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. The Fund may also
borrow money from banks from time to time to purchase or carry securities. Such
borrowing is speculative and increases both investment opportunity and
investment risk. 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 contains information you should know about the Fund before
you invest. Please keep it for future reference. The Fund's Statement of
Additional Information, dated September 2, 1998, has been filed with the
Securities and Exchange Commission ("SEC") and is incorporated by reference in
this prospectus. It is available at no charge by calling toll-free at
1-888-503-FUND (1-888-503-3863). The SEC maintains a Web site
(http://www.sec.gov) that contains the Fund's Statement of Additional
Information, material incorporated by reference, and other information regarding
registrants that file electronically with the SEC, as does the Fund. Fund shares
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 TABLES. The tables and example below are designed to help you understand
the various costs and expenses that you will bear directly or indirectly as an
investor in the Fund. A $2 monthly account fee is charged if your average
monthly balance is less than $500, unless you are in the Bull & Bear Automatic
Investment Program (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 Fee within 30 days of purchase............................. 1.00%
Redemption Fee after 30 days of purchase............................... NONE
Exchange Fees.......................................................... NONE
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees....................................................... 0.98%
12b-1 Fees............................................................ 1.00%
Other Expenses........................................................ 1.90%
Total Fund Operating Expenses......................................... 3.88%
EXAMPLE 1 year 3 years 5 years 10 years
------ ------- ------- --------
You would pay the following expenses
on a $1,000 investment, assuming a $39 $118 $200 $410
5% annual return and a redemption
at the end of each time period:
The example set forth above assumes reinvestment of all dividends and other
distributions and uses an assumed 5% annual rate of return as required by the
SEC. THE EXAMPLE IS AN ILLUSTRATION ONLY AND SHOULD NOT BE CONSIDERED AN
INDICATION OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS AND EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN. The percentages given for annual Fund
expenses are based on the Fund's operating expenses and average daily net assets
during its fiscal year ended June 30, 1998. 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" includes amounts paid to the Fund's
custodian and Transfer Agent and reimbursable to the Investment Manager and the
Distributor for certain administrative and shareholder services, and interest
expense from the Fund's bank borrowing.
FINANCIAL HIGHLIGHTS are presented below for a share of capital stock
outstanding throughout each period. The following information is supplemental to
the Fund's audited financial statements and report thereon of Tait, Weller &
Baker, independent accountants, appearing in the June 30, 1998 Annual Report to
Shareholders and incorporated by reference in the Statement of Additional
Information.
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
PER SHARE DATA 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net asset value at beginning of period $7.14 $14.02 $13.13 $15.71 $16.98 $11.62 $12.49 $13.36 $13.27 $14.31
Income from investment operations:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net investment income (loss)... (.12) (.25) (.22) -- (.11) (.03) (.10) .03 .10 .02
Net realized and unrealized gain(loss)
on investments................. (2.94) (4.36) 2.72 (1.13) (1.05) 5.39 (.72) (.87) .12 (1.03)
------ ------ ---- ------ ------ ---- ----- ----- --- ------
Total from investment operations (3.06) (4.61) 2.50 (1.13) (1.16) 5.36 (.82) (.84) .22 (1.01)
------ ------ ---- ------ ------ ---- ----- ----- --- ------
Less distributions:
Distributions from net investment income -- -- -- -- -- -- (.05) (.03) (.13) (.03)
Distributions from net realized gains.. (.41) (2.27) (1.61) (1.45) (.11) -- -- -- -- --
Distributions from paid-in-capital -- -- -- -- -- -- -- -- -- --
Total distributions........... (.41) (2.27) (1.61) (1.45) (.11) -- (.05) (.03) (.13) (.03)
----- ------ ------ ------ ----- ----- ----- ----- -----
Net asset value at end of period.. $3.67 $7.14 $14.02 $13.13 $15.71 $16.98 $11.62 $12.49 $13.36 $13.27
===== ===== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN...................... (43.45)% (37.81)% 21.01% (8.01)% (6.92)% 46.13% (6.57)% (6.23)% 1.51% (7.04)%
================ ====== ======= ======= ====== ======= ======= ===== =======
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $8,324 $15,217 $27,489 $29,007 $36,603 $47,489 $24,939 $33,133 $40,301 $37,791
====== ======= ======= ======= ======= ======= ======= ======= ======= =======
Ratio of expenses to average net assets 3.57% 2.77% 2.93% 2.82% 2.54% 3.01% 2.96% 2.59% 2.62% 2.46%
(a)(b)(c) ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
Ratio of net investment income (loss) to
average net assets(d)(e).......... (2.09)% (1.89)% (1.49)% 0.12% (.65)% .27)% (.61)% .34% .65% .17%
======= ======= ======= ===== ====== ===== ====== ==== ==== ====
Portfolio turnover rate........... 136% 37% 61% 158% 129% 156% 97% 95% 65% 60%
==== === === ==== ==== ==== === === === ===
Average commission per share...... $.0118 $0.0180 $0.0202
====== ======= =======
</TABLE>
(a) Ratio prior to reimbursement by the Investment Manager was 2.70% in 1989.
(b) Ratios including interest expense were 3.88%, 2.94%, 3.05%, 2.93%, and
2.57%, for the years ending June 30, 1998, 1997, 1996, 1995, and 1994,
respectively. (c) Ratio after custodian credits was 3.51% for the year ended
June 30, 1998. (d) Ratio prior to reimbursement by the Investment Manager was
(.07)% in 1989. (e) Ratios including interest expense were (2.40)%, (2.06)%,
(1.61)%, .01%, and (.68)%, for the years ending June 30, 1998, 1997, 1996, 1995,
and 1994, respectively.
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 Year 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>
1998 $717,836 $618,636 2,226,376 $0.28
1997 1,276,840 471,972 2,086,047 0.23
1996 0 501,113 2,115,363 0.24
1995 0 464,223 2,446,903 0.19
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>
TABLE OF CONTENTS
Expense Tables.......................2 Distributions and Taxes..............14
Financial Highlights.................2 Determination of Net Asset Value.....15
General..............................3 Investment Manager...................16
The Fund's Investment Program........3 Distribution of Shares...............16
Risk Factors.........................5 Performance Information..............17
How to Purchase Shares...............9 Capital Stock........................17
Shareholder Services................11 Custodian and Transfer Agent.........17
How to Redeem Shares................13
GENERAL
PURPOSE OF THE FUND. The Fund is designed for investors 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
inflation hedges.
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
investments in bullion and gold mining shares may offer greater capital
appreciation potential during inflationary and politically unstable periods.
Additionally, since the market action of gold mining shares has tended to move
independently of or against the market trends of other sectors of the economy,
adding an investment in the Fund to your portfolio may increase your overall
return and may reduce overall fluctuations in portfolio value. You should not,
however, consider a purchase of Fund shares to be a complete investment program.
There is no assurance that the Fund will achieve its objectives.
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 mining shares
and gold, platinum, and silver bullion. This means at least 25% will, and up to
100% of its assets may, be so invested. Generally, 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
bullion investments to less than 25% of its total assets.
The Fund may invest up to 35% of its 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. 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. Pending
investment or for temporary defensive purposes, the Fund may commit all or a
portion of its assets to cash (U.S. dollars and/or foreign currencies) or invest
in money market instruments of U.S. and foreign issuers, including repurchase
agreements.
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
2
<PAGE>
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
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.
SHORT SALES. The Fund may from time to time use short sales, which means that
the Fund may sell a security that it does not own in the hope of replacing it by
a later purchase at a lower price. In order to make delivery to the buyer, the
Fund must borrow the security. When it does, the Fund incurs an obligation to
replace that security, whatever its price may be, at the time the Fund purchases
it for delivery to the lender. The Fund must also pay to the lender of the
security the dividends or interest payable during such period and may have to
pay a premium to borrow the security. The proceeds of the short sale will be
retained by the broker, to the extent necessary to meet the margin requirements,
until the short position is closed out. The obligation to restore the borrowed
security will at all times also be secured by collateral consisting of cash or
liquid securities whose value is marked to the market daily. In addition to the
amount required to be maintained by the broker, a similarly collateralized
deposit will be made to a segregated account at the Fund's custodian bank in an
amount such that the value of these two deposits will, at all times, be at least
equal to the current market value of the securities sold short. Ordinarily, no
interest will be received by the Fund on the proceeds of the short sale held by
the broker, although income from the collateral securities will belong to the
Fund. The Fund will incur a loss, which could be substantial, if the price of
the security increases between the date of the short sale and the date on which
it purchases securities to replace those borrowed. The Fund will realize a gain
if the security declines in price between those dates. Any such gain will be a
short term gain.
The frequency of short sales by the Fund may vary substantially, and no
specified portion of the Fund's assets will be invested in short sales. However,
not more than 25% of the Fund's net assets will be used to collateralize short
sales. To adhere to the 25% limitation, the Fund may be required to cover short
sales at a disadvantageous time.
The Fund may also make short sales "against the box." A short sale is
"against the box" to the extent that the Fund contemporaneously owns or has the
right to obtain without additional cost securities identical to those sold
short. Such sales will not be subject to the limitations referred to above.
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 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
3
<PAGE>
unrated securities if such securities offer, in the Investment Manager's
opinion, 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 fluctuations in price 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 agency arrangement with an affiliate of its Custodian,
the Fund may lend portfolio securities or other assets through such affiliate
for a fee to other parties. The Fund's agreement requires 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. Loans of portfolio securities may not exceed one-third of
the Fund's total assets. 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 to
be creditworthy. Any loan made by the Fund will provide that it may be
terminated by either party upon reasonable notice to the other party.
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 ("RIC") under the Internal Revenue Code of 1986, as
amended (the "Code"), 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 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
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, 1998 and 1997,
the Fund's portfolio turnover rate was 136% and 37%, respectively. A turnover
rate of 100% is equivalent to the Fund buying and selling all of the securities
in its portfolio once in the course of a year. A higher portfolio turnover rate
involves correspondingly greater transaction costs and increases the potential
for short term capital gains and taxes (see "Distributions and Taxes" below).
RISK FACTORS
Because of the following considerations, Fund shares should be considered
speculative and are not a complete investment program. Risks in 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 securities in which the Fund may
invest.
4
<PAGE>
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, Australia, the Commonwealth of Independent States (the "CIS,"
formerly the Union of Soviet Socialist Republics), Canada, and China. As South
Africa, the CIS and China are three major producers of gold and platinum,
changes in political, social and economic conditions affecting these countries
pose certain risks to the Fund's investments. The social upheaval and related
economic difficulties in South Africa, the CIS and China may, from time to time,
influence the price of gold and platinum and the share values of mining
companies involved in South Africa, the CIS, China and elsewhere. For example,
South Africa depends significantly on gold sales for the foreign exchange
necessary to finance its imports. Accordingly, 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. National economic and political
developments could affect South Africa's policy regarding gold sales and in turn
the price of gold and the share values of mining companies involved in South
Africa.
3. CONCENTRATION. As a matter of fundamental investment policy, the Fund
concentrates its investments in (i) securities of companies primarily involved,
directly or indirectly in, or that derive a portion of their gross revenues,
directly or indirectly from, the business of mining, processing, fabricating,
distributing or otherwise dealing in gold, silver, platinum, or other natural
resources and (ii) gold, silver and platinum bullion. Such concentration
subjects the Fund's shares to greater risk than a fund whose portfolio is not so
concentrated in that the Fund's shares will be affected by economic, political,
legislative and regulatory developments impacting the companies or bullion in
which it may invest. As a result of such concentration, the Fund may experience
increased problems of liquidity and the value of Fund shares may fluctuate more
than if it invested in a greater number of industries.
4. PRIVATE PLACEMENTS. The Fund may invest in securities that are sold in
private placement transactions between the issuers and their purchasers and that
are neither listed on an exchange nor traded in the secondary market. In many
cases, privately placed securities will be subject to contractual or legal
restrictions on transfer. As a result of the absence of a public trading market,
privately placed securities may in turn be less liquid and more difficult to
value than publicly traded securities. Although privately placed securities may
be resold in privately negotiated transactions, the prices realized from the
sales could, due to illiquidity, be less than if such securities were more
widely traded. In addition, issuers whose securities are not publicly traded may
not be subject to the disclosure and other investor protection requirements that
may be applicable if their securities were publicly traded. If any privately
placed securities held by the Fund are required to be registered under the
securities laws of one or more jurisdictions before being resold, the Fund may
be required to bear the expenses of registration.
5. SMALL CAPITALIZATION COMPANIES. The Fund may invest in companies that are
small or thinly capitalized, and may have a limited operating history. As a
result, investment in these securities involves greater risks and may be
considered speculative. For example, such companies may have more limited
product lines, markets or financial resources than companies with larger
capitalizations, and may be more dependent on a small management group. In
addition, the securities of such companies may trade less frequently and in
smaller volume, and may be subject to more abrupt or erratic price movements,
than securities of large companies. The Fund's positions in securities of such
companies may be substantial in relation to the market of such securities.
Accordingly, it may be difficult for the Fund to dispose of securities of these
companies at prevailing market prices. Full development of these companies takes
time, and for this reason the Fund should be considered a long term investment
and not a vehicle for seeking short term profit. The securities of small or
thinly capitalized companies may also be more sensitive to market changes than
the securities of large companies. Such companies may not be well known to the
investing public and may not have institutional ownership. Such companies may
also be more vulnerable than larger companies to adverse business or economic
developments.
6. BORROWING. The Fund may borrow money from banks (including its custodian
bank) to purchase and carry securities and will pay interest thereon. Such
borrowing is referred to as leverage, is speculative, and increases both
investment opportunity and investment risk. If the investment income on
securities purchased with borrowed money exceeds the interest paid on the
borrowing, the Fund's income will be correspondingly higher. If the investment
income fails to cover the Fund's costs, including interest on borrowings, or if
there are losses,
5
<PAGE>
the net asset value of the Fund's shares will decrease faster than would
otherwise be the case. The 1940 Act requires the Fund to maintain asset coverage
of at least 300% (including the amount borrowed) for all such borrowings, and
should such asset coverage at any time fall below 300%, the Fund will be
required to reduce its borrowing within three days to the extent necessary to
meet the requirements of the 1940 Act. To reduce its borrowing the Fund might be
required to sell securities at a disadvantageous time. Interest on money
borrowed is an expense the Fund would not otherwise incur, and it may therefore
have little or no investment income during periods of substantial borrowings.
7. 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.
8. UNPREDICTABLE INTERNATIONAL MONETARY POLICIES, ECONOMIC AND POLITICAL
CONDITIONS. Under unusual international monetary or political conditions, the
Fund's assets might be less liquid and the change in value of its assets 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.
9. FOREIGN SECURITIES, MARKETS AND CURRENCIES. All or a portion of the Fund's
assets may be invested in foreign securities. 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;
non-negotiable brokerage commissions; 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 (which may include suspension of the ability to transfer
currency from a given country), and currency restrictions; and the possible
greater political, economic, and social instability of developing as well as
developed countries, including 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 Fund's expense ratio can be
expected to be higher than for investment companies investing exclusively in
domestic securities.
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.
6
<PAGE>
The Fund may purchase securities 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
Fund's assets 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
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.
Because investments in foreign currencies, 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.
When purchasing foreign securities, the Fund will ordinarily purchase
securities which are traded in the U.S. or purchase American Depository
Receipts, which are certificates issued by U.S. banks representing the right to
receive securities of a foreign issuer deposited with that bank or a
correspondent bank. However, the Fund may purchase foreign securities directly
in foreign markets so long as in management's judgment an established public
trading market exists (that is, there are a sufficient number of shares traded
regularly relative to the number of shares to be purchased by the Fund).
10. OPTIONS, FUTURES, AND FORWARD CURRENCY CONTRACTS. 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 these strategies. 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.
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11. LACK OF INCOME ON GOLD, SILVER, AND PLATINUM INVESTMENTS. Investments in
gold, silver and platinum bullion do not generate income and will subject the
Fund to taxes and insurance, shipping and storage costs. The sole source of
return to the Fund from such investments would be gains realized on sales, and a
negative return would be realized if such investments are sold at a loss.
12. YEAR 2000 RISKS. Like other investment companies, financial and business
organizations around the world, the Fund will be adversely affected if the
computer systems used by the Investment Manager and the Fund's other service
providers do not properly process and calculate date-related information and
data from and after January 1, 2000. This is commonly known as the "Year 2000
Problem." The Fund is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to the computer systems it uses and
to obtain satisfactory assurances that comparable steps are being taken by each
of the Fund's major service providers. The Fund does not expect to incur any
significant costs in order to address the Year 2000 Problem. However, at this
time there can be no assurances that these steps will be sufficient to avoid any
adverse impact on the Fund.
HOW TO PURCHASE SHARES
The Fund's shares are sold on a continuing basis at net asset value (see
"Determination of Net Asset Value"). The minimum initial investment is $1,000
for regular and Uniform Gifts/Transfers to Minors Act custody accounts, $1,000
for traditional deductible individual retirement accounts ("IRAs"), Roth IRAs,
simplified employee pension plan IRAs ("SEP-IRAs"), savings incentive match plan
for employee IRAs ("SIMPLE IRAs"), rollover IRAs, 403(b) plan accounts, and $500
for Education IRAs. The minimum subsequent investment is $100. The initial
investment minimums are waived if a shareholder elects to invest $100 or more
each month in the Fund through the Bull & Bear Automatic Investment Program (see
"Additional Investments" below). The Fund in its discretion may waive or lower
the investment minimums.
INITIAL INVESTMENT. The Account Application accompanying this prospectus should
be completed, signed and, with a check or other negotiable bank draft drawn to
the order of Gold Investors, mailed to Investor Service Center, 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.
ADDITIONAL INVESTMENTS. Additional investments may be made conveniently at any
time by any one or more of the following methods:
o BULL & BEAR AUTOMATIC INVESTMENT PROGRAM. With the Bull & Bear Automatic
Investment Program, you can establish a convenient and affordable long term
investment program through one or more of the Plans explained below. Each
Plan is designed to facilitate an automatic monthly investment of $100 or
more into your Fund account.
The BULL & BEAR BANK TRANSFER PLAN lets you purchase Fund shares on a
certain day each month by transferring electronically a specified
dollar amount from your regular checking account, NOW account, or bank
money market deposit account.
In the BULL & BEAR SALARY INVESTING PLAN, part or all of your salary
may be invested electronically in Fund shares on each pay date,
depending upon your employer's direct deposit program.
The BULL & BEAR GOVERNMENT DIRECT DEPOSIT PLAN allows you to deposit
automatically part or all of certain U.S. Government payments into your
Fund account. Eligible U.S. Government payments include Social
Security, pension benefits, military or retirement benefits, salary,
veteran's benefits and most other recurring payments.
For more information concerning these Plans, or to request the necessary
authorization form(s), please call Investor Service Center toll-free at
1-888-503-FUND (1-888-503-3863). You may modify or terminate the Bank Transfer
Plan at any time by written notice received at least 10 days prior to the
scheduled investment date. To modify or terminate the Salary Investing Plan or
Government Direct Deposit Plan, you should contact, respectively, your employer
or the appropriate U.S. Government agency. The Fund reserves the right to redeem
any account if participation in the Program is terminated and the account's
value is less than $1,000. The
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Program and the Plans do not assure a profit or protect against loss in a
declining market, and you should consider your ability to make purchases when
prices are low.
o CHECK. Mail a check or other negotiable bank draft ($100 minimum), drawn to
the order of Gold Investors, together with a Bull & Bear FastDeposit form to
Investor Service Center, Box 419789, Kansas City, MO 64141-6789. If you do
not use that form, please send a letter indicating the Fund and account
number to which the subsequent investment is to be credited, and name(s) of
the registered owner(s).
o ELECTRONIC FUNDS TRANSFER (EFT). With EFT, you may purchase additional
shares of the Fund quickly an simply, just by calling Investor Service
Center toll-free at 1-888-503-VOICE (1-888-503-8642). We will contact the
bank you designate on your Account Application or Authorization Form to
arrange for the EFT, which is done through the Automated Clearing House
system, to your Fund account. For requests received by 4 p.m., eastern time,
the investment will be credited to your Fund account ordinarily within two
business days. There is a $100 minimum for each EFT investment. Your
designated bank must be an Automated Clearing House member and any
subsequent changes in bank account information must be submitted in
writing with a voided check or deposit slip.
o FEDERAL FUNDS WIRE. You may wire money, by following the procedures set
forth below, to receive that day's net asset value per share.
INVESTING BY WIRE. For an initial investment by wire, you must first telephone
Investor Service Center toll-free at 1-888-503-FUND (1-888-503-3863), to give
the name(s) under which the account is to be registered, tax identification
number and the name of the bank sending the wire, and to be assigned a Bull &
Bear Gold Investors account number. You may then purchase shares by requesting
your bank to transmit immediately available funds ("Federal funds") by wire to:
United Missouri Bank NA, ABA #10-10-00695; for Account 98- 7052-724-3; Gold
Investors. Your account number and name(s) must be specified in the wire as they
are to appear on the account registration. You should then enter your account
number on your completed Account Application and promptly forward it to Investor
Service Center, Box 419789, Kansas City, MO 64141-6789. This service is not
available on days when the Federal Reserve wire system is closed. Subsequent
investments by wire may be made at any time without having to call Investor
Service Center by simply following the same wiring procedures.
SHAREHOLDER ACCOUNTS. When you invest in the Fund, your account will be credited
with all full and fractional shares (to three decimal places), together with any
dividends and other distributions that are paid in additional shares (see
"Distributions and Taxes"). For joint tenant accounts, any account owner has the
authority to act on the account without notice to the other account owners.
Investor Service Center in its sole discretion and for its protection may, but
is not obligated to, require the written consent of all account owners of a
joint tenant account prior to acting upon the instructions of any account owner.
Stock certificates will be issued only for full shares when requested in
writing. In order to facilitate redemptions and exchanges and provide
safekeeping, we recommend that you do not request certificates. You will receive
transaction confirmations upon purchasing or selling shares, and quarterly
statements. Shares of the Fund may also be purchased through certain
broker-dealers and other financial intermediaries that have entered into selling
agreements or related arrangements. Investors may be charged a fee by such
broker or financial intermediary if they effect transactions through such
entity. The Fund or the Distributor may, from time to time, make payments to
broker/dealers or other financial intermediaries for certain services to the
Fund and/or their shareholders, including sub-administration, sub-transfer
agency and shareholder servicing.
WHEN ORDERS ARE EFFECTIVE. The purchase price for Fund shares is the net asset
value of such shares next determined after receipt and acceptance by Investor
Service Center of a purchase order in proper form. All purchases are accepted
subject to collection at full face value in Federal funds. Checks must be drawn
in U.S. dollars on a U.S. bank. No third party checks will be accepted and the
Fund reserves the right to reject any order for any reason. Accounts are charged
$30 by the Transfer Agent for submitting checks for investment which are not
honored by the investor's bank.
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SHAREHOLDER SERVICES
You may modify or terminate your participation in any of the Fund's special
plans or services 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 Investor Service
Center by calling toll-free at 1-888- 503-FUND (1-888-503-3863).
INVESTOR ACCESS. Investor Service Center's free Investor Access service gives
you instant 24 hour access to your Fund investments either by toll-free
telephone or by using your personal computer for Internet access. With Investor
Access you can monitor your investments, check your account balance and account
activity, retrieve your account history, exchange between Funds offered by
Investor Service Center, review recent transactions, and make transfers using
EFT from or to your authorized bank account. For Investor Access by phone, just
dial toll-free at 1-888-503-VOICE (1-888-503-8642) and follow the prompts. For
Internet Investor Access, visit Investor Service Center's Internet site at
www.mutualfunds.net and select "Access Your Fund Account." You will need your
account number and your Personal Identification Number ("PIN"), which is the
last 4 digits of the social security number or taxpayer identification number
associated with your account number. If you would like a different PIN, just
call an Investor Service Representative toll-free at 1-800-345-0051. There is no
charge for using Investor Access, and your account information is based on the
most recent Fund prices, updated every business day. Any transactions you
request are carried out at the Fund's net asset value next determined after
receipt of your order. You will receive in the mail written confirmations for
all transactions you request through Investor Access, and if you purchase or
redeem Fund shares using EFT, your bank statement will reflect the appropriate
electronic credit or debit.
ELECTRONIC FUNDS TRANSFER (EFT). You automatically have the privilege of linking
your bank account designated on your Account Application or Authorization Form
and your Fund account through Bull & Bear's EFT service. With EFT, you use the
Automated Clearing House system to electronically transfer money quickly and
safely between your bank and Fund accounts. EFT may be used for purchasing and
redeeming Fund shares, direct deposit of dividends and other distributions into
your bank account, the Automatic Investment Program, the Systematic Withdrawal
Plan, and systematic IRA distributions. You may decline this privilege by
checking the indicated box on the Account Application. Any subsequent changes in
bank account information must be submitted in writing (and the Transfer Agent
may require the signature to be guaranteed), with a voided check.
DIVIDEND SWEEP PRIVILEGE. You may elect to have automatically invested either
all dividends or all dividends and other 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 Investor Service Center
toll-free at 1-888-503-FUND (1-888-503-3863). You may cancel this privilege by
mailing written notification to Investor Service Center, Box 419789, Kansas
City, MO 64141-6789. To select a new Bull & Bear Fund after cancellation, you
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.
SYSTEMATIC WITHDRAWAL PLAN. If you own Fund shares with a value of at least
$20,000 you may elect an automatic monthly or quarterly withdrawal of cash from
your Fund account in fixed or variable amounts, subject to a minimum amount of
$100. Under the Systematic Withdrawal Plan, all dividends and other
distributions, if any, are reinvested in the Fund.
ASSIGNMENT. Fund shares may be transferred to another owner. Instructions are
available from Investor Service Center by calling toll-free at 1-888-503-FUND
(1-888-503-3863).
EXCHANGE PRIVILEGE. You may exchange at least $500 worth of Fund shares for
shares of any Bull & Bear Fund listed below (provided the registration is
exactly the same, the shares may be sold in your state of residence, and the
exchange may otherwise legally be made).
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To exchange shares, please call Investor Service Center toll-free at
1-888-503-VOICE (1-888-503-8642) between 9 a.m. and 5 p.m. eastern time on any
business day of the Fund and provide your account registration information
including address, account number and 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 your
identity and telephone number. 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 generally free from most state and
local income taxes. Free unlimited check writing ($250 minimum per check).
Pays monthly 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.
Exchange 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 that business day.
Exchange requests received between 4 p.m. and 5 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 the next Fund
business day. The Fund is designed as a long term investment, and short term
trading is discouraged. Accordingly, if shares of the Fund held for 30 days or
less are redeemed or exchanged, the Fund will deduct a redemption fee equal to
one percent of the net asset value of shares redeemed or exchanged. The fee will
be retained by the Fund and used to offset the transaction costs that short term
trading imposes on the Fund and its shareholders. If an account contains shares
with different holding periods (i.e. some shares held 30 days or less, some
shares held 31 days or more), the shares with the longest holding period will be
redeemed first to determine if the Fund's redemption fee applies. If you are
unable to reach Investor Service Center at the above telephone number you may,
in emergencies, call toll-free at 1-888-503- FUND (1-888-503-3863). Exchanges
may be difficult or impossible to implement during periods of rapid changes in
economic or market conditions. Exchange privileges may be terminated or modified
by the Fund without notice. For tax purposes, an exchange is treated as a
redemption and purchase of shares. A free prospectus containing more complete
information including charges, expenses and performance, on any of the Funds
listed above is available from Investor Service Center by calling toll-free at
1-888-503-FUND (1-888- 503-3863). The other Fund's prospectus should be read
carefully before exchanging shares. You may give exchange instructions to
Investor Service Center by telephone without further documentation. If you have
requested share certificates, this procedure may be utilized only if, prior to
giving telephone instructions, you deliver the certificates to the Transfer
Agent for deposit into your account.
o BULL & BEAR SECURITIES DISCOUNT BROKERAGE ACCOUNT. Bull & Bear Securities,
Inc., an affiliate of the Investment Manager, offers discount brokerage services
with the option of FREE, UNLIMITED check writing privileges, with a minimum
initial balance of $1,000. Additionally, investors may purchase Fund shares
through a Bull & Bear Securities Discount Brokerage Account and access their
investments in any Bull & Bear Mutual Fund to pay for securities purchased in
their brokerage account, and have proceeds osecurities sold in their brokerage
account used to purchase shares of any Bull & Bear Fund. You may request a
Discount Brokerage Account Application from Bull & Bear Securities, Inc. by
calling toll-free
at 1-800-262-5800.
TAX-ADVANTAGED RETIREMENT PLANS. These plans provide an opportunity 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 these plans is available from
Investor Service Center by calling toll-free at 1-888-503-FUND (1-888-503-3863).
The minimum initial investment to establish a Bull & Bear Education IRA is
$500. The minimum initial investment to establish any other Bull & Bear IRA or
retirement account is $1,000.
Minimum subsequent investments are $100. The initial minimum investments
are waived if you elect to invest $100 or more each month in the Fund through
he Bull & Bear Automatic Investment Program. There
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are no set-up fees for any Bull & Bear IRA or retirement account. Subject to
change on 30 days' notice, the plan custodian charges Bull & Bear IRAs $10 for
each distribution prior to age 59 1/2, and a $20 plan termination fee.
HOW TO REDEEM SHARES
Generally, you may redeem by any of the methods explained below. Requests
for redemption should include the following information: your account
registration information including address, account number and taxpayer
identification number; dollar value, number or percentage of shares to be
redeemed; how and to where the proceeds are to be sent; if applicable, the
bank's name, address, ABA routing number, bank account registration and account
number, and a contact person's name and telephone number; and your daytime
telephone number.
BY MAIL. You may request that the Fund redeem any amount of shares by submitting
a written request to Investor Service Center, Box 419789, Kansas City, MO
64141-6789, signed by the record owner(s). If the written 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.
BY TELEPHONE. You may telephone Investor Service Center toll-free at
1-888-503-VOICE (1-888-503-8642) to expedite redemption of Fund shares if share
certificates have not been issued.
You may redeem as little as $250 worth of shares by requesting Bull & Bear's
Electronic Funds Transfer (EFT) service. With EFT, you can redeem Fund shares
quickly and conveniently because Investor Service Center will contact the bank
designated on your Account Application or Authorization Form to arrange for the
electronic transfer of your redemption proceeds (through the Automated Clearing
House system) to your bank account. EFT proceeds are ordinarily available in
your bank account within two business days.
If you are redeeming $1,000 or more worth of shares, you may request that
the proceeds be mailed to your address of record or mailed or wired to your
authorized bank.
Telephone requests received on Fund business days by 4 p.m. eastern time
will be redeemed from your account that day, and if after, on the next Fund
business day. Any subsequent changes in bank account information must be
submitted in writing, signature guaranteed, with a voided check or deposit slip.
If you are unable to reach Investor Service Center at the above telephone number
you may, in emergencies, call toll-free at 1-888-503-FUND (1-888-503-3863).
Redemptions by telephone may be difficult or impossible to implement during
periods of rapid changes in economic or market conditions.
CHECK WRITING ACCESS. You may exchange a minimum of $500 at any time by
toll-free telephone call into Bull & Bear Dollar Reserves, Bull & Bear's money
market fund, offering free personalized checks, a $250 check writing minimum
(there is no check writing minimum for Bull & Bear Securities discount brokerage
account checking account), and no limit on the number of checks that may be
written. A signature card, which should be submitted for the check writing
privilege, and a free Bull & Bear Dollar Reserves prospectus containing more
complete information including yield, charges and expenses is available from
Investor Service Center by calling toll-free at 1-888-503-FUND (1-888-503-3863).
Please read the prospectus carefully before exchanging.
REDEMPTION PRICE AND FEES. The redemption price is the net asset value per share
next determined after receipt of the redemption request in proper form. The Fund
is designed as a long term investment, and short term trading is discouraged.
Accordingly, if shares of the Fund held for 30 days or less are redeemed or
exchanged, the Fund will deduct a redemption fee equal to one percent of the net
asset value of shares redeemed or exchanged. The fee will be retained by the
Fund and used to offset the transaction costs that short term trading imposes on
the Fund and its shareholders. If an account contains shares with different
holding periods (i.e. some shares held 30 days or less, some shares held 31 days
or more), the shares with the longest holding period will be redeemed first to
determine if the Fund's redemption fee applies. Shares acquired through the
Dividend Sweep Privilege and the reinvestment of dividends and capital gains or
redeemed under the Systematic Withdrawal Plan are exempt from the redemption
fee. 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.
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REDEMPTION PAYMENT. Payment for shares redeemed will ordinarily be made within
seven 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 seven
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 EFT transfer is generally subject to a fifteen
business day delay to allow the check or transfer to clear. The fifteen 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 you
may be entitled through the date of redemption. The clearing period does not
apply to purchases made by wire. 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. You automatically have all telephone privileges to, among
other things, authorize purchases, redemptions and exchanges, with EFT or by
other means, unless declined on the Account Application or otherwise in writing.
Neither the Fund nor Investor 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 losses due to unauthorized or fraudulent transactions. These
procedures include requiring personal identification prior to acting upon
telephone instructions, providing written confirmation of such transactions, and
recording telephone conversations. 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 you at your address of record. If the redemption proceeds are to be paid
to a non-shareholder of record, or to an address other than your address of
record, or the shares are to be assigned, the Transfer Agent may require that
your 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, and may restrict the mailing
of redemption proceeds to your address of record within 60 days of such address
being changed unless you provide 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 offsetting 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 paid in additional Fund shares or
shares of another Bull & Bear Fund pursuant to the Dividend Sweep Privilege,
unless you elect to receive cash on the Account Application or so elect
subsequently by calling Investor Service Center toll-free at 1-888-503-FUND
(1-888-503-3863). For Federal income tax purposes, dividends and other
distributions are treated in the same manner whether received in additional
shares of the Fund or another Bull & Bear Fund or in cash. Any election will
remain in effect until you notify Investor Service Center 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.
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Dividends paid by the Fund from its investment company taxable income
(whether paid in cash or in additional shares) generally are taxable to its
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 shares) when designated as such by the Fund, are taxable
to its shareholders as long term capital gains, regardless of how long they have
held their Fund shares. The Code provides that an individual generally will be
taxed on his or her net capital gain at a maximum rate of 28% with respect to
capital gain from securities held for more than one year but not more than 18
months and at a maximum rate of 20% with respect to capital gain from securities
held for more than 18 months. 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 tax.
The Fund's investments in gold, platinum and silver bullion and coins may
cause it to fail 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 to
shareholders.
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 also is required from
dividends and capital gain distributions payable to such shareholders who are
otherwise subject to backup withholding.
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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. Since other
Federal, state and local tax considerations may apply, you should consult your
tax adviser.
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 its 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. A business day of the Fund is any day on which the New
York Stock Exchange is open for trading. The following are not business days of
the Fund: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
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.
INVESTMENT MANAGER
Bull & Bear Advisers, Inc. ("Investment Manager") acts as general manager of
the Fund, being responsible for the various functions assumed by it, including
regularly furnishing advice with respect to portfolio transactions. The
Investment Manager also furnishes or obtains on behalf of the Fund all services
necessary for the proper conduct of the Fund's business and administration. The
Investment Manager retains final discretion in the investment and reinvestment
of the Fund's assets, subject to the control and oversight 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 other affiliated investment companies. The Investment Manager
may also allocate transactions to broker/dealers that remit a portion of their
commissions as a credit against the Fund's expenses. Thomas B. Winmill,
President and Chief Executive Officer of the Investment Manager and the Fund, is
the Fund's portfolio manager. Mr. Winmill has served as a member of the
Investment Manager's Investment Policy Committee since 1990 and as portfolio
manager of the Fund since May 1, 1998.
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 1% on the first $10 million, 7/8 of 1% over $10 million up to $30
million, 3/4 of 1% over $30 million up to $150 million, 5/8 of 1% over $150
million up to $500 million, and 1/2 of 1% over $500 million. From time to time,
the Investment Manager may reimburse all or part of this fee to improve the
Fund's total return. The Investment Manager provides certain administrative
services to the Fund at cost. During the fiscal year ended June 30, 1998, the
investment management fees paid by the Fund represented approximately 0.98% 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 The Nasdaq Stock Market 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.
DISTRIBUTION OF SHARES
Pursuant to a Distribution Agreement between the Fund and Investor Service
Center, Inc., 11 Hanover Square, New York, NY 10005 ("Distributor"), the
Distributor acts as the Fund's principal agent for the sale of Fund shares. The
Investment Manager is an affiliate of the Distributor. The Fund has also adopted
a plan of distribution ("Plan") pursuant to Rule 12b-1 under the 1940 Act.
Pursuant to the Plan, the Fund pays the
15
<PAGE>
Distributor monthly a distribution fee in an amount of 0.75% per annum of the
Fund's average daily net assets and a service fee in an amount of 0.25% per
annum of the Fund's average daily net assets. The service fee portion is
intended to cover personal services provided to Fund shareholders and
maintenance of shareholder accounts. 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. These fees may be retained by the Distributor or passed
through to brokers, banks and others who provide services to their customers who
are Fund shareholders generally at the rate of 0.35% per annum on such customer
balances. 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. If the Distributor's
expenses are less than such fees, it may realize a profit. Certain other
advertising and sales materials may be prepared to promote the sale of Fund
shares and shares of 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
Advertisements and other sales literature for the Fund may refer to the
Fund's "average annual total return" and "cumulative total return." All such
quotations are based upon historical earnings and are not intended to indicate
future performance. The investment return on and principal value of an
investment in the Fund will fluctuate, so that an investor's shares when
redeemed may be worth more or less than their original cost. In addition to
advertising average annual total return and cumulative total return, comparative
performance information may be used from time to time in advertising the Fund's
shares, including data from Morningstar, Inc., Lipper Analytical Services, Inc.
and other sources. "Average annual total return" is the average annual
compounded rate of return on a hypothetical $1,000 investment made at the
beginning of the advertised period. In calculating average annual total return,
all dividends and other distributions are assumed to be reinvested. "Cumulative
total return" is calculated by subtracting a hypothetical $1,000 payment to the
Fund from the ending redeemable value of such payment (at the end of the
relevant advertised period), dividing such difference by $1,000 and multiplying
the quotient by 100. In calculating ending redeemable value, all dividends and
other distributions are assumed to be reinvested in additional Fund shares.
Although the Fund imposes a 1% redemption fee on the redemption of shares held
for 30 days or less, all of the periods for which performance is quoted are
longer than 30 days, and therefore the 1% fee is not reflected in the
performance calculations. In addition, there is no sales charge upon
reinvestment of dividends or other distributions. Additional information
regarding the Fund's performance is available in its Annual Report to
Shareholders, which is available at no charge upon request to Investor Service
Center by calling toll-free at 1-888-503-FUND (1-888-503-3863).
CAPITAL STOCK
The Fund, a non-diversified open-end management investment company organized
as a Maryland corporation in 1987, commenced investment operations in January
1988 when it merged with Bull & Bear Gold Investors Ltd. (formerly Golconda
Investors Ltd.), a New York corporation. The Fund is authorized to issue up to
500,000,000 shares of common stock ($.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.
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<PAGE>
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 a majority 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 Fiduciary Trust Company, 801 Pennsylvania, Kansas City, MO 64105,
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 such subcustodianships and related foreign
depositories. Utilization of such arrangements and depositories will increase
the Fund's expenses (see the special considerations involving foreign securities
discussed above). All of the Fund's gold, platinum, and silver bullion is held
by Republic National Bank of New York, 452 Fifth Avenue, New York, NY 10018. The
custodian also performs certain accounting services for the Fund.
The Fund's transfer and dividend disbursing agent is DST Systems, Inc., Box
419789, Kansas City, MO 64141-6789. The Distributor provides certain shareholder
administration 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 Funds distributed by the Distributor based on the relative number of
inquiries and other factors. The Fund may also enter into agreements with
brokers, banks and others who may perform on behalf of their customers certain
shareholder services not otherwise provided by the Transfer Agent or the
Distributor.
17
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[Left Side of Back Cover Page]
GOLD
INVESTORS
- -----------------------------------------------------
11 HANOVER SQUARE
NEW YORK, NY 10005
- -----------------------------------------------------
FOR FUND PROSPECTUSES AND OTHER INVESTMENT
INFORMATION, CALL TOLL-FREE
1-888-503-FUND
1-888-503-3863
FOR SHAREHOLDER SERVICES BY INVESTOR ACCESS,
CALL TOLL-FREE
1-888-503-VOICE
1-888-503-8642
OR, ACCESS THE FUND ON THE WEB AT
WWW.MUTUALFUNDS.NET
- -----------------------------------------------------
[Right Side of Back Cover Page]
GOLD
INVESTORS
- ---------------------------------------------------------
INVESTING IN MINING SHARES
AND GOLD, PLATINUM AND
SILVER BULLION FOR LONG
TERM CAPITAL APPRECIATION
ELECTRONIC FUNDS TRANSFERS
AUTOMATIC INVESTMENT PROGRAM
RETIREMENT PLANS:
TRADITIONAL DEDUCTIBLE IRA,
ROTH IRA, SEP-IRA, SIMPLE IRA,
EDUCATION IRA, AND 403(B)
- ---------------------------------------------------------
PROSPECTUS
SEPTEMBER 2, 1998
- ---------------------------------------------------------
MINIMUM INITIAL INVESTMENT:
REGULAR ACCOUNTS, $1,000
TRADITIONAL DEDUCTIBLE IRA, ROTH IRA,
SEP-IRA, SIMPLE IRA, AND 403(B),
$1,000
EDUCATION IRA, $500
AUTOMATIC INVESTMENT PROGRAMS, $100
MINIMUM SUBSEQUENT INVESTMENTS:
$100
BULL
&
BEAR-----------------------------------------
PERFORMANCE DRIVEN(R)
18
