the Waived Fees are also
reflected in the 3,5 and 10 Year Examples through the period ended October 31,
2002. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DLJ Core Equity Fund Class A Class B Class C Class D Class R
Management Fee .62% .62% .62% .62% .62%
Distribution (12b-1) .25% 1.00% 1.00% .00% .25%
and Service Fees (a)
Other Expenses % % % % %
Total Annual Fund % % % % %
Operating Expenses
------------------------------------------------------------------------------------------------------------------------
DLJ Developing Markets Class A Class B Class C Class R
Fund
Management Fee 1.25% 1.25% 1.25% 1.25%
Distribution (12b-1) .25% 1.00% 1.00% .25%
and Service Fees (a)
Other Expenses % % % %
Total Annual Fund % % % %
Operating Expenses
Waived Fees (d) % % % %
Total Expenses Less % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
DLJ Fixed Income Fund Class A Class B Class C Class D Class R
Management Fee .58% .58% .58% .58% .58%
Distribution (12b-1) .25% 1.00% 1.00% .00% .25%
and Service Fees (a)
Other Expenses % % % % %
Total Annual Fund % % % % %
Operating Expenses
Waived Fees (d) % % % % %
Total Expenses Less % % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
DLJ Growth and Income Class A Class B Class C Class D Class R Advisor Class
Fund
Management Fee .57% .57% .57% .57% .57% .57%
Distribution (12b-1) .25% 1.00% 1.00% .00% .25% .50% (b)
and Service Fees (a)
Other Expenses % % % % % %
Total Annual Fund % % % % % %
Operating Expenses
------------------------------------------------------------------------------------------------------------------------
DLJ High Income Fund Class A Class B Class C Class D Class R
Management Fee .70% .70% .70% .70% .70%
Distribution (12b-1) .25% 1.00% 1.00% .00% .25%
and Service Fees (a)
Other Expenses % % % % %
Total Annual Fund % % % % %
Operating Expenses
Waived Fees (d) % % % % %
Total Expenses Less % % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DLJ International Class A Class B Class C Class D Class R
Equity Fund
Management Fee 1.25% 1.25% 1.25% 1.25% 1.25%
Distribution (12b-1) .25% 1.00% 1.00% .00% .25%
and Service Fees (a)
Other Expenses % % % % %
Total Annual Fund % % % % %
Operating Expenses
Waived Fees (d) % % % % %
Total Expenses Less % % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
DLJ Municipal Trust Class A Class B Class C Class R
Fund
Management Fee .63% .63% .63% .63%
Distribution (12b-1) .25% 1.00% 1.00% .25%
and Service Fees (a)
Other Expenses % % % %
Total Annual Fund % % % %
Operating Expenses
Waived Fees (d) % % % %
Total Expenses Less % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
DLJ Small Company Class A Class B Class C Class R
Value Fund
Management Fee .81% .81% .81% .81%
Distribution (12b-1) .25% 1.00% 1.00% .25%
and Service Fees (a)
Other Expenses % % % %
Total Annual Fund % % % %
Operating Expenses
------------------------------------------------------------------------------------------------------------------------
DLJ Strategic Growth Class A Class B Class C Class R
Fund
Management Fee .75% .75% .75% .75%
Distribution (12b-1) .25% 1.00% 1.00% .25%
and Service Fees (a)
Other Expenses % % % %
Total Annual Fund % % % %
Operating Expenses
Waived Fees (c) % % % %
Total Expenses Less % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
DLJ Technology Fund Class A Class B Class C Class R
Management Fee .88% .88% .88% .88%
Distribution (12b-1) .25% 1.00% 1.00% .25%
and Service Fees (a)
Other Expenses % % % %
Total Annual Fund % % % %
Operating Expenses
Waived Fees (d) % % % %
Total Expenses Less % % % %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
DLJ Municipal Money
Fund
<S> <C>
Management Fee .40%
Distribution (12b-1) .25%
and Service Fees (a)(j)
Other Expenses %
Total Annual Fund %
Operating Expenses
Waived Fees (k) %
Total Expenses Less %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
U.S. Government Money Fund
Management Fee .40%
Distribution (12b-1) .25%
and Service Fees (a)(j)
Other Expenses %
Total Annual Fund %
Operating Expenses
Waived Fees (l) %
Total Expenses Less %
Waived Fees
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Examples
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DLJ Core Equity Class A Class B* Class B** Class C* Class C** Class D Class R
Fund
1 Year $
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Growth and Class A Class B* Class B** Class C* Class C** Class D Class R Advisor Class
Income Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Small Company Class A Class B* Class B** Class C* Class C** Class R
Value Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Strategic Class A Class B* Class B** Class C* Class C** Class R
Growth Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Technology Class A Class B* Class B** Class C* Class C** Class R
Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DLJ Developing Class A Class B* Class B** Class C* Class C** Class R
Markets Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ International Class A Class B* Class B** Class C* Class C** Class D Class R
Equity Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Fixed Income Class A Class B* Class B** Class C* Class C** Class D Class R
Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Municipal Class A Class B* Class B** Class C* Class C** Class R
Trust Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ High Income Class A Class B* Class B** Class C* Class C** Class D Class R
Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
DLJ Municipal
Money Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
U.S. Government
Money Fund
1 Year
3 Years
5 Years
10 Years
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* Assumes reinvestment of all dividends and redemption at end of period.
** Assumes reinvestment of all dividends and no redemption at end of period.
+ Ten year figures assume conversion of Class B shares to Class A shares at
the end of the eighth year following the date of purchase.
22
<PAGE>
++ Shares purchased directly into a Money Fund will not be subject to a CDSC
and therefore expenses paid will remain unaffected by redemption.
(a) The Fund has adopted a Rule 12b-1 plan for the indicated classes of shares
that allows the Fund to pay distribution fees for the sale and
distribution of those classes of shares out of the assets applicable to
those classes. Because these fees are paid out over time, they will
increase the cost of your investment and may cost you more than paying
other types of sales charges. A portion of the 12b-1 fee represents an
asset-based sales charge.
(b) The maximum amount payable for distributing these shares is .75% of the
average daily net assets attributable to this Class. The Board of Trustees
is currently limiting the amount payable to .50 of 1% of the average daily
net assets attributable to the Class.
(c) The Adviser has undertaken, in writing to limit Total Expenses of the DLJ
Strategic Growth Fund to 1.19% for the Fund's Class A and Class R shares
and 1.94% for the Fund's Class B and Class C shares. This arrangement will
remain in place at least until October 31, 2002.
(d) The Adviser has undertaken, in writing, to limit Total Expenses of the DLJ
Technology Fund to 1.14% per year for the Fund' Class D shares, 1.39% per
year for the Fund's Class A and Class R shares, and 2.14% for the Fund's
Class B and Class C shares. This arrangement will remain in place at least
until October 31, 2002.
(e) The expense ratios for each class of shares of the DLJ Developing Markets
Fund and the DLJ International Equity Fund are higher than those paid by
most other investment companies, but Credit Suisse Asset Management, LLC
(as Adviser) believes that the fees are comparable to those paid by
investment companies of similar investment orientation.
(f) The Adviser has undertaken, in writing, to limit Total Expenses of the DLJ
Developing Markets Fund to 2.15% per year for the Fund's Class A and Class
R shares and 2.90% for the Fund's Class B and Class C shares. This
arrangement will remain in place at least until October 31, 2001.
(g) The Adviser has undertaken, in writing, to limit Total Expenses of the DLJ
Fixed Income Fund to .70% for the Fund's Class D shares and .95% for the
Fund's Class A shares and Class R shares and 1.70% for the Fund's Class B
and Class C shares. This arrangement will remain in place at least until
October 31, 2001.
(h) The Adviser has undertaken, in writing, to limit Total Expenses of the DLJ
Municipal Trust Fund to .95% per year for the Fund's Class A shares and
Class R shares and 1.70% for the Fund's Class B and Class C shares. This
arrangement will remain in place at least until October 31, 2001.
(i) The Adviser has undertaken, in writing, to limit Total Expenses, of the
DLJ High Income Fund to .85% per year for the Fund's Class D shares and
1.10% for the Fund's Class A shares and Class R shares, and 1.85% for the
Fund's Class B and Class C shares. This arrangement will remain in place
at least until October 31, 2001.
(j) The maximum allowable amount payable for distributing these shares is .40
of 1% of the average daily net assets of each Money Fund. The Board of
Trustees has currently limited the amount payable to .25 of 1% of the
average daily net assets of each Money Fund.
(k) The Adviser has undertaken, in writing, to limit Total Expenses of the DLJ
Municipal Money Fund to .90% per year. This arrangement will remain in
place at least until October 31, 2001.
(l) The Adviser has undertaken, in writing, to limit Total Expenses of the DLJ
U.S. Government Money Fund to .90% per year. This arrangement will remain
in place at least until October 31, 2001.
23
<PAGE>
RECENT DEVELOPMENTS
The consummation of the previously announced acquisition of Donaldson, Lufkin &
Jenrette, Inc. ("DLJ") by Credit Suisse Group ("Credit Suisse") occurred on
November 3, 2000, following which the assets and business of DLJ Asset
Management Group, Inc. ("DLJAM") were transferred to CSAM. As a result, and
pursuant to approval by the Board of Trustees of each of the DLJ Focus Funds,
the DLJ Opportunity Funds and the DLJ Select Funds (each a "Fund" and
collectively the "Funds"), CSAM has succeeded DLJAM as investment adviser to the
Funds pursuant to interim advisory agreements (the "Interim Advisory
Agreements"). The Interim Investment Advisory Agreements terminate at the
earlier of April 2, 2001 and the approval by shareholders of the Funds of new
investment advisory agreements with CSAM.
To rationalize the management of the Funds and the Warburg Pincus family of
funds managed by CSAM ("Warburg Pincus Funds"), CSAM has proposed, and the Board
of Trustees of the relevant Funds have approved for submission to shareholders
at meetings scheduled for late March 2001: (i) new investment advisory
agreements with CSAM on the same economic terms as the Interim Advisory
Agreements; (ii) the replacement of all the current Trustees of the Funds, other
than Peter F. Krogh, with trustees of the Warburg Pincus Funds; and (iii) as
more fully explained below, the combinations of certain series of the Funds (the
"Acquired Funds") into similar funds within the Warburg Pincus Funds (the
"Acquiring Funds").
The Board of Trustees for each of the Acquired Funds listed below has approved,
subject to shareholder approval, the transfer to the Acquiring Fund listed below
of all of the assets and liabilities of the Acquired Fund in exchange for shares
of the Acquiring Fund.
Acquired Fund Acquiring Fund
------------- --------------
DLJ Fixed Income Fund Warburg Pincus DLJ Fixed Income Fund
DLJ Municipal Trust Fund Warburg, Pincus Municipal Bond Fund, Inc.
DLJ Developing Markets Fund Warburg, Pincus Emerging Markets Fund, Inc.
DLJ Strategic Growth Fund Warburg, Pincus Focus Fund, Inc.
Each of the Acquiring Funds has an investment objective and strategies
substantially similar to the investment objective and strategies of the
corresponding Acquired Fund. Shareholders of each Acquired Fund would receive on
a tax-free basis shares of the relevant Acquiring Fund with the same net asset
value as their shares of the Acquired Fund. The investment advisory fees of the
Acquiring Funds would in each case be the same as the relevant Acquired Funds,
and CSAM has agreed to reimburse expenses of each Acquiring Fund as necessary so
that for the two-year period following the consummation of each acquisition the
annual expense ratio of each Acquired Fund would not increase above its expense
ratio for the 60-day period prior to consummation of the acquisitions. Each
acquisition would be consummated promptly after receipt of shareholder approval.
PURCHASE INFORMATION
Shares of the DLJ Municipal Money Fund and the DLJ U.S. Government Money Fund
(the "Money Funds") or Class A, Class B or Class C shares of the other Funds may
be purchased directly by using the Share Purchase Application found in this
Prospectus, or through Credit Suisse Asset Management Securities, Inc.
("CSAMSI"), the Funds' distributor, or by contacting your securities dealer.
Advisory Class Shares of the DLJ Growth and Income Fund are available for
purchase through certain eligible institutions and financial services firms and
not by individual investors directly.
The minimum initial investment in each Fund is $1,000. The minimum for
additional investments is $25. These minimums are waived for certain types of
accounts. Share certificates will not be issued for full or fractional shares of
the Funds. Further information can be obtained from DLJ Mutual Funds at the
address
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<PAGE>
and telephone number shown on the back cover of this Prospectus. See "How to Buy
and Sell Shares" and "Other Shareholder Services."
The Funds, except the Money Funds, offer Class A, Class B, Class C and Class R
shares. The DLJ Growth and Income Fund also offers Advisor Class shares. Class A
shares may be purchased at the net asset value per share of the Fund plus an
initial sales charge imposed at the time of purchase and may be subject to a
contingent deferred sales charge ("CDSC") in cases where the initial sales
charge was not applied because of the size of the purchase. Class B shares may
be purchased at the net asset value per share, but are subject to a CDSC upon
redemption. The CDSC applicable to Class B shares declines from 4% for
redemptions made during the first year of purchase to zero after four years.
Class C shares may be purchased at the net asset value per share, but are
subject to a 1% CDSC if redeemed within the first year of purchase. Class R
shares are available for purchase by eligible institutions on behalf of their
clients (generally individuals who do not purchase shares directly). Class R
shares may be purchased at a price equal to the net asset value per share.
Institutions may charge direct fees in connection with transactions related to
Class R shares. The Advisor Class shares of the DLJ Growth and Income Series
will be offered without any initial sales charge or CDSC. The DLJ Core Equity
Fund, DLJ Growth and Income Fund, DLJ Technology Fund, DLJ International Equity
Fund, DLJ Fixed Income Fund and DLJ High Income Fund also offer Class D shares.
Class D shares are offered without any initial sales charge or CDSC to employees
of Credit Suisse First Boston and its subsidiaries that are eligible to
participate in the Credit Suisse First Boston Employee Savings and Profit
Sharing Plan. These employees should contact the CSFB Hotline at [ ] concerning
how to purchase Class D shares. See "How to Buy and Sell Shares."
Shares of the Money Funds may be purchased at a price equal to the net asset
value per share of each Money Fund, which is expected to be $1.00 per share. See
"Net Asset Value" in the side-bar included on this page.
The DLJ Core Equity Fund, the DLJ Growth and Income Fund, the DLJ Small Company
Value Fund and the DLJ Municipal Trust Fund are each a series of the DLJ Focus
Funds. The DLJ International Equity Fund, the DLJ Developing Markets Fund, the
DLJ High Income Fund, the DLJ Municipal Money Fund and the DLJ U.S. Government
Money Fund are each a series of the DLJ Opportunity Funds. The DLJ Strategic
Growth Fund and the DLJ Technology Fund are each a series of the DLJ Select
Funds.
The DLJ Opportunity Funds, DLJ Focus Funds, and DLJ Select Funds are different
legal entities and are separately offering their Funds through this Prospectus.
Based on the advise of counsel, the Funds believe that the potential liability
of each Fund with respect to the disclosure in this Prospectus extends only to
the disclosure relating to that Fund.
[side bar]
Net Asset Value:
Net asset value per share (or "NAV") is determined separately for each class by
taking the total assets of each class of a Fund and subtracting its total
liabilities and then dividing the difference by the total number of shares
outstanding in each class.
The NAV is determined at the close of the New York Stock Exchange each day that
the New York Stock Exchange is open for trading. The price at which a purchase
or redemption is effected is based on the next calculation of NAV after the
order is placed.
For the Money Funds, the NAV is expected to be maintained at a constant $1.00
per share, although this price is not guaranteed.
For purposes of computing NAV, the securities in each Money Fund's portfolio are
valued at amortized cost, which minimizes the effect of changes in a security's
market value and helps maintain a stable $1.00 per share price. However, there
is a risk that we will sell a security for a price that is higher or lower than
amortized cost. Such an event could have an effect on our ability to maintain an
NAV of $1.00 per share.
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<PAGE>
In calculating the NAV of the DLJ Mutual Funds, except the Money Funds, each
Fund's investments are valued at their current market value determined on the
basis of market quotations or, if such quotations are not readily available,
such other method as the Trustees of the applicable Fund believe in good faith
would accurately reflect their fair value.
[end side bar]
The investment objectives and policies of each Fund are set forth below. There
can be, of course, no assurance that any Fund will achieve its investment
objective. The Funds' investment objectives are fundamental policies that cannot
be changed without the approval of the shareholders of the applicable Fund. The
Board of Trustees of a Fund may change non-fundamental policies without
shareholder approval.
DLJ MUTUAL FUNDS' INVESTMENT OBJECTIVES AND POLICIES
DLJ Core Equity Fund
Goal: The investment objective of the DLJ Core Equity Fund is long-term capital
appreciation. Investments are made based on their potential for long-term
capital appreciation. The DLJ Core Equity Fund may make an investment to earn
income when, in the opinion of the Adviser, such an investment will not
compromise the DLJ Core Equity Fund's investment objective.
Strategy: The DLJ Core Equity Fund invests in common stock, securities
convertible into common stock and other equity securities (e.g., preferred stock
and interests in master limited partnerships). It invests primarily in
well-known and established companies (generally, companies in operation for more
than three years). The Fund may occasionally invest in new and unseasoned
companies which, in the opinion of the Adviser, have the potential for long-term
capital appreciation.
The Adviser applies extensive research that has been conducted primarily by
research analysts employed by Credit Suisse First Boston on the growth prospects
of stocks that are considered for the Fund's portfolio. Target companies
normally have market capitalizations of at least $1 billion at the time of
purchase. Generally, the Adviser attempts to identify companies with growth
rates that will exceed that of the S&P 500 Index. The DLJ Core Equity Fund is
"sector neutral." This means that its investments are allocated to industries in
proportion to the sector allocation of the S&P 500 Index, with the exception of
the electric and the gas utilities sectors. Other factors considered in the
selection of securities include the economic and political outlook, the value of
a particular security relative to another security, trends in the determinants
of corporate profits, and management capability and practices. See "Risks for
the DLJ Core Equity Fund and the DLJ Growth and Income Fund" on page [19].
Investments: Under normal circumstances, the DLJ Core Equity Fund invests at
least 65% of its total assets in equity securities of companies that the Adviser
believes have above-average long-term capital appreciation potential. For
temporary defensive purposes, the DLJ Core Equity Fund may invest in
investment-grade short-term fixed-income securities, enter into repurchase
agreements and hold cash. A temporary defensive position could affect the Fund's
ability to achieve its investment objective. In addition, the Fund may invest in
equity securities selected on a basis other than the potential for long-term
capital appreciation. The Fund may invest up to 35% of the value of its assets
in investment-grade fixed-
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<PAGE>
income securities, including bonds, debentures, notes, asset and mortgage-backed
securities and money market instruments such as commercial paper and
bankers'-acceptances and other financial instruments. The Fund may invest in
both listed and unlisted securities and may also:
o invest up to 10% of the value of its total assets in non-U.S. securities;
o invest no more than 10% of its net assets in restricted securities or
other instruments with no ready market;
o invest up to 5% of its total assets in warrants; and
o attempt to minimize the effect of a market decline on the value of its
securities, subject to market conditions, by writing covered call options
on securities or stock indices. See "Additional Information on Investment
Policies and Risks."
[side bar]
Risks for the DLJ Core Equity Fund, and the DLJ Growth and Income Fund:
Like any investment, an investment in the DLJ Core Equity Fund or DLJ Growth and
Income Fund is subject to risk and you could lose money. While the Funds seek
investments that will appreciate in value and/or provide income, the value of
the securities could decline and provide no income.
The Funds are subject to risks that affect equity securities markets in general,
such as general economic conditions and adverse changes in interest rates
(generally increases). If the value of equity markets in general declines, you
can expect the value of your investment in the Funds to decline, possibly to a
greater extent than the decline in equity markets generally.
The DLJ Core Equity Fund may invest in new and unseasoned companies. Stocks of
these companies tend to be more volatile than stocks of larger and more
established companies. In addition, because stocks are selected on the basis of
their appreciation potential, they tend to be more risky than many investments
that provide current income.
The DLJ Growth and Income Fund may invest in debt securities. Debt securities
are subject to risks that the issuer will not repay its borrowings or pay
interest. They are also subject to the risk of declines in value because of
increases in interest rates and decreases in the credit quality of the issuer.
The DLJ Core Equity Fund and the DLJ Growth and Income Fund may each invest in
unlisted securities. Investments in unlisted securities may be less liquid and
more volatile than investments in listed securities and could result in losses
to the Funds if they had to be sold quickly.
The DLJ Core Equity Fund and the DLJ Growth and Income Fund may each invest in
non-U.S. securities. Non-U.S. securities carry the same risks as securities of
U.S. companies and the added risks of being traded in less liquid markets than
U.S. securities. Non-U.S. securities are also issued by companies that are not
subject to U.S. reporting requirements and involve political systems, economies
and markets that may not be as developed as in the U.S. See "Additional
Information on Investment Policies and Risks".
[end side bar]
DLJ Growth and Income Fund
Goal: The investment objective of the DLJ Growth and Income Fund is long-term
capital appreciation and continuity of income.
Strategy: The DLJ Growth and Income Fund pursues its investment objective by
investing principally in dividend-paying common stock and by diversifying its
investments among different industries and companies. Securities are selected
based on the Adviser's evaluation of their investment merit and their potential
for appreciation in value and/or income. The selection of securities on the
basis of their capital appreciation or income potential does not ensure against
possible loss in value.
27
<PAGE>
Investments: The DLJ Growth and Income Fund invests in common stock, preferred
stock and securities convertible into common stock. The DLJ Growth and Income
Fund may invest in debt securities that are of investment-grade quality at the
time of purchase (including bonds, debentures, notes and asset and
mortgage-backed securities), U.S. government securities, municipal securities
(including general and special obligation securities and industrial revenue
bonds) and money market instruments. See "Additional Information on Investment
Policies and Risks-- Mortgage and Asset-Backed Securities and Investment-Grade
Debt Securities." There is no fixed proportion of the DLJ Growth and Income
Fund's assets that must be invested in particular types of securities. The
percentage of assets invested in various types of securities may be changed from
time to time by the Adviser.
The DLJ Growth and Income Fund invests in both listed and unlisted securities.
The DLJ Growth and Income Fund may invest in non-U.S. securities and restricted
securities. To minimize the effect of a market decline in the value of its
securities, the Fund may, depending on market conditions, write covered call
options on securities or stock indices. The Fund may invest up to 10% of its
assets in non-U.S. securities and up to 10% of its assets in restricted
securities. For additional information on the use, risks and costs of the above
referenced policies and practices, see "Additional Information on Investment
Policies and Risks."
DLJ Small Company Value Fund
Goal: The investment objective of the DLJ Small Company Value Fund is a high
level of growth of capital. The DLJ Small Company Value Fund is not intended for
investors whose principal objective is assured income or preservation of
capital.
Strategy: The DLJ Small Company Value Fund invests primarily in common stock and
may also invest in securities convertible into common stock, preferred stock,
other equity securities, bonds or other debt securities as described below.
Under normal market conditions, at least 65% of the Fund's assets are invested
in equity securities of small market capitalization companies. Small cap
companies, for purposes of this Fund, are considered to be companies with market
capitalizations of $2 billion or less at the time of purchase. If the market
capitalization of a small cap company in which the Fund has invested increases
to a level above $2 billion, the investment adviser will continue to hold the
securities of that company until the investment adviser determines that the
company no longer has growth potential.
Investments: The DLJ Small Company Value Fund pursues its investment objective
by employing a value-oriented investment approach. This means that the Adviser
seeks securities that appear to be underpriced. The Adviser looks for stocks
issued by companies with proven management, consistent earnings, sound finances
and strong potential for market growth. By investing in such companies, the DLJ
Small Company Value Fund tries to enhance its potential for appreciation and
limit the risk of decline in the value of its portfolio. The DLJ Small Company
Value Fund focuses on the fundamentals of each small-cap company instead of
trying to anticipate what changes might occur in the stock market, the economy,
or the political environment. This approach differs from that used by many other
funds investing in small-cap company stocks. Those other funds often buy stocks
of companies they believe will have above-average earnings growth, based on
anticipated future developments. In contrast, the DLJ Small Company Value Fund's
securities are generally selected with the belief that they are currently
undervalued based on existing conditions and that their earning power or
franchise value does not appear to be reflected in their current stock price. To
further reduce risk, the DLJ Small Company Value Fund diversifies its holdings
among many companies and industries. The Adviser also considers whether a
company has an established presence in its industry, a product or market niche
and whether management owns a significant stake in the company.
The DLJ Small Company Value Fund may also invest in special situation companies.
A special situation company is a company whose value may increase within a
reasonable period of time solely by reason of a development particularly or
uniquely applicable to that company. The securities of these companies may be
affected by particular developments unrelated to business conditions generally.
These investments may fluctuate without relation to general market trends. In
general, the principal risk associated with investing in
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<PAGE>
special situation companies is the potential decline in the value of these
securities likely to occur if the anticipated development fails to take place.
Examples of special situation companies are companies that are being reorganized
or merged, have unusual new products, enjoy particular tax advantages, or
acquire new management.
The DLJ Small Company Value Fund invests primarily in common stock. It may also
invest in securities convertible into common stock, preferred stock,
investment-grade debt securities (including bonds, debentures, notes, asset and
mortgage-backed securities), U.S. Government Securities, municipal securities
(including general and special obligation securities and industrial revenue
bonds), money market instruments (such as commercial paper and bankers'
acceptances) and other financial instruments.
The DLJ Small Company Value Fund may also invest in unlisted securities and
securities traded in the over-the-counter markets. The DLJ Small Company Value
Fund may allocate a larger percentage of its assets to unlisted securities than
would a typical large company mutual fund. The DLJ Small Company Value Fund may
also:
o purchase or sell options on securities and on indices to seek to enhance
return or hedge its portfolio;
o purchase or sell financial futures contracts and options thereon for
hedging and risk management purposes;
o invest up to 20% of total assets in non-U.S. securities;
o invest up to 5% of total assets in rights or warrants; and
o invest not more than 10% of net assets in instruments having no ready
market.
However, the Fund does not invest in restricted securities.
[sidebar]
Risks for the DLJ Small Company Value Fund:
The investment objective for the DLJ Small Company Value Fund causes it to be
riskier than other funds and you could lose money. While it seeks investments
that will provide a high level of growth of capital, they may decline in value.
You should not invest in the DLJ Small Company Value Fund if your principal
objective is assured income or capital preservation. While smaller companies
generally have the potential for rapid growth, they often involve greater risks
than investments in larger, more established companies. Small companies may have
less management experience, fewer financial resources, and limited product
diversification.
In addition, in many instances the frequency and trading volume for securities
of smaller companies are substantially less than those of larger companies,
causing such securities to be subject to greater and more abrupt price
fluctuations and to be less liquid than securities of larger companies. When
making large sales of portfolio securities, it may be necessary for the DLJ
Small Company Value Fund to sell such securities at discounts from quoted prices
or to execute a series of small sales over an extended period of time. These
factors cause an investment in the DLJ Small Company Value Fund to be riskier
than an investment in a typical "large company" mutual fund.
The DLJ Small Company Value Fund also is subject to risks that affect equity
securities markets in general, such as general economic conditions and adverse
changes in interest rates. These factors also could adversely affect an
investment in the Fund. If the value of equity markets in general declines, the
value of your investment in the DLJ Small Company Value Fund could also decline,
possibly to a greater extent than the decline in equity markets generally.
The DLJ Small Company Value Fund may invest in various types of debt securities.
Debt securities are subject to the risk that the issuer will not repay its
borrowings or pay interest. They are also subject to the risk of declines in
value because of increases in interest rates and decreases in the perceived
credit quality of the issuer.
29
<PAGE>
The Fund may also invest in unlisted securities. Investments in unlisted
securities may be less liquid and more volatile than investments in listed
securities and could result in losses if they had to be sold quickly.
The Fund may also invest in non-U.S. securities. Not only do non-U.S. securities
carry the same risks as securities of U.S. companies, they also have the added
risks of generally being traded in less liquid markets than U.S. securities,
involve political systems, economies and markets that may not be as developed as
in the U.S. and may be issued by companies that are not subject to reporting
requirements that are as rigorous as those imposed on U.S. issuers.
The Fund also may invest in options, warrants and financial futures contracts.
Selecting options, warrants and financial futures contracts involves
determinations as to how a particular security, index, interest rate, or
currency will change. If the Adviser is wrong in its prediction, the Fund could
lose money. In addition, such instruments may not be available, or if available,
may be too expensive to utilize. See "Additional Information on Investment
Policies and Risks".
[end sidebar]
DLJ STRATEGIC GROWTH FUND
Goal: The investment objective of the Growth Fund is long-term growth of
capital. Investments are made based on their potential for superior growth.
Strategy: The Fund seeks to achieve this objective by investing in equity
securities of a limited number of large, carefully selected companies that the
Adviser believes will achieve superior growth. Unlike most equity funds, the
Fund focuses on a relatively small number of intensely researched companies. The
Fund seeks to achieve superior performance as compared to other U.S. domestic
growth funds.
The Adviser applies extensive research that has been conducted primarily by
research analysts employed by Credit Suisse First Boston on the growth prospects
of stocks that are considered for the Fund's portfolio. Unlike many equity
funds, the DLJ Strategic Growth Fund seeks to limit the number of Fund holdings
to companies that offer the highest potential for capital appreciation. The Fund
intends to hold securities of approximately 50-60 companies, which may fluctuate
depending on the Adviser's view of market conditions. Growth companies tend to
be concentrated in the technology, health care, consumer, financial,
telecommunications and commercial services sectors. By emphasizing Credit Suisse
First Boston research in the portfolio stock selection, this Fund will try to
deliver superior performance as compared to the U.S. domestic growth fund peer
universe. Other factors considered in the selection of securities include the
economic and political outlook, the value of a particular security relative to
another security, trends in the determinants of corporate profits, and
management capability and practices. See "Additional Information on Investment
Policies and Risks."
Investments: Under normal circumstances, the DLJ Strategic Growth Fund invests
at least 85% of its total assets in equity securities in U.S. companies that the
Adviser believes have above-average long-term capital appreciation potential.
The Adviser expects the average market capitalization of companies in the
portfolio to be in the range of companies that are included in the Standard &
Poor's 500 Index. The Fund may invest in both listed and unlisted securities and
may also:
o invest up to 10% of the value of its total assets in non-U.S. securities;
o invest no more than 15% of its net assets in illiquid securities;
o invest up to 5% of its total assets in warrants;
o attempt to minimize the effect of a market decline on the value of its
securities, subject to market conditions, by writing covered call options
on securities or stock indices See "Additional Information on Investment
Policies and Risks."; and
o invest in investment-grade fixed income securities, including bonds,
debentures, notes and money market instruments such as commercial paper
and bankers acceptances and other financial instruments.
For additional information on the use, risks and costs of the above referenced
policies and practices, see "Additional Information on Investment Policies and
Risks."
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<PAGE>
DLJ TECHNOLOGY FUND
Goal: The DLJ Technology Fund's investment objective is growth of capital.
Strategy: The DLJ Technology Fund seeks to achieve this objective by investing
in a broad number of industries that comprise the U.S. domestic technology
sector. The Fund seeks to create a blend of stocks in companies that include the
computer hardware, computer software, electronics, semiconductor, semiconductor
capital equipment, telecommunication equipment, telecommunication services and
internet industries. Stock selection reflects a growth approach and is based on
fundamental research that assesses a company's prospects for above-average
earnings. The research applied by the Adviser is conducted primarily by research
analysts employed by Credit Suisse First Boston. In addition, the Adviser also
obtains research from other investment firms.
Investments: The DLJ Technology Fund invests in common stock, preferred stock
and securities convertible into common stock. The Fund will normally invest 80%
of its assets in securities of companies principally engaged in offering,
developing products, processes or services that will provide technological
advances and improvements. The types of companies include computer hardware,
computer software, electronics, semiconductor, telecommunication equipment,
telecommunication services and internet industries. The Fund may invest in
listed and unlisted securities, well-known and established companies and in new
and unseasoned companies. The Fund will not invest more than 25% of its total
assets in any one industry. The Fund may also:
o attempt to minimize the effect of a market decline on the value of its
securities, subject to market conditions, by writing covered call options
on securities or stock indices;
o invest up to 10% of its assets in non-U.S. securities;
o invest up to 15% of its net assets in illiquid securities; and
o invest in investment-grade fixed income securities, including bonds,
debentures, notes and money market instruments such as commercial paper
and bankers-acceptances and other financial instruments.
[side bar]
Risks for the DLJ Technology Fund and the DLJ Strategic Growth Fund:
Like any investment, an investment in the DLJ Technology Fund or DLJ Strategic
Growth Fund is subject to risk and you could lose money. While the Funds seek
investments that will appreciate in value, the value of the securities could
decline and provide no income. The Funds are subject to market risks that affect
equity securities markets in general, such as general economic conditions and
adverse changes in interest rates (generally increases). If the value of equity
markets in general declines, you can expect the value of your investment in the
Funds to decline, possibly to a greater extent than the decline in equity
markets generally. The Funds are also subject to investment risk, which is the
possibility that the returns from a specific type of stock will perform worse
than the overall stock market or other market sectors. Other general risks
include the following:
The DLJ Technology Fund invests in technology companies. The fact that the Fund
concentrates in a single sector increases risk and volatility as compared to a
fund with a more diversified portfolio. This is because factors that affect that
sector are likely to directly affect the Fund's performance, both negatively and
positively. Even if the overall direction of equity prices is upward, if
technology stocks are headed lower, Fund performance could be adversely
affected. Certain factors or market conditions that affect technology companies
could have an impact on the Fund's net asset value and performance. For example,
companies in the rapidly changing technology sector often face unusually high
price volatility, both in terms of gains and losses. Products or services that
at first appear promising may not prove commercially successful or may become
obsolete quickly. Earnings disappointments could also result in sharp price
declines. In addition, stocks of small, less seasoned companies, tend to be more
volatile than the overall market.
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<PAGE>
The DLJ Strategic Growth Fund will limit the number of companies in its
portfolio. As a result, changes in the value of one security are more likely to
have a greater effect on the Fund's net asset value than other U.S. domestic
growth funds with more diversified portfolios.
In addition, each Fund may from time to time take temporary defensive positions
that are inconsistent with a Fund's investment strategies in attempting to
respond to adverse market conditions. If a Fund takes a temporary defensive
position, the Fund may not achieve its investment objective.
THE DLJ INTERNATIONAL FUNDS
DLJ Developing Markets Fund
Goal: The investment objective of the DLJ Developing Markets Fund is long-term
growth of capital by investing primarily in common stocks and other equity
securities of companies from developing countries. Under normal market
conditions, the Fund invests at least 65% of its assets in equity securities of
developing countries.
Strategy: The Fund seeks to achieve this objective by investing in securities of
issuers in countries included in the Morgan Stanley Capital Index ("MSCI")
Emerging Markets Free index. The Fund's investment approach is to seek to
minimize country and sector risk by maintaining country and sector neutrality,
with weightings close to those of the MSCI Emerging Markets Free index.
Investments: Equity securities include common and preferred stock, warrants,
rights or options that are convertible into common stock, debt securities that
are convertible into common stock, depositary receipts for those securities and
other classes of stock that may exist. The Fund may purchase non-U.S. securities
in the form of sponsored or unsponsored depositary receipts or other securities
representing underlying shares of non-U.S. issuers. The Fund may purchase a
limited amount of restricted or otherwise illiquid securities. The Fund may
enter into forward foreign currency exchange contracts to attempt to protect the
value of its assets against future changes in the level of currency exchange
rates. The Fund may purchase and sell financial futures contracts and options
thereon which are traded on a commodities exchange or board of trade for certain
hedging, return enhancement and risk management purposes. The Fund may purchase
and sell financial futures contracts and related options, without limitation,
for bona fide hedging purposes. Subject to the foregoing, the value of all
financial futures contracts sold will not exceed the total market value of the
Fund's portfolio. These futures contracts and related options will be on
financial indices and foreign currencies or groups of foreign currencies.
As used in this prospectus, a company in a developing country is an entity for
which either the principal securities trading market is in a developing country,
it is organized under the laws in a developing country or it has its principal
office in a developing country. The Fund invests primarily in countries
represented within the MSCI Emerging Markets Free Index. Those countries
currently include Argentina, Brazil, Chile, China, Colombia, Czech Republic,
Egypt, Greece, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia,
Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Sri
Lanka, Taiwan, Thailand, Turkey and Venezuela. The Fund generally does not
invest more than 25% of its total assets in developing countries not represented
within the MSCI Emerging Markets Free Index.
[side bar]
Risks for the DLJ Developing Markets Fund:
Like any investment, an investment in the DLJ Developing Markets Fund is subject
to risk and you could lose money. While the Fund selects investments that the
Fund believes will experience long-term appreciation, their value could decline.
The Fund is also subject to risks that affect equity securities markets in
general, such as general economic conditions and adverse changes (generally
increases) in interest rates.
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<PAGE>
There are certain risks involved in investing in non-U.S. securities, in
addition to the risks inherent in U.S. investments. These risks may include
currency fluctuations, currency revaluations, adverse political and economic
developments, currency exchange blockages, foreign governmental laws or
restrictions, reduced public information concerning issuers, and the lack of
uniform accounting, auditing and financial reporting standards and other
regulatory practices and requirements comparable for domestic companies.
Furthermore, non-U.S. securities may be less liquid and more volatile than
comparable U.S. securities. There is also a possibility of expropriation,
nationalization, confiscatory taxation, and limitations on use or removal of
Funds or assets. Investments in non-U.S. securities may result in higher
expenses due to currency conversions, brokerage commissions which generally are
higher than U.S. commissions and the expense of maintaining securities with
non-U.S. custodians.
In addition to the general risks of investing in non-U.S. securities,
characteristics of developing countries may affect certain investments, such as
national policies that restrict foreign investment and the absence of developed
legal structures governing private property and private and foreign investments.
The typically small size of securities markets and the possibility of a low or
nonexistent volume of trading in developing countries may also result in a lack
of liquidity and substantial price volatility.
You should be aware that investing in developing countries generally involves
exposure to economic structures that are generally less diverse and mature, and
to political systems with less stability than those of developed countries.
[end side bar]
For additional information on the use, risks and costs of the above referenced
policies and practices, see "Additional Information on Investment Policies and
Risks."
DLJ International Equity Fund
Goal: The investment objective of the DLJ International Equity Fund is long-term
growth of capital by investing primarily in equity securities from established
non-U.S. markets. During normal market conditions, the Fund invests most of its
assets in securities of issuers from at least three different countries outside
the United States. The Fund may invest in securities of companies incorporated
in the United States but having their principal activities and interests outside
of the United States.
Strategy: The Fund seeks to achieve this objective by focusing on stock
selection based primarily on the recommendations of CSFB International Research.
The Fund invests in the developed countries of Europe, Australia and the Far
East ("EAFE"), using disciplined, quantitative methods in its attempt to
minimize country, industry and financial risks. The Fund is country and sector
neutral and seeks to maintain its weightings close to those of the MSCI-EAFE
Index.
Investments: Equity securities include common and preferred stock, warrants,
rights or options that are convertible into common stock, debt securities that
are convertible into common stock, depositary receipts for those securities and
other classes of stock that may exist. The Fund may purchase non-U.S. securities
in the form of sponsored or unsponsored depositary receipts or other securities
representing underlying shares of non-U.S. issuers. The Adviser anticipates
that, subject to market conditions, depositary receipts may represent a
substantial portion of the Fund's investments. This Fund may invest a limited
amount of its assets in restricted or otherwise illiquid securities. The Fund
may enter into forward foreign currency exchange contracts to protect the value
of its assets against future changes in the level of currency exchange rates.
The Fund may purchase and sell financial futures contracts and options thereon
which are traded on a commodities exchange or board of trade for certain
hedging, return enhancement and risk management purposes. The Fund may purchase
and sell financial futures contracts and related options, without limitation,
for bona fide hedging purposes. Subject to the foregoing, the value of all
financial futures contracts sold will not exceed the total market value of the
Fund's portfolio. These futures contracts and related options will be on
financial indices and foreign currencies or groups of foreign currencies.
33
<PAGE>
[side bar]
ADRs:
ADRs are depositary receipts typically issued by a U.S. bank or trust company
which evidence ownership of underlying securities issued by a non-U.S.
corporation.
EDRs and GDRs are depositary receipts typically issued by non-U.S. banks or
trust companies, although they also may be issued by U.S. banks or trust
companies, and evidence ownership of underlying securities issued by either a
non-U.S. or a U.S. corporation.
[end side bar]
[side bar]
Risks for the DLJ International Equity Fund:
Like any investment, an investment in the DLJ International Equity Fund is
subject to risk and you could lose money. While the Fund selects investments the
Fund believes will experience long-term appreciation, their value could decline.
The Fund is also subject to risks that affect equity securities markets in
general, such as general economic conditions and adverse changes (generally
increases) in interest rates.
There are certain risks involved in investing in non-U.S. securities, in
addition to the risks inherent in U.S. investments. These risks may include
currency fluctuations, currency revaluations, adverse political and economic
developments, currency exchange blockages, foreign governmental laws or
restrictions, reduced public information concerning issuers, and the lack of
uniform accounting, auditing and financial reporting standards and other
regulatory practices and requirements comparable for domestic companies.
Furthermore, non-U.S. securities may be less liquid and more volatile than
comparable U.S. securities. There is also a possibility of expropriation,
nationalization, confiscatory taxation, and limitations on use or removal of
funds or assets. Investments in non-U.S. securities may result in higher
expenses due to currency conversions, brokerage commissions which generally are
higher than U.S. commissions and the expense of maintaining securities with
non-U.S. custodians.
[end side bar]
For additional information on the use, risks and costs of the above referenced
policies and practices, see "Additional Information on Investment Policies and
Risks."
THE DLJ FIXED INCOME FUNDS
DLJ Fixed Income Fund
Goal: The investment objective of the DLJ Fixed Income Fund is to provide as
high a level of total return as is consistent with capital preservation by
investing principally in debt securities, including, without limitation,
convertible and nonconvertible debt securities of domestic and foreign
companies, including both well-known and established and new and lesser-known
companies. Total return means the sum of net investment income (if any) and
realized and unrealized gains less losses. Capital preservation means minimizing
the risk of capital loss in a period of falling prices (rising interest rates)
for debt securities.
Strategy: The Fund invests in and holds debt securities that the Adviser
believes will maximize total return at a level consistent with capital
preservation. The average maturity of the Fund's portfolio is adjusted based on
the Adviser's assessment of relative yields on debt securities and expectations
of future interest rate patterns.
A change in the price of a debt security generally is inversely related to
market interest rates. This means that the value of the Fund's investments will
tend to decrease during periods of rising interest rates and to
34
<PAGE>
increase during periods of falling rates. In general, as the average maturity of
the portfolio increases, so does the potential volatility in share price. As a
matter of fundamental policy, the Fund will invest at least 80% of the value of
its total assets in debt securities. In normal circumstances, the DLJ Fixed
Income Fund invests at least 65% of the value of its total assets in fixed
income securities. However, the Fund may hold cash and short-term fixed income
securities and may enter into repurchase agreements for temporary defensive
purposes as determined by the Adviser without regard to the above limits. A
temporary defensive position could affect the Fund's ability to achieve its
investment objective.
Investments: The DLJ Fixed Income Fund may invest in bonds, including municipal
bonds (taxable and tax-exempt) and other debt securities rated Aaa, Aa, A or
MIG-1 by Moody's Investors Service, Inc. ("Moody's"), or AAA, AA, A or SP-1 by
Standard & Poor's Ratings Group ("S&P"), U.S. Government Securities, obligations
issued or guaranteed by national or state bank holding companies, and commercial
paper rated Prime-1 by Moody's or A-1+ or A-1 by S&P.
The DLJ Fixed Income Fund may also invest not more than 25% of its total assets
in lower-rated debt securities that are not rated below BBB or SP-2 by S&P or
Baa or MIG-2 by Moody's to the extent the Adviser views such investments as
consistent with this fund's investment objective. See "Additional Information on
Investment Policies and Risks" for a description of securities rated BBB by S&P
and Baa by Moody's. The DLJ Fixed Income Fund may enter into repurchase
agreements, terminable within seven days or less, involving U.S. Treasury
securities, with member banks of the Federal Reserve System or primary dealers
in U.S. Government Securities. The DLJ Fixed Income Fund may invest up to 10% of
its assets in restricted securities and in instruments having no ready market
value.
[side bar]
Risks for the DLJ Fixed Income Fund and DLJ Municipal Trust Fund:
While these Funds seek investments that will satisfy their investment
objectives, the Funds' investments could decline in value and you could lose
money. Concerns about an issuer's ability to repay its borrowings or to pay
interest will adversely affect the value of its securities. The Funds' Adviser
seeks to limit this risk generally by selecting higher-quality debt securities.
In addition, the Funds are subject to risks that affect the bond markets in
general, such as general economic conditions and adverse changes (generally
increases) in interest rates.
Each Fund may invest in unlisted securities. Unlisted securities may be less
liquid and more volatile than listed securities and could result in losses if
they had to be sold quickly. The DLJ Municipal Trust Fund is also subject to
risks of investing in municipal securities. These risks include uncertainties
regarding the tax status of a particular security, political and legislative
changes and the rights of their holders. These factors could adversely affect
your investment.
[end of side bar]
[side bar]
High Quality Ratings:
High Quality Ratings are Aaa, Aa, A or MIG-1 by Moody's, or AAA, AA, A or SP-1
by S&P.
[end of side bar]
DLJ Municipal Trust Fund
Goal: The investment objective of the DLJ Municipal Trust Fund is to provide as
high a level of total return as is consistent with capital preservation by
investing principally in high-grade tax-exempt municipal securities. This
investment objective, unlike that of most other municipal bond funds, is not to
provide current income exempt from federal and/or state income tax. Total return
means the sum of net investment income and capital gains less capital losses.
The Fund intends to distribute annually its net capital gains.
35
<PAGE>
Such distributions, if any, will be taxable to a shareholder as capital gain.
See "Dividend and Distribution Information" and "Taxes."
Strategy: The DLJ Municipal Trust Fund attempts to maximize total return by
actively managing the maturities of the bonds in its portfolio to reflect the
Adviser's assessment of anticipated interest rate movements and relative yields.
The DLJ Municipal Trust Fund currently maintains an average maturity of between
5 and 10 years in order to help reduce the interest rate risk associated with
investing in long-term bonds. However, the Fund may adjust this average maturity
as the Adviser's views on interest rate movements change, shortening maturities
in periods of rising interest rates and lengthening maturities in periods of
falling interest rates. The Fund attempts to supplement total return by
identifying and purchasing undervalued municipal securities.
As with any fixed income investment, the success of these strategies depends
upon the Adviser's ability to accurately forecast changes in interest rates and
to assess the value of municipal securities. You should be aware that there are
no assurances that the Fund's investment strategies will be successful. See
"Risks for the DLJ Fixed Income Fund and the DLJ Municipal Trust Fund" on page
22.
Investments: The DLJ Municipal Trust Fund seeks to achieve its objective by
investing primarily in a diversified portfolio of high-grade, intermediate-term
municipal securities. Municipal securities fall into two principal classes:
bonds and notes, both of which may have fixed, variable or floating rates of
interest. The Fund invests in tax-exempt municipal bonds and notes which are
rated Aaa, Aa, A or MIG-1 by Moody's or AAA, AA, A or SP-1 by S&P. The Fund may
also invest up to 25% of its total assets in lower-rated municipal securities to
the extent the Adviser views such investments as consistent with this Fund's
investment objective. See "Additional Information on Investment Policies and
Risks-- Investment-Grade Debt Securities" for a description of securities rated
BBB by S&P and Baa by Moody's. The Fund may also invest in unrated municipal
securities when the Adviser believes they are of comparable quality to that of
rated securities and are consistent with the Fund's objective and policies.
Because a change in the market value of a debt security generally is inversely
related to market interest rates, the market value of the DLJ Municipal Trust
Fund's investments will tend to decrease during periods of rising interest rates
and to increase during periods of falling rates. In general, as the average
maturity of the portfolio increases, so does the potential volatility in share
price. Fluctuations in market value of the DLJ Municipal Trust Fund's portfolio
resulting from fluctuations in interest rates will generally be greater at times
when the average maturity of the DLJ Municipal Trust Fund's portfolio is longer.
The DLJ Municipal Trust Fund may enter into repurchase agreements terminable
within seven days or less. The Fund may also invest in restricted securities, in
instruments having no ready market value and municipal bonds that are subject to
the alternative minimum tax. The DLJ Municipal Trust Fund reserves the right to
hold cash and short-term fixed income securities and to enter into repurchase
agreements as necessary for temporary defensive or emergency purposes as
determined by the Adviser, without regard for the above limitation. A temporary
defensive position could affect the Fund's ability to achieve its investment
objective. Dividends of the DLJ Municipal Trust Fund will consist of income
exempt from federal income tax, income subject to the federal alternative
minimum tax ("AMT"), and taxable ordinary income and capital gains. See
"Dividend and Distribution Information" and "Taxes."
DLJ High Income Fund
Goal: The DLJ High Income Fund's primary investment objective is to provide a
high level of current income and a secondary objective is capital appreciation.
This Fund is not recommended for investors whose principal objective is assured
income or capital preservation.
Strategy: This Fund seeks to achieve its investment objectives by investing in
fixed-income securities, including corporate bonds and notes, convertible
securities and preferred stocks, that are rated in the lower rating categories
of the established rating services (Baa or lower by Moody's and BBB or lower by
S & P), or, if unrated, are of comparable quality. Securities rated Baa or lower
by Moody's and BBB or lower by S
36
<PAGE>
& P are commonly known as "junk bonds." These bonds are considered by those
rating agencies to have speculative characteristics. These bonds can be expected
to provide higher yields. However these securities may be subject to greater
market fluctuations and risk of loss of income and principal than lower
yielding, higher-rated fixed-income securities. Investment in such high-yield
securities entails relatively greater risk of loss of income and principal.
Investments: This Fund seeks to achieve its objective by investing primarily in
a diversified portfolio of lower-rated fixed-income securities including
convertible and non-convertible debt securities and preferred stock. The Fund
may also hold assets in cash or cash equivalents. This Fund generally does not
invest in common stocks, rights or other equity securities. From time to time,
the Fund may acquire or hold such securities (if consistent with its objectives)
when they are acquired in unit offerings with fixed-income securities or in
connection with an actual or proposed conversion, exchange or restructuring of
fixed-income securities.
Selection and supervision by the Adviser of the Fund of investments in
lower-rated fixed-income securities involves continuous analysis of individual
issuers, general business conditions and other factors. The furnishing of these
services does not, of course, guarantee successful results. The Adviser's
analysis of issuers includes, among other things, historic and current financial
conditions, current and anticipated cash flow and borrowing requirements, value
of assets in relation to historical cost, strength of management, responsiveness
to business conditions, credit standing, and current and anticipated results of
operations. Analysis of general business conditions and other factors may
include anticipated changes in economic activity and interest rates, the
availability of new investment opportunities, and the economic outlook for
specific industries. While the Adviser considers as one factor in its credit
analysis the ratings assigned by the rating services, the Adviser performs its
own independent credit analysis of issuers and consequently, the DLJ High Income
Fund may invest, without limit, in unrated securities. The Fund's ability to
achieve its investment objective may depend on the Adviser's own credit analysis
to a greater extent than the funds that invest in higher-rated securities.
Although the DLJ High Income Fund primarily invests in lower-rated securities,
it will generally not invest in securities rated at the time of investment in
the lowest rating categories (Ca or below for Moody's and CC or below for S &
P). Securities which are subsequently downgraded may continue to be held and
will be sold only if, in the judgment of the Adviser, it is advantageous to do
so.
[side bar]
Risks for the DLJ High Income Fund:
While the Fund seeks investments that will satisfy our investment objective, our
investments could decline in value and you could lose money. Concerns about an
issuer's ability to repay its borrowings or to pay interest will adversely
affect the value of its securities. The Fund is also subject to risks that
affect the bond markets in general, such as general economic conditions and
adverse changes (generally increases) in interest rates.
The market value of longer maturity debt securities, like those held by the
Fund, is more sensitive to interest rate changes than the market value of
shorter maturity debt securities. In addition, the Fund's investments in lower
grade securities will subject investors to greater risk than normally
experienced in other fixed income securities.
Lower grade securities are regarded as being predominantly speculative as to the
issuer's ability to pay the principal and interest. Issuers of lower grade
securities are more likely to experience financial stress in periods of economic
downturn or rising interest rates. The issuer's ability to service its debt may
be adversely affected by poor management, inability to meet business forecasts
or unavailability of additional financing.
There is a higher default rate with lower grade securities because they may be
unsecured or subordinate to other securities of the issuer. There are fewer
dealers in lower grade securities which may make the market
37
<PAGE>
for these securities less liquid and cause larger differences in prices quoted
than that of higher-rated fixed income securities.
In addition, the Fund may incur additional expense when it is required to seek
recovery upon a default or restructuring.
[end side bar]
THE DLJ MONEY FUNDS
DLJ Municipal Money Fund
Goal: The DLJ Municipal Money Fund seeks maximum current income, consistent with
liquidity and safety of principal, that is exempt from Federal income taxation
to the extent described herein.
Strategy: The Fund pursues its objectives by investing at least 80% of its total
assets in municipal securities. One hundred percent of the securities the Fund
invests in are high quality having remaining maturities of one year or less,
although their maturities may extend to 397 days. The Fund reserves the right to
lower the percentage of investments in municipal securities if economic or
political conditions warrant. To increase the Fund's ability to reach its
investment objectives, the dollar-weighted average maturity of its portfolio
securities is always 90 days or less. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a default
on the DLJ Municipal Money Fund's investments could cause its net asset value
per share to deviate from $1.00.
Investments: Normally, substantially all the DLJ Municipal Money Fund's income
will be exempt from Federal income taxation. Such income may be subject to state
or local and/or Federal AMT income taxes. The Fund invests in municipal notes
and short-term municipal bonds, which may have fixed, variable or floating rates
of interest. Municipal securities with variable rates may include participation
interests in industrial development bonds which may be backed by letters of
credit from banking or other financial institutions. The letters of credit of
any single institution in respect of all variable rate obligations will not
cover more than the allowable percentage of the DLJ Municipal Money Fund's total
assets in accordance with Rule 2a-7 under the Investment Company Act of 1940, as
amended ("1940 Act"). For a more complete discussion of Municipal Securities,
see "Additional Information on Investment Policies and Risks--Municipal
Securities." All of the Fund's municipal securities at the time of purchase are
rated within the two highest quality ratings of Moody's or S&P's, or judged by
the Adviser to be of comparable quality.
The DLJ Municipal Money Fund may also invest without limitation in tax-exempt
municipal securities subject to the AMT. (See "Dividend and Distribution
Information" and "Taxes.")
The DLJ Municipal Money Fund may invest to a limited extent in stand-by
commitments, delayed-delivery, when-issued securities and other illiquid
securities. This Fund may also invest a small percentage of its net assets in
municipal leases, which are leases or installment purchases used by state and
local governments as a means to acquire property, equipment or facilities
without involving debt issuance limitations. The Fund may from time to time
invest in taxable securities including obligations of the U.S. Government and
its agencies, high quality certificates of deposit and bankers' acceptances,
prime commercial paper, and repurchase agreements.
[side bar]
Cash Equivalents:
The International Funds may from time to time take a defensive position by
holding all or a portion of the Fund in other types of securities, including
commercial paper, bankers' acceptances, short-term debt securities (corporate
and government) or government and high quality money market securities of U.S.
and
38
<PAGE>
non-U.S. issuers, repurchase agreements, time deposits or cash (foreign
currencies or U.S. dollars). The International Funds may also temporarily hold
cash and invest in high quality foreign or domestic money market instruments
with up to 35% of their assets, pending investment of proceeds from new sales of
International Funds' shares or to meet ordinary daily cash needs.
[end side bar]
[sidebar]
Risks for the DLJ Municipal Money Fund:
Like any money market fund investment, this investment is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. This fund seeks to preserve the value of your investment at $1.00 per
share; however, it is possible to lose money by investing in this Fund. To seek
to reduce investment risk, the DLJ Municipal Money Fund may not invest in the
securities of any one issuer, (except the U.S. Government), in excess of the
percentage of the DLJ Municipal Money Fund's total assets allowed under Rule
2a-7 of the 1940 Act.
The DLJ Municipal Money Fund earns income at current money market rates and its
yield varies from day to day and generally reflects current short-term interest
rates and other market conditions. It is important to note that neither the DLJ
Municipal Money Fund nor its yield are insured or guaranteed by the U.S.
Government.
[end sidebar]
For additional information on the use, risks and costs of the above referenced
policies and practices, see "Additional Information on Investment Policies and
Risks."
DLJ U.S. Government Money Fund
Goal: The DLJ U.S. Government Money Fund seeks maximum current income,
consistent with liquidity and safety of principal.
Strategy: This Fund pursues its objectives by maintaining a portfolio of high
quality money market securities, including the types described in the succeeding
paragraph, which at the time of investment generally have remaining maturities
of one year or less. Some maturities may extend to 397 days. The dollar weighted
average maturity of the DLJ U.S. Government Money Fund's portfolio securities
will vary, but will always be 90 days or less. In general, securities with
longer maturities are more vulnerable to price changes, although they may
provide higher yields. It is possible that a major change in interest rates or a
default on the DLJ U.S. Government Money Fund's investments could cause its net
asset value per share to deviate from $1.00.
Investments: The Fund invests in U.S. Government Securities, including issues of
the U.S. Treasury, such as bills, certificates of indebtedness, notes and bonds,
and issues of agencies and instrumentalities established under the authority of
an act of Congress, including variable rate obligations such as floating rate
notes. The Fund also invests in repurchase agreements that are collateralized in
full each day by eligible mortgage related securities or the types of securities
listed above. These agreements are entered into with "primary dealers" (as
designated by the Federal Reserve Bank of New York) in U.S. Government
Securities. This type of investment could create a loss to the Fund if, in the
event of a dealer default, the proceeds from the sale of the collateral were
less than the repurchase price. In addition, if the seller of repurchase
agreements becomes insolvent, the Fund's right to dispose of the securities
might be restricted. Investments in young companies with limited operating
histories may involve risks not present in investments in established and
well-known companies.
In addition to the investments listed, the Money Funds may take temporary
defensive measures by holding other types of securities which are permitted by
Rule 2a-7 of the 1940 Act.
[side bar]
39
<PAGE>
Risks for the DLJ U.S. Government Money Fund:
Like any money market fund investment, this investment is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
This Fund seeks to preserve the value of your investment at $1.00 per share,
however, it is possible to lose money by investing in this Fund.
The DLJ U.S. Government Money Fund earns income at current money market rates
and its yield will vary from day to day and generally reflects current
short-term interest rates and other market conditions.
It is important to note that neither the DLJ U.S. Government Money Fund nor its
yield is insured or guaranteed by the U.S. Government.
[end side bar]
[side bar]
To maintain portfolio diversification and reduce investment risk, the Money
Funds do not:
(1) borrow money, except from banks on a temporary basis or through entering
into reverse repurchase agreements to be used exclusively to facilitate the
orderly maturation and sale of portfolio securities during any periods of
abnormally heavy redemption requests (the borrowings are not used to purchase
investments); or
(2) pledge, hypothecate or in any manner transfer, as security for indebtedness,
its assets, except to secure permitted borrowings.
[end sidebar]
For additional information on the use, risks and costs of the above referenced
policies and practices, see "Additional Information on Investment Policies and
Risks."
ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND RISKS
The following general investment policies and risks supplement those set forth
above for each Fund.
Equity Securities. "Equity securities" include common stock, preferred stock
(including convertible preferred stock), bonds convertible into common or
preferred stock, rights and warrants, equity interests in trusts and depositary
receipts for equity securities.
Convertible Securities. A "convertible security" is a bond or preferred stock
which may be converted at a stated price within a specified period of time into
a certain quantity of the common or preferred stock of the same or a different
issuer. Convertible securities have characteristics of both bonds and equity
securities. Like a bond, a convertible security tends to increase in market
value when interest rates decline and tends to decrease in market value when
interest rates rise. However, the price of a convertible security is also
influenced by the market value of the underlying stock. The price of a
convertible security tends to increase as the market value of the underlying
stock rises, whereas it tends to decrease as the market value of the underlying
stock declines.
Warrants. A "warrant" gives the holder thereof the right to buy equity
securities at a specific price during a specified period of time. Warrants tend
to be more volatile than the underlying security, and if at a warrant's
expiration date the security is trading at a price below the price set in the
warrant, the warrant will expire worthless. Conversely, if at the expiration
date the underlying security is trading at a price higher than the price set in
the warrant, the holder of the warrant can acquire the security at a price below
its market value.
Mortgage-Backed Securities. Except for the DLJ Municipal Trust Fund, the DLJ
Mutual Funds may invest in mortgage and asset-backed securities.
"Mortgage-backed securities" are securities that directly or
40
<PAGE>
indirectly represent a participation in, or are secured by and payable from
mortgage loans on real property, including pass-through securities such as
Ginnie Mae, Fannie Mae and Freddie Mac Certificates. The yield and credit
characteristics of mortgage-backed securities differ in a number of ways from
traditional fixed income securities. The major differences typically include
more frequent interest and principal payments, usually monthly, and the
possibility that prepayment of principal may be made at any time. Prepayment
rates are influenced by changes in current interest rates and a variety of other
factors. In general, changes in the rate of prepayment on a security will change
the yield to maturity of that security. Under certain interest rate or
prepayment rate scenarios, a Fund may fail to recoup fully its investment in
such securities notwithstanding the credit quality of the issuers of such
securities. Based on historic prepayment patterns, amounts available for
reinvestment are likely to be greater during a period of declining interest
rates and, thus, are likely to be reinvested at lower interest rates, than
during a period of rising interest rates. Mortgage-backed securities may
decrease in value as a result of increases in interest rates and may benefit
less than other fixed income securities from declining interest rates because of
the risk of prepayment.
Asset-Backed Securities. "Asset-backed securities" have similar structural
characteristics to mortgage-backed securities, but the underlying assets include
assets such as motor vehicle installment sales or installment loan contracts,
leases of various types of real and personal property and receivables from
revolving credit agreements, rather than mortgage loans or interests in mortgage
loans. Asset-backed securities present certain risks that are not present in
mortgage-backed securities; primarily, these securities do not have the benefit
of the same security interest in the related collateral. There is the
possibility that recoveries of repossessed collateral may not, in some cases, be
available to support payments on these securities. For example, in the event
that the collateral underlying an asset-backed security must be disposed of, it
may be difficult to convert that collateral into a stream of payments to be paid
to the holders of the security.
Municipal Securities. "Municipal securities" are either bonds or notes.
Municipal bonds, which are longer-term debt obligations meeting long-term
capital needs, are either "general obligation" bonds or "revenue" bonds. Payment
of principal and interest on general obligation bonds is secured by the issuing
municipality's pledge of its full faith and credit and taxing power. Payment on
revenue bonds is met from the revenues obtained from a certain facility, class
of facilities, special excise or other tax, but not from general tax revenues.
Variations on these two classifications exist, such as revenue bonds backed by a
municipality's general taxing power, or general obligation bonds backed by
limited taxing power.
Municipal notes are short-term debt obligations generally maturing in one year
or less meeting short-term capital needs and are also either "general
obligation" or "revenue" debt securities. They include tax anticipation notes,
revenue anticipation notes, bond anticipation notes, construction loan notes and
tax- exempt commercial paper.
Municipal securities may have fixed, variable or floating rates of interest.
Variable and floating rate securities pay interest at rates that are adjusted
periodically, according to a specified formula, in order to minimize fluctuation
in the value of the principal of the securities. A "variable" interest rate
adjusts at predetermined intervals (e.g., daily, weekly, or monthly), while a
"floating" interest rate adjusts whenever a specified benchmark rate (such as
the bank prime lending rate) changes.
The DLJ Municipal Money Fund and DLJ Municipal Trust Fund may invest in variable
rate obligations. Such adjustments minimize changes in the market value of the
obligation, and in the case of the DLJ Municipal Money Fund enhances the ability
of such Fund to maintain a stable $1.00 net asset value. See "'Net Asset Value"
on page [17].
Investment-Grade Debt Securities. All of the DLJ Mutual Funds may invest in debt
securities of investment-grade quality. "Investment-grade debt securities" are
debt securities rated in one of the four highest rating categories by a
nationally recognized statistical rating organization, such as S&P or Moody's.
Investment-grade debt securities may also include debt securities believed by
the Adviser (on the basis of criteria believed by the Adviser to be comparable
to that applied by such rating agencies) to be of comparable quality to debt
securities so rated by the rating agencies.
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<PAGE>
Debt securities rated Baa or higher by Moody's or BBB or higher by S&P are
investment-grade securities. Securities rated BBB are regarded by S&P as having
an adequate capacity to pay interest and repay principal; while such securities
normally exhibit adequate protection parameters, adverse economic conditions or
changing circumstances are more likely, in the opinion of S&P, to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.
Securities rated Baa by Moody's are considered to be medium-grade obligations.
These securities are neither highly protected nor poorly secured. The rating
organization determines that interest payments and principal security appear to
be adequate for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time. For a more
complete description of Moody's and S&P's ratings, see the Appendix to the
Statement of Additional Information of each of the DLJ Mutual Funds. The
investment-grade limitations referenced for each Fund are applicable at the time
of initial investment and a Fund may determine to retain securities of issuers
which have had their credit characteristics downgraded.
Repurchase Agreements. The DLJ Mutual Funds may enter into a repurchase
agreement with member banks of the Federal Reserve System or "primary dealers"
(as designated by the Federal Reserve Bank of New York) in such securities.
Repurchase agreements permit a Fund to keep all of its assets at work while
retaining "overnight" flexibility in pursuit of investments of a longer-term
nature. The Adviser requires continual maintenance of collateral with a Fund's
custodian in an amount equal to, or in excess of, the market value of the
securities that are the subject of a repurchase agreement. In the event a
counterparty defaults on its repurchase obligation, a Fund might suffer a loss
to the extent that the proceeds from the sale of the collateral are less than
the repurchase price. If the counterparty becomes the subject of bankruptcy
proceedings, the Fund might be delayed in selling the collateral.
Non-U.S. Securities. All of the DLJ Mutual Funds, except the Money Funds and the
DLJ Municipal Trust Fund, may invest in securities of issuers outside of the
United States, which we refer to as "non-U.S. securities." There are additional
risks involved in investing in non-U.S. securities. These risks include those
resulting from fluctuations in currency exchange rates, revaluation of
currencies, and the possible imposition of currency exchange blockages. In
addition, there are risks associated with future adverse political and economic
developments and a limited availability of public information concerning
issuers. Non-U.S. issuers typically are subject to different accounting,
auditing and financial reporting standards. Securities of many non-U.S.
companies may be less liquid and their prices more volatile than those of
domestic companies. There is the possibility of expropriation, nationalization,
confiscatory taxation and limitations on the use or removal of Funds or other
assets of a non-U.S. issuer, including the withholding of dividends.
Non-U.S. securities may be subject to taxes imposed by foreign governments that
would reduce the net yield on such securities. Investment in non-U.S. securities
may result in higher expenses due to the cost of converting foreign currency
into U.S. dollars, the payment of fixed brokerage commissions on foreign
exchanges (which generally are higher than commissions on U.S. exchanges) and
the expense of maintaining securities with non-U.S. custodians.
Investments in non-U.S. securities include securities issued by European
issuers. On January 1, 1999, the countries participating in the European
Monetary Union ("EMU") implemented a new currency unit, the Euro, which is
reshaping financial markets, banking systems and monetary policies in Europe and
other parts of the world. Although it is not possible to predict the eventual
impact of the Euro implementation plan on the Funds, the transition to the Euro
may change the economic environment and behavior of investors, particularly in
European markets. Certain European investments may be subject to additional
risks as a result of this conversion. These risks include adverse tax and
accounting consequences, as well as difficulty in processing transactions. The
Funds are aware of such potential problems and are coordinating ways to prevent
or alleviate their adverse impact on the Funds.
Investment Companies. Certain Funds may invest a limited amount of their assets
in shares of other investment companies. Investments in other mutual funds may
involve the payment of substantial premiums above the value of such investment
companies' portfolio securities. In addition, such
42
<PAGE>
investments are subject to limitations under the 1940 Act and market
availability. Currently, the International Funds, the DLJ Strategic Growth Fund,
the DLJ Technology Fund and the DLJ Municipal Money Fund may invest in such
investment companies if, in the judgment of the Adviser, the potential benefits
of such investments justify the payment of any applicable premium or sales
charge. As a shareholder in an investment company, these Funds would bear its
ratable share of that investment company's expenses, including its advisory and
administrative fees. At the same time shareholders of these Funds would continue
to pay their own management fees and other expenses.
Options. A call option is a contract that gives the holder the right to buy from
the seller the security underlying the call option at a pre-determined price
while a put option is a contract that gives the buyer the right to require the
seller to purchase the security underlying the put option at a pre-determined
price. The DLJ Core Equity Fund and the DLJ Growth and Income Fund may write
covered call options on individual securities or stock indices. For these Funds,
this practice will only be used to minimize the effect of a market decline in
the value of securities in their respective portfolios. We cannot guarantee
that, should a Fund seek to enter into such transactions, it could do so at all
or on terms that are acceptable. The DLJ Small Company Value Fund may purchase
or sell put and call options on individual securities or stock indices as a
means of achieving additional return or of hedging the value of its portfolio.
The International Funds may purchase and sell put and call options on
securities, currencies and financial indices that are traded on U.S. or non-U.S.
securities exchanges or in the over-the-counter market. Options traded in the
over-the-counter market are considered illiquid investments. The International
Funds may purchase and sell financial futures contracts and options thereon
which are traded on a commodities exchange or board of trade for certain
hedging, return enhancement and risk management purposes in accordance with
regulations of the CFTC. These futures contracts and related options will be on
financial indices and foreign currencies or groups of foreign currencies.
Each of the DLJ Strategic Growth Fund's, DLJ Technology Fund's and International
Fund's successful use of options and financial futures depends on the ability of
the Adviser to predict the direction of the market and is subject to various
additional risks. The investment techniques and skills required to use options
and futures successfully are different from those required to select
international securities for investment. The ability of each of these funds to
close out an option or futures position depends on a liquid secondary market.
There is no assurance that liquid secondary markets will exist for any
particular option or futures contract at any particular time. The inability to
close options and futures positions also could have an adverse impact on each
International Fund's ability to effectively hedge its portfolio. There is also
the risk of loss by the International Funds of margin deposits or collateral in
the event of bankruptcy of a broker with whom the International Funds have an
open position in an option, a futures contract or related option.
Lower-Grade or Unrated Securities. The DLJ High Income Fund will purchase lower
or unrated securities. "Lower-grade securities" are regarded as being
predominantly speculative as to the issuer's ability to make payments of
principal and interest. Investment in these securities involves substantial
risk. Lower-grade securities are commonly referred to as "junk bonds". Issuers
of lower-grade securities may be highly leveraged and may not have traditional
methods of financing. The risks associated with acquiring the securities of
these issuers generally are greater than is the case with higher-rated
securities. For example, during an economic downturn or a sustained period of
rising interest rates, issuers of lower-grade securities may be more likely to
experience financial stress, especially if such issuers are highly leveraged.
The risk of loss due to default is significantly greater for the holders of
lower-grade securities because such securities may be unsecured and may be
subordinate to other securities of the issuer.
FUND MANAGEMENT
As discussed under "Recent Developments," on November 3, 2000, DLJ, the indirect
parent of DLJAM was acquired by Credit Suisse. Following the acquisition, CSAM
succeeded DLJAM as Adviser of the DLJ Mutual Funds pursuant to Interim Advisory
Agreements. CSAM, located at 466 Lexington Avenue, New York, New York
10017-3147, is a member of Credit Suisse Asset Management, the institutional
asset management arm of Credit Suisse Group, one of the world's leading banks.
Except as set forth below, the investment personnel involved in the management
of the Funds has not changed.
43
<PAGE>
Effective November 1, 2000, the Subadvisory Agreement with AXA Investor Managers
GS Ltd. ("AXA") pursuant to which AXA acted as subadviser of the DLJ Developing
Markets Fund and DLJ International Equity Fund (the "International Funds") was
terminated by mutual agreement of the parties. At that time, the Adviser became
solely responsible for investment management of the International Funds.
The fees paid for the fiscal year ended October 31, 2000 were as follows:
Fund* % of Average Net Assets Fees Paid
--------------------------------------------------------------------------------
DLJ Core Equity Fund .67% $[ ]
--------------------------------------------------------------------------------
DLJ Growth and Income Fund .58% $[ ]
--------------------------------------------------------------------------------
DLJ Small Company Value Fund .79% $[ ]
--------------------------------------------------------------------------------
DLJ Strategic Growth Fund .75% $[ ]
--------------------------------------------------------------------------------
DLJ Technology Fund .88% $[ ]
--------------------------------------------------------------------------------
DLJ Developing Markets Fund 1.25% $[ ]
--------------------------------------------------------------------------------
DLJ International Equity Fund 1.25% $[ ]
--------------------------------------------------------------------------------
DLJ Fixed Income Fund .625% $[ ]
--------------------------------------------------------------------------------
DLJ Municipal Trust Fund .625% $[ ]
--------------------------------------------------------------------------------
DLJ High Income Fund .70% $[ ]
--------------------------------------------------------------------------------
DLJ Municipal Money Fund .40% $[ ]
--------------------------------------------------------------------------------
DLJ U.S. Government Money Fund .40% $[ ]
--------------------------------------------------------------------------------
* The DLJ Strategic Growth Fund and the DLJ Technology Fund commenced operations
on November 18, 1999.
The following individuals are responsible for management of the DLJ's Funds.
Cathy A. Jameson is the portfolio manager of the DLJ Fixed Income Fund, a
position she has held since the Fund was started in 1986. Ms. Jameson is a Vice
President of the DLJ Focus Funds. She is also a Managing Director of CSAM.
Roger W. Vogel serves as the primary portfolio manager of the DLJ Small Company
Value Fund and as of February, 2000, the DLJ Growth and Income Fund. He has
acted as the portfolio co-manager of the DLJ Core Equity Fund, the DLJ Growth
and Income Fund, and the DLJ Small Company Value Fund since July 1993. Mr. Vogel
is a Vice President of the DLJ Focus Funds, and a Managing Director of CSAM.
Prior to becoming associated with the Funds, Mr. Vogel was a Vice President and
portfolio manager with Chemical Banking Corp.
Marybeth B. Leithead is the portfolio manager of the DLJ Municipal Trust Fund, a
position she has held since the commencement of its operations on July 28, 1993.
Ms. Leithead is also a Vice President of the DLJ Focus Funds and a Director of
CSAM.
Hugh M. Neuburger is the primary portfolio manager of the DLJ Core Equity Fund,
DLJ Strategic Growth Fund and DLJ Technology Fund. He has also served as the
co-portfolio manager of the DLJ Core Equity Fund, the DLJ Growth and Income Fund
and the DLJ Small Company Value Fund since August 1995. Mr. Neuburger is a
Managing Director and Director of Quantitative Analysis of CSAM.
William D. Butler, a [Director] of CSAM, serves as co-portfolio manager of the
DLJ Technology Fund. Mr. Butler joined DLJAM as an Equity Analyst in 1998 after
spending 3 years as a Senior Consultant at BARRA Inc., advising institutional
money managers on equity risk management, performance attribution and portfolio
construction.
Effective December 8, 2000, Richard Lindquist has assumed the role of portfolio
manager for the DLJ DLJ High Income Fund. Mr. Lindquist is a Managing Director
of CSAM and heads CSAM's high yield
44
<PAGE>
management team. Mr. Lindquist joined CSAM in 1995 as a result of CSAM's
acquisition of CS First Boston Investment Corp., which he joined in 1989.
Previously, he managed high yield portfolios at Prudential Insurance Company of
America and a high yield mutual fund at T. Rowe Price Associates. Mr. Lindquist
has also assumed the role of portfolio manager for the DLJ High Yield Bond Fund.
Mr. Lindquist is a Chartered Financial Analyst.
Luisa Michel, , is the co-portfolio manager of the DLJ Developing Markets Fund
and the DLJ International Equity Fund and [Managing Director] of the Adviser,
with which she has been associated since 1998. From 1993 to 1998, Ms. Michel was
a Senior International Credit Analyst at Merrill, Lynch, Pierce, Fenner and
Smith Inc. focusing on Latin America. From 1989 to 1991, she acted as a lending
officer for Manufacturers Hanover Trust Company.
HOW TO BUY AND SELL SHARES
Opening an Account:
Decide whether your first payment will be delivered by check or wire. Initial
payment must be at least $1,000.
By check using U.S. mail:
Complete an application and send it along with a check made payable to the DLJ
Mutual Funds to:
DLJ Mutual Funds
PFPC, Inc.
P.O. Box 61503
King of Prussia, PA 19406-3101
By check using U.S. overnight delivery.
Complete an application and send it along with a check made payable to the DLJ
Mutual Funds to:
DLJ Mutual Funds
PFPC, Inc.
211 S. Gulph Road
King of Prussia, PA 19406-3101
By wire:
Call DLJ Mutual Funds at 1-800-225-8011 (option #2) to obtain an account number.
A representative will instruct you to send a completed, signed application to
the Transfer Agent, PFPC, Inc ("Transfer Agent"). Your account cannot be opened
without a completed, signed application and a Fund account number.
Contact your bank to arrange a wire transfer to:
Boston Safe Deposit & Trust
ABA #:011001234
Credit: (Insert Name of Your Fund)
ACCT#: 006068
FBO (Shareholder name and account number)
Your wire instructions must also include: the name of the Fund, your account
number and the name(s) of the account holders.
An account at the Fund will be established once the application and check are
received in good order.
45
<PAGE>
If you purchase shares of the Money Funds through a wire transfer, you will be
eligible to receive the daily dividend declared on the date of purchase, as long
as the Transfer Agent is notified of such purchase by 12:00 noon. The funds must
be received by the Transfer Agent by 4:00 P.M.
Investors may also purchase shares of the DLJ Mutual Funds through their
securities dealer. For shares purchased through a securities dealer or by
clients of an eligible institution: call your broker or service representative
for instructions in opening an account. Investors may be charged separate fees
if they effect transactions through a securities dealer or eligible institution.
In addition, securities dealers may offer an automatic sweep for the shares of
the Money Funds in the operation of cash accounts for their customers. Shares of
the Money Funds purchased through an automatic sweep by 1:00 P.M. are eligible
to receive that day's daily dividend. For more information, contact your
securities dealer. Other information regarding purchasing shares is contained in
each Fund's Statement of Additional Information.
Shareholder accounts established on behalf of the following types of plans will
be exempt from the Fund's minimum and additional investment amounts: 401(k)
Plans, 403(b) Plans, 457 Plans, SEP Plans, and SIMPLE Plans. An account
established for the Funds' Class D shares will also be exempt from the Funds'
minimum and subsequent purchase requirements. In addition, the Funds reserve the
right to waive their minimum purchase requirements.
Additional investments may be made at any time by sending a check payable to the
Funds along with an investment stub found at the bottom of the Funds'
Shareholder Statement form. If the stub is not available, you may send a check
payable to the "DLJ Mutual Funds" directly to the Transfer Agent at the address
listed above. Please reference the account number to be credited on the check,
as well as the Fund you have selected to purchase.
Selling Shares of the Money Funds
or Class A, Class B or Class C shares of the Other DLJ Mutual Funds
Will you be requesting a redemption of your holdings in the DLJ Mutual Funds
through the Funds' Telephone Redemption Privilege?
Yes.
Call 1-800-225-8011 to sell your shares. Requests for redemptions of more than
$50,000 must be made in writing and be accompanied by a signature guarantee.
(A "signature guarantee" is a signature guaranteed by an eligible bank, broker,
dealer, credit union, national securities exchange, registered securities
association, clearing agency or savings association.)
Remember, the DLJ Mutual Funds require a minimum account size of $250.
No.
For shares held at the Fund, write to the Fund at:
DLJ Mutual Funds
PFPC, Inc. P.O. Box 61503
(211 S. Gulph Road)*
King of Prussia, PA 19406-3101
Remember, any account that has less than $250, the Fund may redeem.
* For overnight delivery.
46
<PAGE>
For shares purchased through a broker-dealer: call your broker or securities
dealer representative.
Your redemption will be processed at the net asset value per share, next
computed following the receipt of your request in proper form. If you own Class
B or Class C shares or purchased Class A shares without paying an initial sales
charge, any applicable CDSC will be applied to the net asset value and deducted
from your redemption. The value of your shares may be more or less than your
investment depending on the net asset value of your Fund on the day you redeem.
The DLJ Mutual Funds have a minimum account size of $250. You may be requested
to increase your balance if it falls below $250. The Funds reserve the right to
close such account and send the proceeds to you. A Fund will not redeem
involuntarily any shareholder account with an aggregate balance of less than
$250 based solely on the market movement of such Fund's shares.
For information concerning circumstances in which redemptions may be effected
through the delivery of in-kind portfolio securities, see your Statement of
Additional Information.
Purchasing additional shares
Decide if you are making additional purchases by mail, wire, or automatic
investment. If using mail or wire, please check to make sure funds meet the
$25.00 minimum.
By Mail:
Complete the investment stub found at the bottom of the Funds' shareholder
statement form, or if an investment stub is not available, reference on the
check the account number to be credited and the Fund you have selected to
purchase and mail to:
DLJ Mutual Funds
PFPC, Inc.
P.O. Box 61503
King of Prussia, PA. 19406-3101
By Wire:
Please call the Transfer Agent at 800-225-8011 (option #2) to notify them of the
impending wire.
Provide your bank with funds and with the following information:
Boston Safe Deposit & Trust
ABA #: 011001234
Credit: (Insert Name of Your Fund)
ACCT#: 006068
FBO (Shareholder name and account number)
Purchase should reference your name, account number, and name of Fund.
Automatic Investment Program:
The automatic investment program requires purchases of at least $25.00. Fill out
the application, designating the automatic investment option and provide your
bank information. The Fund automatically deducts payment from your account on a
regular basis.
47
<PAGE>
Provide your bank with funds and with the following information:
Boston Safe Deposit & Trust
ABA #:011001234
Credit: (Insert Name of Your Fund)
ACCT#: 006068
FBO (Shareholder name and account number)
Shares of the Money Funds or Class A, Class B or Class C shares of the other DLJ
Mutual Funds may be purchased directly by using the Share Purchase Application
found in the prospectus, or through CSAMSI, or by contacting your securities
dealer. Shareholders should read the prospectus carefully before investing in
the Funds.
The minimum initial investment in each Fund is $1,000. The minimum for
additional investments is $25. The minimum initial and minimum additional
investment may be waived for retirement accounts. There is a maximum purchase
limitation in the Funds' Class B shares of $250,000 and $1,000,000 in the Funds'
Class C shares. Each of the Funds, except the Money Funds, offers Class A, Class
B and Class C shares. Class A shares may be purchased at a price equal to net
asset value of the Fund plus an initial sales charge imposed at the time of
purchase. On a purchase of $1,000,000 or more, there is no initial sales charge,
but there could be a CDSC if the shares are redeemed within one year of
purchase. Class B shares may be purchased for net asset value, but may be
subject to a CDSC upon redemption. The CDSC declines from 4% during the first
year of purchase to zero after four years. Class B shares will convert to Class
A shares approximately eight years from the time of purchase. Class C shares may
be purchased for net asset value, but may be subject to a 1% CDSC if redeemed in
the first year. Class R shares are available for purchase by eligible
institutions on behalf of their clients. The Advisor Class shares of the DLJ
Growth and Income Series are available for purchase through certain eligible
institutions and financial services firms. Class D shares are offered
exclusively to employees of Credit Suisse First Boston and its subsidiaries that
are eligible to participate in the Credit Suisse First Boston Employee Savings
and Profit Sharing Plan. These employees should contact the CSFB Hotline at [ ]
to learn how to purchase Class D shares. Shares of the Money Funds may be
purchased at a price equal to the net asset value per share which is expected to
be $1.00.
OTHER SHAREHOLDER INFORMATION
Classes of Shares and Sales Charges
The DLJ Mutual Funds, except the Money Funds, offer Class A shares, Class B
shares and Class C shares to the general public. Class R shares are offered to
eligible institutions on behalf of their clients. The Advisor Class shares of
the DLJ Growth and Income Series are available for purchase through certain
eligible institutions and financial services firms. Class D shares are offered
exclusively to employees of Credit Suisse First Boston and its subsidiaries who
are eligible to participate in the Credit Suisse First Boston Employee Savings
and Profit Sharing Plan. Class D shares are only offered by the DLJ Core Equity
Fund, the DLJ Growth and Income Fund, the DLJ Technology Fund, the DLJ Fixed
Income Fund, the DLJ High Income Fund and the DLJ International Equity Fund.
Shares held in each Fund are normally entitled to one vote (with proportional
voting for fractional shares) for all purposes.
Each class is identical in all respects except that each class bears different
distribution service fees (except for Class D shares, which are not subject to
any distribution service fees and are offered only to a limited group of
investors). Each class has different exchange privileges and only Class B shares
have a conversion feature. Class A, Class B, Class C, Class R and Advisor Class
Shareholders have exclusive voting rights relating to their respective class's
12b-1 Plan.
Class A Shares
[side bar]
48
<PAGE>
Offering Price:
The offering price for Class A shares (with a sales charge) is NAV plus the
applicable sales charge (unless you are entitled to a waiver).
[end side bar]
The offering price for Class A shares of the Funds is the net asset value plus
the applicable sales charge from the schedule below.
INITIAL SALES CHARGE-CLASS A
<TABLE>
<CAPTION>
DLJ Fixed Income Funds (1)
-------------------------------------------------------------------------------------------------------------
Commission to
As a % of Amount Dealer/Agent as a % of
Amount Purchased Invested As a % of Offering Price Offering Price
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.99% 4.75% 4.25%
-------------------------------------------------------------------------------------------------------------
$50,000 to less than 4.71% 4.50% 4.00%
$100,000
-------------------------------------------------------------------------------------------------------------
$100,000 to less than 3.63% 3.50% 3.25%
$250,000
-------------------------------------------------------------------------------------------------------------
$250,000 to less than 2.56% 2.50% 2.25%
$500,000
-------------------------------------------------------------------------------------------------------------
$500,000 to less than 2.04% 2.00% 1.75%
$1,000,000
-------------------------------------------------------------------------------------------------------------
$1,000,000 or more 0 0 1.00%*
-------------------------------------------------------------------------------------------------------------
<CAPTION>
DLJ Equity Funds (2)
-------------------------------------------------------------------------------------------------------------
Commission to
As a % of Amount Dealer/Agent as a % of
Amount Purchased Invested As a % of Offering Price Offering Price
-------------------------------------------------------------------------------------------------------------
Less than $50,000. 6.10% 5.75% 5.00%
-------------------------------------------------------------------------------------------------------------
$50,000 to less than 4.99% 4.75% 4.00%
$100,000
-------------------------------------------------------------------------------------------------------------
$100,000 to less than 3.90% 3.75% 3.00%
$250,000.
-------------------------------------------------------------------------------------------------------------
$250,000 to less than 2.56% 2.50% 2.00%
$500,000.
-------------------------------------------------------------------------------------------------------------
$500,000 to less than 2.04% 2.00% 1.75%
$1,000,000
-------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The DLJ Fixed Income Funds include the DLJ Fixed Income Fund, the DLJ
Municipal Trust Fund and the DLJ High Income Fund.
(2) The DLJ Equity Funds include the DLJ Core Equity Fund, the DLJ Growth and
Income Fund, the DLJ Small Company Value Fund, the DLJ Strategic Growth
Fund, the DLJ Technology Fund, the DLJ Developing Markets Fund and the DLJ
International Equity Fund.
*On purchases of $1,000,000 or more, there is no initial sales charge although
there could be a Limited CDSC (as described below). The Distributor may pay the
dealer a fee of up to 1% as follows: 1% on purchases up to and including $3
million, .50% on the next $47 million, .25% on purchases over $50 million. In
addition, Class A shares issued upon conversion of Class B shares of the Funds
are not subject to an initial sales charge.
49
<PAGE>
From time to time, the Distributor may re-allow the full amount of the sales
charge to brokers as a commission for sales of such shares.
In addition, investors may be charged a fee by a securities dealer if they
effect transactions through a broker or agent.
The initial sales charge is waived for the following shareholders or
transactions:
(1) investment advisory clients of the Adviser;
(2) officers, Trustees and retired Trustees of the Funds, directors or trustees
of other investment companies managed by the Adviser, officers, directors and
full-time employees of the Adviser and of its wholly-owned subsidiaries or
parent entities ("Related Entities"); or the spouse, siblings, children, parents
or grandparents of any such person or any such person's spouse (collectively,
"relatives"), or any trust or individual retirement account or self-employed
retirement plan for the benefit of any such person or relative; or the estate of
any such person or relative, if such sales are made for investment purposes
(such shares may not be resold except to the Funds);
(3) certain employee benefit plans for employees of the Advisers and Related
Entities;
(4) full-time employees of the Funds' Transfer Agent or an entity that provides
distribution to the Funds, an agent or broker of a dealer that has a sales
agreement with the Distributor, for their own account or an account of a
relative of any such person, or any trust or individual retirement account or
self-employed retirement plan for the benefit of any such person or relative; or
the estate of any such person or relative, if such sales are made for investment
purposes (such shares may not be resold except to the Funds);
(5) shares purchased by registered investment advisers on behalf of fee-based
accounts or by broker-dealers that have sales agreements with the Funds and for
which shares have been purchased on behalf of wrap fee client accounts and for
which such registered investment advisers or broker-dealers perform advisory,
custodial, record keeping or other services;
(6) shareholders who received shares in the DLJ Mutual Funds as a result of the
merger of Neuwirth Fund, Inc., Pine Street Fund, Inc. or deVegh Mutual Fund,
Inc., and who have maintained their investment in such shares;
(7) shares purchased for 401(k) Plans, 403(b) Plans and 457 Plans; and employee
benefit plans sponsored by an employer; non-U.S. nationalized pension plans; and
(8) Class B shares which are automatically converted to Class A shares.
Reduced sales charges are available to participants in the following programs:
Letter of Intent. By initially investing at least $1,000 and submitting a Letter
of Intent to the Funds' Distributor or Transfer Agent, you may purchase shares
of a DLJ Mutual Fund over a 13-month period at the reduced sales charge, which
applies, to the aggregate amount of the intended purchases stated in the Letter.
The Letter only applies to purchases made up to 90 days before the date of the
Letter.
Right of Accumulation. For investors who already have an account with the Funds,
reduced sales charges based upon the Funds' sales charge schedules are
applicable to subsequent purchases. The sales charge on each additional purchase
is determined by adding the current net asset value of the shares the investor
currently owns to the amount being invested. The Right of Accumulation is
illustrated by the following example: If a previous purchase currently valued in
the amount of $50,000 had been made subject to a sales charge and the shares are
still held, a current purchase of $50,000 will qualify for a reduced sales
charge (i.e., the sales charge on a $100,000 purchase).
50
<PAGE>
The reduced sales charge is applicable only to current purchases. It is the
investor's responsibility to notify the Transfer Agent at the time of subsequent
purchases that the account is eligible for the Right of Accumulation.
Concurrent Purchases. To qualify for a reduced sales charge, you may combine
concurrent purchases of shares purchased in any DLJ Mutual Fund. For example, if
the investor concurrently invests $25,000 in one Fund and $25,000 in another,
the sales charge would be reduced to reflect a $50,000 purchase. In order to
exercise the Concurrent Purchases privilege, the investor must notify the
Distributor or Transfer Agent prior to his or her purchase.
Combined Purchase Privilege. By combining the investor's holdings of shares in
any DLJ Mutual Fund, the investor can reduce the initial sales charges on any
additional purchases of Class A shares. The investor may also use these
combinations under a Letter of Intent. This allows the investor to make
purchases over a 13-month period and qualify the entire purchase for a reduction
in initial sales charges on Class A shares. A combined purchase of $1,000,000 or
more may trigger the payment of a dealer's commission and the applicability of a
Limited CDSC. See "Other Shareholder Information - Class A Limited CDSC."
Reinstatement Privilege. The Reinstatement Privilege permits shareholders to
reinvest the proceeds provided by a redemption of a Fund's Class A shares within
120 days from the date of redemption without an initial sales charge. It is the
investor's responsibility to notify the Transfer Agent prior to his or her
purchase in order to exercise the Reinstatement Privilege. In addition, a CDSC
paid to the Distributor will be eligible for reimbursement at the current net
asset value of the applicable Fund if a shareholder reinstates his Fund account
holdings within 120 days from the date of redemption.
Class B Shares
You may choose to purchase Class B shares at the Fund's net asset value although
such shares may be subject to a CDSC when you redeem your investment. The CDSC
does not apply to investments held for more than four years or shares received
pursuant to dividend reinvestment.
Where the CDSC is imposed, the amount of the CDSC will depend on the number of
years that you have held the shares according to the table on this page. The
CDSC will be assessed on an amount equal to the lesser of the then current net
asset value or the original purchase price of the shares identified for
redemption.
[sidebar]
Year after Purchase CDSC Percentage
1st 4%
2nd 3%
3rd 2%
4th 1%
After 4th year None
[end sidebar]
The CDSC on Class B shares will be waived for the following shareholders or
transactions:
(1) shares received pursuant to the exchange privilege which are currently
exempt from a CDSC;
(2) redemptions as a result of shareholder death or disability (as defined in
the Internal Revenue Code of 1986, as amended);
(3) redemptions made pursuant to a DLJ Mutual Fund's systematic withdrawal plan
pursuant to which up to 1% monthly or 3% quarterly of an account (excluding
dividend reinvestments) may be withdrawn, provided that no more than 12% of the
total market value of an account may be withdrawn over any 12 month period.
Shareholders who elect systematic withdrawals on a semi-annual or annual basis
are not eligible for the waiver; and
51
<PAGE>
(4) liquidations, distributions or loans from the following types of retirement
plan accounts:
o Section 401(k) retirement Plans;
o Section 403(b) Plans; or
o Section 457 Plans; and
(5) A total or partial redemption related to certain distributions from
retirement plans or accounts at age 70 1/2, which are permitted without penalty
pursuant to the Internal Revenue Code.
Redemptions effected by the Funds pursuant to their right to liquidate a
shareholder's account with a current net asset value of less than $250 will not
be subject to the CDSC. In addition, Class B shares held for eight years after
purchase will be automatically converted in Class A shares and accordingly will
no longer be subject to the CSDC.
Class A Limited CDSC. A Limited Contingent Deferred Sales Charge ("Limited
CDSC") will be imposed by the Funds upon certain redemptions of Class A shares
(or shares into which such Class A shares are exchanged) made within 12 months
of purchase, if such purchases were made at net asset value and triggered the
payment by the Distributor of the dealer's commission described above (i.e.,
purchases of $1,000,000 or more).
The Limited CDSC will be paid to the Distributor and will be equal to the lesser
of 1% of:
o the net asset value at the time of purchase of the Class A shares being
redeemed; or
o the net asset value of such Class A shares at the time of redemption.
For purposes of this formula, the "net asset value at the time of purchase" will
be the net asset value at the time of purchase of such Class A shares even if
those shares are later exchanged, and in the event of an exchange of such Class
A shares, the "net asset value of such shares at the time of redemption" will be
the net asset value of the shares into which the Class A shares have been
exchanged. The Limited CDSC on Class A shares will be waived on redemptions made
pursuant to a DLJ Mutual Fund's systematic withdrawal plan under the same
circumstances as outlined in item (3) above related to the waiver of the CDSC on
Class B shares.
Class C Shares
You may choose to purchase Class C shares at the Fund's net asset value,
although such shares will be subject to a 1% CDSC if you redeem your shares
within 1 year. If you exchange your shares for Class C shares of another DLJ
Mutual Fund, the 1% CDSC also will apply to those Class C shares. The 1 year
period for the CDSC begins with the date of your original purchase, not the date
of the exchange for the other Class C shares. The 1% CDSC on Class C shares will
be waived under the circumstances that would result in a waiver of the CDSC on
Class B shares.
Class D Shares
Class D shares are offered only to employees of Credit Suisse First Boston and
its subsidiaries who are eligible to participate in the Credit Suisse First
Boston Employee Savings and Profit Sharing Plan. Class D shares are not subject
to any sales charges or distribution fees. These employees should contact the
CSFB 401(k) Hotline at [ ] to learn how to purchase Class D shares.
Class R Shares
Class R shares are offered only to eligible institutions who purchase shares on
behalf of their clients and are not available to individual investors directly.
Class R shares are not subject to any initial or contingent
52
<PAGE>
deferred sales charge, but there is a distribution fee of .25% of average daily
net assets. Institutions may charge direct fees in connection with transactions
related to Class R shares.
Advisor Class Shares
Advisor Class shares of the DLJ Growth and Income Series are available for
purchase through certain institutions and financial services firms and are not
available to individual investors directly. These shares will be offered without
a front end sales load or a contingent deferred sales charge but will be charged
a shareholder service fee payable at an annual rate of up to .25%, and a
distribution and/or administrative services fee payable at an annual rate of up
to .50% of the average daily net assets of such class. The aggregate
distribution and/or shareholder services fee payable by the Advisor Class may
not exceed .75% of the average daily net assets relating to that class. The
Board of Trustees is currently limiting the amount payable to .50 of 1% of the
average daily net assets relating to that class. Payments may be made to an
institution directly out of assets of the Fund attributable to the class or by
the Distributor on the Fund's behalf. The Distributor, the Adviser or their
affiliates may make additional payments to institutions for providing
distribution, administrative, accounting and/or other services with respect to
Advisor Class shares. Under certain circumstances, the Fund, on behalf of the
Series, may reimburse a portion of these payments.
ADDITIONAL SHAREHOLDER SERVICES
Exchange Privilege. You may exchange shares of a Fund for shares offered under
the same class of another DLJ Mutual Fund. Shareholders whose initial investment
was directly into a Money Fund may exchange such shares for either Class A,
Class B, Class C, Class R of another DLJ Mutual Fund. Shares of each Money Fund
purchased pursuant to the DLJ Mutual Funds' exchange privilege will be eligible
for exchange into another DLJ Mutual Fund provided that the exchange is directed
into the same class of shares upon which the initial investment was made.
Shareholders whose initial investment was invested directly into a Money Fund
will, upon an exchange request, automatically be exchanged into Class A shares
of the requested Fund (unless otherwise indicated on the purchase application or
by written notice). You should be aware that for federal income tax purposes an
exchange is treated as a sale and a purchase of shares which may result in
recognition of a gain or loss.
The following privileges are provided by the Transfer Agent and do not apply to
Class D, Class R or Advisor Class shares:
Automatic Monthly Investment Plan. You may elect on the Application to make
additional investments in a Fund automatically by authorizing DLJ to withdraw
funds from your bank or other cash account and purchase additional shares with
those funds. You select the date (either the 10th, 15th or 20th of each month)
and amount (subject to a minimum of $25). The plan may be terminated at any time
without penalty by you or the Fund.
Automatic Exchange Plan. You may authorize the DLJ Mutual Funds in advance to
exchange a set dollar amount of shares in one Fund for shares of the same class
of another Fund or for shares of the Money Funds on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum
exchange amount under the Automatic Exchange Plan is $50. These exchanges are
subject to the terms of the Exchange Privilege described above.
Dividend Direction Option. A shareholder may elect on the Application to have
his or her dividends paid to another individual or directed for reinvestment
within the same class of another Fund provided that an existing account in such
other Fund is maintained by the shareholder.
Systematic Withdrawal Plan. Any shareholder who owns or purchases shares of a
Fund having a current net asset value of at least $10,000 may establish a
Systematic Withdrawal Plan under which the shareholder or a third party will
receive payment by check in a stated amount of not less than $50 on a monthly,
quarterly, semi-annual or annual basis. A CDSC which may otherwise be imposed on
a redemption will be
53
<PAGE>
waived in connection with redemptions made pursuant to DLJ Mutual Funds'
Systematic Withdrawal Plan up to 1% monthly or 3% quarterly of an account
(excluding dividend reinvestment) not to exceed 12% over any 12 month rolling
period. Systematic withdrawals elected on a semi-annual or annual basis are not
eligible for the waiver.
Checkwriting Privileges. Shareholders of the Money Funds may redeem shares by
writing checks of at least $100 against their account balance. Investments in
the Money Funds will continue to earn dividends until a shareholder's check is
presented to the Money Funds for payment. Checks will be returned by the
Transfer Agent if there are insufficient shares to meet the withdrawal amount.
You should not attempt to close an account by check because the exact balance at
the time the check clears will not be known when the check is written. There is
currently no charge to shareholders for checkwriting, but the Money Funds
reserve the right to impose a charge in the future. The Money Funds may modify,
suspend or terminate checkwriting privileges at any time upon notice to
shareholders and will terminate checkwriting privileges without notice for
accounts whose assets are exchanged completely out of the Money Funds. In
addition, Boston Safe Deposit & Trust., as agent for the Transfer Agent in
processing redemptions via the checkwriting privilege, reserves the right to
terminate checkwriting privileges at any time without notice to you.
Checkwriting privileges are not available for accounts subject to a CDSC.
Retirement Plans. DLJ Mutual Funds offer a range of qualified retirement plans
including Traditional, Educational and Roth IRAs, SEPs, SIMPLE plans and other
pension and profit sharing plans. Semper Trust Company serves as custodian under
these prototype retirement plans and charges an annual account maintenance fee
of $15 per participant, regardless of the number of Funds selected. For more
information you should write or telephone the Transfer Agent at 1-800-225-8011.
For a more detailed explanation of the retirement plans offered by the Funds,
see each Fund's Statement of Additional Information.
Additional information concerning shareholder services is available by
contacting the Funds at the address or telephone number listed on the last page
of this Prospectus.
THE FUNDS DO NOT PERMIT MARKET-TIMING. DO NOT INVEST IN THESE FUNDS IF YOU ARE A
MARKET-TIMER. CSAMSI RESERVES THE RIGHT TO IMPOSE SHORT-TERM REDEMPTION FEES TO
DISCOURAGE MARKET-TIMING IN THE FUNDS.
DISTRIBUTION CHARGES
Each Fund has adopted 12b-1 Plans pursuant to the rules of the 1940 Act. These
plans allow each Fund to collect distribution and service fees for the sale and
servicing of the individual classes of each Fund's shares. Since these fees are
paid out of each Fund's assets on an on-going basis, over time these fees will
increase the cost of your investment. These fees may cost you more than paying
other types of sales charges. Effective as of the date of this Prospectus, the
limitation on annual distribution and service fees for Class A shares of the DLJ
Core Equity Fund, DLJ Growth and Income Fund, DLJ Small Company Value Fund, DLJ
Fixed Income Fund and DLJ Municipal Trust Fund has been reduced from 0.30% to
0.25% and the limitation on annual distribution and service fees for the Advisor
Class of the DLJ Growth and Income Fund has been reduced from 0.75% to 0.50%.
The Funds do not pay any of the expenses for distributing Class D shares.
[side bar]
Distribution and Service Fees:
Distribution and service fees are used to pay the Distributor to promote the
sale of shares and the servicing of accounts of each Fund.
The expenses incurred by the Distributor under the 12b-1 Plans include the
preparation, printing and distribution of prospectuses, sales brochures and
other promotional materials sent to prospective shareholders. They also include
purchasing radio, television, newspaper and other advertising and
54
<PAGE>
compensating the Distributor's employees or employees of the Distributor's
affiliates for their distribution assistance.
Distribution fees also allow the Distributor to compensate broker/dealers or
other persons or entities for providing distribution assistance, as well as
financial intermediaries for providing administrative and accounting services
for their account holders. In addition to commissions and maintenance fees paid
to broker/dealers the Distributor may from time to time pay additional
compensation to broker/dealers in connection with the sale of shares. Such
additional amounts may be utilized to provide additional compensation to
registered representatives of such broker/dealers who sell shares of the Fund.
On some occasions, such compensation will be conditioned on the sale of a
specified minimum dollar amount of the shares of the Funds during a specific
period of time. Such incentives may take the form of payment for meals,
entertainment, or attendance at educational seminars and associated expenses
such as travel and lodging. Such broker/dealers may elect to receive cash
incentives of equivalent amounts in lieu of such payments.
[end side bar]
DIVIDEND AND DISTRIBUTION INFORMATION
Dividends are declared daily and paid monthly to shareholders of the Money
Funds, the DLJ Fixed Income Fund, the DLJ Municipal Trust Fund and the DLJ High
Income Fund from net investment income. Dividends are paid to shareholders of
the DLJ Growth and Income Fund quarterly, if net investment income has been
earned, and to shareholders of the DLJ Core Equity Fund, the DLJ Small Company
Value Fund, the DLJ Strategic Growth Fund, the DLJ Technology Fund and the
International Funds once a year. Capital gains earned in any of the Funds are
normally distributed to shareholders once a year. For purposes of this
calculation, net investment income consists of all accrued interest income on
Fund assets less the Fund expenses applicable to that dividend period.
For your convenience, dividends and capital gains are automatically reinvested
in your Fund. If you ask us to pay the distributions in cash, the Fund will send
you a check instead of purchasing more shares of your Fund. You will receive a
confirmation that shows the payment amount and a summary of all transactions.
Checks are normally mailed within five business days of the payment date.
TAXES
As with any investment, you should consider how your investment in the Funds
will be taxed. If your account is not a tax-deferred retirement account, you
should be aware of these tax consequences. For federal income tax purposes, a
Fund's income and short-term capital gain distributions are taxed as ordinary
income. Long-term capital gain distributions are taxed as long-term capital
gains. Your distributions may also be subject to state and local income taxes.
The distributions are taxable when they are paid, whether you receive them in
cash or participate in the dividend reinvestment program. Each January, your
Fund will mail you a form indicating the federal tax status of your dividend and
capital gain distributions. For individuals, long-term capital gains are
generally subject to a maximum tax rate of 20%. If you hold shares in a
tax-deferred retirement account, your distributions will be taxed when you
receive a distribution from your tax-deferred account.
Distributions to shareholders of tax-exempt interest income earned by the DLJ
Municipal Trust Fund and the DLJ Municipal Money Fund are not subject to federal
income tax if, at the close of each quarter of each Fund's taxable year, at
least 50% of the value of each Fund's total assets consists of tax-exempt
obligations. Both Funds intend to meet this requirement. Because the DLJ
Municipal Trust Fund and DLJ Municipal Money Fund can invest in taxable
municipal bonds and other taxable securities as well as tax-exempt municipal
bonds, the portion of their dividends exempt from or subject to regular federal
income taxes cannot be predicted. In addition, these distributions may also be
subject to state and local taxes.
If you are subject to the AMT, you should be aware that a portion of the
distributions out of tax-exempt interest earned by the DLJ Municipal Trust Fund
and the DLJ Municipal Money Fund may be taxable.
55
<PAGE>
When you redeem your shares, the tax treatment of any gains or losses may be
affected by the length of time for which you hold your shares.
As a shareholder, you must provide your Fund with a correct taxpayer
identification number (generally your Social Security number) and certify that
you are not subject to backup withholding. If you fail to do so, the IRS can
require your Fund to withhold 31% of your taxable distributions and redemptions.
Federal law also requires your Fund to withhold 30% or the applicable tax treaty
rate from dividends paid to certain non-resident alien, non-U.S. partnership and
non-U.S. corporation shareholder accounts.
Please see the Statement of Additional Information for your Fund for more
information on the tax consequences of your investment. You should also consult
your own tax adviser for further information.
[side bar]
The Taxpayer Relief Act of 1997:
The Taxpayer Relief Act of 1997 made certain changes to capital gains tax rates.
Under this law, certain taxpayers will pay a lower tax rate when it comes to
capital gains.
The Fund will provide information relating to the portion of any Fund
distribution that is eligible for the reduced capital gains tax rate.
[end side bar]
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand your Fund's
financial performance for the past 5 years (or, if shorter, the period of the
Fund's operations.) Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the indicated Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by Ernst & Young LLP, the Funds' independent auditors, whose unqualified
reports, along with the Funds' financial statements, are included in the
Statements of Additional Information, which are available upon request.
Additional information about the performance of the Funds is contained in each
Fund's annual report to shareholders, which may be obtained without charge.
Prior to February 28, 1996, the Focus Funds offered only a single class of
shares. Accordingly, the data presented below with respect to Class A shares of
the Focus Funds for periods prior to such date have been obtained from the
financial statements for the Focus Funds' sole class of shares outstanding
during such prior fiscal years.
<TABLE>
<CAPTION>
Net Asset Net Realized and
Value Unrealized Total from Dividends from Distributions
Beginning of Net Investment Gains/(Losses) on Investment Net Investment from Capital
Period Income/(Loss) Securities Operations Income Gains
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DLJ CORE EQUITY FUND
CLASS A
Year Ended October
31, 2000
Year Ended October 16.52 (0.03)* 5.04 5.01 - (0.26)
31, 1999
Year Ended October 14.56 (0.00)* @ 2.88 2.88 (0.02) (0.90)
31, 1998
Year Ended October 12.69 0.03 3.07 3.10 (0.05) (1.18)
31, 1997
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Net Asset Net Realized and
Value Unrealized Total from Dividends from Distributions
Beginning of Net Investment Gains/(Losses) on Investment Net Investment from Capital
Period Income/(Loss) Securities Operations Income Gains
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended October 11.35 0.05 2.11 2.16 (0.04) (0.78)
31, 1996
CLASS B
Year Ended October
31, 2000
Year Ended October 16.25 (0.17)* 4.93 4.760 - (0.260)
31, 1999
Year Ended October 14.41 (0.12)* 2.86 2.74 - (0.90)
31, 1998
Year Ended October 12.63 (0.03) 3.02 2.99 (0.03) (1.18)
31, 1997
Year Ended October 11.88 (0.01) 0.76 0.75 - -
31, 1996+
CLASS C
Year Ended October
31, 2000++++
CLASS D
Year Ended October
31, 2000
Year Ended October
31, 1999++ 20.29 0.01* 0.97 0.98 - -
CLASS R
Year Ended October
31, 2000++++++
----------------------------------------------------------------------------------------------------------------------
DLJ GROWTH AND INCOME FUND
CLASS A
Year Ended October
31, 2000
Year Ended October 22.60 0.12* 2.87 2.99 (0.09) (2.01)
31, 1999
Year Ended October 20.09 0.20* 3.51 3.71 (0.17) (1.03)
31, 1998
Year Ended October 17.18 0.21 4.59 4.80 (0.21) (1.68)
31, 1997
Year Ended October 14.57 0.27 2.93 3.20 (0.24) (0.35)
31, 1996
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
Net Asset Net Realized and
Value Unrealized Total from Dividends from Distributions
Beginning of Net Investment Gains/(Losses) on Investment Net Investment from Capital
Period Income/(Loss) Securities Operations Income Gains
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Year Funded
October 31 2000
Year Ended October 22.55 (0.04)* 2.88 2.84 (0.01) (2.01)
31, 1999
Year Ended October 20.06 0.04* 3.50 3.54 (0.02) (1.03)
31, 1998
Year Ended October 17.15 0.08 4.58 4.66 (0.07) (1.68)
31, 1997
Year Ended October 16.05 0.14 1.11 1.25 (0.15) -
31, 1996+
CLASS C
Year Ended October
31, 2000++++
CLASS D
Year Ended October
31, 2000
Year Ended October
31, 1999+++ 23.73 0.10* (0.26) (0.16) (0.07) -
CLASS R
Year Ended
October 31,
2000+++++
----------------------------------------------------------------------------------------------------------------------
DLJ SMALL COMPANY VALUE FUND
CLASS A
Year Ended October
31, 2000
Year Ended October 19.54 0.06* 1.01 1.07 (.07) (0.02)
31, 1999
Year Ended October 23.34 0.07* (2.55) (2.48) (0.06) (1.26)
31, 1998
Year Ended October 18.41 0.07 5.66 5.73 (0.08) (0.72)
31, 1997
Year Ended October 16.61 0.09 2.16 2.25 (0.04) (0.41)
31, 1996
CLASS B
Year Ended October
31, 2000
Year Ended
October 31,
1999 19.23 (0.14)* 1.06 0.92 - (0.02)
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
Net Asset Net Realized and
Value Unrealized Total from Dividends from Distributions
Beginning of Net Investment Gains/(Losses) on Investment Net Investment from Capital
Period Income/(Loss) Securities Operations Income Gains
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended October
31, 1998 23.12 (0.09)* (2.55) (2.64) - (1.25)
Year Ended October
31, 1997 18.34 (0.02) 5.57 5.55 (0.05) (0.72)
Year Ended October
31, 1996+ 17.41 (0.02) 0.95 0.93 - -
CLASS C
Year Ended October
31, 2000++++
CLASS R
Year Ended October
31, 2000+++++
----------------------------------------------------------------------------------------------------------------------
DLJ STRATEGIC GROWTH FUND
CLASS R
Year Ended October
31, 2000++++++
CLASS A
Year Ended October
31, 2000+++++++
CLASS B
Year Ended October
31, 2000+++++++
CLASS C
Year Ended October
31, 2000+++++++
----------------------------------------------------------------------------------------------------------------------
DLJ TECHNOLOGY FUND
CLASS R
Year Ended October
31, 2000++++++
CLASS A
Year Ended October
31, 2000+++++++
CLASS B
Year Ended October
31, 2000+++++++
CLASS C
Year Ended October
31, 2000+++++++
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
Net Asset Net Realized and
Value Unrealized Total from Dividends from Distributions
Beginning of Net Investment Gains/(Losses) on Investment Net Investment from Capital
Period Income/(Loss) Securities Operations Income Gains
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS D
Year Ended October
31, 2000++++++++
----------------------------------------------------------------------------------------------------------------------
DLJ FIXED INCOME FUND
CLASS A
Year Ended October
31, 2000
Year Ended October
31, 1999 10.46 0.50 (0.53) (0.03) (0.50) (0.10)
Year Ended October
31, 1998 10.16 0.53 0.30 0.83 (0.53) -
Year Ended October
31, 1997 10.07 0.58 0.09 0.67 (0.58) -
Year Ended October
31. 1996 10.22 0.58 (0.15) 0.43 (0.58) -
CLASS B
Year Ended October
31, 2000
Year Ended October
31, 1999 10.46 0.43 (0.53) (0.10) (0.43) (0.10)
Year Ended October
31, 1998 10.16 0.46 0.30 0.76 (0.46) -
Year Ended October
31, 1997 10.07 0.50 0.09 0.59 (0.50) -
Year Ended
October 31,1996+ 10.22 0.34 (0.15) 0.19 (0.34) -
CLASS C
Year Ended October
31, 2000++++
CLASS D
Year Ended October
31, 2000
Year Ended October
31, 1999+++ 10.09 0.26 (0.26) 0.00 (0.26) -
CLASS R
Year Ended October
31, 2000+++++
----------------------------------------------------------------------------------------------------------------------
</TABLE>
60
<PAGE>
+ For the period February 28, 1996 (commencement of offering of Class B
shares) to October 31, 1996.
++ For the period May 13,1999 (commencement of offering Class D shares)
to October 31, 1999.
+++ For the period April 30, 1999 (commencement of offering Class D
shares) to October 31, 1999.
++++ For the period February 28, 2000 (commencement of offering Class C
shares) to October 31, 2000.
+++++ For the period August 1, 2000 (commencement of offering Class R shares
by all Funds except DLJ Strategic Growth Fund and DLJ Technology Fund)
to October 31, 2000.
++++++ For the period November 18, 1999 (commencement of operations) to
October 31, 2000.
+++++++ For the period August 1, 2000 (the commencement of offering of Class
A, Class B and Class C shares by the DLJ Strategic Growth Fund and DLJ
Technology Fund) to October 31, 2000.
++++++++ For the period September 1, 2000 (the commencement of offering of
Class D shares of the DLJ Technology Fund) to October 31, 2000.
* Based on average shares outstanding.
** Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestments of all dividends
and distributions at net asset value during the period, and redemption on
the last day of the period. An initial sales charge or contingent deferred
sales charge is not reflected in the calculation of total return.
@ Rounds to less than $0.01.
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Net Asset Net Assets End Expenses to Investment Income
Value End of Total of Period (000 Average Net (Loss) to Average Portfolio
Total Distributions Period Return** omitted) Assets (2) Net Assets (2) Turnover Rate
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(0.26) 21.27 30.77 135,677 1.23 (0.16) 34.7
(0.92) 16.52 21.00 97,078 1.29 (0.02) 21.0
(1.23) 14.56 26.48 82,926 1.36 0.21 41.1
(0.82) 12.69 20.32 68,096 1.48 0.47 60.6
(0.26) 20.75 29.73 32,783 1.93 (0.86) 34.7
(0.90) 16.25 20.20 17,438 1.99 (0.72) 21.0
(1.21) 14.41 25.66 10,378 2.06 (0.51) 41.1
- 12.63 6.40 3,177 2.17(1) (0.34)(1) 60.6
</TABLE>
61
<PAGE>
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Net Asset Net Assets End Expenses to Investment Income
Value End of Total of Period (000 Average Net (Loss) to Average Portfolio
Total Distributions Period Return** omitted) Assets (2) Net Assets (2) Turnover Rate
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- 21.27 4.83 4,839 1.17(1) 0.07(1) 34.7
----------------------------------------------------------------------------------------------------------------------
(2.10) 23.49 14.37 174,213 1.11 0.52 24.5
(1.20) 22.60 19.14 163,936 1.13 0.92 32.7
(1.89) 20.09 30.53 145,586 1.22 1.15 19.8
(0.59) 17.18 22.60 113,803 1.36 1.68 44.0
(2.02) 23.37 13.66 41,144 1.81 (0.18) 24.5
(1.05) 22.55 18.29 33,325 1.83 0.22 32.7
(1.75) 20.06 29.59 19,664 1.92 0.39 19.8
(0.15) 17.15 7.67 6,545 1.99(1) 1.06(1) 44.0
- 23.49 - 44,670 0.79(1) (1) -
(0.07) 23.50 (0.67) 48,152 0.97(1) 0.99(1) 24.5
----------------------------------------------------------------------------------------------------------------------
(0.09) 20.52 5.47 188,192 1.37 0.33 29.6
(1.32) 19.54 (11.20) 237,873 1.29 0.30 41.5
(0.80) 23.34 32.48 283,001 1.35 0.37 21.1
(0.45) 18.41 13.80 227,716 1.47 0.48 35.1
(0.02) 20.13 4.75 19,257 2.07 (0.71) 29.6
(1.25) 19.23 (11.98) 22,284 1.99 (0.40) 41.5
(0.77) 23.12 31.55 18,395 2.05 (0.32) 21.1
- 18.34 5.28 6,305 2.15(1) (0.34)(1) 35.1
----------------------------------------------------------------------------------------------------------------------
(0.60) 9.83 (0.26) 43,060 1.00 4.91 84.3
(0.53) 10.46 8.46 47,834 1.00 5.24 114.0
(0.58) 10.16 6.84 54,755 1.00 5.74 119.3
(0.58) 10.07 4.34 56,388 1.00 5.72 90.2
(0.53) 9.83 (0.97) 4,471 1.70 4.21 84.3
(0.46) 10.46 7.71 5,849 1.70 4.50 114.0
(0.50) 10.16 8.10 3,375 1.70 4.99 119.3
(0.34) 10.07 2.23 1,629 1.70(1) 5.03(1) 90.2
(0.26) 9.83 0.04 116,424 0.70(1) 6.30(1) 84.3
----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized
(2) See footnote (3) on page [51].
62
<PAGE>
<TABLE>
<CAPTION>
Net Net Realized
Net Asset Invest- and Unrealized Contri- Dividends Distri-
Value ment Gains/ bution Total from from Net butions
Beginning Income/ (Losses) on from Sub- Investment Investment from Capital Tax Return
of Period (Loss) Securities Advisor Operations Income Gains of Capital
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DLJ MUNICIPAL TRUST FUND
CLASS A
Year Ended October 31,
2000
Year Ended October 31,
1999 10.53 0.38 (0.48) - (0.10) (0.38) - -
Year Ended October 31,
1988 10.29 0.38 0.24 - 0.62 (0.38) - -
Year Ended October 31,
1997 10.01 0.45 0.28 - 0.73 (0.45) - -
Year Ended October 31,
1996 10.06 0.43 (0.05) - 0.38 (0.43) - -
CLASS B
Year Ended October 31,
2000
Year Ended October 31,
1999 10.53 0.31 (0.48) - (0.17) (0.31) - -
Year Ended October 31,
1998 10.29 0.32 0.24 - 0.56 (0.32) - -
Year Ended October 31,
1997 10.01 0.37 0.28 - 0.65 (0.37) - -
Year Ended October 31,
1996+ 10.12 0.25 (0.11) - 0.14 (0.25) - -
CLASS C
Year Ended October 31,
2000+++++
CLASS R
Year Ended October 31,
2000++++++
----------------------------------------------------------------------------------------------------------------------------------
DLJ INTERNATIONAL EQUITY FUND
CLASS A
Year Ended October 31,
2000
Year Ended October 31,
1999 12.20 (0.06)** 2.56 - 2.50 - (0.70) -
Year Ended October 31,
1998 11.42 (0.06)** 0.99 - 0.93 (0.06) (0.09) -
Year Ended October 31,
1997 10.38 (0.07)** 1.11 - 1.04 - - -
Year Ended October 31,
1996 9.58 (0.04)** 0.84 - 0.80 - - -
CLASS B
Year Ended October 31,
2000
Year Ended October 31,
1999 11.98 (0.15)** 2.50 - 2.35 - (0.70) -
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
Net Net Realized
Net Asset Invest- and Unrealized Contri- Dividends Distri-
Value ment Gains/ bution Total from from Net butions
Beginning Income/ (Losses) on from Sub- Investment Investment from Capital Tax Return
of Period (Loss) Securities Advisor Operations Income Gains of Capital
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended October 31,
1998 11.24 (0.15)** 0.98 - 0.83 - (0.09) -
Year Ended October 31,
1997 10.29 (0.15)** 1.10 - 0.95 - - -
Year Ended October 31,
1996 9.57 (0.13)** 0.85 - 0.72 - - -
CLASS C
Year Ended October 31,
2000+++++
CLASS D
Year Ended October 31,
2000
Year Ended October 31,
1999+++ 12.69 (0.14)** 1.47 - 1.33 - - -
CLASS R
Year Ended October 31,
2000++++++
----------------------------------------------------------------------------------------------------------------------------------
DLJ DEVELOPING MARKETS FUND
CLASS A
Year Ended October 31,
2000
Year Ended October 31,
1999 7.14 0.03** 2.58 0.23 2.84 (0.01) - (0.02)
Year Ended October 31,
1998 9.52 0.02** (2.40) - (2.38) - - -
Year Ended October 31,
1997 9.96 (0.02)** (0.40) - (0.42) - (0.02) -
Year Ended October 31,
1996 9.53 (0.01)** 0.44 - 0.43 - - -
CLASS B
Year Ended October 31,
2000
Year Ended
October 31, 1999 6.96 (0.03)** 2.50 0.23 2.70 - - -
Year Ended October 31,
1998 9.36 (0.04)** (2.36) - (2.40) - - -
Year Ended October 31,
1997 9.86 (0.19)** (0.29) - (0.48) - (0.02) -
Year Ended October 31,
1996 9.52 (0.08)** 0.42 - 0.34 - - -
CLASS C
Year Ended October 31,
2000+++++
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
Net Net Realized
Net Asset Invest- and Unrealized Contri- Dividends Distri-
Value ment Gains/ bution Total from from Net butions
Beginning Income/ (Losses) on from Sub- Investment Investment from Capital Tax Return
of Period (Loss) Securities Advisor Operations Income Gains of Capital
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS R
Year Ended October 31,
2000++++++
----------------------------------------------------------------------------------------------------------------------------------
DLJ MUNICIPAL MONEY FUND
Year Ended October 31,
2000
Year Ended
October 31, 1999 1.00 0.023 - - 0.023 (0.023) - -
Year Ended October 31,
1998 1.00 0.027 - - 0.027 (0.027) - -
Year Ended October 31,
1997*** 1.00 0.020 - - 0.020 (0.020) - -
----------------------------------------------------------------------------------------------------------------------------------
DLJ U.S. GOVERNMENT MONEY FUND
Year Ended October 31,
2000
Year Ended October 31,
1999 1.00 0.042 - - 0.042 (0.042) - -
Year Ended October 31,
1998 1.00 0.047 - - 0.047 (0.047) - -
Year Ended October 31,
1997*** 1.00 0.032 - - 0.032 (0.032) - -
----------------------------------------------------------------------------------------------------------------------------------
DLJ HIGH INCOME FUND
CLASS A
Year Ended October 31,
2000
Year Ended October 31,
1999++ 10.00 0.56 (0.34) - 0.22 (0.56) - -
CLASS B
Year Ended October 31,
2000
Year Ended October 31,
1999++ 10.00 0.50 (0.34) - 0.16 (0.50) - -
CLASS C
Year Ended October 31,
2000+++++
CLASS D
Year Ended October 31,
2000++++
Year Ended October 31,
1999++++ 10.23 0.41 (0.58) - (0.16) (0.41) - -
CLASS R
Year Ended October 31,
2000++++++
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE>
(a) Unaudited
** Based on average shares outstanding.
*** Commencement of operations for the DLJ Municipal Money Fund and the
DLJ U.S. Government Money Fund was February 24, 1997.
+ For the period February 28, 1996 (commencement of offering of Class B
shares) to October 31, 1996.
++ Commencement of operations for the DLJ High Income Fund was March 8,
1999.
+++ For the period May 17,1999 (commencement of offering Class D shares)
to October 31, 1999.
++++ For the period May 13, 1999 (commencement of offering Class D shares)
to October 31,1999.
+++++ For the period February 28, 2000 (commencement of offering Class C
shares) to October 31, 2000.
++++++ For the period August 1, 2000 (commencement of offering Class R shares
by all Funds except DLJ Strategic Growth Fund and DLJ Technology Fund)
to October 31, 2000.
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Net Asset Net Assets End Expenses to Investment Income
Value End of Total of Period (000 Average Net (Loss) to Average Portfolio
Total Distributions Period Return(2) omitted) Assets (3) Net Assets (3) Turnover Rate
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(0.38) 10.05 (1.02) 29,912 1.00 3.65 76.5
(0.38) 10.53 6.28 44,306 1.00 3.78 51.5
(0.45) 10.29 7.37 35,878 0.70 4.38 84.3
(0.43) 10.01 3.83 38,794 0.80 4.26 79.3
(0.31) 10.05 (1.71) 1,044 1.70 2.94 76.5
(0.32) 10.53 5.54 1,430 1.70 3.04 51.5
(0.37) 10.29 6.62 546 1.40 3.66 84.3
(0.25) 10.01 1.42 489 1.23(1) 3.81(1) 79.3
---------------------------------------------------------------------------------------------------------------------
(0.70) 14.00 21.76 48,181 2.15 (0.44) 82.0
(0.15) 12.20 8.20 44,286 2.15 (0.49) 69.7
- 11.42 10.02 44,316 2.15 (0.59) 73.9
- 10.38 8.35 42,170 2.15 (0.39) 94.1
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Net Asset Net Assets End Expenses to Investment Income
Value End of Total of Period (000 Average Net (Loss) to Average Portfolio
Total Distributions Period Return(2) omitted) Assets (3) Net Assets (3) Turnover Rate
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(0.70) 13.63 20.86 5,527 2.90 (1.18) 82.0
(0.09) 11.98 7.43 6,133 2.90 (1.24) 69.7
- 11.24 9.23 6,821 2.90 (1.32) 73.9
- 10.29 7.52 4,955 2.90 (1.25) 94.1
- 14.02 10.48 1,586 1.90(1) (1.14)(1) 82.0
---------------------------------------------------------------------------------------------------------------------
(0.03) 9.95 39.82 16,023 2.15 0.32 36.9
- 7.14 (25.00) 16,355 2.15 0.22 43.6
(0.02) 9.52 (4.18) 29,402 2.15 (0.17) 52.8
- 9.96 4.51 36,918 2.15 (0.14) 26.8
- 9.66 38.79 2.685 2.90 (0.36) 36.9
- 6.96 (25.64) 2,509 2.90 (0.50) 43.6
(0.02) 9.36 (4.83) 4,941 2.90 (1.74) 52.8
- 9.86 3.57 3,641 2.90 (0.83) 26.8
---------------------------------------------------------------------------------------------------------------------
(0.023) 1.00 2.37 44,347 0.90 2.33 N/A
(0.027) 1.00 2.72 57,778 0.90 2.68 N/A
(0.020) 1.00 2.90(1) 38,681 0.90(1) 2.87 N/A
---------------------------------------------------------------------------------------------------------------------
(0.042) 1.00 4.26 59,877 0.90 4.19 N/A
(0.047) 1.00 4.79 $56,697 0.90 4.68 N/A
(0.032) 1.00 4.68(1) 35,174 0.90(1) 4.65(1) N/A
---------------------------------------------------------------------------------------------------------------------
(0.56) 9.66 2.19 10,488 1.10(1) 8.61 188.4
(0.50) 9.66 1.60 1,447 1.85 7.83 188.4
(0.41) 9.65 (1.63) 9.26 0.85(1) 9.36(1) 188.4
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized
(2) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period, and redemption on
the last day of the period. An initial sales charge or contingent deferred
sales charge is not reflected in the calculation of total return. Total
return calculated for a period of less than one year is not annualized
except for Money Funds. Total return for the year end October 31, 1999
excluding the effect of the contribution from the former sub adviser for
realized and unrealized securities losses was 36.59% and 35.49% for the
DLJ Developing Markets Fund Class A and B shares, respectively.
67
<PAGE>
(3) Net of voluntary assumption by the investment adviser of expenses,
expressed as a percentage of average net assets, as follows: DLJ Strategic
Growth Fund Class R shares, ___% (annualized) for the period 11/19/ 99
through 10/31/00, DLJ Strategic Growth Fund Class A, B and C shares, ___%,
___% and ___% (annualized), respectively for the period 8/1/00, through
10/31/00; DLJ Technology Fund Class R shares, ___%(annualized) for the
period 11/ 19/99, through 10/31/00, DLJ Technology Fund Class A, B, C and
D shares, ___%, ___%, ___% and ___% (annualized), respectively for the
period 8/1/00, through 10/31/00; DLJ Fixed Income Fund Class A shares,
___%, .14%, .30%, .30%, and .34%, for the years ended 10/31/00, 99, 98,
97, and 96 respectively; DLJ Fixed Income Fund Class B shares, ___%, .14%,
.30%, and .30% for the years ended 10/31/00, 99, 98 and 97, and .34%
(annualized) for the period 2/28/96 through 10/31/96; Fixed Income Class C
shares, ___% (annualized) for the period 2/28/00 through 10/31/00; Fixed
Income Class D shares, ___% for the year ended 10/31/00, and .14%
(annualized) for the period 4/30/99 through 10/31/99; Fixed Income Class R
shares, ___% (annualized) for the period 8/1/00 through 10/31/00; DLJ
Municipal Trust Fund Class A shares, ___%, .42 %, .41%, .74%, and .64% for
the years ended 10/31/00, 99, 98, 97, and 96, respectively; DLJ Municipal
Trust Fund Class B shares, ___%, .42 %, .41 % and .74% for the years ended
10/31/00, 99, 98 and 97, and .64% (annualized) for the period 2/28/96
through 10/31/96, DLJ Municipal Trust Fund Class R shares, ___%
(annualized) for the period 8/1/00 through 10/31/00; DLJ Municipal Trust
Fund Class C shares, ___% (annualized) for the period 2/28/00 through
10/31/00; DLJ Developing Markets Fund Class A and Class B shares, ___%,
.76%, .61%, .34%, and .54% for the years ended 10/31/00, 99, 98, 97, and
96, respectively; DLJ Developing Markets Fund Class C shares, ___% for the
year ended 10/31/00; DLJ Developing Markets Fund Class R shares, ___%
(annualized) for the period 8/1/00 through 10/31/00; DLJ International
Equity Fund Class A and Class B shares, ___%, .04%,.10%, .18%, and .27%
for the years ended 10/31/00, 99, 98, 97, and 96, respectively; DLJ
International Equity Fund Class C shares, ___% (annualized) for the period
2/28/00 through 10/31/00; DLJ International Equity Fund Class D shares,
___% for the year ended 10/31/00, and .04% (annualized) for the period
5/13/99 through 10/31/99; DLJ International Equity Fund Class R shares,
___% (annualized) for the period 8/1/00 through 10/31/00; DLJ Municipal
Money Fund, , .14%, .15% and .40% (annualized) for the years ended
10/31/00, 99, 98 and 97, respectively; DLJ U.S. Government Money Fund,
___% .19%, .25% and .45% (annualized) for the years ended 10/31/00, 99,
98, and 97, respectively; DLJ High Income Fund Class A, Class B and Class
D shares, ___%, ___% and ___% (annualized), respectively, for the year
ended 10/31/00 and 1.43% (annualized) for the period 3/8/99 through
10/31/99; DLJ High Income Fund Class C shares, ___% (annualized) for the
period 2/28/00 through 10/31/00 and DLJ High Income Fund Class R shares,
___% (annualized) for the period 8/1/00 through 10/31/00.
BACK COVER
FOR MORE INFORMATION
General Information and Other Available Information
The Funds send out a semi-annual report and an annual report to all
shareholders. These reports include a list of your Fund's investments and
financial statements. The annual report contains a statement from the Fund's
Adviser discussing market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
The Funds have Statements of Additional Information that contain additional
information on all aspects of the Funds and are incorporated by reference into
this Prospectus. The Statements of Additional Information have been filed with
the Securities and Exchange Commission and are available for review at the SEC's
Public Reference Room in Washington, DC (1-202-942-8090) or on the SEC's web
site at http://www.sec.gov. You can also obtain copies of Fund documents filed
with the SEC by electronic request at the following e-mail address:
[email protected], or by writing:
68
<PAGE>
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-0102
Payment of a duplicating fee may be required.
Shareholders may obtain any of these documents free of charge and may obtain
other information about the Funds by visiting the Funds' website (www.CSAM.com),
calling 800-225-8011 or by writing:
DLJ Mutual Funds
PFPC, Inc.
P.O. Box 61503
King of Prussia, PA. 19406-0903
DLJ MUTUAL FUNDS
SEC file numbers: DLJ Focus Funds 811-04604
DLJ Core Equity Fund
DLJ Growth and Income Fund
DLJ Small Company Value Fund
DLJ Fixed Income Fund
DLJ Municipal Trust Fund
DLJ Opportunity Funds 811-9054
DLJ Developing Markets Fund
DLJ International Equity Fund
DLJ High Income Fund
DLJ Municipal Money Fund
DLJ U.S. Government Money Fund
DLJ Select Funds 811-09531
DLJ Strategic Growth Fund
DLJ Technology Fund
69
<PAGE>
DLJ SELECT FUNDS
277 PARK AVENUE,
NEW YORK, NEW YORK 10172
Toll Free (800) 825-5723
STATEMENT OF ADDITIONAL INFORMATION
February __, 2001
This Statement of Additional Information relates to the DLJ Strategic
Growth Fund and the DLJ Technology Fund. Each Fund is a series of the DLJ Select
Funds (the "DLJ Select Funds" or the "Funds"). This Statement of Additional
Information is not a prospectus and should be read in conjunction with the
Funds' current Prospectus dated February __, 2001, as supplemented from time to
time, which is incorporated herein by reference. A copy of the Prospectus may be
obtained by contacting the Funds at the address or telephone number listed
above.
TABLE OF CONTENTS
FUND HISTORY.................................................................2
INVESTMENT POLICIES AND RESTRICTIONS.........................................2
MANAGEMENT...................................................................9
Adviser...................................................................11
EXPENSES OF THE FUNDS
Distribution Plan.........................................................13
PURCHASES, REDEMPTIONS, AND EXCHANGES
Purchases.................................................................15
Redemptions...............................................................16
Exchanges.................................................................17
Systematic Withdrawal Plans...............................................18
RETIREMENT PLANS
Individual Retirement Accounts ("IRA")....................................19
Simplified Employee Pension Plan ("SEP/IRA")..............................20
Savings Incentive Match Plan for Employees ("SIMPLE") - SIMPLE IRA and
SIMPLE 401(k)...........................................................20
Employer-Sponsored Retirement Plans.......................................20
Self-Directed Retirement Plans............................................20
NET ASSET VALUE.............................................................20
DIVIDENDS, DISTRIBUTIONS AND TAXES..........................................22
PORTFOLIO TRANSACTIONS......................................................24
PORTFOLIO TURNOVER..........................................................26
INVESTMENT PERFORMANCE INFORMATION..........................................26
SHARES OF BENEFICIAL INTEREST...............................................27
GENERAL INFORMATION
Organization and Capitalization...........................................28
Counsel and Independent Auditors..........................................28
Custodian and Transfer Agent..............................................29
Additional Information....................................................29
Financial Statements........................................................29
<PAGE>
FUND HISTORY
The DLJ Select Funds (previously named the DLJdirect Mutual Funds) were
organized on August 3, 1999 as a business trust under the laws of the state of
Delaware. Its shares are currently divided into two series, the DLJ Strategic
Growth Fund (the "Strategic Growth Fund") and the DLJ Technology Fund (the
"Technology Fund") (collectively referred to as the "Funds" and previously named
the DLJdirect Strategic Growth Fund and DLJdirect Choice Technology Fund,
respectively). The Strategic Growth Fund and Technology Fund both operate as
diversified open-end management investment companies. The Funds have an
unlimited number of authorized shares of beneficial interest, par value $.001
per share, which may, without shareholder approval, be divided into an unlimited
number of series and an unlimited number of classes.
The Board of Trustees of the DLJ Select Funds has approved, subject to
shareholder approval, the transfer to the Warburg, Pincus Focus Fund, Inc. of
all of the assets and liabilities of the DLJ Strategic Growth Fund in exchange
for shares of the Warburg, Pincus Focus Fund, Inc.
The Warburg, Pincus Focus Fund, Inc. has an investment objective and
strategies substantially similar to the investment objective and strategies of
the DLJ Strategic Growth Fund. Shareholders of the DLJ Strategic Growth Fund
would receive on a tax-free basis shares of the Warburg, Pincus Focus Fund, Inc.
with the same net asset value as their shares of the DLJ Strategic Growth Fund.
The investment advisory fees of the Warburg, Pincus Focus Fund, Inc. would be
the same as the DLJ Strategic Growth Fund, and CSAM has agreed to reimburse
expenses of the Warburg, Pincus Focus Fund, Inc. as necessary so that for the
two-year period following the consummation of the acquisition the annual expense
ratio of the DLJ Strategic Growth Fund would not increase above its expense
ratio for the 60-day period prior to consummation of the acquisition. The
acquisition would be consummated promptly after receipt of shareholder approval.
INVESTMENT POLICIES AND RESTRICTIONS
The following investment policies and restrictions supplement and should
be read in conjunction with the information set forth under the heading "The DLJ
Select Funds' Investment Objectives and Policies" in the Funds' Prospectus.
Except as noted in the Prospectus, each Fund's investment policies are not
fundamental and may be changed by the Trustees of the Funds without shareholder
approval. Shareholders will be notified prior to a significant change in such
policies. Each Fund's fundamental investment restrictions may not be changed
without shareholder approval as defined in "Fundamental Investment Restrictions"
in this Statement of Additional Information.
It is the policy of the Technology Fund to seek growth of capital by
investing in a broad number of industries that comprise the U.S. domestic
technology sector. It is the policy of the Strategic Growth Fund to seek
long-term growth of capital by investing primarily in a limited number of large,
carefully selected companies that Credit Suisse
2
<PAGE>
Asset Management, LLC ("CSAM" or the "Adviser") believes will achieve superior
growth. In addition, each Fund may invest in any of the securities described
below.
Warrants. The Strategic Growth Fund and the Technology Fund each may
invest up to 5% of their respective total assets in warrants. Warrants may be
considered more speculative than certain other types of investments due to the
following:
(1) Holders are not entitled to dividends or voting rights with
respect to the underlying securities;
(2) Warrants do not represent any rights to the assets of the
issuing company;
(3) A warrant's value does not necessarily change in proportion to
the value of the underlying securities; and
(4) A warrant ceases to have value if it is not exercised prior to
the expiration date.
Non-U.S. Securities. The Strategic Growth Fund and the Technology Fund may
invest up to 10% of the value of their respective total assets in non-U.S.
securities. Investment in non-U.S. securities involves certain risks not
ordinarily associated with investments in securities of domestic issuers. These
risks include fluctuations in foreign exchange rates, future political and
economic developments, and the possible imposition of exchange controls or other
foreign governmental laws or restrictions. With respect to certain countries,
there is also the possibility of expropriation of assets, confiscatory taxation,
political or social instability or diplomatic developments which could adversely
affect investments in those countries.
There may be less publicly available information about a non-U.S. company
than about a U.S. company. Non-U.S. companies may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to or as
uniform as those to which U.S. companies are subject. Non-U.S. securities
markets, while growing in volume, generally have substantially less trading
volume than securities of comparable U.S. companies. Transaction costs of
investing in non-U.S. securities markets generally are higher than in the U.S.
There is generally less government supervision and regulation of exchanges,
brokers and issuers than there is in the U.S. The Funds may have greater
difficulty taking appropriate legal action in non-U.S. courts. Non-U.S. markets
also have different clearance and settlement procedures which in some markets
have at times failed to keep pace with the volume of transactions, thereby
creating substantial delays and settlement failures that could adversely affect
a Fund's performance. Dividend and interest income from non-U.S. securities will
generally be subject to withholding taxes by the country in which the issuer is
located and may not be recoverable by the Funds or investors.
Options. The Strategic Growth Fund and Technology Fund may purchase and
sell call and put options for the purpose of hedging against a decline in the
value of their respective portfolio securities.
3
<PAGE>
A call option gives the purchaser, in exchange for a premium paid, the
right for a specified period of time to purchase the securities or currency
subject to the option at a specified price (the exercise price or strike price).
The writer, or seller, of a call option, in return for the premium, has the
obligation, upon exercise of the option, to deliver, depending upon the terms of
the option contract, the underlying securities or a specified amount of cash to
the purchaser upon receipt of the exercise price. When a Fund writes a call
option, that Fund gives up the potential for gain on the underlying securities
or currency in excess of the exercise price of the option during the period that
the option is open.
A put option gives the purchaser, in return for a premium, the right, for
a specified period of time, to sell securities or currency subject to the option
to the writer of the put at the specified exercise price. The writer of the put
option, in return for the premium, has the obligation, upon exercise of the
option, to acquire the securities or currency underlying the option at the
exercise price. A Fund that sells a put option might, therefore, be obligated to
purchase the underlying securities or currency for more than their current
market price.
If a Fund desires to sell a particular security from its portfolio on
which it has written an option, the Fund will seek to effect a closing purchase
transaction prior to or concurrently with the sale of the security. A closing
purchase transaction is a transaction in which an investor who is obligated as a
writer of an option terminates his obligation by purchasing an option of the
same series as the option previously written. (Such a purchase does not result
in the ownership of an option). A Fund may enter into a closing purchase
transaction to realize a profit on a previously written option or to enable the
Fund to write another option on the underlying security with either a different
exercise price or expiration date or both. A Fund realizes a profit or loss from
a closing purchase transaction if the cost of the transaction is less or more,
respectively, than the premium received from the writing of the option.
A Fund will write only fully "covered" options. An option is fully covered
if at all times during the option period, the Fund writing the option owns
either (i) the underlying securities, or securities convertible into or carrying
rights to acquire the optioned securities at no additional cost, or (ii) an
offsetting call option on the same securities at the same or a lower price.
A Fund may not write a call option if, as a result thereof, the aggregate
of such Fund's portfolio securities subject to outstanding call options (valued
at the lower of the option price or market value of such securities) would
exceed 10% of its total assets. The Funds may also purchase and sell financial
futures contracts and options thereon for hedging and risk management purposes
and to enhance gains as permitted by the Commodity Futures Trading Commission
(the "CFTC").
A Fund may also purchase and sell securities index options. Securities
index options are similar to options on specific securities. However, because
options on securities indices do not involve the delivery of an underlying
security, the option
4
<PAGE>
represents the holder's right to obtain from the writer in cash a fixed multiple
of the amount by which the exercise price exceeds (in the case of a put) or is
less than (in the case of a call) the closing value of the underlying securities
index on the exercise date. When a Fund writes an option on a securities index,
it will establish a segregated account with its custodian in which it will
deposit cash or high quality short-term obligations or a combination of both
with a value equal to or greater than the market value of the option and will
maintain the account while the option is open.
Each Fund's successful use of options and financial futures depends on the
ability of the Adviser to predict the direction of the market and is subject to
various additional risks. The investment techniques and skills required to use
options and futures successfully are different from those required to select
international securities for investment. The ability of a Fund to close out an
option or futures position depends on a liquid secondary market. There is no
assurance that liquid secondary markets will exist for any particular option or
futures contract at any particular time. The inability to close options and
futures positions also could have an adverse impact on each Fund's ability to
effectively hedge its portfolio. There is also the risk of loss by a Fund of
margin deposits or collateral in the event of bankruptcy of a broker with whom
the Fund has an open position in an option, a futures contract or related
option.
To the extent that puts, calls, straddles and similar investment
strategies involve instruments regulated by the CFTC, each Fund is limited to an
investment not in excess of 5% of its total assets, except that each Fund may
purchase and sell such instruments, without limitation, for bona fide hedging
purposes.
Repurchase Agreements. The Funds may enter into "repurchase agreements"
with member banks of the Federal Reserve System, "primary dealers" (as
designated by the Federal Reserve Bank of New York) in such securities or with
any domestic broker/dealer which is recognized as a reporting government
securities dealer. Repurchase agreements permit a Fund to keep all of its assets
at work while retaining "overnight" flexibility in pursuit of investments of a
longer-term nature. The Funds require continual maintenance of collateral with
the Custodian in an amount equal to, or in excess of, the market value of the
securities which are the subject of a repurchase agreement. In the event a
vendor defaults on its repurchase obligation, a Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were less than the
repurchase price. If the vendor becomes the subject of bankruptcy proceedings, a
Fund might be delayed in selling the collateral.
Reverse Repurchase Agreements. The Funds may also enter into reverse
repurchase agreements. Under a reverse repurchase agreement a Fund would sell
securities and agree to repurchase them at a mutually agreed upon date and
price. At the time a Fund enters into a reverse repurchase agreement, it would
establish and maintain with an approved custodian a segregated account
containing liquid high-grade securities having a value not less than the
repurchase price. Reverse repurchase agreements involve the risk that the market
value of the securities subject to such agreement could decline
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below the repurchase price to be paid by a Fund for such securities. In the
event the buyer of securities under a reverse repurchase agreement filed for
bankruptcy or became insolvent, such buyer or receiver would receive an
extension of time to determine whether to enforce a Fund's obligations to
repurchase the securities and a Fund's use of the proceeds of the reverse
repurchase could effectively be restricted pending such decision. Reverse
repurchase agreements create leverage, a speculative factor, but are not
considered senior securities by the Funds or the Securities and Exchange
Commission ("SEC") to the extent liquid high-grade debt securities are
segregated in an amount at least equal to the amount of the liability.
Illiquid Investments. The Strategic Growth Fund and the Technology Fund
may invest up to 15% of its assets in illiquid investments. Under the
supervision of the Trustees, the Adviser determines the liquidity of a Fund's
investments. The absence of a trading market can make it difficult to ascertain
a market value for illiquid investments. Disposing of illiquid investments may
involve time-consuming negotiation and legal expenses, and it may be difficult
or impossible for a Fund to sell them promptly at an acceptable price. The staff
of the SEC currently takes the position that OTC options purchased by a Fund,
and portfolio securities "covering" the amount of that Fund's obligation
pursuant to an OTC option sold by the Fund (the cost of the sell-back plus the
in-the-money amount, if any) are illiquid, and are subject to such Fund's
limitations on investments in illiquid securities.
Borrowing. Each Fund may borrow up to one-third of the value of its total
assets from banks to increase its holdings of portfolio securities or for other
purposes. Under the Investment Company Act of 1940, as amended (the "1940 Act"),
each Fund is required to maintain continuous asset coverage of 300% with respect
to such borrowings. Leveraging by means of borrowing may exaggerate the effect
of any increase or decrease in the value of portfolio securities on an Fund's
net asset value, and money borrowed will be subject to interest and other costs
(which may include commitment fees and/or the cost of maintaining minimum
average balances) which may or may not exceed the income received from the
securities purchased with borrowed funds. The Adviser does not currently intend
to engage in borrowing transactions.
Securities Lending. The Funds may seek to receive or increase income by
lending their respective portfolio securities. Under present regulatory
policies, such loans may be made to member firms of the New York Stock Exchange
and are required to be secured continuously by collateral held by the Custodian
consisting of cash, cash equivalents or U.S. Government Securities maintained in
an amount at least equal to the market value of the securities loaned.
Accordingly, the Funds will continuously secure the lending of portfolio
securities by collateral held by the Custodian consisting of cash, cash
equivalents or U.S. Government Securities maintained in an amount at least equal
to the market value of the securities loaned. The Funds have the right to call
such a loan and obtain the securities loaned at any time on five days notice.
Cash collateral may be invested in fixed income securities rated at least A or
better by S&P or Moody's. As is the case with any extension of credit, loans of
portfolio securities involve special risks in the event that the borrower should
be unable to repay the loan, including delays or
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inability to recover the loaned securities or foreclose against the collateral.
The aggregate value of securities loaned by a Fund may not exceed 33 1/3% of the
value of the Fund's total assets.
When Issued, Delayed Delivery Securities and Forward Commitments. The
Funds may, to the extent consistent with their other investment policies and
restrictions, enter into forward commitments for the purchase or sale of
securities, including on a "when issued" or "delayed delivery" basis in excess
of customary settlement periods for the type of security involved. In some
cases, a forward commitment may be conditioned upon the occurrence of a
subsequent event, such as approval and consummation of a merger, corporate
reorganization or debt restructuring, i.e., a when, as and if issued security.
When such transactions are negotiated, the price is fixed at the time of
the commitment, with payment and delivery taking place in the future, generally
a month or more after the date of the commitment. While a Fund will only enter
into a forward commitment with the intention of actually acquiring the security,
such Fund may sell the security before the settlement date if it is deemed
advisable.
Securities purchased under a forward commitment are subject to market
fluctuation, and no interest (or dividends) accrues to a Fund prior to the
settlement date. Each Fund will segregate with its Custodian cash or liquid
high-grade securities in an aggregate amount at least equal to the amount of its
respective outstanding forward commitments.
Short Selling. In these transactions, a Fund sells a security it does not
own in anticipation of a decline in the market value of the security. To
complete the transaction, a Fund must borrow the security to make a delivery to
the buyer. A Fund is obligated to replace the security borrowed by purchasing it
subsequently at the market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
Fund, which would result in a loss or gain, respectively.
Securities will not be sold short if, after effect is given to any such
short sale, the total market value of all securities sold short would exceed 25%
of the value of the Funds' net assets. The Funds may not make a short sale which
results in the Funds having sold short in the aggregate more than 10% of the
outstanding securities of any class of an issuer.
The Funds also may make short sales "against the box" in which the Fund
enters into a short sale of a security it owns.
Until the Funds closes out their short position or replace the borrowed
security, they will: (a) maintain a segregated account, containing permissible
liquid assets, at such a level that the amount deposited in the account plus the
amount deposited with the broker as collateral always equals the current value
of the security sold short; or (b) otherwise cover their short position.
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8
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Fundamental Investment Restrictions
The following fundamental investment restrictions may not be changed with
respect to a Fund without the approval of a majority of the shareholders of that
Fund, which means the affirmative vote of the holders of (a) 67% or more of the
shares of that Fund represented at a meeting at which more than 50% of the
outstanding shares of the Fund are represented or (b) more than 50% of the
outstanding shares of that Fund, whichever is less. Except as set forth in the
Prospectus, all other investment policies or practices are considered by each
Fund not to be fundamental and accordingly may be changed without shareholder
approval. If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values or
assets will not constitute a violation of such restriction.
The following investment restrictions are applicable to each of the Funds.
Briefly, these restrictions provide that a Fund may not:
(1) purchase the securities of any one issuer, other than the United
States Government, or any of its agencies or instrumentalities, if
immediately after such purchase more than 5% of the value of its total
assets would be invested in such issuer or the Fund would own more than
10% of the outstanding voting securities of such issuer, except that up to
25% of the value of the Fund's total assets may be invested without regard
to such 5% and 10% limitations;
(2) invest 25% or more of the value of its total assets in any one
industry, provided that, for purposes of this policy, consumer finance
companies, industrial finance companies and gas, electric, water and
telephone utility companies are each considered to be separate industries;
(3) issue senior securities in excess of 33 1/3% of its total assets
(including the amount of senior securities issued but excluding any
liabilities and indebtedness not constituting senior securities) or pledge
its assets other than to secure such issuances or in connection with
hedging transactions, short sales, when-issued and forward commitment
transactions and similar investment strategies. A Fund's obligations under
swaps are not treated as senior securities;
(4) borrow money (including on margin if margin securities are owned
and enter into reverse repurchase agreements) in excess of 33 1/3% of its
total assets except that the Fund may borrow up to 5% of its total assets
for temporary purposes; or
(5) make loans of money or property to any person, except through
loans of portfolio securities, the purchase of fixed income securities
consistent with the Fund's investment objectives and policies or the
acquisition of securities subject to repurchase agreements;
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(6) underwrite the securities of other issuers, except to the extent
that in connection with the disposition of portfolio securities a Fund may
be deemed to be an underwriter;
(7) purchase real estate or interests therein;
(8) purchase or sell commodities or commodities contracts except for
purposes, and only to the extent, permitted by applicable law without the
Fund becoming subject to registration with the CFTC as a commodity pool;
(9) make any short sale of securities except in conformity with
applicable laws, rules and regulations and unless, giving effect to such
sale, the market value of all securities sold short does not exceed 25% of
the value of the Fund's total assets and the Fund's aggregate short sales
of a particular class of securities do not exceed 25% of the then
outstanding securities of that class; or
(10) invest in oil, gas or other mineral leases.
MANAGEMENT
The Trustees and principal officers of the Funds, their ages and their
primary occupations during the past five years are set forth below. Unless
otherwise specified, the address of each such person is 277 Park Avenue, New
York, New York 10172. Those Trustees whose names are preceded by an asterisk are
"interested persons" of the Funds as defined by the 1940 Act.
*G. Moffett Cochran, 50, Chairman of the Board of Trustees and President
of the DLJ Select Funds, DLJ Focus Funds, DLJ Opportunity Funds and DLJ High
Yield Bond Fund, is President and Managing Director of the adviser to the DLJ
Select Funds, CSAM; former Chairman of DLJ Asset Management Group, Inc.
("DLJAM") with which he was associated since prior to 1993; formerly Senior Vice
President with Bessemer Trust Companies. Trustee of the DLJ High Yield Bond
Fund.
Stig Host, 74, Trustee Chairman of the Board of Kriti Exploration, Inc.,
Kriti Properties and Development Corp. and International Marine Sales, Inc., a
Trustee of the DLJ Select Funds, DLJ Focus Funds, DLJ Opportunity Funds, DLJ
High Yield Bond Fund, Alliance International Fund, Alliance Global Environmental
Fund, Alliance New Europe Fund, Alliance All-Asia Investment Fund and Alliance
Developing Markets Fund and a Director of Florida Fuels, Inc. His address is 103
Oneida Drive, Greenwich, CT 06830.
Robert E. Fischer, 70, Trustee of the DLJ Select Funds, DLJ Focus Funds,
DLJ Opportunity Funds and DLJ High Yield Bond Fund, has been Member at the law
firm Wolf, Block, Schorr and Solis-Cohen LLP (or its predecessor firm) since
prior to 1994.
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*Martin Jaffe, -54, Trustee, is Vice President, Secretary and Treasurer of
the DLJ Select Funds, DLJ Focus Funds, DLJ Opportunity Funds and DLJ High Yield
Bond Fund, is a Chief Financial Officer and Managing Director of the Adviser;
Former chief Operating Officer of DLJAM, with which he was associated since
prior to 1994.
Wilmot H. Kidd, III, -59, Trustee of the DLJ Select Funds, DLJ Focus
Funds, DLJ Opportunity Funds and DLJ High Yield Bond Fund, has been President of
Central Securities Corporation since prior to 1994.
Peter F. Krogh, 63, Trustee of the DLJ Select Funds, DLJ Focus Funds, DLJ
Opportunity Funds, DLJ High Yield Bond Fund, Trustee Dean Emeritus and
Distinguished Professor of International Affairs, School of Foreign Service,
Georgetown University, Washington, D.C. with which he has been associated since
1992. He is moderator of "Great Decisions", a foreign affairs television series,
author of numerous articles relating to international issues for professional
publications and serves on the board of the Carlisle Companies and several world
affairs organizations. His address is 3417 N. Street NW, Washington, DC 20007.
Hugh M. Neuburger, Ph.D., 57, Vice President of the DLJ Select Funds, is
the primary portfolio manager of the Funds and Managing Director of the Adviser;
Former Managing Director with DLJAM with which he was associated with since
March 1995. From 1992 to March 1995, Mr. Neuburger was president of a consulting
firm that provided domestic and global tactical asset allocation advice.
John J. Sheehan, 70, Trustee of the DLJ Select Funds, DLJ Focus Funds, DLJ
Opportunity Funds, DLJ High Yield Bond Fund, Trustee Consultant to Financial
Data Processing with which he has been associated since prior to 1990. His
address is 4 Bennington Place, Newton, PA 18940.
Brian A. Kammerer, 43, Vice President of the DLJ Select Funds is a
Director of the Adviser; Former Senior Vice President of DLJAM with which he was
associated with since prior to 1994.
William D. Butler, Vice-President of the Select Funds and the co-portfolio
manager of the Technology Fund with which he has been associated with since
1998; Former Vice-President of DLJAM; Previously, Mr. Butler spent 3 years as a
Senior Consultant at BARRA Inc. advising institutional money managers on equity
risk management, performance attribution and portfolio construction. Prior to
1995, Mr. Butler was an Associate Director with Mabon Securities involved in
Institutional Fixed Income Sales and Trading.
To rationalize the management of the Funds and the Warburg Pincus family
of funds managed by CSAM ("Warburg Pincus Funds"), CSAM has proposed, and the
Board of Trustees has approved for submission to shareholders at a meeting
scheduled
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for late March 2001, the replacement of all the current Trustees of the Funds,
other than Peter F. Krogh, with trustees of the Warburg Pincus Funds.
The following table sets forth certain information regarding compensation of the
Funds' Trustees and officers. Except as disclosed below, no executive officer or
person affiliated with the Funds received compensation from the Funds.
Compensation Table
Total
Pension or Compensation
Retirement From Trust
Benefits Estimated and Fund
Aggregate Accrued Annual Complex
Compensation As Part of Benefits Expected to
From Trust Upon be Paid to
Name and Position Trust (1) Expenses Retirement Trustees
G. Moffett Cochran, Trustee None None
Robert E. Fischer, Trustee None None
Martin Jaffe, Trustee None None
Wilmot H. Kidd, III, Trustee None None
Stig Host, Trustee None None
Peter F. Krogh, Trustee None None
John J. Sheehan, Trustee None None
John W. Waller, III, Trustee* None None
* Retired April 20, 2000
----------
(1) The DLJ Select Funds anticipate paying each independent Trustee
approximately [ ] in each calendar year.
(2) The parenthetical number represents the number of portfolios (including
the DLJ Select Funds) for which such person acts as Trustee that are
considered part of the same fund complex as the Funds.
----------
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The Trustees of the DLJ Select Funds who are officers or employees of the
Adviser or any of its affiliates receive no remuneration from the DLJ Select
Funds. Effective May 16, 2000, each of the Trustees who are not affiliated with
the Adviser will be paid a [ ] fee for each board meeting attended, a [ ] fee
for each special meeting attended and a [ ] annual retainer. Messrs. Cochran and
Jaffe are members of the Executive Committee. Messrs. Fisher Host, Kidd, Krogh
and Sheehan are members of the Audit Committee and are paid a [ ] fee for each
Audit Committee meeting attended.
Adviser
Credit Suisse Asset Management, LLC, with principal offices at 466
Lexington Avenue, New York, New York 10017 ("CSAM" or the "Adviser") has been
retained under an interim investment advisory agreement ("Interim Investment
Advisory Agreement") as the Funds' investment adviser (see "Fund Management" in
the Prospectus) effective November 3, 2000.
Credit Suisse Group ("Credit Suisse") acquired Donaldson, Lufkin &
Jenrette, Inc. ("DLJ"), including its subsidiary, DLJ Asset Management Group,
Inc. ("DLJAM"), the previous investment adviser of the Funds, and has combined
the investment advisory business of DLJAM with its existing U.S. asset
management business, CSAM. CSAM is part of Credit Suisse Asset Management, which
is the institutional asset management and mutual fund arm of Credit Suisse, with
global assets under management of approximately $198 billion as of September 30,
2000. Credit Suisse is a global financial services company, providing a
comprehensive range of banking and insurance products.
Prior to the Acquisition, DLJAM was a wholly-owned subsidiary of
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ Securities"), the
former distributor of the Funds' shares, a wholly-owned subsidiary of DLJ, which
was in turn an independently operated, indirect subsidiary of AXA Financial,
Inc. ("AXA Financial"), a holding company controlled by AXA ("AXA"), a French
insurance holding company. DLJAM succeeded Wood, Struthers & Winthrop Management
Corp., established in 1871 as a private concern to manage money for the Winthrop
family of Boston. Following the Acquisition, DLJAM was merged with Credit Suisse
Investment Corporation ("CSIC"), the parent company of CSAM. CSIC subsequently
changed its name to CSAM Americas Holding Corp. and CSIC contributed all of its
assets and liabilities, including its investment advisory agreements, to CSAM.
Prior to the Acquisition, CSAM managed $68 billion of the $198 billion in total
assets managed by Credit Suisse Asset Management globally. As a result of the
transfer of the assets and business of DLJAM to CSAM, CSAM manages more than
$100 billion in total assets in the U.S.
CSAM is an indirect wholly-owned U.S. subsidiary of Credit Suisse. Credit
Suisse is a global financial services company, providing a comprehensive range
of banking and insurance products. Active on every continent and in all major
financial centers, Credit Suisse comprises five business units -- Credit Suisse
Asset Management (asset management), of which CSAM is a member; Credit Suisse
First Boston (investment banking); Credit Suisse Private Banking (private
banking); Credit Suisse (retail banking); and Winterthur (insurance). Credit
Suisse has approximately
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$680 billion of global assets under management and employs approximately 62,000
people worldwide. The principal business address of Credit Suisse is Paradeplatz
8, CH 8070, Zurich, Switzerland. Credit Suisse Asset Management companies
managed approximately $68 billion in the U.S. and $198 billion globally as of
September 30, 2000.
CSAM's sole member is CSAM Americas Holding Corp. located at 466 Lexington
Avenue, New York, New York New York, NY 10017, which is wholly-owned by Credit
Suisse Asset Management Holding Corp., of the same address, which in turn is
wholly-owned by Credit Suisse First Boston, Inc., located at 11 Madison Avenue,
New York, NY 10010, which is indirectly wholly-owned by Credit Suisse Group.
The Interim Investment Advisory Agreement became effective on November 3,
2000. The Interim Investment Advisory Agreement replaced an earlier,
substantially identical agreement (the "Previous Investment Advisory Agreement")
with DLJAM that terminated pursuant to the terms of the existing agreement. The
Previous Investment Advisory Agreement was approved by the Board of Trustees of
the Funds on July 15, 1999 and by the then shareholders on November 17, 1999 and
became effective on the same date. The provisions of the Interim Investment
Advisory Agreement and the Previous Investment Advisory Agreement are the same,
except for the identity of the parties, the commencement and termination dates
and the payment of fees. On October 26, 2000, the Board of Trustees approved the
Interim Investment Advisory Agreement with DLJAM, which was assigned to CSAM as
part of the Acquisition. The Interim Investment Advisory Agreement terminates,
pursuant to its terms, upon the earlier of 150 days from November 3, 2000, which
is April 2, 2001, or the date of approval by the shareholders, voting separately
by series, of a new investment advisory agreement. CSAM has proposed, and the
Board of Trustees have approved for submission to shareholders at meetings
scheduled for late March 2001 a new investment advisory agreement with CSAM on
the same economic terms as the Interim Investment Advisory Agreement.
The Interim Investment Advisory Agreement provides for termination at any
time without penalty on ten days' prior written notice, by a vote of the holders
of a majority of the Fund's outstanding voting securities or by a vote of a
majority of the Board of Trustees or by the Adviser on sixty days' prior written
notice, and will automatically terminate in the event of its assignment.
Under its Previous and Interim Advisory Agreements with the Funds, the
Advisor will provide investment advisory services, order placement facilities
and pay all compensation of Trustees of the Funds who are affiliated persons of
the Advisor. The Funds will pay the Advisor at the following annual percentage
rates of the average daily net assets of each Fund: Strategic Growth Fund, .750
of 1% of the first $500,000,000, .625% of 1% of the balance; and the Technology
Fund, .875 of 1% of the first $500,000,000, .750 of 1% of the next $500,000,000.
and .625 of 1% of the balance.
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For the fiscal years ending October 31, 2000, 1999, and 1998, the
Strategic Growth Fund paid the Adviser fees of [$ ], [$ ] and [$ ],
respectively, and the Technology Fund paid the Adviser fees of [$ ], [$ ] and
[$ ], respectively. During the fiscal years ending October 31, 2000, 1999, and
1998, the Adviser reimbursed the Strategic Growth Fund [$ ], [$ ] and [$ ],
respectively, and the Adviser reimbursed the Technology Fund [$ ], [$ ] and
[$ ], respectively.
As required by Rule 15a-4(vi) of the 1940 Act, however, the Interim
Investment Advisory Agreement provides that fees earned by CSAM with respect to
each series of the Funds will be deposited into an interest-bearing escrow
account with Citibank, N.A., and will only be paid to CSAM if a majority of the
shareholders of such series approves a new investment advisory agreement for
that series. If shareholders of a series do not approve a new investment
advisory agreement, CSAM will receive as compensation or reimbursement in
respect of such series the lesser of: (i) the fee under such Interim Investment
Advisory Agreement; or (ii) the costs of providing services during the term of
such Interim Investment Advisory Agreement (plus, in each case, interest earned
on that amount while in escrow).
Pursuant to the terms of the Interim Investment Advisory Agreement, the
Adviser may retain, at its own expense, a subadviser to assist in the
performance of its services to the Funds, although such an arrangement is not
currently contemplated.
On December 18, 2000, Credit Suisse Asset Management Securities, Inc.
("CSAMSI" or the "Distributor") became the distributor of the Funds.
Distribution Plan
Pursuant to Rule 12b-1 adopted by the SEC under the 1940 Act, the Funds
have adopted a Distribution Agreement (the "Distribution Agreement") and a Rule
12b-1 Plan for shares of each Fund (the "12b-1 Plans") to permit such Fund
directly or indirectly to compensate the Distributor for activities with the
distribution of shares.
Pursuant to the Distribution Agreement and the 12b-1 Plans, the Treasurer
of the Funds reports the amounts expended under the Distribution Agreement and
the purposes for which such expenditures were made to the Trustees of the Funds
on a quarterly basis. Also, the 12b-1 Plans provide that the selection and
nomination of disinterested Trustees (as defined in the 1940 Act) are committed
to the discretion of the disinterested Trustees then in office. The Distribution
Agreement and 12b-1 Plans may be continued annually if approved by a majority
vote of the Trustees, including a majority of the Trustees who neither are
interested persons of the Funds nor have any direct or indirect financial
interest in the Distribution Agreement, the 12b-1 Plans or in any other
agreements related to the 12b-1 Plans, cast in person at a meeting called for
the purpose of voting on such approval. The Distribution Agreement and 12b-1
Plans were initially approved by the Funds' Trustees including a majority of the
disinterested Trustees, on July 15, 1999 and by the then shareholders on
November 17, 1999. The Distribution Agreement for the Class B and Class C shares
was initially approved by the Funds' Trustees including a
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<PAGE>
majority of the disinterested Trustees, on April 20, 2000 and by the then
shareholders on July 28, 2000. The Distribution Agreement for the Class R shares
was initially approved by the Funds' Trustees including a majority of the
disinterested Trustees, on May 16, 2000 and by the then shareholders on July 28,
2000.
All material amendments to the 12b-1 Plans must be approved by a vote of
the Trustees, including a majority of the Trustees who neither are interested
persons of the Funds nor have any direct or indirect financial interest in the
12b-1 Plans or any related agreement, cast in person at a meeting called for the
purpose of voting on such approval. In addition to such Trustee approval, the
12b-1 Plans may not be amended in order to increase materially the costs which
the Funds may bear pursuant to the 12b-1 Plans without the approval of a
majority of the outstanding shares of such Funds. Each Fund's 12b-1 Plan or
Plans may be terminated without penalty at any time by a majority vote of the
disinterested Trustees, by a majority vote of the outstanding shares of a Fund
or by the Adviser. Any agreement related to the 12b-1 Plans may be terminated at
any time, without payment of any penalty, by a majority vote of the independent
Trustees or by majority vote of the outstanding shares of a Fund on not more
than 60 days notice to any other party to the agreement, and will terminate
automatically in the event of assignment.
With respect to sales of a Fund's Class B or Class C shares through a
broker-dealer, the Distributor pays the broker-dealer a concession at the time
of sale. In addition, an ongoing maintenance fee may be paid to broker-dealers
on sales of both Class A, Class B and Class C shares. Pursuant to the Funds'
12b-1 Plans, the Distributor is compensated for its distribution and service
activities with amounts paid from the assets of such Fund. The payments to the
broker-dealer, although a Fund expense which is paid by all shareholders, will
only directly benefit investors who purchase their shares through a
broker-dealer rather than from the Funds. Broker-dealers who sell shares of the
Funds may provide services to their customers that are not available to
investors who purchase their shares directly from the Funds. Investors who
purchase their shares directly from a Fund will pay a pro rata share of such
Fund's expenses of encouraging broker-dealers to provide such services but not
receive any of the direct benefits of such services. The payments to the
broker-dealers will continue to be paid for as long as the related assets remain
in the Funds.
Pursuant to the provisions of the 12b-1 Plans and the Distribution
Agreement, each Fund pays a distribution services fee each month to the
Distributor, with respect to the aggregate daily net assets attributable to the
Class A and Class R shares of each Fund at an annual rate of .25 of 1%, and with
respect to the Class B and Class C shares of each Fund the annual rate is 1%, of
the aggregate average daily net assets attributable to the Class B and Class C
shares, of each Fund.
Under the Agreements, the Adviser may make payments to the Distributor
from the Adviser's own resources, which may include the management fees paid by
the Funds. In addition to the maintenance fee paid to dealers or agents, the
Distributor may from time to time pay additional compensation to dealers or
agents in connection with the sale of shares. Such additional amounts may be
utilized, in whole or in part, in some cases together with other revenues of
such dealers or agents, to provide additional
16
<PAGE>
compensation to registered representatives of such dealers or agents who sell
shares of the Fund. On some occasions, such compensation will be conditioned on
the sale of a specified minimum dollar amount of the shares of the Funds during
a specific period of time. Such incentives may take the form of payment for
meals, entertainment, or attendance at educational seminars and associated
expenses such as travel and lodging. Such dealer or agent may elect to receive
cash incentives of equivalent amounts in lieu of such payments.
PURCHASES, REDEMPTIONS, AND EXCHANGES
The following information supplements that set forth in the Funds' Prospectus
under the heading "Purchases, Redemptions and Shareholder Services."
Purchases
Shares of the Funds are offered at the net asset value (less any
applicable sales charge for Class A shares) per share next determined following
receipt of a purchase order in proper form by the Funds, the Funds' transfer
agent, PFPC, Inc. (the "Transfer Agent"), by the Distributor, Credit Suisse
Asset Management Securities, Inc. ("CSAMSI") or in the case of Class R shares,
by an eligible institution. The Funds calculate net asset value per share as of
the close of the regular session of the New York Stock Exchange, (the "NYSE")
which is generally 4:00 p.m. New York City time on each day that trading is
conducted on the NYSE.
In addition to Class A, Class B and Class C shares, the Funds offer Class
R shares and the Technology Fund offers Class D shares. Class R shares are
available for purchase by eligible institutions (including Pershing, Inc., a
division of Donaldson, Lufkin & Jenrette Securities Corp., and certain other
affiliates) on behalf of their clients (generally individuals who do not
purchase shares directly). Class R shares are sold primarily to financial
service providers acting on behalf of customers having an investment account(s)
or relationship at such institution, or to customers who have received and hold
shares of the Fund distributed to them by virtue of such an account or
relationship. Institutions effecting transactions in Class R shares for the
accounts of clients may charge such clients direct fees in connection with such
transactions. Purchases of Class R and Class D shares are offered without any
initial sales charge or CDSC. Class D shares are solely available for purchase
by employees of Credit Suisse First Boston and its subsidiaries that are
eligible to participate in the Credit Suisse First Boston Employee Savings and
Profit Sharing Plan. These employees should contact the CSFB Hotline at [ ]
concerning how to purchase Class D shares.
All shares purchased are confirmed to each shareholder and are credited to
such shareholder's account at net asset value. Share certificates will not be
issued for full or fractional shares of the Funds. This eliminates the
requirement of share certificates being presented upon redemption and relieves
the shareholder of the responsibility and inconvenience of preventing the share
certificates from becoming lost or stolen.
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Brokerage firms and other intermediaries which have entered into the
appropriate selling or service agreement with the Funds' are authorized to
accept orders on the Funds' behalf. Shareholders maintaining accounts through
brokerage firms and other intermediaries should be aware that such
intermediaries may necessarily set deadlines for receipt of transaction orders
from their clients that are earlier than the transaction times of the Fund
itself so that the institutions may properly process such orders prior to their
transmittal to the Fund or the Distributor. Should an investor place a
transaction order with such an intermediary after its deadline, the intermediary
may not effect the order with the Fund until the next business day. Accordingly,
an investor should familiarize himself or herself with the deadlines set by his
or her institution. (For example, a brokerage firm may accept purchase orders
from its customers up to 2:15 p.m. for issuance at the 4:00 p.m. transaction
time and price.) A brokerage firm acting on behalf of a customer in connection
with transactions in Fund shares is subject to the same legal obligations
imposed on it generally in connection with transactions in securities for a
customer, including the obligation to act promptly and accurately.
Redemptions
Shares of the Funds may be redeemed at a redemption price equal to the net
asset value per share, as next computed as of the regular trading session of the
NYSE following the receipt in proper form by the Funds of the shares tendered
for redemption.
Payment of the redemption price may be made either in cash or in portfolio
securities (selected in the discretion of the Trustees and taken at their value
used in determining the redemption price), or partly in cash and partly in
portfolio securities. However, payments will be made wholly in cash unless the
Trustees believe that economic conditions exist which would make such a practice
detrimental to the best interest of the Funds. DLJ Select Funds has filed a
formal election with the Securities and Exchange Commission pursuant to which
DLJ Select Funds will only effect a redemption in portfolio securities where the
particular shareholder of record is redeeming more than $250,000 or 1% of a
Fund's total net assets, whichever is less, during any 90 day period. In the
opinion of the Funds management, however, the amount of a redemption request
would have to be significantly greater than $250,000 or 1% of total net assets
of a Fund before a redemption wholly or partly in portfolio securities would be
made. If payment for shares redeemed is made wholly or partly in portfolio
securities, brokerage costs may be incurred by the investor in converting the
securities to cash.
For Class A, Class B and Class C shares, to redeem shares, the registered
owner or owners should forward a letter to the Transfer Agent containing a
request for redemption of such shares at the next determined net asset value per
share. Alternatively, the shareholder may elect the right to redeem shares by
telephone as described in the Prospectus.
The right of redemption may not be suspended or the date of payment upon
redemption postponed for more than seven days after shares are tendered in
proper
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form for redemption, except for any period during which the NYSE is closed
(other than customary weekend and holiday closings) or during which trading on
the exchange is deemed to be restricted under rules of the SEC, or for any
period during which an emergency (as determined by the SEC) exists as a result
of which disposal by the Strategic Growth Fund or Technology Fund of its
portfolio securities is not reasonably practicable, or as a result of which it
is not reasonably practicable for the Strategic Growth Fund or Technology Fund
to determine the value of its net assets, or for such other period as the SEC
may by order permit for the protection of shareholders. Generally, redemptions
will be made by payment in cash or by check.
If the total value of the shares being redeemed exceeds $50,000 (before
deducting any applicable contingent deferred sales charge) or a redemption
request directs proceeds to a party other than the registered account owner(s),
the signature or signatures on the letter or the endorsement must be guaranteed
by an "eligible guarantor institution" as defined in Rule 17Ad-15 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
broker-dealer guaranteeing signatures must be a member of a clearing corporation
or maintain net capital of at least $100,000. Credit unions must be authorized
to issue signature guarantees. Signature guarantees will be accepted from any
eligible guarantor institution which participates in a signature guarantee
program. Additional documents may be required for redemption of corporate,
partnership or fiduciary accounts.
The requirement for a guaranteed signature is for the protection of the
shareholder in that it is intended to prevent an unauthorized person from
redeeming his shares and obtaining the redemption proceeds.
Exchanges
Class A, Class B, Class C and Class R shares of a DLJ Select Fund can be
exchanged for shares of the same class of another DLJ Select Fund, shares of the
DLJ Municipal Money Fund and DLJ U.S. Government Money Fund (the "DLJ Money
Funds") and shares of the same class of the DLJ High Income Fund, DLJ
International Equity Fund, DLJ Developing Markets Fund (together with the DLJ
Money Funds, the "DLJ Opportunity Funds") and shares of the same class of DLJ
Core Equity Fund, DLJ Fixed Income Fund, DLJ Small Company Value Fund, DLJ
Growth and Income Fund and DLJ Municipal Trust Fund (the "DLJ Focus Funds").
Shareholders may exchange shares by mail. Shareholders or the shareholders'
investment dealer of record may exchange shares by telephone.
Participants within the Credit Suisse First Boston Employee Savings and
Profit Sharing Plan should contact their plan administrator for information
regarding exchanging Class D shares of the Technology Fund.
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The exchange privilege is available only in those jurisdictions where
shares of such Fund may be legally sold. In addition, the exchange privilege is
available only when payment for the shares to be redeemed has been made.
Only those shareholders who have had shares in a DLJ Select Fund for at
least seven days may exchange all or part of those shares for shares of the
other DLJ Select Fund, the DLJ Opportunity Funds, the Money Funds or DLJ Focus
Funds, and no partial exchange may be made if, as a result, the shareholders'
interest in a DLJ Select Fund would be reduced to less than $250. The minimum
initial exchange into another Fund is $1,000.
Exchanges into any of the DLJ Funds are subject to the minimum investment
requirements and any other applicable terms set forth in the Prospectus for the
Fund whose shares are being acquired. If for these or other reasons the exchange
cannot be effected, the shareholder will be so notified.
The exchange privilege is intended to provide shareholders with a
convenient way to switch their investments when their objectives or perceived
market conditions suggest a change. The exchange privilege is not meant to
afford shareholders an investment vehicle to play short-term swings in the stock
market by engaging in frequent transactions in and out of all the Funds.
Shareholders who engage in such frequent transactions may be prohibited from or
restricted in placing future exchange orders.
Exchanges of shares are subject to the other requirements of the Fund into
which exchanges are made. Annual fund operating expenses for such fund may be
higher. See " Summary of Fund Expenses" and " Additional Shareholder Services-
Exchange Privilege" in the Prospectus for a description of these expense
differences.
Systematic Withdrawal Plan
Shares of a DLJ Select Fund owned by a participant in the Funds'
systematic withdrawal plan will be redeemed as necessary to meet withdrawal
payments. A contingent deferred sales charge which would otherwise be imposed
will be waived in connection with redemptions made pursuant to the Funds'
systematic withdrawal plan up to 1% monthly or 3% quarterly of an account not to
exceed 12% of total market value over any 12 month rolling period. Systematic
withdrawals elected on a semi-annual or annual basis are not eligible for the
waiver. See the Prospectus for a description of the contingent deferred sales
charge. The systematic withdrawal plan may be terminated at any time by the
shareholder or the Funds.
Redemption of shares for withdrawal purposes may reduce or even liquidate
an account. While an occasional lump sum investment may be made by a shareholder
who is maintaining a systematic withdrawal plan, such investment should normally
be an amount equivalent to three times the annual withdrawal or $5,000 whichever
is less.
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RETIREMENT PLANS
Each of the DLJ Select Funds may be a suitable investment vehicle for part
or all of the assets held in various tax sheltered retirement plans, such as
those listed below. Semper Trust Company serves as custodian under these
prototype retirement plans and charges an annual account maintenance fee of $15
per participant, regardless of the number of Funds selected. Persons desiring
information concerning these plans should write or telephone the Funds' Transfer
Agent. While the Funds reserve the right to suspend sales of its shares in
response to conditions in the securities markets or for other reasons, it is
anticipated that any such suspension of sales would not apply to the types of
plans listed below.
Individual Retirement Accounts ("IRA")
The Adviser has available a prototype form of a Traditional IRA for
investment in shares of any one or more DLJ Select Funds. Under the Code,
individuals may currently make IRA contributions of up to $2,000 annually.
Married individuals filing jointly may contribute up to $2,000 for each spouse
if the combined compensation of both spouses is at least equal to the
contributed amount. Contributions to an IRA may be wholly or partly
tax-deductible, depending upon the contributor's income level and participation
in an employer-sponsored retirement plan. The income earned on shares held in an
IRA is not subject to federal income tax until withdrawn in accordance with the
Code. Investors may be subject to penalties or additional taxes on contributions
to or withdrawals from IRAs under certain circumstances. As with tax-deductible
contributions, taxes on the income earned from nondeductible IRA contributions
will be deferred until distributed from the IRA.
The Adviser has available a prototype form of the Roth IRA. Unlike
Traditional IRA's, contributions to a Roth IRA are not currently deductible.
However, the amounts within the Roth IRA accounts will accumulate tax-free, and
qualified distributions from the Funds will not be included in a shareholder's
taxable income. An individual may contribute a maximum of $2,000 annually to a
Roth IRA ($4,000 for joint returns). However, such limit is calculated in the
aggregate with contributions to traditional IRA's. In addition, Roth IRA's are
not available to individuals above certain income levels.
The Adviser also has available a prototype form of the Education IRA for
investment in shares of any one or more DLJ Select Funds. Like the Roth IRA,
contributions are not currently deductible. However, the investment earnings
accumulate tax-free, and qualifying distributions used for higher education
expenses are not taxable. An individual may contribute a maximum of $500 per
account annually. In addition, Education IRA's are not available to individuals
above certain income levels.
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Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA is available for investment and may be established on a group
basis by an employer who wishes to sponsor a tax-sheltered retirement program by
making IRA contributions on behalf of all eligible employees.
Savings Incentive Match Plan for Employees ("SIMPLE") - SIMPLE IRA and SIMPLE
401(k)
SIMPLE plans offer employers with 100 or fewer eligible employees who
earned at least $5,000 from the employer in the preceding calendar year the
ability to establish a retirement plan that permits employee contributions. An
employer may also elect to make additional contributions to these Plans. Please
telephone the Funds' transfer agent at (800) 225-8011 for more information.
Employer-Sponsored Retirement Plans
The Adviser has a prototype retirement plan available which provides for
investment of plan assets in shares of any one or more DLJ Select Funds. The
prototype retirement plan may be used by sole proprietors and partnerships as
well as corporations to establish a tax qualified profit sharing plan or money
purchase pension plan (or both) of their own.
Under the prototype retirement plan, an employer may make annual
tax-deductible contributions for allocation to the accounts of the plan
participants to the maximum extent permitted by the federal tax law for the type
of plan implemented. The Adviser has received favorable opinion letters from the
IRS that the prototype retirement plan is acceptable by qualified employers.
Self-Directed Retirement Plans
Shares of the DLJ Select Funds may be suitable for self-directed IRA
accounts and prototype retirement plans.
NET ASSET VALUE
Shares of each Fund will be priced at the net asset value per share as
computed each Fund Business Day in accordance with the Funds' Agreement and
Declaration of Trust and By-Laws. For this purpose, a Fund Business Day is any
day on which the NYSE is open for business, typically, Monday through Friday
exclusive of New Year's Day, Martin Luther King Jr. Day, President's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
Good Friday.
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The net asset value of the shares of each Fund is determined as of the
close of the regular session on the NYSE, which is generally at 4:00 p.m., New
York City time, on each day that trading is conducted on the NYSE. The net asset
value per share is calculated separately for each class, by taking the sum of
the value of each Fund's investments and any cash or other assets, subtracting
liabilities, and dividing by the total number of shares outstanding per class.
All expenses, including the fees payable to the Adviser, are accrued daily.
For purposes of the computation of net asset value, each of the Funds
values securities held in its respective portfolios as follows: readily
marketable portfolio securities listed on an exchange are valued, except as
indicated below, at the last sale price at the close of the exchange on the
business day as of which such value is being determined. If there has been no
sale on such day, the securities are valued at the mean of the closing bid and
asked prices on such day. If no bid or asked prices are quoted on such day, then
the security is valued by such method as the Trustees of the Funds shall
determine in good faith to reflect its fair value.
Readily marketable securities, including certain options, not listed on an
exchange but admitted to trading on the National Association of Securities
Dealers Automatic Quotations, Inc. ("NASDAQ") National Market System (the
"System") are valued in like manner. Portfolio securities traded on more than
one exchange are valued at the last sale price on the business day as of which
such value is being determined at the close of the exchange representing the
principal market for such securities.
Readily marketable securities, including certain options traded only in
the over-the-counter market and listed securities whose primary market is
believed by the Adviser to be over-the-counter (excluding those admitted to
trading on the List) are valued at the mean of the current bid and asked prices
as reported by such sources as the Trustees of the Funds deem appropriate to
reflect their fair market value. However, fixed-income securities (except
short-term securities) may be valued on the basis of prices provided by a
pricing service when such prices are believed by the Adviser to reflect the fair
market value of such securities. The prices provided by a pricing service are
determined without regard to bid or last sale prices but take into account
institutional size trading in similar groups of securities and any developments
related to specific securities. The money market securities in which each Fund
invests are traded primarily in the over-the-counter market and are valued at
the mean between most recent bid and asked prices as obtained from dealers that
make markets in such securities, except for securities having 60 days or less
remaining until maturity which are stated at amortized cost. Portfolio
securities underlying listed call options will be valued at their market price
and reflected in net assets accordingly. Premiums received on call options
written by a Fund will be included in the liability section of the Statement of
Assets and Liabilities as a deferred credit and subsequently adjusted
(marked-to-market) to the current market value of the option written.
Investments for which market quotations are not readily available are valued at
fair value as determined in good faith by the Trustees of the Funds.
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DIVIDENDS, DISTRIBUTIONS AND TAXES
The Funds intend to distribute to shareholders of the Funds on an annual
basis, substantially all of such respective periods' investment company taxable
income, if any, for each respective Fund. Such distributions generally will be
taxable to shareholders as ordinary income for federal income tax purposes.
Since each Fund is treated as a single entity for Federal income tax purposes,
the performance of one Fund will have no effect on the income tax liability of
shareholders of another Fund.
Upon a redemption or other disposition of shares of a Fund, a shareholder
will generally recognize gain or loss in an amount equal to the difference
between the amount realized and the shareholder's tax basis in such shares.
Generally, such gain or loss will be capital gain or loss, if the shares are
held as capital assets and will be long-term capital gain or loss if the
shareholder's holding period for such shares exceeds one year.
Capital gains, if any, realized by each of the Funds during their fiscal
year will be distributed to the respective shareholders shortly after the end of
such fiscal year. Distributions of the Funds' net capital gain, when designated
as such, will be taxable to shareholders as long-term capital gain, regardless
of how long the shareholders have held their shares.
Each income dividend and capital gains distribution, if any, declared by
the Funds on the outstanding shares of any Fund will, at the election of each
shareholder, be paid in cash or reinvested in additional full and fractional
shares of that Fund at the net asset value as of the close of business on the
date identified for reinvestment. Such distributions, to the extent they would
otherwise be taxable, will be taxable to shareholders regardless of whether paid
in cash or reinvested in additional shares. An election to receive dividends and
distributions in cash or shares is made at the time of the initial investment
and may be changed by notice received by the Funds from a shareholder at least
30 days prior to the record date for a particular dividend or distribution on
shares of each Fund. There is no charge in connection with the reinvestment of
dividends and capital gains distributions.
For Federal income tax purposes, dividends that are declared by a Fund in
October, November or December of any year and payable to shareholders of record
on a specified date in such a month and actually paid in January of the
following year will be treated as if they were paid on December 31 of the year
in which they were declared. Therefore, such dividends will generally be taxable
to a shareholder in the year declared rather than the year paid.
Shareholders will be advised annually as to the Federal tax status of
dividends and capital gains distributions made by each Fund for the preceding
year.
There is no fixed dividend rate and there can be no assurance that a Fund
will pay any dividends or realize any gains. The amount of any dividend or
distribution paid by each Fund depends upon the realization by the Fund of
income and capital gains from
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that Fund's investments. All dividends and distributions will be made to
shareholders of a Fund solely from assets of that Fund.
Payment (either in cash or in portfolio securities) received by a
shareholder upon redemption of his shares, or an exchange of shares in one Fund
for shares in another fund, assuming the shares constitute capital assets in his
hands, will result in long-term or short-term capital gains (or losses)
depending upon the shareholder's holding period and basis in respect of shares
redeemed. Any loss realized by a shareholder on the sale of Fund shares held for
six months or less will be treated for Federal income tax purposes as a
long-term capital loss to the extent of any distributions of long-term capital
gains received by the shareholder with respect to such shares. Note that any
loss realized on the sale of shares will be disallowed to the extent the shares
disposed of are replaced within a period of 61 days beginning 30 days before the
disposition of such shares. In such case, the basis of the shares acquired will
be adjusted to reflect the disallowed loss.
Each Fund intends to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), so that it will not be liable for Federal income taxes to the extent
that its net taxable income and net capital gains are distributed to
shareholders. Accordingly, each Fund must, among other things, (a) derive at
least 90% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of stock or securities or other foreign currencies, or other income
(including but not limited to gains from futures and forward contracts) derived
with respect to its business of investing in stock, securities or currencies;
and (b) diversify its holdings so that, at the end of each fiscal quarter, (i)
at least 50% of the market value of the Fund's assets is represented by cash,
cash items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect of any one issuer, to
an amount not greater than 5% of the value of the Fund's assets and 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any one issuer (other than
U.S. Government securities or the securities of other RICs) or of two or more
issuers which the Fund controls and which are engaged in the same or related
trades or businesses. Foreign currency gains that are not `directly related' to
the Fund's principal business of investing in stock or securities may be
excluded by Treasury Regulations from income that counts toward the 90% of gross
income requirement described above. The Treasury Department has not yet issued
any such regulations.
A dividend or capital gains distribution with respect to shares of any
Fund held by a tax-deferred or qualified retirement plan, such as an IRA, Keogh
Plan or corporate pension or profit sharing plan, will not be taxable to the
plan. Distributions from such plans will be taxable to individual participants
under applicable tax rules without regard to the character of the income earned
by the qualified plan.
As a regulated investment company, each Fund will not be subject to
Federal income tax on income and gains distributed to shareholders if it
distributes at least 90% of its investment company taxable income to
shareholders each year but will be subject to
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tax on its income and gains to the extent that it does not distribute to its
shareholders an amount equal to such income and gains. In addition, each Fund
will be subject to a nondeductible 4% excise tax on the excess, if any, of
certain required distribution amounts over the amounts actually distributed by
that Fund. To the extent practicable, each Fund intends to make such
distributions as may be necessary to avoid this excise tax.
Some of the investment practices of each Fund are subject to special
provisions that, among other things, may defer the use of certain losses of such
Funds and affect the holding period of the securities held by the Funds and,
particularly in the case of transactions in or with respect to foreign
currencies, and in the case of certain hedges or appreciated securities, the
character of the gains or losses realized. These provisions may also require the
Fund to mark-to-market some of the positions in their respective portfolios
(i.e., treat them as if they were closed out), which may cause such Funds to
recognize income without receiving cash with which to make distributions in
amounts necessary to satisfy the distribution requirements for qualification as
a regulated investment company and for avoiding income and excise taxes. Each
Fund will monitor its transactions and may make certain tax elections in order
to mitigate the effect of these rules and prevent disqualification of the Fund
as a regulated investment company.
Each Fund is required to withhold and remit to the U.S. Treasury 31% of
the dividends, capital gain distributions or the proceeds of any redemptions or
exchanges of shares with respect to any shareholder who fails to furnish the
Funds with a correct taxpayer identification number, who under-reports dividend
or interest income or who fails to certify to the Funds that he or she is not
subject to such withholding. An individual's tax identification number is his or
her social security number.
The foregoing is only a brief summary of some of the material U.S. federal
income tax considerations generally relating to an investment in the Funds. It
is based upon the Code, applicable Treasury regulations and administrative
rulings and pronouncements of the Internal Revenue Service, all as in effect on
the date hereof and which are subject to change, possibly with retroactive
effect. This summary is directed to investors who are U.S. persons (as
determined for U.S. federal income tax purposes) and does not purport to discuss
all of the income tax consequences applicable to the Funds or to all categories
of investors, some of whom may be subject to special rules (including dealers in
securities, insurance companies, non-U.S. persons and tax-exempt entities).
Investors are urged to consult their tax advisers regarding the specific U.S.
federal income tax consequences of an investment in the Funds, as well as the
effects of state, local and foreign tax laws and any proposed tax law changes.
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board of Trustees of the Funds,
the Adviser is responsible for the investment decisions and the placing of the
orders for portfolio transactions for the Funds. Portfolio transactions for the
Funds are normally effected by brokers.
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The Funds have no obligation to enter into transactions in portfolio
securities with any broker, dealer, issuer, underwriter or other entity. In
placing orders, it is the policy of the Funds to obtain the best price and
execution for its transactions. Where best price and execution may be obtained
from more than one broker or dealer, the Adviser may, in its discretion,
purchase and sell securities through brokers and dealers who provide research,
statistical and other information to the Adviser. Such services may be used by
the Adviser for all of their investment advisory accounts, and accordingly, not
all such services may be used by the Adviser in connection with the Funds. If a
Fund determines in good faith that the amount of transaction costs charged by a
broker or dealer is reasonable in relation to the value of the brokerage and
research and statistical services provided by the executing broker or dealer,
the Fund may utilize such broker or dealer although the transaction costs of
another broker or dealer are lower. The supplemental information received from a
broker or dealer is in addition to the services required to be performed by the
Adviser under the Previous and Interim Investment Advisory Agreements, and the
expenses of the Adviser will not necessarily be reduced as a result of the
receipt of such information.
Neither the Funds, nor the Adviser on behalf of the Funds have entered
into agreements or understandings with any broker or dealer regarding the
placement of securities transactions. Because of research or information to the
Adviser for use in rendering investment advice to the Funds, such information
may be supplied at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the Funds. While it
is impossible to place an actual dollar value on such investment information,
its receipt by the Adviser probably does not reduce the overall expenses of the
Adviser to any material extent.
The investment information provided to the Adviser is of the types
described in Section 28(e)(3) of the Securities Exchange Act of 1934 and is
designed to augment the Adviser's own internal research and investment strategy
capabilities. Research and statistical services furnished by brokers through
which the Funds effect securities transactions are used by the Adviser in
carrying out their investment management responsibilities with respect to all
their client accounts but not all such services may be utilized by the Adviser
in connection with the Funds.
The Funds may deal in some instances in equity securities which are not
listed on an exchange but are traded in the over-the-counter market. Where
transactions are executed in the over-the-counter market, the Funds seek to deal
with the primary market-makers, but when necessary in order to obtain the best
price and execution, it utilizes the services of others. In all cases, the Funds
will attempt to negotiate best execution.
The Funds may from time to time place orders for the purchase or sale of
securities (including listed call options) with Credit Suisse First Boston or
other affiliates of the Funds in accordance with the provisions of Section 11(a)
of the Securities Exchange Act of 1934 referred to below. With respect to orders
placed with these affiliates for execution on a national securities exchange,
commissions received must
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conform to Section 17(e)(2)(A) of the 1940 Act and Rule 17e-1 thereunder, which
permit an affiliated person of a registered investment company (such as the
Funds), or any affiliated person of such person, to receive a brokerage
commission from such registered investment company provided that such commission
is reasonable and fair compared to the commissions received by other brokers in
connection with comparable transactions involving similar securities during a
comparable period of time.
Pursuant to Section 11(a) of the Securities Exchange Act of 1934, these
affiliates of the Funds are restricted as to the nature and extent of the
brokerage services they may perform for the Funds. The SEC has adopted rules
under Section 11(a) which permit an investment adviser to a registered
investment company, or the adviser's affiliates, to receive compensation for
effecting, on a national securities exchange, transactions in portfolio
securities of such investment company, including causing such transactions to be
transmitted, executed, cleared and settled and arranging for unaffiliated
brokers to execute such transactions.
To the extent permitted by such rule, these affiliates of the Funds may
receive compensation relating to transactions in portfolio securities of the
Funds provided that each Fund enters into a written agreement, as required by
such rules, with that firm authorizing it to retain compensation for such
services. The Trustees of the Funds have granted authorization conforming to the
requirements of Section 11(a) to the Adviser to effect transactions in portfolio
securities of the Funds through their affiliates, Credit Suisse First Boston and
Autranet, Inc.
PORTFOLIO TURNOVER
Each Fund's average annual portfolio turnover rate is the ratio of the
lesser of sales or purchases to the monthly average value of such securities
owned during the year, excluding from both the numerator and the denominator all
securities with maturities at the time of acquisition of one year or less. Each
Fund does not anticipate a portfolio turnover rate in excess of 100%. A higher
rate involves greater transaction costs to a Fund and may result in the
realization of net capital gains, which would be taxable to shareholders when
distributed.
INVESTMENT PERFORMANCE INFORMATION
Each Fund may furnish data about its investment performance in
advertisements, sales literature and reports to shareholders. "Total return"
represents the change in value of $1,000 invested at the maximum public offering
price for a period assuming reinvestment of all dividends and distributions.
Quotations of average annual total return will reflect only the
performance of an investment in any Fund during the particular time period
shown. Each Fund's total return and current yield may vary from time to time
depending on market conditions, the
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compositions of its portfolio and operating expenses. These factors and possible
differences in the methods used in calculating yield should be considered when
comparing each Fund's current yield to yields published for other investment
companies and other investment vehicles. Average annual total return and yield
should also be considered relative to change in the value of each Fund's shares
and the risks associated with each Fund's investment objectives, policies and
risk considerations. At any time in the future, average annual total returns and
yield may be higher or lower than past total returns and yields and there can be
no assurance that any historical return or yield will continue.
From time to time evaluations of performance are made by independent
sources that may be used in advertisements concerning each Fund. These sources
include Lipper, Inc., Weisenberger Investment Company Service, Barron's,
Business Week, Kiplinger's Personal Finance, Financial World, Forbes, Fortune,
Money, Personal Investor, SmartMoney, Sylvia Porter's Personal Finance, Bank
Rate Monitor, Morningstar and The Wall Street Journal.
In connection with communicating its yield or average annual total return
to current or prospective shareholders, each Fund may also compare these figures
to the performance of other mutual funds tracked by mutual fund rating services
or to other unmanaged indexes which may assume reinvestment of dividends but
generally do not reflect deductions for administrative and management costs.
Quotations of each Fund's average annual total return will represent the
average annual compounded rate of return of a hypothetical investment in each
Fund over periods of 1, 5, and 10 years (or up to the life of each Fund), and
are calculated pursuant to the following formula:
P(1+T)^n=ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years, and ERV = the redeemable value at the end
of the period of a $1,000 payment made at the beginning of the period). All
average annual total return figures will reflect the deduction of Fund expenses
(net of certain expenses reimbursed by the Adviser) on an annual basis, and will
assume that all dividends and distributions are reinvested.
For the period November 18, 1999 (commencement of offering of shares)
throughOctober 31, 2000, the return was % and % for the DLJ Strategic Growth
Fund and the DLJ Technology Fund, respectively.
SHARES OF BENEFICIAL INTEREST
As of ________, there were no shareholders who owned 5% or more of either
the Strategic Growth Fund or the Technology Fund.
29
<PAGE>
As of the date of this Statement of Additional Information, the Trustees
and Officers of the Funds as a group owned less than 1% of the outstanding
shares of either Fund.
The Adviser manages accounts over which it has discretionary power to vote
or dispose of securities held in such accounts and which accounts hold in the
aggregate, as of, shares (%) of the Strategic Growth Fund and shares (%) of the
Technology Fund.
GENERAL INFORMATION
Organization and Capitalization
The Trust was formed on August 3, 1999, as a `business trust' under the
laws of the State of Delaware.
The Agreement and Declaration of Trust provides that no Trustee, officer,
employee or agent of the Funds is liable to the Funds or to a shareholder, nor
is any Trustee, officer, employee or agent liable to any third persons in
connection with the affairs of the Funds, except as such liability may arise
from his or its own bad faith, willful misfeasance, gross negligence or reckless
disregard of his or her duties. It also provides that all third parties shall
look solely to the property of a Fund or the property of such appropriate Fund
for satisfaction of claims arising in connection with the affairs of a Fund.
With the exceptions stated, the Agreement and Declaration of Trust permits the
Trustees to provide for the indemnification of Trustees, officers, employees or
agents of the Funds against all liability in connection with the affairs of the
Funds.
All shares of the Funds when duly issued will be fully paid and
non-assessable. The Trustees are authorized to re-classify and issue any
unissued shares to any number of additional series without shareholder approval.
Accordingly, the Trustees in the future, for reasons such as the desire to
establish one or more additional Funds with different investment objectives,
policies, risk considerations or restrictions, may create additional series or
classes of shares. Any issuance of shares of such additional series would be
governed by the 1940 Act and the laws of the State of Delaware.
Counsel and Independent Auditors
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, serves as
legal counsel for the Funds.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019, has been
appointed as independent auditors for the Funds.
30
<PAGE>
Custodian and Transfer Agent
Citibank, N.A., 111 Wall Street, New York, New York 10043 serves as
custodian to the Funds.
PFPC, Inc., 211 S. Gulph Road, King of Prussia, PA 19406-3101 serves as
Transfer Agent for the Funds.
Additional Information
This Statement of Additional Information does not contain all the
information set forth in the Registration Statement filed by the Funds with the
SEC under the Securities Act of 1933. Copies of the Registration Statement may
be obtained at a reasonable charge from the SEC or may be examined, without
charge, at the offices of the SEC in Washington, D.C.
Financial Statements
The audited financial statements of each International Fund for the fiscal
year ended October 31, 2000 and the report of the Funds' independent auditors in
connection therewith are included in the October 31, 2000 Annual Report to
Shareholders. The Annual Report is incorporated by reference into this Statement
of Additional Information. You can obtain a copy of the International Funds'
Annual Report by writing or calling the International Funds at the address or
telephone numbers set forth on the cover of this Statement of Additional
Information.
31
<PAGE>
PART C
Other Information
Item 23. EXHIBITS
(a) Form of Agreement and Declaration of Trust*
(b) Form of Bylaws*
(c) Not Applicable
(d) (1) Form of Investment Advisory Agreement*
(2) Interim Investment Advisory Agreement with Credit Suisse Asset
Management, LLC, dated November 3, 2000**
(e) Distribution Agreement with Credit Suisse Asset Management
Securities, Inc., dated December 18, 2000**
(f) Not Applicable
(g) Form of Custody Services Agreement*
(h) (1) Form of Services Agreement*
(2) Form of Interim and Restated Services Agreement**
(i) Legal Opinion*
(j) Consent of Independent Auditors**
(k) Financial Data Schedule****
(l) Form of Subscription Agreement with initial shareholders*
(m) (1) Rule 12b-1 Plan for the Growth Fund, Class A shares***
(2) Rule 12b-1 Plan for the Technology Fund, Class A shares***
(3) Rule 12b-1 Plan for the Growth Fund, Class B shares***
(4) Rule 12b-1 Plan for the Growth Fund, Class C shares***
(5) Rule 12b-1 Plan for the Growth Fund, Class R shares***
(6) Rule 12b-1 Plan for the Technology Fund, Class B shares**
(7) Rule 12b-1 Plan for the Technology Fund, Class C shares***
(8) Rule 12b-1 Plan for the Technology Fund, Class R shares*
(n) Rule 18f-3 Plan***
(p) Code of Ethics of Registrant**
----------
* Incorporated herein by reference to Post-effective Amendment No.1 to
Registration Statement of DLJ Select Funds on Form N-1A.
<PAGE>
** Filed herewith.
*** Incorporated herein by reference to Post-Effective Amendment No. 3
to Registration Statement of DLJ Select Funds on Form N-1A.
**** Incorporated herein by reference to NSAR-B, filed on December 27,
2000.
***** To be filed subsequently by amendment.
Item 24 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not Applicable
Item 25 INDEMNIFICATION
Registrant's Agreement and Declaration of Trust provides that the
Trust (for the appropriate Fund) shall indemnify each person who is a trustee or
officer of the Trust against any liabilities, including amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable counsel fees, incurred in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or investigative body, in which
such person may be or may have been threatened, while in office, except with
respect to any matter as to which such person did not act in good faith in the
reasonable belief that such person's action was in the best interests of the
Trust and certain limitations with respect to criminal proceedings.
The Interim Advisory Agreement between Registrant and Credit Suisse
Asset Management, LLC ("CSAM"), which incorporates the substantive terms of the
prior Investment Advisory Agreement between the Registrant and DLJ Asset
Management Group, Inc., provides that the Adviser will not be liable thereunder
for any mistake of judgment or in any event whatsoever except for lack of good
faith and that nothing therein shall be deemed to protect the Adviser against
any liability to Registrant or its security holders to which it would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties thereunder, or by reason of reckless disregard of
its duties and obligations thereunder.
The Distribution Agreement between the Registrant and Credit Suisse
Asset Management Securities, Inc. ("CSAMSI") provides that Registrant will
indemnify, defend and hold CSAMSI, and any other person who controls it within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses which CSAMSI or any
controlling person of CSAMSI may incur in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which CSAMSI or any controlling person of CSAMSI may be or may have been
involved as a party or otherwise or with which he may be or may have been
threatened, while CSAMSI was active in the capacity of distributor or by reason
of CSAMSI having acted in such capacity or arising out of or based upon any
untrue statement of a material fact contained in the then-current Prospectus
relating to the shares or arising out of, or based upon any alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading except as to certain limited circumstances and
provided, however, that, among other things, CSAMSI or any controlling person of
CSAMSI shall not be indemnified against any liability or expense with respect to
any matter as to which such person shall have been adjudicated not to have acted
in good faith in the reasonable belief that its action was in the best interest
of the Fund or arising by reason of such person's willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations under the Distribution Agreement.
The foregoing summaries are qualified by the entire text of
Registrant's Agreement and Declaration of Trust, the Investment Advisory
Agreements, the Interim Investment Advisory Agreement and the Distribution
Agreement. The Registrant's Agreement and Declaration of Trust, Investment
Advisory Agreements, Interim Investment Advisory Agreement and Distribution
Agreement are incorporated by reference to Item 23.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to trustees,
officers and controlling persons of the Registrant pursuant to the foregoing
<PAGE>
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission, such indemnification may be against
public policy as expressed in the Securities Act and may be, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a trustee, officer or the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
For events subsequent to November 3, 2000, the Gulf Insurance
Company carries for the Trust, Directors and Officers Liability Insurance. For
events prior to November 3, 2000, the Equitable Life Assurance Society of the
United States carries for the Trust, Directors and Officers Liability Insurance.
Coverage under the Equitable Life Assurance Society policy has been extended to
directors and officers of the investment companies formerly managed by DLJAM.
Under each policy, outside directors would be covered up to the limits specified
for any claim against them for acts committed in their capacities as members of
the Board.
<PAGE>
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
CSAM acts as investment adviser to the Registrant. CSAM renders
investment advice to a wide variety of individual and institutional clients. The
list required by this Item 26 of officers and directors of CSAM, together with
information as to their other business, profession, vocation or employment of a
substantial nature during the past two years, is incorporated by reference to
Schedules A and D of Form ADV filed by CSAM (SEC File No. 801-37170).
Item 27. PRINCIPAL UNDERWRITERS
(a) CSAMSI, the Registrant's Distributor (Underwriter) also acts as
Distributor for the following investment companies:
DLJ Focus Funds: DLJ Small Company Value Fund, DLJ Fixed Income
Fund, DLJ Growth and Income Fund, DLJ Municipal Trust Fund and DLJ
Core Equity Fund.
DLJ Opportunity Funds: DLJ Developing Markets Fund, DLJ
International Equity Fund, DLJ High Income Fund, DLJ Municipal Money
Fund and DLJ U.S. Government Money Fund.
DLJ Select Funds: DLJ Strategic Growth Fund and DLJ Technology Fund.
Warburg Pincus Balanced Fund; Warburg Pincus Capital Appreciation
Fund; Warburg Pincus Cash Reserve Fund; Warburg Pincus Central &
Eastern Europe Fund; Warburg Pincus Emerging Growth Fund; Warburg
Pincus Emerging Markets Fund; Warburg Pincus Emerging Markets II
Fund; Warburg Pincus European Equity Fund; Warburg Pincus Fixed
Income Fund; Warburg Pincus Global Fixed Income Fund; Warburg Pincus
Global Post-Venture Capital Fund; Warburg Pincus Global
Telecommunications Fund; Warburg Pincus Growth & Income Fund;
Warburg Pincus Health Sciences Fund; Warburg Pincus High Yield Fund;
Warburg Pincus Institutional Fund; Warburg Pincus Intermediate
Maturity Government Fund; Warburg Pincus International Equity Fund;
Warburg Pincus International Growth Fund; Warburg Pincus
International Small Company Fund; Warburg Pincus Japan Growth Fund;
Warburg Pincus Japan Small Company Fund; Warburg Pincus Long-Short
Equity Fund; Warburg Pincus Long-Short Market Neutral Fund; Warburg
Pincus Major Foreign Markets Fund; Warburg Pincus New York
Intermediate Municipal Fund; Warburg Pincus New York Tax Exempt
Fund; Warburg Pincus Post-Venture Capital Fund; Warburg Pincus
Select Economic Value Equity Fund; Warburg Pincus Small Company
Growth Fund; Warburg Pincus Small Company Value Fund; Warburg Pincus
Strategic Global Fixed Income Fund; Warburg Pincus Trust; Warburg
Pincus Trust ; Warburg Pincus Trust II; Warburg Pincus U.S. Core
Equity Fund; Warburg Pincus U.S. Core Fixed Income Fund; Warburg
Pincus WorldPerks Money Market Fund; and Warburg Pincus WorldPerks
Tax Free Money Market Fund.
(b) For information relating to each director, officer or partner of
CSAMSI, reference is made to Form BD (SEC File No. 8-32482) filed by
CSAMSI under the Securities Exchange Act of 1934.
(c) Not Applicable
Item 28. LOCATION OF ACCOUNTS AND RECORDS
The majority of accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained at the offices of the DLJ Select Funds at 277 Park
Avenue, New York, New York 10172 (see "Fund Management" in the Prospectus).
Additional records are maintained at the offices of Citibank, N.A., the
Registrant's Custodian, 111 Wall Street, New York, New York 10043.
<PAGE>
Item 29. MANAGEMENT SERVICES
Other than as set forth under the captions "Fund Management" in the
Prospectus and "Management" in the Statement of Additional Information,
constituting Parts A and B, respectively, of this Post-Effective Amendment to
the Registration Statement, Registrant is not a party to any management-related
service contract.
Item 30. UNDERTAKINGS
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and the State of New York on the 29th day of
December, 2000.
DLJ Select Funds
By: /s/ G. Moffett Cochran
-----------------------
Name: G. Moffett Cochran
Title: President
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated:
Signature Title Date
--------- ----- ----
/s/ G. Moffett Cochran* President December 29, 2000
Chairman of the Board
------------------------
G. Moffett Cochran
/s/ Martin Jaffe Trustee, Vice President, December 29, 2000
Secretary and Treasurer
------------------------
Martin Jaffe
/s/ Stig Host* Trustee December 29, 2000
------------------------
Stig Host
/s/ Peter F. Krogh* Trustee December 29, 2000
------------------------
Peter F. Krogh
/s/ Robert E. Fischer* Trustee December 29, 2000
------------------------
Robert E. Fischer
<PAGE>
/s/ Wilmot H. Kidd, III* Trustee December 29, 2000
------------------------
Wilmot H. Kidd, III
/s/ John J. Sheehan* Trustee December 29, 2000
------------------------
John J. Sheehan
*By:
/s/ Martin Jaffe
------------------------
Martin Jaffe
(Attorney-in-fact)
Pursuant to Power of Attorney
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned has
constituted and appointed, and by these presents does constitute and appoint, G.
Moffet Cochran and Martin Jaffe, or either of them, the true and lawful agents
and attorneys-in-fact of each of the undersigned with respect to all matters
arising in connection with the filing with the Securities and Exchange
Commission of this Post-Effective Amendment No. 4to the Registration Statement
under the Securities Act of 1933 and under the Investment Company Act of 1940 on
Form N-1A and any subsequent amendments to the Registration Statement with full
power and authority to execute and deliver for and on behalf of each of the
undersigned all such consents and documents in connection therewith as said
agents and attorneys-in-fact may deem advisable. Each of the undersigned hereby
gives to said agents and attorneys-in-fact full power and authority to act in
the premises, including, but not limited to, the power and authority to execute
and file with the Securities and Exchange Commission this Post-Effective
Amendment No. 4 to the Registration Statement on Form N-1A and any amendments
thereto, and/or other documents in connection therewith, and to appoint a
substitute or substitutes to act hereunder with the same power and authority as
said agents and attorneys-in-fact would have if personally acting. Each of the
undersigned hereby ratifies and confirms all that said agents and
attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.
This Power of Attorney may be signed in more than one counterpart,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
/s/ G. Moffett Cochran /s/ Wilmot H. Kidd, III
------------------------ ------------------------
G. Moffett Cochran Wilmot H. Kidd, III
/s/ Stig Host /s/ Peter F. Krogh
------------------------ ------------------------
Stig Host Peter F. Krogh
/s/ John J. Sheehan /s/ Robert E. Fischer
------------------------ ------------------------
John J. Sheehan Robert E. Fischer
Dated as of December 18, 2000
<PAGE>
12
<PAGE>
SCHEDULE OF EXHIBITS TO FORM N-1A
Exhibits
A complete list of exhibits is included in Part C, Item 23 of the Registration
Statement.
13
