Bull & Bear Gold Investors seeks long term capital appreciation in
investments with the potential to provide a hedge against inflation and preserve
the purchasing power of the dollar. The Fund invests primarily in gold, platinum
and silver bullion and a global portfolio of securities of companies involved
directly or indirectly in mining, processing or dealing in gold or other
precious metals ("gold mining shares"). Income is a secondary objective. The
Fund may hold cash in foreign currencies and may invest in gold, platinum, and
silver coins. There is no assurance the Fund will achieve its objectives.
The Fund's investments may include foreign securities which may be highly
volatile and subject to risks relating to adverse political and economic
developments abroad, fluctuations in currency exchange rates, and differing
characteristics of foreign economies and markets. Investments in gold mining
shares and gold, platinum, and silver bullion are considered speculative and
subject to substantial price fluctuations and other risks. See "Risk Factors."
- --------------------------------------------------------------------------------
NEWSPAPER LISTING. Shares of the Fund
are sold at the net asset value per
share which is shown daily in the
mutual fund section of newspapers under
the "Bull & Bear Group" heading.
- --------------------------------------------------------------------------------
This Prospectus sets forth concisely information about the Fund which
prospective investors should know before investing in the Fund and should be
retained for future reference. A careful reading of this Prospectus is
recommended prior to any investment. A Statement of Additional Information about
the Fund dated November 1, 1994 has been filed with the Securities and Exchange
Commission and is available to prospective investors without charge upon request
to Bull & Bear Service Center, Inc., Distributor, 11 Hanover Square, New York,
NY 10005, telephone 1-800-847-4200/1-212-363-1100. The Statement of Additional
Information, as amended or supplemented from time to time, is incorporated
herein by reference. Shares of the Fund are not bank deposits or obligations of,
or guaranteed or endorsed by any bank or any affiliate of any bank, and are not
Federally insured by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other agency.
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.
1
<PAGE>
Expense Table. The tables below are intended to assist investors in
understanding the costs and expenses that Fund shareholders bear directly or
indirectly. A $2 monthly fee is charged where average monthly balances are less
than $500, except for accounts in the Bull & Bear Automatic Investment Program
where shareholders invest $100 or more each month (see "How to Purchase
Shares").
Shareholder Transaction Expenses
Sales Load Imposed on Purchases......................................... NONE
Sales Load Imposed on Reinvested Dividends.............................. NONE
Deferred Sales Load..................................................... NONE
Redemption Fees......................................................... NONE
Transfer Fees........................................................... NONE
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees......................................................... 0.86%
12b-1 Fees.............................................................. 1.00%
Other Expenses.......................................................... 0.71%
----
Total Fund Operating Expenses........................................... 2.57%
Example 1 year 3 years 5 years 10 years
------ ------- ------- --------
You would pay the following $26 $80 $137 $290
expenses on a $1,000 investment,
assuming a 5% annual return
and a redemption at the end
of each time period:
The example should not be considered a representation of past or future expenses
and actual performance and expenses may be greater or lesser than shown. The
percentages given for Annual Fund Operating Expenses are based on the Fund's
operating expenses and average daily net assets during its fiscal year ended
June 30, 1994. Long term shareholders may pay more than the economic equivalent
of the maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc.'s ("NASD") rules regarding investment companies. "Other
Expenses" include the amounts paid to the Fund's custodian (net of brokerage
commission credits pursuant to an arrangement not anticipated to materially
increase brokerage commissions paid by the Fund -- see "The Investment Manager")
and Transfer and Dividend Disbursing Agent and reimbursable to the Investment
Manager and the Distributor for certain administrative and shareholder services.
The assumption in the Example of a 5% annual return is required by regulations
of the Securities and Exchange Commission ("SEC") and is not a prediction of,
and does not represent the Fund's projected or actual performance.
Financial Highlights for a share of capital stock outstanding throughout each
period. The following information is supplemental to the Fund's financial
statements and report thereon of Tait, Weller & Baker, independent accountants,
appearing in the June 30, 1994 Annual Report to Shareholders and incorporated by
reference in the Statement of Additional Information.
<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value at beginning
of period $ 16.98 $ 11.62 $ 12.49 $ 13.36 $ 13.27 $ 14.31 $ 18.76 $ 9.98 $ 10.21 $ 12.04
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income
(loss) (.11) (.03) (.10) .03 .10 .02 .02 (.02) .02 .11
Net realized and
unrealized
gain (loss) on (1.05) 5.39 (.72) (.87) .12 (1.03) (3.08) 8.83 (.21) (1.82)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
investments
Total from investment
operations (1.16) 5.36 (.82) (.84) .22 (1.01) (3.06) 8.81 (.19) (1.71)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Distributions from net
investment income -- -- (.05) (.03) (.13) (.03) -- (.03) (.04) (.12)
Distributions from net
realized gains (.11) -- -- -- -- -- (.35) -- -- --
Distributions from
paid-in-capital -- -- -- -- -- -- (1.04)(c) -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (.11) -- (.05) (.03) (.13) (.03) (1.39) (.03) (.04) (.12)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value at end
of period $ 15.71 $ 16.98 $ 11.62 $ 12.49 $ 13.36 $ 13.27 $ 14.31 $ 18.76 $ 9.98 $ 10.21
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN (6.92)% 46.13% (6.57)% (6.23)% 1.51% (7.04)% (16.77)% 88.48% (1.87)% (14.20)%
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) $36,603 $47,489 $24,939 $33,133 $40,301 $37,791 $47,732 $62,256 $20,595 $21,610
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Ratio of expenses to average
net assets(a) 2.57% 3.01% 2.96% 2.59% 2.62% 2.46% 2.33% 2.46% 2.39% 1.74%
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Ratio of net investment
income (loss) to
average net assets(b) (.68)% (.29)% (.63)% .34% .65% .17% .10% (.21)% .18% 1.08%
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover rate 129% 156% 97% 95% 65% 60% 52% 66% 32% 30%
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a) Ratio prior to reimbursement by the Investment Manager was 2.52% in 1987,
2.44% in 1988, and 2.70% in 1989.
(b) Ratio prior to reimbursement by the Investment Manager was (.27%) in 1987,
(.01%) in 1988, and (.07%) in 1989.
(c) The distribution represents amounts required to be distributed to avoid
imposition of excise taxes on realized capital gains.
Information relating to outstanding debt during the fiscal periods shown below:
<TABLE>
<CAPTION>
Amount of Debt Average Amount of Average Number of Average Amount of
Fiscal Years Ended Outstanding at End Debt Outstanding Shares Outstanding Debt Per Share
June 30 of Period During the Period During the Period During the Period
------- --------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1994 $0 $232,392 2,820,198 $0.08
1993 0 76,436 2,296,254 0.03
1992 0 104,041 2,398,765 0.04
</TABLE>
2
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Transaction and Operating Expenses. 2 Distributions and Taxes .......... 14
Financial Highlights .............. 2 Determination of Net Asset Value . 15
General ........................... 3 The Investment Manager ........... 15
The Fund's Investment Program ..... 4 Distribution of Shares ........... 16
Risk Factors ...................... 6 Performance Information .......... 16
How to Purchase Shares ............ 8 Capital Stock .................... 17
Shareholder Services .............. 9 Custodian and Transfer Agent ..... 17
How to Redeem Shares .............. 12
- --------------------------------------------------------------------------------
GENERAL
Purpose of the Fund. The Fund is designed for investors who are seeking long
term capital appreciation through holdings of gold, platinum and silver bullion,
a global portfolio of gold mining shares, and other investments considered to be
an inflation hedge.
Gold Investing. The Investment Manager believes that investments in gold,
platinum and silver bullion and gold mining shares offer an opportunity to
achieve the long term capital appreciation necessary to protect wealth against
eroding monetary values. Modern history indicates that many leading industrial
nations are now pursuing policies with potentially irreversible inflationary
consequences worldwide. In these nations the leaders of government, business,
labor, and consumer groups are seeking increasingly differing objectives, making
the concerted efforts necessary to control inflation more elusive than ever. As
a result, political pressures to counteract economic slowdowns have resulted in
long term increases in government deficits and high rates of growth of monetary
reserves and credit, along with other factors such as increases in wage and
benefit payments exceeding increases in productivity. These conditions have been
major factors in the inflationary cycles experienced over the past thirty years
in the United States and abroad. During periods of accelerating inflation or
currency uncertainty, worldwide investment demand for gold and securities of
gold mining companies tends to increase and during periods of decelerating
inflation and currency stability, it tends to decrease. Other uncertain and
unstable political and social conditions have also stimulated demand for gold.
The Investment Manager believes that the accelerating growth of monetary
reserves and credit in major industrial markets may favorably effect gold and
gold mining share prices.
Adding the Fund to Your Portfolio. Although investing in bullion, gold mining
shares and foreign securities may involve special considerations and additional
investment risks (see "Risk Factors"), the Investment Manager believes that
these investments may offer greater capital appreciation potential during
inflationary and politically unstable periods. Also, since the market action of
gold mining shares has tended to move against or independently of the market
trend of other sectors of the economy, the addition of an investment in the Fund
to an investor's portfolio may increase the individual investor's overall return
and may reduce overall fluctuations in portfolio value. Thus, an investment in
the Fund should be considered part of an overall investment program rather than
a complete investment program. There is, of course, no assurance that the Fund
will achieve its objectives.
Portfolio Management. The Fund's Portfolio Manager is Bassett S. Winmill. Mr.
Winmill is Chairman of the Investment Policy Committee of Bull & Bear Advisers,
Inc., the Fund's Investment Manager. He is a member of the New York Society of
Security Analysts and the Association for Investment Management and Research.
3
<PAGE>
THE FUND'S INVESTMENT PROGRAM
In seeking to achieve its primary investment objective of long term capital
appreciation, the Fund will concentrate its investments in gold, platinum, and
silver bullion and gold mining shares. This fundamental concentration policy
means at least 25% will, and up to 100% of its assets may, be so invested.
Normally, at least 65% of the Fund's total assets will be invested in equity
securities (including common stocks, convertible securities and warrants) of
companies involved directly or indirectly in mining, processing or dealing in
gold or other precious metals, gold, platinum and silver bullion and gold coins.
Currently, the Fund limits its investments in bullion as a non-fundamental
investment policy to less than 25% of total assets.
The Fund may invest up to 35% of the Fund's total assets in securities of
companies that own or develop natural resources and other basic commodities, in
securities of selected growth companies, and securities issued by the U.S.
Government, its agencies or instrumentalities, as a non-fundamental investment
policy. Natural resources include ferrous and non-ferrous metals (such as iron,
aluminum and copper), strategic metals (such as uranium and titanium),
hydrocarbons (such as coal, oil and natural gases), chemicals, forest products,
real estate, food products and other basic commodities, which historically have
been produced and marketed profitably during periods of rising inflation.
Selected growth companies in which the Fund may invest typically have earnings
or tangible assets which are expected to grow faster than the rate of inflation
over time. The Investment Manager believes that such investments can also offer
excellent opportunities to provide hedges against inflation.
The Fund may invest in securities of issuers located in emerging market
countries. The risks of investing in foreign securities may be greater with
respect to securities of issuers in, or denominated in the currencies of,
emerging market countries. The economies of emerging market countries generally
are heavily dependent upon international trade and accordingly, have been and
may continue to be adversely affected by trade barriers, exchange controls,
managed adjustments in relative currency values and other protectionist measures
imposed or negotiated by the countries with which they trade. These economies
also have been and may continue to be adversely affected by economic conditions
in the countries with which they trade. The securities markets of emerging
market countries are substantially smaller, less developed, less liquid and more
volatile than the securities markets of the U.S. and other developed countries.
Disclosure and regulatory standards in many respects are less stringent in
emerging market countries than in the U.S. and other major markets. There also
may be a lower level of monitoring and regulation of emerging markets and the
activities of investors in such markets, and enforcement of existing regulations
may be extremely limited. Investing in local markets, particularly in emerging
market countries, may require the Fund to adopt special procedures, seek local
government approvals or take other actions, each of which may involve additional
costs to the Fund. Certain emerging markets countries may also restrict
investment opportunities in issuers in industries deemed important to national
interests.
Options, Futures, and Forward Currency Contracts. The Fund may purchase call
options on securities that the Investment Manager intends to include in the
Fund's portfolio in order to fix the cost of a future purchase or to attempt to
enhance return by, for example, participating in an anticipated price increase
of a security. The Fund may purchase put options to hedge against a decline in
the market value of securities held in the Fund's portfolio or to attempt to
enhance return. The Fund may write (sell) covered put and call options on
securities in which it is authorized to invest. The Fund may purchase and write
covered straddles, purchase and write put and call options on stock and bond
indexes, and take positions in options on foreign currencies to hedge against
the risk of foreign exchange rate fluctuations on foreign securities the Fund
holds in its portfolio or that it intends to purchase. The Fund may purchase and
sell interest rate futures contracts, stock and bond index futures contracts and
foreign currency futures contracts, and may purchase put and call options and
write covered put and call options on such futures contracts.
The Fund may enter into forward currency contracts to set the rate at which
currency exchanges will be made for contemplated or completed transactions. The
Fund might also enter into forward currency contracts in amounts approximating
the value of one or more portfolio positions to fix the U.S. dollar value of
those positions. For example, when the Investment Manager believes that the
currency of a particular foreign country may suffer a substantial decline
against the U.S. dollar, the Fund may enter into a forward contract to sell, for
4
<PAGE>
a fixed amount of dollars, the amount of foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in such
foreign currency. The Fund has no specific limitation on the percentage of
assets it may commit to foreign currency exchange contracts, except that it will
not attempt to enter into a forward contract if the amount of assets set aside
to cover the contract would impede portfolio management or the Fund's ability to
meet redemption requests.
Strategies with options, financial futures, and forward currency contracts
may be limited by market conditions, regulatory limits and tax considerations,
and the Fund might not employ any of the strategies described above. There can
be no assurance that any strategy used will be successful. The loss from
investing in futures transactions is potentially unlimited. Options and futures
may fail as hedging techniques in cases where price movements of the securities
underlying the options and futures do not follow the price movements of the
portfolio securities subject to the hedge. Gains and losses on investments in
options and futures depend on the Investment Manager's ability to predict
correctly the direction of stock prices, interest rates, and other economic
factors. In addition, the Fund will likely be unable to control losses by
closing its position where a liquid secondary market does not exist and there is
no assurance that a liquid secondary market for hedging instruments will always
exist. It also may be necessary to defer closing out hedged positions to avoid
adverse tax consequences. The percentage of the Fund's assets set aside to cover
its obligations under options, futures, or forward currency contracts could
impede effective portfolio management or the ability to meet redemption or other
current obligations.
Fixed Income Securities. When seeking to achieve its secondary objective of
income, the Fund will normally invest in investment grade fixed income
securities. Investment grade securities are those rated in the top four
categories by a nationally recognized statistical rating organization such as
Standard & Poor's Ratings Group or Moody's Investors Service, Inc., ("Moody's")
or, if unrated, are determined by the Investment Manager to be of comparable
quality. Moody's considers securities in the fourth highest category to have
speculative characteristics. Such securities may include long, intermediate and
short maturities, depending on the Investment Manager's evaluation of market
patterns and trends. The Fund may invest for temporary defensive purposes in
high grade fixed income securities. The Fund may invest up to 35% of its assets
in fixed income securities rated below investment grade, although it has no
current intention of investing more than 5% of its assets in such securities
during the coming year. The Fund may also invest without limit in unrated
securities if such securities offer, in the opinion of the Investment Manager,
the opportunity for a high overall return by reason of their yield, discount at
purchase, or potential for capital appreciation without undue risk. Securities
rated below investment grade and many unrated securities may be considered
predominantly speculative and subject to greater market fluctuations and risks
of loss of income and principal than higher rated fixed income securities. The
market value of fixed income securities usually is affected by changes in the
level of interest rates. An increase in interest rates tends to reduce the
market value of such investments, and a decline in interest rates tends to
increase their value. In addition, fixed income securities with longer
maturities, which tend to produce higher yields, are subject to potentially
greater capital appreciation and depreciation than obligations with shorter
maturities. Fluctuations in the market value of fixed income securities
subsequent to their acquisition do not affect cash income from such securities
but are reflected in the Fund's net asset value.
Lending. Pursuant to an arrangement with its custodian bank, the Fund may lend
portfolio securities or other assets of the Fund to other parties limited to one
third of the Fund's total assets. If the Fund engages in lending transactions,
it will enter into lending agreements that require that the loans be
continuously secured by cash, securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, or any combination of cash and
such securities, as collateral equal at all times to at least the market value
of the assets lent. To the extent of such activities, the custodian will apply
credits against its custodial charges. There are risks to the Fund of delay in
receiving additional collateral and risks of delay in recovery of, and failure
to recover, the assets lent should the borrower fail financially or otherwise
violate the terms of the lending agreement. Loans will be made only to borrowers
deemed by the Investment Manager to be of good standing and when, in the
judgment of the Investment Manager, the consideration which can be earned
currently from such lending transactions justifies the attendant risk. Any loan
made by the Fund will provide that it may be terminated by either party upon
reasonable notice to the other party.
5
<PAGE>
Other Information. The Fund is "non-diversified," as defined in the Investment
Company Act of 1940 ("1940 Act"), but intends to continue to qualify as a
regulated investment company for Federal income tax purposes. This means, in
general, that more than 5% of the Fund's total assets may be invested in the
securities of one issuer (including a foreign government), but only if at the
close of each quarter of the Fund's taxable year, the aggregate amount of such
holdings is less than 50% of the value of its total assets and no more than 25%
of the value of its total assets is invested in the securities of a single
issuer. To the extent that the Fund's portfolio at times may include the
securities of a smaller number of issuers than if it were "diversified", as
defined in the 1940 Act, the Fund will at such times be subject to greater risk
with respect to its portfolio securities than an investment company that invests
in a broader range of securities, in that changes in the financial condition or
market assessment of a single issuer may cause greater fluctuation in the Fund's
total return.
The Fund may borrow money from banks for temporary or emergency purposes
(not for leveraging or investment) and engage in reverse repurchase agreements,
but not in excess of an amount equal to one third of the Fund's total assets.
The Fund may not purchase securities for investment while any bank borrowing
equaling 5% or more of its total assets is outstanding. The Fund may invest (i)
up to 15% of its net assets in illiquid securities, including repurchase
agreements with a maturity of more than seven days and (ii) up to 10% of its
total assets in restricted securities. In addition to the Fund's fundamental
investment objectives and its fundamental concentration policy, the Fund has
adopted certain investment restrictions set forth in the Statement of Additional
Information that are fundamental and may not be changed without shareholder
approval. The Fund's other investment policies are not fundamental and may be
changed by the Board of Directors without shareholder approval. For the fiscal
years ended June 30, 1994, 1993 and 1992, the Fund's portfolio turnover rate was
129%, 156% and 97%, respectively. A higher portfolio turnover rate involves
correspondingly greater transaction costs and increases the potential for short
term capital gains and taxes.
RISK FACTORS
Because of the following considerations, shares of the Fund should be
considered speculative and should not be considered a complete investment
program. Risks relating to the Fund's investment policies include:
1. Price Fluctuations in Bullion. The value of the Fund's investments may be
affected by changes in the price of gold, platinum, and silver. Gold, platinum,
and silver have been subject to substantial price fluctuations over short
periods of time. The prices have been influenced by industrial and commercial
demand, investment and speculation, and monetary and fiscal policies of central
banks and governmental and international agencies. Price fluctuations in bullion
have also caused large price fluctuations in gold mining shares.
2. Concentration of Source of Supply and Control of Sales. Currently, there are
only six major producers of gold: the Republic of South Africa ("South Africa"),
the United States, the Commonwealth of Independent States (the "CIS," formerly
the Union of Soviet Socialist Republics), Australia, Canada, and China. As South
Africa and the CIS are two major producers of gold and platinum, changes in
political, social and economic conditions affecting either country pose certain
risks to the Fund's investments. The social upheaval and related economic
difficulties in South Africa and the CIS, may, from time to time, influence the
price of gold and platinum and the share values of mining companies involved in
South Africa and the CIS and elsewhere. Investors should understand the special
considerations and risks related to such an investment emphasis, and its
potential effect on the Fund's per share value. South Africa depends
predominantly on gold sales for the foreign exchange necessary to finance its
imports, and its sales policy is necessarily subject to national economic and
political developments. The ability of the Fund to make investments in South
Africa may also be affected by changes in U.S. laws or regulations relating to
South Africa or foreign investments generally.
3. Concentration. As a fundamental policy, the Fund concentrates its investments
in gold mining shares and in gold, platinum, and silver bullion. The policy of
concentrating its investments involves additional investment risks, increased
problems of liquidity, and causes the value of its shares to fluctuate more than
if it invested in a greater number of industries.
6
<PAGE>
4. Tax or Currency Laws. Changes in tax or currency laws of the United States or
foreign countries, such as imposition of withholding taxes or other taxes or of
exchange controls on foreign currencies, may inhibit or increase the cost of the
Fund's pursuit of its investment program.
5. Unpredictable International Monetary Policies, Economic and Political
Conditions. There is the possibility that under unusual international monetary
or political conditions the Fund's assets might be less liquid or that the
change in value of its assets might be more volatile than would be the case with
other investments. In particular, because the price of gold and platinum may be
affected by unpredictable international monetary policies and economic
conditions there may be greater likelihood of a more dramatic impact upon the
market prices of securities of companies mining, processing or dealing in gold
and other precious metals than would occur in other industries.
6. Foreign Securities, Markets and Currencies. Investors should understand and
consider carefully the substantial risks involved in foreign investing.
Investing in foreign securities, which are generally denominated in foreign
currencies, and utilization of forward contracts on foreign currencies involve
certain considerations comprising both risk and opportunity not typically
associated with investing in U.S. securities. These considerations include:
fluctuations in currency exchange rates; restrictions on foreign investment and
repatriation of capital; costs of converting foreign currency into U.S. dollars;
greater price volatility and trading illiquidity; less public information on
issuers of securities; difficulty in enforcing legal rights outside of the
United States; lack of uniform accounting, auditing and financial reporting
standards; the possible imposition of foreign taxes, exchange controls, and
currency restrictions; and the possible greater political, economic, and social
instability of developing as well as developed countries including without
limitation nationalization, expropriation of assets, and war. Furthermore,
individual foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross national product, rate of inflation,
capital reinvestment, resource self-sufficiency, and balance of payments
position. These risks are often heightened when the Fund's investments are
concentrated in a small number of countries. In addition, because transactional
and custodial expenses for foreign securities are generally higher than for
domestic securities, the expense ratio of the Fund can be expected to be higher
than for investment companies investing exclusively in domestic securities.
Securities may be purchased by the Fund on U.S. and foreign stock exchanges
or in the over-the-counter market. Foreign stock markets are generally not as
developed or efficient as those in the United States. In most foreign markets
volume and liquidity are less than in the United States and, at times,
volatility of price can be greater than in the United States. Fixed commissions
on some foreign stock exchanges are higher than the negotiated commissions on
U.S. exchanges. There is generally less government supervision and regulation of
foreign stock exchanges, brokers and companies than in the United States. If the
Fund invests in countries in which settlement of transactions is subject to
delay, the Fund's ability to purchase and sell portfolio securities at the time
it desires may be hampered. Delays in settlement practices in foreign countries
may also affect the Fund's liquidity, making it more difficult to meet
redemption requests, or require the Fund to maintain a greater portion of its
assets in money market instruments in order to meet such requests. Some of the
securities in which the Fund invests may not be widely traded, and the Fund's
position in such securities may be substantial in relation to the market for
such securities. Accordingly, it may be difficult for the Fund to dispose of
such securities at prevailing market prices in order to meet redemption
requests.
Since investment in foreign securities usually involves foreign currencies
and since the Fund may temporarily hold cash in bank deposits in foreign
currencies in order to facilitate portfolio transactions, the value of the
assets of the Fund as measured in U.S. dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange control
regulations. For example, if the value of the U.S. dollar decreases relative to
a foreign currency in which a Fund investment is denominated or which is
temporarily held by the Fund to facilitate portfolio transactions, the value of
such Fund assets and the Fund's net asset value per share will increase, all
else being equal. Conversely, an increase in the value of the U.S. dollar
relative to such a foreign currency will result in a decline in the value of
such Fund assets and its net asset value per share. The Fund may incur
additional costs in connection with conversions of currencies and securities
7
<PAGE>
into U.S. dollars. The Fund will conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis, or through entering into
forward contracts. The Fund generally will not enter into a forward contract
with a term of greater than one year.
The Fund may hold a portion or all of its cash in the form of foreign
currencies. Because investments in foreign currencies as well as in bullion and
coins do not yield income, the Fund may not achieve its secondary objective
during periods when it holds significant positions in such investments. The Fund
purchases or sells gold, platinum, and silver bullion primarily of standard
weight at the best available prices in the New York bullion market (see
"Determination of Net Asset Value"). The Investment Manager retains discretion,
however, to purchase or sell bullion in other markets, including foreign
markets, if better prices can be obtained.
HOW TO PURCHASE SHARES
The Fund's shares are sold on a continuing basis at the net asset value per
share next determined after receipt and acceptance of the order by Bull & Bear
Service Center (see "Determination of Net Asset Value"). The minimum initial
investment is $1,000 for regular accounts and $500 for Individual Retirement
Accounts ("IRAs") and profit sharing plans. The minimum subsequent investment is
$100. The initial investment minimums are waived for investors electing to
invest $100 or more each month in the Fund through the Bull & Bear Automatic
Investment Program.
Bull & Bear Automatic Investment Program. By participating in the Bull & Bear
Automatic Investment Program, a shareholder can establish a convenient and
affordable long term investment program. The Program is designed to facilitate
the automatic monthly investment of $100 or more into the shareholder's Fund
account.
o The Bull & Bear Bank Transfer Plan lets shareholders electronically
purchase Fund shares on a certain day each month by transferring a
specified dollar amount from the shareholder's regular checking account,
NOW account, or bank money market deposit account.
o Through the Bull & Bear Salary Investing Plan, part or all of a
shareholder's salary may be invested electronically in shares of the Fund
at each pay period, depending upon the direct deposit program of the
shareholder's employer.
o The Bull & Bear Government Direct Deposit Plan allows the shareholder to
deposit automatically part or all of certain U.S. Government checks in the
shareholder's Fund account. Eligible U.S. Government checks include
payments for Social Security, pension benefits, military or retirement
benefits, salary, veteran's benefits and most other recurring payments.
For more information concerning this Program, or to request the necessary
authorization form(s), please call Bull & Bear Service Center, 1-800-847-4200.
Shareholders may terminate participation in the Program at any time by written
notice received at least 10 days prior to the scheduled investment date. The
Fund reserves the right to redeem any account if participation in the Program is
terminated and the account's value is less than $500. The Plans do not assure a
profit or protect against loss in a declining market.
Initial Investment. The Account Application that accompanies this Prospectus
should be completed, signed and, with a check or other negotiable bank draft
payable to Gold Investors, mailed to Bull & Bear Service Center, P.O. Box
419789, Kansas City, MO 64141-6789. Initial investments also may be made by
having your bank wire money, as set forth below, in order to avoid mail delays.
Subsequent Investments. Subsequent investments may be made at any time by wiring
money as set forth below, or by mailing a check or other negotiable bank draft
($100 minimum), made payable to Gold Investors, together with a Bull & Bear
FastDeposit form to Bull & Bear Service Center, P.O. Box 419789 Kansas City, MO
64141-6789. If that form is not used, a letter should indicate the Fund and
account number to which the subsequent investment is to be credited, and name(s)
of the registered owner(s).
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Investment by Telephone. Shareholders may purchase additional shares of the Fund
by telephone through the Automated Clearing House (ACH) system as long as the
shareholder's bank is a member of the ACH system and the shareholder has a
completed, approved authorization on file. The funding for the purchase will be
automatically deducted from the bank account designated on the shareholder's
authorization. For requests received by 3:00 p.m., eastern time, the investment
normally will be credited to the Fund account on the next business day of the
Fund. There is a minimum of $100 for each investment by telephone. Any
subsequent changes in bank account information must be submitted in writing and
accompanied by a sample voided check or deposit slip. To initiate an investment
by telephone, please call 1-800-847-4200.
Investment by Wire. When making an initial investment by wire, investors must
first telephone Bull & Bear Service Center, 1-800-847-4200, to give the name(s)
under which the account is to be registered, tax identification number, the name
of the bank sending the wire, and to be assigned a Bull & Bear Gold Investors
account number. Investors may then purchase shares by requesting their bank to
transmit immediately available funds ("Federal funds") by wire to the Transfer
Agent at: United Missouri Bank NA, ABA #10-10-00695; for Account Number
98-7052-724-3; Gold Investors, investor's name(s) and account number. The
account number and the investor's name(s) must be specified in the wire as they
are to appear on the account registration. In addition, the account number the
investor(s) has been assigned should be entered on the completed Account
Application and promptly forwarded to Bull & Bear Service Center, P.O. Box
419789, Kansas City, MO 64141-6789. This service is not available on days when
the Federal Reserve wire system is closed. Subsequent investments may be made at
any time through the wire procedure described above, which must include the
shareholder name(s) and account number, after notifying Bull & Bear Service
Center by telephone, as noted above.
Shareholder Accounts. By investing in the Fund, a shareholder has an account
established to which all full and fractional shares (to three decimal places)
will be credited, together with any dividends that are paid in additional shares
(see "Distributions and Taxes"). Stock certificates will be issued only for full
shares when requested in writing. In order to facilitate redemptions and
transfers, it is recommended that shareholders not request certificates.
Shareholders receive confirmation statements upon the purchase and sale of
shares.
When Orders are Effective. The purchase price for shares of the Fund is the net
asset value of such shares next determined after receipt and acceptance by Bull
& Bear Service Center of a purchase order in proper form. All checks are
accepted subject to collection at full face value in Federal funds and must be
drawn in U.S. dollars on a U.S. bank. The Fund reserves the right to reject any
order. Accounts are charged $30 by the Transfer Agent for submitting checks for
investment which are not honored by the investor's bank. The Fund may waive or
lower the investment minimums with respect to any person or class of persons.
SHAREHOLDER SERVICES
An investor participating in any of the Fund's special plans or services
may terminate or modify such participation at any time. Shares or cash should
not be withdrawn from any Tax-Advantaged Retirement Plan described below,
however, without consulting a tax adviser concerning possible adverse tax
consequences. Additional information regarding any of the following services is
available from the Fund's Distributor, Bull & Bear Service Center,
1-800-847-4200.
Check Writing Privilege for Easy Access. The Transfer Agent will, upon request,
provide shareholders with free, unlimited checks that may be made payable to the
order of anyone in any amount of not less than $250. The Fund will arrange for
the checks to be honored by United Missouri Bank ("UMB") for this purpose. This
Check Writing Privilege enables the shareholder to continue receiving dividends
on shares redeemed by check until such time as the check is presented to UMB for
payment. UMB has the right to refuse any checks which do not conform with its
requirements. The shareholder will be subject to UMB's rules and regulations
governing checking accounts, including a $20 charge for refused checks, which
may change without notice. When such a check is presented to UMB for payment,
the Transfer Agent, as the shareholder's agent, will cause the Fund to redeem a
sufficient number of full and fractional shares in the shareholder's account to
cover the amount of the check. The Fund generally will not honor for up to 10
days a check written by a shareholder that requires the redemption of shares
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recently purchased by check or until it is reasonably assured of payment of the
check representing the purchase. Since the value of Fund shares and of a
shareholder's account changes daily, shareholders should not attempt to close an
account by writing a check.
Dividend Sweep Privilege. Shareholders may elect to have invested automatically
either all dividends or all dividends and capital gain distributions paid by the
Fund in any other Bull & Bear Fund. Shares of the other Bull & Bear Fund will be
purchased at the current net asset value calculated on the payment date. For
more information concerning this privilege and the other Bull & Bear Funds, or
to request a Dividend Sweep Authorization Form, please call Bull & Bear Service
Center, 1-800-847-4200. Shareholders may cancel this privilege by mailing
written notification to Bull & Bear Service Center, P.O. Box 419789, Kansas
City, MO 64141-6789. To select a new Fund after cancellation, shareholders must
submit a new Authorization Form. Enrollment in or cancellation of this privilege
is generally effective three business days following receipt. This privilege is
available only for existing accounts and may not be used to open new accounts.
The Fund may modify or terminate this privilege at any time or charge a service
fee. No such fee currently is contemplated.
Systematic Withdrawal Plan. Shareholders who own Fund shares with a value of at
least $20,000 may elect an automatic withdrawal of cash in fixed or variable
amounts from their Fund accounts at monthly or quarterly intervals in the
minimum amount of $100. Under the Systematic Withdrawal Plan, all dividends and
other distributions, if any, are reinvested in the Fund.
Assignment. Shares of the Fund may be transferred to another owner. Instructions
are available from Bull & Bear Service Center, 1-800-847-4200.
Transfer Privileges. Shareholders may transfer their investment by exchanging at
least $500 worth of shares of the Fund for shares of any other Bull & Bear Fund
(provided the registration is exactly the same, the shares may be sold in the
shareholder's state of residence, and the exchange may otherwise legally be
made). Information, including a free prospectus, on any of the Funds listed
below is available from Bull & Bear Service Center, 11 Hanover Square, New York,
NY 10005, telephone 1-800-847-4200. The other Fund's prospectus should be read
in advance.
To implement a transfer, shareholders should call Bull & Bear Service
Center toll-free at 1-800-847-4200 between 9 a.m. and 5 p.m. eastern time, on
any business day of the Fund, and provide the following information: account
registration including address and number; taxpayer identification number;
percentage, number, or dollar value of shares to be redeemed; name and, if
different, the account number of the Bull & Bear Fund to be purchased; and, the
identity and telephone number of the caller. A "business day of the Fund" is any
day on which the New York Stock Exchange is open for business. The following are
not business days of the Fund: New Years Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The other Bull & Bear Funds are:
o Bull & Bear Dollar Reserves is a high quality money market fund investing
in U.S. Government securities. Income is free from most state and local
income taxes. Free unlimited check writing ($250 minimum per check). Pays
monthly dividends.
o Bull & Bear U.S. Government Securities Fund invests for a high level of
current income, liquidity, and safety of principal. Free unlimited check
writing ($250 minimum per check). Pays monthly dividends.
o Bull & Bear Municipal Income Fund invests for the highest possible income
exempt from Federal income tax consistent with preservation of principal.
Free unlimited check writing ($250 minimum per check). Pays monthly
dividends.
o Bull & Bear Global Income Fund seeks a high level of income from a global
portfolio of primarily investment grade fixed income securities. Free
unlimited check writing ($250 minimum per check). Pays monthly dividends.
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o Bull & Bear Quality Growth Fund seeks growth of capital and income from a
portfolio of common stocks of large, quality companies with potential for
significant growth of earnings and dividends.
o Bull & Bear U.S. and Overseas Fund invests worldwide for the highest
possible total return.
o Bull & Bear Special Equities Fund invests aggressively for maximum capital
appreciation.
Transfer requests received between 9 a.m. and 4 p.m. eastern time, on any
business day of the Fund, will be effected at the net asset values of the Fund
and the other Bull & Bear Fund as determined at the close of regular trading on
the next business day of the Fund. Transfer requests received between 4 p.m. and
5 p.m. eastern time, on any business day of the Fund, will be effected at the
close of regular trading on the next business day of the Fund. Shareholders
unable to reach Bull & Bear Service Center at the above telephone number may, in
emergencies, call 1-212-363-1100 or communicate by fax 1-212-363-1103 or cable
to the address BULLNBEAR NEWYORK. Transfers may be difficult or impossible to
implement during periods of rapid changes in economic or market conditions.
Transfer privileges may be terminated or modified by the Fund upon 60 days'
notice. For tax purposes, transfers are treated as a redemption and purchase of
shares. Shareholders may give transfer instructions to Bull & Bear Service
Center by telephone without further documentation. If certificates have been
issued to the shareholder, this procedure may be utilized only if, prior to
giving telephone instructions, the shareholder delivers the certificates to the
Transfer Agent for deposit into the shareholder's account.
o Bull & Bear Securities (Discount Brokerage Account) Transfers. Shareholders
with an account at Bull & Bear Securities, Inc., an affiliate of the
Investment Manager and a wholly owned subsidiary of Bull & Bear Group, Inc.
offering discount brokerage services, may access their investment in any of
the Bull & Bear Funds to pay for securities purchased in their brokerage
account and have proceeds of securities sold in their brokerage account
used to purchase shares of any of the Bull & Bear Funds. Shareholders may
request a Discount Brokerage Account Application from Bull & Bear
Securities, Inc., 1-800-262-5800.
Tax-Advantaged Retirement Plans. These plans provide an opportunity for
individuals to set aside money for retirement in a tax-advantaged account in
which earnings can be compounded without incurring a tax liability until the
money and earnings are withdrawn. Contributions may be fully or partially
deductible for Federal income tax purposes as noted below. Information on any of
the plans described below is available from Bull & Bear Service Center,
1-800-847-4200.
The minimum investment to establish a Bull & Bear or other retirement plan
is $500. Minimum subsequent investments are $100. The initial investment
minimums are waived for investors electing to invest $100 or more each month in
the Fund through the Bull & Bear Automatic Investment Program. There are no
set-up fees for any Bull & Bear Retirement Plans. Subject to change on 30 days'
notice, the plan custodian charges Bull & Bear IRAs a $10 annual fiduciary fee
and $10 for each distribution prior to age 59 1/2; however, the annual fiduciary
fee is waived for IRAs with assets of $10,000 or more and for shareholders
investing regularly through the Bull & Bear Automatic Investment Program.
o Individual Retirement Accounts. Anyone with earned income who is less than
age 70 1/2at the end of the tax year, even if also participating in another
type of retirement plan, may establish an IRA and contribute each year up
to $2,000 or 100% of earned income, whichever is less, and an aggregate of
up to $2,250 when a non-working spouse is also covered in a separate
spousal account. If each spouse has at least $2,000 of earned income each
year, they may contribute up to $4,000 annually. Also, employers may make
contributions to an IRA on behalf of an individual under a Simplified
Employee Pension Plan ("SEP") an amount up to 15% of up to $150,000 of
compensation. Generally, taxpayers may contribute to an IRA during the tax
year and through the next year until the income tax return for that year is
due, without regard to extensions. For example, most individuals may
contribute for the 1994 tax year from January 1, 1994 through April 15,
1995.
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Deductibility. Contributions to IRAs are fully deductible for most
taxpayers. For a taxpayer who is an active participant in an
employer-maintained retirement plan (or whose spouse is), a portion of IRA
contributions is deductible if adjusted gross income (before the IRA
deductions) is $40,000-$50,000 (if married) and $25,000-$35,000 (if
single). Only IRA contributions by a taxpayer who is an active participant
in an employer-maintained retirement plan (or whose spouse is) and has
adjusted gross income of more than $50,000 (if married) and $35,000 (if
single) will not be deductible. An eligible individual may establish a Bull
& Bear IRA under the prototype plan available through the Fund, even though
such individual or spouse actively participates in an employer-maintained
retirement plan.
o IRA Transfer and Rollover Accounts. Special forms are available from Bull &
Bear Service Center, 1-800-847-4200, which make it easy to transfer or
roll over IRA assets to a Bull & Bear IRA. An IRA may be transferred from
one financial institution to another without adverse tax consequences.
Similarly, no taxes need be paid on a lump-sum distribution which an
individual may receive as a payment from a qualified pension or profit
sharing plan due to retirement, job termination or termination of the plan,
so long as the assets are put into an IRA Rollover account within 60 days
of the receipt of the payment. Withholding for Federal income tax purposes
is required at the rate of 20% for "eligible rollover distributions" made
from any retirement plan (other than an IRA) that are not directly
transferred to an "eligible retirement plan," such as a Bull & Bear
Rollover Account.
o Profit Sharing and Money Purchase Plans provide an opportunity to
accumulate earnings on a tax-deferred basis by permitting corporations,
self-employed individuals (including partners) and their employees
generally to contribute (and deduct) up to $30,000 annually or, if less,
25% (15% for profit sharing plans) of compensation or self-employment
earnings up to a maximum of $150,000. Corporations and partnerships, as
well as all self-employed persons, are eligible to establish these Plans.
In addition, a person who is both salaried and self-employed, such as a
college professor who serves as a consultant, may adopt these retirement
plans based on self-employment earnings.
o Section 403(b)(7) Accounts. Section 403(b)(7) of the Internal Revenue Code
of 1986, as amended ("Code"), permits the establishment of custodial
accounts on behalf of employees of public school systems and certain
tax-exempt organizations. A participant in such a plan does not pay taxes
on any contributions made by the participant's employer to the
participant's account pursuant to a salary reduction agreement, up to a
maximum amount, or "exclusion allowance." The exclusion allowance is
generally computed by multiplying the participant's years of service times
20% of the participant's compensation included in gross income received
from the employer (reduced by any amount previously contributed by the
employer to any 403(b)(7) account for the benefit of the participant and
excluded from the participant's gross income). However, the exclusion
allowance may not exceed the lesser of 25% of the participant's
compensation (limited as above) or $30,000. Contributions and subsequent
earnings thereon are not taxable until withdrawn, when they are received as
ordinary income.
HOW TO REDEEM SHARES
Liquidity. Generally, shareholders may require the Fund to redeem their shares
by submitting a written request to Bull & Bear Service Center, P.O. Box 419789,
Kansas City, MO 64141-6789, signed by the record owner(s). If a written
redemption request is sent to the Fund, it will be forwarded to the above
address. If stock certificates have been issued for shares being redeemed, they
must accompany the written request. In addition, a minimum of $500 may be
transferred at any time by toll-free telephone into Bull & Bear Dollar Reserves,
Bull & Bear's money market fund, offering free personalized checks, a $250 check
writing minimum ($100 minimum for Bull & Bear Securities Performance Plus(sm)
discount brokerage accounts), and no limit on the number of checks that may be
written. The Bull & Bear Dollar Reserves prospectus should be read in advance
and an Account Application submitted for the check writing privilege.
Expedited Redemption. Shareholders redeeming at least $1,000 worth of shares
(for which certificates have not been issued) may obtain expedited redemption by
calling Bull & Bear Service Center, 1-800-847-4200. If this automatic benefit
has been declined by the shareholder on the Account Application, a separate
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Authorization Form must be completed and returned to the Transfer Agent before
the request can be accepted. Shareholders may request that payment be sent to
the shareholder's bank designated on the authorization by Federal funds wire (or
if a check is requested, by regular mail) or the shareholder's address of record
by regular mail.
To implement an expedited redemption, shareholders should call Bull & Bear
Service Center toll-free at 1-800-847-4200 between 9 a.m. and 5 p.m. eastern
time, on any business day of the Fund, and provide the following information:
Fund account registration including address, account number, and taxpayer
identification number; number, percentage, or dollar value of shares to be
redeemed; whether the proceeds are to be mailed to the shareholder's address of
record, or mailed or wired to the shareholder's bank; the bank's name, address,
ABA routing number, bank account registration and account number, and a contact
person's name and telephone number; and the identity and telephone number of the
caller. Shareholders unable to reach Bull & Bear Service Center at the above
telephone number may, in emergencies, call 1-212-363-1100 or communicate by fax
1-212-363-1103 or cable to the address BULLNBEAR NEWYORK. Expedited redemptions
may be difficult or impossible to implement during periods of rapid changes in
economic or market conditions. Expedited redemption privileges may be terminated
or modified by the Fund upon 60 days' notice.
Expedited redemption requests received between 9 a.m. and 4 p.m., eastern
time, on any business day of the Fund, will be effected at the net asset values
of the Fund and the other Bull & Bear Fund as determined at the close of
business that day. Transfer requests received between 4 p.m. and 5 p.m., eastern
time, on any business day of the Fund, will be effected at the close of business
on the next day the New York Stock Exchange is open for trading. Shareholders
unable to reach Bull & Bear Service Center at the above telephone number may, in
emergencies, call 1-212-363-1100 or communicate by fax 1-212-363-1103 or cable
to the address BULLNBEAR NEWYORK..
Redemption Price. The redemption price is the net asset value per share next
determined after receipt of the redemption request in proper form. Registered
broker/dealers, investment advisers, banks, and insurance companies may open
accounts and redeem shares by telephone or wire and may impose a charge for
handling purchases and redemptions when acting on behalf of others. Payment for
shares redeemed will be made as soon as possible, ordinarily within 7 days after
receipt of the redemption request in proper form. The right of redemption may
not be suspended, or date of payment delayed more than 7 days, except for any
period (i) when the New York Stock Exchange is closed or trading thereon is
restricted as determined by the SEC; (ii) under emergency circumstances as
determined by the SEC that make it not reasonably practicable for the Fund to
dispose of securities owned by it or fairly to determine the value of its
assets; or (iii) as the SEC may otherwise permit. The mailing of proceeds on
redemption requests involving any shares purchased by personal, corporate, or
government check or ACH transfer is generally subject to a 10 day delay to allow
the check or transfer to clear. The 10 day clearing period does not affect the
trade date on which a purchase or redemption order is priced, or any dividends
and capital gain distributions to which a shareholder may be entitled through
the date of redemption. Fund check writing redemption checks received during the
10 day clearing period will be rejected and marked uncollected. The clearing
period does not apply to purchases made by wire, or cashier's, treasurer's, or
certified checks. Due to the relatively higher cost of maintaining small
accounts, the Fund reserves the right, upon 60 days' notice, to redeem any
account, other than IRA and other Bull & Bear prototype retirement plan
accounts, worth less than $500 except if solely from market action, unless an
investment is made to restore the minimum value.
Telephone Privileges. Shareholders automatically have all telephone privileges
to, among other things, authorize an expedited redemption or transfer, unless
declined on the Account Application or otherwise in writing. Neither the Fund
nor Bull & Bear Service Center shall be liable for any loss or damage for acting
in good faith upon instructions received by telephone and believed to be
genuine. The Fund employs reasonable procedures to confirm that instructions
communicated by telephone are genuine and if it does not, it may be liable for
any losses due to unauthorized or fraudulent transactions. These procedures
include requiring some form of personal identification prior to acting upon
instructions received by telephone, providing written confirmation of such
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transactions, or tape recording of telephone instructions. The Fund may modify
or terminate any telephone privileges or shareholder services (except as noted)
at any time without notice.
Signature Guarantees. No signature guarantees are required when payment is to be
made to the shareholder of record at the shareholder's address of record. If the
proceeds of the redemption are to be paid to a non-shareholder of record, or to
an address other than the address of record, or the shares are to be assigned,
the Transfer Agent may require that the owner's signature be guaranteed by an
entity acceptable to the Transfer Agent, such as a commercial bank or trust
company or member firm of a national securities exchange or of the NASD. A
notary public may not guarantee signatures. The Transfer Agent may require
further documentation. The Transfer Agent may restrict the mailing of redemption
proceeds to a shareholder's address of record within 30 days of such address
being changed unless the shareholder provides a signature guarantee, as
described above.
DISTRIBUTIONS AND TAXES
Distributions. The Fund pays dividends annually to its shareholders from its net
investment income, if any. The Fund also makes an annual distribution to its
shareholders out of any net realized capital gains, after off setting any
capital loss carryover, and any net realized gains from foreign currency
transactions. Dividends and other distributions, if any, are declared and
payable to shareholders of record on a date in December of each year. Such
distributions may be paid in January of the following year in which event they
will be deemed received by the shareholders on the preceding December 31 for tax
purposes. The Fund may also make an additional distribution following the end of
its fiscal year out of any undistributed income and capital gains. Dividends and
other distributions are made in additional shares of the Fund, unless the
shareholder elects to receive cash on the Account Application or so elects
subsequently by calling Bull & Bear Service Center, 1-800-847-4200. For Federal
income tax purposes, dividends and other distributions are treated in the same
manner whether received in additional Fund shares or in cash. Any election will
remain in effect until Bull & Bear Service Center is notified by the shareholder
to the contrary.
Taxes. The Fund intends to continue to qualify for treatment as a regulated
investment company under the Code so that it will be relieved of Federal income
tax on that part of its investment company taxable income (generally consisting
of net investment income, net short term capital gains, and net gains from
certain foreign currency transactions) and net capital gain (the excess of net
long term capital gain over net short term capital loss) that is distributed to
its shareholders. Dividends paid by the Fund from its investment company taxable
income (whether paid in cash or in additional Fund shares) generally are taxable
to shareholders, other than shareholders that are not subject to tax on their
income, as ordinary income to the extent of the Fund's earnings and profits; a
portion of those dividends may be eligible for the corporate dividends-received
deduction. Distributions by the Fund of its net capital gain (whether paid in
cash or in additional Fund shares) when designated as such by the Fund, are
taxable to the shareholders as long term capital gains, regardless of how long
they have held their Fund shares. The Fund notifies its shareholders following
the end of each calendar year of the amounts of dividends and capital gain
distributions paid (or deemed paid) that year and of any portion of those
dividends that qualifies for the corporate dividends-received deduction. Any
dividend or other distribution paid by the Fund will reduce the net asset value
of Fund shares by the amount of the distribution. Furthermore, such
distribution, although similar in effect to a return of capital, will be subject
to taxes.
The Fund's investments in gold, platinum and silver bullion and coins may
result in the Fund's failing to meet certain income or asset tests that must be
satisfied to qualify as a regulated investment company under the Code.
Accordingly, the Investment Manager will endeavor to manage the Fund's portfolio
so that (1) income and gains derived from investments in bullion and coins (and
any other "non-qualified" income) will not exceed 10% of the Fund's gross annual
income and (2) less than 50% of the value of the Fund's total assets as of the
close of each quarter of its taxable year will be invested in bullion and coins
(and any other "non-qualified assets"). If the Fund did not qualify for taxation
as a regulated investment company, it would be required to pay Federal income
tax on its net income, which would reduce the amount available for distribution
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to shareholders. The Fund notifies its shareholders following the end of each
calendar year of the amounts of dividends and capital gain distributions paid
(or deemed paid) that year and of any portion of those dividends that qualifies
for the corporate dividends-received deduction.
The Fund is required to withhold 31% of all dividends, capital gain
distributions and redemption proceeds payable to any individuals and certain
other noncorporate shareholders who do not provide the Fund with a correct
taxpayer identification number. Withholding at that rate from dividends and
capital gain distributions also is required for such shareholders who are
otherwise subject to backup withholding.
The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Fund and its shareholders; see the
Statement of Additional Information for a further discussion. Because other
Federal, state and local tax considerations may apply, investors are urged to
consult their tax advisers.
DETERMINATION OF NET ASSET VALUE
The value of a share of the Fund is based on the value of its net assets.
The Fund's net assets are the total of the Fund's investments and all other
assets minus any liabilities. The value of one share is determined by dividing
the net assets by the total number of shares outstanding. This is referred to as
"net asset value per share," and is determined as of the close of regular
trading on the New York Stock Exchange (currently, 4 p.m. eastern time, unless
weather, equipment failure or other factors contribute to an earlier closing)
each business day of the Fund.
Portfolio securities and other assets of the Fund are valued primarily on
the basis of market quotations, if readily available. Foreign securities, if
any, are valued on the basis of quotations from a primary market in which they
are traded and are translated from the local currency into U.S. dollars using
current exchange rates. Securities, and other assets for which quotations are
not readily available will be valued at fair value as determined in good faith
by or under the direction of the Board of Directors.
THE INVESTMENT MANAGER
Bull & Bear Advisers, Inc. (the "Investment Manager") acts as general
manager of the Fund, being responsible for the various functions assumed by it,
including the regular furnishing of advice with respect to portfolio
transactions. The Investment Manager manages the investment and reinvestment of
the assets of the Fund, subject to the control and final direction of the Board
of Directors. The Investment Manager is authorized to place portfolio
transactions with Bull & Bear Securities, Inc., an affiliate of the Investment
Manager, and may allocate brokerage transactions by taking into account the
sales of shares of the Fund and the other Bull & Bear Funds. The Investment
Manager may also allocate portfolio transactions to broker/dealers that remit a
portion of their commissions as a credit against the Fund's expenses.
For its services, the Investment Manager receives an investment management
fee, payable monthly, based on the average daily net assets of the Fund, at the
annual rate of 0.70% of the first $250 million, of 0.625% from $250 million to
$500 million, and 0.50% over $500 million. From time to time, the Investment
Manager may reimburse all or part of this fee to improve the Fund's yield and
total return. The Investment Manager provides certain administrative services to
the Fund at cost. During the fiscal year ended June 30, 1994, the investment
management fees paid by the Fund represented approximately 0.70% of its average
daily net assets. The Investment Manager is a wholly owned subsidiary of Bull &
Bear Group, Inc. ("Group"). Group, a publicly owned company whose securities are
listed on NASDAQ and traded in the over-the-counter market, is a New York based
manager of mutual funds and discount brokerage services. Bassett S. Winmill may
be deemed a controlling person of Group and, therefore, may be deemed a
controlling person of the Investment Manager.
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DISTRIBUTION OF SHARES
Pursuant to a Distribution Agreement between the Fund and Bull & Bear
Service Center, Inc. (the "Distributor") the Distributor to acts as the Fund's
exclusive agent for the sale of Fund shares. The Fund has also adopted a plan of
distribution (the "Plan") pursuant to Rule 12b-1 under the Investment Company
Act of 1940 ("1940 Act"). Pursuant to the Plan, the Fund pays the Distributor
monthly a distribution fee in an amount of three-quarters of one percent per
annum of the Fund's average daily net assets and a service fee in an amount of
one-quarter of one percent per annum of the Fund's average daily net assets. The
service fee portion is intended to cover personal services provided to
shareholders in the Fund and the maintenance of shareholder accounts. The
service fee may be retained or passed through by the Distributor to brokers,
banks and others who provide services to Fund shareholders. The distribution fee
portion is intended to cover all other activities and expenses primarily
intended to result in the sale of the Fund's shares. The Fund will pay the fees
to the Distributor until either the Plan is terminated or not renewed. In that
event, the Distributor's expenses in excess of fees received or accrued through
the termination day will be the Distributor's sole responsibility and not
obligations of the Fund. During the period they are in effect, the Distribution
Agreement and Plan obligate the Fund to pay fees to the Distributor as
compensation for its service and distribution activities. If the Distributor's
expenses exceed the fees, the Fund will not be obligated to pay any additional
amount to the Distributor and, if the Distributor's expenses are less than such
fees, it may realize a profit. Certain other advertising and sales materials may
be prepared which relate to the promotion of the sale of shares of the Fund and
one or more other Bull & Bear Funds. In such cases, the expenses will be
allocated among the Funds involved based on the inquiries resulting from the
materials or other factors deemed appropriate by the Board of Directors. The
costs of personnel and facilities of the Distributor to respond to inquiries by
shareholders and prospective shareholders will also be allocated based on such
relative inquiries or other factors. There is no certainty that the allocation
of any of the foregoing expenses will precisely allocate to the Fund costs
commensurate with the benefits it receives, and it may be that the other Funds
and Bull & Bear Securities, Inc. will benefit therefrom.
PERFORMANCE INFORMATION
From time to time the Fund may advertise its "average annual total return"
or "total return" (which may be referred to as cumulative total return or
cumulative growth) over specified periods. Average annual total return is
calculated pursuant to a standardized formula which assumes a hypothetical
$10,000 investment in the Fund was redeemed at the end of a stated period of
time, after giving effect to the reinvestment of dividends and distributions
during the period. The return is expressed as a percentage rate which, if
applied on a compounded annual basis, would result in the redeemable value of
the investment at the end of the period. Total return is computed on a per share
basis, assumes the reinvestment of dividends and distributions, and is
calculated by combining the income and principal changes for a specified period
and dividing by the net asset value per share at the beginning of the period.
Advertisements may show total return as a percentage rate or as the value of a
hypothetical investment at the end of the period. The Fund's performance may be
compared to the performance of broad groups of comparable mutual funds, or the
performance of unmanaged indexes of comparable securities. The Fund's total
return is based upon historical performance information and not intended to
indicate future performance.
[The following plot points were used to construct a graph in the printed
prospectus showing the results of an initial investment of $10,000 in the Fund
from July 1, 1984 to June 30, 1994 with dividends and capital gains reinvested.
The Fund's average annual total return for periods ending June 30, 1994 are as
follows: one year (6.92)%; five years 3.88%; ten years 4.04%.]
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund $8,583 8,422 15,884 13,156 12,291 12,473 11,691 10,922 15,960 14,862
S&P500 13,099 17,789 22,269 20,747 25,006 29,128 31,284 35,482 40,313 40,882
</TABLE>
16
<PAGE>
The Fund's performance during the year generally reflected primarily
fluctuations in the prices of gold and other precious metals. Although prices
increased over the April 1993 through August 1994 period, short term
fluctuations displayed substantial up and down volatility in response to global
economic and political events. Commodity and hedge fund speculation, changing
Far East economic demand and political developments, European currency turmoil,
international trade activity, jewelry manufacturing levels, and central bank
policies all tended to affect price levels over the recent fiscal year period.
The Fund's investments in South Africa were also specifically affected by the
general elections there and the resulting impact on the discount between the
financial rand (with which the Fund may purchase South African securities) and
the commercial rand (for domestic South African entities). Over the fiscal year,
the Fund engaged in futures and options transactions to fix the costs of future
investments, to hedge against potential price declines in the market value of
certain portfolio securities, and to enhance returns. The Fund did not invest in
coins although permitted to do so by the Fund's current investment policies
during the year.
CAPITAL STOCK
The Fund, a non-diversified open-end investment company organized as a
Maryland corporation in 1987, commenced investment operations in January 1988
when it merged with Bull & Bear Gold Investors Ltd. (formerly Golconda Investors
Ltd.), a New York corporation. The Fund is authorized to issue up to 500,000,000
shares of common stock ($.01 par value). The Fund's stock is freely assignable
by way of pledge (as, for example, for collateral purposes), gift, settlement of
an estate and also by an investor to another investor. Each share has equal
dividend, voting, liquidation and redemption rights with every other share. The
shares have no preemptive, conversion or cumulative voting rights and they are
not subject to further call or assessment. The Board of Directors of the Fund
may establish additional series or classes of shares, although it has no current
intention of doing so.
In accordance with the provisions of the General Corporation Law of the
State of Maryland applicable to open-end investment companies incorporated in
Maryland and registered under the 1940 Act, as is the Fund, the Fund's By-Laws
provide that there will be no annual meeting of shareholders in any year except
as required by law. In practical effect, this means that the Fund will not hold
an annual meeting of shareholders in years in which the only matters which would
be submitted to shareholders for their approval are the election of Directors
and ratification of the Directors' selection of accountants, although holders of
10% of the Fund's shares may call a meeting at any time. There will normally be
no meetings of shareholders for the purpose of electing Directors unless fewer
than a majority of the Directors holding office have been elected by
shareholders. Shareholder meetings will be held in years in which shareholder
vote on the Fund's investment management agreement, plan of distribution, or
fundamental investment objective, policies or restrictions is required by the
1940 Act.
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111, acts as
custodian of the Fund's assets and may appoint one or more subcustodians
provided such subcustodianship is in compliance with the rules and regulations
promulgated under the 1940 Act. The Fund may maintain a portion of its assets in
foreign countries pursuant to an agreement between the custodian and Citibank,
N.A. and through the custodian with Euro-clear. Utilization by the Fund of such
foreign custodial arrangements will increase the Fund's expenses. All of the
Fund's gold, platinum, and silver bullion is held by Wilmington Trust Company,
Rodney Square North, Wilmington, DE 19890. The custodian also performs certain
accounting services for the Fund.
The Fund's transfer and dividend disbursing agent is Supervised Service
Company, P.O. Box 419789, Kansas City, MO 64141-6789. The Distributor provides
certain transfer agency services to the Fund and is reimbursed its cost by the
Fund. The costs of facilities, personnel and other related expenses are
allocated among the Bull & Bear Funds based on the relative number of inquiries
and other factors deemed appropriate by the Board of Directors.
17
<PAGE>
BULL
&
BEAR-----------------------------------------------------------------------
Performance Driven (R)
BULL & BEAR
GOLD INVESTORS LTD.
Supplement of November 1, 1994 to the
Prospectus dated November 1, 1994
The following is intended to substitute for certain information contained in the
Prospectus in the sections entitled "How to Purchase Shares," "Shareholder
Services," "How to Redeem Shares," and "Custodian and Transfer Agent".
Until November 18, 1994, Fund/Plan Services, Inc., P.O. Box 8070, Philadelphia,
PA 19101 is the Transfer Agent for the Fund. Accordingly, until November 18,
1994, the following information is applicable:
Initial Investment. The Account Application that accompanies this Prospectus
should be completed, signed and, with a check or other negotiable bank draft
payable to Global Income Fund, mailed to Bull & Bear Service Center, P.O. Box
8070, Philadelphia, PA 19101.
Subsequent Investments. Subsequent investments may be made at any time by wiring
money as set forth below, or by mailing a check or other negotiable bank draft
($100 minimum), made payable to Gold Investors together with a Bull & Bear
FastDeposit form to Bull & Bear Service Center, P.O. Box 410677, Kansas City, MO
64179.
Investing by Wire. When making an initial investment by wire, investors must
first telephone Bull & Bear Service Center, 1-800-847-4200, to give the name(s)
under which the account is to be registered, tax identification number, the name
of the bank sending the wire, and to be assigned a Bull & Bear Gold Investors
Ltd. account number. Investors may then purchase shares by requesting their bank
to transmit immediately available funds ("Federal funds") by wire to the
Transfer Agent at: United Missouri Bank NA, ABA #10-10-00695/Attn: Fund/Plan
Services, Inc. A/C 98-7037-071-9/Gold Investors, investor's name(s) and account
number. In addition, the account number the investor(s) has been assigned should
be entered on the completed Account Application and promptly forwarded to Bull &
Bear Service Center, P.O. Box 8070, Philadelphia, PA 19101.
Dividend Sweep Privilege. Shareholders may cancel this Privilege by mailing
written notification to Bull & Bear Service Center, P.O. Box 8070, Philadelphia,
PA 19101.
Liquidity. Generally, shareholders may require the Fund to redeem their shares
by submitting a written request to Bull & Bear Service Center, P.O. Box 8070,
Philadelphia, PA 19101, signed by the record owner(s).
GIL-11/4.WI
18
<PAGE>
BULL
&
BEAR-----------------------------------------------------------------------
Performance Driven (R)
BULL & BEAR
GOLD INVESTORS LTD.
Supplement dated June __, 1995 to the
Prospectus dated November 1, 1994
Bull & Bear Advisers, Inc. is the Fund's Investment Manager. The Board of
Directors has approved, subject to shareholder approval, a subadvisory agreement
between the Investment Manager and Lion Resource Management Limited. Pursuant to
the Subadvisory Agreement, the Subadviser will advise and consult with the
Investment Manager regarding the selection, clearing and safekeeping of the
Fund's portfolio investments and assists in pricing and generally monitoring
such investments. The Subadviser also will provide the Investment Manager with
advice as to allocating the Fund's portfolio assets among various countries,
including the United States, and among equities, bullion, and other types of
investments, including recommendations of specific investments. The Investment
Manager, not the Fund, will pay the Subadviser monthly a fee based upon the
Fund's performance and its total net assets. Based in London (U.K.), the
Subadviser is a part of Lion Mining Group, which specializes in gold mining and
resource company investment management, corporate finance and consulting. For
shareholders of record on July __, 1995, proxy material describing the foregoing
more fully will be mailed on or about July __, 1995 and is available without
charge by calling Bull & Bear Service Center, 1-800-847-4200. A meeting of
shareholders to consider the Subadvisory Agreement is scheduled for August __,
1995.
GL-S-6/5
