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Filed pursuant to
Rule 497(e) under the
Securities Act of 1933
File No. 33-85710
THE COUNTRYBASKETS INDEX FUND, INC.
SUPPLEMENT DATED JULY 1, 1996
TO THE PROSPECTUS DATED MARCH 5, 1996
WAIVER OF FEES AND EXPENSE REIMBURSEMENT
State Street Bank and Trust Company, administrator to The CountryBaskets
Index Fund, Inc. (the "Fund"), has agreed to waive part of its administration
fee and Deutsche Morgan Grenfell/C. J. Lawrence Inc., the investment adviser to
the Fund, has agreed to waive all or a portion of its investment management fees
and make such reimbursement of other expenses as may be necessary to assure that
the annualized ratio of operating expenses to average daily net assets of such
Series will not exceed 1.00% for the period from the commencement of operations
of each Series through October 31, 1996. See Footnotes B and C on page 12 of the
Prospectus relating to Annual Series Operating Expenses as they were estimated
as of March 5, 1996. The sections in the Prospectus captioned "Prospectus
Summary -- Fees" and "The Fund -- Fees" are amended to incorporate the
foregoing.
DETERMINATION OF NET ASSET VALUE -- page 26
The third paragraph is amended to read in its entirety as follows:
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In computing a Series' net asset value, the portfolio securities of each
Series other than equity securities held by the UK Index Series are valued based
on their last quoted current sales price (or, if no sales price is available,
the arithmetic mean of the most recent bid and asked prices or, if no asked
price is available, at the bid price) on the primary exchange or market upon
which they trade. Equity securities held by the UK Index Series are valued based
on the arithmetic mean of the closing bid and asked prices on the London Stock
Exchange (or, if no asked price is available, at the bid price). However, when
market quotations are not readily available, portfolio securities are valued
based on fair value as determined in good faith by the Adviser in accordance
with procedures adopted by the Board of Directors of the Fund. Events affecting
the values of portfolio securities that occur between the time their prices are
determined on the primary exchange or market in which they are traded on the
close of regular trading on the NYSE will not be reflected in the calculation of
a Series' net asset value unless the Adviser determines that the particular
event would materially affect net asset value, in which case an adjustment will
be made.
<PAGE>
Filed pursuant to
Rule 497(e) under the
Securities Act of 1933
File No. 33-85710
THE COUNTRYBASKETS INDEX FUND, INC.
SUPPLEMENT DATED JULY 1, 1996
TO THE STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 5, 1996
WAIVER OF FEES AND EXPENSE REIMBURSEMENT
State Street Bank and Trust Company, administrator to The CountryBaskets
Index Fund, Inc. (the "Fund"), has agreed to waive part of its administration
fee and Deutsche Morgan Grenfell/C. J. Lawrence Inc., the investment adviser to
the Fund, has agreed to waive all or a portion of its investment management fees
and make such reimbursement of other expenses as may be necessary to assure that
the annualized ratio of operating expenses to average daily net assets of each
Series will not exceed 1.00% for the period from the commencement of operations
of such Series through October 31, 1996. The sections in the Statement of
Additional Information captioned "Investment Advisory, Management And Other
Services -- The Investment Adviser" and "-- The Administrator, Custodian and
Transfer Agent" are amended to incorporate the foregoing.
PURCHASE AND ISSUANCE OF FUND SHARES
IN CREATION UNIT AGGREGATIONS
THE DISTRIBUTOR
The third paragraph is supplemented to add the following:
- --------------------------------------------------
The Distributor may also enter into stockholder servicing agreements with
broker-dealers or other persons that are DTC Participants to provide stockholder
services. Under the terms of each stockholder servicing agreement, such
broker-dealer or other person will be paid stockholder servicing fees under the
12b-1 Plan of each Series other than the US Index Series of up to 0.1% of the
aggregate net asset value of CB Shares held through DTC for the account of such
DTC Participant.
DETERMINING NET ASSET VALUE
VALUATION OF PORTFOLIO SECURITIES BY THE FUND
The section is amended to read in its entirety as follows:
- -------------------------------------------------
Portfolio securities held by each Series other than equity securities held
by the UK Index Series are valued, for purposes of determining the net asset
value per share of the Series, at the last quoted sales price on the securities
exchange or national securities market on which such securities are primarily
traded. Equity securities held by the UK Index Series are valued based on the
arithmetic mean of the closing bid and asked prices on the London Stock Exchange
(or, if no asked price is available, at the bid price). The value of portfolio
securities delivered to the Fund as part of the in-kind deposit of portfolio
securities (I.E., the Fund Basket) required for a purchase of Creation Units on
any Business Day will be determined on the same basis. Securities not listed on
an exchange or national securities market, or securities in which there were no
transactions, are valued at the arithmetic mean of the most recent bid and asked
prices, or if no asked price is available, at the bid price. However, when
market quotations are not readily available, portfolio securities and other
assets are valued based on fair value as determined in good faith by the Adviser
in accordance with procedures adopted by the Board of Directors of the Fund.
Events affecting the values of portfolio securities
<PAGE>
that occur between the time their prices are determined on the primary exchange
or market in which they are traded and the close of regular trading on the NYSE
will not be reflected in the calculation of a Series' net asset value unless the
Adviser determines that the particular event would materially affect net asset
value, in which case an adjustment will be made. The values of portfolio
securities denominated in currencies other than the US dollar are converted into
US dollars at the WM Reuters spot rate for the relevant Series Currency at 4:00
p.m., London time, on the day that the foreign currency values of the securities
are determined, or at such other quoted exchange rate as may be determined by
the Adviser to be appropriate. Expenses and fees, including the investment
advisory, administration and distribution fees of each Series, are accrued daily
and taken into account for the purpose of determining the net asset value of
shares of that Series.
2
