<PAGE>
Supplement dated July 19, 2000
To the Prospectus dated May 1, 2000
Of Flag Investors Communications Fund, Inc.
(Institutional Shares)
The Prospectus dated May 1, 2000 of Flag Investors Communications Fund, Inc.
(Institutional Shares) is hereby amended and supplemented by the following:
The Board of Directors of the Fund has called a Special Meeting of shareholders
to be held on August 31, 2000. At the Special Meeting, Fund shareholders of
record as of July 5, 2000 are voting to approve the following matters:
o Changes to the Fund's fee arrangements, including new advisory
and sub-advisory agreements for the Fund that increase the
fees paid to the Fund's advisor and sub-advisor. The impact of
the Fund's new fee arrangements is described below.
o The restructuring of the Fund into a master-feeder format (the
"Restructuring") under which the Fund would become a "feeder"
fund investing all of its assets in a "master" portfolio. The
new structure will not change the Fund's investment objective,
strategies and risks. The investment advisor and sub-advisor
who are currently responsible for managing the Fund's assets
will remain the same.
o A proposed sub-advisory agreement to reflect an expected
change of control of the Fund's sub-advisor in March 2001.
This change of control is not expected to have any impact on
the quality and nature of the services that the sub-advisor
provides to the Fund.
If the changes to the Fund's fee arrangements and the Restructuring are both
approved, the changes to the Fund's fee arrangements will go into effect
immediately upon shareholder approval. The Restructuring would take place on or
about October 2, 2000.
If the changes to the Fund's fees become effective, the Annual Fund Operating
Expenses portion of the table appearing under "Fees And Expenses Of The
Institutional Shares" on page 2 of the prospectus and the Example that follows
the table would be replaced with the following:
Annual Fund Operating Expenses
(expenses that are deducted from Fund Assets)
Management Fees 0.73%
Distribution and/or Service (12b-1) Fees None
Other Expenses 0.29%
-----
Total Annual Fund Operating Expenses 1.02%
Less Fee Waivers*** (0.15%)
------
Total Annual Fund Operating Expenses 0.87%
======
*** The Fund's Advisor and Administrator have contractually agreed to an
aggregate fee for waiver equal to 0.15% of the Fund's average daily net
assets. This agreement will continue until at least August 31, 2002.
-------------------------
<PAGE>
Example:
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. This is a hypothetical example
only, and is not intended to suggest that the Fund's future performance will
match the assumptions used in the example.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year, the Fund's
operating expenses remain the same, and the fee waiver applies during the first
two years only. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
Institutional Shares $89 $299 $533 $1,220
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
<PAGE>
Supplement dated July 19, 2000
To the Prospectus dated May 1, 2000
Of Flag Investors Communications Fund, Inc.
(Class A, Class B, and Class C Shares)
The Prospectus dated May 1, 2000 of Flag Investors Communications Fund, Inc.
(Class A, Class B, and Class C Shares) is hereby amended and supplemented by the
following:
The Board of Directors of the Fund has called a Special Meeting of shareholders
to be held on August 31, 2000. At the Special Meeting, Fund shareholders of
record as of July 5, 2000 are voting to approve the following matters:
o Changes to the Fund's fee arrangements, including new advisory
and sub-advisory agreements for the Fund that increase the
fees paid to the Fund's advisor and sub-advisor. The impact of
the Fund's new fee arrangements is described below.
o The restructuring of the Fund into a master-feeder format (the
"Restructuring") under which the Fund would become a "feeder"
fund investing all of its assets in a "master" portfolio. The
new structure will not change the Fund's investment objective,
strategies and risks. The investment advisor and sub-advisor
who are currently responsible for managing the Fund's assets
will remain the same.
o A proposed sub-advisory agreement to reflect an expected
change of control of the Fund's sub-advisor in March 2001.
This change of control is not expected to have any impact on
the quality and nature of the services that the sub-advisor
provides to the Fund.
If the changes to the Fund's fee arrangements and the Restructuring are both
approved, the changes to the Fund's fee arrangements will go into effect
immediately upon shareholder approval. The Restructuring would take place on or
about October 2, 2000.
If the changes to the Fund's fees become effective, the Annual Fund Operating
Expenses portion of the table appearing under "Fees And Expenses Of The Fund" on
page 2 of the prospectus and the Example that follows the table would be
replaced with the following:
<TABLE>
<CAPTION>
Annual Fund Operating Expenses Class A Class B Class C
(expenses that are deducted from Fund Assets) Shares Shares Shares
------ ------ ------
<S> <C> <C> <C>
Management Fees 0.73% 0.73% 0.73%
Distribution and/or Service (12b-1) Fees 0.25% 0.75% 0.75%
Other Expenses (including a 0.25% shareholder
servicing fee for Class B and Class C Shares) 0.28% 0.53% 0.52%
----- ----- -----
Total Annual Fund Operating Expenses 1.26% 2.01% 2.00%
Less Fee Waivers*** (0.15%) (0.15%) (0.15%)
------- ------- -------
Total Annual Fund Operating Expenses 1.11% 1.86% 1.85%
======== ======= =======
</TABLE>
*** The Fund's Advisor and Administrator have contractually agreed to an
aggregate fee for waiver equal to 0.15% of the Fund's average daily net
assets. This agreement will continue until at least August 31, 2002.
-------------------------
<PAGE>
Example:
This Example is intended to help you compare the cost of investing in each class
of the Fund with the cost of investing in other mutual funds. This is a
hypothetical example only, and is not intended to suggest that the Fund's future
performance will match the assumptions used in the example.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year, the Fund's
operating expenses remain the same, the fee waiver applies during the first two
years only and all expenses reflect the maximum applicable sales charges.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 Year 3 Years 5 Years 10 Years
Class A Shares $657 $899 $1,176 $1,963
Class B Shares $689 $901 $1,255 $2,028
Class C Shares $288 $598 $1,049 $2,302
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
Class A Shares $657 $899 $1,176 $1,963
Class B Shares $189 $601 $1,055 $2,028
Class C Shares $188 $598 $1,049 $2,302
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
