As Filed With The Securities And Exchange Commission on April 30, 1998.
File Nos. 2-52552 and 811-2539
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (X)
Pre-Effective Amendment No. ( )
Post-Effective Amendment No. 33 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 (X)
Amendment No. 22 (X)
FUND FOR GOVERNMENT INVESTORS
(Exact Name of Registrant as Specified in Charter)
4922 Fairmont Avenue, Bethesda, Maryland 20814
(Address of Principal Executive Offices) (Zip Code)
(301) 657-1500
(Registrant's Telephone Number, Including Area Code)
Timothy N. Coakley
4922 Fairmont Avenue
Bethesda, Maryland 20814
(Name and Address of Agent for Service of Process)
Approximate Date of Commencement of the Proposed Public Offering
of the Securities:
It is proposed that this filing will become effective (check
appropriate box):
___ immediately upon filing pursuant to paragraph (b) of rule 485.
_X_ on May 1, 1998 pursuant to paragraph (b) (1) (v) of rule 485.
___ 60 days after filing pursuant to paragraph (a) (1) of rule 485.
___ on (date) pursuant to paragraph (a) (1) of rule 485.
___ 75 days after filing pursuant to paragraph (a) (2) of rule 485.
___ 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.
The Registrant has previously filed a declaration of indefinite
registration of its shares pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The Rule 24f-2 Notice for the
Registrant's fiscal year ended December 31, 1997 was filed on
February 27, 1998.
<PAGE>
FUND FOR GOVERNMENT INVESTORS
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET
Form N-1A Location in
Item No. Registration Statement
Part A. Information Required in Prospectus
1. Cover Page Outside Front Cover Page
of Prospectus
2. Synopsis Fee Table
3. Condensed Financial Financial Highlights
Information
4. General Description of Organization and
Registrant Description of Shares of
Beneficial Interest;
Investment Objective and
Policies; Management of
the Fund
5. Management of the Fund Management of the Fund
5A. Management's Discussion Management's Discussion
of Fund of Fund Performance
Performance
6. Capital Stock and Other Organization and
Securities Description of Shares of
Beneficial Interest;
Dividends and
Distribution; Taxes
7. Purchase of Securities How to Invest in the
Being Offered Fund; Exchanges; Net
Asset Value
8. Redemption or How to Redeem an
Repurchase Investment (Withdrawals)
9. Legal Proceedings Not Applicable
Part B: Information Required In Statement
of Additional Information
10. Cover Page Outside Front Cover Page
of Statement of
Additional Information
11. Table of Contents Table of Contents
12. General Information and Not Applicable
History
13. Investment Objectives Investment Policies;
and Policies Investment Restrictions
14. Management of the Management of the Fund
Registrant
15. Control Persons and Principal Holders of
Principal Holders Securities
of Securities
16. Investment Advisory and Management of the Fund
Other Services
17. Brokerage Allocation Investment Policies
18. Capital Stock and Other Not Applicable
Securities
19. Purchase, Redemption Not Applicable
and Pricing of
Securities Being
Offered
20. Tax Status Dividends, Distributions,
and Taxes
21. Underwriters Management of the Fund
22. Calculations of Performance Information;
Performance Data Calculation of Return
Quotations
23. Financial Statements Financial Statements
Part C: Other Information
24. Financial Statements Financial Statements and
and Exhibits Exhibits
25. Persons Controlled by Persons Controlled by or
or Under Under Common Control
Common Control
26. Number of Holders of Numbers of Holders of
Securities Securities
27. Indemnification Indemnification
28. Business and Other Business and Other
Connections Connections of Investment
of Investment Adviser Adviser
29. Principal Underwriters Principal Underwriters
30. Location of Accounts Location of Accounts and
and Records Records
31. Management Services Management Services
32. Undertakings Undertakings
33. Signatures Signatures
<PAGE>
FUND FOR GOVERNMENT INVESTORS
A Money Market Fund
4922 Fairmont Avenue, Bethesda, Maryland 208l4
(800) 343-3355
(301) 657-1500
Fund for Government Investors (the "Fund") is an investment
company that invests in short-term marketable debt securities
issued by the United States Government, its agencies and
instrumentalities, and repurchase agreements secured by such
securities, with the sole objective of achieving current income
with safety of principal.
Investors should read this Prospectus and retain it for future
reference. It is designed to set forth concisely the information
an investor should know before investing in the Fund. A
Statement of Additional Information, dated May 1, 1998,
containing additional information about the Fund has been filed
with the Securities and Exchange Commission and is incorporated
herein by reference. A copy of the Statement of Additional
Information may be obtained, without charge, by writing or
telephoning the Fund.
The shares offered by this Prospectus are not deposits or
obligations of any bank, are not endorsed or guaranteed by any
bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other
U.S. Government agency.
The securities of the Fund are neither insured nor guaranteed by
the U.S. Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per
share.
The date of this Prospectus and of the Statement of Additional
Information is May 1, 1998.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
FEE TABLE
The following table illustrates all expenses and fees that a
shareholder of the Fund will incur:
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested None
Dividends
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
Monthly Account Fee (applies to regular $5.00
accounts under $500)*
Annual Fund Operating Expenses (as a
percentage of average net assets)
Management Fees 0.50%
12b-1 Fees None
Other Expenses 0.25%
-----
Total Fund Operating Expenses 0.75%
=====
* A charge of $5 per month may be imposed on any account
whose average daily balance for the month falls below
$500. See "Transaction Charges."
Example
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period:
1 Year 3 Years 5 Years 10 Years
$8 $25 $43 $95
The same level of expenses would be incurred if the investment
were held throughout the period indicated.
The preceding table of fees and expenses is provided to assist
investors in understanding the various costs and expenses that an
investor in the Fund will incur directly or indirectly. The
percentages shown above are based on actual expenses incurred by
the Fund. The 5% assumed annual return is for comparison
purposes only. The actual annual return for the Fund may be more
or less depending on market conditions, and the actual expenses
an investor incurs in future periods may be more or less than
those shown above and will depend on the amount invested and on
the actual growth rate of the Fund. The example should not be
considered a representation of past or future expenses. For more
complete information about the various costs and expenses of the
Fund, see "Management of the Fund" in the Prospectus and in the
Statement of Additional Information.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Fund for Government Investors
Audited
<CAPTION>
For The Years Ended December 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning
of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------ ------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income 0.044 0.044 0.049 0.033 0.023 0.030 0.053 0.071 0.082 0.064
------- ------- ------- ------ ------- ------- ------- ------- ------- -------
Total from Investment
Operations 0.044 0.044 0.049 0.033 0.023 0.030 0.053 0.071 0.082 0.064
------- ------- ------- ------ ------- ------- ------- ------- ------- -------
Distributions to Shareholders:
From Net Investment Income (0.044) (0.044) (0.049) (0.033) (0.023) (0.030) (0.053) (0.071) (0.082) (0.064)
------- ------- ------- ------ ------- ------- ------- ------- ------- -------
Total Distributions to
Shareholders (0.044) (0.044) (0.049) (0.033) (0.023) (0.030) (0.053) (0.071) (0.082) (0.064)
------- ------- ------- ------ ------- ------- ------- ------- ------- -------
Net Increase in Net
Asset Value 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------ ------- ------- ------- ------- ------- -------
Net Asset Value - End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======== ======= ======= ======= ======= ======= ======= =======
Total Investment Return 4.49% 4.50% 5.04% 3.38% 2.37% 3.02% 5.38% 7.38% 8.51% 6.66%
Ratios to Average Net Assets:
Expenses 0.74% 0.74% 0.74% 0.75% 0.75% 0.71% 0.69% 0.71% 0.72% 0.73%
Net Investment Income 4.40% 4.41% 4.93% 3.31% 2.32% 3.00% 5.29% 7.13% 8.19% 6.44%
Supplementary Data:
Number of Shares Outstanding
at End of Year with a Net
Asset Value of $1 (000s
omitted) 572,313 535,325 577,194 524,154 600,766 751,925 796,655 857,418 704,479 634,723
The auditors' report is incorporated by reference in the registration statement. The auditors' report and further information
about the performance of the Fund are contained in the annual report to shareholders which may be obtained without charge by
calling or writing the Fund.
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
GENERAL DISCUSSION
The sole objective of the Fund is to achieve current income with
safety of principal. Although there is no assurance that this
objective will be achieved, the Fund will pursue this objective
by investing exclusively in marketable debt securities issued by
the United States Government or by agencies and instrumentalities
of the U.S. Government (collectively, "U.S. Government
Securities") and in repurchase agreements secured by U.S.
Government Securities. Repurchase agreements are fully
collateralized, but the value of the underlying collateral may be
affected by sharp fluctuations in short-term interest rates.
The Fund will invest in short-term United States Government
Securities, including U.S. Treasury bills, U.S. Treasury notes,
and U.S. Treasury bonds that mature within one year. All
securities purchased by the Fund are held by the Fund's custodian
bank, Rushmore Trust and Savings, FSB (the "Custodian"). U.S.
Treasury securities are backed by the full faith and credit of
the United States Government.
The Fund may not borrow money, except that as a temporary measure
the Fund may borrow money to facilitate redemptions. Such a
borrowing may be in an amount not to exceed 30% of the Fund's
total assets, taken at current value before such borrowing. The
Fund may borrow only to accommodate requests for redemption of
shares of the Fund while effecting an orderly liquidation of
portfolio securities.
The investment objective and the investment policies of the Fund
may not be changed without the approval of a majority of the
shareholders, as defined in the Investment Company Act of 1940.
U.S. Government Securities
U.S. Treasury securities are backed by the full faith and credit
of the U.S. Treasury. U.S. Treasury securities differ only in
their interest rates, maturities, and dates of issuance.
Treasury bills have maturities of one year or less. Treasury
notes have maturities of one to ten years, and Treasury bonds
generally have maturities of greater than ten years at the date
of issuance. Yields on short-, intermediate-, and long-term U.S.
Government Securities are dependent on a variety of factors,
including the general conditions of the money and bond markets,
the size of a particular offering, and the maturity of the
obligation. Debt securities with longer maturities tend to
produce higher yields and are generally subject to potentially
greater capital appreciation and depreciation than obligations
with shorter maturities and lower yields. The market value of
U.S. Government Securities generally varies inversely with
changes in market interest rates. An increase in interest rates,
therefore, would generally reduce the market value of the Fund's
portfolio investments in U.S. Government Securities, while a
decline in interest rates would generally increase the market
value of the Fund's portfolio investments in these securities.
Certain U.S. Government Securities are issued or guaranteed by
agencies or instrumentalities of the U.S. Government including,
but not limited to, obligations of U.S. Government agencies or
instrumentalities such as the Federal National Mortgage
Association, the Government National Mortgage Association, the
Small Business Administration, the Export-Import Bank, the
Federal Farm Credit Administration, the Federal Home Loan Banks,
Banks for Cooperatives (including the Central Bank for
Cooperatives), the Federal Land Banks, the Federal Intermediate
Credit Banks, the Tennessee Valley Authority, the Export-Import
Bank of the United States, the Commodity Credit Corporation, the
Federal Financing Bank, the Student Loan Marketing Association,
and the National Credit Union Administration.
Some obligations issued or guaranteed by agencies or
instrumentalities of the U.S. Government are backed by the full
faith and credit of the U.S. Treasury. Such agencies and
instrumentalities may borrow funds from the U.S. Treasury.
However, no assurances can be given that the U.S. Government will
provide such financial support to the obligations of the other
U.S. Government agencies or instrumentalities in which the Fund
invests, since the U.S. Government is not obligated to do so.
These other agencies and instrumentalities are supported by
either the issuer's right to borrow, under certain circumstances,
an amount limited to a specific line of credit from the U.S.
Treasury, the discretionary authority of the U.S. Government to
purchase certain obligations of an agency or instrumentality, or
the credit of the agency or instrumentality itself.
U.S. Government Securities may be purchased at a discount. Such
securities, when held to maturity or retired, may include an
element of capital gain. Capital losses may be realized when
such securities purchased at a premium are held to maturity or
are called or redeemed at a price lower than their purchase
price. Capital gains or losses also may be realized upon the
sale of securities.
Repurchase Agreements
The Fund may also invest in repurchase agreements secured by U.S.
Government Securities. Under a repurchase agreement, the Fund
purchases a debt security and simultaneously agrees to sell the
security back to the seller at a mutually agreed-upon future
price and date, normally one day or a few days later. The resale
price is greater than the purchase price, reflecting an agreed-
upon market interest rate during the purchaser's holding period.
While the maturities of the underlying securities in repurchase
transactions may be more than one year, the term of each
repurchase agreement will always be less than one year. The Fund
will enter into repurchase agreements only with member banks of
the Federal Reserve System or primary dealers of U.S. Government
Securities. The Fund's investment adviser will monitor the
creditworthiness of each of the firms which is a party to a
repurchase agreement with the Fund. In the event of a default or
bankruptcy by the seller, the Fund will liquidate those
securities (whose market value, including accrued interest, must
be at least equal to 100% of the dollar amount invested by the
Fund in each repurchase agreement) held under the applicable
repurchase agreement, which securities constitute collateral for
the seller's obligation to pay. However, liquidation could
involve costs or delays and, to the extent proceeds from the
sales of these securities were less than the agreed-upon
repurchase price, the Fund would suffer a loss. The Fund also
may experience difficulties and incur certain costs in exercising
its rights to the collateral and may lose the interest the Fund
expected to receive under the repurchase agreement. Repurchase
agreements usually are for short periods, such as one week or
less, but may be longer. It is the current policy of the Fund to
treat repurchase agreements that do not mature within seven days
as illiquid for the purposes of the Fund's investment policies.
HOW TO INVEST IN THE FUND
FACTS TO KNOW BEFORE YOU INVEST
- The minimum initial investment is $2,500.
- Retirement accounts may be opened with a $500 minimum
investment (see "Tax-Sheltered Retirement Plans" for plan types).
- There is no minimum amount for subsequent investments.
- Shares of the Fund are offered for sale continuously by the Fund.
- There is no sales charge.
- The Fund reserves the right to reject any purchase order.
- All accounts will be held in book entry form. No certificates for
shares will be issued.
- Orders received prior to 12 Noon, Eastern time, will be invested
in shares of the Fund at the next determined net asset value.
- The Government securities market, in which the Fund buys and
sells its securities, usually requires immediate settlement in
Federal funds for all security transactions. Payments received
by bank wire can be converted immediately into Federal funds
and will begin earning dividends the same day. Payment for the
purchase of Fund shares not received in the form of Federal
funds (i.e., by check) will begin earning dividends the
following day.
PURCHASING SHARES
By Mail
Complete an application and make a check payable to "Fund for
Government Investors." Send your completed and signed
application and check drawn on a U.S. bank to:
Fund for Government Investors
4922 Fairmont Avenue
Bethesda, Maryland 208l4
By Bank Wire
Speak to the branch manager of your bank. Request a transfer
of Federal funds to Rushmore Trust and Savings, FSB,
instructing the bank to wire transfer the money before 12
Noon, Eastern time to:
Rushmore Trust and Savings, FSB
Bethesda, Maryland
Routing No. 0550-71084
For Account of
Fund for Government Investors
Account No. 029385770
After instructing your bank to transfer Federal funds, you
must telephone the Fund at (800) 622-1386 or (301) 657-1510
between 8:30 A.M. and 12 Noon Eastern time and tell us the
amount you transferred and the name of the bank sending the
transfer. Your bank may charge a fee for such services.
Remember that it is important to complete the wire transfer
before 12 Noon Eastern time.
Through Brokers
Investors may invest in the Fund by purchasing shares through
registered broker-dealers. Such broker-dealers who process
orders may charge a fee for such service.
HOW TO REDEEM AN INVESTMENT
(WITHDRAWALS)
FACTS TO KNOW BEFORE YOU REDEEM
- An investor may withdraw all or any portion of his investment
by redeeming shares by writing or telephoning the Fund at (800)
622-1386 or (301) 657-1510 on any day that the Fund is open for
business. The shares will be redeemed at the next determined
net asset value per share after receipt of the order.
- The proceeds of redemptions will be sent directly to the
investor's address of record. If the investor requests payment
of redemptions to a third party or to a location other than his
address of record listed on the account application, the
request must be in writing and the investor's signature must be
guaranteed by an eligible institution. Eligible institutions
generally include banking institutions, securities exchanges,
associations, agencies or broker/dealers, and "STAMP" program
participants. There are no fees charged for redemptions.
- Normally, the Fund will make payment for all shares redeemed
within one business day. However, withdrawal requests upon
investments that have been made by check may be delayed up to
ten calendar days following such investment or until the check
clears, whichever occurs first. This delay is necessary to
assure the Fund that investments made by check are good funds.
The proceeds of the redemption will be forwarded promptly upon
confirmation of receipt of good funds.
- The right of redemption may be suspended, or the date of
payment postponed during the following periods: (a) periods
during which the New York Stock Exchange (the "NYSE") is closed
(other than customary weekend or holiday closings); (b) periods
when trading on the NYSE is restricted, or an emergency exists,
as determined by the Securities and Exchange Commission, so
that disposal of the Fund's investments for determination of
net asset value is not reasonably practicable; or (c) for such
other periods as the Commission, by order, may permit for
protection of the Fund's investors.
- After receipt of redemption instructions, shareholders may
receive monies by bank wire, check, or ACH. When the amount to
be redeemed is at least $5,000, the Fund, upon telephone or
written instructions, will wire transfer the amount to the
investor's commercial bank or brokerage account specified in
the account application. For amounts less than $5,000,
investors may have redemption proceeds deposited directly into
an account specified on the account application or request that
a redemption check be delivered by mail to the address of
record.
REDEEMING SHARES
By Telephone
The privilege to initiate redemption transactions by telephone
will be made available to Fund shareholders automatically.
Telephone orders for redemptions must be received by 12 Noon
Eastern time to be effective that day. Telephone redemptions
will only be sent to the address of record or to bank accounts
specified in the account applications. When acting on
instructions believed to be genuine, the Fund will not be
liable for any loss resulting from a fraudulent telephone
redemption request and the investor would bear the risk of any
such loss. The Fund will employ reasonable procedures to
confirm that redemption instructions communicated by telephone
are genuine; and if the Fund does not employ such procedures,
then the Fund may be liable for any losses due to unauthorized
or fraudulent instructions. The Fund follows specific
procedures for transactions initiated by telephone, including
among others requiring some form of personal identification
prior to acting on instructions received by telephone,
providing written confirmation not later than five business
days after such transactions, and/or tape recording of
telephone transactions. Telephone redemption privileges may be
terminated or modified by the Fund upon 60 days notice to all
shareholders of the Fund.
By Mail or Fax
Mail your instructions for Fax your instructions for
redemption to: redemption to:
Rushmore Trust and Savings, FSB (301) 657-1520
4922 Fairmont Avenue Attn: Shareholder Services
Bethesda, MD 20814
Attn: Shareholder Services
Include the following information:
- the name of the Fund and account number you are redeeming from;
- your name(s) and address as it appears on your account;
- the dollar amount or number of shares you wish to redeem;
- your signature(s) as it appears on your account; and
- a daytime telephone number.
SHAREHOLDER ACCOUNTS
ACCOUNT STATEMENTS
The Fund maintains an account for each investor in full and
fractional shares. Statements of account will be sent monthly
showing the beginning balance and the ending balance and
detailing transactions for the month. Confirmations of individual
transactions will not be sent.
TRANSACTION CHARGES
In addition to charges described elsewhere in this Prospectus,
the Fund may impose a charge of $5 per month for any Fund account
whose average daily balance for the month falls below $500. The
fee may continue to be imposed during the months when the account
balance remains below $500. This fee will be paid to Rushmore
Trust and Savings, FSB. The fee will not be imposed on tax-
sheltered retirement plans or accounts established under the
Uniform Gifts or Transfers to Minors Act. Because of the
administrative expense of handling small accounts, the Fund
reserves the right to involuntarily redeem an investor's account
which falls below $500 due to redemptions or exchanges after
providing 60 days written notice. The Fund may also assess a
charge of $10 for items returned for insufficient or
uncollectible funds.
TAX-SHELTERED RETIREMENT ACCOUNTS
Tax-Sheltered Retirement Plans of the following types are
available to investors. Additional information regarding these
accounts may be obtained by contacting the Fund at (800) 343-3355.
Individual Retirement Accounts (IRAs)
Traditional IRAs
Roth IRAs
Education IRAs
Keogh Accounts - Defined Contribution Plan (Profit Sharing Plan)
Keogh Accounts - Money Purchase Plan (Pension Plan)
Internal Revenue Code
Section 401(k) Plans
Section 403(b) Plans
EXCHANGE PRIVILEGES
Shares of the Fund may be exchanged for shares of Fund for Tax-
Free Investors, Inc., The Rushmore Fund, Inc., the American Gas
Index Fund, Inc., or the Cappiello-Rushmore Trust on the basis of
the respective net asset values of the shares involved, provided
such exchange is permitted under the applicable laws of the state
of the investor's residence. Shareholders contemplating such an
exchange should obtain and review the prospectuses of those
funds. Exchanges may be made by telephone or letter. Written
requests should be sent to Fund for Government Investors, 4922
Fairmont Avenue, Bethesda, Maryland 20814 and be signed by the
record owner or owners. Telephone exchange requests may be made
by telephoning the Fund at (800) 622-1386 or (301) 657-1510. To
implement an exchange, shareholders should provide the following
information: account registration including address and number,
taxpayer identification number, number, percentage or dollar
value of shares to be redeemed, name and account number of the
portfolio to which the investment is to be transferred.
Exchanges may be made only if they are between identically
registered accounts. Telephone exchange privileges may be
terminated or modified by the Fund upon 60 days notice to all
shareholders of the Fund.
ADDITIONAL INFORMATION ABOUT THE FUND
PERFORMANCE DATA
From time to time the Fund advertises its "yield" and "effective
yield". Both yield figures are based on historical earnings and
are not intended to indicate future performance. The yield of
the Fund refers to the income generated by an investment in the
Fund over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized". That is, the
amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The effective yield is
calculated similarly, but, when annualized, the income earned by
the investment in the Fund is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.
Comparative performance and relative ranking information may be
used from time to time in advertising or marketing the Fund's
shares, including data from Lipper Analytical Services, Inc.,
Donoghue's Money Fund Report and other industry publications.
For the seven day period ended December 31, 1997, the Fund's
annualized average yield was 4.44%. The effective annual yield
was 4.55%.
NET ASSET VALUE
The Fund's net asset value per share will be determined as of 12
Noon, Eastern time, on days when the New York Stock Exchange and
the custodian bank are open for business. The net asset value
per share is determined by adding the appraised value of all
securities and all other assets, deducting liabilities and
dividing by the number of shares outstanding. The value of the
Fund's portfolio of securities is determined on the basis of fair
value as determined in good faith by the Fund's Trustees. In
determining fair value, the Fund uses the amortized cost method
of valuing the securities in its portfolio, which method involves
valuing a security at its cost adjusted by a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. The purpose of this method of calculation is
to facilitate the maintenance of a constant net asset value per
share for the Fund of $1.00. However, there is no assurance the
$1.00 net asset value will be maintained.
DIVIDENDS
The Fund distributes all of its net income on a daily basis.
Dividends are declared each day that the Fund is open for
business. Investors receive dividends in the form of additional
shares unless they elect to receive cash. Payment is made in
additional shares at the net asset value on the payable date or
in cash, on a monthly basis. To change the method of receiving
dividends, investors must notify the Fund in writing at least one
week before payment is to be made.
Net income of the Fund shall consist of all interest income
accrued and discount earned, plus or minus any realized gains or
losses, less estimated expenses of the Fund. The Fund does not
expect to realize any long-term capital gains.
TAXES
The Fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. Because of this
qualification, the Fund will not be liable for Federal income
taxes to the extent its earnings are distributed.
Dividends derived from interest and dividends received by the
Fund, together with distributions of any short-term capital
gains, are taxable as ordinary income whether or not reinvested.
Statements as to the Federal tax status of shareholders'
dividends and distributions will be mailed annually.
Shareholders should consult their tax advisers concerning the tax
status of the Fund's dividends in their own states and
localities.
Shareholders are required by law to certify that their tax
identification number is correct and that they are not subject to
back-up withholding. In the absence of this certification, the
Fund is required to withhold taxes at the rate of 31% on
dividends, capital gains distributions, and redemptions.
Shareholders who are non-resident aliens may be subject to a
withholding tax on dividends earned.
MANAGEMENT AND ORGANIZATION OF THE FUND
OFFICERS AND DIRECTORS
The Fund has a Board of Trustees which is responsible for the
general supervision of the Fund's business. The day-to-day
operations of the Fund are the responsibility of the Fund's
officers. A complete list of the Fund's Trustees and officers is
provided in the Statement of Additional Information.
INVESTMENT ADVISER AND ADMINISTRATIVE SERVICING AGENT
The Fund is provided investment advisory and management services
by Money Management Associates (the "Adviser"), 1001 Grand Isle
Way, Palm Beach Gardens, Florida 33418. The Agreement between
the Adviser and the Fund was approved by shareholders of the Fund
on May 24, 1996, at a special meeting of Fund shareholders. The
Adviser is a limited partnership which was formed under the laws
of the District of Columbia on August 15, 1974. Its primary
business since inception has been to serve as the investment
adviser of the Fund. Daniel L. O'Connor is the sole general
partner of the Adviser, and, as such, exercises control of the
Adviser. Money Management Associates provides investment advice
and management to other mutual funds including The Rushmore Fund,
Inc., Fund for Tax-Free Investors, Inc., and the American Gas
Index Fund, Inc. Net assets under management currently
approximate $900 million.
Under an agreement with the Adviser, the Fund pays a fee at an
annual rate based on the size of the Fund's net assets as
follows:
0.50% of the first $500 million;
0.45% of the next $250 million;
0.40% of the next $250 million; and
0.35% of the net assets over $1 billion.
For the year ended December 31, 1997, the Fund paid the Adviser
investment advisory fees of 0.49% (49/100 of 1%) of the average
daily net assets of the Fund.
Effective March 1, 1996, the Board of Trustees approved an
arrangement whereby Rushmore Trust and Savings, FSB, 4922
Fairmont Avenue, Bethesda, Maryland 20814, a majority-owned
subsidiary of the Adviser, provides the Fund with custodial,
transfer agency, dividend-disbursing, and other shareholder
services. The Fund pays an annual fee of 0.25% (25/100 of 1%) of
the average daily net assets of the Fund for these services.
ORGANIZATION AND DESCRIPTION OF SHARES OF BENEFICIAL INTEREST
The Fund is a no-load, open-end, diversified management
investment company. The Fund is an unincorporated voluntary
association organized under the laws of the State of Delaware as
a business trust pursuant to a Declaration of Trust dated January
25, 1996. The Fund is authorized to issue an unlimited number of
shares of beneficial interest, which shares have no par value,
and which shares may be issued in separate classes. The Fund
currently has one series of shares outstanding and presently does
not intend to organize other separate series. Shares have equal
voting rights, and no preferences to conversion, exchange,
dividends, retirement or any other feature. These shares have
non-cumulative voting rights, which means that the holders of
more than 50% of the shares voting for the election of Trustees
can elect 100% of the Trustees, if they choose to do so. In such
event, the holders of the remaining shares voting (less than 50%)
will be unable to elect any Trustees.
Under Delaware law, a registered investment company is not
required to hold annual shareholders' meetings if the Investment
Company Act of 1940 does not require a meeting. It will,
however, hold special meetings as required or deemed desirable by
the Board of Trustees for such purposes as electing trustees,
changing fundamental policies, or approving an investment
advisory contract. Under the Investment Company Act of 1940,
shareholders of the Fund have the right to remove Trustees and,
if holders of 10% of the outstanding shares request in writing, a
shareholder's meeting must be called.
Shareholders of the Fund having inquiries about the Fund's
organization or operation should contact the Fund in writing at
4922 Fairmont Avenue, Bethesda, Maryland 20814 or by telephone
at (301) 657-1500 or (800) 343-3355.
<PAGE>
CONTENTS
Page [LOGO]
Fee Table
FUND FOR GOVERNMENT INVESTORS
Financial Highlights
Prospectus
Investment Objective and Policies
General Discussion
May 1, 1998
How to Invest in the Fund
Facts to Know Before You Invest
Purchasing Shares
How to Redeem an Investment (Withdrawals)
Facts to Know Before You Redeem
Redeeming Shares
Shareholder Accounts
Account Statements
Transaction Charges
Tax-Sheltered Retirement Accounts
Exchange Privileges
Additional Information About the Fund
Performance Data
Net Asset Value
Dividends
Taxes
Management and Organization of the Fund
Officers and Directors
Investment Adviser and Administrative
Servicing Agent
Organization and Description of
Shares of Beneficial Interest
<PAGE>
PART B
<PAGE>
FUND FOR GOVERNMENT INVESTORS
A Money Market Fund
4922 Fairmont Avenue, Bethesda, Maryland 20814
(301) 657-1500 (800) 343-3355
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus.
This Statement of Additional Information should be read in
conjunction with the Fund's Prospectus, dated May 1, 1998. A
copy of the Fund's Prospectus may be obtained without charge by
writing or telephoning the Fund.
The date of this Statement of Additional Information is May 1, 1998.
<PAGE>
FUND FOR GOVERNMENT INVESTORS
A Money Market Fund
STATEMENT OF ADDITIONAL INFORMATION
Table of Contents
Cross Reference to Related Item in Prospectus
Page in
Statement of Page in
Additional Prospectus
Information
Investment Objective and Policies
Investment Restrictions
Management of the Fund
Principal Holders of Securities
Investment Advisory and Other
Services
Net Asset Value
Comparative Performance Data
Calculation of Yield Quotations
Auditors and Financial Statements
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
General
The Fund may invest only in marketable debt securities of the
United States Government, its agencies and instrumentalities
(collectively, "U.S. Government Securities"), and in repurchase
agreements secured by such securities. The investment objective,
the investment policies, and the investment restrictions of the
Fund may not be changed without the approval of a majority of the
shareholders, as defined in the Investment Company Act of 1940.
Portfolio turnover of the Fund will be high due to the short-term
nature of the Fund's investments. High turnover will not
adversely affect the Fund's yield because brokerage commissions
are not normally paid on investments the Fund makes.
U.S. Government Securities
The Fund invests primarily in U.S. Government Securities.
Securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities include U.S. Treasury securities,
which differ only in their interest rates, maturities, and times
of issuance. U.S. Treasury bills have initial maturities of one
year or less; U.S. Treasury notes have initial maturities of one
to ten years; and U.S. Treasury bonds generally have initial
maturities of greater than ten years. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities,
including, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury. Other obligations issued by or
guaranteed by Federal agencies, such as those securities issued
by the Federal National Mortgage Association, are supported by
the discretionary authority of the U.S. Government to purchase
certain obligations of the Federal agency, while other
obligations issued by or guaranteed by Federal agencies, such as
those of the Federal Home Loan Banks, are supported by the right
of the issuer to borrow from the U.S. Treasury. While the U.S.
Government provides financial support to such U.S. Government-
sponsored Federal agencies, no assurance can be given that the
U.S. Government will always do so, since the U.S. Government is
not so obligated by law. U.S. Treasury notes and bonds typically
pay coupon interest semi-annually and repay the principal at
maturity. The Fund will invest in such U.S. Government
Securities only when the Fund's investment adviser (the
"Adviser") is satisfied that the credit risk with respect to the
issuer is minimal.
Repurchase Agreements
As discussed in the Fund's Prospectus, the Fund also may enter
into repurchase agreements with financial institutions. The Fund
follows certain procedures designed to minimize the risks
inherent in such agreements. These procedures include effecting
repurchase transactions only with large, well-capitalized and
well-established financial institutions whose condition will be
continually monitored by the Adviser. In addition, the value of
the collateral underlying the repurchase agreement will always be
at least equal to the repurchase price, including any accrued
interest earned on the repurchase agreement. In the event of a
default or bankruptcy by a selling financial institution, the
Fund will seek to liquidate such collateral. However, the
exercising of the Fund's right to liquidate such collateral could
involve certain costs or delays and, to the extent that proceeds
from any sale upon a default of the obligation to repurchase were
less than the repurchase price, the Fund could suffer a loss. It
is the current policy of the Fund not to invest in repurchase
agreements that do not mature within seven days if any such
investment, together with any other illiquid assets held by the
Fund, amounts to more than 10% of the Fund's total assets. The
investments of the Fund in repurchase agreements, at times, may
be substantial when, in the view of the Adviser, liquidity or
other considerations so warrant.
INVESTMENT RESTRICTIONS
As stated above, the Fund may invest only in U.S. Government
Securities and in repurchase agreements secured by such
securities, although the Fund did not invest in repurchase
agreements during the year and has no intentions to do so. The
Fund may not invest in any other securities.
The Fund may not borrow money, except that as a temporary measure
the Fund may borrow money to facilitate redemptions. Such a
borrowing may be in an amount not to exceed 30% of the Fund's
total assets, taken at current value before such borrowing. The
Fund may borrow only to accommodate requests for redemption of
shares of the Fund while effecting an orderly liquidation of
portfolio securities. Additionally, the Fund may not sell
securities short, write options, underwrite securities of other
issuers, purchase or sell real estate, commodities or commodity
contracts, or loan money to others (except securities under
repurchase agreements). The Fund may not purchase a portfolio
security if a borrowing by the Fund is outstanding. No other
senior securities may be issued by the Fund.
DRAFT CHECK REDEMPTION
Investors may elect to redeem shares by draft check (minimum
check - $250) made payable to the order of any person or
institution. Upon the Fund's receipt of a completed signature
card, investors will be supplied with draft checks which are
drawn on the Fund's account and are paid through Rushmore Trust
and Savings, FSB. The Fund reserves the right to change or
suspend the checking service and to charge for the reorder of
draft checks. These draft checks cannot be certified, nor can
these checks be negotiated for cash at Rushmore Trust and
Savings, FSB. There will be a $10 charge for each stop payment
request on the draft checks. Investors will be subject to the
same rules and regulations that Rushmore Trust and Savings, FSB
applies to checking accounts. Investors' accounts may not be
closed by draft check.
MANAGEMENT OF THE FUND
Trustees and Officers of the Fund and Officers of the Adviser,
together with information as to their principal business
occupations during the past five years, are set forth below.
Officers of the Fund do not receive salaries or other forms of
compensation from the Fund. Non-interested Trustees' fees and
expenses will be paid by the servicing agent. Non-interested
Trustees were paid an annual fee of $3,000. For the year ended
December 31, 1997, such fees amounted to $14,250.
*Daniel L. O'Connor, 56 - Chairman of the Board of Trustees,
President, and Treasurer of the Fund. General Partner of the
adviser since 1975. President of Rushmore Trust and Savings, FSB
since 1989. Address: 1001 Grand Isle Way, Palm Beach Gardens,
FL 33418.
*Richard J. Garvey, 65 - Trustee of the Fund. Employee of
Rushmore Services, Inc., a subsidiary of the Adviser, since 1995.
Limited Partner of the Adviser since 1975. Address: 4922
Fairmont Avenue, Bethesda, Maryland 20814.
Jeffrey R. Ellis, 53 - Trustee of the Fund. Vice President,
LottoFone, Inc., a telephone state lottery service, since 1993.
Vice President Shoppers Express, Inc. 1988-1992. Address: 513
Kerry Lane, Virginia Beach, Virginia 23451.
Bruce C. Ellis, 53 - Trustee of the Fund. Vice President,
LottoFone, Inc., a telephone state lottery service, since 1991.
Vice President, Shoppers' Express, Inc. 1986-1992. Address: 7108
Heathwood Court Bethesda, Maryland 20817.
Patrick F. Noonan, 55 - Trustee of the Fund. Chairman and Chief
Executive Officer of the Conservation Fund since 1986. Vice
Chairman, American Farmland Trust and Trustee, American
Conservation Association since 1985. President, Conservation
Resources, Inc. since 1981. Address: 11901 Glen Mill Drive,
Potomac, Maryland 20854.
Michael D. Lange, 56 - Trustee of the Fund. Vice President,
Capital Hill Management Corporation since 1967. Owner of Michael
D. Lange, Ltd., a builder and developer since 1980. Partner of
Greatful Falls, a building developer since 1994. Address: 7521
Pepperell Drive, Bethesda, Maryland 20817.
Leo Seybold, 84 - Trustee of the Fund. Retired 1988. Address:
5804 Rockmere Drive, Bethesda, Maryland 20816.
*Timothy N. Coakley, CPA, 30 - Vice President since 1994.
Controller 1994-1997. Chief Financial Officer, Rushmore Trust
and Savings, FSB since 1995. Formerly Audit Manager, Deloitte &
Touche LLP until 1994. Address: 4922 Fairmont Avenue, Bethesda,
MD 20814.
*Martin M. O'Connor, 52 - Vice President since 1974. Employee of
Rushmore Services, Inc., a subsidiary of the Adviser, since 1995.
A limited partner of the Adviser since 1979. Address: 4922
Fairmont Avenue, Bethesda, Maryland 20814.
*John R. Cralle, 57 - Vice President since 1978. Employee of
Rushmore Services, Inc., a subsidiary of the Adviser, since 1995.
A limited partner of the Adviser since 1979. Address: 4922
Fairmont Avenue, Bethesda, Maryland 20814.
*Edward J. Karpowicz, CPA, 34 - Controller since July 1997.
Treasurer, Bankers Finance Investment Management Corp., August
1993 to June 1997. Senior Accountant, Ernst & Young, September
1989 to February 1993. Address: 4922 Fairmont Avenue, Bethesda,
MD 20814.
*Stephenie E. Adams, 29 - Secretary. Manager, Fund
Administration and Marketing, Rushmore Services, Inc., from July
1994 to present. Regional Sales Coordinator, Media General
Cable, from June 1993 to June 1994. Graduate Student,
Northwestern University, M.S., from September 1991 to December
1992. Address: 4922 Fairmont Avenue, Bethesda, Maryland 20814.
Daniel L. O'Connor and Martin M. O'Connor are brothers.
* Indicates interested person as defined by the Investment
Company Act of 1940.
Certain Trustees and Officers of the Fund are also Directors and
Officers of Fund For Tax-Free Investors, Inc., The Rushmore Fund,
Inc., and American Gas Index Fund, Inc., other investment
companies managed by the Adviser.
PRINCIPAL HOLDERS OF SECURITIES
On April 1, 1998, there were 562,587,747.56 shares of beneficial
interest of the Fund outstanding. National Automobile Dealers
Association, McLean, Virginia and Rushmore Trust and Savings,
FSB, Bethesda, Maryland, as Custodian, held for the benefit of
others 6.60% and 5.49% of the Fund, respectively. Officers and
Trustees of the Fund, as a group, own less than 1% of shares
outstanding.
INVESTMENT ADVISORY AND OTHER SERVICES
The Fund is provided investment advisory and management services
by Money Management Associates (the "Adviser"), 1001 Grand Isle
Way, Palm Beach Gardens, Florida 33418. The Adviser is a
limited partnership which was formed under the laws of the
District of Columbia on August 15, 1974. Certain Officers and
Trustees of the Fund are affiliated with the Adviser. Under an
Agreement (the "Agreement") with the Adviser, the Fund pays a fee
at an annual rate based on the size of the Fund's net assets as
follows:
0.50% of the first $500 million;
0.45% of the next $250 million;
0.40% of the next $250 million; and
0.35% of the net assets over $1 billion.
Under the Agreement, the Adviser will reimburse the Fund for
expenses (including management fee) but excluding interest and
extraordinary legal expenses, which exceed one percent of the
average daily net assets per annum.
Normal expenses which are borne by the Fund include, but are not
limited to, taxes, trust fees, interest expenses (if any), office
expenses, the costs incident to preparing reports to governmental
agencies, auditing and accounting, the costs incident to
providing stock certificates for shareholders, and of registering
and redeeming such certificates, custodian charges, the expense
of shareholders' and Trustees' meetings, data processing,
preparation, printing and distribution of all reports and proxy
materials, legal services rendered to the Fund, compensation for
those Trustees, Officers and employees of the Fund who do not
also serve as Officers or employees of the Adviser, insurance
coverage for the Fund and its Trustees and Officers, and its
membership in trade associations. The Adviser may, from time to
time, make payments to broker-dealers and others for their
expenses in connection with the distribution of Fund shares.
Although such payments may be based upon the number of shares
distributed, it is the understanding of the Adviser that such
payments will be for reimbursement and will not exceed the
expenses of the recipients in arranging for and administering
distribution of Fund shares. Salaries of the Trustees of the
Fund, who are not affiliated with the Adviser, are expenses of
the Fund and are established annually by the Board of Trustees.
This includes a majority of those Trustees who are non-interested
persons of the Adviser. All fees and expenses are estimated and
accrued daily. For the years: 1997, 1996 and 1995, the Adviser
earned $2,824,552, $2,823,002 and $2,787,502, respectively in
management fees.
Daniel L. O'Connor is the sole general partner of the Adviser
and, as such, exercises control of the Adviser.
The Agreement between the Adviser and the Fund was last approved
by the shareholders of the Fund on October 30, 1997. The
Agreement shall be renewed annually, if approved by either of two
methods: (1) by the Board of Trustees, including approval by a
majority of the non-interested Trustees by vote cast in person at
a meeting called for such purpose; or (2) by a majority of the
shareholders of the outstanding voting securities of the Fund.
The Agreement may be canceled by the Fund without penalty on
sixty days' notice by the Board of Trustees of the Fund or by
vote of the holders of a majority of the Fund's shares. The
Agreement may also be canceled by the Adviser without penalty on
sixty days' notice. The Agreement will terminate automatically
in the event of its assignment.
Effective March 1, 1996, the Board of Trustees approved an
arrangement whereby Rushmore Trust and Savings, FSB ("RTS"), 4922
Fairmont Avenue, Bethesda Maryland 20814, a majority-owned
subsidiary of the Adviser, acts as the Fund's custodian, transfer
agent, dividend disbursing agent and shareholder servicing agent.
The Fund pays RTS an annual fee of 0.25% of the average daily net
assets of the Fund for these services. The fee will be reviewed
and approved annually by the non-interested Trustees. The Fund
is subject to the self-custodian rules of the Securities and
Exchange Commission. These rules require that the custodian be
subject to three securities verification examinations each year
conducted by the Fund's independent accountants. Two of the
examinations must be performed on an unannounced surprise basis.
Year 2000
The investment management services provided to the Fund by the Adviser
and the services provided to the Fund and its shareholders by RTS depend
on the smooth functioning of computer systems. Like other mutual funds
and financial and business organizations around the world, the Fund
could be adversely affected if the computer systems used by the Adviser
and RTS and their vendors do not properly process and calculate date-related
information and data on and after January 1, 2000. The Adviser and RTS
are taking necessary steps to assure that the computer systems utilized
by them will be prepard for the year 2000. Although at this time there
can be no assurance of sufficient or timely remediation, they do not
anticipate that the transition to the 21st century will have a material
impact on their ability to continue to service the Fund at current levels.
NET ASSET VALUE
The Fund's net asset value per share will be determined as of 12
Noon, Eastern time, on days when the New York Stock Exchange and
the custodian bank is open for business. The net asset value per
share is determined by adding the appraised value of all
securities and all other assets, deducting liabilities and
dividing by the number of shares outstanding. The value of the
Fund's portfolio of securities is determined on the basis of fair
value as determined in good faith by the Fund's Trustees. In
determining fair value, the Fund uses the amortized cost method
of valuing the securities in its portfolio pursuant to Rule 2a-7
under the Investment Company Act of 1940. The Fund's Trustees
continuously review this method of valuation and recommend
changes which may be necessary to assure that the portfolio
instruments of the Fund are valued at their fair value. In its
review, the Trustees of the Fund consider the relevant factors
which may affect the value of the portfolio investments, such as
maturity, yield, stability, special circumstances or trading
markets, and any other factors which they deem pertinent.
Amortized cost is the purchase price of the security plus
accumulated discount or accrued interest from the date of
purchase. This method of valuation does not take into account
unrealized gains or losses due to short-term market fluctuations
and tends to stabilize the price of the Fund's shares. Under
Rule 2a-7, the Fund will not purchase any securities with a
remaining maturity of greater than 397 days, or maintain a dollar
weighted average portfolio maturity in excess of 90 days. When
interest rates decline, the market value of the Fund's portfolio
rises; when rates rise, the market value declines. To the extent
that the Fund's amortized cost valuation of its short-term
securities differs from the actual liquidation value, the price
at which an investor purchases or redeems will correspondingly
differ from the per share liquidation value of the portfolio.
Thus, when interest rates are declining and purchases of Fund
shares exceed redemptions, the interest of existing investors may
be diluted. When interest rates are rising and redemptions
exceed share purchases, the interest of existing investors may be
diluted. Declining interest rates and net redemption of Fund
shares or rising interest rates and new purchases of Fund shares
may enhance the interest of existing investors. When interest
rates are declining, the Fund's valuation method tends to
understate the percentage rate of net investment income per
share. When interest rates are rising, the reverse is true. The
Board of Trustees of the Fund believes that the amortized cost
basis offers the most consistent and conservative method of
valuing short-term investments.
COMPARATIVE PERFORMANCE DATA
The Fund's performance may be compared in advertising to the
performance of other money market and mutual funds in general or
to the performance of particular types of money market funds,
especially those with similar objectives. More up-to-date
performance data may be provided as it becomes available. From
time to time, the Fund may provide information concerning general
economic conditions, financial trends, analysis and supply
comparative performance and rankings, with respect to comparable
investments for the same period, for unmanaged market indexes
such as the Dow Jones Industrial Average, Standard & Poor's 500
IndexTM, Shearson Lehman Bond Indexes, Merrill Lynch Bond
Indexes, Bond Buyer Index, and from recognized independent
sources such as Donoghue's Money Fund Report, Donoghue Money
Letter, Bank Rate Monitor, Money Magazine, Forbes, Lipper,
Standard & Poor's Corporation, CDA/Wiesenberger Investment
Technologies, Inc. ("CDA"), Mutual Fund Values, Mutual Fund
Forecaster, Mutual Fund Sourcebook, Fortune, Business Week,
Kiplinger's Personal Finance, Wall Street Journal, Investor's
Business Daily and Schabacker Investment Management, Inc.
Comparisons may also be made to Consumer Price Index, rate of
inflation, bank money market rates, rates of certificates of
deposit, Treasury Bills and Treasury Bond rates and yields.
CALCULATION OF YIELD QUOTATIONS
The Fund's annualized current yield, as may be quoted from time
to time in advertisements and other communications to
shareholders and potential investors, is computed by determining,
for a stated seven-day period, the net change, exclusive of
capital changes and including the value of additional shares
purchased with dividends and any dividends declared therefrom
(which reflect deductions of all expenses of the Fund such as
management fees), in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the
period, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period
return, and then multiplying the base period return by (365/7).
The Fund's annualized effective yield, as may be quoted from time
to time in advertisements and other communications to
shareholders and potential investors, is computed by determining
(for the same stated seven-day period as the current yield), the
net change, exclusive of capital changes and including the value
of additional shares purchased with dividends and any dividends
declared therefrom (which reflect deductions of all expenses of
the Fund such as management fees), in the value of a hypothetical
pre-existing account having a balance of one share at the
beginning of the period, and dividing the difference by the value
of the account at the beginning of the base period to obtain the
base period return, and then compounding the base period return
by adding 1, raising the sum to a power equal to 365 divided by
7, and subtracting 1 from the result.
The yields quoted in any advertisement or other communication
should not be considered a representation of the yields of the
Fund in the future since the yield is not fixed. Actual yields
will depend not only on the type, quality, and maturities of the
investments held by the Fund and changes in interest rates on
such investments, but also on changes in the Fund's expenses
during the period.
Yield information may be useful in reviewing the performance of
the Fund and for providing a basis for comparison with other
investment alternatives. However, unlike bank deposits or other
investments which typically pay a fixed yield for a stated period
of time, the Fund's yield fluctuates.
AUDITORS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP, independent certified public accountants,
are the auditors of the Fund. The Fund incorporates by reference
in this statement of additional information the financial
statements and notes contained in its annual report to the
shareholders for the year ended December 31, 1997.
<PAGE>
[DELETED RUSHMORE LOGO]
FUND FOR
GOVERNMENT
INVESTORS
____________
Annual Report
December 31, 1997
<PAGE>
[DELETED RUSHMORE LOGO]
Fund for Government Investors
A MONEY MARKET FUND
ANNUAL REPORT
December 31, 1997
January 29, 1998
Dear Shareholders:
Fund for Government Investors ended the year with net assets of
$572 million on December 31, 1997. Net income averaged 4.40% of net
assets for the year, down from 4.41% for the year ended December 31,
1996. The average maturity for the Fund on December 31, 1997 was 38
days.
In 1997 we witnessed an economy that continued to move along with
little sign of inflation. The rates on T-Bills were relatively stable
during the year, with the exception of a temporary spike near the end
of the year due to foreign central bank selling of shorter term U.S.
Government securities as a result of economic difficulties in Asia.
After the Federal Funds rate hike earlier this year in March, the
Federal Reserve chose not to make any further adjustments, as the
rapid growth of the first quarter slowed considerably for the
remainder of the year. Though the labor market remains tight, a
possible inflationary concern to the Fed, increases by companies in
productivity have been able to keep wage pressure from resulting in
increased consumer prices.
We expect 1998 to continue to exhibit an environment of low
inflation, as economic growth should slow from the pace of 1997, due
in no small part to the effects on our economy from Asian currency and
market difficulties. We look for the Fed not to intervene in the near
future as there is not enough inflationary growth to warrant a hike,
and employment data remains enough of a concern to keep the Fed from
easing.
Fund for Government Investors continues its philosophy of
conservative investing with safety of assets our primary concern. And
as always, we thank you for your continued support and look forward to
serving you in 1998.
/s/ Daniel L. O'Connor /s/ Richard J. Garvey
Daniel L. O'Connor Richard J. Garvey
Chairman of the Board President
4922 Fairmont Avenue Bethesda, Maryland 20814 800-621-7874 301-657-1517
<PAGE>
STATEMENT OF NET ASSETS
December 31, 1997
ANNUALIZED
PAYABLE AT MATURITY YIELD ON DATE VALUE
MATURITY DATE OF PURCHASE (NOTE 1)
UNITED STATES TREASURY BILLS - 99.6% of Net Assets
$75,000,000 January 8, 1998 5.05% $ 74,928,250
75,000,000 January 15, 1998 5.11 74,854,750
72,845,000 January 22, 1998 5.07 - 5.08 72,633,410
50,000,000 January 29, 1998 5.06 49,808,278
25,000,000 February 5, 1998 5.25 24,875,799
75,000,000 February 12, 1998 5.28 - 5.29 74,550,104
75,000,000 February 26, 1998 5.26 74,402,666
50,000,000 March 5, 1998 5.22 49,555,500
50,000,000 March 12, 1998 5.29 49,499,306
25,000,000 March 19, 1998 5.18 24,730,500
------------
Total Investments (Cost $569,838,563*) 569,838,563
Other Assets Less Liabilities - 0.4% 2,474,712
------------
Net Assets - 100.0% $572,313,275
------------
Net Asset Value Per Share $1.00
(Based on 572,313,275 Shares Outstanding)
*Same cost is used for Federal income tax purposes.
Weighted Average Maturity of Portfolio: 38 Days
See Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
INVESTMENT INCOME (Note 1) $29,428,044
EXPENSES
Investment Advisory Fee (Note 2) $ 2,824,552
Administrative Fee (Note 2) 1,430,307 4,254,859
----------- -----------
NET INVESTMENT INCOME $25,173,185
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
1997 1996
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS AND DECLARED AS DIVIDENDS TO
SHAREHOLDERS (Note 1) $ 25,173,185 $ 25,210,604
--------------- ---------------
FROM SHARE TRANSACTIONS
(at constant net asset value of $1)
Shares Purchased $ 2,978,762,541 $ 2,826,372,757
Dividends Reinvested 24,697,986 24,524,702
--------------- ---------------
Total 3,003,460,527 2,850,897,459
Shares Redeemed (2,966,472,206) (2,892,766,936)
--------------- ---------------
Increase (Decrease) in Net Assets 36,988,321 (41,869,477)
NET ASSETS - Beginning of Year 535,324,954 577,194,431
--------------- ---------------
NET ASSETS - End of Year $ 572,313,275 $ 535,324,954
--------------- ---------------
See Notes to Financial Statements.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
For the Years Ended December 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Year $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income 0.044 0.044 0.049 0.033 0.023
------- ------- ------- ------- -------
Total from Investment Operations 0.044 0.044 0.049 0.033 0.023
------- ------- ------- ------- -------
Distributions to Shareholders:
From Net Investment Income (0.044) (0.044) (0.049) (0.033) (0.023)
------- ------- ------- ------- -------
Total Distributions to Shareholders (0.044) (0.044) (0.049) (0.033) (0.023)
------- ------- ------- ------- -------
Net Increase in Net Asset Value 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- -------
Net Asset Value - End of Year $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
Total Investment Return 4.49% 4.50% 5.04% 3.38% 2.37%
Ratios to Average Net Assets:
Expenses 0.74% 0.74% 0.74% 0.75% 0.75%
Net Investment Income 4.40% 4.41% 4.93% 3.31% 2.32%
Supplementary Data:
Number of Shares Outstanding at End of Year
with a Net Asset Value of $1 (000's omitted) 572,313 535,325 577,194 524,154 600,766
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Fund for Government Investors (the "Fund") is registered with the
Securities and Exchange Commission under the Investment Company Act of
1940 and invests only in U.S. Government Securities. The Fund is
authorized to issue an unlimited number of shares. The financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following is a summary of significant accounting policies which the
Fund consistently follows:
(a) Investments are valued at amortized cost,
which approximates market value. Amortized cost is the
purchase price of the security plus accumulated
discount or minus amortized premium from the date of
purchase.
(b) Investment income is recorded as earned.
(c) Net investment income is computed, and
dividends are declared daily. Dividends are paid
monthly and reinvested in additional shares unless
shareholders request payment.
(d) The Fund complies with the provisions of the
Internal Revenue Code applicable to regulated
investment companies and distributes all net investment
income to its shareholders. Therefore, no Federal
income tax provision is required.
2. INVESTMENT ADVISER AND SHAREHOLDER SERVICING AGENT
Investment advisory and management services are provided by Money
Management Associates under an agreement whereby the Fund pays a fee
at an annual rate based on the Fund's average daily net assets as
follows: 0.50% of the first $500 million; 0.45% of the next
$250 million; 0.40% of the next $250 million; and 0.35% of the net
assets that exceed $1 billion. Certain Officers and Trustees of the
Fund are affiliated with Money Management Associates.
Rushmore Trust and Savings, FSB, a majority-owned subsidiary of Money
Management Associates, provides custodial services, transfer agency,
dividend disbursing and other shareholder services to the Fund.
Rushmore Trust is paid an administrative fee of 0.25% of average daily
net assets to cover the cost of these services as well as other
expenses of the Fund except for interest and extraordinary legal
expenses.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of Fund for Government Investors:
We have audited the statement of net assets of Fund for Government
Investors (the Fund) as of December 31, 1997, the related statements
of operations for the year then ended and of changes in net assets for
the years ended December 31, 1997 and 1996, and the financial
highlights for each of the five years in the period ended December 31,
1997. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and 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 financial highlights are free from material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned at December 31, 1997, by
correspondence with 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, such financial statements and financial highlights
present fairly, in all material respects, the net assets of Fund for
Government Investors at December 31, 1997, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Princeton, New Jersey
January 23, 1998
<PAGE>
PART C
OTHER INFORMATION
Fund for Government Investors
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial statements:
The Financial Highlights in Part A and the following financial
statements in Part B of this registration statement's amendment
are incorporated by reference.
Statements of Net Assets as of December 31, 1997
Statements of Operations for the year ended December 31, 1997
Statements of Changes in Net Assets for the years ended December
31, 1997 and 1996
Financial Highlights for each of the five years in the period
ended December 31, 1997
b. Exhibits:
11 Consent of Deloitte & Touche LLP independent auditors
for Registrant
16 Schedule for computation of performance quotations
27 Financial Data Schedule
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
Approximate Number of
Shareholders of Record
Title of Class at April 1, 1998
Common Stock, $.001 par value
Fund for Government Investors 9,901
ITEM 27. INDEMNIFICATION
The Articles of Incorporation of the Fund provide that
officers and directors shall be indemnified by the Fund
against liabilities and expenses of defense in
proceedings against them by reason of the fact that they
serve as officers or directors of the Fund or as an
officer or director of another entity at the request of
the entity. The indemnification is subject to the
following conditions:
(a) no director or officer is indemnified against all
liability to the Fund or its security holders which was
the result of any willful misfeasance, bad faith, gross
negligence or reckless disregard of his duties;
(b) officers and directors are only indemnified for
actions taken in good faith which they believed were in
or not opposed to the best interests of the Fund;
(c) expenses of any suit or proceeding will be paid in
advance only if the persons who will benefit by such
advance undertake to repay the expenses unless it is
subsequently determined that they are entitled to
indemnification.
The Articles provide that if indemnification is not
ordered by a court, it may be authorized upon
determination by shareholders, by a majority vote of a
quorum of the directors who were not parties to the
proceedings or if a quorum is not obtainable, or if
directed by a quorum of disinterested directors, by
independent legal counsel in a written opinion that the
persons to be indemnified have met the applicable
standard.
In connection with the approval of indemnification to
officers and directors, the Fund hereby undertakes in
all cases where indemnification is not ordered by a
court not to submit any proposed indemnification to a
vote of its shareholders or directors unless it has
obtained a legal opinion from independent counsel that
the product of the persons seeking indemnification did
not involve willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
Insofar as indemnification for liability arising under
the Securities Act of 1933, as amended (the "1933 Act"),
may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been
advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against
public policy as expressed in the 1933 Act and,
therefore, is unenforceable. In the event that a claim
for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of
the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the
securities being registered, the Registrant, unless in
the opinion of the Registrant's counsel the matter has
been settled by controlling precedent, will submit to a
court of appropriate jurisdiction the question whether
such indemnification by the Registrant is against public
policy as expressed in the 1933 Act and will be governed
by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Money Management Associates ("MMA"), 1001 Grand Isle
Way, Palm Beach Gardens, Florida 33418, a limited
partnership organized under the laws of the District of
Columbia on August 15, 1974, has one general partner and
three limited partners. Daniel L. O'Connor is the
general partner and sole employee of MMA. Richard J.
Garvey, Martin M. O'Connor, and John R. Cralle, are full-
time employees of Rushmore Services, Inc. ("RSI"), a
subsidiary of MMA, at 4922 Fairmont Avenue, Bethesda,
Maryland 20814.
MMA also serves as the investment adviser to Fund for
Government Investors, The Rushmore Fund, Inc., and
American Gas Index Fund, Inc., all regulated investment
companies since their inception.
ITEM 29. PRINCIPAL UNDERWRITERS
Not applicable
ITEM 30. LOCATIONS OF ACCOUNTS AND RECORDS
The physical location for all accounts, books and
records required to be maintained and preserved by
Section 31(a) of the Investment Company Act of 1940, as
amended, and Rules 31a-1 and 31a-2 thereunder, is 4922
Fairmont Avenue, Bethesda, Maryland 20814.
ITEM 31. MANAGEMENT SERVICES
None
ITEM 32. UNDERTAKINGS
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in this City of Bethesda and State of Maryland on the 27th
day of April, 1998.
Fund for Government Investors
By:
/s/ Daniel L. O'Connor*
Daniel L. O'Connor, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 33 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Name Title Date
/s/ Daniel L. O'Connor* Chairman of the Board, April 27, 1998
Daniel L. O'Connor President, Treasurer,
Trustee
/s/ Richard J. Garvey Trustee April 27, 1998
Richard J. Garvey
/s/ Timothy N. Coakley Vice President April 27, 1998
Timothy N. Coakley
/s/ Edward J. Karpowicz Controller April 27, 1998
Edward J. Karpowicz
/s/ Jeffrey R. Ellis* Trustee April 27, 1998
Jeffrey R. Ellis
/s/ Bruce C. Ellis* Trustee April 27, 1998
Bruce C. Ellis
/s/ Michael D. Lange* Trustee April 27, 1998
Michael D. Lange
/s/ Patrick F. Noonan* Trustee April 27, 1998
Patrick F. Noonan
/s/ Leo Seybold* Trustee April 27, 1998
Leo Seybold
*Richard J. Garvey, Attorney-in-Fact
EXHIBIT 11
CONSENT OF DELOITTE & TOUCHE LLP
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Fund for Government Investors
We consent to the incorporation by reference in Post-Effective
Amendment No. 33 to Registration Statement No. 2-52552 of our
report dated January 23, 1998 appearing in the Annual Report of
Fund for Government Investors for the year ended December 31,
1997 and to the reference to us under the caption "Financial
Highlights" appearing in the Prospectus, which are also a part of
such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Princeton, NJ
April 27, 1998
EXHIBIT 16
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
<PAGE>
Fund for Government Investors
Exhibit 16
Computation of Yield Quotation
Item 22, Part B
Net Shares Daily Yield
Investment Outstanding (income divided
Income by shares
multiplied by
365)
December 25, 1997 $ 65,826 549,278,829 4.37%
December 26, 1997 $ 66,991 549,885,325 4.45%
December 27, 1997 $ 66,991 549,885,325 4.45%
December 28, 1997 $ 66,991 549,885,325 4.45%
December 29, 1997 $ 67,991 551,259,170 4.50%
December 30, 1997 $ 68,091 560,137,036 4.44%
December 31, 1997 $ 68,756 567,634,800 4.42%
Average 7-Day Yield 4.44%
Annual Effective Yield 4.55%
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 569,838,563
<INVESTMENTS-AT-VALUE> 569,838,563
<RECEIVABLES> 3,539,761
<ASSETS-OTHER> 819,449
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 574,197,773
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,884,498
<TOTAL-LIABILITIES> 1,884,498
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 572,313,275
<SHARES-COMMON-STOCK> 572,313,275
<SHARES-COMMON-PRIOR> 535,324,954
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 572,313,275
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 29,428,044
<OTHER-INCOME> 0
<EXPENSES-NET> (4,254,859)
<NET-INVESTMENT-INCOME> 25,173,185
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 25,173,185
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (25,173,185)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,978,762,541
<NUMBER-OF-SHARES-REDEEMED> (2,966,472,206)
<SHARES-REINVESTED> 24,697,986
<NET-CHANGE-IN-ASSETS> 36,988,321
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,824,552
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,254,859
<AVERAGE-NET-ASSETS> 572,073,773
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.044
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.044)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.740
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
