GENERAL SECURITIES INC, 485APOS, 1999-01-29

GENERAL SECURITIES INC
485APOS, 1999-01-29

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As filed with the Securities and Exchange Commission on January 30 , 1999
File No. 2-77092
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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. 18 /X/

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

AMENDMENT NO. 18

GENERAL SECURITIES, INCORPORATED
(Exact Name of Registrant as Specified in Charter)

5100 EDEN AVENUE, SUITE 204, EDINA, MN 55435
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (612) 927-6799

Copy to:
CRAIG H. ROBINSON JOHN R. HOUSTON
GENERAL SECURITIES, INCORPORATED LINDQUIST & VENNUM P.L.L.P.
5100 EDEN AVENUE, SUITE 204 4200 IDS CENTER
EDINA, MINNESOTA 55435 MINNEAPOLIS, MINNESOTA 55402
(Name and Address of Agent for Service)

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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: It is proposed that the 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)

/ / on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

/ / This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

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GENERAL SECURITIES, INCORPORATED

REGISTRATION STATEMENT ON FORM N-1A

CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER

<TABLE>
<CAPTION>
PROSPECTUS
PART A PROSPECTUS CAPTION PAGE NUMBER
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<S> <C> <C>
1. Cover Page. . . . . . . . . . . . . . . . . . . . . . . 1
2. Risk/Return Summary:
Investments, Risks and Performance. . . . . . . . . . . 3
3. Risk/Return Summary:Fee Table . . . . . . . . . . . . . 5
4. Investment Objectives, Strategies and Risks . . . . . . 6
5. *
6. Fund Management, Organization
and Capital Structure. . . . . . . . . . . . . . . . . 8
7. Shareholder Information . . . . . . . . . . . . . . . . 10
8. Distribution Arrangements . . . . . . . . . . . . . . . 15
9. Financial Highlights Information. . . . . . . . . . . . 16

<CAPTION>
STATEMENT OF ADDITIONAL STATEMENT OF ADDITIONAL
PART B INFORMATION CAPTION INFORMATION PAGE NUMBER
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<S> <C> <C>
10. Cover Page and Table of Contents. . . . . . . . . . . . 1
11. Fund History. . . . . . . . . . . . . . . . . . . . . . 2
12. Description of the Fund and its Investment Risks. . . . 2
13. Management of the Fund. . . . . . . . . . . . . . . . . 4
14. Control Persons and Principal Holders of Securities . . 7
15. Investment Advisory and Other Services. . . . . . . . . 7
16. Brokerage Allocation and Other Practices. . . . . . . . 10
17. Capital Stock and Other Securities. . . . . . . . . . . 11
18. Purchase, Redemption and Pricing of Shares. . . . . . . 11
19. Taxation of the Fund. . . . . . . . . . . . . . . . . . 16
20. Underwriters. . . . . . . . . . . . . . . . . . . . . . 9
21. Calculation of Performance Data . . . . . . . . . . . . 17
22. Financial Statements. . . . . . . . . . . . . . . . . . 18
</TABLE>

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*Not Applicable.
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>
GENERAL SECURITIES INCORPORATED
5100 Eden Avenue, Suite 204, Edina, Minnesota 55436
Telephone (800) 577-9217

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LOGO General Securities, Incorporated (the "Fund") is a
FOCUS ON diversified open- end management investment company which seeks
---- possible long-term capital appreciation for its shareholders
TQM with reasonable risk. The Fund invests primarily, but not
---- exclusively, in selected common stocks of companies that have
TOTAL QUALITY implemented Total Quality Management principles. The Fund's
MANAGEMENT Investment Advisor is Robinson Capital Management, Inc. The Fund
COMPANIES was incorporated in Minnesota in 1951, and has been in operation
as a mutual fund since then.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS MARCH , 1999.
<PAGE>
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CONTENTS

<TABLE>
<S> <C>
Risk/Return Summary....................................................... 3
Investment Objectives, Strategies and Risks............................... 6
Fund Management........................................................... 8
Purchase of Shares........................................................ 10
Distribution Policy and Tax Status........................................ 14
Distribution Arrangements................................................. 15
Financial Highlights...................................................... 16
General Information....................................................... 17
</TABLE>

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<PAGE>
FUND SUMMARY

RISK/RETURN SUMMARY: INVESTMENTS, RISKS AND PERFORMANCE

INVESTMENTS

The Fund's investment objective is to seek long-term capital appreciation
with reasonable risk. Consistent with that objective, the Investment Advisor
seeks to select common stocks of companies that the Investment Advisor
determines are implementing a "Total Quality Management" (TQM) operating
philosophy. TQM is a management philosophy where a company undertakes a
systematic process of evaluating its business practices and engages in a
continuous effort to improve its operations throughout the organization. The
Investment Advisor also uses fundamental and quantitative analysis techniques to
evaluate TQM companies and identify those that the Investment Advisor believes
are undervalued in the marketplace. These are typically known as "value" stocks.
However, investments in corporate bonds or debentures, United States Government
securities and other types of securities have and will be made as economic
conditions dictate. The Investment Advisor attempts to diversify investments
(subject to certain restrictions set forth herein) as a matter of course as to
individual companies and as to industries most likely to achieve these
objectives.

PRINCIPAL INVESTMENT RISKS

There is no assurance that the investment objectives of the Fund will be
achieved or that a focus on investments in companies implementing TQM principles
will provide a greater return than investments in other companies. Loss of money
is a risk of investing in the Fund. The Fund's principal investment risks
include:

STOCK MARKET VOLATILITY. Stock markets are volatile and can decline
significantly in response to adverse issuer, political, regulatory, market or
economic developments. Different parts of the market can react differently to
these developments.

COMPANY SPECIFIC RISKS. The value of an individual security or particular
type of security can be more volatile than the market as a whole and can perform
differently than the value of the market as a whole.

TQM STRATEGY RISK. A non-traditional screening process that limits
investments to generally those companies the Fund's Investment Advisor believes
are "TQM" oriented may not correctly identify "TQM" companies. Furthermore,
investments in such companies may provide no better and possibly lower returns
than other companies.

"VALUE" INVESTING STRATEGY RISK. "Value" stocks can perform differently
than the market as a whole and other types of stocks and can continue to be
undervalued by the market for long periods of time.

FUND PERFORMANCE

The following bar chart and table provide an indication of the risks of
investing in the Fund by showing changes in the Fund's performance from year to
year over a 10-year period, and by showing how the Fund's average annual returns
for one, five and ten years compare to those of three broad-based securities
market indices. The Fund's past performance is not necessarily an indication of
how the Fund will perform in the future.

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BAR CHART OF TOTAL ANNUAL RETURNS FOR LAST 10 CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

During the 10-year period shown in the bar chart, the highest return for a
quarter was 19.24% (quarter ending March 31, 1991) and the lowest return for a
quarter was -12.20% (quarter ending September 30, 1991).

AVERAGE ANNUAL RETURNS

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS PAST ONE PAST FIVE PAST TEN
(FOR THE PERIODS ENDING DECEMBER 31, 1998) YEAR YEARS YEARS
- ------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
General Securities, Incorporated................. 5.63% 14.22% 13.57%
S&P 500*......................................... 28.58% 23.05% 19.20%
S&P/BARRA 500 Value Index**...................... 14.67% 19.88% 16.67%
S&P/BARRA Midcap 400 Value Index***.............. 4.67% 17.48% N/A
S&P/BARRA Smallcap 600 Value Index****........... (5.06)% 15.31 % N/A
</TABLE>

* The S&P 500 is the Standard & Poor's Composite Index of 500 stocks, a
widely-recognized unmanaged index of common stock prices of large
capitalization U.S. companies.
** The S&P/BARRA 500 Value Index is the Standard & Poor's unmanaged index of
stock prices of U.S. companies contained in the S&P 500, who have lower
price-to-book ratios than the mean price-to-book ratio of all S&P 500
companies. It is widely recognized as a performance benchmark for funds
with a "value" investment objective.
*** The S&P/BARRA Midcap 400 Value Index is an unmanaged index of common stock
prices of mid-sized U.S. companies with lower price-to-book ratios. It is
widely used as a performance benchmark for funds with a "value" oriented
investment objective that invest in mid-sized companies. Ten year returns
are not available.
**** The S&P/BARRA Smallcap 600 Value Index is an unmanaged index of common
stock prices of small-sized U.S. companies with lower price-to-book ratios.
It is widely used as a performance benchmark for funds with a "value"
oriented investment objective that invest in small-sized companies. Ten
year returns are not available.

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RISK/RETURN SUMMARY: FEE TABLE

The following table describes the fees and expenses that you may pay if you
buy and hold shares of the Fund.

SHAREHOLDER FEES (fees paid directly from your investment)

<TABLE>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)...................................... None
Maximum Deferred Sales Charge (Load)...................................... None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and Other Distributions.................................................. None
Redemption Fees........................................................... None(1)
</TABLE>

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets,
expressed as a percentage of average net assets)

<TABLE>
<S> <C>
Management Fees............................................................. .60%
Administrative Fees......................................................... .40%
Distribution or Service Fees (12b-1 fees)................................... None
Other Expenses.............................................................. .47%
---------
Total Fund Operating Expenses............................................... 1.47%
</TABLE>

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(1) The Fund charges $20 for wire transfer of redemption proceeds.

EXAMPLE

This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------- ------- --------
<S> <C> <C> <C>
$150 $ 465 $ 803 $ 1,757
</TABLE>

The table is intended to assist in assessing the various costs and expenses
which an investor will bear, directly or indirectly, with respect to an
investment in the Fund. For a complete description of these expenses, you should
review "FUND MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE" and "SHAREHOLDER
INFORMATION" in this Prospectus and the Statement of Additional Information
available from the Fund. The expenses or the annual rate of return should not be
considered a representation of past or future expenses or the annual rate of
return. Actual future expenses or the annual rate of return may be greater or
lesser than those shown.

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INVESTMENT OBJECTIVES, STRATEGIES AND RISKS

INVESTMENT OBJECTIVES AND STRATEGIES

The Fund's investment objective is to seek long-term capital appreciation
with reasonable risk. The Fund invests a majority of its Fund's assets in common
stocks of companies that the Fund's Investment Advisor believes have implemented
a TQM philosophy. The Investment Advisor also uses fundamental and quantitative
analysis techniques to identify TQM companies that the Investment Advisor
believes are undervalued in the marketplace. There can be no assurance that the
objective of the Fund will be realized.

When determining whether a company being considered as an investment
candidate has implemented TQM principles, the Investment Advisor evaluates
published reports by the company as well as reports from various organizations
that the Investment Advisor believes are knowledgeable in the principles and
practices of TQM. Reports may include announcements of companies that have won
TQM-oriented awards, or other information that otherwise identifies a company as
following TQM principles. As a result of this evaluation, the Investment Advisor
develops a judgment, principally subjective, as to the level of commitment a
company has to TQM principles and practices, and the extent of a company's
deployment of those principles and practices.

The Investment Advisor also seeks to identify TQM companies that the
Investment Advisor believes are undervalued in the marketplace in relation to
factors such as the issuing company's assets, earnings or growth potential. The
Investment Advisor uses fundamental and quantitative analysis to identify
companies that generally have one or more of the following characteristics: (1)
valuable fixed assets; (2) valuable consumer or commercial franchises; (3)
selling at low market valuations of assets relative to the securities market in
general, or that may be currently earning a very low return on assets but which
have the potential to earn higher returns if conditions in their industry
improve; (4) undervalued in relation to their potential for growth in earnings,
dividends or book value; or (5) have recently changed management or control and
have the potential for a "turnaround" in earnings.

Once an investment is made by the Fund, the Investment Advisor continually
monitors, reviews and evaluates the company's performance. If a portfolio
company is determined to have dropped its TQM focus, or otherwise to have ceased
to meet performance expectations, the policy of the Investment Advisor is to
sell the Fund's shares in that company.

From time to time the Fund may also invest in selected corporate bonds or
debentures rated at the time of purchase as A or above by Moody's Investors
Service or Standard & Poors. In addition, when the Investment Advisor believes
that market conditions warrant a temporary defensive position, the Fund
periodically invests in United States Treasury bills, notes and bonds and may in
the future consider investments in certificates of deposit and bank depository
accounts of banks which have total assets in excess of $500 million. The Fund
attempts to diversify investments (subject to certain restrictions) as a matter
of course as to individual companies and as to industries most likely to achieve
these objectives.

No guarantee can be made that any of the Fund's objectives will be achieved,
and inherent in this policy are risks of unpredictable market fluctuations. The
investment objective of the Fund is a

6
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fundamental policy of the Fund and may not be changed without the approval of
the holders of a majority of the Fund's outstanding voting securities.

PRINCIPAL INVESTMENT RISKS

Any investment carries with it some level of risk that generally reflects
its potential for return. The principal risks that could adversely affect the
value of the Fund's shares and total return on your investment include:

COMMON STOCKS. Common stock represents an ownership interest in a company.
The value of a company's stock price may fall as a result of factors relating
directly to that company, such as decisions made by its management or lower
demand for the company's products or services. Similarly, a stock's value may
fall because of factors affecting not just the company, but companies in a
number of industries, such as increases in production costs. The value of a
company's stock price may also be affected by changes in financial markets that
may be unrelated to the company or its industry such as changes in interest
rates or currency exchange rates. In addition, a company's stock generally pays
dividends only after the company makes required payments to holders of its bonds
and other debt. Accordingly, the value of a company's stock price may react more
than bonds or other debt to actual or perceived changes in the company's
financial condition or prospects.

VALUE INVESTING. The Fund may invest in stocks of companies that the
Investment Advisor considers to be inexpensive relative to their earnings or
assets compared to other types of stocks. These "value" stocks can react
differently to issuer, political, market and economic developments than the
market as a whole and to other types of stocks. Value stocks can continue to be
inexpensive for long periods of time and may never realize the value that the
Investment Advisor expects.

TQM. Companies that the Investment Advisor selects who are implementing a
TQM approach may not be best-positioned for growth or may be unable to weather
economic downturns. The Investment Advisor may select companies who are not
firmly following these practices, or these practices may not necessarily
translate into stock performance that the Investment Advisor expects, or that
satisfies the Fund's objectives of capital appreciation consistent with
reasonable risk.

GROWTH STOCKS. Within the confines of the Fund's investment objectives,
the Fund may invest in stocks of companies that the Investment Advisor believes
have earnings that will grow faster than the economy as a whole. Financial
professionals typically call these stocks "growth stocks". They typically trade
at higher multiples of current earnings to their stock price than other stocks.
The values of growth stocks may be more sensitive to changes to in current or
expected earnings than the values of other stocks. If the Investment's Advisor's
assessment of the prospects for a company's earnings growth is wrong, or if its
judgment of how other investors will value the company's earnings growth is
wrong, then the price of the company's stock price may fall or fail to
appreciate in the manner that the Investment Advisor expects.

DEBT SECURITIES. The Fund may invest in U.S. government securities and
corporate bonds and debentures rated A or higher at the time of purchase by
reputable credit rating agencies. There is risk that a bond issuer will fail to
make timely payments of principal or interest. Additionally, corporate bonds and
U. S. government securities fluctuate in price based on changes in market
conditions.

7
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TRADING RISKS. The Fund may buy or sell investments relatively frequently.
Such a strategy involves risks that the Fund may incur higher brokerage
commissions, and may result in higher taxes to shareholders.

DEFENSIVE STRATEGIES. From time to time, the Investment Advisor may
determine that market conditions or other factors warrant that the Fund adopt
defensive strategies to limit losses or lock-in gains. This could include
investments in United States Treasury bills, notes and bonds, certificate of
deposits and bank depository accounts of banks which have total assets in excess
of $500 million. The Fund's defensive strategy could also include buying or
selling options. The Fund may buy or sell options on broad market indexes or
particular securities within the Fund's portfolio in order to hedge the Fund's
exposure to downward price fluctuations. If the Investment Advisor applies a
hedge strategy at an inappropriate time or judges market conditions incorrectly,
these defensive strategies may lower the Fund's return and limit the Fund's
ability to achieve its objective of capital appreciation.

YEAR 2000. Many computer software systems in use today cannot properly
process the date-related information from and after January 1, 2000. Should any
of the computer systems employed by the Fund, the Investment Advisor or the
Fund's service providers fail to process this type of information properly, it
could have a negative impact on the Fund's operations and services that are
provided to the Fund's shareholders. The Investment Advisor, along with the
Fund's Transfer Agent, Custodian and Registrar, IFTC, have undertaken a
compliance program that has involved a review of relevant computer systems, and
subsequent appropriate modification and upgrades to such systems to foreclose
any negative impact from the Year 2000. As of the date of this Prospectus, the
Fund and the Investment Advisor do not anticipate that the move to the Year 2000
will have a material adverse impact on the Investment Advisor's ability to
continue to provide the Fund with service at current levels, although there can
be no assurance of this. Similarly, the values of certain of the securities held
by the Fund may be adversely affected by the inability of those companies or of
third-parties to process information properly, and the value of such securities,
or the overall market, could decline.

FUND MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE

THE FUND'S INVESTMENT ADVISOR

Robinson Capital Management, Inc. serves as Investment Advisor to the Fund
pursuant to an Investment Advisory Agreement, and manages the Fund's business
affairs pursuant to a Management Agreement. Robinson Capital has served as the
Investment Advisor to the Fund since 1994. Robinson Capital is a Minnesota
corporation with offices at 5100 Eden Avenue, Suite 204, Edina, Minnesota 55436.
Robinson Capital does not serve as investment advisor to any other registered
investment companies.

The officers of the Fund, along with Robinson Capital, manage the Fund's
investment activities and day-to-day operations, subject to supervision by the
Board of Directors. The Board of Directors sets broad policies for the Fund and
chooses the Fund's officers and the companies that provide the Fund with
services. Craig Robinson is President of the Fund and Robinson Capital. Mr.
Robinson also serves as the Fund's Associate Portfolio Manager. Mr. Robinson has
held various sales and marketing positions at Robinson Capital since 1995, and
served as an account executive at Paine Webber, Inc. from 1994 to 1995. Mark
Billeadeau is Vice-President of the Fund and Robinson Capital, and serves as

8
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the Fund's Senior Portfolio Manager. Mr. Billeadeau has served as a
Vice-President of the Fund since 1997, and a Vice-President and Financial
Analyst of Robinson Capital since 1995. From 1990 to 1995, he also served as
Manager (Consulting Service) at Craig-Hallum, Inc. and its successor, Principal
Financial Services, Inc.

Pursuant to an Investment Advisory Agreement which was approved by the
Fund's shareholders on December 9, 1998, Robinson Capital provides the Fund all
necessary information, advice, recommendation services and determinations
relating to investments and portfolio management. Orders for securities are
placed by Robinson Capital with the view to obtaining the best combination of
price and execution available. Robinson Capital attempts to evaluate the overall
quality and reliability of the broker-dealers and the services provided,
including research services, general execution capability, reliability and
integrity, willingness to take a position in securities, general operational
capabilities and financial condition. Robinson Capital is authorized to place
orders with various broker-dealers, subject to all applicable legal
requirements. Robinson Capital may also place orders with broker-dealers that
sell the Fund's shares, provided Robinson Capital believes the price and
execution are comparable to other broker-dealers. A greater spread, discount or
commission may be paid to broker-dealers that provide research services, which
may be used by Robinson Capital in managing assets of its clients, including the
Fund. Although it is believed that research services received directly or
indirectly benefit all of Robinson Capital's clients, the degree of benefit
varies by account and is not directly related to the commissions or remuneration
paid by the account.

As compensation for its services under the Investment Advisory Agreement,
Robinson Capital is paid an investment advisory fee, payable monthly, at an
annual rate of 0.60% for average net assets up to and including $100 million,
0.35% for the next $150 million of average net assets and 0.10% for net assets
over $250 million. While the advisory fee paid Robinson Capital is comparable to
the advisory fee paid by other mutual funds, the total expenses of the Fund are
higher than total expenses paid by most mutual funds, many of which have net
assets that are substantially larger than the net assets of the Fund. For the
fiscal year ended November 30, 1998, the advisory fees paid Robinson Capital
were $294,321.

Robinson Capital also provides the Fund with non-investment advisory
management and administrative services necessary for the conduct of the Fund's
business pursuant to a Management Agreement which was approved by the Fund's
shareholders on December 9, 1998. Robinson Capital prepares and updates
securities registration statements and filings, shareholder reports and other
documents. In addition, Robinson Capital provides office space and facilities
for the management of the Fund and provides accounting, record-keeping and data
processing facilities and services. Robinson Capital also provides information
and certain administrative services for shareholders of the Fund. For managing
the business affairs and providing certain shareholder services pursuant to the
Management Agreement, the Fund pays Robinson Capital a management administration
fee, payable monthly, at an annual rate of 0.40% of the average daily net assets
of the Fund, plus out-of-pocket expenses incurred in connection with shareholder
servicing activities such as postage, data entry, stationery, tax forms and
other printed material. Robinson Capital may subcontract with other entities to
provide certain shareholder servicing activities.

The Fund pays the investment management advisory fee, administrative fee,
shareholder services expenses, transaction costs, interest, taxes, legal,
accounting, audit, transfer agent and custodial fees, brokerage commissions and
other costs incurred in buying and selling assets, fees paid to directors not
affiliated with Robinson Capital, the cost of stationery and envelopes, the cost
of

9
<PAGE>
qualification and registration of shares under state and federal laws, the cost
of solicitation of proxies and certain other operational expenses. However,
Robinson Capital is obligated to pay all Fund expenses (exclusive of brokerage
expenses and fees, interest and any federal or state income taxes) which exceed
11/2% of the Fund's average net assets for any fiscal year on the first $100
million of average net assets, 11/4% of the Fund's average net assets for any
fiscal year on the next $150 million of average net assets, and 1% of the Fund's
average net assets for any fiscal year on average net assets in excess of $250
million. During the fiscal year ended November 30, 1998, total expenses of the
Fund amounted to $722,839, or 1.47% of average net assets.

SHAREHOLDER INFORMATION

PURCHASE OF SHARES

MECHANICS OF PURCHASE. Shares of the Fund may be purchased directly from
the Fund or through authorized investment dealers. Initial investments in the
Fund may be made by mailing a completed application, together with a check for
the total purchase price, to General Securities, Incorporated, c/o IFTC, P.O.
Box 419249, Kansas City, Missouri 64105, or by contacting an authorized
investment dealer. Initial investments may also be made by submitting a
completed application and check to an authorized investment dealer who will
forward them to the Fund's Transfer Agent. Applications may be obtained by
calling the Fund at (800) 577-9217 or writing to the Fund at General Securities
Incorporated, 5100 Eden Avenue, Suite 204, Edina, Minnesota 55436. The dealer is
responsible for transmitting the order promptly to the Transfer Agent in order
to permit the investor to obtain the current price. Subsequent purchases in the
Fund may be made by mailing a check directly to the Transfer Agent at General
Securities, Incorporated, c/o IFTC, P.O. Box 419249, Kansas City, Missouri
64105, or by contacting an authorized investment dealer. Checks should be made
payable to General Securities, Incorporated, subsequent purchases should
indicate the account number on the check and checks must be drawn on a U.S. bank
or its foreign branch or subsidiary and must be payable in U.S. dollars. Third
party checks, except those payable to an existing shareowner who is a natural
person (as opposed to a corporation or partnership), credit cards and cash will
not be accepted.

When purchases are made by check or periodic automatic investment,
redemptions will not be allowed until the investment being redeemed has been in
the account for 15 days. Initial and subsequent investments may also be made by
wiring Federal Funds to Investors Fiduciary Trust Company; Routing #ABA
101003621; Deposit Account: Bank Account 7523491; From: Shareholder Name,
Address, Tax Identification Number-For purchase of: General Securities,
Incorporated shares. In order for a wire investment to be processed on the same
day, (1) the investor must notify the Transfer Agent of his or her intention to
make such investment by 12:00 noon Eastern time on the day of his or her
investment by calling the Transfer Agent at 1-800-939-9990; and (2) the wire
must be received by 4:00 p.m. Eastern time that same day.

Shares may be purchased in any amount not less than $1,500 initially with a
$100 minimum on subsequent investments (reduced pursuant to the Low Minimum
Initial Investment Plan/Automatic Investment Plan described below and subject to
waiver at the discretion of the Investment Advisor). Dividends and capital gains
distributions, if any, will be reinvested regardless of amount at the net asset
value determined on the distribution date, unless requested in cash, although
they will be taxable in the manner set forth in the section of this Prospectus
entitled DISTRIBUTION POLICY AND TAX

10
<PAGE>
STATUS. When the dollar amount of a purchase is not evenly divisible by the
current price of shares, the purchaser will receive a number of whole shares
plus a fractional share which is proportionately the same as a whole share.
Investments may thus be made in any dollar amount (subject to the minimum
described above) regardless of the current price of shares.

The Fund reserves the right to withdraw all or any part of the offering made
by this Prospectus and to reject purchase orders in whole or in part. Also, from
time to time, the Fund may temporarily suspend the offering of its shares to new
investors. During the period of such suspension, persons who are already
shareholders of the Fund normally are permitted to continue to purchase
additional shares and to have dividends reinvested.

PRICE PER SHARE. The Fund is offering its shares at a public offering price
equal to the next determined net asset value per share. Net asset value is based
upon and varies with changes in the market value of securities owned by the Fund
and is determined for purposes of a purchase at the close of business
immediately following the receipt of a subscription by the Fund. Subscription
forms and other information concerning the purchase of shares may be obtained
from the Fund at the address and telephone number listed on the cover page of
this Prospectus or from securities dealers offering shares of the Fund. Stock
certificates will not be issued.

Shares of the Fund may be purchased at a price equal to their net asset
value. The net asset value of a Fund share is the proportionate interest of each
share (or a fractional share) in the net corporate assets. It is computed not
less frequently than once daily. For the purposes of determining the net
corporate assets, securities are valued, as of the market close New York time,
on the basis of the last sale (if a sale occurred that day). If no sale occurred
that day, securities traded on a national securities exchange are valued at the
last bid price, whereas securities traded on the Nasdaq Stock Market or in the
over-the-counter market are valued at the mean between the last bid and asked
price, in all cases excluding brokerage commissions and odd lot premiums.

LOW MINIMUM INITIAL INVESTMENT PLAN/AUTOMATIC INVESTMENT PLAN. A
shareholder may automatically purchase additional shares of the Fund through the
Low Minimum Initial Investment Plan or Automatic Investment Plan. The minimum
initial investment in the Fund is $1,500. However, the Low Minimum Initial
Investment Plan allows an account to be opened with an initial investment of
$100 and subsequent monthly investments of $100 or more for a one year period.
Under these Plans, monthly investments (minimum $100, except where reduced in
certain cases by the Fund) are made automatically from the shareholder's account
at a bank, savings and loan or credit union into the shareholder's account.

By enrolling in either Plan, the shareholder authorizes the Fund and its
agents to either draw checks or initiate Automated Clearing House debits against
the designated account at a bank or other financial institution. Such account
must have check or draft writing privileges. This privilege may be selected by
completing the appropriate section on the Account Application or by contacting
the Transfer Agent for appropriate forms. If the shareholder also has expedited
wire transfer redemption privileges, the same bank, savings and loan or credit
union account must be designated for both the Automatic Investment Plan and the
wire redemption programs. You may terminate your Plan by sending written notice
to the Transfer Agent. Termination by a shareholder will become effective within
five days after the Transfer Agent has received the written request. The Fund
may immediately terminate a shareholder's Plan in the event that any item is
unpaid by the shareholder's financial institution. The payment of proceeds from
the redemption of Fund shares purchased

11
<PAGE>
through the Automatic Investment Plan may be delayed to allow the check or
transfer of funds for payment of the purchase to clear, which may take up to 15
calendar days from the purchase date. If a shareholder cancels the Low Minimum
Initial Investment Plan before a one year period, the Fund reserves the right to
redeem the shareholder's account if the balance is below the minimum investment
level, currently $1,500. The Fund may terminate or modify this privilege at any
time.

AUTOMATIC WITHDRAWAL PLAN. The owner of $10,000 or more of Fund shares at
net asset value may provide for the payment from the owner's account of any
requested dollar amount of $100 or more to be paid to the owner or a designated
payee monthly, quarterly, semi-annually or annually. Shares are redeemed on the
5th business day from the end of the month so that the payee will receive
payment approximately the first week of the following month. When receiving
payments under the Automatic Withdrawal Plan, any income and capital gain
dividends will be automatically reinvested at net asset value on the
reinvestment date. A sufficient number of full and fractional shares will be
redeemed to make the designated payment. Depending upon the size of the payments
requested and fluctuations in the net asset value of the shares redeemed,
redemptions for the purpose of making such payments may reduce or even exhaust
the account.

The Fund reserves the right to amend the Automatic Withdrawal Plan on thirty
days written notice and to terminate this privilege at any time. The plan may be
changed or terminated at any time by you in writing, with all registered owners'
signatures guaranteed.

SERVICING ORGANIZATIONS. Shares of the Fund may also be purchased through a
"Servicing Organization" which is a broker-dealer, bank or other financial
institution that purchases shares for its customers. When shares are purchased
this way, the Servicing Organization, rather than its customer, may be the
shareholder of record of the shares. The minimum initial and subsequent
investments in the Fund for shareholders who invest through a Servicing
Organization generally will be set by the Servicing Organization. Servicing
Organizations may also impose other charges, restrictions or procedures in
addition to or different from those applicable to investors who remain the
shareholder of record of their shares. The procedures for purchases or
redemptions through Servicing Organizations may vary slightly from that which is
described elsewhere in this Prospectus. Thus, an investor contemplating
investing with the Fund through a Servicing Organization should read materials
provided by the Servicing Organization in conjunction with this Prospectus.
Furthermore, the Fund may apply different procedures and charge different costs
to Servicing Organizations than as described elsewhere in this Prospectus.

Although Servicing Organizations will sell and redeem shares at net asset
value, they may charge their customers a fee in connection with services offered
to customers. Shares held through a Servicing Organization may be transferred
into the investor's name following procedures established by the investor's
Servicing Organization and the Fund's Transfer Agent. Certain Servicing
Organizations may receive compensation from Robinson Capital.

REDEMPTION OF SHARES

SELLING YOUR SHARES. You may redeem all or a portion of your shares on any
day that the New York Stock Exchange is open. Your shares will be redeemed at
the next net asset value calculated after the Transfer Agent has received a
properly executed redemption request. Payment for shares will be made as
promptly as practicable but in no event later than seven days after receipt of a
properly executed request. When the Fund is requested to redeem shares for which
it may not have yet received

12
<PAGE>
good payment, it may delay the mailing of a redemption draft until it has
determined that collected funds have been received for the purchase of such
shares, which may take up to 15 days from the purchase date.

SELLING BY TELEPHONE. If the proceeds of the redemption are $50,000 or less
and the proceeds are to be payable to the shareholder(s) of record and mailed to
the address of record, normally a telephone request by any one account owner is
sufficient for redemptions unless the account application has denied such
privilege. Telephone requests may be made by calling 1-800-939-9990.
Institutional account owners may exercise this special privilege of redeeming
shares by telephone request subject to the same conditions as individual account
owners provided that this privilege has been pre-authorized by the institutional
account owner by written instruction to the Transfer Agent with signatures
guaranteed. This privilege of redeeming shares by telephone request may not be
used if any address change for the shareholder's account has been effected
within 30 days of the redemption request. During periods when it is difficult to
contact the Transfer Agent by telephone, it may be difficult to implement the
telephone redemption privilege. The Fund reserves the right to terminate or
modify this privilege at any time. Additional information concerning telephone
redemptions appears under the section entitled "Important Information."

EXPEDITED WIRE REDEMPTION. If you give authorization for expedited wire
redemption, shares of the Fund can be redeemed and the proceeds sent by Federal
wire transfer to a single previously designated bank account. Requests received
by the Transfer Agent prior to the close of the Exchange (currently 4:00 p.m.
Eastern time) will result in shares being redeemed that day at the next
determined net asset value of the Fund and normally the proceeds being sent to
the designated bank account the following business day. Delivery of the proceeds
of a wire redemption request of $250,000 or more may be delayed by the Fund for
up to 7 days if the Investment Advisor deems it appropriate under then current
market conditions. Once authorization is on file, the Transfer Agent will honor
requests by telephone at 1-800-939-9990. The Fund cannot be responsible for the
efficiency of the Federal wire system or the shareholder's financial
institution.

The Fund currently charges $20 for wire transfer of redemption proceeds. The
shareholder is responsible for any charges imposed by the shareholder's bank.
The minimum amount that may be wired is $2,500. The Fund reserves the right to
change this minimum or to terminate the wire redemption privilege. To change the
name of the single designated bank account to receive wire redemption proceeds,
it is necessary to send a written request with signatures guaranteed to the
Transfer Agent. During periods when it is difficult to contact the Transfer
Agent by telephone, it may be difficult to implement the expedited redemption
privilege.

SELLING BY MAIL. When shares are held for the account of a shareholder by
the Transfer Agent, the shareholder may redeem them by making a written request
to the Transfer Agent, Attention: Redemption Department, PO. Box 419249, Kansas
City, Missouri 64105. If the proceeds of the redemption are $50,000 or less on
an account, no signature guarantee will be required, unless a change in address
for the shareholder's account has been effected within 30 days of the redemption
request. For all other redemptions, signatures must be guaranteed by a bank,
broker/dealer, municipal securities broker, government securities dealer or
broker, credit union, savings association, national securities exchange,
registered securities association or clearing agency.

The purpose of a signature guarantee is to protect shareholders against the
possibility of fraud. The Transfer Agent may reject redemption instructions if
the guarantor is neither a member of nor a

13
<PAGE>
participant in a signature guarantee program (currently known as "STAMP-SM-").
Guarantees from institutions or individuals who do not provide reimbursement in
case of fraud, such as notaries public, will not be accepted. Further
documentation may be requested from institutional or fiduciary accounts, such as
corporations, custodians (e.g., under the Uniform Gifts to Minors Act),
executors, administrators, trustees or guardians ("institutional account
owners"). The redemption request must be signed by all registered owners exactly
as the account is registered, including any special capacity of the registered
owner. The Fund currently charges for actual costs of special delivery service
of redemption proceeds.

IMPORTANT INFORMATION. The Transfer Agent employs procedures designed to
confirm that instructions communicated by telephone are genuine, including
requiring certain identifying information prior to acting upon instructions,
recording all telephone instructions and sending written confirmations of
telephone instructions. To the extent such procedures are reasonably designed to
prevent unauthorized or fraudulent instructions, neither the Transfer Agent nor
the Fund would be liable for any losses from unauthorized or fraudulent
instructions. However, if such reasonable procedures are not followed, the
Transfer Agent and the Fund may be liable for losses due to unauthorized
telephone transactions.

MINIMUM ACCOUNT BALANCE REQUIREMENT. Because of the high cost of
maintaining small accounts, the Fund reserves the right to redeem a shareholder
account that falls below the minimum investment level, currently $1,500, unless
the shareholder account falls below the minimum due to changes in the market
value of the portfolio. Currently, Individual Retirement Accounts, employee
benefit plan accounts, Employer Sponsored Payroll Deduction Plans and other
accounts with respect to which the Investment Advisor, in its sole discretion,
has waived the minimum purchase amount, are not subject to this procedure. You
will be notified in writing and will be allowed 60 days to make additional
purchases to bring the account value up to the minimum investment level before
the Fund redeems the account.

DIVIDEND AND DISTRIBUTION POLICIES AND CERTAIN TAX CONSEQUENCES

DIVIDENDS. The Fund follows a policy of distributing substantially all
income on a quarterly basis to shareholders; it distributes realized capital
gains, including both long-, mid- and short-term, if any, on an annual basis to
shareholders. As an investment company, and so long as certain diversification
of assets and source of income requirements prescribed by the Internal Revenue
Code are met and at least 90% of its "investment company taxable income" plus
certain other amounts are distributed to its shareholders, the Fund is allowed
to deduct certain dividends paid to shareholders and "pass through" the tax
character of certain dividends and long-term and mid-term capital gains to
shareholders who receive distributions. The Fund always has qualified for such
tax treatment (including with respect to the last fiscal year) and intends to
continue to do so.

CERTAIN TAX CONSEQUENCES. Distributions from dividend and interest income,
including short-term capital gains, whether paid in cash or reinvested in
shares, are taxable to shareholders as ordinary income for federal income tax
purposes. Long-term capital gains distributions, whether paid in cash or
reinvested, will be taxable as long-term and mid-term capital gains to
shareholders regardless of the length of time Fund shares have been owned by
shareholders, but will not be eligible for the dividends received deduction
generally available to corporate shareholders. If the net asset value of shares
should be reduced below a shareholder's cost by distribution of gain realized on
sale of

14
<PAGE>
securities, such distribution would be a return of investment, the shareholder's
basis in the Fund's shares would remain unchanged and the distribution would be
taxable as stated above. Accordingly, it may not necessarily be advantageous for
a shareholder to purchase shares in anticipation of the payment of dividends or
of capital gain distributions.

Under current federal tax laws, an individual's net long-term capital gains
on property held for more than 12 months are taxed at a maximum rate of 20%,
while an individual's ordinary income and net short-term capital gains on
property held for less than 12 months are taxed at a maximum rate of 39.6%.
However, a corporation's net long-term capital gains continue to be taxed at the
corporate ordinary income tax rate, which is 35%.

The preceding discussion is based on the Internal Revenue Code of 1986, as
amended, regulations, rulings and decisions in effect on the date of this
Prospectus, all of which are subject to change. This summary does not discuss
any aspect of state, local or foreign taxation and does not discuss all the tax
considerations that may be relevant to particular shareholders in light of their
personal investment circumstances, or to certain types of shareholders that may
be subject to special tax rules. Shareholders should consult their own tax
advisors concerning the application to distributions of federal, state, local,
foreign or other tax laws.

DISTRIBUTION ARRANGEMENTS

The Fund serves as its own underwriter and distributor of its shares.

Investors Fiduciary Trust Company ("IFTC"), 330 W. 9th Street, P.O. Box
419249, Kansas City, Missouri 64105, serves as the Fund's Transfer and Dividend
Paying Agent ("Transfer Agent") and Custodian. IFTC maintains the Fund's
shareholder records and assets and performs certain accounting services for the
Fund. Assets of the Fund may also be held by sub-custodians selected by IFTC and
approved by the Board of Directors.

15
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years. 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 Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG Peat Marwick LLP, whose report, along with
the Fund's financial statements, are included in the Fund's Annual Report, which
is available on request.

<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
------------------------------------------------
1998 1997 1996 1995 1994**
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................... $16.55 $16.08 $14.61 $12.08 $12.23
Operations:
Investment income -- net...... 15 .18 .17 .25 .20
Net realized and unrealized
gains (losses) on
investments.................. .72 2.08 2.46 3.49 .40
-------- -------- -------- -------- --------
Total from operations........... .87 2.26 2.63 3.74 .60
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income --
net.......................... (.15) (.18) (.17) (.25) (.21)
Excess distributions of net
investment income............ (.03) -- (.01) -- (.02)
From net realized gains....... (.90) (1.61) (.98) (.96) (.52)
-------- -------- -------- -------- --------
Total distributions to
shareholders................... (1.08) (1.79) (1.16) (1.21) (.75)
-------- -------- -------- -------- --------
Net asset value, end of year.... $16.34 $16.55 $16.08 $14.61 $12.08
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return*................... 5.26% 14.08% 18.15% 31.15% 4.89%
Net assets, end of year (000's
omitted)....................... $43,791 $46,006 $39,974 $32,541 $26,581
Ratio of expenses to average
daily net assets............... 1.47% 1.44% 1.50% 1.50% 1.50%
Ratio of net investment income
to average daily net assets.... .90% 1.02% 1.11% 1.79% 1.69%
Portfolio turnover rate......... 25% 20% 18% 24% 42%
</TABLE>

* These are the Fund's total returns during the years, including reinvestment
of all dividend and capital gain distributions without adjustments for sales
charge.

** From March 23, 1994 through November 30, 1994, The Fund's Investment Advisor
was Alpha Source Asset Management, Inc., a wholly-owned subsidiary of
Hamilton Investments, Inc. From March 23, 1994 through November 30, 1994, the
Fund's Administrator was Hamilton Investments, Inc. Prior to March 23, 1994,
the Fund's Investment Advisor and its Administrator was Craig-Hallum, a
division of Hamilton Investments, Inc.

16
<PAGE>
GENERAL INFORMATION

REPORTS TO SHAREHOLDERS

The Fund's fiscal year ends on November 30. The Fund will send to its
shareholders, at least semiannually, reports showing its portfolio securities
and other information. An annual report containing financial statements audited
by the Fund's independent auditors will be sent to shareholders each year.

SHAREHOLDER INQUIRIES

Shareholder inquiries may be addressed to the Fund at the address or
telephone number set forth on the cover or back page of this Prospectus.

ADDITIONAL INFORMATION

This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. Investors should read and retain this
Prospectus for future reference. A Statement of Additional Information (the
"Statement of Additional Information"), containing additional information about
the Fund, has been filed with the Securities and Exchange Commission and is
hereby incorporated by reference into this Prospectus. Additional information
about the Fund is available in the Fund's annual and semi-annual reports to
shareholders. In the Fund's annual report, you will also find a discussion of
the market conditions and investment strategies that significantly affected the
Fund's performance during its fiscal year. A copy of the Statement of Additional
Information as well as the Fund's annual and semi-annual reports can be obtained
without charge by telephone (collect) or written request to the Fund at the
following address and telephone number:

GENERAL SECURITIES INCORPORATED
5100 Eden Avenue, Suite 204, Edina, Minnesota 55436
Telephone (800) 577-9217

You may also request additional information or direct shareholder inquiries
to the Fund. In addition, the Commission maintains a Website at
http://www.sec.gov that contains this Prospectus, the Statement of Additional
Information and certain other electronic filings including exhibits made by the
Fund with the Commission. This information may also be examined without charge
at the Public Reference Room of the Commission at 450 Fifth Street, N.W,
Washington, D.C. 20549, and copies thereof may be obtained from the Commission
upon payment of the prescribed fees.

17
<PAGE>
PROSPECTUS

GENERAL SECURITIES is the registered service mark of General Securities,
Incorporated

LOGO
GENERAL SECURITIES
INCORPORATED
5100 EDEN AVENUE, SUITE 204, EDINA, MINNESOTA 55436
PROSPECTUS
-------------------------------------------

LOGO
FOCUS ON
----
TQM
----
TOTAL QUALITY
MANAGEMENT
COMPANIES
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

DATED MARCH , 1999

GENERAL SECURITIES, INCORPORATED

5100 Eden Avenue, Suite 204, Edina, Minnesota 55436
Telephone (612) 927-6799

General Securities, Incorporated (the "Fund") is a diversified open-end
management investment company which seeks possible long-term capital
appreciation for its shareholders consistent with reasonable risk. The Fund
invests primarily, but not exclusively, in selected common stocks. Shares of
the Fund may be purchased directly from the Fund at a price equal to the net
asset value, as determined at the close of business immediately following
receipt by the Fund of a subscription.

This Statement of Additional Information provides certain detailed information
concerning the Fund. It is not a prospectus and should be read in conjunction
with the Fund's current Prospectus, a copy of which may be obtained by telephone
or written request to the Fund at the address and telephone number printed
above.

This Statement of Additional Information relates to the Fund's Prospectus dated
March ____, 1999.

----------

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Description of the Fund and its Investment Risks . . . . . . . . . . . . . 2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Control Persons and Principal Holders of Securities. . . . . . . . . . . . 7
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . 7
Brokerage Allocation and Other Practices . . . . . . . . . . . . . . . . . 9
Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . 11
Purchase, Redemption and Pricing of Shares . . . . . . . . . . . . . . . . 11
Taxation of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Calculation of Performance Date. . . . . . . . . . . . . . . . . . . . . . 16
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>

<PAGE>

DESCRIPTION OF THE FUND AND ITS INVESTMENTS RISKS

FUND CLASSIFICATION

The Fund is organized and existing under the laws of the state of
Minnesota. The Fund has been an investment company since its formation in 1951.
The Fund is a diversified, open-end, management investment company.

INVESTMENT STRATEGIES AND RISKS

As described in the Fund's Prospectus, the Fund's objective is to seek
long-term capital appreciation consistent with reasonable risk. Consistent
with that objective, the Investment Advisor seeks to select common stocks of
companies that the Investment Advisor determines are implementing a "Total
Quality Management" (TQM) operating philosophy. TQM is a management
philosophy where a company undertakes a systematic process of evaluating its
business practices and engages in a continuous effort to improve its
operations throughout the organization. The Investment Advisor also uses
fundamental and quantitative analysis techniques to evaluate TQM companies
that the Investment Advisor believes are undervalued in the marketplace. The
Fund intends to invest most of its assets in common stocks, although
investments in corporate bonds, debentures or preferred stocks and United
States Government Securities, in addition to certificates of deposit, bank
depository accounts and other short-term investments, have and will be made
as economic conditions dictate.

FUND POLICIES

In order to define its investment policies, the Fund has established
certain rules and guidelines. Some have been voluntarily adopted and others
have been required to meet either federal or state statutes. As indicated, some
policies are in the form of fundamental policies or charter restrictions which
may be changed only with the approval of a majority of the Fund's outstanding
voting securities while others are subject to change by the Board of Directors.
Without the affirmative vote of the lesser of (i) a majority of all outstanding
shares of the Fund, or (ii) 67% or more of the Fund's shares represented at a
meeting if more than 50% of all outstanding shares of the Company are
represented in person or by proxy at such meeting, the Fund may not, among other
things,:

1. Buy "on margin" or sell "short";

2. Borrow money;

3. Issue securities senior to the outstanding shares of common stock;

2
<PAGE>

4. Act as underwriter;

5. Invest more than 5% of the value of its total assets (taken at cost)
in the securities of any one company, or purchase more than 10% of any
class of voting securities or more than 10% of any class of securities
of any one company;

6. Invest more than 25% of the value of its total assets (taken at cost)
in the securities of companies all of which conduct their principal
business activities in the same industry;

7. Invest in commodities or commodity contracts, or interests in real
estate;

8. Lend money or assets;

9. Purchase or retain the securities of any issuer if those officers and
directors of the Fund or the advisor owning beneficially more than 1/2
of 1% of the securities of such issuer together own more than 5% of
the securities of such issuer;

10. Purchase the securities of any other investment company; or

11. Invest in companies for the purpose of exercising control or
management.

TEMPORARY DEFENSIVE POSITIONS

From time to time, the Fund's portfolio managers may determine that market
conditions or other factors warrant that the Fund adopt defensive strategies to
limit losses or lock-in gains. This could include investments in United States
Treasury bills, notes and bonds, certificate of deposits and bank depository
accounts of banks which have total assets in excess of $500 million. The Fund's
defensive strategy could also include buying or selling exchange-traded options
on particular securities or a broad index of securities. An option entitles the
holder to receive (in the case of a call option) or to sell (in the case of a
put option) a particular security at a specified exercise price at any time
during its term.

The Fund may buy put options ("puts"). When the Fund buys a put, it gives
the purchaser the right to sell the underlying security to the Fund at the
exercise price at any time during the option period. When the Fund purchases a
put, it pays a premium in return for the right to sell the underlying security
at the exercise price at any time during the option period. If any put is not
exercised or sold, it will become worthless on its expiration date.

The Fund may buy or sell options on particular securities within the Fund's
portfolio or on a group of securities in an index in order to hedge the Fund's
exposure to downward price fluctuations. If the Investment Advisor applies a
hedge strategy at an inappropriate time or

<PAGE>

judges market conditions incorrectly, these defensive strategies may lower the
Fund's return and limit the Fund's ability to achieve its objective of capital
appreciation.

The Fund considers the use of a limited option strategy to be consistent
with the Fund's stated objectives because the strategy is utilized to lock-in
gains on particular securities or for the market as a whole, upon achieving
certain capital appreciation-oriented performance goals for certain Fund
investments. The Fund also considers this strategy useful to limiting Fund
losses and risk.

The use of options involves risks. One risk arises because of the imperfect
correlation between movements in the price of options and movements in the price
of securities that are the subject of the hedge. The Fund's hedging strategy
may not be fully effective if such imperfect correlation exists. Price movement
correlation may be distorted by illiquidity in the options market and the
participation of speculators in such markets. If an insufficient number of
contracts are traded, commercial users may not deal in options because they do
not want to assume the risk that they may not be able to close out their
positions within a reasonable amount of time. In such instances, options market
prices may be driven by different forces than those driving the market in the
underlying securities, and price spreads between these markets may widen. The
participation of speculators in the market typically enhances liquidity.
Nevertheless, the trading activities of speculators in the options market may
create temporary price distortions unrelated to the market in the underlying
securities.

An exchange-traded option may be closed out only on an exchange which
generally provides a liquid secondary market for an option of the same series.
If a liquid secondary market for an exchange-traded option does not exist, it
might not be possible to effect a closing transaction with respect to a
particular option, with the result that the Fund would have to exercise the
option in order to accomplish the desired hedge. Reasons for the absence of a
liquid secondary market on an exchange include the following: (i) insufficient
trading interest in certain options; (ii) restrictions imposed by an exchange on
opening or closing transactions for the option; (iii) trading halts, suspensions
or other restrictions may be imposed for options or underlying securities; (iv)
unusual or unforeseen circumstances may interrupt normal operations on an
exchange or (v) the facilities of an exchange or the Options Clearing
Corporation or other clearing organization may not be adequate to handle current
trading volume.

MANAGEMENT OF THE FUND

DIRECTORS AND OFFICERS

The officers of the Fund, along with Robinson Capital, the Investment
Advisor and Administrator, manage the Fund's investment activities and
day-to-day operations, subject to supervision by the Board of Directors. The
Board of Directors sets broad policies for the Fund and chooses the Fund's
officers and the companies that provide the Fund with services.

<PAGE>

The directors and officers of the Fund are listed below together with their
addresses and information as to their principal business occupations during the
last five years (if other than their present business occupations) and other
current business affiliations, including affiliation with the Investment
Advisor.

M. MICHELLE COADY, Ph.D., age 40, Chairperson of the Board of Directors of
the Fund, 3236 48th Avenue South, Minneapolis, Minnesota 55406. She is Director
of Client Services, Major Markets, at St. Paul Fire and Marine Companies, a St.
Paul-based property and casualty insurer. From 1991 to 1994, Dr. Coady was
Senior Director of Continuous Quality Improvement at HealthPartners, Inc.,
Minneapolis, Minnesota. She has also been the proprietor of a consulting
business since 1985.

GARY D. FLOSS, age 57, Director of the Fund, 1444 18th Street, N.W., New
Brighton, Minnesota 55112. He is Director of Customer-Focused Quality for
Medtronic Corporation, a Minneapolis, Minnesota manufacturer of medical devices.
From 1990-1997 he was Vice President, Quality & Productivity for Consulting
Devices International, a business unit of Ceridian Corporation. Ceridian
Corporation is a Minneapolis, Minnesota provider of information services in the
human resources and transportation areas.

DAVID W. PREUS, age 76, Director of the Fund, 60 Seymour Avenue S.E.,
Minneapolis, Minnesota 55414. He is the Presiding Bishop Emeritus of The
American Lutheran Church and a Distinguished Visiting Professor at Luther
Northwestern Theological Seminary, St. Paul, Minnesota.

LAVERNE W. REES, age 78, Director of the Fund, 13 Lily Pond Road, North
Oaks, Minnesota 55110. He is a business consultant.

OSCAR VICTOR, age 79, Director of the Fund, 3917 W. 24th Street,
Minneapolis, Minnesota 55416. He is currently retired and the former President
of Vic Research and Development Incorporated, a Minneapolis, Minnesota provider
of consulting services. He is also the former Chief Executive Officer of Vic
Manufacturing Co. Incorporated, a manufacturer of commercial dry cleaning and
air pollution control equipment. He serves on the Board of Directors of Check
Technology Corporation and Fidelity Bank.

CHARLES J. WALTON, age 75, Director of the Fund, 653 S.W. Thorn Hill Lane,
Palm City, Florida 34990. He is President of Walton Enterprise Leasing Co., a
Minneapolis, Minnesota automobile, truck and equipment leasing corporation.

ARNOLD M. WEIMERSKIRCH, age 62, Director of the Fund, 2831 Sandpiper Trail,
Excelsior, Minnesota 55331. He is Vice President for Corporate Quality for
Honeywell, Inc., a Minneapolis, Minnesota manufacturer of temperature control
systems and avionics.

<PAGE>

MARK D. BILLEADEAU, age 42, Vice President of the Fund and Senior
Portfolio Manager since September 1998, 5100 Eden Avenue, Suite 204, Edina,
Minnesota 55436. He has been Treasurer and Chief Financial Officer of
Robinson Capital since September 1998, and has served as a Financial Analyst
at Robinson Capital since February 1995. From September 1990 to February
1995, he was a Manager of Consulting Service of Craig-Hallum and its
successor, Principal Financial Services, Inc.

*CRAIG H. ROBINSON, age 41, Director and President of the Fund, and
Associate Portfolio Manager, 5100 Eden Avenue, Suite 204, Edina, Minnesota
55436 since September 1998. He has worked in sales and marketing at Robinson
Capital since August 1995. He also served as Vice President of the Fund from
February 1997 through September 1988. He has been President and Chief
Executive Officer of Robinson Capital since September 1998 and was a Vice
President from February 1997 through September 1998. From August 1994 to
August 1995, he worked as an Account Executive at Paine Webber Incorporated.
From 1990 to August 1994, he worked as a Sales Manager at Comprehensive Loss
Management, Inc.

RENEE A. RASMUSSON, age 54, Treasurer of the Fund, 5100 Eden Avenue,
Suite 204, Edina, Minnesota 55436 since November 1998. She also has served
as Assistant Treasurer of the Fund from December 1994 through September 1998,
and Assistant Treasurer of Robinson Capital Management, Inc. since December
1994. From July 1993 to July 1994, she was an employee of Hamilton
Investments, Inc. and prior to July 1993 she was a Vice President of
Craig-Hallum, Inc.

LORY M. HASSLER, age 67, Assistant Secretary and Assistant Treasurer of
the Fund, 5100 Eden Avenue, Suite 204, Edina, Minnesota 55436, since December
1994. She has also served as Secretary of Robinson Capital Management, Inc.
since September 1998 and Assistant Secretary from December 1994 through
September 1998. From July 1993 to December 1994, she was a registered
representative of Hamilton Investments, Inc. Prior to July 1993, she was a
registered representative and Vice President of Craig-Hallum, Inc.

JOHN R. HOUSTON, age 46, Secretary of the Fund, 4200 IDS Center,
Minneapolis, Minnesota 55402. He is partner of Lindquist & Vennum P.L.L.P.,
legal counsel for the Fund.

- ---------------------------
*Designates a director who is an "interested person" with respect to the Fund as
defined in the Investment Company Act of 1940.

REMUNERATION OF OFFICERS AND DIRECTORS

The Fund does not pay any remuneration directly to its officers, but
compensation of officers and employees is paid by Robinson Capital Management,
Inc., its current Investment Advisor. During the last fiscal year, the Fund
paid Robinson Capital Management, Inc., a Minnesota corporation, its Investment
Advisor for the year, $294,321 for investment advisory services.

The directors who have no substantial interest in the Investment Advisor or
its affiliates (Dr. Coady and Messrs. Floss, Preus, Rees, Victor, Walton, and
Weimerskirch) receive a nominal honorarium from the Fund for each directors'
meeting attended (an aggregate of $13,371 during the last fiscal year).

<PAGE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

The Fund does not know of any person who owns of record more than five
percent of the Fund's outstanding securities.* On March 2, 1999, the Fund's
officers and directors owned _______________ shares, or ___% of the total
number of the Fund shares outstanding.*

* To be filed amendment.

INVESTMENT ADVISORY AND OTHER SERVICES

Robinson Capital Management, Inc. ("Robinson Capital"), a Minnesota
corporation with offices at 5100 Eden Avenue, Suite 204, Edina, Minnesota 55436,
is the Investment Advisor for the Fund and provides the Fund with professional
investment supervision and management. Robinson Capital is an investment
advisory firm controlled by Craig H. Robinson, John C. Robinson, Susan A.
Peterson and Beth E. Robinson, who each own 18.06% of the outstanding common
stock of Robinson Capital. These shareholders are the children of John P.
Robinson, who served as Fund's President and served on the Board of Directors
from the Fund's inception in 1951 until his death in 1998. Craig H. Robinson is
President of Robinson Capital and President of the Fund. Since 1995, John C.
Robinson is a owns and operates a business that provides inventory data
management for retail pharmacies. Susan A. Peterson is Chief Financial Officer
and founder of Decision Support Software, Inc., and Beth A. Robinson is an
independent business consultant, and owns and operates a ceramics business.

Pursuant to an Investment Advisory Agreement which was approved by the
Fund's shareholders on December 9, 1998, Robinson Capital provides the Fund all
necessary information, advice, recommendation services and determinations
relating to investments and portfolio management. Orders for securities are
placed by Robinson Capital with the view to obtaining the best combination of
price and execution available. Robinson Capital attempts to evaluate the
overall quality and reliability of the broker-dealers and the services provided,
including research services, general execution capability, reliability and
integrity, willingness to take a position in securities, general operational
capabilities and financial condition. Robinson Capital is authorized to place
orders with various broker-dealers, subject to all applicable legal
requirements. Robinson Capital may also place orders with broker-dealers that
sell the Fund's shares, provided Robinson Capital believes the price and
execution are comparable to other broker-dealers. A greater spread, discount or
commission may be paid to broker-dealers that provide research services which
may be used by Robinson Capital in managing assets of its clients, including the
Fund. Although it is believed that research services received directly or
indirectly benefit all of Robinson Capital's clients, the degree of benefit
varies by account and is not directly related to the commissions or remuneration
paid by the account.

<PAGE>

As compensation for its services under the Investment Advisory Agreement,
Robinson Capital is paid an investment advisory management fee, payable monthly,
at an annual rate of 0.60% for average net assets up to and including $100
million, 0.35% for the next $150 million of average net assets and 0.10% for net
assets over $250 million. For the fiscal years ended November 30, 1998, 1997
and 1996, the advisory fees paid Robinson Capital were 294,321, $289,638 and
$225,164, respectively.

Robinson Capital also provides the Fund with non-investment advisory
management and administrative services necessary for the conduct of the Fund's
business pursuant to a Management Agreement which was approved by the Fund's
shareholders on December 9, 1998. Robinson Capital prepares and updates
securities registration statements and filings, shareholder reports and other
documents. In addition, Robinson Capital provides office space and facilities
for the management of the Fund and provides accounting, record-keeping and data
processing facilities and services. Robinson Capital also provides information
and certain administrative services for shareholders of the Fund. For managing
the business affairs and providing certain shareholder services pursuant to the
Management Agreement, the Fund pays Robinson Capital an administrative fee,
payable monthly, at an annual rate of 0.40% of the average daily net assets of
the Fund, plus out-of-pocket expenses incurred in connection with shareholder
servicing activities such as postage, data entry, stationery, tax forms and
other printed material. Robinson Capital may subcontract with other entities to
provide certain shareholder servicing activities.

During the fiscal year ended November 30, 1998 the Fund paid total fees to
Robinson Capital amounting to $490,535. Of this amount, $294,321 was paid for
investment advisory services and $196,214 was paid for non-investment management
or administrative services. For the fiscal year ended November 30, 1997,
Robinson Capital received $482,730 in total advisory and management fees from
the Fund. Of this amount, $289,638 was paid for investment advisory services
and $193,092 was paid for non-investment management or administrative services.
For the fiscal year ended November 30, 1996, Robinson Capital received $375,273
in total advisory and management fees from the Fund. Of this amount, $225,164
was paid for investment advisory services and $150,109 was paid for
non-investment management or administrative services.

The Fund's total net assets at the beginning and end of fiscal 1998 were
$46,005,599 and $43,790,861, respectively. The combined advisory management
fees and non-investment management and administrative fees of 1% on the first
$100 million of the Fund's net assets and 3/4 of 1% on the next $150 million of
the Fund's net assets are higher than similar fees paid by most mutual funds,
many of which have net assets that are substantially larger than the net assets
of the Fund.

The Fund pays the investment advisory management fee, administrative fee,
shareholder services expenses, transaction costs, interest, taxes, legal,
accounting, audit, transfer agent and custodial fees, brokerage commissions and
other costs incurred in buying and selling assets, fees

<PAGE>

paid to directors not affiliated with Robinson Capital, the cost of stationery
and envelopes, the cost of qualification and registration of shares under state
and federal laws, the cost of solicitation of proxies and certain other
operational expenses. However, Robinson Capital is obligated to pay all Fund
expenses (exclusive of brokerage expenses and fees, interest and any federal or
state income taxes) which exceed 1-1/2% of the Fund's average net assets for any
fiscal year on the first $100 million of average net assets, 1-1/4% of the
Fund's average net assets for any fiscal year on the next $150 million of
average net assets, and 1% of the Fund's average net assets for any fiscal year
on average net assets in excess of $250 million. For the fiscal year ended
November 30, 1998, total expenses of the Fund amounted to $722,839 or 1.47% of
average net assets. For the fiscal year ended November 30, 1997, total expenses
of the Fund amounted to $696,963 or 1.44% of average net assets. For the fiscal
year ended November 30, 1996 total expenses of the Fund were $571,297 of which
$8,514 was reimbursed by Robinson Capital. Net expenses to the Fund for the
year ended November 30, 1996 were $562,783, or 1.50% of average net assets.

Each of the Investment Advisory Agreement and Management Agreement will
continue in force from year to year so long as the continuance is specifically
approved at least annually (1) by the Board of Directors of the Fund or (2) by a
vote of the majority of the outstanding voting securities of the Fund, provided
that in either event the continuance is also approved by the vote of a majority
of directors who are not interested persons of the Fund or Robinson Capital,
cast in person at a meeting called for the purpose of voting on such approval.
Each of the Investment Advisory Agreement and Management Agreement may be
terminated at any time, without the payment of any penalty, by the Board of
Directors of the Fund, by a vote of the majority of the Fund's outstanding
voting securities, or by Robinson Capital on 60 days' written notice. They each
terminate automatically in the event of an assignment.

The Fund serves as its own underwriter and distributor of its shares.

Investors Fiduciary Trust Company ("IFTC"), 1004 Baltimore, 7th Floor, P.O.
Box 419249, Kansas City, Missouri 64105-6249, currently serves as the Fund's
Registrar, Transfer Agent and Dividend Paying Agent and Custodian. IFTC, which
is not affiliated with either the Fund or Robinson Capital, maintains the Fund's
shareholder records and assets and performs certain accounting services for the
Fund. Assets of the Fund may also be held by sub-custodians selected by IFTC
and approved by the Board of Directors.

LEGAL COUNSEL

Lindquist & Vennum PLLP, Minneapolis, Minnesota, are counsel for the Fund.

<PAGE>

INDEPENDENT AUDITORS

KPMG Peat Marwick, LLP, 4200 Norwest Center, 90 South 7th Street,
Minneapolis, Minnesota 55402, has been selected as the independent auditors of
the Fund. The selection of independent auditors is subject to annual
ratification by the Fund's Board of Directors.

BROKERAGE ALLOCATION AND OTHER PRACTICES

During the past fiscal year, the Fund had total purchases of portfolio
securities, other than short-term securities, of $9,207,625, and sales of such
securities of $11,496,628, resulting in portfolio turnover in that year of 25%;
compared with a portfolio turnover rate of 20% during fiscal 1997 and 18% in
fiscal 1996. The Fund's total net assets at the beginning of fiscal 1998 were
$46,005,599 and $43,790,861 at the end of the year. The total amount of
brokerage fees for handling portfolio transactions of the Fund during the three
fiscal years ended November 30, 1998, 1997, and 1996 were $31,320, $23,060, and
$24,420 respectively.

The Fund's brokerage business is distributed among various brokers and
dealers, and the allocation is determined primarily at the discretion of the
Investment Advisor. The Fund always seeks to effect its transactions in
portfolio securities where it can get prompt execution of orders at the most
favorable prices ("best execution"). The commissions charged by brokers and
dealers vary and the Fund is not required by law to utilize the services of
national securities exchange members or other brokers or dealers charging the
lowest commission for any particular transaction.

It is the practice of the Fund and its Investment Advisor to consider
statistical and factual information, as well as reports on general market
conditions, industry analysis and analysis of particular companies whose
securities are publicly traded, furnished to them by investment banking firms as
a factor in connection with allocation of brokerage business to such firms,
provided the best execution is still obtained. Such services are generally
provided to the Investment Advisor, to the extent that such services are used by
it in rendering investment advice to the Fund, they tend to reduce the advisor's
expenses. During fiscal 1998, certain brokers rendered research services to the
Fund and in exchange for such services the Fund directed brokerage transactions
to them. However, such placement of brokerage transactions was not pursuant to
binding written agreement with such brokers. The aggregate amount of such
transactions was $18,053,584; the aggregate amount of related commissions was
$31,320.

Where the concept of best execution is satisfied by two brokers and one
broker charges a lower commission but does not provide such services, the
advisor has indicated that it may place its orders with the broker charging a
higher commission where the amount of such commission is reasonable in relation
to the value of the brokerage and research services provided. If the Investment
Advisor purchases such information its expenses will increase without

<PAGE>

reimbursement from the Fund. If it is concluded that it would be impractical
for the Investment Advisor to attempt to provide the full range of services
which are available from brokerage firms or if the advisor deems that it cannot
afford purchasing such information and services, it may become necessary to pay
a higher level of commissions to firms offering these services. The Investment
Advisor will not institute such a policy without the prior authorization of the
Fund's Board of Directors, however, and any such payments will be reviewed by
the directors on at least a quarterly basis.

The Fund made no allocation of brokerage business during the last fiscal
year to those dealers and brokers who were sellers of the Fund's shares and no
reciprocal brokerage business was received by the Investment Advisor. When
appropriate, the Investment Advisor may make brokerage allocation to sellers of
Fund shares in the current fiscal year. Purchases and sales of securities which
are not listed or traded on a securities exchange will ordinarily be executed
with primary market makers acting as principals, except where best execution may
otherwise be obtained.

Robinson Capital is not registered as a broker/dealer and, consequently,
did not in fiscal 1996, 1997 or 1998 and will not in fiscal 1999, be acting
as broker in the execution of any orders for the Fund.

CAPITAL STOCK AND OTHER SECURITIES

CAPITAL STOCK

General Securities, Incorporated is authorized to issue 10 million shares
of the nominal par value of one cent per share. On March 2, 1999, there were
__________ shares outstanding.* All shares are fully paid, nonassessable, and
transferable and have equal rights in earnings, in voting and on liquidation.
There are no junior or senior securities and no preemptive rights. No
securities senior to the shares of common stock can be issued.

* To be filed by amendment.

The shares have noncumulative voting rights which means that the holders of
more than 50% of the shares voting for the election of directors can elect 100%
of the directors if they choose to do so, and, in such event, the holders of the
remaining less than 50% of the shares voting for the election of directors will
not be able to elect any person or persons to the Board of Directors.

PURCHASE, REDEMPTION AND PRICING OF SHARES

<PAGE>

In addition to the methods of purchase described in the Prospectus, the
Fund offers the following plans and services in connection with purchasing
shares.

LOW MINIMUM INITIAL INVESTMENT PLAN/AUTOMATIC INVESTMENT PLAN

A shareholder may automatically purchase additional shares of the Fund
through the Low Minimum Initial Investment Plan or Automatic Investment Plan.
The minimum initial investment in the Fund is $1,500. However, the Low Minimum
Initial Investment Plan allows an account to be opened with an initial
investment of $100 and subsequent monthly investments of $100 or more for a one
year period. Under these Plans, monthly investments (minimum $100, except where
reduction in certain cases by the Fund) are made automatically from the
shareholder's account at a bank, savings and loan or credit union into the
shareholder's account. By enrolling in either Plan, the shareholder authorizes
the Fund and its agents to either draw checks or initiate Automated Clearing
House debits against the designated account at a bank or other financial
institution. Such account must have check or draft writing privileges. This
privilege may be selected by completing the appropriate section on the Account
Application or by contacting the Transfer Agent for appropriate forms. If the
shareholder also has expedited wire transfer redemption privileges, the same
bank, savings and loan or credit union account must be designated for both the
Automatic Investment Plan and the wire redemption programs. You may terminate
your Plan by sending written notice to the Transfer Agent. Termination by a
shareholder will become effective within five days after the Transfer Agent has
received the written request. The Fund may immediately terminate a
shareholder's Plan in the event that any item is unpaid by the shareholder's
financial institution. The payment of proceeds from the redemption of Fund
shares purchased through the Automatic Investment Plan may be delayed to allow
the check or transfer of funds for payment of the purchase to clear, which may
take up to 15 calendar days from the purchase date. If a shareholder cancels
the Low Minimum Initial Investment Plan before a one year period, the Fund
reserves the right to redeem the shareholder's account if the balance is below
the minimum investment level, currently $1,500. The Fund may terminate or
modify this privilege at any time.

INDIVIDUAL RETIREMENT ACCOUNT (IRA PLAN), ROTH IRA, SEP-IRA PLANS AND SIMPLE IRA
PLANS

Any individual with earned income can establish an individual retirement
account (IRA) to provide retirement benefits to the individual. The Fund offers
an IRA Plan funded with shares of the Fund. The Fund's IRA Plan follows the
basic format of the Internal Revenue Service model plan, and accordingly, upon
submission to the Service for approval, the Fund was advised that no further
qualifying action was required by individuals adopting the IRA Plan. Any person
with earned income may establish his or her own IRA by adopting the IRA Plan and
may make annual contributions in an amount not exceeding the lesser of 100% of
his or her adjusted gross income or $2,000. An individual can make an
additional contribution of up to $2,000 to an IRA for a nonworking spouse if the
combined contributions for both the individual's and his or her spouse's IRAs do
not exceed 100% of the individual's or spouse's

<PAGE>

adjusted gross income. Such contributions are tax deductible by all individuals
except those who are active participants, or whose spouses are active
participants, in a qualified employer sponsored profit sharing or pension plan.
For these individuals, the tax deduction is reduced or eliminated but income on
such contributions continues to be currently tax deferred. Minimum annual
distributions from the IRA are required beginning no later than April 1, of the
year following the year in which the individual attains age 70-1/2. Substantial
tax penalties exist for premature distributions from the IRA Plan prior to age
59-1/2 or for failure to make timely distributions. The adoption of the IRA
Plan should be reviewed by the individual and his or her attorney prior to
investing.

For tax years beginning after December 31, 1997, the IRA Plan may be used
by individuals to establish a so-called "Roth IRA." Contributions to a Roth IRA
are nondeductible; however, the accumulations on the contributions may be
withdrawn tax-free, provided the Roth IRA has been maintained for at least five
years and distributions are made only after the individual attains the age
59-1/2 dies, becomes disabled, or to pay for first time homebuying expenses.
However, substantial tax penalties exist for premature distributions of
contributions or accumulations from a Roth IRA. The annual limit on
contributions to a Roth IRA is $2,000; as with an ordinary IRA, up to $2,000 may
be contributed to a Roth IRA for a nonworking spouse. This limit is phased out
for single taxpayers with an adjusted gross income between $95,000 and $110,000,
or joint filers with adjusted gross income between $150,000 and $160,000.
Individuals with adjusted gross income of less than $100,000 may also contribute
to a Roth IRA, amounts distributed from a regular IRA that have been included in
the taxpayer's gross income. Contributions to a Roth IRA may be made after age
70-1/2 and distributions are not required to begin at age 70-1/2.

The IRA Plan may also be utilized by any person under age 70-1/2 to
maintain the tax-sheltered treatment of benefits distributed from an employer's
tax qualified pension plan because of the employee's termination of employment.
Benefits distributed in a lump sum or installments for a period less than ten
years can be invested in the IRA Plan, provided the employee elects either to
make a direct rollover from the trustee of the employee's plan to the IRA Plan,
or if the employee receives the distribution directly, to invest in the IRA Plan
within 60 days of such receipt. In this manner, assets from the previous
employer's pension plan are reinvested, the tax consequences stemming from the
distribution are deferred, and the assets deposited in the IRA Plan, at the
option of the holder, may in the future be "rolled over" to a tax qualified
pension plan of a subsequent employer.

In addition, individuals covered by an employer sponsored Savings Incentive
Match Plan for employees ("SIMPLE Plan") or Simplified Employee Pension-IRA
Plan ("SEP-IRA Plan") may establish an IRA to which the employer can make tax
deductible contributions as a uniform percentage of compensation. The employer
sponsoring a SIMPLE Plan is required to make either a matching contribution of
100% of the employee's contributions up to 3% of the employee's compensation (1%
for certain years) or a uniform contribution to all eligible employees equal to
2% of compensation. The employer sponsoring the SEP-IRA may

<PAGE>

contribute up to the lesser of $30,000 or 15% of the employee's compensation, up
to a maximum compensation of $160,000 for 1999. SIMPLE Plans are a form of
qualified retirement plan authorized by tax law changes in 1996 that are
available to employers who employ 100 or less employees. SIMPLE Plans are exempt
from many of the testing and other requirements imposed on qualified retirement
plans. SIMPLE Plans and certain salary reduction SEP-IRA Plans (SARSEP) in
existence prior to January 1, 1997 also permit employees to elect to contribute
portions of their pre-tax compensation to such plans in addition to the
employer's contribution, subject to the above limitations. No new SARSEP's may
be established after December 31, 1996. Generally, such individual
contributions are limited to a maximum dollar amount of compensation each year
($6,000 for SIMPLE Plans and $10,000 for SARSEP Plans for 1999). The employee
covered by a SEP-IRA Plan that prohibits individual pre-tax contributions may
make additional contributions of the lesser of $2,000 or 100% of compensation
either to the SEP-IRA Plan or to a separate IRA which may be deductible. An IRA
established pursuant to a SEP-IRA Plan, SIMPLE Plan or SARSEP may invest in the
Fund.

Under the Fund's IRA Plan, IFTC serves as custodian of the assets. IFTC
will charge an annual maintenance fee of $12 for its custodial services. In
addition, there will be a fee of $15 for a lump sum benefit distribution, but no
fee for each periodic cash distribution received from the Fund. This fee
schedule may be altered at any time by IFTC on 60 days' written notice. Persons
opening an IRA Plan may rescind it upon written notice to the custodian on or
before the seventh day following acceptance of the IRA Plan by the custodian.
Any individual rescinding an IRA Plan during the seven-day period will be fully
reimbursed even though it is the Fund's practice to invest all proceeds
immediately upon receipt. If the proceeds so invested depreciate prior to
rescission, the investment advisor will absorb the loss. If the proceeds
invested appreciate, the Fund will realize the gain. Shares held in an IRA Plan
may be redeemed at any time pursuant to a proper redemption request. See
"Redemption of Shares" in the Prospectus.

EMPLOYER SPONSORED QUALIFIED RETIREMENT PLANS

Employer sponsored pension plans and their related trusts that are
qualified under the Internal Revenue Code, including so-called Section 401(k)
salary reduction plans, may invest in mutual funds such as General Securities,
Incorporated. A SIMPLE Plan may be established by an employer with 100 or less
employees under which contributions are made to a tax exempt trust (rather than
individual IRAs as described above) may also invest in the Fund. The employer
sponsoring a SIMPLE Plan is required to make either a matching contribution of
100% of the employee's contributions up to 3% of the employee's compensation or
a uniform contribution to all eligible employees equal to 2% of compensation.
Certain retirement plans permit employees to elect to contribute portions of
their compensation pre-tax to such plans in addition to the employer's
contribution, subject to the above limits. Generally, such individual
contributions are limited to a maximum dollar amount of compensation each year
described above.

<PAGE>

Such qualified retirement plans may also be established by self employed
individuals for themselves and their eligible employees, if any. These
individuals may make annual tax deductible contributions out of earned income to
their self-employed plan, in amounts up to the lesser of $30,000 or 15 % of
earned income (after such contributions) if the contribution is discretionary
(e.g., a profit sharing plan) or $30,000 or 25% of earned income (after such
contribution) if the contribution is fixed in full or in part (e.g., a pension
plan or a combination of pension and profit sharing plan) to purchase shares of
the Fund. Prior to 1997, the Fund provided a Self-Employed Retirement Plan
document and Custodial Agreement for adoption by self-employed individuals.
After 1996, self-employed individuals are responsible for amending the documents
to maintain compliance with tax and other laws, or adopting new documents to
maintain compliance with such laws. Initial and annual maintenance fees,
withdrawal, termination and distribution fees are charged by IFTC, the custodian
bank, according to a schedule of fees established in the Custodial Agreement.
The fees are the same as the fees IFTC charges for IRA Plan services. The
custodian has reserved the right to increase fees for its services on 60 days'
written notice.

It is recommended that interested persons consult with an attorney and a
qualified trustee regarding the nature of such plans, including their tax
consequences and dollar limitations. Since such a retirement investment program
involves commitments covering future years and tax penalties for premature
distributions, it is important that the investor consider the investment
objectives of the Fund as described in the Prospectus and this Statement. The
Fund may elect to provide quarterly statements containing information regarding
transactions for the period covered in lieu of confirming each transaction to
persons making purchases pursuant to the IRA Plan, SEP-IRA, SIMPLE IRA, SARSEP
or employer sponsored qualified retirement plans.

AUTOMATIC WITHDRAWAL PLAN

The owner of $10,000 or more of Fund shares at net asset value may provide
for the payment from the owner's account of any requested dollar amount of $100
or more to be paid to the owner or a designated payee monthly, quarterly,
semi-annually or annually. Shares are redeemed on the 5th business day from the
end of the month so that the payee will receive payment approximately the first
week of the following month. When receiving payments under the Automatic
Withdrawal Plan, any income and capital gain dividends will be automatically
reinvested at net asset value on the reinvestment date. A sufficient number of
full and fractional shares will be redeemed to make the designated payment.
Depending upon the size of the payments requested and fluctuations in the net
asset value of the shares redeemed, redemptions for the purpose of making such
payments may reduce or even exhaust the account.

The Fund reserves the right to amend the Automatic Withdrawal Plan on
thirty days' written notice and to terminate this privilege at any time. The
plan may be changed or terminated at any time by you in writing, with all
registered owners' signatures guaranteed. Additional information concerning
signature guarantees appears under the section entitled "Redemption of Shares -
Selling by Mail."

<PAGE>

DETERMINATION OF OFFERING PRICE AND NET ASSET VALUE

Shares of the Fund may be purchased at a price equal to their net asset
value. The net asset value of a Fund share is the proportionate interest of
each share (or fractional share) in the net corporate assets. Net asset value
varies as prices of portfolio securities fluctuate. It is computed not less
frequently than once daily. For the purposes of determining the net corporate
assets, securities are valued, as of the market close New York time, on the
basis of the last sale (if a sale occurred that day). If no sale occurred that
day, securities traded on a national securities exchange are valued at the last
bid price, whereas securities traded on the Nasdaq Stock Market or in the
over-the-counter market are valued at the mean between the last bid and asked
price, in all cases excluding brokerage commissions and odd lot premiums.
Securities having no readily available market quotation and all other assets are
valued in good faith at fair value under the direction of the Board of
Directors.

Computation of net asset value as of November 30, 1998 is illustrated
below:

<TABLE>
<S> <C>
Market value of portfolio securities . . . . $46,368,822
Cash and receivables less liabilities. . . . ($2,577,961)
Net assets . . . . . . . . . . . . . . . . . $43,790,861
Number of shares outstanding . . . . . . . . 2,680,024
Net asset value per share (net assets
divided by shares outstanding) . . . . . . $16.34
</TABLE>

The net asset value used by General Securities, Incorporated in selling and
redeeming shares is that of the computation at the close of business immediately
following the receipt of a subscription for shares or of a request for
redemption.

TAXATION OF THE FUND

As an investment company, and so long as certain diversification of assets
and source of income requirements prescribed by the Internal Revenue Code are
met and at least 90% of its "investment company taxable income" plus certain
other amounts are distributed to its shareholders, the Fund is allowed to deduct
certain dividends paid to shareholders and "pass through" the tax character of
certain dividends and long-term and mid-term capital gains to shareholders who
receive dividend distributions. The Fund always has qualified for such tax
treatment (including with respect to the last fiscal year) and intends to
continue to do so.

<PAGE>

CALCULATION OF PERFORMANCE DATA

Advertisements and other sales literature for the Fund may refer to
"average annual total return" and "cumulative total return." Average annual
total return is computed by finding the average annual compounded rates of
return over the periods indicated in the advertisement that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

P(1+T) TO THE POWER OF n = ERV
Where:

P = a hypothetical initial payment of $1,000
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of such
period.

The average annual compounded total return on investments in the Fund for
the one, five and ten year periods ended November 30, 1998 were 5.31 %, 14.32 %
and 14.67%, respectively.

Cumulative total return figures are computed by finding the cumulative
compounded rate of return over the period indicated in the advertisement that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:

CTR = (ERV - P)
---------- 100
Where:

CTR = Cumulative total return
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of such
period; and
P = initial payment of $1,000

The cumulative total return on investments in the Fund for the one, five
and ten year periods ended November 30, 1998 were 5.31%, 95.26% and 293.10%,
respectively.

The calculations for both average annual total return and cumulative total
return assume all dividends and all capital gain distributions are reinvested at
net asset value on the appropriate reinvestment dates as described in the
Prospectus and include all recurring fees, such as investment advisory and
management fees, charged as expenses to all shareholder accounts.

<PAGE>

FINANCIAL STATEMENTS

18
<PAGE>

TO THE SHAREHOLDERS OF

GENERAL SECURITIES
INCORPORATED

Much has happened since our last letter in May. The market (as measured by the
Dow Jones Industrial Average and the S&P 500) reached new highs in July. In late
August General Securities suffered the loss of its founder, President and
Portfolio Manager, John (Jack) Robinson. At about the same time the market
corrected 20% to a yearly low; our country's President has since been impeached;
the United States has again intervened in the Middle-East; many of the world's
economies remain mired in recession with varying degrees of severity; the
computer dependent parts of the world remain vulnerable to a potential problem
called "the year two thousand bug" or "Y2K" for short; continental Europe has a
new "electronic" currency called the Euro; and as of this writing the market
stands at all-time highs.

Quite a ride, with all the change and turmoil it might seem best to just step
aside and let it all blow over. The truth is, as investors, it never really all
blows over. Instead it changes all the time, sometimes coming back the same,
sometimes differently.

The way we handle these changes is to adhere to a time-tested discipline of
stock selection based upon a process that is continuously tested and improved
upon. Jack Robinson spent the better part of the past four years preparing me to
assume the responsibilities of portfolio manager of the Fund and in teaching
Craig Robinson, his son, to handle the responsibilities of the Presidency of
both the Fund and Robinson Capital Management, the Fund's advisor and
administrator. This preparation didn't include what to do if the President gets
impeached or what to do about the global economic recession or a widespread
software bug. Instead it identified the steps necessary to stay focused on the
investment process and how to avoid being distracted by events that we have
either little or no control over, no matter how exciting or controversial.

The first step in our overall investment process which attempts to identify
"total quality" oriented companies for potential investment has yielded an
increase in the number of companies available for further evaluation from less
than 30 in 1987 to more than 330 as of December 1, 1998. A large pool of
"quality oriented" companies has in turn increased the number of companies
available for the second step of our investment process, valuation. The
valuation process attempts to identify which of the quality oriented companies
has the best risk-reward characteristics at a given point in time. Our work
indicates that, over time, an effort to fully invest the assets of the Fund into
a diverse group of these companies will provide you, our shareholders, with a
competitive risk adjusted return over the long-term.

To summarize, our quality screening process is designed to identify what we
believe are good companies. Our valuation screening process is designed to
identify the best investment opportunities among them. Our portfolio management
process is designed to make sure that the Fund owns a diversified group of the
best investment opportunities available over the longest possible time frame.

2
<PAGE>

Craig and I would like to express our thanks for your recent vote of confidence
in us and in our process as indicated by your approval of the Investment
Advisory Agreement and the Management Agreement. We will continue to work
diligently to earn your continuing trust and confidence by striving to provide
you with superior risk-adjusted returns.

The most significant influences on the Fund's performance relative to the S&P
500 were related to our value-oriented philosophy, a material weighting in
small-cap companies (approximately 25%) and a relatively large cash position
(approximately 25%) throughout much of fiscal 1998. Unfortunately this
combination of strategies, which has worked reasonably well over the long-term,
has been significantly out of favor for not only this past fiscal year ended
November 1998 but for much of fiscal 1997 as well. We believe now is not the
time to abandon a proven long-term strategy. Going forward, we believe a
continued focus on quality-oriented companies selling at a discount to our
estimate of their intrinsic value, combined with a less aggressive use of cash,
can generate the kind of risk-adjusted returns you have a right to expect in an
actively managed fund.

General Securities declared a fourth quarter dividend of $.90 a share from net
long-term capital gains bringing total distributions for 1998 to $1.08. This is
our One Hundred Ninetieth consecutive quarterly dividend paid.

Mark Billeadeau
Senior Portfolio Manager

PERFORMANCE

November 30, 1998

General Securities, Incorporated

The following graph was prepared assuming a hypothetical investment of $10,000
on December 1, 1988 The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.

GENERAL SECURITIES INC.
PERFORMANCE GRAPH
11/30/98

<TABLE>
<CAPTION>
GSI S&P 500 INDEX
<S> <C> <C>
Nov-88 10,000 10,000
Nov-89 12,307 13,077
Nov-90 12,115 12,625
Nov-91 16,204 15,187
Nov-92 17,767 17,987
Nov-93 18,755 19,796
Nov-94 19,673 20,003
Nov-95 25,800 27,391
Nov-96 30,483 35,019
Nov-97 34,775 45,001
Nov-98 36,605 55,649
</TABLE>

[BAR GRAPH]

Past Performance is not indicative of future performance.

*These are the portfolios total returns during the period including reinvestment
of all dividend and capital gains distributions.

**This is an unmanaged index.

3
<PAGE>

STATEMENT OF NET ASSETS NOVEMBER 30, 1998

ASSETS

<TABLE>
<CAPTION>
Number of Market
shares value (a)
--------- ---------
<S> <C> <C>
INVESTMENT SECURITIES (percentages repre-
sent value of investments compared to total
net assets):

COMMON STOCKS (80.06%):
Audio/Video Products (3.90%):
Harman International (b) . . . . . . . . 40,000 $ 1,707,500
------------
Auto Parts - Original Equipment (7.79%):
Dana Corp. . . . . . . . . . . . . . . 35,000 1,365,000
Tower Automotive (d) . . . . . . . . . 90,000 2,047,500
------------
3,412,500
------------
Banking (3.87%):
Banc One (d) . . . . . . . . . . . . . 33,000 1,693,313
------------
Chemicals (2.65%):
Eastman Chemical Company . . . . . . . 20,000 1,158,750
------------
Communications Equipment (2.01%):
Ortel Corp. (d), (e) . . . . . . . . . 80,000 880,000
------------
Computer/Integrated Systems (4.71%):
Diebold, Inc. (b). . . . . . . . . . . 60,000 2,062,500
------------
Electrical Machinery, Equipment
and Supplies (5.78%):
Grainger (W.W.), Inc. (d). . . . . . . 60,000 2,535,000
------------
Electronics (14.87%):
Intel Corp. (c). . . . . . . . . . . . 15,000 1,614,375
Motorola, Inc. (d) . . . . . . . . . . 13,000 806,000
Solectron Corp. (c), (e) . . . . . . . 35,000 2,316,563
Xerox Corp. (c). . . . . . . . . . . . 5,000 537,500
Zygo Corp. (d), (e). . . . . . . . . . 100,000 1,237,500
------------
6,511,938
------------
Farm & Construction Machinery (.80%):
Deere & Co. (b). . . . . . . . . . . . 10,000 349,375
------------
Hospital Suppliers (2.78%):
Johnson & Johnson. . . . . . . . . . . 15,000 1,218,750
------------
Information Services (3.15%):
Hewlett-Packard. . . . . . . . . . . . 22,000 1,380,500
------------
Instruments and Related Products (5.48%):
Honeywell, Inc.. . . . . . . . . . . . 30,000 2,398,125
------------
Medical Instruments and Supplies (3.86%):
Adac Laboratories (d), (e) . . . . . . 65,000 1,690,000
------------
Paper & Forest Products (4.01%):
Weyerhauser Co.. . . . . . . . . . . . 35,000 1,754,375
------------
Petroleum & Drilling Services (.63%):
Baker Hughes, Inc. (b) . . . . . . . . 15,000 274,687
------------
Pharmaceuticals (2.12%):
Merck (c). . . . . . . . . . . . . . . 6,000 929,250
------------
Photography (1.32%):
Eastman Kodak. . . . . . . . . . . . . 8,000 580,500
------------
Printing & Publishing (1.82%):
Banta Corp.. . . . . . . . . . . . . . 30,000 798,750
------------
Retail & Wholesale (.92%):
Corning, Inc.. . . . . . . . . . . . . 10,000 401,250
------------
Steel/Producers (3.34%):
Worthington Industries (d) . . . . . . 120,000 1,462,500
------------
</TABLE>

4
<PAGE>

STATEMENT OF NET ASSETS NOVEMBER 30, 1998

ASSETS (CONT.)

<TABLE>
<CAPTION>
Number of Market
shares value (a)
--------- ---------
<S> <C> <C>
COMMON STOCKS (CONT.):
Utilities (4.25%):
GTE. . . . . . . . . . . . . . . . . . 30,000 1,860,000
------------
Total common stock
(cost $ 22,669,095). . . . . . . . . . . . . . . 35,059,563
------------

U.S. TREASURY BILLS (22.82%):
$8,000,000, 4.95%, due 12/03/98 (f). . . . . . . . . . . . 7,997,858
$2,000,000, 4.62%, due 12/24/98 (f). . . . . . . . . . 1,994,096
------------
Total U.S. Treasury Bills
(cost $9,991,954). . . . . . . . . . . . . . . . 9,991,954
------------

MONEY MARKET INSTRUMENT (3.01%):
State Street Capital Markets Sweep Account
Variable Rate, 3.50%
(cost $1,317,305). . . . . . . . . . . . . . . . . . . . 1,317,305
------------
Total investment securities
(cost $33,978,354) (g) . . . . . . . . . . . . . . . . . . 46,368,822
Receivable for capital shares sold . . . . . . . . . . . . . 2,508
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 17
Dividends receivable . . . . . . . . . . . . . . . . . . . . 58,220
Interest receivable. . . . . . . . . . . . . . . . . . . . . 128
------------
Total assets . . . . . . . . . . . . . . . . . . . . $46,429,695
------------

LIABILITIES

Accrued investment advisory fees . . . . . . . . . . . . . . 22,198
Accrued management administration fees . . . . . . . . . . . 14,798
Other accrued expenses . . . . . . . . . . . . . . . . . . . 48,924
Payable for shares redeemed. . . . . . . . . . . . . . . . . 133,538
Dividend payable . . . . . . . . . . . . . . . . . . . . . . 2,419,376
Total liabilities. . . . . . . . . . . . . . . . . . . . . 2,638,834
Net assets applicable to outstanding capital stock . . . . . $43,790,861
------------

Represented by:
Capital stock - authorized 10,000,000 shares of $.01
par value per share; outstanding 2,680,024 shares. . . . . 26,800
Capital surplus. . . . . . . . . . . . . . . . . . . . . . 31,503,860
Distributions in excess of net investment income . . . . . (130,267)
Unrealized appreciation of investments . . . . . . . . . . 12,390,468
------------
Net assets applicable to outstanding capital stock . . . . . $43,790,861
------------
------------
Net asset value per share of outstanding capital stock . . . $16.34
------------
------------

See accompanying notes to investment securities list and financial statements.

NOTES TO INVESTMENT SECURITIES LIST:
November 30, 1998

(a) Investment securities are valued by the procedures described in note 1 to
the financial statements.
(b) New holding in fiscal 1998.
(c) Holding decreased in fiscal 1998.
(d) Holding increased in fiscal 1998.
(e) Currently non-income producing.
(f) Rate shown is annualized yield on date of purchase.
(g) At November 30, 1998 the cost of securities for federal income tax purposes
was $33,978,354, and the aggregate unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation. . . . . . . . . . . . . . . . . $13,437,231
Unrealized depreciation. . . . . . . . . . . . . . . . . (1,046,763
------------
$12,390,468
------------
------------
</TABLE>

5
<PAGE>

STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998

<TABLE>

<S> <C>
INVESTMENT INCOME:
Income:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . $ 549,725
Interest . . . . . . . . . . . . . . . . . . . . . . . . 612,744
-----------
Total income . . . . . . . . . . . . . . . . . . . . . 1,162,469
-----------
Expenses (note 2):
Investment advisory fees . . . . . . . . . . . . . . . . 294,321
Management administration fees . . . . . . . . . . . . . 196,214
Shareholder notices and reports. . . . . . . . . . . . . 36,296
Auditing and tax services. . . . . . . . . . . . . . . . 22,123
Custodian and portfolio accounting fees. . . . . . . . . 44,914
Transfer agent, registrar and disbursing agent fees. . . 71,383
Legal services . . . . . . . . . . . . . . . . . . . . . 26,585
Directors' fees. . . . . . . . . . . . . . . . . . . . . 13,371
Federal and state registration fees and expenses . . . . 15,124
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 2,508
-----------
Total expenses . . . . . . . . . . . . . . . . . . . . 722,839
-----------
Investment income - net. . . . . . . . . . . . . . . . . 439,630
-----------
Realized and unrealized gains from Investments - net:
Net realized gains on securities
transactions (note 3). . . . . . . . . . . . . . . . . 2,429,181
Net change in unrealized appreciation
or depreciation of investments . . . . . . . . . . . . (472,241)
-----------
Net gain on investments. . . . . . . . . . . . . . . . . 1,956,940
-----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . . . . . . . . . $2,396,570
-----------
-----------
</TABLE>

FINANCIAL HIGHLIGHTS: Year Ended November 30

SELECTED PER SHARE HISTORICAL DATA WERE AS FOLLOWS: 1998 1997 1996 1995 1994+
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year . . . . . . . . . $ 16.55 $ 16.08 $ 14.61 $ 12.08 $ 12.23
-------- -------- -------- -------- --------
Operations:
Investment income - net. . . . . . . . . . . . . . .15 .18 .17 .25 .20
Net realized and unrealized gains (losses)
on investments . . . . . . . . . . . . . . . . . .72 2.08 2.46 3.49 .40
-------- -------- -------- -------- --------
Total from operations. . . . . . . . . . . . . . . . .87 2.26 2.63 3.74 .60
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net . . . . . . . . . . . (.15) (.18) (.17) (.25) (.21)
Excess distributions of net investment income. . . (.03) - (.01) - (.02)
From net realized gains. . . . . . . . . . . . . . (.90) (1.61) (.98) (.96) (.52)
-------- -------- -------- -------- --------
Total distributions to shareholders. . . . . . . . . (1.08) (1.79) (1.16) (1.21) (.75)
-------- -------- -------- -------- --------
Net asset value, end of year . . . . . . . . . . . . $ 16.34 $ 16.55 $ 16.08 $ 14.61 $ 12.08
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return*. . . . . . . . . . . . . . . . . . . . 5.26% 14.08% 18.15% 31.15% 4.89%
Net assets, end of year (000's omitted). . . . . . . $43,791 $46,006 $39,974 $32,541 $26,581

Ratio of expenses to average daily net assets. . . . 1.47% 1.44% 1.50% 1.50% 1.50%
Ratio of net investment income to average
daily net assets . . . . . . . . . . . . . . . . . .90% 1.02% 1.11% 1.79% 1.69%
Portfolio turnover rate. . . . . . . . . . . . . . . 25% 20% 18% 24% 42%
</TABLE>

* These are the Fund's total returns during the years, including reinvestment
of all dividend and capital gain distributions without adjustments for sales
charge.

+ From March 23, 1994 through November 30, 1994, the Fund's advisor was Alpha
Source Asset Management, Inc., a wholly-owned subsidiary of Hamilton
Investments, Inc. Prior to March 23, 1994, the Fund's advisor was
Craig-Hallum, Inc., a division of Hamilton Investments, Inc.

6
<PAGE>

STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30, 1998
AND YEAR ENDED NOVEMBER 30, 1997

<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income. . . . . . . . . . . . . . . . $ 439,630 $ 492,434
Net realized gains on investments. . . . . . . . . . 2,429,181 4,472,429
Net change in unrealized appreciation
or depreciation of investments . . . . . . . . . . (472,241) 1,097,239
----------- -----------
Net increase in assets from
operation. . . . . . . . . . . . . . . . . . . . . 2,396,570 6,062,102
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income. . . . . . . . . . . . . . . (439,630) (488,882)
Excess distributions of net
investment income. . . . . . . . . . . . . . . . (74,394) -
Net realized gains on investments. . . . . . . . . (2,425,433) (4,473,367)
----------- -----------
Total distributions . . . . . . . . . . . . . . . (2,939,457) (4,962,249)
----------- -----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of 74,357 and
371,799 shares, respectively . . . . . . . . . . . . 1,280,766 6,495,168
Net asset value of 260,180 and 163,381
shares, respectively, issued in
reinvestment of net investment income
and net realized gain distributions. . . . . . . . 4,361,571 2,674,214
Payments for redemptions of 434,124
and 241,119 shares, respectively . . . . . . . . . (7,314,188) (4,237,890)
----------- -----------
Increase (decrease) in net assets from
capital share transactions, representing
net increase (decrease) of (99,587) and
294,061 shares, respectively . . . . . . . . . . . (1,671,851) 4,931,492
----------- -----------

TOTAL INCREASE (DECREASE) IN NET ASSETS . . . . . . . (2,214,738) 6,031,345

NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . 46,005,599 39,974,254
----------- -----------
End of period (Including distributions in
excess of net investment income of
$130,267 and $55,873 respectively) . . . . . . . . $43,790,861 $46,005,599
----------- -----------
----------- -----------
</TABLE>

7
<PAGE>

NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Securities, Incorporated (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified open end
management investment company. The Fund invests primarily in common stocks
of companies believed to be undervalued.

The significant accounting policies followed by the Fund are summarized as
follows:

INVESTMENTS IN SECURITIES

Securities listed on national securities exchanges are valued on the basis
of the last reported sale each day, or if no sale is made, at the mean of
the last reported bid and asked price for such securities. Short-term
securities are valued at amortized cost which approximates market value.

Security transactions are recorded on the date securities are purchased or
sold. Realized gains or losses and unrealized appreciation or depreciation
of investments are determined on the basis of identified cost. Dividend
income is recorded on the ex-dividend date. Interest is recognized on the
accrual basis.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.

FEDERAL INCOME TAXES

It is the Fund's policy to continue meeting the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute taxable income to its shareholders in amounts which will relieve
it from all, or substantially all, federal income and excise taxes.
Therefore, the Fund does not provide for federal income or excise taxes.

DISTRIBUTIONS

Distributions to shareholders from investment income are made quarterly and
realized capital gain distributions, if any, are made annually. These
distributions are recorded on the record date and are payable in cash or
reinvested in additional shares of the Fund's capital stock.

Due to the timing of dividend distributions, the fiscal year in which
amounts are distributed for tax purposes may differ from the year that
income or realized gains were recorded by the Fund. The effect on
distributions of this book-to-tax difference is presented as "excess
distributions of net investment income" in the statement of changes in net
assets and the financial highlights.

(2) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Robinson Capital Management, Inc. is the Fund's investment advisor and
administrator. As compensation for its services under the Investment
Advisory Agreement, Robinson Capital is paid an investment management
advisory fee, payable monthly, at an annual rate of 0.60% for average net
assets up to and including $100 million, 0.35% for next $150 million of
average net assets and 0.10% for net assets over $250 million. Robinson
Capital is obligated to pay all Fund expenses (exclusive of brokerage
expenses and fees, interest and any federal or state income taxes) which
exceed 1.50% of the Fund's average net assets for any fiscal year on the
first $100 million of average net assets, 1.25% of the Fund's average net
assets for any

8
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1998

fiscal year on the next $150 million of average net assets, and 1% of the
Fund's average net assets for any fiscal year on average net assets in
excess of $250 million. For managing the business affairs and providing
certain shareholder services pursuant to the Management Agreement, the Fund
pays Robinson Capital an administrative fee, payable monthly, at an annual
rate of 0.40% of the average daily assets of the Fund, plus out-of-pocket
expenses incurred. Robinson Capital may subcontract with other entities to
provide certain shareholder servicing activities.

Legal service fees were paid to a law firm in which the secretary of the
Fund is a partner.

(3) SECURITIES TRANSACTIONS

Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $9,207,626 and $11,496,940,
respectively, for the year ended November 30, 1998.

9
<PAGE>

INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
General Securities, Incorporated:

We have audited the accompanying statement of net assets of General
Securities, Incorporated as of November 30, 1998, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period ended November 30, 1998, and the
financial highlights for each of the years in the five-year period ended
November 30, 1998. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of General Securities, Incorporated at November 30, 1998 and the
results of its operations for the year then ended, the changes in its net assets
for each of the years in the two-year period ended November 30, 1998, and the
financial highlights for each of the years in the five-year period ended
November 30, 1998, in conformity with generally accepted accounting principles.

Minneapolis, Minnesota KPMG Peat Marwick LLP
December 18, 1998

<PAGE>

PART C

OTHER INFORMATION

ITEM 23. EXHIBITS

(a.) Articles of Incorporation of the Fund now in effect, filed as
Exhibit 1 to initial Form N-1 Registration Statement, File No.
2-77092, are incorporated herein by reference.

(b.) By-laws of the Fund, filed as Exhibit 2 to initial Form N-1
Registration Statement, File No. 2-77092, are incorporated herein
by reference.

(c.) Not Applicable.

(d.) Investment Advisory Agreement between the Fund and Robinson
Capital Management, Inc., filed as an Exhibit herein, and
approved by the Fund's shareholders on December 9, 1998.

(d.)(1) Management Agreement between the Fund and Robinson Capital
Management, Inc., filed as an Exhibit herein, and approved by the
Fund's shareholders on December 9, 1998.

(e.) Not Applicable.

(f.) Not Applicable.

(g.) Custodian Agreement between the Fund and Investors Fiduciary
Trust Company, filed as Exhibit 8 to Form N-1A Registration
Statement, Amendment No. 13, File No. 2-77092, is incorporated
herein by reference.

(h.) Transfer Agency Agreement between the Fund and Investors
Fiduciary Trust Company, filed as Exhibit 9 to Form N-1A
Registration Statement, Amendment No. 13, File No. 2-77092, is
incorporated herein by reference.

(i.) Opinion of Counsel as to the legality of the securities being
registered, filed as Exhibit 7 to initial Form N-1 Registration
Statement, File No. 2-77092, is incorporated herein by reference.

(j.) Independent Auditors' Consent.

(k.) Not Applicable.

<PAGE>

(l.) Not Applicable.

(m.) Not Applicable.

(n.) Financial Data Schedule.

(o.) Not Applicable.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND

All of the officers except the Secretary and one of the directors of the
Fund are employees of Robinson Capital Management, Inc., the Fund's
Investment Advisor.

ITEM 25. INDEMNIFICATION

Minnesota Statutes Section 302A.521 provides that a corporation shall
indemnify any person made or threatened to be made a party to a proceeding by
reason of the former or present official capacity of such person against
judgments, penalties, fines, including, without limitation, excise taxes
assessed against such person with respect to an employee benefit plan,
settlements and reasonable expenses, including attorneys' fees and
disbursements, incurred by such person in connection with the proceeding, if,
with respect to the acts or omissions of such person complained of in the
proceeding, such person (1) has not been indemnified therefor by another
organization or employee benefit plan; (2) acted in good faith; (3) received no
improper personal benefit and Section 302A.255 (with respect to director
conflicts of interest), if applicable, has been satisfied; (4) in the case of a
criminal proceeding, had no reasonable cause to believe the conduct was
unlawful; and (5) reasonably believed that the conduct was in the best interest
of the corporation in the case of acts or omissions in such person's official
capacity for the corporation, or reasonably believed that conduct was not
opposed to the best interests of the corporation in the case of acts or
omissions in such person's official capacity for other affiliated organizations.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR

Robinson Capital Management, Inc., the Fund's Investment Advisor, was
organized in 1994. Its activities are limited to acting as an investment
advisor.

The officers and directors of Robinson Capital Management, Inc., together
with a description of their business, profession, vocation or employment during
the past two fiscal years, is listed below. The principal business address of
all such persons is 5100 Eden Avenue, Suite 204, Edina, Minnesota 55436.

<PAGE>

MARK D. BILLEADEAU, Vice President and Financial Analyst at Robinson
Capital Management, Inc., from February 1995 to present; Vice President of the
Fund from February 1997 to present; Senior Portfolio Manager of the Fund from
September 1998 to present; Manager (Consulting Service) of Craig-Hallum, Inc.,
and its successor, Principal Financial Services, Inc., from September 1990 to
February 1995.

CRAIG H. ROBINSON, President of Robinson Capital Management, Inc. since
1998; Vice President of Robinson Capital February 1997 to September 1998;
various sales and marketing positions at Robinson Capital Management, Inc.
August 1995 to February 1997; President of the Fund and Associate Portfolio
Manager September 1998 to present; Account Executive with Paine Webber
Incorporated from August 1994 to August 1995.

RENEE A. RASMUSSON, Assistant Treasurer of Robinson Capital Management,
Inc., December 1994 to present; employee of Hamilton Investments, Inc. from July
1993 to July 1994; Vice President of Craig-Hallum, Inc. prior to July 1993.

LORY M. HASSLER, Assistant Secretary of Robinson Capital Management, Inc.,
December 1994 to present; registered representative of Hamilton Investments,
Inc. from July 1993 to December 1994; registered representative and Vice
President of Craig-Hallum, Inc. prior to July 1993.

SUSAN A. PETERSON, Director of Robinson Capital Management, Inc. since
1997; founder and Chief Financial Officer of Decision Support Software, Inc.
since 1983.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) None; the Registrant acts as its own underwriter.

(b) None; the Registrant acts as its own underwriter.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
rules promulgated thereunder are in the possession of Robinson Capital
Management, Inc. at its offices at 5100 Eden Avenue, Suite 204, Edina, Minnesota
55436 except those books, records and other documents maintained by the
custodian, transfer agent and registrar, Investors Fiduciary Trust Company,
which are located at its offices at 330 W. 9th Street, P. O. Box 419249, Kansas
City, Missouri 64105.

<PAGE>

ITEM 29. MANAGEMENT SERVICES

Not Applicable.

ITEM 30. UNDERTAKINGS

The Registrant hereby undertakes to furnish to each person to whom the
Prospectus included in this Registration Statement is delivered with a copy of
the Registrant's latest Annual Report to Shareholders, upon request and without
charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund has duly caused this post-effective
amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Edina, State of
Minnesota, on the 29th day of January, 1999.

GENERAL SECURITIES, INCORPORATED

By /s/ Craig H. Robinson
------------------------------------
Craig H. Robinson, President

Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to the Registration Statement has been signed below on
the 29th day of January, 1999, by the following persons in the capacities
indicated.

Signature Title
--------- -----

/s/ Craig H. Robinson President (principal executive, financial and
- ------------------------------ accounting officer) and Director,
Craig H. Robinson January 29, 1999

/s/ M. Michelle Coady, Ph.D. Director, January 29, 1999
- ------------------------------
M. Michelle Coady

/s/ Gary D. Floss Director, January 29, 1999
- ------------------------------
Gary D. Floss

/s/ David W. Preus Director, January 29, 1999
- ------------------------------
David W. Preus

/s/ Director, January 29, 1999
- ------------------------------
LaVerne W. Rees

<PAGE>

/s/ Oscar Victor Director, January 29, 1999
- ------------------------------
Oscar Victor

/s/ Charles J. Walton Director, January 29, 1999
- ------------------------------
Charles J. Walton

/s/ Arnold M. Weimerskirch Director, January 29, 1999
- ------------------------------
Arnold M. Weimerskirch

<PAGE>

Exhibit (d)
- -----------

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made effective as of the 28th day of August, 1998 by and between
GENERAL SECURITIES, INCORPORATED, a Minnesota corporation (the "Fund"), and
ROBINSON CAPITAL MANAGEMENT, INC., a Minnesota corporation (the "Advisor").

WHEREAS, the Fund is an open-end, diversified management investment company
registered under the Investment Company Act of 1940 (the "1940 Act"), the shares
of common stock (the "Shares") of which are registered under the Securities Act
of 1933 (the "1933 Act"); and

WHEREAS, the Fund desires at this time to retain the Advisor to render
investment advisory services to the Fund, and the Advisor is willing to render
such services, all subject to approval of this Agreement by the shareholders of
the Fund within 120 days of the date hereof;

NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:

1. INITIAL APPOINTMENT OF ADVISOR. The Fund hereby appoints the Advisor
to act as investment advisor to the Fund for the period and on the terms herein
set forth. The Advisor accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.

2. DELIVERY OF DOCUMENTS. The Fund has delivered (or will deliver as
soon as is possible) to the Advisor copies of each of the following documents
and will deliver to the Advisor all future amendments and supplements:

(a) Articles of Incorporation of the Fund together with all
amendments thereto (such Articles, as presently in effect and as amended from
time to time, are herein called the "Articles of Incorporation"), a copy of
which also is on file with the Minnesota Secretary of State.

(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "ByLaws").

(c) Certified resolutions of the Board of Directors and Shareholders
of the Fund authorizing the appointment of the Advisor and approving this
Agreement.

(d) Registration Statement under the 1933 Act and under the 1940 Act
on Form N-1A (the "Registration Statement") as filed with the Securities and
Exchange Commission and all amendments thereto.

<PAGE>

(e) Current prospectus and statement of additional information of the
Fund (such prospectus and statement of additional information as then in effect
and as amended, supplemented and/or superseded from time to time, are herein
collectively called the "Prospectus").

3. DUTIES OF THE ADVISOR. Subject to the general supervision of the
Board of Directors of the Fund, the Advisor shall manage the investment
operations of the Fund and the composition of the Fund's assets, including the
purchase, retention and disposition thereof, in accordance with the policies of
the Fund as stated in the Prospectus and with the investment objective(s) of the
Fund and subject to the following understandings:

(a) The Advisor shall use the same skill and care in the management
of the Fund as is required to be used in the discharge of fiduciary duties under
the 1940 Act, the Investment Advisers Act of 1940 (the "1940 Advisers Act"), the
1933 Act and the Internal Revenue Code of 1986 (the "Code").

(b) The Advisor shall provide supervision of the Fund's assets;
furnish a continuous investment program for the Fund; determine from time to
time what investments or securities will be purchased, retained or sold by the
Fund, and what portion of the assets will be invested or held uninvested as
cash.

(c) The Advisor, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation, By-Laws, Registration Statement and Prospectus and with the
instructions and directions of the Directors of the Fund, and will comply with
and conform to the requirements of the 1940 Act, the 1940 Advisers Act, the 1933
Act and the Code (applicable to the Fund as a regulated investment company or
otherwise) as each may from time to time be amended, and all other applicable
federal and state laws, regulations and rulings.

(d) The Advisor shall determine the securities to be purchased or
sold by the Fund and will place orders pursuant to its determinations either
directly with the issuer or underwriter or with any broker-dealer (including, as
set forth below, a broker-dealer which is an affiliated person of the Advisor)
who deals in the securities in which the Fund is active. In placing orders with
broker-dealers, the Advisor will attempt to obtain the best combination of price
and execution. In seeking to achieve the best combination of price and
execution, an effort shall be made to evaluate the overall quality and
reliability of broker-dealers and the service they provide, including their
general execution capability, reliability and integrity, willingness to take
positions in securities, general operational capabilities and financial
condition. However, the responsibility of the Advisor to attempt to obtain the
best combination of price and execution does not obligate it to solicit a
competitive bid for each transaction, and the Advisor shall have no obligation
to seek the lowest available commission cost to the Fund, so long as the Advisor
determines in good faith that the commission paid to a broker-dealer is
reasonable in relation to the value of the brokerage, research, statistical or
other services provided by such broker-dealer to the Fund or the Advisor. The
Advisor will not place orders with broker-dealers which are affiliated persons
of the Advisor

26
<PAGE>

or the Fund without the prior written authorization of the Fund, and then will
do so subject to (i) the provisions of Sections 17(e)(2) and Rule 17e-l and
Section 10(f) and Rule l0f-3 under the 1940 Act, Rule 206(3)-2 under the 1940
Advisers Act, Section 11(a) and Rule 11a2-2(T)(a)(2) under the Securities
Exchange Act of 1934 (the "1934 Act") and any other applicable laws or
regulations, and (ii) procedures properly adopted by the Fund with respect
thereto.

(e) On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients, if
any, the Advisor, to the extent permitted by applicable laws and regulations,
may aggregate the securities to be purchased or sold. In such event, allocation
of the securities so purchased or sold will be made by the Advisor in a manner
it considers to be equitable and consistent with its fiduciary obligations to
each, and transaction costs will be allocated so that each receives, to the
extent possible, the same price.

(f) The Advisor shall render to the Board of Directors of the Fund
such periodic and special reports as the Directors may reasonably request.

(g) The Advisor, and not the Fund, shall pay the salaries and fees of
any officers or Directors of the Fund who are "interested persons" (as defined
in the Investment Company Act of 1940) and who are employed by the Advisor to
perform services relating to the Fund.

(h) The services of the Advisor to the Fund under this Agreement are
not to be deemed exclusive and the Advisor shall be free to render similar or
other services in the future to the Fund or to others so long as its services
under this Agreement are not impaired thereby.

4. TRANSACTION PROCEDURES. All transactions will be consummated by
payment to or delivery by the Custodian of the Fund, or such depositories or
agents as may be designated by the Custodian in writing, as custodian for the
Fund, of all cash and/or securities due to or from the Fund, and the Advisor
shall not have possession or custody thereof or any responsibility or liability
with respect thereto. The Advisor shall advise the Custodian of all investment
orders at the time and in the manner as prescribed by the Fund. The Fund shall
issue to the Custodian such instructions as may be appropriate in connection
with the settlement of any transaction initiated by the Advisor. The Fund shall
be responsible for all custodial arrangements and the payment of custodial
charges and fees, and, upon giving proper instructions to the Custodian, the
Advisor shall have no responsibility or liability with respect to custodial
arrangements or the acts, omissions or other conduct of the Custodian.

5. ADOPTION OF ETHICS CODE. The Advisor has or will adopt a written code
of ethics complying with the requirements of Rule 17j-l under the 1940 Act and
has or will provide the Fund with a copy of such ethics code and evidence of its
adoption. Upon written request of the Fund, the Advisor shall permit the Fund,
its employees or its agents to examine the reports required to be made by the
Advisor under Rule 17j-l(c)(1).

<PAGE>

6. BOOKS AND RECORDS. The Advisor agrees that all records which it
maintains for the Fund are the property of the Fund and it will surrender
promptly to the Fund any of such records upon the Fund's request. The Advisor
further agrees to maintain, keep current and preserve, on behalf of the Fund, in
the manner required or permitted under the 1940 Act, the records relating to the
activities performed by the Advisor under this Agreement as are required to be
maintained under the 1940 Act.

7. COMPENSATION. For the services provided pursuant to this Agreement,
the Fund will pay to the Advisor at the end of each calendar month during the
term of this Agreement, an investment advisory fee equal to a daily rate of
sixty one-hundredths of one percent (.60%) of the first $100 million of the
average daily net assets of the Fund, an annualized rate of thirty-five
one-hundredths of one percent (.35%) of the average daily net assets in excess
of $100 million up to and including $250 million, and an annualized rate of ten
one-hundredths of one percent (.10%) of such net assets in excess of $250
million. For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the number
of days that the Agreement is in effect during the month and year, respectively.

8. EXPENSES. In addition to the fee of the Advisor, the Fund shall
assume and pay any fees and expenses incurred under a management agreement, any
distribution fees incurred under a distribution agreement, any expenses for
services rendered by a custodian for the safekeeping of the Fund's securities or
other property, for keeping its books of account and for any other charges of
the Custodian, as provided in the Prospectus of the Fund. The Advisor shall not
be required to pay and the Fund shall assume and pay the charges and expenses of
its operations, including compensation of the Board of Directors (other than
those affiliated with the Advisor), charges and expenses of independent
auditors, of legal counsel, of any transfer or dividend disbursing agent, and of
any registrar of the Fund, costs of Fund accounting services, costs of acquiring
and disposing of Fund securities, interest, if any, on obligations incurred by
the Fund, costs of share certificates and of reports, membership dues in the
Investment Company Institute or any similar organization, costs of reports and
notices to shareholders, stationery, printing, postage, other like miscellaneous
expenses and all taxes and fees payable to federal, state or other governmental
agencies on account of the registration of securities issued by the Fund, filing
of trust documents or otherwise. The Fund shall not pay or incur any obligation
for any expenses for which the Fund intends to seek reimbursement from the
Advisor as herein provided without first obtaining the written approval of the
Advisor. The Advisor shall arrange, if desired by the Fund, for officers or
employees of the Advisor to serve, without compensation from the Fund, as
directors, officers or agents of the Fund if duly elected or appointed to such
positions and subject to their individual consent and to any limitations imposed
by law.

If expenses borne by the Fund in any fiscal year (including the Advisor's
fee and all other fees and expenses referred to or contemplated in this
paragraph 8, but excluding interest, taxes, and fees incurred in acquiring and
disposing of portfolio securities) exceed 1-1/2% of the Fund's average daily net
assets on the first $100 million of average daily net assets, 1-1/4% of the
Fund's average daily net assets on the next $150 million average daily net
assets and 1% of the Fund's average daily

<PAGE>

net assets on average daily net assets in excess of $250 million, the Advisor
will reduce its fee or reimburse the Fund for fifty percent (50%) of any such
excess. If for any month the expenses of the Fund properly chargeable to the
income account shall exceed 1/12 of the percentage of average daily net assets
allowable as expenses, the payment to the Advisor for that month shall be
reduced and if necessary the Advisor shall make a refund payment to the Fund by
half the amount necessary to cause the total net expense not to exceed such
percentage. As of the end of the Fund's fiscal year, however, the foregoing
computations and payments shall be readjusted so that the aggregate compensation
payable to the Advisor for the year is equal to the percentage set forth in
Section 7 hereof of the average daily net asset value as determined as described
herein throughout the fiscal year, diminished by half the amount necessary so
that the total of the aforementioned expense items of the Fund shall not exceed
the expense limitation. The aggregate of repayments, if any, by the Advisor to
the Fund for the year shall be the amount necessary to limit the said net
expense to said percentage.

Notwithstanding anything in the foregoing to the contrary, the Advisor
shall not be obligated to reimburse the Fund in an amount exceeding its advisory
fee for the period, except to the extent required by applicable law.

The net asset value for the Fund shall be calculated in accordance with the
provisions of the Fund's prospectus or at such other time or times as the Board
of Directors may determine in accordance with the provisions of the 1940 Act.
On each day when net asset value is not calculated, the net asset value of a
share of the Fund shall be deemed to be the net asset value of such a share as
of the close of business on the last day on which such calculation was made for
the purpose of the foregoing computations.

9. LIMITATION OF LIABILITY. Subject to Section 36 of the 1940 Act,
neither the Advisor nor any of its agents or employees shall be liable for any
error of judgment, act or omission, or mistake of law or for any loss suffered
by the Fund or its Shareholders in connection with the matters to which this
Agreement relates, except liability to the Fund or the Shareholders to which the
Advisor would otherwise be subject by reason of the Advisor's willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations and duties under this
Agreement.

10. INDEMNIFICATION. (a) Subject to the conditions set forth below, the
Fund agrees to indemnify and hold harmless the Advisor, its officers and
employees, and each person, if any, who controls the Advisor within the meaning
of Section 15 of the 1933 Act and Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense whatsoever, jointly and severally
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Fund's Registration Statement or the Prospectus or any amendment or
supplement thereto, or any advertisement or sales literature authorized by the
Fund, or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the

29
<PAGE>

statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the Fund
by or on behalf of the Advisor expressly for use in the Fund's Registration
Statement or prospectus or any amendment or supplement thereof. If any action
is brought against the Advisor or any controlling person thereof in respect of
which indemnity may be sought against the Fund pursuant to the foregoing, the
Advisor shall promptly notify the Fund in writing of the institution of such
action and the Fund shall assume the defense of such action, including the
employment of counsel selected by the Fund and payment of expenses. The
Advisor, or any such controlling person thereof, shall have the right to employ
separate counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Advisor or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Fund in
connection with the defense of such action or the Fund shall not have employed
counsel to have charge of the defense of such action, in which event such fees
and expenses shall be borne by the Fund. Anything in this subparagraph to the
contrary notwithstanding, the Fund shall not be liable for any settlement of any
such claim or action effected without its written consent. The Fund agrees
promptly to notify the Advisor of the commencement of any litigation or
proceedings against the Fund or any of its officers or directors or controlling
persons in connection with the issue and sale of shares or in connection with
the Fund's Registration Statement, prospectus or statement of additional
information.

(b) The Advisor agrees to indemnify and hold harmless the Fund, each
of its Directors, each of its officers and each other person, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act, with respect
to statements or omissions, if any, made in the Fund's Registration Statement,
prospectus or statement of additional information or any amendment or supplement
thereof in reliance upon and in conformity with information in writing furnished
to the Fund with respect to the Advisor by or on behalf of the Advisor expressly
for use in the Fund's Registration Statement, prospectus or statement of
additional information or any amendment or supplement thereof. In case any
action shall be brought against the Fund or any other person so indemnified
based on the Fund's Registration Statement, prospectus or statement of
additional information or any amendment or supplement thereof and in respect of
which indemnity may be sought against the Advisor, the Advisor shall have the
rights and duties given to the Fund and the Fund and each other person so
indemnified shall have the rights and duties given to the Advisor by the
provisions of subparagraph (a) above.

(c) Nothing herein contained shall be deemed to protect any person
against liability to the Fund or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the duties of such person or by reason of the
reckless disregard by such person of the obligations and duties of such person
under this Agreement.

11. DURATION AND TERMINATION. This Agreement shall become effective as of
the date hereof, provided that this Agreement shall be approved by the
shareholders of the Fund within 120 days of the date hereof in accordance with
the requirements of the 1940 Act and the rules and regulations thereunder and
unless sooner terminated as provided herein shall continue in effect until

<PAGE>

December 1, 1999. This Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved at
least annually in the manner required by the 1940 Act and the rules and
regulations thereunder; provided however, that if the continuation of this
Agreement is not approved, the Advisor may continue to serve in such capacity in
the manner and to the extent permitted by the 1940 Act and the rules and
regulations thereunder. This Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by vote of a majority of the Directors
of the Fund or by vote of a majority of the outstanding Shares on sixty (60)
days written notice to the Advisor, or by the Advisor at any time without the
payment of any penalty on sixty (60) days written notice to the Fund. This
Agreement may be terminated at any time without the payment of any penalty by
the Board of Directors or by vote of a majority of the outstanding Shares in the
event that it shall have been established by a court of competent jurisdiction
that the Advisor or any officer or director of the Advisor has taken any action
which results in a breach of the covenants of the Advisor set forth herein.

12. ASSIGNMENT. This Agreement will automatically and immediately
terminate in the event of its "assignment" (as defined in Section 2(a)(4) of the
1940 Act). The Advisor shall notify the Fund in writing sufficiently in advance
of any proposed change of control, as defined in Section 2(a)(9) of the 1940
Act, as will enable the Fund to consider whether an "assignment" will occur, and
to take the steps necessary to enter into a new contract with the Advisor.

13. STATUS OF ADVISOR AS INDEPENDENT CONTRACTOR. The Advisor shall for
all purposes herein be deemed to be an independent contractor, and shall, unless
otherwise expressly provided herein or authorized by the Board of Directors of
the Fund from time to time, have no authority to act for or represent the Fund
in any way or otherwise be deemed an agent of the Fund.

14. AFFILIATIONS. Subject to applicable statutes and regulations, it is
understood that directors, officers or agents of the Fund are or may be
interested in the Advisor as officers, directors, agents, shareholders or
otherwise, and that the officers, directors, shareholders and agents of the
Advisor may be interested in the Fund otherwise than as a directors, officer or
agent.

15. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be (a) by vote of a majority of those
Directors of the Fund who are not parties to this Agreement or interested
persons (as defined in the 1940 Act) of any such party at a meeting called for
the purpose of voting on such amendment, and (b) by vote of a majority of the
outstanding Shares.

16. ARBITRATION. Any disputes or controversies between the parties to
this Agreement involving the construction or application of any of the terms,
provisions, or conditions of this Agreement shall be submitted to arbitration.
The arbitration shall be conducted in Minneapolis, Minnesota in accordance with
the Rules of the American Arbitration Association. The parties shall each
appoint one person to hear and determine the dispute and, if they are unable to
agree, then the two persons so chosen shall select a third impartial arbitrator
whose decision shall be final and

<PAGE>

conclusive upon both parties. The decision rendered in arbitration shall be
borne by the losing party or in such proportions as the arbitrator shall decide.

17. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provisions of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Minnesota, and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, subject to paragraph 11 hereof.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.

GENERAL SECURITIES, INCORPORATED
GENERAL SECURITIES, INCORPORATED

Craig H. Robinson
By: /s/ Craig H. Robinson
-------------------------------------------
Its: President
----------------------------------------
Attest:

Renee Rasmussen
/s/ Renee Rasmussen
- ---------------------------
Its: Assistant Treasurer
----------------------

ROBINSON CAPITAL MANAGEMENT, INC.

Mark Billeadeau
By: /s/ Mark Billeadeau
-------------------------------------------
Its: CIO, Portfolio Manager
------------------------------------------
Attest:

Lory M. Hassler
/s/ Lory M. Hassler
- ---------------------------
Its: Secretary
-----------------------

<PAGE>

Exhibit (d)(1)
- --------------
MANAGEMENT AGREEMENT

AGREEMENT made effective as of the 28th day of August, 1998 between GENERAL
SECURITIES, INCORPORATED, a Minnesota corporation (hereinafter called the
"Fund") and ROBINSON CAPITAL MANAGEMENT, INC., a Minnesota corporation
(hereinafter called "Robinson").

WHEREAS, the Fund desires at this time to retain Robinson to provide the
Fund with certain non-investment advisory management and administrative services
(the "Services"), and Robinson is willing to render such services, all subject
to approval of this Agreement by the shareholders of the Fund within 120 days of
the date hereof;

NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:

1. INITIAL APPOINTMENT OF ROBINSON. The Fund hereby appoints Robinson as
its Manager to provide it with the Services. It is understood that the persons
employed by Robinson to assist in the performance of its services and duties
hereunder will not devote their full time to such services and nothing herein
contained shall be deemed to limit or restrict the right of Robinson to engage
in and devote time and attention to other businesses or to render services of
whichever kind or nature as long as the Services provided hereunder are not
impaired thereby.

2. DELIVERY OF DOCUMENTS. The Fund has delivered (or will deliver as
soon as is possible) to Robinson copies of each of the following documents and
will deliver to Robinson all future amendments and supplements:

(a) Articles of Incorporation of the Fund, together with all
amendments thereto (such Articles, as presently in effect and as amended from
time to time, is herein called the "Articles of Incorporation"), a copy of which
also is on file with the Minnesota Secretary of State.

(b) By-Laws of the Fund (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "ByLaws").

(c) Certified resolutions of the Board of Directors and Shareholders
of the Fund authorizing the appointment of Robinson as its Manager and approving
this Agreement.

<PAGE>

(d) Registration Statement under the 1933 Act and under the 1940 Act
on Form N-1A (the "Registration Statement") as filed with the Securities and
Exchange Commission and all amendments thereto.

3. ACCEPTANCE OF APPOINTMENT. Robinson hereby accepts such appointment
and agrees to perform the services and duties as set forth in paragraph 4
immediately below.

4. SERVICES AND DUTIES OF ROBINSON. As Manager, subject to the
supervision and control of the Fund's Board of Directors, Robinson will provide
the Fund with office space and facilities; accounting and bookkeeping,
recordkeeping and data processing facilities and services; internal compliance
services relating to accounting and legal matters; and personnel to carry out
certain administrative services required for operation of the business and
affairs of the Fund other than those investment advisory functions that are to
be performed by the Fund's investment advisor pursuant to its agreement with the
Fund, the services of the underwriter/distributor, those services to be
performed by the Fund's custodian and transfer agent, and those fund accounting
services to be performed by one or more service providers under a fund
accounting or similar agreement. Robinson's responsibilities include without
limitation the following services:

(a) Preparing and updating the Fund's state registration statements
and filings, reports to shareholders, and other documents;

(b) Paying the compensation of all officers and personnel of the Fund
for their services to the Fund and the directors of the Fund who are interested
persons of the Fund;

(d) Providing information and certain administrative services to
shareholders of the Fund, including but not limited to, transmitting redemption
requests to the Fund's Transfer Agent and transmitting the proceeds of
redemption of shares of the Fund pursuant to a shareholder's instructions when
such redemption is effected through Robinson, providing telephone and written
communications with respect to its shareholders account inquiries, assisting its
shareholders in altering privileges and ownership of their accounts and serving
as a source of information for its existing shareholders in answering questions
concerning the Fund and their transactions with the Fund.

(e) Robinson shall oversee the maintenance by the Fund's custodian
and transfer agent of the books and records of the Fund required under the 1940
Act, in connection with the performance of the Fund's agreement with such
entities.

<PAGE>

(f) In providing the Services, Robinson will act in conformity with
the Articles of Incorporation, By-laws and Prospectus and with the instructions
and directions of the Board of Directors of the Fund and will conform to and
comply with the requirements of the 1940 Act and all other applicable federal or
state laws and regulations.

5. BOOKS AND RECORDS. Robinson agrees that all records that it maintains
for the Fund are the property of the Fund and it will surrender promptly to the
Fund any of such records upon the Fund's request.

6. SUBCONTRACTORS. It is understood that Robinson may from time to time
employ or associate with itself such person or persons as Robinson may believe
to be particularly fitted to assist in the performance of this Agreement;
provided, however, that the compensation of such person or persons shall be paid
by Robinson and that Robinson shall be as fully responsible to the Fund for the
acts and omissions of any subcontractor as it is for its own acts and omissions.

7. COMPENSATION. For the services provided pursuant to this Agreement,
the Fund will pay Robinson at the end of each calendar month during the term of
this Agreement, a fee equal to an annualized rate of four-tenths of one percent
(.40%) of the average daily net assets of the Fund plus out-of-pocket expenses
in connection with its shareholder servicing activities, such as postage, data
entry, stationery, tax forms and other printed material. For the month and year
in which this Agreement becomes effective or terminates, there shall be an
appropriate proration on the basis of the number of days that the Agreement is
in effect during the month and year, respectively.

8. EXPENSES. Except as otherwise stated in paragraph 7 and this
paragraph 8, Robinson shall pay all expenses incurred by it in providing the
Services. All other expenses incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by others. In
addition to the management fee of Robinson, the Fund shall assume and pay any
fees and expenses incurred under an investment advisory agreement, any
distribution fees incurred under a distribution agreement, any expenses for
services rendered by a custodian for the safekeeping of the Fund's securities or
other property, for keeping its books of account and for any other charges of
the custodian of the Fund, as provided in the Prospectus of the Fund. Robinson
shall not be required to pay and the Fund shall assume and pay the charges and
expenses of its operations, including compensation of the directors (other than
those affiliated with Robinson), charges and expenses of independent auditors,
of legal counsel, of any transfer or dividend disbursing agent, and of any
registrar of the Fund, costs of Fund accounting services, costs of acquiring and
disposing of Fund securities, interest, if any, on obligations incurred by the
Fund, costs of share certificates and of reports, membership dues in the
Investment Company Institute or any similar organization, costs of reports and
notices to shareholders, stationery, printing, postage, other like miscellaneous
expenses and all taxes and fees payable to federal, state or other governmental
agencies on account of the registration of securities issued by the Fund, filing
of trust documents or otherwise. The Fund shall not pay or incur any obligation
for any expenses for which the Fund intends to seek reimbursement from Robinson
as herein provided without first obtaining the written approval of Robinson.
Robinson shall arrange, if desired by the Fund, for officers and employees of
Robinson

<PAGE>

to serve, without compensation from the Fund, as directors, officers or agents
of the Fund if duly elected or appointed to such positions and subject to their
consent and to any limitations imposed by law.

If expenses borne by the Fund in any fiscal year (including Robinson's fee
and all other fees and expenses referred to or contemplated in this paragraph 8,
but excluding interest, taxes, and fees incurred in acquiring and disposing of
portfolio securities) exceed 1-1/2% of the Fund's average daily net assets on
the first $100 million of average daily net assets, 1-1/4% of the Fund's average
daily net assets on the next $150 million average daily net assets and 1% of the
Fund's average daily net assets on average daily net assets in excess of $250
million, Robinson will reduce its fee or reimburse the Fund for fifty percent
(50%) of any such excess. If for any month the expenses of the Fund properly
chargeable to the income account shall exceed 1/12 of the percentage of average
daily net assets allowable as expenses, the payment to Robinson for that month
shall be reduced and if necessary Robinson shall make a refund payment to the
Fund by half the amount necessary to cause the total net expense not to exceed
such percentage. As of the end of the Fund's fiscal year, however, the
foregoing computations and payments shall be readjusted so that the aggregate
compensation payable to Robinson for the year is equal to the percentage set
forth in paragraph 7 hereof of the average daily net asset value as determined
as described herein throughout the fiscal year, diminished by half the amount
necessary so that the total of the aforementioned expense items of the Fund
shall not exceed the expense limitation. The aggregate of repayments, if any,
by Robinson to the Fund for the year shall be the amount necessary to limit the
said net expense to said percentage.

Notwithstanding anything in the foregoing to the contrary, Robinson shall
not be obligated to reimburse the Fund in an amount exceeding its fee for the
period, except to the extent required by applicable law.

The net asset value for the Fund shall be calculated in accordance with the
provisions of the Fund's Prospectus or at such other time or times as the Board
of Directors may determine in accordance with the provisions of the 1940 Act.
On each day when net asset value is not calculated, the net asset value of a
share of the Fund shall be deemed to be the net asset value of such a share as
of the close of business on the last day on which such calculation was made for
the purpose of the foregoing computations.

9. LIMITATION OF LIABILITY. Neither Robinson nor any of its agents or
employees shall be liable for any error of judgment or mistake of law or for any
loss suffered by the Fund in connection with the matters to which this Agreement
relates, except liability to the Fund or its Shareholders to which Robinson
would otherwise be subject by reason of Robinson's willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reasons of its
reckless disregard of its obligations and duties under this Agreement. Any
person, even though also an officer, employee or agent of Robinson who may be or
become an officer, director, employee or agent of the Fund, shall be deemed,
when rendering services to the Fund, or acting on any business of the Fund
(other than services or business in connection with Robinson's duties

<PAGE>

hereunder) to be rendering such services to or acting solely for the Fund and
not as an officer, director, employee or agent or one under the control or
direction of Robinson even though paid by Robinson.

10. DURATION AND TERMINATION. This Agreement shall become effective as of
the date hereof, provided that this Agreement shall be approved by the
shareholders of the Fund within 120 days of the date hereof in accordance with
the requirements of the 1940 Act and the rules and regulations thereunder and
unless sooner terminated as provided herein shall continue in effect until
December 1, 1999. This Agreement shall continue in force from year to year
thereafter, but only as long as such continuance is specifically approved at
least annually in the manner required by the 1940 Act and the rules and
regulations thereunder; provided however, that if the continuation of this
Agreement is not approved, Robinson may continue to serve in such capacity in
the manner and to the extent permitted by the 1940 Act and the rules and
regulations thereunder. This Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by vote of a majority of the directors
of the Fund or by vote of a majority of the outstanding Shares on sixty (60)
days written notice to Robinson, or by Robinson at any time without the payment
of any penalty on sixty (60) days written notice to the Fund. This Agreement
may be terminated at any time without the payment of any penalty by the Board of
Directors or by vote of a majority of the outstanding Shares in the event that
it shall have been established by a court of competent jurisdiction that
Robinson or any officer or director of Robinson has taken any action which
results in a breach of the covenants of Robinson set forth herein.

11. ASSIGNMENT. This Agreement will automatically and immediately
terminate in the event of its "assignment" (as defined in Section 2(a)(4) of the
1940 Act). Robinson shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the 1940 Act,
as will enable the Fund to consider whether an "assignment" will occur, and to
take the steps necessary to enter into a new contract with Robinson.

12. STATUS OF ROBINSON AS INDEPENDENT CONTRACTOR. Robinson shall for all
purposes herein be deemed to be an independent contractor, and shall, unless
otherwise expressly provided herein or authorized by the directors of the Fund
from time to time, have no authority to act for or represent the Fund in any way
or otherwise be deemed an agent of the Fund.

13. AFFILIATIONS. Subject to applicable statutes and regulations, it is
understood that directors, officers or agents of the Fund are or may be
interested in Robinson as officers, directors, agents, shareholders or
otherwise, and that the officers, directors, shareholders and agents of Robinson
may be interested in the Fund otherwise than as a directors, officer or agent.

14. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be (a) by vote of a majority of those
directors of the Fund who are not parties to this Agreement or interested
persons (as defined in the 1940 Act) of any such party at a meeting called for
the purpose of voting on such amendment, and (b) by vote of a majority of the
outstanding Shares.

<PAGE>

15. ARBITRATION. Any disputes or controversies between the parties to
this Agreement involving the construction or application of any of the terms,
provisions, or conditions of this Agreement shall be submitted to arbitration.
The arbitration shall be conducted in Minneapolis, Minnesota in accordance with
the Rules of the American Arbitration Association. The parties shall each
appoint one person to hear and determine the dispute and, if they are unable to
agree, then the two persons so chosen shall select a third impartial arbitrator
whose decision shall be final and conclusive upon both parties. The decision
rendered in arbitration shall be borne by the losing party or in such
proportions as the arbitrator shall decide.

16. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provisions of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Minnesota, and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, subject to paragraph 10 hereof.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.

GENERAL SECURITIES, INCORPORATED

Craig H. Robinson
By: /s/ Craig H. Robinson
------------------------------------
Its: President
--------------------------------
Attest:

Renee Rasmussen
/s/ Renee Rasmussen
- -----------------------------
Its: Assistant Treasurer
------------------------

ROBINSON CAPITAL MANAGEMENT, INC.

Mark Billeadeau
By: /s/ Mark Billeadeau
------------------------------------
Its: CIO, Portfolio Manager
-----------------------------------
Attest:

Lory M. Hassler
/s/ Lory M. Hassler
- -----------------------------
Its: Secretary
-------------------------

<PAGE>

Exhibit (j)
- -----------
INDEPENDENT AUDITORS' CONSENT

The Board of Directors
General Securities, Incorporated:

We consent to the use of our report dated December 18, 1998 included herein and
references to our Firm under the headings "FINANCIAL HIGHLIGHTS" in Part A and
"INVESTMENT ADVISORY AND OTHER SERVICES-Independent Auditors" in Part B of the
Registration Statement.

/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Minneapolis, Minnesota
January 29, 1999

<PAGE>
<ARTICLE> 6
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 33,978
<INVESTMENTS-AT-VALUE> 46,369
<RECEIVABLES> 61
<ASSETS-OTHER> 0
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<SENIOR-EQUITY> 0
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<APPREC-INCREASE-CURRENT> (472)
<NET-CHANGE-FROM-OPS> 2,397
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 514
<DISTRIBUTIONS-OF-GAINS> 2,425
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<NUMBER-OF-SHARES-SOLD> 74
<NUMBER-OF-SHARES-REDEEMED> 434
<SHARES-REINVESTED> 260
<NET-CHANGE-IN-ASSETS> (2,215)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 56
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<GROSS-ADVISORY-FEES> 294
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 723
<AVERAGE-NET-ASSETS> 49,054
<PER-SHARE-NAV-BEGIN> 16.55
<PER-SHARE-NII> .15
<PER-SHARE-GAIN-APPREC> .72
<PER-SHARE-DIVIDEND> .18
<PER-SHARE-DISTRIBUTIONS> .90
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<PER-SHARE-NAV-END> 16.34
<EXPENSE-RATIO> 1.47
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>